/raid1/www/Hosts/bankrupt/TCRLA_Public/070301.mbx
T R O U B L E D C O M P A N Y R E P O R T E R
L A T I N A M E R I C A
Thursday, March 1, 2007, Vol. 8, Issue 43
Headlines
A R G E N T I N A
ARROW ELECTRONICS: Earns US$388 Million for Full Year 2006
ARVINMERITOR INC: Moody's Lifts Ba1 Bank Debt Rating to Baa3
ARVINMERITOR INC: Initial Purchasers Buy US$25M Additional Notes
BANCO MACRO: Earns ARS147 Million in Quarter Ended Dec. 31, 2006
DAIMLERCHRYSLER: Plans to Cut 1,000 Salaried Jobs by June 2007
DAIMLERCHRYSLER: Chrysler & UAW Ink Two Employee Incentive Deals
FIAT SPA: Denies WSJ Report on Spin-off Plans for Auto Division
TK ALUMINUM: Advisors Okay Nemak Transaction Consent Terms
YOMA TANNERY: Enters Bankruptcy on Court Order
* ARGENTINA: 10 Blocks to be Tendered to Need US$3MM Investment
* BUENOS AIRES: Moody's Rates Proposed US$450-Mil. Bonds at B3
* BUENOS AIRES: S&P Rates Proposed US$450-Mil. Bonds at B+
B A R B A D O S
AIR JAMAICA: May Increase Weekly Flights to Barbados
B E R M U D A
KEPLER HOLDINGS: S&P Assigns BB Prelim. Rating on US$200MM Loan
REFCO INC: Refco LLC Trustee Pays US$38.3 Mil. in Cure Amounts
REFCO INC: Refco LLC Pays US$9.6 Million in Exchange Memberships
B R A Z I L
BANCO BRADESCO: Fourth Quarter 2006 Results Worse Than 2005
ALCATEL-LUCENT: Inks Marketing Partnership Pact with ConSentry
BANCO DO BRASIL: Brazil & Uruguay to Discuss Bank's Recovery
BANCO DO BRASIL: Earns BRL6 Billion in 2006 Fourth Quarter
BANCO INDUSTRIAL: S&P Assign B+ Counter Party Credit Rating
DAIMLERCHRYSLER: Supervisory Board Approves Small-Car Chery Pact
EMI GROUP: Buyout Firms Eye Possible Takeover Deal
ITRON INC: Actaris Buy Cues Moody's to Place Ratings on Review
JABIL CIRCUIT: Moody's Lowers Corporate Family Rating to Ba1
LG.PHILIPS: To Sell Czech Display Plant to CTP Invest for EUR40M
NRG ENERGY: Declares Share Dividends Payment on March 15
VALMONT INDUSTRIES: Paying 9.5 Cents A Share Dividend on Apr. 16
ULTRAPAR PARTICIPACOES: Hires Andre Covre as Chief Fin'l Officer
C A Y M A N I S L A N D S
AL-MEEZAN INVESTMENTS: Proofs of Claim Must be Filed by March 3
AL-FIRDAUS INVESTMENTS: Proofs of Claim Must be Filed by March 3
AL-BUNYAN INVESTMENTS: Proofs of Claim Must be Filed by March 3
AL-BAYAN INVESTMENTS: Proofs of Claim Must be Filed by March 3
AL-ABRAR INVESTMENTS: Proofs of Claim Must be Filed by March 3
AL-MANAR INVESTMENTS: Proofs of Claim Must be Filed by March 3
AMERINDO INTERNET: Chapter 15 Petition Summary
ATLANTIC & WESTERN: Missed Premium Cues Fitch to Watch Ratings
CITIGROUP REAL: Proofs of Claim Must be Filed by March 5
GOLDMAN SACHS (CURRENCY): Proofs of Claim Filing Ends on March 8
GOLDMAN SACHS (FIXED): Proofs of Claim Must be Filed by March 8
GOLDMAN SACHS (STRATEGIES): Claims Filing Ends on March 8
MARUFUKU ASSET: Proofs of Claim Must be Filed by March 8
PHOENIX-DURANGO: Proofs of Claim Must be Filed by March 8
SUN HUNG: Proofs of Claim Must be Filed by March 7
UCAM SEMICONDUCTOR: Proofs of Claim Must be Filed by March 8
TENJIN TWO: Proofs of Claim Must be Filed by March 6
TOSHIN HOLDING: Proofs of Claim Must be Filed by March 8
C H I L E
BLOCKBUSTER INC: Posts US$12.9MM Net Income in 2006 Fourth Qtr.
C O L O M B I A
AES CORP: Restatement Issues Won't Affect Ratings Yet, S&P Says
C O S T A R I C A
* COSTA RICA: Working on Bilateral Pact with Dominican Republic
D O M I N I C A N R E P U B L I C
AES CORP: Fitch Affirms Subsidiary's B- Issuer Default Rating
VIVA INTERNATIONAL: Changes Name to River Hawk Aviation
* DOMINICAN REPUBLIC: Telecom Sector Sees DOP2B in Investments
* DOMINICAN REPUBLIC: Working on Bilateral Pact with Costa Rica
E C U A D O R
IMPSAT FIBER: Moves Tender Offer, Consent Solicitation Deadline
* ECUADOR: Awaits Rafael Correa's Approval for OPEC Membership
E L S A L V A D O R
BIO-RAD LABORATORIES: Reports US$16.6MM 2006 4th Qtr. Revenues
G U A T E M A L A
ALCATEL-LUCENT: Eyes Another 1,700 Job Cuts in Europe
ALCATEL-LUCENT: Wins US$1.5-Billion Patent Suit vs. Microsoft
J A M A I C A
AIR JAMAICA: Petrocaribe Helps Airline in Oil Supply
AIR JAMAICA: Won't Participate in Talks for Regional Airline
DIGICEL LTD: Reports US$948 Million in Revenues for 2006
DYOLL INSURANCE: Liquidators & Farmers Reach Payment Agreement
NATIONAL WATER: Enfield Calling for Piped Water Restoration
SUGAR COMPANY: Won't Reach 300,000-Ton Monymusk Output Target
* JAMAICA: Anthony Johnson Asks Gov't to Intervene Banana Sector
* JAMAICA: Trinidad Won't Supply Nation with Natural Gas
M E X I C O
ADVANCED MARKETING: Court Allows Hiring of Capstone as Advisors
ADVANCED MARKETING: Gets Final Access to Use Cash Collateral
ADVANCED MARKETING: Panel Wants Lowenstein Sandler as Counsel
ARAMARK CORP: Subsidiary Inks Beverage Service Deal with NetJets
BALDOR ELETRIC: Paying US$0.17 Per Share Cash Dividend
BENQ CORP: Mobile Unit's Assets to Be Split Up & Liquidated
COINSTAR INC: Moody's Ups Corporate Family Rating to Ba2
DELTA AIR: Committee Amends SSI's Engagement Letter
DESARROLLADORA METROPOLITANA: Moody's Puts Ba1.mx Issuer Rating
GENERAL MOTORS: Daimler May Accept GM Stake for Chrysler
IXE BANCO: Fitch Puts B+ Rating on US$120MM Perpetual Securities
MAXCOM TELECOM: Reports MXN477.2 Mil. Revenues in Fourth Quarter
MCDERMOTT INT'L: No TXU Update Regarding Contracts Amidst Sale
SUNCOM WIRELESS: Has US$30.8 Million EBITDA in 2006 Fourth Qtr.
N I C A R A G U A
* NICARAGUA: Seeking US495-Mil. Agricultural Loan from Taiwan
* NICARAGUA: Will Receive 60,000 Barrels of Oil from Venezuela
P A N A M A
* PANAMA: Regulator Rejects Six Requests for Hydro Projects
P A R A G U A Y
* PARAGUAY: Inks Aviation Agreement with European Union
P E R U
IRON MOUNTAIN: Names Laurie Tucker to Board of Directors
P U E R T O R I C O
B&G FOODS: Purchases Wheat Brands from Kraft Foods for US$200MM
CENTENNIAL COMM: Blackstone Sells 10 Million Shares
FEDERATED DEP'T: Moody's Lowers Preferred Shelf Rating to (P)Ba1
FERRELLGAS PARTNERS: Declares Second Quarter Distribution
T R I N I D A D & T O B A G O
BRITISH WEST: Cargo Policies Under Review
U R U G U A Y
* URUGUAY: International Roaming May Generate US$63 Million
* URUGUAY: To Discuss Cooperation & Investment with Brazil
V E N E Z U E L A
BANCO VENEZOLANO: Fitch Affirms Ratings on Several Categories
CITGO PETROLEUM: Pres. Chavez Seeks to Divest A U.S. Refinery
DAIMLERCHRYSLER AG: May Accept GM Stake in Exchange for Chrysler
DAIMLERCHRYSLER AG: Supervisory Board Okays Chery Motors Pact
* VENEZUELA: Drafts Orinoco Nationalization Decree
* VENEZUELA: Reduced Shipments to US Due to OPEC Cuts
- - - - -
=================
A R G E N T I N A
=================
ARROW ELECTRONICS: Earns US$388 Million for Full Year 2006
----------------------------------------------------------
Arrow Electronics Inc. released its financial results for the
fourth quarter and full year ended Dec. 31, 2006.
Arrow Electronics posted US$388.33 million in net profit on
US$13.58 billion in net revenues for the year ended
Dec. 31, 2006, compared with US$253.61 million in net profit on
US$11.16 billion in net revenues for 2005.
Arrow Electronics posted US$128.07 million in net profit on
US$3.49 billion in net revenues for the fourth quarter ended
Dec. 31, 2006, compared with US$74.45 million in net profit on
US$2.96 billion in net revenues for the same period in 2005.
As of Dec. 31, 2006, Arrow Electronics had US$6.67 billion in
total assets, US$3.67 billion in total liabilities and US$3
billion in total shareholders' equity.
"We ended an exceptional year with another very strong quarter,
again posting impressive financial results and industry-leading
levels of profitability," William E. Mitchell, chairman,
president and chief executive of Arrow Electronics, said.
"Sales and operating income grew to their highest fourth quarter
levels since 2000. Outstanding working capital management drove
operating cash flow of US$288 million with return on invested
capital greater than our cost of capital for the 12th
consecutive quarter."
"We saw sales at record levels in 2006 with market share gains
in all of our businesses," Mr. Mitchell added. "Our continued
pursuit of operational excellence enabled us to grow earnings at
a faster pace than sales for the fourth consecutive year. We
achieved our highest return on working capital since 2000 and
generated a return on invested capital in excess of our cost of
capital for the third consecutive year. In the past four years
annual net income, excluding items impacting comparability, has
advanced from US$15 million to US$362 million, earnings per
share have grown at a compound annual growth rate of 110%, our
return on invested capital has more than tripled and cash flow
from operations has totaled over US$1 billion, all while
investing in growing our business. We continue to create value
for our shareholders, employees, customers and suppliers."
About Arrow Electronics
Headquartered in Melville, New York, Arrow Electronics --
http://www.arrow.com/-- provides products, services and
solutions to industrial and commercial users of electronic
components and computer products. Arrow serves as a supply
channel partner for nearly 600 suppliers and more than 130,000
original equipment manufacturers, contract manufacturers and
commercial customers through a global network of over 270
locations in 53 countries and territories.
The company operates in France, Spain, Portugal, Denmark,
Estonia, Finland, Ireland, Latvia, Lithuania, Norway, Sweden,
Italy, Germany, Austria, Switzerland, Belgium, the Netherlands,
United Kingdom, Argentina, Brazil, Mexico, Australia, China, Hong
Kong, Korea, Philippines and Singapore.
* * *
Arrow Electronics carries Fitch's 'BB+' issuer default rating.
The Company's senior unsecured notes and senior unsecured bank
credit facility also carry Fitch's 'BB+' rating. Fitch said the
rating outlook is positive.
ARVINMERITOR INC: Moody's Lifts Ba1 Bank Debt Rating to Baa3
------------------------------------------------------------
Moody's Investors Service upgraded ArvinMeritor's senior secured
bank debt rating to Baa3 (LGD 2, 13%) from Ba1 (LGD-2, 20%) and
affirmed the company's Corporate Family Rating of Ba3,
Speculative Grade Liquidity rating of SGL-2, and stable outlook.
The actions follow shifts in the company's capital structure,
which have enhanced expected recovery rates on secured
indebtedness, an amendment to its bank credit facilities, and
the announcement of the pending sale of its Emission Technology
business.
During February, ARM issued US$200 million of unsecured
convertible notes with maturity in 2027. Proceeds will be used
to pre-pay a US$170 million senior secured bank term loan due in
2012 with the balance after fees and expenses retained for
general corporate purposes. The company also amended its bank
revolving credit facility. This involved a reduction in the
committed amount from US$980 million to US$900 million and flows
from the smaller aggregate size of the organization's
requirements, which will arise post the disposition of its
Emission Technologies business.
At the same time, two financial covenants in its bank credit
facility were amended which will expand the company's compliance
headroom over the intermediate term. Moody's would not expect
any material change in key metrics affecting the firm's
Corporate Family rating if proceeds were used to reduce
indebtedness as total debt in proportion to continuing EBITDA
should not appreciably change, nor would those ratios be
materially affected by the refinancing. Although interest
coverage may improve slightly, other ratios will remain in a
range typical of peers in the Ba3 rating category. While
Emissions Technology had lower margins than ARM's other business
groups, it was expected to contribute to free cash flow.
Accordingly, the Corporate Family Rating has been affirmed.
ARM will continue to face challenges in certain markets over the
coming year. But, it will do so with a solid liquidity profile,
the benefits of geographic diversification, participation in
multiple remaining segments with market leadership, and
contributions from its restructuring initiatives. The Emissions
Technology group provided some upside potential from its
solutions to changing regulatory requirements, particularly in
the commercial vehicle market in advance of the 2010 EPA
requirements in North America.
However, margins in Emissions Technology were also being
affected by higher nickel prices and related costs of stainless
steel. Although quantitative metrics for much of 2007 will be
affected by the decline in North American Class 8 production,
those volume declines will be partially offset by levels of
ongoing demand for medium and heavy duty vehicles in Europe as
well as contributions from its aftermarket parts, trailer and
Asian markets. North American commercial vehicle production is
anticipated to recover in 2008 and 2009. On balance, the
company's financial performance in 2007 and 2008 should remain
within the parameters of its assigned Corporate Family Rating.
Consequently, the stable outlook remains appropriate.
The refinancing activity alters recovery expectations in
downside scenarios on debt in ARM's capital structure. While
aggregate enterprise value is essentially unchanged, the
reduction in the amount of higher priority secured debt and
increase in unsecured obligations beneath their claims has
improved recovery rates on the bank facility.
This is reflected in results in Moody's Loss Given Default
model. On a pro forma basis as of Dec. 31, 2006 and adjusting
for the convertible issuance, term loan repayment and revolving
credit commitment reduction, the rating on the secured bank debt
was raised by one notch to Baa3 (LGD-2, 13%) from Ba1 (LGD-2,
20%). The recovery rate for unsecured debt was not materially
affected. Its recovery assessment at LGD-4, 63% declined
marginally but remains within the bounds of its B1 rating
category. Similarly, ratings on Arvin Capital and ARM's other
obligations were not affected. ARM's convertible note issues
are not rated by Moody's. The rating on the secured bank term
loan has been withdrawn upon its repayment.
The SGL-2 liquidity rating represents good liquidity over the
coming 12 months. The rating incorporates significant internal
sources arising from existing cash, modest free cash flow
expectations post the business disposition, and anticipated
receipt of proceeds from the announced sale of Emissions
Technologies (the valuation is stated as US$310 million but
includes consideration of a US$20 million seller note, the
assumption of certain liabilities and is subject to settlement
adjustments).
While external committed facilities have been reduced 8%, the
amount remains ample with respect to the requirements of the
smaller size of the continuing business (pro forma revenues will
be roughly 30% lower). A recent amendment to the bank
facilities also established incremental headroom under its
prescribed leverage and fixed charge covenants.
Ratings changed:
* ArvinMeritor, Inc.
-- Senior secured revolving credit facility to Baa3
(LGD-2, 13%) from Ba1 (LGD-2, 20%)
Changes to Loss Given Default Assessments:
* ArvinMeritor, Inc.
-- Senior unsecured notes to LGD-4, 63% from LGD-4, 65%
-- Shelf unsecured to LGD-4, 63% from LGD-4, 65%
The last rating action was on Jan. 19, 2007, at which time ARM's
Corporate Family Rating was lowered to Ba3 from Ba2.
Headquartered in Troy, Michigan, ArvinMeritor, Inc. (NYSE: ARM)
-- http://www.arvinmeritor.com/-- is a premier USUS$8.8
billion global supplier of a broad range of integrated systems,
modules and components to the motor vehicle industry. The
company serves light vehicle, commercial truck, trailer and
specialty original equipment manufacturers and certain
aftermarkets. ArvinMeritor employs approximately 29,000 people
at more than 120 manufacturing facilities in 25 countries.
These countries are: China, India, Japan, Singapore, Thailand,
Australia, Venezuela, Brazil, Argentina, Belgium, Czech
Republic, France, Germany, Hungary, Italy, Netherlands, Spain,
Sweden, Switzerland, United Kingdom, among others. ArvinMeritor
common stock is traded on the New York Stock Exchange under the
ticker symbol ARM.
ARVINMERITOR INC: Initial Purchasers Buy US$25M Additional Notes
----------------------------------------------------------------
ArvinMeritor Inc. has reported that the initial purchasers in
the company's private offering of US$175 million aggregate
principal amount of 4% convertible senior unsecured notes due
2027 have exercised in full their option to acquire up to US$25
million additional principal amount of the notes, bringing to
US$200 million the aggregate principal amount of 4% convertible
senior unsecured notes due 2027 sold by the company in the
private offering to qualified institutional buyers.
The company will pay 4% cash interest on the notes semiannually
until Feb. 15, 2019, after which no cash interest will be paid.
Commencing Feb. 15, 2019, the principal amount of the notes will
be subject to accretion at a rate that provides holders with an
aggregate annual yield to maturity of 4%.
The notes will be convertible in certain circumstances into cash
up to the accreted principal amount of the notes, and cash,
shares of common stock, or a combination thereof, at the
company's election, for the remainder of the conversion
obligation, if any, in excess of the accreted principal amount,
based on an initial conversion rate, subject to adjustment,
equivalent to 37.41 shares of common stock per US$1,000
original principal amount of notes. This represents an initial
conversion price of US$26.73 per share.
Net proceeds from the recent issue of convertible senior
unsecured notes along with other sources were used to fund the
repayment in full the US$169.5 million aggregate principal
amount of the company's outstanding Term Loan B due in 2012.
The additional purchase and sale is scheduled to close on
Feb. 28, 2007, subject to customary closing conditions.
About ArvinMeritor Inc.
Headquartered in Troy, Michigan, ArvinMeritor, Inc. (NYSE: ARM)
-- http://www.arvinmeritor.com/-- is a premier US$8.8 billion
global supplier of a broad range of integrated systems, modules
and components to the motor vehicle industry. The company
serves light vehicle, commercial truck, trailer and specialty
original equipment manufacturers and certain aftermarkets.
ArvinMeritor employs approximately 29,000 people at more than
120 manufacturing facilities in 25 countries. It maintains 23
facilities in Venezuela, Brazil and Argentina. ArvinMeritor
common stock is traded on the New York Stock Exchange under the
ticker symbol ARM.
BANCO MACRO: Earns ARS147 Million in Quarter Ended Dec. 31, 2006
----------------------------------------------------------------
Banco Macro S.A. reported its results for the fourth quarter
period ended Dec. 31, 2006.
The Bank's net income totaled ARS147 million in fourth quarter
2006. This result was 95%, or ARS72 million, higher than fourth
quarter 2005's ARS75 million and 39%, or ARS41 million, higher
than third quarter's ARS106 million. Fiscal year 2006 net
income totaled ARS424 million, 62% higher than 2005's ARS263
million. The annualized 2006 return on equity and return on
assets reached 22.15% and 3.60%, respectively.
Loans to the private sector also showed significant growth of
10%, or ARS498 million, quarter-over-quarter and 85%, or ARS2.54
billion, year-over-year. Personal loans, which represent a
strategic product for the Bank, once again led private loan
portfolio growth. This product grew ARS327 million QoQ and
ARS954 million YoY.
Total deposits grew ARS383 million, or 4%, QoQ. Saving accounts
increased by 29%, or ARS473 million, QoQ while current accounts
grew 13%, or ARS208 million, in the same period.
In December 2006, Banco Macro issued US$150 million in a 30-year
perpetual Tier-1 subordinated bond. Based on the new Central
Bank regulations, this bond is considered as regulatory capital
for the Bank. Therefore, Banco Macro's fourth quarter 2006
excess capital reached ARS1.92 billion or 258%.
The Bank's asset quality continued improving. In fourth quarter
2006, Banco Macro's PDLs to total loans was 1.98% and the
coverage ratio was 156.34%.
Net fee income to expenses ratio was 54.51%.
For comparison purposes, Nuevo Banco Bisel was fully
incorporated in this fourth quarter 2006's financials. In third
quarter 2006, Banco Macro only consolidated 51 days of NBB's
quarter since Banco Macro had taken control of NBB on Aug. 11,
2006.
Banco Macro S.A. (NYSE: BMA) (Buenos Aires: BMA) runs the gambit
when it comes to retail and commercial banking in Argentina.
The bank provides customers with traditional banking products
such as savings, international financing, checking and deposit
accounts, phone and online banking services, credit cards, and
asset management-related services. Chief subsidiaries include
trading entity Sud Acciones y Valores, offshore financial
institution Sud Bank and Trust Co., and asset management
business Sud Valores Soc. Ger. F.C.I. The company was
established as a primarily non-banking institution in 1985.
* * *
As reported in the Troubled Company Reporter on Jan. 11, 2007,
Moody's Investors Service assigned a provisional B2 global
foreign currency rating to Banco Macro SA's senior unsecured
notes, which are due 2017, for US$150,000,000. Moody's also
assigned a provisional Aa3.ar in national scale to the same
debt. Moody's said the outlook on the ratings is stable.
DAIMLERCHRYSLER: Plans to Cut 1,000 Salaried Jobs by June 2007
--------------------------------------------------------------
As part of DaimlerChrysler AG's Chrysler Group Recovery and
Transformation Plan, the company has targeted the reduction of
2,000 salaried positions by 2008.
The Chrysler Group intends to reach that target through
attrition and special programs. The special programs include
the following separation incentive and early retirement packages
for non-bargaining unit, or salaried employees.
The aim of the packages is to reach the 2007 reduction target of
1,000 salaried positions by June 30, 2007.
The packages include the following programs:
Separation Incentive Program:
* Eligibility
All non-union salaried employees aged 62 or older with 10
or more years of service as of May 31, 2007.
* Program Terms:
-- Offers made May 7, 2007, and returned by May 31, 2007.
-- Retirements effective May 31, 2007.
-- Program incentives include three months salary and
either a US$20,000 car voucher grossed up for taxes, or
a US$20,000 contribution to the Retirement Health Care
Account.
-- 100% Retiree Choice medical credits through aged 64 and
at age 65 100% Credits in the Health Care Retirement
Account. Ordinarily, an employee must be aged 60 with
30 years of service to receive 100%.
Special Early Retirement:
* Eligibility
All non-union salaried employees aged 53 to 61 years old
with 10 or more years of service, with earnings in 2006 of
less than US$100,000 and select non-union salaried
employees, aged 55 to 61 years old with 10 or more years of
service with 2006 earnings of US$100,000 or greater.
-- This is in compliance with Internal Revenue Service
guidelines.
-- Eligibility requirements must be satisfied by June 30,
2007.
* Program Terms:
-- Offers will be made to select employees June 4, 2007,
and returned by June 29, 2007.
-- Retirements effective June 30, 2007.
-- Retirement benefits will not be reduced by an early
retirement reduction percent.
-- 100% Retiree Choice medical credits through age 64 and
at age 65 100% credits in the Health Care Retirement
Account. Ordinarily, an employee must be age 60 with 30
years of service to receive 100%.
DaimlerChrysler had about 16,800 salaried workers and about
82,500 total employees as of Dec. 31, 2006, Reuters reports
citing Chrysler Group spokesman Mike Aberlich.
About DaimlerChrysler
Based in Stuttgart, Germany, DaimlerChrysler AG --
http://www.daimlerchrysler.com/-- develops, manufactures,
distributes, and sells various automotive products, primarily
passenger cars, light trucks, and commercial vehicles worldwide.
It primarily operates in four segments: Mercedes Car Group,
Chrysler Group, Commercial Vehicles, and Financial Services.
The company's worldwide locations are located in: Canada,
Mexico, United States, Argentina, Brazil, Venezuela, China,
India, Indonesia, Japan, Thailand, Vietnam and Australia.
The Chrysler Group segment offers cars and minivans, pick-up
trucks, sport utility vehicles, and vans under the Chrysler,
Jeep, and Dodge brand names. It also sells parts and
accessories under the MOPAR brand.
The Chrysler Group is facing a difficult market environment in
the United States with excess inventory, non-competitive legacy
costs for employees and retirees, continuing high fuel prices
and a stronger shift in demand toward smaller vehicles. At the
same time, key competitors have further increased margin and
volume pressures -- particularly on light trucks -- by making
significant price concessions. In addition, increased interest
rates caused higher sales & marketing expenses.
In order to improve the earnings situation of the Chrysler Group
as quickly and comprehensively, measures to increase sales and
cut costs in the short term are being examined at all stages of
the value chain, in addition to structural changes being
reviewed as well.
DAIMLERCHRYSLER: Chrysler & UAW Ink Two Employee Incentive Deals
----------------------------------------------------------------
DaimlerChrysler AG's Chrysler Group and the United Auto Workers
agreed to two special programs that will provide retirement and
separation incentives for the Company's bargaining-unit
employees in the United States as part of the Chrysler Group's
Recovery and Transformation Plan.
The negotiated programs include an Incentive Program for
Retirement with US$70,000 cash lump-sum amount for employees
with 30 or more years of credited service, or who meet a
combination of age and years-of-service eligibility, and an
Enhanced Voluntary Termination of Employment Program, which
provides a lump sum payment of US$100,000 for employees with at
least one year of credited service.
"These actions enable us to become more competitive going
forward," Chrysler Group Communications Vice President Jason
Vines said.
"Chrysler Group and the UAW want to ensure that we have socially
responsible separation incentives that will allow us to align
our workforce needs with the capacity needs of our manufacturing
operations."
A letter outlining the plans was sent to affected employees
yesterday.
About DaimlerChrysler
Based in Stuttgart, Germany, DaimlerChrysler AG --
http://www.daimlerchrysler.com/-- develops, manufactures,
distributes, and sells various automotive products, primarily
passenger cars, light trucks, and commercial vehicles worldwide.
It primarily operates in four segments: Mercedes Car Group,
Chrysler Group, Commercial Vehicles, and Financial Services.
The company's worldwide locations are in Canada, Mexico, United
States, Argentina, Brazil, Venezuela, China, India, Indonesia,
Japan, Thailand, Vietnam and Australia.
The Chrysler Group segment offers cars and minivans, pick-up
trucks, sport utility vehicles, and vans under the Chrysler,
Jeep, and Dodge brand names. It also sells parts and
accessories under the MOPAR brand.
The Chrysler Group is facing a difficult market environment in
the United States with excess inventory, non-competitive legacy
costs for employees and retirees, continuing high fuel prices
and a stronger shift in demand toward smaller vehicles. At the
same time, key competitors have further increased margin and
volume pressures -- particularly on light trucks -- by making
significant price concessions. In addition, increased interest
rates caused higher sales & marketing expenses.
In order to improve the earnings situation of the Chrysler Group
as quickly and comprehensively, measures to increase sales and
cut costs in the short term are being examined at all stages of
the value chain, in addition to structural changes being
reviewed as well.
FIAT SPA: Denies WSJ Report on Spin-off Plans for Auto Division
---------------------------------------------------------------
Fiat SpA denied a Wall Street Journal report that the company
intends to spin off its auto unit after the group injected EUR6
billion to Fiat Partecipazioni SpA's equity, Bloomberg News
relates.
The WSJ report disclosed that the EUR6 billion investment into
Fiat Partecipazioni SpA in May 2006 boosted the unit's worth to
EUR7.97 billion on Dec. 31, 2006, from EUR581 million a year
earlier, giving rise to spin-off speculations.
However, a Fiat spokesman who requested anonymity told Bloomberg
in an interview that the company doesn't have a spin-off in the
works for its auto unit.
"As long as the car business retains its financial wherewithal
and has solid results, its financial position will match that of
a standalone company as soon as 2008 . . . But we have
absolutely no commitment to embark on a spin-off process," Fiat
CEO Sergio Marchionne said in November 2006.
About Fiat S.p.A.
Headquartered in Turin, Italy, Fiat S.p.A. --
http://www.fiatgroup.com/-- manufactures and sells automobiles,
commercial vehicles, and agricultural and construction
equipment. It also manufactures, for use by the company's
automotive sectors and for sale to third parties, other
automotive-related products and systems, principally power
trains (engines and transmissions), components, metallurgical
products and production systems. Fiat's creditors include Banca
Intesa, Banca Monte dei Paschi di Siena, Banca Nazionale del
Lavoro, Capitalia, Sanpaolo IMI, and UniCredito Italiano.
Fiat operates in Argentina, Australia, Austria, Belgium, Brazil,
Bulgaria, China, Czech Republic, Denmark, France, Germany,
Greece, Hungary, India, Ireland, Italy, Japan, Lituania,
Netherlands, Poland, Portugal, Romania, Russia, Singapore,
Spain, among others.
* * *
On Feb. 12, Moody's Investors Service upgraded to Ba2 from Ba3
Fiat SpA's Corporate Family Rating and the group's other long-
term senior unsecured ratings. At the same time, Moody's
maintained the positive outlook on all long-term ratings. The
short-term non-Prime rating remains unchanged.
Issuers: Fiat Finance & Trade Ltd.
Fiat Finance Canada Ltd.
Fiat Finance Luxembourg S.A.
Fiat Finance North America Inc.
Fiat France S.A.
Fiat S.p.A.
On Jan. 30, Fitch Ratings upgraded Fiat S.p.A.'s and Fiat
Finance and Trade Ltd. S.A.'s respective Issuer Default and
senior unsecured ratings to 'BB' from 'BB-'. Fitch affirmed
Fiat's Short-term rating at 'B'. Fitch said the outlook on the
Issuer Default rating remains positive.
On Jan. 30, Standard & Poor's Ratings Services revised its
outlook on Italian industrial group Fiat SpA to positive from
stable. At the same time, Standard & Poor's affirmed the 'BB'
long-term and 'B' short-term corporate credit ratings on Fiat.
