/raid1/www/Hosts/bankrupt/TCRLA

/raid1/www/Hosts/bankrupt/TCRLA_Public/070116.mbx T R O U B L E D C O M P A N Y R E P O R T E R L A T I N A M E R I C A Tuesday, January 16, 2007, Vol. 8, Issue 11 Headlines A R G E N T I N A ALLIS-CHALMERS: S&P Raises Corporate Credit Rating to B from B- AGILENT TECH: S&P Lifts Corporate Credit Rating to BBB- from BB+ IRSA INVERSIONES: S&P Assigns B+ Corporate Credit Rating LA SEGUNDA COOPERATIVA: Moody's Affirms B2 Fin. Strength Rating LA SEGUNDA ART: Moody's Affirms B2 Financial Strength Rating PASELEDA SRL: Deadline for Claims Verification Is on March 21 PLUS SRL: Claims Verification Deadline Is on Feb. 16 PLUSPACK SA: Last Day for Claims Verification Is on Feb. 28 POSTA DEL ESPINILLO: Claims Verification Is Until March 16 RAMJET SRL: Trustee Verifies Proofs of Claim Until May 2 REARTE-LARRAN: Reorganization Proceeding Concluded RODOLFI SARA: Names Ana Bilbao as Bankruptcy Trustee SOLUCIONES HARD: Deadline for Claims Verification Is on Feb. 14 SHERLOCK SA: Last Day for Claims Verification Is on March 5 SIIPA SRL: Proofs of Claim Verification Is Until Feb. 5 YPF SA: Repsol Deploys Cisco for Latin American Communications VALEANT PHARMA: Inks Licensing Agreement for Rights to (C)Xyrem * ARGENTINA: Implements Tax Hike on Soybean Exports B A H A M A S PINNACLE ENT: Prices Offering of 10 Mln Shares of Common Stock WINN-DIXIE: Has 54 Million Outstanding Shares of Common Stock B E R M U D A C TANKER: To Hold Final General Meeting on Feb. 7 CAPCOUNT (BERMUDA): Final General Meeting Is on Feb. 12 PARAISO LTD: Final Shareholders Meeting Is on Jan. 21 REFCO INC: RCM Trustee Withdraws Objection to PlusFunds' Claims REFCO INC: Wants West Loop's Claims Reduced TONINAS LTD: Shareholders to Gather for Final Meeting on Jan. 21 VILLAIR LTD: Last Day for Proofs of Claim Filing Is on Feb. 12 B O L I V I A * BOLIVIA: State Mining Firm May Invest US$500 Million in Sector B R A Z I L ACTUANT CORP: Earns US$25.1 Mil. in First Quarter Ended Nov. 30 ALERIS INT: Discloses Management Promotions BANCO BRADESCO: Launching First Investment Fund on Market BANCO BRADESCO: Unit Inks Insurance Contract with Chevron BANCO CRUZEIRO: Central Bank Okays Firm's Capital Increase BANCO DO BRASIL: Pushing Mobile Banking in Brazil BENQ CORP: Sentex Sensing Presents Business Model to Creditors COMPANHIA ENERGETICA: Moody's Rates US$250 Mil. Notes at Ba3 COMPANHIA SIDERURGICA: Completing Slab Project Study This Month DURA AUTO: Discloses David L. Harbert's Terms of Employment DURA AUTOMOTIVE: Panel Taps Young Conaway as Bankr. Co-Counsel DURA AUTOMOTIVE: US Trustee Objects to Miller Buckfire Retention ELETROPAULO METROPOLITANA: Sao Paulo Authorities Probing Firm VOLKSWAGEN AG: Porsche CEO Wiedeking Calls for Company Changes METSO OYJ: Names Juhani Suvinen as Valmet Automotive President PROPEX INC: Moody's Revises Debt Rating Outlook to Negative PROPEX INC: S&P Cuts Corporate Credit Rating to B- from B+ TELE NORTE: Raises Non-Convertible Debenture Issue to BRL250MM C A Y M A N I S L A N D S ADVANTAGE ADVISERS: Final Shareholders Meeting Is on Jan. 17 CAPITAL Z: Deadline for Proofs of Claim Filing Is on Jan. 18 BARRAMUNDI FUND: Deadline for Proofs of Claim Filing Is Jan. 24 DIA RAILROAD: Proofs of Claim Filing Deadline Is on Jan. 18 EQUITABLE PCI: Proofs of Claim Filing Deadline Is on Jan. 22 EUROPEAN PSYCHIC: Sets Final Shareholders Meeting on Jan. 18 EXIS HOLDINGS: Shareholders to Convene for Jan. 18 Final Meeting HMTF POULTRY: Calls Shareholders for Final Meeting on Jan. 18 IRP SECOND: Shareholders to Gather for Final Meeting on Jan. 23 KINGFISHER LTD: Final Shareholders Meeting Is on Jan. 17 LRM SECOND: Liquidator to Present Wind Up Accounts on Jan. 23 NATIONAL AEROSPACE: Proofs of Claim Filing Deadline Is Jan. 17 NATIONAL AEROSPACE: Final General Meeting Is on Jan. 24 C H I L E ARAMARK CORP: Moody's Affirms (P)Ba3 Rating on US$4.15-Bil. Loan ARAMARK CORP: S&P Says Loan Add-Ons Won't Affect Debt Ratings C O L O M B I A NOVELL INC: Asserts Inevitable Bankruptcy of SCO Group SCO GROUP: Denies Looming Bankruptcy Rumors from Novell C O S T A R I C A PERKINELMER INC: Completes Euroscreen & Evotec Acquisitions D O M I N I C A N R E P U B L I C AHORROS Y PRESTAMOS: Liquidation Proceeding Concluded BANCO INTERCONTINENTAL: Justice Ministry Dumps Some Evidence SMURFIT KAPPA: Confirms Possible Initial Public Offering Plans SMURFIT KAPPA: S&P Puts B+ Rating on Watch Positive on IPO Plans * DOMINICAN REPUBLIC: Seeks European Deal for Sugar Industry E C U A D O R ADVANCED MICRO: Shares Drop 10% as Lower Prices Cut Profit * ECUADOR: Bondholders Positive President Won't Default on Debts G U A T E M A L A BANCO DE COMERCIO: Guatemala Suspending Bank's Operations * GUATEMALA: Suspending Banco de Comercio's Operations H O N D U R A S * HONDURAS: Government to Control Exxon, Chevron Oil Terminals J A M A I C A AIR JAMAICA: Responding to Union's Proposals This Week DYOLL INSURANCE: Earl Witter May Handle Insurance Payment Clash M E X I C O ADVANCED MARKETING: Hachette Book Blocks US$75-Mln DIP Financing ADVANCED MARKETING: Taps Richards Layton as Local Bankr. Counsel ADVANCED MARKETING: Wants to Hire O'Melveny as Bankruptcy Atty. DELTA AIR: S&P Says Ratings Unaffected by US Airways Higher Bid GENERAL MOTORS: Outlines Priorities for 2007 & Increases CapEx GRUPO GIGANTE: Market Chain Picks KSS for Price Optimization FORD MOTOR: CEO Alan Mulally Considers Selling Jaguar Brand FORD MOTOR: Closing Plants & Cutting Jobs Ahead of Schedule KANSAS CITY SOUHERN: Declares Dividends on Preferred Stock SONIC CORP: Moody's Withdraws Ba3 Corporate Family Rating TV AZTECA: To Launch Eight High Definition Films at NATPE WERNER LADDER: Court Okays Mercer as Human Resources Consultant * MEXICO: Discloses Results of Dutch Auction for Old Bonds * MEXICO: Discloses UST Benchmark Rate for Dutch Auction * MEXICO: Repurchases US$2.8 Bil. in Bonds with Cash & New Debts N I C A R A G U A PETROLEOS DE VENEZUELA: Makes Third Fuel Shipment to Nicaragua P A N A M A BANCO GENERAL: Focusing on Closing Merger with Continental CLIENTLOGIC CORP: SITEL Shareholders Approve Proposed Merger CLIENTLOGIC CORP: S&P Lifts Corporate Credit Rating to B+ from B SOLO CUP: Fitch Assigns B- Issuer Default Rating P U E R T O R I C O ADELPHIA COMMS: Effective Date of Plan Extended Until Friday DAVID'S BRIDAL: Moody's Assigns B2 Corporate Family Rating DAVID'S BRIDAL: S&P Assigns B Corporate Credit Rating DORAL FINANCIAL: Shareholders May Face Dilution, Analysts Say PILGRIM'S PRIDE: Names Wayne Lord as VP of Governmental Affairs MAIDENFORM BRANDS: S&P Revises Rating Outlook to Positive V E N E Z U E L A DAIMLERCHRYSLER AG: CEO Expresses Support for Chrysler Chief PETROLEO BRASILEIRO: Forming Joint Ventures with PDVSA PETROLEOS DE VENEZUELA: Forming Joint Ventures with Petrobras * VENEZUELA: Gov't Says It Will Pay Companies in Nationalization * VENEZUELA: J.P. Morgan Pares Rating on Sovereign Bonds * VENEZUELA: Treasury Promises to Compensate CANTV Shareholders * Fitch Reviews Latin America Structured Finance in 2006 * Large Companies with Insolvent Balance Sheets - - - - - ================= A R G E N T I N A ================= ALLIS-CHALMERS: S&P Raises Corporate Credit Rating to B from B- --------------------------------------------------------------- Standard & Poor's Ratings Services raised its corporate credit rating on oilfield services company Allis-Chalmers Energy Inc. to 'B' from 'B-'. At the same time, Standard & Poor's assigned its 'B' rating to the company's proposed US$225 million senior notes due 2017. The outlook is stable. Pro forma for the notes issuance, Houston, Texas-based Allis-Chalmers has US$497 million in debt. "The upgrade reflects good operating performance, adherence to stated financial policy, and meaningful improvements in the company's scale and product offerings over the past year," said Standard & Poor's credit analyst David Lundberg. The company has made a series of acquisitions and increased pro forma EBITDA to US$158 million for the 12 months ended Sept. 30, 2006, as compared with US$37 million when first rated by Standard & Poor's in January 2006. The acquisitions have strengthened the company's position in the rental tool business in particular, and have expanded the company's presence in the offshore Gulf of Mexico and into Argentina. Management has also displayed a willingness to maintain financial leverage in the 3x debt to EBITDA area. With the equity offering planned for later this month, Allis will have issued common stock in the secondary markets twice during the past 12 months, in addition to providing some amount of common stock to sellers in all five of its acquisitions in 2006. The proposed notes, along with a concurrent equity offering, will repay the amount outstanding under a US$300 million bridge loan that Allis used to finance its acquisition of Oil & Gas Rental Services Inc. in December 2006. The outlook is stable. Standard & Poor's recognizes that industry trends for oilfield services should remain favorable in the near term and that Allis' cash flows should remain relatively strong in 2007, absent a sharp decline in commodity prices. Standard & Poor's expects the company to continue to be acquisitive and maintain a debt to EBITDA ratio of around 3x. Any further positive rating actions are contingent on Allis' ability to meet financial targets and integrate acquired properties successfully. Worse-than-expected financial results, whether due to deteriorating industry fundamentals or company- specific issues, could result in a negative rating action. Any leveraging acquisitions could also pressure ratings. AGILENT TECH: S&P Lifts Corporate Credit Rating to BBB- from BB+ ---------------------------------------------------------------- Standard & Poor's Ratings Services raised its corporate credit rating on Palo Alto, Calif.-based Agilent Technologies Inc. to 'BBB-' from 'BB+', and removed it from CreditWatch, where it was placed with positive implications on Dec. 6, 2006. The rating outlook is stable. "The upgrade reflects the recent completion of various strategic actions, which have resulted in the transformation of Agilent into a pure-play measurement company," said Standard & Poor's credit analyst Ben Bubeck. Agilent's remaining businesses, focused on electronic and bio-analytical measurement, are expected to demonstrate lower volatility than the previous portfolio, which included a substantial exposure to the more- volatile semiconductor sector. The rating on Agilent reflects an improved operating profile following the divestiture of various business units, Standard & Poor's expectation for improved and more stable operating margins, and a modest financial risk profile. These are partially offset by a limited track record of both performance and financial policy following substantial divestitures and restructuring actions and continued exposure to cyclical end markets. With annual revenues of approximately US$5 billion, Agilent is a leading provider of electronic and bio-analytical measurement solutions to the electronics, communications, life sciences, and chemical analysis industries. Agilent had approximately US$1.8 billion of operating lease- and pension-adjusted debt as of October 2006. Agilent Technologies, Inc. -- http://www.agilent.com/-- is a measurement company providing core bio-analytical and electronic measurement solutions to the communications, electronics, life sciences and chemical analysis industries. The company has operations in Argentina, India and Luxembourg. * * * As reported in the Troubled Company Reporter on Dec. 13, 2006, Moody's Investors Service upgraded both the corporate family rating and probability of default rating of Agilent Technologies Inc. to Ba1 from Ba2 and revised the outlook to positive. In addition, Moody's also affirmed the company's speculative grade liquidity rating at SGL-1. As reported on Dec. 12, 2006, Standard & Poor's Ratings Services placed its 'BB+' corporate credit rating on Palo Alto, California-based Agilent Technologies Inc. on CreditWatch with positive implications. IRSA INVERSIONES: S&P Assigns B+ Corporate Credit Rating -------------------------------------------------------- Standard & Poor's Ratings Services assigned its 'B+' corporate credit rating to Argentina-based real estate company IRSA Inversiones y Representaciones SA. At the same time, S&P assigned a 'B+' rating to an upcoming issuance of US$150 million 10-year bullet bonds. The outlook is stable. "The ratings on IRSA reflect the company's geographical concentration in the highly cyclical Argentine real estate market," said Standard & Poor's credit analyst Luciano Gremone. "These factors are partially offset by the company's strong market position, a moderate consolidated debt level in relation to its strong asset base, and the quality and good location of its diverse asset portfolio," Mr. Gremone continued. IRSA will use the new debt primarily to finance capital expenditures, particularly its recently closed acquisition of the Republica and La Nacion office buildings. The company intends to maintain a portion of the issuance in cash to fund future business opportunities, which it may opportunistically move forward. Standard & Poor's expects IRSA to deploy a fairly aggressive growth strategy and invest about US$200 million to US$250 million in fiscal 2007 and 2008 to continue to actively expand its office and residential portfolio through developments and acquisitions, such as the Santa Maria residential development and other office buildings. Total debt will rise to US$290 million after the issuance, from about US$100 million as of September 2006, but the increase in leverage will be somewhat offset by the expectation that most of the new projects will start producing revenues very soon after the acquisition. The stable outlook reflects Standard & Poor's expectations that the company will carry out its growth strategy mainly by developing rentals and other assets that produce revenues quickly. An upgrade would require an improvement in Argentina's business environment that could translate into more predictable performance in the real estate market in the country. The rating and/or outlook could come under pressure if macroeconomic conditions negatively affect property or rental prices, if the company's growth strategy becomes more aggressive, or if adjusted EBITDA interest coverage and adjusted FFO deteriorate to less than 2x and 15%, respectively. LA SEGUNDA COOPERATIVA: Moody's Affirms B2 Fin. Strength Rating --------------------------------------------------------------- Moody's Latin America affirmed La Segunda Cooperativa's B2 insurance financial strength rating with a stable outlook and has placed the company's A2.ar insurance financial strength rating on the Argentina national scale on review for possible upgrade. In addition, Moody's affirmed both the B2 and A1.ar insurance financial strength ratings of the subsidiary, La Segunda ART, which is 74% owned by La Segunda Cooperativa and 11.7% by Asociacion de Cooperativas Argentinas. The outlooks for these ratings are all stable. La Segunda Cooperativa is the property & casualty insurer of the regional La Segunda Group, which comprises: -- La Segunda ART; -- La Segunda Personas; and -- La Segunda Retiro. La Segunda Cooperativa specializes in underwriting personal lines insurance and coverages for small and medium-size companies distributed mainly through local brokers or producers. These relationships have proven to be very steady for the cooperative. The rating agency explained that the B2 IFS rating on La Segunda is based on its fine market share, brand recognition and its good profitability. La Segunda is one of the top ten property and casualty primary insurers in Argentina, holding an overall market share of 3.3% in the general insurance sector and is among the top three insurers in the important province of Province of Santa Fe. Moody's said, however, that although the company's underwriting expense ratio compares unfavorably on a global basis, it is in line with or even somewhat better than the average of the Argentine national market. Finally, the company's five-year return on average equity was 6.6%, in line with a global Baa rating category. Moody's also cited another important factor behind its B2 IFSR rating -- the company's relatively low underwriting leverage relative to the median of B2-rated companies. Commenting on some negative credit factors or concerns, Moody's noted La Segunda's relative lack of business diversification and its underwriting losses are both a credit weakness relative to the highest rated companies in the region. La Segunda's overall underwriting risk is highly connected to the cycles of the motor business line, which is usually highly volatile and has not been profitable. Motor business represents 63% of its total net written premiums and hail/crop insurance make up another 20%. The motor business line includes third party liability coverage for car accidents, which is usually considered one of the longest tail business in Argentina. Moody's emphasized that La Segunda's B2 global insurance financial strength rating is also influenced by Argentina's country ceiling for local currency bonds and bank deposits, that can depress its assets quality. At present, a significant part of La Segunda's assets are investments exposed to Argentine sovereign risk, which are essentially speculative grade. However, the cooperative holds approximately 16% of its total cash and invested assets in investment-grade bank deposits in New York and in shares of mutual funds. Moody's further notes as positive that the company's use of reinsurance is sparing, and the absence of goodwill on its balance sheet. Regarding La Segunda's A2.ar national scale rating, Moody's noted that the review for possible upgrade is prompted primarily by the company's continued relatively strong performance -- despite a high reliance on investment returns -- as measured by its returns on equity over the last three years which have averaged about 10%, and on its controlled underwriting leverage. The Cooperative continues to serve a growing and ample base of clients, being one of the top three insurance providers in the important province of Santa Fe. Moody's review will focus on the sustainability of La Segunda's operating performance and leverage profile. In Moody's opinion, a positive rating action could emerge if the company continues to demonstrate returns on equity in the 10% range, sustained strong market presence, and if its gross underwriting leverage reduced to the vicinity of 3x adjusted shareholder's equity. Conversely, certain factors could have a negative effect on the rating. In this regard, Moody's cited an additional increase in gross leverage -- above 6 times - coupled with a reduciton in market-share, or with an operating loss leading to a decline in capital of 15% or more over a one year period. Related rating action In the same rating action, Moody's affirmed its B2 IFS rating of La Segunda Aseguradora de Riesgos del Trabajo SA aka La Segunda ART. This affirmation reflects the subsidiary's good market share in its specific market segment as well as the brand recognition, support and commercial integration with its main shareholder -- La Segunda Cooperativa. The agency also pointed to the company's relatively low expense ratio as a positive factor behind its affirmation. Meanwhile, the rating also incorporates weaknesses such as La Segunda ART's high gross underwriting leverage, poor asset quality, and declining profitability during the last three fiscal years. The company's high gross underwriting leverage stood at more than 10x its shareholder's equity at year-end 2006, which was the highest level among its peers. Regarding profitability, although it reported net profits in three of the last 5 years, those profits were relatively modest, primarily as a result of accrued premiums receivables. However, the company's underwriting results were less volatile than the average of its peers in the B category. For La Segunda, relative to its B2 global rating, a positive rating action could result from a sustained and enhanced level of profitability and a reduction in gross underwritting leverage to approximately 5x adjusted shareholders' equity. Furthermore, an upgrade of the company's majority shareholder, La Segunda Cooperativa, would likely have positive implications for La Segunda ART's outlook and its rating. Conversely, a reduction in market-share or other business impairments resulting from ongoing reform of the current legal and regulatory framework and a more exposed labor force due to an increase in economic activity, or operating losses leading to a decline in capital of 15% or more over a one year period could result in a downgrade. Finally, a downgrade of La Segunda Cooperativa would also likely have negative implications for La Segunda ART's outlook and its rating. Based in Rosario, Argentina, La Segunda Cooperativa reported a net profit of ARS6.45 million during the first quarter of 2007 fiscal year, ended September 30, 2006. During the first quarter, shareholders' equity rose by 5.6%, to ARS164.6 million from ARS155.9 million and included the capital contributions from policyholders, which reflects the company's status as a cooperative institution. La Segunda ART reported a net profit of ARS1.3 million during the first quarter of 2007 fiscal year and its shareholder's equity rose by 5.2%, to ARS25.8 million from ARS24.5 million, as of June 30, 2006. LA SEGUNDA ART: Moody's Affirms B2 Financial Strength Rating ------------------------------------------------------------ Moody's Latin America affirmed La Segunda Cooperativa's B2 insurance financial strength rating with a stable outlook and has placed the company's A2.ar insurance financial strength rating on the Argentina national scale on review for possible upgrade. In addition, Moody's affirmed both the B2 and A1.ar insurance financial strength ratings of the subsidiary, La Segunda ART, which is 74% owned by La Segunda Cooperativa and 11.7% by Asociacion de Cooperativas Argentinas. The outlooks for these ratings are all stable. La Segunda Cooperativa is the property & casualty insurer of the regional La Segunda Group, which comprises: -- La Segunda ART; -- La Segunda Personas; and -- La Segunda Retiro. La Segunda Cooperativa specializes in underwriting personal lines insurance and coverages for small and medium-size companies distributed mainly through local brokers or producers. These relationships have proven to be very steady for the cooperative. The rating agency explained that the B2 IFS rating on La Segunda is based on its fine market share, brand recognition and its good profitability. La Segunda is one of the top ten property and casualty primary insurers in Argentina, holding an overall market share of 3.3% in the general insurance sector and is among the top three insurers in the important province of Province of Santa Fe. Moody's said, however, that although the company's underwriting expense ratio compares unfavorably on a global basis, it is in line with or even somewhat better than the average of the Argentine national market. Finally, the company's five-year return on average equity was 6.6%, in line with a global Baa rating category. Moody's also cited another important factor behind its B2 IFSR rating -- the company's relatively low underwriting leverage relative to the median of B2-rated companies. Commenting on some negative credit factors or concerns, Moody's noted La Segunda's relative lack of business diversification and its underwriting losses are both a credit weakness relative to the highest rated companies in the region. La Segunda's overall underwriting risk is highly connected to the cycles of the motor business line, which is usually highly volatile and has not been profitable. Motor business represents 63% of its total net written premiums and hail/crop insurance make up another 20%. The motor business line includes third party liability coverage for car accidents, which is usually considered one of the longest tail business in Argentina. Moody's emphasized that La Segunda's B2 global insurance financial strength rating is also influenced by Argentina's country ceiling for local currency bonds and bank deposits, that can depress its assets quality. At present, a significant part of La Segunda's assets are investments exposed to Argentine sovereign risk, which are essentially speculative grade. However, the cooperative holds approximately 16% of its total cash and invested assets in investment-grade bank deposits in New York and in shares of mutual funds. Moody's further notes as positive that the company's use of reinsurance is sparing, and the absence of goodwill on its balance sheet. Regarding La Segunda's A2.ar national scale rating, Moody's noted that the review for possible upgrade is prompted primarily by the company's continued relatively strong performance -- despite a high reliance on investment returns -- as measured by its returns on equity over the last three years which have averaged about 10%, and on its controlled underwriting leverage. The Cooperative continues to serve a growing and ample base of clients, being one of the top three insurance providers in the important province of Santa Fe. Moody's review will focus on the sustainability of La Segunda's operating performance and leverage profile. In Moody's opinion, a positive rating action could emerge if the company continues to demonstrate returns on equity in the 10% range, sustained strong market presence, and if its gross underwriting leverage reduced to the vicinity of 3x adjusted shareholder's equity. Conversely, certain factors could have a negative effect on the rating. In this regard, Moody's cited an additional increase in gross leverage -- above 6 times - coupled with a reduciton in market-share, or with an operating loss leading to a decline in capital of 15% or more over a one year period. Related rating action In the same rating action, Moody's affirmed its B2 IFS rating of La Segunda Aseguradora de Riesgos del Trabajo SA aka La Segunda ART. This affirmation reflects the subsidiary's good market share in its specific market segment as well as the brand recognition, support and commercial integration with its main shareholder -- La Segunda Cooperativa. The agency also pointed to the company's relatively low expense ratio as a positive factor behind its affirmation. Meanwhile, the rating also incorporates weaknesses such as La Segunda ART's high gross underwriting leverage, poor asset quality, and declining profitability during the last three fiscal years. The company's high gross underwriting leverage stood at more than 10x its shareholder's equity at year-end 2006, which was the highest level among its peers. Regarding profitability, although it reported net profits in three of the last 5 years, those profits were relatively modest, primarily as a result of accrued premiums receivables. However, the company's underwriting results were less volatile than the average of its peers in the B category. For La Segunda, relative to its B2 global rating, a positive rating action could result from a sustained and enhanced level of profitability and a reduction in gross underwritting leverage to approximately 5x adjusted shareholders' equity. Furthermore, an upgrade of the company's majority shareholder, La Segunda Cooperativa, would likely have positive implications for La Segunda ART's outlook and/or its rating. Conversely, a reduction in market-share or other business impairments resulting from ongoing reform of the current legal and regulatory framework and a more exposed labor force due to an increase in economic activity, or operating losses leading to a decline in capital of 15% or more over a one year period could result in a downgrade. Finally, a downgrade of La Segunda Cooperativa would also likely have negative implications for La Segunda ART's outlook and its rating. Based in Rosario, Argentina, La Segunda Cooperativa reported a net profit of ARS6.45 million during the first quarter of 2007 fiscal year, ended Sept. 30, 2006. During the first quarter, shareholders' equity rose by 5.6%, to ARS164.6 million from ARS155.9 million and included the capital contributions from policyholders, which reflects the company's status as a cooperative institution. La Segunda ART reported a net profit of ARS1.3 million during the first quarter of 2007 fiscal year and its shareholder's equity rose by 5.2%, to ARS25.8 million from ARS24.5 million, as of June 30, 2006. PASELEDA SRL: Deadline for Claims Verification Is on March 21 ------------------------------------------------------------- Jorge Ernesto del Hoyo, the court-appointed trustee for Paseleda SRL's bankruptcy proceeding, will verify creditors' proofs of claim until March 21, 2007. Under the Argentine bankruptcy law, Jorge Ernesto del Hoyo is required to present the validated claims in court as individual reports. 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 Paseleda SA and its creditors. Inadmissible claims may be subject for appeal in a separate proceeding known as an appeal for reversal. Jorge Ernesto del Hoyo will also submit a general report that contains an audit of Paseleda SRL's accounting and banking records. The report submission dates have not been disclosed. The debtor can be reached at: Paseleda SRL Cabello 3772 Buenos Aires, Argentina The trustee can be reached at: Jorge Ernesto del Hoyo Cerrito 484 Buenos Aires, Argentina PLUS SRL: Claims Verification Deadline Is on Feb. 16 ---------------------------------------------------- Jorge Raul Cicarilli, the court-appointed trustee for Plus SRL's reorganization proceeding, will verify creditors' proofs of claim until Feb. 16, 2007. Under the Argentine bankruptcy law, Mr. Cirarilli is required to present the validated claims in court as individual reports. A Court in Santa Fe will determine if the verified claims are admissible, taking into account the trustee's opinion and the objections and challenges raised by Plus SRL and its creditors. Inadmissible claims may be subject for appeal in a separate proceeding known as an appeal for reversal. Mr. Cicarilli will also submit a general report that contains an audit of Plus SRL's accounting and banking records. The report submission dates have not been disclosed. Plus SA's creditors will vote on a settlement plan that the company will lay on the table. The debtor can be reached at: Plus SA San Martin 2360 Santa Fe, Argentina The trustee can be reached at: Jorge Raul Cicarilli Boulevard Galvez 1217 Santa Fe, Argentina PLUSPACK SA: Last Day for Claims Verification Is on Feb. 28 ----------------------------------------------------------- A court-appointed trustee for Pluspack SA's reorganization proceeding, will verify creditors' proofs of claim until Feb. 28, 2007. The Trustee will present the validated claims in court as individual reports on April 17, 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 Pluspack SA 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 Pluspack SA's accounting and banking records will follow on June 1, 2007. POSTA DEL ESPINILLO: Claims Verification Is Until March 16 ---------------------------------------------------------- A court-appointed trustee for Posta del Espinillo SA's bankruptcy proceeding, will verify creditors' proofs of claim until March 16, 2007. Under the Argentine bankruptcy law, the trustee is required to present the validated claims in court as individual reports. A Court in Cordoba will determine if the verified claims are admissible, taking into account the trustee's opinion and the objections and challenges raised by Posta del Espinillo and its creditors. Inadmissible claims may be subject for appeal in a separate proceeding known as an appeal for reversal. The Trustee will also submit a general report that contains an audit of Posta del Espinillo's accounting and banking records. The report submission dates have not been disclosed. The debtor can be reached at: Posta del Espinillo SA Ruta Nacional Nro. 9 Marco Juarez Cordoba, Argentina RAMJET SRL: Trustee Verifies Proofs of Claim Until May 2 -------------------------------------------------------- Martin Casares, the court-appointed trustee for Ramjet SRL's bankruptcy proceeding, verifies creditors' proofs of claim until May 2, 2007. Mr. Casares will present the validated claims in court as individual reports on June 21, 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 Ramjet SRL 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 Ramjet SRL' accounting and banking records will follow on August 22, 2007. Mr. Casares is also in charge of administering Ramjet SRL's assets under court supervision and will take part in their disposal to the extent established by law. The debtor can be reached at: Ramjet SRL Jose Ingenieros 3464, Beccar Buenos Aires, Argentina The trustee can be reached at: Martin Casares Centenario 566, San Isidro Buenos Aires, Argentina REARTE-LARRAN: Reorganization Proceeding Concluded -------------------------------------------------- Rearte-Larran SH's reorganization proceeding has ended. Data published by Infobae on its Web site indicated that the process was concluded after a court in Salta approved the debt agreement signed between the company and its creditors. RODOLFI SARA: Names Ana Bilbao as Bankruptcy Trustee ---------------------------------------------------- A court in Santa Fe appointed Ana Bilbao to supervise the reorganization proceeding of Rodolfi Sara NT. Under reorganization protection, control of the company's assets is transferred to Ms. Bilbao. As trustee, Ms. Bilbao will: -- verify creditors' proofs of claim; -- prepare and present individual and general reports in court after the claims are verified; and -- administer Rodolfi Sara's assets under court supervision and take part in their disposal to the extent established by law. The trustee can be reached at: Ana Bilbao Riva Davia 208, San Lorenzo Santa Fe, Argentina SOLUCIONES HARD: Deadline for Claims Verification Is on Feb. 14 --------------------------------------------------------------- Juan Marcelo Villoldo, the court-appointed trustee for Soluciones Hard Pilar SA's bankruptcy proceeding, will verify creditors' proofs of claim until Feb. 14, 2007. Under the Argentine bankruptcy law, Mr. Villoldo is required to present the validated claims in court as individual reports. Court No. 6 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 Soluciones Hard and its creditors. Inadmissible claims may be subject for appeal in a separate proceeding known as an appeal for reversal. Mr. Villoldo will also submit a general report that contains an audit of Soluciones Hard's accounting and banking records. The report submission dates have not been disclosed. Soluciones Hard was forced into bankruptcy at the behest of Jordan Morrison SRL, whom it owes US$14,542.08. Clerk No. 11 assists the court in the proceeding. The debtor can be reached at: Soluciones Hard Pilar SA Teniente General Juan Domingo Peron 1730 Buenos Aires, Argentina The trustee can be reached at: Juan Marcelo Villoldo Uruguay 651 Buenos Aires, Argentina SHERLOCK SA: Last Day for Claims Verification Is on March 5 ----------------------------------------------------------- Norberto Abel Mosca, the court-appointed trustee for Sherlock SA's reorganization proceeding, will verify creditors' proofs of claim until March 5, 2007. Mr. Mosca will present the validated claims in court as individual reports on April 20, 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 Sherlock SA 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 Sherlock SA's accounting and banking records will follow on June 4, 2007. The trustee can be reached at: Norberto Abel Mosca Calle 22 Nro. 922 Mercedes Buenos Aires, Argentina SIIPA SRL: Proofs of Claim Verification Is Until Feb. 5 ------------------------------------------------------- Leonardo Benjamin Lavaque, the court-appointed trustee for Siipa SRL's reorganization proceeding, will verify creditors' proofs of claim until Feb. 5, 2007. Mr. Lavaque will present the validated claims in court as individual reports on March 14, 2006. 