/raid1/www/Hosts/bankrupt/TCRLA_Public/071025.mbx
T R O U B L E D C O M P A N Y R E P O R T E R
L A T I N A M E R I C A
Thursday, October 25, 2007, Vol. 8, Issue 212
Headlines
A R G E N T I N A
ALITALIA SPA: September Traffic Declines Year-on-Year
ARBOS DISENOS: Proofs of Claim Verification Is Until Dec. 12
CONARBRAS SRL: Proofs of Claim Verification Deadline Is Nov. 16
CHRYSLER LLC: UAW Local 685 Rejects Tentative Labor Agreement
EJOTA SA: Seeks for Bankruptcy Approval from Buenos Aires Court
IMAGEN EN: Seeks for Reorganization Okay from Buenos Aires Court
LONG REGENT: Files Reorganization Petition in Buenos Aires Court
MENDOZA VEINTIUNO: Proofs of Claim Verification Is Until Nov. 23
NATUR FEM: Trustee Filing Individual Reports on Feb. 28, 2008
B A H A M A S
BANK OF BARODA: Board to Consider Q2 Results on Oct. 31
B E L I Z E
CONTINENTAL AIRLINES: Bags New IT Services Deals with EDS & HP
CONTINENTAL AIRLINES: Reaches New Deals with EDS & GE Aviation
B E R M U D A
REFCO INC: Shareholders Sue Mayer Brown Over Role in Collapse
REFCO INC: Trusts Seek Return of US$400 Mln from Former Insiders
B R A Z I L
AAR CORP: Elects Norman R. Bobins as Director
BANCO NACIONAL: Inks Financing Agreement with IFC & IDB
BANCO NACIONAL: Okays BRL120-Mil. Loan for Neoenergia's 2 Plants
BRASIL TELECOM: Reports BRL150.3 Million Third Quarter Earnings
BUCKEYE TECH: Earns US$13.5 Mil. in First Quarter Ended Sept. 30
COSAN SA: Prices Tender Offer for 9.00% Senior Notes
JAPAN AIRLINES: R&I Affirms BB+ Rating with Stable Outlook
PARANA BANCO: Will Buy Back 10% of Preferred Shares
TELECOM ARGENTINA: Anatel Conditionally Okays Telefonica Deal
TOWER AUTOMOTIVE: Court Oks PCT'S Bid for Deal with Plaintiffs
TOWER AUTOMOTIVE: Dec. 10 Hearing Set for ERISA Suit Settlement
C A Y M A N I S L A N D S
BANK OF AYUDHYA: Selling Off THB25B in Bad Loans by Year-End
BANK OF INDIA: To Release Second Quarter Results on Oct. 29
BOMBAY CO: Gets Court Nod to Sell Bombay Furniture to Benix
FLEET FUNDING: Sets Final Shareholders Meeting for Nov. 2
FOURTH SHARE: Holding Final Shareholders Meeting on Nov. 2
FRIENDSHIP INVESTMENT: Final Shareholders Meeting Is on Nov. 2
GALLERIA II: Will Hold Final Shareholders Meeting on Nov. 2
SPARTACUS FINANCE: Holding Final Shareholders Meeting on Nov. 2
TA FUNDING: Sets Final Shareholders Meeting for Nov. 2
TAURUSFIVE CDS: Final Shareholders Meeting Is on Nov. 2
TCIP COMPANY: Holding Final Shareholders Meeting on Nov. 2
TCW GEM: Sets Final Shareholders Meeting for Nov. 2
TETHYS FINANCIAL: Will Hold Final Shareholders Meeting on Nov. 2
C H I L E
AES CORP: Shuts Down Alamitos Power Station's Unit 6
HOUGHTON INTERNATIONAL: Signs Merger Pact with AEA Affiliate
C O L O M B I A
COMPANIA DE DESARROLLO: S&P Puts BB Long-Term Credit Rating
C O S T A R I C A
ANIXTER INT'L: Third Qtr. Net Income Drops 15% to US$64.8 Mil.
