/raid1/www/Hosts/bankrupt/TCRLA_Public/070511.mbx
T R O U B L E D C O M P A N Y R E P O R T E R
L A T I N A M E R I C A
Friday, May 11, 2007, Vol. 8, Issue 93
Headlines
A R G E N T I N A
BANCO COMAFI: Moody's Lifts Fin'l Strength Rating to D- from E+
BANCO DE LA PROVINCIA: Moody's Ups Fin'l Strength Rating to E+
BANCO DE LA PROVINCIA: Voluntarily Liquidates New York Agency
BANCO ITAU: Moody's Lifts Financial Strength Rating to D from E+
BANCO PIANO: Moody's Ups Financial Strength Rating to D- from E+
CUATRO DOS: Proofs of Claim Verification Deadline Is June 18
DADI ROLL: Proofs of Claim Verification Ends on June 27
FEDERACION ARGENTINA: Claims Verification Deadline Is June 29
JLJ SA: Proofs of Claim Verification Deadline Is July 5
PETROBRAS ENERGIA: Profit Drops to ARS182 Mil. in First Quarter
ROSA SALVAJE: Proofs of Claim Verification Is Until July 13
STANDARD BANK: Moody's Ups Fin'l Strength Rating to D- from E+
TENNECO INC: Hires David Wardell as Senior Vice President
VALL ROS: Trustee Verifies Proofs of Claim Until July 11
YPF SA: Presents Tamberias Work Program
YPF: Repsol In Talks for the Sale of Stakes in Argentine Unit
* ARGENTINA: To Sell US$750 Million of Dollar Bonds
B E R M U D A
CENTRAL EUROPEAN: Moody's Puts (P)Ba3 Rating on Proposed Notes
LASALLE RE: Creditors Must File Proofs of Claim by Aug. 30
SEA CONTAINERS: Trustee Amends List of Unsecured Creditors Panel
SEA CONTAINERS: Wants US$176 Million DIP Lending Pact Approved
SEA CONTAINERS: Court Okays AP Services as Crisis Managers
SEA CONTAINERS: Wants Archlane Leases Settlement Approved
WOELM HOLDING: Final General Meeting Is Set for June 14
WOELM HOLDING: Proofs of Claim Filing Deadline Is May 28
B O L I V I A
PETROLEO BRASILEIRO: Brazil Seeks Plant Price Pact with Bolivia
* BOLIVIA: Seeks To Reach Oil Refinery Price Accord with Brazil
B R A Z I L
AMRO REAL: Banco Itau Wants To Acquire Bank
BANCO DO BRASIL: Discloses Business Consolidation Plan
BANCO DO BRASIL: Will Incorporate Besc, Says Brazilian President
BANCO ITAU: Interested in Buying ABN Amro Real
BANCO NACIONAL: Board Approves BRL3.95-Million Financing
CAIXA ECONOMICA: Grants BRL4.26 Billion in Home Loans for 1Q
HAYES LEMMERZ: Stockholders Okay US$180 Million Rights Offering
HAYES LEMMERZ: Unit Launches Cash Tender Offer for 10-1/2% Notes
HAYES LEMMERZ: Fitch Assigns B Issuer Default Rating
INTERNATIONAL PAPER: Earns US$434 Million in First Quarter 2007
LAZARD LTD: March 31 Balance Sheet Upside-Down by US$206.8 Mil.
STRATOS INT'L: Annual Meeting Delay Cues Nasdaq Delisting Notice
TRW AUTOMOTIVE: Fitch Rates New Senior Credit Facility at BB+
ULTRAPAR PARTICIPACOES: Earns US$37.2MM Net Income in First Qtr.
* BRAZIL: Obtains US$16.1-Million Financing from IDB
B R I T I S H V I R G I N I S L A N D S
DIGICEL LTD: Obtains Interim Injunction Against Regulator
C A Y M A N I S L A N D S
SPYGLASS CAPITAL: Proofs of Claim Filing Deadline Is May 30
SWIX CURRENCY: Sets Final Shareholders Meeting for May 30
TCW EM: Proofs of Claim Must be Filed by May 31
TINTIN SPC: Final Shareholders Meeting Moved to May 30
C H I L E
CONSTELLATION BRANDS: Inks US$421M Repurchase Pact with Citibank
CONSTELLATION BRANDS: Fitch Rates US$700-Million Notes at BB-
EASTMAN KODAK: Moody's Affirms B1 Corporate Family Rating
SHAW GROUP: Wins US$700 Mil. EPC Contract from American Electric
WARNER MUSIC: Incurs US$27 Million Net Loss in 2nd Quarter 2007
C O L O M B I A
ECOPETROL: Earns COP838 Billion in First Quarter 2007
GOODYEAR TIRE: Declares Public Offering of 22.5 Million Shares
C O S T A R I C A
SMURFIT KAPPA: Folding Cartons Unit to Close Plant in Ireland
US AIRWAYS: Pilots Express Frustration Over Management Failures
D O M I N I C A N R E P U B L I C
BASIC ENERGY: Net Income Up to US$22.1 Mil. in 2007 First Qtr.
E C U A D O R
BANCO DEL PICHINCHA: Credife Acquires Banco Centromundo
GRAHAM PACKAGING: Dec. 31 Balance Sheet Upside-Down by US$597MM
G U Y A N A
DIGICEL LTD: Secures Temporary Int'l License from Guyana Gov't
J A M A I C A
DYOLL INSURANCE: Coffee Farmers To Get Paid by May 31
M E X I C O
ALL AMERICAN: NASDAQ to Delist Common Stock after Form 25 Filing
BANCO DEL BAJIO: Moody's Ups Fin'l Strength Rating to D+ from D-
BANCO INTERACCIONES: Moody's Ups Financial Strength Rating to D
BANCO J.P.: Moody's Assigns D+ Bank Financial Strength Rating
BANK OF AMERICA: Moody's Assigns D+ Bank Fin'l Strength Rating
BARCLAYS BANK: Moody's Affirms D Bank Financial Strength Rating
GENERAL MOTORS: Offers 0% Financing for Silverado, Sierra Trucks
GLOBAL POWER: Wants to Issue EUR1.1 Mln L/C from DIP Facility
MEGA BRANDS: Earns US$25.3 Million in Full Year Ended Dec. 31
SATELITES MEXICANOS: Extends Bid Submission Deadline to May 30
TV AZTECA: Secures Deals in 15 Markets in Europe & Latin America
N I C A R A G U A
* NICARAGUA: State Firm Won't Conduct Oil Imports from Venezuela
P A R A G U A Y
UNIAO DE BANCOS: Reports BRL581 Million Net Income in First Qtr.
P E R U
PRIDE INTERNATIONAL: Credit Suisse Reiterates Neutral Rating
P U E R T O R I C O
CENTENNIAL COMMUNICATIONS: Inks Purchase Agreement with Islanet
STANDARD MOTOR: Reports US$2.9 Mil. Net Income in First Quarter
SUNCOM WIRELESS: March 31 Balance Sheet Upside-Down by US$446MM
V E N E Z U E L A
CITGO PETROLEUM: Felix Rodriguez Resigns as CEO & President
DAIMLERCHRYSLER: Constructing New Mercedes-Benz Plant in India
DIRECTV GROUP: First Quarter Net Income Climbs to US$563 Million
- - - - -
=================
A R G E N T I N A
=================
BANCO COMAFI: Moody's Lifts Fin'l Strength Rating to D- from E+
---------------------------------------------------------------
Moody's Investors Service has confirmed that it raised its bank
financial strength rating on Banco Comafi S.A. to D- from E+, in
connection with the rating agency's implementation of its
refined joint default analysis and updated BFSR methodologies
for banks in Argentina.
Banco Comafi's Local Currency Deposit Rating is upgraded to Ba2
from B1. Its Foreign Currency Deposit Rating is affirmed at
Caa1, with positive outlook. The company's long term Argentine
National Scale Rating for Local Currency Deposits is raised to
Aa2.ar from Aa3.ar and its long term Foreign Currency deposit
rating in National Scale is affirmed at Ba1.ar.
The BFSRs of 18 Argentine banks were upgraded, by one or two
notches, as a result of their improving financial fundamentals
and evolving franchises, combined with an improving regulatory
environment. Many of the banks that were upgraded had had
positive outlooks on their BFSRs.
Moody's has assigned support levels to banks in Argentina using
its high country support guideline. This guideline takes into
consideration the recent evidence of support for banks, in
addition to size, strength and degree of fragmentation of the
Argentinean banking system. The implementation of the JDA
methodology also led to the upgrade of the local currency
deposit ratings of 15 banks by two notches, on average.
Most of the national scale ratings, which are derived from the
global local currency deposit ratings, were also upgraded as a
result of the rise in deposit ratings.
BFSRs evaluate the stand-alone or intrinsic financial strength
of banks without reference to external support factors. BFSRs
are the starting point of Moody's bank credit analysis, and are
an important determinant of Moody's bank deposit and debt
ratings.
Moody's then uses its JDA methodology to incorporate the
potential for external support into a bank's local currency
deposit rating. The potential for external support can reduce
the riskiness of a bank's deposit and debt obligations; however,
such support is often uncertain.
Moody's uses conservative support assumptions and a limited
number of support levels to ensure that sufficient weight is
given to a bank's intrinsic financial strength in its bank
deposit and debt ratings.
Moody's uses deposit ratings to determine bank debt ratings
based on its notching guidelines for bank securities. Ratings
for foreign currency obligations are determined after
considering Moody's country ceilings for foreign currency
ratings.
BANCO DE LA PROVINCIA: Moody's Ups Fin'l Strength Rating to E+
--------------------------------------------------------------
Moody's Investors Service has confirmed that it raised its bank
financial strength rating on Banco de la Provincia de Buenos
Aires to E+ from E, in connection with the rating agency's
implementation of its refined joint default analysis and updated
BFSR methodologies for banks in Argentina.
Banco de la Provincia's Local Currency Deposit Rating is
downgrade to Ba2 from Ba1. Its Foreign Currency Deposit Rating
is affirmed at Caa1, with positive outlook. The company's long
term Argentine National Scale Rating for Local Currency Deposits
is downgraded to Aa2.ar from Aaa.ar and itslong term Foreign
Currency deposit rating in National Scale is affirmed at Ba1.ar.
The BFSRs of 18 Argentine banks were upgraded, by one or two
notches, as a result of their improving financial fundamentals
and evolving franchises, combined with an improving regulatory
environment. Many of the banks that were upgraded had had
positive outlooks on their BFSRs.
Moody's has assigned support levels to banks in Argentina using
its high country support guideline. This guideline takes into
consideration the recent evidence of support for banks, in
addition to size, strength and degree of fragmentation of the
Argentinean banking system. The implementation of the JDA
methodology also led to the upgrade of the local currency
deposit ratings of 15 banks by two notches, on average.
Most of the national scale ratings, which are derived from the
global local currency deposit ratings, were also upgraded as a
result of the rise in deposit ratings.
BFSRs evaluate the stand-alone or intrinsic financial strength
of banks without reference to external support factors. BFSRs
are the starting point of Moody's bank credit analysis, and are
an important determinant of Moody's bank deposit and debt
ratings.
Moody's then uses its JDA methodology to incorporate the
potential for external support into a bank's local currency
deposit rating. The potential for external support can reduce
the riskiness of a bank's deposit and debt obligations; however,
such support is often uncertain.
Moody's uses conservative support assumptions and a limited
number of support levels to ensure that sufficient weight is
given to a bank's intrinsic financial strength in its bank
deposit and debt ratings.
Moody's uses deposit ratings to determine bank debt ratings
based on its notching guidelines for bank securities. Ratings
for foreign currency obligations are determined after
considering Moody's country ceilings for foreign currency
ratings.
Banco de la Provincia de Buenos Aires is Argentina's oldest
bank. It is the fifth largest in terms of assets and third in
terms of deposits; by 2002 they were valued at US$3.51 billion
and US$1.57 billion, respectively. That same year loans were
US$1.79 billion and equity US$311 million. Banco de la
Provincia's focus is mainly on the province's small- and mid-
sized enterprises and the retail segment. The bank has some 350
branches throughout Buenos Aires, which represents approximately
40% of Argentina's gross domestic product.
BANCO DE LA PROVINCIA: Voluntarily Liquidates New York Agency
-------------------------------------------------------------
Banco de la Provincia de Buenos Aires has voluntarily liquidated
its New York Agency, under the provisions of Section (605)11 of
the New York State Banking Law.
The liquidation commenced on April 30, 2007. Once the wind-up
process is completed, all business with the agency shall be
conducted from Banco de la Provincia de Buenos Aires's home
office and its offices abroad.
All inquiries regarding the liquidation of Banco de la Provincia
de Buenos Aires' New York office should be directed on or before
June 30, 2007, to:
Steve Deely
New York Agency
609 5th Avenue 10th floor, Suite 1006
New York, NY 1007 USA
Phone: 212-220-0548
Banco de la Provincia de Buenos Aires is Argentina's oldest
bank. It is the fifth largest in terms of assets and third in
terms of deposits; by 2002 they were valued at US$3.51 billion
and US$1.57 billion, respectively. That same year loans were
US$1.79 billion and equity US$311 million. Banco de la
Provincia's focus is mainly on the province's small- and mid-
sized enterprises and the retail segment. The bank has some 350
branches throughout Buenos Aires, which represents approximately
40% of Argentina's gross domestic product.
BANCO ITAU: Moody's Lifts Financial Strength Rating to D from E+
----------------------------------------------------------------
Moody's Investors Service has confirmed that it raised its bank
financial strength rating on Banco Itau Buen Ayre S.A. to D from
E+, in connection with the rating agency's implementation of its
refined joint default analysis and updated BFSR methodologies
for banks in Argentina.
Banco Itau's Local Currency Deposit Rating is upgraded to Ba1
from Ba3. Its Foreign Currency Deposit Rating is affirmed at
Caa1, with positive outlook. The company's long term Argentine
National Scale Rating for Local Currency Deposits is raised to
Aa1.ar from Aa2.ar and its long term Foreign Currency deposit
rating in National Scale is affirmed at Ba1.ar.
The BFSRs of 18 Argentine banks were upgraded, by one or two
notches, as a result of their improving financial fundamentals
and evolving franchises, combined with an improving regulatory
environment. Many of the banks that were upgraded had had
positive outlooks on their BFSRs.
Moody's has assigned support levels to banks in Argentina using
its high country support guideline. This guideline takes into
consideration the recent evidence of support for banks, in
addition to size, strength and degree of fragmentation of the
Argentinean banking system. The implementation of the JDA
methodology also led to the upgrade of the local currency
deposit ratings of 15 banks by two notches, on average.
Most of the national scale ratings, which are derived from the
global local currency deposit ratings, were also upgraded as a
result of the rise in deposit ratings.
BFSRs evaluate the stand-alone or intrinsic financial strength
of banks without reference to external support factors. BFSRs
are the starting point of Moody's bank credit analysis, and are
an important determinant of Moody's bank deposit and debt
ratings.
Moody's then uses its JDA methodology to incorporate the
potential for external support into a bank's local currency
deposit rating. The potential for external support can reduce
the riskiness of a bank's deposit and debt obligations; however,
such support is often uncertain.
Moody's uses conservative support assumptions and a limited
number of support levels to ensure that sufficient weight is
given to a bank's intrinsic financial strength in its bank
deposit and debt ratings.
Moody's uses deposit ratings to determine bank debt ratings
based on its notching guidelines for bank securities. Ratings
for foreign currency obligations are determined after
considering Moody's country ceilings for foreign currency
ratings.
Banco Itau Buen Ayre S.A., based in Buenos Aires, Argentina, is
a wholly owned subsidiary of Banco Itau S.A. of Brazil. As of
June 30, 2005, Itau Buen Ayre was Argentina's 15th largest
private bank in terms of deposits. It is primarily a wholesale
bank serving Brazilian corporates and individuals as well as
selected Argentine and multinational firms.
BANCO PIANO: Moody's Ups Financial Strength Rating to D- from E+
----------------------------------------------------------------
Moody's Investors Service has confirmed that it raised its bank
financial strength rating on Banco Piano S.A. to D- from E+, in
connection with the rating agency's implementation of its
refined joint default analysis and updated BFSR methodologies
for banks in Argentina.
Banco Piano's Local Currency Deposit Rating is upgraded to Ba2
from B2. Its Foreign Currency Deposit Rating is affirmed at
Caa1, with positive outlook. The company's long term Argentine
National Scale Rating for Local Currency Deposits is raised to
Aa2.ar from A1.ar and its long term Foreign Currency deposit
rating in National Scale is affirmed at Ba1.ar.
The BFSRs of 18 Argentine banks were upgraded, by one or two
notches, as a result of their improving financial fundamentals
and evolving franchises, combined with an improving regulatory
environment. Many of the banks that were upgraded had had
positive outlooks on their BFSRs.
Moody's has assigned support levels to banks in Argentina using
its high country support guideline. This guideline takes into
consideration the recent evidence of support for banks, in
addition to size, strength and degree of fragmentation of the
Argentinean banking system. The implementation of the JDA
methodology also led to the upgrade of the local currency
deposit ratings of 15 banks by two notches, on average. The
local currency deposit ratings for MBA Banco de Inversiones S.A.
and Banco Piano S.A. were upgraded by three notches, as a result
of the rise in their BFSR, as well as the inclusion of systemic
support.
Most of the national scale ratings, which are derived from the
global local currency deposit ratings, were also upgraded as a
result of the rise in deposit ratings.
BFSRs evaluate the stand-alone or intrinsic financial strength
of banks without reference to external support factors. BFSRs
are the starting point of Moody's bank credit analysis, and are
an important determinant of Moody's bank deposit and debt
ratings.
Moody's then uses its JDA methodology to incorporate the
potential for external support into a bank's local currency
deposit rating. The potential for external support can reduce
the riskiness of a bank's deposit and debt obligations; however,
such support is often uncertain.
Moody's uses conservative support assumptions and a limited
number of support levels to ensure that sufficient weight is
given to a bank's intrinsic financial strength in its bank
deposit and debt ratings.
Moody's uses deposit ratings to determine bank debt ratings
based on its notching guidelines for bank securities. Ratings
for foreign currency obligations are determined after
considering Moody's country ceilings for foreign currency
ratings.
Headquartered in Buenos Aires, Argentina, Banco Piano S.A. is a
specialized retail bank owned by the Piano family. As of March
2006, the bank had ARS303.6 million in assets (approximately
US$98.6 million) and ARS193.1 million in deposits (approximately
US$62.7 million).
CUATRO DOS: Proofs of Claim Verification Deadline Is June 18
------------------------------------------------------------
Juan Giannazzo, the court-appointed trustee for Cuatro Dos
Servicios Integrales SA's bankruptcy proceeding, verifies
creditors' proofs of claim until June 18, 2007.
Mr. Giannazzo will present the validated claims in court as
individual reports. The National Commercial Court of First
Instance No. 19 in Buenos Aires, with the assistance of Clerk
No. 38, 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 Cuatro Dos 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 Cuatro Dos'
accounting and banking records will be submitted in court.
La Nacion did not state the reports submission date.
Mr. Giannazzo is also in charge of administering Cuatro Dos'
assets under court supervision and will take part in their
disposal to the extent established by law.
The debtor can be reached at:
Cuatro Dos Servicios Integrales SA
Echeverria 2557,
Buenos Aires, Argentina
The trustee can be reached at:
Juan Giannazzo
Jufre 21
Buenos Aires, Argentina
DADI ROLL: Proofs of Claim Verification Ends on June 27
-------------------------------------------------------
Daniel Ernesto Altman, the court-appointed trustee for Dadi Roll
SA's bankruptcy proceeding, verifies creditors' proofs of claim
until June 27, 2007.
Mr. Altman will present the validated claims in court as
individual reports. The National Commercial Court of First
Instance No. 4 in Buenos Aires, with the assistance of Clerk
No. 7, 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 Dadi Roll 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 Dadi Roll's
accounting and banking records will be submitted in court.
La Nacion did not state the reports submission date.
Mr. Altman is also in charge of administering Dadi Roll's assets
under court supervision and will take part in their disposal to
the extent established by law.
The debtor can be reached at:
Dadi Roll SA
Hubac 6080/2
Buenos Aires, Argentina
The trustee can be reached at:
Daniel Ernesto Altman
Parana 774
Buenos Aires, Argentina
FEDERACION ARGENTINA: Claims Verification Deadline Is June 29
-------------------------------------------------------------
Lidia Martin, the court-appointed trustee for Federacion
Argentina de Cooperativas Avicolas Facap's bankruptcy
proceeding, verifies creditors' proofs of claim until
June 29, 2007.
Ms. Martin will present the validated claims in court as
individual reports. The National Commercial Court of First
Instance No. 12 in Buenos Aires, with the assistance of Clerk
No. 23, 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 Federacion Argentina 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 Federacion
Argentina's accounting and banking records will be submitted in
court.
La Nacion did not state the reports submission date.
Ms. Martin is also in charge of administering Federacion
Argentina's assets under court supervision and will take part in
their disposal to the extent established by law.
The debtor can be reached at:
Federacion Argentina de Cooperativas Avicolas Facap
Ecuador 374
Buenos Aires, Argentina
The trustee can be reached at:
Lidia Martin
Avenida Cordoba 1352
Buenos Aires, Argentina
JLJ SA: Proofs of Claim Verification Deadline Is July 5
-------------------------------------------------------
Alberto Buceta, the court-appointed trustee for J.L.J. SA's
bankruptcy proceeding, verifies creditors' proofs of claim until
June 27, 2007.
Mr. Buceta will present the validated claims in court as
individual reports. The National Commercial Court of First
Instance No. 14 in Buenos Aires, with the assistance of Clerk
No. 27, 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 J.L.J. 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 J.L.J.'s accounting
and banking records will be submitted in court.
La Nacion did not state the reports submission date.
Mr. Buceta is also in charge of administering J.L.J.'s assets
under court supervision and will take part in their disposal to
the extent established by law.
The debtor can be reached at:
J.L.J. SA
Bahia Blanca 2510
Buenos Aires, Argentina
The trustee can be reached at:
Alberto Buceta
Avenida Rivadavia 1342
Buenos Aires, Argentina
PETROBRAS ENERGIA: Profit Drops to ARS182 Mil. in First Quarter
---------------------------------------------------------------
Petrobras Energia Participaciones said in a filing with the
Buenos Aires Stock Exchange that its profit decreased to ARS182
million in the first quarter 2007, from ARS365 million a year
earlier, as higher costs cut into flat sales.
Reuters relates that the result was lower than the ARS226.5-
million average forecast of four local analysts.
Petrobras Energia told Reuters that sales were flat at ARS2.861
billion in the first quarter 2007, compared to last year's first
quarter. Meanwhile, the cost of sales increased, as well as the
administration and exploration expenses.
Reuters notes that Petrobras Energia's oil and natural gas
exploration and production unit reported lower sales because
results from Venezuelan operations are no longer consolidated,
while volume and prices increased.
The report says that refined product sales grew 16% in the first
quarter 2007, compared to the same period in 2006, mainly due to
higher sales volumes of diesel, gasoline and derivatives. The
amount of oil processed increased 17% due to expansions at the
San Lorenzo plant last year.
Petrobras Energia told Reuters that higher international prices
for refined products increased prices for its products,
excluding those subject to Argentina's anti-inflation price
controls.
Petrobras Energia Participaciones SA (Buenos Aires: PBE,
NYSE:PZE) through its subsidiary, 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
* * *
As reported in the Troubled Company Reporter-Latin America on
Jan. 4, 2007, Fitch Argentina Calificadora de Riesgo affirmed
these ratings assigned to Petrobras Energia:
-- international currency: B+
-- local currency: BB-
-- unsecured senior debt: B+
ROSA SALVAJE: Proofs of Claim Verification Is Until July 13
-----------------------------------------------------------
Guido Maria Salvadori, the court-appointed trustee for Rosa
Salvaje SRL's bankruptcy proceeding, verifies creditors' proofs
of claim until July 13, 2007.
Mr. Salvadori will present the validated claims in court as
individual reports. The National Commercial Court of First
Instance No. 6 in Buenos Aires, with the assistance of Clerk
No. 11, 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 Rosa Salvaje 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 Rosa Salvaje's
accounting and banking records will be submitted in court.
La Nacion did not state the reports submission date.
Mr. Salvadori is also in charge of administering Rosa Salvaje's
assets under court supervision and will take part in their
disposal to the extent established by law.
The debtor can be reached at:
Rosa Salvaje SRL
Vicente Lopez 2305
Buenos Aires, Argentina
The trustee can be reached at:
Guido Maria Salvadori
Junin 55
Buenos Aires, Argentina
STANDARD BANK: Moody's Ups Fin'l Strength Rating to D- from E+
--------------------------------------------------------------
Moody's Investors Service has confirmed that it raised its bank
financial strength rating on Standard Bank Argentina S.A. to D-
from E+, in connection with the rating agency's implementation
of its refined joint default analysis and updated BFSR
methodologies for banks in Argentina.
Standard Bank's Local Currency Deposit Rating is affirmed at
Ba1. Its Foreign Currency Deposit Rating is unchanged at Caa1,
with positive outlook. The company's long term Argentine
National Scale Rating for Local Currency Deposits is affirmed at
Aaa.ar and its long term Foreign Currency deposit rating in
National Scale is affirmed at Ba1.ar.
The BFSRs of 18 Argentine banks were upgraded, by one or two
notches, as a result of their improving financial fundamentals
and evolving franchises, combined with an improving regulatory
environment. Many of the banks that were upgraded had had
positive outlooks on their BFSRs.
Moody's has assigned support levels to banks in Argentina using
its high country support guideline. This guideline takes into
consideration the recent evidence of support for banks, in
addition to size, strength and degree of fragmentation of the
Argentinean banking system. The implementation of the JDA
methodology also led to the upgrade of the local currency
deposit ratings of 15 banks by two notches, on average.
Most of the national scale ratings, which are derived from the
global local currency deposit ratings, were also upgraded as a
result of the rise in deposit ratings.
BFSRs evaluate the stand-alone or intrinsic financial strength
of banks without reference to external support factors. BFSRs
are the starting point of Moody's bank credit analysis, and are
an important determinant of Moody's bank deposit and debt
ratings.
Moody's then uses its JDA methodology to incorporate the
potential for external support into a bank's local currency
deposit rating. The potential for external support can reduce
the riskiness of a bank's deposit and debt obligations; however,
such support is often uncertain.
Moody's uses conservative support assumptions and a limited
number of support levels to ensure that sufficient weight is
given to a bank's intrinsic financial strength in its bank
deposit and debt ratings.
Moody's uses deposit ratings to determine bank debt ratings
based on its notching guidelines for bank securities. Ratings
for foreign currency obligations are determined after
considering Moody's country ceilings for foreign currency
ratings.
Headquartered in Buenos Aires, Argentina, Standard Bank
Argentina, was recently granted regulatory approval to operate a
commercial bank, upon which the bank acquired certain assets and
liabilities of ING Bank Argentina. As of June 2006, the bank did
not hold deposits.
TENNECO INC: Hires David Wardell as Senior Vice President
---------------------------------------------------------
Tenneco Inc. has appointed David Wardell as its new senior vice
president, general counsel and corporate secretary. In
addition, Karel Van Bael has been promoted to vice president and
general manager for the original equipment ride control
business, Europe. Both appointments are effective immediately.
"We are very pleased to welcome David Wardell to Tenneco. He
brings with him an impressive legal background and a wealth of
corporate law experience," said Gregg Sherrill, Tenneco Chairman
and CEO. "We are also delighted that Karel will be joining our
senior management team. His deep knowledge and experience in
our Europe OE ride control business makes him the perfect choice
for this key leadership role."