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 Siipa SRL 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 Siipa SRL's accounting and banking records will follow on April 30, 2007. On Oct. 22, 2007, Siipa SRL's creditors will vote on a settlement plan that the company will lay on the table. The trustee can be reached at: Leonardo Benjamin Lavaque Adolfo Ganames 551, Tartagal Salta, Argentina YPF SA: Repsol Deploys Cisco for Latin American Communications -------------------------------------------------------------- Cisco Systems, a US networking equipment vendor, said in a statement that it has upgraded YPF parent firm Repsol's Latin American communications network. Business News Americas relates that Cisco Systems deployed 2,800 Internet protocol telephone terminals for its solution Cisco Call Manager and will continue to install more phones to serve the Repsol's 15,000 workers in the region. According to BNamericas, Repsol has spent US$3 million on the equipment. BNamericas emphasizes that Repsol deployed Internet protocol technology in Spain and Argentina before deciding to use it to other Latin American nations where it has operations like: -- Brazil, -- Chile, -- Ecuador, -- Colombia, -- Mexico, -- Peru, and -- Trinidad & Tobago. Fernando Beninati, Cisco Argentina's account executive, told BNamericas, "This project will allow Repsol YPF to have one of the biggest IP (Internet protocol) telephony networks in Latin America with coverage of most of Argentina and offices in the main countries across the region." The report says that the project may include the installation of: -- videotelephony, -- videoconferencing, and -- unified messaging solutions. Cisco Systems' technological partner for this project is networking solutions integrator Softnet-Logicalis, which provides consulting services and support for the platform, BNamericas states. About Cisco Systems Cisco Systems, Inc., designs, manufactures and sells networking and other products related to the communications and information technology industry, and provides services associated with these products and their use. Its products are installed at corporations, public institutions, telecommunications companies, and businesses of all sizes. Cisco systems provides a line of products for transporting data, voice, and video within buildings, across campuses, and around the world. 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. * * * Fitch Ratings assigned BB+ long-term issuer default rating on YPF SA. Fitch said the outlook is stable. Moody's Investors Service assigned these ratings on YPF SA: -- B2 long-term foreign currency corporate family rating; and -- Ba2 foreign currency senior unsecured rating; Moody's said the outlook is negative. VALEANT PHARMA: Inks Licensing Agreement for Rights to (C)Xyrem --------------------------------------------------------------- Valeant Pharmaceuticals International has signed a licensing agreement for the Canadian rights to (C)Xyrem (sodium oxybate) for the treatment of cataplexy, a debilitating symptom of narcolepsy, from Jazz Pharmaceuticals, Inc. The agreement calls for Valeant to pay Jazz Pharmaceuticals an upfront fee and payments based on sales. "Xyrem is a strategic fit for our existing marketing and sales organizations in Canada and we are excited about the potential of this agreement and the opportunity to work with Jazz Pharmaceuticals," Valeant's president and chief executive officer, Timothy C. Tyson said. "The product expands our neurology business in Canada in a niche market with unmet medical needs." Xyrem, a liquid formulation of sodium oxybate, is the first and only product approved in Canada to treat cataplexy, which is a sudden loss of muscle tone associated with narcolepsy. Valeant expects to launch and distribute Xyrem in Canada in mid 2007 through its neurology sales force. Xyrem has demonstrated an acceptable safety profile in narcoleptics with cataplexy when administered in nightly divided doses of 6 to 9 g with a recommended starting dose of 4.5 g/night. The adverse event profile was generally consistent with the known pharmacological actions of sodium oxybate and intercurrent disease states. The most commonly reported adverse drug reactions are dizziness, nausea, and headache, occurring in 17-25 percent of patients. These are not the only possible effects with Xyrem. Patients administered Xyrem should be monitored for treatment-emergent adverse events. Headquartered in Costa Mesa, California, Valeant Pharmaceuticals International (NYSE:VRX) -- http://www.valeant.com/is a research-based specialty pharmaceutical company that discovers, develops, manufactures and markets products primarily in the areas of neurology, infectious disease and dermatology. The company has offices in Argentina. * * * As reported in the Troubled Company Reporter on Nov. 20, 2006, Standard & Poor's Ratings Services lowered its ratings on Costa Mesa, California-based Valeant Pharmaceuticals International. The corporate credit rating was lowered to 'B+' from 'BB-'. The ratings remain on CreditWatch with negative implications, where they were placed Oct. 24, 2006, to reflect the ongoing uncertainty regarding the company's inability to file its Form 10-Q for the third quarter and the consequences if the company is not able to resolve the situation in 60 days. * ARGENTINA: Implements Tax Hike on Soybean Exports --------------------------------------------------- The Argentine government has implemented a tax hike from 24% to 27.5% on soybean exports and its products, the Associated Press reports. Soy byproduct taxes are also expected to increase to 24% from 20%. This is a move by the government to ease the inflation on basic consumer foods. The AP said, citing Econmy Minister Felisa Miceli, that the added revenue from the increased export tax would be directed to subsidies on producers of basic foodstuff and would raise an added US$100 million in the coming year for these subsidies. This is to make up for the growing production costs. Farmers and grain exporters are not happy with this tax hike implementation, however Pres. Nestor Kirchner is intent on keeping the prices in check for consumers that are still recovering from the 2001-2002 economic crisis, the AP relates. The inflation for 2006, almost reached 10%. Ms. Miceli told the AP that producers have to pay in dollars in a peso economy, but the government is positive that through this measure, the subsidies would lessen the producer's passing off their costs to consumers. "This is a mechanism under which international prices can increase without having this felt at the (dinner) table," Ms. Miceli told the AP. Argentine shave enjoyed for 11 years until December 2001 a peso currency secured by law that is equal to the U.S. dollar but crisis in that year effected a more than 70% depreciation of the local peso that until now caused many badly eroded wages, the AP relates. The AP says that the tax hike was implemented on Monday beginning with soy oil products that are exported to foreign markets. * * * Fitch Ratings assigned these ratings on Argentina: Rating Rating Date ------ ----------- Country Ceiling B+ Aug. 1, 2006 Local Currency Long Term Issuer B Aug. 1, 2006 Short Term IDR B Dec. 14, 2005 Long Term IDR RD Dec. 14, 2005 ============= B A H A M A S ============= PINNACLE ENT: Prices Offering of 10 Mln Shares of Common Stock -------------------------------------------------------------- Pinnacle Entertainment, Inc., disclosed that the underwritten public offering of 10.0 million of its newly issued shares of common stock has been priced at US$32.00 per share, which will result in gross proceeds to Pinnacle of US$320 million. Bear, Stearns & Co. Inc. and Lehman Brothers Inc. are acting as joint book-running managers of the offering. In addition, Deutsche Bank Securities Inc. is acting as lead manager of the offering. The offering is expected to close on Jan. 18, 2007, subject to customary closing conditions. The underwriters of the offering have a 30-day option to purchase an additional 1.5 million shares of common stock from Pinnacle. The company expects to use the proceeds of this offering for general corporate purposes and for one or more of its capital projects, including expansions at existing facilities, its St. Louis construction projects, its Sugarcane Bay and Atlantic City development projects, and possible other future development projects. Copies of the prospectus supplement relating to the offering may be obtained from: Bear, Stearns & Co. Inc. Attn: Prospectus Department 383 Madison Avenue, New York New York 10179 Tel: 1-866-803-9204 -- or -- Lehman Brothers Inc. c/o ADP Financial Services Attn: Prospectus Fulfillment 1155 Long Island Avenue Edgewood, NY 11717 Fax: 631-254-7268 E-mail: monica_castillo@adp.com Headquartered in Las Vegas, Nevada, Pinnacle Entertainment Inc. (NYSE: PNK) -- http://www.pnkinc.com/-- owns and operates casinos in Nevada, Louisiana, Indiana and Argentina, owns a hotel in Missouri, receives lease income from two card club casinos in the Los Angeles metropolitan area, has been licensed to operate a small casino in the Bahamas, and owns a casino site and has significant insurance claims related to a hurricane- damaged casino previously operated in Biloxi, Mississippi. Pinnacle opened a major casino resort in Lake Charles, Louisiana in May 2005 and a new replacement casino in Neuquen, Argentina in July 2005. * * * As reported in the Troubled Company Reporter on Oct. 4, 2006, Moody's Investors Service's confirmed Pinnacle Entertainment Inc.'s B2 Corporate Family Rating. At the same time, Standard & Poor's Ratings Services affirmed its 'BB-' rating and '1' recovery rating following Pinnacle Entertainment Inc.'s US$250 million senior secured bank facility add-on. WINN-DIXIE: Has 54 Million Outstanding Shares of Common Stock ------------------------------------------------------------- Winn-Dixie Stores, Inc., pursuant to its Amended and Restated Articles of Incorporation, disclosed that the number of the outstanding shares of its common stock (that shareholders should take into account in determining their percentage stock ownership of the company) is 54 million shares. The company's Amended and Restated Articles of Incorporation provide that, in certain circumstances, transfers of the company's common stock by certain stockholders will be subject to advance notice requirements and possible restriction or prohibition. A description of these restrictions and a complete copy of the Amended and Restated Articles of Incorporation are included in the company's Form 8-A/A, which was filed with the U.S. Securities and Exchange Commission on Nov. 21, 2006, and may be obtained at http://www.sec.gov The 54 million share count that shareholders should use in determining their percentage stock ownership of the company for purposes of the transfer restrictions excludes options to purchase 675,000 shares and restricted stock units relating to 405,000 shares which have been granted to Chairman and Chief Executive Officer Peter Lynch under the management incentive plan. The company has authorization to issue a total of 5.4 million shares of common stock under the management incentive plan. 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. The Honorable Jerry A. Funk confirmed Winn-Dixie's Joint Plan of Reorganization on Nov. 9, 2006. Winn-Dixie emerged from bankruptcy on Nov. 21, 2006. (Winn-Dixie Bankruptcy News, Issue No. 62; Bankruptcy Creditors' Service, Inc., http://bankrupt.com/newsstand/or 215/945-7000). ============= B E R M U D A ============= C TANKER: To Hold Final General Meeting on Feb. 7 ------------------------------------------------- C Tanker Ltd.'s final general meeting will be at 9:30 a.m. on Feb. 7, 2007, or as soon as possible, at the liquidator's place of business. C Tanker's shareholders will determine during the meeting, through a resolution, the manner in which the books, accounts and documents of the company and of the liquidator will be disposed. The liquidator can be reached at: Robin J. Mayor Messrs. Conyers Dill & Pearman, Clarendon House, Church Street Hamilton, Bermuda CAPCOUNT (BERMUDA): Final General Meeting Is on Feb. 12 ------------------------------------------------------- Capcount (Bermuda) Ltd.'s final general meeting will be at 10:00 a.m. on Feb. 12, 2007, or as soon as possible, at the liquidator's place of business. Capcount (Bermuda)'s shareholders will determine during the meeting, through a resolution, the manner in which the books, accounts and documents of the company and of the liquidator will be disposed. The liquidator can be reached at: Jennifer Y. Fraser Canon's Court, 22 Victoria Street Hamilton, Bermuda PARAISO LTD: Final Shareholders Meeting Is on Jan. 21 ----------------------------------------------------- Paraiso Ltd.'s final general meeting will be at 10:00 a.m. on Jan. 21, 2007, or as soon as possible, at the liquidator's place of business. Paraiso Ltd.'s shareholders will determine during the meeting, through a resolution, the manner in which the books, accounts and documents of the company and of the liquidator will be disposed. The liquidator can be reached at: James A.F. Watlington Alexanders 73 Front Street, 4th Floor Hamilton, Bermuda REFCO INC: RCM Trustee Withdraws Objection to PlusFunds' Claims --------------------------------------------------------------- In a stipulation approved by the U.S. Bankruptcy Court for the Southern District of New York, Marc S. Kirschner, Chapter 11 Trustee of Refco Capital Markets, Ltd., and Refco Inc. and its debtor-affiliates agree to withdraw their objections to PlusFunds Group, Inc.'s claims, with prejudice. PlusFunds filed amended proofs of claim on Dec. 1, 2006. The parties agree that the Amended Claims will supersede all Claims filed by PlusFunds in the Refco cases. In addition, allowance of the Amended Claims against all the Debtors and Refco LLC will, in the aggregate, be capped at US$7,000,000. PlusFunds will be required to establish in further proceedings which Debtor, if any, is liable for the Amended Claim or Claims, and in what amount. The Debtors will establish reserves as appropriate for a potential US$7,000,000 claim in the aggregate against all the Debtors and Refco LLC. The aggregate reserve will be used to pay any allowed Amended Claim against any of the Debtors and Refco LLC not exceeding US$7,000,000. Any reserve taken by a Debtor in connection with the US$7,000,000 cap will reduce, dollar-for-dollar, the reserve amount that must be taken by the other Debtors with respect to the Amended Claims. If and to the extent the Amended Claims should be adjudicated as a liability of RCM, the RCM Trustee will classify the Amended Claim as a Class 3 RCM FX/Unsecured Claim under the Plan. The parties reserve all rights with respect to the validity of the Amended Claims as against any Debtor or Refco LLC, or whether the same is subject to subordination. The Debtors and Refco LLC reserve the right to seek avoidance of any preferential payment to PlusFunds. PlusFunds reserves the right to assert all defenses to the same. On Dec. 7, 2006, PlusFunds cast ballots to reject the Plan in the full amount of its Amended Claims. Pursuant to the Stipulation, the Ballots cast will not be counted for purposes of numerosity, value or existence of the Amended Claims at any or all of the Debtors. However, any elections contained in any Ballot will be deemed valid to the extent the applicable Amended Claim is allowed. PlusFunds withdraws its Plan confirmation objection with prejudice and its request pursuant to Bankruptcy Rule 3018 seeking temporarily allowance of the Amended Claims for voting purposes. Prior to the stipulation, Marc S. Kirschner, Chapter 11 Trustee of Refco Capital Markets, Ltd., asks Judge Drain to disallow and expunge Claim No. 11289 filed by PlusFunds against RCM for approximately US$532,000,000. The Claim asserts entitlement to an amount precisely equal to a US$312,000,000 preference cash, plus PlusFunds' "enterprise value" of US$220,000,000 and "unliquidated damages in an amount to be determined at trial" related to PlusFunds' lost management fees. Claim No. 11289 arose from the decline of PlusFunds' assets under management in the wake of a preference action commenced by the Official Committee of Unsecured Creditors against SPhinX Managed Futures Fund SPC. The SPhinX Preference Action sought to avoid a US$312,000,000 cash transfer placed with RCM by SPhinX to segregated customer accounts at Refco, LLC. The Preference Cash was then transferred from Refco LLC outside of Refco entirely, to accounts at Lehman Brothers. Jared R. Clark, Esq., at Bingham McCutchen LLP, in New York, relates that on October 13, 2005, Refco, Inc., and its affiliates imposed a 15-day moratorium on withdrawals from RCM accounts because of insufficient liquidity within RCM. On December 16, Judge Drain entered a temporary restraining order freezing and attaching SPhinX's assets in an amount equal to the Preference Cash. To resolve the SPhinX Preference Action, the Creditors Committee and SPhinX entered into a settlement, subsequently approved by Judge Drain, providing for a US$263,000,000 payment to RCM. The SPhinX Settlement is currently subject to appeal pending before the U.S. District Court for the Southern District of New York. Mr. Clark tells Judge Drain that Claim No. 11289 fails to articulate any facts that could serve as the basis for an alleged breach of a contractual obligation or common law duty by RCM. Mr. Clark argues that the unspecified charge of wrongdoing does not approach the level of particularity required for a fraud claim under Rule 9(b) of the Federal Rules of Civil Procedure. Specifically, he states, the Claim does not allege with particularity: (1) what statement or omission RCM made or failed to make; (2) scienter on the part of RCM; (3) how or whether PlusFunds replied; or (4) what specific injury resulted. Furthermore, Mr. Clark contends that PlusFunds' general allegations of breach of contract, breach of fiduciary duty, aiding, abetting, and conspiracy are similarly unsubstantiated. He notes that the Claim asserts breach of contract without specifying the nature of the contract with RCM that PFGI replies upon; duty without alleging a relationship; and conspiracy without naming the cabalists. "The Claim's general, innuendo-laden allegations themselves demonstrate that nothing lies back of it; it is prima facie invalid," Mr. Clark asserts. To the extent the Claim suggests the SPhinX Transfer itself started a chain of events leading to PlusFunds' collapse, PlusFunds was the catalyst, Mr. Clark points out. Therefore, he says, PlusFunds' subsequent wounds were self-inflicted. To the extent the Claim suggests that Refco's filing for bankruptcy caused PlusFunds to lose value, PlusFunds fails to state a cognizable claim, Mr. Clark maintains. About Refco Inc. Headquartered in New York City, Refco Inc. (OTC: RFXCQ) -- 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 U.S. 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. 54; Bankruptcy Creditors' Service, Inc., http://bankrupt.com/newsstand/or 215/945-7000) Plan Update On Sept. 14, 2006, Refco, Inc., and 25 of its subsidiaries, along with Marc S. Kirschner, the Chapter 11 Trustee for the estate of Refco Capital Markets, Ltd., delivered a Chapter 11 plan of reorganization and accompanying Disclosure Statement to the Court. On Oct. 10, 2006, the Debtors filed an Amended Plan and Disclosure Statement and on Oct. 13, filed a Modified Amended Disclosure Statement. On Oct. 16, 2006, the Court gave its tentative approval on the Disclosure Statement and the Court Clerk entered an order on Oct. 20, 2006. On Dec. 15, the Modified Joint Chapter 11 Plan of Refco Inc. and certain of its direct and indirect subsidiaries, including Refco Capital Markets, Ltd., and Refco F/X Associates LLC, was confirmed by the Court. That Plan became effective on Dec. 26, 2006. REFCO INC: Wants West Loop's Claims Reduced ------------------------------------------- Refco Inc. and its debtor-affiliates ask the U.S. Bankruptcy Court for the Southern District of New York to reduce Claim Nos. 9884 and 9887 so that their maximum amount cannot exceed the statutory cap under Section 502(b)(6) of the Bankruptcy Code. Refco Group Ltd., LLC, and 550 Jackson Associates Limited Liability Company were parties to a lease dated April 24, 2001, for an office space located at 550 West Jackson Boulevard, in Chicago, Illinois. West Loop Associates, Inc., acquired title to the Premises, with an assignment of the Lease. RGL rejected the Lease, effective as of August 15, 2006. West Loop Claim Nos. 9884 and 9887 West Loop filed Claim Nos. 9884 and 9887 against RGL asserting damages equal to US$67,482,808 caused by: (1) RGL's breach and rejection of the Lease; (2) acts of occupants of the Premises during the term of the Lease that caused the filing of mechanic's liens against the Building; (3) RGL's fraudulent transfer of approximately US$1,325,000,000 to Refco Group Holdings, Inc., in connection with a leveraged recapitalization that left RGL undercapitalized and insolvent; and (4) RGL's fraud, including misrepresentations, omissions, and concealment of material facts with the intent to defraud West Loop. Specifically, West Loop asserted that: (i) assuming that payment of rent remains current under the Lease until August 15, the base rent owed from August 16, 2006, to March 31, 2015, will total US$36,159,764; and (ii) an additional rent is owed under the Lease from August 16 to March 31, 2015, totaling approximately US$27,484,008. Thus, according to West Loop, the Base Rent and Additional Rent from August 16 to the end of the Lease total US$63,643,772. Furthermore, West Loop held that the total rent reserved under the Lease from the Petition Date until March 2015 is US$69,041,563, of which 15% equals the US$10,256,235 Rejection Claim Amount. West Loop also asserted that it will incur additional estimated damages for US$3,002,217 in commissions, and US$8,114,100 in tenant improvement costs in connection with re-letting the premises. The Debtors object to West Loop's calculation of the Rejection Claim Amount on the grounds that: (1) West Loop failed to include all of its claims relating to the rejection of the Lease that are subject to Section 502(b)(6) cap, including its fraud-related damage claims, and the cost of re-letting the Premises, including the commissions. (2) rejection damage calculation is incorrect; and (3) the Building is in Illinois and, under Illinois law, West Loop has a duty to mitigate its damages, and has the burden of proving its mitigation. In addition, the Debtors want West Loop's claim for reimbursement of attorneys' fees and costs denied because West Loop: -- did not provide documentation evidencing that it incurred no less than US$366,491 in attorneys' fees and costs; and -- has not demonstrated that the fees and costs are reimbursable for the full amount sought. Moreover, the Debtors state that the attorneys' fees and costs are subject to cap under Section 502(b)(6) of the Bankruptcy Code. Sally McDonald Henry, Esq., at Skadden, Arps, Slate, Meagher & Flom LLP, in New York, tells the Court that there is no evidence that RGL was insolvent in September 2005. Since there was no default, there could be no false statement of material fact in the estoppel certificate. Ms. Henry argues that there is no evidence that the RGL estoppel certificate was issued to induce West Loop to act, or that RGL received any benefit from executing the certificate. Ms. Henry summons West Loop to demonstrate that its damages result from relying on RGL's purported false statements. The Debtors maintain that West Loop has not demonstrated that it is entitled to recover additional estimated damages equal to US$3,002,217 in commissions and US$8,114,100 in tenant improvement costs with reletting the Premises. The Debtors insist that even if the Lease allows West Loop to recover the Reletting Claims, the costs of reletting the Premises were caused by the rejection of the Lease, and, thus should be capped under Section 502(b)(6). West Loop Related Claims The Debtors further ask the Court to disallow and expunge: (a) a master proof of claim -- Claim No. 11560 -- filed by West Loop against RGL and its affiliates, except Refco Capital Markets, Ltd., Refco, Inc., and Refco, LLC; (b) Claim Nos. 9885 and 9886 filed by West Loop against Refco asserting damages caused by Refco's fraud; and (c) Claim Nos. 9882 and 9883 filed by West Loop against New Refco Group Ltd., LLC, asserting claims to the extent New RGL (x) had knowledge of, or was involved in, the fraudulent activities of RGL, Refco LLC, and (y) received any benefit on account of the breaches or fraudulent activities of entities, or is found responsible for the conduct of the entities. Ms. Henry insists that the Related Claims should be disallowed because: (i) West Loop has not demonstrated that a fraud claim lies against RGL; (ii) West Loop did not specifically assert that the RGL Affiliates made any misleading misrepresentations that were relied on by West Loop resulting in damages, nor has West Loop shown any other basis on which entities other than RGL could be liable; and (iii) West Loop's broad allegation that the RGL Affiliates are liable, to the extent that any or all of them had knowledge of or were involved in the fraudulent activities of Refco, Refco LLC, or RGL, received any benefit on account of the breaches or fraudulent activities of those entities or are found responsible for their conduct, does not satisfy Rule 9(b) of the Federal Rules of Civil Procedure. To the extent that the Related Claims are not disallowed and expunged in their entirety, the Debtors seek that they should be subject to the Section 502(b)(6) cap because West Loop's damages, if any, arise from RGL's rejection of the Lease. Debtors Seek Partial Summary Judgment The Debtors ask Judge Drain to enter an order granting partial summary judgment under Rule 7056 of the Federal Rules of Bankruptcy Procedure and Civil Rule 56, finding that any fraud- related damages asserted in the West Loop Claims are subject to statutory limitation on lease rejection claims pursuant to Section 502(b)(6). Ms. Henry states that West Loop's recharacterization of its lease termination damages claim to a fraud claim is irrelevant. There was a landlord-tenant relationship between West Loop and RGL. West Loop's fraud claim is a claim arising from the termination of a lease, she says. Ms. Henry maintains that even if the Court favors West Loop, the asserted fraud-related damages should be subject to Section 502(b)(6) limitation on lease termination damage claims. The Official Committee of Unsecured Creditors supports the Debtors' position. West Loop Responds A. Brent Truitt, Esq., at Hennigan, Bennett & Dorman LLP, in New York, argues that West Loop's fraud claim and the damages arising from that claim are factually and legally independent and distinct from any claims and damages that resulted from RGL's rejection of the Lease. Mr. Truitt notes that the Court has (i) previously rejected the very arguments now raised by the Debtors, and (ii) expressly held that Section 502(b)(6) does not apply to damages resulting from a sale of real property. Mr. Truitt reminds Judge Drain that the Bankruptcy Court for the Southern District of New York has recognized in Leslie Fay Cos., Inc. v. Corporate Property Associates 3 (In re The Leslie Fay Cos., Inc.), 166 B.R. 802 (Bankr. S.D.N.Y. 994), that "it is simply impossible to draw the inference which Leslie Fay says flows from the facts which it has pleaded, that the fair market value of the Premises is nothing more than the discounted rental stream." Rather, Mr. Truitt points out, the damages caused by West Loop's payment of a purchase price in excess of the Property's actual value is not simply lost cash flow, but is based on the higher capitalization rate that would have been applied by West Loop in October 2005 to calculate its purchase price, had it not been misled about RGL's solvency and financial condition. Mr. Truitt insists that the Section 502(b)(6) cap simply does not apply to West Loop's fraud-based claims, and, thus the Debtors' request should be denied. About Refco Inc. Headquartered in New York City, Refco Inc. (OTC: RFXCQ) -- 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 U.S. 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. 54; Bankruptcy Creditors' Service, Inc., http://bankrupt.com/newsstand/or 215/945-7000) Plan Update On Sept. 14, 2006, Refco, Inc., and 25 of its subsidiaries, along with Marc S. Kirschner, the Chapter 11 Trustee for the estate of Refco Capital Markets, Ltd., delivered a Chapter 11 plan of reorganization and accompanying Disclosure Statement to the Court. On Oct. 10, 2006, the Debtors filed an Amended Plan and Disclosure Statement and on Oct. 13, filed a Modified Amended Disclosure Statement. On Oct. 16, 2006, the Court gave its tentative approval on the Disclosure Statement and the Court Clerk entered an order on Oct. 20, 2006. On Dec. 15, the Modified Joint Chapter 11 Plan of Refco Inc. and certain of its direct and indirect subsidiaries, including Refco Capital Markets, Ltd., and Refco F/X Associates LLC, was confirmed by the Court. That Plan became effective on Dec. 26, 2006. TONINAS LTD: Shareholders to Gather for Final Meeting on Jan. 21 ---------------------------------------------------------------- Toninas Ltd.'s final general meeting will be at 10:00 a.m. on Jan. 21, 2007, or as soon as possible, at the liquidator's place of business. Toninas Ltd.'s shareholders will determine during the meeting, through a resolution, the manner in which the books, accounts and documents of the company and of the liquidator will be disposed. The liquidator can be reached at: James A.F. Watlington Alexanders 73 Front Street, 4th Floor Hamilton, Bermuda VILLAIR LTD: Last Day for Proofs of Claim Filing Is on Feb. 12 -------------------------------------------------------------- Villair Ltd.'s creditors are given until Feb. 12, 2007, to prove their claims to Alain Audrey, the company's liquidator, or be excluded from receiving any distribution or payment. In their proofs of claim, creditors must indicate their full names, addresses, the full particulars of their debts or claims, and the names and addresses of their lawyers, if any. Villair Ltd.'s shareholders agreed on Jan. 3, 2007, to place the company into voluntary liquidation under Bermuda's Companies Act 1981. The liquidator can be reached at: Alain Audrey c/o Thistle House 4 Burnaby Street Hamilton, Bermuda ============= B O L I V I A ============= * BOLIVIA: State Mining Firm May Invest US$500 Million in Sector ---------------------------------------------------------------- Bolivian mining minister Guillermo Dalence told Business News Americas that Comibol, the nation's state mining corporation, expects to settle investments of US$500 million in 2007 with money from loans or by establishing joint ventures to reactivate the sector. Minister Dalence told Agencia Boliviana de Informacion that the lack of interest of previous administrations has hindered the deployment of a mining policy that works in favor of Bolivia. The country had become used to receiving investments of between US$10 million and US$15 million for exploration alone, and until a few years ago was the world's largest tin producer. Minister Dalence told BNamericas that the mining ministry has started to implement structural measures related to: -- tax issues, -- return of mining concessions to state hands, and -- nationalization of mining interests, respecting foreign investment and legal security. Minister Dalence commented to BNamericas, "It is doing a meticulous job because the measures that are being adopted in mining have to be technically impeccable as well as economically and financially responsible. We are obligated to do an arduous job because mining has been the victim of systematic destruction for a long time. We agree with the president of the republic [Evo Morales] when he says that this should be a year for mining." Agencia Boliviana relates that Bolivia is far behind in terms of exploration. The latest studies indicate that 80% of its territory has never been explored. Social groups, universities and Comibol are analyzing offers for the sector, BNamericas notes. The proposals will be addressed during a mining summit in Oruro slated for the end of this month. The Bolivian government said in December that it will increase the complementary mining tax and incorporate several minerals into the system that are not being taxed, BNamericas states. * * * Fitch Ratings assigned these ratings on Bolivia: Rating Rating Date ------ ----------- Country Ceiling B- Jun. 17, 2004 Long Term IDR B- Dec. 14, 2005 Local Currency Long Term Issuer Default Rating B- Dec. 14, 2005 =========== B R A Z I L =========== ACTUANT CORP: Earns US$25.1 Mil. in First Quarter Ended Nov. 30 --------------------------------------------------------------- Actuant Corp. reported first quarter fiscal 2007 net earnings of US$25.1 million, which compares favorably with net earnings of US$21.3 million for the first quarter of fiscal 2006. First quarter sales increased to US$343 million from US$284 million in the prior year, driven by strong base business growth and approximately US$25 million of sales from acquired businesses. Excluding foreign currency exchange rate changes and sales from acquired businesses, first quarter fiscal 2007 sales increased approximately 9% from the comparable prior year period. This increase was driven by growth in all four reportable segments, including strong growth in the Industrial and Actuation Systems segments. At Nov. 30, 2006, the company's balance sheet showed US$1.2 billion in total assets, US$845.8 million in total liabilities, and US$397 million in total stockholders' equity. Net debt was US$455 million, unchanged from the beginning of the quarter. Consistent with prior years, Actuant's first quarter cash flow was impacted by seasonal trends including working capital growth and employee incentive compensation payments for the prior year. Robert C. Arzbaecher, president and chief executive officer of Actuant, commented, "Actuant is off to a solid start in fiscal 2007 with 9% core sales growth, which was slightly ahead of our expectations. Additionally, first quarter EPS increased approximately 16% from last year, driven by higher sales and the benefit of prior year acquisitions." Mr. Arzbaecher continued, "We were especially pleased with the performance of our Industrial segment, which generated strong increases in both core sales and profit margins. Our overall profit margins were down year-over-year as a result of unfavorable sales mix and lower Actuation System and Electrical segment profitability. Our previously announced European Electrical restructuring activities continue on plan, although there was limited financial impact this quarter." He added, "We are also pleased with our acquisition progress, both in integrating previously announced acquisitions and in identifying new acquisition opportunities. We've had success in supplementing our core revenue growth with acquisitions, and this combination has helped Actuant double its sales over the last three years." Full-text copies of the company's consolidated financial statements for the quarter ended Nov. 30, 2006, are available for free at http://researcharchives.com/t/s?1856 