TK ALUMINUM: Advisors Okay Nemak Transaction Consent Terms
----------------------------------------------------------
TK Aluminum Ltd., the indirect parent of Teksid Aluminum
Luxembourg S.a. r.l., S.C.A. disclosed that the discussions with
Houlihan Lokey Howard & Zukin (Europe) Limited and Cadwalader,
Wickersham & Taft LLP, the financial and legal advisors to an ad
hoc noteholders committee regarding terms for Noteholder consent
to the sale of certain Teksid assets to Tenedora Nemak, S.A. de
C.V., a subsidiary of ALFA, S.A. de C.V., and the distribution
of proceeds from such sale, the Advisors confirmed they would
recommend approval of those terms to the Ad Hoc Committee. The
Ad Hoc Committee represents holders of over 50% of the
outstanding Teksid Aluminum senior notes, and accordingly the
company anticipates that its consent solicitation will be
accepted by the Majority Noteholders. The company also
announced the release of updated information relating to the
proposed sources and uses of the proceeds from the Nemak
transaction.
Terms of Consent Solicitation
and Indenture Amendment
The consent solicitation will provide for approval by the
Noteholders of the Nemak transaction, and the release of note
guarantees of the relevant Nemak-purchased subsidiaries involved
in the transaction, as well as providing the necessary
amendments to the existing indenture. The proposed indenture
amendments would also require Teksid Aluminum to pay out of the
proceeds from the first closing of the Nemak transaction
(relating to all of the assets being sold to Nemak other than
the operations in Poland and the majority of Teksid Aluminum's
interests in its China operations) the interest due and unpaid
on the Senior Notes as of Jan. 15, 2007, together with required
interest on such unpaid interest to the date of payment (the
"January 15 Interest Payment", which amount, if the closing of
the Nemak transaction occurs on Feb. 28, 2007, would equal
approximately US$19,522,000, increasing by approximately
US$6,600 for each day thereafter). The January 15 Interest
Payment will be paid to holders of record of the Senior Notes on
Jan. 1, 2007.
In addition, the indenture amendment would require Teksid
Aluminum to make a tender offer for a limited portion of the
Senior Notes at 100% of par (including accrued but unpaid
interest to the date of purchase). The tender offer would
involve that amount of Senior Notes, which can be purchased
(including accrued interest on such Senior Notes from Jan. 15,
2007 to the date of purchase in the tender) for the euro
equivalent (such euro equivalent as determined by Teksid
Aluminum) of US$71,891,000 less the sum of:
(i) the January 15 Interest Payment and
(ii) if the first closing of the Nemak transaction occurs
after Feb. 28, 2007, but before March 15, 2007, the
incremental amount (as determined by Teksid Aluminum) as
a result of any delay in such first closing from
Feb. 28, 2007, of additional interest payable on debt
being paid or purchased in connection with the first
closing of the Nemak transaction and additional overdue
interest on the January 15 Interest Payment, and such
US$71,891,000 is subject to further adjustment for
changes in exchange rates from the assumed exchange rate
of 1 euro = US$1.295 used in the computation of the
US$71,891,000 amount in connection with amounts payable
on the Sources and Uses.
The amount of the required tender offer is the result of
negotiations between the company and the Advisors as to
permitted uses of proceeds and limitations on the use of funds
for certain purposes. Such permitted uses of proceeds are a
component of the indenture amendment and include the items
provided for in the Sources and Uses, including among other
things, and without duplication:
(i) repayment of senior secured indebtedness;
(ii) cash collateralization of outstanding letters of credit;
(iii) payment of the January 15 Interest Payment;
(iv) the purchase of intercompany obligations by Nemak;
(v) repayment of capitalized leases;
(vi) repayment of non-recourse factoring relating to
the entities sold in the first closing of the Nemak
transaction;
(vii) settlement of certain intercompany transactions
necessary for the consummation of the Nemak transaction;
(viii) payment of certain employee-related expenses and
professional fees and expenses related to the
transaction; and
(ix) a reserve of additional funds to provide for
contingencies.
As a result of the foregoing, Teksid Aluminum's French
subsidiaries will receive approximately EUR40 million. The
permitted uses of the proceeds will also include payments to
Teksid Aluminum's Italian subsidiaries, including payments to
terminate certain agreements between such Italian subsidiaries
and the companies being sold to Nemak, which payments will
provide Teksid Italy with funds sufficient to allow the Italian
subsidiaries to entirely repay their secured indebtedness under
the senior credit facility in the amount of EUR26 million,
obtain the release of all the collateral over their assets in
respect thereof, and satisfy certain other obligations,
including intercompany obligations, of the Italian subsidiaries,
thereby improving the financial position of the Italian
subsidiaries.
The indenture amendment also contemplates that the proceeds to
be received under its settlement agreement with Fiat, proceeds
received from subsequent anticipated sales of its Polish and
Chinese operations pursuant to the Nemak transaction agreement,
and any remainder of a purchase price adjustment escrow that is
returned by Nemak to Teksid Aluminum, in each case less certain
expenses, will be used to repurchase additional Senior Notes
through tender offers at 100% of par plus accrued and unpaid
interest thereon to the date of purchase. Remaining Senior
Notes will be left outstanding in accordance with their original
terms (as amended by the indenture amendment), but will no
longer be guaranteed by those subsidiaries purchased by Nemak.
In addition, the indenture amendment implements a standstill
preventing acceleration of the Senior Notes through
March 15, 2007, provided the lenders under Teksid Aluminum's
credit facilities do not accelerate the amounts due under our
senior credit facilities. In addition, the amendments to the
indenture would permit an increase of up to EUR15 million in the
amount of indebtedness, which may be incurred by Teksid Aluminum
under its existing senior credit facility (provided that any of
such amounts borrowed are required to be repaid at the first
Nemak closing, or be applied to meet expenditures that result in
a working capital adjustment in Teksid's favor). The indenture
amendment would limit to US$55.25 million (including amounts
borrowed under a bridge facility, if any) the amount of Nemak
sale proceeds that can be paid into the company's subsidiaries
in Italy, France and Germany. Finally, the indenture amendments
would defer Teksid Aluminum's financial statement reporting
requirements to Noteholders.
There will not be any consent fee offered to Noteholders in
conjunction with the consent solicitation. Most of the
amendments to the indenture will not become effective if the
first closing of the Nemak transaction does not occur on or
before March 15, 2007.
Consent Agreements
The company expects to enter into consent agreements with the
Majority Noteholders that will obligate such Noteholders to
accept the consent solicitation promptly after it is launched.
The Advisors will recommend that the Majority Noteholders enter
into consent agreements; however, there is no guarantee that the
Majority Noteholders will do so. The consent agreements, like
the indenture amendment, provide for a standstill through
March 15, 2007, and certain restrictions on transfer prior to
the effectiveness of the amendment. The consent agreements
further provide that the company will promptly appoint a
representative of Alvarez and Marsal as the chief restructuring
officer of the appropriate Teksid Aluminum entity or entities
for an appropriate period of time to assist in the
restructuring, recapitalization or disposition of the company's
operations in France, Italy and Germany.
Prior to the execution of the indenture amendment, the consent
agreement may be terminated under certain circumstances,
including if:
(i) the Company withdraws the consent solicitation or amends
the terms in a manner adverse to the Majority
Noteholders;
(ii) certain bankruptcy-related events or filings occur;
(iii) the lenders under the company's senior secured
indebtedness accelerate the amounts due thereunder;
(iv) the Nemak transaction agreement is terminated; or
(v) the company and the Majority Noteholders agree to
terminate the consent agreements.
Status of the Nemak Transaction
On Feb. 12, 2007, the company received a signed term sheet from
Nemak indicating revised terms for the transaction, taking into
account the most current circumstances. The company continues
to work with Nemak to finalize definitive documentation
consistent with these terms and consummate the Nemak
transaction. If Majority Noteholders provide their consent in
the consent solicitation, as recommended by the Advisors, one of
the conditions to the closing of the Nemak transaction will be
satisfied. The company anticipates that Majority Noteholder
consent will be received; however, until such Noteholders have
delivered their consent in the consent solicitation, there can
be no guarantee that the consents will be received. In
addition, the previously announced letter of understanding with
Nemak places Nemak under no obligation to consummate a
transaction until a definitive agreement to amend the
transaction has been executed. Failure to close the Nemak
transaction could materially and adversely affect the Company's
ability to continue trading. Closing of the amended Nemak
transaction is subject to various conditions, including the
receipt of the Noteholder consent discussed above and other
customary conditions, including regulatory approvals.
Italian Subsidiary Intercompany Loans
Pursuant to intercompany loans by Teksid Aluminum's Italian
subsidiaries to the Issuer, Teksid Investment Aluminum B.V. and
TK Aluminum-Luxembourg Finance S.a. r.l. existing prior to the
Nemak transaction, Teksid Aluminum's Italian subsidiaries are
owed approximately EUR41 million. As a result of the settlement
of intercompany relationships in connection with the first
closing of the Nemak transaction, the company expects the amount
due to Teksid Aluminum's Italian subsidiaries to be reduced to
approximately EUR22.5 million, approximately EUR8 million of
which will be due from the Issuer. There can be no guarantee
that these intercompany arrangements can be settled as expected,
and thus the amounts that remain outstanding after the first
closing of the Nemak transaction may be greater than
anticipated.
Sources and Uses for Nemak Transaction
The Sources and Uses have been reviewed by the Advisors, and, if
the indenture amendments are approved by the Noteholders, the
Sources and Uses provide the general basis for the terms of the
amendment relating to the use of proceeds from the Nemak
transaction and receipt of Fiat settlement agreement proceeds,
if received.
The Sources and Uses are provided to aid the Noteholders in
their assessment of the Nemak transaction and consent
solicitation. However, the Sources and Uses are based on
numerous assumptions and projections about our financial
condition, results of operations, business, strategies,
objectives, future business, financing needs and capital
expenditures. These assumptions and projections may prove to be
materially inaccurate. In addition, other than the amount of
the initial tender offer to Noteholders, in the company's
current operating environment it is difficult to accurately
quantify the payments from the Nemak transaction proceeds that
the company will need to make, and the actual amounts may be
higher or lower than those set forth in the Sources and Uses.
The Sources and Uses are based on estimated working capital on
an assumed date for each closing of the Nemak transaction, and
thus the actual sources and uses may vary materially if the
estimated working capital as of the actual date of any such
closing is different. Accordingly, actual results may differ
materially from those expressed or implied by the Sources and
Uses.
About Teksid Aluminum
Headquartered in Turin, Italy, TK Aluminum Ltd. --
http://www.teksidaluminum.com/-- manufactures light metal
castings for the automotive industry. The company's core
products are cylinder heads and blocks, and transmission and
suspension components produced with a wide range of
technologies: semipermanent mold gravity casting, high-pressure
die casting, low pressure, precision sand core and lost foam.
The company also operates in France, Poland, U.S.A., Mexico,
Brazil, Argentina and China.
As reported in the Troubled Company Reporter on Jan. 18, 2007,
Moody's Investors Service downgraded the Corporate Family Rating
of Teksid Aluminum Ltd. aka TK Aluminum to Caa3 from Caa1 and
the senior unsecured rating of Teksid Aluminum Luxembourg S.a.
r.l. SCA to Ca from Caa3. The ratings remain on review with an
uncertain direction; the rating review was initiated on
Nov. 3, 2006.
YOMA TANNERY: Enters Bankruptcy on Court Order
----------------------------------------------
The Civil, Commercial and Mining Court in Chilecito, Argentina,
has ordered Yoma Tannery's liquidation, Infobae reports.
Infobae relates that experts will make an assessment of Yoma
Tannery, which is estimated at US$432 million.
Meanwhile, Yoma Tannery will continue to manufacture leathers in
smaller quantity in Nonogasta, under the supervision of judicial
administrator Miguel Paulon, Infobae notes. The plant has been
administered since 2005 when the family of former President
Carlos Menem left the administration. The supervision of Yoma
Tannery was set to end on Feb. 9. However, the negotiations
conducted with Yoma Tannery's main creditor, Banco de la Nacion
Argentina, regarding the payment of US487 million that the plant
borrowed in the 90's failed. Interested parties Frigorifico
Mattievich of Santa Fe, Vazquez and Bestani, discouraged by the
liabilities that they would have to face, didn't send any
representative.
The banks Nacion, Ciudad and Provincia de Buenos Aires would
become the owners of Yoma Tannery, as the latter owed US$140
million to the three banks at the time of entering "concurso,"
Infobae states.
* ARGENTINA: 10 Blocks to be Tendered to Need US$3MM Investment
---------------------------------------------------------------
Raul Almirall -- the director of Pampetrol, an oil firm
controlled by Argentina's La Pampa province -- told Business
News Americas that the 10 blocks that the company will tender in
the short term will require a US$3-million investment.
BNamericas relates that the blocks that will be tendered are:
-- Gobernador Ayala I,
-- Gobernador Ayala IV,
-- Gobernador Ayala V,
-- Gobernador Ayala VI,
-- Salina Grande VIII,
-- Salina Grande IX,
-- Salina Grande X,
-- Salina Grande XI,
-- Salina Grande XII, and
-- Macachin Norte.
Mr. Almirall told BNamericas that the winning bidders will carry
out 3-D seismic evaluations on the entirety of each 300-square-
kilometer block and drill two exploratory wells.
According to BNamericas, the blocks have been explored in the
past with some 2-D seismic evaluations, and gravity and
aeromagnetic surveys.
Mr. Almirall said that Pampetrol has almost finished making the
bidding rules for the blocks' exploration and production. The
firm could launch the tender in 10 days, BNamericas states.
* * *
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
* BUENOS AIRES: Moody's Rates Proposed US$450-Mil. Bonds at B3
--------------------------------------------------------------
Moody's has assigned a rating of B3 (Global Scale, foreign
currency), with stable outlook, to the planned offering of up to
US$450 million senior unsecured notes by the Province of Buenos
Aires. The province intends to use note proceeds for capital
expenditures.
The assigned ratings reflect economic recovery evident in the
province and nationally, which has supported strong revenue
growth in the years since 2002. Revenue gains contributed to
the province's better financial performance from 2002 through
2004. The ratings also acknowledge the considerable economic
uncertainty and financial pressures still facing the province
-- reflected in weaker financial performance since 2005 -- as
well as its financial reliance on the federal government, which
includes the need to refinance debt maturities as they come due
as well as the importance of federal transfers to the province's
revenue stream (over 44% in 2005 and preliminary 2006).
Economic recovery is evident in double-digit real GDP growth
(preliminary) in the three years following the declines that
concluded in 2002, an unemployment rate that has been decreasing
since reaching its recent peak in 2002, and parallel declines in
the number of people and households in the Conurbano Bonaerense
(the province's largest urban area, with some 63% of its
population) living below the poverty line.
The recovery has contributed, along with the effects of
inflation and increased tax enforcement efforts, to double-digit
revenue growth -- ranging from 19% to nearly 32% -- for the
province in the last four years, compared to revenue declines in
the immediately preceding years. This revenue growth and
spending control efforts enabled the province to reduce its
financing deficits and, in 2004, achieve a financing surplus,
i.e., revenues exceeded expenditures, including interest
payments.
But the province still faces serious challenges. The financing
surplus achieved in 2004 (excluding interest for foreign
currency debt on which it suspended payment effective
Dec. 31, 2001), was followed by a small deficit in 2005 (ARS276
million or 1.5% of that year's revenue), and by a larger deficit
in 2006, about ARS1.1 billion (preliminary) or 4.8% of revenues.
Much of the deficit may be attributed to substantial increases
in personnel spending, which rose more than ARS5.7 billion
(preliminary) or 87% in the last two years. For 2007, the
province has budgeted a financing deficit of ARS1.6 billion or
6.2% of revenue, much of it attributable to an increase in
capital spending.
To cover principal payments on outstanding debt, which is
projected at ARS2.85 billion in 2007 (tapering off over the next
four years to ARS2.8 billion), the province -- like many others
in Argentina -- expects to rely on the federal government for
financial support. Having assumed a large part of the
province's debt during the worst of the crisis years, the
federal government is now the province's largest single
creditor. As of year-end 2006 it held more than 60% of the
province's debt.
Finally, the province will continue to be pressed to increase
public employee salaries, which declined in real terms through
July 2004 but have since been increasing.
* BUENOS AIRES: S&P Rates Proposed US$450-Mil. Bonds at B+
----------------------------------------------------------
Standard & Poor's Ratings Services assigned its 'B+' senior
unsecured debt rating to the Province of Buenos Aires' (Republic
of Argentina, B+/Stable/B sovereign credit ratings) proposed
US$450 million Eurobond due in 2028. Standard & Poor's also
affirmed its 'B+' long-term foreign and local currency issuer
credit ratings on the province. The outlook on the ratings
remains stable.
According to Standard & Poor's credit analyst Sebastian Briozzo,
the new bond represents the province's second international
issuance since curing its default by completing a comprehensive
debt restructuring in January 2006. Buenos Aires issued a
previous Eurobond for US$475 million due in 2018 in October
2006.
"The ratings on the province continue to be supported by a
diversified economic base that represents an estimated 36% of
Argentina's GDP and constitutes a key driver of the country's
recent and continuing economic growth trajectory," said Mr.
Briozzo. "Nonetheless, several factors constrain Buenos Aires'
ratings at the current level. These include structural fiscal
imbalances resulting from (among other factors) a relatively low
share of federal government revenue transfers compared to both
the province's contribution to the system and its high level of
expenditure responsibilities (education and health, in
particular)," he said. Recent concern over the impact a
central-government-sponsored increase in teachers' salaries
could have on the province's finances is another example of the
weakness in Buenos Aires' fiscal and financial profile.
Although the full burden of the final increase in teachers'
salaries is not expected to levy completely on the province's
finances (some type of financial assistance from the federal
government is expected), the increase will have to have an
impact on the province's expenditure rigidity not only in 2007
but also going forward.
Standard & Poor's said that even before this recent
announcement, Buenos Aires' finances were already showing a
fiscal deficit of Argentine peso ARS1.1 billion (approximately
US$383 million), or 5.0% of total revenue estimated for 2006,
despite the very high growth of the economy that year (8.5%).
Although the final estimate rests upon final negotiations over
the salary increase, the province is expected to run a deficit
close to 6.2% of total revenue in 2007 (about ARS1.6 billion).
Mr. Briozzo explained that another factor that constitutes an
important constraint to the rating is the province's high debt
burden. Total debt (at US$10.8 billion) reached 150.1% of
operating revenue in fiscal 2006. However, the importance of
this high ratio on the province's creditworthiness is partially
offset by the structure of its debt. Over 60% of Buenos Aires'
total debt is held with the federal government, as per the
sovereign-sponsored provincial restructuring at the end of 2001
and the programs of financial assistance with the federal
government the province agreed to every year since
2003.
"The stable outlook indicates Standard & Poor's expectation that
the province's economic strengths will be maintained," Mr.
Briozzo noted. "It also indicates Standard & Poor's expectation
that Buenos Aires will maintain both positive operating
surpluses over the next few years and manageable deficits after
capital expenditure. Deteriorating financial indicators, such
as a substantial increase in the province's fiscal deficit,
could negatively affect Standard & Poor's outlook on the rating
and eventually lead to a downgrade," he concluded.
===============
B A R B A D O S
===============
AIR JAMAICA: May Increase Weekly Flights to Barbados
----------------------------------------------------
Air Jamaica could increase its 28 weekly flights into Barbados,
Michael Conway, the airline's president and chief executive
officer, told the Caribbean Broadcasting Corp.
CBC relates that Air Jamaica's management is reviewing and
revising the airline's operations.
The reorganization is part of the changes the Jamaican
government ratified. The government also committed over 120
million us dollars to Air Jamaica over the next two years, CBC
states, citing Mr. Conway.
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.
=============
B E R M U D A
=============
KEPLER HOLDINGS: S&P Assigns BB Prelim. Rating on US$200MM Loan
---------------------------------------------------------------
Standard & Poor's Ratings Services assigned its 'BB' preliminary
senior secured bank loan rating to Kepler Holdings Ltd.'s
proposed US$200 million term loan. The rating is subject to
final documentation, legal review of the transaction documents
and the segregated cell structure, and comfort regarding
segregation for both this rating and the other previous and
future unrated loans of Kaith Re Ltd.
Kepler Holdings is a newly formed, Bermuda-exempted company. It
was set up specifically to enter into a US$200 million senior
secured credit facility and to subscribe to the shares of Kaith
Re's newly formed, segregated account: Kepler Re. Kepler Re has
deposited the proceeds into a collateral trust account to fully
collateralize its reinsurance obligations under an excess-of-
loss reinsurance agreement it entered into with Hannover
Rueckversicherung-AG (AA-/Negative/--), E+S Rueckversicherungs
AG (AA-/Negative/--), and Hannover Re Bermuda Ltd. (AA-
/Negative/--) (collectively Hannover Re).
"The rating on the term loan reflects the obligation's very low
modeled probability of default and the structural provisions
that align the interest between Kepler Re and Hannover Re,"
explained Standard & Poor's credit analyst Maren Josefs. Kepler
Re will benefit from the very strong competitive position of
Hannover Re, as one of the world's five largest reinsurers, and
from Hannover Re's very strong operating performance. Hannover
Re also has an experienced underwriting and modeling team with a
long track record in the global reinsurance market. These
positive factors are partially offset, however, by Hannover Re's
exposure to property catastrophe losses and the high level of
modeling risk inherent in forecasting the frequency and severity
of natural disasters.
The modeled probability of default refers to the percentages of
simulations that result in the term loan becoming impaired and
is based on the modeled loss output from Risk Management
Solutions and AIR Worldwide Corp. The modeled annual
probability of default for the term loan is 120 basis points.
Standard & Poor's has adjusted this probability to charge for
modeling risk, operational risk, credit risk, and other
unfavorable variance in the assumptions made.
The rating also reflects the application of Standard & Poor's
criteria for obligations exposed to single or multiple event
risk. Although the modeled and adjusted probabilities are low,
Kepler Re's term loan could become impaired by the occurrence of
a single natural catastrophe event, although modeling suggests
the severity of such an event would have to be in excess of a
one-in-100-year return period. Ratings for securities where
lenders are exposed to a loss of principal or interest from one
natural catastrophe events are capped at 'BB+'.
Hannover Re will cede a portion of the losses from its property
catastrophe excess-of-loss reinsurance business to Kepler Re via
an excess-of-loss retrocession agreement or XOL layer. The
agreement provides coverage in respect of losses occurring on
and after March 1, 2007, through to Dec. 31, 2008, for policies
in force during this time period. Kepler Re will follow the
fortunes of Hannover Re and assume losses exceeding a certain
attachment point up to a defined exhaustion point.
Hannover Re will always retain at least 10% of the risk it cedes
to Kepler Re and bears part of the losses below the attachment
point and above the exhaustion point of the XOL layer. This
creates a strong incentive for Hannover Re to produce quality
business.
At closing, the net proceeds from the capital raising will be
placed into a security trust, which will provide Hannover Re
with a source of security for losses relating to its property
catastrophe excess-of-loss reinsurance business. Hannover Re
will make payments to cover the expenses of Kepler Holdings and
Kepler Re and pay quarterly premiums in arrears to cover the
floating rate interest payments due to lenders. In addition,
Hannover Re has committed to make whole any investment shortfall
on the collateral with regard to the predetermined floating rate
and any investment loss upon the sale of the collateral. The
inherent credit risk this presents is mitigated by the fact that
Kepler Re can offset its payment obligations under the
reinsurance treaty against payments due to it by Hannover Re.
Kepler Holdings Limited is a newly formed Bermuda exempted
company, wholly owned by a charitable purpose trust. Kepler
Holdings will enter into the US$200 million senior secured
credit facility, the proceeds of which will be deposited into a
segregated account, Kepler Re. Kepler Re is a newly formed
segregated account of Kaith Re Ltd., an existing licensed Class
3 Bermuda reinsurer and Bermuda segregated accounts company.
Kaith Re, on behalf of Kepler Re, will enter into an aggregate
indemnity catastrophe excess of loss reinsurance agreement with
Hannover Re.
REFCO INC: Refco LLC Trustee Pays US$38.3 Mil. in Cure Amounts
--------------------------------------------------------------
Pursuant to an order authorizing him to (i) assume and perform
an Acquisition Agreement with Man Financial, Inc., (ii) sell
regulated futures commission merchant business, and (iii) assume
and assign related executory contracts to Man Financial,
Albert Togut, the Chapter 7 Trustee overseeing the liquidation
of Refco LLC's estate, reports that he has paid US$38,354,067 in
cure amounts on account of more than 700 contracts:
Date Description Amount
---- ----------- ------
11/28/05 Pioneer Futures-Viola Contract Cure US$27,225,000
03/17/06 Currenex Cure Payment 1,422,137
04/28/06 Broker Cure Payments 5,397,005
05/23/06 Nyfix Overseas Cure Payment 251,196
06/02/06 Gombas Cure Payment 319,899
07/07/06 Broker Cure Payments 759,591
09/21/06 Broker Cure Payments 2,973,855
Various Dates Property Lease Cure Payments 5,384
Refco LLC is a debtor-affiliate of Refco Inc.
A schedule detailing all counterparties to assumed contracts and
leases and the Cure Amounts paid is available at no charge at
http://ResearchArchives.com/t/s?1a1e
About Refco Inc.
Headquartered in New York, Refco Inc. -- http://www.refco.com/
-- is a diversified financial services organization with
operations in 14 countries and an extensive global institutional
and retail client base. Refco's worldwide subsidiaries are
members of principal U.S. and international exchanges, and are
among the most active members of futures exchanges in Chicago,
New York, London and Singapore. In addition to its futures
brokerage activities, Refco is a major broker of cash market
products, including foreign exchange, foreign exchange options,
government securities, domestic and international equities,
emerging market debt, and OTC financial and commodity products.
Refco is one of the largest global clearing firms for
derivatives.
The company and 23 of its affiliates filed for chapter 11
protection on Oct. 17, 2005 (Bankr. S.D.N.Y. Case No. 05-60006).
J. Gregory Milmoe, Esq., at Skadden, Arps, Slate, Meagher & Flom
LLP, represent the Debtors in their restructuring efforts. Luc
A. Despins, Esq., at Milbank, Tweed, Hadley & McCloy LLP,
represents the Official Committee of Unsecured Creditors. Refco
reported US$16.5 billion in assets and US$16.8 billion in debts
to the Bankruptcy Court on the first day of its chapter 11
cases. (Refco Bankruptcy News, Issue No. 57; Bankruptcy
Creditors' Service Inc., http://bankrupt.com/newsstand/or
215/945-7000).
REFCO INC: Refco LLC Pays US$9.6 Million in Exchange Memberships
----------------------------------------------------------------
Albert Togut, the Chapter 7 Trustee overseeing the liquidation
of the Refco LLC estate, discloses that more than 90 claims were
satisfied from the US$9,601,267 proceeds of the Debtor's
exchange memberships in accordance with an order authorizing him
to assume and perform the Acquisition Agreement with Man
Financial, Inc.
To facilitate the transfer of Refco LLC's Exchange Memberships
to Man Financial free and clear of liabilities pursuant to the
Acquisition Agreement, the Chapter 7 Trustee posted deposits
with commodity exchanges totaling approximately US$87,100,000.
The deposits served as a proxy for the exchange memberships that
were transferred to Man Financial, and secured payment of any
claims that were made in accordance with applicable exchange
rules.
Consequently, a number of exchanges and exchange members
asserted claims against the deposits that had been posted by the
Chapter 7 Trustee.
The Chapter 7 Trustee states that all claims asserted at
commodity exchanges have now been resolved, and all claims
allowed at the exchanges have been paid from the proceeds of the
deposits used to secure the transfer of the Exchange Memberships
to Man Financial free and clear of liens and liabilities.
The consolidated amounts paid for Exchange Fees & Member Claims
are:
Fee Type Exchange Amount
-------- -------- ------
Exchange Fees Chicago Board Options Exchange US$1,369,273
Member Claims Chicago Board Options Exchange 765,869
Exchange Fees Chicago Mercantile Exchange 4,261,488
Member Claims Chicago Mercantile Exchange 1,200,888
Exchange Fees New York Mercantile Exchange, Inc. 1,815,810
Exchange Fees New York Board Of Trade 26,937
Exchange Fees Kansas City Board of Trade 23,444
Member Claims Kansas City Board of Trade 128,794
Exchange Fees Mineapolis Grain Exchange 8,763
Refco LLC is a debtor-affiliate of Refco Inc.
A detailed report of claims paid from the deposits used to
secure the transfer of Exchange Memberships is available at no
charge at http://ResearchArchives.com/t/s?1a1f
About Refco Inc.
Headquartered in New York, Refco Inc. -- http://www.refco.com/
-- is a diversified financial services organization with
operations in 14 countries and an extensive global institutional
and retail client base. Refco's worldwide subsidiaries are
members of principal U.S. and international exchanges, and are
among the most active members of futures exchanges in Chicago,
New York, London and Singapore. In addition to its futures
brokerage activities, Refco is a major broker of cash market
products, including foreign exchange, foreign exchange options,
government securities, domestic and international equities,
emerging market debt, and OTC financial and commodity products.
Refco is one of the largest global clearing firms for
derivatives.
The company and 23 of its affiliates filed for chapter 11
protection on Oct. 17, 2005 (Bankr. S.D.N.Y. Case No. 05-60006).
J. Gregory Milmoe, Esq., at Skadden, Arps, Slate, Meagher & Flom
LLP, represent the Debtors in their restructuring efforts. Luc
A. Despins, Esq., at Milbank, Tweed, Hadley & McCloy LLP,
represents the Official Committee of Unsecured Creditors. Refco
reported US$16.5 billion in assets and US$16.8 billion in debts
to the Bankruptcy Court on the first day of its chapter 11
cases. (Refco Bankruptcy News, Issue No. 57; Bankruptcy
Creditors' Service Inc., http://bankrupt.com/newsstand/or
215/945-7000).
===========
B R A Z I L
===========
BANCO BRADESCO: Fourth Quarter 2006 Results Worse Than 2005
-----------------------------------------------------------
Unibanco Corretora analyst Carlos Macedo told Business News
Americas that the fourth quarter 2006 results for Banco Bradesco
and Banco Itau Holding Financeira SA were worse than 2005, but
in line with expectations.