Mr. Wardell comes from Abbott Laboratories, where he held
positions of increasing responsibility, including several
leadership positions in International Legal Operations. Most
recently, he served as associate general counsel and divisional
vice president, Pharmaceutical Products Group Legal Operations.
Before joining Abbott, Mr. Wardell served as assistant counsel
in the International Law department for Bristol-Myers Squibb
Company. He also worked as associate counsel for Clairol
Incorporated, a Bristol-Myers Squibb subsidiary. Prior to his 10
years at Bristol-Myers Squibb, Mr. Wardell was an assistant
district attorney in the New York County District Attorney's
Office. He graduated with an AB from Princeton University and a
JD from Case Western Reserve University School of Law.
Mr. Van Bael had been serving as interim general manager of the
company's European OE ride control business unit since
March 1, 2007. Previously, since 2002, he served as executive
director of operations; responsible for all ride control
manufacturing and aftermarket distribution throughout Europe.
Previously, Mr. Van Bael held a number of ride control positions
with increasing responsibilities in the areas of sales,
engineering and operations, including plant manager of Tenneco's
Sint Truiden, Belgium facility; Director of OE sales and
engineering for Monroe Europe; and vice president of operations,
Monroe Europe. He joined Tenneco in 1969.
Headquartered in Lake Forest, Ill., Tenneco Inc., (NYSE: TEN) --
http://www.tenneco.com/-- manufactures automotive ride and
emissions control products and systems for both the worldwide
original equipment market and aftermarket. Leading brands
include Monroe(R), Rancho(R), and Fric Rot ride control
products and Walker(R) and Gillet emission control products.
The company has global operations in Argentina, Japan, and
Germany, among others, with its European operations
headquartered in Brussels, Belgium.
* * *
As reported in the Troubled Company Reporter-Latin America on
March 20, 2007, Fitch Ratings has assigned a rating of 'BB+' to
Tenneco Inc.'s new senior secured bank facility. The new
facility replaces Tenneco's existing bank facility. As such,
there is no impact to Fitch's current ratings of the existing
debt or Rating Outlook, which are:
-- Issuer Default Rating (IDR) 'BB-';
-- Senior secured bank facility 'BB+';
-- Senior secured second lien notes 'BB'; and
-- Senior subordinated notes 'B'.
VALL ROS: Trustee Verifies Proofs of Claim Until July 11
--------------------------------------------------------
Juan Giannazzo, the court-appointed trustee for Vall Ros
Internacional SA's reorganization proceeding, verifies
creditors' proofs of claim until July 11, 2007.
The National Commercial Court of First Instance No. 19 in Buenos
Aires, with the assistance of Clerk No. 37, approved a petition
for reorganization filed by Vall Ros, according to a report from
Argentine daily La Nacion.
Mr. Giannazzo 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 Vall Ros 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 Vall Ros' accounting
and banking records will be submitted in court.
La Nacion didn't state the reports submission dates.
The informative assembly will be held on April 21, 2008.
Creditors will vote to ratify the completed settlement plan
during the assembly.
The debtor can be reached at:
Vall Ros Internacional SA
Avenida Boedo 981
Buenos Aires, Argentina
The trustee can be reached at:
Juan Giannazzo
Jufre 21
Buenos Aires, Argentina
YPF SA: Presents Tamberias Work Program
---------------------------------------
YPF SA has presented its work program for the Tamberias area in
San Juan, Argentina, according to a statement by the provincial
government.
Business News Americas reports that YPF was the sole bidder in
the tender for Tamberias, which is a "high-risk area," last
year. It offered US$6.12 million for exploration of the block
over six years.
According to BNamericas, YPF agreed to invest US$1.3 million in
the first three-year exploratory period, which involves:
-- acquiring new seismic data;
-- performing magnetometry and gravimetric works;
-- processing existing seismic data; and
-- training personnel.
San Juan energy resources department engineer Luis Archillo told
BNamericas that YPF seeks to start acquiring the 250-kilometer
2D seismic in the first quarter 2008.
BNamericas relates that Mr. Archillo said the two-year second
exploratory period includes drilling an exploratory well. YPF
acquiesced to invest over US$3 million in the period.
The report says that the third period, which will take about a
year, calls for drilling another well and acquiring 3D seismic
data.
Each of the three periods can be extended by a year at YPF's
request, BNamericas states.
Headquartered in Buenos Aires, Argentina, YPF S.A. (YPF) is an
integrated oil and gas company engaged in the exploration,
development and production of oil and gas, natural gas and
electricity-generation activities (upstream), the refining,
marketing, transportation and distribution of oil and a range of
petroleum products, petroleum derivatives, petrochemicals and
liquid petroleum gas (LPG) (downstream). The company is a
subsidiary of Repsol YPF, S.A., a Spanish company engaged in oil
exploration and refining, which holds 99.04% of its shares. Its
international operations are conducted through its subsidiaries,
YPF International S.A. and YPF Holdings Inc.
* * *
Fitch Ratings assigned BB+ long-term issuer default rating on
YPF SA. Fitch said the outlook is stable.
Moody's Investors Service assigned these ratings on YPF SA:
-- B2 long-term foreign currency corporate family
rating; and
-- Ba2 foreign currency senior unsecured rating;
Moody's said the outlook is negative.
YPF: Repsol In Talks for the Sale of Stakes in Argentine Unit
-------------------------------------------------------------
Spain's Repsol YPF SA is in talks with potential takers for
stakes in its Argentine Unit, YPF.
According to Reuters, the Madrid-based company had intended to
float between 15% to 20% of YPF on the local market but
ultimately decided against it, saying market conditions did not
warrant it.
"I think it would be a good thing to have Argentine partners
that share our transparent business philosophy, ethics and
company values," Repsol Chairman Antonio Brufau was quoted by
Reuters as saying.
Bloomberg News says Repsol's decision to sell shares is aimed at
reducing its exposure in Argentina, where production is falling,
and focus more in finding oil and gas in Africa and the Middle
East.
"The sale of a stake would help Repsol diversify away from
Argentina -- share some of the pain, if you like -- and give it
cash which could be reinvested in more profitable opportunities
internationally," Jason Kenney, oil analyst at ING in Edinburgh
was quoted by Reuters as saying.
Repsol's investments in Latin America are located in Argentina,
Brazil and Bolivia. Last year's nationalization of Bolivia's
oil and gas sector has hurt Repsol's production. To compensate,
Bloomberg says, the company has expanded in Libya and is now
prospecting in the Gulf of Mexico.
About Repsol
Repsol YPF, S.A. is an integrated oil and gas company engaged in
all aspects of the petroleum business, including exploration,
development and production of crude oil and natural gas,
transportation of petroleum products, liquefied petroleum gas
and natural gas, petroleum refining, petrochemical production
and marketing of petroleum products, petroleum derivatives,
petrochemicals and natural gas. The company operates in four
segments: Exploration and Production, Refining and Marketing,
Chemicals, and Gas and Electricity.
About YPF SA
Headquartered in Buenos Aires, Argentina, YPF S.A. (YPF) is an
integrated oil and gas company engaged in the exploration,
development and production of oil and gas, natural gas and
electricity-generation activities (upstream), the refining,
marketing, transportation and distribution of oil and a range of
petroleum products, petroleum derivatives, petrochemicals and
liquid petroleum gas (LPG) (downstream). The company is a
subsidiary of Repsol YPF, S.A., a Spanish company engaged in oil
exploration and refining, which holds 99.04% of its shares. Its
international operations are conducted through its subsidiaries,
YPF International S.A. and YPF Holdings Inc.
* * *
Fitch Ratings assigned BB+ long-term issuer default rating on
YPF SA. Fitch said the outlook is stable.
Moody's Investors Service assigned these ratings on YPF SA:
-- B2 long-term foreign currency corporate family
rating; and
-- Ba2 foreign currency senior unsecured rating;
Moody's said the outlook is negative.
* ARGENTINA: To Sell US$750 Million of Dollar Bonds
---------------------------------------------------
The Argentine government sold yesterday US$750 million of 10-
year dollar-denominated Bonar bonds in the local market to
refinance maturing debt, Daniel Helft at Bloomberg News reports.
The bonds have a 7% coupon rate and will mature in April 2017,
the same report says, citing a statement from Argentina's
Economy Ministry. The government sold US$750 million of the
same bond to yield 8.46% on April 12.
The government has congressional approval to sell as much as
US$2.5 billion of the Bonar bonds this year.
* * *
Fitch Ratings assigned these ratings on Argentina:
Rating Rating Date
------ -----------
Country Ceiling B+ Aug. 1, 2006
Local Currency
Long Term Issuer B Aug. 1, 2006
Short Term IDR B Dec. 14, 2005
Long Term IDR RD Dec. 14, 2005
=============
B E R M U D A
=============
CENTRAL EUROPEAN: Moody's Puts (P)Ba3 Rating on Proposed Notes
--------------------------------------------------------------
Moody's Investors Service assigned a (P)Ba3 rating and a Loss
Given Default assessment of LGD4 (59%) to the proposed issuance
of EUR150 million senior floating rate notes due in 2014 by
Central European Media Enterprises Ltd. Concurrently, Moody's
has affirmed CME's Corporate Family Rating at Ba3 with a stable
outlook.
The new notes will rank pari-passu with the existing EUR245
million 8.25% senior notes due in 2012 and the EUR125 million
Senior floating rate notes due in 2012. Moody's notes that the
company intends to redeem the EUR125 million Senior Floating
Rate Notes on May 15, 2007.
The new notes are contractually and structurally subordinated to
debt raised at the operating company level and benefit from
certain debt incurrence and structural protections, although the
terms are less restrictive than those included in the
documentation of the existing EUR245 million senior notes due
2012. For example, the new notes allow for a material amount of
secured debt at the subsidiary level (primarily EUR150 million
of credit facilities and a EUR100 million basket). However,
Moody's derives comfort from the fact that the more restrictive
covenants of the existing notes will continue to govern the
financial policy of the company at least until May 15, 2009,
when the EUR245 million notes can be redeemed.
The Ba3 rating of the notes, i.e. at the same level as the
Corporate Family Rating, factors Moody's expectation that there
will continue to be a limited amount of debt ranking
structurally or effectively ahead of these obligations.
However, the rating agency cautions that any further material
use of the flexibility to incur secured debt ahead of the notes
could have negative impact on the notching.
Moody's notes that the company expects to apply the net proceeds
from the offering toward general corporate purposes, including
the potential purchase of additional ownership interests in its
existing operations. In Moody's opinion, the company has built
up financial flexibility in its current rating as a result of an
improvement in its operating and financial risk profiles.
Moody's expects CME to make use of this financial flexibility in
order to selectively pursue opportunistic acquisitions,
particularly in growth markets. However, it is Moody's
expectation that any potential acquisition will be made in the
context of CME's stated commitment to investors to adhere to a
net-debt-to-EBITDA ratio of less than 4.0x.
The stable outlook reflects Moody's view that CME is comfortably
positioned in the Ba3 rating category, despite the event risk
associated with potential bolt-on acquisitions. Downward
pressure on the ratings could materialize if the company's
management increased its leverage targets above the stated net
debt to EBITDA ratio of less than 4.0x.
Based in Bermuda with corporate offices in London, UK, Central
European Media Enterprises Ltd is an international television
broadcasting company with operations across Central and Eastern
Europe. Launched in 1994, CME and its partners now operate 13
networks in six countries, including TV Nova and Galaxie Sport
in the Czech Republic; PRO TV, PRO Cinema and Acasa in Romania;
Markiza TV in the Slovak Republic; POP TV and Kanal A in
Slovenia; and Studio 1+1, Kino and Citi in Ukraine. For the
year ending on Dec. 31, 2006, CME generated Segment revenues of
US$605 million and Segment EBITDA of US$219 million.
LASALLE RE: Creditors Must File Proofs of Claim by Aug. 30
----------------------------------------------------------
LaSalle Re Limited's creditors are given until Aug. 30, 2007, to
file with the company a Claim Form, plus supporting materials.
The Scheme of Arrangement between LaSalle Re and its creditors
became effective on May 2, 2007. In line with the terms of the
Scheme, the required documents must be received by the company
on or before the claims submission date unless creditors have
already filed a scheme voting form and marked that form as their
claim forms.
Claim Forms are being forwarded to all non-SVF Scheme creditors,
or Scheme creditors who didn't mark their Scheme Voting Form as
their Claim Form, by post and are also available from the
company Web site -- http://www.lasallerescheme.com/ Creditors
who haven't received Claim Forms may get one from the Web site
or from the offices of the company at:
Attention: LaSalle Scheme Administration
LaSalle Re Limited
44 Church Street, Hamilton HM 12, Bermuda
Scheme Creditors who marked the Scheme Voting Form -- filed with
the company in connection with the Scheme Creditors' Meeting --
as their Claim Form may resubmit their Scheme Claim by
completing a new Claim Form.
Creditors must return the completed Claim Forms, so as to reach
the offices of the company on or before the claims submission
date. This rule also applies to amendments to or resubmissions
of Claim Forms.
Claim Forms and attachments can also be faxed to LaSalle Scheme
Administration at +1 441 294 6496, provided that the company
receives an original signed copy of the documents within three
business days of the fax being received but not later than
Sept. 5, 2007. Instructions on the completion of the claim form
are provided with the form.
Scheme Creditors who fail to file a claim form by the claims
submission date will receive distributions under the Scheme
equal to Agreed Claims (as defined in the Scheme) only.
SEA CONTAINERS: Trustee Amends List of Unsecured Creditors Panel
----------------------------------------------------------------
Kelly Beaudin Stapleton, the U.S. Trustee for Region 3, informs
the U.S. Bankruptcy Court for the District of Delaware that The
Bank of New York has resigned from the Official Committee of
Unsecured Creditors of Sea Containers, Ltd. and its debtor-
affiliates.
The U.S. Trustee has appointed HSBC Bank USA, N.A., in its
capacity as indenture trustee, to fill in the vacant post.
The Creditors Committee is currently composed of:
1. HSBC Bank USA, National Association
452 Fifth Avenue
New York, NY 10018-2706
Attn: Sandra E. Horwitz
Phone: (212) 525-1358
Fax: (212) 525-1300
2. HSH Nordbank AG
Gerhart-Hauptmann-Platz 50
Hamburg, Germany D20095
Attn: Jorg-Rainer Kalz
Phone: (9) 40-3333-13561
Fax: (9) 40-3333-13561
3. Trilogy Capital LLC
2 Pickwick Plaza
Greenwich, CT 06830
Attn: Barry D. Kupferberg
Phone: (203) 971-3420
Fax: (203) 971-3499
4. Dune Capital LLC
c/o Dune Capital Management LP
623 Fifth Avenue, 30th Floor
New York, NY 10022
Attn: Andrew B. Cohen
Phone: (212) 301-8308
Fax: (646) 885-2473
5. Mariner Investment Group, Inc.
500 Mamaroneck Avenue, Suite 101
Harrison, NY 10528
Attn: Adam S. Cohen
Phone: (914) 798-4234
Fax: (914) 777-3363
Based in Hamilton, Bermuda, Sea Containers Ltd. --
http://www.seacontainers.com/-- provides passenger and freight
transport and marine container leasing. Registered in Bermuda,
the company has regional operating offices in London, Genoa, New
York, Rio de Janeiro, Sydney, and Singapore. The company is
owned almost entirely by United States shareholders and its
primary listing is on the New York Stock Exchange (SCRA and
SCRB) since 1974. On Oct. 3, the company's common shares and
senior notes were suspended from trading on the NYSE and NYSE
Arca after the company's failure to file its 2005 annual report
on Form 10-K and its quarterly reports on Form 10-Q during 2006
with the U.S. Securities and Exchange Commission.
Through its GNER subsidiary, Sea Containers Passenger Transport
operates Britain's fastest railway, the Great North Eastern
Railway, linking England and Scotland. It also conducts ferry
operations, serving Finland and Estonia as well as a commuter
service between New York and New Jersey in the U.S.
Sea Containers Ltd. and two subsidiaries filed for chapter 11
protection on Oct. 15, 2006 (Bankr. D. Del. Case No. 06-11156).
Edmon L. Morton, Esq., Edwin J. Harron, Esq., Robert S. Brady,
Esq., Sean Matthew Beach, Esq., and Sean T. Greecher, Esq., at
Young, Conaway, Stargatt & Taylor, represent the Debtors in
their restructuring efforts.
The Official Committee of Unsecured Creditors and the Financial
Members Sub-Committee of the Official Committee of Unsecured
Creditors of Sea Containers Ltd. is represented by William H.
Sudell, Jr., Esq., and Thomas F. Driscoll, Esq., at Morris,
Nichols, Arsht & Tunnell LLP. Sea Containers Services, Ltd.'s
Official Committee of Unsecured Creditors is represented by
attorneys at Willkie Farr & Gallagher LLP.
In its schedules filed with the Court, Sea Containers Ltd.
disclosed total assets of US$62,400,718 and total liabilities of
US$1,545,384,083. (Sea Containers Bankruptcy News, Issue
No. 16; Bankruptcy Creditors' Service, Inc.,
http://bankrupt.com/newsstand/or 215/945-7000)
The Debtors' exclusive period to file a chapter 11 plan of
reorganization expires on June 12, 2007.
SEA CONTAINERS: Wants US$176 Million DIP Lending Pact Approved
--------------------------------------------------------------
Sea Containers, Ltd. and its debtor-affiliates ask permission
from the Honorable Kevin J. Carey of the U.S. Bankruptcy Court
for the District of Delaware to enter into a commitment letter
with certain debtor-in-possession lenders.
Pursuant to a commitment letter dated May 3, 2007, Caspian
Capital Partners LP, Dune Capital LP and Trilogy Capital LLC
have committed to provide the Debtors with a senior secured
debtor-in-possession credit facility of up to US$176,500,000,
Mark Wilson, senior vice president and CEO of SCL, informs Judge
Carey.
Caspian Capital will act as the administrative and collateral
agent under the DIP Facility.
The DIP Facility consists of a term loan of up to
US$151,500,000, and a US$25,000,000 revolving credit facility.
The Term Loan provides for a non-amortizing term loan available
in a single drawing on the closing date. The Debtors intend to
use the proceeds of the Term Loan to help fund repayment of an
existing debt securitization facility involving Sea Containers
SPC Ltd., a non-debtor, "bankruptcy remote" subsidiary organized
and existing under the laws of Bermuda. The Repayment will
prevent foreclosure of SPC by its lenders who have alleged a
default under that the SPC Securitization Facility.
The proceeds of the Revolving Credit Facility will be used to
fund operating and administrative expenses during the Debtors'
Chapter 11 cases.
The Commitment Letter also includes an agreement by SCL to pay
certain expenses and to indemnify the DIP Lenders and the
Administrative and Collateral Agent in certain circumstances,
Mr. Wilson notes. SCL intends to pay all costs and expenses of:
-- the DIP Lenders relating to the structuring of the
proposed financing for SCL or SPC, including negotiation,
documentation and administration of the Commitment Letter
and the DIP Credit Documents;
-- the DIP Lenders relating to the enforcement and
preservation of the respective DIP Agent's and DIP
Lenders' rights and remedies under and in connection with
the Commitment Documents and DIP Credit Documents; and
-- negotiating, documenting and obtaining court approval of
SCL's entry into the Commitment Documents, the DIP Credit
Documents and other related transactions.
Mr. Wilson maintains that the DIP Lenders' proposal offers
attractive financing terms, including no cash upfront fees or
break-up fees and a solution to the Debtors' dispute with their
Noteholders.
"The DIP Lenders' proposal will allow the Debtors to lock in
permanent financing, thereby enabling the Debtors and their
advisors to focus their efforts going forward on key
restructuring initiatives and developing a confirmable
Chapter 11 plan," Mr. Wilson says.
Moreover, the structure of the proposal ensures that the bulk of
the covenants and other obligations under the Facility will
relate to assets and operations of SCL rather than SPC, who does
not have direct control over its primary assets, the containers
leased or managed by GE SeaCo.
A full-text copy of the Caspian Commitment Letter and the DIP
Facility contemplated under the Commitment Letter is available
for free at http://researcharchives.com/t/s?1eac
Under the DIP Facility contemplated under the Caspian Commitment
Letter, SPC Holdings Ltd. will guarantee the payment of the DIP
Obligations as they become due.
SCL's DIP Obligations will be secured by a perfected, first
priority security interest in and Lien on:
(i) SCL's security interests in SPC Holdings,
(ii) all cash and cash equivalents of SCL, and
(iii) all amounts received or receivable by SPC Holdings from
SPC Holdings and SPC.
All DIP Obligations will be granted a superpriority
administrative expense claim under Section 364(c)(1) of the
Bankruptcy Code.
The DIP Lenders' commitment to provide the proposed financing is
subject to the Bankruptcy Court's entry of a final order on or
before:
(i) May 18, 2007, approving and authorizing SCL's entry into
the Commitment Documents; and
(ii) June 18, 2007, approving and authorizing SCL's entry into
the DIP Credit Documents and other related transactions.
Additionally, the Debtors ask the Court for permission to:
(a) use estate funds to pay certain out-of-pocket costs and
expenses of the DIP Lenders, including the reasonable
fees and expenses of their legal and other advisors; and
(b) provide indemnification to the DIP Lenders and the DIP
Agent in their capacities under the contemplated DIP
Credit Facility.
The Commitment Letter represents the culmination of a lengthy
negotiating process, during which both SCL and Sea Containers
Services Limited sought the input of their creditors committees
on a frequent, sometimes daily, basis, Mr. Wilson maintains.
Gibson, Dunn & Crutcher LLP represents the DIP Lenders in the
Debtors' cases.
Judge Carey will hold a hearing on May 8, 2007, to consider
approval of the Debtors' request.
Based in Hamilton, Bermuda, Sea Containers Ltd. --
http://www.seacontainers.com/-- provides passenger and freight
transport and marine container leasing. Registered in Bermuda,
the company has regional operating offices in London, Genoa, New
York, Rio de Janeiro, Sydney, and Singapore. The company is
owned almost entirely by United States shareholders and its
primary listing is on the New York Stock Exchange (SCRA and
SCRB) since 1974. On Oct. 3, the company's common shares and
senior notes were suspended from trading on the NYSE and NYSE
Arca after the company's failure to file its 2005 annual report
on Form 10-K and its quarterly reports on Form 10-Q during 2006
with the U.S. Securities and Exchange Commission.
Through its GNER subsidiary, Sea Containers Passenger Transport
operates Britain's fastest railway, the Great North Eastern
Railway, linking England and Scotland. It also conducts ferry
operations, serving Finland and Estonia as well as a commuter
service between New York and New Jersey in the U.S.
Sea Containers Ltd. and two subsidiaries filed for chapter 11
protection on Oct. 15, 2006 (Bankr. D. Del. Case No. 06-11156).
Edmon L. Morton, Esq., Edwin J. Harron, Esq., Robert S. Brady,
Esq., Sean Matthew Beach, Esq., and Sean T. Greecher, Esq., at
Young, Conaway, Stargatt & Taylor, represent the Debtors in
their restructuring efforts.
The Official Committee of Unsecured Creditors and the Financial
Members Sub-Committee of the Official Committee of Unsecured
Creditors of Sea Containers Ltd. is represented by William H.
Sudell, Jr., Esq., and Thomas F. Driscoll, Esq., at Morris,
Nichols, Arsht & Tunnell LLP. Sea Containers Services, Ltd.'s
Official Committee of Unsecured Creditors is represented by
attorneys at Willkie Farr & Gallagher LLP.
In its schedules filed with the Court, Sea Containers Ltd.
disclosed total assets of US$62,400,718 and total liabilities of
US$1,545,384,083. (Sea Containers Bankruptcy News, Issue
No. 16; Bankruptcy Creditors' Service, Inc.,
http://bankrupt.com/newsstand/or 215/945-7000)
The Debtors' exclusive period to file a chapter 11 plan of
reorganization expires on June 12, 2007.
SEA CONTAINERS: Court Okays AP Services as Crisis Managers
----------------------------------------------------------
Sea Containers, Ltd. and its debtor-affiliates obtained
authority from the Honorable Kevin J. Carey of the U.S.
Bankruptcy Court for the District of Delaware to employ AP
Services LLC to provide them certain temporary employees and
interim management to oversee and manage their restructuring
efforts.
As interim management for the Debtors, Laura Barlow, the
Debtors' chief financial officer and chief restructuring
officer, is expected to:
-- manage the Debtors' financial, treasury and tax functions;
-- oversee negotiations with potential acquirers of the
Debtors' assets;
-- oversee management of the "working group" professionals
who are assisting the Debtors in the reorganization
process or who are working for the Debtors' various
stakeholders to improve coordination of their effort and
individual work product to be consistent with the Debtors'
restructuring goal;
-- work with the Debtors to further identify and implement
both short-term and long-term liquidity generating
initiatives;
-- oversee the Debtors' execution of its planned disposal
program in respect of various non-core assets;
-- oversee the Debtors' management of the relationship with
its stakeholders and their advisers and in meeting its
requirements to provide information to those stakeholders;
-- oversee the Debtors' negotiation and restructuring of its
current indebtedness with its key stakeholders, including
liaising and negotiating with the different stakeholders;
and
-- manage other matters as may be requested by the Debtors
that fall within APS Services' expertise and that are
mutually agreeable.
APS Services will be paid on an hourly rate basis:
Assisting Member Hourly Rate
---------------- -----------
Managing Directors GBP485-GBP545
Directors GBP415-GBP440
Vice Presidents GBP315-GBP360
Associates GBP220-GBP285
Ms. Barlow assures the Court that AP Services does not hold or
represent any interest adverse to the Debtors' estate, and is
deemed a "disinterested person" within the meaning of Section
101(14) of the Bankruptcy Code.
About Sea Containers
Based in Hamilton, Bermuda, Sea Containers Ltd. --
http://www.seacontainers.com/-- provides passenger and freight
transport and marine container leasing. Registered in Bermuda,
the company has regional operating offices in London, Genoa, New
York, Rio de Janeiro, Sydney, and Singapore. The company is
owned almost entirely by United States shareholders and its
primary listing is on the New York Stock Exchange (SCRA and
SCRB) since 1974. On Oct. 3, the company's common shares and
senior notes were suspended from trading on the NYSE and NYSE
Arca after the company's failure to file its 2005 annual report
on Form 10-K and its quarterly reports on Form 10-Q during 2006
with the U.S. Securities and Exchange Commission.
Through its GNER subsidiary, Sea Containers Passenger Transport
operates Britain's fastest railway, the Great North Eastern
Railway, linking England and Scotland. It also conducts ferry
operations, serving Finland and Estonia as well as a commuter
service between New York and New Jersey in the U.S.
Sea Containers Ltd. and two subsidiaries filed for chapter 11
protection on Oct. 15, 2006 (Bankr. D. Del. Case No. 06-11156).
Edmon L. Morton, Esq., Edwin J. Harron, Esq., Robert S. Brady,
Esq., Sean Matthew Beach, Esq., and Sean T. Greecher, Esq., at
Young, Conaway, Stargatt & Taylor, represent the Debtors in
their restructuring efforts.
The Official Committee of Unsecured Creditors and the Financial
Members Sub-Committee of the Official Committee of Unsecured
Creditors of Sea Containers Ltd. is represented by William H.
Sudell, Jr., Esq., and Thomas F. Driscoll, Esq., at Morris,
Nichols, Arsht & Tunnell LLP. Sea Containers Services, Ltd.'s
Official Committee of Unsecured Creditors is represented by
attorneys at Willkie Farr & Gallagher LLP.
In its schedules filed with the Court, Sea Containers Ltd.
disclosed total assets of US$62,400,718 and total liabilities of
US$1,545,384,083. (Sea Containers Bankruptcy News, Issue
No. 16; Bankruptcy Creditors' Service, Inc.,
http://bankrupt.com/newsstand/or 215/945-7000)
The Debtors' exclusive period to file a chapter 11 plan of
reorganization expires on June 12, 2007.
