/raid1/www/Hosts/bankrupt/TCRLA_Public/070425.mbx
T R O U B L E D C O M P A N Y R E P O R T E R
L A T I N A M E R I C A
Wednesday, April 25, 2007, Vol. 8, Issue 81
Headlines
A R G E N T I N A
BALLY TECHNOLOGIES: Inks US$56-Million Deal with Las Vegas Sands
GRABAR SRL: Claims Verification Deadline Moved to May 29
JORGE EDUARDO: Proofs of Claim Verification Deadline Is June 11
LOS CUATRO: Trustee To File Individual Reports on July 23
PETROBRAS ENERGIA: S&P Lifts Ratings to BB from B+
THRIVE SRL: Trustee To File Individual Reports on July 16
TYSON FOODS: Davenport Raises Rating on Firm's Shares to "Buy"
B A H A M A S
RENTOKIL INITIAL: Inks HK$280MM Pest Control Deal with Hong Kong
B A R B A D O S
INTERPOOL INC: Takeover Pact Cues S&P to Keep Ratings on Watch
B E R M U D A
CHATHAM ATLANTIC: Proofs of Claim Filing Is Until May 31
MAN BRIDGE: Sets Final General Meeting for May 23
REFCO INC: Marc Kirschner Discharges Duties as RCM Trustee
REFCO INC: Plan Administrators Object to Grant Thornton's Claims
B O L I V I A
ADVANCED MICRO: Moody's Revises Outlook to Negative from Stable
ADVANCED MICRO: Subpar Performance Cues S&P to Cut Rating to B
B R A Z I L
BANCO BRADESCO: Will Pay Monthly Interest on June 1
BANCO DO BRASIL: Creates Consumer Finance Unit with Lojas Maia
BANCO NACIONAL: Gets US$1-Billion Financing from IDB
CAIXA ECONOMICA: Will Increase Loans to BRL35 Billion in 2007
CAIXA ECONOMICA: Will Invest in Itaborai Infrastructure
COMPANHIA SIDERURGICA: Report Says Profits May Rise 43% in 1Q
DURA AUTOMOTIVE: Inks Technical Union with India's Aditya Auto
HAYES LEMMERZ: Discloses Rights Distribution to Stockholders
HERCULES INC: Credit Suisse Assigns "Outperform" Rating on Firm
MACDERMID INC: S&P Lowers Corp. Rating to B After Merger Closure
PETROLEO BRASILEIRO: Will Purchase Tubes from TenarisConfab
TELE NORTE: S&P Puts BB+ Corp. Credit Ratings on CreditWatch
TRW AUTOMOTIVE: Completes Tender Offers of Outstanding Notes
UNIAO DE BANCOS: Unibanco AIG Wants 30% of High-Income Segment
VALMONT INDUSTRIES: Board Swells Dividend by 10.5% Due July 16
* BRAZIL: Sells US$500 Mil. of Dollar-Denominated Bonds Due 2017
C A Y M A N I S L A N D S
BATAVIA CREDIT: Sets Final Shareholders Meeting for June 28
HOTEI LTD: Sets Final Shareholders Meeting for June 28
KNOLL INC: First Quarter 2007 Net Income Climbs to US$14.8 Mil.
NSJ TWO: Will Hold Final Shareholders Meeting on June 28
SF BUILDING: Sets Final Shareholders Meeting for June 28
SF TENNOUZU: Will Hold Shareholders Meeting on June 28
C H I L E
GOODYEAR TIRE: Says 4% Sr. Notes are Convertible Until June 29
C O L O M B I A
ADVANCED MICRO: Posts US$611 Million Net Loss in First Quarter
ECOPETROL: Will Increase Planned Investment at Oil Refinery
D O M I N I C A N R E P U B L I C
BANCO INTERCONTINENTAL: Central Bank Ad Campaign Irks Figueroa
E C U A D O R
PETROECUADOR: Ministry Eyes Nearly US$2.8B Investment in 2007-10
G U A T E M A L A
AFFILIATED COMPUTER: Darwin Deason Raises Bid to US$62 a Share
BRITISH AIRWAYS: Mulls Consortium Offer for Iberia
G U Y A N A
DIGICEL LTD: Launches MX Platform to Provide Voicemail in Guyana
J A M A I C A
CADMUS COMMUNICATIONS: Moody's Withdraws Ba3 Corp. Family Rating
M E X I C O
ADVANCED MARKETING: AMS Reports US$22.8 Mln Deficit at Jan. 31
ADVANCED MARKETING: AMS Reports US$22.4 Mln Deficit at Feb. 28
BERRY PLASTICS: S&P Affirms B Corp. Rating on Covalence Merger
CLEAR CHANNEL: Raised Bid Prompts S&P to Cut Credit Rating to B+
DELTA AIR: Judge Hardin Approves US$2.5 Billion Exit Financing
DELTA AIR: Files Joint Plan of Reorganization Supplements
DELTA AIR: Various Parties Object to Plan Confirmation
DELTA AIR: Incurs US$130 Million Net Loss in 2007 First Quarter
GENERAL MOTORS: Wagoner Sees Hope Despite Delay in Delphi's Exit
ITRON INC: Completes EUR800-Million Acquisition of Actaris
KRISPY KREME: Incurs US$42.2 Million Net Loss in Fiscal 2007
MEGA BRANDS: Names Kathleen Campisano as Chief Marketing Officer
N I C A R A G U A
XEROX CORP: Earns US$233 Million in 2007 First Quarter
P A N A M A
BANCO LATINOAMERICANO: Earns US$14.8MM in Quarter Ended March 31
P E R U
INTEROCEANICA IV: Fitch Assigns BB+ Preliminary Rating
P U E R T O R I C O
FOOT LOCKER: Offers to Buy Genesco for US$1.2 Billion in Cash
FOOT LOCKER: Genesco's Stock Acquisition Plan Gets Snubbed
GENESCO INC: Earns US$67.6 Million in Year Ended February 3
PRODUCTOS DE CEMENTO: Voluntary Chapter 11 Case Summary
RIVER EDGE: Case Summary & Seven Largest Unsecured Creditors
T R I N I D A D & T O B A G O
MIRANT CORP: Corcoran Plaintiffs Balk at NY-Gen's Reorg. Plan
MIRANT: NY-GEN Wants Court Approval on Estimated Claim Amounts
V E N E Z U E L A
ARMOR HOLDINGS: Credit Suisse Keeps "Outperform" Rating on Firm
ARMOR HOLDINGS: Prudential Keeps "Overweight" Rating on Firm
DAIMLERCHRYSLER AG: UAW Talks with Tracinda but Prefers Magna
PEABODY ENERGY: Reports US$88.5 Mil. Net Income in First Quarter
PETROLEOS DE VENEZUELA: Investing US$10 Billion This Year
* VENEZUELA: Not Renewing RCTV License Despite Pressures
- - - - -
=================
A R G E N T I N A
=================
BALLY TECHNOLOGIES: Inks US$56-Million Deal with Las Vegas Sands
----------------------------------------------------------------
Bally Technologies, Inc. has signed the gaming industry's
largest combined slot, casino management and bonusing systems
deal to date, an agreement with Las Vegas Sands Corp. to provide
an expansive range of Bally technology at nine casino resorts in
Las Vegas, Macau and Singapore.
Upon complete execution, based on successful "go-lives" at
multiple properties, the series of contracts is valued at up to
US$56 million.
The comprehensive agreement covers The Palazzo Resort Hotel
Casino under construction on the Las Vegas Strip, The Venetian
Macao Resort Hotel under construction on the Cotai Strip(TM) in
the People's Republic of China Special Administrative Region of
Macau, six future Las Vegas Sands casinos on the Cotai Strip and
The Marina Bay Sands under construction in Singapore.
"This is a milestone event for Bally as we announce the largest
contract in the Company's 75-year history," said Richard
Haddrill, CEO of Bally Technologies. "To be the technology
provider of choice for such a progressive company is a role we
take very seriously, and we look forward to working together on
all of these integrated resorts around the world."
The contract includes a full range of Bally Casino Management
Systems (CMS(TM)) / Slot Management Systems (SMS(TM))
technologies, the complete suite of Bally Power Bonusing(TM)
solutions, eTICKET(TM) cashless functionality and interactive
iVIEW(TM) displays for up to 16,000 slot machines.
Already the casino management systems provider at Las Vegas
Sands' The Venetian Resort Hotel Casino on the Las Vegas Strip
and at the Sands Macau, Bally has enhanced its software and
product sets for Las Vegas Sands to accommodate the specific
requirements of the growing Asian market. Bally CMS/SMS can
support dual currencies, multiple chip sets per table, non-
negotiable chips, premium player programs, chip purchase
vouchers and expanded monetary fields.
With Bally technology dramatically expanding the capabilities of
Las Vegas Sands' universal player's card by linking Las Vegas,
Macau and Singapore resorts, Las Vegas Sands will also enhance
the player experience by deploying Bally Power Winners(TM), a
configurable random progressive jackpot technology that rewards
players using their player's club cards.
"We see this as an endorsement of our technology portfolio and
product road map," said Tom Reilly, Vice President of Sales,
East Region. "Clearly Las Vegas Sands is a company on the move
and we're proud to be their partner as they develop some of the
most spectacular integrated resorts ever created."
The "go-live" dates for the various Bally technologies will be
staggered over the next two years, with The Venetian Macao
scheduled to open in Summer 2007, The Palazzo later in 2007 and
The Marina Bay Sands in 2009.
Headquartered in Las Vegas, Nevada, Bally Technologies, Inc.
(NYSE: BYI) -- http://www.BallyTech.com/-- designs,
manufactures, operates, and distributes advanced gaming devices,
systems, and technology solutions worldwide. Bally's product
line includes reel-spinning slot machines, video slots, wide-
area progressives and Class II lottery and central determination
games and platforms. Bally Technologies also offers an array of
casino management, slot accounting, bonus, cashless, and table
management solutions. The company also owns and operates
Rainbow Casino in Vicksburg, Miss. The company's South American
operations are located in Argentina. The company also has
operations in Macau, China, and India.
* * *
As reported in the Troubled Company Reporter-Latin America on
April 10, 2007, Standard & Poor's Ratings Services revised its
CreditWatch implication on its ratings for Bally Technologies
Inc. to developing from negative. The corporate credit rating
on the company is 'B-'. The ratings were initially placed on
CreditWatch on Sept. 9, 2005, and several rating actions have
occurred since the original CreditWatch listing.
GRABAR SRL: Claims Verification Deadline Moved to May 29
--------------------------------------------------------
The deadline for the verification of creditors' claims against
Grabar S.R.L. has been moved to May 29, 2007. The National
Commercial Court of First Instance No. 13 converted the
company's reorganization case into bankruptcy.
As reported in the Troubled Company Reporter-Latin America on
April 13, 2006, the deadline for the verification of creditors'
claims against Grabar was previously moved to May 26, 2006, from
April 11, 2006.
Mauricio Mudric, the court-appointed trustee, will present the
validated claims in court as individual reports. The court will
determine if the verified claims are admissible, taking into
account the trustee's opinion, and the objections and challenges
that will be raised by Grabar and its creditors.
Inadmissible claims may be subject for appeal in a separate
proceeding known as an appeal for reversal.
A general report that contains an audit of Grabar's accounting
and banking records will be submitted in court.
Infobae did not state the reports submission date.
Mr. Mudric is also in charge of administering Grabar's assets
under court supervision and will take part in their disposal to
the extent established by law.
The debtor can be reached at:
Grabar S.R.L.
Hipolito Yrigoyen 2359
Buenos Aires, Argentina
The trustee can be reached at:
Mauricio Mudric
Tucuman 893
Buenos Aires, Argentina
JORGE EDUARDO: Proofs of Claim Verification Deadline Is June 11
---------------------------------------------------------------
Angel Rodolfo Vazquez, the court-appointed trustee for Jorge
Eduardo Suarez Empresa Constructora S.R.L.'s bankruptcy
proceeding, verifies creditors' proofs of claim until
June 11, 2007.
Mr. Vazquez will present the validated claims in court as
individual reports on July 25, 2007. The National Commercial
Court of First Instance in Villa Maria, Cordoba, will determine
if the verified claims are admissible, taking into account the
trustee's opinion, and the objections and challenges that will
be raised by Jorge Eduardo and its creditors.
Inadmissible claims may be subject for appeal in a separate
proceeding known as an appeal for reversal.
A general report that contains an audit of Jorge Eduardo's
accounting and banking records will be submitted in court.
Infobae did not state the general report submission date.
Mr. Vazquez is also in charge of administering Jorge Eduardo's
assets under court supervision and will take part in their
disposal to the extent established by law.
The debtor can be reached at:
Jorge Eduardo Suarez Empresa Constructora S.R.L.
San Luis 1073, Villa Maria
Cordoba, Argentina
The trustee can be reached at:
Angel Rodolfo Vazquez
General Paz 431, Villa Maria
Cordoba, Argentina
LOS CUATRO: Trustee To File Individual Reports on July 23
---------------------------------------------------------
Ana Maria Lopez, the court-appointed trustee for Los Cuatro
Robles S.A.'s bankruptcy proceeding, will present creditors'
validated claims as individual reports in the National
Commercial Court of First Instance No. 22 in Buenos Aires on
July 23, 2007.
The court will determine if the verified claims are admissible,
taking into account the trustee's opinion and the objections and
challenges raised by Los Cuatro and its creditors.
Inadmissible claims may be subject for appeal in a separate
proceeding known as an appeal for reversal.
As reported in the Troubled Company Reporter-Latin America on
April 18, 2007, Ms. Lopez verifies creditors' proofs of claim
until May 23, 2007.
Ms. Lopez will also submit to court a general report containing
an audit of Los Cuatro's accounting and banking records on
Sept. 4, 2007.
The debtor can be reached at:
Los Cuatro Robles SA
Santiago del Estero 286
Buenos Aires, Argentina
The trustee can be reached at:
Ana Maria Lopez
San Martin 662
Buenos Aires, Argentina
PETROBRAS ENERGIA: S&P Lifts Ratings to BB from B+
--------------------------------------------------
Standard & Poor's Ratings Services raised all ratings on
Petrobras Energia S.A. or PESA to 'BB' from 'B+'. The outlook
is stable. At the same time, Standard & Poor's assigned a
'BBB-' foreign currency rating to PESA's US$300 million proposed
10-year notes. These notes benefit from credit support provided
by PESA's controlling shareholder, Petroleo Brasileiro S.A.
(Petrobras; BBB-/Stable/--), under the terms of a standby
purchase agreement or SPA.
"The rating action is based on our perception of greater
economic incentives from Petrobras to support PESA, given its
strategic importance as a key foreign subsidiary in Latin
America," said Standard & Poor's credit analyst Luciano Gremone.
"This is evidenced partly through the SPAs granted to PESA to
support the debt issuance. As a result, our final rating on
PESA is two notches above the stand-alone credit rating and two
notches above the foreign currency rating on the Republic of
Argentina (B+/Stable/B)," Mr. Gremone added.
The rating on the US$300 million notes is aligned with that of
Petrobras, considering the SPA provided by Petrobras for the
notes. The SPA has several guarantee-like features and provides
strong credit support to the notes. However, there are some
differences with a typical guarantee, mostly in the enforcement
mechanisms and procedures if Petrobras fails to comply with its
obligations under the agreement.
The stand-alone credit rating on PESA reflects its relatively
aggressive financial risk profile, its significant need for
capital expenditures (to develop its reserve base and increase
production levels), and the high exposure to uncertain and
rapidly changing economic and regulatory rules, mainly in
Venezuela, Argentina, and Ecuador. Those factors are partially
mitigated by an adequate level of integration between upstream
and downstream operations, and competitive production costs.
Petrobras Energia Participaciones SA (Buenos Aires: PBE,
NYSE:PZE) through its subsidiary, Petrobras Energia S.A.,
explores, produces, and refines oil and gas, as well as
generates, transmits, and distributes electricity. It also
offers petrochemicals, as well as markets and transports
hydrocarbons. The company conducts oil and gas exploration and
production operations in Argentina, Venezuela, Peru, Ecuador,
and Bolivia
THRIVE SRL: Trustee To File Individual Reports on July 16
---------------------------------------------------------
Ricardo Adrogue, the court-appointed trustee for Thrive S.R.L.'s
bankruptcy proceeding, will present creditors' validated claims
as individual reports in the National Commercial Court of First
Instance No. 11 in Buenos Aires on July 16, 2007.
The court will determine if the verified claims are admissible,
taking into account the trustee's opinion and the objections and
challenges raised by Thrive and its creditors.
Inadmissible claims may be subject for appeal in a separate
proceeding known as an appeal for reversal.
As reported in the Troubled Company Reporter-Latin America on
April 18, 2007, Mr. Adrogue verifies creditors' proofs of claim
until June 4, 2007.
Mr. Adrogue will also submit to court a general report
containing an audit of Thrive's accounting and banking records
on Sept. 18, 2007.
Clerk No. 22 assists the court on this case.
The trustee can be reached at:
Ricardo Adrogue
Bouchard 468
Buenos Aires, Argentina
TYSON FOODS: Davenport Raises Rating on Firm's Shares to "Buy"
--------------------------------------------------------------
Davenport & Company analyst Ann H. Gurkin has raised the rating
on Tyson Foods Inc. shares to "buy," from "neutral,"
Newratings.com reports.
The 12-month target price for Tyson Foods shares is set at
US$28.
Ms. Gurkin said in a research note published on April 23 that
Tyson Foods is expected to swing to profits in 2007 considering
the increase in chicken prices and the estimated US$200 million
in cost savings. According to Ms. Gurkin, Tyson Foods is
expected to report its second quarter earnings per share at
US$0.12, as compared to the earlier estimate of US$0.01 on
account of improved results from the chicken, beef and prepared
foods operations.
The earnings per share estimate for Tyson Foods in the fiscal
year 2007 was raised to US$0.75 from US$0.50, Newratings.com
states.
Based in Springdale, Arkansas, Tyson Foods, Inc. (NYSE:TSN) --
http://www.tysonfoods.com/-- is a processor and marketer of
chicken, beef, and pork. The company produces a wide variety of
protein-based and prepared food products, which are marketed
under the "Powered by Tyson(TM)" strategy. It has operations in
Argentina.
* * *
On Sept. 25, 2006, Moody's Investors Service took a number of
rating actions in relation to Tyson, including the assignment of
a Ba1 rating to the company's:
-- US$1 billion senior unsecured bank credit facility; and
-- US$345 million senior unsecured bank term loan for its
Lakeside Farms Industries Ltd. subsidiary, under a full
Tyson Foods, Inc. guarantee.
=============
B A H A M A S
=============
RENTOKIL INITIAL: Inks HK$280MM Pest Control Deal with Hong Kong
----------------------------------------------------------------
Rentokil Initial has signed a two-year contract with the
Government of Hong Kong Special Administrative Region to provide
pest control technologies and services.
The contract, which begins this month, is valued at HKD280
million (GBP17.9 million). It is the highest value contract of
its kind ever signed by the Government of HKSAR. Rentokil
Initial was awarded the contract by the Food and Environmental
Hygiene Department whose mission is to build a cleaner living
environment for the people of Hong Kong.
Rentokil Initial has been operating in Hong Kong since 1964 and
is a pioneer in the pest control services industry. The company
provides a wide range of professional pest control solutions.
"We are delighted to have been selected to work with the HKSAR
Government. We're determined to use our market leading
technology and local expertise to deliver the finest pest
control services in the region," David Liu, Regional Managing
Director - Asia Pacific of Rentokil Initial, said.
Separately, the company has appointed The Honorable Dr. Philip
Y. H. Wong, GBS, as the Non-Executive Chairman of Rentokil
Initial China and Hong Kong. Dr. Wong has extensive knowledge
of the market in China and has strong connections with
government bodies.
Headquartered in West Sussex, England, Rentokil Initial PLC
(LSE: RTO) -- http://www.rentokil-initial.com/-- is one of the
largest business services companies in the world, operating in
all the major economies of Europe, North America, Asia Pacific
and Africa. The company has some 90,000 employees providing a
range of support services in over 40 countries, including,
Bahamas, Barbados, Guyana, Jamaica, and Trinidad and Tobago.
At Dec. 31, 2006, the company's consolidated balance sheet
showed EUR1.8 billion in total assets and EUR2.3 billion in
total liabilities, resulting in a EUR533.6-million stockholders'
deficit.
The company's Dec. 31 balance sheet also showed strained
liquidity with EUR672.6 million in total current assets
available to pay EUR1.1 billion in total liabilities coming due
within the next 12 months.
===============
B A R B A D O S
===============
INTERPOOL INC: Takeover Pact Cues S&P to Keep Ratings on Watch
--------------------------------------------------------------
Standard & Poor's Ratings Services' ratings on Interpool Inc.
(BB/Watch Neg/--) remain on CreditWatch with negative
implications, where they were placed on Jan. 16, 2007. The
CreditWatch update follows Interpool's announcement that it has
entered into a definitive agreement to be acquired by certain
private equity funds. The ratings were initially placed on
CreditWatch after Interpool announced it had received an offer
to be acquired. "We will meet with management to discuss the
Interpool's financial profile to resolve the CreditWatch
listing," said Standard & Poor's credit analyst Betsy Snyder.
Interpool is the largest lessor of chassis in North America.
Chassis are wheeled frames attached to cargo containers that,
when combined, are equivalent to a trailer that can be trucked
to its destination. Interpool's only major competitor in this
business is privately held Flexi-Van Leasing Inc. Interpool
also manages chassis for shipping lines and neutral pools at
railroad and marine terminals. The chassis leasing business has
tended to generate strong and stable cash flow, even in periods
of economic weakness.
Interpool is one the larger participants in the marine cargo
container leasing market, its other major business. The company
focuses on long-term operating and finance leases. Marine cargo
container leasing is a cyclical business, dependent on global
economic merchandise trends. However, Interpool's earnings and
cash flow from marine cargo container leasing benefit from the
long-term nature of its leases.
Interpool, Inc. (NYSE: IPX) is one of the world's leading
lessors of intermodal dry containers, and the largest lessor of
intermodal container chassis in the U.S. The company also has
operations in Barbados.
=============
B E R M U D A
=============
CHATHAM ATLANTIC: Proofs of Claim Filing Is Until May 31
--------------------------------------------------------
Chatham Atlantic Re Ltd.'s creditors are given until
May 31, 2007, to prove their claims to Peter C.B. Mitchell and
Nigel Chatterjee, the company's liquidators, or be excluded from
receiving any distribution or payment.
In their proofs of claim, creditors must indicate their full
names, addresses, the full particulars of their debts or claims,
and the names and addresses of their lawyers, if any.
Chatham Atlantic's shareholders agreed on April 13, 2006, to
place the company into voluntary liquidation under Bermuda's
Companies Act 1981.
The liquidators can be reached at:
Peter C.B. Mitchell
Nigel Chatterjee
Dorchester House
7 Church Street
Hamilton, Bermuda
MAN BRIDGE: Sets Final General Meeting for May 23
-------------------------------------------------
Man Bridge Tower Ltd's final general meeting will be on
May 23, 2007, at 9:30 a.m., at:
Argonaut House
5 Park Road, Hamilton HM O9
Bermuda
Man Bridge's shareholders will determine during the meeting,
through a resolution, the manner in which the books, accounts
and documents of the company and of the liquidator will be
disposed.
The liquidator can be reached at:
Beverly Mathias
Argonaut House
5 Park Road, Hamilton HM O9
Bermuda
REFCO INC: Marc Kirschner Discharges Duties as RCM Trustee
----------------------------------------------------------
Marc S. Kirschner, as Chapter 11 trustee and duly appointed Plan
Administrator of Refco Capital Markets Ltd.'s estate, obtained
the Court's authority to assign any and all of his remaining
rights, powers and duties to the RCM Plan Administrator, leaving
him as the sole party acting on behalf of and administering the
RCM estate.
The Court also authorized Mr. Kirschner to:
(i) discharge his duties as RCM Trustee;
(ii) release and terminate the duty to obtain and maintain
the RCM Trustee's surety bonds by Hartford; Fidelity &
Deposit/Zurich; Federal (Chubb), and Safeco; and
(iii) release and terminate the restrictions on the Restricted
Accounts.
Timothy B. DeSieno, Esq., at Bingham McCutchen LLP, in New York,
relates that by notice dated April 10, 2006, the U.S. Trustee
appointed Mr. Kirschner as RCM Trustee, subject to a bond under
Section 322. The Court subsequently approved the appointment of
the RCM Trustee, requiring him to post a $1,000,000,000 bond.
The Bond was later reduced to US$156,500,000, subject to
segregation of a substantial portion of RCM's cash into
restricted accounts.
The RCM Trustee then (a) obtained the Bond for US$156,500,000,
and (b) created the Restricted Accounts with US$800,500,000 in
cash invested as required by Section 345. The annual premium
for the Bond was US$762,938 and was fully earned. The Bond
expires on April 19, 2007.
Post-Effective Date Management of RCM
Given the assignment of the RCM Trustee's role and duties to the
RCM Administrator, the RCM Trustee's work for the RCM estate has
concluded, Mr. DeSieno tells Judge Drain.
Mr. DeSieno states that the Plan Confirmation Order left the RCM
Trustee in charge of the RCM estate, although it required him to
enter into a December 2006 RCM Administration Agreement with the
RCM Administrator.
Specifically, Mr. DeSieno says, the RCM Administration Agreement
enumerates the RCM Administrator's powers and responsibilities,
which include liquidating RCM's assets, paying RCM's expenses,
investing RCM's cash, calculating and paying distributions to
creditors of RCM, and dissolving and winding up RCM.
Mr. DeSieno states that the Plan, the Confirmation Order, and
the RCM Administration Agreement do not require continued
maintenance of the Bond or the Restricted Accounts by the RCM
Trustee or the RCM Plan Administrator. However, he says, in
accordance with the RCM Administration Agreement, the RCM
Administrator has obtained professional liability insurance for
US$5,000,000.
Distributions from RCM Estate
Mr. DeSieno states that the assets of the RCM estate have been
significantly reduced as a consequence of making distributions
and other court-approved and ordinary course payments.
During the RCM Trustee's appointment, Mr. DeSieno relates, the
RCM estate had US$2,054,000,000 in assets. At the time of the
Plan Confirmation, the RCM estate held approximately
US$2,500,000,000 in assets, of which US$1,800,000,000 was cash
or cash equivalents, and the remainder in securities.
As of March 1, 2007, the RCM estate held about US$920,000,000 in
liquid and illiquid assets, of which US$13,900,000 is in the RCM
Wind-Down Reserves pursuant to the Plan.
Since his appointment, Mr. DeSieno notes, the RCM Trustee has
distributed from the RCM estate:
(a) US$56,400,000 in fees and expenses of estate
professionals, of which US$1,000,000 was paid to the RCM
Trustee;
(b) US$84,400,000 to JPMorgan Chase Bank, N.A., pursuant to a
Court-approved settlement agreement; and
(c) US$1,475,767,317 to RCM creditors between Dec. 27 and 28,
2006.
Furthermore, the Court authorized a second interim distribution
to RCM creditors, aggregating US$428,000,000.
Mr. DeSieno says various estate professionals have also filed
final applications for payment of fees and reimbursement of
expenses, which will result in additional disbursements from the
RCM estate.
To date, the RCM estate has contributed approximately
US$16,000,000 into an administrative expense reserve to fund the
administration of the Plan, including compensation of
administrative professionals.
Assuming the payments are made under the Second Distribution and
final fee applications, the RCM estate will have remaining
assets exceeding US$450,000,000, Mr. DeSieno says.
The remaining RCM assets will now be administered by the RCM
Administrator following the approval of the Motion, Mr. DeSieno
states.
About Refco Inc.
Based in New York, Refco Inc. -- http://www.refco.com/-- is a
diversified financial services organization with operations in
14 countries and an extensive global institutional and retail
client base. Refco's worldwide subsidiaries are members of
principal 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.
On June 5, 2006, three more affiliates filed for chapter 11
protection namely: Westminster-Refco Management LLC, Refco
Managed Futures LLC, and Lind-Waldock Securities LLC.
Refco Commodity Management, Inc., another affiliate, filed for
bankruptcy on Oct. 16, 2006.
