/raid1/www/Hosts/bankrupt/TCRLA

/raid1/www/Hosts/bankrupt/TCRLA_Public/070202.mbx T R O U B L E D C O M P A N Y R E P O R T E R L A T I N A M E R I C A Friday, February 2, 2007, Vol. 8, Issue 24 Headlines A R G E N T I N A HEXION SPECIALTY: Closes Buy of Orica's Adhesive & Resin Assets * ARGENTINA: Grants US$240-Mil. Loan for Water Infrastructure * ARGENTINA: Spain Mediates in Dispute with Uruguay B A H A M A S JETBLUE: Posts US$633MM Operating Revenues for Fourth Qtr. 2006 B E L I Z E * BELIZE: Fuel Prices Drop by Thirty-Five Cents * BELIZE: Holders of 93% of Debts Participate in Exchange Offer B E R M U D A FOCUS ENHANCED: Final General Meeting Is Set for Feb. 26 FOSTER WHEELER: Names Umberto Della Sala as President & COO FOSTER WHEELER: F. Baseotto to Succeed J.T. La Duc as Exec. VP GLOBAL CROSSING: Promoting Caribbean Region Development with GCN GORTHON INTERNATIONAL: Final Shareholders Meeting Is on Feb. 20 MONTPELIER RE: Raymond Barrette Resigns as Board Director MSD WARWICK: Shareholders to Gather for Final Meeting on Feb. 26 B O L I V I A INTERNATIONAL PAPER: Closes Sale of Beverage Packaging Operation * BOLIVIA: Accuses Jindal Steel of Rejecting Contract Clauses B R A Z I L BANCO DO BRASIL: Eyes BRL2.70B Vehicle Financing Operations BANCO DO BRASIL: Reserves BRL2.20 Billion for Dairy Farmers BANCO NACIONAL: Okays US$1.16B Loan for Petrobras' Ship Building BANCO NACIONAL: Okays BRL156 Million in Loans to Bolognesi BRASIL TELECOM: Picks Widevine to Protect IPTV Deployment CHEMTURA CORP: Completes Acquisition of Kaufman Holdings COMPANHIA SIDERURGICA: Discloses Share Buyback Program COMPANHIA SIDERURGICA: S&P Affirms BB Corporate Credit Ratings DURA AUTOMOTIVE: Court Okays Chanin Capital as Panel's Advisor DURA AUTOMOTIVE: Judge Carey OKs Kramer Levin as Panel's Counsel FIDELITY NATIONAL: EMC Inks Tax Processing Pact with FNTS NOVELIS INC: Supplies Aluminum Sheet for Hood of New GMC Acadia PETROLEO BRASILEIRO: Completes Nova Piratininga Plant Expansion PETROLEO BRASILEIRO: Gets US$1.16-Bil. Loan for Ship Building TELEMIG CELULAR: Parent Hires Merrill Lynch to Facilitate Sale * BRAZIL: Sells US$500 Million Dollar Bonds Due 2037 * BRAZIL: IDB Grants US$7.15MM Loan to Improve Public Policies C A Y M A N I S L A N D S ADORI HOLDINGS: Proofs of Claim Filing Deadline Is on Feb. 8 ADORI HOLDINGS: Shareholders to Gather for Feb. 8 Final Meeting ADROIT PRIVATE: Final General Meeting Is Set for Feb. 8 ANOM LTD: Deadline for Proofs of Claim Filing Is on Feb. 8 ARARA HOLDINGS: Calls Shareholders for Feb. 8 Final Meeting ATTICA ASSET: Proofs of Claim Filing Deadline Is on Feb. 8 BAREP SYSTEMATIC: Last Day to File Proofs of Claim Is on Feb. 8 CAMARILLA INVESTMENTS: Proofs of Claim Filing Is Until Feb. 8 CAMEL INVESTMENTS: Proofs of Claim Must be Filed by Feb. 8 DRYDEN III: Last Day to File Proofs of Claim Is on Feb. 8 DRYDEN LEVERAGED: Deadline for Proofs of Claim Filing Is Feb. 8 HEJAZ INVESTMENT: Proofs of Claim Must be Filed by Feb. 8 JME OFFSHORE: Creditors Must File Proofs of Claim by Feb. 8 LUBICE FINANCE: Claims Filing Deadline Is Set for Feb. 8 LUBICE FINANCE: Shareholders to Gather for Feb. 8 Final Meeting MINCS-MAGNUM: Filing of Proofs of Claim Is Until Feb. 8 SAPIC 98: Shareholders to Convene for Feb. 8 Final Meeting SEQUILS-MAGNUM: Creditors Must Submit Proofs of Claim by Feb. 8 SITKA INVESTMENTS: Proofs of Claim Must be Filed by Feb. 8 SOFOS CAPITAL: Final Shareholders Meeting Is Set for Feb. 8 STOCKLORD INVESTMENTS: Proofs of Claim Filing Is Until Feb. 8 VHC EUROPEAN: Last Day for Proofs of Claim Filing Is on Feb. 8 VHC EUROPEAN EVENT: Proofs of Claim Filing Deadline Is Feb. 8 VHC MASTER: Deadline for Proofs of Claim Filing Is on Feb. 8 VHC RESTRUCTURING: Last Day to File Proofs of Claim Is on Feb. 8 C O L O M B I A ARMOR HOLDINGS: Posts US$38 Million Net Income in Fourth Quarter C O S T A R I C A US AIRWAYS: Withdraws Delta Air Merger Proposal US AIRWAYS: Withdrawn Delta Bid Cues S&P to Affirm Ratings * COSTA RICA: Mulling to Speed Up International Pact Approval C U B A * CUBA: Has Over 350,000 Participants in Agriculture Program D O M I N I C A N R E P U B L I C * DOMINICAN REPUBLIC: Central Bank Issuing DOP1.5B Certificates E C U A D O R * ECUADOR: Bonds Rise on Statement to Seek Friendly Accord * ECUADOR: Farmers Seek Imports & Exports Nationalization H O N D U R A S CONTINENTAL AIRLINES: To Add US$35 Million to Pension Plans CONTINENTAL AIRLINES: Issues 4.26 Million Shares of Common Stock * HONDURAS: Files Claim Over Fuel Storage Price on Failed Talks J A M A I C A AIR JAMAICA: Cabinet Approves Restructuring Plan KAISER ALUMINUM: Competes Secondary Offering of Common Stock M E X I C O AFFILIATED COMP: Wins Automation Pact on Mexico Fare Collection BALDOR ELECTRIC: Completes Acquisition of Reliance Electric CELESTICA INC: Weak Results Cue S&P to Put Ratings on Watch DELTA AIR: Unofficial Panel Upset by Official Panel's Rejection DELTA AIR: US Airways Withdraws Merger Proposal DELTA AIR: CEO Comments on Creditors' Committee Support for Plan DELTA AIR: S&P Holds D Rating on Withdrawn US Airways Offer GRUPO MEXICO: Investing Part of Cash Reserves in Railroad KRISPY KREME: Daryl Brewster & Charles Blixt Elected on Board REMY INT: To Sell Remanufacturing Asset & Systems to Caterpillar SATELITES MEXICANOS: To Receive Non-Binding Bids by March * MEXICO: Cantarell's Daily Output Declines by 500,000 Barrels N I C A R A G U A * NICARAGUA: Vice President Overseeing Business & Investments P A N A M A SOLO CUP: S&P Holds CCC- Rating on Second-Lien Term Loan P E R U * PRIDE INT'L: To Pay Back Taxes of US$32.5 Million to Seniat * PERU: Perupetro Secured US$690 Mil. from 16 Contracts in 2006 P U E R T O R I C O DORAL FIN'L: Pays Cash Dividend on 4 Series of Preferred Stock FIRSTBANK PUERTO RICO: Scotiabank To Buy Bank, Analyst Says NEWCOMM WIRELESS: Committee Seeks to Retain Foley as Counsel PILGRIM'S PRIDE: Declares 2-1/4 Per Share Quarterly Dividend PILGRIM'S PRIDE: Incurs US$8.7MM Net Loss in Qtr. Ended Dec. 30 SUNCOM WIRELESS: Reaches Consensual Agreement with Bondholders T R I N I D A D & T O B A G O HILTON HOTELS: Reports Strong Results for Quarter Ended Dec. 31 HILTON HOTELS: Fitch Upgrades Debt Ratings to BB+ from BB HILTON HOTELS: S&P Places BB Corp. Credit Rating on CreditWatch U R U G U A Y * URUGUAY: Spanish Envoy Mediates in Dispute with Argentina V E N E Z U E L A PETROLEOS DE VENEZUELA: Halts Operations at Puerto La Cruz Plant * VENEZUELA: Analysts Say Movilnet Must be Separated from Cantv * VENEZUELA: May Pay Verizon Less Than US$677MM for Cantv Stake * VENEZUELA: President to be Able to Make Oil & Gas Decrees - - - - - ================= A R G E N T I N A ================= HEXION SPECIALTY: Closes Buy of Orica's Adhesive & Resin Assets --------------------------------------------------------------- Hexion Specialty Chemicals, Inc., has completed its purchase of the adhesives and resins business of Orica Limited. The purchase price was not disclosed. The Orica adhesives and resins business manufactures formaldehyde and formaldehyde-based binding resins used primarily in the forest products industry. The business includes three manufacturing facilities located in Deer Park (Victoria) Australia, and Mountview and Hornby, New Zealand. The business had 2005 sales of US$104 million and employs 100 people. "We are delighted to complete this transaction and welcome the business and its associates into Hexion," said Craig O. Morrison, Chairman and CEO. "This acquisition strengthens our presence in the Asia-Pacific region and will enable us to expand our service to the forest products marketplace." The Orica business produces formaldehyde and downstream resin systems including urea-formaldehyde, melamine-formaldehyde, phenol-formaldehyde and additional formulations. These products are used primarily to produce wood panels such as particleboard, medium-density fiberboard and plywood. Its resins also are used in overlays for laminates and veneers, in engineered timber products such as laminated veneer lumber and finger joinery, and in insulation applications. About Orica Limited Orica is a publicly listed Australian company operating in over 50 countries with annual sales of about US$3 billion. It is the leader in its chosen markets, globally in commercial explosives and regionally in chemicals and paints. About Hexion Specialty Based in Columbus, Ohio, Hexion Specialty Chemicals Inc. -- http://hexionchem.com/-- manufactures and markets resins, inks, coating and adhesive resins, formaldehyde, oil field products and other specialty and industrial chemicals worldwide. At Sept. 30, 2006, the company has 103 production and manufacturing facilities, of which 38 are located in the U.S. In Latin America, the company has operations in Argentina, Brazil and Colombia. * * * As reported in the Troubled Company Reporter on Oct. 23, 2006, Standard & Poor's Ratings Services lowered its corporate credit rating on Hexion Specialty Chemicals Inc. to 'B' from 'B+'. The outlook is stable. S&P also lowered the rating on the existing US$225 million first-lien senior secured revolving credit facility to 'B' from 'B+'. As reported in the Troubled Company Reporter on Oct. 19, 2006, Moody's Investors Service assigned B3 ratings to the new guaranteed senior secured second lien notes due 2014 of Hexion Specialty Chemicals Inc. * ARGENTINA: Grants US$240-Mil. Loan for Water Infrastructure ------------------------------------------------------------- The Inter-American Development Bank approved a US$240 million loan to Argentina for a program to improve the use of water resources in the northern provinces of Tucuman, Jujuy, Santiago del Estero, Catamarca and Chaco. The program will be carried out by the Ministry of Federal Planning, Public Investment and Services, and will focus on hydraulic infrastructure for production, water and sewer systems, and operational and institutional strengthening. Through hydraulic works projects for agricultural production and multiple uses, 95,000 new hectares will be converted to irrigated farmland. Public utility projects will help one million people gain better access to water and more than 55,000 persons will be connected to the sewer system, expanding the coverage of basic sanitation services for low-income communities. Flood protection and control for 70,000 persons will prevent damages to private property and public infrastructure. "This program has been designed to solve, through specific projects, problems such as flooding in Tucuman; scarcity of irrigation water in Santiago del Estero and Jujuy; lack of water regulation structures in Tucuman, Jujuy and Santiago del Estero; and contamination of water resources and limited water and sanitation services in Catamarca and Chaco," said IDB Team Leader Gabriel Montes. The program also seeks to improve the management of water companies in order to strengthen their capacity to regulate and control the use and sustainable management of water resources. "Upon completion, works executed under this program will be transferred to the provinces, through the companies or entities that will operate and maintain them," said Mr. Montes. "Regulations and monitoring will ensure the environmentally sustainable use of water resources." This project is part of a broader policy of the Argentine government to develop and integrate the so-called Norte Grande region through national IDB-financed infrastructure investments to support production. Accordingly, this program will be implemented alongside two other operations for electricity and road infrastructure. Another operation to support the competitiveness of the region by focusing on the main production chains is already under way. The loan is for a 25-year period, with a six-year grace period, at a variable interest rate. Local counterpart funds for this loan total 60 million dollars. * * * 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 * ARGENTINA: Spain Mediates in Dispute with Uruguay --------------------------------------------------- Juan Antonia Yanez Barnueo, Spain's envoy ambassador to mediate between Argentina and Uruguay's pulp mill construction dispute, met Monday Argentine Foreign Affairs Minister Jorge Taiana for a third round of talks. He then met Tuesday Uruguayan Foreign Affairs Minister Reinaldo Gargano to discuss the conflict and come up with a possible solution. The neighboring countries are at odds over the construction of two pulp mills along their river border. The Argentine government and environmental groups are protesting the mills' alleged adverse effect on marine life at their river border. Uruguay argued that studies have been made ascertaining the safety of the river habitat and measures would be taken to ensure that the mills won't pollute the river. Argentina also claims Uruguay violated the 1975 Statute of the River Uruguay, which states that all issues concerning the river must be agreed upon by the two nations. The matter has been brought to the International Court of Justice at The Hague. A preliminary ruling was issued in favor of Uruguay. The ruling, along with a financing from the World Bank, renewed a series of protests and blockades of access roads leading to Uruguay. Merco Press says Argentina expressed "its full willingness" to dialogue with Uruguay in order to find a solution to their dispute. Uruguay has previously refused to dialogue unless Argentine protesters are stopped from blockading access to Uruguay. However, the International Court does not think the protests are materially damaging to Uruguay. For the Argentine government's part, it said in reports that it won't force its citizens to stop picketing because it is within their rights of free expression. According to Merco Press, the possible solutions to the dispute are: -- construction of a 30-km long pipeline down the River Uruguay through which, the wastes coming from the mills would be pumped; -- reshaping to help limit the plant visual contamination (huge chimney) from the Argentine side; and -- construction of an additional drain that be jointly financed by Argentina, Uruguay and Spain. * * * 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 ============= JETBLUE: Posts US$633MM Operating Revenues for Fourth Qtr. 2006 --------------------------------------------------------------- JetBlue Airways Corp. reported results for the fourth quarter and full year 2006: * Operating revenues for the quarter totaled US$633 million, representing growth of 42.1% over operating revenues of US$446 million in the fourth quarter of 2005. For the full year, operating revenues totaled US$2.36 billion, representing growth of 38.9% over operating revenues of US$1.70 billion for the full year 2005. * Operating income for the quarter was US$64 million, resulting in a 10.2% operating margin, compared with an operating loss of US$31 million and a negative 7.1% operating margin in the fourth quarter of 2005. For the full year 2006, operating income was US$127 million, resulting in an operating margin of 5.4%. This compares with operating income of US$48 million and a 2.8% operating margin for the full year 2005. * Pre-tax income for the quarter was US$30 million, compared with a pre-tax loss of US$55 million in the year-ago period. For the full year, pre-tax income was US$9 million, compared with a pre-tax loss of US$24 million for the full year 2005. * Net income for the quarter was US$17 million, representing earnings of US$0.10 per diluted share, compared with fourth quarter 2005 net loss of US$42 million, or a loss of US$0.25 per diluted share. For the full year 2006, net loss totaled US$1 million, or US$0.00 per diluted share, compared with a net loss of US$20 million, or a loss of US$0.13 per diluted share, for the full year 2005. "I'm tremendously proud of the efforts our crewmembers have made in advancing our plan to institutionalize low-cost carrier spending habits and improve revenue overall -- we've made great progress since the beginning of 2006," said David Neeleman, JetBlue's Chairman and CEO. "We are optimistic about what lies ahead as we seek to further improve our financial and operating performance." During the fourth quarter of 2006, JetBlue achieved a completion factor of 99.6% of scheduled flights versus 98.9% in the fourth quarter of 2005. On-time performance, defined by the US Department of Transportation as arrivals within 14 minutes of schedule, was 68.4% in the fourth quarter of 2006 compared with 70.9% for the same period in 2005. For the full year 2006, JetBlue achieved a completion factor of 99.5%, compared with 99.2% in the full year 2005. On-time performance for the full year 2006 was 72.8%, compared with 71.4% for the full year 2005. The company attained a load factor in the fourth quarter of 2006 of 79.7%, a decrease of 1.4 points on a capacity increase of 14.5% over the fourth quarter of 2005. Load factor for the full year 2006 was 81.6%, a decrease of 3.6 points on a capacity increase of 20.6%. Dave Barger, JetBlue's President and COO, commented, "The JetBlue team, now 11,000 strong, rose to the occasion and met the difficult operational and financial challenges of 2006. The creativity and innovation of our crew members positions us well for 2007, a year in which we plan to grow capacity eleven to fourteen percent, while continuing to enhance the JetBlue Experience." For the fourth quarter, yield per passenger mile was 10.21 cents, up 25.0% compared with 2005. Operating revenue per available seat mile (RASM) increased 24.1% year-over-year to 8.71 cents. Revenue passenger miles increased 12.4% from the fourth quarter of 2005 to 5.8 billion. Available seat miles grew 14.5% to 7.3 billion. Operating expenses for the fourth quarter were US$569 million, up 19.1% from the fourth quarter of 2005. Operating expense per ASM (CASM) for the fourth quarter 2006 increased 4.1% year-over-year to 7.82 cents, while average stage length decreased 17.9%. Excluding fuel, CASM increased 2.3% to 5.24 cents. During the quarter, realized fuel price was US$1.92 per gallon, a 2.8% increase over fourth quarter 2005 realized fuel price of US$1.87. JetBlue ended the fourth quarter and full year with US$699 million in cash and investment securities. Looking ahead, for the first quarter of 2007, JetBlue expects to report an operating margin between two and four percent based on an assumed aircraft fuel cost per gallon of US$1.91, net of hedges. Pre-tax margin for the quarter is expected to be between negative four and negative two percent. CASM is expected to increase between six and eight percent over the year-ago period. Excluding fuel, CASM in the first quarter is expected to increase between four and six percent year over year. Capacity is expected to increase between 14 and 16 percent in the first quarter and stage length is expected to decrease roughly 14 percent over the same period last year. For the full year 2007, JetBlue expects to report an operating margin between 10 and 12 percent based on an assumed aircraft fuel cost per gallon of US$1.93, net of hedges. Pre-tax margin for the full year is expected to be between five and seven percent. CASM for the full year is expected to increase between five and seven percent over full year 2006. Excluding fuel, CASM in 2007 is expected to increase between seven and nine percent year over year. Capacity for the full year 2007 is expected to increase between 11 and 14 percent over 2006 and stage length is expected to decrease roughly seven percent over full year 2006. The CASM and ex-fuel CASM guidance in both the first quarter and full year includes the impact of the reduction in seats on JetBlue's A320 aircraft from 156 to 150 seats per aircraft. Based in Forest Hills, New York, JetBlue Airways Corp. (Nasdaq:JBLU) -- http://www.jetblue.com/-- provides passenger air transportation services primarily in the United States. As of Feb. 14, 2006, the Company operated approximately 369 daily flights serving 34 destinations in 15 states, Puerto Rico, the Dominican Republic, and the Bahamas. The Company also provides in-flight entertainment systems for commercial aircraft, including live in-seat satellite television, digital satellite radio, wireless aircraft data link service, and cabin surveillance systems and Internet services, through its wholly owned subsidiary, LiveTV, LLC. * * * As reported in the Troubled Company Reporter on Nov. 23, 2006, Moody's Investors Service assigned ratings of Caa1 (LGD5, 88%) to the approximately US$40 million of Special Facility Revenue Bonds, Series 2006 (JetBlue Airways Corporation Project or the JFK Facility Bonds) to be issued by the New York City Industrial Development Agency. Moody's affirmed the B2 corporate family rating for JetBlue Airways Corp. Moody's said the outlook remains negative. Standard & Poor's Ratings Services assigned its 'B' rating to US$40 million of New York City Industrial Development Agency special facility revenue bonds, series 2006 maturing on May 15, 2021, and May 15, 2030; the amount for each maturity have yet to be determined. The bonds, which will be used to finance a hangar and other facilities, will be serviced by payments made by JetBlue Airways Corp. (B/Stable/B-3) under a lease between the airline and the agency. =========== B E L I Z E =========== * BELIZE: Fuel Prices Drop by Thirty-Five Cents ----------------------------------------------- Belize has faced a cut in its fuel prices. Service stations' prices have dropped by as much as 35 cents, PetrolWorld reports. According to the same report the prices on these different fuel products became effective last week: -- premium fuel: to US49.39 from US$9.74, -- regular fuel: to US$9.33 from US$9.56, -- kerosene price maintained at US$6.11 per gallon, and -- diesel price remains at US$6.90. The price drop is due to government's commitment to pass on savings to consumers from a decrease in the costs of imported fuel, PetrolWorld relates. * * * As reported in the Troubled Company Reporter on Dec. 11, 2006, Standard & Poor's Ratings Services revised its long-term foreign currency sovereign credit rating on Belize to 'SD' from 'CC/C'. Standard & Poor's also said that it revised to 'D' its long-term foreign currency ratings on the rated bonds that are included in a proposed exchange. In addition, Standard & Poor's affirmed its 'CCC+/C' local currency sovereign credit rating on Belize. * BELIZE: Holders of 93% of Debts Participate in Exchange Offer --------------------------------------------------------------- The Government of Belize disclosed that the holders of the country's public external commercial indebtedness have overwhelmingly agreed to exchange their existing claims against the country for new bonds to be issued by Belize maturing 2029. The exchange offer was launched on Dec. 18, 2006. Holders of the affected debts had until Jan. 26, 2007, to tender their claims into the exchange. Holders of more than 93% of the debts eligible to participate in the exchange offer (excluding two loans that benefited from an insurance policy issued by a third party) have accepted the offer. A closing of the exchange is scheduled to take place on Feb. 20, 2007. Carla Barnett, the Financial Secretary of Belize, said, "The Government of Belize is extremely pleased with the outcome of this exchange offer. It provides a significant degree of debt relief to Belize and firmly places our debt service profile on a sound and sustainable footing. We understand that the only remaining commercial creditor of any significant size (the holder of the insured loans) is currently in discussions with the other parties involved in those transactions. We expect that those arrangements will be completed in time to permit the insured loans to participate in the exchange offer." "Belize approached this debt restructuring in a fully transparent and co-operative manner," said Mark Espat, Minister of National Development. "Our creditors have reciprocated. We recognise -- and we appreciate -- their cooperation. The level of debt relief requested by Belize was necessary and proportionate to the financial situation facing the country. By their positive response to the exchange offer, our creditors have confirmed that Belize has made a convincing case for the financial terms of the offer." The new bonds to be issued by Belize will amortise in equal and semi-annual instalments commencing 2019, with final maturity due 2029. The new bonds will carry a coupon of 4.25% for the first three years, 6.00% for years four and five, rising to 8.50% in year seven through to maturity. Houlihan Lokey Howard & Zukin acted as the financial advisors to the Government of Belize in the transaction. D.F. King & Co. acts as the information agent. * * * As reported in the Troubled Company Reporter on Dec. 11, 2006, Standard & Poor's Ratings Services revised its long-term foreign currency sovereign credit rating on Belize to 'SD' from 'CC/C'. Standard & Poor's also said that it revised to 'D' its long-term foreign currency ratings on the rated bonds that are included in a proposed exchange. In addition, Standard & Poor's affirmed its 'CCC+/C' local currency sovereign credit rating on Belize. ============= B E R M U D A ============= FOCUS ENHANCED: Final General Meeting Is Set for Feb. 26 -------------------------------------------------------- Focus Enhanced Arbitrage Fund, Ltd.'s final general meeting will be at 9:30 a.m. on Feb. 26, 2007, or as soon as possible, at the liquidator's place of business. Focus Enhanced'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 FOSTER WHEELER: Names Umberto Della Sala as President & COO ----------------------------------------------------------- Foster Wheeler Ltd.'s board of directors has elected Umberto della Sala to the position of president and chief operating officer, effective immediately. In this newly created role, Mr. della Sala will report directly to Raymond J. Milchovich, chairman and chief executive officer, and will assume full responsibility for the company's two business groups: -- the Global Engineering and Construction (E&C) Group and -- the Global Power Group. "Umberto is a 33-year veteran of Foster Wheeler. He has served in a variety of engineering, commercial and operational roles in both Europe and North America, and has an excellent, in-depth knowledge of the contracting business," said Mr. Milchovich. "Umberto has proven himself as a strong, experienced, and visionary leader. Under his leadership as chief executive officer of our Global E&C Group, the Group has delivered an outstanding operational and business-winning performance and also has achieved a significant and well-managed growth in capacity. Previously, as president and chief executive officer of the Global E&C Group's Continental Europe business unit, Umberto dramatically improved the business unit's financial performance, consistently met or exceeded client expectations, and built a world-class management team. "As well as continuing to lead the Global E&C Group, Umberto will assume immediate and full responsibility for the Global Power Group. Having assumed the position of acting chief executive officer of the Global Power Group in June 2006, I will work closely with Umberto over the next six to eight months to ensure a successful transition. We have already made significant operational changes during the last year in the Global Power Group and Umberto will drive the transfer of industry best practices, which are already deeply embedded in the Global E&C Group's operations, into the Global Power Group's operations. I am highly confident that Umberto will continue to deliver a very significant contribution to the future growth and success of Foster Wheeler." Headquartered in Hamilton, Bermuda, Foster Wheeler Ltd. -- http://www.fwc.com/-- offers a broad range of engineering, procurement, construction, manufacturing, project development and management, research and plant operation services. Foster Wheeler serves the refining, upstream oil and gas, LNG and gas- to-liquids, petrochemical, chemicals, power, pharmaceuticals, biotechnology and healthcare industries. * * * As reported in the Troubled Company Reporter on Dec. 18, 2006, Standard & Poor's Ratings Services revised its outlook on Foster Wheeler Ltd. to positive from stable. At the same time, Standard & Poor's affirmed its 'B+' corporate credit rating and other ratings on the Clinton, New Jersey-based engineering and construction company. The company had about US$217 million of total debt at Sept. 29, 2006. FOSTER WHEELER: F. Baseotto to Succeed J.T. La Duc as Exec. VP -------------------------------------------------------------- Foster Wheeler Ltd.'s board of directors has elected Franco Baseotto to the position of executive vice president and chief financial officer, effective Aug. 13, 2007. John T. La Duc, who currently holds this role, was elected to this position in April 2004. Mr. La Duc has agreed to extend his current contract