SEA CONTAINERS: Wants Archlane Leases Settlement Approved
---------------------------------------------------------
Sea Containers, Ltd. and its debtor-affiliates ask the Honorable
Kevin J. Carey of the U.S. Bankruptcy Court for the District of
Delaware to approve the leases settlement agreement with
Archlane Limited.
The Debtors currently maintain their corporate headquarters at
20 Upper Ground, in London SE1, United Kingdom. The Premises
was purchased by a subsidiary of Sea Containers Ltd. in 1979 and
was transferred in 1988 to another SCL subsidiary, which in turn
sold the building to Adamshield Limited.
As part of the sale, pursuant to two subleases, Adamshield
leased back certain portions of the Premises -- the 5th, 11th,
12th, 13th and 14th floors of the South wing and the 12th and
13th floors of the West wing -- to Sea Containers Services Ltd.
SCL guarantee SCSL's obligations under the Subleases.
In turn, SCSL entered into certain sublease arrangements,
pursuant to which Seven Custom Publishing Limited, Orient
Express Services and GE SeaCo occupy portions of the leased
space.
Archlane Limited, successor-in-interest to Adamshield, is the
current landlord of the Premises. The Leases will expire on
Dec. 24, 2011.
The aggregate annual rent under the Leases is approximately
GBP2,550,000, or about US$5,100,000 at current exchange rates.
SCSL also pays about GBP1,116,020, or US$2,178,040, in
additional aggregate annual charges under the Leases for
utilities and other services.
The Leases are subject to a rent review in 2010, which may
result in a marginal increase in rent, Sean T. Greecher, Esq.,
at Young Conaway Stargatt & Taylor, LLP, in Wilmington,
Delaware, relates. The utilities and services charges may also
increase incrementally over the remaining term of the Leases.
The Debtors estimate that the aggregate payment obligations
remaining under the Lease may aggregate more than US$36,000,000.
After careful analysis of their options with respect to the
Leases, the Debtors have decided that a settlement with Archlane
surrendering the Leases and entering into new shorter-term
leases is the best choice for maximizing value for their
estates, Mr. Greecher informs the Court.
The Debtors do not believe it is prudent to simply reject the
Leases. For one, the IT System at the Premises forms the
backbone of the Debtors' operations. The IT System uses an
outdated mainframe and operating system, making a transfer to an
offsite hosting facility extremely difficult, and could possibly
result in a catastrophic loss of data and functionality,
Mr. Greecher tells Judge Carey.
Moreover, Archlane could attempt to cite rejection as a breach
of the Leases and could attempt to initiate a court action to
terminate the Leases and evict the Debtors from the Premises,
Mr. Greecher points out. "Such actions would create significant
administrative costs for the estates . . . and give rise
significant unsecured claims against the [Debtors]."
Accordingly, after engaging in intensive negotiations, the
Debtors and Archlane reached a settlement in principle that
provides for:
(1) Surrender of SCSL's current Leases subject to a
GBP7,000,000 payment to Archlane;
(2) Entry into new leases for the current occupied Premises
under the Leases commencing on May 18, 2007, and expiring
on June 30, 2007;
(3) Entry into a new lease for the 12th Floor West Wing of
the Premises commencing on May 18, 2007, and expiring on
June 30, 2007, with a tenant's option to extend the New
Lease through Aug. 5, 2007;
(3) Entry into a new lease for the Basement 1 agreed areas of
the West Wing commencing on May 18, 2007, and expiring on
Dec. 24, 2011, with a tenant's option to break the
New Lease after Dec. 31, 2007, and every six months
thereafter, subject to three months' notice;
(4) Entry into a new lease for the Basement 2 agreed areas in
the West Wing commencing on May 18, 2007, and expiring on
Dec. 31, 2007;
(5) Provision for rental of parking spaces;
(6) Assignment of SCSL's rights under that certain sublease
between SCSL and Seven Custom Publishing Ltd to Archlane
on May 14, 2007; and
(7) Entry into a new lease between Archlane and Orient
Express Services Limited for space in the Premises.
The Debtors' entry into the Settlement would provide for new
lease terms that meet their business needs and avoid unnecessary
costs to the estate, Mr. Greecher asserts. "The Debtors do not
require the space and facilities of the current Premises beyond
the end of the year."
On the contrary, the Debtors maintain that assignment and
subleasing the Premises is a less attractive prospect than entry
into the Settlement as they might be required to make
significant up-front expenditures to refurbish the Premises
prior to sublease or assignment to make the space attractive to
new tenants.
* * *
At the Debtors' behest, Judge Carey extends the time by which
the Debtors must assume or reject the Leases to May 18, 2007,
provided that nothing will be deemed a waiver of the Debtors'
right to assume or reject the Leases before the set deadline.
The Court authorizes the Debtors to deposit with their counsel,
Kirkland & Ellis LLP, an amount equal to the payments
contemplated under the Settlement Documents. The Deposit will
be refunded in the event the Settlement Documents are not
approved or consummated.
Judge Carey will convene a hearing on May 18 to consider the
Debtors' request on a final basis.
Any interested party who opposes the approval of the Settlement
Documents must file a formal objection to the Court on or before
May 15, 2007.
About Sea Containers
Based in Hamilton, Bermuda, Sea Containers Ltd. --
http://www.seacontainers.com/-- provides passenger and freight
transport and marine container leasing. Registered in Bermuda,
the company has regional operating offices in London, Genoa, New
York, Rio de Janeiro, Sydney, and Singapore. The company is
owned almost entirely by United States shareholders and its
primary listing is on the New York Stock Exchange (SCRA and
SCRB) since 1974. On Oct. 3, the company's common shares and
senior notes were suspended from trading on the NYSE and NYSE
Arca after the company's failure to file its 2005 annual report
on Form 10-K and its quarterly reports on Form 10-Q during 2006
with the U.S. Securities and Exchange Commission.
Through its GNER subsidiary, Sea Containers Passenger Transport
operates Britain's fastest railway, the Great North Eastern
Railway, linking England and Scotland. It also conducts ferry
operations, serving Finland and Estonia as well as a commuter
service between New York and New Jersey in the U.S.
Sea Containers Ltd. and two subsidiaries filed for chapter 11
protection on Oct. 15, 2006 (Bankr. D. Del. Case No. 06-11156).
Edmon L. Morton, Esq., Edwin J. Harron, Esq., Robert S. Brady,
Esq., Sean Matthew Beach, Esq., and Sean T. Greecher, Esq., at
Young, Conaway, Stargatt & Taylor, represent the Debtors in
their restructuring efforts.
The Official Committee of Unsecured Creditors and the Financial
Members Sub-Committee of the Official Committee of Unsecured
Creditors of Sea Containers Ltd. is represented by William H.
Sudell, Jr., Esq., and Thomas F. Driscoll, Esq., at Morris,
Nichols, Arsht & Tunnell LLP. Sea Containers Services, Ltd.'s
Official Committee of Unsecured Creditors is represented by
attorneys at Willkie Farr & Gallagher LLP.
In its schedules filed with the Court, Sea Containers Ltd.
disclosed total assets of US$62,400,718 and total liabilities of
US$1,545,384,083. (Sea Containers Bankruptcy News, Issue
No. 16; Bankruptcy Creditors' Service, Inc.,
http://bankrupt.com/newsstand/or 215/945-7000)
The Debtors' exclusive period to file a chapter 11 plan of
reorganization expires on June 12, 2007.
WOELM HOLDING: Final General Meeting Is Set for June 14
-------------------------------------------------------
Woelm Holding Company Ltd.'s final general meeting will be at
9:00 a.m. on June 14, 2007, or as soon as possible, at the
liquidator's place of business.
Woelm Holding's shareholders will determine during the meeting,
through a resolution, the manner in which the books, accounts
and documents of the company and of the liquidator will be
disposed.
The liquidator can be reached at:
Jennifer Y. Fraser
Canon's Court, 22 Victoria Street
Hamilton, Bermuda
WOELM HOLDING: Proofs of Claim Filing Deadline Is May 28
--------------------------------------------------------
Woelm Holding Company Ltd.'s creditors are given until
May 28, 2007, to prove their claims to Jennifer Y. Fraser, the
company's liquidator, or be excluded from receiving any
distribution or payment.
In their proofs of claim, creditors must indicate their full
names, addresses, the full particulars of their debts or claims,
and the names and addresses of their lawyers, if any.
Woelm Holding's shareholders agreed on June 14, 2006, to place
the company into voluntary liquidation under Bermuda's Companies
Act 1981.
The liquidator can be reached at:
Jennifer Y. Fraser
Canon's Court, 22 Victoria Street
Hamilton, Bermuda
=============
B O L I V I A
=============
PETROLEO BRASILEIRO: Brazil Seeks Plant Price Pact with Bolivia
---------------------------------------------------------------
Brazilian Foreign Minister Celso Amorim told Bill Faries at
Bloomberg News reports that the country has sought to reach an
agreement with Bolivia on the selling price of two oil plants
owned by Brazilian state-run oil firm Petroleo Brasileiro SA in
Bolivia.
Mr. Amorim told the press, "I wouldn't even say there is a
dispute. What we have expressed very clearly to our Bolivian
friends is that unilateral actions are not normally conducive to
good results."
Bloomberg News' Mr. Faries relates that Petroleo Brasileiro
officials met with Bolivian Hydrocarbons and Energy Minister
Carlos Villegas in La Paz after Bolivia disclosed on May 6 that
it was transferring the company's right to sell crude and white
gasoline from the plants to Bolivia's own state-run oil firm
Yacimientos Petroliferos Fiscales Bolivianos.
According to Bloomberg News' Mr. Faries, Petroleo Brasileiro had
said after the May 6 announcement that it wants to sell the
plants.
As reported in the Troubled Company Reporter-Latin America on
May 9, 2007, Petroleo Brasileiro presented in a letter addressed
to Yacimientos Petroliferos, and to the Bolivian Hydrocarbons
Ministry, the terms of its final proposal for the sale of the
Guillermo Elder Bell Refinery, in Santa Cruz de La Sierra, and
of the Gualberto Villaroel Refinery, in Cochabamba, Bolivia.
The offer is for the full sale of Petrobras' share participation
in both refineries.
Minister Villegas was positive that a deal would be reached,
Bloomberg News' Mr. Faries says.
Brazilian Energy Minister Silas Rondeau told Brazilian press, "I
don't believe we've yet reached a point that we need to use a
contingency plan. We're waiting and hoping that the
negotiations will yield a positive result."
Bolivia offered to buy the two plants for US$60 million,
newswire EFE notes, citing Bolivian Vice President Alvaro Garcia
Linera.
However, Petroleo Brasileiro wants to sell the plants at US$112
million, EFE relates.
Bloomberg News' Mr. Faries states that Brazil's President Luiz
Inacio Lula da Silva had said that Brazil may seek international
arbitration. The Brazilian leader said, "A country has the
right to seek to buy a company that it believes it needs to take
care of. And Petrobras [Petroleo Brasileiro] has the right to
aim for a fair price."
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.
* BOLIVIA: Seeks To Reach Oil Refinery Price Accord with Brazil
---------------------------------------------------------------
Bolivia sought to reach an agreement with Brazil on the selling
price of two oil plants owned by Petroleo Brasileiro SA in
Bolivia, Bill Faries at Bloomberg News reports, citing Brazilian
Foreign Minister Celso Amorim.
Mr. Amorim told the press, "I wouldn't even say there is a
dispute. What we have expressed very clearly to our Bolivian
friends is that unilateral actions are not normally conducive to
good results."
Bloomberg News' Mr. Faries relates that Petroleo Brasileiro
officials met with Bolivian Hydrocarbons and Energy Minister
Carlos Villegas in La Paz after Bolivia disclosed on May 6 that
it was transferring the company's right to sell crude and white
gasoline from the plants to Bolivia's own state-run oil firm
Yacimientos Petroliferos Fiscales Bolivianos.
According to Bloomberg News' Mr. Faries, Petroleo Brasileiro had
said after the May 6 announcement that it wants to sell the
plants.
As reported in the Troubled Company Reporter-Latin America on
May 9, 2007, Petroleo Brasileiro presented in a letter addressed
to Yacimientos Petroliferos, and to the Bolivian Hydrocarbons
Ministry, the terms of its final proposal for the sale of the
Guillermo Elder Bell Refinery, in Santa Cruz de La Sierra, and
of the Gualberto Villaroel Refinery, in Cochabamba, Bolivia.
The offer is for the full sale of Petrobras' share participation
in both refineries.
Minister Villegas was positive that a deal would be reached,
Bloomberg News' Mr. Faries says.
Brazilian Energy Minister Silas Rondeau told Brazilian press, "I
don't believe we've yet reached a point that we need to use a
contingency plan. We're waiting and hoping that the
negotiations will yield a positive result."
Bolivia offered to buy the two plants for US$60 million,
newswire EFE notes, citing Bolivian Vice President Alvaro Garcia
Linera.
However, Petroleo Brasileiro wants to sell the plants at US$112
million, EFE relates.
Bloomberg News' Mr. Faries states that Brazil's President Luiz
Inacio Lula da Silva had said that Brazil may seek international
arbitration. The Brazilian leader said, "A country has the
right to seek to buy a company that it believes it needs to take
care of. And Petrobras [Petroleo Brasileiro] has the right to
aim for a fair price."
* * *
Fitch Ratings assigned these ratings on Bolivia:
Rating Rating Date
Country Ceiling B- Jun. 17, 2004
Long Term IDR B- Dec. 14, 2005
Local Currency
Long Term Issuer
===========
B R A Z I L
===========
AMRO REAL: Banco Itau Wants To Acquire Bank
-------------------------------------------
Banco Itau Holding Financeira's Senior Vice President Henri
Penchas said in a conference call that the bank is interested in
acquiring ABN Amro Real, Dutch bank ABN Amro's Brazilian unit,
"at the right price."
Mr. Penchas admitted to Business News Americas, "Obviously we're
interested, but it seems [UK bank] Barclays [NYSE: BCS] wants to
hold onto the bank in Brazil."
BNamericas relates that ABN Amro agreed in April to a
EUR67-billion takeover by Barclays. However, an RBS-led
consortium with Santander and Fortis made another offer.
According to BNamericas, Barclays wants to acquire all ABN Amro
assets except for the LaSalle Bank in the US, which would be
sold to Bank of America.
Banco Itau is waiting to see how the talks will turn out. The
bank could make a bid at a favorable time, BNamericas says,
citing Mr. Penchas.
"Without a doubt, ABN Amro Real is an exceptional bank, very
well managed and with extremely competent personnel. For the
right price and adding value for our shareholders, it interests
us," Mr. Penchas told BNamericas.
About Banco Itau
Banco Itau currently has 51 thousand employees serving more than
16 million clients, through its network of 2,391 branches and 22
thousand ATMs.
About ABN Amro Real
ABN Amro Real specializes in commercial banking, capital
markets, corporate banking, asset management, and trade finance.
Its more than 22,000 employees assist over five million clients
throughout five thousand different points of sales. In 1999,
the bank merged with Brazil's Banco Real. The regional office
for Latin America and the Caribbean is located in Brazil.
* * *
As reported in the Troubled Company Reporter-Latin America on
Sept 4, 2006, Moody's Investors Service upgraded Banco ABN AMRO
Real S.A.'s long-term foreign currency deposits to Ba3, from B1.
Moody's said the rating outlook is stable.
BANCO DO BRASIL: Discloses Business Consolidation Plan
------------------------------------------------------
Banco do Brasil has disclosed restructuring plans aimed at
improving its regional presence, Business News Americas reports.
BNamericas relates that the restructuring plans involved the
consolidation of 43 regional loan offices into five and reforms
to 415 branches.
Banco do Brasil told BNamericas that it expects to save BRL350
million a year from the restructuring measures, which could
decrease its workers by 1.5%.
The workers union has opposed the plans, promising to try
blocking them, BNamericas states.
Banco do Brasil is Brazil's federal bank and is the largest in
Latin America with some 20 million clients and over 7,000 points
of sale (3,200 branches) in Brazil, and 34 offices and
partnerships in 26 other countries. In addition to its
traditional retail banking services, Banco do Brasil underwrites
and sells bonds, conducts asset trading, offers investors
portfolio management services, conducts financial securities
advising, and provides market analysis and research.
* * *
As reported on Mar. 3, 2006, Standard & Poor's Ratings Services
raised its foreign currency counter party credit ratings on
Banco do Brasil SA to 'BB' from 'BB-'. The foreign and local
currency ratings of this bank are now equalized at 'BB'. S&P
said the outlook is stable.
BANCO DO BRASIL: Will Incorporate Besc, Says Brazilian President
----------------------------------------------------------------
Banco do Brasil will absorb Besc, the former Santa Catarina
state bank, Business News Americas reports, citing Brazilian
President Luiz Inacio Lula da Silva.
As reported in the Troubled Company Reporter-Latin America on
April 24, 2007, Banco do Brasil said that the country's treasury
department is considering the bank's absorption of former Santa
Catarina state bank Banco do Estado de Santa Catarina or Besc
and real estate finance company Bescri. According to Banco do
Brasil, the treasury decided to study the bank's merger with
Besc after meetings with the finance ministry.
BNamericas relates that President Lula da Silva said in a speech
in front of Santa Catarina state governor Luiz Henrique da
Silveira and Besc president Eurides Luiz Mescolotto, "We've
already decided we're not going to privatize Besc. We're going
to do something I think is more important. BB [Banco do Brasil]
is going to buy Besc, which will become part of the BB network
and keep its name because it doesn't need to change. We want to
prove that well-administered and well-managed state-owned banks
are of great benefit to the development of any state in Brazil."
Rumors of Banco do Brasil absorbing Besc have circulated since
earlier this year. Finance minister Guido Mantega called in
March for the privatization of Besc. The national treasury and
the Santa Catarina finance ministry created a committee on March
6 to discuss Besc's future, BNamericas 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 ITAU: Interested in Buying ABN Amro Real
----------------------------------------------
Banco Itau Holding Financeira's Senior Vice President Henri
Penchas said in a conference call that the bank is interested in
acquiring ABN Amro Real, Dutch bank ABN Amro's Brazilian unit,
"at the right price."
Mr. Penchas admitted to Business News Americas, "Obviously we're
interested, but it seems [UK bank] Barclays [NYSE: BCS] wants to
hold onto the bank in Brazil."
BNamericas relates that ABN Amro agreed in April to a EUR67-
billion takeover by Barclays. However, an RBS-led consortium
with Santander and Fortis made another offer.
According to BNamericas, Barclays wants to acquire all ABN Amro
assets except for the LaSalle Bank in the US, which would be
sold to Bank of America.
Banco Itau is waiting to see how the talks will turn out. The
bank could make a bid at a favorable time, BNamericas says,
citing Mr. Penchas.
"Without a doubt, ABN Amro Real is an exceptional bank, very
well managed and with extremely competent personnel. For the
right price and adding value for our shareholders, it interests
us," Mr. Penchas told BNamericas.
About ABN Amro Real
ABN Amro Real specializes in commercial banking, capital
markets, corporate banking, asset management, and trade finance.
Its more than 22,000 employees assist over five million clients
throughout five thousand different points of sales. In 1999,
the bank merged with Brazil's Banco Real. The regional office
for Latin America and the Caribbean is located in Brazil.
About Banco Itau
Banco Itau currently has 51 thousand employees serving more than
16 million clients, through its network of 2,391 branches and 22
thousand ATMs.
* * *
As reported in the Troubled Company Reporter-Latin America on
May 2, 2007, Fitch Ratings assigned these ratings to Banco ABN
AMRO Real S.A.:
-- 'BB+' long-term foreign currency Issuer Default
Rating (IDR);
-- 'B' short-term foreign currency rating;
-- 'BBB-' long-term local currency IDR;
-- 'F3' short-term local currency;
-- Individual 'C'.
Fitch also affirmed the bank's other ratings:
-- 'AA+(bra)' national long-term;
-- 'F1+(bra)' national short-term;
-- support rating at '3'.
BANCO NACIONAL: Board Approves BRL3.95-Million Financing
--------------------------------------------------------
Banco Nacional de Desenvolvimento Economico e Social aka BNDES'
board of directors has approved a BRL3.95 million financing
within the scope of the Line of Support to Innovation, to Partec
Integracao e Tecnologia para a Informatica Ltda, in the city of
Sao Leopoldo/RS. The objective is the infrastructure expansion
of the Local Productive Arrangement installed in the city
Informatics Pole, with the construction of a 4,690 m2 building
addressed to research, development and innovation activities.
The operation will be indirectly carried out, through the Caixa
Estadual S/A - Fomenting Agency/RS.
The project is part of a more comprehensive initiative, which
forecasts the construction of two towers, for a total
constructed area of 8,160 m2, plus parking lots.
Partec is a Special Purpose Entity created to execute the
project and manage its infrastructure after investment
conclusion. The venture was conceived and will be managed on a
cooperative basis by the businessmen of the Technologic Park and
by the companies Altus Sistemas de Informatica S.A., Digistar
Telecomunicacoes Ltda, GVDASA Consultoria em Informatica Ltda,
META Servicos em Informatica Ltda and SKA Automacao de
Engenharias Ltda.
The project should benefit the carrying out of research,
development and innovation initiatives and the creation of new
companies. The venture forecasts the generation of 800 new work
posts in the companies installed in the Technologic Park. Its
implementation will strengthen the APL concept in the
Informatics Pole, as it promotes infrastructure sharing and
rationalization, aimed at the growth of the companies installed
in the location and the cooperative development of solutions for
clients, and should attract other companies. It also
facilitates contacts with the industry, technology transfer and
the commercialization of the academic research conducted at
Unisinos, encouraging the emerging of spin-off companies started
by college students. Another positive factor is to provide
access to edge research and development activities of companies
located in the park.
In addition, the new facilities should consolidate and stimulate
university born companies, as well as the carrying out of human
resources capacitation and absorption activities, technology
transfer and qualification and certification of products and
processes.
The Technologic Park currently has an approximately 7,600 m2
constructed area, where seven companies operate. The current
project will represent an approximately 60% increment of the
park total constructed area.
The building will comprise 60 m2 and 640 m2 units, thus enabling
flexibility in the occupation. It will have central air
conditioning system, electric facilities and data and phone
network, to be implemented to allow adaptation to each company
or project lay out that uses it. The expectation is to shelter
at least seven companies in the building, after the construction
is completed.
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: Grants BRL4.26 Billion in Home Loans for 1Q
------------------------------------------------------------
Caixa Economica Federal told Business News Americas that it
granted about BRL4.26 billion in home loans in the first four
months of 2007, which was 13.0% higher compared to the same
period in 2006.
BNamericas relates that Caixa Economica's home loans totaled
about BRL4.55 billion after the first three working days of May.
According to BNamericas, Caixa Economica used BRL1.46 billion
from savings deposits on home loans, which was 75% higher
compared to the same period in 2006.
BNamericas notes that Caixa Economica home loans this year would
increase 22.5% to at least BRL17.4 billion, compared to BRL14.2
billion in 2006. Caixa Economica would lend about BRL85 billion
over the course of the year.
The report says that local savings and home loan providers
association Abecip predicts that home loans financed by savings
accounts, not including funds for predominantly lower income
earners, would grow 15% to BRL11 billion this year, compared to
last year.
Abecip told BNamericas that new home loans in Brazil increased
86.1% to BRL2.91 billion in the first quarter 2007, from the
first quarter 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.
HAYES LEMMERZ: Stockholders Okay US$180 Million Rights Offering
---------------------------------------------------------------
Hayes Lemmerz International Inc.'s stockholders approved of:
a) a rights offering of up to US$180 million to holders of
the company's outstanding Common Stock as of
April 10, 2007, through the issuance of 55,384,615 rights
to purchase one share of Common Stock at an exercise price
of US$3.25 per share,
b) the sale of any Common Stock not subscribed for in the
Rights Offering to Deutsche Bank Securities Inc. and SPCP
Group LLC, an affiliate of Silver Point Capital L.P.;
c) at the Investor's option, the purchase of up to 4,038,462
shares of Common Stock at the Exercise Price, resulting in
additional proceeds of up to US$13,125,002; and
d) the related Amended and Restated Equity Purchase and
Commitment Agreement and other transactions contemplated.
The stockholders also considered the proposals on:
-- Amendment of the company's Certificate of Incorporation
to increase the aggregate number of authorized shares of
Common Stock from 100 million to 200 million and the
aggregate number of authorized shares of capital stock
from 101 million to 201 million.
-- Amendment of the company's Certificate of Incorporation
to increase the maximum number of members of the board of
directors from nine to twelve.
All three proposals were approved, with more than 99% of the
shares voted at the special meeting and more than 61% of the
total issued and outstanding shares supporting each proposal.
"The company appreciates the strong support of its stockholders
in the company's efforts to reduce its debt and increase
stockholder equity," James Yost, vice president of finance and
chief financial officer, said. "The approval of the Rights
Offering and the related proposals is a significant step in
completing the company's overall debt refinancing, reducing
leverage and lowering interest costs, as reflected in the
improved ratings by Standard & Poor's Ratings Services and
Moody's Investor Services."
Each record holder of the company's Common Stock on
April 10, 2007, received 1.3970 rights for each share of common
stock held on the record date. The rights may be exercised
until 5:00 p.m. Eastern Daylight Time on May 21, 2007, unless
the company extends the Rights Offering. 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.
About Hayes Lemmerz International
Headquartered in Northville, Michigan, Hayes Lemmerz
International Inc. (Nasdaq: HAYZ) -- http://www.hayes-
lemmerz.com/ -- is a global supplier of steel and aluminum
automotive and commercial vehicle highway wheels, well as
aluminum components for brakes, powertrain, suspension, and
other lightweight structural products. Worldwide revenues
approximate US$2.1 billion. The company has 30 facilities and
approximately 8,500 employees worldwide. The company has 33
facilities worldwide including India, Brazil and Germany, among
others.
* * *
As reported on May 4, 2007, Moody's Investors Service raised to
B3 from Caa1 the corporate family and probability of default
ratings of Hayes Lemmerz International's wholly owned
subsidiary, HLI Operating Company, Inc., and changed the rating
outlook to stable from negative. Moody's also assigned a B2
(LGD3, 33%) to new senior secured bank facilities to be issued
by HLI, a B2 (LGD3, 33%) to a secured term loan and synthetic
letter of credit facility to be issued by HLI Luxembourg
S.a.r.l. and a Caa2 (LDG5, 87%) to new senior unsecured notes
also to be issued by HLI Luxembourg.
HAYES LEMMERZ: Unit Launches Cash Tender Offer for 10-1/2% Notes
----------------------------------------------------------------
Hayes Lemmerz International, Inc.'s indirect subsidiary, HLI
Operating Company, Inc., commenced a cash tender offer to
repurchase all of its outstanding 10-1/2% Senior Notes Due 2010,
upon the terms and subject to the conditions set forth in HLI's
Offer to Purchase and Consent Solicitation Statement dated
May 8, 2007, and the related Letter of Transmittal and Consent
for Tender Offer. HLI is also soliciting consents to amend the
indenture governing the Notes. The proceeds of the company's
previously announced US$180.0 million equity rights offering
will be used by HLI to repurchase the Notes. Currently, the
aggregate principal amount of Notes outstanding is US$157.0
million.
The tender offer and consent solicitation for the Notes are part
of a recapitalization of the Company and its subsidiaries that
includes the Rights Offering and a proposed new senior secured
credit facility in the aggregate principal amount of US$495.0
million that will be used, together with additional indebtedness
of approximately US$150.0 million to be incurred by the Company,
to refinance debt under the company's Amended and Restated
Credit Agreement dated as of April 11, 2005, and related
documents, to pay related transaction costs, fees, and expenses,
to provide working capital, and for other general corporate
purposes.