The Court confirmed the Modified Joint Chapter 11 Plan of
Refco Inc. and certain of its Direct and Indirect Subsidiaries,
including Refco Capital Markets, Ltd., and Refco F/X Associates,
LLC, on Dec. 15, 2006. That Plan became effective on
Dec. 26, 2006. (Refco Bankruptcy News, Issue No. 61; Bankruptcy
Creditors' Service Inc., http://bankrupt.com/newsstand/
or 215/945-7000).
REFCO INC: Plan Administrators Object to Grant Thornton's Claims
----------------------------------------------------------------
David S. Rosner, Esq., at Kasowitz, Benson, Torres & Friedman
LLP, in New York, states that in July 2006, Grant Thornton LLP
filed 27 proofs of claim -- Claim Nos. 11393 through 11395 and
Claim Nos. 11527 through 11550 -- against various Debtor
entities, asserting:
(i) US$242,804 in fees and costs for prepetition services
rendered as the independent auditor for Refco Inc. and
its subsidiaries, including Refco Capital Markets, Ltd.;
and
(ii) US$2,800,000 in attorneys fees and costs incurred in
connection with its defense of securities litigation
actions, including, In re Refco, Inc. Securities
Litigation, No. 05 Civ. 8626 (GEL) (S.D.N.Y.), and In re
Refco Capital Markets, Ltd. Brokerage Customer Securities
Litigation, No. 06-CV-643 (GEL) (S.D.N.Y.).
Grant Thornton also asserted that it holds contingent
unliquidated claims as a result of the Securities Actions.
Grant Thornton further argued that its claims were based on the
terms of its relationship that was memorialized in various
engagement letters or contracts with (i) Refco group Ltd., LLC,
and its subsidiaries, including RCM, and (ii) New Refco Group
Ltd., LLC.
Pursuant to their Chapter 11 Plan, and as of the Effective Date,
the Reorganized Debtors and Marc S. Kirschner, as the then-
Chapter 11 Trustee for Refco Capital Markets, Ltd.'s estate,
established a litigation trust for the pursuit of any and all
Contributed Claims, including litigation claims of the Debtors,
RCM, or their estates. The Litigation Claims include any and
all claims, rights of action, suits or proceedings that any
Debtor or RCM may hold.
Mr. Rosner states that the Litigation Trust is currently
investigating Grant Thornton in connection with its conduct with
respect to the Debtors and RCM and its relationship and role
with respect to the Debtors' collapse. The investigation may
lead to the assertion of affirmative claims by the Litigation
Trust against Grant Thornton, he notes.
On March 16, 2007, Grant Thornton filed amended claims -- Claim
Nos. 14458 through 14484 -- to increase the amount of liquidated
damages asserted in each Original Claim to US$4,356,371.
On March 23, RJM, LLC, as Plan Administrator for the Chapter 11
Debtors' cases, and Mr. Kirschner, as the duly appointed Plan
Administrator for the RCM estate, objected to the Original
Claims, seeking entry of an order:
(i) expressly reserving any and all rights, claims and
defenses of the estates and their successors to assert
any and all claims against Grant Thornton; to object to
and defend against the Claims; and to obtain a full and
fair litigation of all claims, objections and matters
relating to Grant Thornton in an appropriate forum;
(ii) disallowing the Claims for reimbursement of costs and
expenses to the extent that Grant Thornton seeks
indemnification for claims, damages, losses, liabilities,
costs and expenses, incurred in connection with the
Securities Actions or any other actions; and
(iii) disallowing the Claims to the extent that they assert the
same liability against multiple Debtor entities,
including RCM.
After reviewing the Original Claims, the Plan Administrators
have determined that each of those claims have been amended and
superseded by the Amended Claims.
Accordingly, the Plan Administrators ask Judge Drain to disallow
and expunge the Original Claims.
The Plan Administrators believe that Grant Thornton will not be
prejudiced by having their Original Claims disallowed and
expunged, because their Amended Claims will remain on the claims
registry.
Moreover, the Plan Administrators object to and seek entry of an
order with respect to the Amended Claims on the same grounds and
for the same reasons set forth in their First Objection to the
Original Claims.
About Refco Inc.
Based in New York, Refco Inc. -- http://www.refco.com/-- is a
diversified financial services organization with operations in
14 countries and an extensive global institutional and retail
client base. Refco's worldwide subsidiaries are members of
principal 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.
On June 5, 2006, three more affiliates filed for chapter 11
protection namely: Westminster-Refco Management LLC, Refco
Managed Futures LLC, and Lind-Waldock Securities LLC.
Refco Commodity Management, Inc., another affiliate, filed for
bankruptcy on Oct. 16, 2006.
The Court confirmed the Modified Joint Chapter 11 Plan of
Refco Inc. and certain of its Direct and Indirect Subsidiaries,
including Refco Capital Markets, Ltd., and Refco F/X Associates,
LLC, on Dec. 15, 2006. That Plan became effective on
Dec. 26, 2006. (Refco Bankruptcy News, Issue No. 61; Bankruptcy
Creditors' Service Inc., http://bankrupt.com/newsstand/
or 215/945-7000).
=============
B O L I V I A
=============
ADVANCED MICRO: Moody's Revises Outlook to Negative from Stable
---------------------------------------------------------------
Moody's Investors Service changed the outlook for Advanced Micro
Devices, Inc. to negative from stable.
As reported in the Troubled Company Reporter on March 15, 2007,
Moody's Investors Service lowered Advanced Micro's corporate
family rating to B1 from Ba3. The outlook was stable.
The action reflects Advanced Micro's reduced financial
flexibility following the company's weaker than expected
operating performance in the first quarter of 2007 and Moody's
expectations that the next couple of quarters will remain very
challenging even though the company plans to reduce costs and
preserve liquidity, while at the same time rolling out its new
product platform dubbed Barcelona in the third quarter of 2007.
Advanced Micro's ratings could come under downward pressure to
the extent that product launches are delayed, if it experiences
operating losses in the second half of 2007, or if cash levels
fall below US$1 billion. Alternatively, a stabilization of its
ratings outlook could emerge if Advanced Micro is able to make
steady progress towards sustainable free cash flow from
operations, which would enhance financial flexibility that is
critical in the capital intensive and volatile microprocessor
segment.
The company ended the first quarter of 2007 with US$1.17 billion
of cash, slightly above the minimum level of US$1 billion that
Moody's had previously outlined would be a trigger to downwards
rating pressure. Moody's notes that the company benefited in
the first quarter from very effective working capital
management, particularly the collection of trade receivables
that represented nearly a US$500 million source of cash, which
Moody's do not believe will be repeated over the next few
quarters. Absent this success, Moody's believes the company's
cash balances would have fallen below US$1 billion.
While the company's position in the server, desktop and notebook
business segments remains good, it lost an estimated 5% of share
in the overall microprocessor unit market share in the first
quarter after having reached an all time high of about 25% as of
year end 2006. Although the company believes it is on track to
begin shipping products under its new product platform known as
Barcelona in the third quarter of 2007 for the server, desktop,
and mobile markets using 65 nanometer process technology,
Advanced Micro remains about one year behind Intel in
introducing 45 nanometer product.
To the extent that Advanced Micro is able to ship increasing
volumes of this more cost effective product, it would help to
improve the company's gross margins, however this potential
benefit could be muted as Intel begins to ship 45 nanometer
products in the fourth quarter of 2007. Moody's recognizes that
while the process technology node by itself is not the sole
determinant of product competitiveness, it does create
differences in manufacturing costs and the ability to be
aggressive in pricing. In Advanced Micro's case, Moody's
believe this represents continued exposure to aggressive pricing
actions by Intel that could continue to result in operating
losses and the use of cash. The exposure, while not new, is
more sensitive given the company's reduced cash balances and the
likelihood in Moody's view that Advanced Micro will continue to
consume cash over the near term.
Positively, management is implementing urgent efforts to reduce
its cost structure and to improve the company's overall
operating efficiency through a combination of hiring restraints,
more rigid discretionary cost controls, and a slight push out of
its capital expenditure program.
Specifically:
(1) the company has reduced its capital spending plan in 2007
from US$2.5 billion to US$2.0 billion and
(2) the company is effectively freezing new hires except in
very selected areas, with the expectation that operating
expenses will decline by approximately US$100 million
annually and headcount will decline by approximately 500
or 3% by year end 2007.
While these actions are moderately helpful in the near term, any
delay in ramping efficient production volumes of near-leading
edge microprocessor product would negatively impact the
company's overall scale of operations, which is a critical
success factor given the highly capital intensive nature of the
business.
As a result, Moody's anticipates that Advanced Micro will be
more challenged than previously anticipated to internally fund
the build out of its 300 millimeter production capacity, which
is essential to Advanced Micro keeping pace with manufacturing
cost reduction and process node advances, while at the same time
maintaining strong balance sheet liquidity and reducing debt
levels.
As Moody's commented in previous reports, to the extent that
secured debt declines to below a certain level, the security
package benefiting the US$390 million senior note holders would
be released. Absent any other change, such collateral release
would cause the then unsecured senior note rating to decline by
up to two notches from its existing Ba3 level, reflecting its
more junior position in Advanced Micro's capital structure.
Based in Sunnyvale, California, Advanced Micro Devices Inc.
(NYSE: AMD) -- http://www.amd.com/-- designs and produces
innovative microprocessor and graphics and media solutions for
the computer, communications, and consumer electronics
industries. The company has corporate locations in Sunnyvale,
California, Austin, Texas, and Markham, Ontario, and global
operations include those in Bolivia, Chile, Colombia and
Ecuador, among others.
ADVANCED MICRO: Subpar Performance Cues S&P to Cut Rating to B
--------------------------------------------------------------
Standard & Poor's Ratings Services lowered its corporate credit
rating on Advanced Micro Devices Inc. to 'B' from 'B+'. The
outlook is negative.
"The action reflects recent subpar execution of its business
plans, as well as marketplace challenges, which were
significantly more severe than had previously been expected,"
said Standard & Poor's credit analyst Bruce Hyman. This
resulted in substantially lower profitability and cash flows,
expected to continue over the intermediate term.
Ratings on Advanced Micro continue to reflect aggressive
competitive conditions, highly volatile operating performance
and profitability, and ongoing substantially negative free cash
flows, in part offset by a generally improved product line,
anticipated adequate near-term liquidity, and expectations that
a planned change in business model will reduce the company's
asset intensity and capital expenditures.
Advanced Micro did not balance anticipated growth in sales to
brand name PC makers against commitments to support its
distributors in the second half of 2006 and into 2007. Branded
PC sales proved to be below expectations, while subsequent price
discounts to the distributors were not able to recapture the
company's share loss in that market, which may take time to
recover. Resulting March 2007 quarter revenues were US$1.2
billion, well below initial expectations of US$1.6 billion-
US$1.7 billion, and also well below the US$2.0 billion reported
in the year-ago quarter, pro forma for the acquisition of ATI.
As OEM and distributor inventories rebalance in coming months,
the company expects revenues in the June 2007 quarter to be flat
to slightly above March levels. Advanced Micro's March 2007
quarter EBITDA was negative US$144 million, versus pro forma
US$500 million in the year-ago quarter.
The negative outlook reflects the significant challenges that
Advanced Micro faces in recovering its market position,
restoring its profitability from currently depressed levels, and
stabilizing its cash flows notwithstanding a continued
technology lag, while financial metrics are expected to be quite
weak for the rating over the intermediate term. If the company
is not able to execute those plans, the ratings could be lowered
by early 2008. The outlook could be revised to stable over the
intermediate term should the company's product plans and
marketplace performance result in a rebound of EBITDA that
supports the company's debt levels, and as progress is made on
its asset-light manufacturing strategy.
Based in Sunnyvale, California, Advanced Micro Devices Inc.
(NYSE: AMD) -- http://www.amd.com/-- designs and produces
innovative microprocessor and graphics and media solutions for
the computer, communications, and consumer electronics
industries. The company has corporate locations in Sunnyvale,
California, Austin, Texas, and Markham, Ontario, and global
operations include those in Bolivia, Chile, Colombia and
Ecuador, among others.
===========
B R A Z I L
===========
BANCO BRADESCO: Will Pay Monthly Interest on June 1
---------------------------------------------------
Banco Bradesco S.A., in a regulatory filing with the U.S.
Securities and Exchange Commission, disclosed that in conformity
with the System for Monthly Payment to Stockholders, the company
will pay on June 1, 2007, Interest on Own Capital related to the
month of May 2007, in the amount of BRL0.018026250 per common
share and BRL0.019828875 per preferred share to the stockholders
registered in the company's records on May 2, 2007.
The company asserts that the payment, net of the Withholding
Income Tax of 15%, except for legal entity stockholders exempted
from the referred taxation, which will receive for the stated
amount, will be made through the net amount of BRL0.015322313
per common share and BRL0.016854544 per preferred share, as
follows:
-- credit in the current account informed by the stockholder;
-- the stockholders who do not inform their banking data or
do not hold a current account in a Financial Institution
must go to a Bradesco Branch on their preference having
their identification document and the "Notice For Receipt
of Earnings from Book-Entry Stocks", sent by mail to those
having their address updated in the Company's records;
-- to those with stocks held on custody with the CBLC -
Companhia Brasileira de Liquidacao e Custodia (CBLC -
Brazilian Clearing and Depository Corporation), the
payment of Interest will be made to CBLC, which will
transfer them to the stockholders through the Depository
Agents.
Headquartered in Sao Paulo, Brazil, Banco Bradesco S.A. (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-
BANCO DO BRASIL: Creates Consumer Finance Unit with Lojas Maia
--------------------------------------------------------------
Brazilian business magazine Revista Fator reports that Banco do
Brasil has formed consumer finance unit FSV in conjunction with
retailer Lojas Maia.
According to Revista Fator, FSV will offer personal loans and
payroll-linked loans for consumer goods, vehicles and real
estate as well as credit cards.
Revista Fator notes that that FSV, through Banco do Brasil's
affiliated insurers, will market:
-- life insurance,
-- property and casualty insurance,
-- payment protection insurance,
-- private pension plans, and
-- savings bonds
Banco do Brasil entered into a financial services accord with
Lojas Maia in April 2006. Since then, the bank has worked with
retailers, small business associations and other non-bank
partners, Business News Americas states.
Banco do Brasil is Brazil's federal bank and is the largest in
Latin America with some 20 million clients and over 7,000 points
of sale (3,200 branches) in Brazil, and 34 offices and
partnerships in 26 other countries. In addition to its
traditional retail banking services, Banco do Brasil underwrites
and sells bonds, conducts asset trading, offers investors
portfolio management services, conducts financial securities
advising, and provides market analysis and research.
* * *
As reported on Mar. 3, 2006, Standard & Poor's Ratings Services
raised its foreign currency counter party credit ratings on
Banco do Brasil SA to 'BB' from 'BB-'. The foreign and local
currency ratings of this bank are now equalized at 'BB'. S&P
said the outlook is stable.
BANCO NACIONAL: Gets US$1-Billion Financing from IDB
----------------------------------------------------
Banco Nacional de Desenvolvimento Economico e Social aka BNDES
has received a US$1 billion loan approval from the Inter-
American Development Bank to support expansion, integration and
access to financing by the Brazilian micro, small and medium-
sized enterprises sector.
This loan is the second US$1 billion financing approved in the
context of a US$3 billion Conditional Credit Line (CCLIP) for
investment projects launched in 2004. The CCLIP allows BNDES to
use resources from three successive operations of up to US$1
billion each in a nine-year term.
The loan is guaranteed by the Brazilian Government and will
provide medium and long-term financing for investment projects
and for permanent working capital to make firms more
competitive. Lending in local currency and other innovations
such as flexibility in determining the amortization schedule and
terms, and prices based on actual cost of financing were
authorized for the CCLIP program in 2006.
"This project not only continues IDB collaboration with BNDES to
support development and modernization of micro, small and
medium-sized enterprises through medium and long-term
financing," said IDB Team Leader Felipe Gomez-Acebo. "It also
gives BNDES the possibility of requesting financing directly in
reais, allowing for a more efficient handling of exchange rate
situations."
"This type of innovative financing allows the country to avoid
the risks of incurring debt in foreign currency," explained
Gomez-Acebo.
BNDES channels a large portion of indirect loan (onlending)
operations to enterprises. Microenterprises, those that have 19
or fewer employees and annual gross sales of US$400,000 or less,
and the formal small and medium-sized enterprise sector,
composed of firms having between 20 and 499 employees and gross
annual sales of under US$20 million, are key for the entire
economy because of their role in industrial modernization and
re-engineering of production processes.
The IDB has also supported four very successful multisector
credit programs with BNDES since 1995 for a total of US$3.5
billion. BNDES, the only significant source of medium- and
long-term funding for financial intermediaries, has a strategic
role in Brazil in increasing the volume of credit in the
economy.
The loan is for a 20-year term with a four-year grace period and
follows the IDB strategy agreed with Brazilian authorities in
the context of the country's 2004-2007 Economic Plan to achieve
sustained, socially inclusive growth. Local counterpart funds
also total US$1 billion.
About BNDES
Banco Nacional de Desenvolvimento Economico e Social is Brazil's
national development bank. It provides financing for projects
within Brazil and plays a major role in the privatization
programs undertaken by the federal government.
* * *
As reported on Nov. 27, 2006, Standard & Poor's Ratings Services
changed the ratings outlook to Positive from Stable on Banco
Nacional de Desenvolvimento Economico e Social SA's BB Foreign
currency counterparty credit rating and BB+ Local currency
counterparty credit rating.
CAIXA ECONOMICA: Will Increase Loans to BRL35 Billion in 2007
-------------------------------------------------------------
Caixa Economica Federal plans to increase loans to small and
medium-sized enterprises by 51.9% to BRL35.4 billion this year,
according to a report by the Brazilian government's news agency
Agencia Brasil.
Caixa Economica Chief Executive Officer Maria Fernanda Ramos
Coelho told Agencia Brasil that in Rio de Janeiro, the bank
expects to boost lending to small companies by 73.0% to BRL2.10
billion in 2007, compared to 2006.
Business News Americas relates that Caixa Economica granted
about BRL23.3 billion in loans to small companies in 2006.
Agencia Brasil notes that so far this year, the bank granted
BRL3.10 billion in home loans.
According to BNamericas, Caixa Economica has a BRL17.4-billion
home loan budget for 2007, which is 22.5% more than the BRL14.2
billion granted in 2006.
BNamericas says that Abecip, the Brazilian savings and home loan
providers' association, sees that home loans funded by savings
accounts will increase by 15% to BRL11 billion in 2007, compared
to 2006. This doesn't include Caixa Economica's funds for
predominantly lower-income earners.
Abecip told BNamericas that new home loans in Brazil increased
86.1% to BRL2.91 billion in the first quarter 2007, compared to
the same quarter in 2006.
Apart from its commercial banking activities, Caixa Economica
Federal is responsible for executing policies in the areas of
housing and basic sanitation, the administration of social funds
and programs and federal lotteries. Caixa Economica Federal is
Brazil's second largest financial institution and is the fourth
largest bank in Latin America. According to a 2002 ranking of
Latin American banks undertaken by Caracas-based SOFTline, it
had US$36.3 billion (11.7%) in assets, deposits valued at
US$21.7 billion and loans worth US$7 billion as of 2002.
* * *
As reported in the Troubled Company Reporter-Latin America on
Sept. 4, 2006, Moody's Investors Service upgraded these ratings
of Caixa Economica Federal:
-- long-term foreign currency deposits to Ba3 from Ba1; and
-- long- and short-term global local currency deposit ratings
to A1/Prime-1 from A3/Prime-2.
Moody's said the ratings outlook was stable.
CAIXA ECONOMICA: Will Invest in Itaborai Infrastructure
-------------------------------------------------------
Caixa Economica Federal Chief Executive Officer Maria Fernanda
Coelho told reporters that the bank will help in financing
infrastructure in Itaborai, Rio de Janeiro.
Business News Americas relates that Caixa Economica director
Jose Domingos Vargas said the bank is preparing to contribute
financing for the development of housing and sanitation for 11
municipalities in Itaborai, and contributions may also be made
to transport infrastructure.
BNamericas says that the petrochemical complex Comperj will be
constructed in Itaborai. An entire infrastructure of housing
and transport systems will be implemented to support the
complex.
According to BNamericas, the Comperj petrochemical complex will
start operations in 2012. Investments are estimated at US$8.3
billion.
Meanwhile, Caixa Economica is still studying the amount to be
invested from the Brazilian government's growth acceleration
plan, BNamericas says. It has made available BRL3.1 billion for
housing throughout the country. It aims to disburse about
BRL17.4 billion for the sector this year.
Ms. Coelho said that Caixa Economica is also analyzing the BRL3-
billion sanitation projects. The bank plans to release the
resources by July, BNamericas states.
Apart from its commercial banking activities, Caixa Economica
Federal is responsible for executing policies in the areas of
housing and basic sanitation, the administration of social funds
and programs and federal lotteries. Caixa Economica Federal is
Brazil's second largest financial institution and is the fourth
largest bank in Latin America. According to a 2002 ranking of
Latin American banks undertaken by Caracas-based SOFTline, it
had US$36.3 billion (11.7%) in assets, deposits valued at
US$21.7 billion and loans worth US$7 billion as of 2002.
* * *
As reported in the Troubled Company Reporter-Latin America on
Sept. 4, 2006, Moody's Investors Service upgraded these ratings
of Caixa Economica Federal:
-- long-term foreign currency deposits to Ba3 from Ba1; and
-- long- and short-term global local currency deposit ratings
to A1/Prime-1 from A3/Prime-2.
Moody's said the ratings outlook was stable.
COMPANHIA SIDERURGICA: Report Says Profits May Rise 43% in 1Q
-------------------------------------------------------------
Brokerage Brascan Corretora said in an earnings preview report
that Companhia Siderurgica Nacional's net profit could increase
43% in the first quarter of 2007, from the same period in 2006,
according to Business News Americas.
As reported in the Troubled Company Reporter-Latin America on
May 12, 2006, Companhia Siderurgica reported its results for the
first quarter of 2006, disclosing that its net income reached
BRL340 million. Despite the accident in Blast Furnace No. 3,
net income remained flat compared to the previous quarter.
Companhia Siderurgica's 2006 results were negatively affected by
the accident that resulted to a suspension of the furnace's
operation for several months, BNamericas says.
BNamericas relates that Companhia net revenue in the first
quarter 2007 is expected to grow 43% to BRL2.81 billion year-
over-year. Sales volume could increase 23% to 1.23 million
tons, compared to 997,000 tons in the first three months of
2006.
According to BNamericas, Brascan Corretora said in its report,
"Overall, the scenario to be outlined in 1Q07 [first quarter
2007] is due to show a strong recovery at CSN's [Companhia
Siderurgica] operations, with a return to good margins, large
sales volume and [steel] prices on the rise."
Companhia Siderurgica Nacional is one of the lowest-cost steel
producers in the world, which is a result of its access to
proprietary, high-quality iron ore (at the Casa de Pedra mine);
self-sufficiency in energy; streamlined facilities; and
logistics advantages. This is in addition to the group's strong
market position in the fairly concentrated steel industry in
Brazil.
* * *
On Jan. 26, 2006, Standard and Poor's Rating Services assigned a
'BB' corporate credit rating on Brazilian flat carbon steelmaker
Companhia Siderurgica Nacional.
The 'BB' corporate credit rating on CSN reflects the company's
exposure to volatile demand and price cycles, increasing
competition in its home and predominant market of Brazil,
aggressive dividend policy and capital investment plan, and
sizable gross-debt position. These risks are partly offset by
CSN's privileged cost position and sound operating profile,
favorable market position in Brazil, strong export capabilities
to offset occasional domestic demand sluggishness, and
increasing business diversification.
DURA AUTOMOTIVE: Inks Technical Union with India's Aditya Auto
--------------------------------------------------------------
DURA Automotive Systems, Inc. entered into a technical alliance
with Aditya Auto Products and Engineering Pvt. Ltd., based in
Bangalore, India, to bring new automotive technologies to the
growing domestic Indian and Asian markets. DURA will supply
technology to Aditya for the manufacture of products such as
pedals, parking brakes, shifters and spare tire carriers.
Aditya will produce the parts and provide local support to
automotive OEMs in the region. DURA and Aditya anticipate that
the alliance will commence manufacturing of DURA components in
India by the first quarter of 2008.
"Establishing a manufacturing presence in India is a key
component of our global growth strategy, which is designed to
leverage DURA technology investments and provide local support
to customers anywhere in the world," Larry Denton, DURA
Automotive's chief executive officer said. "The DURA and Aditya
partnership opens significant opportunities for us in fast-
growing automotive markets."
By 2012, India is projected to be the seventh largest automobile
producer in the world. The establishment of the alliance in
Bangalore, a major Indian market, also provides access to
neighboring Asian markets.
"Our alliance brings together Aditya's expertise in designing
and manufacturing systems with DURA's world-class technology to
meet the requirements of leading automakers in this region," C.
Jayaraman, Aditya's managing director and chief executive
officer, said. "Combining our strengths will better position us
to participate in India's growing domestic automotive market and
beyond."
DURA will contribute designs, intellectual property and
technical resources. Under the terms of the agreement, the
alliance is planned to become a joint venture in three years and
when certain milestones are achieved. Once initiated, the joint
venture will operate under the name Aditya DURA Pvt. Ltd.
DURA currently has a presence in 16 countries with 69 locations,
including its manufacturing facilities, technology and customer
service centers, and joint venture companies.
About Aditya Auto
Headquartered in Bangalore, India, Aditya Auto Products &
Engineering India Private Limited -- http://www.adityaauto.com/
-- is a privately owned and professionally managed organization,
engaged in the business of design & manufacture of systems & sub
systems to meet the requirements of the growing automobile
industry. Beginning as Autarky Auto in April 1989 and
established as Aditya Auto Products in February 1999, the
company works closely with leading Automotive OEMs & Global tier
1 industries, both in India and the rest of the world.
About DURA Automotive Systems Inc.
Rochester Hills, Mich.-based DURA Automotive Systems Inc.
(Nasdaq: DRRA) -- http://www.DURAauto.com/-- is an independent
designer and manufacturer of driver control systems, seating
control systems, glass systems, engineered assemblies,
structural door modules and exterior trim systems for the global
automotive industry. The company is also a supplier of similar
products to the recreation vehicle and specialty vehicle
industries. DURA sells its automotive products to North
American, Japanese and European original equipment manufacturers
and other automotive suppliers.
The Debtors filed for chapter 11 petition on Oct. 30, 2006
(Bankr. D. Delaware Case No. 06-11202). Richard M. Cieri, Esq.,
Marc Kieselstein, Esq., Roger James Higgins, Esq., and Ryan
Blaine Bennett, Esq., of Kirkland & Ellis LLP are lead counsel
for the Debtors' bankruptcy proceedings. Mark D. Collins, Esq.,
Daniel J. DeFranseschi, Esq., and Jason M. Madron, Esq., of
Richards Layton & Finger, P.A. Attorneys are the Debtors' co-
counsel. Baker & McKenzie acts as the Debtors' special counsel.
Togut, Segal & Segal LLP is the Debtors' conflicts counsel.
Miller Buckfire & Co., LLC is the Debtors' investment banker.
Glass & Associates Inc., gives financial advice to the Debtor.
Kurtzman Carson Consultants LLC handles the notice, claims and
balloting for the Debtors and Brunswick Group LLC acts as their
Corporate Communications Consultants for the Debtors. As of
July 2, 2006, the Debtor had US$1,993,178,000 in total assets
and US$1,730,758,000 in total liabilities.
The Debtors' exclusive plan-filing period expires on May 23,
2007.
HAYES LEMMERZ: Discloses Rights Distribution to Stockholders
------------------------------------------------------------
Hayes Lemmerz International, Inc. reported the distribution of
rights in its previously announced US$180 million rights
offering and the execution of a commitment letter for a new
US$495 million senior secured credit facility.
The company is distributing to stockholders of record as of
April 10, 2007, non-transferable subscription rights to purchase
shares of its common stock in connection with the Rights
Offering. Stockholders on the record date will receive 1.3970
rights for each share of the company's common stock held on the
record date. Each right entitles the holder to purchase one
share of common stock at a price of US$3.25 per share until 5:00
p.m. Eastern Daylight Time, on May 21, 2007, unless extended by
the company. Stockholders who receive rights through a bank or
broker will receive instructions for exercising rights from
their bank or broker and may be required to act prior to the
stated expiration time. Hayes Lemmerz may terminate the Rights
Offering for any reason prior to the expiration time.