E C U A D O R
* ECUADOR: Oil Export Revenues Decrease to US$625MM in August
E L S A L V A D O R
MILLICOM CELLULAR: Earns US$138 Million in Third Quarter 2007
G U A T E M A L A
ALCATEL-LUCENT: Dresdner Maintains Buy Rating on Firm's Shares
BRITISH AIRWAYS: Seeks Closer Relationship with U.S. Partner
M E X I C O
ALERIS INT'L: Merging Monterrey Unit to Monclova Plant in Mexico
ARROW ELECTRONICS: Earns US$98.3 Million in 2007 Third Quarter
DANA CORP.: Gets Go Signal to Begin Soliciting Votes on Plan
ENESCO GROUP: Plan Confirmation Hearing Set for Nov. 28
ENESCO GROUP: Unsecured Creditors to Get 27% Under Amended Plan
FIRST DATA: Subsidiary Reaches Agreement with Meijer
FLEXTRONICS INT'L: Earns US$120.9 Mil. in Quarter Ended Sept. 28
MOVIE GALLERY: Releases Proposed Restructuring Term Sheet
MOVIE GALLERY: US Trustee Appoints Seven-Member Creditors Panel
MOVIE GALLERY: Wants To Assume Great American Consulting Pact
SPANSION INC: Inks Pact with SMIC To Form MirrorBit(R) Products
SPANSION INC: Names Gary Wang as President for China Unit
VOLKSWAGEN AG: To Restructure Auto Parts Venture in China
N I C A R A G U A
XEROX CORP: Denies Speculations on Lexmark International Bid
P E R U
FREEPORT MCMORAN: Deutsche Bank Reaffirms Buy Rating on Shares
P U E R T O R I C O
ADELPHIA COMMUNICATIONS: ACOM Debtors File Objection to Claims
ADELPHIA COMMUNICATIONS: Trust Counsel Seeks Recovery Payments
CHATTEM INC: Dec. Trial Set for Dexatrim Liability Suit in CA
CENTENNIAL COMM: Lehman Keeps Overweight Rating on Firm's Shares
GLOBAL HOME: Court Approves Expansion of PwC's Tax Services
ROYAL CARIBBEAN: Earns US$395 Million in Quarter Ended Sept. 30
V E N E Z U E L A
SHAW GROUP: Appeals IRS Adjustments for 2002-2003 Tax Returns
SHAW GROUP: Stone Acquisition-Related Appeal Still Pending
SHAW GROUP: Continues Review of Accounting for Acquisitions
SILGAN HOLDINGS: Moody's Affirms Ba2 Ratings
* VENEZUELA: Strengthening Energy & Trade Pacts with Puerto Rico
- - - - -
=================
A R G E N T I N A
=================
ALITALIA SPA: September Traffic Declines Year-on-Year
-----------------------------------------------------
Alitalia S.p.A.'s September 2007 traffic data compared to the
same period in 2006 showed a slight decrease in both passenger
and cargo businesses.
Passenger business showed a decrease in terms of traffic (-0.7%)
with an increase of capacity offered by 0.4% compared with the
same period of 2006.
September 2007 Cargo statistics, compared to September 2006,
showed a decrease in terms of goods flown (-0.7%) with capacity
offered down 7.5%.
Passengers Operations
Traffic, measured in Revenue Passenger Kilometers, decreased
0.7% and the capacity, measured in Available Seat Kilometers,
increased 0.4%. Therefore load factor decreased 0.8 percentage
points reaching 77.5%.
Alitalia carried 2.25 million passengers, up 2% compared to the
previous year.
-- Domestic Passenger Network: traffic increased by 4.4%
with offered capacity up 3.2%. Load factor was 68.3%;
-- International Passenger Network: traffic increased by
0.1% and offered capacity decreased by 0.2%. Load factor
was 75.3%; and
-- Intercontinental Passenger Network: traffic decreased by
2.7% and capacity was down 0.2%. Load factor was 82.6%.
Cargo Operations
September 2007 Cargo performance showed, compared to September
2006, a traffic decrease by 0.7% (traffic, measured in terms of
Revenue Ton Kilometers) while capacity was down 7.5%.
Overall Load factor was 64.3% with an increase by 4.4 percentage
points. Regarding the All-Cargo sector, Load factor was 79% with
an increase by 16.3 percentage points compared with the same
period of 2006.
About Alitalia
Headquartered in Rome, Italy, Alitalia S.p.A. --
http://www.alitalia.it/ -- provides air travel services for
passengers and air transport of cargo on national, international
and inter-continental routes. The Italian government owns 49.9%
of Alitalia. The company has operations in Argentina.
Despite a EUR1.4 billion state-backed restructuring in 1997,
Alitalia posted net losses of EUR256 million and EUR907 million
in 2000 and 2001 respectively. Alitalia posted EUR93 million in
net profits in 2002 after a EUR1.4 billion capital injection.
The carrier booked annual net losses of EUR520 million in 2003,
EUR813 million in 2004, EUR168 million in 2005, and EUR625.6
million in 2006.
ARBOS DISENOS: Proofs of Claim Verification Is Until Dec. 12
------------------------------------------------------------
Alejandro Fontenla, the court-appointed trustee for Arbos
Disenos S.A.'s bankruptcy proceeding, verifies creditors' proofs
of claim until Dec. 12, 2007.
Mr. Fontenla will present the validated claims in court as
individual reports on Feb. 28, 2008. The National Commercial
Court of First Instance in Buenos Aires 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 Arbos Disenos 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 Arbos Disenos'
accounting and banking records will be submitted in court on
April 16, 2008.
Mr. Fontenla is also in charge of administering Arbos Disenos'
assets under court supervision and will take part in their
disposal to the extent established by law.