Holders who validly tender their Notes and deliver their
consents to the proposed amendments to the indenture on or prior
to 5:00 p.m., New York City time, on May 21, 2007, unless
extended or earlier terminated, will be eligible to receive the
"Total Consideration" for the Notes. The "Total Consideration"
to be paid for each US$1,000 of principal amount of Notes
validly tendered and accepted for purchase, subject to the terms
and conditions of the Offer to Purchase, will be paid in cash
and will be based on a fixed spread pricing formula. HLI
expects to determine the Total Consideration on May 21, 2007
(unless extended), based upon a fixed spread of 50 basis points
over the yield on the 3.625% U.S. Treasury Note due
June 30, 2007. The Total Consideration includes a consent
payment equal to US$30.00 per US$1,000 in principal amount of
Notes.
Tendered Notes may not be withdrawn and consents may not be
revoked after the Consent Date. The tender offer will expire at
11:59 p.m., New York City time, on June 5, 2007, unless extended
or earlier terminated by HLI. Holders of Notes who tender their
Notes after the Consent Date and on or before the expiration
date will receive the Tender Offer Consideration, which is the
Total Consideration minus the Consent Payment.
In each case, holders whose Notes are accepted for payment in
the tender offer will receive accrued and unpaid interest in
respect of such purchased Notes from the last interest payment
date to, but not including, the applicable payment date for
Notes purchased in the tender offer.
Concurrently with the tender offer, HLI is soliciting consents
to amend the indenture governing the Notes. The proposed
amendments to the indenture governing the Notes will, among
other things, eliminate substantially all restrictive covenants,
certain related events of default and conditions on the
defeasance of the Notes, and certain limitations on the ability
of HLI and the company to merge, consolidate, sell all or
substantially all of their assets, and enter into similar
transactions. In addition, the proposed amendments will permit
notice of redemption of the Notes and the intended redemption
thereof to occur on the same day. On or promptly after receipt
of the requisite consents, HLI and the trustee under the
indenture will execute an amendment to the indenture, the
amended provisions of which will not become operative until the
date on which HLI purchases those Notes validly tendered (and
not validly withdrawn) on or prior to the Consent Date.
The tender offer and consent solicitation for the Notes is
conditioned on the satisfaction of certain conditions,
including, but not limited to:
a) the valid tender on or prior to the Consent Date (without
a valid withdrawal) of at least a majority of the
aggregate principal amount of Notes outstanding not owned
by HLI or any of its affiliates;
b) receipt by the Company upon completion of the Rights
Offering of net cash proceeds sufficient to fund:
(i) the purchase of all Notes validly tendered (and not
validly withdrawn) in the tender offer,
(ii) the payment of the fees and expenses related to the
Rights Offering, the tender offer, and the consent
solicitation, and
(iii) the amendment or refinancing of the Existing Credit
Facility; and
c) the execution of the Supplemental Indenture on or promptly
following receipt of the requisite consents.
Deutsche Bank Securities Inc. is the dealer manager for the
tender offer and solicitation agent for the consent
solicitation. Questions regarding the tender offer and consent
solicitation should be directed to Patricia McGowan at
(212) 250-7772 (collect). Requests for documentation may be
directed to Innisfree M&A Incorporated, the Information Agent,
which may be contacted at (212) 750-5833 (for banks and brokers
only) or toll-free (888) 750-5834 (for all others).
About Hayes Lemmerz
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 on May 4, 2007, Moody's Investors Service raised to
B3 from Caa1 the corporate family and probability of default
ratings of Hayes Lemmerz International's wholly owned
subsidiary, HLI Operating Company, Inc., and changed the rating
outlook to stable from negative. Moody's also assigned a B2
(LGD3, 33%) to new senior secured bank facilities to be issued
by HLI, a B2 (LGD3, 33%) to a secured term loan and synthetic
letter of credit facility to be issued by HLI Luxembourg
S.a.r.l. and a Caa2 (LDG5, 87%) to new senior unsecured notes
also to be issued by HLI Luxembourg.
HAYES LEMMERZ: Fitch Assigns B Issuer Default Rating
----------------------------------------------------
Fitch Ratings has initiated ratings for Hayes Lemmerz
International Inc. with an Issuer Default Rating of 'B'.
Fitch also expects to assign ratings to Hayes Lemmerz's proposed
senior secured revolving credit facility, senior secured Euro
term loan, senior secured Euro synthetic letter of credit
facility, and senior unsecured notes. The proposed facility
replaces HAYZ' existing bank facility.
The ratings are:
Hayes Lemmerz International, Inc.
-- Issuer Default Rating 'B';
HLI Operating Company, Inc. (HLI Opco)
-- Issuer Default Rating 'B';
-- Senior secured revolving credit facility 'BB/RR1';
Hales Lemmerz Finance - Luxembourg S.A. (European Holdco)
-- Issuer Default Rating 'B';
-- Senior secured revolving credit facility 'BB/RR1';
-- Senior secured Euro term loan 'BB/RR1';
-- Senior secured Euro synthetic LOC facility 'BB/RR1';
-- Senior unsecured Euro notes 'B-/RR5'.
The Rating Outlook is Stable. Fitch's ratings incorporate the
expectation that HAYZ will complete several pending financial
transactions, including HAYZ' US$180 million rights offering,
the proposed bank facility and the US$150 million Euro notes
offering.
The ratings are also contingent on a review of final
documentation. Including the undrawn revolver, Fitch's ratings
affect approximately US$515 million in total debt.
Fitch's ratings reflect the benefits of HAYZ' pending
recapitalization, the company's strong presence in the global
wheel market, geographic diversity, a growing book of non-
Detroit 3 customers, significant progress in restructuring
operations and improved operating results. Fitch's concerns
include low free cash flow, the exposure to the Detroit 3
customers' potential for a labor stoppage, a leveraged balance
sheet, and the risk that further restructuring may be necessary.
The Stable Outlook reflects Fitch's expectations for moderate
revenue growth and modestly positive free cash flow over the
intermediate term. These expectations are supported by HAYZ'
geographic diversity which provides access to higher growth
vehicle markets and reduces the risk of cyclicality in any one
region. Fitch believes there is some downside cushion to the
Outlook, and HAYZ could generate limited positive free cash flow
and minor debt reduction even under a stressed scenario that
includes the assumptions of substantial declines in Detroit 3
volume and limited margin improvement despite significant
restructuring in recent years. However, the Outlook could be
negatively affected by uncertainty with respect to the upcoming
UAW contract negotiations as well as a financially stressed
supply base, both of which could cause considerable disruptions
to the industry's production, as well as to HAYZ' balance sheet,
which could quickly deteriorate given the limited free cash flow
that Fitch has estimated. The Outlook could be positively
affected if more solid free cash flow were to materialize from
consistent, steady operating conditions and expected volumes in
2007, leading to more significant debt reduction.
The recovery ratings and notching in the debt structure reflect
Fitch's recovery expectations under a scenario in which
distressed enterprise value is allocated to the various debt
classes. Fitch's recovery analysis for HAYZ is based on a
restructuring as a going concern scenario rather than a
liquidation. Fitch estimates that in a distressed scenario,
HAYZ' enterprise value could significantly deteriorate and
secured debt holders would most likely still receive full
recovery. As a result, the proposed senior secured facilities
were assigned an 'RR1' (91% to 100% recovery), and the senior
secured revolver, Euro term loan and Euro synthetic LOC loan
were notched +3 from the IDR under Fitch's recovery methodology.
The senior unsecured Euro notes were assigned a recovery rating
of 'RR5' (11% to 30%) and notched -1 from the IDR to reflect the
junior position of the senior unsecured debt holders' claim
relative to the senior secured debt holders'. Despite the fact
that many of HAYZ' operations are located outside of North
America, Fitch did not use its 'soft cap' guidelines for HAYZ
because Fitch believed that any restructuring action would
likely be initiated in the U.S., allowing for Fitch's standard
notching policies to be followed.
HAYZ' recapitalization enhances the company's financial
flexibility by reducing leverage, extending maturities and
providing approximately US$25 million of incremental liquidity.
The proposed capital structure also reduces HAYZ' cost of
capital and better aligns currency denomination and collateral
with the geographic location of HAYZ' primary source of
operating cash flow. The proposed bank agreement consists of a
US$125 million revolving credit facility, a Euro denominated
term loan facility of up to US$350 million equivalent and a Euro
denominated US$20 million equivalent synthetic LOC facility.
Hayes will concurrently offer approximately US$150 million in
equivalent Euro denominated senior unsecured notes. The notes
will be issued by a European Holdco subsidiary but will be
offered in the United States to qualified institutional
investors.
The company also intends to pay off its 10-1/2% notes due 2009
using proceeds from a US$180 million equity rights offering.
Stockholders are to receive 1.3970 rights for each share of
common, entitling the purchase of stock at US$3.25 per share.
The rights offering is backstopped by Deutsche Bank. Silver
Point Capital has agreed to acquire one-half of Deutsche Bank's
shares purchased under the backstop. Deutsche Bank also has the
option to make a direct investment of up to a maximum of
slightly more than 4 million shares of common at US$3.25 per
share or roughly US$13 million. Deutsche's direct investment
shares would be incremental to the number of shares in the
rights offering. The rights offering was approved by
stockholders at a special meeting held May 4.
The proposed Euro term loan and Euro synthetic LOC loan will be
obligations of a European Holdco domiciled in Luxembourg. The
proposed revolver will be the obligation of the HLI Operating
Co. and the European Holdco. To the extent allowed by law and
tax implications, the parent -- Hayes Lemmerz International, Inc
-- guarantees the proposed senior secured facility. Collateral
includes substantially all of HAYZ' assets and 65% of the stock
of the first-tier foreign subsidiaries. The revolver has first
priority over the Euro term loan with respect to the domestic
assets among the lenders in the credit agreement. Relative to
any other party outside of the credit agreement, only one lien
on substantially all assets exists. This is established by the
collateral sharing agreement, which states that upon
acceleration, all of the lenders receive pro rata recovery,
independent of the facility into which they were lending. This
reduces recovery analysis complexity regarding the alignment of
cash flows and assets with their respective tranche as well as
any issues with foreign entities' ability to guarantee the US
loans due to tax implications.
The proposed bank facility covenants include limitations on
indebtedness, liens and capital expenditures as well as maximum
leverage and minimum coverage ratios.
Going forward, HAYZ is expected to benefit from its steel wheel
technology, moves to lower cost countries and growth from non-
Detroit 3 customers, especially in regions of increasing vehicle
demand. To some degree, the demand for steel wheels in the U.S.
has seen resurgence in recent years due to reduced weight
differential with aluminum wheels, improved styling capability
and substantially competitive pricing versus aluminum. However,
aluminum wheels may garner increasing installation rates in
other regions of the world. Given HAYZ' moves to locate steel
and aluminum wheel capacity throughout the globe, the company
stands to benefit from steel wheel penetration in the US,
aluminum penetration outside the US and from higher growth
vehicle markets such as Eastern Europe, India and China.
On a discontinued operations (disc ops) basis, consolidated
sales for fiscal 2006 were up 5.1% to US$2,056 million from
US$1,957 million in the prior year. Consolidated Operating
EBITDA margin improved 150 basis points (bps) to 8.7% from 7.2%
in fiscal 2005. The Wheels Group sales increased 4.8% to
US$1,672 million in fiscal 2006 from US$1,594 million in the
prior year. Fitch calculates a 70 bps improvement in Operating
EBITDA margin for the Wheel Group to 10.6%, healthy for an
automotive supplier, from 9.9% in fiscal 2005. On a disc ops
basis, fiscal 2006 sales for the Components Group rose 6.2% to
US$385 million from US$362 million. Fitch calculates Components
Group Operating EBITDA declined 110 bps to 2.6% from 3.7% in
fiscal 2005. In addition, HAYZ reported a US$71.6 million
improvement in consolidated free cash flow excluding
securitizations and factoring of a use of US$9.1 million versus
a use of US$80.7 million in fiscal 2005.
Including the cash and marketable securities balance of US$38.4
million, total liquidity at the end of fiscal 2006 on
Jan. 31, 2007, was US$146.1 million. At year-end, HAYZ had no
outstanding borrowings under its revolver and US$79.7 million of
availability after US$$20.3 million in outstanding LOCs. The
company also had a U.S. securitization facility of approximately
US$65 million of which US$28 million was available at year-end.
In addition, the company had US$39.3 million outstanding and
US$4.7 million available under its uncommitted European
receivable facilities, the availability of which Fitch does not
include in liquidity since the facilities are cancelable at any
time. As of Jan. 31, total adjusted debt-to-EBITDA was reduced
to 3.9 times, down from 4.5x at the end of fiscal 2005.
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.
INTERNATIONAL PAPER: Earns US$434 Million in First Quarter 2007
---------------------------------------------------------------
International Paper Co. reported preliminary first-quarter 2007
net earnings of US$434 million, compared with net loss of US$1.2
billion in the first quarter of 2006. Amounts in all periods
include special items, including the receipt of proceeds from
the sale of the majority of the company's U.S. forestlands in
the fourth quarter of 2006.
Quarterly net sales were US$5.2 billion, compared with US$5.3
billion in the fourth quarter of 2006, and US$5.5 billion in the
first quarter of 2006, primarily reflecting lower forestland
sales.
Industry segment operating profits continued to rise to
US$530 million for the 2007 first quarter versus US$425 million
in the 2006 fourth quarter and US$411 million in the first
quarter of 2006. The increase reflects continued strong average
price realizations and strong manufacturing operations.
"We've hit the ground running in 2007 with our best first
quarter since 2000 and operational margins up nearly 300 basis
points versus the first quarter last year," said Chairman and
CEO John Faraci. "Our pricing momentum remains strong, with
volumes flat overall as we took some downtime and shifted
product among global markets to match our supply with our
customers' demand. Our manufacturing operations performed well
and improvements in cost and mix more than offset some overall
increases in input costs. We've also now bought more than
US$800 million in shares on the open market, which has brought
our outstanding share count down."
Commenting on the second quarter of 2007, Mr. Faraci said, "We
expect somewhat higher earnings from continuing operations in
the second quarter, with seasonally stronger volumes and
improvements in average price realizations. We continue to
improve the performance of our global manufacturing operations,
and we'll realize earnings from our first full quarter of
operations from the Luiz Antonio mill in Brazil. We expect that
input costs will remain high and also expect to have slightly
higher maintenance outage expense in the second quarter."
As of March 31, 2007, the company listed total assets of
US$23.8 billion and total liabilities of US$15.7 billion, with
minority interest of US$236 million, resulting to a total
shareholders' equity of US$7.9 billion.
Segment Information
Operating profits for Printing Papers were US$231 million, up
from fourth quarter 2006 operating profits of US$191 million,
excluding special items. Industrial Packaging operating profits
were US$103 million, compared with US$130 million in the prior
quarter. Consumer Packaging operating profits were US$61
million in the first quarter, up from US$27 million in the 2006
fourth quarter, due to higher earnings in U.S. and European
coated paperboard and foodservice businesses, as well as
contributions from the IP-Sun Paper joint venture in China. The
company's distribution business, xpedx, reported record first-
quarter operating profits of US$29 million compared with
operating profits in the prior quarter of US$31 million. Sales
revenues were slightly down versus the fourth quarter of 2006
because of seasonal slowdowns in volumes.
Forest Products operating profits declined to US$100 million
from fourth-quarter operating profits of US$162 million. Net
corporate expense totaled US$164 million for the quarter,
essentially even with US$166 million in the 2006 fourth quarter
and well below US$180 million for the 2006 first quarter.
About International Paper
Based in Stamford, Connecticut, International Paper Co.
(NYSE: IP) -- http://www.internationalpaper.com/-- is in the
forest products industry for more than 100 years. The company
is currently transforming its operations to focus on its global
uncoated papers and packaging businesses, which operate and
serve customers in the U.S., Europe, South America and Asia. In
Europe, the company has offices in the United Kingdom, Poland,
Russia, among others. These businesses are complemented by an
extensive North American merchant distribution system.
International Paper is committed to environmental, economic and
social sustainability, and has a long-standing policy of using
no wood from endangered forests.
* * *
International Paper Co. carries Moody's Investors Service Ba1
senior subordinate rating and Ba2 Preferred Stock rating.
LAZARD LTD: March 31 Balance Sheet Upside-Down by US$206.8 Mil.
---------------------------------------------------------------
Lazard Ltd. reported total assets of US$2.6 billion, total
liabilities of US$2.8 billion, and minority interest at
US$55.7 million, resulting in a total stockholders' deficit of
US$206.8 million as of March 31, 2007.
Total revenue for the first quarter ended March 31, 2007, was
US$398.6 million, as compared with total revenue for the first
quarter ended March 31, 2006, of US$355 million. Net income
increased to US$26.4 million, as compared with US$19.7 million
for the first quarter of 2006.
Operating revenue increased to US$388.2 million, as compared
with US$351.1 million for the first quarter of 2006, resulting
primarily from growth in the company's Asset Management
business. Operating income was US$78.3 million, as compared
with US$78.1 million for the first quarter of 2006.
"We have made impressive achievements in our Asset Management
business with record assets under management of US$124.9 billion
and record quarterly positive net inflows, with US$11.6 billion
in new assets in the quarter. Our three-year plan for Asset
Management has been a success and progress is continuing," said
Bruce Wasserstein, chairman and chief executive officer of
Lazard Ltd.
"In our Financial Advisory business, we continue to serve as
independent, strategic advisors on some of the most important
cross-border, global and domestic M&A and restructuring
assignments around the world. We are actively pursuing
expanding Financial Advisory by geography and adjacent
businesses through acquisitions, investments and new hires. We
also are actively pursuing expansion of our Asset Management
business through acquisitions, new investment products,
including merchant banking investments, making new hires of
individuals and teams, and upgrading our current platforms. We
continue to invest for future growth and feel that the firm is
well positioned."
"Our market position is strong in both our Financial Advisory
and Asset Management businesses," noted Steven J. Golub,
Lazard's vice-chairman. "Our Financial Advisory backlog
continues to build, and we are the strategic advisor on many
high-profile, precedent-setting transactions, including the
restructuring of New Century Financial, a leader in sub-prime
lending; Barclays' US$91.3 billion merger with ABN Amro, the
largest bank merger in history; Acciona in its agreement with
Enel concerning their EUR 43.7 billion transaction with respect
to Endesa; and TXU's US$45 billion sale to a private equity
group, the largest-ever LBO. We continue to work on other major
transactions such as Mellon Financial's US$16.5 billion merger
with The Bank of New York, KeySpan's US$11.8 billion sale to
National Grid, the Chicago Board of Trade's merger discussions
and American Standard's plan to separate its businesses. We
continue to add senior talent, such as executive Donald G.
Drapkin, who joined us last week."
"Our results are best measured on an annual basis rather than on
any single quarter," added Mr. Golub. "This year our backlog
for completion of transactions seems to be weighted toward the
second half of the year. We continue to focus on controlling
costs. The increase in our non-compensation expense was
impacted by, among other factors, one-time cost recoveries in
the first quarter of 2006. We remain confident that the
operating leverage in our business model will continue to yield
long-term positive results."
About Lazard Ltd.
Lazard Ltd. -- http://www.lazard.com/-- one of the world's
preeminent financial advisory and asset management firms,
operates from 29 cities across 16 countries in North America,
Europe, Asia, Australia and Brazil. With origins dating back to
1848, the firm provides services including mergers and
acquisitions advice, asset management, and restructuring advice
to corporations, partnerships, institutions, governments, and
individuals.
STRATOS INT'L: Annual Meeting Delay Cues Nasdaq Delisting Notice
----------------------------------------------------------------
Stratos International has received a notice from Nasdaq
indicating that, because Stratos failed to hold its 2006 annual
meeting of shareholders prior to April 30, 2007, Nasdaq was
initiated the process to delist Stratos' securities from trading
on The Nasdaq Global Market. Stratos has appealed the delisting
determination and Nasdaq has scheduled a hearing on the matter
in early June.
Stratos determined to delay holding its annual meeting of
shareholders in light of its decision to explore strategic
alternatives, including a possible sale of the company, which
was announced on Sept. 14, 2006. In connection with this
process, Stratos retained CIBC World Markets Corp. as its
exclusive financial advisor. Because Steel Partners II publicly
disclosed its plan to conduct a proxy contest with respect to
election of directors and also indicated an interest in
acquiring the company, Stratos' board concluded that it would be
impossible to conduct a meaningful strategic alternative process
if control of the board of directors might change in the midst
of the process.
Stratos has pursued this process, one in which Steel Partners II
was invited to participate, for nearly eight months. As a
consequence, Stratos currently is in negotiations in connection
with the completion of the process. However, there can be no
assurance that the negotiations will be resolved successfully or
that any transaction will occur. Stratos plans to conduct its
annual meeting as soon as practicable following resolution of
the process.
In accordance with Nasdaq procedures, Stratos has requested a
hearing with the Nasdaq Listing Qualifications Panel to appeal
the delisting determination. Stratos' shares will remain listed
on Nasdaq Global Market under the ticker symbol STLW pending a
decision by Nasdaq. There can be no assurance that Nasdaq will
grant Stratos' request for continued listing.
About Stratos International
Headquartered in St. John's, Newfoundland, Canada, with
executive offices in Bethesda, Maryland, Stratos Corporation
(Nasdaq: STLW) -- http://www.stratosglobal.com/-- is a publicly
traded company that provides a range of mobile and fixed-site
remote communications solutions for users operating beyond the
reach of traditional networks. The company has offices in
Canada, Brazil, the United Kingdom, Norway, Germany, the
Netherlands, Sweden, Italy, Spain, Turkey, Russia, Kenya, South
Africa, United Arab Emirates, India, Hong Kong, Japan,
Singapore, Australia and New Zealand.
* * *
As reported in the Troubled Company Reporter on May 9, 2007,
Moody's Investors Service confirmed Stratos Global Corporation's
B1 corporate family, Ba2 senior secured and B3 senior unsecured
ratings and lowered the company's speculative grade liquidity
rating to SGL-4 from SGL-3. The outlook is negative. The long
term ratings reflect a B1 probability of default and loss-given
default assessments of LGD 2, 24% on the senior secured debt and
LGD 5, 77% on the senior unsecured notes.
TRW AUTOMOTIVE: Fitch Rates New Senior Credit Facility at BB+
-------------------------------------------------------------
Fitch Ratings has assigned a 'BB+' rating to TRW Automotive
Inc.'s new senior secured revolving credit facility, new senior
secured term loan A facility and new senior secured term loan B
facility.
The new bank lines replace the existing senior secured bank
lines and as such, do not affect the current ratings or Rating
Outlook.
In addition, Fitch is withdrawing its issue ratings on the
9-3/8% senior notes due 2013 ('BB-'), the 10-1/8% senior Euro
notes due 2013 ('BB-'), the 11% senior subordinated notes due
2013 ('B+') and the 11-3/4% senior subordinated Euro notes due
2013 ('B+') following the tender of substantially all of the
notes.
The current ratings of TRW Automotive Holdings Corp. and TRW
Automotive, Inc. are:
TRW Automotive Holdings Corp.
-- Issuer Default Rating 'BB';
TRW Automotive Inc.
-- Issuer Default Rating 'BB';
-- Senior secured revolving credit facility 'BB+';
-- Senior secured term loan A facility 'BB+';
-- Senior secured term loan B facility 'BB+';
-- Senior unsecured notes 'BB-'.
Fitch's rating actions affect approximately US$4 billion in
total debt, including the undrawn revolving credit facility.
The Rating Outlook is Stable.
TRW announced that it is refinancing US$2.5 billion in existing
bank facilities with the same amount in new facilities. The new
credit facilities include a US$1.4 billion revolving credit
facility, a US$600 million tranche A-1 term loan and a US$500
million tranche B-1 term loan. The new bank lines closed on
May 9, 2007.
The new credit agreement lowers TRW's cost of capital, extends
maturities and loosens covenants. Interest rates for the
revolver and tranche A-1 term loan are based on LIBOR plus an
amount determined by pricing grid based on a Net Leverage Ratio
while the tranche B-1 term loan interest rate is based on LIBOR
plus 1.5% or an alternative base rate plus 0.5%. TRW's existing
revolver and tranche A term loan matures in January of 2010, the
tranche B and B-2 term loans mature in June 2012 and a tranche E
term loan that matures in October of 2010. Under the new credit
agreement, the revolver matures five years from the closing
date, the tranche A-1 term loan matures six years after closing
and the tranche B-1 matures six years and nine months from the
closing date.
Financial covenants are slightly less restrictive and include a
minimum interest coverage ratio and a maximum net leverage
ratio. The net leverage ratio takes unrestricted cash in excess
of US$100 million and up to US$500 million and nets it against
debt to determine the ratio. The current facility uses gross
debt in the calculation.
Fitch's ratings reflect TRW's relatively diverse customer base,
global manufacturing presence, as well as the company's
technology-driven products. Operating efficiency, a substantial
book of business outside of North America and continued healthy
demand for safety related products partially offsets significant
declines in North American manufacturers' volumes as well as
industry cost challenges. The company's margins remain at the
high end of the automotive supply chain. Healthy margins and
liquidity should provide TRW with a buffer if industry
fundamentals were to erode materially. Even when assuming
adverse economic and industry conditions through 2007, Fitch
expects TRW to generate free cash flow, although debt reduction
could be limited in such a scenario.
Fitch's concerns include debt levels, margin pressures from
price competition and raw materials, customers' production
volumes, potential work stoppages due to customers' critical
union negotiations, and a financially stressed base of suppliers
other than TRW.
Including the cash and marketable securities balance of US$589
million, total liquidity at the end of the fourth-quarter 2006
was approximately US$1.7 billion. Also at the end of 4Q06, TRW
had approximately US$830 million of availability under its
current revolver after US$70 million in outstanding letters of
credit. As of Dec. 31, 2006, there were no outstanding balances
on any of TRW's accounts receivable programs. Under the U.S.
A/R securitization facility, approximately US$191 million of
receivables was eligible for borrowings and about US$104 million
would have been available for funding. After giving effect to a
January 2007 amendment to the A/R facility, US$196 million would
have been available for funding. In addition, approximately
EUR140 million and GBP11 million were available under
uncommitted European facilities.
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.
ULTRAPAR PARTICIPACOES: Earns US$37.2MM Net Income in First Qtr.
----------------------------------------------------------------
Ultrapar Participacoes S.A. recorded US$37.2 million of net
income for the three months ended March 31, 2007, compared to
US$56.8 million of net income for the same period in 2006.
In March 2007, Ultrapar carried out the acquisition of the fuel
and lubricant distribution businesses of Ipiranga Group in the
South and Southeast regions, in one of the largest acquisition
transactions ever carried out in Brazil. In parallel, the other
businesses of Ultrapar have continued to grow in first quarter
2007, with consolidated EBITDA of BRL115 million, 8% up on first
quarter 2006,
Highlights include:
-- announcing of the acquisition of the ipiranga group
together with Petrobras and Braskem
-- EBITDA at Ultragaz amounted to BRL60 million in first
quarter 2007, up 9% compared to first quarter 2006
-- EBITDA at Oxiteno totalled BRL42 million, up 4% compared
to first quarter 2006
-- EBITDA at Ultracargo amounted to BRL11 million, 19% higher
than in first quarter 2006
-- announcing of the acquisitions of Union Quimica in Mexico,
or US$4 million, and Petrolog Servicos e Armazens Gerais,
for BRL10 million
Ipiranga Acquisition
On March 19, 2007, Ultrapar, together with Petrobras and
Braskem, announced the acquisition of the Ipiranga Group, in one
of the largest acquisition transactions ever carried out in
Brazil. Ultrapar acquired the fuel and lubricant distribution
businesses in the South and Southeast regions of Brazil, keeping
the Ipiranga brand. The transaction, for Ultrapar, consists of
4 steps, being:
(i) the acquisition of the shares owned by the families that
made up the controlling block of the Ipiranga Group
(carried out on April 18, 2007),
(ii) the carrying out of a mandatory tender offer for the
common shares held by the minority shareholders of CBPI,
RPI and DPPI (tagalong offer), a request for which was
filed with the CVM on May 02, 2007,
(iii) the exchange offer of the preferred shares of CBPI, RPI
and DPPI and
(iv) the split of the assets acquired between Ultrapar,
Petrobras and Braskem. It is estimated that the entire
transaction will be completed by fourth quarter 2007.