The Rights Offering and the related agreements are subject to
the approval of the company's stockholders. A special meeting
to approve the rights offering and certain other matters is
scheduled to be held on May 4, 2007, at the company's
headquarters in Northville, Michigan.
Hayes Lemmerz also has executed a commitment letter with
Citigroup Global Markets Inc. and Deutsche Bank AG, New York
Branch and Deutsche Bank Securities Inc. to provide new senior
secured credit facilities in an amount of up to US$495 million.
Citigroup and Deutsche Bank will act as joint arrangers and
joint book-runners for the syndication of the new credit
facilities. The new credit facilities are expected to consist
of a term loan facility of up to US$350 million, which will be
denominated in euros and placed with a subsidiary in Europe, a
revolving credit facility of up to US$125 million and a
synthetic letter of credit facility of up to US$20 million.
The proceeds of the new credit facilities will be used, together
with the proceeds of other financing activities, to refinance
the company's obligations under its Amended and Restated Credit
Agreement dated April 11, 2005. The refinancing of the Amended
and Restated Credit Agreement and the placement of a portion of
the Company's debt outside the United States are conditions to
the obligation of Deutsche Bank Securities Inc. and SPCP Group,
LLC, an affiliate of Silver Point Capital, L.P., to backstop the
Rights Offering. Additional proceeds will be used to replace
existing letters of credit and to provide for working capital
and other general corporate purposes, and to pay the fees and
expenses associated with the new credit facilities.
The company and its officers and directors may be deemed to be
participants in the solicitation of proxies from the company's
stockholders in connection with the approval of the Rights
Offering and certain related proposals. Information about those
officers and directors of the company and their ownership of the
Company's common stock is set forth in the proxy statement for
the special meeting, which was filed with the Securities and
Exchange Commission on April 18, 2007.
Hayes Lemmerz International, headquartered in Northville,
Michigan, is a global supplier of steel and aluminum automotive
and commercial vehicle highway wheels, as well as aluminum
components for brakes, powertrain, suspension, and other
lightweight structural products. Worldwide revenues approximate
US$2.2 billion. The company has 33 facilities worldwide
including India, Brazil and Germany, among others.
* * *
As reported in the Troubled Company Reporter-Latin America on
Feb. 7, 2007, Moody's Investors Service lowered HLI Operating
company, Inc.'s ratings:
* Corporate Family to Caa1 from B3;
* first lien senior secured to B1 from Ba3;
* second lien term loan to Caa1 from B3.
HERCULES INC: Credit Suisse Assigns "Outperform" Rating on Firm
---------------------------------------------------------------
Newratings.com reports that Credit Suisse analysts have assigned
an "outperform" rating on Hercules Inc shares.
Newratings.com notes that the target price for Hercules shares
is set at US$24.
The analysts mentioned in a research note published on April 23
that Hercules has become a company with better financial
flexibility, industry-leading margins, lower raw material
volatility and higher earnings stability. According to the
analysts, the transformation was due to several onetime cash
windfalls during 2007 and the divestiture of the FiberVisions
division.
Hercules has the potential to have over 15% earnings per share
growth and generate robust free cash flows over a minimum of two
years, Newratings.com states, citing Credit Suisse.
Headquartered in Wilmington, Delaware, Hercules, Inc., (NYSE:
HPC) -- http://www.herc.com/-- is a global manufacturer and
marketer of specialty chemicals and related services. Its
principal products are chemicals for the paper industry, water-
soluble polymers, and specialty resins. The company has its
regional headquarters in China and Switzerland, and a production
facility in Brazil.
* * *
Hercules, Inc. carries Moody's Baa3 Senior Secured Debt and Bank
Loan Debt Ratings, Ba2 Long-term Corporate Family, Senior
Unsecured Debt, and Probability of Default Ratings, and B1
Junior Subordinated Debt Rating.
The company also carries Standard & Poor's BB Long-term Foreign
and Local Issuer Credit Ratings.
MACDERMID INC: S&P Lowers Corp. Rating to B After Merger Closure
----------------------------------------------------------------
Standard & Poor's Ratings Services lowered its corporate credit
rating on MacDermid Inc. to 'B' from 'BB+' and removed the
rating from CreditWatch where it had been placed with negative
implications on Sept. 6, 2006.
"The resolution of the CreditWatch follows the closing of the
merger involving an acquisition vehicle formed by Daniel H.
Leever, MacDermid's chairman and chief executive officer, Court
Square Capital Partners II, and Weston Presidio V.," said
Standard & Poor's credit analyst David Bird. The downgrade
reflects the highly leveraged transaction.
At the same time, Standard & Poor's affirmed its senior secured
and subordinated debt ratings previously assigned in connection
with the financing of the transaction. The outlook is stable.
The ratings on MacDermid reflect its satisfactory business
position, offset by a highly leveraged financial profile.
MacDermid manufactures and markets specialty chemicals to a
variety of industries, including graphic arts, electronic
materials (primarily printed circuit boards), and metal
finishing. Graphic arts include liquid and solid-sheet
photopolymer plates for flexographic printing, and offset
blankets for the offset printing segment. In electronic
materials, the company focuses on chemicals used in the
fabrication of printed circuit boards. Metal finishing products
include decorative and functional metal and plastic plating, and
surface treatment chemicals used in a variety of end-markets,
including automotive, electronic equipment, and appliances.
MacDermid, with more than US$800 million in annual sales,
benefits from solid business positions, with leading market
shares in products that make up a majority of sales. The
company's diverse product line and end markets lend relative
stability to earnings and cash flow generation. Still, some of
the company's products are used in electronic, automotive,
oilfield and other industrial applications, which could result
in the modest deterioration of margins or volume shortfalls
during periods of key end market contraction.
MacDermid Inc. (NYSE:MRD)-- http://www.macdermid.com/-- is
manufacturer of a broad line of chemicals and related equipment
for a range of applications, including metal and plastic
finishing, electronics, graphic arts and printing, and offshore
drilling. The company maintains its headquarters in Denver,
Colorado, but operates facilities worldwide, including Brazil,
China, Germany, Italy, and Japan. Revenues for the twelve
months ended June 30, 2006, were US$797 million.
PETROLEO BRASILEIRO: Will Purchase Tubes from TenarisConfab
-----------------------------------------------------------
Brazil's state-owned oil company Petroleo Brasileiro SA has
signed a contract to buy tubes from steel tube and equipment
producer TenarisConfab, the latter said in a statement.
Business News Americas relates that the US$172-million contract
involves supplying 204 kilometers of tubes -- ranging from 24-28
inches in diameter -- for Petroleo Brasileiro's Plangas natural
gas project, which aims to increase natural gas supply in
Brazil's southeast region to some 40 million cubic meters per
day by end-2008 from the current 15 million cubic meters per
day.
TenarisConfab will start delivering the tubes in August 2007.
Delivery is expected to end in April 2008, BNamericas states.
Headquartered in Rio de Janeiro, Brazil, Petroleo Brasileiro SA
aka Petrobras -- http://www2.petrobras.com.br/ingles/index.asp
-- was founded in 1953. The company explores, produces,
refines, transports, markets, distributes oil and natural gas
and power to various wholesale customers and retail distributors
in Brazil. Petrobras has operations in China, India, Japan, and
Singapore.
Petroleo Brasileiro SA's long-term corporate family rating is
rated Ba3 by Moody's.
Fitch Ratings assigned these ratings on Petroleo Brasileiro's
senior unsecured notes:
Maturity Date Amount Rate Ratings
------------- ------ ---- -------
April 1, 2008 US$400,000,000 9% BB+
July 2, 2013 US$750,000,000 9.125% BB+
Sept. 15, 2014 US$650,000,000 7.75% BB+
Dec. 10, 2018 US$750,000,000 8.375% BB+
Fitch upgraded the foreign currency rating of Petrobras to BB+
from BB, with positive outlook, in conjunction with Fitch's
upgrade of the long-term foreign and local currency IDRs of the
Federative Republic of Brazil to BB, from BB- on June 29, 2006.
TELE NORTE: S&P Puts BB+ Corp. Credit Ratings on CreditWatch
------------------------------------------------------------
Standard & Poor's Ratings Services placed its long-term 'BB+'
corporate credit ratings on Tele Norte Leste Participacoes S.A.
or TNL and Telemar Norte Leste S.A. or TMar, and the ratings on
the local debentures of Telemar Participacoes S.A. or TmarPart
on CreditWatch with negative implications.
"The CreditWatch listing follows TmarPart's decision to proceed
with a debt-funded tender offer for the acquisition of TNL's and
TMar's outstanding nonvoting shares," said Standard & Poor's
credit analyst Jean-Pierre Cote Gil. Although a successful
outcome of the proposal would provide TmarPart's controlling
shareholders with the necessary flexibility to make several
decisions regarding these companies' corporate structure
(including the potential consolidation of all Telemar entities),
the resulting significant increase in debt levels at TmarPart
would pressure the ratings on all entities (as TmarPart depends
on the dividend distributions of its ultimate operating
companies).
Standard & Poor's expect to resolve the CreditWatch after the
conclusion of the offer. The cost will depend on the level of
acceptance from nonvoting shareholders (the transaction is
subject to a minimal acceptance of 66% of nonvoting
shareholders). Standard & Poor's will also need to review the
company's funding strategy and the financial policies following
a potential positive outcome. If approved by all nonvoting
shareholders of TNL and TMar, TmarPart would have to disburse
about BRL11 billion (about US$5.5 billion) to complete the deal.
Telemar entities' consolidated total debt amounted to about
US$4.6 billion at Dec. 31, 2006.
Headquartered in Rio de Janeiro, Brazil, Tele Norte Leste
Participacoes SA -- http://www.telemar.com.br-- is a provider
of fixed-line telecommunications services in South America. The
company markets its services under its Telemar brand name. Tele
Norte's subsidiaries include Telemar Norte Leste SA; TNL PCS SA;
Telemar Internet Ltda.; and Companhia AIX Participacoes SA.
TRW AUTOMOTIVE: Completes Tender Offers of Outstanding Notes
------------------------------------------------------------
TRW Automotive Holdings Corp., through its subsidiary TRW
Automotive Inc., disclosed the expiration of its cash tender
offers for its outstanding:
-- US$825-million 9-3/8% Senior Notes due 2013,
-- EUR130-million 10-1/8% Senior Notes due 2013,
-- US$195-million 11% Senior Subordinated Notes due 2013, and
-- EUR81-million 11-3/4% Senior Subordinated Notes due 2013.
The tender offers expired at midnight, New York City time, on
April 18.
The settlement for Notes validly tendered and accepted for
payment between the Consent Date of March 23, and the Expiration
Date occurred on April 19, and was funded with cash on hand.
Through the tender offers, the company repurchased a total of:
-- US$825,218,850 or 99.98% of the aggregate principal amount
of the 9-3/8% Senior Notes;
-- EUR121,123,000 or 93.17% of the aggregate principal amount
of the 10-1/8% Senior Notes;
-- US$192,909,000 or 98.93% of the aggregate principal amount
of the 11% Senior Subordinated Notes; and
-- EUR79,028,000 or 97.27% of the aggregate principal amount
of the 11-3/4% Senior Subordinated Notes.
As a result of the Note tender transaction, the company expects
to incur related premiums and expenses of US$147 million in the
first quarter of 2007.
About TRW Automotive
Headquartered in Livonia, Michigan, TRW Automotive Holdings
Corp. (NYSE: TRW) -- http://www.trwauto.com/-- is an automotive
supplier. Through its subsidiaries, it employs approximately
63,800 people in 26 countries including Brazil, China, Germany,
Italy, among others. TRW Automotive products include integrated
vehicle control and driver assist systems, braking systems,
steering systems, suspension systems, occupant safety systems
(seat belts and airbags), electronics, engine components,
fastening systems and aftermarket replacement parts and
services.
* * *
Fitch assigned a 'BB' on TRW Automotive Holdings Corp.'s LT
Issuer Default rating and 'BB-' on its Unsecured Debt rating.
Fitch said the outlook is stable.
UNIAO DE BANCOS: Unibanco AIG Wants 30% of High-Income Segment
--------------------------------------------------------------
Fabio Leme -- the premium manager of Unibanco AIG, a joint
venture between Brazilian bank Uniao de Banco Brasileiros and US
insurer American International Group -- told Business News
Americas that the company is aiming for a 30% market share of
the high-income segment by the end of 2008.
Mr. Leme explained to BNamericas, "The high-income segment here
is big enough for significant results. Premiums could be even
more than we expect."
Unibanco AIG launched a line of products for high-income
earners, which the insurer will market through the private
banking division of Uniao de Bancos and brokers that work with
high-income customers, BNamericas notes, citing Mr. Leme.
Unibanco AIG's Chief Executive Officer Jose Rudge said in March
that the company would concentrate on selling retail products
through bank branches to increase premiums 30% in 2007 compared
to 2006, BNamericas states.
About American International Group
Headquartered in New York, USA, American International Group,
Inc. is a holding company that, through its subsidiaries, is
engaged in a range of insurance and insurance-related activities
in the United States and abroad. AIG's primary activities
include both General Insurance and Life Insurance & Retirement
Services operations. Other significant activities include
Financial Services and Asset Management. AIG's reportable
segments by product or service line are General Insurance, Life
Insurance & Retirement Services, Financial Services and Asset
Management. AIG provides its products and services in more than
130 countries and jurisdictions.
About Uniao de Bancos
Headquartered in Sao Paulo, Brazil, Uniao de Bancos Brasileiros
SA -- http://www.unibanco.com/-- is a full-service financial
institution providing a range of financial products and services
to a diversified individual and corporate customer base
throughout Brazil. The company's businesses comprise segments:
Retail, Wholesale, Insurance and Pension Plans and Wealth
Management. Uniao de Bancos and its associated companies
FinInvest, LuizaCred, PontoCred and Tecban (Banco 24 Horas)
offer a network composed of 17,000 points of service. It also
counts on 7,580 automated teller machines and all 30 Hours'
products and services, including the telephone service and the
Internet banking. The company's international network consists
of branches in Nassau and the Cayman Islands; representatives
offices in New York; banking subsidiaries in Luxembourg, the
Cayman Islands and Paraguay; and a brokerage firm in New York --
Unibanco Securities Inc.
* * *
As reported in the Troubled Company Reporter Latin America on
Feb. 12, 2007, Fitch changed the outlook of these ratings of
Unibanco-Uniao de Bancos Brasileiros SA:
-- Foreign currency IDR at 'BB+'; Outlook to Positive from
Stable;
-- Local currency IDR at 'BB+'; Outlook to Positive from
Stable; and
-- National Long-term rating at 'AA(bra)'; Outlook to
Positive from Stable
Fitch Ratings revised the Outlook on the foreign and local
currency Issuer Default ratings and National ratings of a select
group of Brazilian banks, insurance and leasing companies to
Positive from Stable. This rating action follows the revision
of Brazil's foreign and local currency IDR Outlooks. All the
ratings on these banks, insurers and leasing companies are
affirmed.
VALMONT INDUSTRIES: Board Swells Dividend by 10.5% Due July 16
--------------------------------------------------------------
Valmont Industries, Inc.'s Board of Directors has increased the
company's quarterly cash dividend effective this July. The
second quarter cash dividend will be 10.5 cents per share
payable on July 16, 2007 to shareholders of record on
June 29, 2007. The dividend is an increase of 10.5% from the
prior quarter's dividend, and indicates an annual rate of 42.0
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%
* BRAZIL: Sells US$500 Mil. of Dollar-Denominated Bonds Due 2017
----------------------------------------------------------------
Brazil has sold early this month US$500 million of global bonds
denominated in dollars, published reports say.
Adriana Brasileiro at Bloomberg News says the bonds are due in
2017 and was sold at yields lower than those over benchmark U.S.
Treasuries when the debt was issued in November.
Reuters says the Brazilian government initially sold in November
2006 US$1.5 billion of the 6 percent coupon bond to yield 6.24
percent. The new issuance were priced to yield 5.888 percent,
or 1.22 percentage points more than 10-year U.S. government
bonds, Brazil's Treasury said in a statement.
* * *
As reported on Nov. 24, 2006, Standard & Poor's Ratings Services
revised its outlook on its long-term ratings on the Federative
Republic of Brazil to positive from stable. Standard & Poor's
also affirmed these ratings on the Republic of Brazil:
-- 'BB' for long-term foreign currency credit rating,
-- 'BB+' for long-term local currency credit rating, and
-- 'B' for short-term currency sovereign credit rating.
===========================
C A Y M A N I S L A N D S
===========================
BATAVIA CREDIT: Sets Final Shareholders Meeting for June 28
-----------------------------------------------------------
Batavia Credit Card Corporation Ltd. will hold its final
shareholders meeting on June 28, 2007, at:
Queensgate House
George Town, Grand Cayman
Cayman Islands
These agendas will be taken during the meeting:
1) accounting of the liquidation process showing how the
winding up has been conducted during the preceding year,
and
2) hearing any explanation that may be given by the
liquidators.
A member entitled to attend and vote at the meeting will be
allowed to appoint a proxy, who need not be a member, in his
stead.
The liquidators can be reached at:
George Bashforth
Emile Small
Maples Finance Limited
P.O. Box 1093
George Town, Grand Cayman
Cayman Islands
HOTEI LTD: Sets Final Shareholders Meeting for June 28
------------------------------------------------------
Hotei Ltd. will hold its final shareholders meeting on
June 28, 2007, at:
Queensgate House
George Town, Grand Cayman
Cayman Islands
These agendas will be taken during the meeting:
1) accounting of the liquidation process showing how the
winding up has been conducted during the preceding year,
and
2) hearing any explanation that may be given by the
liquidator.
A member entitled to attend and vote at the meeting will be
allowed to appoint a proxy, who need not be a member, in his
stead.
The liquidator can be reached at:
Richard Gordon
Maples Finance Limited
P.O. Box 1093
George Town, Grand Cayman
Cayman Islands
KNOLL INC: First Quarter 2007 Net Income Climbs to US$14.8 Mil.
---------------------------------------------------------------
Knoll, Inc. has reported net sales of US$247.9 million for the
first quarter ended March 31, 2007, an increase of 13.7% from
first quarter 2006. Operating income was US$30.8 million, or
12.4% of net sales, an increase of 40.6% from the first quarter
2006, net income was US$14.8 million, an increase of 45.1% over
the first quarter 2006, and earnings per share was US$0.30
compared to US$0.20 adjusted earnings per share in the prior
year.
"Knoll is firing on all cylinders," said Andrew Cogan, Chief
Executive Officer. "Thanks to the breadth and diversity of our
growth initiatives, for the third year in a row we are growing
our sales faster than the industry. And, importantly in 2007,
investments in our operations are resulting in significant
improvements in both our gross and industry leading operating
margins."
"We are encouraged by the ongoing activity in the business and
look forward to an exciting NeoCon trade show in June, as we
continue to make investments in strengthening and expanding our
product portfolio. I want to congratulate and thank our
associates and dealers for their strong performance and
continued commitment to our success."
First Quarter Results
Net sales for the quarter were US$247.9 million, an increase of
US$29.8 million, or 13.7%, over the first quarter of 2006, with
all of our product categories continuing to experience double
digit growth.
Backlog of unfilled orders at March 31, 2007 was US$193.5
million, an increase of US$19.4 million, or 11.1% compared to
unfilled orders at March 31, 2006.
Gross profit for the first quarter of 2007 was US$84.5 million,
an increase of US$14.7 million or 21.1%, over the same period in
2006. Gross margin increased to 34.1% from 32.0% in the same
quarter of 2006 and sequentially increased from 32.6% in the
fourth quarter of 2006. The increase from the first quarter of
2006 largely resulted from improved price realization, increased
volume allowing for better absorption of fixed costs and lower
material costs as a result of our global sourcing initiatives.
These positive measures were partially offset by inflationary
pressures on the company's material and labor costs.
Operating expenses for the quarter were US$53.7 million, or
21.7% of sales, compared to US$47.8 million, or 21.9% of sales,
for the first quarter of 2006. The increase in operating
expense dollars during the first quarter of 2007 was due to
investments in growth initiatives and higher variable sales and
incentive compensation as a result of increased sales levels and
higher operating profits. In addition, first quarter 2006
operating expenses included US$392 thousand of secondary
offering costs.
The company' operating income increased to 12.4% of sales from
10.0% of sales in the same period in the prior year.
Interest expense increased US$1.2 million due to increased
average debt for the quarter coupled with higher average
interest rates. Other income (expense) decreased approximately
US$600 thousand due to losses from foreign currency translation.
The effective tax rate was 38.0% for the quarter, as compared to
39.1% for the same period last year. The decrease in the
effective tax rate is largely due to the mix of pretax income in
the countries in which we operate. Net income for the first
quarter 2007 was US$14.8 million, or US$0.30 per share, as
compared to US$10.2 million, or US$0.20 adjusted earnings per
share, for the same quarter in 2006.
Cash generated from operations during the first quarter 2007 was
US$2.0 million, compared to US$15.2 million used in operations
the year before. Capital expenditures for the period totaled
US$3.0 million compared to US$1.2 million for 2006. The company
repurchased approximately 0.5 million shares of its stock for
US$13.5 million during the first quarter of 2007 compared to 0.8
million shares for US$16.3 million during the first quarter of
2006. The company also had net borrowings during the first
quarter of 2007 of US$7.0 million primarily to fund working
capital compared to net borrowings of US$16.4 million during
2006. The company also paid a quarterly dividend of US$5.3
million in the first quarter of 2007 compared to US$5.2 million
in the first quarter of 2006.
Barry L. McCabe, Chief Financial Officer said, "We are very
pleased with both our gross and operating margin expansions and
the strength of our balance sheet. We reduced our leverage
ratio to 2.4 to 1 and have US$106 million available to us under
our revolving credit facility."
Second Quarter 2007 Outlook
The company expects second quarter 2007 revenue to be in the
US$262-272 million range, an increase of 6%-10% from the second
quarter of 2006. Earnings per share estimates are between
US$0.35 and US$0.37.
Headquartered in East Greenville, Pennsylvania, Knoll Inc.,
(NYSE:KNL) -- http://www.knoll.com-- designs and manufactures
branded office furniture products and textiles, serves clients
worldwide. It distributes its products through a network of
more than 300 dealerships and 100 showrooms and regional
offices. The company has locations in Argentina, Australia,
Bahamas, Cayman Islands, China, Colombia, Denmark, Finland,
Greece, Hong Kong, India, Indonesia, Japan, Korea, Malaysia,
Philippines, Poland, Portugal and Singapore, among others.
* * *
As reported in the Troubled Company Reporter-Latin America on
Oct. 4, 2006, in connection with Moody's Investors Service's
implementation of its new Probability-of-Default and Loss-Given-
Default rating methodology for the for the U.S. Consumer
Products, Beverage, Toy, Natural Product Processors, Packaged
Food Processors and Agricultural Cooperative sectors, the rating
agency assigned its B1 Corporate Family Rating for Knoll Inc.,
and upgraded its a3 rating on the company's US$200 million
senior secured revolver and US$250 million senior secured term
loan to Ba2. Additionally, Moody's assigned an LGD2 rating to
both loans, suggesting noteholders will experience a 27% loss in
the event of a default.
NSJ TWO: Will Hold Final Shareholders Meeting on June 28
--------------------------------------------------------
NSJ Two Ltd. will hold its final shareholders meeting on
June 28, 2007, at:
Queensgate House
George Town, Grand Cayman
Cayman Islands
These agendas will be taken during the meeting:
1) accounting of the liquidation process showing how the
winding up has been conducted during the preceding year,
and
2) hearing any explanation that may be given by the
liquidators.
A member entitled to attend and vote at the meeting will be
allowed to appoint a proxy, who need not be a member, in his
stead.
The liquidators can be reached at:
Chris Marett
Joshua Grant
Maples Finance Limited
P.O. Box 1093
George Town, Grand Cayman
Cayman Islands
SF BUILDING: Sets Final Shareholders Meeting for June 28
--------------------------------------------------------
S.F. Building Holdings Inc. will hold its final shareholders
meeting on June 28, 2007, at:
Queensgate House
George Town, Grand Cayman
Cayman Islands
These agendas will be taken during the meeting:
1) accounting of the liquidation process showing how the
winding up has been conducted during the preceding year,
and
2) hearing any explanation that may be given by the
liquidator.
A member entitled to attend and vote at the meeting will be
allowed to appoint a proxy, who need not be a member, in his
stead.
The liquidator can be reached at:
Nobuhiro Sakano
Maples Finance Limited
P.O. Box 1093
George Town, Grand Cayman
Cayman Islands
SF TENNOUZU: Will Hold Shareholders Meeting on June 28
------------------------------------------------------
S.F. Tennouzu Development Holdings Inc. will hold its final
shareholders meeting on June 28, 2007, at:
Queensgate House
George Town, Grand Cayman
Cayman Islands
These agendas will be taken during the meeting:
1) accounting of the liquidation process showing how the
winding up has been conducted during the preceding year,
and
2) hearing any explanation that may be given by the
liquidator.
A member entitled to attend and vote at the meeting will be
allowed to appoint a proxy, who need not be a member, in his
stead.
The liquidator can be reached at:
Nobuhiro Sakano
Maples Finance Limited
P.O. Box 1093
George Town, Grand Cayman
Cayman Islands
=========
C H I L E
=========
GOODYEAR TIRE: Says 4% Sr. Notes are Convertible Until June 29
--------------------------------------------------------------
The Goodyear Tire & Rubber Company said that its 4% Convertible
Senior Notes due June 15, 2034, are now convertible at the
option of the holders and will remain convertible through
June 29, 2007, the last business day of the current fiscal
quarter.
The notes became convertible because the last reported sale
price of the company's common stock for at least 20 trading days
during the 30 consecutive trading-day period ending on
April 17, 2007 (the 11th trading day of the current fiscal
quarter) was greater than 120% of the conversion price in
effect on such day. The notes have been convertible in previous
fiscal quarters.
The company will deliver shares of its common stock or pay cash
upon conversion of any notes surrendered prior to June 29, 2007.
If shares are delivered, cash will be paid in lieu of fractional
shares only. Issued in June 2004, the notes are currently
convertible at a rate of 83.0703 shares of common stock per
US$1,000 principal amount of notes, which is equal to a
conversion price of US$12.04 per share.
There is approximately US$350 million in aggregate principal
amount of notes outstanding.
If all outstanding notes are surrendered for conversion, the
aggregate number of shares of common stock issued would be
approximately 29 million. The notes could be convertible after
June 30, 2007, if the sale price condition described above is
met in any future fiscal quarter or if any of the other
conditions to conversion set forth in the indenture governing
the notes are met.
Headquartered in Akron, Ohio, The Goodyear Tire & Rubber Company
(NYSE: GT) -- http://www.goodyear.com/-- is the world's largest
tire company. The company manufactures tires, engineered rubber
products and chemicals in more than 90 facilities in 28
countries. Goodyear Tire has marketing operations in almost
every country around the world including Chile, Colombia,
Guatemala, Jamaica and Peru in Latin America. Goodyear employs
more than 80,000 people worldwide.
As reported in the Troubled Company Reporter-Latin America on
April 10, 2007, Fitch Ratings has affirmed ratings for The
Goodyear Tire & Rubber Co. and revised the rating outlook to
positive from stable:
-- Issuer Default Rating 'B';
-- US$1.5 billion first-lien credit facility 'BB/RR1';
-- US$1.2 billion second-lien term loan 'BB/RR1';
-- US$300 million third-lien term loan 'B/RR4';
-- US$650 million third-lien senior secured notes 'B/RR4';
-- Senior unsecured debt 'CCC+/RR6'.
===============
C O L O M B I A
===============
ADVANCED MICRO: Posts US$611 Million Net Loss in First Quarter
--------------------------------------------------------------
Advanced Micro Devices Inc. reported a net loss of
US$611 million on net revenue of US$1.2 billion for the first
quarter ended March 31, 2007, compared with net income of US$185
million on net revenue of US$1.3 billion for the same period
ended March 26, 2006. The results for the first quarter of 2007
include ATI acquisition-related and integration charges of
US$113 million and employee stock-based compensation expense of
US$28 million.