Headquartered in Butler, Wisconsin, Actuant Corp. (NYSE: ATU) -- http://www.actuant.com/-- is a diversified industrial company with operations in more than 30 countries, including Brazil in Latin America. The Actuant businesses are market leaders in highly engineered position and motion control systems and branded hydraulic and electrical tools and supplies. Since its creation through a spin-off in 2000, Actuant has grown its sales from US$482 million to over US$1 billion and its market capitalization from US$113 million to over US$1.4 billion. The company employs a workforce of more than 6,300 worldwide. * * * As reported in the Troubled Company Reporter-Europe on Oct. 24, Moody's Investors Service affirmed its Ba2 corporate family rating for Actuant Corp. ALERIS INT: Discloses Management Promotions ------------------------------------------- Aleris International, Inc., disclosed promotions effective Jan. 9, 2007. Christopher R. Clegg has been promoted to Executive Vice President, General Counsel and Secretary. He has served as the company's Senior Vice President, General Counsel and Secretary since December 2004. Mr. Clegg joined Commonwealth Industries, Inc. in June 2004 as Vice President, General Counsel and Secretary. Before joining Commonwealth, he had served as Senior Vice President, General Counsel and Secretary of Noveon, Inc. since March 2001. Mr. Clegg also held several senior legal positions with the Goodrich Corporation and was a corporate lawyer in private practice with the law firms of Squire, Sanders & Dempsey in Cleveland, Ohio and Perkins Coie in Seattle, Washington. K. Alan Dick has been promoted to Senior Vice President, Global Metals Procurement. Commenting on the promotion, Steven J. Demetriou, Chairman and CEO of Aleris said, "Since the formation of Aleris in December 2004, Mr. Dick's leadership of the Metals Procurement function has led to the development of a much more effective global metals sourcing strategy which has benefited Aleris greatly." Mr. Dick joined Commonwealth Industries, Inc. in October 1998 as Manager, Metals Purchasing and was a key leader in the Commonwealth Industries Supply Chain organization. Prior to joining Commonwealth, he served as Vice President and General Manager - Pacific Region for Ideal Metals. He began his career with Pechiney SA in Canada where he held several positions including Vice President. Headquartered in Beachwood, Ohio, a suburb of Cleveland, Aleris International, Inc. -- http://www.aleris.com/-- manufactures aluminum rolled products and extrusions, aluminum recycling and specification alloy production. The company is also a recycler of zinc and a leading U.S. manufacturer of zinc metal and value- added zinc products that include zinc oxide and zinc dust. On Aug. 1, 2006, the company acquired the aluminum business of Corus Group plc for a cash purchase price of approximately US$885.7 million. The acquisition included Corus Group plc's aluminum rolling and extrusions business but did not include Corus's primary aluminum smelters. Along with company's aluminum recycling operations in Germany, the United Kingdom, Mexico and Brazil and magnesium recycling operations in Germany and the Netherlands, with the Corus Aluminum acquisition, the company now has rolled products and extrusions operations in Germany, Belgium, Canada and China. In addition, the company is in the process of constructing a zinc recycling facility in China. * * * As reported in the Troubled Company Reporter on Dec. 22, 2006, Standard & Poor's Ratings Services affirmed its 'B+' loan and '2' recovery ratings on the senior secured first-lien term loan of Aleris International Inc., after the report that the company increased the term loan by US$125 million. BANCO BRADESCO: Launching First Investment Fund on Market --------------------------------------------------------- Banco Bradesco told Business News Americas that it is launching the Bradesco Infra-estrutura, the first investment fund on the market to focus on firms connected to the infrastructure sector. According to BNamericas, Bradesco Infra-estrutura will initially be investing 67% of its assets in shares of firms directly or indirectly linked to infrastructure. The rest is reserved for new investment opportunities that may come up during the year. BNamericas underscores that Herculano Anibal Alves, Bradesco Asset Management director of variable income instruments, will also be responsible for managing the fund. Mr. Alves told BNamericas, "The country is undergoing a period which needs investment in the [infrastructure] area for the economy to grow." Mr. Alves said that Bradesco Infra-estrutura's resources of BRL3 million are invested in the shares of 11 firms, and the bank expects to eventually use the fund to invest in up to 30 companies, with funding expected to reach up to BRL300 million in a year, BNamericas notes. Future investments may include firms operating in ports, railways and other sectors as well as those working with sanitation, energy, metallurgy and capital goods, BNamericas says, citing Mr. Alves. Mr. Alves told BNamericas, "We are already investing in ALL, Arcelor, Lupatech, Santos Brasil, Gerdau, Copel and Copasa. We have chosen companies in this wide-reaching sector [infrastructure] which we believe to be best suited at the moment, but this may change in the future." The report says that the bank will decide if a firm fits its criteria for investment based upon: -- its areas of activity, -- its share price, and -- its opportunities in the short term. Mr. Alves told BNamericas, "Companies in this sector are already looking to improve their productivity. I think they will enjoy above-average economic growth and this can bring good returns for shareholders. There are bottlenecks that demand high levels of investment and companies that are well positioned will take advantage of this. In the future, with the series of company listings [on the stock exchange] that are taking place, we may have heavy construction companies in the portfolio." According to the report, Banco Bradesco's 30,000 high-income sector prime customers are being offered the chance to invest in Bradesco Infra-estrutura. Initial minimum applications will be of BRL1,000 with subsequent investments of BRL500. Mr. Alves told BNamericas, "The way in which interest rates are falling, investors will look to invest their resources in alternative areas which provide a higher return and banks will relocate money where there are opportunities to earn." BNamericas emphasizes that the Bradesco Infra-estutura comes amidst criticism from the private and financial sectors of the Brazilian government's postponing the concessions process for seven federal highways. "There is some risk [in the infrastructure sector] because it depends upon regulation, but we hope the government will not make great changes and [regulation] continues more or less as it has been," Mr. Alves told BNamericas. Headquartered in Sao Paulo, Brazil, Banco Bradesco S.A. Banco -- http://www.bradesco.com.br/-- prides itself on serving low-and medium-income individuals in Brazil since the 1960s. Bradesco is Brazil's largest private bank, with more than 3,000 banking branches, and also a leader in insurance and private pension management. Bradesco has branches throughout Brazil as well as one in New York, and Japan. Bradesco offers Internet banking, insurance, pension plans, annuities, credit card services (including football-club affinity cards for the soccer-mad population), and Internet access for customers. The bank also provides personal and commercial loans, along with leasing services. * * * Fitch Ratings upgraded Banco Bradesco S.A.'s short-term local currency rating to 'F3' from 'B.' Fitch has also taken these rating actions on Banco Bradesco: -- Foreign Currency Issuer Default Rating upgraded to 'BB+' from 'BB', Outlook remains Stable; -- Short-term Foreign Currency rating affirmed at 'B'; -- Local Currency Issuer Default Rating affirmed at 'BBB-', Outlook Stable; -- Individual rating affirmed at 'B/C'; -- Support rating affirmed at '4'; -- National Long-term affirmed at 'AA+(bra)', Outlook remains Stable; and -- National Short-term affirmed at 'F1+(bra)'. Moody's Investors Service upgraded these ratings of Banco Bradesco SA: -- long-term foreign currency deposits to Ba3 from B1; and -- long- and short-term global local currency deposit ratings to A1/Prime fom A3/Prime-2. Moody's said the ratings outlook is stable. BANCO BRADESCO: Unit Inks Insurance Contract with Chevron --------------------------------------------------------- Bradesco Auto/RE, an insurance division of Banco Bradesco, said in a statement that it has signed an accord with Chevron to provide US$1.4 billion in coverage for the construction and installation of a 100,000 barrel-a-day production, storage and offloading vessel in the deepwater Frade field. Frade is in the Campos basin at water depths of up to 1,200 meters. It is located about 121 kilometers from the Rio de Janeiro coast. Business News Americas relates that Chevron's Brazilian unit operates that Frade field with a 51.74% stake. Petroleo Brasileiro owns 30% of the field. FJPL, a Japanese consortium, holds 18.26% of the field. According to BNamericas, Frade will start producing in early 2009 after total investment of US$2.4 billion. Under the terms of the contract, Bradesco Auto/RE could not reveal the amount Chevron would pay in yearly premiums, BNamericas says, citing the unit's commercial director Luiz Carlos Nabuco. Published reports say that the maximum claim amount is US$950 million and an adjacent civil liability policy has a maximum claim amount of US$50 million. Meanwhile, Mr. Nabuco told BNamericas that the contract with Chevron helped the unit move up to first place in the special risks segment in terms of premiums. The insurer registered BRL88.0 million in special risk premiums in January to November 2006, enough for a 46.4% market share. Unibanco AIG had occupied the top spot through October 2006, BNamericas states. About Bradesco Auto/RE Bradesco Auto/RE is a division of Banco Bradesco, which held BRL243 billion in total assets at the end of the third quarter of 2006, including insurance, private pension and savings bonds operations. About Banco Bradesco Headquartered in Sao Paulo, Brazil, Banco Bradesco SA -- http://www.bradesco.com.br/-- prides itself on serving low-and medium-income individuals in Brazil since the 1960s. Bradesco is Brazil's largest private bank, with more than 3,000 banking branches, and also a leader in insurance and private pension management. Bradesco has branches throughout Brazil as well as one in New York, and Japan. Bradesco offers Internet banking, insurance, pension plans, annuities, credit card services (including football-club affinity cards for the soccer-mad population), and Internet access for customers. The bank also provides personal and commercial loans, along with leasing services. * * * Fitch Ratings upgraded Banco Bradesco SA's short-term local currency rating to 'F3' from 'B.' Fitch has earlier taken these rating actions on Banco Bradesco: -- Foreign Currency Issuer Default Rating upgraded to 'BB+' from 'BB', Outlook remains Stable; -- Short-term Foreign Currency rating affirmed at 'B'; -- Local Currency Issuer Default Rating affirmed at 'BBB-', Outlook Stable; -- Individual rating affirmed at 'B/C'; -- Support rating affirmed at '4'; -- National Long-term affirmed at 'AA+(bra)', Outlook remains Stable; and -- National Short-term affirmed at 'F1+(bra)'. Moody's Investors Service upgraded these ratings of Banco Bradesco SA: -- long-term foreign currency deposits to Ba3 from B1; and -- long- and short-term global local currency deposit ratings to A1/Prime fom A3/Prime-2. Moody's said the ratings outlook is stable. BANCO CRUZEIRO: Central Bank Okays Firm's Capital Increase ---------------------------------------------------------- The Brazilian central bank has authorized Banco Cruzeiro do Sul to increase its capital to BRL183 million from BRL145 million, Agencia Estador reports. Agencia Estado relates that the central bank has also allowed Banco Comercial Uruguai to BRL63.1 million from BRL51.5 million, Agencia Estado relates. Banco Cruzeiro do Sul is headquartered in Sao Paulo, Brazil and had BRL2.6 billion (US$880 million) in total assets and BRL162.6 million (US$84.6 million) in shareholders' equity as of June 2006. * * * As reported in the Troubled Company Reporter-Latin America on Sept. 4, 2006, Moody's Investors Service upgraded Banco Cruzeiro do Sul SA's long-term foreign currency deposits to Ba3 from Ba1. Moody's said the rating outlook is stable. BANCO DO BRASIL: Pushing Mobile Banking in Brazil ------------------------------------------------- "Banco do Brasil's online banking service is currently used by 30% of customers and we expect mobile banking to overtake it in six years (by 2012) as Brazil has great potential with around 100 million mobile phone users," Banco do Brasil executive manager of electronic banking Raul Moreira told Business News Americas. Mr. Moreira told BNamericas that the seven-year mobile banking project is divided into three parts: -- general banking, -- customer relationships like sending SMS to clients, and -- mobile payments. Banco do Brasil aims to reach 1 million subscribers for its mobile banking services this year in Brazil and Japan, BNamericas notes, citing Mr. Moreira. According to BNamericas, the m-banking project began last year and now has 340,000 users in Brazil, plus 300,000 in Japan. Mr. Moreira said that uptake has been faster in Japan, where there is a culture of mobile banking and using phones to make payments, the report says. Mr. Moreira told BNamericas, "We aim to encourage the culture of mobile banking in Brazil... We will launch a marketing campaign this year." BNamericas emphasizes that with 80% of mobile phone users in Brazil being prepaid, Banco do Brasil is also targeting these users. Mr. Moreira told BNamericas, "Twenty-three percent of our 2,000 transactions a month [via m-banking] come from prepaid phone users." Banco do Brasil will also forge partnerships with firms to establish the use of mobile phones as credit cards, BNamericas says, citing Mr. Moreira. Banco do Brasil has accords with all mobile operators in Brazil. 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. BENQ CORP: Sentex Sensing Presents Business Model to Creditors -------------------------------------------------------------- Henrik Rubinstein, president of Sentex Sensing Technologies Inc., presented the company's position to creditors of BenQ Mobile GmbH & Co. in relation to its offer to acquire the bankrupt German unit of Taiwan-based BenQ Corp. Mr. Henrik made the presentation at a creditors' meeting held by Martin Prager, BenQ Mobile's insolvency administrator, under German Insolvency Law on Jan. 9. The previous Siemens Mobile Division filed insolvency and is under administration in Munich, Germany. Sentex stated their interest was based on the strong technology and products of the previous Siemens R&D as well the market access in Europe which turned out almost 25 million high-end mobile phones in the last business year. Mr. Rubinstein explained in detail its financial model, which showed its fair value as well as the incentives for the employees with strong growth in the NewCo -- SENSe Mobile GmbH. He provided the description of the mobile prototypes, which showed clearly what the SENSe Mobile Division could create versus the competition. He explained the positive link between U.S. and German high tech ventures. As a result of the meeting, the Insolvency team informed Sentex of the liquidation value of the assets and informed Sentex to prepare new financial information that demonstrates how to pay the liquidation value, and its acceptance of it. They started negotiations on the earn-out model. Sentex has received a written statement of Nord Rhein Westfahlen again on a country endorsement for working capital of EUR25 million, which was forwarded to the Bank for approval. Sentex is in serious discussions with several Financial Institutions for the strategic financing for the deal to succeed. The Administration team for BenQ Mobile was very helpful in the due diligence process and created with Sentex a strong business model based on the previous US$2 billion revenue from BenQ Mobile GmbH & Co. OHG. About Sentex Sensing Sentex Sensing Technologies, Inc. http://www.sentextech.com/-- provides fingerprint, facial and voice biometric technologies, as well as systems, and critical system components that empower the identification of individuals in large-scale ID and ID management programs. About BenQ Headquartered in Taiwan, Republic of China, BenQ Corp. Inc. -- http://www.benq.com/-- manufactures, develops and sells computer peripherals and telecommunication products. It is also a major provider of 3G handset, 3G handset, Camera phones, and other products. BenQ Mobile GmbH & Co., the company's wholly owned subsidiary, operates from Munich, Germany. BenQ Mobile filed for insolvency in Germany on Sept. 29. The collapse follows a year after Siemens sold the company to Taiwanese technology group BenQ. BenQ Mobile has lost market share against giant competitors. It has operations in Brazil. * * * As reported in the TCR-AP on Oct. 31, 2006, Taiwan Ratings Corp. affirmed its twBB+/twB corporate credit ratings and twBB+ unsecured corporate bond issue rating on BenQ Corp. The outlook on the long-term rating is negative. At the same time, Taiwan Ratings removed all ratings from Credit Watch with negative implications, where they were placed on March 14, 2006, and withdrew all the ratings upon the company's request. COMPANHIA ENERGETICA: Moody's Rates US$250 Mil. Notes at Ba3 ------------------------------------------------------------ Moody's Investors Service assigned a Ba3 foreign currency rating to Companhia Energetica de Sao Paulo aka CESP's proposed unsubordinated unsecured Real-denominated IPCA linked notes due in 2015 in the amount of approximately US$250 million in Real- equivalent. The 2015 notes shall be issued under the US$975 million Medium Term Notes Program rated Ba3 by Moody's. Moody's notes that, although the notes will be denominated in Brazilian Real, all related payments shall be made in US-Dollars. The ratings outlook is positive. The Ba3 foreign currency rating of the MTN Program reflects the Ba3 global local currency corporate family rating of CESP, and is not constrained by Brazil's current Ba1 sovereign ceiling. The net proceeds from the issuance will be used to prepay outstanding debt due 2008 and 2011 issued under the MTN Program. With over 95% of its voting shares directly and indirectly owned by the Government of the State of Sao Paulo, CESP is considered a government-related issuer in accordance with Moody's rating methodology entitled "The Application of Joint Default Analysis to Government-Related Issuers." Moody's methodology for government-related issuers systematically incorporates into the rating the company's stand-alone credit risk profile or Baseline Credit Assessment as well as the likelihood that a government would provide extraordinary support to that company's debt obligations. The ratings of CESP result from the application of a joint- default analysis of the company's Baseline Credit assessment, the Ba2 rating of the State of Sao Paulo, and Moody's view of medium dependence, and medium support probability of extraordinary support from the controlling shareholder. The Baseline Credit Assessment of a government-related issuer is expressed on a 1-21 scale or as a range within the 1-21 scale, according to the issuer's preference, where 1 represents the equivalent risk of an Aaa, 2 a Aa1, 3 a Aa2 and so forth. CESP's ratings incorporate a Baseline Credit Assessment that is currently in the 14-16 range. The positive outlook reflects Moody's expectation that, following the conclusion of its debt restructuring, CESP will focus on the continuous deleveraging of its balance-sheet in the coming years, supported by its strong cash flows that should benefit from legal restrictions to distribute dividends due to significant accumulated losses, and low levels of capital expenditures which should be limited to the ongoing maintenance of its plants. Headquartered in Sao Paulo, Brazil, CESP -- Companhia Energetica de Sao Paulo is the country's third largest power generator, majority owned by the State of Sao Paulo. CESP operates 6 hydroelectric plants with total installed capacity of 7,456 MW and reported net revenues of BRL1,983 million in the last twelve months through Sept. 30, 2006. COMPANHIA SIDERURGICA: Completing Slab Project Study This Month --------------------------------------------------------------- Companhia Siderurgica Nacional said in a report that it expects the feasibility study for a 4.5-million-ton-per-year slab project in Rio de Janeiro to be completed in January. Business News Americas relates that Companhia Siderurgica had aimed for the study to be completed by December 2006. According to BNamericas, Companhia Siderurgica signed a partnership with China's steelmaker Baosteel for a feasibility and basic engineering study for the project. Under the agreemnt, Baosteel could have a 25% stake in the project. The environmental permit for the slab unit is expected by April, BNamericas says, citing Companhia Siderurgica. Companhia Siderurgica said in a report, "Expanding slab production capacity in Brazil should pave the way for the company's international plans." Companhia Siderurgica is planning another slab project in Rio de Janeiro or Minas Gerais, BNamericas states. Headquartered Sao Paolo, Brazil, Companhia Siderurgica Nacional S.A. -- http://www.csn.com.br/-- 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. The group also operates in Portugal and the U.S. * * * 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. S&P said 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 AUTO: Discloses David L. Harbert's Terms of Employment ----------------------------------------------------------- Dura Automotive Systems Inc. has informed the U.S. Securities and Exchange Commission that it has entered into an employment agreement with David L. Harbert as its interim vice president and chief financial officer, which agreement is subject to the U.S. Bankruptcy Court for the District of Delaware's approval. The terms of the agreement are: (a) The Employment Agreement will be deemed effective as of Dec. 9, 2006; (b) As chief financial officer, Mr. Harbert will: * perform all duties as are consistent therewith as the Chief Executive Officer or the Board of Directors will designate; * report directly to Dura's chief executive officer; * devote his full time and attention and expend his best efforts, energies and skills on behalf of Dura in the performance of his duties and responsibilities; (c) Dura will pay Mr. Harbert US$43,200 a month payable in accordance with the Company's normal payroll periods and procedures, but no less frequently than on a semi-monthly basis. Dura, in its sole discretion, may increase Mr. Harbert's salary. Dura will pay Mr. Harbert an early termination fee should it elect to terminate the Employment Agreement within 90 days of the Beginning Date. Dura will pay Mr. Harbert in an amount such that the total of Salary and Early Termination Fee paid is equal to US$2,250 per day worked by Mr. Harbert from the Beginning Date to the date of termination of the agreement; (d) During the course of Mr. Harbert's employment, he will remain a partner at Tatum. Mr. Harbert will share with Tatum a portion of his economic interest in any stock options or equity bonus that Dura may, in its discretion, grant him. He may also share with Tatum a portion of any cash bonus and severance the Company may, in its discretion, pay him, to the extent specified in that certain Interim Engagement Resources Agreement between Dura and Tatum. Dura will promptly reimburse Mr. Harbert directly for reasonable travel and out-of-pocket business expenses in accordance with Dura's expense reimbursement policies and procedures and a per diem of US$50.00; (e) Mr. Harbert will be eligible for: * any 401(k) plan offered to Dura's senior management in accordance with the terms and conditions of that 401(k) plan; * holidays consistent with Dura's policy as it applies to senior management; and * vacation accrued at 1.67 days per month. Mr. Harbert be exempt from any waiting periods required for eligibility under any benefit plan of Dura, other than a qualified retirement plan or if that exemption would otherwise cause impermissible discrimination under the income tax laws applicable to employee benefit plans; (f) Mr. Harbert must receive written evidence that Dura maintains directors' and officers' insurance to cover him in an amount comparable to that provided to senior management of the Company at no additional cost. Dura will maintain that insurance at all times while the Employment Agreement remains in effect. Furthermore, Dura will maintain that insurance coverage with respect to occurrences arising during the term of the Employment Agreement for at least three years after the termination or expiration of the Employment Agreement, or will purchase a directors' and officers' extended reporting period, or "tail," policy to cover Mr. Harbert. Dura has also agreed to indemnify Mr. Harbert for any claim arising from, related to or in connection with the his performance of the services. (g) Dura or Mr. Harbert may terminate the Employment Agreement for any reason on at least 30 days' prior written notice. Mr. Harbert will continue to render services and to be paid during that 30-day period, regardless of who give that notice; (h) Mr. Harbert may terminate the agreement immediately if Dura has not remained current in its obligations under the Employment Agreement or the Tatum Agreement, or if Dura engages in, or asks him to engage in or to ignore, any illegal or unethical conduct; (i) Dura may terminate the Employment Agreement immediately for cause; and (j) Either party may terminate the agreement in the event the Court declines to approve the Employment Agreement on or before Jan. 23, 2007. Service Agreement with Mr. Harbert's Firm Dura entered into a related services agreement dated Dec. 20, 2006, with Tatum for the provision of resources and support in connection with Mr. Harbert's employment. The Tatum Agreement is subject to Court approval and will be deemed effective as of Dec. 9, 2006. Pursuant to the Tatum Agreement, Dura will pay directly to Tatum a fee equal to 25% of Mr. Harbert's salary as partial compensation for resources provided. In the event Mr. Harbert will be paid a bonus, Dura will pay Tatum, whether cash or equity, 25% of the total bonus paid by Dura during the term of the Tatum Agreement. Dura will have the opportunity to make Mr. Harbert a full-time permanent member of Dura management at any time during the term of the Tatum Agreement entering into another form of agreement. The Tatum Agreement will terminate immediately upon the earlier of: (a) the effective date of the Termination; (b) expiration of Mr. Harbert's employment with Dura; or (c) Mr. Harbert ceasing to be a partner of Tatum. During the 12-month period following termination or expiration of the Tatum Agreement, other than in connection with another agreement with the firm, Dura will not employ Mr. Harbert or engage him as an independent contractor, to render services of substantially the same nature as those for which Tatum is making him available pursuant to the Agreement. The parties agree that a breach by Dura of this provision would result in the loss to Tatum of Mr. Harbert's valuable expertise and revenue potential. Thus, in the event of breach, Tatum will be entitled to receive liquidated damages in an amount equal to 45% of Mr. Harbert's Annualized Compensation. In the event a court or arbitrator, as applicable, determines that liquidated damages are not appropriate for the breach, Tatum will have the right to seek actual damages. The amount will be due and payable to Tatum upon written demand to Dura. The Tatum Agreement defines "annualized compensation" as Mr. Harbert's most recent annual salary and the maximum amount of any bonus for which he was eligible with respect to the then current bonus year. Also, pursuant to the Tatum Agreement, Dura will provide Tatum or Mr. Harbert written evidence that it maintains directors' and officers' insurance covering the Partner as it covers similarly situated executive employees of the Company. Rochester Hills, Mich.-based DURA Automotive Systems Inc. (Nasdaq: DRRA) -- http://www.DURAauto.com/-- is an independent designer and manufacturer of driver control systems, seating control systems, glass systems, engineered assemblies, structural door modules and exterior trim systems for the global automotive industry. The company is also a supplier of similar products to the recreation vehicle and specialty vehicle industries. DURA sells its automotive products to North American, Japanese and European original equipment manufacturers and other automotive suppliers. The Debtors filed for chapter 11 petition on October 30, 2006 (Bankr. District of Delaware Case No. 06-11202). Richard M. Cieri, Esq., Marc Kieselstein, Esq., Roger James Higgins, Esq., and Ryan Blaine Bennett, Esq., of Kirkland & Ellis LLP are lead counsel for the Debtors' bankruptcy proceedings. Mark D. Collins, Esq., Daniel J. DeFranseschi, Esq., and Jason M. Madron, Esq., of Richards Layton & Finger, P.A. Attorneys are the Debtors' co-counsel. Baker & McKenzie acts as the Debtors' special counsel. Togut, Segal & Segal LLP is the Debtors' conflicts counsel. Miller Buckfire & Co., LLC is the Debtors' investment banker. Glass & Associates Inc., gives financial advice to the Debtor. Kurtzman Carson Consultants LLC handles the notice, claims and balloting for the Debtors and Brunswick Group LLC acts as their Corporate Communications Consultants for the Debtors. As of July 2, 2006, the Debtor had US$1,993,178,000 in total assets and US$1,730,758,000 in total liabilities. (Dura Automotive Bankruptcy News, Issue No. 9; Bankruptcy Creditors' Service, Inc., http://bankrupt.com/newsstand/or 215/945-7000). DURA AUTOMOTIVE: Panel Taps Young Conaway as Bankr. Co-Counsel -------------------------------------------------------------- The Official Committee of Unsecured Creditors in DURA Automotive Systems Inc. and its debtor affiliates' Chapter 11 cases seek authority from the U.S. Bankruptcy Court for the District of Delaware to retain Young Conaway Stargatt & Taylor, LLP as bankruptcy co-counsel, nunc pro tunc to Nov. 14, 2006. Committee Chairperson Nicholas W. Walsh relates that Young Conaway will, among others: (a) assist and advise the Committee in its consultation with the Debtors and the U.S. Trustee relative to the administration of the Debtors' Chapter 11 cases; (b) review, analyze and respond to pleadings filed with the Court by the Debtors and to participate in the pleading hearings; (c) assist and advise the Committee in its examination and analysis of the conduct of the Debtors' affairs and financial condition; (d) assist the Committee in the review, analysis, and negotiation of any plan of reorganization and its disclosure statement, and any asset acquisition proposal that may be filed; (e) take all necessary action to protect the rights and interests of the Committee, including, but not limited to, possible prosecution of actions on its behalf; if appropriate, negotiations concerning all litigation in which the Debtors are involved; and if appropriate, review and analysis of claims filed against the Debtors' estate; (f) represent the Committee in connection with the exercise of its powers and duties under the Bankruptcy Code and in connection with the Debtors' Chapter 11 cases; (g) generally prepare on behalf of the Committee all necessary motions, applications, answers, orders, reports and papers in support of positions taken by the Committee; (h) assist the Committee in the review, analysis, and negotiation of any financing arrangements; and (i) perform all other necessary legal services in connection with the Debtors' Chapter 11 cases. Young Conaway will bill: Professional Hourly Rate ------------ ----------- M. Blake Cleary US$440 Edmon L. Morton US$380 Erin Edwards US$270 Kim Beck (paralegal) US$155 Mr. Cleary, a partner at Young Conaway, discloses that the firm may have in the past represented, may currently represent, and will likely in the future represent parties-in-interest to the Debtors' Chapter 11 cases. Mr. Cleary assures the Court that no past or current representations are material or related to the Debtors' Chapter 11 cases. The parties are: -- certain Secured lenders represented by the firm include Bank of America, N.A.; Deutsche; Silver Point Capital; and Wachovia Bank, National Association; -- Contender 2 Limited, a significant equity investor and shareholder; -- the Debtors' Indenture Trustees; -- significant bondholders, including Bank of America; Deutsche; Jefferies & Company, Inc.; Lehman Brothers Inc; and Wachovia Bank; and -- Lear Corporation, a litigant. Mr. Cleary assures the Court that his firm is a "disinterested person," as that term is defined in Section 101(14) of the Bankruptcy Code. Rochester Hills, Mich.