to continue in this position until August 2007 and to work closely with Mr. Baseotto to ensure a smooth transition. Upon assuming his new position in August 2007, Mr. Baseotto will report directly to Raymond J. Milchovich, chairman and chief executive officer. "Franco is a highly talented and widely respected individual. In his current role as financial leader of our Global Engineering and Construction (E&C) Group, and chief financial officer of our Global E&C Group's Continental Europe business unit, he has proven that he is eminently well-qualified to assume this position," said Mr. Milchovich. "Franco has been with Foster Wheeler for sixteen years. He has worked in Europe and in North America and has developed an in-depth knowledge of all aspects of finance and accounting, the contracting business, and our Company at a corporate and operational level. I am highly confident that Franco will continue to deliver the same commitment and success in his new role. "John La Duc joined Foster Wheeler at a very critical time for this Company and I would like to thank him for his energy, commitment and outstanding contribution to its successful transformation. I am delighted that John has agreed to extend his contract with Foster Wheeler to work with Franco to ensure a smooth and successful transition." Headquartered in Hamilton, Bermuda, Foster Wheeler Ltd. -- http://www.fwc.com/-- offers a broad range of engineering, procurement, construction, manufacturing, project development and management, research and plant operation services. Foster Wheeler serves the refining, upstream oil and gas, LNG and gas- to-liquids, petrochemical, chemicals, power, pharmaceuticals, biotechnology and healthcare industries. * * * As reported in the Troubled Company Reporter on Dec. 18, 2006, Standard & Poor's Ratings Services revised its outlook on Foster Wheeler Ltd. to positive from stable. At the same time, Standard & Poor's affirmed its 'B+' corporate credit rating and other ratings on the Clinton, New Jersey-based engineering and construction company. The company had about US$217 million of total debt at Sept. 29, 2006. GLOBAL CROSSING: Promoting Caribbean Region Development with GCN ---------------------------------------------------------------- Global Crossing is working with Global Caribbean Network or GCN, a subsea cable operator headquartered in Guadeloupe, French West Indies, to enhance global IP connectivity to the Caribbean region. Under the terms of several agreements, GCN will interconnect its voice and data traffic services arriving from the Caribbean to Global Crossing's IP network in St. Croix, via 10-Gigabit wavelengths, enabling GCN to extend its services to North America, Europe and Asia. Primarily based in the Caribbean, GCN's customers will now gain access to Global Crossing's state- of-the-art global network, so they can connect to any of the 600 cities in 60 countries where Global Crossing delivers services. At the same time, through the interconnection with GCN, Global Crossing will now be able to offer its own customers services in 13 additional countries in the Caribbean. "Global Crossing's services support our plans to offer Caribbean residential and commercial users a more advanced telecom infrastructure," said Ehsan Emami, GCN's president. "Our customers will benefit from a fast and reliable network, where all data, voice, video and multimedia traffic can converge to a single global backbone." "We're excited about this opportunity to work with GCN as it begins to offer local and international operators broadband services in the Caribbean region," said Jose Antonio Rios, Global Crossing's international president. "Our combined capabilities reinforce our commitment to accelerate deployment of our services to the region." GCN is a subsidiary of Groupe Loret, an enterprise conglomerate responsible for different businesses in various segments, including real estate, communications, automotive, and air transportation, among others. GCN began offering its commercial services in the Caribbean in October 2006 through the official launch of the first phase of its GCN-1 system, which connects Guadeloupe, St. Martin, St. Barthelemy, San Juan and St. Croix. It is currently expanding its reach further south in the Caribbean to: -- Dominica, -- Martinique, -- St. Kitts, -- Antigua, -- St. Lucia, -- St. Vincent, -- Barbados, -- Grenada and -- Trinidad as part of the second and third phases of the project, in 2007. According to a 2006 Telecommunications Industry Review study, the Caribbean is one of the fastest growing broadband markets in the world. To accommodate this rapidly expanding demand in Latin America and the Caribbean region, Global Crossing recently announced that it will upgrade its Mid-Atlantic Crossing or MAC system, which connects North America to Latin America through the Caribbean. Global Crossing's MAC ring, which runs between Brookhaven, NY; Hollywood, FL; and St. Croix, Virgin Islands, is an essential piece of the company's advanced, global network. "Global Crossing is committed to the Caribbean region and is uniquely positioned to serve companies like GCN, that require global connectivity," commented Dale Miller, Global Crossing's senior vice president for carrier sales in Latin America. "By choosing Global Crossing, GCN has improved its network functionality, enhanced its flexibility and expanded its reach around the world." Global Crossing's carrier services portfolio is strategically positioned to meet the needs of carriers building networks or buying services to meet the needs of their consumer or business customers. Global Crossing sells 2.5 to 10 Gigabit wavelengths, private line circuits, dark fiber and indefeasible rights to use. About Global Caribbean Network Global Caribbean Network aka GCN is a new cable operator in the Caribbean region. It is a subsidiary of Groupe Loret, one of the main players in the French West Indies and Guiana economies, with sales of 500 million euros in 2005. GCN has been awarded a Public Service Delegation contract by the Regional Council of Guadeloupe (FWI) to build and operate a new submarine cable linking Guadeloupe, Puerto Rico, St.Croix, St. Martin and St. Barthelemy to the rest of the world. About Global Crossing Headquartered in Florham Park, New Jersey, Global Crossing Ltd. -- http://www.globalcrossing.com/-- provides telecommunication services over the world's first integrated global IP-based network, which reaches 27 countries and more than 200 major cities around the globe including Bermuda, Argentina, Brazil, and the United Kingdom. Global Crossing serves many of the world's largest corporations, providing a full range of managed data and voice products and services. The company filed for chapter 11 protection on Jan. 28, 2002 (Bankr. S.D.N.Y. Case No. 02-40188). When the Debtors filed for protection from their creditors, they listed $25,511,000,000 in total assets and US$15,467,000,000 in total debts. Global Crossing emerged from chapter 11 on Dec. 9, 2003. At Sept. 30, 2006, Global Crossing Ltd.'s balance sheet showed a US$131 million stockholders' deficit, compared to a US$173 million stockholders' deficit at Dec. 31, 2005. GORTHON INTERNATIONAL: Final Shareholders Meeting Is on Feb. 20 --------------------------------------------------------------- Gorthon International Shipping Ltd.'s final general meeting will be at 10:00 a.m. on Feb. 20, 2007, or as soon as possible, at the liquidator's place of business. Gorthon International'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: Gemma A. Morrison Cox Hallett Wilkinson, Milner House 18 Parliament Street Hamilton, Bermuda MONTPELIER RE: Raymond Barrette Resigns as Board Director --------------------------------------------------------- Montpelier Re Holdings Ltd. disclosed that Raymond Barrette has resigned as a director of the company with immediate effect following his recent election as Chairman and CEO of White Mountains Insurance Group, Ltd. Anthony Taylor, Chairman and Chief Executive said, "We are grateful to Ray for his wise counsel and support since the formation of the company. We wish him every success in his new role." Headquartered in Bermuda, Montpelier Re Holdings Ltd., through its operating subsidiary Montpelier Reinsurance Ltd., is a premier provider of global property and casualty reinsurance and insurance products. During the year ended Dec. 31, 2005, Montpelier underwrote US$978.7 million in gross premiums written. Shareholders' equity at Dec. 31, 2005, was US$1.1 billion. * * * As reported in the Troubled Company Reporter on Dec. 19, 2006, A.M. Best affirms these ratings on Montpelier Re Holdings: Montpelier Re Holdings Ltd. -- "bbb-" on senior unsecured debt; -- "bb+" on subordinated debt; and -- "bb" on preferred stock. MRH Capital Trust I and II (guaranteed by Montpelier Re Holdings Ltd.) -- "bb" on preferred securities. MSD WARWICK: Shareholders to Gather for Final Meeting on Feb. 26 ---------------------------------------------------------------- MSD Warwick (Manufacturing) Ltd.'s final general meeting will be at 9:30 a.m. on Feb. 26, 2007, or as soon as possible, at the liquidator's place of business. MSD Warwick'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 ============= B O L I V I A ============= INTERNATIONAL PAPER: Closes Sale of Beverage Packaging Operation ---------------------------------------------------------------- International Paper completed the sale of its North American beverage packaging operations to Carter Holt Harvey Limited for approximately US$413 million. In December 2006, the company agreed to sell its entire beverage packaging business to New Zealand-based Carter Holt Harvey. The North American portion of the sale, completed today, represents the majority of the business. The beverage packaging business also includes wholly owned subsidiaries in China, South Korea and Taiwan, and joint ventures in Latin America, Israel, and Saudi Arabia. The sale of these assets to Carter Holt Harvey is expected to close later in the first quarter, at which time International Paper will receive the remainder of the proceeds from the transaction. The North American beverage packaging assets include gable-top beverage converting facilities in: -- California, -- Florida, -- Massachusetts, -- Michigan, -- North Carolina, -- Ontario and Quebec, Canada, -- the Evergreen Packaging manufacturing facility in Iowa, and -- the Pine Bluff mill in Arkansas. Based in Stamford, Connecticut, International Paper Co. (NYSE: IP) -- http://www.internationalpaper.com/-- is in the forest products industry for more than 100 years. The company is currently transforming its operations to focus on its global uncoated papers and packaging businesses, which operate and serve customers in the US, Europe, South America and Asia. Its South American operations include, among others, facilities in Argentina, Brazil, Bolivia, and Venezuela. These businesses are complemented by an extensive North American merchant distribution system. International Paper is committed to environmental, economic and social sustainability, and has a long-standing policy of using no wood from endangered forests. * * * Moody's Investors Service assigned a Ba1 senior subordinate rating and Ba2 Preferred Stock rating on International Paper Co. on Dec. 5, 2005. * BOLIVIA: Accuses Jindal Steel of Rejecting Contract Clauses ------------------------------------------------------------- The Bolivian government has alleged that Jindal Steel and Power rejected some of the clauses of its US$2.3-billion contract with Bolivia to develop El Mutun mines, The Economic Times reports. Jindal Steel refused to issue a US$100-million guarantee to the Bolivian state to back investments at El Mutun, The Economic Times notes, citing the government. The Economic Times underscores that the government refused to subsidize natural gas, as demanded by Jindal Steel. One of the Bolivian ministers told the local press, "We are not going to do that because subsidizing gas for them to use our iron ore will be a betrayal of the country." The Bolivian mining minister Guillermo Dalence hinted to The Economic Times that the government is considering new partners to develop El Mutun. An industry analyst had commented to The Economic Times, "Though it is too early to say now, but if Tata Steel is interested in this, it may alter the equations in the race for Corus. One of the biggest plus points for its rival Companhia Siderurgica Nacional is the latter's iron ore mines in Brazil." The Economic Times says that steel manufacturers from India -- including Tata Steel, Essar Steel, JSW Steel and Ispat Industries -- have reportedly been looking overseas for iron ore. Sources told The Economic Times that the Bolivian government was also negotiating with a steelmaker from Chinese. However, observers think that the latest comments from the Bolivian government could be pressure tactics, before it enters into another round of negotiation with Jindal Steel, according to The Economic Times. A team lead by Jindal Steel vice- chairperson and chief executive officer Vikrant Gujral will be meeting with the Bolivian government officials. Mr. Gujral commented to The Economic Times, "I am in Sao Paulo (Brazil's capital), on the way to Bolivia for the meeting. Things are fine, we will continue meeting with the government." Mr. Gujral had told the Economic Times that Jindal Steel is close to signing the contract and it should be done by the end of January or in early February. However, President Evo Morales passed a bill to the Parliament to increase taxes on foreign mining firms, The Economic Times says. "Mining resources must benefit the country and not just exporting companies," The Economic Times states, citing the Bolivian leader. * * * Fitch Ratings assigned these ratings on Bolivia: Rating Rating Date ------ ----------- Country Ceiling B- Jun. 17, 2004 Long Term IDR B- Dec. 14, 2005 Local Currency Long Term Issuer Default Rating B- Dec. 14, 2005 =========== B R A Z I L =========== BANCO DO BRASIL: Eyes BRL2.70B Vehicle Financing Operations ----------------------------------------------------------- Banco do Brasil will increase vehicle funding operations to BRL2.70 billion in 2007, from BRL907 million in 2006, news agency Agencia Estado reports. Banco do Brasil's retail director Mauricio Fernandes told Agencia Estado that Banco do Brasil expects up to 3% market share in the auto loan segment in 2007. Mr. Fernandez said that Banco do Brasil increased its market share in the segment to 1.5% in 2006, compared with 0.4% in the previous year, as it raised the number of financed vehicles to 76,500 from 27,000, Business News Americas states. Banco do Brasil is Brazil's federal bank and is the largest in Latin America with some 20 million clients and over 7,000 points of sale (3,200 branches) in Brazil, and 34 offices and partnerships in 26 other countries. In addition to its traditional retail banking services, Banco do Brasil underwrites and sells bonds, conducts asset trading, offers investors portfolio management services, conducts financial securities advising, and provides market analysis and research. * * * As reported on Mar. 3, 2006, Standard & Poor's Ratings Services raised its foreign currency counter party credit ratings on Banco do Brasil SA to 'BB' from 'BB-'. The foreign and local currency ratings of this bank are now equalized at 'BB'. S&P said the outlook is stable. BANCO DO BRASIL: Reserves BRL2.20 Billion for Dairy Farmers ----------------------------------------------------------- Banco do Brasil told Business News Americas that it has put aside BRL2.20 billion for a line of credit for dairy farmers. The credit line provides financing at 8.75% yearly for up to five years, while previous loans to the dairy segment had two- year terms, BNamericas relates, citing agribusiness division manager Antonio Pontoglio. Mr. Pontoglio told BNamericas that the loans Banco do Brasil granted to dairy producers increased 20% to BRL1.60 billion in 2006, compared with 2005. The bank sees a 37% boost in applied loans for the segment this year. Mr. Pontoglio commented to BNamericas that the dairy sector evaded the recession in the agricultural industry over the past two harvests due to: -- strong Brazilian real compared to the US dollar, -- high international commodity prices, and -- prolonged drought in southern Brazil. BNamericas underscores that Banco do Brasil renegotiated about BRL6.00 billion in debt from over 330,000 agricultural producers last year, extending some loan payments for four years. Banco do Brasil increased loan-loss provisions by 6.49% to BRL8.20 billion by the end of the third quarter of 2006, compared with the same time in the previous year, due to higher rate of defaults in the rural loan portfolio, according to BNamericas. Agricultural sector loans represented 34.1% of Banco do Brasil's loan book in September 2006. Agribusiness director Jose Carlos Vaz told BNamericas that Banco do Brasil will maintain loan-loss provisions in 2005's levels for the time being despite signs of recovery in the agricultural sector. Banco do Brasil could lessen loan-loss provisions over the course of the year. BNamericas states that Banco do Brasil disclosed earlier in January plans to raise lending for livestock operations by 15% to BRL5.00 billion in 2007, compared with 2005. The bank expects total lending to the agribusinesses to increase 22% to BRL33.0 billion for the 2006-07 harvest. Banco do Brasil had BRL282 billion in total banking assets at the end of the third quarter of 2006, BNamericas reports. Banco do Brasil is Brazil's federal bank and is the largest in Latin America with some 20 million clients and over 7,000 points of sale (3,200 branches) in Brazil, and 34 offices and partnerships in 26 other countries. In addition to its traditional retail banking services, Banco do Brasil underwrites and sells bonds, conducts asset trading, offers investors portfolio management services, conducts financial securities advising, and provides market analysis and research. * * * As reported on Mar. 3, 2006, Standard & Poor's Ratings Services raised its foreign currency counter party credit ratings on Banco do Brasil SA to 'BB' from 'BB-'. The foreign and local currency ratings of this bank are now equalized at 'BB'. S&P said the outlook is stable. BANCO NACIONAL: Okays US$1.16B Loan for Petrobras' Ship Building ---------------------------------------------------------------- Banco Nacional de Desenvolvimento Economico e Social S.A., Brazil's state-owned bank, will help finance Petroleo Brasileiro SA's shipbuilding project with a BRL2.47 billion loan (US$1.16 billion, EUR895 million), according to a statement from the Brazilian President's press office. The loan, the largest-ever financing provided by the state bank, is aimed at reviving the country's naval industry, which was the world's second largest in the 1970s, but dwindled a decade later, Brazzil Magazine relates. Transpetro, Petroleo Brasileiro's transportation unit, inked Jan. 31 a US$1.2 billion (EUR925 million) pact for 10 new oil tankers of the Suezmax type. As previously reported, the first phase of the Transpetro Fleet Modernization and Expansion Program, which foresees the construction of 26 oil tankers at a total cost of US$2.8 billion, is expected to generate 22,000 new jobs. The first 10 tankers will be built by the Atlantico Sul consortium, comprised of: Andrade Gutierrez, Camargo Correa, Queiroz Galvao and Aker Promar, the Associated Press says. Brazzil Magazine says the new ships will be built at Rio Naval Consortium, Maua Jurong Shipyard and Itajai Shipyard. On top of Brazil's program to revive the shipbuilding industry, Petroleo Brasileiro will also increase its fleet for its own purposes. Of its 130 operating vessels, the company owns only 52 of them. Being the country's largest oil company, Petroleo Brasileiro's new ships will be utilized to deliver coastwise shipping needs and meet long-distance transporation demands, Brazzil Magazine says. 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, and distributes oil and natural gas and power to various wholesale customers and retail distributors in Brazil. About Banco Nacional Banco Nacional de Desenvolvimento Economico e Social is Brazil's national development bank. It provides financing for projects within Brazil and plays a major role in the privatization programs undertaken by the federal government. * * * As reported on Nov. 27, 2006, Standard & Poor's Ratings Services changed the ratings outlook on both of Banco Nacional de Desenvolvimento Economico e Social SA's foreign and local currency counterparty credit ratings: -- Foreign currency counterparty credit rating * to BB/Positive/-- from BB/Stable/-- -- Local currency counterparty credit rating * to BB+/Positive/-- from BB+/Stable/-- BANCO NACIONAL: Okays BRL156 Million in Loans to Bolognesi ---------------------------------------------------------- Banco Nacional de Desenvolvimento Economico e Social said in a statement that it ratified BRL156 million in loans to Brazilian industrial group Bolognesi for the construction of two small- scale hydro projects in Rio Grand do Sul. Business News Americas relates that the two projects are: -- 28-megawatt Jararaca, and -- 26-megawatt Central da Ilha. According to BNamericas, Jararaca and Central da Ilha are included in Proinfa -- the federal government's renewable power incentive program, through which Eletrobras is committed to purchasing power from the plants for 20 years. Commercial operations have to begin by the end of next year. Combined investment in the Jararaca and Central de Ilha is estimated at BRL227 million. Bolognesi will spend BRL71 million from its own resources, Banco Nacional told BNamericas. Banco Nacional de Desenvolvimento Economico e Social is Brazil's national development bank. It provides financing for projects within Brazil and plays a major role in the privatization programs undertaken by the federal government. * * * As reported on Nov. 27, 2006, Standard & Poor's Ratings Services changed the ratings outlook on both of Banco Nacional de Desenvolvimento Economico e Social SA's foreign and local currency counterparty credit ratings: -- Foreign currency counterparty credit rating * to BB/Positive/-- from BB/Stable/-- -- Local currency counterparty credit rating * to BB+/Positive/-- from BB+/Stable/-- BRASIL TELECOM: Picks Widevine to Protect IPTV Deployment --------------------------------------------------------- Brasil Telecom selected Widevine Technologies to protect its IP video service. Scheduled to launch in phases, the service enables subscribers to securely view a variety of premium Hollywood content and local programming on set top boxes, home media gateways and, eventually, PCs. Brasil Telecom is the first to offer IPTV in Brazil. Brasil Telecom's selection of Widevine from a short list of content security vendors is, in part, due to its proven ability to protect and enable the acquisition of premium content at Tier 1 operators worldwide. "Our decision to deploy premium video content is critical to delivering a compelling offer to our customers," said Luis Henrique Castro Lima, Director of Mobile Operations and Business Development of Brasil Telecom. "Brasil Telecom requires a content protection solution that meets current content owner requirements and also supports future growth opportunities. Specifically, we are looking ahead to the need for a solution to secure and protect content across a wide range of existing IP video devices." "Over the last seven years, Widevine has changed the way the industry thinks about content security including the importance of protecting the digital hole -- the point when content has been decrypted on a video consumer electronics device just prior to on screen display. This is critical for protecting premium content delivered to consumer devices that are becoming increasingly popular," said Brian Baker, President and CEO of Widevine. "Brasil Telecom's selection of Widevine further proves Widevine's core content protection technologies and future proof digital copy protection capabilities are the preferred solution for Tier 1 operators globally. We are pleased to work with Brasil Telecom to deliver new revenue generating business models and secure the future of its IP video initiatives." Headquartered in Brasilia, Brazil, Brasil Telecom Participacoes SA -- http://www.brasiltelecom.com.br-- is a holding company that conducts substantially all of its operations through its wholly owned subsidiary, Brasil Telecom SA. The fixed-line telecommunications services offered to the company's customers include local services, including all calls that originate and terminate within a single local area in the region, as well as installation, monthly subscription, measured services, public telephones and supplemental local services; intraregional long- distance services, which include intrastate and interstate calls; interregional and international long-distance services; network services, including interconnection and leasing; data transmission services; wireless services, and other services. * * * As reported on Nov. 24, 2006, Standard & Poor's Ratings Services revised its outlook on its long-term ratings on the Federative Republic of Brazil to positive from stable. Standard & Poor's also affirmed these ratings on the Republic of Brazil: -- 'BB'for long-term foreign currency credit rating, -- 'BB+' for long-term local currency credit rating, and -- 'B' for short-term currency sovereign credit rating. CHEMTURA CORP: Completes Acquisition of Kaufman Holdings -------------------------------------------------------- Chemtura Corp. has completed the acquisition of the stock of Kaufman Holdings Corp. in an all-cash transaction. Kaufman has approximately 300 employees and 2006 revenues in excess of US$200 million. The acquisition includes Kaufman's two operating companies: * Hatco Corporation, a worldwide leading producer of polyol esters used for technically demanding synthetic lubricant applications, including aviation turbine oils and lubricants for HFC refrigeration compressors; and * Anderol Inc., a worldwide leader in high-performance, synthetic lubricants used in demanding aviation and industrial applications, such as compressors, bearings, gears and food-grade machinery. "The acquisition of these companies aligns with our strategy to add high-performing businesses to our portfolio," said Chemtura Chairman and CEO Robert L. Wood. "Both Hatco and Anderol are world leaders in their respective markets." "Our existing Petroleum Additives/Lubricants business is core to our growth, and Hatco and Anderol fit in well with this business. There are related product offerings in key customer areas, as well as the opportunity to strengthen alliances with major suppliers. There may be distribution synergies as well, benefiting our global customers," Mr. Wood said. "Chemtura will add industry expertise, Six Sigma-based products and processes, and new information technology systems that will benefit Kaufman customers." "The acquisition brings together complementary technology and manufacturing experience and will result in our ability to offer customers a broader portfolio of products, technology and service," said Janet Mann, general manager and vice president of Chemtura Performance Specialties, which includes the Petroleum Additives/Lubricants business. Hatco and Anderol will become part of the Performance Specialties group of businesses. "We see many opportunities for global expansion in two high- growth markets: HFC refrigeration lubricants and high- performance synthetic lubricants," Ms. Mann said. "Growth in HFC refrigeration lubricants is driven by the Montreal Protocol, which provides for the accelerating adoption of environmentally friendly refrigerants. Growth also will be driven by the demand for improved fuel and energy efficiency, as well as increased equipment durability, all of which are enhanced by the use of synthetic lubricants." "Chemtura is pleased to welcome Hatco and Anderol employees into the Chemtura organization and looks forward to the success we will achieve together," said Mr. Wood. Headquartered in Middlebury, Connecticut, Chemtura Corp. (NYSE: CEM) -- http://www.chemtura.com/-- is a global supplier of plastic additives, including flame-retardants. The company also manufactures and markets pool and spa products and seed treatment and miticide in the agricultural market. Chemtura has more than 6,500 employees in research, manufacturing, sales and administrative facilities in every major market of the world. In Latin America, Chemtura has facilities in Brazil and Mexico. * * * As reported in the Troubled Company Reporter on Nov. 7, 2006, Moody's Investors Service affirmed its Ba1 Corporate Family Rating for Chemtura Corp., in connection with the implementation of its new Probability-of-Default and Loss-Given-Default rating methodology for the U.S. chemicals and allied products sectors. Additionally, Moody's held its Ba1 probability-of-default rating on the company's US$500 Million 6.875% Guaranteed Senior Notes due June 2016. COMPANHIA SIDERURGICA: Discloses Share Buyback Program ------------------------------------------------------ Companhia Siderurgica Nacional said Monday in a filing with the Sao Paulo's stock exchange, Bovespa, that it intends to repurchase 923,628 shares until January 2008. The company has 156 million shares in circulation. The company made the announcement a day before it was beaten in an auction by Tata Steel for control of Corus Group. Meanwhile, Companhia Siderurgica told Reuters it intends to continue with its internationalization plans despite experiencing setbacks in its acquisition efforts. "We are confident that the process of consolidation of the steel sector is only in the beginning, which will bring better growth opportunities to CSN in the future, for which we will always be prepared," Chief Executive Officer Benjamin Steinbruck told Reuters. 