The decline in revenue was primarily due to a US$568 million
decline in net revenue from the Computing Solutions segment,
which includes what the company previously called the
Computation Products and Embedded Products segments as well as
the chipset business acquired with ATI. Year-over-year server
and desktop processor unit shipments and revenues declined
significantly, while mobile processor unit shipments and revenue
increased significantly.
First quarter Graphics segment revenue of US$197 million
increased 19 percent from the fourth quarter of 2006, primarily
due to a full quarter of operations. Graphics segment had no
revenues for the first quarter of 2006.
Consumer Electronics segment revenue, including a full quarter
of operations, was down sequentially to US$118 million, from
US$120 million in the fourth quarter of 2006. On a full quarter
comparative basis, video processor unit shipments into the
digital TV market increased in the seasonally down quarter while
handheld processor unit shipments and game console revenue
decreased.
First quarter 2007 gross margin was 31 percent, excluding stock-
based compensation expense and acquisition-related charges,
compared to 59 percent in the first quarter of 2006. The
decrease from the prior quarter was largely due to significantly
lower microprocessor unit shipments, lower microprocessor
average selling prices, and the inclusion of the former ATI
operations, which generally have lower-margin products, for the
entire quarter.
AMD reported an operating loss of US$504 million for the first
quarter ended March 31, 2007, compared with operating income of
US$259 million for the same period ended March 26, 2006,
primarily due to a decrease in gross margin, and an increase in
research and development expenses, marketing, general and
administrative expenses, and amortization of acquired intangible
assets and integration charges.
"After more than three years of successfully executing our
customer expansion strategy and significantly growing our unit
and revenue base, our first quarter performance is disappointing
and unacceptable," said Robert J. Rivet, AMD's chief financial
officer. "We are aggressively addressing the issues that led to
our significant revenue decline. We are aligning our business
model, capital expenditures and cost structure with the goal of
accelerating our return to profitability. Lastly, our customer
relationships remain solid, reflecting their confidence in our
strategic direction, current and new products, and technology
roadmaps."
At March 31, 2007, the company's balance sheet showed
US$12.7 billion in total assets, US$7.2 billion in total
liabilities, US$303 million in minority interest in consolidated
subsidiaries, and US$5.2 billion in total stockholders' equity.
About Advanced Micro
Based in Sunnyvale, California, Advanced Micro Devices Inc.
(NYSE: AMD) -- http://www.amd.com/-- designs and produces
innovative microprocessor and graphics and media solutions for
the computer, communications, and consumer electronics
industries. The company has corporate locations in Sunnyvale,
California, Austin, Texas, and Markham, Ontario, and global
operations include those in Bolivia, Chile, Colombia and
Ecuador, among others.
* * *
The company's 7-3/4% Senior Notes due Nov. 1, 2012, carry
Standard & Poor's B+ rating, Moody's Ba3 rating and Fitch's BB-
rating.
ECOPETROL: Will Increase Planned Investment at Oil Refinery
-----------------------------------------------------------
Colombian state-run oil company Ecopetrol's Chief Executive
Javier Gutierrez told the Associated Press that the firm and
Glencore International AG will increase planned investment at
the Refineria de Cartagena SA plant.
The AP relates that Ecopetrol and Glencore International plan to
increase the investment to US$2 billion, to boost the refinery's
production to 50,000 barrels a day. It will be partly funded by
the proceeds from Ecopetrol's sale of a 51% stake in the plant
to Glencore International last year.
Ecopetrol Vice President Federico Maya told the AP that the
remainder will come from the cash generated by the plant and
from debt to be sold by the new company.
According to the AP, Ecopetrol and Glencore International
previously planned to spend US$880 million to produce 140,000
barrels of lower-quality fuel oil.
Meanwhile, Brazilian state-owned oil firm Petroleo Brasileiro SA
is negotiating with Glencore International to buy a stake in the
Refineria de Cartagena, the AP states, citing Mr. Gutierrez.
About Glencore International
Headquartered in Baar, Switzerland, Glencore International
trades in the stuff of which stuff is made. The company is a
commodities trader (metals and minerals, agricultural products,
and energy) and a diversified natural resources conglomerate
with interests in companies involved in mining, smelting,
refining, and processing. In the energy sector, the company
markets such products as coal, crude oil, jet fuel, and
gasoline. Glencore's ownership stakes include a 14% share in
Xstrata and a 12% interest in RUSAL, the world's largest
aluminum producer. Founded in 1974 as a marketer of ferrous and
nonferrous metals and other products, the company is owned by
management and employees.
About Ecopetrol
Ecopetrol is an integrated-oil company that is wholly owned by
the Colombian government. The company's activities include
exploration for and production of crude oil and natural gas, as
well as refining, transportation, and marketing of crude oil,
natural gas and refined products. Ecopetrol is Latin America's
fourth-largest integrated-oil concern. Operations are organized
into Exploration & Production, Refining & Marketing,
Transportation, and International Commerce & Gas.
* * *
On June 27, 2006, Fitch Ratings revised the rating outlook of
the long-term foreign currency issuer default rating of
Ecopetrol SA to Positive from Stable. This rating action
follows the recent revision in the Rating Outlook to Positive
from Stable of the 'BB' foreign currency IDR of the Republic of
Colombia. Ecopetrol's IDR remain strongly linked with the
credit profile of the Republic of Colombia.
===================================
D O M I N I C A N R E P U B L I C
===================================
BANCO INTERCONTINENTAL: Central Bank Ad Campaign Irks Figueroa
--------------------------------------------------------------
Attorneys for Banco Intercontinental's former president Ramon
Baez Figueroa accused the Dominican Republic's central bank of
authorizing the disbursement of millions of pesos to restart an
ad campaign in several digital media to pressure the court
hearing the fraud case, Dominican Today reports.
As reported in the Troubled Company Reporter-Latin America on
Jan. 2, 2007, the Justice and Transparency Foundation alleged
that the monetary and financial authorities aired a radio and
television ad campaign to pressure the Dominican justice so it
could not properly try the Banco Intercontinental fraud case.
The Justice Foundation described as deplorable and inadmissible
the million-dollar campaign, which was headed by Hector Valdez
Alvizu, the central bank governor. The group claimed that the
move was aimed at preventing the court from freely and
impartially hearing the case. The Dominican Republic's Justice
Ministry would investigate the ad campaign, to determine if the
ads violate legislation.
Dominican Today relates that Marino Vinicio Castillo, one of Mr.
Figueroa's lawyer, said, "Before the resounding collapse of the
Central Bank's accusation in the Baninter [Banco
Intercontinental] case, (Central banker) Hector Valdez Albizu
and the lawyers of (ex-president) Hipolito Mejia who represent
that institution have panicked and have resorted to the illegal
and abusive mechanism, never seen in the country, of paying for
advertising spots to pressure justice."
Millions of the taxpayers' money are being used in a campaign
that violates the constitutional rule that protects the presumed
innocence of any citizen under trial, Dominican Today notes,
citing Mr. Castillo.
Mr. Castillo alleged that the monetary officials are using the
televised program headed by Andy Dauhajre, Dominican Today
states.
The TCRLA also reported on April 23, 2007, that Zunilda Paniagua
-- a member of the Banco Intercontinental Liquidator Commission
who testified before the National District 1st Collegiate Court
of the Dominican Republic in favor of the prosecution in the
bank's DOP55-billion fraud case -- said that Banco
Intercontinental spent DOP400 million in the purchase of the
National System of Broadcasting's radio stations. According to
Ms. Paniagua, the transmitters were bought with Banco
Intercontinental funds.
Marino Vinicio Castillo can be reached at:
Fuerza Nacional Progresista
Presidente
Consejo Nacional de Drogas
Oficinas Gubernamentales, Bloque C
Avenida Mexico esq. 30 de Marzo
Tel. 809-2221-4747
809-221-5166
Email: of.pcastillo@codetel.net.do
Banco Intercontinental aka Baninter collapsed in 2003 as a
result of a massive fraud that drained it of about US$657
million in funds. As a consequence, all of its branches were
closed. The bank's current and savings accounts holders were
transferred to the bank's new owner -- Scotiabank. The
bankruptcy of Baninter was considered the largest in world
history, in relation to the Dominican Republic's Gross Domestic
Product. It cost Dominican taxpayers DOP55 billion and resulted
to the country's worst economic crisis.
=============
E C U A D O R
=============
PETROECUADOR: Ministry Eyes Nearly US$2.8B Investment in 2007-10
----------------------------------------------------------------
The Ecuadorian energy and mines ministry said in its new four-
year plan that it expects state-run oil firm Petroecuador's
investment to be almost US$2.80 billion from 2007-10, Business
News Americas reports.
BNamericas relates that Petroecuador will invest about
US$928 million this year and US$1.87 billion from 2008-10.
According to BNamericas, 48% of the total investment will be
allocated for slowing the decline of production on fields run by
Petroecuador's Petroproduccion subsidiary in 2007, maintaining
stable production in 2008 and increasing production from 2009
onward.
BNamericas notes that the ministry's plan blamed the decline of
production on lack of investment in the past. Petroecuador
invested about US$967 million in the last 10 years, with less
than 20% the amount coming from private firms. In terms of
produced units, Petroecuador invested US$0.70 per barrel, while
private companies invested US$7.80 per barrel.
Petroecuador has allotted about US$1.35 billion for production
activities for four years. It will also invest some US$207
million in exploration, US$109 million in transport, US$127
million in the rehabilitation of the Esmeraldas plant, US$94
million in liquefied petroleum gas storage and US$908 million in
other works.
The ministry's plan also mentioned about reducing smuggling,
which costs Ecuador US$300 million yearly, BNamericas states.
Petroecuador, according to published reports, is faced with
cash-problems. The state-oil firm has no funds for maintenance,
has no funds to repair pumps in diesel, gasoline and natural gas
refineries, and has no capacity to pay suppliers and vendors.
The government refused to give the much-needed cash alleging
inefficiency and non-transparency in Petroecuador's dealings.
=================
G U A T E M A L A
=================
AFFILIATED COMPUTER: Darwin Deason Raises Bid to US$62 a Share
--------------------------------------------------------------
Affiliated Computer Services Inc. has received a revised
proposal from Darwin Deason, chairman of the board of ACS, and
Cerberus Capital Management LP, to acquire, for a cash purchase
price of US$62 per share, all of the outstanding shares of the
company's common stock, other than certain shares and options
held by Mr. Deason and members of the company's management team
that would be rolled into equity securities of the acquiring
entity in connection with the proposed transaction.
Mr. Deason's original offer was US$59.25 per share.
A special committee of independent directors formed by the board
of directors to evaluate the company's strategic alternatives,
including the proposal from Mr. Deason and Cerberus, expects to
make a recommendation to the board after its consideration of
all strategic alternatives, including the proposal and all
others received, in due course. The special committee continues
to have concerns about the Deason/Cerberus proposal and the sale
process that it outlines, particularly with regard to the
unchanged exclusivity arrangement that the independent directors
asked to be voided on March 21, 2007. The special committee has
written a letter to Mr. Deason seeking clarification with
respect to several issues of concern.
About Cerberus Capital Management
Headquartered in New York City, and established in 1992,
Cerberus Capital Management LP is one of the world's leading
private investment firms with approximately US$25 billion of
capital under management in funds and accounts. Through its
team of investment and operations professionals, Cerberus
specializes in providing both financial resources and
operational expertise to help transform its portfolio companies
into industry leaders for long-term success and value creation.
Cerberus has offices in Los Angeles, Chicago and Atlanta, well
as advisory offices in London, Baan, Frankfurt, Tokyo, Osaka and
Taipei.
About Affiliated Computer Services
Affiliated Computer Services Inc. (NYSE: ACS)
-- http://www.acs-inc.com/-- provides business process
outsourcing and information technology solutions to world-
class commercial and government clients. The company has more
than 58,000 employees supporting client operations in nearly 100
countries. The company has global operations in Brazil, China,
Dominican Republic, India, Guatemala, Ireland, Philippines,
Poland, and Singapore.
* * *
As reported in the Troubled Company Reporter-Latin America on
April 3, 2007, Moody's Investors Service confirmed Affiliated
Computer Services' Ba2 corporate family rating and assigned a
stable rating outlook, following the company's conclusion of an
internal investigation into its options granting practices and
restoration to current U.S. Securities and Exchange Commission
financial reporting.
As reported in the Troubled Company Reporter on March 29, 2007,
Fitch Ratings placed Affiliated Computer Services Inc. on
Rating Watch Negative after the proposed offer from Darwin
Deason, founder and current chairman of ACS, and Cerberus
Capital Management L.P. to acquire the company in a leveraged
buyout transaction valued at $8.2 billion, including existing
debt.
Ratings affected were (i) Issuer Default Rating 'BB'; (ii)
Senior secured revolving credit facility at 'BB'; (iii) Senior
secured term loan at 'BB'; and (iv) Senior notes at 'BB-'.
BRITISH AIRWAYS: Mulls Consortium Offer for Iberia
--------------------------------------------------
British Airways plc is considering how to use its 10% holding in
Iberia Lineas Aereas de Espana SA.
As part of this process, the airline has approached a number of
private equity companies about making a consortium offer for
Iberia. Any consortium bid would not involve further capital
investment by British Airways. As well as a private equity
partner, this consortium is likely to include one or more
Spanish partners.
British Airways has not made a final decision about the future
of its shareholding in Iberia and continues to examine numerous
options including full disposal. However, it has ruled out an
independent bid for the airline.
As previously reported in the TCR-Europe on April 5, British
Airways has decided to appoint UBS AG to advise on how to use
its 10% holding in Iberia in the best interests of shareholders.
The move came after Iberia disclosed that it has received a bid
approach from private equity firm Texas Pacific Group.
According to the report, TPG is considering a cash offer of
EUR3.60 a share, which values Iberia at EUR3.4 billion (US$4.5
billion.
About British Airways
Headquartered in West Drayton, United Kingdom, British Airways
Plc -- http://www.ba.com/-- operates of international and
domestic scheduled and charter air services for the carriage of
passengers, freight and mail, and provides of ancillary
services. The British Airways group consists of British Airways
Plc and a number of subsidiary companies including in particular
British Airways Holidays Limited and British Airways Travel
Shops Limited. BA has offices in India and Guatemala.
* * *
In connection with Moody's Investors Service's implementation of
its new Probability-of-Default and Loss-Given-Default rating
methodology for the existing non-financial speculative-grade
corporate issuers in Europe, Middle East and Africa, the rating
agency confirmed its Ba1 Corporate Family Rating for British
Airways Plc.
* Issuer: British Airways, Plc
Projected
Old POD New POD LGD Loss-iven
Debt Issue Rating Rating Rating Default
---------- ------- ------- ------ ----------
GBP100-million 10.875%
Sr. Unsec. Regular
Bond/Debenture
Due 2008 Ba2 Ba2 LGD5 84%
GBP250-million 7.25%
Sr. Unsec. Regular
Bond/Debenture
Due 2016 Ba2 Ba2 LGD5 84%
As reported in the TCR-Europe on March 27, Standard & Poor's
Ratings Services said that its 'BB+' long-term corporate credit
rating on British Airways PLC remains on CreditWatch, with
positive implications, following a vote on March 22 by EU
ministers approving a proposed "open skies" aviation treaty with
the U.S.0
===========
G U Y A N A
===========
DIGICEL LTD: Launches MX Platform to Provide Voicemail in Guyana
----------------------------------------------------------------
Digicel Ltd. has started using Mpathix Inc.'s MX Platform to
provide voicemail and messaging services to its wireless
subscribers in Guyana. Digicel deployed the MX platform as part
of its market launch in Guyana. The MX platform will support
Digicel's mission to provide innovative and affordable mobile
services to the Guyanese market.
"The timelines for this deployment were extremely tight,"
Digicel Guyana Chief Executive Officer Tim Bahrani said.
"Mpathix delivered on time, proving to be a trusted and reliable
partner. We look forward to working with Mpathix to bring
quality services to the people of Guyana."
"Digicel has a reputation for delivering world-class mobile
telecommunication services," Mpathix Director of Product
Management Kevin Lister stated. "With the MX platform, Digicel
will be able to easily add next generation features as customer
needs evolve over time."
About Mpathix Inc.
Founded in 1997 and based in Toronto, Ontario, Mpathix Inc. --
www.mpathix.com -- is a pioneer in providing open system,
carrier-grade telecom solutions to wireless service providers
all over the world. Mpathix generates profits for wireless
carriers by providing cost-effective voice services including
mobile email, voicemail and unified messaging. Designed for
wireless networks, the MX Platform is a future proof investment
that easily integrates with all the latest technologies to meet
the evolving network needs. Mpathix serves over 7 million
subscribers across networks in North America the Caribbean and
Asia.
About Digicel
Digicel Ltd. is a wireless services provider in the Caribbean
region founded in 2000, and controlled by Denis O'Brien. The
company started 0operations 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.
=============
J A M A I C A
=============
CADMUS COMMUNICATIONS: Moody's Withdraws Ba3 Corp. Family Rating
----------------------------------------------------------------
Moody's Investors Service withdrew the Ba3 corporate family
rating of Cadmus Communications Corporation and downgraded the
Cadmus Communications senior subordinated notes rating to B3.
In conjunction with its acquisition of Cadmus Communications,
Cenveo executed supplemental indentures so that bondholders of
both Cadmus Communications and Cenveo bonds benefit from
guarantees from all domestic subsidiaries of the combined entity
and are equally subordinate to all senior debt. As such,
Moody's views the Cadmus Communications bonds as pari passu with
the B3 rated Cenveo senior subordinate bonds. Cenveo offered to
purchase the US$125 million outstanding Cadmus Communications
senior subordinated notes. However, the majority of bondholders
did not tender, and approximately US$105 million of these bonds
remain outstanding. Moody's is also revising the LGD
assessments to reflect the capital structure following this
redemption.
The outlook remains negative.
Rating actions:
Cadmus Communications
-- Senior Subordinated Bond Downgraded to B3, LGD5 84%,
from B1
-- Ba3 Corporate Family Rating Withdrawn
-- Ba3 Probability of Default Rating Withdrawn
Cenveo
-- B1 Corporate Family Rating Affirmed
-- Senior Subordinated Bond, Affirmed B3, LGD5 84%
-- Senior Secured Bank Credit Facility, Affirmed Ba3,
LGD3 31%
-- Outlook Negative
About Cenveo
Headquartered in Stamford, Connecticut, Cenveo, Inc., is one of
North America's leading providers of print and visual
communications, with one-stop services from design through
fulfillment. The company's broad portfolio of services and
products include commercial printing, envelopes, labels,
packaging and business documents delivered through a network of
production, fulfillment and distribution facilities throughout
North America.
About Cadmus Communications
Headquartered in Richmond, Virginia, Cadmus Communications Corp.
provides end-to-end integrated graphic communications and
content processing services to professional publishers, not-for-
profit societies, and corporations. Its annual revenue is
approximately US$450 million. It has operations in the U.S.,
India and the Caribbean Rim.
===========
M E X I C O
===========
ADVANCED MARKETING: AMS Reports US$22.8 Mln Deficit at Jan. 31
--------------------------------------------------------------
AMS Corp.
Balance Sheet
As of January 31, 2007
ASSETS
Current Assets
Cash and Cash Equivalents US$3,293,815
Short-term Investments -
Accounts Receivable, Net 54,244,745
Vendor & Misc. Receivables 9,015,952
Intercompany Receivables 20,887,870
Inventory 70,569,480
Freight on Inventory 556,522
Inventory in Process, in Transit 6,230,867
Inventory Reserves (9,427,119)
------------
Inventory, net 67,929,751
Deferred Income Tax 63,486
Income Tax Receivable (3,524)
Prepaid Expenses 25,986,319
------------
Total Current Assets 181,418,413
PROPERTY & EQUIPMENT
Leasehold Improvements 4,956,425
Office Furniture & Equipment 40,776,286
Warehouse Equipment 15,751,486
Autos -
------------
Total Property & Equipment 61,484,197
Accumulated Depreciation (39,725,689)
------------
Net Property & Equipment 21,758,509
Long-Term Investment 16,068
Goodwill & Other Assets 17,562,528
------------
TOTAL ASSETS US$220,755,518
============
LIABILITIES & STOCKHOLDER EQUITY
Current Liabilities
Accounts Payable US$189,161,831
Accrued Liabilities 13,201,398
Income Taxes Payable 152,950
Intercompany Payables -
Short-term Debt 34,653,738
------------
TOTAL CURRENT LIABILITIES 237,169,917
Long Term Liabilities 6,412,415
------------
TOTAL LIABILITIES 243,582,332
STOCKHOLDERS' EQUITY
Common Stock @ Par Value 23,350
Additional Paid-in Capital 13,109,981
Common Stock Dividend (4,213,583)
Deferred Compensation (75,004)
Retained Earnings - Prior Year 29,229,430
Retained Earnings - Current Year (38,759,416)
Cumulative Other Comp. Income (585,202)
Treasury Stock (21,556,370)
------------
TOTAL STOCKHOLDERS' EQUITY (22,826,814)
------------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY US$220,755,518
============
AMS Corp.
Statement of Operations
From January 1 to 31, 2007
GROSS SALES
Invoiced Amount US$25,924,194
Stickering Revenue 138,623
Service & Fee Revenue 593,554
Interco Revenue -
Total Sales Returns (17,839,833)
Sales Returns Provision 9,797,432
Unprocessed Sales Returns 804,149
------------
Sales Less Returns Prov. 19,418,119
============
SALES DEDUCTIONS
Cash Discount Provision 4,196
New Store Allowance 6,331
Customer Rebates -
Co-op Allowance -
Misc. Allowance & Adjustment 7,977
Sales Commissions -
------------
Total Sales Deductions 18,505
------------
NET SALES 19,399,614
============
COST OF NET SALES
Standard Cost of Sales 21,102,941
Interco Cost of Sales -
Standard Cost of Returns (14,012,605)
Standard Cost of Returns Provision 7,783,345
Standard Cost of Returns - Unprocessed 680,691
Purchase Variance, Revaluation (1,189)
Return to Publisher Variance 17,234
Freight In Costs of Sales 166,725
Freight - AGL 90,767
Freight Customer Returns 12,764
Freight -Return to Publisher 100,532
Freight Warehouse Transfer 14,879
Quantity Adjustments 1,604,419
Markdown Expense 199,846
Publisher Incentive -
Publisher Account Settlements (688)
Other Costs of Sales 430,636
------------
Total Cost of Sales 18,190,296
------------
GROSS PROFIT 1,209,318
============
VARIABLE EXPENSES
Freight Sales Shipments 445,516
Freight - Special Shipments -
Shipping Supplies and Service 12,077
Payroll DC operations 1,066,940
Distribution Fees 70,194
------------
Total Variable Expenses 1,594,726
------------
VARIABLE PROFIT MARGIN (385,408)
============
FIXED EXPENSE
Payroll (excl. DC Oper.) 1,579,750
Travel & Entertainment 46,345
Professional Services 1,245,399
Information Services 174,205
Office Equipment & Supplies 24,671
Telephone Expense 7,668
Facility Occupancy 507,217
General Insurance 85,519
Depreciation 689,769
Uncollectible Accounts 25,945
Customer Service 11,409
Promotion Expense 14,670
Express Mail & Postage 10,456
Training & Education 615
Exchange Gain/Loss -
Miscellaneous Expense 33,706
Shareholder's Relations 2,121
Co-op Advertising Exp/Inc (55,622)
Miscellaneous Income (14,887)
Warehouse Equipment 36,301
------------
Total Fixed Expenses 4,425,256
------------
OPERATING INCOME: (4,810,665)
Interest Expense 292,357
Interest Income (35,422)
Equity in Inc/Loss of Affiliates 55,873
Other Non-operating Expenses 750,000
------------
NON-OPERATING INCOME 1,062,808
------------
INCOME BEFORE INC TAX (5,873,474)
Tax Provision -
------------
NET INCOME (US$5,873,474)
============
Advanced Marketing Services, Inc.
(Excluding Publishers Group West Incorporated)
Statement of Cash Flows
From January 1 to 31, 2007
CASH RECEIPTS
Accounts Receivable US$26,213,378
Other 73,337
------------
Total Cash Receipts 26,286,715
------------
INVENTORY DISBURSEMENTS
Publishers - Wires 19,953,030
Publishers - Checks -
------------
Total Inventory Disbursements 19,953,030
------------
OPERATING DISBURSEMENTS
Total Payroll (including taxes) 2,252,167
Employee retention plan -
Temp/contract labor 37,811
Health insurance 353,020
Insurance (D&O, Prop., WC, GL) 51,097
Rent - facilities 668,593
Freight 974,023
Shipping supplies 94,000
Utilities 125,356
IT Expenses -
Travel & other EE related exp. 23,186
Professional fees -
Other 143,709
Capital expenditures -
Income/gross receipts taxes -
Bank interest and fees 1,355,170
------------
Total Operating Disbursements 6,078,132
------------
Total Disbursements 26,031,162
----------
Net Operating Cash Inflow (Outflow) 255,553
------------
INTERCOMPANY TRANSFERS
PGW Rcpts. Swept to AMS 13,113,699
AMS (To) / From PGW (8,712,400)
Foreign Subsidiaries 580,299
------------
Total I/C Transfers (4,981,598)
------------
Net Cash Inflow (Outflow) US$5,237,151
============
Publishers Group West Incorporated
Statement of Cash Flows
January 1 to 31, 2007
CASH RECEIPTS
Accounts Receivable US$13,113,699
Other -
------------
Total Cash Receipts 13,113,699
------------
INVENTORY DISBURSEMENTS
Publishers - Wires 7,189,184
Publishers - Checks 411,864
------------
Total Inventory Disbursements 7,601,408
------------
OPERATING DISBURSEMENTS
Total Payroll (including taxes) 601,548
Employee retention plan -
Temp/contract labor 43,168
Health insurance -
Insurance (D&O, Prop., WC, GL) -
Rent - facilities 33,906
Freight 228,320
Shipping supplies -
Utilities 2,086
IT Expenses -
Travel & other EE related exp. 17,536
Professional fees -
Other 21,399
Capital expenditures -
Income/gross receipts taxes -
Bank interest and fees -
------------
Total Operating Disbursements 947,963
------------
Total Disbursements 8,549,011
------------
Net Operating Cash Inflow (Outflow) 4,564,688
------------
INTERCOMPANY TRANSFERS
PGW Rcpts. Swept to AMS (13,113,699)
AMS (To) / From PGW 8,712,400
Foreign Subsidiaries -
------------
Total I/C Transfers (4,401,299)
------------
Net Cash Inflow (Outflow) US$163,389
============
About Advanced Marketing Services
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.
Lowenstein Sandler PC represents the Official Committee of
Unsecured Creditors. When the Debtors filed for protection from
their creditors, they listed estimated assets and debts of more
than US$100 million. The Debtors' exclusive period to file a
chapter 11 plan expires on Apr. 28, 2007. (Advanced Marketing
Bankruptcy News, Issue No. 10; Bankruptcy Creditors' Service
Inc., http://bankrupt.com/newsstand/or 215/945-7000).
ADVANCED MARKETING: AMS Reports US$22.4 Mln Deficit at Feb. 28
--------------------------------------------------------------
AMS Corp.
Balance Sheet
As of February 28, 2007
ASSETS
Current Assets
Cash and Cash Equivalents US$8,578,615
Short-term Investments -
Accounts Receivable, Net 43,373,018
Vendor & Misc. Receivables 8,937,476
Intercompany Receivables 21,088,097
Inventory 79,449,472
Freight on Inventory 556,522
Inventory in Process, in Transit 6,230,867
Inventory Reserves (9,257,041)
------------
Inventory, net 76,979,821
Deferred Income Tax 63,486
Income Tax Receivable (3,524)
Prepaid Expenses 32,472,438
------------
Total Current Assets 191,489,427
PROPERTY & EQUIPMENT
Leasehold Improvements 4,956,365
Office Furniture & Equipment 40,776,286
Warehouse Equipment 15,751,486
Autos -
------------
Total Property & Equipment 61,484,137
Accumulated Depreciation (40,396,609)
------------
Net Property & Equipment 21,087,528
Long-Term Investment 16,068
Goodwill & Other Assets 17,467,896
------------
TOTAL ASSETS US$230,060,919
============
LIABILITIES & STOCKHOLDER EQUITY
Current Liabilities
Accounts Payable 27,725,952
Accrued Liabilities 12,724,517
Income Taxes Payable 152,950
Intercompany Payables -
Short-term Debt 31,492,202
------------
TOTAL CURRENT LIABILITIES 72,095,621
Long Term Liabilities 180,453,377
------------
TOTAL LIABILITIES 252,548,998
STOCKHOLDERS' EQUITY
Common Stock @ Par Value 23,350
Additional Paid-in Capital 13,276,648
Common Stock Dividend (4,213,583)
Deferred Compensation (75,004)
Retained Earnings - Prior Year 28,747,751
Retained Earnings - Current Year (38,105,420)
Cumulative Other Comp. Income (585,202)
Treasury Stock (21,556,370)
------------
TOTAL STOCKHOLDERS' EQUITY (22,487,829)
------------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY US$230,061,169[sic.]