As reported in the Troubled Company Reporter-Latin America on
Feb. 14, 2007, the 2006 fourth quarter recurring net income of
Banco Bradesco was BRL1.620 billion, +0.6% compared to the 2006
third quarter. In the year of 2006, the annualized return on
average stockholders' equity stood at 30% (32.1% in 2005), and
at 32.3% in the quarter annualized (32.7% in 2006 third
quarter). Total Assets reached BRL265.5 billion, +27.2% when
compared to December 2005 and +9.2% when compared to September
2006, BRL96.2 billion or 36.2% of which represented by Loans and
Leasing.
Mr. Macedo told BNamericas, "What propped up Bradesco were the
insurance businesses, accounting for 43% of net income in fourth
quarter 2006. Insurance keeps growing because the banking
business no longer achieves results. The loan portfolio
expanded, but not among profitable loans."
Banco Bradesco started developing its credit card business in
2005 after it bought Amex operations in Brazil for US$490
million, while the bank's private label accords with retailers
like Casas Bahia did not help boost lending in the fourth
quarter of 2006, BNamericas says, citing Mr. Macedo.
Mr. Macedo told BNamericas that Banco will likely deliver strong
results in 2007, with return on equity above 29%.
"But it has to deliver better results from its banking business.
The insurance sector is going through a positive period, but
there is no telling on how abruptly that may end," Mr. Macedo
commented to BNamericas.
Meanwhile, Banco Itau Holding Financiera SA's results looked
good at first. Further analysis revealed the bulk came from
treasury operations, BNamericas says, citing Mr. Macedo.
BNamericas underscores that Banco Itau's recurring net income in
the fourth quarter 2006 increased 14.2% to BRL1.63 billion, from
the fourth quarter 2005.
"The NPL [non-performing loan] ratio improved a lot, but I
wonder if it's going to improve in 2007," Mr. Macedo told
BNamericas.
About Banco Itau
Banco Itau Holding Financeira SA -- http://www.itau.com.br/--
is a private bank in Brazil. The company has four principal
operations: banking -- including retail banking through its
wholly owned subsidiary, Banco Itau SA (Itau), corporate banking
through its wholly owned subsidiary, Banco Itau BBA SA (Itau
BBA) and consumer credit to non-account hold customers through
Itaucred -- credit cards, asset management and insurance,
private retirement plans and capitalization plans, a type of
savings plan. Itau Holding provides a variety of credit and
non-credit products and services directed towards individuals,
small and middle market companies and large corporations.
About Banco Bradesco
Headquartered in Sao Paulo, Brazil, Banco Bradesco S.A. Banco
(NYSE: BBD) -- http://www.bradesco.com.br/-- prides itself on
serving low-and medium-income individuals in Brazil since the
1960s. Bradesco is Brazil's largest private bank, with more
than 3,000 banking branches, and also a leader in insurance and
private pension management. Bradesco has branches throughout
Brazil as well as one in New York, and Japan. Bradesco offers
Internet banking, insurance, pension plans, annuities, credit
card services (including football-club affinity cards for the
soccer-mad population), and Internet access for customers. The
bank also provides personal and commercial loans, along with
leasing services.
* * *
As reported in the Troubled Company Reporter-Latin America on
Jan. 26, 2007, Fitch Ratings affirmed these issuer default
ratings on Bradesco, with a Stable Outlook:
-- Long-term foreign currency at 'BB+';
-- Long-term local currency at 'BBB-';
-- Individual rating at 'B/C';
-- Local currency short-term at 'F3';
-- Short-term at 'B';
-- Support rating of '4';
-- National short-term rating 'F1+(bra)'; and
-- National long-term rating 'AA+(bra)'.
* * *
As reported in the Troubled Company Reporter-Latin America on
Nov. 27, 2006, Standard & Poor's Ratings Services maintained the
'BB+' ratings on both of Banco Bradesco SA's foreign and local
currency counterparty credit rating, however it changed the
ratings outlook to positive from stable on both ratings:
-- Foreign currency counterparty credit rating
* to BB+/Positive/B from BB+/Stable/B
-- Local currency counterparty credit rating
* to BB+/Positive/B from BB+/Stable/B
-- Brazil national scale rating
* to brAA+/Positive/brA-1 from brAA+/Stable/brA-1
ALCATEL-LUCENT: Inks Marketing Partnership Pact with ConSentry
--------------------------------------------------------------
ConSentry Networks, announced a multi-year worldwide Original
Equipment Manufacturer or OEM agreement with Alcatel-Lucent for
its award-winning LANShieldTM Switch and LANShield Controller
platforms as well as its InSightTM Command Center. Under the
terms of the agreement, Alcatel-Lucent will market the ConSentry
products under the OmniAccess SafeGuard brand across the global
Alcatel-Lucent enterprise market beginning in March 2007.
Supporting both pre-admission and post-admission controls, the
ConSentry LANShield family provides enterprises with a proven
and affordable solution for controlling access to resources and
applications on the LAN. Since introducing its Controller
platform in September 2005 and Switch platform in May 2006,
ConSentry has deployed LANShield systems capable of controlling
more than a half-million end users. With the agreement,
ConSentry adds the power and breadth of the Alcatel-Lucent
sales, service, and support teams to capitalize on that strong
momentum and extend its leadership position.
"The ConSentry platform is unique in its ability to provide both
comprehensive threat control and identity-based access control,
including the ability to provide per-application enforcement.
We believe the all-in-one platform provides strong
differentiation for security managers looking to increase
overall security and improve visibility in a simple, cost-
effective way," said Tom Burns, head of Alcatel-Lucent
enterprise solutions activities.
"We had a record fourth quarter, and this agreement with
Alcatel-Lucent marks another major milestone for ConSentry,"
said Tom Barsi, ConSentry president and CEO. "Alcatel-Lucent
has developed an impressive global base of customers and
partners. Our relationship with the company will enable us to
expand our global market reach and accelerate our leadership
position in LAN security."
Many industry observers have forecast 2007 as the year of
Network Access Control or NAC maturation. While many NAC
products focus solely on LAN admission, the ConSentry LANShield
family provides a more comprehensive approach to LAN security,
focusing on post-admission controls. So in addition to the
authentication and posture check functionality that ensures only
valid people and systems can enter a LAN, the ConSentry devices
also offer complete visibility into all network activities,
logged by user and including server and application details;
identity-based controls to restrict access to resources based on
a user's role in an organization; and zero-day malware
containment to automatically minimize the impact of worms,
viruses, and other network-borne threats to LAN security.
"The demand for increased security control embedded into
traditional network infrastructure equipment will clearly
increase starting this year," said Mark Fabbi, vice president
and distinguished analyst in Gartner's enterprise infrastructure
team. "Enterprise network architects must realize that the
focus for future network purchases will shift from connecting
the dots to providing more business-focused services for the
enterprise. Vendors that recognize and lead this shift will be
in a good position to gain traction in the competitive network
infrastructure market."
About ConSentry Networks
ConSentry Networks delivers Control without Compromise with its
family of award-winning LANShield platforms - the LANShieldTM
Controller and LANShield Switch. ConSentry enables businesses
to protect their corporate assets, ensure continuity of
operations, and dramatically reduce the risk of security
breaches. ConSentry's LANShield platforms and InSightTM Command
Center provide network admission control, visibility, identity-
based control, and threat control. This combination of pre- and
post-admission controls provides enterprises with a simple,
proven, and affordable means of integrating security into their
LAN infrastructure and controlling access to business resources
and applications. Backed by blue-chip venture capital firms
that include Accel Partners, DAG Ventures, INVESCO Private
Capital, and Sequoia Capital, ConSentry is headquartered in
Milpitas, California. ConSentry Networks also has offices in
Germany, United Kingdom and Japan.
About Alcatel-Lucent
Headquartered in Paris, France, Alcatel-Lucent
-- http://www.alcatel-lucent.com/-- provides solutions that
enable service providers, enterprises and governments worldwide,
to deliver voice, data and video communication services to end
users. Through its operations in fixed, mobile and converged
broadband networking, Internet protocol technologies,
applications, and services, Alcatel-Lucent offers the end-to-end
solutions that enable communications services for people at
home, at work and on the move.
On Nov. 30, 2006, Alcatel and Lucent Technologies Inc. completed
their merger transaction, and began operations as a
communication solutions provider under the name Alcatel-Lucent
on Dec. 1, 2006.
Alcatel-Lucent maintains operations in 130 countries, including,
Austria, Germany, Hungary, Italy, Netherlands, Ireland, Canada,
United States, Costa Rica, Dominican Republic, El Salvador,
Guatemala, Peru, Venezuela, Australia, Brunei and Cambodia.
* * *
As of Feb. 7, Alcatel-Lucent's Long-Term Corporate Credit rating
and Senior Unsecured Debt carry Standard & Poor's BB- rating.
It's Short-Term Corporate Credit rating stands at B.
Moody's, on the other hand, put a Ba2 rating on Alcatel's
Corporate Family and Senior Debt rating. Lucent carries Moody's
B1 Senior Debt rating and B2 Subordinated debt & trust preferred
rating.
Fitch rates Alcatel's Issuer Default Rating and Senior Unsecured
Debt rating at BB.
BANCO DO BRASIL: Brazil & Uruguay to Discuss Bank's Recovery
------------------------------------------------------------
Banco do Brasil's recovery will be included in the discussions
between Brazilian President Luiz Inacio Lula da Silva will meet
with Tabare Vazquez, Prensa Latina reports.
According to Prensa Latina, President Lula da Silva is expected
to develop an ambitious agenda with President Vazquez at a
meeting in the Anchorena presidential residence in Colonia
Department. The two presidents will also discuss energy
interconnection. Meanwhile, both of the countries' ministers
from will deal with issues like investment.
Prensa Latina states that Brazilian ministers accompanying
President Lula da Silva to Uruguay include:
-- foreign affairs,
-- energy,
-- economy and trade, and the
-- advisor on foreign policy.
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 in the Troubled Company Reporter-Latin America on
Feb. 20, 2007, Fitch Ratings upgraded Banco do Brasil S.A.'s
Support rating to '3' from '4', and affirmed its other ratings:
-- Foreign currency Issuer Default Rating (IDR) at 'BB+';
-- Short-term foreign currency at 'B';
-- Local currency IDR at 'BB+';
-- Short-term local currency at 'B';
-- Individual rating at 'C/D';
-- National Long-term rating at 'AA(bra)'; and
-- Short-term rating at 'F1+(bra)'.
BANCO DO BRASIL: Earns BRL6 Billion in 2006 Fourth Quarter
----------------------------------------------------------
Banco do Brasil recorded net income of BRL6.044 billion in 2006,
an increase of 45.5% compared to the previous year. The result
was mainly due to the growth of the Loan Portfolio, which
surpassed the performance of the Brazilian Banking System, and
to the increase of 16.2% in service fees while administrative
expenses grew only 4.6%.
The results correspond to a Return on Equity of 32.1% and
earnings per share of BRL7.32. In fourth quarter 2006, net
profit was BRL1.2 billion, 69.4% higher than fourth quarter
2005.
In the year, the Bank distributed BRL2.4 billion to shareholders
-- BRL1 billion as Dividends and BRL1.4 billion as Interest on
Shareholders' Equity.
Also in 2006, Banco do Brasil was admitted into Bovespa's Novo
Mercado, a segment for companies that adopt differentiated
corporate governance practices, and celebrated 100 years of
trading on stock exchanges. BB's shares appreciated 65.8% in
2006, while Ibovespa appreciated 32.9% (year basis).
Banco do Brasil's loan portfolio reached R$ 133.2 billion, a
growth of 30.8% compared to 2005. The domestic loans portfolio
grew 30.6% in the year, while the Brazilian Banking Industry
increased 20.8%. Loans to individuals backed by free funds
increased 35.8%, 10.6 basis points higher than the Brazilian
Banking Industry. Loans to businesses grew 34.8% in the period,
and agribusiness loans increased 26.2%.
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 in the Troubled Company Reporter-Latin America on
Feb. 20, 2007, Fitch Ratings upgraded Banco do Brasil S.A.'s
Support rating to '3' from '4', and affirmed its other ratings:
-- Foreign currency Issuer Default Rating (IDR) at 'BB+';
-- Short-term foreign currency at 'B';
-- Local currency IDR at 'BB+';
-- Short-term local currency at 'B';
-- Individual rating at 'C/D';
-- National Long-term rating at 'AA(bra)'; and
-- Short-term rating at 'F1+(bra)'.
BANCO INDUSTRIAL: S&P Assign B+ Counter Party Credit Rating
-----------------------------------------------------------
Standard & Poor's Ratings Services assigned its 'B+' counter
party credit rating to Banco Industrial e Comercial S.A. aka
BICBANCO. The outlook is stable.
"The rating reflects the risks of future margin decline and the
challenge to grow operations under a scenario of increasing
competition," said Standard & Poor's credit analyst Daniel
Araujo. The rating also factors in the relatively weak
capitalization (compared to peers), and the challenge to build
and maintain a diversified funding base. The positive factors
incorporated in the ratings include the bank's well-defined
strategy, good asset quality indicators that benefit from
management in the short term, secured loans to middle-market
companies as its core business, and adequate liquidity
management.
The stable outlook reflects our expectations that BICBANCO will
maintain a consistent approach to credit risk management, and
credit granting policies and procedures in particular, so that
growth in the loan portfolio does not cause asset quality
indicators to deteriorate. We expect the maintenance of prudent
liquidity management and the gradual strengthening of the bank's
capital base in the medium term. The outlook may be revised to
negative or the rating may be lowered if there is significant
deterioration in asset quality indicators, with the NPL-to-total
loans ratio exceeding 6% or if profitability levels decline,
with a ROAA below 1%.
BICBANCO is headquartered in Sao Paulo, Brazil. It had total
assets of BRL6.7 billion and equity of BRL505 million in
December 2005.
DAIMLERCHRYSLER: Supervisory Board Approves Small-Car Chery Pact
----------------------------------------------------------------
The DaimlerChrysler AG Supervisory Board approved the framework
of a limited partnership to develop small vehicles between the
Chrysler Group and Chery Motor Company of China.
The deal is still contingent upon approval by the Chinese
government, but the final pact of the framework is expected to
be signed by the end of March.
Under the non-equity partnership, Chery-built vehicles will be
distributed under Chrysler Group brands, primarily in North
America and Western Europe.
Chrysler Group indicated that the partnership would allow the
company to become a bigger player on the global automotive stage
by giving it access to products in new segments more quickly,
with less capital spending.
Small vehicles such as these will allow Chrysler Group brands to
compete in segments in which the brands do not currently
compete, and which are especially important in price- and fuel-
economy sensitive markets.
Some 67% of all vehicles sold outside of North America are in
these segments. Chrysler Group's major competitors in the U.S.
and Western Europe have similar arrangements with Asian
manufacturers for vehicles in these segments.
About DaimlerChrysler
Based in Stuttgart, Germany, DaimlerChrysler AG --
http://www.daimlerchrysler.com/-- develops, manufactures,
distributes, and sells various automotive products, primarily
passenger cars, light trucks, and commercial vehicles worldwide.
It primarily operates in four segments: Mercedes Car Group,
Chrysler Group, Commercial Vehicles, and Financial Services.
The company's worldwide locations are located in: Canada,
Mexico, United States, Argentina, Brazil, Venezuela, China,
India, Indonesia, Japan, Thailand, Vietnam and Australia.
The Chrysler Group segment offers cars and minivans, pick-up
trucks, sport utility vehicles, and vans under the Chrysler,
Jeep, and Dodge brand names. It also sells parts and
accessories under the MOPAR brand.
The Chrysler Group is facing a difficult market environment in
the United States with excess inventory, non-competitive legacy
costs for employees and retirees, continuing high fuel prices
and a stronger shift in demand toward smaller vehicles. At the
same time, key competitors have further increased margin and
volume pressures -- particularly on light trucks -- by making
significant price concessions. In addition, increased interest
rates caused higher sales & marketing expenses.
In order to improve the earnings situation of the Chrysler Group
as quickly and comprehensively, measures to increase sales and
cut costs in the short term are being examined at all stages of
the value chain, in addition to structural changes being
reviewed as well.
EMI GROUP: Buyout Firms Eye Possible Takeover Deal
--------------------------------------------------
Fortress Investment Group LLC, Apollo and One Equity are among
the buyout firms interested in EMI Group Plc, Mark Kleinman of
the Sunday Telegraph reports.
People familiar with the matter told the Sunday Telegraph that
Fortress is undertaking detailed work on EMI ahead of a possible
approach to the record labels of Robbie Williams and Madonna.
Permira Advisers LLP, which approached EMI on November 2006, was
also expected to review its offer, the report states.
However, the Telegraph suggests, it is possible none of the
buyout firms will make formal approaches to the EMI board.
Warner Music Group Corp. approached EMI on Jan. 24, after it
obtained the support of Brussels-based Impala, a trade group for
independent European record labels ending its opposition to a
Warner-EMI merger, reports say. WMG clarified Feb. 21 that any
possible takeover offer for EMI Group PLC is likely to be solely
in cash.
In 2006, EMI and Warner were locked in a GBP2.3 billion takeover
battle. The deal was halted in June 2006 following the
annulment of the 2004 Sony-BMG tie-up by a European Court.
Analysts believed that an EMI-Warner merger could generate cost
savings of about GBP150 million a year.
About EMI
Headquartered in London, United Kingdom, EMI Group PLC --
http://www.emigroup.com/-- is the world's largest independent
music company, operating directly in 50 countries and with
licensees in a further 20. The group has operations in Brazil,
China, and Hungary. The group employs over 6,600 people.
Revenues in 2005 were near EUR2 billion and operating profit
generated was over EUR225 million.
At March 31, 2006, EMI Group's consolidated balance sheet
revealed GBP1.817 billion in total assets, GBP2.544 billion in
total liabilities and GBP726.6 million in shareholders' deficit.
* * *
On Jan. 15, Moody's Investors Service downgraded EMI Group Plc's
Corporate Family and senior debt ratings to Ba3 from Ba2. All
ratings remain under review for possible further downgrade.
As reported in the TCR-LA on Feb. 19, Standard & Poor's Ratings
Services kept the U.K.-based music major EMI Group Plc's ratings
at BB-/Watch Neg/B, after the company announced it expects
revenues in its recorded music division to decline by 15% in the
fiscal year ended March 31, 2007, at constant currencies. The
ratings also remain on CreditWatch with negative implications,
where they were placed on Feb. 5, 2007.
ITRON INC: Actaris Buy Cues Moody's to Place Ratings on Review
--------------------------------------------------------------
Moody's Investors Service placed all ratings of Itron Inc. under
review for possible downgrade following the company's
announcement that it was acquiring Actaris Metering Systems , a
leading European manufacturer of electric, gas and water meters,
for approximately US$1.6 billion, including the retirement of
approximately ?445 million of Actaris' debt. The action is
predicated on Moody's expectation that the transaction will
result in a significant increase in leverage at closing, with
approximately US$1.1 billion incremental debt and proforma
debt/EBITDA on a reported basis rising to 5.75x from 4.07x at
Dec. 31, 2006. Moody's notes that the acquisition will be also
funded with the net proceeds of a US$235 million private
placement of equity and cash on hand, which was substantial at
Dec. 31, 2006, following the issuance of US$345 million
convertible subordinated notes in August 2006.
During its review, Moody's will look into the financial
implications of the transaction, focusing on the cash flow
profile of the combined entity, the assumed amount of debt-like
obligations such as pension deficit and capitalized operating
leases, as well as the pace at which Itron is expected to de-
lever. The rating agency will also consider the potential
synergies and integration risks associated with a transaction of
this magnitude. To define the scope of the downgrade within the
B rating category, Moody's will weigh the positive factors of
the transaction, primarily broader scale and diversity, and
determine to what extent they bring more stability to cash flows
and mitigate the significant deterioration of the credit metrics
at closing. Moody's cautions that Itron has been historically
exposed to utility spending cycles and partially reliant on
large project-based orders for the marketing of its AMR
technology.
These ratings have been placed under review for possible
downgrade:
-- Ba3 Corporate Family Rating
-- Ba3 Probability of Default Rating
-- Baa3 Senior Secured Revolver due 2009
-- Ba1 Subordinated Notes due 2012
Itron Inc., -- http://www.itron.com/-- is a technology provider
and critical source of knowledge to the global energy and water
industries. Nearly 3,000 utilities worldwide rely on Itron
technology to provide the knowledge they require to optimize the
delivery and use of energy and water. Itron creates value for
its clients by providing industry-leading solutions for
electricity metering; meter data collection; energy information
management; demand response; load forecasting, analysis and
consulting services; distribution system design and
optimization; Web-based workforce automation; and enterprise and
residential energy management. Effective April 2006, Itron has
acquired Brazil's ELO Tecnologia. Itron Tecnologia has offices
and a manufacturing assembly facility in Campinas, Sao Paulo,
Brazil and offices in Santiago, Chile.
JABIL CIRCUIT: Moody's Lowers Corporate Family Rating to Ba1
------------------------------------------------------------
Moody's Investors Service downgraded Jabil Circuit, Inc.'s
issuer rating to Ba1 (corporate family rating) and the senior
unsecured note rating to Ba2 from Baa3, while continuing to keep
the company's rating under review for possible downgrade.
Moody's first placed Jabil's rating under review for possible
downgrade in November 2006. Continuation of the review process
reflects continued uncertainty vis-a-vis Jabil's credit and
liquidity profile mainly due to issues surrounding delays in its
filing of audited financial statements.
"While Moody's continues to believe that Jabil is a leader in
the North American EMS industry, a confluence of events/issues
over the past nine months has led Moody's to downgrade Jabil's
rating", according to Tom Wu, Vice President -- Senior Analyst.
Each of these issues on its own probably would not have resulted
in a downgrade. The current rating action reflects the combined
impact of:
(1) Jabil's continued inability to file its financial
statements as a result of the on-going investigations
over its stock options practices;
(2) the possibility of acceleration by bondholders due to a
potential covenant breach as a result of the delayed
filing of financial statements. Jabil has the option to
seek a consent waiver from its bondholders to extend
deadlines imposed under any such acceleration. Jabil's
total available liquidity (assuming it has full access to
its remaining revolvers) should cover such an
acceleration, but not by a wide margin, which is a
concern for Moody's;
(3) a protracted investigation thus far which inevitably
would serve as a major distraction for management in an
industry where management focus and execution are key
competitive differentiations;
(4) significant negative free cash flow generation in recent
months due in part to increasing working capital, based
on Moody's estimates, which has reduced Jabil's cash
balance to a level which does not provide as much
financial flexibility;
(5) increase in leverage from 1.6x EBITDA to over 3x (Moody's
adjusted) on a pro forma basis as a result of the debt
financed acquisition of Taiwan Green Point Enterprises;
and
(6) integration risks associated with a sizable
(US$900 million) acquisition.
Moody's decision to maintain Jabil's rating under review for
further possible downgrade reflects the continued uncertainty
surrounding Jabil's ability to timely file its financial
statements, how Jabil will address requirements vis-a-vis its
bondholders and related liquidity implications (if any).
Moody's will most likely stabilize Jabil's ratings outlook if
Jabil is able to successfully bring the options investigation to
a conclusion in a timely manner (i.e., file its financial
statements within the current timeframe allowed by its covenants
or within an extended timeframe provided by a consent waiver -
should Jabil decide to seek one) without triggering an
acceleration by its creditors. In the longer term, Jabil will
need to: address concerns in managing the business now with
increased leverage; demonstrate evidence of successful
integration of Green Point and management's ability to refocus
itself on core execution; and re-establish a track record of
generating sustainable free cash flow.
The ratings reflect both the overall probability of default PDR
of the company under Moody's loss-given-default or LGD
framework, to which Moody's assigned a PDR of Ba1, and a loss-
given-default of LGD-5 for the senior unsecured notes. The Ba2
rating on the notes reflects the structural subordination of
this debt relative to debt and trade claims residing at the
operating subsidiaries under Moody's LGD framework.
These ratings were downgraded and kept under review for possible
downgrade:
-- Corporate Family Rating (formerly issuer rating)
to Ba1 from Baa3;
-- US$300 million senior unsecured notes due 2011
to Ba2 (LGD-5, 83%) from Baa3
Moody's also assigned a Probability of Default Rating of Ba1
Jabil Circuit, Inc. (NYSE:JBL) -- http://www.jabil.com/--,
headquartered in St. Petersburg, Florida, is an electronic
product solutions company providing comprehensive electronics
design, manufacturing and product management services to global
electronics and technology companies in the networking,
telecommunications, computing and storage, peripherals, consumer
products, automotive and instrumentation and medical industries.
Jabil Circuit has more than 50,000 employees and facilities in
20 countries, including Brazil, Mexico, Europe and Asia.
LG.PHILIPS: To Sell Czech Display Plant to CTP Invest for EUR40M
----------------------------------------------------------------
LG.Philips Displays is selling its cathode-ray tube factory in
the Czech Republic for EUR40 million to business parks developer
CTP Invest, Bill Rochelle, the bankruptcy columnist for
Bloomberg News, reports.
LG.Philips Displays Holding B.V. is the European holding company
for Hong Kong-based LG.Philips Displays. On Jan. 27, 2006,
LG.Philips Displays Holding B.V. filed for insolvency protection
along with its Dutch subsidiary, LG.Philips Displays Netherlands
B.V., and its German subsidiary in Aachen due to worsening
conditions in the CRT marketplace and unsustainable debt.
Less than two months after the insolvency filings in Europe, the
company's U.S. unit, LG.Philips Displays USA Inc., filed a
chapter 11 petition in the U.S. Bankruptcy Court for the
District of Delaware on March 15.
As reported in the Troubled Company Reporter-Europe, the
LG.Philips Displays group had scaled down its cathode ray tube
production after the market saw an increase in demand for new
flat panel televisions, including liquid crystal display and
plasma televisions.
About LG.Philips Displays
Headquartered in Hong Kong, LG.Philips Displays --
http://www.lgphilips-displays.com/-- manufactures cathode ray
tubes for use in televisions and computer monitors. The company
produces one in every four television and computer monitor tubes
sold. Making use of its global manufacturing infrastructure, it
provides regional supplies to top TV and monitor brands
worldwide. LG.Philips Displays continues to be committed to the
CRT industry and will maintain a strong profile based on its
competitive operations and innovative, high-quality products.
The company's production facilities are in: China, Korea,
Indonesia, Brazil, The Netherlands and United Kingdom.
NRG ENERGY: Declares Share Dividends Payment on March 15
--------------------------------------------------------
NRG Energy Inc. announced these dividends, payable on
March 15, 2007, for preferred stock to shareholders of record as
of March 1, 2007:
-- A US$10 per share cash dividend on its 4% Convertible
Perpetual Preferred Stock issued in December 2004; and
-- A US$3.59375 per share cash dividend on its 5.75%
Mandatory Convertible Preferred Stock issued on
Feb. 2, 2006.
All inquiries and correspondence regarding NRG common and
preferred stock - relating to shareholder records, transfer of
shares, lost certificates, or change of address -- should be
addressed to:
Bank of New York
P.O. Box 11258
Church Street Station
New York, NY 10286
Tel: (800) 524-4458
Headquartered in Princeton, New Jersey, NRG Energy Inc.
(NYSE:NRG) owns and operates power generating facilities,
primarily in Texas and the northeast, south central and western
regions of the United States. NRG also owns generating
facilities in Australia, Brazil, and Germany.
* * *
As reported in the Troubled Company Reporter on Nov. 14, 2006,
Fitch Ratings assigned a rating of 'B+/RR3' on NRG Energy's
issuance of US$1.1 billion senior notes due 2011. This issue
will rank equally with NRG's other senior unsecured obligations.
Fitch said the rating outlook is stable.
VALMONT INDUSTRIES: Paying 9.5 Cents A Share Dividend on Apr. 16
----------------------------------------------------------------
Valmont Industries Inc.'s board of directors has declared a
quarterly dividend of 9.5 cents per share payable on
April 16, 2007, to shareholders of record on March 30, 2007.
The dividend indicates an annual rate of 38.0 cents per share.
Headquartered in Valley, Nebraska, Valmont Industries Inc. --
http://www.valmont.com/-- is engaged in the manufacture of
fabricated metal products, metal and concrete pole and tower
structures. The company also operates in Brazil.
* * *
As reported in the Troubled Company Reporter-Latin America on
Nov. 9, 2006, Moody's Investors Service, in connection with its
implementation of its new Probability-of-Default and Loss-Given-
Default rating methodology for the US manufacturing sector,
confirmed the Ba2 Corporate Family Rating for Valmont Industries
Inc., as well as the rating on the company's US$150 Million
Senior Subordinated 6.875% Notes due 2014. Those debentures
were assigned an LGD5 rating suggesting noteholders will
experience an 82% loss in the event of default. Additionally,
Moody's revised its probability-of-default ratings and assigned
loss-given-default ratings on these loans and bond debt
obligations of the company:
Projected
Old POD New POD LGD Loss-Given
Debt Issue Rating Rating Rating Default
---------- ------- ------- ------ ----------
US$150 Mil. Sr.
Unsec. Bank
Facility
Due 2009 (Rev.) Ba2 Ba1 LGD3 34%
US$75 Mil. Sr.
Unsec. Bank
Facility due 2014 Ba2 Ba1 LGD3 34%
ULTRAPAR PARTICIPACOES: Hires Andre Covre as Chief Fin'l Officer
----------------------------------------------------------------
Ultrapar Participacoes S.A. has appointed new Chief Financial
and Investor Relations Officer, Andre Covre, who will provide
continuity to the directions that Fabio Schvartsman has
implemented over the past 22 years. Fabio Schvartsman leaves
Ultrapar after a track record of success and accomplishments
with the company.
"Ultrapar's financial management is based on a culture of
operational excellence, focus on shareholder's return and
support for the company's growth and continuous improvement of
corporate governance. Andre, in addition to the expertise
developed during his career, shares the same culture", says
Pedro Wongtschowski, Chief Executive Officer.
Andre Covre joined Ultrapar in 2003 as Planning and Investor
Relations Director. He has 15 years of experience in corporate
finance, mergers & acquisitions and capital markets. He began
his career with Unisys Corp. in the United States, and was
formerly a director of ABN AMRO Capital, a private equity and
venture capital fund in Amsterdam. He has a public
administration degree from EAESP- Fundacao Getulio Vargas, and
holds an MBA from INSEAD, in France.
Andre Covre's employment begins today.
Ultrapar Participacoes S.A. (NYSE: UGP) (BOVESPA: UGPA4) is a
company with two main operations: LPG distribution (through its
fully-owned subsidiary Ultragaz Participacoes Ltda.) and
chemical production (through its also fully-owned subsidiary
Oxiteno S.A.). A third smaller but growing business is the
transportation and storage of chemicals and fuels, Ultracargo
Operacoes Logisticas e Participacoes Ltda., which completes
Ultrapar's business portfolio and reinforces the trend for
further business diversity in the long run.