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. Companhia Siderurgica Nacional is considered one of the lowest- cost steel producers in the world, which is a result of its access to proprietary, high-quality iron ore (at the Casa de Pedra mine); self-sufficiency in energy; streamlined facilities; and logistics advantages. This is in addition to the group's strong market position in the fairly concentrated steel industry in Brazil. The group also operates in Portugal and the U.S. * * * Standard & Poor's Ratings Services affirmed its 'BB' local- and foreign-currency corporate credit ratings on Brazil-steel maker Companhia Sider�rgica Nacional and removed them from CreditWatch, where they were placed on Nov. 17, 2006, with negative implications. The rating action was taken after the completion of the Corus-acquisition process where Companhia Siderurgica lost to Tata Steel of India. S&P said the outlook is stable. COMPANHIA SIDERURGICA: S&P Affirms BB Corporate Credit Ratings -------------------------------------------------------------- Standard & Poor's Ratings Services affirmed its 'BB' local- and foreign-currency corporate credit ratings on Brazil-steel maker Companhia Sider�rgica Nacional or CSN and removed them from CreditWatch, where they were placed on Nov. 17, 2006, with negative implications. The outlook is stable. The CreditWatch resolution follows the completion of the auction process for Corus Group plc (BB/Watch Negative/--), during which India-based steel manufacturer Tata Steel Ltd. (BB/Watch Neg/--) offered the highest bid of 608 pence per share, beating CSN's competing offer of 603 pence per share. "The stable outlook reflects our expectation that CSN will preserve strong liquidity thanks to its robust cash generation and despite its significant capital-expenditure program and dividend distribution," said credit analyst Reginaldo Takara, of the Corporate & Government Ratings group. "We expect CSN's credit measures to improve in the next quarters as the effects of the BF#3 accident dissipate." The outlook also assumes that CSN will be able to maintain sound operating results through the steel cycle thanks to its favorable cost position and access to steel export markets. "Given the risks associated with CSN's significant capital expenditure plans, we do not foresee upward potential for the ratings in the medium term," continued Mr. Takara. "The rating could come under downward pressure if a continuing increase in gross debt leads financial metrics to deteriorate permanently. Acquisitions or further capital commitments that could potentially hurt the company's current liquidity condition or add financial leverage could equally lead to a negative revision of the ratings or a negative outlook." DURA AUTOMOTIVE: Court Okays Chanin Capital as Panel's Advisor -------------------------------------------------------------- The Honorable Kevin J. Carey of the U.S. Bankruptcy Court for the District of Delaware authorized the Official Committee of Unsecured Creditors to retain Chanin Capital Partners as its financial advisors, nunc pro tunc Nov. 10, 2006, in Dura Automotive Systems Inc. and its debtor-affiliates' chapter 11 cases. As reported in the Troubled Company Reporter on Jan. 9, 2007, the Committee needs Chanin Capital's assistance in collecting and analyzing financial and other information in relation to the Debtors' Chapter 11 cases. The Committee expects the firm to: (a) analyze and evaluate the liquidity position, assets and liabilities, and financial condition of the Debtors; (b) review and analyze the Debtors' financial and operating statement; (c) review and analyze the Company's business and financial projections; (d) evaluate the Company's debt capacity in light of its projected cash flows; (e) assist in the determination of an appropriate capital structure for the Company; (f) determine a theoretical range of values for the Company on a going concern basis; (g) assist the Committee in identifying and evaluating candidates for the potential acquisition of certain assets of the Company; (h) analyze proposed sales of assets of the Debtors, the terms and options and related issues, including available strategic alternatives; (i) review, analyze and monitor the Debtor-In-Possession financing and other financing alternatives; (j) advise the Committee on tactics and strategies for negotiating with the Company and other purported stakeholders; (k) determine a theoretical range of values for any securities to be issued or distributed in connection with the Chapter 11 case, including without limitation any securities to be distributed under a plan; (l) advise and assist the Committee in the review and analysis of the Debtors' business plan; (m) advise and assist the Committee in the review of all plans; (n) assist with a review of the Debtors' short-term cash management procedures and monitoring of cash flow; (o) assist with a review of the Debtors' employee benefit programs; (p) assist and advise the Committee with respect to the Debtors' management of their supply chain, including critical and foreign vendors; (q) assist with a review of the Debtors' performance of cost/benefit evaluations with respect to the affirmation or rejection of various executory contracts involving vendors and customers; (r) assist in the evaluation of the Debtors' operations and identification of areas of potential cost savings, including overhead and operating expense reductions and efficiency improvements; (s) assist in the review and preparation of information and analysis necessary for the confirmation of a plan; (t) assist in the review of potential claims levels and the Debtors' reconciliation process; (u) assist with various tax matters; (v) provide testimony in any proceeding before the Court; and (w) provide the Committee with other appropriate general restructuring advice. Chanin Capital will be paid US$150,000 per month and will be reimbursed for expenses incurred in connection with the engagement. A US$1,500,000 transaction fee will also be paid to the firm on the effective date of a plan of reorganization. Brent Williams, managing director at Chanin Capital, disclosed that the firm represents certain Committee members or parties- in-interest in the Debtors' Chapter 11 cases. Chanin Capital, however, has not identified any material relationships with any party that would otherwise affect its judgment or ability to perform services for the Committee. Chanin Capital assured the Court that it has not and will not provide any professional services to the Debtors, any of the creditors, other parties-in-interest with regard to any matter related to the Debtors' Chapter 11 cases. Mr. Williams attestd that Chanin Capital is a "disinterested person," as that term is defined in Section 101(14) of the Bankruptcy Code. About DURA Automotive Systems Rochester Hills, Mich.-based DURA Automotive Systems Inc. (Nasdaq: DRRA) -- http://www.DURAauto.com/-- is an independent designer and manufacturer of driver control systems, seating control systems, glass systems, engineered assemblies, structural door modules and exterior trim systems for the global automotive industry. The company is also a 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 Oct. 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: Judge Carey OKs Kramer Levin as Panel's Counsel ---------------------------------------------------------------- The Honorable Kevin J. Carey of the U.S. Bankruptcy Court for the District of Delaware authorized the Official Committee of Unsecured Creditors in Dura Automotive Systems Inc. and its debtor-affiliates' chapter 11 cases to retain Kramer Levin Naftalis & Frankel LLP as its counsel, effective as of Nov. 7, 2006. As reported in the Troubled Company Reporter on Jan. 9, 2007, in addition to acting as primary spokesman for the Committee, Kramer Framer Levin's services will include, without limitation, assisting, advising and representing the Committee with respect to these matters: a. The administration of these cases and the exercise of oversight with respect to the Debtors' affairs including all issues in connection with the Debtors, the Committee or the Chapter 11 cases; b. The preparation on behalf of the Committee of necessary applications, motions, memoranda, orders, reports and other legal papers; c. Appearances in Court and at statutory meetings of creditors to represent the interests of the Committee; d. The negotiation, formulation, drafting and confirmation of a plan or plans of reorganization and matters related thereto; e. The investigation, if any, as the Committee may desire concerning, among other things, the assets, liabilities, financial condition, sale of any of the Debtors' businesses, and operating issues concerning the Debtors that may be relevant to the Chapter 11 Cases; f. Communications with the Committee's constituents and others at the direction of the Committee in furtherance of its responsibilities, including, but not limited to, communications required under Section 1102 of the Bankruptcy Code; and g. The performance of all of the Committee's duties and powers under the Bankruptcy Code and the Bankruptcy Rules and the performance of other services as are in the interests of those represented by the Committee. Kramer Levin will be paid on an hourly basis based on its customary rates: Professional Hourly Rate ------------ ----------- Partners US$500 to US$795 Counsel US$505 to US$855 Associates US$295 to US$545 Legal Assistants US$190 to US$220 Kramer Levin will also seek reimbursement of out-of-pocket expenses. The firm regularly charges its clients for the expenses and disbursements incurred in connection with the client's case, including, inter alia, word processing, secretarial time, telecommunications, photocopying, postage and package delivery charges, court fees, transcript costs, travel expenses, expenses for "working meals" and computer-aided research. Thomas Moers Mayer, Esq., a member at Kramer Levin, assured the Court that: (i) the firm is a "disinterested person" within the meaning of Section 101(14) of the Bankruptcy Code; (ii) neither Kramer Levin nor its professionals have any connection with the Debtors, the creditors or any other party-in-interest; and (iii) Kramer Levin does not hold or represent any interest adverse to the Committee in the matters for which it is to be retained. About DURA Automotive Systems Rochester Hills, Mich.-based DURA Automotive Systems Inc. (Nasdaq: DRRA) -- http://www.DURAauto.com/-- is an independent designer and manufacturer of driver control systems, seating control systems, glass systems, engineered assemblies, structural door modules and exterior trim systems for the global automotive industry. The company is also a 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 Oct. 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). FIDELITY NATIONAL: EMC Inks Tax Processing Pact with FNTS --------------------------------------------------------- Fidelity National Information Services, Inc. aka FIS, disclosed that EMC Mortgage Corporation or EMC, a wholly owned subsidiary of The Bear Stearns Companies Inc., has signed a multiyear contract to outsource its tax processing to Fidelity National Tax Services, Inc. or FNTS, an FIS-affiliated service entity. FIS provides a wide range of real estate tax services and data to mortgage lenders and servicers nationwide, through in-source and outsource solutions. Specifically, FIS' automated escrow reporting and payment system enables all escrowed taxes to be reported and paid on a timely basis without penalty or loss of discount. Additionally, FIS' comprehensive delinquency management program helps mitigate the loss of properties to tax sale and accommodates the diverse tax requirements of multiple geographic locations. By leveraging these services in an outsourced environment, EMC will be able to provide improved customer support and realize enhanced efficiency, increased capacity and mitigated risk. "From a servicing standpoint, the contract with Fidelity National Tax Services represents an easy transition and creates a win-win situation for EMC and FIS," said Bill Glasgow, Jr., executive vice president of Loan Administration for EMC. "EMC customers will benefit from FNTS' comprehensive service, and EMC can be confident that its tax processing will be completed in an accurate and timely manner." "Fidelity National Tax Services' existing client relationships with various EMC vendors, our newly enhanced technologies and recent integration initiatives will enable EMC to further streamline its business processes," said Eric Swenson, president of FIS' Mortgage Information Services division. "This new business relationship is intended to create an overall better borrower experience." About EMC Mortgage EMC Mortgage Corp., headquartered in Lewisville, Texas, within the Dallas-Fort Worth metroplex, is a mortgage servicing company specializing in the acquisition, securitization, servicing and disposition of residential loans. EMC is a wholly owned subsidiary of The Bear Stearns Companies Inc. Founded in 1923, The Bear Stearns Companies Inc. (NYSE: BSC) is the parent company of Bear, Stearns & Co. Inc., a leading investment banking and securities trading and brokerage firm. With approximately US$66.7 billion in total capital, Bear Stearns serves governments, corporations, institutions and individuals worldwide. Through Bear, Stearns Securities Corp., it offers financing, securities lending, clearing and technology solutions. About Fidelity National Information Services Headquartered in Jacksonville, Florida, Fidelity National Information Services, Inc. -- http://www.fidelityinfoservices.com/-- provides core processing for financial institutions; card issuer and transaction processing services; mortgage loan processing and mortgage related information products; and outsourcing services to financial institutions, retailers, mortgage lenders and real estate professionals. FIS has processing and technology relationships with 35 of the top 50 global banks, including nine of the top ten. Nearly 50% of all US residential mortgages are processed using FIS software. FIS maintains a strong global presence, serving over 7,800 financial institutions in more than 60 countries worldwide, including Brazil. * * * As reported in the Troubled Company Reporter on Jan. 24, 2007, Fitch Ratings assigned a senior unsecured rating of 'BB+' for Fidelity National Information Services' new US$3 billion senior unsecured credit facilities. The facilities consist of a US$2.1 billion term loan and a US$900 million revolving credit facility. The company used the proceeds to refinance existing debt. Fidelity's Issuer Default Rating remains at 'BB+'. Fitch said the rating outlook is stable. NOVELIS INC: Supplies Aluminum Sheet for Hood of New GMC Acadia --------------------------------------------------------------- General Motors has selected Novelis Inc. to supply aluminum sheet for the hood of the all-new 2007 GMC Acadia, the brand's first crossover SUV. The aluminum sheet for the Acadia will be supplied from Novelis rolling mills in Oswego, N.Y., and Kingston, Ont. "The automotive market is a key growth segment for Novelis," said Buddy Stemple, Vice President and General Manager of Novelis North America's Specialty Products Group. "The award of this business signifies the growing demand for light-weight solutions and further demonstrates our ability to deliver innovative products and services to the market." The Acadia is now available in North American showrooms. Built on GM's new unibody Lambda platform, the new crossover vehicle delivers car-like handling and available seating for up to eight adults. Based in Atlanta, Georgia, Novelis, Inc., (NYSE: NVL) (TSX: NVL) -- http://www.novelis.com/-- provides customers with a regional supply of technologically sophisticated rolled aluminum products throughout Asia, Europe, North America, and South America. The company operates in 11 countries and has around 13,000 employees. Through its advanced production capabilities, the company supplies aluminum sheet and foil to the automotive and transportation, beverage and food packaging, construction and industrial, and printing markets. Novelis South America operates two rolling plants and primary production facilities in Brazil. The company's Pindamonhangaba rolling and recycling facility in Brazil is the largest aluminum rolling and recycling facility in South America and the only one capable of producing can body and end stock. The plant recycles primarily used beverage cans, and is engaged in tolling recycled metal for its customers. * * * As reported in the Troubled Company Reporter on Sept. 7, 2006, Moody's Investors Service downgraded Novelis Inc.'s corporate family rating to B1 from Ba3, the bank revolver rating to Ba3 from Ba2, the bank term loan rating to Ba3 from Ba2, and senior unsecured notes to B2 from B1. Moody's also downgraded Novelis Corp.'s bank term loan rating to Ba3 from Ba2. PETROLEO BRASILEIRO: Completes Nova Piratininga Plant Expansion --------------------------------------------------------------- Brazilian state oil firm Petroleo Brasileiro SA said in a statement that it has concluded the expansion of its gas-fired Nova Piratininga power plant. According to Petroleo Brasileiro's statement, the expansion at Nova Piratininga increases the plant's capacity to 560 megawatts from 370 megawatts. The plant is in Sao Paulo. It launched commercial operations in early 2005. Business News Americas relates that the power plant's name was changed to Fernand Gasparian, in honor of a local journalist who fought against the 1964-85 military dictatorship. According to BNamericas, Petroleo Brasileiro has disclosed plans to invest US$191 million in Sao Paulo power plants from 2007 to 2011. Investment would include: -- conversion of gas-fired power plants to operate with other fuels, and -- construction of the 160-megawatt Cubatao gas-fired plant. Petroleo Brasileiro will also rename its 928-megawatt gas-fired Maca power plant in Rio de Janeiro to UTE Mario Lago, BNamericas states. 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, and 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. Petroleo Brasileiro SA's long-term corporate family rating is rated Ba3 by Moody's. Fitch Ratings assigned these ratings on Petroleo Brasileiro's senior unsecured notes: Maturity Date Amount Rate Ratings ------------- ------ ---- ------- April 1, 2008 US$400,000,000 9% BB+ July 2, 2013 US$750,000,000 9.125% BB+ Sept. 15, 2014 US$650,000,000 7.75% BB+ Dec. 10, 2018 US$750,000,000 8.375% BB+ Fitch upgraded the foreign currency rating of Petrobras to BB+ from BB, with positive outlook, in conjunction with Fitch's upgrade of the long-term foreign and local currency IDRs of the Federative Republic of Brazil to BB, from BB- on June 29, 2006. PETROLEO BRASILEIRO: Gets US$1.16-Bil. Loan for Ship Building ------------------------------------------------------------- Transpetro, Petroleo Brasileiro SA's transportation unit, inked Jan. 31 a US$1.2 billion (EUR925 million) pact for 10 new oil tankers of the Suezmax type. As previously reported, the first phase of the Transpetro Fleet Modernization and Expansion Program, which foresees the construction of 26 oil tankers at a total cost of US$2.8 billion, is expected to generate 22,000 new jobs. The first 10 tankers will be built by the Atlantico Sul consortium, comprised of: Andrade Gutierrez, Camargo Correa, Queiroz Galvao and Aker Promar, the Associated Press says. Brazzil Magazine says the new ships will be built at Rio Naval Consortium, Maua Jurong Shipyard and Itajai Shipyard. Banco Nacional de Desenvolvimento Economico e Social S.A., Brazil's state-owned bank, will help finance the project with a BRL2.47 billion loan (US$1.16 billion, EUR895 million), according to a statement from the Brazilian President's press office. The loan, the largest-ever financing provided by the state bank, is aimed at reviving the country's naval industry, which was the world's second largest in the 1970s, but dwindled in a decade later, Brazzil Magazine relates. On top of Brazil's program to revive the shipbuilding industry, Petroleo Brasileiro will also increase its fleet for its own purposes. Of its 130 operating vessels, the company owns only 52 of them. Being the country's largest oil company, Petroleo Brasileiro's new ships will be utilized to deliver coastwise shipping needs and meet long-distance transporation demands, Brazzil Magazine says. 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, and 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. 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. TELEMIG CELULAR: Parent Hires Merrill Lynch to Facilitate Sale -------------------------------------------------------------- Mem Celular Participacoes SA, the parent company of Telemig Celular and Amazonia Celular, disclosed in a filing with Bovespa, the retention of Merrill Lynch to study investment alternatives for its subsidiaries, including their possible sale. According to Business News Americas, talks circulated last month that Mem Celular and Citigroup might choose Merrill Lynch to coordinate the telcos' sale. Rumors in the industry, BNamericas says, names Vivo and Claro as the likely purchasers of the Telemig and Amazonia. Vivo is a joint venture of Telefonica and Portugal Telecom. Claro is America Movil's Brazilian unit. Headquartered in Belem, Brazil, Amazonia Celular is the leading provider of mobile communications services in a region covering the states of Maranhao, Para, Amazonas, Amapa and Roraima in the northern region of Brazil. As of Sept. 30, 2006, Amazonia had 1.27 million subscribers, with a market share of 24% in its concession area. Headquartered in Belo Horizonte, Brazil, Telemig Celular is the leading provider of mobile communications services in the state of Minas Gerais, Brazil. As of Sept. 30, 2006, Telemig had 3.42 million subscribers, with a market share of 33% in its concession area. As reported in the Troubled Company Reporter-Latin America on Jan. 4, 2007, Moody's Investors Service placed under review for possible downgrade the B2 foreign currency rating of the US$120 million senior unsecured notes units issued by Telemig Celular SA and Amazonia Celular SA. Moody's rating action reflected primarily Amazonia's overall deteriorated credit metrics as a result of weakened operating margins and increased competitive pressures, as well as Moody's concerns regarding the company's tightened liquidity position due to a substantial concentration of debt maturity in the short term. * BRAZIL: Sells US$500 Million Dollar Bonds Due 2037 ---------------------------------------------------- The Brazilian government has sold US$500 million dollar- denominated bonds due 2037, Bloomberg News reports. Analysts say that the government is taking advantage of the country's lowest borrowing costs. According to the same report, the bonds have a yield of 6.635% or 1.73 percentage points over the same U.S. Treasuries. The yield fell to 6.52% on Jan. 3 versus the 8.1% in May 2006. "This is a very favorable moment for Brazil to issue bonds," Luis Fernando Lopes, a partner at Patria Banco de Negocios, who helps manage US$950 million in stocks and bonds, told Bloomberg. "Brazil needs to take advantage of this opportunity as economic fundaments are very positive." According to JPMorgan Chase & Co., the average yield spread on the dollar-denominated bonds over U.S. Treasuries dropped to 1.84 points on Jan. 19, Bloomberg relates. The Brazilian government initially sold US$1 billion of the 7- 1/8% bonds on January 2006, with a yield of 7.56% or 2.95 percentage points over the Treasuries, Bloomberg says. The last offer was made in March, which sold US4500 million with a yield of 6.83% or 2.04 percentage points more than the Treasuries. "It's been a long time since the market has seen such a long maturity from Brazil," Henry Stipp, who helps manage US$5 billion in emerging market assets for Threadneedle Asset Management, told Bloomberg in a phone interview from London. In August, Brazil offered to exchange old bonds maturing from 2020 to 2030 for 7.125% Global Bonds due 2037. Raphael Kassin, who manages US$4 billion of emerging-market fixed income at ABN Asset Management Services in London, told Bloomberg that a demand for emerging market bonds have grown and investors have become very interested high interest rates. * * * As reported on Nov. 24, 2006, Standard & Poor's Ratings Services revised its outlook on its long-term ratings on the Federative Republic of Brazil to positive from stable. Standard & Poor's also affirmed these ratings on the Republic of Brazil: -- 'BB'for long-term foreign currency credit rating, -- 'BB+' for long-term local currency credit rating, and -- 'B' for short-term currency sovereign credit rating. * BRAZIL: IDB Grants US$7.15MM Loan to Improve Public Policies -------------------------------------------------------------- The Brazilian Instituto de Pesquisa Economica Aplicada -- Institute for Applied Economic Research -- will receive a US$7,150,000 technical cooperation loan from the Inter-American Development Bank to improve its capacity to formulate, monitor and evaluate public policies and to study the country's development challenges to recommend alternative solutions. The program approved by the Board of Executive Directors will support the management and performance of IPEA. It will produce, systematize and disseminate knowledge by developing key research projects that will contribute toward the improvement of prototypes and new processes to meet specific requirements for public policy. It will also strengthen cooperation with national and international researchers and institutions by implementing exchanges of visiting specialists, participation in international congresses and supporting a national forum. Communication and dissemination of information to the general public will be an important objective. "This operation will invest in research and development to support the search for new or refined knowledge and ideas," said Juan Luna-Kelser, the Project Team Leader. "It will also support the application of such knowledge and ideas for the development of new and improved public policy products, with the expectation of improving Brazil's productive capacity and accelerating social development." "IPEA's research production is extremely valuable to the IDB since it provides key inputs for the preparation of the Bank's country lending strategy and direction, as well as country and sector studies," added Mr. Luna-Kelser. IPEA is a public planning and research foundation under the Ministry of Planning, Budget and Management. During its 40-year history, IPEA has been responsible for the preparation of economic and social studies that have served as the basis for the government's formulation of economic policy and economic development plans, with a medium- and long-term strategic vision. It produces discussion papers, studies and socioeconomic research. The loan is for a 20-year period, with a five-year grace period, at a variable interest rate based on Libor. Local counterpart funds for the project will total US$1,650,000. * * * As reported on Nov. 24, 2006, Standard & Poor's Ratings Services revised its outlook on its long-term ratings on the Federative Republic of Brazil to positive from stable. Standard & Poor's also affirmed these ratings on the Republic of Brazil: -- 'BB'for long-term foreign currency credit rating, -- 'BB+' for long-term local currency credit rating, and -- 'B' for short-term currency sovereign credit rating. =========================== C A Y M A N I S L A N D S =========================== ADORI HOLDINGS: Proofs of Claim Filing Deadline Is on Feb. 8 ------------------------------------------------------------ Adori Holdings Ltd.'s creditors are required to submit proofs of claim by Feb. 8, 2007, to the company's liquidator: Buchanan Ltd. P.O. Box 1170 Grand Cayman, Cayman Islands Creditors who are not able to comply with the Feb. 8 deadline won't receive any distribution that the liquidator will make. Creditors are required to present proofs of claim personally or through their solicitors. Adori Holdings' shareholders agreed on Dec. 27, 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: Timothy Haddleton P.O. Box 1170, Grand Cayman Cayman Islands Tel: (345) 949-0355 Fax: (345) 949-0360 ADORI HOLDINGS: Shareholders to Gather for Feb. 8 Final Meeting --------------------------------------------------------------- Adori Holdings Ltd.'s final shareholders meeting will be on Feb. 8, 2007, at: Cititrust (Cayman) Ltd. CIBC Financial Centre, 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: Buchanan Ltd. P.O. Box 1170 Grand Cayman, Cayman Islands ADROIT PRIVATE: Final General Meeting Is Set for Feb. 8 ------------------------------------------------------- Adroit Private equity (Offshore) Ltd.'s final shareholders meeting will be at 10:00 a.m. on Feb. 8, 2007, at: Trident Trust Company Ltd. Fourth Floor, One Capital Place P.O. Box 847, 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: Kimbert Solomon Trident Trust Company Ltd. Fourth Floor, One Capital Place P.O. Box 847, George Town Grand Cayman, Cayman Islands Tel: (345) 949 0880 Fax: (345) 949 0881 ANOM LTD: Deadline for Proofs of Claim Filing Is on Feb. 8 ---------------------------------------------------------- Anom Ltd.'s creditors are required to submit proofs of claim by Feb. 8, 2007, to the company's liquidators: Royhaven Secretaries Ltd. Coutts House, 1446 West Bay Road P.O. Box 707, George Town Grand Cayman, Cayman Islands Creditors who are not able to comply with the Feb. 8 deadline won't receive any distribution that the liquidator will make. Creditors are required to present proofs of claim personally or through their solicitors. Anom Ltd.'s shareholders agreed on Dec. 20, 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: Michael C Fitzgerald P.O. Box 707, George Town Grand Cayman, Cayman Islands Tel: 945-4777 Fax: 945-4799 ARARA HOLDINGS: Calls Shareholders for Feb. 8 Final Meeting ----------------------------------------------------------- Arara Holdings Ltd.'s final shareholders meeting will be at 10:00 a.m. on Feb. 8, 2007, at: Tumblers Barn, Fairoak Lane Oxshott, Surrey KT22 OTY, United Kingdom 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: Karen De Segundo Tumblers Barn, Fairoak lane Oxshott, Surrey KT22 OTY United Kingdom Tel: +44 1372 843-079 Fax: +44 1372 844-169 E-mail: Karen@desegundo.com ATTICA ASSET: Proofs of Claim Filing Deadline Is on Feb. 8 ----------------------------------------------------------- Attica Asset Management (Cayman) Ltd.'s creditors are required to submit proofs of claim by Feb. 8, 2007, to the company's liquidators: Mike Hughes Jan Neveril Maples Finance Ltd. P.O. Box 1093, George Town Grand Cayman, Cayman Islands Creditors who are not able to comply with the Feb. 8 deadline won't receive any distribution that the liquidator will make. Creditors are required to present proofs of claim personally or through their solicitors. Attica Asset's shareholders agreed on Nov. 16, 2006, for the company's voluntary liquidation under Section 135 of the Companies Law (2004 Revision) of the Cayman Islands. BAREP SYSTEMATIC: Last Day to File Proofs of Claim Is on Feb. 8 --------------------------------------------------------------- Barep Systematic Commodity Arbitrage Fund's creditors are required to submit proofs of claim by Feb. 8, 2007, to the company's liquidators: Q&H Nominees Ltd. Third Floor, Harbour Centre P.O. Box 1348, Grand Cayman KY1-1108, Cayman Islands Creditors who are not able to comply with the Feb. 8 deadline won't receive any distribution that the liquidator will make. Creditors are required to present proofs of claim personally or through their solicitors. Barep Systematic's shareholders agreed on Dec. 12, 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: Quin & Hampson P.O. Box 1348, Grand Cayman Cayman Islands Tel: +1 345 949 4123 Fax: +1 345 949 4647 CAMARILLA INVESTMENTS: Proofs of Claim Filing Is Until Feb. 8 ------------------------------------------------------------- Camarilla Investments Ltd.'s creditors are required to submit proofs of claim by Feb. 8, 2007, to the company's liquidators: C.I. Directors Ltd. P.O. Box 1110, George Town Grand Cayman, Cayman Islands Creditors who are not able to comply with the Feb. 8 deadline won't receive any distribution that the liquidator will make. Creditors are required to present proofs of claim personally or through their solicitors. Camarilla Investments Ltd.'s shareholders agreed on Dec. 21, 2006, for the company's voluntary liquidation under Section 135 of the Companies Law (2004 Revision) of the Cayman Islands. CAMEL INVESTMENTS: Proofs of Claim Must be Filed by Feb. 8 ---------------------------------------------------------- Camel Investments International, Ltd.'s creditors are required to submit proofs of claim by Feb. 8, 2007, to the company's liquidators: Abdullah Almarzouq Messrs. Maples and Calder P.O. Box 309, George Town Grand Cayman, Cayman Islands Creditors who are not able to comply with the Feb. 8 deadline won't receive any distribution that the liquidator will make. Creditors are required to present proofs of claim personally or through their solicitors. Camel Investments' shareholders agreed on Dec. 21, 2006, for the company's voluntary liquidation under Section 135 of the Companies Law (2004 Revision) of the Cayman Islands. DRYDEN III: Last Day to File Proofs of Claim Is on Feb. 8 --------------------------------------------------------- Dryden III-Leveraged Loan CDO 2002's creditors are required to submit proofs of claim by Feb. 8, 2007, to the company's liquidators: Guy Major Richard Gordon Maples Finance Ltd. P.O. Box 1093, George Town Grand Cayman, Cayman Islands. Creditors who are not able to comply with the Feb. 8 deadline won't receive any distribution that the liquidator will make. Creditors are required to present proofs of claim personally or through their solicitors. Dryden III-Leveraged's shareholders agreed on Dec. 19, 2006, for the company's voluntary liquidation under Section 135 of the Companies Law (2004 Revision) of the Cayman Islands. DRYDEN LEVERAGED: Deadline for Proofs of Claim Filing Is Feb. 8 --------------------------------------------------------------- Dryden Leveraged Loan CDO 2002-II's creditors are required to submit proofs of claim by Feb. 8, 2007, to the company's liquidators: Guy Major Richard Gordon Maples Finance Ltd. P.O. Box 1093, George Town Grand Cayman, Cayman Islands. Creditors who are not able to comply with the Feb. 8 deadline won't receive any distribution that the liquidator will make. Creditors are required to present proofs of claim personally or through their solicitors. Dryden Leveraged's shareholders agreed on Dec. 19, 2006, for the company's voluntary liquidation under Section 135 of the Companies Law (2004 Revision) of the Cayman Islands. HEJAZ INVESTMENT: Proofs of Claim Must be Filed by Feb. 8 --------------------------------------------------------- Hejaz Investment International, Ltd.'s creditors are required to submit proofs of claim by Feb. 8, 2007, to the company's liquidators: Abdullah Almarzouq Messrs. Maples and Calder P.O. Box 309, George Town Grand Cayman, Cayman Islands Creditors who are not able to comply with the Feb. 8 deadline won't receive any distribution that the liquidator will make. Creditors are required to present proofs of claim personally or through their solicitors. Hejaz Investments' shareholders agreed on Dec. 21, 2006, for the company's voluntary liquidation under Section 135 of the Companies Law (2004 Revision) of the Cayman Islands. JME OFFSHORE: Creditors Must File Proofs of Claim by Feb. 8 ----------------------------------------------------------- JME Offshore Opportunity Fund II Ltd.'s creditors are required to submit proofs of claim by Feb. 8, 2007, to the company's liquidators: Stuart K. Sybersma Ian A.N. Wight Deloitte, Cayman Islands Creditors who are not able to comply with the Feb. 8 deadline won't receive any distribution that the liquidator will make. Creditors are required to present proofs of claim personally or through their solicitors. JME Offshore's shareholders agreed on Dec. 4, 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: Nicole Ebanks Deloitte, P.O. Box 1787, George Town Grand Cayman, Cayman Islands Tel: (345) 949 7500 Fax: (345) 949 8258 LUBICE FINANCE: Claims Filing Deadline Is Set for Feb. 8 -------------------------------------------------------- Lubice Finance Inc.'s creditors are required to submit proofs of claim by Feb. 8, 2007, to the company's liquidators: Joshua Grant Richard Gordon Maples Finance Ltd. P.O. Box 1093, George Town Grand Cayman, Cayman Islands Creditors who are not able to comply with the Feb. 8 deadline won't receive any distribution that the liquidator will make. Creditors are required to present proofs of claim personally or through their solicitors. Lubice Finance's shareholders agreed on Dec. 20, 2006, for the company's voluntary liquidation under Section 135 of the Companies Law (2004 Revision) of the Cayman Islands. LUBICE FINANCE: Shareholders to Gather for Feb. 8 Final Meeting --------------------------------------------------------------- Lubice Finance Inc.'s final shareholders meeting will be on Feb. 8, 2007, at: Maples Finance Ltd. Queensgate House, 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: Joshua Grant Richard Gordon Maples Finance Ltd. P.O. Box 1093,George Town Grand Cayman, Cayman Islands MINCS-MAGNUM: Filing of Proofs of Claim Is Until Feb. 8 ------------------------------------------------------- Mincs-Magnum, Ltd.'s creditors are required to submit proofs of claim by Feb. 8, 2007, to the company's liquidators: Phillip Hinds Richard Gordon Maples Finance Ltd. P.O. Box 1093, George Town Grand Cayman, Cayman Islands Creditors who are not able to comply with the Feb. 8 deadline won't receive any distribution that the liquidator will make. Creditors are required to present proofs of claim personally or through their solicitors. Mincs-Magnum's shareholders agreed on Dec. 20, 2006, for the company's voluntary liquidation under Section 135 of the Companies Law (2004 Revision) of the Cayman Islands. SAPIC 98: Shareholders to Convene for Feb. 8 Final Meeting ---------------------------------------------------------- Sapic 98 Reference Fund (3) Ltd.'s final shareholders meeting will be at 10:00 a.m. on Feb. 8, 2007, at the company's registered office. 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: Russell Smith Attn: Jodi Smith P.O. Box 225, George Town Grand Cayman, Cayman Islands SEQUILS-MAGNUM: Creditors Must Submit Proofs of Claim by Feb. 8 --------------------------------------------------------------- Sequils-Magnum, Ltd.'s creditors are required to submit proofs of claim by Feb. 8, 2007, to the company's liquidators: Phillip Hinds Richard Gordon Maples Finance Ltd. P.O. Box 1093, George Town Grand Cayman, Cayman Islands Creditors who are not able to comply with the Feb. 8 deadline won't receive any distribution that the liquidator will make. Creditors are required to present proofs of claim personally or through their solicitors. Sequils-Magnum's shareholders agreed on Dec. 20, 2006, for the company's voluntary liquidation under Section 135 of the Companies Law (2004 Revision) of the Cayman Islands. SITKA INVESTMENTS: Proofs of Claim Must be Filed by Feb. 8 ---------------------------------------------------------- Sitka Investments Ltd.'s creditors are required to submit proofs of claim by Feb. 8, 2007, to the company's liquidators: Stuart K. Sybersma Ian A.N. Wight Deloitte, Cayman Islands Creditors who are not able to comply with the Feb. 8 deadline won't receive any distribution that the liquidator will make. Creditors are required to present proofs of claim personally or through their solicitors. Sitka Investments' shareholders agreed on Dec. 19, 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: Nicole Ebanks Deloitte, P.O. Box 1787, George Town Grand Cayman, Cayman Islands Tel: (345) 949 7500 Fax: (345) 949 8258 SOFOS CAPITAL: Final Shareholders Meeting Is Set for Feb. 8 ----------------------------------------------------------- Sofos Capital Fund's final shareholders meeting will be at 10:00 a.m. on Feb. 8, 2007, at: Trident Trust Company Ltd. Fourth Floor, One Capital Place P.O. Box 847, 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: Kimbert Solomon Trident Trust Company Ltd. Fourth Floor, One Capital Place P.O. Box 847, George Town Grand Cayman, Cayman Islands Tel: (345) 949 0880 Fax: (345) 949 0881 STOCKLORD INVESTMENTS: Proofs of Claim Filing Is Until Feb. 8 ------------------------------------------------------------- Stocklord Investments Ltd.'s creditors are required to submit proofs of claim by Feb. 8, 2007, to the company's liquidators: Abdullah Almarzouq Messrs. Maples and Calder P.O. Box 309, George Town Grand Cayman, Cayman Islands Creditors who are not able to comply with the Feb. 8 deadline won't receive any distribution that the liquidator will make. Creditors are required to present proofs of claim personally or through their solicitors. Stocklord Investments' shareholders agreed on Dec. 27, 2006, for the company's voluntary liquidation under Section 135 of the Companies Law (2004 Revision) of the Cayman Islands. VHC EUROPEAN: Last Day for Proofs of Claim Filing Is on Feb. 8 -------------------------------------------------------------- VHC European Restructuring Fund Ltd.'s creditors are required to submit proofs of claim by Feb. 8, 2007, to the company's liquidators: Stuart K. Sybersma Ian A N Wight Deloitte, Cayman Islands Creditors who are not able to comply with the Feb. 8 deadline won't receive any distribution that the liquidator will make. Creditors are required to present proofs of claim personally or through their solicitors. VHC European's shareholders agreed on Dec. 18, 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: Nicole Ebanks Deloitte, P.O. Box 1787, George Town Grand Cayman, Cayman Islands Tel: (345) 949 7500 Fax: (345) 949 8258 VHC EUROPEAN EVENT: Proofs of Claim Filing Deadline Is Feb. 8 ------------------------------------------------------------- VHC European Event Driven Fund Ltd.'s creditors are required to submit proofs of claim by Feb. 8, 2007, to the company's liquidators: Stuart K. Sybersma Ian A N Wight Deloitte, Cayman Islands Creditors who are not able to comply with the Feb. 8 deadline won't receive any distribution that the liquidator will make. Creditors are required to present proofs of claim personally or through their solicitors. VHC European Event's shareholders agreed on Dec. 18, 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: Nicole Ebanks Deloitte, P.O. Box 1787, George Town Grand Cayman, Cayman Islands Tel: (345) 949 7500 Fax: (345) 949 8258 VHC MASTER: Deadline for Proofs of Claim Filing Is on Feb. 8 ------------------------------------------------------------ VHC Master Fund Ltd.'s creditors are required to submit proofs of claim by Feb. 8, 2007, to the company's liquidators: Stuart K Sybersma Ian A N Wight Deloitte, Cayman Islands Creditors who are not able to comply with the Feb. 8 deadline won't receive any distribution that the liquidator will make. Creditors are required to present proofs of claim personally or through their solicitors. VHC Master's shareholders agreed on Dec. 18, 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: Nicole Ebanks Deloitte, P.O. Box 1787, George Town Grand Cayman, Cayman Islands Tel: (345) 949 7500 Fax: (345) 949 8258 VHC RESTRUCTURING: Last Day to File Proofs of Claim Is on Feb. 8 ---------------------------------------------------------------- VHC Restructuring Master Fund Ltd.'s creditors are required to submit proofs of claim by Feb. 8, 2007, to the company's liquidators: Stuart K. Sybersma Ian A N Wight Deloitte, Cayman Islands Creditors who are not able to comply with the Feb. 8 deadline won't receive any distribution that the liquidator will make. Creditors are required to present proofs of claim personally or through their solicitors. VHC Restructuring's shareholders agreed on Dec. 18, 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: Nicole Ebanks Deloitte, P.O. Box 1787, George Town Grand Cayman, Cayman Islands Tel: (345) 949 7500 Fax: (345) 949 8258 =============== C O L O M B I A =============== ARMOR HOLDINGS: Posts US$38 Million Net Income in Fourth Quarter ---------------------------------------------------------------- Armor Holdings Inc. reported financial results for the fourth quarter and fiscal year ended Dec. 31, 2006. For the fourth quarter ended Dec. 31, 2006, the company reported revenue of US$801 million, an increase of 77%, compared to US$453 million in the fourth quarter last year. Net income for the fourth quarter was US$38 million. Earnings before interest, taxes, depreciation and amortization for the fourth quarter increased by 23% to US$82 million versus US$67 million in the year-ago quarter. Excluding the impact of the Stewart & Stevenson acquisition and a number of other operating and non-operating items in both periods, pro forma net income was US$38 million for the three- months ended Dec. 31, 2006, compared to US$39 million for the prior year period. Robert R. Schiller, Armor Holdings' President and Chief Operating Officer of commented, "We are pleased to have finished fiscal 2006, a truly transformational year, with a strong fourth quarter performance. We believe our OEM vehicle assembly operations, vehicle armor and safety systems business, individual soldier equipment, law-enforcement products and commercial vehicle armoring businesses are all positioned to continue to show growth and improvements in profitability as we move forward. In the year ahead, we intend to make substantial investments in our capability for design, development and production in each of our major product areas." Mr. Schiller continued, "In addition to the ongoing strong demand for the FMTV and Up-Armored HMMWVs, we are pleased with the many opportunities that are emerging to potentially provide other types of vehicles and to support other organizations with armor components. At the same time, for the long-term, we continue to be excited by our team's role to develop the next generation of light tactical vehicle, JLTV. We believe that our broad capabilities for all manner of armoring and assembly operations position us well to serve the diverse needs for light and medium tactical wheeled vehicles." Internal revenue growth, which includes increases or decreases in acquired companies' current quarter revenues since the date of acquisition versus the comparable prior year period, was 31%, including 0.5% impact for foreign currency movements. Internal revenue growth/(declined) by segment, including foreign currency movements, was 39% for the Aerospace & Defense Group, 8% for the Products Group and (3%) for the Mobile Security Division from the same period last year. -- The Aerospace & Defense Group internal revenue growth was primarily due to higher volumes of HMMWV related business partially offset by a reduction in medium and heavy truck kit business. -- The Products Group internal revenue growth was primarily due to a large international shipment within our hard armor business and strong sales of law enforcement duty gear. -- The Mobile Security Division internal revenue decline was the result of a lower level of demand from the Middle East. The Company's gross profit margin in the fourth quarter was 17.6% versus 22.5% in the year-ago quarter. This reduction resulted primarily from the acquisition of S&S, which operates at lower average gross margins. -- The S&S acquisition also impacted the Aerospace & Defense Group's gross margins, which declined to 14.8% versus 19.5% in the year-ago quarter. However, excluding the impact of the S&S acquisition, the Aerospace & Defense Group's gross margins would have been 18.8% for the quarter. -- The Products Group's gross margins increased to 38.7% versus 36.1% in the year-ago quarter due to a variety of factors, including improved manufacturing processes, better outsourcing and higher capacity utilization. -- The Mobile Security Division's gross margins decreased to 18.0% from 20.4% in the same period last year, primarily due to a lower-margin mix of vehicles shipped in the quarter. The company's selling, general and administrative expenses as a percentage of revenue decreased to 7.7% versus 7.8% in the year- ago quarter. This improvement was primarily due to the inclusion of the S&S business, which operates with lower average operating expenses as a percentage of revenue. This was partially offset by additional investments in research and development and in sales and marketing, as well as higher legal fees. Cash flow provided by operating activities for the fourth quarter was US$29 million versus US$75 million in the year-ago quarter. Free cash flow, defined as net cash provided by operating activities less purchases of property and equipment, was US$18 million versus US$71 million in the same period last year. The decrease in free cash flow was primarily due to an increase in working capital necessary to support a 42% increase in fourth quarter revenues over third quarter, and an increased investment in capital expenditures. Year-to-Date Results For the fiscal year ended Dec. 31, 2006, the company reported revenue of US$2.4 billion, an increase of 44%, compared to US$1.6 billion in the fiscal year ended Dec. 31, 2005. Net income for the fiscal year ended Dec. 31, 2006, was US$135 million versus US$133 million for the fiscal year ended Dec. 31, 2005. EBITDA for the fiscal year ended Dec. 31, 2006, increased by 19% to US$280 million versus US$236 million in the year-ago comparable period. Excluding the impact of the S&S acquisition and a number of other operating and non-operating items in both periods, pro forma net income was $148 million for the fiscal year ended Dec. 31, 2006, compared to US$144 million for the comparable period in 2005. Internal revenue growth, which includes increases or decreases in acquired companies' current year revenues since the date of acquisition versus the comparable prior year period, was 15%, including 0.1% impact for foreign currency movements. Internal revenue growth/(decline) by segment, including foreign currency movements, was 22% for the Aerospace & Defense Group, 5% for the Products Group and (24%) for the Mobile Security Division from the same period last year. -- The Aerospace & Defense Group internal revenue growth was primarily due to higher volumes of HMMWV related business partially offset by a reduction in medium and heavy truck kit business. -- The Products Group internal revenue growth was primarily due to stronger sales of domestic soft body armor and increased sales within our law enforcement duty gear and automotive businesses. -- The Mobile Security Division internal revenue decline was primarily the result of continued issues with the availability of base units to support customer orders and a lower level of demand from the Middle East. The Company's gross profit margin for the fiscal year ended Dec. 31, 2006, decreased to 19.6% versus 23.7% in the year-ago level. The reduction in gross margins resulted primarily from the acquisition of S&S, which operates at lower average gross margins. -- As a result of the S&S acquisition, the Aerospace & Defense Group's gross margins decreased to 16.3% versus 20.7% in the year-ago level. Excluding the impact of S&S, gross margins declined to 20.0% versus the prior year period. -- The Products Group's gross margins increased to 39.4% versus 37.0% in the year-ago level due to select selling price increases, continued expansion of lean manufacturing initiatives, increased utilization of our lower-cost manufacturing plants, and improved outsourcing of externally manufactured products. -- The Mobile Security Division's gross margins decreased to 19.0% from 22.7% in the same period last year, primarily due to decreased overhead absorption caused by reduced production through-put, lower demand in the Middle East, and a less profitable sales mix. The Company's selling, general and administrative expenses as a percentage of revenue improved to 8.3% versus 8.5% in the year- ago period. This improvement was primarily due to the inclusion of the S&S business, which operates with lower average operating expenses as a percentage of revenue. This was partially offset by additional investments in research and development and in sales and marketing, as well as higher legal fees. Cash flow provided by operating activities for the fiscal year ended Dec. 31, 2006, was US$139 million versus US$135 million in the year-ago comparable period. Free cash flow, defined as net cash provided by operating activities less purchases of property and equipment, was US$104 million for the fiscal year ended Dec. 31, 2006, versus US$119 million in the same period last year. Balance Sheet As of Dec. 31, 2006, the company reported: * Cash, cash equivalents, short-term investment securities and equity-based securities of US$40 million compared to US$500 million at Dec. 31, 2005. Cash equivalents at Dec. 31, 2005, excluded US$29 million that was invested in equity-based securities, which was reflected on the company's balance sheet as a long-term asset in accordance with U.S. GAAP. * Total debt (short-term, current portion and long-term) was US$767 million at Dec, 31, 2006, compared to US$497 million at Dec. 31, 2005. The aggregate of cash, cash equivalents and short-term investment securities declined and total debt increased during the fiscal year ending Dec. 31, 2006, primarily to fund the acquisition of S&S. Guidance The Company anticipates fiscal 2007 financial performance as follows: -- Revenues of US$3.4 billion to US$3.6 billion with fully diluted earnings per share of US$4.80 to US$5.20. -- 2007 integration costs of US$0.04 to US$0.06 per share. -- 2007 internal research and development expenses of US$30 million to US$34 million. -- 2007 free cash flow of approximately US$100 million, which includes US$100 million to US$120 million of capital expenditures for expansion of our medium vehicle capacity and a ramp up of our capability to implement LTAS for the FMTV, expanded ballistic materials manufacturing capability and additional capacity for production of the M1151/52 and certain soldier equipage products. -- First quarter 2007 diluted earnings per share of US$1.07 to US$1.12. Headquartered in Jacksonville, Florida, Armor Holdings, Inc. (NYSE: AH) -- http://www.armorholdings.com/-- manufactures and distributes security products and vehicle armor systems for the law enforcement, military, homeland security, and commercial markets. The company's mobile security division is located in Mexico, Venezuela, Colombia and Brazil. * * * In connection with Moody's Investors Service's implementation of its new Probability-of-Default and Loss-Given-Default rating methodology, the rating agency confirmed its Ba3 Corporate Family Rating for Armor Holdings Inc. Additionally, Moody's affirmed its B1 ratings on the company's 2% Convertible Senior Subordinated Notes Due 2024 and 8.25% Senior Subordinated Notes Due 2013. Moody's assigned those debentures an LGD5 rating suggesting noteholders will experience a 77% loss in the event of default. =================== C O S T A R I C A =================== US AIRWAYS: Withdraws Delta Air Merger Proposal ----------------------------------------------- US Airways withdrew its offer to merge with Delta Air Lines Inc. The airline was informed on Jan. 31 that the Official Unsecured Creditors' Committee would not meet its demands by the airline's established deadline of Feb. 1, 2007. As previously announced, US Airways' offer of US$5.0 billion in cash and 89.5 million shares of US Airways stock would have expired on Feb. 1, 2007, unless there was affirmative support from the Official Unsecured Creditors' Committee for commencement of due diligence, making the required filings under Hart-Scott-Rodino, as well as the postponement of Delta's hearing on its Disclosure Statement scheduled for Feb. 7, 2007. US Airways Chairman and Chief Executive Officer Doug Parker stated, "We are disappointed that the Committee, which has been chosen to act on behalf of all Delta creditors, is ignoring its fiduciary obligation to those creditors. Our proposal would have provided substantially more value to Delta's unsecured creditors than the Delta stand-alone plan. We would have created a better and more financially stable airline that