-based DURA Automotive Systems Inc. (Nasdaq: DRRA) -- http://www.DURAauto.com/-- is an independent designer and manufacturer of driver control systems, seating control systems, glass systems, engineered assemblies, structural door modules and exterior trim systems for the global automotive industry. The company is also a supplier of similar products to the recreation vehicle and specialty vehicle industries. DURA sells its automotive products to North American, Japanese and European original equipment manufacturers and other automotive suppliers. The Debtors filed for chapter 11 petition on October 30, 2006 (Bankr. District of Delaware Case No. 06-11202). Richard M. Cieri, Esq., Marc Kieselstein, Esq., Roger James Higgins, Esq., and Ryan Blaine Bennett, Esq., of Kirkland & Ellis LLP are lead counsel for the Debtors' bankruptcy proceedings. Mark D. Collins, Esq., Daniel J. DeFranseschi, Esq., and Jason M. Madron, Esq., of Richards Layton & Finger, P.A. Attorneys are the Debtors' co-counsel. Baker & McKenzie acts as the Debtors' special counsel. Togut, Segal & Segal LLP is the Debtors' conflicts counsel. Miller Buckfire & Co., LLC is the Debtors' investment banker. Glass & Associates Inc., gives financial advice to the Debtor. Kurtzman Carson Consultants LLC handles the notice, claims and balloting for the Debtors and Brunswick Group LLC acts as their Corporate Communications Consultants for the Debtors. As of July 2, 2006, the Debtor had US$1,993,178,000 in total assets and US$1,730,758,000 in total liabilities. (Dura Automotive Bankruptcy News, Issue No. 7; Bankruptcy Creditors' Service, Inc., http://bankrupt.com/newsstand/or 215/945-7000). DURA AUTOMOTIVE: US Trustee Objects to Miller Buckfire Retention ---------------------------------------------------------------- Kelly Beaudin Stapleton, the United States Trustee for Region 3, objects to DURA Automotive Systems, Inc. and its debtor affiliates' application to employ Miller Buckfire & Co., LLC, to the extent the firm is seeking approval for its request to apply to the U.S. Bankruptcy Court for the District of Delaware for its compensation pursuant to the standard set forth under Section 328(a) of the Bankruptcy Code. William K. Harrington, Esq., trial attorney, notes that the Application provides that the U.S. Trustee can only object to the fees of Miller Buckfire pursuant to the standards set forth in Section 328. In effect, according to Mr. Buckfire, the Debtors are seeking to have the Court approve not only the firm's retention, but to determine at the time of the retention that the fees they have agreed to pay to the firm are reasonable under the standards set forth in Section 328(a). The U.S. Trustee asserts that any present determination with respect to the reasonableness of the fees is premature and inconsistent with Sections 330 and 331, and merely serves to limit the Court's later review of the reasonableness of the fees as contemplated by those sections. Instead, Mr. Harrington asserts, review and approval by the Court should be made at an interim or final fee application hearing, when the benefit of the firm's services and the reasonableness of the fees can be better evaluated, with all rights of interested parties fully preserved until then. Mr. Harrington explains that the issue of the reasonableness of Miller Buckfire's fees is of particular concern because the fees requested are substantial and it is impossible at the present time to determine if the fees are reasonable. He notes that the firm will be paid a monthly fee of US$200,000, plus a Transaction Fee of 1% of the aggregate gross consideration from a sale of the Debtors' assets or a flat Transaction Fee of US$7,700,000 if a plan of reorganization is confirmed. Mr. Harrington notes, at the present time, it is impossible for any party to evaluate these fees as no sales have currently been proposed by the Debtors and no plan of reorganization has been proposed. The U.S. Trustee also objects to the Application on these grounds: (i) The liability cap provisions in the Engagement Letter protect Miller Buckfire's exposure if indemnification does not apply by limiting its damages to the fees it actually received. The U.S. Trustee asserts that these provisions are unreasonable and contrary to standard practice in the District of Delaware; and (ii) the Engagement Letter provides that the firm is providing services as an independent contractor and that the firm's employment does not create a fiduciary relationship between the firm and the Debtors. The provision is inconsistent with Section 327(a) of the Bankruptcy Code, the U.S. Trustee says. A professional employed on behalf of a debtor-in-possession under Section 327(a) owes fiduciary obligations to the debtor and its creditors to act solely in the best interests of the estate. In addition, given the breadth of the client-relationships identified by Marc D. Puntus, a managing director at Miller Buckfire, in his affidavit, the U.S. Trustee wants the firm to provide clarification as to its ability to take positions adverse to Debtor's secured and unsecured creditors. Moreover, The U.S. Trustee is concerned with certain provisions in the Engagement Letter regarding the expenses for which Miller Buckfire can be reimbursed. Miller Buckfire Responds Harold Neu, Esq., at Miller Buckfire, in New York, clarifies that the firm, like other investment bankers, does not charge for its services on an hourly basis. The customary practice of Miller Buckfire and other investment bankers is to charge fixed monthly fees plus additional fees that are payable upon the occurrence of certain transactions or events. However, Mr. Neu notes, if there is a Sale of substantially all assets, Miller Buckfire will receive only the Sale Transaction Fee and not a Restructuring Transaction Fee. Miller Buckfire submits that its proposed fees should be approved pursuant to Section 328(a). Section 328(a), not Section 330, is the section that addresses non-hourly fee arrangements such as Miller Buckfire's. Mr. Neu notes that there are numerous recent cases in this District in which Miller Buckfire's monthly fees and transaction-based fees have been approved pursuant to Section 328(a). This engagement should not be treated differently, he says. Miller Buckfire also has agreed to other modifications to the Engagement Letter that address the remaining issues raised by the U.S. Trustee. At the U.S. Trustee's behest: (i) the limited liability provision in the Engagement Letter is eliminated. (ii) the proposed order approving the application provides modifications to the indemnity provisions and the limitation of liability to conform to the orders customarily entered in the District of Delaware and in other cases involving the firm. About DURA Automotive Rochester Hills, Mich.-based DURA Automotive Systems, Inc. (Nasdaq: DRRA) -- http://www.DURAauto.com/-- is an independent designer and manufacturer of driver control systems, seating control systems, glass systems, engineered assemblies, structural door modules and exterior trim systems for the global automotive industry. The company is also a supplier of similar products to the recreation vehicle and specialty vehicle industries. DURA sells its automotive products to North American, Japanese and European original equipment manufacturers and other automotive suppliers. The Debtors filed for chapter 11 petition on October 30, 2006 (Bankr. District of Delaware Case No. 06-11202). Richard M. Cieri, Esq., Marc Kieselstein, Esq., Roger James Higgins, Esq., and Ryan Blaine Bennett, Esq., of Kirkland & Ellis LLP are lead counsel for the Debtors' bankruptcy proceedings. Mark D. Collins, Esq., Daniel J. DeFranseschi, Esq., and Jason M. Madron, Esq., of Richards Layton & Finger, P.A. Attorneys are the Debtors' co-counsel. Baker & McKenzie acts as the Debtors' special counsel. Togut, Segal & Segal LLP is the Debtors' conflicts counsel. Miller Buckfire & Co., LLC is the Debtors' investment banker. Glass & Associates Inc., gives financial advice to the Debtor. Kurtzman Carson Consultants LLC handles the notice, claims and balloting for the Debtors and Brunswick Group LLC acts as their Corporate Communications Consultants for the Debtors. As of July 2, 2006, the Debtor had US$1,993,178,000 in total assets and US$1,730,758,000 in total liabilities. (Dura Automotive Bankruptcy News, Issue No. 6; Bankruptcy Creditors' Service, Inc., http://bankrupt.com/newsstand/or 215/945-7000). ELETROPAULO METROPOLITANA: Sao Paulo Authorities Probing Firm ------------------------------------------------------------- The Sao Paulo legislative assembly said in its news service that its investigation commission held a meeting to decide on ways to probe the privatization of Eletropaulo Metropolitana Eletricidade de Sao Paulo SA. Business News Americas relates that state legislators formed the commission to investigate loans by BNDES to AES Corp. to purchase Eletropaulo Metropolitana fro the state government. According to BNamericas, Eletropaulo Metropolitana was sold to private hands for BRL2 billion in 1998. BNamericas underscores that the Workers' Party members have called for the investigation. They alleged that Eletropaulo Metropolitana hired former BNDES workers as consultants. The investigation commission has 90 days to complete the investigation, BNamericas states. Eletropaulo distributes power in Brazil's industrial hub of Sao Paulo city and 23 surrounding towns. Power consumption in Sao Paulo state grew 3.8% in 2005 from 2004, according to data from Sao Paulo state government. * * * As reported in the Troubled Company Reporter-Latin America on Nov. 8, 2006, Standard & Poor's Ratings Services raised the ratings on Brazilian electric utility Eletropaulo Metropolitana Eletricidade de Sao Paulo SA and its BRL474 million senior unsecured and unsubordinated euro bonds to 'BB-' from 'B+'. On the Brazil national scale, the 'brBBB+' corporate credit rating was raised to 'brA-'. S&P said the outlook is stable. VOLKSWAGEN AG: Porsche CEO Wiedeking Calls for Company Changes -------------------------------------------------------------- Porsche AG CEO Wendelin Wiedeking is seeking for at least one more board seat at Volkswagen AG and vowed he would push for big changes at the company to increase its underperforming results, Joseph B. White writes for the Wall Street Journal. "I know how to make money. I will force that we make money in VW, believe me," Mr. Wiedeking, who already holds two seats on VW's supervisory board, was quoted by WSJ as saying. "There must be a lot of changes in the VW organization." In response to press speculation, Mr. Wiedeking disclosed he does not want to take over as Volkswagen's CEO and eliminated a full merger between Porsche and Volkswagen. Porsche holds a 27.4% stake in Volkswagen. According to WSJ, Porsche will try to take advantage of VW's measures to reduce the costs it must pay in developing expensive new technology for its high performance cars. Headquartered in Wolfsburg, Germany, the Volkswagen Group -- http://www.volkswagen.de/-- is one of the world's leading automobile manufacturers and the largest carmaker in Europe. With 47 production plants in eleven European countries and a further seven countries in the Americas, like Mexico, Africa, and Asia. Volkswagen has more than 343,000 employees producing over 21,500 vehicles or are involved in vehicle- related services on every working day. * * * Volkswagen has been carrying out measures to cut costs and raise profits, which could affect up to 30,000 jobs. The potential job cuts represent about a third of the carmaker's workforce and three times higher than initial estimates made by Chief Executive Bernd Pischetsrieder and Volkswagen brand head, Wolfgang Bernhard. In November last year, Volkswagen maintained its 2005 earnings guidance amid rumors it may lower targets. The company predicts a year-on-year improvement in both operating profit after special items and profit before tax this year. Rumors flew that the company would slash full-year earnings forecast due to higher restructuring costs. The company said the impact of its workforce reduction measures, which will be charged as special items in the fourth quarter, will be lower than last year's. The company also admitted there were no significant improvements in the economic environment in the first nine months of 2005, and the overall situation in the important automotive markets remained difficult. It also expected tougher competition in the Chinese and U.S. markets, and the rise in fuel prices to influence consumer confidence. METSO OYJ: Names Juhani Suvinen as Valmet Automotive President -------------------------------------------------------------- Juhani Suvinen has been appointed President of Valmet Automotive, a unit of Metso Oyj, as of Jan. 10, 2007. Mr. Suvinen has held the position of Executive Vice President of Valmet Automotive since 1996. At the same time, Ilpo Korhonen was appointed Executive Vice President, and is responsible for the production process. He has previously acted as Vice President responsible for the Porsche project and the production, and before that he acted in different production and quality related assignments. Valmet Automotive's current president, Tapio Kuisma, resigns simultaneously and will become Board Member of Valmet Automotive. About Valmet Automotive Headquartered in Uusikaupunki, Finland, Valmet Automotive -- http://www.valmet-automotive.com/-- is a unit of Metso Corp aka Metso Oyj. The company is a brand-independent contract manufacturer of exclusive specialty cars of superior quality About Metso Headquartered in Helsinki, Finland, Metso Corporation -- http://www.metso.com/-- serves customers in the pulp and paper industry, rock and minerals processing, the energy industry and selected other industries. The company's principal production plants are located in Brazil, China, Finland, France, Germany, India, Italy, South Africa, Sweden, the United Kingdom and the United States. * * * As reported in the TCR-Europe on April 11, Standard & Poor's Ratings Services revised its outlook on Finland-based machinery and engineering group Metso Corp. to positive from stable, reflecting improvements in the group's operating performance and capital structure that offer it the potential to return to a low investment-grade rating. The 'BB+' long-term and 'B' short-term corporate credit ratings, as well as the 'BB' senior unsecured debt rating on the group were affirmed. PROPEX INC: Moody's Revises Debt Rating Outlook to Negative ----------------------------------------------------------- Moody's Investors Service changed the outlook on Propex Inc.'s long-term debt ratings to negative from stable. The action was prompted by operating weakness, including declining sales and profitability resulting from a cyclical slowdown in residential construction and overall economic activity. The company is currently in the process of renegotiating its bank covenants. The operating weakness was exacerbated by the greater than expected impact of the backward integration of the large residential carpet manufacturers, namely Shaw Industries, Inc. (not rated by Moody's) and Mohawk Industries, Inc. (Baa3 with a negative outlook) into the carpet backing business. Volumes in geotextiles as well as other industrial and concrete applications were also below expectations, as was the case with other polypropylene converters in recent months. Moody's expects that weak performance is likely to continue through 2007 or until residential construction begins to recover. Although Moody's believes that current ratings appropriately balance the company's leadership position in its principal markets with the mature and cyclical nature of many of these markets, we are at a point in the business cycle which, if prolonged, presents increased risk for the lenders. Notwithstanding the probable covenant breach as of Dec. 31, 2006, Moody's believes that covenant relief should be provided by the lender group at levels, which recognize current weakness in the company's principal end markets. The B2 Corporate Family Rating and instrument ratings continue to reflect the company's high leverage, weak interest coverage and low free cash flow generation relative to debt. The ratings also reflect the highly competitive, mature industry that Propex operates in and the cyclical nature of many of the end markets. Residential renovation and construction are particularly vulnerable to economic downturns, increases in interest rates and housing-specific market disruptions or corrections. The ratings benefit from scale and diversification opportunities offered by the integration of SI's industrial fabrics, geotextiles and concrete systems businesses and a shift away from carpet backing as the source of the majority of the revenues along with a reduction in customer concentration. The ratings recognize the completion of key initiatives to achieve cost reductions and eliminate duplication. The ratings also acknowledge Propex's leadership position in its principal market segments and historical ability in managing price fluctuations relating to raw materials. Moody's affirmed these ratings: -- The Ba3 (LGD 3, 30%) rating on the senior secured credit facilities consisting of a US$50 million revolver due 2011, and the original US$260 million term loan due 2012; -- The Caa1 (LGD 5, 82%) rating on the US$150 million senior unsecured due 2012; -- The B2 Corporate Family Rating; and -- The B2 Probability of Default Rating; The ratings outlook was changed to negative from positive. The Speculative Grade Liquidity Rating is SGL-3. Adequate liquidity is subject to covenant relief. Propex Inc., based in Chattanooga, Tennessee is the world's largest independent producer of primary and secondary carpet backing and a leading manufacturer and marketer of woven and nonwoven polypropylene fabrics and fibers used in geosynthetic applications and a variety of other industrial applications such as fabric bags/containers, fabric protective coverings and concrete fiber reinforcement. The company became a stand-alone company following the acquisition of the BP Fabrics and Fibers Business of BP p.l.c by The Sterling Group, L.P., Genstar Capital, L.P., Laminar Direct Capital, L.P., Paribas North America Inc. and members of management in December 2004. The company has manufacturing operations in North America, Europe and Brazil. Sales for the last twelve months ending Sept. 30, 2006, were US$646 million. PROPEX INC: S&P Cuts Corporate Credit Rating to B- from B+ ---------------------------------------------------------- Standard & Poor's Ratings Services lowered its ratings on Propex Inc., including its corporate credit rating to 'B-' from 'B+'. The outlook is stable. The downgrade reflects concerns that difficult operating conditions are likely to forestall Propex's ability to meaningfully improve its highly leveraged financial profile during the next couple of years. The potential for lower-than- expected residential construction activity and the possibility for further declines in the domestic housing markets could cause earnings and cash flow to be weaker than previously expected. "While Propex's liquidity position is satisfactory and supportive of credit quality, we believe the current level of uncertainty in operating trends raises the potential for financial covenant violations during the next several quarters," said Standard & Poor's credit analyst David Bird. "We expect that Propex will successfully negotiate relief as necessary, but ratings will be constrained until the company's operating performance results in improved measures of credit quality." The ratings on Propex reflect the company's vulnerable business position as a niche producer of primary and secondary carpet backing and geosynthetic and industrial fibers for mature and competitive end markets, and a highly leveraged financial profile. Propex Inc., based in Chattanooga, Tennessee is the world's largest independent producer of primary and secondary carpet backing and a leading manufacturer and marketer of woven and nonwoven polypropylene fabrics and fibers used in geosynthetic applications and a variety of other industrial applications such as fabric bags/containers, fabric protective coverings and concrete fiber reinforcement. The company became a stand-alone company following the acquisition of the BP Fabrics and Fibers Business of BP p.l.c by The Sterling Group, L.P., Genstar Capital, L.P., Laminar Direct Capital, L.P., Paribas North America Inc. and members of management in December 2004. The company has manufacturing operations in North America, Europe and Brazil. Sales for the last twelve months ending Sept. 30, 2006, were US$646 million. TELE NORTE: Raises Non-Convertible Debenture Issue to BRL250MM -------------------------------------------------------------- Tele Norte Leste Participacoes said in a filing with the Bovespa stock exchange that it has increased the value of its proposed non-convertible debenture issue to BRL250 million from BRL200 million. Shareholders would vote on a BRL200-million non-convertible debenture issue during a meeting slated for Jan. 24, Tele Norte told Business News Americas. BNamericas relates that with the increased value of the proposed debenture, the Rio de Janeiro meeting has been delayed to Jan. 26. Tele Norte was one of the firms to receive large scale funding from BNDES last year. BNDES granted BRL2.4 billion to Tele Norte as part of the operator's plans to modernize network infrastructure, information technology, and fixed line and mobile services, BNamericas states. Headquartered in Rio de Janeiro, Brazil, Tele Norte Leste Participacoes SA -- http://www.telemar.com.br-- is a provider of fixed-line telecommunications services in South America. The company markets its services under its Telemar brand name. Tele Norte's subsidiaries include: -- Telemar Norte Leste SA, -- TNL PCS SA, -- Telemar Internet Ltda., and -- Companhia AIX Participacoes SA. * * * As reported on Aug. 21, 2006, Fitch Ratings upgraded Tele Norte Leste Participacoes SA's foreign currency issuer default rating to 'BB+' from 'BB'. =========================== C A Y M A N I S L A N D S =========================== ADVANTAGE ADVISERS: Final Shareholders Meeting Is on Jan. 17 ------------------------------------------------------------ Advantage Advisers Sawgrass International Ltd.'s final shareholders meeting will be at 10:00 a.m. on Jan. 17, 2007, at: FCM LTD. P.O. Box 1982 Grand Cayman KY1-1104 Cayman Islands These agenda will be taken during the meeting: 1) accounting of the liquidation process showing how the winding up has been conducted during the preceding year, 2) requesting the members' approval of the liquidation fees incurred to date, approval of the liquidator's estimated costs to completion, and 3) hearing any explanation that may be given by the liquidator. A member entitled to attend and vote at the meeting may appoint a proxy, who need not be a member, in his stead. The liquidator can be reached at: Raymond E. Whittaker FCM LTD. P.O. Box 1982, Grand Cayman KY1-1104 Cayman Islands Tel: 345-946-5125 Fax: 345-946-5126 CAPITAL Z: Deadline for Proofs of Claim Filing Is on Jan. 18 ------------------------------------------------------------ Capital Z Lancshire Gp, Ltd.'s creditors are required to submit proofs of claim by Jan. 18, 2007, to the company's liquidators: Robert Spass Bradley Cooper P.O Box 265, George Town Grand Cayman KY1-9001, Cayman Islands Creditors who are not able to comply with the Jan. 18 deadline won't receive any distribution that the liquidator will make. Creditors are required to present proofs of claim personally or through their solicitors. Capital Z's shareholders agreed on Dec. 15, 2006, for the company's voluntary liquidation under Section 135 of the Companies Law (2004 Revision) of the Cayman Islands. Parties-in-interest may contact: Nick Robinson P.O Box 265, George Town Grand Cayman KY1-9001, Cayman Islands Tel: 345 914 4216 Fax: 345 814 8216 BARRAMUNDI FUND: Deadline for Proofs of Claim Filing Is Jan. 24 --------------------------------------------------------------- Barramundi Fund's creditors are required to submit proofs of claim by Jan. 24, 2007, to the company's liquidator: Simon Atkinson Ark Mori Building 22nd Floor, P.O. Box 578 1 - 12 - 32 Akusaka, Minato-ku Tokyo 107-6022, Japan Creditors who are not able to comply with the Jan. 22 deadline won't receive any distribution that the liquidator will make. Creditors are required to present proofs of claim personally or through their solicitors. Barramudi Fund's shareholders agreed on Nov. 24, 2006, for the company's voluntary liquidation under Section 135 of the Companies Law (2004 Revision) of the Cayman Islands. Parties-in-interest may contact: Sophie Ann Gray c/o Ogier, Queensgate House South Church Street, P.O. Box 1234 Grand Cayman, Cayman Islands Tel: (345) 949 9876 Fax: (345) 949 1986 DIA RAILROAD: Proofs of Claim Filing Deadline Is on Jan. 18 ----------------------------------------------------------- DIA Railrod Leasing Ltd.'s creditors are required to submit proofs of claim by Jan. 18, 2007, to the company's liquidators: Tatano Yuji Yasuhisa Tsuruhashi Creditors who are not able to comply with the Jan. 18 deadline won't receive any distribution that the liquidator will make. Creditors are required to present proofs of claim personally or through their solicitors. DIA Railroad's shareholders agreed on Dec. 14, 2006, for the company's voluntary liquidation under Section 135 of the Companies Law (2004 Revision) of the Cayman Islands. Parties-in-interest may contact: Janeen Aljadir Caledonian Bank & Trust Limited Caledonian House, 69 Dr. Roy's Drive P.O. Box 1043, George Town Grand Cayman, Cayman Islands Tel: (345) 949-4943 Fax: (345) 814-4859 EQUITABLE PCI: Proofs of Claim Filing Deadline Is on Jan. 22 ------------------------------------------------------------ Equitable PCI Bank Cayman Ltd.'s creditors are required to submit proofs of claim by Jan. 22, 2007, to the company's liquidators: Sergio LL. Naranjilla Btenvenido M. Juat, Jr. c/o PO Box 501, George Town Grand Cayman, Cayman Islands Creditors who are not able to comply with the Jan. 22 deadline won't receive any distribution that the liquidator will make. Creditors are required to present proofs of claim personally or through their solicitors. Equitable PCI's shareholders agreed on Nov. 24, 2006, for the company's voluntary liquidation under Section 135 of the Companies Law (2004 Revision) of the Cayman Islands. EUROPEAN PSYCHIC: Sets Final Shareholders Meeting on Jan. 18 ------------------------------------------------------------ European Psychic Agency Ltd.'s final shareholders meeting will be at 10:00 a.m. on Jan. 18, 2007, at: Close Brothers Ltd. 4th Floor Harbour Place, George Town Grand Cayman, Cayman Islands These agenda will be taken during the meeting: 1) accounting of the liquidation process showing how the winding up has been conducted during the preceding year, 2) requesting the members' approval of the liquidation fees incurred to date, approval of the liquidator's estimated costs to completion, and 3) hearing any explanation that may be given by the liquidator. A member entitled to attend and vote at the meeting may appoint a proxy, who need not be a member, in his stead. The liquidator can be reached at: Jeff Arkley Attn: Neil Gray Fourth Floor, Harbour Place P.O. Box 1034, George Town Grand Cayman, Cayman Islands Tel: (345) 949 8455 Fax: (345) 949 8499 EXIS HOLDINGS: Shareholders to Convene for Jan. 18 Final Meeting ---------------------------------------------------------------- Exis Holdings Ltd.'s final shareholders meeting will be at 10:00 a.m. on Jan. 18, 2007, at: Close Brothers Ltd. 4th Floor Harbour Place, George Town Grand Cayman, Cayman Islands These agenda will be taken during the meeting: 1) accounting of the liquidation process showing how the winding up has been conducted during the preceding year, 2) requesting the members' approval of the liquidation fees incurred to date, approval of the liquidator's estimated costs to completion, and 3) hearing any explanation that may be given by the liquidator. A member entitled to attend and vote at the meeting may appoint a proxy, who need not be a member, in his stead. The liquidator can be reached at: Linburgh Martin Attn: Thiry Gordon Close Brothers Ltd. Fourth Floor, Harbour Place P.O. Box 1034, George Town Grand Cayman, Cayman Islands Tel: (345) 949 8455 Fax: (345) 949 8499 HMTF POULTRY: Calls Shareholders for Final Meeting on Jan. 18 ------------------------------------------------------------- HMTF Poultry Holdings Ltd.'s final shareholders meeting will be at 10:00 a.m. on Jan. 18, 2007, at: Close Brothers Ltd. 4th Floor Harbour Place, George Town Grand Cayman, Cayman Islands These agenda will be taken during the meeting: 1) accounting of the liquidation process showing how the winding up has been conducted during the preceding year, 2) requesting the members' approval of the liquidation fees incurred to date, approval of the liquidator's estimated costs to completion, and 3) hearing any explanation that may be given by the liquidator. A member entitled to attend and vote at the meeting may appoint a proxy, who need not be a member, in his stead. The liquidator can be reached at: Linburgh Martin Attn: Thiry Gordon Close Brothers Ltd. Fourth Floor, Harbour Place P.O. Box 1034, George Town Grand Cayman, Cayman Islands Tel: (345) 949 8455 Fax: (345) 949 8499 IRP SECOND: Shareholders to Gather for Final Meeting on Jan. 23 --------------------------------------------------------------- IRP Second Funding Co.'s final shareholders meeting will be on Jan. 23, 2007, at: Caledonian House 69 Dr. Roy's Drive, George Town Grand Cayman, Cayman Islands These agenda will be taken during the meeting: 1) accounting of the liquidation process showing how the winding up has been conducted during the preceding year, 2) requesting the members' approval of the liquidation fees incurred to date, approval of the liquidator's estimated costs to completion, and 3) hearing any explanation that may be given by the liquidator. A member entitled to attend and vote at the meeting may appoint a proxy, who need not be a member, in his stead. The liquidator can be reached at: David S. Walker Caledonian Bank & Trust Limited Caledonian House P.O. Box 1043, George Town Grand Cayman, Cayman Islands KINGFISHER LTD: Final Shareholders Meeting Is on Jan. 17 -------------------------------------------------------- Kingfisher Ltd.'s final shareholders meeting will be at 9:00 a.m. on Jan. 17, 2007, at: FCM LTD. P.O. Box 1982 Grand Cayman KY1-1104 Cayman Islands These agenda will be taken during the meeting: 1) accounting of the liquidation process showing how the winding up has been conducted during the preceding year, 2) requesting the members' approval of the liquidation fees incurred to date, approval of the liquidator's estimated costs to completion, and 3) hearing any explanation that may be given by the liquidator. A member entitled to attend and vote at the meeting may appoint a proxy, who need not be a member, in his stead. The liquidator can be reached at: Raymond Whittaker FCM LTD. PO Box 1982, Grand Cayman KY1-1104 Cayman Islands Tel: 345-946-5125 Fax: 345-946-5126 LRM SECOND: Liquidator to Present Wind Up Accounts on Jan. 23 ------------------------------------------------------------- LRM Second Co.'s final shareholders meeting will be on Jan. 23, 2007, at: Caledonian House 69 Dr. Roy's Drive, George Town Grand Cayman, Cayman Islands These agenda will be taken during the meeting: 1) accounting of the liquidation process showing how the winding up has been conducted during the preceding year, 2) requesting the members' approval of the liquidation fees incurred to date, approval of the liquidator's estimated costs to completion, and 3) hearing any explanation that may be given by the liquidator. A member entitled to attend and vote at the meeting may appoint a proxy, who need not be a member, in his stead. The liquidator can be reached at: David S. Walker Caledonian Bank & Trust Limited Caledonian House P.O. Box 1043, George Town Grand Cayman, Cayman Islands NATIONAL AEROSPACE: Proofs of Claim Filing Deadline Is Jan. 17 -------------------------------------------------------------- National Aerospace Fasteners Corp., Cayman Investment's creditors are required to submit proofs of claim by Jan. 17, 2007, to the company's liquidators: Chen, Te Jung National AeroSpace Fasteners Corp No. 1, Tai Ping E. Road Ping Chen City, Tao Yuan Hsien Taiwan, ROC Tel: 886.3.450.8868 Fax: 886.3.460.4183 Creditors who are not able to comply with the Jan. 17 deadline won't receive any distribution that the liquidator will make. Creditors are required to present proofs of claim personally or through their solicitors. National Aerospace's shareholders agreed on Nov. 30, 2006, for the company's voluntary liquidation under Section 135 of the Companies Law (2004 Revision) of the Cayman Islands. NATIONAL AEROSPACE: Final General Meeting Is on Jan. 24 ------------------------------------------------------- LRM Second Co.'s final shareholders meeting will be at 1:00 p.m. on Jan. 23, 2007, at: No. 1, Tai Ping E. Road Ping Chen City, Tao Yuan Hsien Taiwan, ROC These agenda will be taken during the meeting: 1) accounting of the liquidation process showing how the winding up has been conducted during the preceding year, 2) requesting the members' approval of the liquidation fees incurred to date, approval of the liquidator's estimated costs to completion, and 3) hearing any explanation that may be given by the liquidator. A member entitled to attend and vote at the meeting may appoint a proxy, who need not be a member, in his stead. The liquidator can be reached at: Chen, Te Jung No. 1, Tai Ping E. Road, Ping Chen City Tao Yuan Hsien, Taiwan, ROC Tel: 886 3 450-8868 Fax: 886 3 460-4183 ========= C H I L E ========= ARAMARK CORP: Moody's Affirms (P)Ba3 Rating on US$4.15-Bil. Loan ---------------------------------------------------------------- Moody's Investors Service affirmed the (P)Ba3 rating on Aramark Corp.'s proposed US$4.15 billion secured term loan (upsized from US$3.66 billion) and the (P)B3 rating on US$1.78 billion of proposed senior notes (upsized from US$1.7 billion). The upsized term loan and senior note offerings are intended to replace a US$570 million senior subordinated note offering (rated (P)B3 on Jan. 5, 2007) that was cancelled. Concurrently, Moody's withdrew the (P)B3 rating on the US$570 million of proposed senior subordinated notes. Pro-forma for the aforementioned capital mix changes, Moody's affirmed the (P)B1 Corporate Family Rating. The ratings outlook is stable. The leveraged buyout of ARAMARK is expected to be financed with a US$4.15 billion secured term loan, US$1.78 billion of senior unsecured notes and an equity contribution of US$2.1 billion. Moody's took these ratings on ARAMARK (New Co.): -- Affirmed US$600 million secured revolving credit facility due 2013, (P)Ba3 (to LGD 3, 36% from LGD 3, 32%); -- Affirmed US$4.15 billion secured term loan due 2014, (P)Ba3 (to LGD 3, 36% from LGD 3, 32%); -- Affirmed US$250 million secured synthetic letter of credit facility due 2013, (P)Ba3 (to LGD 3, 36% from LGD 3, 32%); -- Affirmed US$1.78 billion senior unsecured notes due 2015, (P)B3 (to LGD 5, 86% from LGD 5, 80%); -- Affirmed Corporate Family Rating, (P)B1; -- Affirmed Probability of Default Rating, B1; and -- Withdrew US$570 million senior subordinated notes due 2016, (P)B3 (LGD 6, 93%). These ratings are subject to Moody's review of final documentation. Rating actions on ARAMARK (Old): -- Affirmed Corporate Family Rating, B1; -- Affirmed Probability of default rating, B1; -- Affirmed senior unsecured shelf registration, (P)B3 (LGD 6, 96%); and -- Affirmed senior subordinated shelf registration, (P)B3 (LGD 6, 97%). Ratings actions on ARAMARK Services: -- Affirmed US$250 million senior unsecured notes due 2012, B3 (LGD 6, 96%); -- Affirmed senior unsecured shelf registration, (P)B3 (LGD 6, 96%); -- Affirmed senior subordinated shelf registration, (P)B3 (LGD 6, 97%); -- Affirmed US$300 million senior unsecured notes due 2007, Baa3; -- Affirmed US$31 million senior unsecured notes due 2007, Baa3; and -- Affirmed US$300 million senior unsecured notes due 2008, Baa3. Headquartered in Philadelphia, ARAMARK Corp. -- http://www.aramark.com/-- is a leader in professional services, providing food services, facilities management, and uniform and career apparel to health care institutions, universities and school districts, stadiums and arenas, and businesses around the world. It has approximately 240,000 employees serving clients in 20 countries, including Belgium, Czech Republic, Germany, Ireland, UK, Mexico, Brazil, Chile, among others. ARAMARK CORP: S&P Says Loan Add-Ons Won't Affect Debt Ratings ------------------------------------------------------------- Standard & Poor's Ratings Services affirmed its loan and recovery ratings on the proposed senior secured credit facilities of ARAMARK (B+/Negative/--), following the announcement that the company will increase the term loan by almost US$500 million. With the add-on, the total amount of the term loan is now US$4.15 billion. The loan rating was affirmed at 'B+' (the same level as the corporate credit rating on ARAMARK) and the recovery rating was affirmed at '2', indicating the expectation for substantial (80%-100%) recovery of principal in the event of a payment default. The company will also increase its senior debt offering by about US$80 million in lieu of the prior expectation of issuing US$570 million of subordinated debt. Net proceeds from the company's proposed enlarged term loan and senior unsecured debt offering, together with about US$2.1 billion of equity, will be used to finance the acquisition of ARAMARK by a group of investors led by its chairman and CEO, Joseph Neubauer, which includes the repayment of about US$1.7 billion of ARAMARK's outstanding debt. Ratings Affirmed: -- Corporate Credit Rating B+/Negative/-- -- Senior Secured B+ (Recovery Rtg: 2) -- Senior Unsecured B- Rating Withdrawn: To From -- Subordinated NR B- Headquartered in Philadelphia, ARAMARK Corp. -- http://www.aramark.com/-- is a leader in professional services, providing food