As a result of this acquisition, Ultrapar, the largest LPG
distributor in the country, has also become the second largest
fuel distribution company in Brazil, with a market share of
approximately 15% of the Brazilian market -- with market shares
that range from 17% to 40% in the regions in which it operates
(South and Southeast) -- and approximately 3,300 service
stations. Ipiranga's estimated results from the businesses
acquired by Ultrapar in 2006 amounted to net revenues of BRL19
billion and BRL340 million of EBITDA.
The distribution of fuels and lubricants is an activity whose
main success drivers are similar to those of the distribution of
LPG: a major brand, logistics efficiency and efficiency in
managing the resellers network. These components combined with
its higher capacity for investment, put Ultrapar in a position
to benefit from growth opportunities, which can be leveraged by
the improvement in income among the Brazilian population --
already being reflected in record nationwide vehicles sales -
and by Brazil's competitiveness in bio fuels, particularly in
the production of ethanol. At Ipiranga, Ultrapar will apply the
same management methods used in its businesses, focusing on the
sustainable growth, alignment of interest and simplicity and
agility of the decision process.
The results of the distribution and lubricants business of South
and Southeast regions acquired from the Ipiranga Group will
begin to be consolidated in Ultrapar's results as from April.
Mexico Expansion
In April, Ultrapar announced that its subsidiary CANAMEX
acquired the operational sulfate and sulfonate assets of Uni¢n
Qu¡mica S.A. de C.V. in Mexico. The assets of Uni¢n Qu¡mica
include a plant with an installed production capacity of 8,600
tons/year of sulfates/sulfonates, which that mainly serves the
cosmetics and detergents segments, with potential annual revenue
generation of approximately US$10 million. The cost of the
acquisition is US$4.0 million, without the assumption of any
debt, being entirely financed by CANAMEX in the local market.
The success of CANAMEX operations, with a 49% growth in sales
volume during 2006, reinforces Ultrapar's long-term commitment
to the Mexican market, where new investment opportunities
continue to be identified. This acquisition represents another
step in strengthening Oxiteno's presence in Mexico.
Petrolog Acquisition
In May, Ultracargo took another step in its strategy of being
recognized as the Brazilian largest and most complete logistical
provider for special bulk cargo, through the acquisition of
Petrolog Servicos e Armazens Gerais for BRL10 million. Petrolog
is a provider of in-house logistics operations, engaged in the
areas of: management of finished products, packaging,
inventories control, storage and despatch to the domestic and
international markets, in customer facilities. The acquired
operation generates annual revenues of BRL11 million, with an
expressive growth potential.
"In one of the largest acquisition transactions in the history
of Brazil, we acquired the Ipiranga's fuel and lubricant
distribution businesses in the South and Southeast regions of
Brazil, together with the Ipiranga brand, moving Ultrapar up to
a new level of size and scale, and generating several results
and growth opportunities for the company. With this, Ultrapar
reinforces its commitment to sustainable growth, taking another
step forward in the project of increasing its presence in the
capital market." said the company's Chief Executive Officer
Pedro Wongtschowski.
About Ultrapar Participacoes
Ultrapar Participacoes S.A. (NYSE: UGP) (BOVESPA: UGPA4) is a
company with two main operations: LPG distribution (through its
fully-owned subsidiary Ultragaz Participacoes Ltda.) and
chemical production (through its also fully-owned subsidiary
Oxiteno S.A.). A third smaller but growing business is the
transportation and storage of chemicals and fuels, Ultracargo
Operacoes Logisticas e Participacoes Ltda., which completes
Ultrapar's business portfolio and reinforces the trend for
further business diversity in the long run.
* * *
In November 2005, Standard & Poor's Ratings Services assigned
its 'BB+' senior unsecured debt rating to the 10-year notes
issuance by LPG International Inc., a wholly owned subsidiary of
Ultrapar Participacoes S.A., in the amount of US$250 million.
At the same time, the 'BB+' long-term corporate credit ratings
on Ultrapar, a Brazilian company with operations in liquefied
petroleum gas (LPG) distribution, chemical production, and
integrated logistics, were affirmed. S&P said the outlook is
stable.
* BRAZIL: Obtains US$16.1-Million Financing from IDB
----------------------------------------------------
The Inter-American Development Bank approved a US$16.1 million
loan to Brazil to support the first phase of modernization of
its legislative branch at the federal, state and municipal
levels.
The Federal Senate through the InterLegis Special Secretariat --
SINTER -- is in charge of the two-phase program, which will
strengthen and expand the scope of the Legislative Integration
and Participation Network -- InterLegis -- and E-Legislativo
systems.
"This phase will consolidate the InterLegis program's current
national network, increase the efficiency and the competencies
of Brazil's legislative bodies through technology transfers,
training and the use of information and communication, which are
part of the four pillars of the legislative new modernization
model adopted by Brazil," said IDB Team Leader Paolo Valenti.
"The program will build InterLegis' institutional capacity for
design, development and implementation of projects and upgrades
in its operating systems," added Mr. Valenti. "It will also
develop specific products for the parliamentary network and
promote international parliamentary cooperation."
Interlegis proved to be an important experience in communication
and participation, allowing a flow of information from
legislators to citizens. It also showed the need to establish a
new model of legislative modernization based in four pillars:
development of infrastructure and technology solutions, channels
of communication and information sources, and training of
legislators and officials, explained Mr. Valenti.
"This new program creates an integral vision of modernization of
the legislature in Brazil, beyond connectivity and technological
solutions," said Mr. Valenti. "It also points to specific
action considering regionalization, with services and products
suited to different economic and socio-cultural realities."
The IDB has been supporting parliamentary modernization and
legislatures information systems programs since 1991. This
operation is consistent with the Bank's strategy for Brazil in
which it leverages the potential of the knowledge society and
information technology to make the government's legislative
operations more efficient and transparent to help further its
modernization efforts.
The program will have an execution period of five years (three
for the first phase and two years for the second phase) at an
estimated total cost of US$64.4 million. The loan approved
today for the first phase is for a 25-year term with a four-year
grace period. Local counterpart funds will match the loan.
* * *
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.
=========================================
B R I T I S H V I R G I N I S L A N D S
=========================================
DIGICEL LTD: Obtains Interim Injunction Against Regulator
---------------------------------------------------------
Digicel Ltd. confirmed to Caribbean Net News that it obtained
from the High Court of the British Virgin Islands an "Interim
Injunction" against the Telecommunications Regulatory Commission
for its failure to deal with the company's application for a
mobile license.
Digicel had filed for a mobile license on Feb. 16, the report
says. The regulatory commission rejected the application,
saying that it failed to meet the stipulations set out under the
Telecommunications Act 2006.
Caribbean Net relates that Digicel filed on April 30 an
application in the High Court for leave "to file an application
for judicial review." The court granted the request on May 4.
According to Caribbean Net, the hearing of the application,
which was held on May 9, will continue on May 18. Hearing of
the full judicial review application is also expected on this
date.
Caribbean Net notes that the court also ordered on May 4 that
the regulatory commission consider and determine Digicel's
application for a mobile license in line with the provisions of
the Telecommunications Act.
Digicel insisted during the May 9 hearing that its application
to run a GSM license in the British Virgin Islands hasn't been
addressed in accordance with the Telecommunications Act, which
orders that applications must be considered on an objective,
transparent and non-discriminatory basis, according to the
report.
Digicel Group Regulatory & Legal Director Jan Tjernell told
Caribbean Net that the company is seeking an objective,
transparent and non-discriminatory process, which should be to
the benefit to everyone in British Virgin Islands.
Digicel has an excellent track record of delivering significant
investment and job creation, producing better value of services
and setting new standards in network quality and client care.
Digicel has been a driving force of mobile liberalization across
the Caribbean, bringing major benefits to its subscribers,
Caribbean Net states, citing Mr. Tjernell.
Digicel said in a statement that it has always had an interest
in entering the British Virgin Islands market.
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.
===========================
C A Y M A N I S L A N D S
===========================
SPYGLASS CAPITAL: Proofs of Claim Filing Deadline Is May 30
-----------------------------------------------------------
Spyglass Capital Offshore's creditors are given until
May 30, 2007, to prove their claims to DMS Corporate Services
Ltd., the company's liquidator, or be excluded from receiving
any distribution or payment.
In their proofs of claim, creditors must indicate their full
names, addresses, the full particulars of their debts or claims,
and the names and addresses of their lawyers, if any.
Spyglass Capital's shareholders agreed on April 18, 2007, to
place the company into voluntary liquidation under The Companies
Law (2004 Revision) of the Cayman Islands.
The liquidator can be reached at:
DMS Corporate Services Ltd
Attention: Jenny Suto
Ansbacher House
P.O. Box 1344
Grand Cayman KY1-1108
Telephone: (345) 946 7665
Fax: (345) 946 7666
SWIX CURRENCY: Sets Final Shareholders Meeting for May 30
---------------------------------------------------------
Swix Currency Fund Ltd. will hold its final shareholders meeting
on May 30, 2007, at 10:30 a.m., at:
Fourth Floor, Citrus Grove
P.O. Box 1787, George Town
Grand Cayman, Cayman Islands
These matters 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) authorizing the liquidator to retain the company's
records for a period of five years from its dissolution,
after which they may be destroyed.
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:
Stuart Sybersma
Attention: Mervin Solas
Deloitte
P.O. Box 1787
George Town, Grand Cayman
Cayman Islands
Telephone: (345) 949-7500
Fax: (345) 949-8258
TCW EM: Proofs of Claim Must be Filed by May 31
-----------------------------------------------
TCW Em Ltd.'s creditors are given until May 31, 2007, to prove
their claims to Chris Marett and Emile Small, 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.
TCW EM's shareholders agreed on April 19, 2007, to place the
company into voluntary liquidation under The Companies Law (2004
Revision) of the Cayman Islands.
The liquidators can be reached at:
Chris Marett
Emile Small
Maples Finance Limited
P.O. Box 1093
George Town, Grand Cayman
Cayman Islands
TINTIN SPC: Final Shareholders Meeting Moved to May 30
------------------------------------------------------
Tintin SPC will hold its final shareholders meeting on
May 30, 2007, at 11:30 a.m., at:
Windward One, Regatta Office Park
West Bay Road, Grand Cayman
Cayman Islands
As reported in the Troubled Company Reporter-Latin America on
Jan. 25, 2007, Tintin's Final Meeting was initially set for
Jan. 29, 2007.
These matters 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:
CDL Company Ltd.
P.O. Box 31106
Grand Cayman KY1-1205
Cayman Islands
=========
C H I L E
=========
CONSTELLATION BRANDS: Inks US$421M Repurchase Pact with Citibank
----------------------------------------------------------------
Constellation Brands Inc. has entered into an accelerated share
repurchase transaction with Citibank N.A. to repurchase a
minimum of 16.9 million shares of its Class A common stock for
US$421.1 million.
The company has already repurchased 3.5 million shares of its
Class A common stock since March 1, 2007, through open market
purchases at a cost of approximately US$78.9 million. Together,
the company says, the transactions will fully utilize its
reported US$500 million share repurchase authorization. All of
the repurchased shares will become treasury shares.
"We believe this accelerated share repurchase transaction
demonstrates our strong commitment to maximizing shareholder
value and also aligns well with our stated objective of
harvesting opportunities that enhance our long-term value
creation goals," stated Constellation Brands Chairman and Chief
Executive Officer Richard Sands.
The specific number of shares to be repurchased in the
transaction is generally based upon the volume-weighted average
price of the company's Class A common stock during a specified
calculation period. The company says it will not be obligated
to return any of the minimum shares or pay Citibank any
additional cash. It is possible that Citibank could deliver an
additional number of shares before the scheduled October 2007
end of the specified calculation period, the company relates.
In connection with the share repurchase transaction, in addition
to purchases of the company's Class A common stock, the company
states that Citibank may engage in certain hedging activities
with respect to the company's Class A common stock in order to
manage its exposure under the transaction.
The purchase price for shares repurchased in the accelerated
share repurchase transaction and in the open market has been or
will be paid with proceeds from borrowings under the company's
existing revolving credit facility.
About Constellation Brands
Headquartered in Fairport, New York, Constellation Brands Inc.
(NYSE:STZ, ASX:CBR) -- http://www.cbrands.com/-- produces and
markets beverage alcohol brands with a broad portfolio across
the wine, spirits and imported beer categories. The company
also operates in the United Kingdom, Canada, Australia, Japan,
and New Zealand. One of Constellation Brands wine and grape
processing facilities is located in Casablanca, Chile.
CONSTELLATION BRANDS: Fitch Rates US$700-Million Notes at BB-
-------------------------------------------------------------
Fitch Ratings has assigned a 'BB-' rating to Constellation
Brands Inc.'s proposed US$700 million 10-year senior note
offering.
Proceeds are to be used to repay revolving bank debt.
The Rating Outlook is Negative.
Recently, STZ accelerated its US$500 million share repurchase
program and completed the SVEDKA acquisition. Due to the stock
repurchase completed on May 8, 2007, for $421 (STZ had
repurchased 3.5 million shares for US$79 million since
March 1, 2007)and the SVEDKA acquisition completed on
March 19, 2007, for US$384 million, company debt levels are
expected to be meaningfully higher in fiscal year 2008 (ending
Feb. 29, 2008). The recently formed joint venture for the U.K
wholesale business provided STZ with US$179 million of cash
proceeds, which will partially offset incremental borrowing
incurred to finance these transactions.
Nonetheless, management's willingness to operate at higher
leverage levels remains. Also, additional shareholder friendly
activity cannot be ruled out.
Over the intermediate term, it is likely that the company will
continue to make acquisitions that could result in financial and
operational stress. Fitch expects that future acquisitions, at
least in the near term, will be smaller in size and
complementary to the existing brand portfolio.
Headquartered in Fairport, New York, Constellation Brands Inc.
(NYSE:STZ, ASX:CBR) -- http://www.cbrands.com/-- produces and
markets beverage alcohol brands with a broad portfolio across
the wine, spirits and imported beer categories. The company
also operates in the United Kingdom, Canada, Australia, Japan,
and New Zealand. One of Constellation Brands wine and grape
processing facilities is located in Casablanca, Chile.
EASTMAN KODAK: Moody's Affirms B1 Corporate Family Rating
---------------------------------------------------------
Moody's Investors Service has confirmed Eastman Kodak Company's
B1 corporate family rating, concluding a review for possible
downgrade, which had been prompted by Kodak's May 2006
announcement of its health business sale.
On April 30, Kodak sold its health imaging business to Onex
Healthcare Holdings and received about US$2.35 billion cash
(excluding Kodak's opportunity to earn an additional US$200
million if Onex realizes an internal rate of return in excess of
25% on its investment). The rating outlook is stable.
The B1 corporate family rating reflects the significant
challenges that Kodak faces to replace revenue and cash flow
from its declining legacy film businesses, as well as the
company's market position, operating profit margin and free cash
flow volatility, asset returns (net of cash), financial
leverage, and liquidity.
The stable rating outlook reflects Moody's expectation that
Kodak will continue to maintain liquidity and generate earnings
sufficient to withstand further secular declines of its legacy
film businesses, lack of substantial profitability in certain of
its digital businesses, and its sizeable new business start up
costs.
The ratings would experience downward rating pressure if the
company were to resume stock purchases, restructuring payments
were to exceed the company's forecast (range of US$575 million
to US$625 million in 2007), digital earnings were to decline,
cash balances were to fall below US$1 billion, or the company's
ratio of debt to EBITDA were to exceed 4.0x. The ratings would
experience upward rating pressure if the company's recurring
digital operating earnings were to grow in excess of US$350
million and the company's ratio of debt to EBITDA were to
represent 3.9x or less on a sustained annual basis. By Moody's
estimates, Kodak had an approximate 2.2x ratio of debt to pre
restructuring charge EBITDA for the twelve months ended March
2007, adjusted for leases, under funded pensions, the health
business sale, and repayment of US$1.15 billion term loans.
Rating upgraded:
* US$1 billion 5 Yr Revolving Credit Facility
(expires 2010), Secured, Ba3 --> Ba1, LGD2, 18%
Ratings confirmed:
* B1 Corporate Family Rating
* US$500 million Senior Notes due 2013,
Unsecured, B2 LGD4, 68%
* US$3 million Senior Term Note Debenture due 2018,
Unsecured, B2 LGD4, 68%
* US$575 million Convertible Senior Notes due 2033,
Unsecured, B2 LGD4, 68%
* US$250 million Senior Medium Term Notes due 2008,
Unsecured, B2 LGD4, 68%
* US$10 million Senior Notes due 2021,
Unsecured, B2 LGD4, 68%
Headquartered in Rochester, New York, Eastman Kodak Co. (NYSE:
EK)-- http://www.kodak.com/-- develops, manufactures, and
markets digital and traditional imaging products, services, and
solutions to consumers, businesses, the graphic communications
market, the entertainment industry, professionals, healthcare
providers, and other customers.
The company has operations in Argentina, Chile, Denmark, Greece,
Jordan, Yemen, Australia, China among others.
SHAW GROUP: Wins US$700 Mil. EPC Contract from American Electric
----------------------------------------------------------------
The Shaw Group Inc. has been awarded an engineering, procurement
and construction contract by Southwestern Electric Power
Company, a unit of American Electric Power, to build a new 600
MW electric generating plant in Hempstead County, Arkansas.
SWEPCO is seeking the necessary regulatory approvals to build
the plant from various Arkansas, Texas and Louisiana
authorities.
The John W. Turk, Jr. - Unit 1 facility will use an ultra-
supercritical advanced pulverized clean coal combustion
technology. By increasing steam pressure and temperatures, the
facility will require less fuel per megawatt hour, resulting in
increased efficiency and reduced emissions. The new plant is
scheduled to be completed in mid-2011 at a total cost of
approximately US$1.3 billion. Shaw's EPC contract is valued at
approximately US$700 million.
"We are very pleased to have been selected by AEP to design,
engineer and construct this highly efficient, environmentally
sound facility," J.M. Bernhard, Jr., Chairman, President and
Chief Executive Officer of Shaw, said. "We are proud to combine
Shaw's leadership in fossil power with our expertise in high
alloy piping materials which are designed to withstand the high
steam temperatures and pressures at the new facility. AEP is a
leader in the use of this technology and we look forward to
successfully delivering this generating plant to this valued
client."
About American Electric Power
Headquartered in Columbus, Ohio, American Electric Power --
http://www.aep.com/-- delivers electricity to more than 5
million customers in 11 states in the U.S. AEP owns nearly
38,000 megawatts of generating capacity in the U.S. AEP also
owns an electricity transmission system, a nearly 39,000-mile
network that includes more 765 kilovolt extra-high voltage
transmission lines than all other U.S. transmission systems
combined. AEP's utility units operate as AEP Ohio, AEP Texas,
Appalachian Power (in Virginia and West Virginia), AEP
Appalachian Power (in Tennessee), Indiana Michigan Power,
Kentucky Power, Public Service Company of Oklahoma, and
Southwestern Electric Power Company (in Arkansas, Louisiana and
east and north Texas).
Southwestern Electric Power Company -- http://swepco.com/--
serves over 464,000 customers in three states: 112,000 in
western Arkansas, 176,000 in Northwest Louisiana, and 176,000 in
East and North Texas.
About Shaw Group
Based in Baton Rouge, Louisiana, The Shaw Group Inc. (NYSE: SGR)
-- http://www.shawgrp.com/-- provides services to the
environmental, infrastructure and homeland security markets,
including consulting, engineering, construction, remediation and
facilities management services to governmental and commercial
customers. It is also a vertically integrated provider of
engineering, procurement, pipe fabrication, construction and
maintenance services to the power and process industries. The
company segregates its business activities into four operating
segments: Environmental & Infrastructure; Energy & Chemicals;
Maintenance, and Fabrication, Manufacturing & Distribution. In
January 2005, the company sold substantially all of the assets
of its Shaw Power Technologies, Inc. and Shaw Power Technologies
International, Ltd. units to Siemens Power Transmission and
Distribution Inc., a unit of Siemens AG.
The company has operations in Chile, China, Malaysia, the United
Kingdom and Venezuela, among others.
* * *
Standard & Poor's Ratings Services affirmed its 'BB' corporate
credit rating on The Shaw Group Inc. and removed it from
CreditWatch, where it was placed with negative implications in
October 2006. S&P said the outlook is stable.
In addition, 'BB' senior secured debt rating was affirmed after
the US$100 million increase to the company's revolving credit
facility.
WARNER MUSIC: Incurs US$27 Million Net Loss in 2nd Quarter 2007
---------------------------------------------------------------
Warner Music Group Corp. reported a net loss of US$27 million
for the second quarter ended March 31, 2007. It had a net loss
in the second quarter of fiscal 2006 of US$7 million. For the
second quarter of fiscal 2007, revenue slipped to US$784 million
from US$796 million in the same period last year.
"We are in the midst of transforming Warner Music Group to a
music-based content company," said Edgar Bronfman, Jr., Warner
Music Group's chairman and chief executive officer. "Despite
tough comparisons to last year and a challenging industry
environment, we achieved some important successes this quarter.
We gained album share in the largest global music market, the
U.S., achieved double-digit revenue growth in the second largest
global music market, Japan, sustained our digital leadership
position, and concluded new partnerships. Perhaps most
significantly, we advanced our initiatives to maximize the value
of our content and to diversify our revenue streams. Essential
to the on-going success of those business initiatives, we are in
the process of realigning the organization to more effectively
deploy our resources to growth areas, such as digital and video
distribution. By helping us manage physical costs, while
redeploying our resources and ongoing investments towards new
business initiatives, this realignment will ensure a successful
transformation in an evolving music industry, not just for this
year or the next, but for years to come."
Michael Fleisher, Warner Music Group's executive vice president
and chief financial officer, added, "Our realignment initiatives
are designed to improve our effectiveness, flexibility,
structure and performance. Between now and the end of the
fiscal year, we expect to incur one-time restructuring and
implementation charges ranging from US$65 million to US$80
million."
Second-Quarter Results
The decline in revenue for the second quarter 2006 was driven by
difficult Recorded Music comparisons against our very strong
second quarter last year. In addition, the recorded music
industry remains challenged by piracy and changing consumption
patterns in the shift from physical sales to new forms of
digital music. On a constant-currency basis, quarterly revenue
fell 5%. Declines in our physical Recorded Music revenue were
only partially offset by increases in Music Publishing and
digital Recorded Music revenue. Domestic revenue was relatively
flat while international revenue was down 4%, or 11% on a
constant-currency basis.
Operating income for the quarter dropped to US$19 million from
US$45 million in the prior-year quarter and operating margin was
down 3.2 percentage points to 2.4%. Adjusted to exclude Non-
Recurring Items, operating income for the quarter declined 22%
to US$35 million and operating margin was down 1.2 percentage
points to 4.5%.
As of March 31, 2007, the company's balance sheet showed total
assets of US$4.5 billion, total liabilities of US$4.5 billion,
and total stockholders' equity of US$4 million. Its accumulated
deficit as of March 31, 2007, grew to US$564 million from US$516
million as of Sept. 30, 2006.
The company's March 31 balance sheet also showed strained
liquidity with total current assets of US$1.2 billion available
to pay total current liabilities of US$1.8 billion.
The company reported a cash balance of US$362 million, total
long-term debt of US$2.3 billion and net debt or total long-term
debt minus cash of US$1.9 billion, all as of March 31, 2007.
Full-text copies of the company's 2007 second quarter report are
available for free at http://ResearchArchives.com/t/s?1eb8
About Warner Music Group
Warner Music Group Corp. (NYSE: WMG) -- http://www.wmg.com/--
is a music company that operates through numerous international
affiliates and licensees in more than 50 countries, including
the Philippines. In Latin America, Warner Music has affiliates
in Argentina, Brazil, Chile, Columbia and Mexico. Warner Music
is home to a collection of record labels in the music industry
including Asylum, Atlantic, Bad Boy, Cordless, East West,
Elektra, Lava, Maverick, Nonesuch, Reprise, Rhino, Rykodisc,
Sire, Warner Bros., and Word.
* * *
On Feb. 27, Standard & Poor's Ratings Services placed its
ratings on Warner Music Group Corp., including the 'BB-'
corporate credit rating, on CreditWatch with negative
implications, following the company's statement that it is
exploring a possible merger agreement with EMI Group PLC
(BB-/Watch Neg/B), which EMI management has confirmed.
Warner Music Group Corp. carries Fitch Ratings' BB- issuer
default rating assigned in May 2006.
===============
C O L O M B I A
===============
ECOPETROL: Earns COP838 Billion in First Quarter 2007
-----------------------------------------------------
Colombian state-owned oil firm Ecopetrol's earnings increased
1.4% to COP838 billion in the first quarter 2007, year-over-
year, Business News Americas reports.
Local paper Portafolio relates that Ecopetrol's total revenue
rose 0.8% to COP4.3 trillion in the first quarter 2007, compared
to the same period in 2006.
Ecopetrol's results showed that revenue in Colombia increased to
COP2.9 til in this year's first quarter, from COP2.5 trillion in
last year's first quarter. Meanwhile, revenue outside the
country dropped to COP1.39 trillion in the first quarter 2007,
compared to COP1.74 trillion year-over-year, BNamericas states.
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.
GOODYEAR TIRE: Declares Public Offering of 22.5 Million Shares
--------------------------------------------------------------
The Goodyear Tire & Rubber Company today has intended to offer
22,549,609 shares of its common stock in an underwritten public
offering.
In addition, Goodyear intends to grant the underwriters a 30-day
option to purchase up to an additional 3,382,441 shares to cover
any over-allotments.
The company estimates the net proceeds from this offering, after
deducting underwriting discounts and commissions, will be
approximately US$725 million, assuming a public offering price
of US$33.26 per share, which was the last reported sale price of
Goodyear's common stock on May 8, 2007. The estimated net
proceeds would be approximately US$834 million if underwriters
exercise their over-allotment option in full.
Goodyear intends to use the net proceeds from the offering to
repay approximately US$175 million of its 8.625% notes due in
2011 and approximately US$140 million of its 9% notes due in
2015. It expects to use the remaining net proceeds for general
corporate purposes, which may include investments in growth
initiatives within the company's core tire businesses and the
repayment of other debt.
Deutsche Bank Securities, Citi and Goldman, Sachs & Co. will be
joint book running managers for the offering.
The offering will be made under an effective shelf registration
statement filed with the U.S. Securities and Exchange
Commission. Copies of the prospectus and the prospectus
supplement relating to the offering may be obtained from:
Deutsche Bank Securities Prospectus Department
100 Plaza One
Jersey City, NJ 07311
Tel: (800)503-4611;
Citigroup Global Markets Inc.
Brooklyn Army Terminal
140 58th Street, 8th Floor
Brooklyn, NY 11220
Tel: (718) 765-6732;
Goldman, Sachs & Co.