offered more choice to consumers and increased job security to its employees. Our merger would have been able to be consummated in a reasonable time-frame and we would have been able to obtain all requisite regulatory approvals. "The publicly traded bonds of Delta have fallen precipitously since rumors of this Committee decision were leaked last week, reducing the implied market valuation of what Delta's unsecured creditors can expect to recover in these cases by over US$1.5 billion. We empathize with the investors who purchased Delta bonds at increasingly higher prices since our offer was announced last November and thank them for their support of our proposal and their confidence in our team. It is now clear that there will not be an opportunity with the Committee to move forward in a timely or productive manner and as a result, we have withdrawn our offer." Mr. Parker added, "At US Airways, we are extremely confident in our own stand-alone plan. Earlier this week, we announced a 2006 profit (excluding charges) of over US$500 million, far and away the best performance by a network airline. Our employees will share US$59 million of well-deserved profit sharing payments as a result. Looking forward, we expect even higher earnings and a higher profit sharing pool in 2007. Our 35,000 employees are doing a wonderful job of transforming US Airways and we are committed to building the best airline we can for them. I can't thank them enough for their support, encouragement, and professionalism during this process. I am very proud of how our entire team performed." About Delta Air 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. About US Airways Headquartered in Arlington, Virginia, US Airways Group Inc.'s (NYSE: LCC) -- http://www.usairways.com/-- primary business activity is the ownership of the common stock of: * US Airways, Inc., * Allegheny Airlines, Inc., * Piedmont Airlines, Inc., * PSA Airlines, Inc., * MidAtlantic Airways, Inc., * US Airways Leasing and Sales, Inc., * Material Services Company, Inc., and * Airways Assurance Limited, LLC. Under a chapter 11 plan declared effective on March 31, 2003, USAir emerged from bankruptcy with the Retirement Systems of Alabama taking a 40% equity stake in the deleveraged carrier in exchange for US$240 million infusion of new capital. US Airways and its subsidiaries filed another chapter 11 petition on Sept. 12, 2004 (Bankr. E.D. Va. Case No. 04-13820). Brian P. Leitch, Esq., Daniel M. Lewis, Esq., and Michael J. Canning, Esq., at Arnold & Porter LLP, and Lawrence E. Rifken, Esq., and Douglas M. Foley, Esq., at McGuireWoods LLP, represent the Debtors in their restructuring efforts. In the Company's second bankruptcy filing, it lists US$8,805,972,000 in total assets and US$8,702,437,000 in total debts. The Debtors' chapter 11 plan for its second bankruptcy filing became effective on Sept. 27, 2005. The Debtors completed their merger with America West on the same date. US Airways, US Airways Shuttle, and US Airways Express operate approximately 3,800 flights per day and serve more than 230 communities in the U.S., Canada, Europe, the Caribbean, and Latin America. The new US Airways is a member of the Star Alliance, which provides connections for customers to 841 destinations in 157 countries worldwide. US Airways has operations in Japan, Australia, China, Costa Rica, Philippines, and Spain, among others. US AIRWAYS: Withdrawn Delta Bid Cues S&P to Affirm Ratings ---------------------------------------------------------- Standard & Poor's Ratings Services affirmed its ratings on US Airways Group. and its major operating subsidiaries America West Holdings Corp., America West Airlines Inc., and US Airways Inc., including the 'B-' corporate credit ratings. The ratings were removed from CreditWatch, where they were placed with developing implications on Nov. 15, 2006. The outlook is now positive. "The affirmation is based on US Airways' announcement that it has withdrawn its offer to merge with Delta Air Lines, after US Airways was informed by Delta's unsecured creditors' committee that it would not meet its demands by the Feb. 1, 2007 deadline that US Airways had established," said Standard & Poor's credit analyst Betsy Snyder. "Although US Airways estimated that successful completion of the merger would result in synergies of approximately US$1.7 billion, the combined debt burden would have increased by more than US$5 billion," she continued. The positive outlook reflects the company's improved operating performance and liquidity; trends that are expected to continue. However, a modest upgrade would be reliant on successful integration of labor at both airlines. US Airways has operations in Japan, Australia, China, Costa Rica, Philippines, and Spain, among others. * COSTA RICA: Mulling to Speed Up International Pact Approval ------------------------------------------------------------- Costa Rican lawmakers have started discussing about a reform in Asamblea Legislativa rules to accelerate ratification of international accords like the nation's free trade pact with the US, A.M. Costa Rica reports. A.M. Costa Rica underscores that the reform would remove the lawmakers' power to make certain motions of revision to the agreements being considered. According to the report, Mayi Antillon Guerrero, Partido Liberacion Nacional's leader, supported the changes. However, Rafael Elias Madrigal Brenes of the Partido Accion Ciudadana objected the changes. He explained to A.M. Costa Rica, "We have many reasons to oppose a treaty that does not correspond to the best interests of the country." The free trade pact was a tax measure that should not be considered in a fast-track process. The treaty addresses import duties, A.M. Costa Rica says, citing Mr. Madrigal. Francisco Antonio Pacheco, Asamblea Legilativa's head, adjourned the session to allow a legislative committee to study the proposed changes. Lawmakers will be having another meeting to further discuss the changes, A.M. Costa Rica states. * * * As reported on Aug. 21, 2006, Fitch Ratings upgraded Costa Rica's country ceiling to BB+ from BB. ======= C U B A ======= * CUBA: Has Over 350,000 Participants in Agriculture Program ------------------------------------------------------------ Over 350,000 people have participated in Cuba's Urban Agriculture Program, which was launched in 1994 and has progressively extended to other Latin American nations, the Cuban News Agency reports. According to the Cuban News Agency, the Urban Agriculture Program is based on an agro-ecological approach that replaces chemical fertilizers and pesticides with organic fertilizers and biological controls. The program has resulted to the annual production of up to four million tons of vegetables for the last five years. Statistics from the Cuban Association of Agriculture and Forestry Technicians indicated that 40,000 of those workers are retired people and almost 68,000 are women, the Cuban News Agency relates, citing the Institute of Research on Tropical Agriculture, the agriculture program's sponsor. At least 10,600 university graduates and 27,900 technicians in Cuba have joined in 28 urban agriculture projects, the Cuban News Agency states. * * * As reported in the Troubled Company Reporter-Latin America on Dec. 18, 2006, Moody's Investors Service said that Cuba's Caa1 foreign-currency issuer rating reflects the debt moratorium that has been in place for more than 15 years, leading to the accumulation of principal and interest arrears. Moody's had assigned these ratings on Cuba: -- CC LT Foreign Bank Deposit, Caa2 -- CC LT Foreign Currency Debt, Caa1 -- CC ST Foreign Bank Deposit, NP -- CC ST Foreign Currency Debt, NP -- Issuer Rating, Caa1 =================================== D O M I N I C A N R E P U B L I C =================================== * DOMINICAN REPUBLIC: Central Bank Issuing DOP1.5B Certificates --------------------------------------------------------------- The Dominican Republic's central bank will place DOP1.5 billion in investment certificates, Dominican Today reports. Dominican Today underscores that these entities can participate: -- multiple banking firms, -- savings and loan institutions, -- credit corporations, -- savings and loan cooperatives, -- institutional investors, -- insurance companies, -- private and public investment funds, -- stock exchange, -- other non-financial entities, and -- the general public. According to Dominican Today, terms for investment are 35, 91, 182 and 364 days, while the minimum amount for offers is set at RD$100,000. Bidding forms can be accessed at the Central Bank's Web page at http://www.bancentral.gov.do/ * * * The Troubled Company Reporter-Latin America reported on May 9, 2006, that Fitch Ratings upgraded these debt and issuer Default Ratings of the Dominican Republic: -- Long-term foreign currency Issuer Default Rating to B from B-; -- Country ceiling upgraded to B+ from B-; -- Foreign currency bonds due 2006 to B-/RR4 from CCC+/RR4; -- Foreign currency Brady bonds due 2009 to B/RR4 from B-/RR4; -- Foreign currency bonds due 2011 to B/RR4 from B-/RR4; -- Foreign currency bonds due 2013 to B-/RR4 from CCC+/RR4; -- Foreign currency bonds due 2018 to B/RR4 from B-/RR4; and -- Foreign currency collateralized Brady bonds due 2024 to B+/RR3 from B/RR3. Fitch also affirmed these ratings: -- Long-term local currency Issuer Default Rating: B; and -- Short-term Issuer Default Rating: B. Additionally, Fitch assigned a debt and Recovery Rating to this issue: -- Foreign currency bonds due 2027: B/RR4. Fitch said the rating outlook for the long-term foreign and local currency IDRs is Stable. ============= E C U A D O R ============= * ECUADOR: Bonds Rise on Statement to Seek Friendly Accord ---------------------------------------------------------- Ecuadorian dollar bonds of 10% due 2030 recorded its biggest gain three months after the country's Economy Minister Ricardo Patino disclosed that the government may request for a "friendly" renegotiation of foreign debt, Bloomberg News reports. Minister Patino's announcement caused investors to assume that the Ecuadorian government may back off its offensive attitude with bondholders, causing in return to the upsurge of the bonds from 5.75 cents on the dollar to 74, Bloomberg continues. Minister Patino remarked to Bloomberg that a negotiation that is pressure-free is more convenient, and it is wise to remember that creditors are not the government's enemies. "These statements are certainly more conciliatory than the disconcerting rhetoric that has characterized previous official statements on the external debt issue," Alberto Ramos, a senior Latin America economist at Goldman Sachs Group Inc. in New York, said in a note to clients. According to JPMorgan Chase & Co., the bonds' yield fell to 1.16 percentage points to 13.73%. Two days after Pres. Correa took office, Minister Patino told investors in Quito that the government may only pay off 40% of the total foreign debt, due to plans to ease up funds for spending on health care and education, Bloomberg says. Citigroup Inc. analysts Don Hanna and Jose Wynne said that Minister Patino discussed taking on a "friendly" restructuring. The analysts, however, are skeptical that the minister's remarks would imply a shift, the same report relates. "What they regard as friendly is not the same thing investors think is friendly," Edwin Gutierrez, who manages US$2.2 billion of emerging-market debt at Aberdeen Asset Management Plc in London, told Bloomberg. Pres. Correa remarked in his inaugural address that his administration considers the US$11 foreign debt to be illegitimate because it was secured through a military dictatorship years ago, Bloomberg relates. According to El-Universo newspaper, Minister Patino declared on Jan. 27 that he won't be delivering the debt-restructuring plan in January, explaining that the Ecuadorian government is taking time to consider if to restructure the debt would be suitable at this time. "It was overly optimistic to think they could come up with a plan in two weeks," Cathy Elmore, who helps manage US$700 million of emerging-market debt at WestLB Mellon Asset Management in London, told Bloomberg. "I don't think they've made any decisions yet." El Universo reported that on Jan. 26, Argentine officials visied Ecuador to meet with the minister to advise on the restructuring of the country's foreign debt. * * * As reported in the Troubled Company Reporter on Jan. 25, 2007, Fitch Ratings downgraded the long-term foreign currency Issuer Default Rating of Ecuador to 'CCC' from 'B-', indicating that default is a real possibility in the near term. In addition, these ratings were downgraded: -- Uncollateralized foreign currency bonds to 'CCC/RR4' from 'B-/RR4'; -- Collateralized foreign currency Par and Discount Brady bonds to 'CCC+/RR3' from 'B/RR3'; and -- Short-term foreign currency IDR to 'C' from 'B'. Fitch also affirmed the Country ceiling rating at 'B-'. * ECUADOR: Farmers Seek Imports & Exports Nationalization --------------------------------------------------------- ABO, an association of El Oro banana growers, has proposed that the Ecuadorian government nationalize all agricultural imports and exports of the nation, Fresh Plaza reports. The ABO members told Fresh Plaza that nationalization of imports and exports boosts profits for the growers. Fresh Plaza notes that nationalization could also correct the chaos in the banana production and exports sector. The government has to form a special entity that would manage the nationalization to regulate the transition, Fresh Plaza states. * * * As reported in the Troubled Company Reporter-Latin America on Feb. 1, 2007, Moody's Investors Service downgraded Ecuador's sovereign ratings in light of mounting concerns regarding the size of creditor losses in the event of a default and in view of the impact such default would inflict upon Ecuador's macroeconomic framework. Ecuador's foreign-currency government bond rating and the foreign-currency country bond ceiling were downgraded to Caa2 with a negative outlook from Caa1 with a stable outlook. The outlook on the Caa2 foreign currency deposit ceiling was revised to negative from stable. Moody's also downgraded the country ceiling for local-currency deposits from Caa1 to Caa2 with a negative outlook. =============== H O N D U R A S =============== CONTINENTAL AIRLINES: To Add US$35 Million to Pension Plans ----------------------------------------------------------- Continental Airlines Inc. will make an early contribution of an additional US$35 million in cash to its defined benefit pension plans. This amount is in addition to a US$71 million contribution made less than a month ago and is being made prior to the next required payment due date in April. "We remain focused on meeting our pension commitments to our employees," said Larry Kellner, chairman and chief executive officer. "Our company culture is strongly linked to our co- workers' trust that we will meet these commitments now and in the future." This pension contribution will be made with the proceeds of recent sales of substantially all of Continental's remaining shares of ExpressJet Airlines Inc. (NYSE: XJT). The disposition of those shares was consistent with previous dispositions by the company of non-core assets. Continental will receive the proceeds from the last portion of its sales on Monday, Feb. 5, 2007, and will make its pension contribution on that date. Since the beginning of 2002, Continental has contributed more than US$1.2 billion to its pension plans. Continental Airlines Inc. (NYSE: CAL) -- http://continental.com/ -- is the world's fifth largest airline. Continental, together with Continental Express and Continental Connection, has more than 3,200 daily departures throughout Mexico, Europe and Asia, serving 154 domestic and 138 international destinations including Honduras and Bonaire. More than 400 additional points are served via SkyTeam alliance airlines. With more than 43,000 employees, Continental has hubs serving New York, Houston, Cleveland and Guam, and together with Continental Express, carries approximately 61 million passengers per year. Continental consistently earns awards and critical acclaim for both its operation and its corporate culture. * * * As reported in the Troubled Company Reporter on Nov. 10, 2006 Moody's Investors Service assigned ratings of Caa1, LDG5-75% to the US$200 million of senior unsecured notes issued by Continental Airlines Inc.'s. Moody's affirmed the B3 corporate family rating. Moody's said the outlook is stable. As reported in the Troubled Company Reporter on Oct. 23, 2006, Standard & Poor's Ratings Services affirmed its ratings, including the 'B' long-term and 'B-3' short-term corporate credit ratings, on Continental Airlines Inc. The outlook is revised to stable from negative. Continental has about US$17 billion of debt and leases. At the same time, Fitch Ratings has upgraded Continental Airlines Inc.'s Issuer Default Rating to 'B-' from 'CCC' and Senior Unsecured Debt to 'CCC/RR6' from 'CC/RR6'. Fitch said the rating outlook was stable. CONTINENTAL AIRLINES: Issues 4.26 Million Shares of Common Stock ---------------------------------------------------------------- Continental Airlines Inc. disclosed that the holders of approximately US$170 million principal amount of its 4.50% Convertible Notes due Feb. 1, 2007, have elected to convert their notes into shares of Continental's common stock. The conversion price was US$40 per share and, as a result, Continental is issuing approximately 4.26 million shares of its common stock to those holders. Continental Airlines Inc. (NYSE: CAL) -- http://continental.com/ -- is the world's fifth largest airline. Continental, together with Continental Express and Continental Connection, has more than 3,200 daily departures throughout Mexico, Europe and Asia, serving 154 domestic and 138 international destinations including Honduras and Bonaire. More than 400 additional points are served via SkyTeam alliance airlines. With more than 43,000 employees, Continental has hubs serving New York, Houston, Cleveland and Guam, and together with Continental Express, carries approximately 61 million passengers per year. Continental consistently earns awards and critical acclaim for both its operation and its corporate culture. * * * As reported in the Troubled Company Reporter on Nov. 10, 2006, Moody's Investors Service assigned ratings of Caa1, LDG5-75% to the US$200 million of senior unsecured notes issued by Continental Airlines Inc.'s. Moody's affirmed the B3 corporate family rating. Moody's said the outlook is stable. As reported in the Troubled Company Reporter on Oct. 23, 2006, Standard & Poor's Ratings Services affirmed its ratings, including the 'B' long-term and 'B-3' short-term corporate credit ratings, on Continental Airlines Inc. The outlook is revised to stable from negative. Continental has about US$17 billion of debt and leases. At the same time, Fitch Ratings has upgraded Continental Airlines Inc.'s Issuer Default Rating to 'B-' from 'CCC' and Senior Unsecured Debt to 'CCC/RR6' from 'CC/RR6'. Fitch said the rating outlook was stable. * HONDURAS: Files Claim Over Fuel Storage Price on Failed Talks --------------------------------------------------------------- The Honduran government has filed a claim with the attorney general's office after failed talks with Dippsa, an oil importer and distributor, on fuel storage price, the presidential Web site reports. Pres. Manuel Zelaya and Dippsa chief Henry Arevalo met to negotiate a price settlement on fuel storage. Mr. Arevalo did not accept the government's offer of US$0.03/gallon and pushed for US$0.065/gallon, BNamericas says. "With US$0.03/gallon (HNL1.13), I don't cover my costs," Mr. Arevalo told BNamericas and clarified that he asked for US%0.06/gallon and not US$0.065/gallon. He added that service stations earn HNL4.60/gallon while the government earns as much as HNL22/gallon. Early January, the government passed an emergency decree that required companies with fuel storage infrastructure to rent storage tanks. Mr. Arevalo reiterated that Dippsa's concession contract with the Honduran government called for the storage tank rental when the government declares an emergency. He argued that the government has not declared one when oil price was at US472/barrel, so why should it now when price is at US$50/barrel, BNamericas relates. * * * 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: Cabinet Approves Restructuring Plan ------------------------------------------------ Jamaica's Cabinet approved Monday Air Jamaica's latest business plan that is targeted at making the airline profitable. Chief Executive Officer Michael Conway and Board Chairman O.K. Melhado presented the plan to Cabinet, local reports say. Cabinet rejected the airline's previous plan with recommendations for downsizing, eliminating unprofitable routes and refleeting. The law-making body accepted the revised plan after taking into account deliberations by a Parliament- appointed select committee, which is reviewing the airline's losses and viability, The Jamaican Observer reports. The Jamaica Gleaner says the new strategies discussed in the plan are aimed at: -- achieving increased reliability, -- rationalizing routes, -- consolidating the airline's administration in Kingston, -- outsourcing of Air Jamaica Vacations and -- converting of the current Airbuses to Boeing. The airline, according the Observer, needs at least US$125 million in fresh capital to keep operating for the next two years. Headquartered in Kingston, Jamaica, Air Jamaica -- http://www.airjamaica.com-- was founded in 1969. It flies passengers and cargo to almost 30 destinations in the Caribbean, Europe, and North America. Air Jamaica offers vacation packages through Air Jamaica Vacations. The company closed its intra- island services unit, Air Jamaica Express, in October 2005. The Jamaican government assumed full ownership of the airline after an investor group turned over its 75% stake in late 2004. The government had owned 25% of the company after it went private in 1994. The Jamaican government does not plan to own Air Jamaica permanently. * * * On July 21, 2006, Standard & Poor's Rating Services assigned B long-term foreign issuer credit rating on Air Jamaica Ltd., which is equal to the long-term foreign currency sovereign credit rating on Jamaica, is based on the government's unconditional guarantee of both principal and interest payments. KAISER ALUMINUM: Competes Secondary Offering of Common Stock ------------------------------------------------------------ Kaiser Aluminum Corp. completed the secondary offering of 6,281,150 shares of common stock by certain of its existing stockholders at a public offering price of US$61.25 per share. The number of shares sold in the offering includes 819,280 shares sold pursuant to the over-allotment option granted to the underwriters by one of the selling stockholders, a voluntary employees' beneficiary association trust that provides benefits to eligible retirees represented by certain unions. The company did not sell any shares in, and will not receive any of the proceeds from, this secondary offering. UBS Securities LLC and Bear, Stearns & Co. Inc. acted as joint book-running managers and Lehman Brothers Inc. and Lazard Capital Markets LLC acted as co-managers of the offering. Headquartered in Foothill Ranch, California, Kaiser Aluminum Corp. -- http://www.kaiseraluminum.com/-- is a leading producer of fabricated aluminum products for aerospace and high-strength, general engineering, automotive, and custom industrial applications. The Company, along with its Jamaican subsidiaries, filed for chapter 11 protection on Feb. 12, 2002 (Bankr. Del. Case No. 02-10429), and has sold off a number of its commodity businesses during course of its cases. Corinne Ball, Esq., at Jones Day, represents the Debtors in their restructuring efforts. Lazard Freres & Co. serves as the Debtors' financial advisor. Lisa G. Beckerman, Esq., H. Rey Stroube, III, Esq., and Henry J. Kaim, Esq., at Akin, Gump, Strauss, Hauer & Feld, LLP, and William P. Bowden, Esq., at Ashby & Geddes represent the Debtors' Official Committee of Unsecured Creditors. The Debtors' Chapter 11 Plan became effective on July 6, 2006, and the company emerged from Chapter 11. On June 30, 2004, the Debtors listed US$1.619 billion in assets and US$3.396 billion in debts. =========== M E X I C O =========== AFFILIATED COMP: Wins Automation Pact on Mexico Fare Collection --------------------------------------------------------------- Affiliated Computer Services, Inc., has been awarded a contract by Mexico City metro operator Sistema de Transporte Colectivo or STC to deliver a contactless ticketing automated fare collection system. The contract is valued at US$9.3 million. After a successful pilot program, STC decided to make contactless ticketing a standard feature across its system. The contract runs through November 2007, during which time ACS will extend this technology across the network, equipping 2,000 platform access gates with contactless card readers and deploying manual and automatic ticket sale points. ACS will also equip each metro station with a supervision system and data concentrator, as well as an optical fibre intelligent communication network linking equipment. "Right from the word go there was no room for mistakes. If we were to persuade our four million daily users to adopt a modernised system, we first had to prove that it would be efficient," explained Florencia Serrania, former manager of STC who initiated the Mexico City metro contactless ticketing project before handing it over to Fransisco Bojorquez, the current General Manager. ACS proved that it was capable of deploying contactless e- ticketing on disparate magnetic equipment, some more than 30 years old, thus validating the selected technologies and their seamless co-existence with magnetic stripe ticketing. ACS is the first and only operator to use this dual technology on a single system. "ACS' capabilities as a systems integrator and supplier of innovative and complex fare collection systems continue to improve public transportation around the globe," said Tom Burlin, Chief Operating Officer - Government. "We look forward to many years of serving the transportation needs of Mexico City and its citizens." The Mexican capital thus joins Lyons, France, Melbourne, Australia, Zurich, Switzerland, and Montreal, Canada, on the list of major international cities recently deploying ACS contactless ticketing systems. Headquartered in Dallas, Texas, Affiliated Computer Services, Inc., (NYSE: ACS) -- http://www.acs-inc.com/ -- provides business process outsourcing and information technology solutions to commercial and government clients. The company has global operations in Brazil, China, Dominican Republic, India, Guatemala, Ireland, Philippines, Poland and Singapore. * * * As reported in the Troubled Company Reporter on Nov. 29, 2006, Standard & Poor's Ratings Services kept its ratings for Affiliated Computer Services Inc. including the 'B+' corporate credit rating, on CreditWatch, where they were placed with negative implications on Sept. 29, 2006. BALDOR ELECTRIC: Completes Acquisition of Reliance Electric ----------------------------------------------------------- Baldor Electric Co. has completed the acquisition of Reliance Electric Co., including Dodge mechanical and Reliance Electric motors, from Rockwell Automation. Details of the acquisition will be discussed when the company releases its fourth quarter and fiscal year 2006 financial results. Baldor Electric Company is a manufacturer of industrial electric motors, drives and generators. Baldor is headquartered in Fort Smith, Arkansas. Power Systems is a leading provider of Dodge power transmission products, including mounted bearings and enclosed gearing, and Reliance Electric industrial motors, including large AC and custom, variable speed and specialty, and small and medium AC motors. The company has offices in Mexico. * * * Moody's Investors Service affirmed on Jan. 26, 2007, the B1 corporate family rating of Baldor Electric Company along with the Ba3 ratings for the proposed senior secured credit facilities and B3 ratings for the proposed US$550 million senior unsecured notes following the company's disclosure that the company intends to eliminate a preferred stock issuance from its previously announced financing plans. The rating outlook is stable. These first-time ratings are subject to final documentation. CELESTICA INC: Weak Results Cue S&P to Put Ratings on Watch ----------------------------------------------------------- Standard & Poor's Ratings Services placed its ratings, including its 'BB-' long-term corporate credit rating, on Celestica Inc. on CreditWatch with negative implications. This action follows the company's weak