services, facilities management, and uniform and career apparel to health care institutions, universities and school districts, stadiums and arenas, and businesses around the world. It has approximately 240,000 employees serving clients in 20 countries, including Belgium, Czech Republic, Germany, Ireland, UK, Mexico, Brazil, Chile, among others. =============== C O L O M B I A =============== NOVELL INC: Asserts Inevitable Bankruptcy of SCO Group ------------------------------------------------------ In a document filed with the District Court of Utah, Novell Inc. claims that The SCO Group Inc., a UNIX vendor that is suing IBM for alleged illegal incorporation of its proprietary Unix code into Linux, is on the verge of bankruptcy, Jennifer Mears of LinuxWorld reports. "Contrary to SCO's assertion that a preliminary injunction should be denied because it may accelerate SCO's bankruptcy, SCO's imminent bankruptcy is a compelling reason to grant Novell's motion," Novell's attorneys write in the filing. "When SCO goes into bankruptcy, it will not be because of Novell's motion, but because of its own financial missteps. For SCO, bankruptcy is inevitable; it characterizes its assets as merely those 'remaining' and does not rebut Novell's arguments that its bankruptcy is imminent." In September last year, Novell demanded to recover a percentage of the revenue SCO earned from its UNIX licensing deals with Microsoft Corp. and Sun Microsystems Inc. Novell claims that it is entitled to 95% of all revenue derived from SCO's SVRX license agreements pursuant to a 1995 agreement governing SCO's purchase of UNIX from Novell. SCO, however, has refused to give up any money, claiming that the Microsoft and Sun licensing deals don't relate with any agreement signed in 1995. SCO also claims that such a move would harm its chances of winning its case against IBM, Ms. Mears reports. Utah District Court magistrate judge Brooke Wells in June dismissed 182 of SCO's claims against IBM and U.S. District Judge Dale Kimball upheld Judge Wells's ruling in a decision handed down November 29, InformationWeek reports. The company has filed a new motion claiming the November decision was procedurally and substantially flawed. SCO spokesman Blake Stowell has denied charges that the company is in financial disaster, Ms. Mears relates. "We will report our fourth quarter financials on Jan. 17, 2007 and give an update at that time," LinuxWorld quotes Mr. Stowell as saying. "We consider it irresponsible of Novell's lawyers to mischaracterize our financial well-being with these false statements." About SCO Group Headquartered in Lindon, Utah, The SCO Group Inc. (Nasdaq: SCOX) -- http://www.sco.com/-- provides software technology for distributed, embedded and network-based systems, offering SCO OpenServer for small to medium business and UnixWare for enterprise applications and digital network services. About Novell Inc. Headquartered in Waltham, Massachusetts, 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. Waiver of Default As reported in the Troubled Company Reporter on Sept. 29,2006, Novell Inc., 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. On Nov. 10, 2006, Novell completed its consent solicitation with respect to certain amendments to, and a waiver of rights to pursue remedies available with respect to certain alleged defaults under, the provisions of the indenture, governing its 0.50% convertible senior debentures due 2024. Under the terms of the Consent Solicitation Statement, Novell will pay an additional 7.33% per annum in special interest on the Debentures from and after Nov. 9, 2006, to Nov. 8, 2007. SCO GROUP: Denies Looming Bankruptcy Rumors from Novell ------------------------------------------------------- Contrary to court documents filed by Novell Inc. in the U.S. District of Utah, SCO Group Inc. spokesman Blake Stowell denies the company is in financial disaster, Jennifer Mears of LinuxWorld reports. "We will report our fourth quarter financials on Jan. 17, 2007 and give an update at that time," LinuxWorld quotes Mr. Stowell as saying. "We consider it irresponsible of Novell's lawyers to mischaracterize our financial well-being with these false statements." In a document filed with the District Court of Utah, Novell claims that The SCO Group Inc., a UNIX vendor that is suing IBM for alleged illegal incorporation of its proprietary Unix code into Linux, is on the verge of bankruptcy, Ms. Mears relates. "Contrary to SCO's assertion that a preliminary injunction should be denied because it may accelerate SCO's bankruptcy, SCO's imminent bankruptcy is a compelling reason to grant Novell's motion," Novell's attorneys write in the filing. "When SCO goes into bankruptcy, it will not be because of Novell's motion, but because of its own financial missteps. For SCO, bankruptcy is inevitable; it characterizes its assets as merely those 'remaining' and does not rebut Novell's arguments that its bankruptcy is imminent." In September last year, Novell demanded to recover a percentage of the revenue SCO earned from its UNIX licensing deals with Microsoft Corp. and Sun Microsystems Inc. Novell claims that it is entitled to 95% of all revenue derived from SCO's SVRX license agreements pursuant to a 1995 agreement governing SCO's purchase of UNIX from Novell. SCO, however, has refused to give up any money, claiming that the Microsoft and Sun licensing deals don't relate with any agreement signed in 1995. SCO also claims that such a move would harm its chances of winning its case against IBM, Ms. Mears reports. Utah District Court magistrate judge Brooke Wells in June dismissed 182 of SCO's claims against IBM and U.S. District Judge Dale Kimball upheld Judge Wells's ruling in a decision handed down November 29, InformationWeek reports. The company has filed a new motion claiming the November decision was procedurally and substantially flawed. About Novell Inc. Headquartered in Waltham, Massachusetts, 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. About SCO Group Headquartered in Lindon, Utah, The SCO Group Inc. (Nasdaq: SCOX) -- http://www.sco.com/-- provides software technology for distributed, embedded and network-based systems, offering SCO OpenServer for small to medium business and UnixWare for enterprise applications and digital network services. The company has operations in Argentina, Brazil, Colombia and Mexico in Latin America. =================== C O S T A R I C A =================== PERKINELMER INC: Completes Euroscreen & Evotec Acquisitions ----------------------------------------------------------- PerkinElmer Inc. has successfully completed two reported acquisitions that will extend its portfolio of advanced tools for cellular analysis, and strengthen its leadership position in the rapidly growing area of High Content Screening. In the fourth quarter of 2006, the company disclosed its intent to acquire Euroscreen Products S.A., the Gosselies, Belgium- based developer of the innovative AequoScreen cellular assay platform, and Hamburg, Germany-based Evotec Technologies. PerkinElmer reported that the Euroscreen Products acquisition was finalized, and the Evotec Technologies transaction was completed at year-end 2006. "The addition of Euroscreen Products' advanced GPCR technology and Evotec Technologies' highly regarded HCS systems to PerkinElmer's current portfolio enables us to offer our biopharma customers a comprehensive solution in advanced cellular imaging, screening and analysis," Robert F. Friel, president, PerkinElmer Life and Analytical Sciences, said. Ongoing revenue of the combined entities was approximately US$25 million in 2006, and both acquisitions are expected to be neutral to slightly accretive to the Company's 2007 earnings per share. PerkinElmer Inc. (NYSE: PKI) -- http://www.perkinelmer.com/-- is a global technology leader driving growth and innovation in Health Sciences and Photonics markets to improve the quality of life. PerkinElmer reported revenues of US$1.5 billion in 2005, has 8,000 employees serving customers in more than 125 countries, and is a component of the S&P 500 Index. In Latin America, PerkinElmer has offices in Argentina, Bolivia, Brazil, Chile, Colombia, Costa Rica, Dominican Republic, Ecuador, El Salvador, Guatemala, Honduras, Mexico, Nicaragua, Panama, Paraguay, Peru, Puerto Rico, Uruguay and Venezuela. * * * PerkinElmer Inc.'s Long Term Subordinated Debt carry Moody's Investors Service's Ba1 rating. =================================== D O M I N I C A N R E P U B L I C =================================== AHORROS Y PRESTAMOS: Liquidation Proceeding Concluded ----------------------------------------------------- The liquidation of Asociacion Central de Ahorros y Prestamos -- a savings and loan firm intervened on Nov. 9, 2006, by authorities for irregularities -- has been concluded, Dominican Today reports, citing Rafael Camilo Abreu, Dominican Republic's banks superintendent. The depositors have received their savings, DR1 Newsletter relates, citing Mr. Abreu. DR1 emphasizes that at Ahorros y Prestamos, 2% of depositors with over DOP500,000 were responsible for 96.6% of the deposits. The liquidation started with the 3,502 people with savings of less than DOP500,000, or a total of DOP28.6 million. Mr. Abreu told Dominican Today that there will be no legal charges for Ahorros y Prestamos' administrators, given that the problems broke out due to poor management rather than fraud on deposits, and that costs were covered with the entities assets. Payments were made with plots of land that Ahorros y Prestamos owned, DR1 says, citing Mr. Abreu. This is the case of the BanReservas, which received payment for a loan to the firm with the transfer of land valued at DOP600 million. Dominican Today underscores that part of the deposits, including Banreservas' DOP449 million pension funds, were mitigated by the land property. However, the land belonged to the State Sugar Council and had been bought by Constructora Hernandez Paulino. The CEA has collected DOP78 million for payment on the land, and the source of the remaining portion of money is yet to be defined. Mr. Abreu admitted to DR1 that he doesn't know who will pay the remaining debt on the land. Monetary authorities are talking with CEA to find a way to secure retention of the funds that were registered as property of Ahorros y Prestamos, Mr. Abreu told Dominican Today. On the other national savings and loans institutions, at least four of the 17 existent businesses must be absorbed by other larger entities, as they are in no condition to satisfy existing norms for the financial sector, Dominican Today states, citing Mr. Abreu. The three leading savings and loans organizations -- La Nacional, Popular and Cibao de Ahorros y Prestamos -- could take over the operation of four provincial savings and loans banks that don't meet the new banking regulations, Mr. Abreu told DR1. Rafael Camilo Abreu can be reached at: Superintendencia de Bancos de la Republica Dominicana Av. Leopoldo Navarro esq. Av. Mexico, N 52. Gazcue. D.N. Apartado Postal 01326 Phone: 809-585-8141 Fax: 809-685-0859 E-mail: webmaster@supbanco.gov.do BANCO INTERCONTINENTAL: Justice Ministry Dumps Some Evidence ------------------------------------------------------------ The Justice Ministry has trashed as evidence a file of challenged 2001 and 20002 financial statements of Banco Intercontinental, as well as the over 14 annexes with hundreds of pages that the prosecution did not read before the court, Dominican Today reports. Dominican Today relates that the evidence the prosecution abandoned tried to prove the existence of a hidden or parallel bank in Banco Intercontinental. Presiding judge Antonio Sanchez Mejia had warned that anything that was not read could be introduced as evidence and be taken into account in the proceedings, Dominican Today notes. Dominican Today underscores that after the hearing ended, Marino Vinicio Castillo -- the head of the defense team -- said, "The massive retirement of annexed evidence and of hundreds of pages deposited with great publicity by the accusing part reveals a resounding collapse of the accusation. It's evident that this retirement clearly indicates that the Justice Ministry does not believe in the effectiveness of that supposed evidence and their annexes. The time has come for their debate and the case is collapsing." The prosecution deliberately omitted parts to jeopardize Mr. Figueroa, Dominican Today says, citing Mr. Castillo. The evidence reflects that the regulatory authorities granted a legal extension so that Mr. Figueroa could present his financial statements corresponding to the end of 2002 to a limit date of March 24, 2003. "This document irremissibly annihilates the supposed rough draft read as supposed evidence (by the Prosecution) because it shows that that financial statement never existed, but on the contrary, that the March 24, 2003, limit date, voluntarily and in a joint manner with the Progreso Bank sent the merger contract annexed only with what had the real size of the assets and liabilities of Baninter (Banco Intercontinental), which was approved without objection by the Monetary Board," the defense told Dominican Today. Marino Vinicio Castillo can be reached at: Fuerza Nacional Progresista Presidente Consejo Nacional de Drogas Oficinas Gubernamentales, Bloque C Avenida Mexico esq. 30 de Marzo Tel. 809-2221-4747 809-221-5166 Email: of.pcastillo@codetel.net.do Banco Intercontinental aka Baninter collapsed in 2003 as a result of a massive fraud that drained it of about US$657 million in funds. As a consequence, all of its branches were closed. The bank's current and savings accounts holders were transferred to the bank's new owner -- Scotiabank. The bankruptcy of Baninter was considered the largest in world history, in relation to the Dominican Republic's Gross Domestic Product. It cost Dominican taxpayers DOP55 billion and resulted to the country's worst economic crisis. SMURFIT KAPPA: Confirms Possible Initial Public Offering Plans -------------------------------------------------------------- Smurfit Kappa Group confirmed it is considering an initial public offering, AFX News reports. The confirmation follows recent market speculation of a possible share offer. The company will seek creditors' approval to alter some terms of its senior credit facility to facilitate an IPO this year, AFX News relays. About Smurfit Kappa Group Headquartered in Dublin, Ireland, Smurfit Kappa Group -- http://www.smurfit-group.com/-- manufactures containerboard containerboard and converts it into corrugated cases, folding cartons, paper sacks, tubes, and composite cans. Other products include boxboard, sack kraft paper, and printing and writing paper. The company produces 6 million tons of paper annually and has 300 facilities worldwide. In Latin America, the company operates in Argentina, Brazil, Chile, Colombia, Costa Rica, Dominican Republic, Ecuador, Mexico and Venezuela. * * * Fitch Ratings affirmed Smurfit Kappa Acquisitions' Issuer Default Rating at 'B+'. At the same time the agency affirmed the instrument ratings. A Stable Outlook has been assigned. The stable outlook assigned to Smurfit Kappa Group's ratings reflects Fitch's view that EBITDA will return to growth during the course of 2006 and that SKG will be in a position to generate significant cashflow for debt repayment from 2007-8. SMURFIT KAPPA: S&P Puts B+ Rating on Watch Positive on IPO Plans ---------------------------------------------------------------- Standard & Poor's Ratings placed all its ratings on Ireland- based paper and packaging company Smurfit Kappa Group Ltd. and related entities, including its 'B+' long-term corporate credit rating on the group, on CreditWatch with positive implications. This follows the group's announcement that it is considering an initial public offering. The '3' recovery rating on the group's senior secured debt has not been placed on CreditWatch. "A successful IPO could improve Smurfit Kappa's financial profile should the proceeds be used for debt repayments, although it should be noted that the group's current credit measures are very weak for the existing ratings," said Standard & Poor's credit analyst Alf Stenqvist. Standard & Poor's estimates that Smurfit Kappa's adjusted-debt- to-EBITDA ratio for full-year 2006 was slightly below 7x. At the end of September 2006, Smurfit Kappa had adjusted debt of about EUR5.7 billion, including unfunded postretirement liabilities of EUR635 million. Regardless of whether the group carries out an IPO, its credit measures are expected to improve in 2007, owing to gradually improving operating performance. This is a result of improving market conditions and benefits from a rationalization program, which have helped offset higher input costs. Standard & Poor's will follow the developments of Smurfit Kappa's IPO plans. Any potential rising of the ratings will depend on a successful completion of an IPO, and its impact on the group's financial profile. In addition, Standard & Poor's will review the group's business and financial strategies before resolving the CreditWatch. * DOMINICAN REPUBLIC: Seeks European Deal for Sugar Industry ------------------------------------------------------------ The Dominican Republic government is looking for ties to enter a European Union deal for its sugar industry that its Caribbean neighbors are currently enjoying, an industry official told AFX News. The Dominican sugar industry was once dominant but lost ten thousands of jobs in over 20 years and is on the verge of losing even more millions of dollars worth of trade protections if and when the Central American Free Trade Agreement that is supported by the U.S. becomes effective in the subsequent months, Dominican Sugar Institute technical manager Manuel Dominguez told AFX. As to prevent this crisis from happening, local producers are asking for assistance from the European Union, in hopes that officials will increase the present 40,000 metric tons of European quota to 50,000 metric tons per year and enjoy the same preferential prices that producers from Guyana, Jamaica, Belize and Barbados currently have, AFX relates. Mr. Dominguez informed AFX that the current European Union's preferential prices are roughly US$3 per pound higher than what Dominican producers earn in Europe. This is even higher even with the imposed 36% cut to sugar subsidies a year ago that the World Trade Organization requested. Dominican Foreign Minister Carlos Morales Tronsoco already discussed the proposal with European officials in a visit to Brussels in December and in a conference with the 15-member Caribbean Community in Guyana on Jan. 13. Mr. Dominguez told AFX that he was not still sure what the European Union would do. "This is creating a new option and thinking about a future," Mr. Dominguez was quoted by AFX. This move, however, prompted the displeasure of the members of the Caribbean Sugar Association. The group claimed that the Dominican Republic has vowed decades ago not to enter into the agreement that guarantees high prices to other former colonies in the Caribbean, Africa and the Pacific, AFX says. The group is worried of what an influence the nation's proposal could have on other Caribbean producers that are fighting the current EU cuts, AFX adds. "We are not going to support them getting into the sugar protocol and if they do, it should not be at the expense of our allocated quota," Guayanese Agriculture Minister Robert Persaud commented to AFX. * * * The Troubled Company Reporter-Latin America reported on May 9, 2006, that Fitch Ratings upgraded these debt and issuer Default Ratings of the Dominican Republic: -- Long-term foreign currency Issuer Default Rating to B from B-; -- Country ceiling upgraded to B+ from B-; -- Foreign currency bonds due 2006 to B-/RR4 from CCC+/RR4; -- Foreign currency Brady bonds due 2009 to B/RR4 from B-/RR4; -- Foreign currency bonds due 2011 to B/RR4 from B-/RR4; -- Foreign currency bonds due 2013 to B-/RR4 from CCC+/RR4; -- Foreign currency bonds due 2018 to B/RR4 from B-/RR4; and -- Foreign currency collateralized Brady bonds due 2024 to B+/RR3 from B/RR3. Fitch also affirmed these ratings: -- Long-term local currency Issuer Default Rating: B; and -- Short-term Issuer Default Rating: B. Additionally, Fitch assigned a debt and Recovery Rating to this issue: -- Foreign currency bonds due 2027: B/RR4. Fitch said the rating outlook for the long-term foreign and local currency IDRs is Stable. ============= E C U A D O R ============= ADVANCED MICRO: Shares Drop 10% as Lower Prices Cut Profit ---------------------------------------------------------- Advanced Micro Devices Inc.'s shares dropped nearly 10% Friday after the company warned of substantially lower profits caused by a price war with its bigger rival Intel Corp., Chris Nuttall writes for the Financial Times. AMD disclosed expects revenue, excluding ATI-related segments, for the fourth quarter ended Dec. 31, 2006, to increase approximately three percent from the US$1.33 billion reported in the third quarter of 2006. Fourth quarter operating income, excluding ATI-related segments and acquisition-related charges, is expected to be positive but substantially lower than in the third quarter. The company said that its fourth quarter gross margin and operating income were impacted by "significantly lower microprocessor average selling prices, which largely offset a significant increase in unit sales." FT reports that AMD's total expected sales of US$1.72 billion for the fourth quarter, including expected revenue of US$350 million from the purchase of ATI Technologies, is below analyst expectations of US$1.85 billion for the fourth quarter. Bank of America semiconductor analyst Sumit Dhanda expressed the figures as a big miss. Joe Osha, an analyst at Merrill Lynch, warned that AMD might lose money in the first half of 2007 citing competition from rival Intel, slower discovery in its ATI's graphics card business and the need to raise capacity. AMD will report fourth quarter 2006 consolidated results after market close on Jan. 23, 2007. About AMD Based in Sunnyvale, California, Advanced Micro Devices Inc. (NYSE: AMD) -- http://www.amd.com/-- designs and produces innovative microprocessor and graphics and media solutions for the computer, communications, and consumer electronics industries. The company has corporate locations in Sunnyvale, California, Austin, Texas, and Markham, Ontario, and global operations include those in Bolivia, Chile, Colombia and Ecuador, among others. * * * As reported in the Troubled Company Reporter on Oct. 31, 2006, in connection with Moody's Investors Service's implementation of its new Probability-of-Default and Loss-Given-Default rating methodology for the U.S. technology semiconductor and distributor sector, the rating agency affirmed its Ba3 corporate family rating on Advanced Micro Devices, Inc. As reported in the Troubled Company Reporter on Oct. 6, 2006, Standard & Poor's Ratings Services affirmed its 'B+' corporate credit rating on AMD. The rating agency also assigned its 'BB-' bank loan rating, one notch above the corporate credit rating, and a '1' recovery rating to the company's proposed US$2.5 billion senior secured term loan, to be used as partial funding of the acquisition. S&P further raised its rating on the company's US$600 million (US$390 million outstanding) senior notes to 'B+' from 'B'. * ECUADOR: Bondholders Positive President Won't Default on Debts ---------------------------------------------------------------- Ecuador bondholders don't believe President Rafael Correa will opt to default on the country's US$11 billion of foreign debts, Lester Pimentel at Bloomberg News reports. As widely reported, the Ecuadorian President said in December 2006 the country would likely hald debt payments in order to spend more for health care and education. Bloomberg says investors believe otherwise because of Ecuador's funds from rising oil exports, quickening economic growth and a budget surplus. "There is no reason to default, he can pay," Arthur Byrnes, who manages US$800 million at Deltec Asset Management in New York, told Bloomberg. "I seriously doubt he would be that foolish." Mr. Byrnes, Bloomberg says, holds US$1 million of the bonds due in 2030. Ecuador's 10% bonds due 2030 trade at 78 cents on the dollar. The bonds were trading below at 35 cents when the country defaulted on its debts in 1999. As reported on Jan. 10, 2007, Moody's Investors Service changed the outlook on Ecuador's sovereign ratings to stable from positive in light of increasing concerns regarding the incoming government's willingness to service debt obligations and uncertainty about its policy direction. The outlook change affects Ecuador's Caa1 foreign currency government bond rating, its Caa1 country ceiling for foreign currency bonds, and its Caa2 country ceiling for foreign currency bank deposits. Ecuador's other ratings, including the Ba2 country ceiling for local currency bonds, are unchanged. ================= G U A T E M A L A ================= BANCO DE COMERCIO: Guatemala Suspending Bank's Operations --------------------------------------------------------- A central bank spokesperson told Reuters that Guatemala will suspend operations at Banco de Comercio. "The bank (Banco de Comercio) itself requested the suspension," the spokesperson told Reuters. Reuters relates that Banco de Comercio asked the Guatemalan banking superintendent to intervene on Jan. 11. Banco de Comercio is a privately owned bank with 36 branches and assets of around US$150 million. It started operations in 1993. The spokesperson told Reuters that it was too early to formally give a reason. However, the likely cause of Banco de Comercio's closure was that the bank had lent more than it is allowed by law. The central bank will be giving more details. The banking superintendent was discussing how to recover the money in Banco de Comercio's over 100,000 accounts, Reuters says, citing the spokesperson. The spokesperson told Reuters, "The problem is limited to this bank. One advantage is that it doesn't have offshore operations, and it's small." The spokesperson said that there was no apparent connection to Bancafe, which collapsed in September 2006, sparking a rush of cash withdrawals by nervous account holders at other banks, Reuters states. * GUATEMALA: Suspending Banco de Comercio's Operations ------------------------------------------------------ A central bank spokesperson told Reuters that the Guatemalan government expects to suspend Banco de Comercio, the second bank in the country to collapse in four months. Reuters reports that the bank asked the banking superintendent to intercede on Jan. 11. The source said that there was no formal disclosure on the bank's reason to be suspended, but the bank's lending out more than allowed by the law may have prompted it. The spokesman continued to tell Reuters that the bank asked for the suspension and added that the superintendent was in talks on how to recover money in Banco de Comercio's more than 100,000 accounts. * * * Fitch Ratings assigned these ratings on Guatemala: Rating Rating Date ------ ----------- Country Ceiling BB+ Feb. 22, 2006 Long Term IDR BB+ Feb. 22, 2006 Short Term IDR B Feb. 22, 2006 Local Currency Long Term Issuer Default Rating BB+ Feb. 22, 2006 Fitch also rated Guatemala's senior unsecured bonds: Maturity Date Amount Rate Ratings ------------- ------ ---- ------- Aug. 3, 2007 US$150,000,000 8.5% BB+ Nov. 8, 2011 US$325,000,000 10.25% BB+ Aug. 1, 2013 US$300,000,000 9.25% BB+ Oct. 6, 2034 US$330,000,000 8.125% BB+ =============== H O N D U R A S =============== * HONDURAS: Government to Control Exxon, Chevron Oil Terminals -------------------------------------------------------------- The Honduran government will temporarily take control of oil storage terminals operated by Exxon Mobil, Chevron Corp. and DIPPSA, after rental talks failed, Reuters reports. President Manuel Zelaya told Reuters that the move is part of a government import program meant to drive down fuel prices. "It is not a nationalization, it's a temporary use of the storage tanks through a lease and payment of a reasonable price," the Honduran President was quoted by Reuters as saying. Reuters relates that the new program could save the government about US$66 million a year. President Zelaya explained that the program would allow the government to go ahead with a deal with Conoco Phillips to import at least 8.4 million barrels of gasoline and diesela year. * * * Moody's Investor Service assigned these ratings on Honduras: Rating Rating Date Senior Unsecured B2 Sept. 29, 1998 Long Term IDR B2 Sept. 29, 1998 ============= J A M A I C A ============= AIR JAMAICA: Responding to Union's Proposals This Week ------------------------------------------------------ Air Jamaica will respond to the National Workers Union's proposals for the airline this week, Radio Jamaica reports. Radio Jamaica relates that the National Workers Union President Vincent Morrison presented a seven-point proposal during the Jan. 10 meeting of the parliamentary committee, which is looking into the operations of Air Jamaica. The proposal includes: -- rationalization of routes and a fleet review, -- re-capitalization of the airline with workers having a stake in its ownership, -- expansion of Board of Directors to include two members of the pilot and ground staff, and -- cutting down the number of airline's management team as it seems overstaffed. Air Jamaica's management are reviewing the union's recommendations, Radio Jamaica notes, citing OK Melhado, the airline's chairperson. A full response will be given during the next meeting of the parliamentary committee, Mr. Melhado told Radio Jamaica. 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. DYOLL INSURANCE: Earl Witter May Handle Insurance Payment Clash --------------------------------------------------------------- The Jamaica Agricultural Society or JAS wants Public Defender Earl Witter's intervention in the insurance payment battle between Dyoll Insurance Co.'s liquidators and coffee farmers, the Jamaica Observer reports. According to The Observer, Senator Norman Grant, who heads the JAS, said in a JAS St. Andrew Association of Branch Societies meeting, "Next week (this week), we will be writing to the Office of the Public Defender seeking his intervention into the dispute between the trustees and the liquidators, in an effort to get the matter arbitrated so we can have closure to the issue." It has been over eight months since the Supreme Court ruled in favor of the farmers, but nothing has happened since, The Observer says, citing Sen. Grant. The Observer underscores that in July 2006 the court authorized the coffee farmers to access US$3.1 million due to them, as insurance benefits from Dyoll Insurance, for damages suffered during Hurricane Ivan in September 2004. Justice Sykes had said then that the money was for the sole benefit of Jamaican coffee farmers who were insured by Dyoll Insurance up to the time of the hurricane. The report says Munich Re holds the funds. After the court issued the decision, joint liquidators John Lee of PriceWaterhouseCoopers and Kenneth Krys of RSM Cayman Islands gave notice of appeal, which has delayed the payment since. Messrs. Lee and Krys had insisted that the funds should be shared among other beneficiaries, including those in the Cayman Islands, The Observer notes. Sen. Grant commented to The Observer, "I know that the joint liquidators have indicated that they will appeal the judgment. It is a situation, which greatly saddens me, but they have their rights. We have run out of patience and the longer the funds stay there, without a decision being taken, is the greater the chance that by the time a decision is made, there will be nothing left to distribute." The legal fees were excessive and were making a huge dent in the US$3.1-million being held in escrow pending a final decision, The Observer notes, citing Sen. Grant. Sen. Grant told The Observer, "It doesn't make any sense that we win the battle and lose the war. I think that it is an opportune time for us to call on the public defender to step in to try to bring arbitration into the process to bring conclusion to the matter." The Observer emphasizes that in the meantime, the Jamaican government has advanced US$100 million to the coffee farmers. Though up to 10,000 farmers would benefit, 75% of them would get about 30% of the total as it was really the big farmers who would benefit, Roger Clarke, the minister of agriculture in Jamaica, told The Observer. Dyoll Group Ltd. is a Jamaica-based company that is principally engaged in the insurance business. Jamaica's Financial Services Commission has assumed temporary management of the Jamaica-based Dyoll Insurance Co. Ltd. in Mar. 7, 2005, in order to establish the true position of the Company, address the matter of settlement to its claimants and ensure that its policies will remain in force after a high level of insurance claims were levelled on the company as a result of the hurricane Ivan. Kenneth Tomlison was appointed temporary manager. Jamaica's Supreme Court ordered for the distribution of a US$653 million fund held by the FSC in accordance with the Insurance Act 2001, section 59, which says that the prescribed deposit, on the winding up of an insurance company, should be applied first to settle the claims of local policyholders. =========== M E X I C O =========== ADVANCED MARKETING: Hachette Book Blocks US$75-Mln DIP Financing ---------------------------------------------------------------- Hachette Book Group USA Inc. asked the U.S. Bankruptcy Court for the District of Delaware to reject Advanced Marketing Services Inc. and its debtor-affiliates' request to obtain US$75,000,000 of DIP Financing. The Hon. Christopher S. Sontchi of the Delaware Bankruptcy Court recently authorized Advanced Marketing Services and its debtor- affiliates, on an interim basis, to dip their hands into the DIP financing facility arranged by Wells Fargo Foothill for a consortium of lenders. AMS, Publishers Group Inc., and Publishers Group West Inc. are borrowers under a Loan and Security Agreement dated April 27, 2004, with Wells Fargo Foothill Inc., as agent, and a consortium of lenders. The Senior Facility provides for a revolving line of credit up to a maximum commitment level of US$90,000,000. Curtis R. Smith, AMS's vice-president and chief financial officer, relates that the Senior Lenders have agreed to continue to provide liquidity to the Debtors through a DIP Loan Facility, which carries forward many of the terms of the Senior Facility. Against this backdrop, the Debtors seek the Court's authority to obtain from Foothill and the Senior Lenders, through the DIP Loan Facility, cash advances and other extensions of credit in an aggregate principal amount of up to US$75,000,000. Hachette Book Group USA Inc., formerly known as Time Warner Book Group, has been a supplier of books to AMS, over the past 20 years. The Debtors have listed Hachette Book as their fourth largest unsecured creditor, holding an unsecured claim for US$22,569,624. Jeffrey A. Marks, Esq., at Squire, Sanders & Dempsey L.L.P, in Cincinnati, Ohio, says that during the 45 days before the Petition Date, Hachette Book sold books to AMS for which it has not yet been paid. Accordingly, Hachette Book has the right to reclaim the books sold to AMS during that period under Section 546(c) of the Bankruptcy Code, and to an administrative expense claim for those books sold to AMS during the 20-day period before the Petition Date under Section 503(b)(9). To that end, on the Petition Date, Hachette Book sent an initial reclamation demand to Mark D. Collins, Esq. of Richards, Layton & Finger, P.A., the Debtors' proposed local counsel, demanding reclamation and