============
AMS Corp.
Statement of Operations
From February 1 to 28, 2007
GROSS SALES
Invoiced Amount US$18,357,532
Stickering Revenue 115,403
Service & Fee Revenue 558,927
Interco Revenue -
Total Sales Returns (9,764,420)
Sales Returns Provision 13,355,682
Unprocessed Sales Returns -
----------
Sales Less Returns Prov. 22,623,124
==========
SALES DEDUCTIONS
Cash Discount Provision 694
New Store Allowance 41,401
Customer Rebates -
Co-op Allowance -
Misc. Allowance & Adjustment 87,205
Sales Commissions 223
----------
Total Sales Deductions 129,523
----------
NET SALES 22,493,601
==========
COST OF NET SALES
Standard Cost of Sales US$14,384,302
Interco Cost of Sales -
Standard Cost of Returns (8,091,836)
Standard Cost of Returns Provision 11,101,196
Standard Cost of Returns - Unprocessed -
Purchase Variance, Revaluation (103,118)
Return to Publisher Variance -
Freight In Costs of Sales 153,870
Freight - AGL 123,879
Freight Customer Returns 6,647
Freight -Return to Publisher 9,906
Freight Warehouse Transfer 7,227
Quantity Adjustments (1,302,490)
Markdown Expense -
Publisher Incentive -
Publisher Account Settlements -
Other Costs of Sales 314,527
Total Cost of Sales 16,604,110
----------
GROSS PROFIT 5,889,490
==========
VARIABLE EXPENSES
Freight Sales Shipments 354,728
Freight - Special Shipments 5,646
Shipping Supplies and Service 106,542
Payroll DC operations 325,477
Distribution Fees 136,012
----------
Total Variable Expenses 928,404
----------
VARIABLE PROFIT MARGIN 4,961,086
==========
FIXED EXPENSE
Payroll (excl. DC Oper.) 1,998,205
Travel & Entertainment 14,557
Professional Services 160,399
Information Services 162,127
Office Equipment & Supplies 36,422
Telephone Expense 21,235
Facility Occupancy 808,879
General Insurance -
Depreciation 684,879
Uncollectible Accounts 23,704
Customer Service 4,449
Promotion Expense 14,537
Express Mail & Postage 16,037
Training & Education 14,865
Exchange Gain/Loss -
Miscellaneous Expense 219,735
Shareholder's Relations 33,010
Co-op Advertising Exp/Inc (44,951)
Miscellaneous Income (429,512)
Warehouse Equipment 31,861
----------
Total Fixed Expenses
3,770,459[sic.]
----------
OPERATING INCOME: 1,190,627
Interest Expense 266,794
Interest Income (22,757)
Equity in Inc/Loss of Affiliates 67,891
Other Non-operating Expenses 250
----------
NON-OPERATING INCOME 312,178
----------
INCOME BEFORE INC TAX 878,449
Tax Provision -
----------
NET INCOME US$878,449
==========
Advanced Marketing Services, Inc.
(Excluding Publishers Group West Incorporated)
Statement of Cash Flows
From February 1 to 28, 2007
CASH RECEIPTS
Accounts Rcvbl. (net of RTPs) US$19,989,296
Other 65,070
------------
Total Cash Receipts 20,054,366
------------
INVENTORY DISBURSEMENTS
Publishers - Wires 7,716,719
Publishers - Checks -
------------
Total Inventory Disbursements 7,716,719
------------
OPERATING DISBURSEMENTS
Total Payroll (including taxes) 2,210,344
Employee retention plan -
Temp/contract labor 439,126
Health insurance 359,193
Insurance (D&O, Prop., WC, GL) 64,503
Rent - facilities 667,140
Freight 506,153
Shipping supplies 127,838
Utilities 89,873
IT Expenses 90,775
Travel & other EE related exp. 33,561
Professional fees (Sep. Tab) -
Other 141,061
Capital expenditures -
Income/gross receipts taxes 925
Bank interest and fees 646,130
------------
Total Operating Disbursements 5,376,622
------------
Total Disbursements 13,093,341
------------
Net Operating Cash Inflow (Outflow) 6,961,025
------------
INTERCOMPANY TRANSFERS
PGW Rcpts. Swept to AMS 8,887,405
AMS (To) / From PGW (11,763,945)
Foreign Subsidiaries -
------------
Total I/C Transfers (2,876,540)
------------
Net Cash Inflow (Outflow) US$4,084,485
============
About Advanced Marketing Services
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.
Lowenstein Sandler PC represents the Official Committee of
Unsecured Creditors. When the Debtors filed for protection from
their creditors, they listed estimated assets and debts of more
than US$100 million. The Debtors' exclusive period to file a
chapter 11 plan expires on Apr. 28, 2007. (Advanced Marketing
Bankruptcy News, Issue No. 10; Bankruptcy Creditors' Service
Inc., http://bankrupt.com/newsstand/or 215/945-7000).
BERRY PLASTICS: S&P Affirms B Corp. Rating on Covalence Merger
--------------------------------------------------------------
Standard & Poor's Ratings Services took these rating actions on
the merger of Berry Plastics Group Inc. and Covalence Specialty
Materials Holding Corp:
-- affirmed the 'B' corporate credit rating on Berry Plastics
Holding Corp., a wholly owned subsidiary of Berry Plastics
Group, which is now the obligor of substantially all the
company's debt.
-- affirmed the 'B+' senior secured debt rating and '1'
recovery rating on Berry Plastics Holding's US$1.2 billion
term loan C due 2015. The working name of the borrower
had been New Berry Holding at the time the ratings were
assigned.
-- affirmed the 'CCC+' subordinated debt rating on Berry
Plastics Holding's US$265 million 10.25% senior
subordinated notes due 2016. These notes were formerly
obligations of Covalence Specialty Materials Corp.
-- raised the rating on Berry Plastic Holding's US$750
million second-priority senior secured notes due 2014
to 'B-' from 'CCC+' and removed the rating from
CreditWatch where it had been placed with positive
implications when the transaction was announced. The
recovery rating on these notes has been revised to '3'
from '4'.
-- withdrew Covalence's corporate credit rating as well as
the ratings on Berry Plastics Group's and Covalence's
former credit facilities, which were refinanced.
The outlook is stable. At the time of the merger, total debt
(adjusted to include capitalized operating leases and unfunded
postretirement liabilities) was about US$2.7 billion.
"The ratings reflect the strength of the merged business and the
potential that the company will improve its highly aggressive
financial profile to acceptable levels within the next couple of
years," said Standard & Poor's credit analyst Liley Mehta.
With more than US$3.2 billion in annual sales pro forma for the
merger, Berry Plastics Group ranks among the largest packaging
companies in North America, with leading positions in both the
rigid and flexible plastic packaging segments. While primarily
domestic in terms of geographic coverage, the company boasts an
impressive operating footprint with approximately 65
manufacturing facilities throughout the U.S., serving an array
of end markets and customers. The concentration of customers
has declined somewhat through the merger, and the combined
administrative and manufacturing operations will likely present
opportunities to realize synergies. However, the large scale of
the businesses to be integrated presents meaningful execution
risk and operating uncertainty until tangible progress is
achieved.
Based in Evansville, Indiana, Berry Plastics Corporation --
http://www.berryplastics.com/-- manufactures and markets rigid
plastic packaging products. Berry Plastics provides a wide
range of rigid open top and rigid closed top packaging as well
as comprehensive packaging solutions to over 12,000 customers,
ranging from large multinational corporations to small local
businesses. The company has 25 manufacturing facilities
worldwide and more than 6,800 employees and 25 manufacturing
facilities in the United States, Mexico, Canada, Europe and
China. Net sales for the twelve months ended Dec. 30, 2006
amounted to approximately US$1.4 billion.
CLEAR CHANNEL: Raised Bid Prompts S&P to Cut Credit Rating to B+
----------------------------------------------------------------
Standard & Poor's Ratings Services lowered its corporate credit
and senior unsecured debt ratings on Clear Channel
Communications Inc. to 'B+' from 'BB+'.
The ratings remain on CreditWatch with negative implications,
where they were placed on Oct. 26, 2006, following the company's
announcement that it was exploring strategic alternatives to
enhance shareholder value.
The downgrade and continuing negative CreditWatch implications
are based on the company's confirmation that the private equity
consortium jointly led by Bain Capital Partners LLC and
Thomas H. Lee Partners L.P. has raised its offer for the company
to US$39.00 per share, from its previous bid of US$37.60. The
proposed total transaction value is now approximately
US$27.1 billion, assuming the inclusion of roughly US$7.7
billion of existing debt.
"The downgrade stems from our conclusion that if the proposed
transaction goes through, credit measures will be heavily
burdened by buyout debt," said Standard & Poor's credit analyst
Michael Altberg. "Although the company has not announced
specific financing terms of the new capital structure, we would
expect a marked increase in leverage if the deal is
consummated."
As Standard & Poor's gets the opportunity to review the proposed
capital structure and the financial and operating strategies of
the new owners, it could further lower the ratings. If the deal
is not approved by shareholders, Standard & Poor's would revisit
the rating at that time.
The merger is subject to approval by Clear Channel's
shareholders and needs two-thirds approval to pass, with
abstentions counting against the deal. A shareholder vote has
been scheduled for May 8.
S&P will continue to monitor developments surrounding the
proposed merger and will review the business and financial
strategies, as well as post-transaction liquidity, in
determining the new rating.
About Clear Channel Communications
Based in San Antonio, Texas, Clear Channel Communications Inc.
-- http://www.clearchannel.com/-- (NYSE:CCU) is a global leader
in the out-of-home advertising industry with radio and
television stations and outdoor displays in various countries
around the world. Aside from the U.S., the company operates in
11 countries -- Norway, Denmark, the United Kingdom, Singapore,
China, the Czech Republic, Switzerland, the Netherlands,
Australia, Mexico and New Zealand.
DELTA AIR: Judge Hardin Approves US$2.5 Billion Exit Financing
--------------------------------------------------------------
The Hon. Adlai S. Hardin of the U.S. Bankruptcy Court for the
Southern District of New York authorized Delta Air Lines Inc.
and its debtor-affiliates to enter into a commitment letter and
related fee letters, with certain financing parties.
The Court stated that all amounts due and owing to any of the
Financing Parties under the Commitment Letter and the Fee
Letters, including the fees and expense reimbursements provided
and any indemnity claims arising thereunder, will be entitled to
priority as administrative expense claims under Sections 503(b)
and 507(a)(2), whether or not the Senior Credit Facilities are
consummated.
New Credit Facility
The Debtors' Joint Plan of Reorganization provides that the
Debtors, as reorganized, will enter into a US$2.5 billion credit
facility, and pay certain fees to the arrangers or bookrunners
and the first-lien administrative agent under that new credit
facility.
As a condition to effectiveness, the Plan requires that:
(a) the New Credit Facility has been executed and delivered
by all of the parties;
(b) all conditions precedent to the consummation of the New
Credit Facility have been waived or satisfied in
accordance with the terms; and
(c) funding pursuant to the New Credit Facility has occurred.
The Debtors relate that they have negotiated the term sheet
describing the New Credit Facility with certain financing
parties. The Official Committee of Unsecured Creditors has
approved the Term Sheet.
The Term Sheet will be attached as an appendix to the disclosure
statement describing the Debtors' Plan.
Along with the Term Sheet, the Debtors also negotiated:
(a) a commitment letter with the Financing Parties:
* J.P. Morgan Securities Inc.,
* JPMorgan Chase Bank, N.A.,
* Lehman Brothers Inc.,
* Lehman Commercial Paper Inc.,
* UBS Securities LLC,
* UBS Loan Finance LLC,
* Goldman Sachs Credit Partners L.P.,
* Merrill Lynch Commercial Finance Corp.,
* Barclays Capital, the investment banking division of
Barclays Bank PLC, and
* Barclays Bank PLC;
(b) an arrangers fee letter between Delta and the Financing
Parties; and
(c) an administrative agent fee letter with JPMCB.
Overview of the Credit Facility
Pursuant to the Commitment Letter, the Financing Parties have
committed to provide to the Debtors senior credit facilities in
an aggregate amount of US$2.5 billion comprising:
(i) first-lien revolving credit facility of US$1 billion;
(ii) first-lien synthetic revolving credit and letter of
credit facility of US$500 million; and
(iii) a second-lien term loan facility of US$1 billion.
Subject to certain conditions, each of JPMCB, LCPI, UBS Finance,
GSCP, Merrill Lynch and Barclays Bank have committed to provide
one-sixth of the entire amount of the US$2.5 billion Senior
Credit Facilities.
The proceeds of the Senior Credit Facilities will be used to:
(a) repay outstanding loans and advances under:
* the Amended and Restated Secured Super-Priority
Debtor in Possession Credit Agreement dated as of
March 27, 2006; and
* the Second Amended and Restated Advance Payment
Supplements to Delta's Co-Branded Credit Card Program
Agreement and Membership Rewards Agreement dated as
of March 27, 2006;
(b) pay certain accrued administrative expenses; and
(c) finance working capital and for other general corporate
purposes.
Terms of the Credit Facilities
The salient terms of the Senior Secured Credit Facilities are:
Borrowers: Delta Air Lines, Inc.
Guarantors: Delta's domestic subsidiaries.
Co-Lead Arrangers: (a) For the First-Lien Facilities, JPMorgan
Securities and Lehman Brothers; and
(b) For the Tranche B Term Facility, Goldman
Sachs and Merrill Lynch.
Joint Bookrunners: (a) For the First-Lien Facilities, JPMorgan
Securities, Lehman Brothers and UBS
Securities; and
(b) For the Tranche B Term Facility, Goldman
Sachs, Merrill Lynch and Barclays
Capital.
Syndication
Agents: UBS Securities for First-Lien Facilities and
Barclays Capital for Tranche B Term Facility.
Administrative
Agents and
Collateral Agents: JPMCB for the First-Lien Facilities and
Goldman Sachs for the Tranche B Term
Facility.
Lenders: A syndicate of banks, financial institutions
and other entities, including JPMCB and
Goldman Sachs, arranged by the applicable
Co-Lead Arrangers and reasonable acceptable
to Delta.
Terms of
Revolving
Facility: Revolving Loans will be repaid in full, and
the commitments will terminate five years
after the Closing Date.
Amortization and
Maturity of
Tranche A Term
Facility: The Tranche A Term Facility will be repaid in
an amount equal to 1% of the original
principal amount of the Tranche A Term Loans
annually, with the balance of the Loans due
and payable on the fifth anniversary of the
Closing Date.
Amortization and
Maturity of
Tranche A Term
Facility: The Tranche B Term Facility will be repaid in
an amount equal to 1% of the original
principal amount of the Tranche B Term Loans
annually, with the balance of the Loans due
and payable on the fifth anniversary of the
Closing Date.
Collateral: Delta and the guarantors will pledge, and
grant security interest on or mortgages with
respect to all of the property securing the
General Electric Capital Corp.-arranged DIP
financing on a first priority basis to the
Collateral Agents to secure all of their
obligations.
The First-Lien Facilities, as well as
designated hedging obligations, will be
secured by a first priority security interest
in the Collateral.
Commitment Fee: 0.50% per annum on the average unused amount
of the Revolving Facility, payable quarterly
in arrears during the period commencing on
the Closing Date and through the Revolving
Facility Maturity Date.
If Delta receives a corporate family rating
of B1 or higher from Moody's and a corporate
credit rating of B+ or higher from Standard &
Poor's Ratings Services, in each case with
stable outlook, then the commitment fee
percentage will decrease to 0.375%.
Interest Rate
Options: Delta may elect that the Loans comprising
each
borrowing bear interest at a rate per annum
equal to:
(a) the ABR plus the Applicable Margin; or
(b) LIBOR plus the Applicable Margin.
ABR is the higher of:
* the rate of interest publicly announced
by the Administrative Agents as its
prime rate in effect at its principal
office in New York City; and
* the federal funds effective rate plus
0.5%.
LIBOR means the London interbank offered rate
for deposits in U.S. dollars.
Applicable Margin, with respect to the
Revolving Loans and the Tranche A Term Loans:
* 1.25% in the case of ABR Loans, and
* 2.25% in the case of LIBOR Loans.
With respect to the Tranche B Loans,
Applicable Margin is:
* 2.50% in the case f ABR Loans, and
* 3.50% in the case of LIBOR Loans.
If Delta receives a corporate family rating
of B1 or higher from Moody's and a corporate
credit rating of B+ or higher from S&P, with
stable outlook in each case, then the
Applicable Margins will each decrease by
0.25%
Default Interest: Overdue principal payments will bear interest
on demand at 2% above the rate otherwise
applicable thereto. Overdue interest, fees
and other amounts will bear interest at 2%
above the rate applicable for ABR Loans.
Minimum Revolver
Borrowings: US$1,000,000 for direct borrowing of ABR
Loans, and US$5,000,000 for direct borrowing
of LIBOR Loans, with no more than 20
borrowings of LIBOR Loans under the Revolving
Facility outstanding at any one time.
Optional
Prepayments and
Commitment
Reductions: Delta may prepay the Loans and reduce the
commitments in minimum amounts to be agreed
without premium or penalty. Optional
prepayments of the Term Loans will be applied
as directed by Delta. Optional prepayments
of the Term Loans may not be reborrowed.
Mandatory
Prepayments and
Commitment
Reductions: Net proceeds of any sale or other disposition
of any assets constituting Collateral will be
applied to prepay Term Loans and reduce the
commitments under the Revolving Facility, in
each case solely to the extent required to
maintain Collateral Coverage Ratios.
The amounts obtained from the asset sale or
disposition will be applied in this order:
(a) to prepay the Tranche A Tern Loans,
(b) to prepay the Tranche B Term Loans, and
(c) to permanently reduce the commitments
under the Revolving Facility.
Mandatory prepayments of the Term Loans will
be applied to the respective installments
thereof ratably in accordance with the then
outstanding amounts thereof. Mandatory
prepayments of the Term Loans may not be
reborrowed. The Revolving Loans will be
prepaid to the extent the extensions of
credit exceed the amount of the commitments
under the Revolving Facility, after giving
effect to any permanent reduction of the
commitments required in connection with any
sale or disposition.
Financial covenants will be limited to:
(a) Minimum Fixed Charge Coverage Ratio. Delta will not
permit its consolidated Fixed Charge Coverage Ratio in
each case for the 12-month period ending as of the last
day of each fiscal quarter ending in the months below to
be less than the corresponding ratio:
March 2007 1.00:1.00
June 2007 1.00:1.00
September 2007 1.00:1.00
December 2007 1.00:1.00
March 2008 and 1.20:1.00
thereafter for each
fiscal quarter ending
through the Tranche B
Term Facility Maturity Date
(b) Minimum Unrestricted Cash Reserves. Delta will not
permit its and its subsidiaries' reserve of unrestricted
cash, unrestricted cash equivalents and unencumbered
short-term investments that are in accounts subject to
shifting account control agreements to be less than
US$750,000,000 at any time;
(c) Minimum Collateral Coverage Ratios. Delta will not
permit the ratio of aggregate current market value of the
Eligible Collateral plus the Cure Collateral to:
* the sum of the aggregate outstanding exposure under
the First-Lien Facilities and any designated hedge
obligations to be less than 1.75:1.00; or
* the sum of the aggregate outstanding amount of the
Tranche B Term Loans plus the First-Lien Obligations
at any time to be less than 1.25:1.00.
However, if upon the delivery of an appraisal, it is
determined that Delta will not be in compliance with
either minimum collateral coverage covenant, Delta will:
* deliver Cure Collateral to the Collateral Agents; or
* prepay the Loans, in each case in an amount
sufficient to enable Delta to comply with the minimum
collateral coverage covenants.
Delta may obtain a release of the lien on an asset
constituting Collateral, provided that:
(i) no Event of Default have occurred and be
continuing,
(ii) either:
(a) after giving effect to the release, the
remaining Eligible Collateral will continue to
satisfy the minimum collateral coverage
covenants;
(b) Delta will prepay the Loans in an amount
required to comply with the minimum collateral
coverage covenants; or
(c) Delta will deliver Cure Collateral to the
Collateral Agents in an amount required to
comply with the minimum collateral coverage
covenants; and
(iii) Delta will deliver an officer's certificate
demonstrating compliance with the minimum
collateral coverage covenants after the release.
The Debtors have also agreed to pay certain related fees as set
forth in the Fee Letters. The Arrangers Fee Letter requires the
payment of certain upfront fees on the closing date of the
Senior Credit Facilities. In addition, the Administrative Agent
Fee Letter provides for the payment of certain administrative
agency fees that are payable at certain, specified time
intervals, with the first payment date being the Closing Date.
The Fee Letters do not require the payment of any fees in
advance of the Closing Date.
Simpson Thacher & Bartlett LLP represents the Co-Lead Arrangers,
the Administrative Agents and the Collateral Agents.
A full-text copy of the Commitment Letter and the Credit
Facilities Term Sheet is available for free at:
http://ResearchArchives.com/t/s?1da7
About Delta Air
Headquartered in Atlanta, Georgia, Delta Air Lines (OTC:DALRQ)
-- http://www.delta.com/-- is the world's second-largest
airline in terms of passengers carried and the leading U.S.
carrier across the Atlantic, offering daily flights to 502
destinations in 88 countries on Delta, Song, Delta Shuttle, the
Delta Connection carriers and its worldwide partners. The
Company and 18 affiliates filed for chapter 11 protection on
Sept. 14, 2005 (Bankr. S.D.N.Y. Lead Case No. 05-17923).
Marshall S. Huebner, Esq., at Davis Polk & Wardwell, represents
the Debtors in their restructuring efforts. Timothy R. Coleman
at The Blackstone Group L.P. provides the Debtors with financial
advice. Daniel H. Golden, Esq., and Lisa G. Beckerman, Esq., at
Akin Gump Strauss Hauer & Feld LLP, provide the Official
Committee of Unsecured Creditors with legal advice. John
McKenna, Jr., at Houlihan Lokey Howard & Zukin Capital and James
S. Feltman at Mesirow Financial Consulting, LLC, serve as the
Committee's financial advisors. As of June 30, 2005, the
Company's balance sheet showed US$21.5 billion in assets and
US$28.5 billion in liabilities. (Delta Air Lines Bankruptcy
News, Issue No. 68; Bankruptcy Creditors' Service, Inc.,
http://bankrupt.com/newsstand/or 215/945-7000)
Plan Update
The Debtors filed a chapter 11 plan of reorganization and
disclosure statement explaining that plan on Dec. 19, 2007.
On Jan 19, 2007, they filed revisions to the plan and disclosure
statement, and submitted further revisions to the plan on
Feb. 2, 2007. On Feb. 7, 2007, the Court approved the Debtors'
disclosure statement. The hearing to consider confirmation the
Debtors' plan is scheduled for today.
DELTA AIR: Files Joint Plan of Reorganization Supplements
---------------------------------------------------------
Delta Air Lines, Inc., and its debtor-affiliates delivered to
the U.S. Bankruptcy Court for the Southern District of New York
supplements to their Joint Plan of Reorganization.
The Plan Supplements are:
(i) a schedule of "Old Aircraft Securities" to be cancelled,
with certain exceptions, on the Effective Date pursuant
to Section 6.6 of the Plan. A full-text copy of the Old
Aircraft Securities schedule is available for free at:
http://ResearchArchives.com/t/s?1da8
(ii) a list of executory contracts and unexpired leases that
the Debtors intend to assume on the Effective Date, a
full-text copy of which is available for free at:
http://ResearchArchives.com/t/s?1da9
(iii) a list of executory contracts and unexpired leases that
the Debtors intend to reject on the Effective Date, a
full-text copy of which is available for free at:
http://ResearchArchives.com/t/s?1daa
(iv) a list, with supplemental lists, of deferred executory
contracts and unexpired leases relating to the Debtors'
aircraft equipment. A full-text copy of the list is
available for free at:
http://ResearchArchives.com/t/s?1dab
(v) a list of the Debtors' Postpetition Aircraft Agreements,
a full-text copy of which is available for free at:
http://ResearchArchives.com/t/s?1dac
(vi) a list of indicative particular Causes of Action that the
Debtors retain. A full-text copy of Retained Causes of
Action List is available for free at:
http://ResearchArchives.com/t/s?1dad
The Plan Supplements also include a disclosure that, as of
March 30, 2007, there are no avoidance actions that the Debtors
will retain on the Effective Date.
However, the Debtors specify that they remain free, subject to
the terms of the Plan, to supplement and amend the list of the
Retained Avoidance Actions or Causes of Actions.
About Delta Air
Headquartered in Atlanta, Georgia, Delta Air Lines (OTC:DALRQ)
-- http://www.delta.com/-- is the world's second-largest
airline in terms of passengers carried and the leading U.S.
carrier across the Atlantic, offering daily flights to 502
destinations in 88 countries on Delta, Song, Delta Shuttle, the
Delta Connection carriers and its worldwide partners. The
Company and 18 affiliates filed for chapter 11 protection on
Sept. 14, 2005 (Bankr. S.D.N.Y. Lead Case No. 05-17923).
Marshall S. Huebner, Esq., at Davis Polk & Wardwell, represents
the Debtors in their restructuring efforts. Timothy R. Coleman
at The Blackstone Group L.P. provides the Debtors with financial
advice. Daniel H. Golden, Esq., and Lisa G. Beckerman, Esq., at
Akin Gump Strauss Hauer & Feld LLP, provide the Official
Committee of Unsecured Creditors with legal advice. John
McKenna, Jr., at Houlihan Lokey Howard & Zukin Capital and James
S. Feltman at Mesirow Financial Consulting, LLC, serve as the
Committee's financial advisors. As of June 30, 2005, the
Company's balance sheet showed US$21.5 billion in assets and
US$28.5 billion in liabilities. (Delta Air Lines Bankruptcy
News, Issue No. 68; Bankruptcy Creditors' Service, Inc.,
http://bankrupt.com/newsstand/or 215/945-7000)
Plan Update
The Debtors filed a chapter 11 plan of reorganization and
disclosure statement explaining that plan on Dec. 19, 2007.
On Jan 19, 2007, they filed revisions to the plan and disclosure
statement, and submitted further revisions to the plan on
Feb. 2, 2007. On Feb. 7, 2007, the Court approved the Debtors'
disclosure statement. The hearing to consider confirmation the
Debtors' plan is scheduled for today.
DELTA AIR: Various Parties Object to Plan Confirmation
------------------------------------------------------
Various tax authorities, aircraft creditors, and other parties-
in-interest delivered to the United States Bankruptcy Court for
the Southern District of New York their objections to the
confirmation of Delta Air Lines Inc. and its debtor-affiliates'
Joint Plan of Reorganization.
Among the objectors are:
(a) the Ad Hoc Committee of Kenton County Bondholders,
holders of the US$419,000,000 Kenton County Airport
Board, Special Facilities Revenue Bonds, 1992 Series A,
and the US$19,000,000 Kenton County Airport Board,
Special Facilities Revenue Bonds, 1992 Series B issued
pursuant to a trust indenture dated Feb. 1, 1992, between
Kenton County Airport Board, as issuer, Star Bank, N.A.,
as trustee, and guaranteed by Delta Air Lines, Inc.;
(b) a group of aircraft creditors, including, Airline Credit
Opportunities, L.P.; Bank of America, N.A.; Bayerische
Landesbank Girozentrale; and Bear Stearns Investment
Properties, Inc.;
(c) Multnomah County, Oregon, holder of a secured tax claim;
(d) Georgia Department of Revenue, which has claims against
the Debtors for unpaid Georgia withholding taxes, sales
and use taxes, corporate net worth taxes, corporate
income taxes, interest and penalties in the total amount
of US$62,938,048;
(e) Local Texas Tax Authorities Bexar County, Dallas County,
El Paso, Harris County, Irving ISD, Nueces County and
Tarrant County, and the City of Memphis;
(f) Wachovia Financial Services, Inc., formerly known as
First Union Commercial Corporation;
(g) U.S. Bank National Association and U.S. Bank Trust
National Association, as indenture trustee and pass
through trustee;
(h) Ohio Department of Taxation;
(i) Wilmington Trust Company; and
(j) The Arizona Department of Revenue.