fourth-quarter (ended Dec. 31, 2006) operating results, which reflected larger-than-expected weakness in end-market demand, particularly with respect to key telecommunications clients and persistent problems at the company's Mexican operations. "Although revenues from the majority of Celestica's customer segments grew in the fourth quarter, revenues from the telecommunications segment declined 28% from the third quarter," said Standard & Poor's credit analyst Don Povilaitis. "Likewise, revenues declined from the automotive and defense segments, as well as the consumer business segment, demand of which (despite an element of seasonality) has become inherently unpredictable," added Mr. Povilaitis. The company's Mexican operations remain challenged, affected by the continued execution issues that resulted in lost customers and an unadjusted EBIT loss. Celestica has a three-step plan to rectify its production problems, including reducing parts complexity, reducing multiple platforms (thereby simplifying production processes), and ensuring reliable delivery by consolidating warehouses. The company also has transferred several customer orders to its Asian facilities. Standard & Poor's remains concerned with Celestica's prospects for fiscal 2007, with no improvement expected before the second half of 2007, as the company is likely to remain challenged by persistent weakness in the telecommunications segment and the effect of more customer disengagements. In addition, Standard & Poor's is concerned by the potential disruption caused by recent management turnover, with the imminent resignation of CFO Tony Puppi, which follows the departure in late 2006 of President Steve Delaney. Standard & Poor's will meet with Celestica's management shortly in order to resolve the CreditWatch placement. Based in Toronto, Ontario, Celestica, Inc. (NYSE: CLS, TSX: CLS/SV) -- http://www.celestica.com/-- provides electronic manufacturing services to original equipment manufacturers in the computing, telecommunications, aerospace and defense, automotive, consumer electronics, and industrial sectors in Asia, Mexico, Puerto Rico, Brazil, and Europe. Its solutions comprise design and engineering, manufacturing and systems integration, and fulfillment, as well as after-market services. The company has a strategic alliance with Bartolini Progetti S.p.a. Celestica was incorporated as Celestica International Holdings, Inc. in 1996 and changed its name to Celestica, Inc. The company is based in Toronto, Canada. Celestica, Inc. is a subsidiary of the Onex Corp. DELTA AIR: Unofficial Panel Upset by Official Panel's Rejection --------------------------------------------------------------- Delta Air Lines Inc.'s unofficial committee of unsecured claimholders expressed its disappointment that the official creditors' committee declined to take the actions requested by US Airways Inc. in connection with its merger proposal, thereby denying creditors the option to choose whether to accept Delta's standalone reorganization plan or pursue strategic alternatives. The unofficial committee previously sent a letter to the official creditors' committee signed by holders of approximately US$2.75 billion in unsecured claims urging them to take the actions requested by US Airways. Their failure to do so may very well result in substantially diminished creditor recoveries in this case. The unofficial committee recognizes that current Delta management's hostility to the US Airways offer complicated the decision of the official creditors' committee. As the largest organized group of unsecured claimholders of Delta, the Unofficial Committee believes that it is important that both committees now work together to decide on important remaining issues facing all creditors. The unofficial committee will continue to work towards maximizing creditor recoveries and creditor rights in Delta's chapter 11 case. As future shareholders of Delta, the members of the Unofficial Committee consider it essential that all value-enhancing opportunities continue to be explored. In the immediate term, it is an important priority that reorganized Delta be positioned to have the right management, board of directors and compensation arrangements in place and that its corporate governance not pose any obstacles to value-enhancing mergers or other strategic alternatives. The unofficial committee looks forward to working with the official creditors' committee to institute the foregoing. 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. DELTA AIR: US Airways Withdraws Merger Proposal ----------------------------------------------- US Airways withdrew its offer to merge with Delta Air Lines Inc. The airline was informed on Jan. 31 that the Official Unsecured Creditors' Committee would not meet its demands by the airline's established deadline of Feb. 1, 2007. As previously announced, US Airways' offer of US$5.0 billion in cash and 89.5 million shares of US Airways stock would have expired on Feb. 1, 2007, unless there was affirmative support from the Official Unsecured Creditors' Committee for commencement of due diligence, making the required filings under Hart-Scott-Rodino, as well as the postponement of Delta's hearing on its Disclosure Statement scheduled for Feb. 7, 2007. US Airways Chairman and Chief Executive Officer Doug Parker stated, "We are disappointed that the Committee, which has been chosen to act on behalf of all Delta creditors, is ignoring its fiduciary obligation to those creditors. Our proposal would have provided substantially more value to Delta's unsecured creditors than the Delta stand-alone plan. We would have created a better and more financially stable airline that offered more choice to consumers and increased job security to its employees. Our merger would have been able to be consummated in a reasonable time-frame and we would have been able to obtain all requisite regulatory approvals. "The publicly traded bonds of Delta have fallen precipitously since rumors of this Committee decision were leaked last week, reducing the implied market valuation of what Delta's unsecured creditors can expect to recover in these cases by over US$1.5 billion. We empathize with the investors who purchased Delta bonds at increasingly higher prices since our offer was announced last November and thank them for their support of our proposal and their confidence in our team. It is now clear that there will not be an opportunity with the Committee to move forward in a timely or productive manner and as a result, we have withdrawn our offer." Mr. Parker added, "At US Airways, we are extremely confident in our own stand-alone plan. Earlier this week, we announced a 2006 profit (excluding charges) of over US$500 million, far and away the best performance by a network airline. Our employees will share US$59 million of well-deserved profit sharing payments as a result. Looking forward, we expect even higher earnings and a higher profit sharing pool in 2007. Our 35,000 employees are doing a wonderful job of transforming US Airways and we are committed to building the best airline we can for them. I can't thank them enough for their support, encouragement, and professionalism during this process. I am very proud of how our entire team performed." About US Airways Headquartered in Arlington, Virginia, US Airways Group Inc.'s (NYSE: LCC) -- http://www.usairways.com/-- primary business activity is the ownership of the common stock of: * US Airways, Inc., * Allegheny Airlines, Inc., * Piedmont Airlines, Inc., * PSA Airlines, Inc., * MidAtlantic Airways, Inc., * US Airways Leasing and Sales, Inc., * Material Services Company, Inc., and * Airways Assurance Limited, LLC. Under a chapter 11 plan declared effective on March 31, 2003, USAir emerged from bankruptcy with the Retirement Systems of Alabama taking a 40% equity stake in the deleveraged carrier in exchange for US$240 million infusion of new capital. US Airways and its subsidiaries filed another chapter 11 petition on Sept. 12, 2004 (Bankr. E.D. Va. Case No. 04-13820). Brian P. Leitch, Esq., Daniel M. Lewis, Esq., and Michael J. Canning, Esq., at Arnold & Porter LLP, and Lawrence E. Rifken, Esq., and Douglas M. Foley, Esq., at McGuireWoods LLP, represent the Debtors in their restructuring efforts. In the Company's second bankruptcy filing, it lists US$8,805,972,000 in total assets and US$8,702,437,000 in total debts. The Debtors' chapter 11 plan for its second bankruptcy filing became effective on Sept. 27, 2005. The Debtors completed their merger with America West on the same date. US Airways, US Airways Shuttle, and US Airways Express operate approximately 3,800 flights per day and serve more than 230 communities in the U.S., Canada, Europe, the Caribbean, and Latin America. The new US Airways is a member of the Star Alliance, which provides connections for customers to 841 destinations in 157 countries worldwide. US Airways has operations in Japan, Australia, China, Costa Rica, Philippines, and Spain, among others. About Delta Air 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. DELTA AIR: CEO Comments on Creditors' Committee Support for Plan ---------------------------------------------------------------- Delta Air Lines Chief Executive Officer Gerald Grinstein issued a statement regarding the Unsecured Creditors' Committee's support for Delta's plan of reorganization: "This is a proud day for the thousands of Delta people, customers, communities, civic leaders and others who stood up for our standalone plan and said, emphatically, 'Keep Delta My Delta.' We appreciate the Unsecured Creditors' Committee's endorsement of our plan of reorganization and the diligent work of the Committee and its advisers in evaluating that plan. We also want to acknowledge the tireless work of all Delta people whose contributions are allowing us to continue the tremendous progress we have made with our restructuring plan. Using the bankruptcy process the right way, Delta people have transformed their company's business model. Our focus now is on the work still before us to emerge from Chapter 11 this spring as a strong, healthy, and vibrant global competitor." 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. DELTA AIR: S&P Holds D Rating on Withdrawn US Airways Offer ----------------------------------------------------------- US Airways Group Inc. dropped its proposed acquisition bid for Delta Air Lines Inc., removing the largest obstacle to Delta's plan to emerge from Chapter 11 as a standalone entity. The announcement has no effect on Standard & Poor's Ratings Services' 'D' corporate credit rating on Delta or the CreditWatch review of various aircraft-backed debt. Standard and Poor's ratings of enhanced equipment trust certificates, excepting 'AAA'-rated, bond-insured issues, remain on CreditWatch with developing implications, pending completion of a review of their treatment in Delta's proposed plan of reorganization. Standard & Poor's will assign a new corporate credit rating to Delta upon its emergence from bankruptcy, expected in the spring of 2007. "Delta was able to persuade a majority of its bankruptcy creditors' committee that the airline's plan to emerge as an independent company carried less risk than US Airways' proposal, which involved added debt and antitrust review by federal authorities," said Standard & Poor's credit analyst Philip Baggaley. Delta's case was helped by the fact that the creditors' committee, which represents unsecured creditors, included representatives of employees' union, suppliers, and the Pension Benefit Guaranty Corp., in addition to bondholders and other lenders. The interests of these various parties varied, making it more difficult for US Airways to line up a majority than would be the case for a typical non-bankrupt company, whose shareholders are mostly institutional investors. Delta's management has stated that the company does not exclude the possibility of entertaining other merger proposals at some point after it emerges from bankruptcy, despite opposition to US Airways' bid. Delta had lined up US$2.5 billion of bankruptcy emergence financing. The company must finalize negotiations with various creditors regarding their proposed compensation under the plan of reorganization and secure their voting approval of the plan. The creditors' committee's rejection of US Airways' proposal is separate from individual voting by each class of impaired creditors on the proposed plan of reorganization. It is possible, though not considered likely, that Delta could fail to secure the needed two-thirds of the dollar amount and a majority of the number of claims of unsecured creditors for its plan, despite today's action by the creditors' committee. If it appeared that such an outcome were possible, Delta would likely change the terms of the compensation offered to creditors in order to secure their support for the plan. 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. GRUPO MEXICO: Investing Part of Cash Reserves in Railroad --------------------------------------------------------- A spokesperson of Grupo Mexico SA de CV told Arizona Daily Star that the company will use part of its cash reserves on its railroad division. The Star relates that Grupo Mexico has built up US$530 million in reserves in 2006. Eduardo Gonzalez, chief financial officer of Grupo Mexico's Southern Copper Corp. told The Star that the parent firm's net income increased 50% to US$447.3 million in the fourth quarter of 2006, from US$298.3 million in 2005, after copper prices increased 57%. Grupo Mexico may invest in ports, warehouses and other infrastructure to stimulate growth at Infraestructura y Transporte Mexico SA de CV, The Star notes, citing Mr. Gonzalez. Mr. Gonzalez denied to The Star that Grupo Mexico is planning acquisitions. "We have no intent to use our cash reserves as a war chest. We will be responsible with our cash and won't do wild things. We will stick to our core business of transport and mining," Mr. Gonzalez commented to The Star. Grupo Mexico SA de C.V. -- http://www.grupomexico.com/-- through its ownership of Asarco and the Southern Peru Copper Company, Grupo Mexico is the world's third largest copper producer, fourth largest silver producer and fifth largest producer of zinc and molybdenum. * * * As reported in the Troubled Company Reporter-Latin America on Dec. 29, 2006, Fitch Ratings upgraded the local and foreign currency Issuer Default Rating Outlook is Stable. KRISPY KREME: Daryl Brewster & Charles Blixt Elected on Board -------------------------------------------------------------- Krispy Kreme Doughnuts Inc. reported the results of its annual meeting of shareholders held in Winston-Salem, North Carolina. Elected to the company's Board of Directors at the meeting were: a) Daryl G. Brewster, Krispy Kreme President and Chief Executive Officer, and b) Charles A. Blixt, Krispy Kreme General Counsel. In addition, six directors were re-elected to the Board: a) James H. Morgan, Chairman of the Board, b) Andrew J. Schindler, c) Robert L. Strickland, d) Michael H. Sutton, e) Lizanne Thomas and f) Togo D. West, Jr. Shareholders also rejected a shareholder proposal to declassify the Board. About Krispy Kreme Founded in 1937 in Winston-Salem, North Carolina, Krispy Kreme (NYSE: KKD) -- http://www.krispykreme.com/-- is a branded specialty retailer of premium quality doughnuts, including the Company's signature Hot Original Glazed. There are currently approximately 320 Krispy Kreme stores and 80 satellites operating systemwide in 43 U.S. states, Australia, Canada, Mexico, the Republic of South Korea and the United Kingdom. Headquartered in Winston-Salem, North Carolina, Freedom Rings LLC is a majority-owned subsidiary and franchisee partner of Krispy Kreme Doughnuts, Inc., in the Philadelphia region. Freedom Rings operates six out of the approximately 360 Krispy Kreme stores and 50 satellites located worldwide. The Company filed for chapter 11 protection on Oct. 16, 2005 (Bankr. D. Del. Case No. 05-14268). M. Blake Cleary, Esq., Margaret B. Whiteman, Esq., and Matthew Barry Lunn, Esq., at Young Conaway Stargatt & Taylor, LLP, represent the Debtor in its restructuring efforts. When the Debtor filed for protection from its creditors, it estimated US$10 million to US$50 million in assets and debts. Headquartered in Oak Brook, Illinois, Glazed Investments, LLC, is a 97%-owned unit of Krispy Kreme. Glazed filed for chapter 11 protection on Feb. 3, 2006 (Bankr. N.D. Ill. Case No. 06-00932). The bankruptcy filing will facilitate the sale of 12 Krispy Kreme stores, as well as the franchise development rights for Colorado, Minnesota and Wisconsin, for approximately US$10 million to Westward Dough, the Krispy Kreme area developer for Nevada, Utah, Idaho, Wyoming and Montana. Daniel A. Zazove, Esq., at Perkins Coie LLP represents Glazed in its restructuring efforts. When Glazed filed for protection from its creditors, it estimated assets and debts between US$10 million to US$50 million. KremeKo Inc., Krispy Kreme's Canadian franchisee, is currently restructuring under the Companies' Creditors Arrangement Act. Pursuant to the Court's Initial Order, Ernst & Young Inc. was appointed as Monitor in KremeKo's CCAA proceedings. The Monitor is attempting to sell the KremeKo business. The U.S. District Court for the Middle District of North Carolina has set Feb. 7, 2007, as the hearing date for the final approval of the terms of the settlement of the shareholder derivative action entitled Wright v. Krispy Kreme Doughnuts Inc., et al. REMY INT: To Sell Remanufacturing Asset & Systems to Caterpillar ---------------------------------------------------------------- Remy International, Inc., signed an agreement for the sale of its light and medium truck diesel engine and component remanufacturing business conducted by Franklin Power Products, Inc. and International Fuel Systems to Caterpillar Inc. for a cash purchase price of US$150 million. The purchase price is subject to adjustment for net investment in the business, including working capital, at closing. The transaction is subject to customary closing conditions, and is expected to close before the end of the first quarter of 2007. "The sale to Caterpillar represents a strategic opportunity to realize value for our stakeholders," said John Weber, President and Chief Executive Officer of Remy International. "This business has performed very well, which is a testament to the total commitment of the employees to quality and lean manufacturing. I want to thank these employees for their dedication and efforts." "This acquisition represents an excellent strategic fit between Cat Reman and these two companies. It increases our overall product and service offering, and will provide a platform for future growth opportunities for Cat Reman," said Steve Fisher, Caterpillar vice president with responsibility for remanufacturing. The first US$50 million of proceeds from the transaction will be held in a restricted account, pledged as collateral to the company's senior lenders and available for withdrawal only with consent of the lenders under the company's senior credit facility. Next, the proceeds will be used to pay down outstanding revolver borrowings at the time of the closing under the company's senior secured revolving credit and term loan facility and the revolving lender commitments under the facility, currently US$160 million, will be reduced by US$40 million. Any remaining proceeds also will be held in the restricted account, and generally will be available for use by the company for capital expenditures, to repay revolver borrowings (with a corresponding reduction in the revolver commitment) and general corporate purposes. The divestiture was managed for Remy by Brookwood Associates, L.L.C. under the direction of Thomas L. Temple. Weber commented, "I am very pleased with the high degree of competent and professional transaction management provided by both Tom and his team at Brookwood. They were a great resource to Remy over the past several months." Headquartered in Anderson, Indiana, Remy International, Inc., manufactures, remanufactures, and distributes Delco Remy brandheavy-duty systems and Remy brand starters and alternators, diesel engines, locomotive products and hybrid power technology. The company also provides worldwide components core-exchange service for automobiles, light trucks, medium and heavy-duty trucks and other heavy-duty, off-road and industrial applications. Remy was formed in 1994 as a partial divestiture by General Motors Corp. of the former Delco Remy Division, which traces its roots to Remy Electric, founded in 1896. Its Latin American operations are in Brazil and Mexico. As reported in the Troubled Company Reporter on Dec. 15, 2006, Moody's Investors Service lowered these ratings of Remy International, Inc.: -- Corporate Family Rating to Caa3 from Caa1; -- Probability of Default Rating to Caa2 from B3; -- second priority secured notes to Caa3 from B3; -- guaranteed senior unsecured notes to Caa3 from Caa1; and -- the guaranteed senior subordinated notes to Ca from Caa2. SATELITES MEXICANOS: To Receive Non-Binding Bids by March --------------------------------------------------------- Thomsa Heather -- restructuring advisor of Satelites Mexicanos, SA de CV, aka Satmex -- told Business News Americas that firms keen on acquiring the company should make non-binding bids by the start of March. BNamericas relates that Satmex emerged from a restructuring process in December 2006. Creditors acquired 76.4% of the firm and the Mexican government owned 23.6%. Much of the foreign ownership will be identified as neutral investment and the government will have 55% of the voting rights. According to BNamericas, Satmex is considering transfering ownership to a group led by a fixed satellite service provider in a process supervised by investment bank Morgan Stanley and Raul Cisneros Matusita, who was appointed as Satmex's Chief Executive Officer after the restructuring process ended. The local press says that nine firms as well as several private investment funds have expressed interest in owning Satmex. Among of the interested companies are: -- Grupo Medcom, -- Pegaso Comunicaciones, -- Intelsat, -- Echostar, -- Eutelsat, and -- SES Global. Mr. Heather told BNamericas, "[Morgan Stanley and management] have been working diligently in developing and preparing an info memo targeted for the end of January... the next step will be to send out invitations to potential strategic buyers." Published reports and industry analysts estimated the sale price at US$500 million. Satelites Mexicanos, SA de CV, provides fixed satellite services in Mexico. Satmex provides transponder capacity via its satellites to customers for distribution of network and cable television programming, direct-to-home television service, on- site transmission of live news reports, sporting events and other video feeds. Satmex also provides satellite transmission capacity to telecommunications service providers for public telephone networks in Mexico and elsewhere and to corporate customers for their private business networks with data, voice and video applications. Satmex also provides the government of the United Mexican States with approximately 7% of its satellite capacity for national security and public purposes without charge, under the terms of the Orbital Concessions. The Debtor filed for chapter 11 petition on Aug. 11, 2006, (Bankr. S.D.N.Y. Case No. 06-11868). Luc A. Despins, Esq., at Milbank, Tweed Hadley & McCloy LLP represents the Debtor in the U.S. Bankruptcy proceedings. Attorneys from Galicia y Robles, S.C., and Quijano Cortina Lopez y de la Torre give legal advice in the Debtor's Mexican Bankrutpcy proceedings. UBS Securities LLC and Valor Consultores, SA de CV, give financial advice to the Debtor. Steven Scheinman, Esq., Michael S. Stamer, Esq., and Shuba Satyaprasad, Esq., at Akin Gump Strauss Hauer & Feld LLP give legal advice to the Ad Hoc Existing Bondholders' Committee. Dennis Jenkins, Esq., and George W. Shuster, Jr., Esq., at Wilmer Cutler Pickering Hale and Dorr LLP give legal advice to Ad Hoc Senior Secured Noteholders' Committee. As of July 24, 2006, the Debtor has US$905,953,928 in total assets and US$743,473,721 in total liabilities. On May 25, 2005, certain holders of Satmex's Existing Bonds and Senior Secured Notes filed an involuntary chapter 11 petition against the Company (Bankr. S.D.N.Y. Case No. 05-13862). On June 29, 2005, Satmex filed a voluntary petition for a Mexican reorganization, known as a Concurso Mercantil, which was assigned to the Second Federal District Court for Civil Matters for the Federal District in Mexico City. On Aug. 4, 2005, Satmex filed a petition, pursuant to Section 304 of the Bankruptcy Code that commenced a case ancillary to the Concurso Proceeding and a motion for injunctive relief that sought among other things, to enjoin actions against Satmex or its assets (Bankr. S.D.N.Y. Case No. 05-16103). Satmex concluded its reorganization efforts on Nov. 30, 2006, and emerged from its U.S. bankruptcy case. The company consummated its U.S. chapter 11 plan of reorganization, which was confirmed by the United States Bankruptcy Court for the Southern District of New York by order dated Oct. 26, 2006, and implemented the restructuring approved in Satmex's Mexican Concurso Mercantil proceeding by the Concurso Plan Order issued on July 14, 2006. * MEXICO: Cantarell's Daily Output Declines by 500,000 Barrels -------------------------------------------------------------- Figures from the Mexican Energy Ministry showed that daily production at Cantarell, the country's biggest oil field, decreased 500,000 million barrels in 2006, The Wall Street Journal reports. According to the Journal, Cantarell's daily production decreased to 1.5 million barrels in December 2006, from 1.99 barrels in January 2006. David Shields, an oil industry consultant in Mexico City, who's been warning about the declining output at Cantarell for the past two years, commented to the Journal: "This is bad news for Mexico. The field is declining faster than even the government's pessimistic scenarios." Production decline at Cantarell could mean: -- pressure prices on the global oil market, -- complicate US efforts to spread its oil imports away from the Middle East, and -- threaten Mexico's financial stability. Cantarell was the world's second-biggest oil field in terms of production in January 2006. The Journal underscores that Cantarell's production drop is expected to continue or worsen in 2007. This would mean that oil from the world market would decline, while oil demand from growing economies like China and India are increasing. Also, Mexico would have to export lesser oil to the US. Mexico is one of the US' three biggest suppliers of oil. The production decrease at Cantarell would also affect Mexican President Felipe Calderon, who could be forced to reduce government spending. The Mexican leader will also be pressured to open the nation's energy market to private investors to help Pemex in finding new oil deposits. However, it would be hard to convince Congress -- dominated by the opposition -- to revise the country's constitution. The Journal had previously published an internal Pemex study, which predicted that Cantarell's output would drop to 1.54 million barrels daily by the end of 2006. However, top Pemex officials objected to the study, saying that it didn't take into account maintenance at the field. Pemex predicted that Cantarell production would decrease to 1.87 million barrels per day by December 2006, while its overall output would increase to 3.42 million barrels daily. Pemex then claimed that it can offset production decreases at Cantarell with new output from other fields. Mr. Shields, the Journal says, expects Cantarell's production to fall another 600,000 barrels daily by the end of 2007, based on Pemex's track record at Cantarell, including its current rates of recovering the oil that remains in the field. Mexico's overall oil production decreased to below three million barrels daily in December 2006, from almost 3.4 million barrels in January 2006. It is the country's lowest rate of oil output since 2000, the Journal relates. Oil exports account for 37% of the Mexican government's revenue. Mexico's daily average oil exports decreased to 1.79 million barrels per day in 2006, compared with 1.82 million in 2005, according to the Journal. Pemex said it expects exports to decline to an average 1.65 million barrels per day in 2007. However, December's daily exports were 1.53 million barrels, which was below Pemex's estimates for 2007, analysts commented to the Journal. Pemex will likely boost production by 200,000 barrels daily at other fields. Mexico would have a net decline of 400,000 barrels a day by the end of this year and daily exports would be lower than 1.4 million barrels, Mr. Shields told the Journal. * * * 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 ================= * NICARAGUA: Vice President Overseeing Business & Investments ------------------------------------------------------------- Nicaragua's Vice President Jaime Morales will administer business, banking and investments in the nation, Prensa Latina reports. Prensa Latina relates that the vice president will work on the collaboration between the Nicaraguan cabinet and foreign financial entities and advise President Daniel Ortega on tourism, environment and duty free zones. Vice President Morales will also lead a delegation to a Central American forum in Costa Rica to discuss integration and investment, Prensa Latina notes. The forum will be sponsored by that the International Monetary Fund and the World Bank. Meanwhile, President Ortega told Prensa Latina that he will check on policies that exacerbated poverty in the nation. * * * Moody's Investor Service assigned these ratings to Nicaragua: Rating Rating Date ------ ----------- Long Term Caa1 June 30, 2003 Senior Unsecured Debt B3 June 30, 2003 =========== P A N A M A =========== SOLO CUP: S&P Holds CCC- Rating on Second-Lien Term Loan -------------------------------------------------------- Standard & Poor's Ratings Services revised its recovery rating on Solo Cup Co.'s second-lien term loan to '5' from '4'. This, together with the 'CCC-' rating on the second-lien loan, indicates the agency's expectation that lenders under this facility would experience negligible (0%-25%) recovery of principal in a payment default. The revision was prompted by a recent US$50 million increase in the second-lien loan to US$130 million. At the same time, S&P affirmed all its other ratings on Solo, including the 'CCC+' corporate credit rating. The outlook remains negative. "The ratings on Solo reflect its vulnerable business risk profile, very high debt leverage, and thin, albeit improved, liquidity," said Standard & Poor's credit analyst Cynthia Werneth. With annual revenues of about US$2.5 billion, Highland Park, Ill.