reserving its rights to supplement and amend its reclamation demand upon further review of its books and records. Hachette Book complains that pursuant to the DIP Loan Facility, the Borrowers have obligated themselves, via an affirmative covenant in the DIP Loan Agreement, to comply with the Qualified Transaction Timeline providing, among other things, that: (i) within 10 days after the Petition Date, the Borrowers must file a motion to sell all or substantially all of their assets, or refinance or recapitalize so as to pay the Lenders in full; and (ii) within 50 days after filing the Sale Motion, the Borrowers must have received cash proceeds from a sale or Other transaction sufficient to pay the Lenders in full. Mr. Marks notes that this obligation under the DIP Loan Facility will fundamentally and irrevocably dictate the course of conduct of the Debtors' bankruptcy case. However, the Court, creditors and other parties-in-interest simply have not been provided sufficient information or opportunity to determine whether a sale or other transaction, under the time frame stipulated, is an appropriate resolution of the bankruptcy case, and is otherwise in the best interests of the Debtors' estate and creditors. Mr. Marks also asserts that: (a) The request fails to specify a proposed maximum borrowing for the period before the Final Hearing; (b) The proposed time frame within which to investigate and, if appropriate, challenge, the position of the Lender/Senior Lender is too short and is overbroad in certain respects; (c) Certain provisions relating to the Professional Fee Carve- Expenses are unclear, specifically, the Distinction between the US$2,000,000 carve-out that is proposed to be in effect before a Payoff Event and the US$3,000,000 carve-out after a Payoff Event; and (d) The procedure for approval of a Non-Material Amendment is inappropriate to the extent that it permits an abbreviated approval process for an amendment that may in fact be material. The definition of Non-Material Amendment encompasses provisions as any new, subsequent, modified, restated or amended covenants or conditions acceptable or required by the Lenders. The covenants or conditions could very well include material provisions. Quarto Inc.; Quarto Publishing, PLC; Book Sales Inc.; Creative Publishing International Inc.; Walter Foster Inc.; and Design Eye Limited, agree with Hachette's arguments. The Quarto Entities assert claims exceeding US$3,200,000 against the Debtors. The Quarto Entities also contend that the US$2,400,000 extension fee paid on July 31, 2006, to the Lenders under the Debtors' Loan and Security Agreement with Wells Fargo Foothill Inc., as well as the US$750,000 closing fee under the DIP Facility are excessive and should be subject to close examination and disallowance. The Quarto Entities are represented in the Debtors' cases by Victor A. Sahn, Esq., at Sulmeyer Kupetz, in Los Angeles, California. About Advanced Marketing Based in San Diego, California, Advanced Marketing Services Inc. -- http://www.advmkt.com/-- provides customized merchandising, wholesaling, distribution and publishing services, currently primarily to the book industry. The company has operations in the U.S., Mexico, the United Kingdom and Australia and employs approximately 1,200 people worldwide. The company and its two affiliates, Publishers Group Incorporated and Publishers Group West Incorporated filed for Chapter 11 protection on Dec. 29, 2006 (Bankr. D. Del. Case Nos. 06-11480 through 06-11482). Chun I. Jang, Esq., Mark D. Collins, Esq., and Paul Noble Heath, Esq., at Richards, Layton & Finger, P.A., represent the Debtors. When the Debtors filed for protection from their creditors, they listed estimated assets and debts of more than US$100 million. The Debtors' exclusive period to file a Chapter 11 plan expires on Apr. 28. (Advanced Marketing Bankruptcy News, Issue No. 2; Bankruptcy Creditors' Service Inc., http://bankrupt.com/newsstand/or 215/945-7000) ADVANCED MARKETING: Taps Richards Layton as Local Bankr. Counsel ---------------------------------------------------------------- Advanced Marketing Services Inc. and its debtor-affiliates seek authority from the U.S. Bankruptcy Court for the District of Delaware to employ Richards, Layton & Finger, P.A. as their local bankruptcy counsel, nunc pro tunc to the Petition Date. Richards Layton will be performing extensive legal services that will be necessary during the Chapter 11 proceedings. Aside from the firm's extensive knowledge in the field of debtors' and creditors' rights and business reorganizations, the Debtors also desire to employ Richards Layton because of its expertise, experience, and knowledge in practicing before the Delaware Bankruptcy Court, its proximity to the Court, and its ability to respond quickly to emergency Court matters. Richards Layton began providing legal services and advice to the Debtors since December 2006. During the firm's representation period, it has acquired knowledge of the Debtors' business, financial affairs, and capital structure. The Debtors believe that Richards Layton is well qualified and capable to efficiently represent them in the Chapter 11 cases. As the Debtors' counsel, Richards Layton will: (a) advise the Debtors of their rights, powers and duties as debtors and debtors in possession; (b) take all necessary action to protect and preserve the Debtors' estates, including the prosecution of actions, the defense of any actions against the Debtors, the negotiation of disputes involving the Debtors and the preparation of objections to claims; (c) prepare all necessary motions, applications, answers, orders, reports and papers in connection with the administration of the debtors' estates; and (d) perform all other necessary legal services in connection with the Chapter 11 cases. Richards Layton will be paid on an hourly basis at its normal and customary hourly rates, plus reimbursement of actual, necessary expenses and other charges incurred: Professional Hourly Rate ------------ ----------- Mark D. Collins US$520 Paul N. Heath US$350 Chun I. Pang US$225 Aja E. McDowell US$165 Mark D. Collins, Esq., a director at Richards Layton, reports that prior to the Petition Date, the Debtors paid the firm a US$125,000 retainer. The Debtors propose that the amount paid be treated as an evergreen retainer to be held by the firm as security throughout the Chapter 11 cases, until its fees and expenses are awarded. Mr. Collins assures the Court that his firm is a "disinterested person," as that term is defined in Section 101(14) of the Bankruptcy Code, and does not hold or represent any interest adverse to the estates. About Advanced Marketing Based in San Diego, California, Advanced Marketing Services Inc. -- http://www.advmkt.com/-- provides customized merchandising, wholesaling, distribution and publishing services, currently primarily to the book industry. The company has operations in the U.S., Mexico, the United Kingdom and Australia and employs approximately 1,200 people worldwide. The company and its two affiliates, Publishers Group Incorporated and Publishers Group West Incorporated filed for Chapter 11 protection on Dec. 29, 2006 (Bankr. D. Del. Case Nos. 06-11480 through 06-11482). Chun I. Jang, Esq., Mark D. Collins, Esq., and Paul Noble Heath, Esq., at Richards, Layton & Finger, P.A., represent the Debtors. When the Debtors filed for protection from their creditors, they listed estimated assets and debts of more than US$100 million. The Debtors' exclusive period to file a Chapter 11 plan expires on Apr. 28. (Advanced Marketing Bankruptcy News, Issue No. 2; Bankruptcy Creditors' Service Inc., http://bankrupt.com/newsstand/or 215/945-7000) ADVANCED MARKETING: Wants to Hire O'Melveny as Bankruptcy Atty. --------------------------------------------------------------- Advanced Marketing Services Inc. and its debtor-affiliates seek authority from the U.S. Bankruptcy Court for the District of Delaware to employ O'Melveny & Myers LLP as their general bankruptcy counsel, nunc pro tunc to the Petition Date. Since April 2004, O'Melveny has represented the Debtors as general corporate, securities, and litigation counsel. It has provided: -- extensive representation and advice relating to the Debtors' prepetition Loan and Security Agreement with Wells Fargo Foothill Inc., as agent, and a syndicate of lenders; -- efforts to refinance the Senior Facility and other strategic alternatives to recapitalize the Debtors; and -- disclosure advice regarding the Debtors' public announcements and regulatory obligations. The Debtors want to hire O'Melveny because of the firm's knowledge in their operations and finances, and its expertise and experience in reorganizations, bankruptcy cases, and other relevant areas of expertise. As the Debtors' general bankruptcy counsel, O'Melveny will: (a) advise the Debtors regarding matters of bankruptcy law; (b) advise the Debtors of the requirements of the Bankruptcy Code, the Federal Rules of Bankruptcy Procedure, applicable local bankruptcy rules pertaining to the administration of their cases and U.S. Trustee Guidelines related to the daily operation of their business and the administration of the estates; (c) prepare motions, applications, answers, proposed orders, reports and papers in connection with the administration of the estates; (d) negotiate with creditors, prepare and seek confirmation of a Chapter 11 plan and related documents and assist the Debtors with implementation of the plan; (e) assist the Debtors in the analysis, negotiation and disposition of certain estate assets for the benefit of the estates and their creditors; (f) advise the Debtors regarding general corporate and securities matters and bankruptcy related employment and litigation issues; and (g) render other necessary advice and services as the Debtors may require in connection with their cases. O'Melveny will be paid on an hourly basis at its normal and customary hourly rates, plus reimbursement of actual, necessary expenses and other charges incurred: Professional Hourly Rate ------------ ----------- Suzzanne Uhland US$725 Austin Barron US$540 Alexandra Feldman US$445 Ana Acevedo US$300 Lynn Talab US$285 Suzzanne Uhland, Esq., a partner at O'Melveny, discloses that before the Petition Date, the Debtors paid O'Melveny US$1,201,990 for fees and expenses for advice and legal services rendered in connection with restructuring advice and the preparation and commencement of the Debtors' cases, as well as to serve as a retainer. During the 90-day period before the Petition Date, the Debtors paid invoices totaling US$942,682 to the firm. According to Ms. Uhland, after deducting fees and expenses previously billed and paid for the prepetition legal services plus estimated unbilled prepetition amounts, approximately US$721,038 remains as retainer, which will be applied to postpetition services. Ms. Uhland attests that her firm is a "disinterested person," as that term is defined in Section 101(14) of the Bankruptcy Code, and does not hold or represent any interest adverse to the estates. About Advanced Marketing Based in San Diego, California, Advanced Marketing Services Inc. -- http://www.advmkt.com/-- provides customized merchandising, wholesaling, distribution and publishing services, currently primarily to the book industry. The company has operations in the U.S., Mexico, the United Kingdom and Australia and employs approximately 1,200 people worldwide. The company and its two affiliates, Publishers Group Incorporated and Publishers Group West Incorporated filed for Chapter 11 protection on Dec. 29, 2006 (Bankr. D. Del. Case Nos. 06-11480 through 06-11482). Chun I. Jang, Esq., Mark D. Collins, Esq., and Paul Noble Heath, Esq., at Richards, Layton & Finger, P.A., represent the Debtors. When the Debtors filed for protection from their creditors, they listed estimated assets and debts of more than US$100 million. The Debtors' exclusive period to file a Chapter 11 plan expires on Apr. 28. (Advanced Marketing Bankruptcy News, Issue No. 2; Bankruptcy Creditors' Service Inc., http://bankrupt.com/newsstand/or 215/945-7000) DELTA AIR: S&P Says Ratings Unaffected by US Airways Higher Bid --------------------------------------------------------------- US Airways Group Inc. (B-/Watch Dev/--) raised its acquisition bid for Delta (rated 'D') to US$5 billion of cash and stock valued currently at US$5.2 billion (an approximate 19% increase over the previous proposal), raising pressure on Delta, whose management seeks to reorganize as an independent entity. Standard & Poor's Ratings Services said its ratings on Delta, including the 'D' corporate credit rating (which is defined by the company's bankruptcy status), are not affected. Ratings on enhanced equipment trust certificates or EETCs remain on CreditWatch with developing implications, excepting 'AAA' rated, insured EETCs, which are not on CreditWatch. US Airways' revised bid would expire Feb. 1, 2007, unless the Delta creditors' committee (which is the principal group whose approval is needed for a merger) supports commencement of due diligence, making required filings under the Hart-Scott-Rodino Act, and postponement of Delta's Feb. 7, 2007, hearing on its disclosure statement. "The offer is likely to increase support among unsecured creditors for exploring the acquisition bid, but Delta's [and possibly US Airways'] labor groups are likely to continue to oppose the merger, and any transaction would have to clear federal antitrust review," said Standard & poor's credit analyst Philip Baggaley. "The increased US Airways' offer may also prompt competing bids from other airlines, most likely UAL Corp. [B/Stable/--] or possibly Northwest Airlines Corp. [rated 'D'], which, like Delta, is in Chapter 11 but also expected to emerge in the second or third quarter of 2007." Headquartered in Atlanta, Georgia, Delta Air Lines (OTC: DALRQ) -- http://www.delta.com/-- is the world's second-largest airline in terms of passengers carried and the leading U.S. carrier across the Atlantic, offering daily flights to 502 destinations in 88 countries on Delta, Song, Delta Shuttle, the Delta Connection carriers and its worldwide partners. The Company and 18 affiliates filed for chapter 11 protection on Sept. 14, 2005 (Bankr. S.D.N.Y. Lead Case No. 05-17923). Marshall S. Huebner, Esq., at Davis Polk & Wardwell, represents the Debtors in their restructuring efforts. Timothy R. Coleman at The Blackstone Group L.P. provides the Debtors with financial advice. Daniel H. Golden, Esq., and Lisa G. Beckerman, Esq., at Akin Gump Strauss Hauer & Feld LLP, provide the Official Committee of Unsecured Creditors with legal advice. John McKenna, Jr., at Houlihan Lokey Howard & Zukin Capital and James S. Feltman at Mesirow Financial Consulting, LLC, serve as the Committee's financial advisors. As of June 30, 2005, the company's balance sheet showed US$21.5 billion in assets and US$28.5 billion in liabilities. GENERAL MOTORS: Outlines Priorities for 2007 & Increases CapEx --------------------------------------------------------------- General Motors Corp. chairman and chief executive officer Rick Wagoner informed securities analysts that GM has made considerable progress in its North America turnaround, and outlined 2007 priorities for the automaker's ongoing transformation. "GM's North America turnaround plan moved faster and further than people expected a year ago," Mr. Wagoner said. "To be direct, 2006 needed to be a huge year for us -- and it was." Mr. Wagoner noted that through the third quarter of last year, GM's adjusted net income had improved by US$4.2 billion to a profit of US$1.9 billion, with most of the improvement coming in North America. GM's improvement was also aided by strong financials and positive results outside North America, particularly in China. In addition, liquidity remained strong with over US$20 billion cash on hand at the end of the third quarter. An important area of improvement for GM in 2006 was in structural cost. The company far exceeded its reduction target of US$6 billion in North America on an annual running-rate basis, achieving US$9 billion of cost reduction on a running- rate basis by year-end 2006. "We expect to reflect at least US$6 billion of these savings in our 2006 financials, and then realize the full US$9 billion savings in 2007," Mr. Wagoner said. "This represents a major first step in achieving our aggressive global target of reducing structural costs to 25% of revenue by 2010." In fact, GM reduced its global automotive structural costs from 34% of revenue in 2005, to between 29% and 30% of global revenue in 2006, and expects to further improve on that figure during 2007. GM also made big moves on the revenue side of its turnaround plan in 2006, especially in terms of its sales and marketing strategy. Thanks to a disciplined approach that included reduced prices, lower incentives, and a renewed focus on products and brands, GM achieved its U.S. retail sales target of 3 million units. The other big move, Mr. Wagoner noted, came with GM's introduction last September of the best powertrain warranty of any full-line manufacturer -- five years or 100,000 miles on every 2007 model year GM car and light-duty truck. "Overall, there is a lot more work to do, but we stand today in a much more favorable position than we did just 12 months ago," he added. Mr. Wagoner said GM has five key priorities for 2007: -- Stay focused on the North America turnaround; -- Continue to drive aggressively in emerging markets, such as China, Brazil, Russia, and India; -- Maximize the benefits of running the business globally; -- Build on GM's comprehensive advanced propulsion strategy; and -- Continue to improve business results, especially improved earnings and cash flow. For the North American turnaround, Mr. Wagoner pointed out that product excellence was the most important element of the strategy, and "will continue to remain our absolute number-one focus." To that end, he announced that GM's global capital spending would increase from under US$8 billion in 2005 and 2006, to between US$8.5 billion and US$9 billion in 2007 and 2008. "We have had a very positive reaction to our newest vehicles, including the Chevy Tahoe, GMC Yukon, and Cadillac Escalade full-size utilities, and the Saturn Outlook, GMC Acadia, and Buick Enclave midsize crossovers," Mr. Wagoner said. "We also swept the car and truck of the year awards at the North American International Auto Show in Detroit with the Saturn Aura and Chevrolet Silverado. "The progress in the execution of our new cars and trucks around the world is a credit to the men and women of General Motors. And we're going to continue raising the bar in future product, with a particular focus on outstanding design and technology leadership," he added. In terms of the global marketplace, Mr. Wagoner noted that 55% of the company's unit sales were outside the United States in 2006, and that this trend would likely continue. To capitalize on this opportunity, Mr. Wagoner said GM would continue to push hard and build on its already strong position in emerging markets. This worldwide sales growth will be aided by GM's continued efforts to run its business globally, particularly in product development, manufacturing, purchasing, and powertrain. "This move to run the business in a globally integrated manner is, in fact, probably the most profound change that is going on in the company today," Mr. Wagoner explained. "In 2007, we'll drive to accelerate the value we realize from global integration of GM." GM's leveraging of global resources is also a key element of the company's drive to achieve energy diversity and environmental leadership, as evidenced by the introduction this week of the Chevrolet Volt concept car, an extended-range electric vehicle based on GM's all-new E-Flex technology. E-Flex is a family of electrically driven propulsion systems for future small and midsize GM vehicles, and a potential "game- changer" for GM and the auto industry, Mr. Wagoner said. The final 2007 priority for GM is very clear: continue to improve business results. "The rate of improvement in our financials through three quarters of 2006 was significant, and it needed to be," Mr. Wagoner said. "But no one at GM believes that hitting breakeven in North America, or making a couple of billion in corporate net income is 'winning.' We know we need to move to steady revenue growth, solid earnings, consistent positive cash flow, and a stronger balance sheet." "We plan to make another significant step in the right direction on these metrics in 2007," he said. About General Motors Corp. General Motors Corp. (NYSE: GM) -- http://www.gm.com/-- is the world's largest automaker and has been the global industry sales leader since 1931. Founded in 1908, GM employs about 327,000 people around the world. It has manufacturing operations in 33 countries and its vehicles are sold in 200 countries. GM sells cars and trucks under these brands: Buick, Cadillac, Chevrolet, GMC, GM Daewoo, Holden, HUMMER, Opel, Pontiac, Saab, Saturn and Vauxhall. * * * As reported in the Troubled Company Reporter on Dec. 15, 2006, Standard & Poor's Ratings Services affirmed its 'B' corporate credit rating and other ratings on General Motors Corp. and removed them from CreditWatch with negative implications, where they were placed March 29, 2006. S&P said the outlook is negative. As reported in the Troubled Company Reporter on Nov. 14, 2006, Moody's Investors Service assigned a Ba3, LGD1, 9% rating to the proposed US$1.5 billion secured term loan of General Motors Corp. The term loan is expected to be secured by a first priority perfected security interest in all of the US machinery and equipment, and special tools of General Motors and Saturn Corp. GRUPO GIGANTE: Market Chain Picks KSS for Price Optimization ------------------------------------------------------------ The Gigante Supermarket chain has selected KSS PriceStrat for price and promotion optimization. Gigante operates supermarkets with four primary store formats: -- Gigante, -- Bodega Gigante, -- Super Gigante and -- SuperPrecio. Gigante will use KSS PriceStrat for both regular and promotional price modeling, optimization and forecasting. KSS PriceStrat provides merchants with a desktop application that accurately models the impact of pricing and promotional decisions and their effect on category and cross category sales and profits. "Price optimization and forecasting are something that will add tremendous value to our operations," said Alejandro Ahuad, commercial director of Gigante. "After investigating several optimization vendors, we decided KSS PriceStrat will best provide our merchandising team with the ability to accurately forecast and evaluate the effects of our pricing and promotional decisions, before we implement them. This unique insight will allow us to work more closely with our suppliers to make sure we are delivering strong value to our consumers while achieving our company's financial goals." "Gigante is a true innovator in the grocery market and we are excited to bring the value of Price Modeling and Optimization to this organization," said Lance Jacobs, chief executive officer of the KSS retail division. "It is very empowering for a merchant when they can have a view of tomorrow, today. KSS PriceStrat will provide their merchandising team with the ability to propose, forecast, evaluate and refine their pricing and promotional plans using a fast, intuitive application. Gigante strives to deliver exceptional value to their consumers and we look forward to working with them to support this." About Gigante With over 600 units in Mexico, Grupo Gigante, S.A. de C.V., is a public Mexican trade company which operates in the Mexican Stock Market -- Bolsa Mexicana de Valores. Through its subsidiaries, Gigante has developed leading chains of supermarkets, family restaurants, and specialized commerce, for 43 years. Its saubsidiaries include "Gigante", which contains formats including: "Gigante" (Hypermarkets), "Super Gigante" (Supermarkets), "Super Maz" and "Bodega" (Warehouses), all of them supermarket chains, as well as "Cafeterias Toks, S.A. de C.V.", a specialized family restaurant chain. With its partners, Grupo Gigante has also established joint ventures, developing Office Depot de Mexico, S.A. de C.V., a Mexican leader chain store of office and school supplies, and Radio Shack de Mexico, S.A. de C.V., an exclusive format with presence throughout the Mexican Republic, that offers a wide assortment of electronic equipment and accessories. * * * As reported in the Troubled Company Reporter on March 29, 2006, Fitch Ratings has assigned a rating of 'BB' to Grupo Gigante S.A. de C.V.'s proposed offering of senior notes due 2016 up to US$250 million. Proceeds from the offering will be used to prepay existing debt. Fitch said the rating outlook is stable. FORD MOTOR: CEO Alan Mulally Considers Selling Jaguar Brand ----------------------------------------------------------- Ford Motor Co. CEO Alan Mulally revealed that he might consider selling the company's Jaguar brand, threatening about 8,000 car workers' jobs, The Scotsman reports. The Company launched "Way Forward," a turnaround plan that includes the sale of Aston Martin, in an effort to stem multi- billion-pound losses, states The Scotsman. Ford has explored strategic options for its Aston Martin sports-car unit in August, with particular emphasis on a potential sale of all or a portion of the unit. "All good businesses continually review their portfolio, and we will continue to evaluate our portfolio going forward," Mr. Mulally said. "I feel more confident now than when I arrived that we can create a viable Ford." However, he noted that it was a "critical time" for the whole car industry. As reported in the Troubled Company Reporter-Europe on Aug. 30, Sir Anthony Bamford, JC Bamford Excavators Ltd.'s chairman of the board, was looking at the possibility of buying the Jaguar brand from Ford. However, Mr. Bamford said he has abandoned plans of buying the Jaguar brand from Ford after executives from Ford Europe and the Premier Automotive Group, revealed that it has no intentions of selling the brand at the moment. According to Mr. Bamford, cited in the Financial Times, Ford was only interested in selling the Jaguar brand together with the profitable Land Rover operations. JC Bamford is a U.K.-based construction-machinery company. Mr. Bamford said that the brand has potential although Jaguar needs to cut ties with Land Rover for him to consider his plans further. Jaguar is part of the Premier Automotive Group -- the organization under which all of Ford's European brands are grouped -- which includes other brands like Volvo, Land Rover and Aston Martin. In Ford's second quarter results, the segment incurred a US$180 million net loss. The Company's management said the decline in earnings in the PAG segment primarily reflected unfavorable currency exchange related to the expiration of favorable hedges, adjustments to warranty accruals for prior model-year vehicles, mainly at Land Rover and Jaguar, and lower market share at Volvo associated with new model changeovers, offset partially by favorable product and market mix and lower overhead costs. About Ford Motor Headquartered in Dearborn, Michigan, Ford Motor Co. (NYSE: F) -- http://www.ford.com/-- manufactures and distributes automobiles in 200 markets across six continents. With more than 324,000 employees worldwide, including Mexico, 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 Dec. 12, 2006, Standard & Poor's Ratings Services affirmed its 'B' bank loan and '2' recovery ratings on Ford Motor Co. after the company increased the size of its proposed senior secured credit facilities to between US$17.5 billion and US$18.5 billion, up from US$15 billion. As reported in the Troubled Company Reporter on Dec. 7, 2006, Fitch Ratings downgraded Ford Motor Company's senior unsecured ratings to 'B-/RR5' from 'B/RR4' due to the increase in size of both the secured facilities and the senior unsecured convertible notes being offered. As reported in the Troubled Company Reporter on Dec. 6, 2006, Moody's Investors Service assigned a Caa1, LGD4, 62% rating to Ford Motor Company's US$3 billion of senior convertible notes due 2036. FORD MOTOR: Closing Plants & Cutting Jobs Ahead of Schedule ----------------------------------------------------------- Ford Motor Co. will be implementing its cost reduction plan, including plant closures and job cuts, earlier than scheduled, Reuters reports, citing the company's chief executive officer Alan Mulally. The car company, Reuters says, is closing 16 plants and cutting nearly 45,000 jobs in a bid to return its North American automotive operations to profits. According to Mr. Mulally, the plan, which spans a five-year time frame, intends to reduce the number of vehicle platforms the company uses around the world and increase the number of shared parts. Ford is set to spend US$17 billion cash over the next three years in restructuring and its automotive operations, Reuters relates. About Ford Motor Headquartered in Dearborn, Michigan, Ford Motor Co. (NYSE: F) -- http://www.ford.com/-- manufactures and distributes automobiles in 200 markets across six continents. With more than 324,000 employees worldwide, including Mexico, 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 Dec. 12, 2006, Standard & Poor's Ratings Services affirmed its 'B' bank loan and '2' recovery ratings on Ford Motor Co. after the company increased the size of its proposed senior secured credit facilities to between US$17.5 billion and US$18.5 billion, up from US$15 billion. As reported in the Troubled Company Reporter on Dec. 7, 2006, Fitch Ratings downgraded Ford Motor Company's senior unsecured ratings to 'B-/RR5' from 'B/RR4' due to the increase in size of both the secured facilities and the senior unsecured convertible notes being offered. As reported in the Troubled Company Reporter on Dec. 6, 2006, Moody's Investors Service assigned a Caa1, LGD4, 62% rating to Ford Motor Company's US$3 billion of senior convertible notes due 2036. KANSAS CITY SOUHERN: Declares Dividends on Preferred Stock ---------------------------------------------------------- The executive committee of the board of directors of Kansas City Southern disclosed the declaration of dividends on three classes of preferred stock. The executive committee of the board of directors declared these dividends: -- A cash dividend of US$.25 per share was declared on the outstanding 4% Non-Cumulative Preferred stock, payable on April 3, 2007, to shareholders of record at the close of business on March 12, 2007. -- A cash dividend of US$5.4818 per share representing the dividend payment originally due May 15, 2006, was declared on the outstanding 4.25% Redeemable Cumulative Convertible Perpetual Preferred stock, Series C, payable Feb. 15, 2007, to shareholders of record at the close of business on Feb. 5, 2007. -- A cash dividend of US$5.4254 per share representing the dividend payment originally due Aug. 15, 2006, was declared on the outstanding Series C Preferred Stock, payable Feb. 15, 2007, to shareholders of record at the close of business on Feb. 5, 2007. -- A cash dividend of US$5.3689 per share representing the dividend payment originally due Nov. 15, 2006, was declared on the outstanding Series C Preferred Stock, payable Feb. 15, 2007, to shareholders of record at the close of business on Feb. 5, 2007. -- A cash dividend of US$5.3125 per share representing the dividend payment due Feb. 15, 2007, was declared on the outstanding Series C Preferred Stock, payable Feb. 15, 2007, to shareholders of record at the close of business on Feb. 5, 2007. -- A dividend payable in KCS common stock of US$13.3050 per share representing the dividend payment originally due May 15, 2006, was declared on the outstanding 5-1/8% Cumulative Convertible Perpetual Preferred stock, Series D, payable Feb. 15, 2007, to stockholders of record at the close of business on Feb. 5, 2007. -- A dividend payable in KCS common stock of US$13.1408 per share representing the dividend payment originally due Aug. 15, 2006, was declared on the outstanding Series D Preferred Stock, payable Feb. 15, 2007, to stockholders of record at the close of business on Feb. 5, 2007. -- A dividend payable in KCS common stock of US$12.9767 per share representing the dividend payment originally due Nov. 15, 2006, was declared on the outstanding Series D Preferred Stock, payable Feb. 15, 2007, to stockholders of record at the close of business on Feb. 5, 2007. -- A dividend payable in KCS common stock of US$12.8125 per share representing the dividend payment due Feb. 15, 2007, was declared on the outstanding Series D Preferred Stock, payable Feb. 15, 2007, to stockholders of record at the close of business on Feb. 5, 2007. The number of shares of KCS common stock payable to the record holders of the Series D Preferred Stock will be determined in accordance with the terms of the Certificate of Designations of the Series D Preferred Stock dated Dec. 9, 2005. Following payment of the above dividends, all dividend arrearages on the Series C Preferred Stock and Series D Preferred Stock will be satisfied. "KCS' improved operating performance for the first nine months of 2006, as evidenced by a substantial year-over-year increases in operating income and EBITDA, allows us to restore dividend payments at this time," stated Chairman and Chief Executive Officer Michael R. Haverty. Headquartered in Kansas City, Mo., KCS is a transportation holding company that has railroad investments in the US, Mexico and Panama. Its primary US holdings include The Kansas City Southern Railway Co., serving the central and south central US. Its international holdings include Kansas City Southern de Mexico, SA de CV, serving northeastern and central Mexico and the port cities of Lazaro Cardenas, Tampico and Veracruz, and a 50% interest in Panama Canal Railway Company, providing ocean- to-ocean freight and passenger service along the Panama Canal. KCS' North American rail holdings and strategic alliances are primary components of a NAFTA Railway system, linking the commercial and industrial centers of the US, Mexico and Canada. * * * As reported in the Troubled Company Reporter on Nov. 15, 2006, Standard & Poor's Ratings Services assigned its 'B-' rating to the US$150 million senior unsecured notes being issued by Kansas City Southern de Mexico SA de CV (B/Negative/--), the Mexican subsidiary of Kansas City Southern (B/Negative/--). Fitch Ratings assigned a 'B+' foreign currency rating and an 'RR4' recovery rating to the US$175 million 7.625% senior notes due 2013 to be issued by Kansas City Southern de Mexico, SA de CV. Fitch also maintains 'B+' foreign currency ratings and 'RR4' recovery ratings on KCSM's US$178 million 12.50% senior notes due 2012 and the US$460 million 9.375% senior notes due 2012. SONIC CORP: Moody's Withdraws Ba3 Corporate Family Rating --------------------------------------------------------- Moody's Investors Service withdrew its corporate ratings and outlook on Sonic Corp. following the completion of its securitized debt financing in December. The company refinanced its secured bank facility, consisting of a term loan and revolver, through a securitization of Franchise and Partner Drive-In royalties and Partner Drive-In rental streams. As a result, Sonic no longer has corporate debt ratings with the rating agency. Please refer to Moody's Withdrawal Policy on moodys.com for further details. Ratings withdrawn: -- Ba3 corporate family rating; -- B1 probability of default rating, LGD3-35% loss given default assessment; -- Ba3 on the US$675 million senior secured term loan maturing in 2013; -- Ba3 on the $150 million senior secured revolver