Prospectus Department
85 Broad St.
New York, NY 10004
Tel: (212) 902-1171;
Goodyear's Investor Relations Department
1144 E. Market St.
Akron, OH 44316
Tel: (330) 796-3751
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 on April 10, 2007,
Fitch Ratings has affirmed ratings for The Goodyear Tire &
Rubber Company, including 'B' Issuer Default Rating; 'BB/RR1'
rating of its US$1.5 billion first-lien credit facility;
'BB/RR1' rating of its US$1.2 billion second-lien term loan;
'B/RR4' rating of its US$300 million third-lien term loan;
'B/RR4' rating of its US$650 million third-lien senior secured
notes; and 'CCC+/RR6' Senior unsecured debt rating.
===================
C O S T A R I C A
===================
SMURFIT KAPPA: Folding Cartons Unit to Close Plant in Ireland
-------------------------------------------------------------
Smurfit Kappa Cartons, a unit of Smurfit Kappa Group, will close
its plant in Coolock, Dublin, as pressures experienced in the
Irish manufacturing sector affected the business, Finfacts
Ireland reports.
According to the report, the plant closure will terminate 140
jobs.
Smurfit Kappa Cartons management said it would enter into a
period of negotiation with employee representatives on
redundancy terms and the company will close operations later
this year, Finfacts relates.
About Smurfit Kappa Group
Headquartered in Dublin, Ireland, Smurfit Kappa Group --
http://www.smurfit-group.com/-- manufactures containerboard
containerboard and converts it into corrugated cases, folding
cartons, paper sacks, tubes, and composite cans. Other products
include boxboard, sack kraft paper, and printing and writing
paper. The company produces 6 million tons of paper annually
and has 300 facilities worldwide. In Latin America, the company
operates in Argentina, Brazil, Chile, Colombia, Costa Rica,
Dominican Republic, Ecuador, Mexico and Venezuela.
* * *
As reported on Feb. 19, Standard & Poor's Ratings Services
maintained its credit ratings, including its 'B+' long- term
corporate credit rating, on Ireland-based paper and packaging
company Smurfit Kappa Group Ltd. and related entities on
CreditWatch with positive implications.
As reported in the TCR-Europe on June 30, 2006, Fitch Ratings
affirmed Smurfit Kappa Acquisitions' Issuer Default Rating at
'B+'. At the same time the agency affirmed the instrument
ratings. A Stable Outlook has been assigned.
The stable outlook assigned to Smurfit Kappa Group's ratings
reflects Fitch's view that EBITDA will return to growth during
the course of 2006 and that SKG will be in a position to
generate significant cashflow for debt repayment from 2007-8.
US AIRWAYS: Pilots Express Frustration Over Management Failures
---------------------------------------------------------------
As operations continue to deteriorate at the reorganized U.S.
Airways Group Inc., the airline's passengers and employees are
baring the brunt of poor decisions made by a management team
that is more interested in lining their pockets than in
fulfilling their promises of building a better airline.
Demonstrating their frustration and fury over management's
growing list of failures, the U.S. Airways pilots of the former
America West, who are represented by the Air Line Pilots
Association, International, today picketed the 16th Annual
International Aviation Symposium in Phoenix, Arizona, where top
executives from U.S. Airways will join their counterparts from
other airlines and government officials to discuss "New
Strategies for Success." Management's blunders have further
unified the labor groups in their efforts to achieve fair
contracts and provide passengers with world-class service, and
the America West flight attendants, who are represented by the
Association of Flight Attendants, joined the pilots on the
picket line.
Though U.S. Airways has been financially successful to date, the
pilots have serious doubts that this will continue unless
management merges the two airlines. Reaching a fair, single
contract with the pilots would be a significant step toward
completing the merger and eliminating many of the problems U.S.
Airways passengers encounter as a result of running two separate
operations. Although ALPA and U.S. Airways management have been
engaged in negotiations for such an agreement for more than a
year and a half, management is only now presenting the pilots
with their first complete economic proposal.
"We've experienced more than our fair share of pain during our
industry's economic downturn while management was given carte
blanche by the federal government to severely limit our pay,
benefits, work rules and overall quality of lives while reaping
the rewards of our sacrifices," said Captain John McIlvenna,
America West MEC Chairman. "U.S. Airways' long-term success
depends upon management's ability to complete the merger of
these two carriers, implement real solutions addressing their
deficiencies with passenger service, and resolve the ongoing
labor disputes with their front-line employees. Once again, in
lieu of addressing the real problems of U.S. Airways, management
has launched a feel-good passenger service initiative and formed
a task force to study what should be an obvious problem. This
makes for good public relations but does nothing to solve the
myriad of operational problems. It's time for management to
recognize our contributions in making U.S. Airways fly at the
bargaining table and start building the world-class airline
management promised employees, investors and passengers."
During the industry downturn following 9/11, the pilots of
America West and U.S. Airways agreed to significant reductions
in pay and benefits to satisfy bankruptcy court provisions and
severe ATSB loan restrictions. The pilots also agreed to work
schedules that would maximize their work time, severely
impacting their quality of life. These sacrifices were made to
ensure the survivability of U.S. Airways, not to support
inflated management compensation packages.
U.S. Airways' financial success is undeniable. After the merger
of U.S. Airways and America West, the airline quickly became
prosperous, posting an operating profit of US$507 million in
2006. U.S. Airways CEO Doug Parker received US$14.4 million in
compensation and benefits for 2006 and was also the highest-paid
airline CEO in 2005.
Operationally, however, U.S. Airways' performance has been
dismal, and passengers are growing weary of the airline's
inability to deal with these issues, which cannot be addressed
simply by implementing quick-fix service initiatives. Merging
America West and U.S. Airways into a single airline would go a
long way in eliminating many of the core operational issues and
would allow management to capture additional synergies for U.S.
Airways' passengers, investors and employees.
About US Airways Group
Based in Tempe, Arizona, US Airways Group Inc.'s (NYSE:
LCC) -- http://www.usairways.com/-- primary business activity
is the ownership of the common stock of US Airways, Inc.,
Allegheny Airlines, Inc., Piedmont Airlines, Inc., PSA Airlines,
Inc., MidAtlantic Airways, Inc., US Airways Leasing and Sales,
Inc., Material Services Company, Inc., and Airways Assurance
Limited, LLC.
Under a Chapter 11 plan declared effective on March 31, 2003,
USAir emerged from bankruptcy with the Retirement Systems of
Alabama taking a 40% equity stake in the deleveraged carrier in
exchange for US$240 million infusion of new capital.
US Airways and its subsidiaries filed another chapter 11
petition on Sept. 12, 2004 (Bankr. E.D. Va. Case No. 04-13820).
Brian P. Leitch, Esq., Daniel M. Lewis, Esq., and Michael J.
Canning, Esq., at Arnold & Porter LLP, and Lawrence E. Rifken,
Esq., and Douglas M. Foley, Esq., at McGuireWoods LLP, represent
the Debtors in their restructuring efforts. In the Company's
second bankruptcy filing, it lists US$8,805,972,000 in total
assets and US$8,702,437,000 in total debts.
The Debtors' Chapter 11 plan for its second bankruptcy filing
became effective on Sept. 27, 2005. The Debtors completed their
merger with America West on the same date.
US Airways, US Airways Shuttle, and US Airways Express operate
approximately 3,800 flights per day and serve more than 230
communities in the U.S., Canada, Europe, the Caribbean, and
Latin America. The new US Airways is a member of the Star
Alliance, which provides connections for customers to
841 destinations in 157 countries worldwide.
US Airways has operations in Japan, Australia, China, Costa
Rica, Philippines, and Spain, among others.
* * *
As reported in the Troubled Company Reporter on March 13, 2007,
Standard & Poor's Ratings Services assigned its 'B' rating to US
Airways Group Inc.'s US$1.6 billion secured credit facility due
2014, currently being syndicated.
===================================
D O M I N I C A N R E P U B L I C
===================================
BASIC ENERGY: Net Income Up to US$22.1 Mil. in 2007 First Qtr.
--------------------------------------------------------------
Basic Energy Services, Inc., reported US$22.1 million of net
income for the first quarter of 2007, compared to US$19.7
million in the same period in 2006. Revenues increased 29% to
US$198.9 million compared to US$154.3 million in the same period
last year. EBITDA for the first quarter of 2007 was
US$59.6 million, or 30% of revenue, compared to US$47.1 million,
or 31% of revenue, in the same period in 2006.
The first quarter of 2007 results include a charge of US$230,000
associated with the write-off of a portion of unamortized debt
issuance costs in connection with amending and restating Basic's
Credit Facility and US$400,000 of non-tax deductible interest
expense related to an underpayment of estimated 2006 federal
income taxes.
Ken Huseman, Basic's President and Chief Executive Officer,
stated, "Our financial performance for the quarter was impacted
by several factors which were not indicative of the underlying
demand for our services. Sporadic severe weather in our larger
market areas hampered operations, particularly in our well
servicing segment, causing our rig utilization rate to be
trimmed by two to three percentage points. We continue to see
strong demand for all our services except when unusually wet
weather conditions prevent us from getting into the field."
"In the first quarter of 2007, we encountered several start-up
issues on two newbuild drilling rigs compounded by escalating
labor and support costs in our Rocky Mountain drilling
operations, which reduced our well servicing segment profit by
approximately US$1 million. As a result of the deteriorating
operating conditions in that market, we have cancelled the
contracts on three of our drilling rigs and will convert the
fourth rig to heavy workover service. We are redeploying those
three rigs to the Permian Basin in May, to expand the six rig
fleet acquired in the Sledge Drilling acquisition."
"In addition to those operating issues, we increased our reserve
for group health insurance by US$1.2 million in the first
quarter of 2007 to match the projected reserve requirements
calculated by our advisors. We had mentioned last quarter that
we have been experiencing substantial increases in our group
health costs beyond what we had expected due to the rapid
increase in plan participants from our recent acquisitions. We
are analyzing the increase with our advisors to determine the
long-term impact to our cost structure."
"Our well servicing segment continues to benefit from the 120
newbuild rig program commenced in 2004 which is allowing us to
modernize and expand our fleet. In the first quarter, we added
nine newbuild rigs and retired seven rigs. We continue to
evaluate the operational efficiency of our older rigs and
selectively retire those rigs that do not meet our standards for
providing the best service to our customers and safety to our
employees. We have 45 remaining newbuilds to be delivered
through the end of 2007 and expect to retire six to eight
existing rigs during that period."
"We closed the previously announced acquisition of JetStar in
the first quarter of 2007 along with two smaller deals and fully
integrated each into our existing operations. Although early in
the process, performance is ahead of our projections."
"While we are off to a bit of a slow start compared to 2006, we
believe the market for our services will improve through the
remainder of 2007 and into 2008. We will continue pursuing our
strategy of adding size and scope to our operations to meet
market opportunities through a balance of internal capital
projects and selective acquisitions."
Business Segment Results
Well Servicing
Well servicing revenues increased approximately 21% to
US$88.6 million during the first quarter of 2007 compared to
US$73.5 million in the same period last year. During the first
quarter of 2007, the Company added 11 rigs, including two barge-
mounted workover rigs and nine newbuild rigs, and retired seven
rigs, bringing its well servicing rig count to 369 as of
March 31, 2007. Revenue per rig hour increased 17% to US$412
during the first quarter of 2007 compared to US$352 in the same
period in 2006. The full-fleet rig utilization rate declined to
81.9% in the first quarter of 2007 compared to 89.4% in the same
period in 2006. Icy and snowy conditions in some of the
company's operating areas negatively impacted activity levels in
the first quarter of 2007. Moderating oil and gas prices and a
return to more typical first quarter seasonal activity in the
first quarter of 2007 compared to the same period in 2006 also
attributed to the decrease in rig utilization.
Operating segment profit in the first quarter of 2007 was
US$35.7 million, or 40% of revenue, compared to US$31.9 million,
or 43% of revenue, in the same period in 2006. The decline in
operating segment profit margin from the first quarter of 2006
mainly reflects the effects of lower utilization in the first
quarter of 2007. Additionally, personnel related and
maintenance expenses as a percent of revenue were higher in the
first quarter of 2007 relative to recent quarters. Rig crews
were assigned to perform maintenance tasks during periods of
lower utilization to ensure retention of trained personnel.
Fluid Services
Fluid services revenues in the first quarter of 2007 increased
20% to US$51.6 million compared to US$43.1 million in the same
period in 2006. During the first quarter of 2007, Basic added a
net of 10 fluid services trucks, bringing the total number of
fluid services trucks to 656 as of March 31, 2007. Average
revenue per fluid services truck decreased by 4% to US$79,000 in
the first quarter of 2007 compared to US$82,000 in the same
period in 2006. Operating segment profit in the first quarter
of 2007 was US$19.8 million, or 38% of revenue, compared to
US$16.8 million, or 39% of revenue, in the same period in 2006,
reflecting the modest decline in year-over-year average revenue
per fluid services truck.
Drilling & Completion Services
Drilling and completion services revenues during the first
quarter of 2007 increased 68% to US$46.1 million compared to
US$27.5 million in the same period in 2006. Operating segment
profit in the first quarter of 2007 was US$23.0 million, or 50%
of revenue, compared to US$13.6 million, or 50% of revenue, in
the same period in 2006. The increase in revenue and
profitability in this segment was the result of several
acquisitions in 2006 and the acquisition of JetStar in the
latter part of the first quarter of 2007 as well as improved
utilization and pricing.
Well Site Construction Services
Well site construction services revenues in the first quarter of
2007 increased 22% to US$12.5 million compared to US$10.3
million in the same period in 2006. Operating segment profit in
the first quarter of 2007 was US$4.3 million, or 34% of revenue,
compared to US$2.6 million, or 26% of revenue, in the same
period in 2006.
Capital Expenditures
During the first quarter of 2007, Basic invested US$29.3 million
for capital expenditures, including capital leases and excluding
acquisitions. This amount included US$18.0 million for
expansion capital expenditures, including US$12.4 million for
the well servicing segment, US$2.9 million for the fluid
services segment and US$2.6 million for the drilling and
completion services segment. Maintenance capital expenditures
amounted to approximately US$8.7 million, or 4% of revenues, for
the first quarter of 2007. Corporate capital expenditures of
US$2.6 million included the licensing of SAP ERP software that
is currently in the implementation stage.
Recent Events
On April 2, 2007, Basic acquired all of the outstanding capital
stock of Sledge Drilling Holding, Corp. for a total acquisition
price, net of estimated working capital, of approximately
US$56 million. The total acquisition price is comprised of
approximately 430,000 shares of Basic common stock, US$27
million in cash to Sledge's shareholders, and US$19 million for
repayment of Sledge outstanding debt.
2007 Outlook
The following statements are based on Basic's current
expectations. These statements are forward-looking and actual
results may differ materially. These statements do not include
the potential impact of any future acquisitions other than those
previously disclosed. Any material change in market conditions
in any of Basic's business segments could affect its guidance.
About Basic Energy
Headquartered in Texas, USA, Basic Energy Services, Inc.,
provides a range of well site services to oil and gas drilling
and producing companies, including well servicing, fluid
services, drilling and completion services, and well site
construction services. Basic Energy has four segments: well
servicing encompasses a range of services performed with a
mobile well servicing rig; fluid services provides transport,
store and dispose of a variety of fluids; drilling and
completion services provides oil and gas operators with a
package of services, and well site construction services employs
an array of equipment and assets to provide services for the
construction and maintenance of oil and gas production
infrastructure. In March 2007, it acquired JetStar Consolidated
Holdings, Inc.
In the Dominican Republic, Basic Energy controls power companies
Cepm, Cespm and Ege Haina.
* * *
As reported in the Troubled Company Reporter-Latin America on
Jan. 30, 2007, Standard & Poor's Ratings Services affirmed its
'B+' corporate credit rating on domestic oilfield services
provider Basic Energy Services Inc. At the same time, Standard
& Poor's assigned its 'BB' debt rating and '1' recovery rating
to the company's proposed USUS$225 million revolving credit
facility. S&P said the outlook remained positive.
=============
E C U A D O R
=============
BANCO DEL PICHINCHA: Credife Acquires Banco Centromundo
-------------------------------------------------------
Microenterprise lender Credife, which is controlled by Banco del
Pichincha, has taken over Banco Centromundo, Ecudor's banking
regulator Superintendencia de Bancos y Seguros said in a
statement.
As reported in the Troubled Company Reporter-Latin America on
May 2, 2007, Banco del Pichincha Chief Executive Officer
Fernando Pozo said that the bank is in advanced talks to buy
Banco Centro Mundo. Mr. Pozo admitted that there were still
some pending issues in the process of negotiation to consider it
a done deal.
SBS told Business News Americas that due to a contraction in
Centromundo's deposit base, its financial situation has weakened
over the past few months. The transfer of its assets and
liabilities to Credife will help maintain depositor trust in the
financial system.
SBS said in a statement that Credife had a loan book of US$150
million and about 81,000 customers as of March 2007.
According to BNamericas, Banco Centromundo had a loan book of
US$106 million as of March 2007, accounting for 1.5% of total
loans held by the Ecuador's 25 banks.
Banco del Pichincha is Ecuador''s largest private bank. At the
end of the first half (2006), Banco del Pichincha ranked first
in the local financial system with an asset market share of 24%.
The bank's parent is financial group Grupo Financiero Banco del
Pichincha, Ecuador's largest financial group, with assets of
US$3.71 billion at June end. Banco del Pichincha was founded in
1906 and has 227 branches in about 80 cities and 416 ATMs.
* * *
As reported in the Troubled Company Reporter-Latin America on
Feb. 16, 2007, Fitch Ratings affirmed Banco del Pichincha's
long-term and short-term Issuer Default Ratings as:
-- Foreign currency long-term IDR at 'B-';
-- Foreign currency short-term rating at 'B'; and
-- Support rating at '5'.
Fitch said the rating outlook is negative.
GRAHAM PACKAGING: Dec. 31 Balance Sheet Upside-Down by US$597MM
---------------------------------------------------------------
Graham Packaging Holdings Company, parent company of Graham
Packaging Company L.P., reported results for the year ended
Dec. 31, 2006, and the refinancing of Term Loans under the
company's Credit Agreements.
As of Dec. 31, 2006, the company recorded in its balance sheet
total assets of US$2.4 billion and total liabilities of US$3
billion, resulting in a total stockholders' deficit of US$597.8
million.
The company experienced a net loss of US$120.4 million for the
year ended Dec. 31, 2006, as compared with net loss of US$52.6
million for the year ended Dec. 31, 2005.
The company reported net sales of US$2.5 billion for 2006 and
2005. The net sales in 2006 increased by US$47.5 million. The
slight increase in net sales was due to an increase in resin
pricing and an increase in units sold. Operating income for
2006 was US$116.4 million, a decline of US$30.7 million, as
compared with 2005, and was adversely impacted by US$14 million
in losses associated with the disposal of fixed assets.
Credit Agreement Amendment
Backed by strong investor demand, the company amended its Credit
Agreement to place US$1.8 billion of new term loan borrowings.
The proceeds were used to pay off the company's existing Term
Loan B borrowings of US$1.6 billion, repay in its entirety the
company's US$250 million Second Lien Term Loan; reduce its
outstanding borrowings under its revolving credit facility by
US$50 million; and pay related fees and expenses. The amendment
will reduce the company's annual interest costs by greater than
US$5 million and provide for a single financial covenant
measured by net leverage. The company expects to fund scheduled
debt repayments from cash from operations and unused lines of
credit. The revolving credit facility expires on Oct. 7, 2010.
At Dec. 31, 2006, the company's total debts were US$2.5 billion.
Liquidity and Capital Resources
In 2006, 2005 and 2004, the company generated US$490.4 million
of cash from operations and US$1.4 billion from increased debts.
This US$1.9 billion was primarily used to fund US$565.5 million
of net cash paid for property, plant and equipment, US$1.2
billion of investments and US$81.5 million of debt issuance fee
payments.
Working capital decreased US$108.6 million in 2006, primarily
due to a decrease in inventories of US$48.9 million.
A full-text copy of the company's 2006 annual report is
available for free at http://ResearchArchives.com/t/s?1d0c
About Graham Packaging Holdings
Graham Packaging Holdings Company is a Pennsylvania limited
partnership. Graham Packaging Company, L.P., --
http://www.grahampackaging.com/-- the company's wholly owned
subsidiary is a worldwide designer, manufacturer and seller of
customized blow molded plastic containers for the branded food
and beverage, household, personal care/specialty and automotive
lubricants product categories and, as of the end of September
2006, operated 85 manufacturing facilities throughout North
America, Europe and South America.
In South America, the company has operations in Argentina,
Brazil, Ecuador, Mexico and Venezuela.
The Blackstone Group, an investment firm, holds 78.6% equity in
Graham Packaging Holdings Company. MidOcean Capital Investors,
L.P., holds 4.1%. A group of management executives holds 2.3%.
The family of Graham Packaging founder Donald Graham holds 15%.
* * *
Graham Packaging Holdings Company carries Standard & Poor's B
rating for both its LT Foreign Issuer Credit and LT Local Issuer
Credit.
===========
G U Y A N A
===========
DIGICEL LTD: Secures Temporary Int'l License from Guyana Gov't
--------------------------------------------------------------
Digicel Ltd. has secured a temporary international license from
the Guyana government, Gordon French at the Caribbean Net News
reports.
Guyana Prime Minister Samuel Hinds told Caribbean Net's Mr.
French that the decision was made because the Americas II cable
about 15 kilometers off French Guiana was ruptured.
According to Caribbean Net's Mr. French, the break in the cable
caused difficulties in making and receiving international calls.
Digicel was forced to route all international traffic through
The Guyana Telephone and Telegraph Company, which has the sole
international license.
Digicel has been authorized to use its earth station to provide
international traffic coming from and ending on its network,
Caribbean Net's Mr. French notes, citing Prime Minister Hinds.
Digicel said in a statement that the government's quick response
means that the firm can assist in alleviating the current crisis
to communications services.
Digicel Chief Executive Officer Tim Bahrani commented to
Caribbean Net's Mr. French, "Digicel welcomes the Government's
move in granting Digicel a temporary international licence to
help alleviate the disruption customers are experiencing in
making international calls. Digicel can now help to resolve
this disruption by routing international calls over the Digicel
network to ensure that the people of Guyana continue to have
access to a world-class, reliable mobile service. We are happy
to assist the country in this time of need."
The license is applicable until international connectivity
through the Americas II cable is resolved. The disruption of
the service negatively affects Guyana's economy as well as the
lives of its citizens, especially in the area of security, Prime
Minister Hinds told Caribbean Net's Mr. French. The Guyana
Telephone would have accepted the need to have the sufficient
"satellite redundancy, knowing the problems in the past with the
Americas II cable." The company -- a unit of US based,
Atlantic-Tele Network -- has a 20-year monopoly on Guyana's
international and landline services.
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
=============
DYOLL INSURANCE: Coffee Farmers To Get Paid by May 31
-----------------------------------------------------
The Coffee Industry Board, Coffee Insurance Fund trustees and
other stakeholders have decided during an emergency meeting that
coffee farmers who suffered losses during the Hurricane Ivan in
2004 will receive their insurance payments from Dyoll Insurance
by May 31, 2007, Tenesha Thomas at the Jamaica Gleaner reports.
CIB Director General Graham Dunkley commented to Farmers Weekly,
"The trustees would like to see cheques rolling out by the end
of the month and that is the target that everybody is working
towards."
As reported in the Troubled Company Reporter-Latin America on
May 10, 2007, St. Thomas and St. Andrew coffee farmers, who were
upset over the delay in the payment of compensation from Dyoll
Insurance, protested in front of the office of the CIB. The
farmers were hoping that the out of court settlement between the
Dyoll Insurance's liquidators and the Trustees of the Coffee
Industry Board would have sped up the payment of the "long
overdue funds."
Mr. Dunkley explained to The Gleaner's Ms. Thomas that the delay
of the payment since the settlement was due to problems with
about 1,822 of the over 5,000 claims submitted by farmers. He
said, "Claims exceeded the sum insured from the beginning.
Subsequently, you had the payment in August and then a range of
appeals were lodged. There was information coming in that
people got overpaid."
All those problems have now been solved. The trustees have also
repaid the government in April the US$60 million that was
borrowed to be used as interim payment to the coffee farmers,
The Gleaner's Ms. Thomas states, citing Mr. Dunkley.
Dyoll Group Ltd. is a Jamaica-based company that is principally
engaged in the insurance business. Jamaica's Financial Services
Commission has assumed temporary management of the Jamaica-based
Dyoll Insurance Co. Ltd. in March 7, 2005, in order to establish
the true position of the Company, address the matter of
settlement to its claimants and ensure that its policies will
remain in force after a high level of insurance claims were
leveled on the company as a result of the hurricane Ivan.
Kenneth Tomlinson was appointed temporary manager. Jamaica's
Supreme Court ordered for the distribution of a US$653 million
fund held by the FSC in accordance with the Insurance Act 2001,
section 59, which says that the prescribed deposit, on the
winding up of an insurance company, should be applied first to
settle the claims of local policyholders.
===========
M E X I C O
===========
ALL AMERICAN: NASDAQ to Delist Common Stock after Form 25 Filing
----------------------------------------------------------------
All American Semiconductor Inc. disclosed that the NASDAQ Stock
Market would delist its common stock, which was suspended on
April 27, 2007, and has not traded on NASDAQ since that time.
The company was informed that NASDAQ would file a Form 25 with
the Securities and Exchange Commission to complete the
delisting.
The delisting becomes effective ten days after the Form 25 is
filed.
On April 18, 2007, the company received a Staff Determination
Letter from The Nasdaq Stock Market indicating that the company
is not in compliance with the continued listing requirements set
forth in Nasdaq Marketplace Rule 4310(c)(14) because the company
failed to timely file its Annual Report on Form 10-K for the
fiscal year ended Dec. 31, 2006. The Staff Determination Letter
provides that, unless the company requests an appeal of this
determination by 4:00 p.m. Eastern Time on April 25, 2007,
trading of the company's common stock will be suspended at the
opening of business on April 27, 2007.
About All American
All American Semiconductor Inc. -- http://www.allamerican.com/
-- (Nasdaq: SEMI) (Pink Sheets: SEMI.PK) is a Delaware
corporation with its principle place of business in Miami,
Florida. It also maintains corporate offices for West Coast
operations in San Jose, California. All American is a
distributor of electronic components manufactured by others.
The company distributes a full range of semiconductors including
transistors, diodes, memory devices, microprocessors,
microcontrollers, other integrated circuits, active matrix
displays and various board-level products.
The company has 36 strategic locations throughout North America
and Mexico, as well as operations in both Asia and Europe.
The company and its Debtor-affiliates filed for Chapter 11
protection on April 25, 2007, (Bankr. Case No.: 07-12963 through
07-13002 S.D. Fla.) Tina M. Talarchyk, Esq. of the Squire
Sanders & Dempsey LLP represents the Debtors in their
restructuring efforts. When the Debtors filed for protection
from their creditors, they listed total assets of US$117,634,000
and total debts of US$106,024,000.
BANCO DEL BAJIO: Moody's Ups Fin'l Strength Rating to D+ from D-
----------------------------------------------------------------
Moody's Investors Service has confirmed that it raised its bank
financial strength rating on Banco del Bajio, S.A. to D+ from
D-, in connection with the rating agency's implementation of its
refined joint default analysis and updated BFSR methodologies
for banks in Mexico.
Banco del Bajio's Local Currency Deposit Rating is changed to
Baa3/Prime-3 from Ba2/Not-Prime. The Foreign Currency Deposit
Rating changed to Baa3/Prime-3 from Ba2/Not-Prime. The long
term Mexican National Scale Rating is changed to Aa3.mx from
A2.mx. The short term Mexican National Scale Rating is
unchanged at MX-2.