* * *
In November 2005, Standard & Poor's Ratings Services assigned
its 'BB+' senior unsecured debt rating to the 10-year notes
issuance by LPG International Inc., a wholly owned subsidiary of
Ultrapar Participacoes S.A., in the amount of US$250 million.
At the same time, the 'BB+' long-term corporate credit ratings
on Ultrapar, a Brazilian company with operations in liquefied
petroleum gas (LPG) distribution, chemical production, and
integrated logistics, were affirmed. S&P said the outlook is
stable.
===========================
C A Y M A N I S L A N D S
===========================
AL-MEEZAN INVESTMENTS: Proofs of Claim Must be Filed by March 3
---------------------------------------------------------------
Creditors of Al-Meezan Investments Limited, which is being
voluntarily wound up, are required to present proofs of claim by
March 3, 2007, to Mohamed Mahsoom M. Ameen, the company's
liquidator.
Creditors are required to present proofs of claim personally or
through their solicitors at the time and place that the
liquidator specified. Failure to present claims would mean
exclusion from the benefit of any distribution that the company
will make.
The liquidator can be reached at:
Mohamed Mahsoom M. Ameen
Attention: Jonathan Culshaw
c/o Walkers, Walker House
87 Mary Street, George Town
Grand Cayman KY1-9001, Cayman Islands
Telephone: (345) 949 6341
Fax: (345) 814 8341
AL-FIRDAUS INVESTMENTS: Proofs of Claim Must be Filed by March 3
----------------------------------------------------------------
Creditors of Al-Firdaus Investments Limited, which is being
voluntarily wound up, are required to present proofs of claim by
March 3, 2007, to Mohamed Mahsoom M. Ameen, the company's
liquidator.
Creditors are required to present proofs of claim personally or
through their solicitors at the time and place that the
liquidator specified. Failure to present claims would mean
exclusion from the benefit of any distribution that the company
will make.
The liquidator can be reached at:
Mohamed Mahsoom M. Ameen
Attention: Jonathan Culshaw
c/o Walkers, Walker House
87 Mary Street, George Town
Grand Cayman KY1-9001, Cayman Islands
Telephone: (345) 949 6341
Fax: (345) 814 8341
AL-BUNYAN INVESTMENTS: Proofs of Claim Must be Filed by March 3
---------------------------------------------------------------
Creditors of Al-Bunyan Investments Limited, which is being
voluntarily wound up, are required to present proofs of claim by
March 3, 2007, to Mohamed Mahsoom M. Ameen, the company's
liquidator.
Creditors are required to present proofs of claim personally or
through their solicitors at the time and place that the
liquidator specified. Failure to present claims would mean
exclusion from the benefit of any distribution that the company
will make.
The liquidator can be reached at:
Mohamed Mahsoom M. Ameen
Attention: Jonathan Culshaw
c/o Walkers, Walker House
87 Mary Street, George Town
Grand Cayman KY1-9001, Cayman Islands
Telephone: (345) 949 6341
Fax: (345) 814 8341
AL-BAYAN INVESTMENTS: Proofs of Claim Must be Filed by March 3
--------------------------------------------------------------
Creditors of Al-Bayan Investments Limited, which is being
voluntarily wound up, are required to present proofs of claim by
March 3, 2007, to Mohamed Mahsoom M. Ameen, the company's
liquidator.
Creditors are required to present proofs of claim personally or
through their solicitors at the time and place that the
liquidator specified. Failure to present claims would mean
exclusion from the benefit of any distribution that the company
will make.
The liquidator can be reached at:
Mohamed Mahsoom M. Ameen
Attention: Jonathan Culshaw
c/o Walkers, Walker House
87 Mary Street, George Town
Grand Cayman KY1-9001, Cayman Islands
Telephone: (345) 949 6341
Fax: (345) 814 8341
AL-ABRAR INVESTMENTS: Proofs of Claim Must be Filed by March 3
--------------------------------------------------------------
Creditors of Al-Abrar Investments Limited, which is being
voluntarily wound up, are required to present proofs of claim by
March 3, 2007, to Mohamed Mahsoom M. Ameen, the company's
liquidator.
Creditors are required to present proofs of claim personally or
through their solicitors at the time and place that the
liquidator specified. Failure to present claims would mean
exclusion from the benefit of any distribution that the company
will make.
The liquidator can be reached at:
Mohamed Mahsoom M. Ameen
Attention: Jonathan Culshaw
c/o Walkers, Walker House
87 Mary Street, George Town
Grand Cayman KY1-9001, Cayman Islands
Telephone: (345) 949 6341
Fax: (345) 814 8341
AL-MANAR INVESTMENTS: Proofs of Claim Must be Filed by March 3
--------------------------------------------------------------
Creditors of Al-Manar Investments Limited, which is being
voluntarily wound up, are required to present proofs of claim by
March 3, 2007, to Mohamed Mahsoom M. Ameen, the company's
liquidator.
Creditors are required to present proofs of claim personally or
through their solicitors at the time and place that the
liquidator specified. Failure to present claims would mean
exclusion from the benefit of any distribution that the company
will make.
The liquidator can be reached at:
Mohamed Mahsoom M. Ameen
Attention: Jonathan Culshaw
c/o Walkers, Walker House
87 Mary Street, George Town
Grand Cayman KY1-9001, Cayman Islands
Telephone: (345) 949 6341
Fax: (345) 814 8341
AMERINDO INTERNET: Chapter 15 Petition Summary
---------------------------------------------
Petitioners: David Walker and Lawrence Edwards
Joint Official Liquidators and
Authorized Foreign Representatives
PwC Corporate Finance & Recovery (Cayman) Limited
Debtor: Amerindo Internet Growth Fund Limited
Strathvale House North Church Street
Georgetown, Grand Cayman
Cayman Islands
Case No.: 07-10327
Type of Business: The Debtor was an open-ended investment
company, which was incorporated on
Feb. 14, 2000, and began operations on
July 3, 2000. The Debtor sought superior
intermediate-term capital appreciation through
investment in U.S. securities in emerging
technology companies, principally in
electronics and biotechnology.
Chapter 15 Petition Date: Feb. 9, 2007
Foreign Court: Grand Court of the Cayman Islands
U.S. Court: Southern District of New York (Manhattan)
Judge: Robert D. Drain
Petitioners' Counsel: Robert J. Rosenberg, Esq.
Henry P. Baer, Jr., Esq.
Latham & Watkins LLP
885 Third Avenue
New York, NY 10022
Tel: (212) 906-1200
Fax: (212) 751-4864
Estimated Assets: US$1 Million to US$100 Million
Estimated Debts: US$100,000 to US$1 Million
ATLANTIC & WESTERN: Missed Premium Cues Fitch to Watch Ratings
--------------------------------------------------------------
Fitch Ratings placed the 'BB' ratings of the class A notes and
the 'B' ratings of the class B notes of Atlantic & Western Re
Ltd. on Rating Watch Negative. The rating actions affect US$300
million of Atlantic & Western Re notes.
Atlantic & Western Re provided coverage to PXRE Reinsurance
Ltd., a Bermuda-based reinsurer, on a five-year reinsurance
contract. PXRE did not pay the premium due Feb. 8, 2007, under
the reinsurance contract. The non-payment resulted in a default
under the reinsurance contract, which, in turn, will result in
an early termination of the reinsurance contract. PXRE
subsequently announced that it intended to make a payment on
May 8, 2007, consisting of the premium payment due that date,
the premium payment that was due on Feb. 8, and the early
termination premium of US$11.0 million specified in the
reinsurance contract. The US$300 million note principal is held
in trust for the benefit of the note holders. As a result,
Fitch expects note holders to have a very early full recovery
under the default.
Fitch expects the Rating Watch to be in effect until the
May 8, 2007, premium payment date. If the outstanding quarterly
and early termination premiums are paid on that date, Fitch
expects to affirm the existing ratings and withdraw them due to
the early termination of the transaction. If the payments are
not made on that date, Fitch will likely downgrade the ratings
commensurate with the degree to which the payments were not
fully made.
These are the affected notes:
Atlantic & Western Re, Ltd.
-- US$100 million class A notes due Nov. 15, 2010
'BB' rating placed on Rating Watch Negative; and
-- US$200 million class B notes due Nov. 15, 2010
'B' rating placed on Rating Watch Negative.
About PXRE Group Ltd.
PXRE Group Ltd. is a publicly traded reinsurance holding company
providing reinsurance products and services to a worldwide
marketplace. For the year ended Dec. 31, 2005, PXT reported net
premiums earned of US$388 million and a net loss of US$705
million. At Dec. 31, 2005, shareholders' equity was US$465
million.
About Atlantic & Western Re
Atlantic & Western Re is a Cayman Islands-domiciled insurance
company formed solely to issue the notes, enter into a
reinsurance contract with PXRE, and to conduct activities
related to the notes' issuance.
CITIGROUP REAL: Proofs of Claim Must be Filed by March 5
--------------------------------------------------------
Creditors of Citigroup Real Estate Finance Asia Limited, which
is being voluntarily wound up, are required to present proofs of
claim by March 5, 2007, to David Tibbals, the company's
liquidator.
Creditors are required to present proofs of claim personally or
through their solicitors at the time and place that the
liquidator specified. Failure to present claims would mean
exclusion from the benefit of any distribution that the company
will make.
The liquidator can be reached at:
David Tibbals
390 Greenwich Street,
New York, New York 10013
USA
GOLDMAN SACHS (CURRENCY): Proofs of Claim Filing Ends on March 8
----------------------------------------------------------------
Creditors of Goldman Sachs Quantitative Currency Strategies
Master Fund Offshore, Ltd., which is being voluntarily wound up,
are required to present proofs of claim by March 8, 2007, to
John Cullinane and Derrie Boggess, the company's liquidators.
Creditors are required to present proofs of claim personally or
through their solicitors at the time and place that the
liquidator specified. Failure to present claims would mean
exclusion from the benefit of any distribution that the company
will make.
The liquidators can be reached at:
John Cullinane
Derrie Boggess
Attention: John Cullinane
c/o Walkers SPV Limited
Walker House
87 Mary Street, George Town
Grand Cayman KY1-9002
Cayman Islands
Telephone: (345) 914-6305
GOLDMAN SACHS (FIXED): Proofs of Claim Must be Filed by March 8
---------------------------------------------------------------
Creditors of Goldman Sachs Quantitative Fixed Income Strategies
Master Fund Offshore, Ltd., which is being voluntarily wound up,
are required to present proofs of claim by March 8, 2007, to
John Cullinane and Derrie Boggess, the company's liquidators.
Creditors are required to present proofs of claim personally or
through their solicitors at the time and place that the
liquidator specified. Failure to present claims would mean
exclusion from the benefit of any distribution that the company
will make.
The liquidators can be reached at:
John Cullinane
Derrie Boggess
Attention: John Cullinane
c/o Walkers SPV Limited
Walker House
87 Mary Street, George Town
Grand Cayman KY1-9002
Cayman Islands
Telephone: (345) 914-6305
GOLDMAN SACHS (STRATEGIES): Claims Filing Ends on March 8
---------------------------------------------------------
Creditors of Goldman Sachs Quantitative Strategies Equity Master
Fund Offshore, Ltd., which is being voluntarily wound up, are
required to present proofs of claim by March 8, 2007, to John
Cullinane and Derrie Boggess, the company's liquidators.
Creditors are required to present proofs of claim personally or
through their solicitors at the time and place that the
liquidator specified. Failure to present claims would mean
exclusion from the benefit of any distribution that the company
will make.
The liquidators can be reached at:
John Cullinane
Derrie Boggess
Attention: John Cullinane
c/o Walkers SPV Limited
Walker House
87 Mary Street, George Town
Grand Cayman KY1-9002
Cayman Islands
Telephone: (345) 914-6305
MARUFUKU ASSET: Proofs of Claim Must be Filed by March 8
--------------------------------------------------------
Creditors of Marufuku Asset Company, which is being voluntarily
wound up, are required to present proofs of claim by
March 8, 2007, to John Cullinane and Derrie Boggess, the
company's liquidators.
Creditors are required to present proofs of claim personally or
through their solicitors at the time and place that the
liquidator specified. Failure to present claims would mean
exclusion from the benefit of any distribution that the company
will make.
The liquidators can be reached at:
John Cullinane
Derrie Boggess
Attention: John Cullinane
c/o Walkers SPV Limited
Walker House
87 Mary Street, George Town
Grand Cayman KY1-9002
Cayman Islands
Telephone: (345) 914-6305
PHOENIX-DURANGO: Proofs of Claim Must be Filed by March 8
---------------------------------------------------------
Creditors of Phoenix-Durango Capital, Ltd., which is being
voluntarily wound up, are required to present proofs of claim by
March 8, 2007, to John Cullinane and Derrie Boggess, the
company's liquidators.
Creditors are required to present proofs of claim personally or
through their solicitors at the time and place that the
liquidator specified. Failure to present claims would mean
exclusion from the benefit of any distribution that the company
will make.
The liquidators can be reached at:
John Cullinane
Derrie Boggess
Attention: John Cullinane
c/o Walkers SPV Limited
Walker House
87 Mary Street, George Town
Grand Cayman KY1-9002
Cayman Islands
Telephone: (345) 914-6305
SUN HUNG: Proofs of Claim Must be Filed by March 7
--------------------------------------------------
Creditors of Sun Hung Kai China Development Fund, Ltd., which
is being voluntarily wound up, are required to present proofs of
claim by March 7, 2007, to Lai Kar Yan (Derek) and Darach E.
Haughey, the company's liquidators.
Creditors are required to present proofs of claim personally or
through their solicitors at the time and place that the
liquidator specified. Failure to present claims would mean
exclusion from the benefit of any distribution that the company
will make.
The liquidators can be reached at:
Lai Kar Yan (Derek)
Darach E. Haughey
Attention: Richard D. Fear
Charles Adams, Ritchie & Duckworth
P.O. Box 709
Zephyr House, Mary Street
Grand Cayman, KY1-1107
Cayman Islands
Tel: 949-4544
Fax: 949-8460
UCAM SEMICONDUCTOR: Proofs of Claim Must be Filed by March 8
-----------------------------------------------------------
Creditors of Ucam Semiconductor, Ltd., which is being
voluntarily wound up, are required to present proofs of claim by
March 8, 2007, to Vincent Yu, the company's liquidator.
Creditors are required to present proofs of claim personally or
through their solicitors at the time and place that the
liquidator specified. Failure to present claims would mean
exclusion from the benefit of any distribution that the company
will make.
The liquidator can be reached at:
Vincent Yu
1615 Wyatt Drive
Santa Clara, California
USA
Tel: (408) 480-6183
Fax: (408) 730-1739
TENJIN TWO: Proofs of Claim Must be Filed by March 6
----------------------------------------------------
Creditors of Tenjin Two, Ltd., which is being voluntarily wound
up, are required to present proofs of claim by March 6, 2007, to
John Cullinane and Derrie Boggess, the company's liquidators.
Creditors are required to present proofs of claim personally or
through their solicitors at the time and place that the
liquidator specified. Failure to present claims would mean
exclusion from the benefit of any distribution that the company
will make.
The liquidators can be reached at:
John Cullinane
Derrie Boggess
Attention: John Cullinane
c/o Walkers SPV Limited
Walker House
87 Mary Street, George Town
Grand Cayman KY1-9002
Cayman Islands
Telephone: (345) 914-6305
TOSHIN HOLDING: Proofs of Claim Must be Filed by March 8
--------------------------------------------------------
Creditors of Toshin Holding, Ltd., which is being voluntarily
wound up, are required to present proofs of claim by
March 8, 2007, to John Cullinane and Derrie Boggess, the
company's liquidators.
Creditors are required to present proofs of claim personally or
through their solicitors at the time and place that the
liquidator specified. Failure to present claims would mean
exclusion from the benefit of any distribution that the company
will make.
The liquidators can be reached at:
John Cullinane
Derrie Boggess
Attention: John Cullinane
c/o Walkers SPV Limited
Walker House
87 Mary Street, George Town
Grand Cayman KY1-9002
Cayman Islands
Telephone: (345) 914-6305
=========
C H I L E
=========
BLOCKBUSTER INC: Posts US$12.9MM Net Income in 2006 Fourth Qtr.
---------------------------------------------------------------
Blockbuster Inc. reported financial results for the fourth
quarter and full-year ended Dec. 31, 2006.
For the fourth quarter of 2006, net income was US$12.9 million
as compared with net income of US$18.0 million for the fourth
quarter of 2005. Adjusted net income for the fourth quarter of
2006 totaled US$20.4 million as compared with adjusted net
income of US$25.0 million for the fourth quarter of 2005.
"2006 was an exciting year for Blockbuster. We delivered four
consecutive quarters of positive same-store domestic movie
rental revenues. We also significantly reduced operating costs,
sizably increased our online subscriber base and substantially
improved our profitability and cash flow," said John Antioco,
Blockbuster Chairman and CEO. "In the year ahead, we anticipate
online subscriber growth to exceed 2006 levels. Specifically,
we expect to have a total of 3 million BLOCKBUSTER Total
Access(TM) subscribers by the end of the first quarter, which
would mean that we will have nearly doubled our subscriber base
in the five months since we launched our new integrated
offering. This growth will require some investment in the first
half of the year, but we believe this investment is the right
strategy to deliver value to our shareholders and should result
in more online customers, more in-store customers, a larger
share of the overall domestic rental market and increasing
revenues."
Fourth Quarter Financial Results
Revenues for the fourth quarter of 2006 increased 1.4% to
US$1.51 billion compared with US$1.49 billion for the fourth
quarter of last year primarily due to an increase in worldwide
same-store merchandise sales and favorable foreign exchange
rates. Revenues for the period also include the favorable
impact of an approximately US$30 million increase in revenues
from Blockbuster's online rental service, which added
approximately 700,000 online rental subscribers during the
fourth quarter, including approximately 500,000 paying
subscribers. The Company credits its significant subscriber
growth during the fourth quarter to the strong customer appeal
of BLOCKBUSTER Total Access, which gives its online customers
the option of returning their DVDs through the mail or
exchanging them at a participating BLOCKBUSTER(R) store for free
in-store movie rentals.
Operating income for the fourth quarter of 2006 totaled US$45.8
million, compared to operating income of US$57.0 million for the
same period last year. Total selling, general and
administrative expenses for the fourth quarter of 2006 increased
US$17.9 million from the fourth quarter of 2005 largely due to
higher level of promotional activities and costs incurred to
launch and support BLOCKBUSTER Total Access. Gross profit
increased US$7.8 million primarily as a result of the increase
in merchandise revenues mostly driven by strong sales of games
internationally. Gross margin for the fourth quarter remained
essentially flat at 51.8% as compared to 52.1% for the same
period last year.
Full-Year 2006 Financial Results
Revenues for 2006 decreased 3.5% to US$5.52 billion from US$5.72
billion for 2005 mostly due to the closure of stores resulting
from accelerated actions to optimize the Company's asset
portfolio and a 2.1% decrease in worldwide same- store sales.
Worldwide same-store revenues include the favorable impact of a
US$105.5 million increase in revenues from Blockbuster's online
rental service resulting from growth in the subscriber base,
which nearly doubled to approximately 2.2 million subscribers,
including approximately 2 million paying subscribers, at the end
of 2006.
Operating income for the full-year 2006 totaled US$79.1 million,
as compared to an operating loss of US$388.0 million for the
same period last year, which included a US$341.9 million non-
cash charge to impair goodwill and other long- lived assets.
Adjusted operating income increased by US$133.2 million to
US$115.4 million for the full-year 2006 from an adjusted
operating loss of US$17.8 million for 2005 mostly driven by
ongoing cost containment actions, which the Company began during
the third quarter of 2005.
For the full-year 2006, net income totaled US$54.7 million as
compared with a net loss of US$588.1 million for 2005.
Excluding the favorable resolution of multi-year tax audits,
store closure and severance costs as well as certain other
items.
Cash flow provided by operating activities increased by US$399.9
million to US$329.4 million for the full-year 2006 from a
US$70.5 million deficit for 2005 driven by improvement in
profitability. Free cash flow (net cash flow provided by
operating activities less capital expenditures) improved by
US$460.8 million to US$250.9 million for the full-year 2006 from
a negative US$209.9 million for the same period last year. As
of Dec. 31, 2006, no balance was outstanding under the company's
revolving credit facility and the Company's borrowing capacity,
which excludes various letters of credit, totaled approximately
US$293 million.
Divestiture of Certain Non-Core Assets
As part of the ongoing review of its asset portfolio, during
2006 the company completed the divestiture of its MOVIE TRADING
CO.(R) locations and Movie Brands Inc. subsidiary, closed its
store operations in Spain and sold its Taiwan subsidiary,
coupled with a master franchise license, to Webs-TV, the largest
broadband TV operator in the Chinese market. Most recently, in
2007 the company sold its 72-store, U.S.-based RHINO VIDEO
GAMES(R) chain to GameStop Corp. and in conjunction with the
Blockbuster Brazilian franchisee's sale of its stores to LOJAS
Americanas, the company signed a 20-year licensing agreement
with Lojas, giving the Brazilian retailer rights to the
BLOCKBUSTER brand for the rental and retail sale of video
products. The company also entered into an agreement to sell
its Australian subsidiary and grant the master franchise rights
for the BLOCKBUSTER system in Australia to Video Ezy, an
Australian-based company with 518 franchised video rental
stores.
Other Matters
The Company and its Chief Executive Officer are in discussions
in an attempt to resolve a disagreement concerning the Board of
Directors' 2006 bonus award to the Chief Executive Officer. On
Jan. 25, 2007, the company's Board of Directors exercised
negative discretion and awarded a 2006 bonus to the Chief
Executive Officer of US$2.28 million, which would be in addition
to his 2006 salary and deferred compensation of approximately
US$2.5 million. The bonus is subject to the condition that the
Board would award him no 2006 bonus if the Chief Executive
Officer contested the award. The Chief Executive Officer
maintains that he would be entitled to a 2006 bonus of US$7.65
million based on the application of the 2006 senior bonus plan
performance goals discussed in the company's Form 8-K dated
Feb. 16, 2006. Therefore, the company has determined to reserve
US$4.5 million for this contingency. The Company has evaluated
this contingency solely based on the guidance outlined in SFAS
No. 5, Accounting for Contingencies. The complete terms and
provisions of the employment agreement with the company's Chief
Executive Officer are filed with the SEC as Exhibit 10.2 to the
company's Form 10-Q for the quarterly period ended
June 30, 2004.
Blockbuster Inc. (NYSE: BBI, BBI.B) --
http://www.blockbuster.com/-- provides in-home movie and game
entertainment, with more than 8,500 stores throughout the
Americas, Europe, Asia, and Australia. The company operates in
Puerto Rico, Argentina, Brazil and Chile.
* * *
As reported in the Troubled Company Reporter on Dec. 18, 2006,
Standard & Poor's Ratings Services revised its outlook on video
rental retailer Blockbuster Inc. to stable from negative. The
ratings on the Dallas-based company, including the 'B-'
corporate credit rating, were affirmed.
===============
C O L O M B I A
===============
AES CORP: Restatement Issues Won't Affect Ratings Yet, S&P Says
---------------------------------------------------------------
Standard & Poor's Ratings Services said that The AES Corp.'s
(BB-/Stable/--) announcement that it would delay the release of
its 2006 10-K, that it would restate previous financial
statements because it has discovered certain errors mostly
related to previously identified material weaknesses, and that
it is reviewing its accounting for long-term compensation does
not immediately affect the company's ratings or outlook. The
review is not yet complete and AES Corp. has not yet determined
the final amount of the adjustments, but at this time the
company does not believe they will be material or will affect
its cash balances. The restatements should not affect our view
of the company's future credit quality, but they do raise
further questions regarding AES Corp.'s accounting and financial
controls, problems with which were first brought to light about
two years ago. Although not expected to cause credit
deterioration on their own, these accounting issues could hinder
the company's ability to develop positive rating momentum as
long as they go unresolved.
AES Corp. -- http://www.aes.com/-- is a global power company.
The company operates in South America, Europe, Africa, Asia and
the Caribbean countries. Generating 44,000 megawatts of
electricity through 124 power facilities, the company delivers
electricity through 15 distribution companies. AES Corp.'s Latin
America business group is comprised of generation plants and
electric utilities in Argentina, Brazil, Chile, Colombia,
Dominican Republic, El Salvador, Panama and Venezuela. Fuels
include biomass, diesel, coal, gas and hydro. The group also
pursues business development activities in the region. AES has
been in the region since May 1993, when it
acquired the CTSN power plant in Argentina.
===================
C O S T A R I C A
===================
* COSTA RICA: Working on Bilateral Pact with Dominican Republic
---------------------------------------------------------------
Marta Nunez, Costa Rica's ambassador to the Dominican Republic,
told DR1 Newsletter that the country's officials are working
with their counterparts in the Dominican Republic to come up
with a bilateral accord for energy cooperation.
Costa Rica tries to formulate a bilateral agreement that would
define and establish the nation's cooperation to alleviate the
energy crisis that affects the Dominican Republic, Dominican
Today states, citing Ms. Nunez.
* * *
As reported on Aug. 21, 2006, Fitch Ratings upgraded Costa
Rica's country ceiling to BB+ from BB.
===================================
D O M I N I C A N R E P U B L I C
===================================
AES CORP: Fitch Affirms Subsidiary's B- Issuer Default Rating
-------------------------------------------------------------
Fitch has affirmed AES Dominicana Energia Finance, S.A.'s
foreign currency Issuer Default Rating at 'B-'. The rating
outlook is stable.
Fitch has also affirmed the 'B-/RR4' rating of the company's
US$160 million of senior unsecured notes due 2015. The notes
are jointly and severally guaranteed by AES Dominicana's two
operating companies, AES Andres B.V. and Dominican Power
Partners. In addition, the notes benefit from a six-month debt-
service reserve account and a US$23.5 million guarantee from AES
Corp., rated 'B+' by Fitch. The 'RR4' recovery rating reflects
the Dominican Republic's recovery rating cap.
AES Dominicana's ratings are based on the credit quality of the
company's two main electricity generation assets, Andres and
Dominican Power. The company's credit metrics are considered
strong for the rating category and have recently improved
significantly. The ratings also consider the company's
dependence on government subsidies and the systemic risks
associated with the power sector in the Dominican Republic.
Over the next two years, Fitch expects the government to
continue to support the sector via subsidies and the sector to
slowly recover. The recent government initiatives to re-
negotiate power purchase agreements might increase cash flow
generation uncertainty for generation companies.
Andres and Dominican Power enjoy a competitive advantage due to
their favorable power purchase agreements and the use of
liquefied natural gas or LNG versus other fuels to generate
electricity. AES Dominicana controls the only LNG import point
into the Dominican Republic. Andres is the newest and most
efficient power plant in the country and ranks among the lowest
cost electricity generators in the country. Andres' combined-
cycle plant burns natural gas and is expected to be fully
dispatched as a base load unit as long as the LNG price is not
more than 15% above the imported price of fuel oil No. 6.
Due to increased electricity generation, strong collections and
favorable natural gas prices, AES Dominicana's credit metrics
have exceeded expectations and are considered to be one year
ahead of projections. The company generated EBITDA of US$74.3
million as of the last twelve months ended Sep. 30, 2006.
Annual debt service of US$17.6 million can be adequately met
using cash on hand of US$46 million as of Sept. 30, 2006, and
free cash flow generation.
The Dominican Republic power sector is characterized by low
collections from end users and high electricity losses. This
creates great uncertainty towards the government respect for
private property. Such conditions have kept distribution
companies from effectively transferring cash to the country's
generation companies. The proposed electricity law reform that
will penalized electricity theft is viewed as positive for the
sector. Should the reform be approved by congress and passed
into law, the sector benefits are expected to take place in two
phases. Phase one will be a sharp reduction in electricity
losses from theft of electricity from industrial customers. The
second phase would be more challenging given that it requires
significant investments from distribution companies in order to
convert non-paying non-subscribers families and small users to
regulated customers.
Over the past two and a half years, the Dominican government has
provided approximately US$1.4 billion of subsidies to the sector
and has budgeted US$400 million in subsidies for 2007. This
compare favorably with the US$500 million budgeted and allocated
subsidies during 2006 and the US$600 million of subsidies during
2005. Going forward, subsidies to distribution companies are
expected to decline as discos should increase efficiency by
increasing collections and reducing losses and government
funding tightens. If the sector's systemic problem does not
improve, it will continue depending on the government's onerous
subsidy program in order to endure.
AES Dominicana is an energy group operating in the Dominican
Republic, which manages two of AES Corp.'s wholly owned
generation assets, Andres and Dominican Power. AES Dominicana,
through an AES Corp subsidiary, also has a management agreement
to operate EDE-Este, one of the three distribution companies in
the country. Andres is a power plant with a 304 MW combined
cycle generation facility with duel fuel capability (gas and
diesel) but with natural gas supplied through the LNG import
facility serving as the primary fuel while DPP is a 236 MW power
plant comprising two simple-cycle combustion turbines that can
burn both natural gas and fuel oil Number 2. Both plants
together have PPA contracts with EDE-Este for 260 MW that
increase over time, but Andres is currently servicing all
contracts given its greater efficiency. Andres LNG terminal
includes a large tanker berth and jetty, an LNG refueling pier,
and a one million barrel (160,000 cubic meters, m3) LNG storage
tank, as well as regasification and handling facilities for both
LNG and diesel.
AES Corp. -- http://www.aes.com/-- is a global power company.
The company operates in South America, Europe, Africa, Asia and
the Caribbean countries. Generating 44,000 megawatts of
electricity through 124 power facilities, the company delivers
electricity through 15 distribution companies.
AES Corp.'s Latin America business group is comprised of
generation plants and electric utilities in Argentina, Brazil,
Chile, Colombia, Dominican Republic, El Salvador, Panama and
Venezuela. Fuels include biomass, diesel, coal, gas and hydro.
The group also pursues business development activities in the
region. AES has been in the region since May 1993, when it
acquired the CTSN power plant in Argentina.
VIVA INTERNATIONAL: Changes Name to River Hawk Aviation
-------------------------------------------------------
Viva International Inc. reported that NASDAQ has authorized the
name change of the company from Viva International to River Hawk
Aviation Inc. and the assignment of (OTCBB: RHWA) as its new
trading symbol.
On Feb. 6, 2007, Viva International effected a 1-for-40 reverse
stock split of the issued and outstanding shares of common stock
of the company held by shareholders of the Company and effected
a simultaneous amendment to the company's Articles of
Incorporation to decrease the number of authorized shares of
common stock of the company from 1 billion to 25 million. The
number of shares of preferred common stock authorized to be
issued by the company is unaffected.