maturing in 2011; and -- SGL-2 Speculative Grade Liquidity rating. Headquartered in Oklahoma City, Oklahoma, Sonic Corp., (Nasdaq: SONC) -- http://www.sonicdrivein.com/-- operates and franchises the largest chain of drive-in restaurants in the United States. As of May 31, 2006, the company owned and operated 604 restaurants and franchised 2,525 restaurants in 33 U.S. States and in Mexico with significant presence in the Southern and Midwestern United States. TV AZTECA: To Launch Eight High Definition Films at NATPE --------------------------------------------------------- TV Azteca SA de CV will launch eight high definition films at the National Association of Television Program Executives, World Screen reports. World Screen relates that the films to be launched include: -- Esperanza, -- Bodas de Oro, -- Milagros, -- La Prueba, -- La Esperanza de la Navidad, -- Lo Que Se Hereda, -- No Se Hurta, -- Cielo and Quince Anos. About the National Association of Television The National Association of Television Program Executives or NATPE is a global, non-profit organization dedicated to the creation, development and distribution of televised programming in all forms across all mature and emerging media platforms. About TV Azteca TV Azteca is one of the two largest producers of Spanish- language television programming in the world, operating two national television networks in Mexico -- Azteca 13 and Azteca 7 -- through more than 300 owned and operated stations across the country. TV Azteca affiliates include Azteca America Network, a new broadcast television network focused on the rapidly growing US Hispanic market, and Todito, an Internet portal for North American Spanish speakers. * * * Moody's Investor Services rated TV Azteca's senior unsecured debt at B1. WERNER LADDER: Court Okays Mercer as Human Resources Consultant --------------------------------------------------------------- The U.S. Bankruptcy Court for the District of Delaware gave Werner Holding Co. (DE) Inc., aka Werner Ladder Company, and its debtor-affiliates permission to employ Mercer Human Resources Consulting Inc., in connection with the review of their compensation and benefits program in their Chapter 11 cases, nunc pro tunc to Aug. 10, 2006. Specifically, Mercer will: (a) conduct a review of the Debtors' existing compensation and benefits programs and assist the Debtors in developing revised programs; (b) provide expert testimony, to the extent necessary, with regard to compensation benefits matters; (c) provide other services as agreed upon by the Debtors and Mercer. Mercer will be paid on an hourly basis. The rates charged by Mercer's personnel range from US$150 to US$700 per hour. Mercer will also seek reimbursement for reasonable travel and out-of-pocket expenses that originate with outside vendors and legal counsel retained by Mercer. The Debtors will indemnify Mercer from any litigation costs associated with actual or threatened actions, proceedings or investigations relating to or arising out of its services provided to the Debtors, except for the firm's gross negligence, bad faith or willful misconduct. As reported in the Troubled Company Reporter on Oct. 3, 2006, Robert S. Brady, Esq., at Young Conaway Stargatt & Taylor, LLP, asserted that one of the most critical elements of the Debtors' ability to successfully reorganize is a proper incentive program for their employees. With Mercer's assistance, the Debtors will be able to conform their compensation programs to current market trends and thereby develop an appropriate program at a reasonable cost, Mr. Brady said. He noted that the Debtors have filed two motions to continue their employee compensation programs. After extensive discovery and two hearings, the Debtors only were able to obtain partial relief on their request to make payments under their Business Optimization Bonus plan. The Debtors believe that it is important to hire Mercer in order to: (a) evaluate, develop, and revise compensation and benefits programs designed to meet market standards and the Debtors' important goal of adequately compensating employees; (b) enable them to inform parties-in-interest, including the Creditors Committee, of market comparables; and (c) provide evidence to the Court, if necessary, as to the reasonableness of any program. John Dempsey, a principal with Mercer, assured the Court that the firm is a "disinterested person" pursuant to Sections 101(14) and 1107(b) of the Bankruptcy Code. Based in Greenville, Pennsylvania, Werner Holding Co. (DE) Inc. aka Werner Ladder Co. -- http://www.wernerladder.com/-- manufactures and distributes ladders, climbing equipment and ladder accessories. The company and three of its affiliates filed for chapter 11 protection on June 12, 2006 (Bankr. D. Del. Case No. 06-10578). The Debtors are represented by the firm of Willkie Farr & Gallagher LLP as lead counsel and the firm of Young, Conaway, Stargatt & Taylor LLP as co-counsel. Rothschild Inc. is the Debtors' financial advisor. The Official Committee of Unsecured Creditors is represented by the firm of Winston & Strawn LLP as lead counsel and the firm of Greenberg Traurig LLP as co-counsel. Jefferies & Company serves as the Creditor Committee's financial advisor. At March 31, 2006, the Debtors reported total assets of US$201,042,000 and total debts of US$473,447,000. The Debtors's exclusive period to file a plan expires on Jan. 15, 2007. (Werner Ladder Bankruptcy News, Issue No. 16; Bankruptcy Creditors' Service Inc. http://bankrupt.com/newsstand/or 215/945-7000) * MEXICO: Discloses Results of Dutch Auction for Old Bonds ---------------------------------------------------------- The United Mexican States or Mexico disclosed the results of its invitation to owners of Old Bonds to submit, in a modified Dutch auction for each series of Old Bonds, offers to exchange Old Bonds for 6.75% Global Notes due 2034 and a U.S. dollar amount of cash, and offers to sell Old Bonds for a U.S. dollar amount of cash. Following the Invitation and the expected cancellation of the Old Bonds tendered and accepted for exchange or purchase by Mexico, approximately: -- US$1,702,747,000 principal amount of 8.125% Global Bonds due 2019, -- US$753,456,000 principal amount of 8.00% Global Notes due 2022, -- US$338,715,000 principal amount of 11.50% Global Bonds due May 15, 2026, -- US$1,877,818,000 principal amount of 8.30% Global Notes due 2031 and -- US$1,315,882,000 principal amount of 7.500% Global Notes due 2033 are expected to remain outstanding. Pursuant to the Invitation, Mexico expects to issue approximately US$2,267,305,000 aggregate principal amount of Reopened Notes and pay approximately US$1,057,411,587 of cash (including Cash Payments pursuant to offers to exchange Old Bonds for 2031 Notes and 2033 Notes, cash used to purchase Old Bonds pursuant to offers to sell Old Bonds for cash and cash payments in respect of rounded amounts) in consideration for approximately US$2,796,977,000 aggregate principal amount of Old Bonds, comprised of: Principal Amount of Old Bonds Principal Amount Series of Exchanged for of Old Bonds Old Bonds Reopened Notes Purchased for Cash 2019 Bonds U.S. $248,716,000 U.S. $73,971,000 2022 Notes U.S. $268,472,000 U.S. $27,265,000 2026 Bonds U.S. $152,857,000 U.S. $42,092,000 2031 Notes U.S. $684,703,000 U.S. $128,905,000 2033 Notes U.S. $1,037,112,000 U.S. $132,884,000 For each series of Old Bonds delivered and accepted for exchange pursuant to offers to exchange Old Bonds for Reopened Notes, Mexico will issue approximately these principal amount of Reopened Notes and will make approximately the following Cash Payment: Principal Amount of Reopened Notes Series of Old Bonds to Be Issued in Exchange Cash Payment 2019 Bonds U.S. $278,549,000 U.S. $0.00 2022 Notes U.S. $305,495,000 U.S. $0.00 2026 Bonds U.S. $229,619,000 U.S. $0.00 2031 Notes U.S. $671,677,000 U.S. $164,328,720 2033 Notes U.S. $781,965,000 U.S. $383,731,440 Mexico will not make any payments in respect of any accrued and unpaid interest on Old Bonds accepted for exchange. Holders of Old Bonds who exchange their Old Bonds for Reopened Notes will not be required to pay an amount equal to the interest accrued since the last interest payment date of the Reopened Notes issued to exchanging holders. These amounts have been incorporated into and form part of the calculation of the Exchange Ratios, which will affect the principal amount of Reopened Notes issued to such exchanging holders. Application has been made to list the Reopened Notes on the Luxembourg Stock Exchange and to admit the Reopened Notes for trading on the regulated market of the Luxembourg Stock Exchange. The Reopened Notes will be consolidated and form a single series with, and be fully fungible with, the outstanding US$1,500,000,000 6.75% Global Notes due 2034 (CUSIP No. 91086QAS7, ISIN US91086QAS75, Common Code 020218118). In determining which offers to accept pursuant to the Invitation, Mexico set the Clearing Spread Differential for each series of Old Bonds as follows: Clearing Spread Diff'l for Old Bonds Clearing Spread Diff'l Series of Accepted for Exchange for Old Bonds Accepted Old Bonds (basis points) for Purchase (bp) 2019 Bonds 47 51 2022 Notes 33 37 2026 Bonds 17 12 2031 Notes 10 7 2033 Notes 6 9 With respect to offers to exchange Old Bonds for Reopened Notes, Mexico disclosed for each series of Old Bonds that it will accept all non-competitive offers to exchange Old Bonds and all competitive offers submitted at Offer Spread Differentials less than or equal to the applicable Clearing Spread Differentials set in the table. With respect to offers to sell Old Bonds for cash, Mexico disclosed for each series of Old Bonds that it will accept all non-competitive offers to sell Old Bonds for cash and all competitive offers submitted at Offer Spread Differentials less than or equal to the applicable Clearing Spread Differentials set forth in the table above. Mexico disclosed that the UST Benchmark Rate for the Invitation is 4.861%, and that the Reopened Notes Issue Spread is 141 basis points. As a result, the Reopened Notes Issue Price is US$1,062.43 and the Reopened Notes Exchange Value is US$1,085.30. The applicable Old Bond Price, Old Bond Exchange Value and Exchange Ratio for each series of Old Bonds accepted by Mexico in exchange for Reopened Notes are as set in the table below: Old Bond Series of Price for Old Bond Old Bonds Exchange Exchange Value Exchange Ratio 2019 Bonds U.S. $1,209.17 U.S. $1,215.72 1.120164 2022 Notes U.S. $1,207.83 U.S. $1,235.61 1.138496 2026 Bonds U.S. $1,607.19 U.S. $1,630.83 1.502650 2031 Notes U.S. $1,267.33 U.S. $1,065.14 0.981425 2033 Notes U.S. $1,165.58 U.S. $818.71 0.754360 For each US$1,000 principal amount of Old Bonds delivered and accepted for purchase pursuant to offers to sell Old Bonds for cash, Mexico will pay these Purchase Price for each series of Old Bonds: Series of Old Bonds Purchase Price 2019 Bonds U.S. $1,213.26 2022 Notes U.S. $1,212.44 2026 Bonds U.S. $1,599.21 2031 Notes U.S. $1,262.83 2033 Notes U.S. $1,169.93 Mexico will also pay an aggregate of approximately US$10,183,503 to holders whose Old Bonds have been delivered and accepted for purchase pursuant to offers to sell Old Bonds for cash in respect of accrued interest on the Old Bonds during the period from and including the most recent interest payment date up to but excluding the settlement date. Further information is provided in the Invitation, which may be downloaded from the Invitation Website at http//:www.bondcom.com/ums, or obtained from the information agent at: Bondholder Communications Group Attention: Monique Santos New York, 30 Broad Street 46th floor, New York, NY 10004 Tel. +1 212 809 2663 E-mail: msantos@bondcom.com -- or -- Bondholder Communications Group London, 28 Throgmorton Street London EC2N 2AN Tel. +44 20 7382 4580 Or form the dealer managers: Barclays Capital Inc. Attn: Liability Management Group 200 Park Avenue New York, New York 10166 Tel: (866) 307 8991 (US toll-free) +1 212 412 4072 (outside US, collect) +44 20 7773 5484 (London) Morgan Stanley & Co. Incorporated Attn: Liability Management Group 1585 Broadway New York, New York 10036 Tel: (800) 624 1808 (US toll-free) +1 212 761 1864 (outside US, collect) The invitation supplement, the prospectus supplement and the prospectus comprising the Invitation is available from the SEC's website at htt://www.sec.gov/ * * * As reported in the Troubled Company Reporter on April 17, 2006, Standard & Poor's Ratings Services placed an mxBB+ long-term rating with stable outlook on the state of Mexico. * MEXICO: Discloses UST Benchmark Rate for Dutch Auction -------------------------------------------------------- The United Mexican States or Mexico disclosed the UST Benchmark Rate in connection with its invitation to owners of Old Bonds to submit, in a modified Dutch auction for each series of Old Bonds, offers to exchange Old Bonds for 6.75% Global Notes due 2034 and a U.S. dollar amount of cash, and offers to sell Old Bonds for a U.S. dollar amount of cash. The UST Benchmark Rate for the Invitation is 4.861%. Mexico has disclosed that the Reopened Notes Issue Spread has been set at 141 basis points, and that the Minimum Clearing Spread Differential for each series of Old Bonds is as set in the table below: Series of Bonds: 8.125% Global Bonds Due 2019 Outstanding Principal Amount: US$2,025,434,000 ISIN: US593048BN00 Maturity Date: 12/30/2019 Cash Payment on Exchange: US$0.00 Minimum Clearing Spread Differential (basis points): 47 Series of Bonds: 8.00% Global Bonds Due 2022 Outstanding Principal Amount: US$1,049,193,000 ISIN: US91086QAJ76 Maturity Date: 9/24/2022 Cash Payment on Exchange: US$0.00 Minimum Clearing Spread Differential (basis points): 33 Series of Bonds: 11.50% Global Bonds Due 2026 Outstanding Principal Amount: US$533,664,000 ISIN: US593048AX90 Maturity Date: 5/15/2026 Cash Payment on Exchange: US$0.00 Minimum Clearing Spread Differential (basis points): 9 Series of Bonds: 8.30%Global Bonds Due 2031 Outstanding Principal Amount: US$2,691,426,000 ISIN: US91086QAG38 Maturity Date: 8/15/2031 Cash Payment on Exchange: US$240.00 Minimum Clearing Spread Differential (basis points): 7 Series of Bonds: 7.500% Global Bonds Due 2033 Outstanding Principal Amount: US$2,485,878,000 ISIN: US91086QAN88 Maturity Date: 4/8/2033 Cash Payment on Exchange: US$370.00 Minimum Clearing Spread Differential (basis points): 6 At or around 11:00 a.m. on Jan. 12, New York City time, Mexico dicsloed whether it will accept any offers to exchange or sell for cash any series of Old Bonds, and, if so, the Reopened Notes Issue Price, the Reopened Notes Exchange Value and the applicable Clearing Spread Differential, Old Bond Price, Old Bond Exchange Value, Exchange Ratio, Purchase Price and proration factor, if any, for each series of Old Bonds accepted for exchange or purchase. Further information is provided in the Invitation, which may be downloaded from the Invitation Website at http//:www.bondcom.com/ums, or obtained from the information agent at: Bondholder Communications Group Attention: Monique Santos New York, 30 Broad Street 46th floor, New York, NY 10004 Tel. +1 212 809 2663 E-mail: msantos@bondcom.com -- or -- Bondholder Communications Group London, 28 Throgmorton Street London EC2N 2AN Tel. +44 20 7382 4580 Or from the dealer managers: Barclays Capital Inc. Attn: Liability Management Group 200 Park Avenue New York, New York 10166 Tel: (866) 307 8991 (US toll-free) +1 212 412 4072 (outside US, collect) +44 20 7773 5484 (London) Morgan Stanley & Co. Incorporated Attn: Liability Management Group 1585 Broadway New York, New York 10036 Tel: (800) 624 1808 (US toll-free) +1 212 761 1864 (outside US, collect) The invitation supplement, the prospectus supplement and the prospectus comprising the Invitation is available from the SEC's website at htt://www.sec.gov/ * * * As reported in the Troubled Company Reporter on April 17, 2006, Standard & Poor's Ratings Services placed an mxBB+ long-term rating with stable outlook on the state of Mexico. * MEXICO: Repurchases US$2.8 Bil. in Bonds with Cash & New Debts ---------------------------------------------------------------- The Mexican government buys back US$2.8 billion of dollar- denominated bonds using cash and longer-term securities, Bloomberg News reports. According to the same report, Mexico's new bonds will become due in 2034, with a 6.27% yield. The debts repurchased were due in 2019, 2022, 2026, 2031 and 2033. In addition, the government has bought back US$405 million of shorter-term dollar bonds with cash. "We want to improve Mexico's external debt profile by developing a curve that is more efficient," Gerardo Rodriguez, director of public credit at the Finance Ministry, said in an interview with Bloomberg. "At the same time, Mexico will continue scaling back external debt outstanding and meet its funding needs in the local market." * * * As reported in the Troubled Company Reporter on April 17, 2006, Standard & Poor's Ratings Services placed an mxBB+ long-term rating with stable outlook on the state of Mexico. ================= N I C A R A G U A ================= PETROLEOS DE VENEZUELA: Makes Third Fuel Shipment to Nicaragua -------------------------------------------------------------- Petroleos de Venezuela SA, the state-run oil company of Venezuela, said in a statement that it has made its third fuel shipment to Nicaragua's Corinto port, as part of the Petrocaribe energy cooperation program. Corinto is in Chinandega department, about 160 kilometers from Managua, Nicaragua. Business News Americas relates that trucks will distribute the 15,000 barrels of diesel to 30 public transport cooperatives in Managua. The diesel will supply 800 buses and benefit 800,000 passengers daily. According to BNamericas, Petroleos de Venezuela made its first delivery of 1,800 barrels of diesel in October 2006. It was followed by a second shipment of 16,000 barrels in November 2006. BNamericas notes that the next fuel shipments will go to the power sector to help alleviate energy crisis in Nicaragua. Nicaraguan municipal governments' association Amunic and Petroleos de Venezuela formed Albanic to distribute the crude and fuels in Nicaragua. Albanic can buy 10 million barrels per year of hydrocarbons under the same special conditions allowed Petrocaribe members, BNamericas states. Petroleos de Venezuela SA -- http://www.pdv.com/-- 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. The company has a commercial office in China. * * * Standard & Poor's said on July 17 that it may lower the company's B+ foreign-currency debt rating in part because of the absence of timely financial and operating information. =========== P A N A M A =========== BANCO GENERAL: Focusing on Closing Merger with Continental ---------------------------------------------------------- A Banco General executive told MarketWatch that the bank will concentrate on completing its merger with BBVA Banco Continental this year before looking at other growth opportunities in Central America. As reported in the Troubled Company Reporter-Latin America on Jan. 8, 2007, Banco General would absorb Banco Continental. The merger would follow the union of Banco Continental parent Grupo Financiero and Empresa General de Inversiones, the parent firm of Banco General, into a new holding firm called BG Financial Group. BG Financial Group would be the parent of merged bank Banco General, which would report: -- US$7.00 billion in assets, -- loan book of US$4.50 billion, and -- equity of US$800 million. Raul Aleman, Banco General's chief executive and executive vice president, explained to MarketWatch, "In the first year our view is to consolidate the businesses, and then in the second and third years we are going to see what opportunities there are at that time." Mr. Aleman commented to MarketWatch, "We will have a bank that already has a very interesting presence in different countries in the region, which we are going to continue to promote the same way Banco Continental has been doing." MarketWatch underscores that Banco Continental has offices in: -- Mexico, -- Guatemala, -- Nicaragua, -- Costa Rica, -- El Salvador, and -- Colombia. The merged bank will have the capital to increase its regional presence, MarketWatch notes. The merger is subject to regulatory approval. According to MarketWatch, Mr. Aleman expects that the new Banco General will be able to play a bigger role in local transportation, energy and tourism projects. "The canal expansion (Panama Canal) is definitely going to bring us a lot of opportunities, not necessarily in terms of direct credit to the Panama Canal Authority, rather to its service providers," Mr. Aleman told MarketWatch. About Banco Continental Headquartered in Lima, Peru, BBVA Banco Continental -- http://www.bbvabancocontinental.com-- is the second largest commercial bank in Peru. As of September 2006, had total loans of US$3.6 billion and total deposits of US$4.1 billion. It has built an extensive network throughout the country with 215 branches, 342 ATMs and 2,868 employees. About Banco General Banco General is Panama's second largest private commercial bank in terms of assets and deposits, with a domestic deposit market share of 16.4% at June 2006. Originally established as a savings and loans institution in 1955 and historically focused on mortgage lending, a few acquisitions and organic growth have aided to diversify into commercial and consumer lending. Banco General is owned by Empresa General de Inversiones, a Panamanian publicly traded company (end-2005 equity: US$515 million) with additional interests in fuel distribution and plastic container manufacturing. * * * As reported in the Troubled Company Reporter-Latin America on Oct. 31, 2006, Fitch Ratings has affirmed the ratings assigned to Panama's Banco General and its subsidiaries as: -- Foreign currency long-term Issuer Default rating at 'BBB'; -- Foreign currency short-term rating at 'F3'; -- Individual rating at 'C'; and -- Support rating at '5'. Fitch said the rating outlook is stable. CLIENTLOGIC CORP: SITEL Shareholders Approve Proposed Merger ------------------------------------------------------------ ClientLogic Corp. and SITEL Corp. disclosed that at SITEL's 2006 Annual Meeting, held on Jan. 13, the company's shareholders voted to approve the proposed merger with ClientLogic. More than 71.9 million, or approximately 96%, of SITEL's outstanding common shares were voted at the meeting, with more than 97% of voted shares voting in favor of the merger. The merger is expected to close in late January 2007 or early February 2007. The U.S. Federal Trade Commission, the European Commission and the Canadian Commissioner of Competition have cleared the merger. Under the terms of the merger agreement approved by SITEL shareholders, SITEL shareholders will receive US$4.25 per share in cash. Jim Lynch, Founder, Chairman and CEO of SITEL Corporation, stated, "We're extremely pleased to see that our shareholders recognize the significant value created from the merger with ClientLogic. I am also happy that our loyal employees have an opportunity to join a combined company that will be a leader in our industry for years to come. I thank our shareholders, clients, and employees for their years of support and dedication." Dave Garner, CEO and President of ClientLogic, commented, "We look forward to the completion of the deal and the ability to combine these two excellent companies, creating the industry leader. Our continued focus will be to ensure that we deliver the utmost benefit to our valued clients, associates, and other stakeholders." At the annual meeting, SITEL's shareholders also voted to re- elect current directors Rohit Desai, David Hanger and Stephen Key as Class II directors to serve on SITEL's Board of Directors until the closing of the merger. About ClientLogic ClientLogic Corp. -- http://www.clientlogic.com/-- is a business process outsourcing provider in the customer care and back office processing industries. ClientLogic's footprint spans 49 facilities in 13 countries: Austria, Canada, France, Germany, India, Ireland, Mexico, Morocco, Netherlands, Panama, Philippines, United Kingdom and the United States. * * * As reported in the Troubled Company Reporter on Jan. 9, 2007, Moody's Investors Service upgraded ClientLogic Corp.'s corporate family rating to B2 from B3. Moody's said the rating outlook is stable. Concurrently, Moody's has assigned a B2 rating to ClientLogic's US$675-million first lien term loan and US$85-million undrawn first lien revolving credit facility. CLIENTLOGIC CORP: S&P Lifts Corporate Credit Rating to B+ from B ---------------------------------------------------------------- Standard & Poor's Rating Services upgraded its corporate credit rating on Nashville, Tenn.-based ClientLogic Corp. to 'B+' from 'B', and removed the ratings from CreditWatch with positive implications where they were placed on Oct. 20, 2006. The outlook is stable. At the same time, we assigned a 'B+' rating, the same as the corporate credit rating, and a recovery rating of '2' to the company's proposed first lien loan of US$760 million (a term B loan of US$675 million and a revolving credit facility of US$85 million). The '2' recovery rating on the first lien indicates expectations for substantial recovery (80% to 100%) of principal in the event of a payment default. Proceeds of the US$675 million term loan, in conjunction with US$57 million in equity roll over, will be used to fund the acquisition of SITEL and to refinance ClientLogic's existing debt. "The ratings reflect ClientLogic's uneven performance operating in a niche oriented and very competitive market, the risk of a lengthy integration process, as well as high leverage," said Standard & Poor's credit analyst Stephanie Crane Mergenthaler. These factors somewhat are offset by increased scale as a result of the SITEL acquisition, and a diversified blue-chip customer list and global end markets. ClientLogic provides outsourced customer-care and fulfillment services, through its customer contact centers and distribution warehouses located across the globe. Many of these services help ClientLogic's customers manage call volume and customer service issues through call centers. SITEL, whose revenue reached US$1 billion in 2005, is a close competitor to ClientLogic in the customer care industry. The union of these two companies should significantly increase market share and scale, as sales are more than two times, placing the combined company in second place within the customer care outsourcing market. The acquisition will also create a much more diversified customer base across a wide assortment of end markets with a global footprint. About ClientLogic ClientLogic Corp. -- http://www.clientlogic.com/-- is a business process outsourcing provider in the customer care and back office processing industries. ClientLogic's footprint spans 49 facilities in 13 countries: Austria, Canada, France, Germany, India, Ireland, Mexico, Morocco, Netherlands, Panama, Philippines, United Kingdom and the United States. SOLO CUP: Fitch Assigns B- Issuer Default Rating ------------------------------------------------ Fitch Ratings has initiated these ratings for Solo Cup Co.: -- Issuer default rating 'B-'; -- Senior secured first lien credit facility 'B+/Recovery Rating (RR) 2'; -- Senior secured second lien credit facility 'CCC+/RR5'; and -- Senior subordinated notes 'CCC/RR6' The Rating Outlook is Negative. Approximately US$1.2 billion of debt is covered by the ratings. The company's Canadian bank debt is excluded from the ratings. The ratings reflect Fitch's concern about the company's negative operating and free cash flow, high leverage, a lengthy and difficult integration process associated with the SF Holdings acquisition, margin contraction due to higher resin and energy prices, material weaknesses in internal accounting controls, low unit volume growth, and management turnover in the past year. The ratings also recognize Solo's leading market share across its product categories, strong brand equity, modest near-term debt maturities, diversified product mix, and stable customer base. The ratings also reflect Solo's increased focus on cost reduction and the possibility of asset sales, the proceeds from which would be used to reduce debt. The Negative Outlook is based on constrained operating cash flow generation and declining operating margins. Inability by Solo to generate cash in the next year as a result of performance improvement or asset sales would likely lead to a review of the ratings for a possible downgrade. The Recovery Ratings and notching in the debt structure reflect Fitch's recovery expectations under a scenario in which distressed enterprise value is allocated to each debt class. The recovery rating for Solo's senior secured first lien credit facility, consisting of a revolving credit facility and term loan ('RR2'; expected 71%-90% recovery) reflect superior expected recovery given the security from substantially all assets. With most of the estimated distressed enterprise value being distributed to the first lien senior secured creditors, Fitch estimates that recoveries for second lien creditors and 8.50% senior subordinated noteholders would be significantly impaired. The recovery rating for the second lien credit facility ('RR5'; expected 11%-30% recovery) reflects the secondary claim to assets and the allocation of concession payments to improve recovery. The recovery on the subordinated notes ('RR6; expected 0%-10% recovery) would likely be poor in a reorganization given the lack of security, contractual subordination and limited, if any, enterprise value remaining to distribute. Solo is a market-leading foodservice disposables manufacturer that has recently endured several business challenges. An unusually adverse operating environment and a difficult merger integration have combined to pose serious challenges to the company over the past two years. Raw materials and energy prices have shown unprecedented increases, creating an inflated cost structure and lower profitability. The merger with Sweetheart has been costly and delayed, with most expected synergies not yet realized. In some respects the two companies have continued to operate as distinct entities, even two years post-acquisition. With this backdrop, the company has also had turnover in several key management positions during the past year. Given Solo's difficult, although improving, operating environment and growing competitive pressures, the company's ability to maintain market share without increased investment in R&D is a concern. Fitch believes that the company's debt burden may be limiting its ability to invest in innovative, higher margin products. Competitors have been able to leverage their brands into certain Solo Cup product areas, and have taken advantage of lower cost resins to produce similar products at lower prices in some cases. Along with pricing pressure from low-cost foreign producers, this has lead to volume losses and constrained cash flows over the past year. Weak cash flows and tightening liquidity forced the company to arrange second lien financing twice in 2006; first with an US$80 million term loan in March, then an additional US$50 million under the same facility acquired in December to pay down the first lien revolver and improve liquidity. Management has acknowledged the need for immediate action to improve the company's performance. Workforce reductions, cost savings initiatives, and sale-leaseback transactions are being contemplated or are already under way. The company is working with external advisors to explore the possible sale of certain non-core assets or business lines. In connection with the December financing arrangements, the credit facility covenants were modified to allow for the sale of up to 20% of consolidated assets in 2007, with proceeds used to pay down debt. Fitch is also encouraged by the appointment of four new board members, including a new chairman by Vestar Capital Partners, the company's minority equity investor. AlixPartners, a consultancy, has also been engaged to implement a performance improvement program. Fitch calculates LTM Oct. 1, 2006, operating EBITDA of $147.5 million and total leverage of 7.8x. Interest coverage for the same period was 1.7x. Although the company has implemented price increases in response to higher raw materials costs, competitive pressures and overall higher freight and other costs will likely prove to be an ongoing challenge which will require structural changes in the business. Asset divestitures will likely be needed to bring the company into compliance with leverage ratio covenant requirements that start at 9.75x and decline every three months this year to 7.25x by Dec. 31, 2007. Fitch believes the company will likely be able to comply with leverage ratio requirements in 2007, assuming sufficient asset sales are executed. The fundamental trend should improve somewhat in 2007, given cost management initiatives, completion of the new order management system, and moderating raw materials and energy prices. As of Oct. 1, 2006, the company had about $49 million of availability under the revolver and cash of US$22 million for total liquidity of roughly US$71 million. Considering the additional US$50 million of second-lien financing, Fitch estimates current liquidity of about US$121 million. Near term debt maturities are not significant with US$6.5 million due in both 2007 and 2008. Capital expenditures are expected to be US$55 to US$60 million in the coming year. The amended credit agreement of Dec. 22, 2006, stipulates that all management fees to Vestar will be suspended in 2007, unless the consolidated leverage ratio is equal to or less than 4.5x. Solo's credit profile could improve in 2007 if significant cost savings or de-leveraging occurs. The company has outlined an aggressive agenda to rationalize costs, maximize cash flows, and change corporate culture. Significant asset sales or other divestitures could materially improve leverage. The company's new technology system is scheduled to come online in the first quarter, which could significantly improve order management, reduce redundancies stemming from the merger, and lead to improved profitability. Fitch believes the rationale for the Sweetheart merger remains mostly intact. There is ample scope for operational improvement such as asset utilization and productivity and better product line management. Many of the originally anticipated synergies could yet be realized accordingly. Headquartered in Highland Park, Illinois, Solo Cup Company -- http://www.solocup.com/-- manufactures disposable paper and plastic food and beverage containers used in the foodservice and retail consumer markets. Products include cups, lids, straws, napkins, cutlery, and plates. The Company was established in 1936 and has a global presence with facilities in Asia, Canada, Europe, Mexico, Panama and the United States. ===================== P U E R T O R I C O ===================== ADELPHIA COMMS: Effective Date of Plan Extended Until Friday ------------------------------------------------------------ Adelphia Communications Corp. has been informed by the Official Committee of Unsecured Creditors that the Settlement Parties have extended the deadline for the Effective Date contained in Section 12.2(c) of the First Modified Fifth Amended Joint Chapter 11 Plan of Reorganization from Jan. 12 to Jan. 19. As reported in the Troubled Company Reporter on Jan 9, 2007 the Honorable Robert E. Gerber of the U.S. Bankruptcy Court for the Southern District of New York confirmed the first modified fifth amended joint Chapter 11 plan of reorganization of Adelphia Communications Corp. and Certain Affiliated Debtors. Under the Federal Rules of Bankruptcy