-based Solo is one of the largest providers of disposable paper and plastic cups, plates, and cutlery to foodservice distributors, quick-service restaurants, and retailers in the U.S. Solo doubled in size in 2004 after acquiring SF Holdings Group Inc., the parent of Sweetheart Cup Co. Inc. Financing for the acquisition, mostly debt, included a minority equity stake from Vestar Capital Partners. Recently, Vestar gained control of the company's board of directors because Solo did not meet targets set forth in the stockholders' agreement. The US$50 million increase in Solo's second-lien term loan reduced immediate liquidity concerns and provided some time for the company to execute its various initiatives to improve earnings and cash flow and sell assets to reduce debt. However, until progress has been made, we remain concerned about Solo's ability to weather stiff competition or any slowdown in demand, and absorb any raw material cost increases or other adverse developments. As a result, ratings could still be lowered if progress is not made fast enough to stave off another liquidity crisis. However, S&P could revise the outlook to stable or positive if the company successfully executes its profit improvement and asset sale plan, significantly reduces debt leverage, and maintains a comfortable level of liquidity. 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 E R U ======= * PRIDE INT'L: To Pay Back Taxes of US$32.5 Million to Seniat ------------------------------------------------------------- Venezuelan tax authority, Integrated National Customs and Tax Administration Service or Seniat, objected to the 2002 tax filings of Pride International, a US oilfield-services major, reports say. Seniat questioned Pride's costs, expenses and losses for previous years for the amount of VEB70.2 billion or US$32.5 million. Other smaller oilfield services have also been presented with similar objections. According to El Universal, the action taken by Seniat is part of the "Plan Zero Evasion." Pride officials did not comment on this claim by the internal revenue service. About Pride International Headquartered in Houston, Texas, Pride International, Inc. -- http://www.prideinternational.com/-- is a drilling contractor. The Company provides onshore and offshore drilling and related services in more than 25 countries, operating a diverse fleet of 278 rigs, including two ultra-deepwater drillships, 12 semi submersible rigs, 28 jackup rigs, 18 tender-assisted, barge and platform rigs, and 218 land rigs. Pride also provides a variety of oilfield services to customers in Argentina, Venezuela, Bolivia and Peru. * * * As reported in the Troubled Company Reporter on Sept. 15, 2006, Standard & Poor's Ratings Services affirmed its 'BB' corporate credit rating on contract driller Pride International Inc. and removed the rating from CreditWatch with negative implications. The outlook is stable. As of June 30, 2006, Houston, Texas- based Pride had US$1.01 billion in adjusted debt. 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. * PERU: Perupetro Secured US$690 Mil. from 16 Contracts in 2006 --------------------------------------------------------------- Peruvian hydrocarbons promotion agency Perupetro has secured for the government PEN2.21 billion or US$690 million from hydrocarbons production and has signed 16 contracts in 2006, the energy and mines ministry disclosed in a statement. In 2005, the agency obtained 15 contracts. According to the ministry, the most important contract was with Barret Resources' Peruvian unit for the development of block 67, BNamericas relates. The company intends to pour in about US$1 bilion in investments for the block's development and production, which is expected to start in 2010. The projected output from block 67 is about 100,000 barrels per day at its peak, which will make Peru to become a net oil exporter, BNamericas says. * * * As reported in the Troubled Company Reporter on Nov. 22, 2006, Standard & Poor's Ratings Services raised its long-term foreign currency sovereign credit rating on the Republic of Peru to 'BB+' from 'BB' and its long-term local currency sovereign credit rating to 'BBB-' from 'BB+'. Standard & Poor's also raised its short-term local currency sovereign credit rating to 'A-3' from 'B', and affirmed its 'B' short-term foreign currency sovereign credit rating on the republic. The outlook on the ratings was revised to stable from positive. Standard & Poor's also raised its assessment of the risk of transfer and convertibility to 'BBB' from 'BBB-'. ===================== P U E R T O R I C O ===================== DORAL FIN'L: Pays Cash Dividend on 4 Series of Preferred Stock -------------------------------------------------------------- Doral Financial Corp. disclosed that, on Jan. 31, 2007, it paid the regular monthly cash dividend on the company's: -- 7% Noncumulative Monthly Income Preferred Stock, Series A, in the amount of US$0.2917 per share; -- 8.35% Noncumulative Monthly Income Preferred Stock, Series B, in the amount of US$0.173958 per share; and -- 7.25% Noncumulative Monthly Income Preferred Stock, Series C, in the amount of US$0.151042 per share. The dividend on each of the series was paid to the record holders as of the close of business on Jan. 29, 2007, in the case of the Series A Preferred Stock, and to the record holders as of the close of business on Jan. 15, 2007, in the case of Series B and Series C Preferred Stock. Doral also announced that the quarterly dividend on the company's 4.75% perpetual cumulative convertible preferred stock, in the amount of US$2.96875 per share, which was approved by the Board of Directors on Jan. 30, 2007, will be paid on March 15, 2007 to holders of record as of the close of business on March 1, 2007. 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. FIRSTBANK PUERTO RICO: Scotiabank To Buy Bank, Analyst Says ----------------------------------------------------------- Canada's Bank of Nova Scotia or Scotiabank has reportedly made a written offer to purchase Firstbank of Puerto Rico, analyst Jason Bilodeau said, citing Caribbean Business. Puerto Rico's banking sector is ripe for consolidation due to a sluggish loan market, the National Post says, citing Mr. Bilodeau. The analyst estimates that First Bancorp -- Firstbank's parent -- has a market value of about US$770 million. Frank Switzer, Scotiabank's director of public affairs, told the National Post, that the bank does not comment on speculations. Scotiabank has 20 branches in Puerto Rico and holds a 3% market share, Business News Americas says. A Firstbank purchase would add 139 branches to Scotiabank, making it one of the three largest lenders in Puerto Rico. FirstBank Puerto Rico, headquartered in San Juan, Puerto Rico, reported total assets of roughly US$19 billion at year-end 2005. As reported in the Troubled Company Reporter-Latin America on June 30, 2006, Moody's Investors Service confirmed the ratings of FirstBank Puerto Rico at Ba1 for deposits. The bank's D+ rating for financial strength was also confirmed. Moody's placed the ratings' outlook at negative. NEWCOMM WIRELESS: Committee Seeks to Retain Foley as Counsel ----------------------------------------------------------- The Official Committee of Unsecured Creditors of Newcomm Wireless Services, Inc., has asked the U.S. Bankruptcy Court for the District of Puerto Rico to authorize the retention of Foley & Lardner LLP as its counsel, nunc pro tunc to Dec. 11, 2006. The Committee members are: -- Magnetiks International, Inc., -- TLD de Puerto Rico, Inc., -- Caribbean American Property Insurance Co., -- Syniverse Technologies, Inc., and -- Munoz Metro Office. Foley & Lardner will: a. advise the Committee with respect to its rights, powers and duties; b. advise the Committee in its consultations with the Debtor relative to the administration of this chapter 11 case; c. advise the Committee in analyzing the claims of the Newcomm Wireless' creditors and in negotiating with the creditors; d. advise the Committee with respect to its investigation of the acts, conduct, assets, liabilities, and financial condition of Newcomm Wireless and its lenders, the operation of the Debtor's business and the desirability of the continuance of the business, and any other matters relevant to the Chapter 11 case or to the formation of a plan of reorganization; e. advise the Committee with respect to the contemplated sale of the Debtor's assets, plans for upgrading the Debtor's telecommunications network, and payments to the Federal Communications Commission; f. assist the Committee in its analysis of, and negotiations with, the Debtor or any third party concerning matters related to, among other things, DIP financing to be obtained in this case and the terms of a Chapter 11 plan for the Debtor; g. assist and advise the Committee with respect to its communications with the general creditor body regarding significant matters in the case; h. represent the Committee in any litigation that may be necessary, and at hearings and other proceedings; i. review and analyze all applications, orders, statements of operations, and schedules filed with the Court and advise the Committee as to their propriety; j. assist the Committee in preparing pleadings and applications as may be necessary in furtherance of the Committee's interests and objections; and k. perform other legal services as may be required and are deemed to be in the interests of the Committee in line with the Committee's powers and duties as set forth in the Bankruptcy Code. Michael P. Richman, Esq., a partner at Foley, assures the Court of his firm's disinterestedness as that term is defined in Section 101(14) of the Bankruptcy Code. Mr. Richman also discloses the firm's professionals' hourly billing rate: Professional Hourly Rate Richman, Michael P. US$697.50 Wolfson, Mark J. US$450.00 DiCastri, Frank W. US$410.00 Vaughan, Lori V. US$410.00 Reck, Kevin A. US$370.00 Chiappetta, Darren S. US$275.00 Valiente, Lauren L. US$260.00 Walker, Lisa (paralegal) US$170.00 Foley & Lardner LLP can be reached at: Attention: Michael P. Richman Mark J. Wolfson Lori V. Vaughan W. Keith Fendrick 90 Park Avenue New York, NY 10016 USA Phone: (212) 682-7474 Fax: (212) 687-2329 E-mail: mrichman@foley.com mwolfson@foley.com lvaughan@foley.com wfendrick@foley.com Based in Guaynabo, Puerto Rico, NewComm Wireless Services Inc. is a PCS company that provides wireless service to the Puerto Rico market. The company is a joint venture between ClearComm, L.P. and Telefonica Larga Distancia. The company filed for chapter 11 protection on Nov. 28, 2006 (Bankr. D. P.R. Case No. 06-04755). Carmen D. Conde Torres, Esq., at C. Conde & Assoc. and Peter D. Wolfston, Esq., at Sonnenschein Nath & Rosenthal LLP represent the Debtor in its restructuring efforts. On Dec. 6, 2006, the United States Trustee for Region 21 appointed a five-member committee of unsecured creditors. When the Debtor filed for protection from its creditors, it reported assets and liabilities of more than US$100 million. PILGRIM'S PRIDE: Declares 2-1/4 Per Share Quarterly Dividend ------------------------------------------------------------ Pilgrim's Pride Corp.'s board of directors has declared a quarterly dividend of 2-1/4 cents per share. The quarterly dividend is payable on March 30, 2007, to shareholders of record at the close of business on March 16, 2007. 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. * * * As reported in the Troubled Company Reporter on Jan. 18, 2007, Moody's Investors Service downgraded the senior unsecured credit rating for Pilgrim's Pride Corp. to B1 from Ba3, its senior subordinated notes to B2 from B1, and its corporate family ratings to Ba3 from Ba2. Moody's also assigned a B1 rating to PPC's planned new US$250 million senior unsecured notes and a B2 to its new US$200 million senior subordinated notes. The outlook on all ratings is stable. Standard & Poor's Ratings Services reported that the corporate credit rating on the largest U.S. poultry processor, Pilgrim's Pride Corp., was lowered to 'BB-' from 'BB'. PILGRIM'S PRIDE: Incurs US$8.7MM Net Loss in Qtr. Ended Dec. 30 --------------------------------------------------------------- Pilgrim's Pride Corp. reported a net loss of US$8.7 million on total sales of US$1.34 billion for the first quarter ended Dec. 30, 2006. For the first quarter of fiscal 2006, the company reported net income of US$25.7 million on total sales of US$1.34 billion. "Our financial results for the first quarter of fiscal 2007 reflect the continued operating challenges facing the U.S. chicken industry," said O.B. Goolsby, Jr., Pilgrim's Pride president and chief executive officer. "Sharp increases in feed-ingredient costs, driven largely by surging demand for corn-based ethanol, represent the most significant threat to our business at this time. Ultimately these higher costs will be passed on to consumers in the form of higher prices for chicken products. While market pricing for U.S. chicken products has shown some improvement recently, thanks in part to industry-wide production cutbacks, it simply is not where it needs to be to offset these cost increases for corn and soybean meal." "Now more than ever, it is important for us to execute on our strategic plan and seize opportunities to build our business, whether by adjusting our product mix, strengthening our brand identity with consumers, or shortening the time it takes to bring new products to market. We are confident that our continued focus on higher-margin prepared foods products, coupled with industry-wide production cutbacks, will help return us to normalized profitability when markets improve," he added. On Dec. 27, 2006, Pilgrim's Pride acquired Gold Kist Inc., creating the world's leading chicken company in terms of production and the fourth-largest U.S. meat protein company by revenues. "We are now ready to begin realizing the compelling strategic value and benefits we envisioned from this acquisition. The integration is off to a good start. We have appointed more than a dozen integration teams composed of employees from Pilgrim's Pride and the former Gold Kist to drill down into every area of the business looking for opportunities to improve the way we operate and eliminate unnecessary costs. They are making good progress and we now believe that our synergy savings will be in the range of US$100 million, an increase from our original estimate of US$50 million last fall when we commenced the tender offer process and only had access to publicly available information," Mr. Goolsby said. 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. * * * As reported in the Troubled Company Reporter on Jan. 18, 2007, Moody's Investors Service downgraded the senior unsecured credit rating for Pilgrim's Pride Corp. to B1 from Ba3, its senior subordinated notes to B2 from B1, and its corporate family ratings to Ba3 from Ba2. Moody's also assigned a B1 rating to PPC's planned new US$250 million senior unsecured notes and a B2 to its new US$200 million senior subordinated notes. The outlook on all ratings is stable. Standard & Poor's Ratings Services reported that the corporate credit rating on the largest U.S. poultry processor, Pilgrim's Pride Corp., was lowered to 'BB-' from 'BB'. SUNCOM WIRELESS: Reaches Consensual Agreement with Bondholders -------------------------------------------------------------- SunCom Wireless Holdings Inc., in a move intended to reduce its debt by approximately US$679.3 million and annual interest payments by approximately US$62 million, reported that the company and its subsidiaries have reached a consensual agreement with bondholders who hold or beneficially own more than 91% of the outstanding 9-3/8% Senior Subordinated Notes due 2011 and 8- 3/4% Senior Subordinated Notes due 2011 of its indirect, wholly owned subsidiary, SunCom Wireless Inc., to exchange their Notes for approximately 87% of SunCom Wireless Holdings' common stock. The exchange will provide the company greater financial flexibility. Completion of the exchange, which was unanimously approved by the SunCom Wireless Holdings board of directors, is expected in the second quarter of 2007, subject to approval by SunCom Wireless Holdings shareholders, regulatory approval and other customary closing conditions. SunCom Wireless Holdings said that its Board of Directors will pursue strategic alternatives, including the potential sale of substantially all of its business, and has engaged Goldman, Sachs & Co. as its strategic advisor, for the purpose of maximizing the company's value to its stockholders. Michael E. Kalogris, chairman and chief executive officer of SunCom Wireless Holdings, said, "While SunCom Wireless occupies a strong, growing and highly competitive position in the Southeastern portion of the United States, Puerto Rico and the U.S. Virgin Islands, the company's debt load poses a challenge. We are, therefore, pleased that our bondholders have worked with us to reach this agreement. The proposed debt-for-equity exchange will provide SunCom stability and financial flexibility to pursue its business strategy. Our Board considered many options and this agreement represents, in our opinion and that of our independent advisors, the best solution for our shareholders while enabling SunCom the opportunity to continue to provide our customers the very best wireless service possible. "The debt reduction will strengthen the company for the benefit of our one million loyal customers and our thousands of dedicated employees. Additionally, the Board's decision to pursue strategic alternatives, including a potential sale transaction, has the potential to maximize the value of the company for shareholders," added Mr. Kalogris. Under the terms of the Exchange Agreement, SunCom Wireless Holdings will contribute newly issued shares representing approximately 87% of its Class A Common Stock (after giving effect to the conversion of outstanding Class B Common Stock) to SunCom Wireless Investment Company LLC, a wholly owned subsidiary of SunCom Wireless Holdings, which will then exchange that shares in a private placement for the Notes held or beneficially owned by the participating bondholders. Following completion of the transaction, current SunCom Wireless stockholders will hold approximately 13% of the Class A Common Stock. Prior to the exchange, the company will effect a merger transaction with one of its wholly owned subsidiaries whereby each outstanding share of its Class A Common Stock will be converted into 0.1 share of Class A Common Stock for the purpose, among others, of implementing a 1-for-10 reverse stock split. Following completion of the exchange, a new ten-member SunCom Wireless Holdings Board of directors will be constituted. Mr. Kalogris will continue as chairman of the board, as well as chief executive officer, and Scott Anderson, chairman of the audit committee, will remain in that position on the Board. The other eight directors will initially be designated by various participating bondholders. Additionally, the SunCom Wireless senior management team will remain in place. Based in Berwyn, Pennsylvania, SunCom Wireless Holdings Inc. (NYSE: TPC) (OTC: SWSH.OB) -- http://www.suncom.com/-- offers digital wireless communications services to more than one million subscribers in the southeastern United States, Puerto Rico and the U.S. Virgin Islands. SunCom is committed to delivering Truth in Wireless by treating customers with respect, offering simple, straightforward plans and by providing access to the largest GSM network and the latest technology choices. SunCom Wireless' balance sheet showed a stockholders' deficit of US$378,099,000 at Sept. 30, 2006, compared with a deficit of US$338,223,000 at June 30, 2006. ================================= T R I N I D A D & T O B A G O ================================= HILTON HOTELS: Reports Strong Results for Quarter Ended Dec. 31 --------------------------------------------------------------- Hilton Hotels Corp. reported financial results for the fourth quarter and fiscal year ended Dec. 31, 2006. Fourth quarter highlights compared with fourth quarter 2005 are as follows: * Diluted EPS of US$0.50 vs. US$0.26 in 2005, an increase of 92%; * Total company Adjusted EBITDA of US$485 million, up 78%; * Pro forma worldwide comparable owned RevPAR increased 10.7% driven by strong rate increases and high demand in most major markets. Pro forma worldwide comparable owned margins improved 90 basis points; * Fees up 60% to US$182 million on strong RevPAR and unit growth, the favorable impact of the Hilton International acquisition and a one-time termination fee; and * Timeshare profitability up 11%. Hilton reported fourth quarter 2006 net income of US$207 million compared with US$105 million in the 2005 quarter. Diluted net income per share was US$0.50 in the 2006 fourth quarter, versus US$0.26 in the 2005 period. In total, non-recurring items benefited the 2006 quarter by approximately US$.11 per share as follows: * US$11 million pre-tax benefit (US$.02 per share) from contract termination fees related to the sale of a joint-venture hotel; * US$14 million pre-tax gain (US$.02 per share) on foreign currency transactions; * US$6 million benefit (US$.01 per share) to the tax provision related to a prior year's tax return; * US$36 million pre-tax gain (US$.06 per share) on asset sales and other items, including a US$22 million pre-tax gain from the sale of a joint-venture hotel in which the company had a minority interest. Additionally, fourth quarter results included a revision to the full year effective tax rate primarily due to higher than expected utilization of foreign tax credits against the company's U.S. income tax liability. This revision benefited fourth quarter results by US$31 million or US$0.07 per share. In the 2005 fourth quarter, non-recurring items benefited results by US$0.04 per share. The company reported fourth quarter 2006 total operating income of US$358 million (an 85% increase from the 2005 quarter,) on total revenue of US$2.232 billion (a 106% increase from US$1.083 billion in the 2005 quarter.) Total company earnings before interest, taxes, depreciation and amortization (Adjusted EBITDA) were US$485 million, an increase of 78% from US$273 million in the 2005 quarter. System-wide RevPAR; Management/Franchise Fees All of the company's brands reported significant system-wide revenue-per-available-room increases, with particularly strong gains in average daily rate. On a system-wide basis (including owned, leased, managed and franchised properties) and pro forma as if the acquisition of Hilton International had occurred Jan. 1, 2005, the company's brands showed fourth quarter RevPAR gains as follows: -- Scandic, 18.1%; -- Conrad, 15.8%; -- Hilton, 12.2%; -- Embassy Suites, 9.9%; -- Doubletree, 9.7%; -- Hampton, 9.0%; -- Hilton Garden Inn, 8.1%; and -- Homewood Suites by Hilton, 6.9%. Management and franchise fees increased 60% in the fourth quarter to US$182 million, benefiting from RevPAR gains, the addition of new units, and the acquisition of HI. Fees in the quarter also include a one-time US$11 million management contract termination fee related to a joint-venture hotel. The property was sold and converted to a franchised hotel during the quarter. Owned Hotel Results Continued strong demand trends and pricing power resulted in high single digit or double digit ADR increases at many of the company's gateway hotels around the world. Business transient, group and leisure segments each showed significant ADR improvement. Across all brands, revenue from the company's owned hotels (majority owned and controlled hotels) was US$683 million in the fourth quarter 2006, a 39% increase from US$490 million in the 2005 quarter. Total owned hotel expenses were up 34% in the quarter to US$459 million. Comparable North America owned revenue and expenses increased 10.7% and 9.2%, respectively. Expenses were impacted by higher insurance and marketing costs. RevPAR from comparable N.A. owned hotels increased 10.2% (91% rate driven.) Comparable N.A. owned hotel occupancy increased 0.7 points to 76.3%, while ADR increased 9.2% to US$220.77. Particularly strong RevPAR growth was reported at the company's owned hotels in Chicago, New York, San Francisco and Phoenix. Results also benefited from higher food and beverage revenue and profits in the quarter. Comparable N.A. owned hotel margins in the fourth quarter increased 90 basis points to 33.4%. The aforementioned higher insurance and marketing costs impacted margins by approximately 120 basis points. Renovation activity at the Waldorf-Astoria, Hilton New York and Hilton Hawaiian Village did not significantly impact results during the fourth quarter. On a pro forma basis, as if the acquisition of HI had occurred Jan. 1, 2005, comparable international owned revenue and expenses increased 9.7% and 8.7%, respectively. Pro forma RevPAR from international comparable owned hotels increased 12.8% (92% rate driven.) Occupancy increased 0.7 points to 68.9%, while ADR increased 11.7% to US$147.34. Strong results were reported in Barcelona, Brussels, Sao Paulo and Zurich. Excluding the impact of foreign exchange, RevPAR from international comparable owned hotels increased 6.0%. Pro forma comparable international owned margins improved 70 basis points to 26.5%. On a worldwide basis, pro forma comparable owned RevPAR increased 10.7% (91% rate driven,) with margins increasing 90 basis points to 31.8%. Excluding the impact of foreign exchange, worldwide pro forma comparable owned RevPAR increased 9.2%. Leased Hotels Revenue from leased hotels was US$731 million in the fourth quarter 2006 compared with US$24 million in the 2005 quarter, while leased hotel expenses were US$605 million in the current quarter versus US$22 million last year. The EBITDAR-to-rent coverage ratio was 1.9 times in the quarter. Pro forma comparable leased revenue increased 14.0%, leased expenses increased 11.6% and margins increased 170 basis points to 17.0%. RevPAR from comparable leased properties increased 17.4%. Excluding the impact of foreign exchange, RevPAR from comparable leased hotels increased 9.9%. Strong results were reported at the company's leased hotels in London, Amsterdam, Paris, and across Germany and the Nordic region. Hilton Grand Vacations Hilton Grand Vacations Company or HGVC, the company's vacation ownership business, reported an 11% increase in profitability in the fourth quarter of 2006 compared with 2005, due primarily to increased financing income. Although average unit sales prices increased 15% and unit sales increased 8%, percentage-of- completion accounting negatively impacted the reported results. HGVC had fourth quarter revenue of US$142 million, a 9% increase from US$130 million in the 2005 quarter. Expenses were US$121 million in the fourth quarter, compared with US$111 million in the 2005 period. Brand Development/Unit Growth In the fourth quarter, the company added 59 properties and 9,040 rooms to its system as: -- Hilton Garden Inn, 18 hotels and 2,616 rooms; -- Hampton Inn, 21 hotels and 1,980 rooms; -- Embassy Suites, 5 hotels and 1,384 suites; -- Hilton, 4 hotels and 1,136 rooms; -- Homewood Suites by Hilton, 8 hotels and 885 suites; -- Doubletree, 2 hotels and 438 rooms; and -- other, 1 hotel and 601 rooms. Nineteen properties and 4,066 rooms were removed from the system during the quarter. During the fourth quarter, the company added new full-service hotels in Boston, Chicago, Mexico City, Tampa, Honolulu, Kauai, and Manchester, U.K. The company also added the Qasr Al Sharq in Jeddah, Saudi Arabia to the Waldorf=Astoria Collection. In addition, the company opened new Hilton Garden Inns in Florence and Rome, Italy. During the quarter, the company announced plans to form a joint venture with DLF Limited to develop hotel properties and serviced apartments in India. The joint-venture company plans to develop and own 50-75 midscale and extended-stay hotels over the next seven years. The company also announced an agreement to develop and franchise an initial 25 Hilton Garden Inns in Beijing, Shanghai and Tianjin, China to Deutsche Asset Management and HQ Asia Pacific. The company also announced that it has signed a management agreement for a new Conrad in Koh Samui, Thailand scheduled to open in 2008. At Dec. 31, 2006, the Hilton worldwide system consisted of 2,935 properties and 501,478 rooms. The company's current development pipeline is its biggest yet, and the largest for any U.S.