Except for an adjustment which may result from the rounding up
of fractional shares as described below, each shareholder will
hold the same percentage of common stock outstanding immediately
following the Reverse Stock Split as immediately prior to the
Reverse Stock Split. The primary purposes of the reverse stock
split are to reduce the number of outstanding shares of common
stock to a level more consistent with the valuation of public
companies with a similar anticipated market capitalization and
to provide the management of the company with additional
flexibility to facilitate future stock acquisitions and
financing for the company and to increase the per share price of
the common stock to maintain and attract the interest of the
markets.
Calvin Humphrey, the Company's CEO, commented, "The reverse
split and name change are important steps in the shift in the
direction of the company. This recapitalization is designed, in
part, to enable the Company to accept capital investment and to
utilize the capital so raised to create assed value within the
company's share structure. Additionally, the name change to
River Hawk Aviation redefines our image and mission and allows
us to continue to leverage the positive attributes and industry
recognition of the River Hawk name."
There can be no assurance that, following the Reverse Stock
Split, the company's valuation will be properly reflected, the
Reverse Stock Split will result in an increase in the price per
share of the Common Stock or that any increase in the price will
be proportional to the decrease in the number of outstanding
shares.
About River Hawk Aviation
River Hawk Aviation, Inc., is an aviation parts and components
supplier in the aviation industry, currently specializing in
Saab and other commuter aircraft parts and components as well as
a provider of consulting services, marketing and appraisals to
the aviation community. At present, the company maintains
executive offices in Michigan.
The company also focuses of the formation and development of
airlines along with the acquisition of aviation-related
operating businesses and airlines that displayed potential for
restructuring into profitable and sustainable aviation-related
growth concerns. The Company's owns two developmental-stage
airline carriers in regional markets from hubs in Puerto Rico
and Santo Domingo, Dominican Republic. The company's hub in
Puerto Rico is maintained through our subsidiary Eastern
Caribbean Airlines Corporation and our hub in Santo Domingo is
maintained through our subsidiary interest in Viva Air
Dominicana, S.A. The company has recently announced a plan to
merge these Caribbean subsidiaries with a U.S. transportation
company and subsequently spin the merged companies out to its
shareholders. This plan remains in effect.
About Viva
Viva International Inc. (OTCBB: VIVI) has a number of airline
and aviation-related interests including two developmental-stage
carriers being readied to operate in regional markets from hubs
in Puerto Rico and Santo Domingo, Dominican Republic.
The Company plans to create a network of regionally based
airlines across the Caribbean, eventually to be linked to key
points in the United States, Latin America, South America, and
Europe.
At present, the Company maintains executive offices in Michigan.
At June 30, 2006, Viva International's balance sheet showed a
stockholders' deficit of US$4,167,988, compared to a deficit of
US$4,116,893 at March 31, 2006.
Going Concern Doubt
As reported in the Troubled Company Reporter on May 26, 2005,
Kempisty & Company CPAs, P.C., raised substantial doubt about
Viva International Inc.'s ability to continue as a going concern
after it audited the Company's financial statements for the
fiscal year ended Dec. 31, 2004. The auditors cite Viva's
US$14.9 million net loss for the period from April 18, 1995, to
Dec. 31, 2004, and zero operating revenue for the two-year
period ended Dec. 31, 2004.
* DOMINICAN REPUBLIC: Telecom Sector Sees DOP2B in Investments
--------------------------------------------------------------
The Dominican Republic's telecom industry is to expect at least
DOP2 billion in investments from industry players as they seek
to increase their market shares, the DR1 newsletter says.
Jose Rafael Vargas, the country's telecommunications head,
explains that America Movil's acquisition of Verizon's local
unit, and the sale of Centennial Communications would boost
local competition, Diario Libre states.
A central bank report disclosed that there are about 165,000
Internet accounts in the country, translating to 1.4 million
Dominican Internet users, Diario Libre relates. Telecom
operators would try to capture the market by pouring in
investments to offer more services and accommodate more users.
Currently, 57 of every 100 Dominicans have access to a telephone
and 46% have access to cellular phone services, 80% of which is
digital.
In Listin Diario's report, the state telecom company, Indotel,
intends to put up computer centers and computer schools in each
of the country's 32 provinces. Last year, 202 centers were
installed. The government plans to establish 205 more of these
centers.
* * *
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 issuer default rating is Stable.
* DOMINICAN REPUBLIC: Working on Bilateral Pact with Costa Rica
---------------------------------------------------------------
Marta Nunez, Costa Rica's ambassador to the Dominican Republic,
told DR1 Newsletter that the country's officials are working
with their Dominican Republic counterparts to come up with a
bilateral accord for energy cooperation.
Costa Rica tries to formulate a bilateral agreement that would
define and establish the nation's cooperation to alleviate the
energy crisis that affects the Dominican Republic, Dominican
Today states, citing Ms. Nunez.
* * *
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 issuer default rating is Stable.
=============
E C U A D O R
=============
IMPSAT FIBER: Moves Tender Offer, Consent Solicitation Deadline
---------------------------------------------------------------
IMPSAT Fiber Networks Inc. disclosed that its previously
announced cash tender offer, consent solicitation and waiver for
its Series A 6% Senior Guaranteed Convertible Notes due 2011 and
its Series B 6% Senior Guaranteed Convertible Notes due 2011 has
been extended. The Offer is being made pursuant to an Offer to
Purchase and Consent Solicitation Statement, dated
Jan. 29, 2007, and an accompanying Letter of Transmittal and
Consent, as amended by a supplement dated Feb. 15, 2007, and a
second supplement dated Feb. 26, 2007.
The expiration date of the Offer is now 5:00 p.m., New York City
time, on March 13, 2007. As of 5:00 p.m., New York City time,
on Feb. 26, 2007, which was the previous expiration date, Impsat
had received valid tenders from holders of US$65,861,085, or
approximately 97% of the outstanding Series A Notes and
US$24,807,000, or approximately 96% of the outstanding Series B
Notes.
The purchase price for each US$1,000 principal amount of Notes
tendered and accepted for payment pursuant to the Offer shall be
US$1,010.00, plus US$26.83 in accrued but unpaid interest, for a
total consideration of US$1,036.83 as of the scheduled
Expiration Time. Because the Offer is being extended, the
consideration for each US$1,000 principal amount of Notes
tendered and accepted for payment pursuant to the Offer shall be
US$1,036.83, plus an amount equal to US$0.17 per US$1,000 of
principal amount of the Notes for each day after Feb. 26, 2007
to, but excluding, the date on which the Notes are purchased.
The US$0.17 approximates the daily interest that would accrue
for each day after Feb. 26, 2007. Therefore, as a result of
this extension, a holder of US$1,000 of principal amount of
Notes should expect to receive an additional US$2.55, for a
total consideration of US$1,039.38. The Offer has also been
amended to reflect that if the Offer is extended beyond
March 15, 2007, holders of Notes on March 15, 2007, will receive
the normal interest payment for the Notes and thereafter the
purchase price for each US$1,000 principal amount of Notes shall
be US$1,010, plus an amount equal to US$0.17 per US$1,000 of
principal amount of Notes for each day after March 15, 2007, to,
but excluding, the date on which the Notes are purchased.
Payment made in respect of any Notes validly tendered is
expected to be promptly following the Expiration Time.
On Oct. 25, 2006, Impsat entered into an Agreement and Plan of
Merger with Global Crossing Limited and GC Crystal Acquisition
Inc. pursuant to which Impsat would be acquired by Global
Crossing. The Offer is being made in connection with the
proposed merger, and the Offer is conditioned upon the
consummation of the proposed merger. The consent solicitation
with respect to the Series A Notes is conditioned upon the
receipt by Impsat of valid consents from holders of a majority
in principal amount of the Series A Notes outstanding and
unaffiliated with Impsat. The consent solicitation with respect
to the Series B Notes is conditioned upon the receipt by Impsat
of holders of a majority in principal amount of the Series B
Notes outstanding and unaffiliated with Impsat. The waiver with
respect to the Series A Notes is conditioned upon the receipt by
Impsat of valid waivers from holders of two-thirds in principal
amount of the Series A Notes outstanding and unaffiliated with
Impsat. The waiver with respect to the Series B Notes is
conditioned upon the receipt by Impsat of valid waivers from
holders of two- thirds in principal amount of the Series B Notes
outstanding and unaffiliated with Impsat.
The proposed amendments and waivers will not become operative
until the closing of the merger. There is no separate payment
for the consent solicitation and waiver, and satisfaction of the
consent solicitation and waiver is not a condition for the
closing of the tender offer. The Offer may be extended or
terminated by Impsat at its option.
The announcement is not an offer to purchase or sell, a
solicitation of an offer to purchase or sell or a solicitation
of consents or waivers with respect to any securities. The
Offer is being made solely pursuant to the Offer to Purchase, a
supplement to the Offer to Purchase, dated Feb. 15, 2007, and a
second supplement to the Offer to Purchase dated Feb. 26, 2007.
The company has retained Goldman, Sachs & Co. to serve as Dealer
Manager and Solicitation Agent, Georgeson Inc. to serve as
Information Agent and The Bank of New York to serve as
Depositary Agent for the Offer.
Requests for documents may be made directly to:
Georgeson Inc.
17 State St. 10th Floor
New York, NY 10004
Tel: (212) 440-9800 or
(866) 277-5068 (toll free)
Questions regarding the solicitation of consents may be directed
to:
Goldman, Sachs & Co.
Attn: Credit Liability Management Group
One New York Plaza, 48th Floor
New York, NY 10004
Tel: (800) 828-3182 (toll free) or
(212) 357-0775 (collect)
About IMPSAT Fiber Networks
IMPSAT Fiber Networks Inc. -- http://www.impsat.com/-- provides
private telecommunications networks and Internet services in
Latin America. The company owns and operates 15 metropolitan
area networks in some of the largest cities in Latin America and
has 15 facilities to provide hosting services, providing
services to more than 4,500 national and multinational clients.
IMPSAT has operations in Argentina, Colombia, Brazil, Venezuela,
Ecuador, Chile, Peru and the United States.
Going Concern Doubt
In its audit report on the consolidated financial statements for
year ended Dec. 31, 2005, auditors working for Deloitte & Touche
LLP noted that IMPSAT Fiber Networks, Inc.'s current liquidity
position, high debt obligations, and negative operating results
raise substantial doubt as to its ability to continue as a going
concern.
* ECUADOR: Awaits Rafael Correa's Approval for OPEC Membership
--------------------------------------------------------------
Ecuador's reentry into the Organization of Petroleum Exporting
Countries or OPEC still needs the approval of the nation's
President Rafael Correa, Prensa Latina reports.
As reported in the Troubled Company Reporter-Latin America on
Feb. 26, 2007, Ecuador's Energy Minister Alberto Acosta said
that Ecuador's departure from OPEC in 1992 was a "historical
mistake." The nation had been a member of the organization for
almost 20 years. Minister Acosta said that OPEC could bring
Ecuador in a better political situation and would let the nation
take advantage of all the potentials given by the group.
Minister Acosta admitted that he had been in touch with
officials in Venezuela -- the sole South American representative
in OPEC -- to ask about reentering the organization.
Ratification of Ecuador's OPEC reentry, as well as the
negotiation of payment of the EUR4-million debt to the
organization, are still pending with the president, Minister
Acosta told Prensa Latina.
* * *
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-'.
=====================
E L S A L V A D O R
=====================
BIO-RAD LABORATORIES: Reports US$16.6MM 2006 4th Qtr. Revenues
--------------------------------------------------------------
Bio-Rad Laboratories Inc. reported that for fourth quarter ended
Dec. 31, 2006, revenues were US$343.1 million, up 11.6% compared
to US$307.3 million reported for the fourth quarter of 2005.
On a currency-neutral basis, revenues increased 7.6% compared to
the same period last year. This growth was primarily organic
across product areas in both the Life Science and Clinical
Diagnostics segments complemented by two acquisitions completed
during the fourth quarter.
Income from continuing operations for the fourth quarter was
US$16.6 million compared to US$13.5 million during the fourth
quarter last year. Fourth-quarter gross margin from continuing
operations was 54.1% compared to 52.9% in the same period last
year.
For the full year, Company sales grew by 7.9% to US$1,273.9
million compared to US$1,181.0 in 2005. Normalizing for the
impact of currency effects, growth was 7.7%. Favorable impacts
on year-to-date figures for 2006 include a Russian tender won in
the first quarter for laboratory equipment as well as one-time
additional revenue of US$11.7 million resulting from a licensing
settlement agreement reached with bioMerieux SA. Full-year
gross margin from continuing operations was 55.9%, up from last
year's figure of 54.7%.
Year-over-year income from continuing operations grew 33.1% to
US$103.3 million, from US$77.6 million, in 2005.
"2006 was a year of continued progress on many fronts," said
Norman Schwartz, Bio-Rad president and chief executive officer.
"The year brought increased organic growth within our core
businesses, expansion of our product lines through new product
introductions and strategic acquisitions, and infrastructure
improvements. As a result, Bio-Rad is well-positioned in key
market areas and has a strengthened foundation for the long
term."
Life Science
The Life Science segment net sales for the quarter were
US$159.0 million, up 13.0% compared to the fourth quarter of
last year. On a currency-neutral basis, segment sales increased
by 8.8%. Full-year reported revenues were US$575.6 million for
the segment, up 4.7% over the prior year, or 4.6% on a currency-
neutral basis. Performance in the Life Science segment was
boosted by a number of factors including significant growth in
protein expression analysis, process chromatography, and
amplification reagents. In addition, the segment benefited from
the purchase of Ciphergen Biosystems, Inc.'s life science
business including worldwide technology rights to Ciphergen's
Surface Enhanced Laser Desorption/Ionization technology and
ProteinChip(R) System. These results were somewhat tempered by
reduced BSE revenue and slowed life science markets in the U.S.
and Japan.
Clinical Diagnostics
The Clinical Diagnostics segment reported net sales of US$180.1
million for the quarter, up 10.6% compared to the prior-year
quarter, or 6.5% excluding currency effects. Full-year segment
sales were US$684.9 million, a 10.8% increase compared to 2005
results, or 10.4% excluding currency effects. These results were
largely due to continued growth across all product lines, most
notably blood virus products as well as MRSASelect(TM)
chromogenic media, which detects Methicillin-resistant
Staphylococcus aureus. Sales of quality controls product lines
were also up significantly during the quarter. During the
quarter, the segment completed the purchase of Blackhawk
BioSystems, Inc., a manufacturer of infectious disease quality
control products.
2006 Full Year Review
* Full-year Company sales grew by 7.9% to US$1,273.9
million.
* Year-over-year income from continuing operations grew by
33.1% to US$103.3 million from US$77.6 million in 2005.
* In February of 2006, the Company settled litigation and
resumed U.S. sales of certain thermal cycling products.
* In April, the Company announced that it had signed a
multi-year agreement in which Premier, one of the largest
group purchasing organizations in the U.S., had agreed to
a 3-year sole-source contract with Bio-Rad covering
diabetes monitoring instrumentation and products.
* As a result of a settlement reached with bioMerieux SA,
in the second quarter Bio-Rad reported additional revenue
of US$11.7 million in royalties and licensing fees.
* Also during the second quarter, the segment launched a
number of products including Platelia(R) Dengue NS1 Ag
Assay for dengue screening; a diagnostic test for celiac
disease, an autoimmune disorder; and a new Rack Loader
for use in conjunction with the D-10(TM) Hemoglobin
Testing System, which expanded the sample handling
capacity of the system to 50 samples per run.
* In September, Bio-Rad announced the availability of the
ProteOn(TM) XPR36 Protein Interaction Array System. In
addition, the Company announced that it had completed the
purchase of the diagnostics business of Provalis plc, a
provider of point of care diagnostic products for chronic
disease management of diabetes and osteoporosis.
* In October, Bio-Rad announced that it had acquired
Blackhawk BioSystems, Inc., a manufacturer of quality
control products used in laboratories that perform
infectious disease testing procedures.
* In November, Bio-Rad completed the purchase of Ciphergen
Biosystems, Inc.'s life science business including
worldwide technology rights to Ciphergen's Surface
Enhanced Laser Desorption/Ionization (SELDI) technology
and ProteinChip(R) System.
About Bio-Rad
Headquartered in Hercules, California, Bio-Rad Laboratories,
Inc. (AMEX: BIO) (AMEX: BIOb) -- http://www.bio-rad.com/-- is a
multinational manufacturer and distributor of life science
research products and clinical diagnostics. It serves more than
85,000 research and industry customers worldwide through its
global network of operations. The company employs over 5,000
people globally and had revenues of nearly US$1.3 billion in
2006. Aside from the United State, the company maintains
operations in Bulgaria, Canada, Denmark, Greece, India,
Philippines, Taiwan, and The Netherlands, Brazil, El Salvador,
Mexico and Puerto Rico.
* * *
As reported in the Troubled Company Reporter on Oct. 12, 2006,
Moody's Investors Service confirmed its Ba2 Corporate Family
Rating for Bio-Rad Laboratories Inc. in connection with its
implementation of its Probability-of-Default and Loss-Given-
Default rating methodology.
=================
G U A T E M A L A
=================
ALCATEL-LUCENT: Eyes Another 1,700 Job Cuts in Europe
-----------------------------------------------------
Alcatel-Lucent will slash over 1,700 jobs in Europe on top of
1,468 cuts already announced in France, the Associated Press
reports citing Patrick Moreau, an official of CGT union.
The company, according to Mr. Moreau, will reduce its workforce
by:
-- 877 jobs in Germany,
-- 310 in Spain,
-- 250 to 280 in Italy,
-- 140 to 180 in the Netherlands, and
-- 140 in Belgium.
As previously reported in the TCR-Europe, Alcatel-Lucent, which
posted EUR618 million in net losses against EUR4.42 billion in
net revenues for the fourth quarter 2006, plans to decrease its
global workforce by 12,500 employees.
Patricia Russo, Chief Executive of Alcatel-Lucent, said the job
cuts could help the company save as much as EUR1.7 billion in
pre-tax cost within three years, with at least EUR600 million
for 2007.
Alcatel-Lucent, meanwhile, refused a request from Gerard
Larcher, France's employment minister, to suspend the job cuts
pending conclusions of a working group that will study the
telecommunications industry in France, Bloomberg News reports
citing union CFTC Metallurgie.
Alcatel, however, said it "welcomes" the creation of a working
group and will take part in it, Bloomberg News adds.
About Alcatel-Lucent
Headquartered in Paris, France, Alcatel-Lucent
-- http://www.alcatel-lucent.com/-- provides solutions that
enable service providers, enterprises and governments worldwide,
to deliver voice, data and video communication services to end
users. Through its operations in fixed, mobile and converged
broadband networking, Internet protocol (IP) technologies,
applications, and services, Alcatel-Lucent offers the end-to-end
solutions that enable communications services for people at
home, at work and on the move.
On Nov. 30, 2006, Alcatel and Lucent Technologies Inc. completed
their merger transaction, and began operations as a
communication solutions provider under the name Alcatel-Lucent
on Dec. 1, 2006.
Alcatel-Lucent maintains operations in 130 countries, including,
Austria, Germany, Hungary, Italy, Netherlands, Ireland, Canada,
United States, Costa Rica, Dominican Republic, El Salvador,
Guatemala, Peru, Venezuela, Australia, Brunei and Cambodia.
* * *
As of Feb. 7, Alcatel-Lucent's Long-Term Corporate Credit rating
and Senior Unsecured Debt carry Standard & Poor's BB- rating.
It's Short-Term Corporate Credit rating stands at B.
Moody's, on the other hand, put a Ba2 rating on Alcatel's
Corporate Family and Senior Debt rating. Lucent carries Moody's
B1 Senior Debt rating and B2 Subordinated debt & trust preferred
rating.
Fitch rates Alcatel's Issuer Default Rating and Senior Unsecured
Debt rating at BB.
ALCATEL-LUCENT: Wins US$1.5-Billion Patent Suit vs. Microsoft
-------------------------------------------------------------
A U.S. federal jury has ordered Microsoft Corp. to pay around
US$1.52 billion in infringement damages to Alcatel-Lucent, the
Associated Press reports.
The jury ruled that Microsoft infringed two MP3 patents, which
cover the encoding and decoding of audio into the digital MP3
format.
"We think this verdict is completely unsupported by the law or
the facts," Tom Burt, a Microsoft deputy general counsel, said.
Lucent Technologies Inc., which merged with Alcatel in 2006 to
form Alcatel-Lucent, filed 15 patent claims in 2003 against
Gateway Inc. and Dell Inc. for technology developed by Bell
Laboratories, its research arm, AP relates. In April 2003,
Microsoft added itself to the list of defendants, saying the
patents were closely tied to its Windows operating system. A
judge had dismissed the claims and scheduled six separate trials
for the remaining disputes. The case in question went on trial
on Jan. 29.
Microsoft argued in court that Alcatel-Lucent's patents govern
its MP3 encoding and decoding tools, stressing that its MP3
software for Windows Media Player was licensed from Fraunhofer-
Gesellschaft, which developed the format along with Bell Labs
and French electronics group Thomson.
"The damages award seems particularly outrageous when you
consider we paid Fraunhofer only US$16 million to license this
technology," Microsoft said adding that the damages were
calculated by multiplying Windows sales volumes and PC sales
prices worldwide since May 2003.
John Desmarais, who represents Alcatel-Lucent in the case, said
the proposed damages were consistent with patent law, adding
that it was not appropriate to compare the amount Microsoft paid
Thomson to the figure Lucent paid Bell Labs since Bell Labs
patents were far more valuable, AP relays.
The federal jury agreed on all Alcatel-Lucent's arguments but
reached an impasse on whether Microsoft had willfully infringed
on the Bell Labs patents, AP reports. AP suggests that if jury
had found that Microsoft did, the firm would have had to pay
triple damages.
AP suggests that the case, if upheld on appeal, could become a
precedent for possible damage actions against firms
manufacturing MP3-playing products. These firms, AP adds, could
face demands to pay royalties to Alcatel-Lucent.
The court will consider the patent suits relating to speech
coding in March or April, AP says citing Microsoft. Other
patents in question include video coding on Microsoft's Xbox
game console and Windows' user interface.
Headquartered in Redmond, Washington, Microsoft Corp. --
http://www.microsoft.com/-- develops, manufactures, licenses
and supports a range of software products for computing devices.
About Alcatel-Lucent
Headquartered in Paris, France, Alcatel-Lucent
-- http://www.alcatel-lucent.com/-- provides solutions that
enable service providers, enterprises and governments worldwide,
to deliver voice, data and video communication services to end
users. Through its operations in fixed, mobile and converged
broadband networking, Internet protocol (IP) technologies,
applications, and services, Alcatel-Lucent offers the end-to-end
solutions that enable communications services for people at
home, at work and on the move.
On Nov. 30, 2006, Alcatel and Lucent Technologies Inc. completed
their merger transaction, and began operations as a
communication solutions provider under the name Alcatel-Lucent
on Dec. 1, 2006.
Alcatel-Lucent maintains operations in 130 countries, including,
Austria, Germany, Hungary, Italy, Netherlands, Ireland, Canada,
United States, Costa Rica, Dominican Republic, El Salvador,
Guatemala, Peru, Venezuela, Australia, Brunei and Cambodia.
* * *
As of Feb. 7, Alcatel-Lucent's Long-Term Corporate Credit rating
and Senior Unsecured Debt carry Standard & Poor's BB- rating.
It's Short-Term Corporate Credit rating stands at B.
Moody's, on the other hand, put a Ba2 rating on Alcatel's
Corporate Family and Senior Debt rating. Lucent carries Moody's
B1 Senior Debt rating and B2 Subordinated debt & trust preferred
rating.
Fitch rates Alcatel's Issuer Default Rating and Senior Unsecured
Debt rating at BB.
=============
J A M A I C A
=============
AIR JAMAICA: Petrocaribe Helps Airline in Oil Supply
----------------------------------------------------
Air Jamaica told Radio Jamaica that it has benefited from the
PetroCaribe initiative between Jamaica and Venezuela.
PetroCaribe is an oil alliance with Venezuela to buy their oil
on preferential payment. The payment system allows for nations
to buy oil on market value but only a certain amount is needed
up front. The remainder can be paid through a 25-year financing
agreement on 1% interest. The deal allows the Caribbean nations
to purchase up to 185,000 barrels of oil per day on these terms.
It also allows nations to pay part of the cost with other
products provided to Venezuela.
The oil deal is providing Air Jamaica with "significant cash
flow." About 50% of the fuel that the airline buys comes from
Venezuela. Air Jamaica has been able to borrow at very
favorable terms, Radio Jamaica says, citing Michael Conway, the
airline's President and Chief Executive Officer.
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.
AIR JAMAICA: Won't Participate in Talks for Regional Airline
------------------------------------------------------------
Air Jamaica refuses to take part on current negotiations to
create a regional airline, Radio Jamaica reports.
The airline's chief executive officer, Michael Conway, explained
to the Caribbean Media Corporation that he doesn't believe a
merger would solve the airline industry's problems. He added
that envisioning a single regional carrier is easier said than
done, Radio Jamaica says.
Talks leading to the formation of a single airline was the
result of a meeting among the Caribbean Community leaders who
envisioned a single Caribbean airline company as the answer to
the industry's woes.
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.
DIGICEL LTD: Reports US$948 Million in Revenues for 2006
--------------------------------------------------------
Digicel Ltd. reported US$948 million in revenues for 2006,
Sunday Business Post reports.
Sunday Business relates that Digicel's client base increased to
4.1 million in 2006, compared to 2005.
According to Fitch Ratings, Digicel had Ebitda of US$132 million
and restricted group Ebitda of US$270 million in 2006.
Digicel's operating performance continued to be strong.
Denis O'Brien had said that he expected Digicel to have annual
revenues of US$1 billion by 2008. The company is therefore
ahead of its own targets, Sunday Business notes.
Fitch Ratings said, "Reported Ebitda is expected to more than
double almost entirely due to Haiti and Trinidad & Tobago, which
are expected to go from negative Ebitda (primarily due to
startup of those business during the preceding year and the high
levels of subscriber acquisition costs associated with strong
subscriber growth) to positive Ebitda. The company's [Digicel]
debt levels have been increasing rapidly as a result of
acquisitions and necessary funding for the rapid build-out of
new markets, Haiti and Trinidad & Tobago."
The increasing earnings will help Digicel repay its US$2.5-
billion debt, Sunday Business states.
Digicel Ltd. is a wireless services provider in the Caribbean
region founded in 2000, and controlled by Denis O'Brien. The
company started operations in Jamaica in April 2001 and now
offers GSM mobile services in Caribbean countries including
Jamaica, St. Lucia, St. Vincent, Aruba, Grenada, Barbados,
Bermuda, Cayman, and Curacao among others. Digicel finished
FY2005 with 1.722 million total subscribers -- 97% pre-paid --
estimated market share of 67% and revenues and EBITDA of US$478
million and US$155 million, respectively.
* * *
As reported in the Troubled Company Reporter-Latin America on
Feb. 20, 2007, Fitch Ratings took these rating actions for
Digicel Group Ltd., Digicel Ltd. and Digicel International
Finance Ltd.:
Digicel Group Ltd.
-- Proposed US$1.4 billion senior subordinated notes
due 2015 assigned 'CCC+/RR5'
Digicel Ltd.
-- Foreign currency Issuer Default Rating downgraded
to 'B-' from 'B'; and
-- US$450 million senior notes due 2012 downgraded
to 'B-/RR4' from'B/RR4'.
Digicel International Finance Ltd.
--US$850 million senior secured credit facility
assigned 'B/RR3'.
Fitch said the outlook on all ratings was stable.
* * *
Fitch Ratings assigned on July 14, 2006, a 'B' rating to Digicel
Ltd.'s proposed add-on offering of US$150 million 9.25% senior
notes due 2012. These notes are an extension of the US$300
million notes issued in July 2005. In addition, Fitch also
affirms Digicel's foreign currency Issuer Default Rating and the
existing US$300 million senior notes due 2012 at 'B'. Fitch
said the rating outlook is stable.
* * *
On July 12, 2006, Moody's Investors Service assigned a B3 senior
unsecured rating to the US$150 million add-on Notes offering of
Digicel Ltd. and affirmed Digicel's existing B3 senior unsecured
and B1 Corporate Family Ratings. Moody's changed the outlook to
stable from positive.
DYOLL INSURANCE: Liquidators & Farmers Reach Payment Agreement
--------------------------------------------------------------
Dyoll Insurance Company's liquidators and officials of the
Jamaica Agricultural Society, which represents coffee farmers,
were able to reach an agreement on compensation, Radio Jamaica
reports.
As reported in the Troubled Company Reporter-Latin America on
Feb. 26, 2007, the coffee farmers were hoping that an out-of-
court settlement would be reached with the liquidators soon.
Appointed liquidators Kenneth Krys and John Lee at RSM Cayman
met with coffee farmers to negotiate an out-of-court settlement
for the payment of US$200 million that the farmers demand for
the damage they suffered during the Hurricane Ivan in 2004.
Senator Norman Grant, Jamaica Agricultural Society president,
said that the farmers are requesting to end the court battle in
favor of a mutually acceptable plan. The coffee growers are
worried of getting swamped with the legal costs of a court
battle. Previously, the coffee farmers got a favorable court
ruling calling for payment for losses incurred as a result of
the Hurricane Ivan. But the liquidators applied for leave to
appeal the decisions.
Agricultural Society President Senator Norman Grant, who has
been leading the talks, told RJR News that he has provided a
report to Jamaican Agriculture Minister Roger Clarke on the
development.
Dyoll Group Ltd. is a Jamaica-based company that is principally
engaged in the insurance business. Jamaica's Financial Services
Commission has assumed temporary management of the Jamaica-based
Dyoll Insurance Co. Ltd. in Mar. 7, 2005, in order to establish
the true position of the Company, address the matter of
settlement to its claimants and ensure that its policies will
remain in force after a high level of insurance claims were
leveled on the company as a result of the hurricane Ivan.
Kenneth Tomlinson was appointed temporary manager. Jamaica's
Supreme Court ordered for the distribution of a US$653 million
fund held by the FSC in accordance with the Insurance Act 2001,
section 59, which says that the prescribed deposit, on the
winding up of an insurance company, should be applied first to
settle the claims of local policyholders.
NATIONAL WATER: Enfield Calling for Piped Water Restoration
------------------------------------------------------------
Radio Jamaica reports that residents of Enfield, St. Mary, are
asking the National Water Commission to restore piped water.
The residents told Radio Jamaica that they sometimes have to
wait for as long as four weeks for piped water. Due to the
disruptions, they are forced to use water from a nearby river.