The updated BFSR methodology has benefited the BFSRs of almost
every bank in Mexico. In particular, the BFSRs of three banks,
HSBC Mexico, Banco Interacciones and Banco del Bajio, were
upgraded by two notches. Relatively strong financial
fundamentals and evolving franchises combined with an improving
regulatory environment have been the main drivers of the BFSR
upgrades for Mexican banks.
Moody's assesses support levels to banks in Mexico using its
high country support guideline. This guideline takes into
consideration the history of support for banks, the size,
strength and the degree of fragmentation of the Mexican banking
system.
Based on this framework, the implementation of the JDA
methodology also led to the upgrade in the local currency
deposit ratings of several Mexican banks, many of which also
benefited from Moody's assessment of the probability of parental
support.
BFSRs evaluate the stand-alone or intrinsic financial strength
of banks without reference to external support factors. BFSRs
are the starting point of Moody's bank credit analysis, and are
an important determinant of Moody's bank deposit and debt
ratings.
Moody's then uses its JDA methodology to incorporate the
potential for external support into a bank's local currency
deposit rating. The potential for external support can reduce
the riskiness of a bank's deposit and debt obligations; however,
such support is often uncertain.
Moody's uses conservative support assumptions and a limited
number of support levels to ensure that sufficient weight is
given to a bank's intrinsic financial strength in its bank
deposit and debt ratings.
Moody's uses deposit ratings to determine bank debt ratings
based on its notching guidelines for bank securities. Ratings
for foreign currency obligations are determined after
considering Moody's country ceilings for foreign currency
ratings.
Banco del Bajio is the eighth largest bank in Mexico with an
overall market share of roughly 2% of loans and deposits.
However, it is one of the largest and fastest growing regional
banks in Mexico. Three groups of national investors own a 49%
stake in the bank, Sabadell and the IFC control 20% and 10%,
respectively, and the balance is widely held. Banco del Bajio
has entered into the mortgage and construction sectors through
the acquisition of two specialized mortgage lenders in 2004 and
2005. These companies and a factoring entity are Banco del
Bajio's sole subsidiaries, while it also has a 50% stake in the
pension fund management company Afore Afirme Bajio, created in
2005. As of September, Bajio had roughly US$3.9 billion in
assets, loans for US$3 billion and equity of US$418 million.
BANCO INTERACCIONES: Moody's Ups Financial Strength Rating to D
---------------------------------------------------------------
Moody's Investors Service has confirmed that it raised its bank
financial strength rating on Banco Interacciones, S.A. to D from
E+, in connection with the rating agency's implementation of its
refined joint default analysis and updated BFSR methodologies
for banks in Mexico.
Banco Interacciones Local Currency Deposit Rating is changed to
Ba1/Not-Prime from Ba3/Not-Prime. The Foreign Currency Deposit
Rating changed to Ba1/Not-Prime from Ba3/Not-Prime. The long
term Mexican National Scale Rating is changed to A1.mx from
A3.mx. The short term Mexican National Scale Rating is
unchanged at MX-2.
The updated BFSR methodology has benefited the BFSRs of almost
every bank in Mexico. In particular, the BFSRs of three banks,
HSBC Mexico, Banco Interacciones and Banco del Bajio, were
upgraded by two notches. Relatively strong financial
fundamentals and evolving franchises combined with an improving
regulatory environment have been the main drivers of the BFSR
upgrades for Mexican banks.
Moody's assesses support levels to banks in Mexico using its
high country support guideline. This guideline takes into
consideration the history of support for banks, the size,
strength and the degree of fragmentation of the Mexican banking
system.
Based on this framework, the implementation of the JDA
methodology also led to the upgrade in the local currency
deposit ratings of several Mexican banks, many of which also
benefited from Moody's assessment of the probability of parental
support.
BFSRs evaluate the stand-alone or intrinsic financial strength
of banks without reference to external support factors. BFSRs
are the starting point of Moody's bank credit analysis, and are
an important determinant of Moody's bank deposit and debt
ratings.
Moody's then uses its JDA methodology to incorporate the
potential for external support into a bank's local currency
deposit rating. The potential for external support can reduce
the riskiness of a bank's deposit and debt obligations; however,
such support is often uncertain.
Moody's uses conservative support assumptions and a limited
number of support levels to ensure that sufficient weight is
given to a bank's intrinsic financial strength in its bank
deposit and debt ratings.
Moody's uses deposit ratings to determine bank debt ratings
based on its notching guidelines for bank securities. Ratings
for foreign currency obligations are determined after
considering Moody's country ceilings for foreign currency
ratings.
BANCO J.P.: Moody's Assigns D+ Bank Financial Strength Rating
-------------------------------------------------------------
Moody's Investors Service has assigned a D+ bank financial
strength rating on Banco J.P. Morgan, S.A. (Mexico), in
connection with the rating agency's implementation of its
refined joint default analysis and updated BFSR methodologies
for banks in Mexico.
Banco J.P. Morgan's Local Currency Deposit Rating is assigned at
A1/Prime-1. The Foreign Currency Deposit Rating is assigned at
Baa1/Prime-2. The long term Mexican National Scale Rating is
unchanged at Aaa.mx. The short term Mexican National Scale
Rating is unchanged at MX-1.
The updated BFSR methodology has benefited the BFSRs of almost
every bank in Mexico. Relatively strong financial fundamentals
and evolving franchises combined with an improving regulatory
environment have been the main drivers of the BFSR upgrades for
Mexican banks.
Moody's assesses support levels to banks in Mexico using its
high country support guideline. This guideline takes into
consideration the history of support for banks, the size,
strength and the degree of fragmentation of the Mexican banking
system.
Based on this framework, the implementation of the JDA
methodology also led to the upgrade in the local currency
deposit ratings of several Mexican banks, many of which also
benefited from Moody's assessment of the probability of parental
support.
BFSRs evaluate the stand-alone or intrinsic financial strength
of banks without reference to external support factors. BFSRs
are the starting point of Moody's bank credit analysis, and are
an important determinant of Moody's bank deposit and debt
ratings.
Moody's then uses its JDA methodology to incorporate the
potential for external support into a bank's local currency
deposit rating. The potential for external support can reduce
the riskiness of a bank's deposit and debt obligations; however,
such support is often uncertain.
Moody's uses conservative support assumptions and a limited
number of support levels to ensure that sufficient weight is
given to a bank's intrinsic financial strength in its bank
deposit and debt ratings.
Moody's uses deposit ratings to determine bank debt ratings
based on its notching guidelines for bank securities. Ratings
for foreign currency obligations are determined after
considering Moody's country ceilings for foreign currency
ratings.
BANK OF AMERICA: Moody's Assigns D+ Bank Fin'l Strength Rating
--------------------------------------------------------------
Moody's Investors Service has assigned a D+ bank financial
strength rating on Bank of America Mexico, S.A, in connection
with the rating agency's implementation of its refined joint
default analysis and updated BFSR methodologies for banks in
Mexico.
Bank of America's Local Currency Deposit Rating is assigned at
A1/Prime-1. The Foreign Currency Deposit Rating is assigned at
Baa1/Prime-2. The long term Mexican National Scale Rating is
unchanged at Aaa.mx. The short term Mexican National Scale
Rating is unchanged at MX-1.
The updated BFSR methodology has benefited the BFSRs of almost
every bank in Mexico. Relatively strong financial fundamentals
and evolving franchises combined with an improving regulatory
environment have been the main drivers of the BFSR upgrades for
Mexican banks.
Moody's assesses support levels to banks in Mexico using its
high country support guideline. This guideline takes into
consideration the history of support for banks, the size,
strength and the degree of fragmentation of the Mexican banking
system.
Based on this framework, the implementation of the JDA
methodology also led to the upgrade in the local currency
deposit ratings of several Mexican banks, many of which also
benefited from Moody's assessment of the probability of parental
support.
BFSRs evaluate the stand-alone or intrinsic financial strength
of banks without reference to external support factors. BFSRs
are the starting point of Moody's bank credit analysis, and are
an important determinant of Moody's bank deposit and debt
ratings.
Moody's then uses its JDA methodology to incorporate the
potential for external support into a bank's local currency
deposit rating. The potential for external support can reduce
the riskiness of a bank's deposit and debt obligations; however,
such support is often uncertain.
Moody's uses conservative support assumptions and a limited
number of support levels to ensure that sufficient weight is
given to a bank's intrinsic financial strength in its bank
deposit and debt ratings.
Moody's uses deposit ratings to determine bank debt ratings
based on its notching guidelines for bank securities. Ratings
for foreign currency obligations are determined after
considering Moody's country ceilings for foreign currency
ratings.
BARCLAYS BANK: Moody's Affirms D Bank Financial Strength Rating
---------------------------------------------------------------
Moody's Investors Service has affirmed its D bank financial
strength rating on Barclays Bank Mexico S.A., in connection with
the rating agency's implementation of its refined joint default
analysis and updated BFSR methodologies for banks in Mexico.
Barclays Bank's Local Currency Deposit Ratings are affirmed at
A1/ Prime-1. The Foreign Currency Deposit Rating is affirmed at
Baa1/ Prime-2. The long term Mexican National Scale Rating is
affirmed at Aaa.mx. The short term Mexican National Scale
Rating is unchanged at MX-1.
The updated BFSR methodology has benefited the BFSRs of almost
every bank in Mexico. Relatively strong financial fundamentals
and evolving franchises combined with an improving regulatory
environment have been the main drivers of the BFSR upgrades for
Mexican banks.
Moody's assesses support levels to banks in Mexico using its
high country support guideline. This guideline takes into
consideration the history of support for banks, the size,
strength and the degree of fragmentation of the Mexican banking
system.
Based on this framework, the implementation of the JDA
methodology also led to the upgrade in the local currency
deposit ratings of several Mexican banks, many of which also
benefited from Moody's assessment of the probability of parental
support.
BFSRs evaluate the stand-alone or intrinsic financial strength
of banks without reference to external support factors. BFSRs
are the starting point of Moody's bank credit analysis, and are
an important determinant of Moody's bank deposit and debt
ratings.
Moody's then uses its JDA methodology to incorporate the
potential for external support into a bank's local currency
deposit rating. The potential for external support can reduce
the riskiness of a bank's deposit and debt obligations; however,
such support is often uncertain.
Moody's uses conservative support assumptions and a limited
number of support levels to ensure that sufficient weight is
given to a bank's intrinsic financial strength in its bank
deposit and debt ratings.
Moody's uses deposit ratings to determine bank debt ratings
based on its notching guidelines for bank securities. Ratings
for foreign currency obligations are determined after
considering Moody's country ceilings for foreign currency
ratings.
Barclays Bank Mexico concentrates on trading, sales, and risk
management instruments including currency, interest rate
derivatives and structured notes.
GENERAL MOTORS: Offers 0% Financing for Silverado, Sierra Trucks
----------------------------------------------------------------
General Motors Corp. is proposing zero-percent financing on
36-month loans for the 2007 Chevrolet Silverado and GMC Sierra,
various sources report. A reduced-rate financing on 60-month
loans for the pickup trucks is also available.
The move is in reaction to incentives deals offered by other
automakers as a result of rising gasoline prices.
As an alternative to the financing offer, clients can choose
US$1,250 cash back on the Sierra or US$1,500 on the Silverado.
The financing program for the pickup trucks commenced on Friday
and will end on July 9, 2007, according to various sources.
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.
GLOBAL POWER: Wants to Issue EUR1.1 Mln L/C from DIP Facility
-------------------------------------------------------------
Global Power Equipment Group Inc. and its debtor-affiliates seek
authority from the U.S. Bankruptcy Court for the District of
Delaware to amend the debtor-in-possession financing agreement
they entered into with Morgan Stanley Senior Funding Inc. and
Morgan Stanley & Co. as agents to the DIP Financing lenders.
The DIP Financing Agreement, which was approved by the Court on
a final basis on Jan. 9, permitted the Debtors to borrow up to
US$85,000,000 from the DIP Financing Lenders.
Additionally, the DIP Financing Agreement provides for certain
restrictions on the use of the funds available to support
operations of the Debtors' foreign affiliates.
One of the exceptions to the restrictions provides that the
Debtors may issue to Braden-Europe BV, a non-Debtor foreign
affiliate of the Debtors, a synthetic letter of credit to
support obligations of certain of the Debtors and Braden-Europe
arising out of a project for a major customer of the Debtors.
Braden-Europe Credit Pact
Braden-Europe is the borrower under a credit agreement with ABN
AMRO Bank NV dated Feb. 14, 2005.
The BE Credit Agreement contains a covenant that requires
Braden-Europe to maintain a certain level of tangible net worth.
As of Dec. 31, 2006, ABN AMRO has alleged that Braden-Europe is
not in compliance with the tangible net worth covenant, due in
large part to the Debtors' commencement of the chapter 11 cases.
To resolve the issue and bring Braden-Europe back into
compliance under the BE Credit Agreement, Braden-Europe has
requested that the Debtors issue in favor of ABN AMRO an
irrevocable standby letter of credit for EUR1,100,000.
To issue the ABN AMRO L/C, however, the Debtors say they need to
amend the DIP Financing Agreement.
The Debtors believe that the amendment to the DIP Financing
Agreement will prevent disruption to the Braden-Europe
operations, which are integral to the value of the Braden
Debtors and to the efficient administration of the cases.
In addition, the Debtors believe that the Final DIP Order
permits them to enter into an amendment without the need for
further Court approval, however, the Debtors say they are asking
the Court's permission out of an abundance of caution and to
provide the greatest amount of transparency to the Court and all
parties-in-interest.
Furthermore, the Debtors explain that they do not seek in the
motion to increase the amounts they can borrow under the DIP
Facility, rather, they seek only to be permitted to use the
already authorized borrowings to protect the estate assets by
providing credit support for Braden-Europe.
The Debtors tell the Court that the DIP Lenders have consented
to the proposed amendment.
About Global Power Equipment Group Inc.
Based in Tulsa, Oklahoma, Global Power Equipment Group Inc. aka
GEEG Inc. -- http://www.globalpower.com/-- provides power
generation equipment and maintenance services for its customers
in the domestic and international energy, power and
infrastructure and service industries. The company designs,
engineers and manufactures a range of heat recovery and
auxiliary equipment primarily used to enhance the efficiency and
facilitate the operation of gas turbine power plants as well as
for other industrial and power-related applications. The
company has facilities in Plymouth, Minnesota; Tulsa, Oklahoma;
Auburn, Massachusetts; Atlanta, Georgia; Monterrey, Mexico;
Shanghai, China; Nanjing, China; and Heerleen, The Netherlands.
The company and 10 of its affiliates filed for chapter 11
protection on Sept. 28, 2006 (Bankr. D. Del. Case No 06-11045).
Attorneys at White & Case LLP and The Bayard Firm, P.A.,
represent the Debtors. Adam G. Landis, Esq., and Kerri K.
Mumford, Esq., at Landis Rath & Cobb LLP represents the Official
Committee of Unsecured Creditors. As of Sept. 30, 2005, the
Debtors reported total assets of US$381,131,000 and total debts
of US$123,221,000.
The Court has entered a second bridge order extending the
Debtors' exclusive period to file a plan until a hearing set for
May 17, 2007.
MEGA BRANDS: Earns US$25.3 Million in Full Year Ended Dec. 31
-------------------------------------------------------------
Mega Brands Inc. reported that for the full year ended
Dec. 31, 2006, its consolidated net sales increased to US$547.3
million, as compared with US$384.9 million in 2005. Net
earnings for the full year 2006 were US$25.3 million as compared
with US$39.6 million for the full year 2005.
Net sales in North America increased to US$397.8 million, as
compared with US$254.3 million in 2005, mainly as a result of
the inclusion of MEGA Brands America for the full year in 2006
compared to about five months in 2005. International net sales
were up to US$149.6 million compared to US$130.5 million in
2005. The company increased its market share in the
construction toy category in virtually all international markets
in 2006 and gained the leadership position in this category in
the U.K. and Spain for the first time.
"All things considered, we are pleased with our operating
performance in 2006, with diluted EPS before Specified Items of
US$1.56, low ending inventories of our products at retail and
the integration of MEGA Brands America," stated Marc Bertrand,
president and chief executive officer. "We overcame a number of
unexpected challenges and positioned MEGA Brands for continued
profitable growth with a strong platform of exciting brands."
"Sales momentum entering 2007 is strong, driven by several
first-quarter product launches and the May releases of Pirates
of the Caribbean 3 and Spider-Man 3," added Mr. Bertrand. "For
2007, we see continued growth and earnings that we expect to be
supported by US$7-10 million of operating synergies resulting
from the integration of MEGA Brands America in 2006."
Fourth Quarter Results
Consolidated net sales in the fourth quarter of 2006 were
US$164.8 million, as compared with US$166.2 million in the
fourth quarter of 2005. Loss from operations in the fourth
quarter of 2006 was US$1.3 million, as compared with earnings
from operations of US$31.7 million in the fourth quarter of
2005. Net earnings in the fourth quarter of 2006 were US$2.8
million, as compared with net earnings of US$20.9 million in the
fourth quarter of 2005.
Liquidity and Capital Resources
Cash flows from operating activities before changes in non-cash
working capital items were US$3 million in the fourth quarter of
2006, as compared with US$30.5 million for the same period in
2005, mainly due to Specified Items recorded during the fourth
quarter of 2006. After changes in non-cash working capital
items, operating cash flow was US$28.7 million, as compared with
US$11 million in the fourth quarter of 2005.
As at Dec. 31, 2006, the company held cash and cash equivalents
of US$13.7 million. Working capital stood at US$124.7 million
as at Dec. 31, 2006, as compared with US$101.6 million at the
end of 2005. This increase is due mainly to higher inventories
at the end of 2006.
Long-term debt at the end of 2006 was US$312 million, as
compared with US$301 million in 2005. As at Dec. 31, 2006, the
company's debt was comprised of US$14.4 million under its Term A
facility maturing in 2009, US$256.8 million under its Term B
facility maturing in 2012 and US$40 million drawn against its
US$120 million revolving credit facility. The company was in
compliance with all covenants of its credit facility as at
Dec. 31, 2006.
As of Dec. 31, 2006, the company posted total assets of
US$800.4 million and total liabilities of US$551 million,
resulting in a total shareholders' equity of US$249.4 million.
About Mega Brands
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
SATELITES MEXICANOS: Extends Bid Submission Deadline to May 30
--------------------------------------------------------------
Reuters reports that Satelites Mexicanos, S.A. de C.V., aka
Satmex, has moved the bid submission deadline for the sale of
the firm to May 30 to answer queries from potential buyers.
As reported in the Troubled Company Reporter-Latin America on
Feb. 2, 2007, Thomsa Heather -- restructuring advisor of Satmex
-- said that firms keen on acquiring the company should make
non-binding bids by the start of March. Satmex emerged from a
restructuring process in December 2006. Creditors acquired
76.4% of the firm and the Mexican government owned 23.6%. Much
of the foreign ownership will be identified as neutral
investment and the government will have 55% of the voting
rights. Satmex is considering transferring ownership to a group
led by a fixed satellite service provider in a process
supervised by investment bank Morgan Stanley and Raul Cisneros
Matusita, who was appointed as Satmex's Chief Executive Officer
after the restructuring process ended. Nine firms as well as
several private investment funds expressed interest in owning
Satmex. Among of the interested companies were:
-- Grupo Medcom,
-- Pegaso Comunicaciones,
-- Intelsat,
-- Echostar,
-- Eutelsat, and
-- SES Global.
Reuters relates that the bids were initially expected during the
first half of May, though Satmex never set an exact date.
However, Satmex Chief Executive Raul Cisneros told workers in a
May 3 memo that groups planning to bid for the firm should be
formed by May 21 and file their economic proposals by the end of
month, Reuters notes. Mr. Cisneros said that the extension will
give the company more time to answer pending questions from
potential bidders.
A Satmex spokesman confirmed to Reuters the accuracy of the
memo.
According to Reuters, Satmex hired investment banker Morgan
Stanley in December 2006 to study strategic options, including
the firm's sale.
European satellite giant SES disclosed in February that it was
interested on the potential sale of Satmex. Mexican broadcaster
Grupo Televisa also admitted in a conference call two weeks ago
that it was keen on acquiring Satmex, Reuters states.
Satelites Mexicanos, SA de CV, provides fixed satellite services
in Mexico. Satmex provides transponder capacity via its
satellites to customers for distribution of network and cable
television programming, direct-to-home television service, on-
site transmission of live news reports, sporting events and
other video feeds. Satmex also provides satellite transmission
capacity to telecommunications service providers for public
telephone networks in Mexico and elsewhere and to corporate
customers for their private business networks with data, voice
and video applications. Satmex also provides the government of
the United Mexican States with approximately 7% of its satellite
capacity for national security and public purposes without
charge, under the terms of the Orbital Concessions.
The Debtor filed for chapter 11 petition on Aug. 11, 2006,
(Bankr. S.D.N.Y. Case No. 06-11868). Luc A. Despins, Esq., at
Milbank, Tweed Hadley & McCloy LLP represents the Debtor in the
U.S. Bankruptcy proceedings. Attorneys from Galicia y Robles,
S.C., and Quijano Cortina Lopez y de la Torre give legal advice
in the Debtor's Mexican Bankrutpcy proceedings. UBS Securities
LLC and Valor Consultores, SA de CV, give financial advice to
the Debtor. Steven Scheinman, Esq., Michael S. Stamer, Esq.,
and Shuba Satyaprasad, Esq., at Akin Gump Strauss Hauer & Feld
LLP give legal advice to the Ad Hoc Existing Bondholders'
Committee. Dennis Jenkins, Esq., and George W. Shuster, Jr.,
Esq., at Wilmer Cutler Pickering Hale and Dorr LLP give legal
advice to Ad Hoc Senior Secured Noteholders' Committee. As of
July 24, 2006, the Debtor has US$905,953,928 in total assets and
US$743,473,721 in total liabilities.
On May 25, 2005, certain holders of Satmex's Existing Bonds and
Senior Secured Notes filed an involuntary chapter 11 petition
against the company (Bankr. S.D.N.Y. Case No. 05-13862). On
June 29, 2005, Satmex filed a voluntary petition for a Mexican
reorganization, known as a Concurso Mercantil, which was
assigned to the Second Federal District Court for Civil Matters
for the Federal District in Mexico City.
On Aug. 4, 2005, Satmex filed a petition, pursuant to
Section 304 of the Bankruptcy Code that commenced a case
ancillary to the Concurso Proceeding and a motion for injunctive
relief that sought among other things, to enjoin actions against
Satmex or its assets (Bankr. S.D.N.Y. Case No. 05-16103).
Satmex concluded its reorganization efforts on Nov. 30, 2006,
and emerged from its U.S. bankruptcy case. The company
consummated its U.S. chapter 11 plan of reorganization, which
was confirmed by the United States Bankruptcy Court for the
Southern District of New York by order dated Oct. 26, 2006, and
implemented the restructuring approved in Satmex's Mexican
Concurso Mercantil proceeding by the Concurso Plan Order issued
on July 14, 2006.
TV AZTECA: Secures Deals in 15 Markets in Europe & Latin America
----------------------------------------------------------------
TV Azteca, S.A. de C.V., has signed deals for its series titled
"Man Wanted" in 15 markets in Central and Eastern Europe as well
as in Latin America, the World Screen reports.
TV Azteca told the World Screen that "Man Wanted," which focuses
on a group of women who visit a beauty salon and spa, is airing
on its Channel 13, achieving a 35% share in its Mexican prime-
time slot.
TV Azteca (BMV: TVAZTCA) (Latibex: XTZA) is one of the two
largest producers of Spanish-language television programming in
the world, operating two national television networks in Mexico
-- Azteca 13 and Azteca 7 -- through more than 300 owned and
operated stations across the country. TV Azteca affiliates
include Azteca America Network, a new broadcast television
network focused on the rapidly growing US Hispanic market, and
Todito, an Internet portal for North American Spanish speakers.
* * *
Moody's Investor Services rated TV Azteca's senior unsecured
debt at B1.
=================
N I C A R A G U A
=================
* NICARAGUA: State Firm Won't Conduct Oil Imports from Venezuela
----------------------------------------------------------------
Published reports say that Nicaraguan state-run oil firm
Petroleos de Nicaragua wouldn't play any role in the import of
oil from Venezuela as the process would occur through corporate
transactions.
However, Nicaraguan President Daniel Ortega's foes rejected the
reports, El Universal notes.
Petroleos de Nicaragua Chief Executive Officer Francisco Lopez
told El Universal that the firm, not the joint venture Alba
Petroleos de Nicaragu, will carry out the oil purchase
operation.
Alba Petroleos de Nicaragua was incorporated in 2006 between
Venezuelan state-owned oil company Petroleos de Venezuela's
affiliate PDV Caribe and the Association of Nicaraguan
Municipalities, which is controlled by Sandinist Mayors.
Mr. Lopez told El Universal that the operations won't involve
public debt, as it is a loan between firms.
The plans aren't fully clear and need to be explained, El
Universal says, citing "Nicaraguan dissenters," who also
wondered how a government corporation will not have public
debts.
"Venezuelans will require a guarantor, and that will be the
(Nicaraguan) State," Francisco Aguirre, a parliamentarian, told
El Universal.
* * *
Moody's Investor Service assigned these ratings to Nicaragua:
Rating Rating Date
------ -----------
Long Term Caa1 June 30, 2003
Senior Unsecured
Debt B3 June 30, 2003
===============
P A R A G U A Y
===============
UNIAO DE BANCOS: Reports BRL581 Million Net Income in First Qtr.
----------------------------------------------------------------
Uniao de Bancos Brasileiros SA reported 2007 first quarter net
income of BRL581 million, up 11.7% when compared to first
quarter 2006.
In the same period, operating income increased 11.7%, reaching
BRL938 million. Annualized return on average equity (ROAE)
reached 25.1% in first quarter 2007.
Unibanco's total assets reached BRL115 billion, up 23.0% when
compared to March 31, 2006. This growth is mainly due to the
increase in marketable securities and foreign exchange
portfolios and the BRL7.3 billion increase in total loans,
particularly in credit card and SME portfolios.
Total loan portfolio reached BRL47,001 million in March 2007.
The loan portfolio to individuals totaled BRL18,319 million, up
5.1% in first quarter 2007. Payroll loans and auto financing
were 1Q07 highlights, posting 20.9% and 9.0% growth,
respectively. In the Retail segment, the SME portfolio is also
worth mentioning, with a 5.8% increase when compared to December
2006.
Unibanco presented a change in its Retail loan portfolio mix,
with growth in better quality loan portfolios, such as payroll
loans and auto financing, and a shift from overdraft loans to
installment credit in the branch network.
Such changes influenced both the financial margin and the
provision for loan losses. The financial margin after provision
for loan losses reached 7.2% in first quarter 2007.
The highlight of the quarter was the 18.4% decrease in provision
for loan losses, first quarter 2007 vis-a-vis first quarter
2006, as a result of asset quality improvement. Provision for
loan losses represented 21.8% of the financial margin in March
2007, compared to 27.2% as of March 2006.
In first quarter 2007, personnel and administrative expenses
decreased 7.8% from fourth quarter 2006, largely due to
operating efficiency and seasonal effects. In 12 months, the
variation in personnel and administrative expenses was only
4.2%, even considering the businesses expansion.
Unibanco remains satisfied and confident with the ongoing
results and the continuous improvement of its performance.
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.
=======
P E R U
=======
PRIDE INTERNATIONAL: Credit Suisse Reiterates Neutral Rating
------------------------------------------------------------
Credit Suisse analyst K. Sill has reaffirmed his "neutral"
rating on Pride International Inc's shares, Newratings.com
reports.
Newratings.com relates that the 12-month target price for Pride
International's shares was increased to US$38 from US$32.