The Kenton County Bondholders Committee asserts that the Plan
cannot be confirmed pursuant to Section 1129 of the Bankruptcy
Code:
* The Plan fails to specify the treatment that the claims
held by the Bondholders in Class 4 (Unsecured Claims)
will receive under the Plan, which violates Section
1123(a)(3), and renders the Plan unconfirmable under
Section 1129(a)(1);
* The Debtors solicited votes on the Plan without
disclosing the terms of the proposed settlement agreement
dated March 8, 2007, with Kenton County Airport Board,
and UMB Bank, N.A., as indenture trustee to the two
facilities revenue bonds. The Proposed Settlement
materially alters recoveries to the Bondholders under the
Plan; thus, the Debtors violated Sections 1127(c) and
1129(a)(2);
* The Bondholders have not agreed to receive less favorable
treatment than the treatment afforded to holders of other
claims in Class 4 (Unsecured Claims), violating Sections
1123(a)(4) and 1129(a)(1);
* The Debtors did not propose the Plan in good faith, given
the circumstances surrounding the execution of the
Settlement Agreement and the timing of the Debtors'
pending Rule 9019 motion to approve it; thus, the Plan
violates Section 1129(a)(3);
* The proposed Plan releases and discharges non-debtor
parties in violation of Sections 524(e) and 1129(a)(1)
and applicable Second Circuit precedent; and
* The Plan does not meet the requirements for confirmation
under section 1129(b) because it unfairly discriminates
against the Bondholders and is not fair and equitable.
Representing Multnomah County, Susan S. Ford, Esq., at Sussman
Shank, LLP, in Portland, Oregon, argues that the Plan fails to
separately classify claims that may be secured by different
property, or, if secured by the same property, with different
rank in priority. The defect is substantial because there may
be multiple liens on aircraft or other transitory property of
the Debtor, some consensual, and some involuntary.
Andrew I. Silfen, Esq., at Arent Fox LLP, in New York,
Wilmington Trust's counsel, asserts that the proposed
distribution scheme violates Section 1123(a)(4) by giving
distributions of materially different character and values to
holders of claims within the same class. He notes that failure
to comply with Section 11234(a)(4) results to a violation of
Section 1129(a)(1), one of the 13 statutory requirements for
confirmation of the Plan.
Among other things, Multnomah County objects to the Plan
provisions categorically disallowing all postpetition interest
or post-effective date interest, because there is no legal basis
for those provisions.
Other tax authorities, including Bexar County, Dallas County, El
Paso, Harris County, Irving ISD, Nueces County and Tarrant
County, and the City of Memphis, assert that the Plan fails to
properly provide for the payment of interest on their claims as
required by Sections 506(b) and 1129(b).
The Georgia Revenue Department and Ohio Department of Taxation
object to the Plan because they cannot determine when payments
on their claims will commence and how frequently the payments
will be made. Section 1129(a)(9)(C) requires that priority tax
claims be paid in "deferred cash payments, over a period not
exceeding six years after the date of assessment of such claim,
of a value, as of the effective date of the plan, equal to the
allowed amount of such claim."
The Arizona Department of Revenue asserts that the Plan's
failure to provide for payment of its postpetition tax claim on
the Plan's effective date violates Section 1129(a)(9)(A). It
also contends that Plan's failure to establish the payment terms
of its priority claim violates Section 1129(a)(9)(C). As
proposed, the Plan, the Department notes, fails to identify if
its priority claim is going to be paid in a single cash
distribution and on what date, if the Department's claim is to
be paid on the fifth and the sixth anniversary of the date of
assessment or other recovery as may be determined by the Court.
The Aircraft Creditors maintain that the Plan is unconfirmable
because it does not specify the manner in which the Debtors will
maintain their distribution reserves for holders of disputed
claims as of the Initial Distribution Date.
The Aircraft Creditors note that the Plan leaves doubt as to
whether disputed claimholders will receive equal treatment to
holders of allowed claims. The Plan cannot be confirmed because
Sections 1123(a)(4) and 1129(a)(1) prohibit disparate treatment
of like claimholders.
Objections to the Debtors' Schedule of Deferred Contracts
Certain parties to the leveraged lease agreements objects to the
Plan's language stating that they may be required to wait for up
to 180 days after the Effective Date for the Debtors' decision
to either reject or assume the executory contracts and unexpired
leases.
The Aircraft Creditors relate that many of them are parties, or
holders of beneficial interests, to numerous executory
agreements and unexpired leases currently listed in the Deferral
Schedule Representing the Aircraft Creditors, Michael J.
Edelman, Esq., at Vedder, Price, Kaufman & Kannholz, P.C., in
New York, argues that the Bankruptcy Code explicitly prohibits
the attempted "deferral" of a debtor-in-possession's decision as
to whether it desires to assume or reject a prepetition
executory agreement or unexpired lease after the confirmation of
a chapter 11 plan.
The Bank of New York, as indenture trustee under certain trust
indentures and security agreements, supports the Aircraft
Creditors' objections.
U.S. Bank notes that the Debtors' schedule of deferred executory
contracts and unexpired leases includes certain agreements in
which no Debtor is a party.
Ira H. Goldman, Esq., at Shipman & Goodwin LLP, in Hartford,
Connecticut, U.S. Bank's counsel, argues that the Debtors have
no authority under the Bankruptcy Code to reject agreements to
which they are not parties. Thus, the Debtors have to revise
the Schedule.
"Old Aircraft Securities" Schedule
Pursuant to prepetition leveraged lease transactions, Wachovia
Financial is an owner participant and sole equity owner of six
Bombardier regional jet aircraft subleased to Comair, Inc.
The Plan includes a schedule of "Old Aircraft Securities" that
the Debtors will cancel, with certain exceptions, on the
Effective Date pursuant to Section 6.6 of the Plan.
Wachovia Financial states that it is not clear what effect, if
any, the language of Section 6.6 of the Plan has on its interest
as Owner Participant in the Leases.
J. Michael Booe, Esq., at Kennedy Covington Lobdell & Hickman,
L.L.P., Charlotte, North Carolina, maintains that Section
1123(b) of the Bankruptcy Code provides that, subject to Section
365, a plan of reorganization may provide for a the assumption,
rejection or assignment of any executory contract. However, the
Plan, if confirmed, defers that decision for Comair for up to
180 days following its Effective Date.
Wachovia objects to that language and its effect to the extent
that Section 6.6 does have any effect its rights under the
Leases.
Objections to Debtors' Proposed Assumption
of Executory Contracts and Unexpired Leases
Various parties-in-interest have objected to the Debtors'
schedule, as supplements to the Plan, enumerating the various
executory contracts and unexpired leases that the Debtors intend
to assume or reject on the Effective Date because, among other
reasons:
(a) the Debtors fail to propose sufficient cure amounts in
connection with the affected contracts or leases;
(b) the Debtors fail to recognize certain agreements as
executory contracts;
(c) the Debtors fail to describe the contracts with
sufficient detail to permit the non-Debtor party to
identify the contracts at issue; or
(d) the non-Debtor party has not consented to the Debtors'
proposed assumption of certain contracts.
Among the objectors to the Debtors' proposed assumption of
certain agreements are:
* Puerto Rico Ports Authority complains that the Schedules
failed to provide the proposed treatment for curing of
arrears that Delta Air Lines, Inc., owed to them on
account of a lease governing Delta's use of Luis Munoz
Marin International Airport in Carolina, Puerto Rico.
* The New Orleans Aviation Board, operator of the Louis
Armstrong New Orleans International Airport, objects to
the classification treatment of its lease with the
Debtors and claims under the Plan because it fails to
Acknowledge the Lease as an executory contract. The Plan
also fails to provide for cure amounts, which it asserts
to be equal to the amounts due under the claims; and
* Cisco Systems, Inc., maintains that the approval of the
Debtors' proposed assumption of Cisco-related contracts
without first identifying the contracts at issue violates
its due process. It denies Cisco an opportunity to
analyze whether the Debtors have a right to assume any
contracts without its express consent.
About Delta Air
Headquartered in Atlanta, Georgia, Delta Air Lines (OTC:DALRQ)
-- http://www.delta.com/-- is the world's second-largest
airline in terms of passengers carried and the leading U.S.
carrier across the Atlantic, offering daily flights to 502
destinations in 88 countries on Delta, Song, Delta Shuttle, the
Delta Connection carriers and its worldwide partners. The
Company and 18 affiliates filed for chapter 11 protection on
Sept. 14, 2005 (Bankr. S.D.N.Y. Lead Case No. 05-17923).
Marshall S. Huebner, Esq., at Davis Polk & Wardwell, represents
the Debtors in their restructuring efforts. Timothy R. Coleman
at The Blackstone Group L.P. provides the Debtors with financial
advice. Daniel H. Golden, Esq., and Lisa G. Beckerman, Esq., at
Akin Gump Strauss Hauer & Feld LLP, provide the Official
Committee of Unsecured Creditors with legal advice. John
McKenna, Jr., at Houlihan Lokey Howard & Zukin Capital and James
S. Feltman at Mesirow Financial Consulting, LLC, serve as the
Committee's financial advisors. As of June 30, 2005, the
Company's balance sheet showed US$21.5 billion in assets and
US$28.5 billion in liabilities. (Delta Air Lines Bankruptcy
News, Issue No. 68; Bankruptcy Creditors' Service, Inc.,
http://bankrupt.com/newsstand/or 215/945-7000)
Plan Update
The Debtors filed a chapter 11 plan of reorganization and
disclosure statement explaining that plan on Dec. 19, 2007.
On Jan 19, 2007, they filed revisions to the plan and disclosure
statement, and submitted further revisions to the plan on
Feb. 2, 2007. On Feb. 7, 2007, the Court approved the Debtors'
disclosure statement. The hearing to consider confirmation the
Debtors' plan is scheduled for today.
DELTA AIR: Incurs US$130 Million Net Loss in 2007 First Quarter
---------------------------------------------------------------
Delta Air Lines reported results for the quarter ended
March 31, 2007. Key points include:
* Delta's operating profit for the March 2007 quarter was
US$155 million, the company's fourth consecutive quarterly
operating profit.
* Delta's first quarter net loss was US$130 million.
Excluding reorganization items, the net loss was
US$6 million.
* On April 16, 2007, Delta announced its creditors
overwhelmingly support the company's plan of
reorganization, with more than 95 percent of ballots cast
in favor of the plan.
* As of March 31, 2007, Delta had US$4.0 billion in cash,
cash equivalents and short-term investments, of which
US$2.9 billion was unrestricted.
Delta reported a net loss of US$130 million in the first quarter
of 2007, compared to a net loss of US$2.1 billion in the first
quarter of 2006. Excluding the reorganization and special items
described below, the net loss was US$6 million in the first
quarter of 2007, a US$350 million improvement compared to the
net loss of US$356 million in the first quarter of 2006. For
the March 2007 quarter, Delta's operating income was US$155
million and its operating margin was 3.7 percent -- an
improvement of more than 8 points over the prior year period,
excluding special items.
"The past 18 months have been challenging times and Delta people
rose to that challenge. As these results show, much more has
been done than improving our financial structure. Delta has
fundamentally transformed into a thriving industry leader," said
Gerald Grinstein, Delta's chief executive officer. "We are
stronger -- financially, operationally, and in spirit -- and
Delta is ready to return to its traditional leadership position
in this highly competitive industry."
Financial Performance
Strong passenger demand, combined with Delta's network
restructuring and revenue management initiatives, drove
improvements in the company's revenue performance, with revenue
strength seen in all geographic markets. Delta's total
international passenger unit revenue grew 6.4 percent year over
year excluding special items, with the Latin and trans-Atlantic
markets each seeing greater than 5 percent PRASM improvement on
32 and 22 percent capacity increases, respectively. Domestic
markets also showed solid PRASM performance with domestic PRASM
up 6.3 percent excluding special items on 5.4 percent lower
capacity. With the change in mix of domestic and international
flying, Delta's consolidated PRASM increased 4.5 percent in the
March 2007 quarter compared to the same period in 2006,
excluding special items.
Delta's length of haul adjusted PRASM increased 6.1 percent for
the first quarter 2007 versus first quarter 2006. This increase
was 4 points higher than the industry average PRASM (excluding
Delta) increase of 2.1% over the same period.
Additionally, Delta continued to generate cost reductions from
its restructuring. For the March 2007 quarter, Delta's
operating expenses decreased 2.3 percent, or US$94 million,
despite a 2.0 percent increase in capacity, compared to the
March 2006 quarter, excluding special items. For the same
period, non-operating expenses decreased 20.3 percent, or US$41
million, due to lower interest expense from lower debt levels
and mark-to-market gains on fuel hedges. Delta's mainline unit
costs in the first quarter of 2007 decreased by 6.3 percent
compared to the first quarter of 2006, excluding special items.
Excluding fuel and special items, mainline unit costs decreased
8.7 percent over the prior year period.
Delta's March quarter 2006 results included US$1.7 billion in
non-cash charges for reorganization and special items.
Including those items, March 2007 quarter PRASM increased 7.1
percent, operating expenses decreased 5.1 percent (or US$215
million), and mainline unit costs decreased 9.8 percent, as
compared to the March 2006 quarter.
At March 31, 2007, Delta had US$4.0 billion in cash, cash
equivalents and short-term investments, of which US$2.9 billion
was unrestricted. During the March 2007 quarter, Delta
generated US$461 million in free cash flow, after a US$50
million contribution to its defined benefit pension plan and
more than US$150 million in capital expenditures to reinvest in
its business.
"Our financial performance this quarter -- both operating margin
improvement and liquidity -- exceeded expectations under our
plan," said Edward H. Bastian, Delta's executive vice president
and chief financial officer. "As we emerge from bankruptcy, we
are well positioned to build on the momentum of our
restructuring with best-in-class costs, improving revenue
performance, a strong balance sheet, and the premiere workforce
in the industry."
Operational Performance
In the March 2007 quarter, despite severe weather in the
Northeast, Delta employees worked together to deliver a DOT on
time arrival rate of 78.1 percent and completion factor of 98.0
percent for the quarter. Delta employees earned Shared Reward
payments in the quarter in recognition of the strong performance
in on time arrival rate and completion factor, as well as
customer satisfaction.
"In overcoming the weather challenges this quarter, Delta people
stepped to the plate to deliver both industry leading
operational performance and the highest level of service to our
customers," said Jim Whitehurst, Delta's chief operating
officer. "As part of our customer service commitment this year,
we will continue to improve our facilities, technology and
processes to ensure we deliver an even better travel
experience."
Fuel Hedging
Delta recorded US$18 million in net charges for settled fuel
hedge contracts for the March 2007 quarter. These charges are
reflected in aircraft fuel expense. In addition, in the March
2007 quarter, the company recorded US$24 million in gains
associated with the ineffective portion of fuel hedges in other
expense (income).
Restructuring Progress
On Feb. 7, 2007, the Bankruptcy Court, with no creditors
objecting, approved Delta's Disclosure Statement and authorized
the company to begin soliciting approval from its creditors for
the Plan of Reorganization. The unofficial vote tally announced
on April 16, 2007, showed overwhelming creditor support with
more than 95% of ballots cast in favor, which was confirmed in a
filing with the Bankruptcy Court on April 18, 2007. A
confirmation hearing for the Bankruptcy Court to consider
approval of the Plan of Reorganization has been scheduled for
April 25, 2007.
Reorganization and Special Items
In the first quarter of 2007, Delta recorded US$124 million in
charges for reorganization items. These charges relate
primarily to allowed general unsecured prepetition claims
granted to several contract carriers in Delta's Chapter 11
proceedings in connection with amendments to their contract
carrier agreements.
In the first quarter of 2006, Delta recorded US$1.7 billion in
charges for reorganization items and accounting adjustments,
including:
(1) a US$1.4 billion charge for reorganization items,
primarily reflecting estimated pre-petition bankruptcy
claims for the restructuring of aircraft financing
arrangements and
(2) a US$310 million net charge for certain accounting
adjustments.
Delta's Current Common Stock
Holders of Delta's current common stock (ticker symbol DALRQ on
the over-the-counter market) will receive no value under Delta's
Plan of Reorganization, which is subject to confirmation by the
Bankruptcy Court at a hearing on April 25, 2007. The company
has recently provided the Depository Trust Corporation the
required notice to have the current stock cancelled on April 30,
2007, the assumed effective date for Delta's Plan.
About Delta Air
Headquartered in Atlanta, Ga., 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 USUS$21.5 billion in assets and
USUS$28.5 billion in liabilities. (Delta Air Lines Bankruptcy
News, Issue No. 66; Bankruptcy Creditors' Service, Inc.,
http://bankrupt.com/newsstand/or 215/945-7000) (Delta Air
Lines Bankruptcy News, Issue No. 66; Bankruptcy Creditors'
Service, Inc., http://bankrupt.com/newsstand/or 215/945-7000)
Plan Update
The Debtors filed a chapter 11 plan of reorganization and
disclosure statement explaining that plan on Dec. 19, 2007.
On Jan 19, 2007, they filed revisions to the plan and disclosure
statement, and submitted further revisions to the plan on
Feb. 2, 2007. On Feb. 7, 2007, the Court approved the adequacy
of the Debtors' disclosure statement. The hearing to consider
confirmation the Debtors' plan is scheduled for today.
GENERAL MOTORS: Wagoner Sees Hope Despite Delay in Delphi's Exit
----------------------------------------------------------------
General Motors Corp.'s chief executive officer Rick Wagoner
remains positive that Delphi Corp. can emerge from bankruptcy
despite the delay caused by a prospective investor's likely
rejection of a deal to invest US$3.4 billion in the bankrupt
auto parts supplier.
"We're optimistic," Mr. Wagoner was quoted as saying by Jeff
Green of Bloomberg News in an interview in Shanghai Friday last
week.
GM Chief Financial Officer Fritz Henderson was also cited by Mr.
Green as saying that "GM is . . . committed to being part of
trying to find a solution to Delphi's exit."
GM, Bloomberg says, spun Delphi off in 1999 and still uses the
company as a source for air bags, anti-lock brakes, steering
components, air conditioners and other parts. The automaker
agreed as part of the spinoff to cover retirement costs for
former GM union workers if Delphi could not afford the expenses,
the source adds.
Free press business writer Katie Merx relates that Delphi's key
investor, Cerberus Capital Management LP, is expected to
withdraw its plan to invest in Delphi after the two sides
disagreed on how much the auto supplier would be worth when it
emerges from Chapter 11 protection.
In a press statement dated April 19, 2007, Delphi confirmed that
it anticipates negotiating changes to an equity purchase and
commitment agreement it entered into in December 2006 with its
plan investors -- affiliates of Appaloosa Management LP,
Cerberus, and Harbinger Capital Partners Master Fund I Ltd., as
well as Merrill Lynch & Co. and UBS Securities LLC.
Delphi said it also anticipates negotiating an amendment to a
related plan framework support agreement it also entered into in
December 2006, with the plan investors and GM, which outlined
the expected treatment of the company's stakeholders in its
anticipated plan of reorganization.
According to Delphi, any changes would be primarily as a result
of addressing differences in views regarding the company's
reorganization enterprise value among the Plan Investors, GM,
the company's statutory creditors' and equity committees and the
Company.
Delphi said it expects that under amended framework agreements,
Appaloosa, Harbinger, Merrill Lynch and UBS will continue to
participate as Plan Investors (together with possible additional
investors that may include members of the Statutory Committees),
and that Cerberus may participate in the company's exit
financing, as part of a competitive process, but not as a plan
investor.
Delphi is also hopeful that GM will support amended framework
agreements and will be a party to any revised Plan Framework
Support Agreement.
About Delphi Corp.
Headquartered in Troy, Mich., Delphi Corporation (OTC: DPHIQ) --
http://www.delphi.com/-- is the single largest global supplier
of vehicle electronics, transportation components, integrated
systems and modules, and other electronic technology. The
company's technology and products are present in more than 75
million vehicles on the road worldwide. The company filed for
chapter 11 protection on Oct. 8, 2005 (Bankr. S.D.N.Y. Lead Case
No. 05-44481). John Wm. Butler Jr., Esq., John K. Lyons, Esq.,
and Ron E. Meisler, Esq., at Skadden, Arps, Slate, Meagher &
Flom LLP, represent the Debtors in their restructuring efforts.
Robert J. Rosenberg, Esq., Mitchell A. Seider, Esq., and Mark A.
Broude, Esq., at Latham & Watkins LLP, represents the Official
Committee of Unsecured Creditors. As of Aug. 31, 2005, the
Debtors' balance sheet showed US$17,098,734,530 in total assets
and US$22,166,280,476 in total debts. Delphi's exclusive plan-
filing period expires on July 31, 2007.
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 for 76 years. GM currently employs about 280,000 people
around the world. GM manufactures its cars and trucks in 33
countries. In 2006, nearly 9.1 million GM cars and trucks were
sold globally under these brands: Buick, Cadillac, Chevrolet,
GMC, GM Daewoo, Holden, HUMMER, Opel, Pontiac, Saab, Saturn and
Vauxhall.
* * *
As reported in the Troubled Company Reporter on Dec. 15, 2006,
Standard & Poor's Ratings Services affirmed its 'B' corporate
credit rating and other ratings on General Motors Corp. and
removed them from CreditWatch with negative implications, where
they were placed March 29, 2006. S&P said the outlook is
negative.
As reported in the Troubled Company Reporter on Nov. 14, 2006,
Moody's Investors Service assigned a Ba3, LGD1, 9% rating to the
US$1.5 billion secured term loan of General Motors Corp.
As reported in the Troubled Company Reporter on Nov. 14, 2006,
Moody's Investors Service assigned a Ba3, LGD1, 9% rating to the
US$1.5 billion secured term loan of General Motors Corp.
ITRON INC: Completes EUR800-Million Acquisition of Actaris
----------------------------------------------------------
Itron Inc. completed the acquisition of Actaris Metering Systems
for EUR800 million plus the retirement of debt, or US$1.7
billion.
"We are delighted to announce the completion of the Actaris
acquisition," said LeRoy Nosbaum, chairman and CEO. "In talking
with customers, investors and employees over the past two months
it is apparent that this is the right acquisition at the right
time."
Actaris is a leader in electricity, gas and water metering,
primarily outside of North America. Itron is the leading
supplier of AMR systems and electricity meters in North America.
The combined company will be one of the largest electricity, gas
and water metering companies in the world. This acquisition
will allow Actaris to offer Itron's AMR and advanced metering
infrastructure (AMI) technologies, software and systems
expertise to customers outside of North America, and expand
Actaris gas and water meter opportunities in North America. The
combined company will have more than 8,000 utility customers, 33
manufacturing facilities, customers in more than 60 countries
and have more than 8,500 employees.
The acquisition was financed by a US$1.2 billion senior secured
credit facility from UBS Investment Bank. The facility is
comprised of:
-- a US$605 million first lien U.S. denominated term loan;
-- a EUR335 million first lien Euro denominated term loan;
-- a GBP50 million first lien Sterling denominated term loan;
and
-- a US$115 million multicurrency revolving line-of-credit,
which was undrawn at close.
Malcolm Unsworth, Itron's former Vice President of Hardware
Solutions, has moved to Brussels to assume the day-to-day
operations of the company as Actaris' Senior Vice-President and
Chief Operating Officer. Actaris will continue to operate
electric, gas and water businesses. Itron will report financial
results for Actaris as a standalone business with these three
operating segments, in addition to reporting financial results
for Itron's previously established hardware and software
segments with sales and operations primarily concentrated in
North America. Philip Mezey, Itron's former Vice President of
Software Solutions, will become Senior Vice President and Chief
Operating Officer of Itron's North American operations.
Itron will announce financial results for the first quarter of
2007 on May 2, 2007 and during that call will discuss the
Actaris transaction in more detail.
"We are excited to complete this transaction so quickly," said
Nosbaum. "The combination of Itron and Actaris will create
opportunities for both companies, for our customers and for our
investors and we are looking forward to making the most of those
opportunities."
About Actaris
Actaris Metering Systems -- http://www.actaris.com/-- is a
world leader in the design and manufacture of meters and
associated systems for the electricity, gas, water and heat
markets, providing innovative products and systems that
integrate the latest technologies to meet the evolving needs of
public or private energy and water suppliers, utility services
and industrial companies worldwide. Actaris is active in more
than 30 countries, employs approximately 6,000 people in 60
locations and has 30 manufacturing sites worldwide. The company
has a cumulative installed base of some 300 million electricity,
gas and water meters throughout the world.
About Itron
Itron (NASDAQ:ITRI) -- http://www.itron.com/-- is a leading
technology provider and critical source of knowledge to the
global energy and water industries. Nearly 3,000 utilities
worldwide rely on Itron's award-winning 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.
Itron maintains operations in Canada, Qatar, Mexico, Taiwan,
France and Australia, The Netherlands, and the United Kingdom.
* * *
In a Troubled Company Reporter-Europe report on March 22,
Moody's Investors Service downgraded the corporate family rating
of Itron Inc to B1 from Ba3, concluding the review process
initiated on Feb. 27.
Moody's also assigned a Ba3 rating to the new senior first-lien
multi-currency credit facilities and downgraded the existing
senior subordinated notes to B3.
KRISPY KREME: Incurs US$42.2 Million Net Loss in Fiscal 2007
------------------------------------------------------------
Krispy Kreme Doughnuts Inc. reported a fiscal 2007 net loss of
US$42.2 million, as compared with a net loss of US$135.8 million
in fiscal 2006. Impairment charges and lease termination costs
were US$12.5 million and US$55.1 million, in fiscal 2007 and
2006, respectively, and litigation settlement costs were
US$16 million compared to US$35.8 million, respectively.
For fiscal 2007, its revenues decreased to US$461.2 million, as
compared with US$543.4 million in fiscal 2006. Company Stores
sales decreased to US$326.2 million, revenues from franchise
operations increased to US$21.1 million and KK Supply Chain
sales to franchise stores decreased to US$113.9 million.
In fiscal 2007 and 2006, the company incurred professional fees,
net of anticipated insurance recoveries, of about US$9 million
and US$31.8 million, respectively, associated with internal and
external investigations, litigation and the interim management
firm engaged by the company in January 2005. The fiscal 2007
amount includes a credit of US$2.3 million recorded in the
fourth quarter resulting from reimbursements from insurance
companies of costs and expenses in excess of amounts previously
estimated.
Fourth Quarter Results
Revenues for the fourth quarter decreased to US$112.2 million,
as compared with US$122.2 million in the fourth quarter of last
year. Company Stores sales decreased to US$79.2 million,
revenues from franchise operations increased to US$5.8 million,
and Krispy Kreme Supply Chain revenues decreased to
US$27.2 million.
Fourth quarter system wide sales decreased from the fourth
quarter of last year. System wide average weekly sales per
store increased from the prior year period to about US$39,500
per store, and Company Store average weekly sales per store
increased to approximately US$54,100 per store.
The net loss for the fourth quarter was US$24.4 million, as
compared with a net loss of US$37.7 million in the comparable
period last year. The net loss for the quarter includes a
charge related to the settlement of litigation of about US$16
million, representing the increase from Oct. 29, 2006, to
Jan. 28, 2007, in the estimated fair value of the securities
issued by the company on March 2, in connection with the
previously announced settlement of the class action litigation
and partial settlement of the shareholder derivative action.
During the quarter, 28 new Krispy Kreme stores, comprised of 12
factory stores and 16 satellites, were opened system wide, and
14 stores, comprised of 9 factory stores and 5 satellites, were
closed. This brings the total number of stores system wide at
year-end to 395, consisting of 296 factory stores and 99
satellites.
"We have made progress during the past year, including resolving
important legal matters, restoring positive cash flow, getting
current with our financials, and closing a new senior secured
credit facility," said Daryl Brewster, president and chief
executive officer of Krispy Kreme Doughnuts, Inc. "Additionally,
we've seen stability in our overall average unit volume,
developed a pipeline for new products and seen growth
internationally utilizing a flexible real estate model."