The problem is due to a malfunctioning pump at Crushes near
Enfield, Radio Jamaica states, citing the residents.
The residents told Radio Jamaica that a pump that should have
been installed to address their problems was sent to another
community.
* * *
As reported in the Troubled Company Reporter on Feb. 7, 2006,
the National Water Commission of Jamaica had been criticized for
failing to act promptly in cutting its losses. For the fiscal
years 2002 and 2003, the water commission accumulated a net loss
of US$2.11 billion. The deficit fell to US$1.86 billion the
following year, and to US$670 million in 2004 and 2005.
SUGAR COMPANY: Won't Reach 300,000-Ton Monymusk Output Target
-------------------------------------------------------------
The Cane Farmers Association Vice Chairperson Dr. Horace Charoo
has doubted that the Sugar Company will reach the 300,000-ton
target it set for its Monymusk factory, Radio Jamaica states.
Dr. Charoo told Radio Jamaica, "I don't think they [are] going
to be making anything near 15,000 [tons]."
In spite of recent management changes at the Sugar Company, the
industry is facing several other challenges, Radio Jamaica says,
citing Dr. Charoo.
Dr. Charoo explained to Radio Jamaica, "Why the factories are
not overburdened [is] because there is shortage of cane....
There's problem in the harvesting, in terms of availability of
units for the harvesting.... The little cane that you're getting
in the factory is such a good quality, that it is the only
saving grace. But after another month, I mean we going to [be]
scouring around looking for cane."
Meanwhile, West End Cane Farmers Association head Astil Sangster
was concerned about the quality of raw cane going into the
factories, as well as the lack of a proper replanting scheme,
Radio Jamaica notes.
Mr. Sangster commented to Radio Jamaica, "The quality of the
cane is not as good as it was last year. And even the fields,
looking at them at the beginning of [the] crop, they look as if
they were doing much better. But it doesn't look as if they're
keeping up at all. We're not doing any replanting whatever.
There's no provision made for this."
The Jamaican government has confirmed that the privatization of
the factories will be a lengthy process. Contingency plans have
been made in case it fails to complete the privatization
exercise, Radio Jamaica states.
Sugar Company of Jamaica operates five factories in Jamaica that
normally produces about 60% of the island's sugar output and
earn roughly US$100 million per year. But for the past five
years, Sugar Company's hasn't been able to realize profit. Its
losses have accumulated to more than US$4 billion, according to
Agriculture Minister Roger Clarke. For the fiscal financial
year ended Sept. 30, 2005, Sugar Company registered a net loss
of almost US$1.1 billion, 80% higher than the US$600 million
reported in the previous financial year. Sugar Company blamed
its financial deterioration to the reduction in sugar cane
production. According to published reports, the Jamaican
government has taken responsibility for payment of the firm's
debts.
* JAMAICA: Anthony Johnson Asks Gov't to Intervene Banana Sector
----------------------------------------------------------------
Anthony Johnson, the leader of Opposition Business in the Upper
House, has presented before the Jamaican senate a request for
the Jamaican government to intervene the banana industry, Radio
Jamaica reports.
According to Radio Jamaica, Senator Johnson asked that the
government do something to stop the rapid decline in the
country's banana output. He argued that the sector's production
has decreased to 50,000 tons in 2005 from 250,000 tons in 1996.
This triggered poverty in parishes that had been relying on
banana production.
The production decline is affected by several factors on the
international arena, Radio Jamaica says, citing Senator Johnson.
Radio Jamaica states that the factors include:
-- economic costs,
-- import license requirement, and
-- the threat in the European market due to Jamaica's
failure to produce quality fruit.
* * *
On May 26, 2006, Moody's Investors Service upgraded Jamaica's
rating under a revised foreign currency ceiling:
-- Long-term foreign currency rating: Ba3 from B1 with
stable outlook.
* JAMAICA: Trinidad Won't Supply Nation with Natural Gas
--------------------------------------------------------
Trinidad & Tobago won't honor a Memorandum of Understanding to
supply Jamaica with liquefied natural gas, Radio Jamaica
reports.
Radio Jamaica underscores that Jamaica signed the MOU with
Trinidad & Tobago two years ago in Port of Spain. Trinidad &
Tobago had promised supplies to produce electricity for domestic
use.
However, Trinidad & Tobago Prime Minister Patrick Manning
disclosed his nation's decision of canceling the agreement
during the intercessional meeting of the Caribbean Community and
Common Market, BBC News states.
* * *
On May 26, 2006, Moody's Investors Service upgraded Jamaica's
rating under a revised foreign currency ceiling:
-- Long-term foreign currency rating: Ba3 from B1 with
stable outlook.
===========
M E X I C O
===========
ADVANCED MARKETING: Court Allows Hiring of Capstone as Advisors
---------------------------------------------------------------
The Hon. Christopher S. Sontchi of the U.S. Bankruptcy Court for
the District of Delaware approved Advanced Marketing Services
Inc. and its debtor-affiliates' application to employ Capstone
Advisory Group LLC as their financial advisors in their
Chapter 11 cases.
Capstone will be entitled to allowance of compensation and
reimbursement of expenses, upon the filing and Court approval of
monthly, interim, and final applications, Judge Sontchi says.
Judge Sontchi notes that the consideration of the "Success Fee"
is continued until that time as Capstone seeks Court approval
and provides notice to interested parties for it. The rights of
all parties with respect to any application are hereby reserved.
The Debtors will have no obligation to indemnify Capstone, or to
provide contribution or reimbursement to Capstone, for any claim
or expense that is judicially determined -- the determination
having become final -- to have arisen from Capstone's gross
negligence, willful misconduct or bad faith, Judge Sontchi says.
The Debtors formerly asked the Court for permission to employ
Capstone Advisory Group LLC as their financial advisors in their
chapter 11 cases.
Specifically, the Debtors will look to Capstone to:
(a) analyze and challenge the Debtors' short-term and long-
term cash flow forecasts;
(b) assist management, as appropriate, in developing
corresponding liquidity analysis;
(c) analyze the Debtors' business plan and any alternative
business plans suggested by the Debtors;
(d) assist the Debtors and their advisors in identifying and
evaluating strategic financial and restructuring
alternatives;
(e) support or assist investment banks of the Debtors in
their efforts to sell or restructure the business entity;
(f) act as a liaison between the Debtors and their investment
bankers;
(g) assist in providing data and information requested by
Houlihan, Lokey, Howard & Zukin Capital Inc., in its
efforts to market and refinance the Debtors;
(h) assist Houlihan Lokey in its efforts to market or
refinance the Debtors;
(i) assist Houlihan, Lokey in identifying and executing an
alternative transaction that best meets the objectives of
the Debtors' and their estates; and
(j) perform other tasks as may be requested by the Debtors
from time to time.
Mark D. Collins, Esq., at Richards, Layton & Finger, PA, in
Wilmington, Delaware, related that Capstone specializes in
providing creative value-added solutions for stakeholders,
lenders and investors dealing with distressed and fraud
situations; for parties in commercial disputes; and for lenders
and investors evaluating capital transactions.
Capstone has provided services to the Debtors since May 2006.
At that time, Capstone was hired, through the Debtors' counsel,
O'Melveny & Myers LLP, to review the Debtors' short-term and
long-term financial forecasts, and assist the Debtors in
identifying and evaluating restructuring alternatives.
The Debtors also previously sought to employ Focus Management
Group U.S.A. Inc. as their financial advisors in a request
approved by the Court. Mr. Collins said that Focus was retained
prior to Capstone and Focus' familiarity with the Debtors'
books, records, and financial reporting has aided Capstone's
provision of financial analysis and advisory services.
Furthermore, the Debtors, Focus, and Capstone have conferred and
will continue to do so to ensure there is no duplication of
effort or overlap of work between and among Focus and Capstone
in order to ensure that the Debtors estates receive their
maximum value.
"Focus will be working on a number of projects either in
conjunction with Capstone or under the supervision of Capstone,"
Mr. Collins says.
The Debtors will pay Capstone hourly rates on actual hours
worked at Capstone's standard hourly rates in effect when the
services are rendered. Capstone's hourly rates are:
Designation Hourly Rate
----------- -----------
Executive Directors US$505 - US$595
Staff US$275 - US$475
Support US$90 - US$200
The Capstone employees that are expected to be directly
responsible for the engagement and their hourly rates are:
* Mark Rohman, Capstone Executive Director -- US$595
* Monique Atkins -- US$450
Mr. Collins noted that there will be a fee awarded to Capstone
upon the completion of a successful sale or refinancing of the
Debtors, equal to 30% of any transaction fee or financing fee
paid by the Debtors to Houlihan Lokey.
In addition, Mr. Collins stated that Capstone will be reimbursed
for all reasonably incurred out-of-pocket expenses in connection
with the rendering of services. These include travel, lodging,
costs of reproduction, reasonable out-of-pocket counsel fees,
and other direct expenses.
The Debtors will also indemnify Capstone for its services.
Mr. Rohman assured the Court that Capstone and its partners and
associates do not have any connection with or any adverse
interest to the Debtors, their creditors, or any other parties-
in-interest.
If, before the earlier of (a) a final order confirming a Chapter
11 plan in the Debtors' bankruptcy cases, or (b) an order
closing the Debtors' Chapter 11 cases, Capstone believes that it
is entitled to the payment of any amounts by the Debtors on
account of the Debtors' indemnification, contribution, and
reimbursement obligations under its employment agreement with
the Debtors, Capstone must file an application with the Court
and the Debtors may not pay any of those amounts before any
Court ruling approving the payment.
Upon Court approval, the Debtors may indemnify Capstone,
pursuant to the terms of the Employment Agreement as amended in
the Debtors' employment application, for any claim related to
Capstone's performance of the services described in the
Employment Agreement.
Judge Sontchi further ruled that upon Court approval and in
accordance with the Employment Agreement as amended in the
Employment Application, the Debtors may indemnify and hold
harmless Capstone for any claim related to the consulting
services, but not for any claim related to Capstone's
postpetition performance of any services other than described in
the Employment Agreement unless the postpetition services and
indemnification are approved by the Court.
About Advanced Marketing
Based in San Diego, California, Advanced Marketing Services Inc.
-- http://www.advmkt.com/-- provides customized merchandising,
wholesaling, distribution, and publishing services, currently
primarily to the book industry. The company has operations in
the U.S., Mexico, the United Kingdom, and Australia and employs
approximately 1,200 people Worldwide.
The company and its two affiliates, Publishers Group
Incorporated and Publishers Group West Incorporated filed for
chapter 11 protection on Dec. 29, 2006 (Bankr. D. Del. Case Nos.
06-11480 through 06-11482). Suzzanne S. Uhland, Esq., Austin K.
Barron, Esq., Alexandra B. Feldman, Esq., O'Melveny & Myers,
LLP, represent the Debtors as Lead Counsel. Chun I. Jang, Esq.,
Mark D. Collins, Esq., and Paul Noble Heath, Esq., at Richards,
Layton & Finger, P.A., represent the Debtors as Local Counsel.
When the Debtors filed for protection from their creditors, they
listed estimated assets and debts of more than US$100 million.
(Advanced Marketing Bankruptcy News, Issue No. 7; Bankruptcy
Creditors' Service, Inc., http://bankrupt.com/newsstand/or
215/945-7000)
The Debtors' exclusive period to file a chapter 11 plan expires
on April 28, 2007.
ADVANCED MARKETING: Gets Final Access to Use Cash Collateral
------------------------------------------------------------
The Hon. Christopher S. Sontchi of the U.S. Bankruptcy Court for
the District of Delaware authorized Advanced Marketing Services
Inc. and its debtor-affiliates, on a final basis, to use the
Secured Lenders' Cash Collateral.
The Debtors are authorized to enter into, execute, deliver,
perform, and comply with all of the terms and covenants of the
Loan Agreement and other Loan Documents, Judge Sontchi says.
The Loan and Security Agreement dated April 27, 2004, among the
Debtors, Wells Fargo Foothill Inc., as agent, and a syndicate of
lenders, is secured by a first priority security interest on
substantially all of the Debtors' assets, all products and
proceeds of the assets, and all cash proceeds and all other cash
equivalents and cash collateral.
Curtis R. Smith, AMS's vice-president and chief financial
officer, related that the Senior Facility imposes numerous
restrictions on the Debtors' ability to access their cash.
Before the Petition Date, virtually all of the Debtors' cash
from operations was swept daily into an account controlled by
Foothill and applied to the loans outstanding, then re-advanced
as loans in accordance with the borrowing base formula as
established and adjusted by Foothill from time to time.
As of the Petition Date, the borrowing base formula under the
Senior Facility totaled US$64,764,447. In contrast, Mr. Smith
says, the Senior Lenders are secured by approximately
US$147,500,000 in accounts receivable, approximately
US$72,500,000 in inventory, as well as other valuable collateral
including Advanced Marketing Services' interests in foreign
subsidiaries, fixed assets and intellectual property.
As of the Petition Date, the Debtors were obligated to the
Senior Lenders for the principal amount drawn on the Revolving
Loans plus accrued and unpaid interest and certain additional
unpaid fees and expenses totaling US$41,514,347.
Pursuant to an Inter-company Subordination Agreement between the
Debtors and certain of their subsidiaries, as Obligors, and
Foothill, the parties agreed to subordinate the payment of all
indebtedness, liabilities and other obligations of each Obligor
owing to any other Obligor to the payment of the US$41,514,347
Indebtedness.
Mr. Smith reminded the Court that the Debtors have secured a
US$75,000,000 postpetition facility from Foothill. In that
regard, the Debtors obtained the express consent of the Senior
Lenders to use the prepetition Cash Collateral in connection
with the DIP Loan Facility.
Accordingly, the Debtors sought the Court's authority to use the
Secured Lenders' Cash Collateral.
To secure all postpetition obligations due to the Lenders by the
Debtors, the Debtors propose to grant the Lenders a lien with
priority and senior to all other liens, other than validly
perfected prepetition liens that would otherwise be senior and
prior to the Senior Lenders' prepetition liens, on all of the
Debtors' prepetition, present and future assets. Moreover, upon
the occurrence of a Default or Event of Default, each Borrower
waives any right to use Cash Collateral.
About Advanced Marketing
Based in San Diego, California, Advanced Marketing Services Inc.
-- http://www.advmkt.com/-- provides customized merchandising,
wholesaling, distribution, and publishing services, currently
primarily to the book industry. The company has operations in
the U.S., Mexico, the United Kingdom, and Australia and employs
approximately 1,200 people Worldwide.
The company and its two affiliates, Publishers Group
Incorporated and Publishers Group West Incorporated filed for
chapter 11 protection on Dec. 29, 2006 (Bankr. D. Del. Case Nos.
06-11480 through 06-11482). Suzzanne S. Uhland, Esq., Austin K.
Barron, Esq., Alexandra B. Feldman, Esq., O'Melveny & Myers,
LLP, represent the Debtors as Lead Counsel. Chun I. Jang, Esq.,
Mark D. Collins, Esq., and Paul Noble Heath, Esq., at Richards,
Layton & Finger, P.A., represent the Debtors as Local Counsel.
When the Debtors filed for protection from their creditors, they
listed estimated assets and debts of more than US$100 million.
(Advanced Marketing Bankruptcy News, Issue No. 7; Bankruptcy
Creditors' Service, Inc., http://bankrupt.com/newsstand/or
215/945-7000).
The Debtors' exclusive period to file a chapter 11 plan expires
on April 28, 2007.
ADVANCED MARKETING: Panel Wants Lowenstein Sandler as Counsel
-------------------------------------------------------------
The Official Committee of Unsecured Creditors in Advanced
Marketing Services Inc. and its debtor-affiliates bankruptcy
cases seeks the authority of the United States Bankruptcy Court
for the District of Delaware to retain Lowenstein Sandler PC as
its main counsel to perform services relating to the Debtors'
bankruptcy cases, effective as of Jan. 12, 2007.
The Creditors Committee has selected Lowenstein because of its
attorneys' experience and knowledge. The Committee believes
that Lowenstein is well qualified to represent it in the
Debtors' Chapter 11 cases.
As the Creditors Committee's counsel, Lowenstein will:
(a) provide legal advise as necessary with respect to the
Committee's powers and duties as an official committee
appointed under Section 1102 of the Bankruptcy Code;
(b) assist the Committee in investigating the acts, conduct,
assets, liabilities, and financial condition of the
Debtors, the Debtors' business operations, potential
claims, and any other matters relevant to the Debtors'
bankruptcy cases or to the formulation of a Chapter 11
plan;
(c) participate in the formulation of a Plan;
(d) provide legal advices with respect to any disclosure
statement and Plan filed the Debtors' bankruptcy cases,
and with respect to the process for approving or
disapproving disclosure statements and confirming or
denying confirmation of a Plan;
(e) prepare on behalf of the Committee, as necessary,
applications, motions, complaints, answers, orders,
agreements and other legal papers;
(f) appear in the Court to present necessary motions,
applications, and pleadings, and otherwise protecting
the interests of those represented by the Committee;
(g) assist the Committee in requesting the appointment of a
trustee or examiner, should the action be necessary; and
(h) perform other legal services as may be required and that
are in the best interests of the Committee and
creditors.
Lowenstein will be paid on an hourly basis, plus reimbursement
of the actual and necessary expenses that Lowenstein incurs in
accordance with the ordinary and customary rates, which are in
effect on the date the services are rendered.
Lowenstein's hourly rates are:
Professional Hourly Rate
------------ -----------
Partners US$320 - US$595
Counsel US$265 - US$425
Associates US$165 - US$300
Legal Assistants US$75 - US$150
Kenneth A. Rosen, Esq., a member at Lowenstein, relates that the
charges set forth are based on actual time charges on an hourly
basis and based on the experience and expertise of the attorney
or legal assistant involved. The hourly rates are subject to
periodic adjustments to reflect economic and other conditions.
Mr. Rosen assures the Court that his firm represents no other
entity in connection with the Debtors' bankruptcy cases, is a
"disinterested person" as the term is defined in Section 101(14)
of the Bankruptcy Code, and does not hold or represent any
interest adverse to the Creditors Committee with respect to the
matters on which it is to be employed.
Based in San Diego, California, Advanced Marketing Services,
Inc. -- http://www.advmkt.com/-- provides customized
merchandising, wholesaling, distribution, and publishing
services, currently primarily to the book industry. The company
has operations in the U.S., Mexico, the United Kingdom, and
Australia and employs approximately 1,200 people Worldwide.
The company and its two affiliates, Publishers Group
Incorporated and Publishers Group West Incorporated filed for
chapter 11 protection on Dec. 29, 2006 (Bankr. D. Del. Case Nos.
06-11480 through 06-11482). Suzzanne S. Uhland, Esq., Austin K.
Barron, Esq., Alexandra B. Feldman, Esq., O'Melveny & Myers,
LLP, represent the Debtors as Lead Counsel. Chun I. Jang, Esq.,
Mark D. Collins, Esq., and Paul Noble Heath, Esq., at Richards,
Layton & Finger, P.A., represent the Debtors as Local Counsel.
When the Debtors filed for protection from their creditors, they
listed estimated assets and debts of more than US$100 million.
The Debtors' exclusive period to file a chapter 11 plan expires
on April 28, 2007. (Advanced Marketing Bankruptcy News, Issue
No. 7; Bankruptcy Creditors' Service, Inc.,
http://bankrupt.com/newsstand/or 215/945-7000)
ARAMARK CORP: Subsidiary Inks Beverage Service Deal with NetJets
----------------------------------------------------------------
ARAMARK Refreshment Services has been selected by NetJets
Services Inc. to provide beverage service for its employees and
business clients in its Columbus, Ohio location.
"At ARAMARK, we pride ourselves on providing world-class
experiences, environments and outcomes for our clients, and for
their customers and employees," said Michael Oppenheim,
executive vice president of ARAMARK Refreshment Services. "We
are pleased to work with NetJets to help get their employees and
the executives they serve motivated, energized, and on their way
to a great business day."
NetJets Services Inc. is a NetJets company. NetJets provides
private aviation solutions globally that allow individuals and
companies to buy a share of a private business jet at a fraction
of the cost of whole aircraft ownership, and guarantees
availability 365 days a year with just a few hours' notice.
NetJets also offers aircraft management, charter management, and
on-demand charter services through its subsidiary, Executive Jet
Management.
NetJets provides the highest quality services to clients flying
on NetJets aircraft, from managing ground transportation to
ensuring an executive's favorite food, newspapers and other
amenities are onboard. For employees, NetJets strives to
provide a comfortable, satisfying work environment to ensure its
workforce stays positive and productive.
As part of NetJets' strategy to keep employees and business
clients happy, ARAMARK is providing coffee service from Green
Mountain Coffee Roasters for approximately 2,000 NetJets
employees, as well as for nearly 100 aircraft. Green Mountain
Coffee provides an assortment of gourmet specialty coffees,
including organic, Fair Trade, exotic and seasonal blends.
ARAMARK is also supplying NetJets with essentials for its coffee
areas, including paper goods and creamers.
About Green Mountain Coffee Roasters
Green Mountain Coffee Roasters Inc. (NASDAQ:GMCR) --
http://www.GreenMountainCoffee.com/--is recognized as a leader
in the specialty coffee industry for its award-winning coffees
and successful business practices. The Company sells over 100
high quality selections, including Fair Trade CertifiedTM and
organic coffees under the Green Mountain Coffee Roasters(R) and
Newman's Own(R) Organics brands. While the majority of the
Company's revenue is derived from its wholesale, direct mail,
and e-commerce operations, it also owns Keurig, Incorporated, a
pioneer and leading manufacturer of gourmet single-cup brewing
systems. Green Mountain Coffee Roasters has been ranked No. 1
on the list of "100 Best Corporate Citizens" for the past two
years, and has been recognized repeatedly by Forbes, Fortune
Small Business, and the Society of Human Resource Management as
an innovative, high-growth, socially responsible company.
About ARAMARK Refreshment Services
ARAMARK - http://www.aramarkrefreshments.com/-- provides
workplace refreshments to more than 100,000 locations throughout
North America, offering clients a single source for office
coffee service, water filtration, brand-name snacks, beverages
and break-room essentials. Through its Complete Breaktime
Experience(R), ARAMARK offers a holistic approach to providing
outstanding client service. ARAMARK Refreshment Services'
parent company is ARAMARK Corp.
About ARAMARK CORP.
Headquartered in Philadelphia, Pennsylvania, Aramark Corp.
(NYSE: RMK) -- http://www.aramark.com/-- is a professional
services organization, providing food services, facilities
management, hospitality services, and uniforms and career
apparel to health care institutions, universities and school
districts, stadiums and arenas, businesses, prisons, senior
living facilities, parks and resorts, correctional institutions,
conference centers, convention centers, and public safety
professionals around the world. Aramark has approximately
240,000 employees serving clients in 20 countries, including
Belgium, Czech Republic, Germany, Ireland, UK, Mexico, Brazil,
Chile, among others.
* * *
As reported in the Troubled Company Reporter on Feb. 15, 2007,
Fitch has downgraded the Issuer Default Rating for both ARAMARK
Corporation and its wholly owned subsidiary, ARAMARK Services,
Inc. to 'B' from 'BB-' and has rated the new financing of
ARAMARK Corporation:
-- US$600 million revolving senior secured credit facility
due 2013 'BB-/RR2';
-- US$4.15 billion senior secured term loans due 2014
'BB-/RR2';
-- US$250 million senior secured synthetic letter of credit
facility due 2013 'BB-/RR2'; and
-- US$1.78 billion senior unsecured notes due 2015 'B-/RR5'.
In addition, the rating for the US$250 million senior unsecured
notes due 2012 was lowered to 'CCC+/RR6' from 'BB-'. The
ratings are removed from Rating Watch Negative.
Fitch said the rating outlook is stable.
BALDOR ELETRIC: Paying US$0.17 Per Share Cash Dividend
------------------------------------------------------
Baldor Electric Company made the following announcements after
the company's board of directors' meeting on Feb. 26, 2007.
The Board declared a regular quarterly cash dividend of US$0.17
per share on the company's common stock. The cash dividend is
payable on March 30, 2007, to shareholders of record on
March 9, 2007.
The Board also established April 2, 2007, as the record date for
voting at the Annual Shareholders' Meeting. The meeting is
scheduled for 10:30 am on Saturday, May 19, 2007, and will be
held at the Fort Smith Convention Center in Fort Smith,
Arkansas.
In addition, the Company will make a presentation at the Sidoti
& Company Emerging Growth Institutional Investor Forum on
March 27, 2007, in New York at 10:25 a.m. (EST). The Company
will also make a presentation at the Better Investing Milwaukee
Chapter Investor Fair on March 24, 2007, in Milwaukee,
Wisconsin.
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.
BENQ CORP: Mobile Unit's Assets to Be Split Up & Liquidated
-----------------------------------------------------------
BenQ Mobile GmbH & Co. OHG, the bankrupt mobile subsidiary of
Taiwan-based BenQ Corp., will be liquidated and sold off
separately, published reports say, citing BenQ Mobile's
insolvency administrator, Martin Prager.
Mr. Prager confirmed a report in Germany's Sueddeutsche Zeitung
that "there is no longer a realistic chance of it [BenQ Mobile]
being sold as a whole," the Associated Press relates.
The announcement came after a potential bidder dropped plans to
acquire the bankrupt firm.
"We have to acknowledge that the market has decided against Benq
Mobile," Mr. Prager told Bloomberg News.
According to Sueddeutsche Zeitung, Mr. Prager estimated up to
EUR310 million of sales proceeds from real estate, machinery and
patents, in addition to EUR66 million of cash, Bloomberg
relates. However, the paper suggests, this is still millions
short compared with the company's EUR883 million in debts.
Mr. Prager wouldn't comment on the possible loss of the firm's
3,000 jobs once the assets are split off and sold separately,
the Wall Street Journal reports citing AP as its source.
Siemens, which previously owned BenQ Mobile before selling it to
BenQ Corp., revealed in January a solid financial basis for the
job placement companies for employees of BenQ Mobile OHG in
North Rhine-Westphalia and Bavaria. A EUR10 million aid fund
has also been set up by Siemens for supporting employees in
financial difficulties. Through the job exchange established by
Siemens for employees of BenQ Mobile OHG, over 690 interviews
have been scheduled at Siemens. Round about 150 concrete job
offers have so far been made. In addition, Siemens has secured
the continuation of training for 88 trainees of BenQ Mobile
within Siemens AG.
About BenQ
Headquartered in Taiwan, Republic of China, BenQ Corp.,
Inc. -- http://www.benq.com/-- is principally engaged in
manufacturing, developing and selling of computer peripherals
and telecommunication products. It is also a major provider of
3G handset, 3G handset, Camera phones, and other products. The
company's global operations are in: Brazil, Mexico, Canada,
United States, Australia, China, Hong Kong, India, Indonesia,
Japan, Korea, Malaysia, New Zealand, Philippines, Singapore,
Taiwan, Turkey, Thailand, Vietnam, Austria, Belgium, among
others.
BenQ Mobile GmbH & Co., the company's wholly owned subsidiary,
operates from Munich, Germany. BenQ Mobile filed for insolvency
in Germany on Sept. 29, after BenQ Corp.'s board decided to
discontinue capital injection into the mobile unit in order to
stem unsustainable losses. The collapse follows a year after
Siemens sold the company to Taiwanese technology group BenQ.
BenQ Mobile has lost market share against giant competitors.
A Munich Court opened insolvency proceedings against BenQ Mobile
GmbH & Co OHG on Jan. 1 after Mr. Prager failed to meet the
deadline in finding a buyer for the company on Dec. 31, 2006.
More than 3,000 manufacturing workers have been affected in the
company's insolvency proceedings after it disclosed of plans to
reduce two-thirds of its work force. The mobile unit took over
a factory in Kamp Lintfort in western Germany from Siemens,
which cost Siemens more than US$1 billion. Under the agreement,
BenQ will have the right to use the Siemens brand for five
years. Siemens owns a 2.5 percent stake in BenQ Corp.
* * *
The Troubled Company Reporter - Asia Pacific reported on
Dec. 5, 2006, that Taiwan Ratings Corp., assigned its long-term
twBB+ and short-term twB corporate credit ratings to BenQ Corp.
The outlook on the long-term rating is negative. At the same
time, Taiwan Ratings assigned its twBB+ issue rating to BenQ's
existing NT$7.05 billion unsecured corporate bonds due in 2008,
2009, and 2010.
The ratings reflect BenQ's:
* continuing operating losses from its handset operations;
* high leverage; and
* the competitive nature and low profitability of the LCD
monitor industry.
COINSTAR INC: Moody's Ups Corporate Family Rating to Ba2
--------------------------------------------------------
Moody's upgraded Coinstar, Inc.'s Corporate Family Rating to
Ba2. At the same time, Moody's upgraded the ratings of the
company's senior secured credit facilities to Ba2 (LGD3, 31%)
and Coinstar's liquidity rating to SGL-1 from SGL-2. The
outlook for the ratings is stable.
The upgrade recognizes consistency in the company's financial
performance, its successful diversification into different
products and services and the successful integration of major
acquisitions. The upgrade also incorporates potential for
further improvement in performance following investments in
DVDXpress and Redbox, which offer DVD rentals through self-
service kiosks, and the increased revenues from initiatives such
as the company's Coin to CardTM program, where coin machine
customers receive gift cards instead of cash vouchers. The
ratings reflect Coinstar's low leverage, strong cash flow
generation, strong liquidity position, and unique market
position, offset by the company's relatively small size,
decreasing profitability, and weak EBIT to interest coverage
ratio for the rating category.
Moody's took these rating actions:
-- Upgraded the Corporate Family Rating to Ba2 from Ba3;
-- Upgraded the Probability of Default Rating to Ba3 from B1;
-- Upgraded the US$60 million senior secured revolver due
2011 to Ba2 (LGD3, 31%) from Ba3 (LGD2, 29%);
-- Upgraded the US$188 million senior secured term loan B
due 2011 to Ba2 (LGD3, 31%) from Ba3 (LGD2, 29%);
-- Upgraded the Speculative Grade Liquidity rating to SGL-1
from SGL-2.
The outlook for the ratings is stable.
Coinstar, Inc., based in Bellevue, Washington, owns and operates
a multinational, fully automated network of coin processing
kiosks, as well as electronic payment, entertainment services,
and self-service DVD rentals. Revenue for the twelve month
period ended Dec. 31, 2006, was about US$534 million. The
Company owns and operates nearly 13,000 coin-counting machines
in the US, Canada and the UK, and 320,000 entertainment services
(skill-crane, bulk vending, and kiddie ride) machines across the
US and Mexico. Additionally, it utilizes more than 19,300
point-of-sale terminals and owns and operates approximately 360
stand-alone e-payment kiosks in the US and the UK. The coin-
counting units are located primarily in supermarkets (such as
Kroger and Albertsons); the entertainment services machines can
be found in more than 33,000 retail locations including Wal-Mart
and Kmart stores.