Mr. Sill said in a research note published on May 9 that Pride
International's first quarter 2007 earnings per share from
continuing operations were broadly in-line with the estimates
and the consensus.
Mr. Sill told Newratings.com that the increase in the target
price indicates a change in the base year.
According to Newratings.com, Pride International reported that
its earnings per share guidance for the second quarter, at
US$0.68 to US$0.72, were ahead of the estimates.
The earnings per share estimate for 2007 increased to US$2.90
from US$2.75, while the estimate for 2008 was raised to US$4.15
from US$4.00, Newratings.com states.
Headquartered in Houston, Texas, Pride International Inc.
(NYSE:PDE) -- http://www.prideinternational.com/-- is a
drilling contractor. The company provides onshore and offshore
drilling and related services in more than 25 countries,
operating a diverse fleet of 278 rigs, including two ultra-
deepwater drillships, 12 semi submersible rigs, 28 jackup rigs,
18 tender-assisted, barge and platform rigs, and 218 land rigs.
Pride also provides a variety of oilfield services to customers
in Argentina, Venezuela, Bolivia and Peru.
* * *
As reported in the Troubled Company Reporter on Sept. 15, 2006,
Standard & Poor's Ratings Services affirmed its 'BB' corporate
credit rating on contract driller Pride International Inc. and
removed the rating from CreditWatch with negative implications.
S&P said the outlook is stable. As of June 30, 2006, Houston,
Texas-based Pride had US$1.01 billion in adjusted debt.
As reported in the Troubled Company Reporter on Aug. 17, 2006,
Fitch Ratings raised Pride International's Issuer Default Rating
to 'BB' from 'BB-'. Fitch also raised the ratings on Pride's
senior secured revolving credit facility, senior unsecured notes
and their convertible senior notes.
=====================
P U E R T O R I C O
=====================
CENTENNIAL COMMUNICATIONS: Inks Purchase Agreement with Islanet
---------------------------------------------------------------
Centennial Communications Corp. has entered into a definitive
agreement to purchase Islanet Communications, a provider of data
and voice communications to business and residential customers
in Puerto Rico. The transaction is expected to close in the
third calendar quarter of 2007, subject to the satisfaction of
customary closing conditions including regulatory approval for
the transfer of Islanet's 2.5Ghz spectrum holdings. The
transaction is expected to be modestly accretive to Centennial's
free cash flow within the first year after closing.
Islanet operates a facilities-based wireless network that
primarily delivers data connectivity solutions to approximately
200 multi-location commercial customers in Puerto Rico.
Islanet's service portfolio includes point of sale data, credit
card transactions, Internet access and Voice over Internet
Protocol. Islanet also holds 2.5Ghz spectrum suitable for WiMAX
technology on the island, which supports its recently launched
residential wireless Internet service.
"We're pleased to expand our comprehensive set of bandwidth and
networking solutions for commercial customers with our
acquisition of Islanet Communications," said Michael J. Small,
Centennial's chief executive officer. "This transaction
immediately expands the addressable market for our broadband
business by providing more efficient last-mile access to reach
small and medium-sized business customers. We'll continue to
evaluate an expanded deployment of WiMAX as the technology
evolves."
Islanet's majority investor is Advent-Morro Equity Partners, a
Puerto Rico-based affiliate of private equity firm Advent
International. "We're delighted to monetize our investment in
Islanet and partner with Centennial in bringing innovation to
enterprise customers on the island," said Cyril Meduna, Advent-
Morro's managing partner. "These assets are complementary to
Centennial's already strong presence in Puerto Rico, and with
their financial resources and operational excellence, will only
benefit the local market."
Headquartered in Wall, New Jersey, Centennial Communications
Corp. (NASDAQ: CYCL) -- http://www.centennialwireless.com/--
provides regional wireless and integrated communications
services in the United States and the Puerto Rico with
approximately 1.1 million wireless subscribers and 387,500
access lines and equivalents. The US business owns and operates
wireless networks in the Midwest and Southeast covering parts of
six states. Centennial's Puerto Rico business owns and operates
wireless networks in Puerto Rico and the U.S. Virgin Islands and
provides facilities-based integrated voice, data and Internet
solutions. Welsh, Carson, Anderson & Stowe and an affiliate of
the Blackstone Group are controlling shareholders of Centennial.
At Feb. 28, 2007, the company's balance sheet showed
US$1,393 million in total assets, US$2,482.8 million in total
liabilities, and US$3.9 million in minority interest in
subsidiaries, resulting in a US$1,093.7 million total
stockholders' deficit.
STANDARD MOTOR: Reports US$2.9 Mil. Net Income in First Quarter
---------------------------------------------------------------
Standard Motor Products, Inc. reported its consolidated
financial results for the three months ended March 31, 2007.
Consolidated net sales for the first quarter of 2007 were
US$199.8 million, compared to consolidated net sales of
US$210.1 million during the comparable quarter in 2006.
Earnings from continuing operations for the first quarter of
2007 were US$2.9 million compared to US$2.6 million in the first
quarter of 2006.
First quarter 2007 consolidated net sales decreased by US$10.3
million. Consolidated gross margins increased to 26% in the
first quarter of 2007 compared to 25.3% in the first quarter of
2006. In addition, operating income decreased US$0.9 million to
US$8.5 million in the first quarter of 2007 from US$9.4 million
in the comparable period in the prior year.
Commenting on the results, Lawrence Sills, Standard Motor
Products' Chairman and Chief Executive Officer, said, "As we
advised during our previous conference call, Engine Management
sales in the first quarter were about US$11 million or 7.7%
below 2006, for two reasons: first, there were substantial
pre-season orders during the first quarter of 2006, which were
not repeated in 2007; and, second, a contract to supply fuel
injectors to an OE customer expired at the end of 2006. We
anticipate improved comparative results for the balance of 2007,
especially as some of our new OE and OES business begins in the
second half of 2007."
"Our Engine Management gross margin percentage continues to
increase, as we achieved 26.3% for the first quarter of 2007,
compared with 24.7% for the first quarter of 2006, and 24.6% for
the full year 2006."
"Temperature Control sales were slightly ahead of last year for
the first quarter, but the key to the year will be the second
and third quarters. April was cooler than normal in most of the
country, thus delaying our traditional seasonal increase."
"Our Temperature Control gross margin fell 1.4 points, from
22.6% to 21.2%, a result of selected price decreases to match
off-shore competition. However, by working aggressively to
reduce SG&A expenses, our operating profit slightly exceeded the
first quarter of 2006. Improvements in gross margin are
expected as we shift additional manufacturing to Reynosa,
Mexico, and close our facility in Ft. Worth, Texas."
"Our European division continued its turnaround, as we went from
a net loss to a net profit in the first quarter. We achieved
improvements in all three major areas.sales, gross margin, and
operating expenses."
The Board of Directors has approved payment of a quarterly
dividend of nine cents per share on the common stock
outstanding. The dividend will be paid on June 1, 2007 to
stockholders of record on May 15, 2007.
About Standard Motor
Headquartered in Long Island City, New York, Standard Motor
Products Inc. (NYSE: SMP) -- http://smpcorp.com/-- manufactures
and distributes replacement parts for motor vehicles in the
automotive aftermarket industry. The company supplies Engine
Management and Temperature Control parts for motor vehicles -
domestic and imported, new as well as older vehicles. Parts are
sold throughout the U.S., Canada, Central and South America,
Europe and Asia, by traditional warehouse distributors and auto
parts stores, as well as major retail stores.
Standard Motor Products Inc has more than 20 factories and
distribution centers throughout the U.S., Puerto Rico, Canada,
Europe and the Far East. Lawrence I. Sills, grandson of the
company's founder, is the current chairman of the board and
chief executive officer, and John Gethin is president and chief
operating officer.
* * *
As reported in the Troubled Company Reporter on Feb. 9, 2006,
Moody's Investors Service lowered the ratings for Standard Motor
Products, Inc. Corporate Family Rating to B3 from B1.
SUNCOM WIRELESS: March 31 Balance Sheet Upside-Down by US$446MM
---------------------------------------------------------------
SunCom Wireless Holdings, Inc., incurred a US$28.9 million net
loss for the three months period of March 31, 2007, compared to
a US$147.2 million net loss for the same period in 2006.
As of March 31, 2007, the company's balance sheet showed total
assets of US$1.6 billion, total liabilities of US$2.0 billion,
resulting in a stockholders' equity deficit of US$445.6 million.
The company reported updated financial results for the first
quarter ended March 31, 2007. Adjusted EBITDA was US$42.6
million, a 38 percent increase from US$30.8 million in the
fourth quarter of 2006, and a dramatic improvement from US$7.4
million in the first quarter of 2006. Net cash provided by
operating activities in the first quarter of 2007 was US$8.4
million compared with net cash used in operating activities of
US$28.5 million in the fourth quarter of 2006 and US$21.6
million of net cash used in operating activities in the first
quarter of 2006.
Service revenues for the quarter were US$186.4 million compared
with US$155.5 million in the first quarter of 2006. The
increase in Adjusted EBITDA and service revenues over the prior
year period was driven by average revenue per user (ARPU) of
US$55.70, reflecting a 1% increase over fourth quarter 2006 ARPU
of US$55.17 and over a US$4 increase from the US$51.55 reported
in the first quarter of 2006. The higher ARPU reflects the
addition of subscribers at higher access points, higher feature
revenues and higher miscellaneous revenues.
Adjusted EBITDA and service revenues also increased due to the
net addition of 33,646 subscribers in the first quarter of 2007.
Consolidated gross additions in the quarter were 107,851, while
monthly churn improved to 2.2% from 2.5% in the first quarter of
2006.
Michael E. Kalogris, Chairman and CEO of SunCom Wireless, said:
"We are very pleased that SunCom's operational performance
continued to improve in the first quarter. We have now
experienced four consecutive quarters of improved ARPU, evidence
that our strategy to improve this key metric is working."
Adjusted EBITDA also benefited from improvements in the
company's cost structure, which included the decommissioning of
its TDMA network, efficiencies in its GSM network, a reduction
of incollect expenses and the benefits of increased scale over
its fixed expenses.
Continental U.S. operations accounted for 20,136 net additions
with the Puerto Rico operations accounting for 13,510 net
additions in the first quarter of 2007. Gross additions were
68,106 in the continental U.S. and 39,745 in Puerto Rico
compared with 78,960 and 37,355, respectively, a year ago.
Churn in the U.S. operations was unchanged at 2.0% compared with
a year ago, while Puerto Rico churn decreased to 2.7% from 4.0%
a year ago.
Commenting on the operational results in the quarter, Bill
Robinson, Executive Vice President of Operations said, "We are
focused on providing great products, competitive pricing and a
personal touch in customer service for our customers."
Financial Highlights:
-- Service revenue was US$186.4 million in the first quarter,
a 19.9% increase compared with US$155.5 million a year
ago. The increase in service revenue was the result of
higher ARPU and a greater number of subscribers compared
with the first quarter of 2006.
-- ARPU increased to US$55.70 in the first quarter from
US$51.55 a year ago, reflecting higher access revenues,
increased feature revenues, as well as modest improvements
in incollect and miscellaneous revenues.
-- Subscribers at quarter end were 1,120,838 compared with
1,007,114 at the end of the first quarter 2006. The
company added 33,646 net customers in the first quarter
2007 on gross additions of 107,851.
-- Monthly churn for the first quarter 2007 was 2.2%, an
improvement from the 2.5% in the first quarter of 2006.
-- Roaming revenue was US$22.0 million compared with
US$21.5 million in the first quarter 2006. Roaming
minutes of use increased 8.2% to 299.4 million in the
quarter from 276.7 million minutes a year ago.
-- Cost of service was US$62.9 million in the first quarter,
a decrease of US$5.0 million from US$67.9 million a year
ago. The decrease reflects the decommissioning of the
TDMA network, a reduction in roaming expenses and lower
toll rates.
-- Cost per gross addition was US$402 compared with US$382 a
year ago, reflecting a reduction in leverage on fixed
selling expenses in this quarter versus the year earlier
period.
-- Adjusted EBITDA rose to US$42.6 million from
US$7.4 million a year ago, while Adjusted EBITDA margin
expanded to 20.5% from 4.2% in the first quarter of 2006
and from 15.4% in the fourth quarter of 2006.
-- Net cash provided by operating activities was
US$8.4 million in the first quarter compared with net cash
used in operating activities of US$21.6 million in the
year-ago period.
-- Capital expenditures were US$5.3 million compared with
US$11.3 million a year ago.
-- The company ended the first quarter of 2007 with
US$209.7 million of cash and short-term investments.
Recent Developments
On April 20, 2007, SunCom's shareholders approved the Exchange
Agreement between SunCom Wireless Investment Co. LLC and holders
of certain of SunCom Wireless Inc.'s subordinated notes as well
as the adoption of the Agreement and Plan of Merger. Both
proposals passed with the required majority of the outstanding
SunCom shares, representing in each case over 80% of the total
votes cast on the proposals. Under the terms of the Exchange
Agreement, subordinated noteholders will exchange approximately
98% of the outstanding subordinated notes for 51.9 million
shares of SunCom Wireless Holdings Inc.'s Class A Common stock,
giving effect for a 1-for-10 reverse stock split effected under
the Agreement and Plan of Merger.
Consummation of the Exchange Agreement cannot occur until the
necessary approval is received from the Federal Communications
Commission. Parties to the Exchange Agreement are actively
working with the FCC to obtain the necessary approval.
About SunCom Wireless
Based in Berwyn, Pennsylvania, SunCom Wireless Holdings Inc.
(NYSE: TPC) (OTC: SWSH.OB) -- http://www.suncom.com/-- offers
digital wireless communications services to more than one
million subscribers in the southeastern United States, Puerto
Rico and the U.S. Virgin Islands. SunCom is committed to
delivering Truth in Wireless by treating customers with respect,
offering simple, straightforward plans and by providing access
to the largest GSM network and the latest technology choices.
* * *
As reported in the Troubled Company Reporter-Latin America on
Feb. 12, 2007, Standard & Poor's Rating Services said it revised
its outlook for Berwyn, Pa.-based SunCom Wireless Holdings Inc.
to positive from negative following SunCom's announcement that
it had reached a consensual agreement with its largest
subordinated bondholders to exchange debt for common stock.
All ratings, including the 'CCC+' corporate credit rating and
those on wholly owned subsidiary SunCom Wireless Inc., were
affirmed.
As reported in the Troubled Company Reporter-Latin America on
Feb. 9, 2007, Moody's lowered the probability of default rating
of SunCom Wireless Inc. to LD, placed the company's Caa3
corporate family rating under review for possible upgrade and
placed its B2 senior secured, Caa2 senior unsecured and Ca
senior subordinate ratings under review direction uncertain.
=================
V E N E Z U E L A
=================
CITGO PETROLEUM: Felix Rodriguez Resigns as CEO & President
-----------------------------------------------------------
Felix Rodriguez has left Citgo Petroleum Corp. as its president
and chief executive officer, El Universal reports. Alejandro
Granado, Citgo's chairman, will replace Mr. Rodriguez.
Mr. Rodriguez was appointed president and CEO of Citgo in
January 2005.
El Universal did not say why Mr. Rodriguez left the company.
* * *
Standard and Poor's Ratings Services assigned a 'BB' rating on
Citgo Petroleum Corp. in Feb. 14, 2006.
Citgo Petroleum carries Fitch's BB- Issuer Default Rating.
Fitch also rates the company's US$1.15 billion senior secured
revolving credit facility maturing in 2010 at 'BB+', its US$700
million secured term-loan B maturing in 2012 at 'BB+', and its
senior secured notes at 'BB+'.
DAIMLERCHRYSLER: Constructing New Mercedes-Benz Plant in India
--------------------------------------------------------------
DaimlerChrysler AG began construction of its new plant for
Mercedes-Benz vehicles at Chakan in Pune, India. The foundation
stone of the new facility was laid by:
* the Honorable Chief Minister of Maharashtra,
* Mr. Vilasrao Deshmukh together with Dr. Joachim Schmidt,
Chairman of the Board of DaimlerChrysler India,
* Prof. Eberhard Haller, Member of the Board of
DaimlerChrysler India and responsible for CKD plants of the
Mercedes Car Group, and
* Wilfried Aulbur, Managing Director and CEO of
DaimlerChrysler India in presence of further Indian
Government Representatives.
In January 2007, DaimlerChrysler India had already signed a
Memorandum of Understanding with the Government of Maharashtra
to build the new plant at a 100-acre plot near an already
existing plant. The new manufacturing facility will produce the
Mercedes-Benz S-Class, E-Class and C-Class for the Indian
market. Start of production is expected in early 2009. Over
the next few years, DaimlerChrysler plans to invest around EUR50
million in connection with the new production facility. The new
Chakan plant will initially employ around 350 workers, matching
the level of the current facility.
"Our confidence in the Indian market is reflected in our long
association with the country. Our engagement with India dates
back to 1954 when we started collaboration for trucks in India.
Subsequently, we were also the pioneers of the luxury car market
in India", said Dr. Joachim Schmidt.
In 2006 DaimlerChrysler India sold 2,121 vehicles, achieving
strong growth of 10% (2005: 1,915). In the first quarter of
2007 DaimlerChrysler India already recorded further growth of
17%. "As a company, we have enjoyed steady and profitable
growth in India and we are looking forward to continue our
success story here in our own premises", Dr. Aulbur underscored
the rapid change of the luxury car market since DaimlerChrysler
entered India in 1994.
In 1995, DaimlerChrysler started producing the Mercedes-Benz
E-Class in a leased factory at Chikhali in Pune, near Mumbai in
the Federal State of Maharashtra. In the following years
DaimlerChrysler broadened its production to include the S-Class
(2000) and C-Class (2001). Today DaimlerChrysler has
dealerships spread across 27 cities in India and was the first
automotive company in India to complete ISO9001: 2000
certification for its entire dealer network in India.
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.
DIRECTV GROUP: First Quarter Net Income Climbs to US$563 Million
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The DIRECTV Group, Inc. disclosed that first quarter revenues
increased 15% to US$3.91 billion and operating profit before
depreciation and amortization increased 54% to US$930 million
compared to last year's first quarter. The DIRECTV Group
reported that first quarter 2007 operating profit increased 44%
and net income increased 43% to US$563 million and US$336
million, respectively, when compared to the same period last
year. Earnings per share were US$0.27 compared with US$0.17 in
the same period last year.
"First quarter results highlight DIRECTV U.S.' operating
strength and ability to generate strong cash flow as indicated
by the US$343 million of cash flow before interest and taxes in
the quarter. The increase in gross subscribers and the lowest
churn rate in three years reflect the strength of DIRECTV's
video service and improved competitive positioning in the
marketplace. Particularly noteworthy was the significant growth
in advanced products in the quarter, including the addition of
nearly twice as many high definition, or HD, customers compared
to the prior year," said Chase Carey, president and CEO of The
DIRECTV Group, Inc.
Mr. Carey continued, "The increased sales of HD and digital
video recorders are driving favorable results for most of our
key operating metrics. For example, the quarterly increase in
gross subscriber additions to 929,000, the decline in monthly
churn to 1.44% and the ARPU growth of over 5% to US$73.40 were
all favorably impacted by the significant increase in sales of
advanced services. The strong subscriber and ARPU growth drove
revenues to over US$3.5 billion, up 11% over the prior year."
Mr. Carey added, "Operating profit before depreciation and
amortization of US$869 million increased over 50% compared to
last year primarily due to the capitalization of set-top boxes
under the lease program implemented in March 2006. Upgrade and
retention costs, including capitalized equipment, were higher
than the prior year due to the increased number of customers
upgrading to HD and DVR services, as well as converting to our
new MPEG-4 HD equipment. As we've seen in recent quarters,
investments in subscribers with advanced services continue to
drive superior financial returns that are generally 2 to 3 times
greater than subscribers without advanced services due to the
significantly higher ARPU and lower churn generated from these
households."
Mr. Carey concluded, "It's very exciting to see the strong
demand for HD services, particularly considering the fact that
we plan to greatly expand our HD programming later this year.
With the successful launch of DIRECTV 10--currently targeted to
lift-off in late June--we remain on schedule to offer up to 100
HD channels by the end of this year. With this added capacity,
we expect to offer significantly more HD channels than most of
our competitors, providing DIRECTV with an important advantage
in this rapidly growing market."
Operational Review
On March 1, 2006, DIRECTV U.S. introduced a set-top receiver
lease program primarily to increase future profitability by
providing DIRECTV U.S. with the opportunity to retrieve and
reuse set-top receivers. Under this new program, set-top
receivers are capitalized and depreciated over their estimated
useful lives of three years. Prior to March 1, 2006, set-top
receivers provided to new and existing DIRECTV U.S. subscribers
were immediately expensed upon activation as a subscriber
acquisition, upgrade or retention cost. The lease program is
expected to result in a reduction in all of these costs. The
amount of set-top receivers capitalized during the period is now
reported in the DIRECTV U.S. Consolidated Statements of Cash
Flows under the captions "Cash paid for subscriber leased
equipment -- subscriber acquisitions" and "Cash paid for
subscriber leased equipment -- upgrade and retention." The
amount of cash DIRECTV U.S. paid during the quarter ended
March 31, 2007, for leased set-top receivers totaled US$406
million -- US$188 million for subscriber acquisitions and US$218
million for upgrade and retention. By comparison, in March 2006
DIRECTV paid US$86 million for leased equipment -- US$46 million
for subscriber acquisitions and US$40 million for upgrade and
retention.
First Quarter Review
In the first quarter of 2007, The DIRECTV Group's revenues of
US$3.91 billion increased 15% over the same period in the prior
year principally due to strong growth in average revenue per
subscriber (ARPU) and a larger subscriber base at DIRECTV U.S.,
as well as the consolidation of Sky Brazil's financial results
due to the completion of the merger with DIRECTV Brazil on
Aug. 23, 2006.
The 54% increase in operating profit before depreciation and
amortization to US$930 million and the 44% increase in operating
profit to US$563 million were mostly related to the DIRECTV U.S.
business due primarily to increased capitalization of customer
equipment under the lease program for both new and existing
subscribers, as well as the consolidation of Sky Brazil's
results. Also impacting the comparison was a US$57 million gain
recorded in the first quarter of 2006 reflecting the completion
of DIRECTV Latin America's Sky Mexico transactions. The change
in operating profit also reflects an increase in depreciation
expense related to the set-top box lease program at DIRECTV U.S.
and higher depreciation and amortization expense resulting from
the Sky Brazil transaction.
Net income increased to US$336 million in the first quarter of
2007 primarily due to the changes in operating profit discussed
above partially offset by higher income tax expense in the most
recent quarter associated with the higher pre-tax income.
The improvement in gross subscriber additions to 929,000 and
average monthly churn to 1.44% were due in part to the increase
in subscribers with HD and DVR services, resulting in net
subscriber additions of 235,000 in the quarter. The total
number of DIRECTV U.S. subscribers as of March 31, 2007, was
16.19 million, an increase of 5% over the 15.39 million
subscribers reported on March 31, 2006.
In the quarter, DIRECTV U.S. revenues increased 11% to US$3.54
billion due to solid ARPU growth and the larger subscriber base.
ARPU of US$73.40 increased 5.2% compared to last year
principally due to programming package price increases and
higher lease, DVR, and HD fees.
The first quarter 2007 operating profit before depreciation and
amortization increased 59% to US$869 million and operating
profit increased 56% to US$566 million primarily due to the
greater amount of capitalized customer equipment. Including the
cost of receivers capitalized under the lease program, operating
profit before depreciation and amortization was essentially
unchanged primarily due to the higher upgrade and retention
costs related to the increased number of customers upgrading to
HD and DVR services and converting to our new MPEG-4 HD
equipment.
Latin America Segment
In August 2006, The DIRECTV Group completed the last of a series
of transactions with News Corporation, Grupo Televisa, Globo and
Liberty Media that strengthens the operating and financial
performance of DIRECTV Latin America by combining the two
platforms into a single platform in each of the major
territories served in the region. In January 2007, The DIRECTV
Group purchased Darlene's 14% ownership in DIRECTV Latin
America, LLC, for US$325 million in cash. As a result, The
DIRECTV Group owns approximately 74% of the merged business in
Brazil, 41% of Sky Mexico and 100% of PanAmericana, which covers
most of the remaining countries in the region. Sky Mexico,
whose results are accounted for as an equity method investment
and therefore are not consolidated by DIRECTV Latin America, had
approximately 1.45 million subscribers as of March 31, 2007.
First Quarter Review
In the first quarter of 2007, DIRECTV Latin America's net
subscriber additions increased 42% to 88,000 primarily due to
subscriber growth in Brazil and Colombia. Also contributing to
the net subscriber increase was a decline in aggregate churn
from 1.56% to 1.40% in the current quarter. The total number of
DIRECTV subscribers in Latin America as of March 31, 2007,
increased 69% to 2.80 million compared to 1.66 million as of
March 31, 2006. The increase was primarily due to the 869,000
subscribers added as a result of the merger with Sky Brazil in
the third quarter of 2006, as well as the new subscribers added
throughout the region over the past year.
Revenues for DIRECTV Latin America increased 92% to US$369
million in the quarter principally due to the consolidation of
Sky Brazil's operations and continued subscriber growth at
PanAmericana. The increase in DIRECTV Latin America's first
quarter 2007 operating profit before depreciation and
amortization to US$81 million was primarily attributable to the
consolidation of the Sky Brazil business and the gross profit
generated from the higher revenues at PanAmericana. Also
impacting the comparison was a non-cash gain of US$57 million
recorded in the first quarter of 2006 related to the completion
of the transaction with Sky Mexico. DIRECTV Latin America's
operating profit declined to US$16 million as the higher
operating profit before depreciation and amortization discussed
above was more than offset by higher depreciation and
amortization expense related to the tangible and intangible
assets recorded as part of the Sky Brazil and Darlene
transactions.
The DIRECTV Group's consolidated cash and short-term investment
balance of US$2.38 billion declined by US$292 million in the
first quarter of 2007 mostly due to the purchase of Darlene's
interest in DIRECTV Latin America for US$325 million, the
repayment of US$210 million of outstanding debt at Sky Brazil
and cash payments for share repurchases of US$101 million.
These payments were partially offset by free cash flow in the
period of US$309 million. Free cash flow was driven by cash
flow from operations of US$1.0 billion partially offset by cash
paid for satellites and property and equipment of US$690
million. Total debt decreased to US$3.40 billion primarily due
to the repayment of US$210 million of outstanding debt at Sky
Brazil.
About The DIRECTV Group
Headquartered in El Segundo, California, The DIRECTV Group
(NYSE:DTV) -- http://www.directv.com/--, Inc. provides digital
television entertainment in the United States and Latin America.
It has two segments, DIRECTV U.S. and DIRECTV Latin America.
The DIRECTV U.S. segment provides direct-to-home digital
television services in the multichannel video programming
distribution industry in the United States. The DIRECTV Latin
America segment provides digital direct-to-home digital
television services to approximately 1.6 million subscribers in
27 countries, including Brazil, Argentina, Venezuela, and Puerto
Rico.
* * *
As reported in the Troubled Company Reporter-Latin America on
April 5, 2007, Standard & Poor's Ratings Services affirmed the
'BB' corporate credit and 'BB-' senior unsecured debt rating on
The DIRECTV Group Inc. S&P said the outlook is stable.
***********
S U B S C R I P T I O N I N F O R M A T I O N
Troubled Company Reporter - Latin America is a daily newsletter
co-published by Bankruptcy Creditors' Service, Inc., Fairless
Hills, Pennsylvania, USA, and Beard Group, Inc., Frederick,
Maryland USA. Marjorie C. Sabijon, Sheryl Joy P. Olano, Rizande
delos Santos, and Christian Toledo, Editors.
Copyright 2007. All rights reserved. ISSN 1529-2746.
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