As of Jan. 28, the company posted total assets of
US$349.5 million and total liabilities of US$270.5 million
resulting to total stockholders' deficit of US$79 million. The
company's December 31 balance sheet also showed strained
liquidity with US$131.8 million in total current assets
available to pay US$134.9 million in total current liabilities.
Accumulated deficit as of Jan. 28 was US$233.2 million, up from
US$191 million as of Jan. 29, 2006.
A full-text copy of the company's annual report is available for
free at http://ResearchArchives.com/t/s?1d80
About Krispy Kreme
Founded in 1937 in Winston-Salem, North Carolina, Krispy Kreme
(NYSE: KKD) -- http://www.krispykreme.com/-- retails doughnuts,
including the company's Hot Original Glazed. There are
currently about 320 Krispy Kreme stores and 80 satellites
operating system wide in 43 U.S., Australia, Canada, Mexico, the
Republic of South Korea and the U.K.
Headquartered in Winston-Salem, North Carolina, Freedom Rings
LLC is a majority-owned subsidiary and franchisee partner of
Krispy Kreme Doughnuts Inc., in the Philadelphia region.
Freedom Rings operates six out of the approximately 360 Krispy
Kreme stores and 50 satellites located worldwide. The company
filed for chapter 11 protection on Oct. 16, 2005 (Bankr. D. Del.
Case No. 05-14268). M. Blake Cleary, Esq., Margaret B.
Whiteman, Esq., and Matthew Barry Lunn, Esq., at Young Conaway
Stargatt & Taylor, LLP, represent the Debtor in its
restructuring efforts. When the Debtor filed for protection
from its creditors, it estimated US$10 million to US$50 million
in assets and debts.
Headquartered in Oak Brook, Illinois, Glazed Investments LLC is
a 97%-owned unit of Krispy Kreme. Glazed filed for chapter 11
protection on Feb. 3, 2006 (Bankr. N.D. Ill. Case No. 06-00932).
The bankruptcy filing will facilitate the sale of 12 Krispy
Kreme stores, as well as the franchise development rights for
Colorado, Minnesota and Wisconsin, for about US$10 million to
Westward Dough, the Krispy Kreme area developer for Nevada,
Utah, Idaho, Wyoming and Montana. Daniel A. Zazove, Esq., at
Perkins Coie LLP represents Glazed in its restructuring efforts.
When Glazed filed for protection from its creditors, it
estimated assets and debts between US$10 million to
US$50 million.
KremeKo Inc., Krispy Kreme's Canadian franchisee, is currently
restructuring under the Companies' Creditors Arrangement Act.
Pursuant to the Court's Initial Order, Ernst & Young Inc. was
appointed as Monitor in KremeKo's CCAA proceedings. The Monitor
is attempting to sell the KremeKo business.
The U.S. District Court for the Middle District of North
Carolina has set Feb. 7, as the hearing date for the final
approval of the terms of the settlement of the shareholder
derivative action entitled Wright v. Krispy Kreme Doughnuts
Inc., et al.
MEGA BRANDS: Names Kathleen Campisano as Chief Marketing Officer
----------------------------------------------------------------
MEGA Brands Inc. has appointed Kathleen Campisano as Executive
Vice-President and Chief Marketing Officer of the Corporation,
effective April 23, 2007. As the Corporation's senior marketing
and brand executive, Ms. Campisano will be responsible for the
strategy, development and management of marketing initiatives
for all brands within MEGA(TM) worldwide, including Mega
Bloks(R), Rose Art(R), Magnetix(R) and Board Dudes(R). In this
capacity, she will work closely with the Corporation's global
business teams on the development and implementation of growth
strategies.
"We are delighted to have Kathleen join our team. She's a
passionate individual with extensive marketing and brand
management experience," stated Vic Bertrand, COO of MEGA Brands.
"Kathleen is the right person to champion our relationship with
consumers and build our global fan base centered around families
who value creativity and child development."
Ms. Campisano has been building brands in executive leadership
roles for over two decades with LeapFrog Enterprises, Fisher
Price and Century Products Company. She will be based in
Livingston, New Jersey.
Montreal, Canada-based Mega Brands Inc. fka Mega Bloks Inc.
-- http://www.megabloks.com/-- distributes a range of toys,
puzzles, and craft-based products worldwide. The company has
offices in Mexico.
* * *
As reported in the Troubled Company Reporter-Latin America on
April 24, 2007, Standard & Poor's Ratings Services placed its
'BB-' long-term corporate credit and bank loan ratings on MEGA
Brands Inc. on CreditWatch with negative implications. The bank
loan's '2' recovery rating was also placed on CreditWatch.
As reported in the Troubled Company Reporter-Latin America on
April 23, 2007, Moody's placed the Ba3 corporate family rating
and other long-term ratings of MEGA Brands, Inc. on review for
possible downgrade after the company announced weaker than
expected results for the fourth quarter of 2006 and for the full
year. The speculative grade liquidity rating was affirmed at
SGL-3
Ratings under review for possible downgrade:
MEGA Brands Inc.
-- Ba3 Corporate Family Rating
MEGA Brands Inc.
-- Ba2 rating on the 5-year revolving credit facility;
LGD 2; 24%
MEGA Blocks US
-- Ba2 rating on the 5-year revolving credit facility;
LGD 2; 24%
MEGA Brands Inc.
-- Ba2 rating on the US$40 million, 5-year term loan A
facility; LGD 2; 24%
MEGA Brands Finco
-- Ba2 rating on the US$260 million 7-year term loan B
facility; LGD 2; 24%
MEGA Brands Inc.
-- Probability of Default rating at B1
=================
N I C A R A G U A
=================
XEROX CORP: Earns US$233 Million in 2007 First Quarter
------------------------------------------------------
Xerox Corporation earned US$233 million of net income on
US$3.8 billion of total revenues for the three months ended
March 31, 2007, compared to a net income of US$200 million on
total revenues of US$3.7 billion in the same quarter of 2006.
The company's earnings include a US$23 million charge to reflect
its share of a restructuring charge recorded by Fuji Xerox Co.
Ltd.
Total revenue of US$3.8 billion grew 4 percent in the first
quarter. Post-sale and financing revenue -- Xerox's annuity
streams that represent more than 70 percent of total revenue --
increased 6 percent. The growth was largely driven by a 7
percent increase in post-sale revenue from digital systems.
Both total revenue and post-sale revenue included a currency
benefit of 3 percentage points.
The company's March 31 balance sheet showed total assets of
US$21.4 billion, total liabilities of US$14.3 billion, and a
stockholders' equity of US$7.1 billion at March 31, 2007,
compared to total assets of US$21.7 billion, total liabilities
of US$14.6 billion, and a US$7 billion stockholders' equity at
Dec. 31, 2006.
New Products Boost Sales
"Xerox's growth strategy focuses on increasing our install base
of digital technology through new products and broader
distribution, strengthening our leadership in color, and
expanding our services business. Success in these areas builds
a healthy annuity stream that serves our company well for the
long term," said Anne M. Mulcahy, Xerox chairman and chief
executive officer. "Our results in the first quarter show that
the strategy is working. We delivered solid activity gains,
grew color revenue, and signed big deals for Xerox's document
management services - all of which contribute to steady annuity
growth.
"Along with progress on the top line, excellent operational
performance and improved margins led to a 17 percent increase in
net income and earnings that exceeded our expectations," added
Ms. Mulcahy.
A fundamental measure of Xerox's business is increasing the
number of Xerox systems installed in customers' workplaces.
This installation activity generates sales of supplies and
services that are expected to drive gains in post-sale revenue.
As Xerox accelerated activity in key markets during the first
quarter, the continued impact of pricing declines put pressure
on equipment sales, which were down 2 percent including a 2-
point benefit from currency.
Since the beginning of the year, Xerox has introduced 19 new
products, half of which are color products, surpassing the 14
total product launches in 2006. The company plans to more than
double its number of product launches this year. More than two-
thirds of Xerox's equipment sales come from products launched in
the past two years.
Xerox is growing color revenue through the industry's broadest
portfolio of color presses, printers and multifunction devices,
and new marketing campaigns that promote quality and
affordability. Revenue from color grew 17 percent in the first
quarter and now represents 37 percent of Xerox's total revenue,
up 4 points from the first quarter of 2006. Xerox color presses
produce the highest volume of pages in the industry and last
year more than 30 billion color pages were printed on Xerox
technology. In the first quarter, color pages contributed to a
21 percent increase in post-sale revenue from color.
Xerox services help businesses simplify work processes, manage
office technology and in-house print shops, digitize paper
files, create digital archives and much more. Through
multiyear, multimillion dollar contracts, the company's document
management services generated nearly US$800 million in annuity
revenue in the first quarter, a 10 percent increase in post-sale
revenue from services.
Xerox's production business provides commercial printers and
document-intensive industries with high-speed digital printing
and services that enable on-demand, personalized printing.
Total production revenue increased 5 percent in the first
quarter including a 4 point currency benefit. Installs of
production black-and-white systems declined 7 percent with
growth in light production and continuous feed only partially
offsetting declines in higher-end production printing.
Production color installs grew 4 percent reflecting strong
activity for the Xerox iGen3(R) Digital Production Press and
continued demand for the DocuColor(R) 5000.
Xerox's office business provides document technology and
services for businesses of any size. Total office revenue was
up 2 percent in the first quarter including a 2-point currency
benefit. Installs of office black-and-white systems were down 5
percent due to activity declines for desktop devices, which were
only partially offset by 11 percent growth in the company's mid-
range line of multifunction devices. Strong demand for Xerox's
color WorkCentre(R) families led to a 71 percent increase in
install activity for color multifunction systems.
In addition to new product and service offerings, Xerox is
making aggressive moves to expand its presence in the fast
growing small and mid-size business market. Earlier this month,
Xerox agreed to acquire Global Imaging Systems for US$1.5
billion, which, upon closing, will give Xerox access to about
200,000 new customers and increase its U.S. distribution to SMB
customers by more than 50 percent. Expected to close in mid-
May, the acquisition of Global Imaging builds on Xerox's
announcement in February to increase its investments in sales
channels by providing more offerings to value-added resellers
and independent agents.
"We're playing offense in the marketplace and we're playing to
win," said Ms. Mulcahy.
About Xerox Corp.
Headquartered in Stamford, Connecticut, Xerox Corp. --
http://www.xerox.com/-- develops, manufactures, markets,
services and finances a range of document equipment, software,
solutions and services. Xerox operates in over 160 countries
worldwide and distributes products in the Western Hemisphere
through divisions, wholly owned subsidiaries and third-party
distributors. The company has operations in Japan, Italy and
Nicaragua.
* * *
As reported in the Troubled Company Reporter-Latin America on
April 4, 2007, Fitch Ratings has affirmed Xerox Corp.'s and its
subsidiary's ratings:
Xerox Corp.
-- Trust preferred securities at 'BB';
-- Issuer Default Rating at 'BBB-';
-- Unsecured credit facility at 'BBB-'; and
-- Senior unsecured debt at 'BBB-'.
Xerox Credit Corp.
-- Issuer Default Rating at 'BBB-'; and
-- Senior unsecured debt at 'BBB-'.
As reported in the Troubled Company Reporter-Latin America on
April 4, 2007, Standard & Poor's Ratings Services placed its
ratings on Xerox Corp., including the 'BB+' corporate credit
rating, on CreditWatch with positive implications. The
CreditWatch placement reflects the company's announcement that
it has reached an agreement in principle to acquire Global
Imaging Systems Inc. for approximately US$1.5 billion in cash.
===========
P A N A M A
===========
BANCO LATINOAMERICANO: Earns US$14.8MM in Quarter Ended March 31
----------------------------------------------------------------
Banco Latinoamericano de Exportaciones, S.A. disclosed its
financial results for the first quarter ended March 31, 2007.
Financial Highlights
First Quarter 2007 vs. First Quarter 2006:
-- Operating income increased 52% from the first quarter of
2006, driven by higher Treasury Division revenues and a
47% increase in net interest income, the latter resulting
mostly from a 23% increase in the average loan portfolio
and a 20 bps increase in net interest margins.
-- Efficiency ratio improved to 35% from 41%.
-- The credit portfolio grew 17%.
-- Net income declined 11% due to lower credit provision
reversals.
First Quarter 2007 vs. Fourth Quarter 2006:
-- Driven by higher Commercial Division and securities
revenue, and lower operating expenses, which offset a
reduction in trading gains from the strong levels of the
fourth quarter, operating income was maintained at US$14.0
million.
-- At March 31, 2007, the credit portfolio stood at US$4.2
billion, 5% higher than at Dec. 31, 2006.
-- Deposits grew 31%, totaling US$1.4 billion at March 31,
2007.
-- Net income amounted to US$14.8 million, down 30% from the
previous quarter, due to lower credit provision reversals
and no asset recoveries during the quarter.
Jaime Rivera, Bladex's Chief Executive Officer, stated the
following regarding the quarter's results: "The operating
results of the first quarter represent the strongest start of
the year that Bladex has enjoyed since we started to transform
the business model three years ago. Our commercial operations
continued growing at a rate exceeding our goal of three to four
times the underlying growth rate of the region, while posting
the strongest increase in net lending margins that we have seen
in 16 quarters. Along with a solid performance in the Available
for Sale portfolio, these increased revenues offset the smaller
trading gains generated in the Treasury Division after a
particularly solid fourth quarter. The results are, in our
opinion, clear evidence of the value of the diversification
instilled in our revenue engine.
"With revenue growth continuing to outpace the expenses needed
to support an expanding business, Bladex's efficiency levels
improved yet again, reaching 35%, placing the Bank in a
privileged competitive position within the industry.
"There were significant positive developments on the liability
side of the balance sheets as well, with deposits increasing a
full 31% during the quarter. I consider the growth to be of
special significance as it was fueled by deposits from Latin
American state institutions.
"In financial terms, the 10.2% ROE represents the first time
since 2002 that Bladex has reached double digit return levels
without the effect of provision reversals related to the
impaired portfolio in Argentina. It is noteworthy that the Bank
reached this result while working off a strong Tier 1
capitalization of 22.3%. I believe this constitutes further
proof of Bladex's ability to meet our objective of steadily
improving ROE levels through careful growth.
"In summary, Bladex's business keeps growing, our profitability
improving, our efficiency strengthening, and our credit quality
remains extraordinarily solid. These trends affirm Bladex's
commitment to add value to its shareholders, while fulfilling
the Bank's critically important mission of supporting trade in
the Region."
Headquartered in Panama City, Panama, Banco Latinoamericano de
Exportaciones, SA aka Bladex -- http://www.bladex.com-- is a
supranational bank originally established by the Central Banks
of Latin American and Caribbean countries to promote trade
finance in the Region. The bank's shareholders include central
banks and state- owned entities in 23 countries in the Region,
as well as Latin American and international commercial banks,
along with institutional and retail investors. Through
Dec. 31, 2005, Bladex had disbursed accumulated credits of over
US$135 billion.
* * *
As reported on April 7, 2006, Moody's affirmed these ratings for
Bladex:
-- Bank Financial Strength Rating: D-minus, change to
positive outlook from stable;
-- Long Term Foreign Currency Deposit Rating: Baa3, with
stable outlook;
-- Short Term Foreign Currency Deposit Rating: Prime-3;
-- Foreign Currency Senior Unsecured Rating: Baa3, with
stable outlook; and
-- Foreign Currency Issuer Rating: Baa3, with stable outlook.
=======
P E R U
=======
INTEROCEANICA IV: Fitch Assigns BB+ Preliminary Rating
------------------------------------------------------
Fitch has assigned a preliminary rating of 'BB+' to
Interoceanica IV Finance Limited, a Peruvian securitization of
government payment obligations in connection with parts of the
IIRSA Sur toll road concession. The approximate US$280 million
in transaction proceeds, expected to be issued in two series,
will be indirectly used to cover the costs of expansion and
improvements on Segment Four of IIRSA Sur, a 2,600 kilometer
network of existing toll roads connecting port cities in Peru
with those in Brazil.
Upon completion, the road is not expected to generate sufficient
revenues to cover its construction costs. As compensation, the
government of Peru will reimburse the concessionaire for
construction progress with annual payments in U.S. dollars
(Certificados de Reconocimiento de Pago Anual por Obras or
CRPAOs) prorated to the advance of works. This transaction will
be a securitization of CRPAOs. CRPAOs delivered from the
government to the concessionaire will be sold to the issuer.
Cash flow to maintain timely debt service on the transaction
will depend on the government's continued payment on all issued
CRPAOs. CRPAOs are backed by the full faith and credit of the
government. While legally different from public debt, Fitch
views the difference in probability of the government honoring
one obligation over the other as immaterial. The rationale
behind the rating of the notes is similar to that of a
government pass-through.
CRPAOs are generated on an ongoing basis in conjunction with the
advance of construction. While construction progresses,
transaction proceeds will be invested in a total return swap or
TRS. Monies invested in the TRS will be made available to
purchase CRPAOs. Once generated, existing CRPAOs are not
subject to any condition or performance obligation relating to
the concession agreement.
While noteholders are not exposed to continuing construction
risk, material construction delays six months past a payment
date would cause a termination under the CRPAO purchase
agreement. In this scenario, noteholders' expected return (and
risk profile) will be altered. Noteholders' collateral would
consist of a combination of existing CRPAOs already purchased
and all remaining proceeds invested under the TRS. Risks
associated with cash flows from the TRS are commensurate with
the credit profile of the TRS counterparty and are not
correlated to CRPAOs.
=====================
P U E R T O R I C O
=====================
FOOT LOCKER: Offers to Buy Genesco for US$1.2 Billion in Cash
-------------------------------------------------------------
Foot Locker Inc. has made an acquisition proposal to purchase
all of the outstanding shares of Genesco Inc. for US$46 per
share in cash, subject to certain terms and conditions. The
proposal came in a letter that Matthew D. Serra, Foot Locker,
Inc.'s Chairman and CEO, sent on April 4, 2007 to Hal N.
Pennington, Chairman, President and Chief Executive Officer of
Genesco Inc.
On April 19, 2007, Mr. Serra sent a follow-up letter to Mr.
Pennington to reiterate Foot Locker, Inc.'s interest in
acquiring Genesco, Inc. and his belief that the proposal
represents significant value to Genesco shareholders. The
proposed purchase price of US$46 per share in cash represents a
total consideration of approximately US$1.2 billion for all of
the equity of Genesco. This proposal provides to Genesco Inc.'s
shareholders a 26% premium to the average share price during the
one year period preceding the April 4, 2007 letter.
About Genesco Inc.
Headquartered in Nashville, Tennessee, Genesco Inc. (NYSE: GCO)
-- http://www.genesco.com/-- is a specialty retailer of
footwear, headwear and accessories in more than 1,900 retail
stores in the U.S. and Canada, principally under the names
Journeys, Journeys Kidz, Shi by Journeys, Johnston & Murphy,
Underground Station, Hatworld, Lids, Hat Zone, Cap Factory, Head
Quarters and Cap Connection, and on Internet websites
http://www.journeys.com,http://www.journeyskidz.com/,
http://www.undergroundstation.com/,
http://www.johnstonmurphy.com/,http://www.lids.com/,
http://www.hatworld.com/and http://www.lidscyo.com/. The
company also sells footwear at wholesale under its Johnston &
Murphy brand and under the licensed Dockers. As of June 9,
2006, it operated a total of 1,773 stores: 1,755 stores
throughout the United States and Puerto Rico, and 18 stores in
Canada.
About Foot Locker
Headquartered in New York, Foot Locker, Inc. (NYSE: FL) ---
http://www.footlocker-inc.com/-- is a global retailer of
athletic footwear and apparel, operated 3,942 primarily mall-
based stores in the United States, Canada, Europe, Australia,
and New Zealand as of Feb. 3, 2007. The company also has about
350 Footaction stores in the US and Puerto Rico, which sell
footwear and apparel to young urbanites.
The Company, through its subsidiaries, operates in two segments:
Athletic Stores and Direct-to-Customers. The Athletic Stores
segment is an athletic footwear and apparel retailer, whose
formats include Foot Locker, Lady Foot Locker, Kids Foot Locker,
Champs Sports and Footaction. The Direct-to-Customers segment
reflects Footlocker.com, Inc., which sells, through its
affiliates, including Eastbay, Inc., to customers through
catalogs and Internet Websites. The Foot Locker brand is the
Company's principal brand. In March of 2006, Foot Locker, Inc.
entered into a 10-year area development agreement with the
Alshaya Trading Co. W.L.L., in which the Company agreed to enter
into separate license agreements for the operation of a minimum
of 75-foot Locker stores.
* * *
As reported in the Troubled Company Reporter-Latin America on
Apr 24, 2007, Standard & Poor's Ratings Services' ratings,
including the 'BB+' corporate credit rating, on Foot Locker Inc.
remain on CreditWatch with negative implications following the
company's announcement that it has launched a bid to acquire
Genesco Inc.
As reported in the Troubled Company Reporter-Latin America on
April 24, 2007, Moody's Investors Service placed the ratings of
Foot Locker, Inc. on review for possible downgrade following the
company's announcement that it had made an unsolicited proposal
to purchase all of the outstanding shares of Genesco Inc. for
US$46 per share cash representing a total consideration of
approximately US$1.2 billion.
These ratings are placed on review for possible downgrade:
-- Corporate family rating of Ba1;
-- Probability of default rating of Ba1; and
-- Senior unsecured notes rating of Ba1.
FOOT LOCKER: Genesco's Stock Acquisition Plan Gets Snubbed
----------------------------------------------------------
Foot Locker Inc.'s proposal to acquire all of the outstanding
shares for US$46 per share in cash was rejected by Genesco
Inc.'s board of directors.
Hal N. Pennington, Genesco's chairman, president and chief
executive officer, said in his letter to Matthew D. Serra,
chairman and CEO of Foot Locker Inc. that after careful
consideration, the board, in consultation with its financial
advisor, Goldman Sachs & Co., and with the assistance of its
legal advisor, Bass Berry & Sims PLC, unanimously determined
that the US$46 per share cash proposal is not in the best
interests of Genesco's shareholders.
"Genesco's board unanimously rejected the proposal and concluded
that it did not reflect the long-term value of Genesco,
including its strong market position and future growth
prospects," Mr. Pennington said.
On April 20, 2006, Foot Locker, though Mr. Serra's letter, has
made an acquisition proposal to purchase all of the company's
outstanding shares for US$46 per share in cash or US$1.2
billion, subject to certain terms and conditions.
Mr. Serra stated in his proposal letter that together with the
company's executive management teams, board of directors, and
advisors, he concluded that a merger of with Genesco would
enable both companies to benefit from mutual best practices,
enhance the companies' ability to serve its customers, and
provide Foot Locker employees and management teams with
increased opportunities.
About Genesco Inc.
Headquartered in Nashville, Tennessee, Genesco Inc. (NYSE: GCO)
-- http://www.genesco.com/-- is a specialty retailer of
footwear, headwear and accessories in more than 1,900 retail
stores in the U.S. and Canada, principally under the names
Journeys, Journeys Kidz, Shi by Journeys, Johnston & Murphy,
Underground Station, Hatworld, Lids, Hat Zone, Cap Factory, Head
Quarters and Cap Connection, and on Internet websites
http://www.journeys.com,http://www.journeyskidz.com/,
http://www.undergroundstation.com/,
http://www.johnstonmurphy.com/,http://www.lids.com/,
http://www.hatworld.com/and http://www.lidscyo.com/. The
company also sells footwear at wholesale under its Johnston &
Murphy brand and under the licensed Dockers. As of June 9,
2006, it operated a total of 1,773 stores: 1,755 stores
throughout the United States and Puerto Rico, and 18 stores in
Canada.
About Foot Locker
Headquartered in New York, Foot Locker, Inc. (NYSE: FL) ---
http://www.footlocker-inc.com/-- is a global retailer of
athletic footwear and apparel, operated 3,942 primarily mall-
based stores in the United States, Canada, Europe, Australia,
and New Zealand as of Feb. 3, 2007. The company also has about
350 Footaction stores in the US and Puerto Rico, which sell
footwear and apparel to young urbanites.
The Company, through its subsidiaries, operates in two segments:
Athletic Stores and Direct-to-Customers. The Athletic Stores
segment is an athletic footwear and apparel retailer, whose
formats include Foot Locker, Lady Foot Locker, Kids Foot Locker,
Champs Sports and Footaction. The Direct-to-Customers segment
reflects Footlocker.com, Inc., which sells, through its
affiliates, including Eastbay, Inc., to customers through
catalogs and Internet Websites. The Foot Locker brand is the
Company's principal brand. In March of 2006, Foot Locker, Inc.
entered into a 10-year area development agreement with the
Alshaya Trading Co. W.L.L., in which the Company agreed to enter
into separate license agreements for the operation of a minimum
of 75-foot Locker stores.
* * *
As reported in the Troubled Company Reporter-Latin America on
Apr 24, 2007, Standard & Poor's Ratings Services' ratings,
including the 'BB+' corporate credit rating, on Foot Locker Inc.
remain on CreditWatch with negative implications following the
company's announcement that it has launched a bid to acquire
Genesco Inc.
As reported in the Troubled Company Reporter-Latin America on
April 24, 2007, Moody's Investors Service placed the ratings of
Foot Locker, Inc. on review for possible downgrade following the
company's announcement that it had made an unsolicited proposal
to purchase all of the outstanding shares of Genesco Inc. for
US$46 per share cash representing a total consideration of
approximately US$1.2 billion.
These ratings are placed on review for possible downgrade:
-- Corporate family rating of Ba1;
-- Probability of default rating of Ba1; and
-- Senior unsecured notes rating of Ba1.
GENESCO INC: Earns US$67.6 Million in Year Ended February 3
-----------------------------------------------------------
Genesco Inc. reported net earnings of US$67.6 million on net
sales of US$1.5 billion for the fiscal year ended Feb. 3, 2007,
as compared with net earnings of US$62.7 million on net sales of
US$1.3 billion for the fiscal year ended Jan. 28, 2006.
The company's net sales increased 13.8% during Fiscal 2007
compared to the prior year. The increase was driven primarily
by the addition of new stores, a 2% increase in comparable store
sales, a 34% increase in Licensed Brands sales and a 14%
increase in Johnston & Murphy wholesale sales.
Operating income decreased as a percentage of net sales during
Fiscal 2007 primarily due to decreased operating income in the
Underground Station Group and decreased operating income as a
percentage of net sales in the Journeys Group and Hat World
Group businesses, partially offset by an increase in operating
income in the Johnston & Murphy Group and Licensed Brands
businesses.
As of Feb. 3, 2007, the company's balance sheet showed total
assets of US$729.4 million and total liabilities of US$324.1
million, resulting to shareholders' equity of US$405.2 million.
The company held cash and cash equivalents of US$16.7 million in
fiscal 2007, down from US$60.5 million in fiscal 2006. The
company expects that cash on hand and cash provided by
operations will be sufficient to fund all of its planned capital
expenditures through fiscal 2008, although the company plans to
borrow under its revolving credit facility from time to time to
support seasonal working capital requirements.
Hat Shack Acquisition
On Jan. 11, 2007, Hat World, which the company bought on April 1
2004, acquired 100% of the outstanding stock of Hat Shack Inc.
for a purchase price of US$16.6 million plus debt assumed of
US$2.2 million, after preliminary closing adjustments
anticipated in the purchase agreement, funded from cash on hand.
As of Feb. 3, 2007, there were 49 Hat Shack retail headwear
stores located primarily in the southeastern U.S.
Amended Revolving Credit Facility
On Dec.1, 2006, the company entered into an Amended and Restated
Credit Agreement with the company and certain of its
subsidiaries as borrowers and Bank of America, N.A. as lender,
as administrative agent. The Credit Facility replaced the
company's US$105 million revolving credit facility.