DELTA AIR: Committee Amends SSI's Engagement Letter
---------------------------------------------------
The Official Committee of Unsecured Creditors of Delta Air Lines
Inc., and its debtor-affiliates has entered into its amendment
to the engagement letter with SSI (U.S.), Inc., doing business
as Spencer Stuart, to provide for certain limited modifications
to the terms of the firm's employment:
(a) in addition to the US$200,000 paid to Spencer Stuart, the
Debtors will be authorized to make a second payment of
US$150,000; and
(b) Spencer Stuart will be paid a minimum fee in the event
that:
* the Creditors Committee terminates the retention prior
to the effective date of a plan of reorganization for
Delta Air Lines, Inc.; or
* fewer than five new members, excluding any existing
member of the Board or any Delta employee, are
recruited to the Board of Reorganized Delta.
The Debtors and the Creditors Committee recently reached an
agreement, in connection with the Debtors' Joint Plan of
Reorganization, that the Committee will select 10 out of 11
members of the New Delta Board, at least three of which will be
current members of Delta's Board.
Spencer Stuart will assist the Creditors Committee, with the
Debtors participating in the board search process, in locating
as many as seven new members for the New Board.
The process, the Creditors Committee relates, will involve
additional work performed by Spencer Stuart than was originally
contemplated when the Engagement Letter was negotiated in
November 2006.
Accordingly, the Creditors Committee asks the U.S. Bankruptcy
Court for the Southern District of New York to approve the
limited modifications of the terms of Spencer Stuart's
engagement.
The Debtors and the U.S. Trustee have no objection to the
application.
As reported in the Troubled Company Reporter on Dec. 26, 2006,
the Court gave the Committee authority to retain SSI as board
search consultant, effective as of November 17, 2006, pursuant
to a letter of engagement dated November 17.
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 Lines
Bankruptcy News, Issue No. 63; Bankruptcy Creditors' Service,
Inc., http://bankrupt.com/newsstand/or 215/945-7000)
DESARROLLADORA METROPOLITANA: Moody's Puts Ba1.mx Issuer Rating
---------------------------------------------------------------
Moody's de Mexico has assigned a Ba1.mx national scale issuer
rating, and a B2 global scale local currency issuer rating, to
Desarrolladora Metropolitana, S.A. de C.V aka Demet. The rating
outlook is stable. This is the first time Moody's rates Demet.
The B2 global local currency and Ba1.mx national scale issuer
ratings reflect Demet's position as one of the top fifteen
homebuilders in Mexico and the second largest in Mexico City,
with 36% market share, based on units sold. Additionally, the
company has successfully expanded its operations to the
Metropolitan Area of the State of Mexico. Demet's credit
strengths include its sophisticated operating systems and
management team, with an average of 15 plus years of experience
in the Mexican housing and financial markets. In addition,
approximately 52% of Demet's shareholder's base is composed of
institutional investors, which are also members of the company's
board of directors, providing independence to the board. In
Moody's opinion, an independent board of directors with members
who have diverse operational career experiences provides the
company with more transparency and enhanced operational acumen.
Demet's credit challenges include its weak operating and credit
statistics and lack of geographic diversification. Demet is
highly levered compared to its peers, with Debt/Total Assets of
63% and Debt/EBITDA of 18.7x as of 3Q2006. Operating margins
were negatively affected by Demet's aggressive growth strategy a
few years ago, but have been on an improving trend since 2002.
Although Demet is one of the top 15 homebuilders in Mexico, its
operations are concentrated in Mexico City. However, it has
expanded throughout the State of Mexico, and Mexico City is one
of the markets with the greatest housing demand. Other
challenges include a certain amount of speculative building,
with Demet bearing 100% of the risk of finding the homebuyers.
The funding of homes remains concentrated with Sociedad
Hipotecaria Federal, INFONAVIT and FOVISSTE, and the timing of
receipt of the mortgages funded by these government and quasi-
government entities can range from three to twelve months.
Moody's stable outlook reflects our expectation that Demet will
substantially improve its credit statistics and operating
performance, while taking great strides in lowering its
effective leverage, improve efficiency in land development
costs, and continue increase funding from other sources and
reduce its reliance on funding from INFONAVIT.
Rating improvements are unlikely in the near-term as the company
needs to focus on stabilizing earnings and capital structure.
Downward rating pressure would result from further increases in
leverage and weakening operating margins, increased costs of
land and land development, and lack of improvements in Demet's
financial flexibility and credit statistics.
These ratings were assigned with a stable outlook:
Desarrolladora Metropolitana, S.A. de C.V
-- National scale issuer rating at Ba1.mx; and
-- Global scale local currency issuer rating at B2.
Desarrolladora Metropolitana is a homebuilder engaged in the
development, construction, marketing and sale of affordable
housing developments in Mexico. The firm reported total assets
of MXN4.4 billion and total equity of MXN1.3 billion at
Sept. 30, 2006.
GENERAL MOTORS: Daimler May Accept GM Stake for Chrysler
--------------------------------------------------------
DaimlerChrysler AG mulls accepting a minority stake in General
Motors Corp. in return for Chrysler if both groups come to an
agreement on the sale of the unit, John Reed writes for the
Financial Times.
As reported in the Troubled Company Reporter-Europe on Feb. 19,
citing German publication Manager Magazin, DaimlerChrysler and
General Motors are in talks about a possible purchase of the
Chrysler Group by GM.
If the all-equity deal pushes through, DaimlerChrysler stands to
save billions of dollars in synergies and merger costs, FT
states.
According to the report, both companies have not confirmed the
discussions, although at least two of DaimlerChrysler
institutional shareholders are in favor of the all-share deal.
DaimlerChrysler also has the option to sell the ailing unit to
private equity or industry investors and is relying on JPMorgan
Chase for advice on its available alternatives, FT relates.
About DaimlerChrysler
Based in Stuttgart, Germany, DaimlerChrysler AG --
http://www.daimlerchrysler.com/-- develops, manufactures,
distributes, and sells various automotive products, primarily
passenger cars, light trucks, and commercial vehicles worldwide.
It primarily operates in four segments: Mercedes Car Group,
Chrysler Group, Commercial Vehicles, and Financial Services.
The Chrysler Group segment offers cars and minivans, pick-up
trucks, sport utility vehicles, and vans under the Chrysler,
Jeep, and Dodge brand names. It also sells parts and
accessories under the MOPAR brand.
The Chrysler Group is facing a difficult market environment in
the United States with excess inventory, non-competitive legacy
costs for employees and retirees, continuing high fuel prices
and a stronger shift in demand toward smaller vehicles. At the
same time, key competitors have further increased margin and
volume pressures -- particularly on light trucks -- by making
significant price concessions. In addition, increased interest
rates caused higher sales & marketing expenses.
In order to improve the earnings situation of the Chrysler Group
as quickly and comprehensively, measures to increase sales and
cut costs in the short term are being examined at all stages of
the value chain, in addition to structural changes being
reviewed as well.
About General Motors Corp.
General Motors Corp. (NYSE: GM) -- http://www.gm.com/-- is the
world's largest automaker and has been the global industry sales
leader since 1931. Founded in 1908, GM employs about 284,000
people around the world. It has manufacturing operations in 33
countries and its vehicles are sold in 200 countries. GM sells
cars and trucks under these brands: Buick, Cadillac, Chevrolet,
GMC, GM Daewoo, Holden, HUMMER, Opel, Pontiac, Saab, Saturn, and
Vauxhall.
* * *
As reported in the Troubled Company Reporter-Europe on
Dec. 15, 2006, Standard & Poor's Ratings Services affirmed its
'B' corporate credit rating and other ratings on General Motors
Corp. and removed them from CreditWatch with negative
implications, where they were placed March 29, 2006. S&P said
the outlook is negative.
As reported in the TCR-Europe on Nov. 16, 2006, Standard &
Poor's Ratings Services assigned its 'B+' bank loan rating to
General Motors Corp.'s proposed US$1.5 billion senior term loan
facility, expiring 2013, with a recovery rating of '1'. The
'B+' rating was placed on CreditWatch with negative
implications, consistent with the other issue ratings of GM,
excluding recovery ratings.
At the same time, Moody's Investors Service assigned a Ba3,
LGD1, 9% rating to the proposed US$1.5 Billion secured term loan
of General Motors Corp. The term loan will be secured by a
first priority perfected security interest in all of the U.S.
machinery and equipment, and special tools of GM and Saturn
Corp.
IXE BANCO: Fitch Puts B+ Rating on US$120MM Perpetual Securities
----------------------------------------------------------------
Fitch has assigned a final 'B+' long term rating to Ixe Banco's
US$120 million Junior Subordinated Perpetual Securities.
This rating reflects that these securities are ranked junior to
all senior unsecured and non-junior subordinated debtors. These
securities will be considered as Class E by Fitch (full equity
credit under our capital assessment approach), but it should be
noted that hybrids can only account for 30% of Fitch's
definition of eligible capital (ie. these securities will only
add up to eligible capital the equivalent to 42.9% of Ixe's
tangible common equity).
Fitch currently rates Ixe Banco:
-- Foreign and local currency long-term
Issuer Default Ratings (IDR) 'BB';
-- Foreign and local currency short-term rating 'B';
-- Individual 'C/D';
-- Support '5';
-- National-scale long term rating 'A(mex)';
-- National-scale short term rating 'F1(mex)';
-- Rating Outlook Stable.
Ixe Banco's IDRs and Individual ratings reflect its adequate
asset quality, stable customer deposit base, ample liquidity and
growing franchise among Mexican specialized financial
intermediaries, while the ratings also consider its weak
profitability, high borrower concentrations and somewhat limited
internal capital generation.
Ixe Banco, established in 1994, is part of Ixe Grupo Financiero,
a medium-sized financial conglomerate with rapidly growing
subsidiaries in the most relevant financial segments. Ixe Banco
is mostly concentrated on loans to the commercial, corporate and
financial sectors, while targeting a larger share of retail
loans. It has gradually built a medium-sized branch network in
Mexico City and Monterrey. Since end-2004, the bank has doubled
its agencies to 55 as of September 2006. Ixe Banco expects to
reach 210 branches by end-2011. As of September 2006, the
bank's assets, deposits and equity amounted to US$1.3 billion,
US$819 million and US$104 million, respectively.
MAXCOM TELECOM: Reports MXN477.2 Mil. Revenues in Fourth Quarter
----------------------------------------------------------------
Maxcom Telecomunicaciones reported its fourth quarter 2006 and
full year 2006 unaudited financial results.
The number of voice lines in service at the end of fourth
quarter 2006 increased 31% to 269,590 lines, from 206,292 lines
at the end of fourth quarter 2005, and 5% when compared to
256,328 lines in service at the end of third quarter 2006.
During fourth quarter 2006, 25,591 new voice lines were
installed, 49% higher than 17,155 lines installed during fourth
quarter 2005. When compared to third quarter 2006, the number of
installations decreased 15% from 30,030 lines.
During the quarter, the monthly churn rate for voice lines was
1.7%, higher than the 1.4% monthly average churn experienced
during fourth quarter 2005, and was also above 1.6% churn rate
in third quarter 2006.
Data equivalent lines (at 64Kbps) increased 53% to 42,074 at the
end of fourth quarter 2006 from 27,586 at the end of fourth
quarter 2005, and 9% when compared to 38,640 equivalent lines at
the end of third quarter 2006.
Customers
Total customers (voice and data) grew 23% to 192,716 at the end
of fourth quarter 2006, from 157,120 at the end of fourth
quarter 2005, and 4% when compared to 185,879 customers at the
end of third quarter 2006.
Revenues
Revenues during fourth quarter 2006 increased 49% to MXN477.2
million, from MXN321.5 million reported in fourth quarter 2005.
Voice revenues in the quarter increased 34% to MXN346.7 million,
from MXN259.3 million during fourth quarter 2005, and were
primarily driven by a 31% increase in voice lines and an
increase in average revenues per line, mainly as a result of
higher public telephony services. Data revenues in fourth
quarter 2006 were MXN27.8 million, a 99% increase when compared
to MXN14.0 million in fourth quarter 2005. Wholesale revenues
in fourth quarter 2006 were MXN102.8 million, twice as much as
MXN48.1 million recorded in fourth quarter 2005.
Fourth quarter 2006 revenues represented a 2% increase from the
MXN466.2 million reported in third quarter 2006. Voice revenues
in fourth quarter 2006 decreased 1% from MXN351.5 million in
third quarter 2006, while data revenues increased to MXN27.8
million, and were 50% higher than those reported in third
quarter 2006 at MXN18.5 million. During fourth quarter 2006,
revenues from Wholesale customers grew 7% to MXN102.8 million
from MXN96.2 million in third quarter 2006.
On a full year basis, revenues increased 40% to MXN1,678.6
million, from MXN1,197.1 million in 2005. Voice revenues in 2006
increased 35% to MXN1,302.9 million, from MXN967.9 million in
2005, while data revenues increased 43% to MXN76.5 million, from
MXN53.5 million in 2005. During 2006 revenues from Wholesale
customers increased 70% to MXN299.2 million, from MXN175.8
million in 2005.
Network Operation Cost
Cost of Network Operation in fourth quarter 2006 was MXN196.4
million, 84% above the cost of MXN106.6 million in fourth
quarter 2005. During the same period, outbound traffic
decreased 17%, showing an increase on a cost per minute basis as
a result of higher operating costs in our public phones and
higher long distance termination charges, driven by volume, as
well as calls to cellular phones. Local traffic represented 83%
of total traffic in fourth quarter 2006, down from 90% in fourth
quarter 2005. The MXN89.8 million increase in the Cost of
Network Operation was generated by:
(i) MXN83.7 million, or 105% increase in network operating
services, as a result of MXN29.6 million higher long
distance interconnection fees, MXN24.4 million higher
cost of operation of public telephones, MXN3.2 million
higher calling party pays interconnection fees, MXN15.9
million higher leases of circuits and ports, MXN3.4
higher internet services cost and MXN7.1 million
increase in other services cost, such as CATV and
Cellular operations;
(ii) MXN5.3 million, or 23% increase in technical expenses;
(iii) MXN0.6 million, or 15% increase in installation
expenses and cost of disconnected lines; and
(iv) MXN0.2 million increase in cost of sales of customer
premises equipment.
Cost of Network Operation increased 2% quarter-over-quarter when
compared to MXN191.9 million in third quarter 2006. The MXN4.5
million increase in Cost of Network Operation was generated by:
(i) MXN5.3 million, or 3% increase in Network operating
services, as a result of MXN5.0 million higher leases
of circuits and ports, MXN4.5 million higher cost of
operation of public telephones, MXN3.2 higher internet
services cost, and MXN3.2 million higher other services
cost, such as CATV and Cellular operations; these
increases were partially offset by MXN6.8 million lower
long distance interconnection fees and MXN3.9 million
lower calling party pays interconnection fees;
(ii) MXN1.3 million decrease in technical expenses;
(iii) MXN1.2 million increase in installation expenses and
cost of disconnected lines; and
(iv) MXN0.6 million decrease in cost of sales of CPE.
On a full year basis, the Cost of Network Operation increased
MXN253.1 million to MXN 652.4 million, from MXN399.3 million in
2005. Cost of network operating services increased MXN240.7
million, or 84%, driven by our larger scale of operations
combined with a shift towards products that carry higher volumes
but lower margins; installation expenses and cost of
disconnected lines increased MXN0.3 million, or 2%, and
technical expenses grew by MXN12.1 million, or 13%.
SG&A expenses were MXN151.6 million in fourth quarter 2006, 26%
above MXN120.8 million in fourth quarter 2005. The MXN30.8
million increase was mainly driven by:
(i) higher salaries, wages and benefits of MXN22.8 million
as a result of larger headcount;
(ii) MXN3.1 million compensation charge related to stock
options plans;
(iii) MXN2.8 million higher advertising and promotion
expenses;
(iv) MXN1.6 million higher sales commissions;
(v) higher bad debt reserve of MXN1.2 million;
(vi) higher external advisors of MXN0.5 million, and
(vii) higher maintenance expenses of MXN0.4 million.
These increases were partially offset by:
(i) MXN1.2 million lower general and corporate expenses; and
(ii) MXN0.4 million lower insurance expenses.
SG&A expenses in fourth quarter 2006 decreased 8% from MXN164.7
million in third quarter 2006. The MXN13.1 million decrease was
generated by:
(i) lower compensation charge related to stock options plan
of MXN8.9 million;
(ii) lower general and corporate expenses of MXN2.5 million;
(iii) MXN1.5 million lower external advisors;
(iv) lower salaries, wages and benefits of MXN0.9 million;
(v) lower bad debt reserve of MXN0.6 million; and
(vi) lower lease expenses of MXN0.2 million.
These decreases were partially offset by:
(i) MXN1.3 million higher sales commissions; and
(ii) MXN0.3 million higher advertising and promotion
expenses.
On a full year basis, SG&A expenses increased 20% to MXN585.5
million from MXN487.3 million in 2005.
SG&A expenses in fourth quarter 2006, before the effect of the
non-cash stock option compensation charge, were MXN148.5
million, a 23% increase from MXN120.8 million in fourth quarter
2005 and a 3% decrease from MXN152.7 in third quarter 2006.
On a full year basis, SG&A expenses, before the effect of the
non-cash stock option compensation charge, increased 17% to
MXN570.3 million in 2006, from MXN487.3 million in 2005.
Adjusted EBITDA
Adjusted EBITDA for fourth quarter 2006 was MXN132.4 million,
41% higher from MXN94.1 million in fourth quarter 2005, and 9%
higher from MXN121.6 million in third quarter 2006.
On a full year basis, adjusted EBITDA grew 47% to MXN455.8
million from MXN310.5 million in 2005.
EBITDA for fourth quarter 2006 was MXN129.2 million, 37% higher
from MXN94.1 million in fourth quarter 2005, and 18% higher from
MXN109.6 million in third quarter 2006.
On a full year basis, EBITDA grew 42% to MXN440.6 million from
MXN310.5 million in 2005.
Operating Income
For the second consecutive year, Maxcom achieved operating
income, which amounted MXN127.2 million in 2006. This result
represents more than six-times increase from MXN17.5 million in
2005.
Capital Expenditures
Capital expenditures in fourth quarter 2006 totaled MXN268.7
million, 42% above MXN189.7 million recorded in fourth quarter
2005, and 66% below MXN161.6 million spent in third quarter
2006.
Capital expenditures for 2006 were MXN852.5 million, which
compares to MXN465.2 million invested in 2005.
Cash Position
Maxcom's cash position at the end of fourth quarter 2006 was
MXN735.1 million in cash and temporary investments, including
MXN22.6 million in restricted cash, as most of the funds from
the financing described below were available, compared to
MXN240.5 million at the end of fourth quarter 2005, which
included MXN7.9 million in restricted cash. Cash and temporary
investments at the end of third quarter 2006 were MXN179.1
million, including MXN10.7 million in restricted cash.
New Financing
On Dec. 13, 2006, Maxcom completed a private placement of debt
instruments denominated "Senior Notes" in the United States of
America and some European, Latin American and Asian countries
amounting to US$150,000,000, in accordance with Rule 144A and
Regulation S of the Securities Act of 1933. In addition, on
Jan. 5, 2007, Maxcom executed a supplemental offering of the
transaction in the amount of US$25,000,000. The use of proceeds
went to refinance debt and capital expenditures.
Headquartered in Mexico City, Mexico, Maxcom Telecomunicaciones,
SA de CV, is a facilities-based telecommunications provider
using a "smart-build" approach to deliver last-mile connectivity
to micro, small and medium-sized businesses and residential
customers in the Mexican territory. Maxcom Telecomunicaciones
launched commercial operations in May 1999 and is currently
offering Local, Long Distance and Internet & Data services in
greater metropolitan Mexico City, Puebla and Queretaro.
* * *
As reported in the Troubled Company Reporter-Latin America on
Nov. 29, 2006, Standard & Poor's Ratings Services assigned its
'B' long-term corporate credit rating to Mexico City-based
Maxcom Telecomunicaciones SA de CV. S&P said the outlook is
stable.
At the same time, Standard & Poor's assigned its 'B' rating to
Maxcom's proposed transaction of up to US$200 million 144-A
senior unsecured notes maturing in 2016. The notes will be
guaranteed by substantially all of Maxcom's subsidiaries.
Proceeds from the proposed offering of notes will be used to
refinance all the existing indebtedness, including vendor
financing, and to prefund approximately US$84 million of capital
expenditures for additional growth.
MCDERMOTT INT'L: No TXU Update Regarding Contracts Amidst Sale
--------------------------------------------------------------
McDermott International Inc. announced that it has not received
any notices from TXU Corp. pursuant to an announcement that TXU
has agreed to be acquired.
However, prior to the acquisition news, TXU had given notice to
McDermott's subsidiary, The Babcock & Wilcox Company, to suspend
performance on five of the eight projects in Texas for the
design and supply of supercritical coal-fired boilers and
selective catalytic reduction systems. A notice of suspension
is a client-initiated directive to wind down and suspend all
work on the affected units until a notice of resumption or
termination is issued. These suspended projects will remain in
McDermott's backlog until TXU provides further notice.
For the suspended units, the contract(s) require that TXU
compensate Babcock & Wilcox for all work performed to date and
for all costs associated with the suspension, storage and
resumption. Also, under the terms of the contract, Babcock &
Wilcox is permitted to file claims for contract changes in all
terms, including price and schedule should work resume. In the
event of termination, the contract(s) provide for recovery of
costs and a reasonable profit. Babcock & Wilcox is continuing
to perform on the remaining unsuspended units.
"We read TXU's press release this morning and their comments
regarding reducing the number of plants. However, Babcock &
Wilcox has not received any official word today from TXU related
to either the suspended units or the other three," said Bruce W.
Wilkinson, Chairman and Chief Executive Officer of McDermott.
"Babcock & Wilcox is a clear industry leader in improving
emissions associated with the power generation market, including
carbon capture technology," continued Wilkinson. "Regardless of
the potential change in TXU's ownership or the status of these
projects, we expect TXU will remain a valued customer."
About McDermott Int'l
McDermott International, Inc. (NYSE:MDR)--
http://www.mcdermott.com/--is a leading worldwide energy
services company. McDermott's subsidiaries provide engineering,
construction, installation, procurement, research,
manufacturing, environmental systems, project management and
facility management services to a variety of customers in the
energy and power industries, including the U.S. Department of
Energy. The company operates in most major offshore producing
regions throughout the world, including the U.S. Gulf of Mexico,
Mexico, the Middle East, India, the Caspian Sea and Asia
Pacific. Operations in this segment are primarily conducted
through its subsidiary, J. Ray McDermott, S.A.
* * *
As reported in the Troubled Company Reporter on Oct. 6, 2006,
Moody's Investors Service's confirmed its B1 Corporate Family
Rating for McDermott International Inc.
SUNCOM WIRELESS: Has US$30.8 Million EBITDA in 2006 Fourth Qtr.
---------------------------------------------------------------
SunCom Wireless Holdings Inc. reported financial results for the
fourth quarter and year ended Dec. 31, 2006. Adjusted EBITDA in
the fourth quarter was US$30.8 million compared with (US$13.6)
million in the fourth quarter of 2005, driven by higher average
revenue per user, lower operating costs and an increase in the
number of subscribers as compared to the fourth quarter of 2005.
Full year 2006 adjusted EBITDA was US$92.9 million compared with
US$31.1 million for 2005. Net cash used in operating activities
was US$28.5 million for the fourth quarter versus US$32.8
million a year ago while net cash used in operations for the
full year was US$76.5 million compared with US$73.3 million for
2005.
ARPU increased over 6% from US$51.93 in the fourth quarter of
2005 to US$55.17 in the fourth quarter of 2006 as a result of
higher access revenues and increased feature revenues. The
company added 41,609 net subscribers in the fourth quarter on
gross additions of 119,680, leading to 1,087,192 total
subscribers at year-end. Monthly churn for the fourth quarter
of 2006 was 2.4%, down from 2.7% in the fourth quarter of 2005.
The ARPU gain and the higher subscriber count produced service
revenues of US$178.7 million, a 4.4% increase over service
revenues of US$171.1 million in the third quarter of 2006.
"We are committed to delivering excellent products and services
and focused on offering the highest-value plans in the market,"
said Mike Kalogris, SunCom's Chairman and CEO. "Our 12.6%
increase in subscribers in 2006 is a consumer vote of confidence
in our strategy. The great work of SunCom associates, and their
strong commitment to delivering the best possible service to our
customers, has established a solid foundation on which we will
continue to grow and improve our business in 2007."
For the full year 2006, the company added approximately 121,000
subscribers.
Financial Highlights:
-- Adjusted EBITDA in the fourth quarter was US$30.8 million
compared with (US$13.6) million in the fourth quarter of
2005. Net cash used by operating activities was US$28.5
million in the fourth quarter, compared with net cash used
by operating activities of US$32.8 million in the fourth
quarter of 2005.
-- Service revenue in the fourth quarter was US$178.7
million, a 19.4% increase over service revenue of
US$149.6 million in the fourth quarter of 2005.
-- Roaming revenue was US$21.2 million in the fourth quarter,
a decline of 5.7% from US$22.5 million in the fourth
quarter of 2005. Total roaming minutes were 297.0 million
in the fourth quarter compared to 265.4 million minutes in
the fourth quarter of 2005.
-- ARPU was US$55.17 in the fourth quarter compared to
US$51.93 in the fourth quarter of 2005. The increase is a
result of higher access revenues and increased feature
revenues.
-- Subscribers at year end were 1,087,192 compared to 965,822
at the end of 2005, an increase of 12.6%, reflecting a net
subscriber increase of 121,370.
-- Monthly churn was 2.4% in the fourth quarter, a decline
from 2.7% in the fourth quarter of 2005.
-- Cost of service was US$64.9 million in the fourth quarter
of 2006 compared to US$73.9 million in the fourth quarter
of 2005. The decrease was mostly the result of the
decommissioning of the TDMA network and better toll rates.
-- Cost per gross addition was US$386 in the fourth quarter
of 2006 compared to US$395 in the fourth quarter of 2005.
-- Capital expenditures were US$19.1 million in the fourth
quarter and US$68.5 million for the full year.
-- The company ended the year with US$197.0 million in cash
and short-term investments.
Recent Developments
On Jan. 31, 2007, SunCom announced that the company and its
subsidiaries reached a consensual agreement with bondholders who
hold or beneficially own approximately 95% of its outstanding
subordinated notes to exchange their notes for approximately
87.5% of SunCom Wireless Holdings' common stock. The move is
intended to reduce the face value of SunCom's debt by
approximately US$708.4 million and annual interest payments by
approximately US$64 million, providing the company greater
financial flexibility. Completion of the exchange is expected
in the second quarter of 2007, subject to approval by SunCom
Wireless Holdings shareholders, regulatory approval and other
customary closing conditions.
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.
* * *
As reported in the Troubled Company Reporter-Latin America on
Feb. 12, 2007, Standard & Poor's Rating Services said it revised
its outlook for Berwyn, Pa.-based SunCom Wireless Holdings Inc.
to positive from negative following SunCom's announcement that
it had reached a consensual agreement with its largest
subordinated bondholders to exchange debt for common stock.
All ratings, including the 'CCC+' corporate credit rating and
those on wholly owned subsidiary SunCom Wireless Inc., were
affirmed.
As reported in the Troubled Company Reporter-Latin America on
Feb. 9, 2007, Moody's lowered the probability of default rating
of SunCom Wireless Inc. to LD, placed the company's Caa3
corporate family rating under review for possible upgrade and
placed its B2 senior secured, Caa2 senior unsecured and Ca
senior subordinate ratings under review direction uncertain.
=================
N I C A R A G U A
=================
* NICARAGUA: Seeking US495-Mil. Agricultural Loan from Taiwan
-------------------------------------------------------------
The Nicaraguan government is seeking a US$495-million loan from
Taiwan to be used in developing the former's agriculture, German
press agency Deutsche Presse-Agentur states, citing a newspaper.
China Times relates that Nicaragua might have also sought loans
to develop its energy, education and construction sectors.
The loan was included in the cooperation accord that the two
countries signed on Jan. 10, 2007, China Times underscores.
According to DPA, the Nicaraguan parliament has set up special
committees to review the three cooperation pacts signed with
Taiwan, Venezuela and Iran.
Details of the cooperation accord will be finalized when
Nicaraguan Foreign Minister Samuel Santos visits Taiwan in
March, China Times states.
* * *
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
* NICARAGUA: Will Receive 60,000 Barrels of Oil from Venezuela
--------------------------------------------------------------
Nicaragua will receive 60,00 barrels from Venezuela, under the
cooperation accords signed between the two nations in Bolivarian
Alternative of the Americas, Prensa Latina reports.
The Bolivarian Alternative is a political, social and economic
cooperation and complementation vision of integration between
the Latin American nations, proposed by the government of
Venezuela as an alternative to the Free Trade Area of the
Americas proposed by the US.
Prensa Latina relates that the Vessel Perla del Caribe, which is
carrying tanks with about two million 100,000 gallons of diesel
and 420,000 gallons of oil from Venezuela, will arrive at
Corinto port in Nicaragua.
According to Prensa Latina, the fuel shipment will be the first
that Nicaragua receives from Venezuela, since signing the
accords with the latter.
One part of the diesel will be given at preferential payment to
the urban transportation cooperative in Managua, Prensa Latina
says, citing Jose Pena, Venezuela-Nicaragua enterprise Alba
Petroleos' manager in Nicaragua.
* * *
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
===========
* PANAMA: Regulator Rejects Six Requests for Hydro Projects
-----------------------------------------------------------
Panamanian public services regulator Asep said in a statement
that it has cancelled six requests to construct hydro projects
totaling 81.7 megawatts of installed capacity.
Business News Americas relates that Asep has rejected requests
for the La Mina Hydro-Power's Bajo de Mina plant in Chiriqui,
and plants in Colon, Chiriqui and Veraguas.
According to the statement, Asep cancelled the requests in
accordance with resolutions that outline the procedure for
awarding hydro and geothermal generation concessions.
BNamericas underscores that individuals and firms whose requests
were canceled could not present a new request for the projects.
New requests must have a project timetable, as well as a
guarantee of US$100 for every megawatt, BNamericas states.
* * *
As reported in the Troubled Company Reporter-Latin America on
Dec. 14, 2006, Fitch Ratings affirmed the Republic of Panama's
long-term foreign currency Issuer Default Rating of 'BB+'.