Procedure, the order was subject to a stay pending appeal, which would expire on Jan. 16, 2007. If no additional stay is issued, the ACOM Debtors expected the Plan to become effective on Jan. 17, 2007. The occurrence of the Effective Date of the Plan is subject to conditions, many of which are outside the control of Adelphia. There can be no assurance whether or when the Effective Date will occur. Based in Coudersport, Pa., Adelphia Communications Corp. (OTC: ADELQ) -- http://www.adelphia.com/-- is a cable television company. Adelphia serves customers in 30 states and Puerto Rico, and offers analog and digital video services, Internet access and other advanced services over its broadband networks. The Company and its more than 200 affiliates filed for Chapter 11 protection in the Southern District of New York on June 25, 2002. Those cases are jointly administered under case number 02-41729. Willkie Farr & Gallagher represents the Debtors in their restructuring efforts. PricewaterhouseCoopers serves as the Debtors' financial advisor. Kasowitz, Benson, Torres & Friedman, LLP, and Klee, Tuchin, Bogdanoff & Stern LLP represent the Official Committee of Unsecured Creditors. Adelphia Cablevision Associates of Radnor, L.P., and 20 of its affiliates, collectively known as Rigas Manged Entities, are entities that were previously held or controlled by members of the Rigas family. In March 2006, the rights and titles to these entities were transferred to certain subsidiaries of Adelphia Cablevision, LLC. The RME Debtors filed for chapter 11 protection on March 31, 2006 (Bankr. S.D.N.Y. Case Nos. 06-10622 through 06-10642). Their cases are jointly administered under Adelphia Communications and its debtor-affiliates chapter 11 cases. DAVID'S BRIDAL: Moody's Assigns B2 Corporate Family Rating ---------------------------------------------------------- Moody's Investors Service assigned first time ratings to David's Bridal, Inc., including a corporate family rating of B2 and a senior secured term loan rating of B2. The rating outlook is stable. The ratings are conditioned upon review of final documentation. These ratings are assigned: -- Corporate family rating at B2; -- Probability-of-default rating at B2; and -- US$315 million senior secured term loan at B2. David's Bridal along with Priscilla's of Boston is being sold by Federated Department Stores to Leonard Green & Partners for approximately US$750 million. The acquisition will be financed with the proceeds of the proposed US$315 million term loan along with an unrated privately placed subordinated notes offering, and an equity contribution by Leonard Green. The B2 corporate family rating of David's Bridal reflects post- transaction credit metrics that will be weak, particularly the very high leverage and low cash flow coverage. The B2 rating is further supported by the company's high seasonality, small scale with top line revenues for the LTM period ended Sept. 30, 2006, of US$623 million, and its shareholder friendly financial policies. Offsetting these high yield characteristics are several investment grade characteristics including: -- its national diversification; -- leading position in the very defined bridal sub-sector of retail; and -- profitability that is in line with its apparel retailing peer group, and its consistent comparable store sales growth. The stable outlook reflects Moody's expectation that the company will continue to reasonably grow comparable store revenues, improve operating margins, and maintain moderately positive free cash flow and adequate liquidity. Given the magnitude of David's Bridal post-transaction leverage, an upgrade is unlikely in the intermediate term. Over the longer term, an upgrade would require continuing solid operating performance coupled with Debt/EBITDA being sustained below 6.0x and FCF/Debt above 5% on a sustainable basis. Conversely, negative rating pressure would develop if: -- operating performance is weaker than expected; -- liquidity erodes; or -- if overall comparable store sales were to become negative. Quantitatively, ratings would be lowered should, as calculated using Moody's standard adjustments, Debt/EBITDA rise above 7.5x, EBITA/IE fall below 1.0x, or if FCF/Debt remains negative. The US$315 million senior secured term loan is rated at the corporate family rating reflecting its weak collateral package, as all the accounts receivable and inventory will be pledged to the asset based revolving credit facility, its lack of meaningful financial covenants, and its size and scale relative to the whole capital structure. The senior secured term loan will be secured by all of the assets of the company, excluding accounts receivable and inventory. However, given the lack of sizable tangible assets excluding accounts receivable and inventory, the term loan is in essence secured by goodwill. The term loan will also be guaranteed by Priscilla's of Boston and DBP Holding Corp. David's Bridal, Inc., headquartered in Conshohocken, PA, is the leading national bridal specialty retailer with an estimated 30% market share for bridal gowns in 2006. The company operates 281 stores in 46 states and 2 stores in Puerto Rico. Revenues for the LTM period ended Sept. 30, 2006, were US$623 million. DAVID'S BRIDAL: S&P Assigns B Corporate Credit Rating ----------------------------------------------------- Standard & Poor's Ratings Services assigned its 'B' corporate credit rating on Conshohocken, Pa.-based David's Bridal Inc. The outlook is stable. Standard & Poor's also assigned a 'B' rating to the company's planned US$315 million term loan B due 2014. This rating and the '3' recovery rating indicate Standard & Poor's expectation for a meaningful (50%-80%) recovery of principal in the event of payment default. "The ratings reflect David's Bridal's participation in the highly competitive and fragmented bridal specialty retail market, and high pro forma leverage of about 6.8x," said Standard & Poor's credit analyst Jackie Oberoi. David's Bridal, the nation's largest bridal specialty retailer, operated 273 David's Bridal stores and 10 Priscilla of Boston stores as of December 2006. David's Bridal participates in the stable wedding industry, which is estimated at about US$47 billion in annual sales. The industry is relatively mature, with expected growth of about 1% to 2% annually over the next several years. A highly fragmented group of retailers serves the wedding industry, with about 95% of the market comprised of independent retailers. David's Bridal is the U.S.'s only national retailer in this industry, with about eight times more stores than its next largest competitor, and operates in 46 U.S. states and Puerto Rico. DORAL FINANCIAL: Shareholders May Face Dilution, Analysts Say ------------------------------------------------------------- Due to Doral Financial Corp.'s financial predicaments, there could be a significant dilution for existing common shareholders and reduction of bondholders, Business News Americas reports, citing analysts. Sterne Agee analyst Thomas Monaco told BNamericas, "Common shareholders could potentially be diluted 34.8-81.7%, reducing book value per share US$0.47-2.37." BNamericas relates that stockholder equity hit US$1.03 billion as of Sept. 30, 2006, with book value increasing to US$4.22 per share. Mr. Monaco told BNamericas that on a stated book basis, a debt- to-equity conversion would result, on a one-for-one basis, in the debt holders owning 49.2% of the common stock. On an adjusted book basis, a debt-to-equity conversion would amount to the debt holders owning 80.2% of Doral's common shares. Anthony Polini, an analyst with Soleil Securities, commented to BNamericas, "I wouldn't be surprised if bondholders ended up owning more than 50% of Doral." Doral Financial's most urgent challenge is finding a way to refinance US$625 million of floating rate notes that mature in July, BNamericas notes. The report says that while analysts think that a private equity transaction could be a cheaper way of providing enough capital to keep Doral Financial operating, the move is likely to result in substantial shareholder dilution. Joseph Gladue, an analyst with Cohen Bros, told BNamericas, "My guess is that the company will be able to refund the debt, but at a very steep cost to existing shareholders. The refunding could dilute existing shareholders 35-70%." BNamericas underscores that Doral Financial's Chief Executive Officer Glen Wakeman said in a conference in October 2006 that his number one priority would be refinancing the notes with high-yield debt, asset disposals and an equity increase. Mr. Monaco told BNamericas, "The most plausible solution, in our view, is a combination of asset disposal and raising equity, provided Wakeman can convince bondholders that there is a viable plan to restore Doral to financial health. Doral does have the ability to dispose of several assets: Doral Bank, FSB -- the New York thrift -- the US$15.0bn servicing portfolio and its headquarters in a sale-leaseback transaction. We calculate all three sales could make a modest dent in the overall floating rate notes." Omotayo Okusanya, a banking analyst with UBS Securities, said in a report, "We would expect private equity investors to implement an aggressive turnaround plan, protect their downside and significantly dilute current shareholders, given current equity is likely to be worthless if Doral goes bankrupt." BNamericas underscores that due to Doral Financial's desperation and unwillingness of most of the 2007 floating rate noteholders to convert to equity, the firm will have to grant substantial concessions to accelerate conversion, and that may have to include board seats and voting control. Analysts told BNamericas that with regards to issuing a high- yield bond to replace the notes, Doral Financial would almost ensure its loss, as it would have just pushed the inevitable back about two years. Doral Financial restated its 2000-04 results, decreasing net income for the period US$609 million and shareholder equity 35% as it corrected the value of derivatives called floating rate interest-only strips used to hedge its mortgage portfolio. The accounting missteps resulted to the resignation of the founding Levis family from the bank's management and board. Investors' fears were also intensified when non-executive chairperson John A. Ward III resigned on Jan. 2 after a disagreement with the board over the firm's future direction, BNamericas states. Based in New York City, Doral Financial Corp. (NYSE: DRL) -- http://www.doralfinancial.com/-- is a diversified financial services company engaged in mortgage banking, banking, investment banking activities, institutional securities and insurance agency operations. Its activities are principally conducted in Puerto Rico and in the New York City metropolitan area. Doral is the parent company of Doral Bank, a Puerto Rico based commercial bank, Doral Securities, a Puerto Rico based investment banking and institutional brokerage firm, Doral Insurance Agency Inc. and Doral Bank FSB, a federal savings bank based in New York City. * * * As reported in the Troubled Company Reporter-Latin America on Jan. 8, 2007, Moody's Investors Service downgraded to B2 from B1 the senior debt ratings of Doral Financial Corp. Moody's said the ratings are on review for possible downgrade. Downgrades: Issuer: Doral Financial Corp. -- Senior Unsecured Regular Bond/Debenture, Downgraded to B2 from B1. Outlook Actions: Issuer: Doral Financial Corp. -- Outlook, Changed To Rating Under Review From Negative. * * * As reported in the Troubled Company Reporter-Latin America on Jan. 8, 2007, Standard & Poor's Ratings Services lowered its long-term ratings on Doral Financial Corp., including the counterparty credit rating, to 'B' from 'B+'. S&P said the outlook remains negative. PILGRIM'S PRIDE: Names Wayne Lord as VP of Governmental Affairs --------------------------------------------------------------- A. Wayne Lord has been appointed vice president of governmental affairs of Pilgrim's Pride Corporation. In this newly created position, Mr. Lord will be responsible for the company's governmental affairs program and will represent Pilgrim's Pride nationally and at the state level in the company's Southeastern and Eastern operations. He will report to Clifford Butler, Pilgrim's Pride vice chairman. Mr. Lord, who is based in Atlanta, brings more than 28 years of experience in agriculture to this position. He had previously served as vice president of corporate relations for Gold Kist Inc. for nearly three years. "Wayne Lord is an experienced leader in Southeastern agriculture who will help ensure that our Company's position on critical business issues is well known at the state and national legislative levels," said Mr. Butler. Mr. Lord began his career in agriculture at Gold Kist in 1979, working in strategic planning, public relations, export management and, as a speaker of Russian, the development of business relations with the former Soviet Union. In the mid- 1980s, he moved to Europe to establish and administer the American Peanut Council's commodity marketing program. He later returned to the United States and joined Southco Commodities Inc., serving as president for 12 years. Mr. Lord also has served as chairman of the board of directors of the American Peanut Council and was instrumental in creating a national foundation for scientific research in peanut production and processing. A native of Alabama, he attended Birmingham-Southern College and earned his master's and doctorate degrees at Georgetown University. He currently serves on the board of directors of the Georgia Chamber of Commerce and is a member of the Advisory Council of the University of Georgia College of Agricultural and Environmental Sciences. About Pilgrim's Pride Headquartered in Pittsburgh, Texas, Pilgrim's Pride Corp. (NYSE: PPC) -- http://www.pilgrimspride.com/-- produces, distributes and markets poultry processed products through retailers, foodservice distributors and restaurants in the United States, Mexico and in Puerto Rico. Pilgrim's Pride employs approximately 40,000 people and has major operations in Texas, Alabama, Arkansas, Georgia, Kentucky, Louisiana, North Carolina, Pennsylvania, Tennessee, Virginia, West Virginia, Mexico and Puerto Rico, with other facilities in Arizona, Florida, Iowa, Mississippi and Utah. * * * Moody's Investors Service's held its Ba2 Corporate Family Rating for Pilgrim's Pride Corp. In addition, Moody's revised or held its probability-of-default ratings and assigned loss-given- default ratings on the company's note issues, including an LGD6 rating on its US$100 million 9.25% Sr. Sub. Global Notes Due Nov. 15, 2013, suggesting noteholders will experience a 95% loss in the event of a default. As reported in the Troubled Company Reporter on Dec. 6, 2006, Standard & Poor's Ratings Services reported that its 'BB' corporate credit rating and other ratings on the second-largest U.S. poultry processor, Pilgrim's Pride Corp., remain on CreditWatch with negative implications, where they were originally placed Aug. 21, 2006. MAIDENFORM BRANDS: S&P Revises Rating Outlook to Positive --------------------------------------------------------- Standard & Poor's Ratings Services revised its rating outlook on Bayonne, N.J.-based intimate apparel designer and marketer Maidenform Brands Inc. to positive from stable. Ratings on the company, including the 'B+' corporate credit rating, were affirmed. Total debt outstanding at Sept. 30, 2006, was US$120 million. "The outlook revision reflects Maidenform's improving trends in revenue, margins, and credit protection measures--in particular, debt leverage, which improved to 2.2x at Sept. 30, 2006, from a high point of 3.4x at fiscal year-end December 2004," noted Standard & Poor's credit analyst Susan Ding. "Since we initially assigned our rating to the company in May 2004, Maidenform has successfully revitalized its well-recognized brands, expanded its distribution channel into the mass market, and improved operating efficiencies and performance." The rating reflects Maidenform's participation in a highly competitive and very promotional retail environment, its relatively small size in the intimate apparel sector, its narrow product focus, and some customer concentration. Maidenform's limited business focus in the intimates segment of the apparel industry and its more than 50% concentration in the department store/chain store channel are also rating concerns. Furthermore, Maidenform competes against much larger players in the industry, including VF Corp. (A-/Stable/A-2), Warnaco Group Inc. (BB-/Stable/--), and Hanesbrands Inc. (B+/Stable--). The retail environment remains challenging, driven by price pressures and competition from private labels. The previously mentioned factors are somewhat mitigated by the company's well- known Maidenform brand, which was introduced in 1922 and which still has very good brand recognition. In addition, the rating incorporates the company's solid market shares in its core market, intimate apparel, which is characterized by relatively stable demand, low fashion risk, and high replenishment rates. In July 2005, Maidenform completed an IPO and used the net proceeds to redeem its preferred stock. At that time, the company refinanced its higher interest bearing US$50 million second-lien loan. For the past 12 months ended Sept. 30, 2006, revenues and EBITDA continued to improve, while credit- protection measures remain above the medians for the rating category. EBITDA interest coverage was 4.3x for the period, while total debt to EBITDA was 2.2x, versus 2.8x in the prior- year period. Maidenform Brands, Inc. -- http://www.maidenform.com/-- is a global intimate apparel company with a portfolio of established and well-known brands, top-selling products and an iconic heritage. Maidenform designs, sources and markets an extensive range of intimate apparel products, including bras, panties and shapewear. During the Company's 83-year history, Maidenform has built strong equity for its brands and established a solid growth platform through a combination of innovative, first-to- market designs and creative advertising campaigns focused on increasing brand awareness with generations of women. Maidenform sells its products under some of the most recognized brands in the intimate apparel industry, including Maidenform(R), Flexees(R), Lilyette(R), Self Expressions(R), Sweet Nothings(R), Bodymates(TM), Rendezvous(R) and Subtract(R). Maidenform products are currently distributed in 48 foreign countries and territories including Puerto Rico. ================= V E N E Z U E L A ================= DAIMLERCHRYSLER AG: CEO Expresses Support for Chrysler Chief ------------------------------------------------------------ Dieter Zetsche, chief executive of DaimlerChrysler AG, said he and the company's supervisory board supports Chrysler head Tom LaSorda in his effort to return the ailing U.S. unit to profitability, Bloomberg News reports. "I have given him advice to not read too many news clips," Mr. Zetsche told Bloomberg News. "He is doing a good job in a difficult environment." Bloomberg News suggests that Mr. Zetsche's comments may clarify speculations that Mr. LaSorda may lose his job. Mr. LaSorda succeeded Mr. Zetsche as Chrysler's chief. Chrysler, which posted US$1.5 billion net loss in third quarter 2006, is forecasting a deficit for 2006. The division recently disclosed of plans to return to profitability in February. "They need to bite the bullet, close some plants and restructure," said Erich Merkle, an analyst at IRN Inc. "They are not going to be able to sell themselves out of this. The economy is slowing down." About DaimlerChrysler Based in Stuttgart, Germany, DaimlerChrysler AG -- http://www.daimlerchrysler.com/-- develops, manufactures, distributes, and sells various automotive products, primarily passenger cars, light trucks, and commercial vehicles worldwide. It primarily operates in four segments: Mercedes Car Group, Chrysler Group, Commercial Vehicles, and Financial Services. The Chrysler Group segment offers cars and minivans, pick-up trucks, sport utility vehicles, and vans under the Chrysler, Jeep, and Dodge brand names. It also sells parts and accessories under the MOPAR brand. The Chrysler Group is facing a difficult market environment in the United States with excess inventory, non-competitive legacy costs for employees and retirees, continuing high fuel prices and a stronger shift in demand toward smaller vehicles. At the same time, key competitors have further increased margin and volume pressures -- particularly on light trucks -- by making significant price concessions. In addition, increased interest rates caused higher sales & marketing expenses. In order to improve the earnings situation of the Chrysler Group as quickly and comprehensively, measures to increase sales and cut costs in the short term are being examined at all stages of the value chain, in addition to structural changes being reviewed as well. Outlook In October 2006, DaimlerChrysler said it expects a slight decrease in worldwide demand for automobiles in the fourth quarter and thus slower market growth than in Q4 2005. For full-year 2006, the company anticipates market growth of around 3%. It expects unit sales in 2006 to be lower than in the previous year (4.8 million units). On Sept. 15, 2006, DaimlerChrysler reduced the Group's operating- profit target for 2006 to an amount of US$6.3 billion. Although the company now has to assume that the profit contribution from EADS will be US$0.3 billion lower than originally anticipated because of the delayed delivery of the Airbus A380, DaimlerChrysler is maintaining this earnings target due to very positive business developments in the divisions Mercedes Car Group, Truck Group and Financial Services. PETROLEO BRASILEIRO: Forming Joint Ventures with PDVSA ------------------------------------------------------ Petroleo Brasileiro, the state-run oil company of Brazil, will forge joint ventures with Petroleos de Venezuela SA, its Venezuelan counterpart, to explore mature fields in eastern Venezuela, Brazilian daily Valor Economico reports. Petroleo Brasileiro's international affairs director Nestor Cervero told Valor Economico that the firm is negotiating with Petroleos de Venezuela to sign four contracts for the exploration of mature fields. Petroleos de Venezuela would control the joint ventures. Business News Americas relates that Petroleos de Venezuela and Petroleo Brasileiro signed memorandum of understandings in 2005 to invest in 20 mature fields in Venezuela to increase their production. The report says that in addition to mature fields, Petroleo Brasileiro is negotiating with Petroleos de Venezuela for exploration operations in the Orinoco heavy crude belt and other projects. Petroleo Brasileiro said in a statement that it produces oil through four joint ventures in Venezuela and has estimated reserves of 269 million barrels of oil equivalent in the nation. Mauro Andrade, Deloitte Petroleum Services group regional manager in Brazil, told BNamericas that Venezuela's President Hugo Chavez's plans to boost the state's presence in the economy have little effect on Petroleo Brasileiro's operations in Venezuela in terms of reserves and production. BNamericas underscores that President Chavez's plans are expected to have little impact on Petroleo Brasileiro's overall performance worldwide since current projects and new contracts include changes in Venezuelan legislation. The report says that Petroleo Brasileiro has total reserves of 13 billion barrels of oil equivalent while total output was over 2.3 million barrels of oil equivalent per day, which is more than 130 times the 17,000 barrels per day it produces in Venezuela. "Of course every barrel counts, but the impact on operations is not significant. The problem is that when the investor looks at a company like Petrobras (Petroleo Brasileiro) that has significant investments in Latin America, which is going through instability and changes in opening up its economy, they want to know if the company is making money there," Mr. Andrade told BNamericas. About Petroleos de Venezuela Petroleos de Venezuela SA -- http://www.pdv.com/-- 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. The company has a commercial office in China. About Petroleo Brasileiro Headquartered in Rio de Janeiro, Brazil, Petroleo Brasileiro SA aka Petrobras -- http://www2.petrobras.com.br/ingles/index.asp -- 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. Petrobras has operations in China, India, Japan, and Singapore. It also operates in Venezuela through wholly owned subsidiary PESA, which is controlled through the firm's Argentina-based unit Petrobras Energia. 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. PETROLEOS DE VENEZUELA: Forming Joint Ventures with Petrobras ------------------------------------------------------------- Petroleos de Venezuela SA, the state-run oil firm of Venezuela, will forge joint ventures with Petroleo Brasileiro, its Brazilian counterpart, to explore mature fields in eastern Venezuela, Brazilian daily Valor Economico reports. Petroleo Brasileiro's international affairs director Nestor Cervero told Valor Economico that the firm is negotiating with Petroleos de Venezuela to sign four contracts for the exploration of mature fields. Petroleos de Venezuela would control the joint ventures. Business News Americas relates that Petroleos de Venezuela and Petroleo Brasileiro signed memorandum of understandings in 2005 to invest in 20 mature fields in Venezuela to increase their production. The report says that in addition to mature fields, Petroleo Brasileiro is negotiating with Petroleos de Venezuela for exploration operations in the Orinoco heavy crude belt and other projects. Petroleo Brasileiro said in a statement that it produces oil through four joint ventures in Venezuela and has estimated reserves of 269 million barrels of oil equivalent in the nation. Mauro Andrade, Deloitte Petroleum Services group regional manager in Brazil, told BNamericas that Venezuela's President Hugo Chavez's plans to boost the state's presence in the economy have little effect on Petroleo Brasileiro's operations in Venezuela in terms of reserves and production. BNamericas underscores that President Chavez's plans are expected to have little impact on Petroleo Brasileiro's overall performance worldwide since current projects and new contracts include changes in Venezuelan legislation. The report says that Petroleo Brasileiro has total reserves of 13 billion barrels of oil equivalent while total output was over 2.3 million barrels of oil equivalent per day, which is more than 130 times the 17,000 barrels per day it produces in Venezuela. "Of course every barrel counts, but the impact on operations is not significant. The problem is that when the investor looks at a company like Petrobras (Petroleo Brasileiro) that has significant investments in Latin America, which is going through instability and changes in opening up its economy, they want to know if the company is making money there," Mr. Andrade told BNamericas. About Petroleo Brasileiro Headquartered in Rio de Janeiro, Brazil, Petroleo Brasileiro SA aka Petrobras -- http://www2.petrobras.com.br/ingles/index.asp -- 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. Petrobras has operations in China, India, Japan, and Singapore. It also operates in Venezuela through wholly owned subsidiary PESA, which is controlled through the firm's Argentina-based unit Petrobras Energia. About Petroleos de Venezuela Petroleos de Venezuela SA -- http://www.pdv.com/-- 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. The company has a commercial office in China. * * * Standard & Poor's said on July 17 that it may lower the company's B+ foreign-currency debt rating in part because of the absence of timely financial and operating information. * VENEZUELA: Gov't Says It Will Pay Companies in Nationalization ---------------------------------------------------------------- Guillermo Parra-Bernal at Bloomberg News reports that the Venezuelan government will compensate power and telephone companies affected by the nationalization of these sectors. The move was announced by President Hugo Chavez when he was sworn in to office. "Confiscation, expropriation are banned words in our dictionary," Ricardo Sanguino, the National Assembly Finance Committee's chairman told Bloomberg News in an interview. "We will be tough but fair negotiators. There are legal mechanisms in the Constitution that give support to our plan." The assurance resulted to a raise for Venezuela's stocks and currency. The Caracas Stock Exchange index rose 6.1%. U.S. shares of CA Nacional Telefonos de Venezuela, or Cantv, which the government plans to nationalize, gained 20% in New York trading. The country's benchmark bond also rose. Mr. Sanguino explained to Bloomberg that President Chavez's nationalization plan calls for buyouts not expropriations. According to Bloomberg, the nationalization of utilities and oil ventures would reverse the previous Venezuelan governments' privatization of state companies and opening the market to foreign investors. * * * As reported in the Troubled Company Reporter on Nov. 20, 2006, Fitch Ratings affirmed Venezuela's long-term foreign and local currency Issuer Default Ratings at 'BB-'. At the same time, the agency also affirmed the short-term foreign currency IDR at 'B' and the Country Ceiling at 'BB-'. Fitch said the outlook on the ratings remains stable. * VENEZUELA: J.P. Morgan Pares Rating on Sovereign Bonds -------------------------------------------------------- Investment bank J.P. Morgan reduced the rating of Venezuela's debt to market correlation from market correlation plus, and added that it took profit on the country's bonds, El Universal reports. According to the investment bank, the rating cut is associated with the risk after the reelection of President Hugo Chavez and falling oil prices, El Universal relates. "President Chavez has clearly set a more radical tone following his reelection by an overwhelming majority, and he seems to speed up his long-term vision of increasing state control in Venezuela," Reuters report, quoting the Bank's written analysis. * * * As reported in the Troubled Company Reporter on Nov. 20, 2006, Fitch Ratings affirmed Venezuela's long-term foreign and local currency Issuer Default Ratings at 'BB-'. At the same time, the agency also affirmed the short-term foreign currency IDR at 'B' and the Country Ceiling at 'BB-'. Fitch said the outlook on the ratings remains stable. * VENEZUELA: Treasury Promises to Compensate CANTV Shareholders --------------------------------------------------------------- The Venezuelan Treasury Department promises to pay the fair value for telecom company Compania Anonima Nacional Telefonos de Venezuela once the government's plan to nationalize it will push through. "Shareholders will receive for the notes the fair value of their assets. Nationalization will be an opportunity for the State to keep the corporate value and ensure also timely investments," Minister of Finance Rodrigo Cabezas told El Universal. "A significant participation of workers is anticipated in the future operational layout of the company." "CANTV formed part of the privatization within the framework of the Washington Accord. Then, State shareholding was reduced, but now the revolution will recover the companies. The Constitution reserved the rights of sovereignty and national autonomy. Therefore, the State not only has reserved the oil business, but also other areas," the finance minister added. About CANTV Compania Anonima Nacional Telefonos de Venezuela, CANTV, offers telecommunications services. The Company provides domestic and international long distance telephone services throughout Venezuela, wireless telephone services, and Internet access, and publishes telephone directories. * * * As reported in the Troubled Company Reporter on Nov. 20, 2006, Fitch Ratings affirmed Venezuela's long-term foreign and local currency Issuer Default Ratings at 'BB-'. At the same time, the agency also affirmed the short-term foreign currency IDR at 'B' and the Country Ceiling at 'BB-'. Fitch said the outlook on the ratings remains stable. * Fitch Reviews Latin America Structured Finance in 2006 -------------------------------------------------------- Fitch Ratings released the "Latin American Structured Finance 2006 Year in Review and 2007 Outlook." The report includes data and explanation of both cross-border and local market structured finance issuance. The report explains that 2006 was an average year for Latin American cross-border structured finance. Dollar issuance volumes in the cross-border capital markets were more than 25% higher than 2005 levels, while remaining below the levels last seen in 2003. Many new issuers and unique transactions were successfully placed in the cross-border market. The major stories in 2006 were the cross-border issuances of sub-investment-grade debt and the shift away from future flow structures toward those utilizing more existing assets. A true asset-backed issuance was Navistar (Trust #229563), an auto-loan securitization originated out of Mexico. Also noteworthy in 2006 was the issuance diversification by country. Along with Mexico, there were successful structured issuances out of Brazil, El Salvador, Panama, Peru, Guatemala, Jamaica, Argentina, and the Dominican Republic. Fitch's expectation is for credit trends to remain stable in 2007. While Fitch would be surprised to see the dollar volume of cross-border issuances for 2007 greatly exceed 2006, there are several companies throughout the region that could access the market with structured financing. There is potential for new asset classes more closely resembling more traditional asset-backed securitizations and increasingly utilizing existing assets. Fitch's expectation for the near future is the successful placement of commercial mortgage-backed securities, residential mortgage-backed securities, and auto loans in the cross-border market. * Large Companies with Insolvent Balance Sheets ----------------------------------------------- Total Shareholders Total Equity Assets Company Ticker (US$MM) (US$MM) ------- ------ ------------ ------- Kuala ARTE3 (33.57) 11.86 Kuala-Pref ARTE4 (33.57) 11.86 Bombril BOBR3 (781.53) 473.67 Bombril-Pref BOBR4 (781.53) 473.67 CIC CIC (1,883.69) 22,312.12 Telefonica Holding CITI (1,010.00) 861.00 Telefonica Holding CITI5 (1,010.00) 861.00 SOC Comercial PL COME (732.78) 461.86 CIMOB Partic SA GAFP3 (44.34) 121.74 CIMOB Part-Pref GAFP4 (44.38) 121.74 DOC Imbituba IMBI3 (19.84) 192.80 DOC Imbitub-Pref IMBI4 (19.84) 192.80 IMPSAT Fiber Networks IMPTQ (17.16) 535.01 Kepler Weber KEPL3 (22.20) 478.81 Paranapanema SA PMAM3 (53.36) 3,268.96 Paranapanema-PREF PMAM4 (53.36) 3,268.96 Telebras-CM RCPT RCTB30 (59.79) 228.35 Telebras-PF RCPT RCTB40 (59.79) 228.35 *********** 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, Francois Albarracin, and Christian Toledo, Editors. Copyright 2076. All rights reserved. ISSN 1529-2746. This material is copyrighted and any commercial use, resale or publication in any form (including e-mail forwarding, electronic re-mailing and photocopying) is strictly prohibited without prior written permission of the publishers. Information contained herein is obtained from sources believed to be reliable, but is not guaranteed. The TCR Latin America subscription rate is US$625 per half-year, delivered via e-mail. Additional e-mail subscriptions for members of the same firm for the term of the initial subscription or balance thereof are US$25 each. For subscription information, contact Christopher Beard at 240/629-3300. * * * End of Transmission * * *