A full-text copy of the company's fiscal 2007 report is
available for free at http://ResearchArchives.com/t/s?1d62
About Genesco
Headquartered in Nashville, Tennessee, Genesco Inc. (NYSE: GCO)
-- http://www.genesco.com/-- is a specialty retailer of
footwear, headwear and accessories in more than 1,900 retail
stores in the U.S. and Canada, principally under the names
Journeys, Journeys Kidz, Shi by Journeys, Johnston & Murphy,
Underground Station, Hatworld, Lids, Hat Zone, Cap Factory, Head
Quarters and Cap Connection, and on Internet websites
http://www.journeys.com,http://www.journeyskidz.com/,
http://www.undergroundstation.com/,
http://www.johnstonmurphy.com/,http://www.lids.com/,
http://www.hatworld.com/and http://www.lidscyo.com/. The
company also sells footwear at wholesale under its Johnston &
Murphy brand and under the licensed Dockers. As of June 9,
2006, it operated a total of 1,773 stores: 1,755 stores
throughout the United States and Puerto Rico, and 18 stores in
Canada.
As reported in the Troubled Company Reporter-Latin America on
April 24, 2007, Moody's Investors Service placed the ratings of
Genesco Inc. on review for possible downgrade following the
announcement by Foot Locker that it had made an unsolicited
proposal to purchase all of the outstanding shares of Genesco
for US$46 per share cash representing a total consideration of
approximately US$1.2 billion.
These ratings are placed on review for possible downgrade:
* Corporate family rating of Ba3;
* Probability of default rating of Ba3;
* Convertible senior subordinated debentures of B1.
As reported in the Troubled Company Reporter-Latin America on
April 24, 2007, Standard & Poor's Ratings Services placed its
ratings, including the 'BB-' corporate credit rating, on
specialty footwear and headwear retailer Genesco Inc. on
CreditWatch with developing implications. This rating action
follows the announcement that Foot Locker Inc.
(BB+/Watch Neg/--) has launched a bid to acquire Nashville,
Tennesse-based Genesco for $1.2 billion.
PRODUCTOS DE CEMENTO: Voluntary Chapter 11 Case Summary
-------------------------------------------------------
Debtor: Productos De Cemento Inc.
P.O. Box 360385
San Juan, PR 00936
Tel: (787) 720-5161
Bankruptcy Case No.: 07-02104
Chapter 11 Petition Date: April 20, 2007
Court: District of Puerto Rico (Old San Juan)
Debtor's Counsel: William Santiago Sastre, Esq.
P.O. Box 19328
Santurce, PR 00910
Tel: (787) 622-3939
Fax: (787) 622-3941
Estimated Assets: Less than US$10,000
Estimated Debts: US$1 Million to US$100 Million
The Debtor did not file a list of its 20 largest unsecured
creditors.
RIVER EDGE: Case Summary & Seven Largest Unsecured Creditors
------------------------------------------------------------
Debtor: River Edge Development Corporation
P.O. Box 129
Yabucoa, PR 00767
Bankruptcy Case No.: 07-02108
Chapter 11 Petition Date: April 20, 2007
Court: District of Puerto Rico (Old San Juan)
Judge: Enrique S. Lamoutte Inclan
Debtor's Counsel: Wigberto Lugo Mender, Esq.
Lugo Mender & Co.
Centro Internacional de Mercadeo
Road 165, Torre 1, Suite 501
Guaynabo, PR 00968
Tel: (787) 707-0404
Estimated Assets: US$1 Million to US$100 Million
Estimated Debts: US$1 Million to US$100 Million
Debtor's Seven Largest Unsecured Creditors:
Entity Claim Amount
------ ------------
Las Cuevas Development US$822,000
c/o Amaris d. Coya, Esq. and
Rolando Emmanuelli, Esq.
Rovira Office, Park 623 Avenue
Al Ceiba, Suite 401
Ponce, PR 00717-1902
Rivera & Placeres US$384,181
HC 01 P.O. Box 4876
Naguabo, PR 00718-9727
Guarionex PR Construction Inc. US$325,000
P.O. Box 136 Wester
Auto Plaza 220, Suite 101
Trujillo Alto, PR 00976
Tower M. Realty US$204,750
Del Valle Construction US$108,854
Amey Construction US$25,000
RE Advertising US$4,522
=================================
T R I N I D A D & T O B A G O
=================================
MIRANT CORP: Corcoran Plaintiffs Balk at NY-Gen's Reorg. Plan
-------------------------------------------------------------
James E. Monroe, Esq., at Dupee & Monroe, PC, in Goshen, New
York, tells the Court that James Corcoran and Sally A. Corcoran
have filed a personal injury lawsuit against Mirant NY-Gen, LLC,
and Time Manufacturing Co. before the Supreme Court of the State
of New York, County of Orange, arising from an accident in June
2004, on the business premises owned by Mirant NY-Gen.
Ms. Corcoran has asserted damages for the loss of her husband's
society, companionship, financial support, services and
consortium.
Under Mirant NY-Gen's Amended Plan of Reorganization, the
Corcorans' Claims are classified as administrative expenses.
According to Mr. Monroe, the Corcorans oppose NY-Gen's request
for the Court to estimate their unliquidated personal injury
tort claim at zero, for all purposes, including plan
feasibility, allowance and distribution.
Mr. Monroe further contends that NY-Gen's Plan cannot be
confirmed because it violates Section 1129 of the Bankruptcy
Code:
(a) the Plan misapplies Section 502(c);
(b) the Plan violates the requirement of Section 503 that
Administrative Claims be paid in full; and
(c) the Plan violates Section 1123(a)(1) by effectively
designating a separate non-voting class of administrative
expenses, fee claims, which, unlike other Administrative
Expenses, are to be paid in full after Court approval.
Based on these, the Corcorans ask the Court to deny confirmation
of Mirant NY-Gen's Amended Plan.
About Mirant Corporation
Headquartered in Atlanta, Georgia, Mirant Corporation (NYSE:
MIR) -- http://www.mirant.com/-- is an energy company that
produces and sells electricity in North America, the Caribbean,
and the Philippines. Mirant's investments in the Caribbean
include three integrated utilities and assets in Jamaica, Grand
Bahama, Trinidad and Tobago and Curacao. Mirant owns or leases
more than 18,000 megawatts of electric generating capacity
globally. Mirant Corporation filed for chapter 11 protection on
July 14, 2003 (Bankr. N.D. Tex. 03-46590), and emerged under the
terms of a confirmed Second Amended Plan on Jan. 3, 2006.
Thomas E. Lauria, Esq., at White & Case LLP, represented the
Debtors in their successful restructuring. When the Debtors
filed for protection from their creditors, they listed
US$20,574,000,000 in assets and US$11,401,000,000 in debts. The
Debtors emerged from bankruptcy on Jan. 3, 2006. Mirant NY-Gen,
LLC, Mirant Bowline, LLC, Mirant Lovett, LLC, Mirant New York,
Inc., and Hudson Valley Gas Corporation, were not included and
have yet to submit their plans of reorganization. (Mirant
Bankruptcy News, Issue No. 120; Bankruptcy Creditors' Service
Inc., http://bankrupt.com/newsstand/or 215/945-7000)
MIRANT: NY-GEN Wants Court Approval on Estimated Claim Amounts
--------------------------------------------------------------
The U.S. Bankruptcy Court for the Northern District of Texas
will hold a confirmation hearing with respect to the Mirant
NY-Gen, LLC's Plan of Reorganization on April 25, 2007, at
1:30 p.m.
The Plan will be funded from the proceeds of Mirant New York,
Inc.'s sale of its membership interests in Mirant NY-Gen to
Alliance Energy Renewables, LLC.
Jeff P. Prostok, Esq., at Forshey & Prostok LLP, in Fort Worth,
Texas, says that sale proceeds will be set aside in an amount
sufficient to pay administrative claims, priority claims,
secured claims and unsecured claims in full and any remaining
proceeds will be paid to Mirant Americas, Inc. in partial
satisfaction of NY-Gen's debtor-in-possession financing.
To determine the amount of sale proceeds that must be set aside
for payment of Allowed Claims and Administrative Expenses, the
Court must first determine the amount of Claims and
Administrative Expenses that are outstanding against NY-Gen,
states Mr. Prostok.
As previously reported, Mirant Americas will release its lien on
the estate assets and will agree that its Lien on the Sale
Proceeds will be subject to a carve-out in:
(a) the Unsecured Creditor Amount -- the Court's estimate of
the total amount of Allowed General Unsecured Claims;
and
(b) the Other Amount -- the Court's estimate of the total
amount of Allowed Administrative Expenses except Fee
Claims and DIP Secured Claims, Tax Claims, Priority
Claims except Tax Claims, Secured Tax Claims, and Other
Secured Claims.
Certain of the Claims and Administrative Expenses included in
the Other Amount and the Unsecured Creditor Amount -- the
Contested Claims -- are contingent or unliquidated.
Resolution of these Claims and Administrative Expenses either
through litigation or by waiting for events giving rise to
liability to occur could take years and will unduly delay Mirant
NY-Gen's confirmation proceedings.
Accordingly, the Contested Claims are subject to and should be
estimated pursuant to Section 502(c) of the Bankruptcy Code so
that the Debtor can determine the amount of sale proceeds
required to fully fund the Other Amount and the Unsecured
Creditor Amount and to take the Plan effective.
By this motion, Mirant NY-Gen asks the Court to approve the
estimated amount of Claims asserted against it, for all purposes
including distribution:
A. Estimated Other Amount
Claim Category Estimate
----- -------- --------
Croissant Claimants Admin. Expense US$0
New York State Department Admin. Expense 0
Of Environmental
Conservation
Barrett Litigation Claim Admin. Expense 0
Corcoran Litigation Claim Admin. Expense 0
Additional Administrative Admin. Expense 100,000
Expenses, including
Cure Amounts
All Tax Claims, Priority Tax Claims, Priority 0
Claims, Secured Tax Claims, Secured Tax
Claims, Other Secured Claims, Other Secured
Claims Claims
--------
Total US$100,000
B. Estimated Unsecured Creditor Amount
Claim Estimate
----- --------
Southern Company US$0
Orange & Rockland Utilities 0
Other General Unsecured Claims 150,000
Rejection Damages 0
--------
Total US$150,000
About Mirant Corporation
Headquartered in Atlanta, Georgia, Mirant Corporation (NYSE:
MIR) -- http://www.mirant.com/-- is an energy company that
produces and sells electricity in North America, the Caribbean,
and the Philippines. Mirant's investments in the Caribbean
include three integrated utilities and assets in Jamaica, Grand
Bahama, Trinidad and Tobago and Curacao. Mirant owns or leases
more than 18,000 megawatts of electric generating capacity
globally. Mirant Corporation filed for chapter 11 protection on
July 14, 2003 (Bankr. N.D. Tex. 03-46590), and emerged under the
terms of a confirmed Second Amended Plan on Jan. 3, 2006.
Thomas E. Lauria, Esq., at White & Case LLP, represented the
Debtors in their successful restructuring. When the Debtors
filed for protection from their creditors, they listed
US$20,574,000,000 in assets and US$11,401,000,000 in debts. The
Debtors emerged from bankruptcy on Jan. 3, 2006. Mirant NY-Gen,
LLC, Mirant Bowline, LLC, Mirant Lovett, LLC, Mirant New York,
Inc., and Hudson Valley Gas Corporation, were not included and
have yet to submit their plans of reorganization. (Mirant
Bankruptcy News, Issue No. 120; Bankruptcy Creditors' Service
Inc., http://bankrupt.com/newsstand/or 215/945-7000)
=================
V E N E Z U E L A
=================
ARMOR HOLDINGS: Credit Suisse Keeps "Outperform" Rating on Firm
---------------------------------------------------------------
Credit Suisse analyst R. Spingarn said in a research note
published on April 20 that he retains his "outperform" rating on
Armor Holdings Inc shares, Newratings.com reports.
Newratings.com relates that the target price for Armor Holdings
shares was raised to US$77 from US$75.
Headquartered in Jacksonville, Florida, Armor Holdings, Inc.
(NYSE: AH) -- http://www.armorholdings.com/-- manufactures and
distributes security products and vehicle armor systems for the
law enforcement, military, homeland security, and commercial
markets. The company's mobile security division is located in
Mexico, Venezuela, Colombia and Brazil.
* * *
Moody's Investors Service's confirmed its Ba3 Corporate Family
Rating for Armor Holdings Inc. Additionally, Moody's affirmed
its B1 ratings on the company's 2% Convertible Senior
Subordinated Notes Due 2024 and 8.25% Senior Subordinated Notes
Due 2013. Moody's assigned those debentures an LGD5 rating
suggesting noteholders will experience a 77% loss in the event
of default.
ARMOR HOLDINGS: Prudential Keeps "Overweight" Rating on Firm
------------------------------------------------------------
Newratings.com reports that Prudential Financial analyst Byron
Callan has retained his "overweight" rating on Armor Holdings
shares.
According to Newratings.com, the target price for Armor Holdings
shares is set at US$72.
Newratings says that Mr. Callan mentioned in a research note
published on April 20 that Armor Holdings has posted its first
quarter earnings per share -- excluding the charges on incentive
award -- significantly ahead of the estimates. Mr. Callan said
that Armor Holdings' sales were ahead of the estimates due to
substantial A&D and operating margin expansion.
Armor Holdings' cash flows were weak during the first quarter
2007 due to the modified payment method for Family of Medium
Tactical Vehicles by the US government, Newratings.com notes,
citing Prudential Financial.
The earnings per share estimate for Armor Holdings this year was
reduced to US$4.60 from US$5.10 to reflect weaker-than-expected
FMTV pricing trends and an increase in incentive award,
Newratings.com states.
Headquartered in Jacksonville, Florida, Armor Holdings, Inc.
(NYSE: AH) -- http://www.armorholdings.com/-- manufactures and
distributes security products and vehicle armor systems for the
law enforcement, military, homeland security, and commercial
markets. The company's mobile security division is located in
Mexico, Venezuela, Colombia and Brazil.
* * *
Moody's Investors Service's confirmed its Ba3 Corporate Family
Rating for Armor Holdings Inc. Additionally, Moody's affirmed
its B1 ratings on the company's 2% Convertible Senior
Subordinated Notes Due 2024 and 8.25% Senior Subordinated Notes
Due 2013. Moody's assigned those debentures an LGD5 rating
suggesting noteholders will experience a 77% loss in the event
of default.
DAIMLERCHRYSLER AG: UAW Talks with Tracinda but Prefers Magna
-------------------------------------------------------------
United Auto Workers members, who have proposed an employee-
stock-ownership plan for DaimlerChrysler AG's Chrysler Group,
met with representatives of billionaire investor Kirk
Kerkorian's Tracinda Corp., which has submitted a US$4.5 billion
bid for the U.S. unit, Gina Chon and John D. Stoll report for
The Wall Street Journal.
Concurrently, the DaimlerChrysler Employee Buyout Committee, a
group of members from UAW local 12 in Toledo, Ohio, has
expressed preference for Magna International Inc. as Chrysler's
buyer. Both the UAW and the Canadian Auto Workers union have
expressed opposition to private equity ownership of the company
because of fears that such owners would eliminate long-standing
labor agreements, close plants and then flip the company once it
returned to profitability, Greg Keenan writes for the Globe and
Mail.
Union Proposal
The TCR-Europe reported on April 23 that workers at a Chrysler
plant in Toledo, Ohio, have written to DaimlerChrysler AG Chief
Executive Dieter Zetsche, suggesting employees could buy 70% of
Chrysler, possibly in exchange for cost concessions.
UAW President Ron Gettelfinger, who serves as an employee
representative on the company's supervisory board, plans to ask
the company's directors to keep Chrysler.
DaimlerChrysler's top leaders, including Chief Executive Dieter
Zetsche, will meet with labor groups, who plan to ask about the
company's strategic review of Chrysler and the status of talks
with three other groups, WSJ reveals. Mr. Zetsche faces
pressure from shareholders who are concerned that Chrysler, with
its $18-billion unfunded health-care liabilities and recent
operating losses, is pulling down the company's profitable
Mercedes-Benz luxury-car business.
Tracinda, in its proposal to DaimlerChrysler, said it would
consider giving the UAW a stake as part of a new capital
structure, WSJ relates. The proposal would give the union
equity in return for giving up some future benefits. This idea,
swapping the retirement health-care debts owed to UAW workers
for equity in their employers, is getting increasing attention
among Detroit union leaders.
The company is presently negotiating with all Chrysler bidders,
including Cerberus Capital Management LP; joint bidders
Blackstone Group and Centerbridge Capital Partners LP; and the
tandem of Magna International Inc. and Onex Corp., but has
ignored Tracinda Corp.
About DaimlerChrysler
Based in Stuttgart, Germany, DaimlerChrysler AG (NYSE:DCX) (FRA:
DCX) -- 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 operations 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.
PEABODY ENERGY: Reports US$88.5 Mil. Net Income in First Quarter
----------------------------------------------------------------
Peabody Energy Corporation has recorded first quarter 2007
earnings of US$0.33 per share on net income of US$88.5 million.
First quarter EBITDA increased to US$269.6 million, and revenues
totaled US$1.37 billion on sales of 60.9 million tons.
"Global coal demand for electricity generation continues to grow
significantly, creating favorable markets and rising coal prices
around the world," said Peabody President and Chief Executive
Officer Gregory H. Boyce. "This will increasingly benefit
Peabody as we expand our global coal presence and complete three
new Australian mines in 2007. In addition, U.S. electricity
demand has rebounded from year-ago levels, tightening the
supply-demand balance. These events set the stage for higher
performance in the last three quarters of the year."
First quarter revenues grew to US$1.37 billion compared with
US$1.31 billion in the prior year, led by a 28 percent increase
in realized pricing for our premium Powder River Basin product.
Australian revenues were 88 percent above year-ago levels,
reflecting the October 2006 acquisition of Excel Coal. Higher
Powder River Basin pricing and Australia volumes were partly
offset by reduced shipments from the Powder River Basin.
EBITDA rose to US$269.6 million from US$259.4 million in the
prior year. Results from mining operations reflected increased
Western U.S. coal pricing and the contribution of Excel Coal.
Trading and Brokerage and Resource Management continued to
provide significant contributions, totaling a combined US$72.1
million of EBITDA in the quarter.
As expected, first quarter results reflect higher depreciation,
depletion and amortization and interest expense associated with
the Excel acquisition, while earnings have yet to fully benefit
from Excel mines that will come on line throughout the year. As
a result of the increases in DD&A and interest, net income for
the quarter was US$88.5 million compared with prior-year income
of US$130.2 million.
First quarter EBITDA was reduced by approximately US$40 million
related to:
-- Adverse weather conditions across the United States,
including a blizzard that effectively shut down Powder
River Basin shipments during the last week of March;
-- Congestion at ports in Australia, reflecting the strong
global coal demand. During the quarter, congestion at
Australia coal export terminals led to mandatory
reductions of throughput entitlements for coal shippers,
ranging from 10 to 15 percent for the remainder of the
year. These short-term corrective measures should lead to
improved long-term coal shipments and reduced demurrage
costs;
-- The effects of currency translation related to the weak
U.S. dollar.
In the quarter, cash flow from operations increased to
US$247 million and the company reduced debt by approximately
US$100 million.
Based on most recent published data, Peabody again operated the
two most productive coal mines in North America in 2006. Also
in the quarter, Peabody's North Antelope Rochelle Mine earned
the Wyoming Governor's Award for operating the safest surface
mine in the state in 2006. The Harris and Federal mines earned
Mountaineer Guardian Awards for excellence in safety from the
West Virginia Office of Miners' Health, Safety and Training.
Peabody earned international recognition as one of the leading
examples of sustainable development by placing in the top 2
percent among more than 700 entries in the Energy Globe Awards,
for the company's activities on Arizona's Black Mesa. Peabody
operations also received statewide reclamation awards for
projects in Indiana, Colorado and West Virginia.
Markets
"Peabody is well positioned to capitalize on the strong global
markets through our increasing international portfolio, which
contributes a growing share of our earnings," said Mr. Boyce.
"Global markets reflect a tight supply-demand balance, which
historically brings pricing pressure to United States markets."
Coal prices have increased in all key international markets,
with thermal coal pricing from Newcastle rising more than 25
percent since the company completed its Excel acquisition last
fall. Much of this growing global demand is being driven by
Pacific Rim nations. Consistent with Peabody's expectations,
China has become a net coal importer in 2007, with coal exports
down more than 30 percent in the first quarter and China
increasing its imports. This is a significant change for a
nation that four years ago exported 83 million tons more than it
imported. With more Chinese coal staying on the mainland, coal
buyers from Korea, Japan, China and other Asian nations are
looking to Australia for coal supplies. India has become an
aggressive coal purchaser from both Pacific and Atlantic
markets, and the pricing for the key delivered coal product to
Europe approached record levels in early April.
Projections of long-term global coal demand also continue to
increase. In the first quarter, India raised its expectation of
annual coal demand by more than 1 billion tons by 2032 -- more
than triple earlier estimates of the U.S. Energy Information
Administration. New coal-fueled generation capacity is being
developed around the world, and China is constructing 65,000 to
70,000 megawatts of capacity that is expected to come on line in
2007.
Overall U.S. electricity generation has increased 5 percent over
the prior year while coal production is nearly 2 percent lower
than the prior year, including an 8 percent reduction in
Appalachia coal shipments.
Within U.S. markets:
-- U.S. coal production has been further tightened in recent
weeks with the blizzard in the Powder River Basin, a major
mine closing in the Illinois Basin, strikes at two mines
in Northern Appalachia, and a court decision that could
initially threaten more than 100 million tons of coal
production at surface mines in Appalachia;
-- In addition to exporting metallurgical coal from the
United States, Peabody has exported steam coal from the
Illinois Basin;
-- Union Pacific has lifted its two-year-old moratorium on
new coal supply transportation agreements, which is
expected to enable more Powder River Basin coal to move
into the market, and the Western railroads continue to
make significant investments in rail upgrades to meet
demand growth;
-- Peabody estimates that 20 new coal-based generating units
with capacity of 10,600 megawatts are under construction.
This represents approximately 43 million tons of
additional coal use, 70 percent of which is expected to be
sourced from the Powder River Basin and Illinois Basin.
Peabody also views another 19 units as highly probable,
representing 11,500 megawatts of generation and 47 million
tons of coal use per year;
-- Coal-to-gas and coal-to-liquids development continued to
gain bipartisan support during the quarter, with
introduction of bills in both houses of Congress allowing
long-term supply contracts by the U.S. Department of
Defense and tax incentives for use of synthetic fuels.
Seven states have also passed bills supporting coal-to-
liquids investments; and
-- Support for carbon capture and sequestration technologies
is also growing, with calls for greater private and public
support for research, development and commercial
deployment of projects such as FutureGen as well as
retrofit applications to remove and sequester carbon
dioxide emissions. Peabody is a founding member of the
FutureGen Alliance.
Outlook
"Peabody continues to manage its diverse portfolio of operations
to meet robust global coal demand," said Chief Financial Officer
and Executive Vice President of Corporate Development Richard A.
Navarre. "Our recent investments and expansion in Australia
have strategically positioned the company in key growth markets,
and we are making additional investments to improve our cost
structure and coal handling capabilities."
Major projects include:
* Progressing with development of the Wambo Underground Mine
in New South Wales, with longwall operations at the export
thermal coal mine expected to begin in the second half of
2007;
* Finishing commissioning of the highly productive Wilpinjong
Mine in New South Wales to serve domestic and export
thermal coal customers;
* Expanding Peabody's global market presence with the opening
of a coal trading office in Europe; initiating coal trading
in Beijing; and opening of a representative office in
Mongolia; and
* Completing the US$160 million construction of a new
dragline, in-pit conveyor and blending system for the
company's North Antelope Rochelle Mine, which will reduce
overburden removal costs, lower diesel fuel and tire
expenses, and optimize coal quality premiums.
The company is essentially sold out of planned production for
2007, and has 60 million to 70 million tons of expected U.S.
production unpriced for 2008. During the first quarter, the
company committed to sales contracts for 16 million tons of
premium Powder River Basin coal at prices that averaged 32
percent higher than average realized 2006 coal prices.
Peabody continues to target full-year financial results in 2007
that include earnings per share of US$2.10 to US$2.75 and EBITDA
of US$1,200 million to US$1,450 million. Quarterly and annual
results remain sensitive to transportation in the United States
and Australia, the completion of new mine developments in
Australia and the timing of metallurgical coal shipments. As
discussed earlier, results are expected to include approximately
US$135 million in impacts related to lower first quarter
production and reductions in Australian throughput entitlements,
demurrage costs and currency translation for the remainder of
the year.
For the second quarter, Peabody is targeting EBITDA of US$300
million to US$350 million and earnings per share of US$0.35 to
US$0.55.
Headquartered in St. Louis, Missouri, Peabody Energy Corporation
(NYSE: BTU) -- http://www.peabodyenergy.com/-- is the world's
largest private-sector coal company, with 2005 sales of 240
million tons of coal and US$4.6 billion in revenues. Its
coal products fuel 10% of all U.S. and 3% of worldwide
electricity. The company has coal operations in Venezuela.
* * *
As reported in the Troubled Company Reporter on Mar 9, 2007,
Moody's Investors Service reported that, after the adoption of
final guidelines for preferred stock and hybrid securities
notching, it downgraded Peabody Energy Corporation's hybrid
instrument to Ba3. This instrument had been placed on review
for downgrade. This completes the review for possible
downgrade.
PETROLEOS DE VENEZUELA: Investing US$10 Billion This Year
---------------------------------------------------------
Petroleos de Venezuela S.A. will be investing US$10 billion for
2007, up 70% from last year's US$5.95 billion investments,
Marianna Parraga at El Universal reports.
Based on the financial data disclosed by Petroleos de Venezuela,
most investments will be devoted to gas projects, at US$3.4
billion this year versus US$1.22 billion in 2006. Overall,
through 2012 the conglomerate is earmarking US$16.19 billion for
investment in gas projects, Ms. Parraga relates.
Ms. Parraga says that the second largest item in the 2007 budget
is intended to maintain and expand production. Disbursements
for these purposes are estimated at US$2.91 billion.
Finally, supply and marketing investments will increase to
US$1.17 billion from US$4 million in 20006, the same report
continues.
Petroleos de Venezuela SA -- http://www.pdv.com/-- is
Venezuela's state oil company in charge of the development of
the petroleum, petrochemical and coal industry, as well as
planning, coordinating, supervising and controlling the
operational activities of its divisions, both in Venezuela and
abroad. The company has a commercial office in China.
* * *
As reported on Nov. 22, 2006, Fitch affirmed the local and
foreign currency Issuer Default Ratings of Petroleos de
Venezuela S.A. at 'BB-'. Fitch has also affirmed the 'AAA(ven)'
national scale rating of the company. Fitch said the rating
outlook is stable.
* VENEZUELA: Not Renewing RCTV License Despite Pressures
--------------------------------------------------------
Venezuelan President Hugo Chavez said during his
Sunday radio and tv show, Alo Presidente!, that the government
won't be persuaded to change its decision not to renew the
broadcasting license of 53-year old Radio Caracas Television,
according to a report from El Universal.
The government declared on Dec. 28, 2006, that RCTV's license
won't be renewed on grounds of its alleged role in the coup
attempts against Pres. Chavez's administration. RCTV's license
would expire on May 27.
The decision sparked criticisms from local and international
press groups, citing repression of press freedom.
"The Coordinating Committee believes the Government should not
infringe freedom of expression or cut the sources of information
Venezuelans have available by arbitrarily refusing to renew a
license," a statement from the Global Coordinating Committee of
Press Freedom Organization said.
However, President Chavez has been firm in his decision to let
the network's license expire.
"What you should accept is a fact that is quite clear: the
license is expiring and the state has the right to grant this
permit to citizens under any other form," the Venezuelan leader
was quoted by El Universal as saying. "People who believe they
can put pressure on me by appealing to international
organizations, foreign governments, and the evil court of this
and that, with demonstrations, forget it! You are not going to
put pressure on me; with nothing and for nothing. Just accept
it. If you cannot face it, it is up to you. And if you believe
you are overthrowing my government, you are wrong again, and
this will be worse for you."
***********
S U B S C R I P T I O N I N F O R M A T I O N
Troubled Company Reporter - Latin America is a daily newsletter
co-published by Bankruptcy Creditors' Service, Inc., Fairless
Hills, Pennsylvania, USA, and Beard Group, Inc., Frederick,
Maryland USA. Marjorie C. Sabijon, Sheryl Joy P. Olano, Rizande
delos Santos, Christian Toledo, and Junald Ango, Editors.
Copyright 2007. All rights reserved. ISSN 1529-2746.
This material is copyrighted and any commercial use, resale or
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* * * End of Transmission * * *