Fitch also affirmed the sovereign's long-term local currency IDR
of 'BB+', the short-term foreign currency IDR of 'B' and the
country ceiling of 'BBB+'. Fitch said the rating outlook is
stable.
===============
P A R A G U A Y
===============
* PARAGUAY: Inks Aviation Agreement with European Union
-------------------------------------------------------
Paraguay has signed an aviation accord with the European Union,
removing "nationality restrictions" and allowing European
airlines to fly into the former, New Europe News reports.
Jacques Barrot, the European Commission's vice president for
transport, said in a statement, "I welcome this further step in
developing Europe's air transport links with Latin America. EU
(European Union) airlines now have non-discriminatory access to
the air transport market between the EU and Paraguay, building
on similar agreements with Chile and Uruguay. At the same time,
the agreement underlines the EU's commitment to creating a more
open international investment regime for aviation. It
recognises the integration and cross border investment taking
place in Latin America by removing the nationality requirements
for Paraguayan airlines flying to Europe."
The aviation accord doesn't replace the bilateral agreements in
place between the EU member states and Paraguay. However, it
brings them in line with EU law by removing the "nationality
restrictions" contained in bilateral air services accords, The
commission told New Europe.
* * *
Moody's assigned these ratings on Paraguay:
-- CC LT Foreign Bank Deposit, Caa2
-- CC LT Foreign Currency Debt, Caa1
-- CC ST Foreign Bank Deposit, NP
-- CC ST Foreign Currency Debt, NP
-- LC Currency Issuer Rating, Caa1
-- FC Currency Issuer Rating, Caa1
-- Local Currency LT Debt, WR
* * *
Standard & Poor's assigned these ratings on Paraguay:
-- Foreign Currency LT Debt B-
-- Local Currency LT Debt B-
-- Foreign Currency ST Debt C
-- Local Currency ST Debt C
=======
P E R U
=======
IRON MOUNTAIN: Names Laurie Tucker to Board of Directors
--------------------------------------------------------
Iron Mountain Incorporated has expanded its board of directors
from seven seats to eight seats. Following a thorough
recruiting process, Laurie Tucker, Senior Vice President of
Marketing at FedEx Corporate Services, Inc. (NYSE: FDX), has
been selected to fill the newly created seat. Ms. Tucker is
expected to be formally elected to the board at its
March 1, 2007, meeting and will assume her responsibilities
immediately thereafter.
"We are tremendously excited to have Laurie join Iron Mountain's
Board of Directors," said Richard Reese, Chairman and Chief
Executive Officer at Iron Mountain. "Laurie has grown with
FedEx as the company itself progressed through many different
stages of development. I know we will benefit greatly from her
experience, as well as her expertise in marketing a business-to-
business services company, particularly one as well-respected as
FedEx."
Ms. Tucker joined FedEx in 1978 as a financial analyst and since
then, has gained experience across many facets of the business.
Ms. Tucker is responsible for developing marketing strategy,
product research and development, brand management, advertising,
retail, sponsorship marketing, business alliances, e-commerce,
and customer experience management. Also active in the
community, Ms. Tucker is on the University of Memphis' Board of
Visitors, which is where she earned both her B.A. and M.B.A.
She is also the FedEx co-chair for the March of Dimes and has
been a United Way Alexis de Tocqueville Society member since
1998.
Headquartered in Boston, Massachusetts, Iron Mountain
Incorporated (NYSE: IRM) is an international provider of
information storage and protection related services. The
company offers comprehensive records management and data
protection solutions, along with the expertise to address
complex information challenges such as rising storage costs,
litigation, regulatory compliance and disaster recovery.
Founded in 1951, Iron Mountain has more than 90,000 corporate
clients throughout North America, Europe, Latin America, and
Asia Pacific. Net revenue for twelve months ended
March 31, 2006 was approximately US$2.1 billion. Its Latin
American operations are located in Argentina, Brazil, Chile,
Mexico and Peru.
* * *
As reported in the Troubled Company Reporter-Latin America on
Jan. 17, 2007, Standard & Poor's Ratings Services assigned its
'B' rating to Iron Mountain Inc.'s proposed EUR175 million 6.75%
senior subordinated notes due 2018.
=====================
P U E R T O R I C O
=====================
B&G FOODS: Purchases Wheat Brands from Kraft Foods for US$200MM
---------------------------------------------------------------
Subsidiaries of B&G Foods Inc. have completed the purchase of
the Cream of Wheat and Cream of Rice brands from Kraft Foods
Global, Inc., effective Feb. 25, 2007, for the price of US$200
million in cash, subject to a post-closing adjustment for
inventory at the closing date.
As reported in the Troubled Company Reporter on Jan. 26, 2007,
B&G Foods, Inc. disclosed that along with its newly-formed,
indirect, wholly owned subsidiary COWC Acquisition Corp., it
entered into an asset purchase agreement with Kraft Foods.
B&G Foods used the proceeds of an additional US$205 million of
term loan borrowings under its newly amended and restated credit
facility to fund the acquisition and pay related transaction
fees and expenses.
"This is a very exciting acquisition for B&G Foods," David L.
Wenner, Chief Executive Officer of B&G Foods, stated. "We have
acquired the number two brand in the hot cereal category, a
brand with great name recognition and over 100 years of
heritage. Cream of Wheat and Cream of Rice fit B&G Foods'
acquisition strategy perfectly, and are brands that our company
can nurture and hopefully grow through focus and innovation.
Significantly, this acquisition together with the related
financing brings our company to approximately US$1.0 billion in
total capitalization, a remarkable milestone for B&G Foods."
About Kraft Foods
Kraft Foods (NYSE:KFT) -- http://www.kraft.com/-- is one of the
world's largest food and beverage companies. Kraft Foods
markets many of the world's leading food brands, including Kraft
cheeses, dinners and dressings; Oscar Mayer meats, DiGiorno
pizzas, Oreo cookies, Ritz crackers and chips, Philadelphia
cream cheese, Milka and Cote d'Or chocolates, Planters nuts,
Honey Bunches of Oats cereals, Jacobs, Gevalia and Maxwell House
coffees; Capri Sun, Crystal Light and Tang refreshment
beverages; and a growing range of South Beach Diet and better-
for-you Sensible Solution options.
About B&G Foods
B&G Foods (AMEX: BGF) -- http://www.bgfoods.com/-- and its
subsidiaries manufacture, sell and distribute a diversified
portfolio of high-quality, shelf-stable foods across the United
States, Canada and Puerto Rico. B&G Foods' products include
jams, jellies and fruit spreads, canned meats and beans, spices,
seasonings, marinades, hot sauces, wine vinegar, maple syrup,
molasses, salad dressings, Mexican-style sauces, taco shells and
kits, salsas, pickles and peppers and other specialty food
products. B&G Foods competes in the retail grocery, food
service, specialty store, private label, club and mass
merchandiser channels of distribution. Based in Parsippany, New
Jersey, B&G Foods' products are marketed under many recognized
brands, including Ac'cent, B&G, B&M, Brer Rabbit, Emeril's,
Grandma's Molasses, Joan of Arc, Las Palmas, Maple Grove Farms
of Vermont, Ortega, Polaner, Red Devil, Regina, San Del, Ac'cent
Sa-Son, Trappey's, Underwood, Vermont Maid and Wright's.
Preliminary revenues for the fiscal year ended Dec. 30, 2006,
were US$411.3 million.
* * *
As reported in the Troubled Company Reporter-Latin America on
Feb. 23, 2007, Standard & Poor's Ratings Services affirmed its
loan and recovery ratings on B&G Foods Inc.'s proposed senior
secured credit facilities, following the announcement that the
company will increase the term loan C facility by US$5 million.
Pro forma for the increased add-on portion, the facilities will
total US$230 million. The secured loan rating is 'B+' (one
notch above the 'B' corporate credit rating) and the recovery
rating is '1', indicating the expectation for full (100%)
recovery of principal in the event of a payment default.
As reported in the Troubled Company Reporter-Latin America on
Feb. 12, 2007, Moody's Investors Service confirmed the B2
corporate family rating, the Ba2 senior secured bank debt
ratings and the Caa1 senior subordinated notes rating of B&G
Foods, Inc. Moody's also lowered the rating on the company's
senior unsecured notes to B3 from B1. The rating outlook is
stable. These rating actions conclude the review for possible
downgrade begun on Jan. 24, 2007, following the company's
announcement of its plan to make a US$200 million debt-funded
acquisition of the Cream of Wheat and Cream of Rice brands from
Kraft Foods, Inc. In addition, Moody's assigned a Ba2 rating to
the company's new US$225 million senior secured term loan.
CENTENNIAL COMM: Blackstone Sells 10 Million Shares
---------------------------------------------------
Centennial Communications Corp. announced that certain
affiliates of The Blackstone Group have agreed to sell
10,000,000 shares of Centennial's common stock in an
underwritten public offering at a price to the public of
US$8.05 per share. Following completion of the offering,
affiliates of The Blackstone Group will own 15,172,043
shares of Centennial's common stock. The transaction is
subject to customary closing conditions.
Lehman Brothers is acting as the sole book-running manager for
the offering. Centennial will not receive any proceeds from the
sale.
The shares are being sold pursuant to Centennial's existing
shelf registration statement. A prospectus supplement relating
to the offering will be filed with the Securities Exchange
Commission. When available, a written prospectus for the
offering meeting the requirements of Section 10 of the
Securities Act of 1933, as amended, may be obtained from Lehman
Brothers by contacting:
Lehman Brothers
c/o ADP Financial Services
Prospectus Fulfillment
1155 Long Island Avenue
Edgewood, NY 11717
fax: (631) 254-7268.
Headquartered in Wall, New Jersey, Centennial Communications
Corp. (NASDAQ: CYCL) -- http://www.centennialwireless.com/--
provides regional wireless and integrated communications
services in the United States and the Puerto Rico with
approximately 1.1 million wireless subscribers and 387,500
access lines and equivalents. The US business owns and operates
wireless networks in the Midwest and Southeast covering parts of
six states. Centennial's Puerto Rico business owns and operates
wireless networks in Puerto Rico and the U.S. Virgin Islands and
provides facilities-based integrated voice, data and Internet
solutions. Welsh, Carson, Anderson & Stowe and an affiliate of
the Blackstone Group are controlling shareholders of Centennial.
* * *
As reported in the Troubled Company Reporter on July 3, 2006,
Fitch assigned Centennial Communications Corp.'s issuer default
rating at 'B-' and senior unsecured notes rating at 'CCC/RR6'.
Fitch said the rating outlook is stable.
FEDERATED DEP'T: Moody's Lowers Preferred Shelf Rating to (P)Ba1
----------------------------------------------------------------
Moody's Investors Service downgraded Federated Department
Stores, Inc.'s long term senior unsecured debt rating to Baa2
from Baa1, and affirmed the company's Prime 2 rating for
commercial paper, following the company's announcement that the
Board had authorized a US$4 billion additional share buyback
program.
Ratings downgraded:
-- Senior unsecured debt rating to Baa2 from Baa1
-- Preferred shelf rating to (P) Ba1 from (P) Baa3
Rating affirmed:
-- Prime 2 rating for commercial paper
The downgrade of Federated's long term rating is based on the
conclusion that, given the US$4 billion share buyback, Federated
would be unable to restore key credit metrics by the end of
fiscal year 2007 to the levels cited in Moody's Credit Opinion
on May 1, 2006, as necessary to maintain the Baa1 rating. The
rating action also reflects the weaker performance of the
acquired May stores and the more challenging than expected
transition to Federated's somewhat less promotional pricing
strategy. Federated has repurchased 45 million shares, or
approximately US$2 billion, of the US$4 billion authorization,
and the remaining approximately US$2 billion will be purchased
on the open market throughout the current fiscal year ending
January 2008. The accelerated share repurchase will be financed
by cash on hand (Federated had US$1.2 billion cash on hand at
fiscal year end, Feb. 3, 2007), and the remaining amount will be
financed by issuing commercial paper backed by the company's
US$2 billion revolving credit that expires in Aug. 2011.
Federated's Baa2 rating reflects the company's large scale which
is a competitive advantage; strong merchandising expertise;
efficient execution; its solid operating cash flow and strong
liquidity; and more aggressive financial policies. Federated
maps to a Baa3 rating in Moody's Global Retail Methodology,
which is one notch below the company's actual rating. However,
Moody's believes that given the company's substantial market
position and cash flow, the Baa2 is justified.
The stable rating outlook reflects the cushion that Federated's
solid cash flow and department store franchise provide at the
Baa2 level for its somewhat more aggressive financial policy, as
well as the fact that credit metrics score at the Baa level.
Federated Department Stores, Inc. is one of the country's
largest department stores operators, with more than 850
department stores in 45 states, the District of Columbia, Guam
and Puerto Rico, operating under the banners Macy's and
Bloomingdale's. The August 2005 acquisition of May nearly
doubled Federated's scale -- sales in fiscal 2006, the first
full year of combination, were US$27 billion.
FERRELLGAS PARTNERS: Declares Second Quarter Distribution
---------------------------------------------------------
Ferrellgas Partners, L.P. declared its second quarter cash
distribution of US$0.50 per partnership common unit. The
distribution is payable March 16, 2007, to common unitholders of
record as of March 9, 2007.
The distribution covers the period from Nov. 1, 2006, to
Jan. 31, 2007, the end of the partnership's second quarter of
fiscal 2007. Ferrellgas' annualized distribution is currently
US$2.00 per common unit.
Headquartered in Overland Park, Kansas, Ferrellgas Partners, LP
(NYSE: FGP) -- http://www.ferrellgas.com/-- through its
operating partnership, Ferrellgas, LP, is a propane marketer in
the United States. Ferrellgas serves more than 1 million
customers in all 50 states, the District of Columbia, Puerto
Rico, and Canada, and has annual sales volumes approaching 1
billion retail gallons. Ferrellgas employees indirectly own
more than 20 million common units of the partnership through an
employee stock ownership plan.
* * *
In connection with Moody's Investors Service's implementation of
its new Probability-of-Default and Loss-Given-Default rating
methodology for the broad energy midstream sector, encompassing
companies that engage in the extraction, treating, transmission,
distribution, and logistics for crude oil, natural gas, and
other hydrocarbon products, the rating agency affirmed its Ba3
corporate family rating on Ferrellgas Partners L.P.
=================================
T R I N I D A D & T O B A G O
=================================
BRITISH WEST: Cargo Policies Under Review
-----------------------------------------
The Caribbean Airlines officials told Newsday that the airline
is reviewing and revising the cargo policies that predecessor
British West Indies Airlines aka BWIA used, Newsday reports.
The changes being considered are for greater operational
efficiency of Caribbean Airlines, as well as greater client
satisfaction, the officials explained to Newsday. It was a work
in progress and would involve the reshuffling several areas of
the airline's cargo operations.
The officials told Newsday that the changes were needed because
BWIA and Caribbean Airlines were entirely different entities and
the former's cargo policy might not work with the latter.
The new cargo policies will be in line with international
standards and will include the use of the latest technologies
for the benefit of Caribbean Airlines and its clients, Newsday
states, citing the officials.
British West Indies aka BWIA was founded in 1940, and for more
than 60 years had been serving the Caribbean islands from
Trinidad and Tobago, the hub of the Americas, linking the twin
island republic and many other Caribbean islands with North
America, South America, the United Kingdom and Europe.
The airline had reportedly been losing US$1 million a week due
to poor operational management. An employee survey revealed
that lack of responsibility by the management was a major issue
in the company. A number of key employees moved to other
companies caused by a deadlock in the airline's negotiation with
its labor union.
The Trinidad & Tobago government, which owns 97.188% of BWIA,
decided to shut down the airline on Dec. 31, 2006, and launch
the Caribbean Airlines.
=============
U R U G U A Y
=============
* URUGUAY: International Roaming May Generate US$63 Million
-----------------------------------------------------------
A study conducted by Signals Consulting indicated that
international roaming services could generate US$63 million
revenues in Uruguay from 2007 to 2011, Business News Americas
reports.
BNamericas relates that the US$63 million will be almost 3.8% of
the total revenues that the Uruguayan mobile telephony market
will generate in the same period.
Income from mobile roaming in Uruguay will decrease 37% to
US$10.3 million in 2011, compared to 2006, mainly due to falling
international roaming calling rates, BNamericas notes, citing
Signals Consulting.
Signals Consulting research director Carlos Blanco commented to
BNamericas that international roaming is still not very
significant for telecom firms as it is easier for them to
generate revenues from other value added services. However,
international roaming services are important for telecoms in
certain situations.
"During Argentina's economic crisis Uruguayan telcos deployed
GSM networks only for incoming traffic to generate revenues from
Argentine tourists," Mr. Blanco told BNamericas.
A previous study by Signals Consulting showed that Uruguay's
telecommunications market could generate yearly revenues of
almost US$800 million by 2011, BNamericas states.
* * *
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+'.
* URUGUAY: To Discuss Cooperation & Investment with Brazil
----------------------------------------------------------
Uruguay and Brazil will discuss cooperation as well as
investment, Prensa Latina reports.
Prensa Latina relates that Uruguayan President Tabare Vazquez
will meet with Brazilian counterpart Luiz Inacio Lula da Silva
to discuss energy interconnection as well as the recovery of
Banco do Brasil.
According to Prensa Latina, Brazilian ministers accompanying
President Lula da Silva to Uruguay include:
-- foreign affairs,
-- energy,
-- economy and trade, and the
-- advisor on foreign policy.
Brazilian and Uruguayan ministers will deal with issues like
investment, Prensa Latina states.
* * *
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
=================
BANCO VENEZOLANO: Fitch Affirms Ratings on Several Categories
-------------------------------------------------------------
Fitch Ratings affirms Banco Venezolano de Credito Universal's
ratings:
-- Long-term Issuer Default Rating (IDR) 'B+';
-- Short-term issuer rating 'B';
-- Long-term Local Currency Rating 'B+';
-- Short-term Local Currency Rating 'B';
-- Individual rating 'D';
-- Support '5';
-- National Long-term rating 'A+(ven)'; and
-- National Short-term rating 'F1(ven)'.
The Rating Outlook is Negative.
Banco Venezolano is a small bank with a 1.6% market share in
terms of invested funds (assets plus investment funds) at
December 2006. Despite this fact, the bank is well positioned
in the corporate and high net worth client market and also has
been considered a refuge bank in times of stress. Established
in 1925, Banco Venezolano is owned by an array of local and
international investors. The bank has a fully consolidated
branch in Grand Cayman (less than 10% of consolidated assets).
Banco Venezolano's ratings reflect its well-established
franchise, good asset quality, and overall conservative risk
appetite. However, the ratings are limited by lower
capitalization ratios and decreasing profitability, though it
still compares favorably with its peers. Also factored in is
the recent increase in Central Bank securities. In common with
all Venezuelan banks, Banco Venezolano's activities are
constrained by higher government intervention and the volatility
of the economic environment.
Sustained by its privileged position in the corporate and high
net worth client market, and propelled by rapid loan demand,
Banco Venezolano has been able to significantly increase its
loan portfolio since year 2003, similar to many of its
competitors. This increase in productive assets and effective
cost control policies has been key to protecting the bank's
historical high profitability ratios, despite lower interest
rates and the lack of foreign exchange gains, which were a
recurrent source of income for Venezuelan banks in the past.
Recent profitability ratios are still above average compared
with its peers, but they are moving in downward trend (return on
average assets or ROAA 2000-2004:8% vs. ROAA 2006: 4%). Going
forward, the different controls over banking activities in
Venezuela, fierce competition and high liquidity will all keep
pressure on the bank's profitability, the main source of capital
buildup for Banco Venezolano in recent years.
With a higher than proportional share of corporate loans granted
to most of the best credits in the country, Banco Venezolano
shows better asset quality ratios, but with higher concentration
levels. The recent rapid increase in loans has resulted in a
decrease of its overall provisioning levels to slightly below
the market average, but is considered tight given the historical
volatility of the Venezuelan economy, the recent build-up of the
portfolio, existing and potential directed lending guidelines,
and the lower capital cushion.
Despite the significant increase in the loan portfolio, the bank
has shown an increase in its exposure to short-term central bank
securities (by policy the bank does not participate in the
Central Government debt market). At end-December 2006, these
investments represent 3.4x equity (2005: 2.5x), still below to
the market average.
Sizable cash dividends and the rapid growth of its balance sheet
have eroded the historically ample capitalization ratios for
Banco Venezolano. At end-December 2006, total equity to assets
came down to 7.3% (Avg 2000-2004: 15.6%), while the market
average at end-2006 was 7.1% (including ceded investments).
CITGO PETROLEUM: Pres. Chavez Seeks to Divest A U.S. Refinery
-------------------------------------------------------------
Venezuelan President Hugo Chavez said last week that the state
wants to sell one more refinery in the United States that is
owned by Citgo Petroleum Corp., the Associated Press reports.
The Venezuelan leader prefers to bring benefits of the business
to another country, AP adds. Last year, Citgo sold off its
stake in Lyondell refinery.
"Do we want to sell another? Yes, we're looking because it's not
a good business for us," Pres. Chavez said during his radio talk
show, "Hello President." The president explained that Citgo's
seven refineries in the U.S. buy discounted Venezuelan crude but
pays taxes in America.
More importantly, Pres. Chavez emphasized that refining crude in
countries like Nicaragua, Jamaica or Brazil is a thousand times
more preferable because these countries are friendly with
Venezuela, AP relates.
The two countries' diplomatic relations have been strained for
some time giving rise to threats of cutting oil supplies to the
U.S., which is Venezuela's largest customer.
Headquartered in Houston, Texas, Citgo Petroleum Corp. --
http://www.citgo.com/-- is owned by PDV America, an indirect,
wholly owned subsidiary of Petroleos de Venezuela SA, the state-
owned oil company of Venezuela.
Petroleos de Venezuela is Venezuela's state oil company in
charge of the development of the petroleum, petrochemical, and
coal industry, as well as planning, coordinating, supervising,
and controlling the operational activities of its divisions,
both in Venezuela and abroad.
* * *
Standard and Poor's Ratings Services assigned a 'BB' rating on
Citgo Petroleum Corp.
Citgo Petroleum carries Fitch's BB- Issuer Default Rating.
DAIMLERCHRYSLER AG: May Accept GM Stake in Exchange for Chrysler
----------------------------------------------------------------
DaimlerChrysler AG mulls accepting a minority stake in General
Motors Corp. in return for Chrysler if both groups come to an
agreement on the sale of the unit, John Reed writes for the
Financial Times.
As reported in the Troubled Company Reporter-Europe on Feb. 19,
citing German publication Manager Magazin, DaimlerChrysler and
General Motors are in talks about a possible purchase of the
Chrysler Group by GM.
If the all-equity deal pushes through, DaimlerChrysler stands to
save billions of dollars in synergies and merger costs, FT
states.
According to the report, both companies have not confirmed the
discussions, although at least two of DaimlerChrysler
institutional shareholders are in favor of the all-share deal.
DaimlerChrysler also has the option to sell the ailing unit to
private equity or industry investors and is relying on JPMorgan
Chase for advice on its available alternatives, FT relates.
About General Motors Corp.
General Motors Corp. (NYSE: GM) -- http://www.gm.com/-- is the
world's largest automaker and has been the global industry sales
leader since 1931. Founded in 1908, GM employs about 284,000
people around the world. It has manufacturing operations in 33
countries and its vehicles are sold in 200 countries. GM sells
cars and trucks under these brands: Buick, Cadillac, Chevrolet,
GMC, GM Daewoo, Holden, HUMMER, Opel, Pontiac, Saab, Saturn, and
Vauxhall.
About DaimlerChrysler
Based in Stuttgart, Germany, DaimlerChrysler AG --
http://www.daimlerchrysler.com/-- develops, manufactures,
distributes, and sells various automotive products, primarily
passenger cars, light trucks, and commercial vehicles worldwide.
It primarily operates in four segments: Mercedes Car Group,
Chrysler Group, Commercial Vehicles, and Financial Services.
The company's worldwide locations are located in: Canada,
Mexico, United States, Argentina, Brazil, Venezuela, China,
India, Indonesia, Japan, Thailand, Vietnam and Australia.
The Chrysler Group segment offers cars and minivans, pick-up
trucks, sport utility vehicles, and vans under the Chrysler,
Jeep, and Dodge brand names. It also sells parts and
accessories under the MOPAR brand.
The Chrysler Group is facing a difficult market environment in
the United States with excess inventory, non-competitive legacy
costs for employees and retirees, continuing high fuel prices
and a stronger shift in demand toward smaller vehicles. At the
same time, key competitors have further increased margin and
volume pressures -- particularly on light trucks -- by making
significant price concessions. In addition, increased interest
rates caused higher sales & marketing expenses.
In order to improve the earnings situation of the Chrysler Group
as quickly and comprehensively, measures to increase sales and
cut costs in the short term are being examined at all stages of
the value chain, in addition to structural changes being
reviewed as well.
DAIMLERCHRYSLER AG: Supervisory Board Okays Chery Motors Pact
-------------------------------------------------------------
The DaimlerChrysler AG Supervisory Board approved the framework
of a limited partnership to develop small vehicles between the
Chrysler Group and Chery Motor Company of China.
The deal is still contingent upon approval by the Chinese
government, but the final pact of the framework will be signed
by the end of March.
Under the non-equity partnership, Chery-built vehicles will be
distributed under Chrysler Group brands, primarily in North
America and Western Europe.
Chrysler Group indicated that the partnership would allow the
company to become a bigger player on the global automotive stage
by giving it access to products in new segments more quickly,
with less capital spending.
Small vehicles such as these will allow Chrysler Group brands to
compete in segments in which the brands do not currently
compete, and which are especially important in price- and fuel-
economy sensitive markets.
Some 67% of all vehicles sold outside of North America are in
these segments. Chrysler Group's major competitors in the U.S.
and Western Europe have similar arrangements with Asian
manufacturers for vehicles in these segments.
Chrysler is strengthening its ties to China to take benefit from
low manufacturing costs at the Asian country.
"All carmakers will have to take advantage of China's low-cost
manufacturing, as well as the nation's increasing domestic
market, to be globally competitive." Li Chunbo of Citic
Securities Co. told Bloomberg News.
About DaimlerChrysler
Headquartered in Stuttgart, Germany, DaimlerChrysler AG --
http://www.daimlerchrysler.com/-- develops, manufactures,
distributes, and sells various automotive products, primarily
passenger cars, light trucks, and commercial vehicles worldwide.
It primarily operates in four segments: Mercedes Car Group,
Chrysler Group, Commercial Vehicles, and Financial Services.
The company's worldwide locations are located in: Canada,
Mexico, United States, Argentina, Brazil, Venezuela, China,
India, Indonesia, Japan, Thailand, Vietnam and Australia.
The Chrysler Group segment offers cars and minivans, pick-up
trucks, sport utility vehicles, and vans under the Chrysler,
Jeep, and Dodge brand names. It also sells parts and
accessories under the MOPAR brand.
The Chrysler Group is facing a difficult market environment in
the United States with excess inventory, non-competitive legacy
costs for employees and retirees, continuing high fuel prices
and a stronger shift in demand toward smaller vehicles. At the
same time, key competitors have further increased margin and
volume pressures -- particularly on light trucks -- by making
significant price concessions. In addition, increased interest
rates caused higher sales & marketing expenses.
In order to improve the earnings situation of the Chrysler Group
as quickly and comprehensively, measures to increase sales and
cut costs in the short term are being examined at all stages of
the value chain, in addition to structural changes being
reviewed as well.
* VENEZUELA: Drafts Orinoco Nationalization Decree
--------------------------------------------------
Venezuelan energy and oil minister Rafael Ramirez told Business
News Americas that the government has drafted the decree to
nationalize the four projects in the Orinoco extra-heavy oil
belt.
According to BNamericas, the Venezuelan national assembly agreed
on Jan. 31, 2007, to grant President Hugo Chavez special powers
for 18 months to regulate:
-- hydrocarbons and their derivates,
-- electric power,
-- telecommunications, and
-- other strategic industries.
The special powers allow President Chavez to nationalize the
Orinoco projects by decree, BNamericas notes.
BNamericas underscores that the four Orinoco projects, which
have capacity to produce 620,000 barrels per day of oil but are
chrning out less than 600,000 barrels per day, include:
-- Ameriven,
-- Petrozuata,
-- Cerro Negro, and
-- Sincor.
BNamericas states that foreign partners in the Orinoco projects
are:
-- US oil and gas major ExxonMobil,
-- UK's BP,
-- US major ConocoPhillips,
-- France's Total,
-- Norway's Statoil, and
-- US oil and gas major Chevron.
Venezuelan state oil firm has a 40% stake on average in each
project, BNamericas relates. Minister Ramirez said the firm
seeks to raise the stake to 60%.
"The nationalization decree is ready. It will be published in
the official gazette in March. Let's say that by May 1 the
process will be finalized," Minister Ramirez told BNamericas.
* * *
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: Reduced Shipments to US Due to OPEC Cuts
-----------------------------------------------------
Reduced shipments to the United States would reflect the
production reduction rule set by the Organization of Petroleum
Exporting Countries or OPEC, Business News Americas reports,
citing Rafael Ramirez, Venezuelan state oil firm Petroleos de
Venezuela's president and the nation's energy and oil minister.
As reported in the Troubled Company Reporter-Latin America on
Feb. 26, 2007, Venezuela's oil shipments to the US decreased
8.2% to 1.14 million barrels per day in 2006, compared to 2005.
Oil shipments to US failed to attain an average of 1.55 million
barrels per day over the last decade, falling short of the
figures recorded in 2005.
The decrease in shipments was also due to seasonal changes,
BNamericas says, citing Minister Ramirez.
Minister Ramirez commented told BNamericas that politics
wouldn't be the reason for the reduced oil shipments.
However, it was reported in the Troubled Company Reporter-Latin
America on Jan 2, 2007, that Venezuela failed to comply with the
production reduction rule. As a member of OPEC, Venezuela was
supposed to cut 138,000 barrels per day of oil production under
the organization's reduction of 1.2 million barrel per day as of
November. However, Venezuela was able to reduce 75,700 barrels
per day of oil in November, OPEC said in its monthly report on
world oil markets.
BNamericas underscores that in line with voluntary OPEC cuts,
Venezuela is reducing almost 200,000 barrels per day of its
output.
Meanwhile, Venezuelan President Hugo Chavez told BNamericas that
the nation was sending the regular 1.5 million barrels per day
to the US and that it has no plans to suspend the supply of oil
to the latter.
However, if the US decides to stop purchasing Venezuelan crude,
Venezuela has plenty customers with whom it can place 1.5
million barrels per day, BNamericas states, citing President
Chavez.
* * *
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
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Copyright 2076. All rights reserved. ISSN 1529-2746.
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