-based hotel company, with more than 775 hotels and 110,000 rooms at Dec. 31, 2006. Approximately 90% of the hotels in the current development pipeline are in the Americas (U.S., Canada, Mexico and South America,) though international development is expected to comprise an increasingly larger%age of the company's development pipeline over the next few years. Asset Dispositions Hilton noted that the sale processes continue for the Scandic portfolio, 10 hotels in Continental Europe, the Hilton Caledonian in Scotland, and six properties in the U.S. First or second round bids have been received for 14 of the 17 properties for sale and Scandic. As previously announced, during the fourth quarter the company completed the sale of two hotels located in the U.K., the 1,054- room Hilton London Metropole and the 794-room Hilton Birmingham Metropole, for GBP417 million. Corporate Finance At Dec. 31, 2006, Hilton had total debt of US$6.97 billion (net of approximately US$500 million of debt and capital lease obligations resulting from the consolidation of certain joint- venture entities and a managed hotel, which are non-recourse to Hilton,) a reduction of approximately US$860 million from Sept. 30, 2006. Of the US$6.97 billion, approximately 53% is floating rate debt. Total cash and equivalents (including restricted cash of approximately US$293 million) were approximately US$420 million at Dec. 31, 2006. The company's average basic and diluted share counts for the fourth quarter were 387 million and 422 million, respectively. Hilton's debt currently has an average life of 6.1 years, at an average cost of approximately 6.6%. Hilton's effective tax rate in the fourth quarter 2006 was 22.5%. As previously noted, the fourth quarter effective tax rate benefited from a higher than expected utilization of full- year 2006 foreign tax credits and a non-recurring item related to the prior year's tax return. Total capital expenditures in the fourth quarter were approximately US$300 million, including US$40 million for timeshare development. Full-Year Results For full-year 2006, Hilton reported net income of US$572 million, compared with US$460 million in 2005. Diluted net income per share was US$1.39 versus US$1.13 in 2005. Non- recurring items benefited the 2006 full-year period by US$.18 per share, versus US$.28 per share in 2005. On a recurring basis (including the full year impact of a lower effective tax rate due to higher than expected utilization of foreign tax credits,) EPS was US$1.21 versus US$.85 in 2005, an increase of 42%. Total company operating income was US$1.274 billion in 2006 (compared with US$805 million in 2005) on revenue of US$8.162 billion (compared with US$4.437 billion in 2005.) Total company Adjusted EBITDA was US$1.742 billion, a 53% increase from US$1.140 billion in 2005. Management and franchise fees were US$684 million, a 51% increase from US$452 million in 2005. Timeshare profitability was up 19% versus 2005. The company added 223 hotels and 35,970 rooms in 2006. 2007 Outlook The 2007 guidance includes incremental operating and corporate costs associated with international growth and development activities and technology initiatives. The guidance also includes cost increases related to stock compensation, including incremental costs from extending the company's equity compensation plans to international employees. The 2007 effective tax rate guidance assumes full utilization of available foreign tax credits. As previously communicated, 2007 diluted EPS guidance includes these two items which combine to adversely impact diluted EPS growth by a total of US$.14 per share: * The company's timeshare business is expected to be negatively impacted, from a reporting standpoint, by percentage-of-completion accounting associated with new projects. The net change attributable to percentage-of-completion accounting between 2006 and 2007 is expected to total approximately US$60 million pre-tax, or US$.09 per share. The company expects the impact of percentage-of-completion accounting on 2007 results to reverse in 2008. * Reported earnings growth in 2007 is expected to be impacted by the timing of the HI acquisition. Results in 2006 include HI from the Feb. 23, 2006 acquisition date. Had the acquisition been completed on Jan. 1, 2006, expected full-year 2006 results would have been reduced by approximately US$.05 per share. During the period Jan. 1 to Feb. 23, 2006 HI's pro forma fixed costs significantly exceeded its operating performance due to the seasonally weak business environment of the period. Total capital spending in 2007 is expected to be approximately US$985 million as: -- approximately US$320 million for routine improvements and technology, -- approximately US$315 million for timeshare projects and -- approximately US$350 million for hotel renovation, special projects, and hotel investments. To the extent the company completes additional asset sales, capital expenditures would be expected to decrease. The company expects to add approximately 255 hotels and 35,000 rooms to its system in 2007. Stephen F. Bollenbach, co-chairman and chief executive officer of Hilton Hotels Corporation, said, "A historic and successful year that began with our acquisition of Hilton International ended with another strong quarter, highlighted by excellent RevPAR growth both domestically and internationally, and significant progress in introducing our brands to new markets around the world. We are particularly excited about the agreements we signed with respected partners to develop Hilton Garden Inns and other Hilton Family brands in India and China. These agreements lay the foundation for our global growth going forward. "With our market leading presence in such robust markets as New York City, Chicago, Hawaii and London; a domestic and international development pipeline that guarantees rapid growth, and strong demand for our timeshare properties, the elements are in place for continued solid operating results in 2007." Mr. Bollenbach concluded, "We expect that the operational, development, marketing and financial plans we have in place for 2007 will further enhance our industry-leading position." Headquartered in Beverly Hills, California, Hilton Hotels Corp. -- http://www.hilton.com/-- together with its subsidiaries, engages in the ownership, management, and development of hotels, resorts, and timeshare properties, as well as in the franchising of lodging properties in the United States and internationally, including Barbados, Costa Rica and Trinidad and Tobago in Latin America. * * * Moody's Investors Service confirmed its Ba2 Corporate Family Rating for Hilton Hotels Corp. in connection with its implementation of its new Probability-of-Default and Loss-Given- Default rating methodology for the gaming, lodging and leisure sectors. Additionally, Moody's revised and held its probability-of- default ratings and assigned loss-given-default ratings on these loans and bond debt obligations: Projected Old POD New POD LGD Loss-Given Debt Issue Rating Rating Rating Default Senior Notes with an average rate of 8.1% due 2007 - 2031 Ba2 Ba2 LGD4 53% Chilean inflation indexed note effective rate 7.65% due 2009 Ba2 Ba2 LGD4 53% 3.375% Contingently convertible senior notes due 2023 Ba2 Ba2 LGD4 53% Minimum Leases Commitments Ba2 Ba2 LGD4 53% Term Loan A at adjustable rates due 2011 Ba2 Ba2 LGD4 53% Term Loan B at adjustable rates due 2013 Ba2 Ba2 LGD4 53% Revolving loans at adjustable rates, due 2011 Ba2 Ba2 LGD4 53% Senior unsecured debt shelf Ba2 Ba2 LGD4 53% Subordinate debt Shelf Ba3 B1 LGD6 97% Preferred B1 B1 LGD6 97% HILTON HOTELS: Fitch Upgrades Debt Ratings to BB+ from BB --------------------------------------------------------- Fitch Ratings upgraded the debt ratings for Hilton Hotels Corporation as: -- Issuer Default Rating to 'BB+' from 'BB'; -- Senior credit facility to 'BB+' from 'BB'; and -- Senior notes to 'BB+' from 'BB'; The ratings apply to its US$5.75 billion credit facility and roughly US$2.6 billion of its senior notes. Fitch has also revised Hilton Hotel's Rating Outlook to Positive from Stable. The ratings upgrade reflects Hilton's indicated and demonstrated commitment to delever following the acquisition of the Hilton International or HI assets in February 2006. Fueled by roughly US$1.5 billion of asset sales since the closing of the transaction through the end of 2006, Hilton Hotels improved its adjusted leverage ratio (per the company's bank facility) from 5.0 times at March 31, 2006, to an estimated 4.2 as of Dec. 31, 2006. At the same time, adjusted coverage increased from 3.0 as of March 31, 2006 to an estimated 3.3x as of Dec. 31, 2006. The pace of asset sales since the acquisition has been faster than Fitch anticipated following the transaction and Hilton retained long-term management/franchise agreements on most of the properties. While the current credit metrics remain somewhat weak for the rating category, Fitch expects further deleveraging in 2007 driven by additional asset sales in a vibrant lodging asset demand environment and a continued strong operating environment. These factors are incorporated into Hilton's Positive Rating Outlook. Asset Sales Could Accelerate Deleveraging: Adjusted leverage could decline to less than 4.0 by the end of 2007 with no asset sales, but Fitch expects that improvement could be accelerated given the current demand environment for lodging assets primarily by real estate investment trusts and private equity firms. In the latest example of numerous transactions over the past 12- 24 months, CNL Hotels & Resorts Inc. announced on Jan. 19 that it had agreed to be acquired by Morgan Stanley's Real Estate Group for US$6.6 billion with Ashford Hospitality Trust Inc. acquiring some of the assets as part of the transaction. Furthermore, European hotel asset demand could be bolstered by the introduction of REITs this year in the UK and possibly Germany. Hilton currently has the Scandic brand for sale, which includes roughly 130 hotels and 23,000 rooms and accounted for roughly 45% of proforma 2006 leased profit. Also currently for sale are 17 owned hotels or 6,500 rooms, which accounted for roughly 15% of proforma 2006 owned profits. An additional 30 owned hotels 10,000 rooms accounting for roughly 25% of proforma 2006 owned profits could be put on the market down the road, roughly half of which could be sold in the next one-to-three years. Fitch believes the negotiations for the sale of Scandic are progressing very well and believes a transaction could be completed possibly by first quarter-2007, but more likely by the end of 2Q'07. First or second round bids have been received for 14 of the 17 properties for sale and Scandic. Furthermore, Hilton is required to pay down some of its credit facility when certain assets are sold. Strong Industry Operating Environment Continues to Provide Tailwinds: The lodging industry is poised to benefit from continued positive fundamentals with strong demand and limited supply growth of less than 2% in 2007. While Fitch expects the overall economy to continue to slow in 2007, the outlook for the business sector remains healthier than that of the consumer sector, which bodes well for the lodging companies since their operating environment is more sensitive to the business economy. Industrywide RevPAR gains are expected to continue in the mid- to-high single-digit range over the next two-to-three years, below the low double-digit gains in 2006 but very solid nonetheless. The RevPAR gains are likely to be driven by rate rather than occupancy in 2007, which should drive stronger margins since rate-driven RevPAR gains don't carry the additional operating costs of occupancy-driven RevPAR gains. On its 4Q'06 earnings release, Hilton raised its 2007 RevPAR growth assumptions indicating the operating environment remains robust. In 2007, Hilton projects the strong supply/demand environment to drive 14-16% growth in its management/franchise fees and RevPAR growth of 9-11% with margins increasing 125-175 basis points. Its leased portfolio is expected to show slightly slower RevPAR growth of 8-10% with margins increasing 30-70 basis points in 2007. Off-Balance Sheet Debt Exposure: Following the HI acquisition, Hilton increased its exposure to the leased hotel segment and as a result gained a significant amount of off-balance sheet debt and non-recourse, on-balance sheet debt primarily in the form of leases. Fitch believes that many of the leases will be sold with the Scandic brand in the next few months. Furthermore, Hilton reports nearly $300 million in operating leases in its financial statements, which equates to roughly US$2.4 billion of adjusted debt (using Fitch's standard of 8x.) However, the actual exposure is likely much lower than that, as Hilton and its banks have agreed to a lower lease adjustment in its adjusted leverage calculations. Management Track Record: Also incorporated into the rating upgrade and Positive Outlook is management's track record of executing on a plan to get back to investment grade. Following the travel disruptions brought on by the events of Sept. 11, 2001, Fitch downgraded Hilton's credit ratings in 2002 to below investment grade. Hilton subsequently suspended its share repurchase program and focused on reducing debt and improving the credit profile, which resulted in an upgrade to investment grade in 2004 as the travel environment recovered. Following the HI transaction last year, management again suspended share repurchase activity and dividend increases and has indicated a target adjusted leverage ratio of 3.5. Fitch believes that Hilton will restart its share repurchase program at some point within the next 12-24 months if asset sales and the operating environment proceed as expected. Hilton has US44.7 million shares authorized for repurchase and management was continually challenged by equity shareholders at its recent analyst day in December to adopt a more shareholder- friendly capital allocation policy. Furthermore, Marriott and Starwood are both actively buying back shares. Rating Outlook Considerations: Fitch's rating upgrade incorporates management's track record that is again being demonstrated through the asset sale and deleveraging execution since the HI transaction. The Positive Outlook incorporates an expectation that balance sheet improvement remains a priority in the near term, that management continues to execute on its asset sale/deleveraging plan, and that the strong demand environment remains intact. A further upgrade to an investment grade rating will be considered as the company makes substantial progress toward its stated goal of achieving its target adjusted leverage ratio of 3.5. Fitch may lower Hilton's Positive Outlook if there is change in management's current asset sale/deleveraging plan, if there is a resumption of share repurchase activity in the near term, or if Fitch's outlook on industry demand changes. Longer-term, Fitch believes Hilton's credit profile can support a sizable share repurchase program. Headquartered in Beverly Hills, California, Hilton Hotels Corp. -- http://www.hilton.com/-- together with its subsidiaries, engages in the ownership, management, and development of hotels, resorts, and timeshare properties, as well as in the franchising of lodging properties in the United States and internationally, including Barbados, Costa Rica and Trinidad and Tobago in Latin America. HILTON HOTELS: S&P Places BB Corp. Credit Rating on CreditWatch --------------------------------------------------------------- Standard & Poor's Ratings Services placed its ratings on Hilton Hotels Corp., including the 'BB' corporate credit rating, on CreditWatch with positive implications. The CreditWatch listing follows Hilton's update today that it continues to make good progress in selling assets and that a meaningful level of asset sales could occur over the near term, which could lead to a faster-than-expected pace of debt reduction. Hilton has announced these potential transactions: -- The sale of part or all of the company's Scandic- branded portfolio, which Standard & Poor's would view favorably because it would lead to sale proceeds in excess of expectations and the transfer of a meaningful portion of Hilton's fixed lease obligations, as well as improve margins in Hilton's global lodging portfolio; -- The sale of a portfolio of 10 hotels in Continental Europe; -- The sale of the Hilton Caledonian in Scotland; and -- The sale of six hotels in the U.S. Headquartered in Beverly Hills, California, Hilton Hotels Corp. -- http://www.hilton.com/-- together with its subsidiaries, engages in the ownership, management, and development of hotels, resorts, and timeshare properties, as well as in the franchising of lodging properties in the United States and internationally, including Barbados, Costa Rica and Trinidad and Tobago in Latin America. ============= U R U G U A Y ============= * URUGUAY: Spanish Envoy Mediates in Dispute with Argentina ----------------------------------------------------------- Juan Antonia Yanez Barnueo, Spain's envoy ambassador to mediate between Argentina and Uruguay's pulp mill construction dispute, met Monday Argentine Foreign Affairs Minister Jorge Taiana for a third round of talks. He then met Tuesday Uruguayan Foreign Affairs Minister Reinaldo Gargano to discuss the conflict and come up with a possible solution. The neighboring countries are at odds over the construction of two pulp mills along their river border. The Argentine government and environmental groups are protesting the mills' alleged adverse effect on marine life at their river border. Uruguay argued that studies have been made ascertaining the safety of the river habitat and measures would be taken to ensure that the mills won't pollute the river. In addition, Argentina claims Uruguay violated the 1975 Statute of the River Uruguay, which states that all issues concerning the river must be agreed upon by the two nations. The matter has been brought to the International Court of Justice at The Hague. A preliminary ruling was issued in favor of Uruguay. The ruling, along with a financing from the World Bank, renewed a series of protests and blockades of access roads leading to Uruguay. Merco Press says Argentina expressed "its full willingness" to dialogue with Uruguay in order to find a solution to their dispute. Uruguay has previously refused to dialogue unless Argentine protesters are stopped from blockading access to Uruguay. However, the International Court does not think the protests are materially damaging to Uruguay. For the Argentine government's part, it said in reports that it won't force its citizens to stop picketing because it is within their rights of free expression. According to Merco Press, the possible solutions to the dispute are: -- construction of a 30-km long pipeline down the River Uruguay through which, the wastes coming from the mills would be pumped; -- reshaping to help limit the plant visual contamination (huge chimney) from the Argentine side; and -- construction of an additional drain that be jointly financed by Argentina, Uruguay and Spain. * * * On Sept 11, 2006, Fitch rated Uruguay's US$400 million issue of 5% inflation-indexed bonds payable in U.S. dollars and maturing Sept. 14, 2018, at 'B+'. ================= V E N E Z U E L A ================= PETROLEOS DE VENEZUELA: Halts Operations at Puerto La Cruz Plant ---------------------------------------------------------------- Venezuela's state oil company Petroleos de Venezuela told Business News Americas that operations have been discontinued at its Puerto La Cruz refinery, due to an operational failure. The Puerto La Cruz plant is near the resort city of Puerto La Cruz in eastern Venezuela. It is one of Petroleos de Venezuela's three refineries in the nation. The other two plants are: -- CRP, and -- El Palito. As reported in the Troubled Company Reporter-Latin America on Jan. 31, 2007, Petroleos de Venezuela SA said that three workers were injured in an accident at a furnace in the firm's Puerto La Cruz plant. The injured workers are in a stable condition, the firm stated. According to the company, there was an accident during the works to restart furnace H751 of the atmospheric distiller at Puerto La Cruz. The firm said, "The incident did not have any impact on the rest of the refinery's units, which remain in service. Petroleos de Venezuela said in a statement that the Fluid Catalytic Cracking unit and the atmospheric distillation unit had to lessen their loads after the accident. Petroleos de Venezuela had promised in 2006 to conduct a US$2- billion modernization of Puerto La Cruz to boost its processing capacity to 200,000 barrels per day from 120,000 barrels daily. 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: Analysts Say Movilnet Must be Separated from Cantv --------------------------------------------------------------- The Venezuelan government should separate mobile unit Telecomunicaciones Movilnet CA from CA Nacional Telefonos de Venezuela aka Cantv, if the nationalization occurs, Business News Americas reports, citing industry analysts. Analysts quoted by BNamericas said the government subsidizes for Movilnet's operations or services could affect the overall health of the mobile industry. Cantv's nationalization could destabilize Venezuela's mobile market, BNamericas says. However, telecoms regulator Conatel director Jesse Chacon said in a statement, "We would be an irresponsible government if we separated Movilnet from [Cantv's] operations." BNamericas relates that Conatel is adamant that Movilnet will fall under state control when Cantv is nationalized. Conatel told BNamericas that it would use Movilnet's profits to increase mobile coverage in the south of Venezuela. The government would seek to reach an accord with Cantv shareholders to change the ownership of the firm. However, it could confiscate the company no agreement could be reached, BNamericas says, citing Mr. Chacon. 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. * VENEZUELA: May Pay Verizon Less Than US$677MM for Cantv Stake --------------------------------------------------------------- Venezuela may pay less than the US$677 million price Verizon Communications Inc. set for its 28.5% stake in CA Nacional Telefonos de Venezuela aka Cantv, Bloomberg reports. As reported in the Troubled Company Reporter-Latin America on Jan. 30, 2007, Venezuela President Hugo Chavez announced the nationalization of Cantv early in January. The country's leader later added that he won't pay the market price for the network's shares. Telecommunications Minister Jesse Chacon said in a news conference that payment for the shares will depend on the owners' attitude. He said, "If we don't reach an agreement with the owners, we'll apply the expropriations law and declare it a public utility. If the owners are willing to sell at reasonable terms, we're open to that possibility." Verizon Communications said in a statement that it isn't challenging the government's plan to nationalize Cantv. Instead, it wants the nationalization process to move promptly and properly. Bloomberg relates that Verizon Communications didn't disclose the amount it expected to get for its stake. According to Bloomberg, Verizon Communications agreed in April 2006 to sell its stake in Cantv to a joint venture of America Movil SA and Telefonos de Mexico SA for US$677 million. The price represents 0.62% of Verizon Communications' market value. However, President Chavez decided for Cantv's nationalization before the sale of the stake could be approved by the regulator. Analysts told Bloomberg that Verizon Communications investors see the Cantv stake as an insignificant factor in the parent firm's value. Verizon Communications has been selling several assets that don't serve its focus on selling high-speed Internet and wireless phone service in US markets, according to Bloomberg. Cantv sells domestic and international long-distance phone service, Internet access and phone directories in Venezuela. "Most people look at Verizon's valuation as being driven by non- voice services first and wireless voice services second. Cantv doesn't meet any of that," Albert Lin, an analyst at American Technology Research, told Bloomberg. American Technology assigned a "buy" rating on Verizon Communications shares. William Power, an analyst with Robert W. Baird & Co., commented to Bloomberg, "It's largely already out of investors' earnings expectations." Bloomberg says that Baird & Co. placed a "neutral" rating on Verizon Communications shares. "We have been anticipating that the government would begin to define the process that they're going to follow in nationalizing Cantv. That process hasn't been fully defined," Verizon Communications told Bloomberg. 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. About Verizon Communications Verizon Communications Inc. provides communications services through four segments: Domestic Telecom, Domestic Wireless, Information Services and International. The domestic wireline telecommunications business provides local telephone services, including broadband in 28 states and Washington, D.C. The domestic wireless business, operating as Verizon Wireless, provides wireless voice and data products and services across the United States. Information Services operates directory publishing businesses and provides electronic commerce services. Verizon's International segment includes wireline and wireless communications operations and investments in the Americas and Europe. In connection with the closing of the merger with MCI, Inc., which occurred on January 6, 2006, Verizon owns and operates end-to-end global Internet protocol networks, which includes over 270,000 domestic and 360,000 international route miles of fiber optic cable and provides access to over 140 countries worldwide. * * * 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: President to be Able to Make Oil & Gas Decrees ----------------------------------------------------------- Venezuelan lawmakers told the Associated Press that they would give President Hugo Chavez special powers to make decrees to change oil, gas and electricity industries. Lawmakers would ratify an "enabling law" to let President Chavez ratify measures by decree for 18 months in the energy sector as well as in 10 other areas, AP says, citing National Assembly President Cilia Flores. Ms. Flores told AP, "We are in complete agreement with the executive branch legislating on energy issues." The law would allow President Chavez make necessary changes in the oil sector, as well as the natural gas and electricity sectors, AP notes, citing Ms. Flores. AP relates that the bill needs final approval on its second reading in the assembly. President Chavez told AP that those private firms affected in the change would have the option to stay on as minority partners in the eastern Orinoco region. These companies are: -- British Petroleum PLC, Exxon Mobil Corp., -- Chevron Corp., -- ConocoPhillips Co., -- Total SA, and -- Statoil ASA. * * * 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. *********** 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 * * *