The trustee can be reached at:
Alejandro Fontenla
Adolfo Alsina 1170
Buenos Aires, Argentina
CONARBRAS SRL: Proofs of Claim Verification Deadline Is Nov. 16
---------------------------------------------------------------
Maria Ines Palermo, the court-appointed trustee for Conarbras
S.R.L.'s bankruptcy proceeding, verifies creditors' proofs of
claim until Nov. 16, 2007.
Ms. Palermo will present the validated claims in court as
individual reports. The National Commercial Court of First
Instance in Buenos Aires 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 Conarbras
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 Conarbras' accounting
and banking records will be submitted in court.
Infobae didn't state the reports submission deadlines.
Ms. Palermo is also in charge of administering Conarbras' assets
under court supervision and will take part in their disposal to
the extent established by law.
The trustee can be reached at:
Maria Ines Palermo
Avenida Santa Fe 3444
Buenos Aires, Argentina
CHRYSLER LLC: UAW Local 685 Rejects Tentative Labor Agreement
-------------------------------------------------------------
United Auto Workers Local 685, with 4,500 employees at three
Chrysler LLC transmission plants in Kokomo, Indiana, rejected a
tentative labor contract between the union and the carmaker by a
72% margin, Mike Ramsey of Bloomberg News reports citing local
president Guy Barger.
The result has raised the likelihood of the pact to fail on an
overall level. Results for nearby Local 1166 were not
available, Mr. Ramsey relates.
As reported in yesterday's Troubled Company Reporter, union
leaders were trying to sweet talk members at three Chrysler
plants in Indiana, Michigan and Illinois, each employing more
than 1,00 workers, to approve a tentative labor contract between
the union and the carmaker.
Lobbying efforts were directed at:
* members of a key local in Kokomo, Indiana, who voted
Oct. 23, 2007,
* members of a key local in Sterling Heights, Michigan, who
are voting today, Oct. 24, 2007, and
* members of a small local in Belvidere, Illinois, voting
later this week.
Four large union locals, representing a majority vote of
Chrysler's 45,000 union members, rejected the United Auto
Workers union's pact with Chrysler LLC over the weekend. Locals
from Delaware, Missouri and Ohio turned down the pact on
Saturday while a Detroit local with 2,200 UAW members, vetoed it
on Sunday.
As previously reported, Bill Parker, Chair of the 2007 UAW
Chrysler National Negotiating Committee, who voted against the
new tentative labor agreement between Chrysler LLC and the
United Auto Workers union, released a minority report to the
members of the UAW Chrysler Council, urging the Council to
reject Chrysler's offer and let the Committee return to the
bargaining table.
The UAW Chrysler Council, which includes local union leaders
from Chrysler LLC facilities throughout the U.S., voted
overwhelmingly to recommend ratification of the tentative
agreement reached on Oct. 10, 2007.
Mr. Parker, however, disclosed that the National Negotiating
Committee had a split vote on the contract.
About Chrysler LLC
Headquartered in Auburn Hills, Michigan, Chrysler LLC --
http://www.chrysler.com/-- 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 company has dealers worldwide, including Canada, Mexico,
U.S., Germany, France, U.K., Argentina, Brazil, Venezuela,
China, Japan and Australia.
* * *
On Oct. 1, 2007, Standard & Poor's Ratings Services placed its
corporate credit ratings on Chrysler LLC and DaimlerChrysler
Financial Services Americas LLC on CreditWatch with positive
implications.
As reported in the Troubled Company Reporter on Aug. 8, 2007,
Standard & Poor's Ratings Services revised its loan and recovery
ratings on Chrysler LLC (B/Negative/--), including a 'BB-'
rating to the US$5 billion "first-out" first-lien term loan
tranche. This rating, two notches above the corporate credit
rating of 'B' on Chrysler LLC, and the '1' recovery rating
indicate S&P's expectation for very high recovery in the event
of payment default. S&P also assigned a 'B' rating to the US$5
billion "second-out" first-lien term loan tranche. This rating,
the same as the corporate credit rating, and the '3' recovery
rating indicate S&P's expectation for a meaningful
recovery in the event of payment default.
Moody's Investors Service has affirmed Chrysler Automotive LLC's
B3 Corporate Family Rating, and the Caa1 rating of the company's
US$2 billion senior secured, second lien term loan in connection
with Monday's closing of DaimlerChrysler AG's sale of a majority
interest of Chrysler Group to Cerberus Capital Management LLC.
EJOTA SA: Seeks for Bankruptcy Approval from Buenos Aires Court
---------------------------------------------------------------
The National Commercial Court of First Instance in Buenos Aires
is studying the merits of Ejota SA's request to enter bankruptcy
protection.
Ejota filed a "Quiebra Decretada" petition following cessation
of debt payments.
The petition, once approved by the court, will transfer control
of the company's assets to a court-appointed trustee who will
supervise the liquidation proceedings.
The debtor can be reached at:
Ejota S.A.
Luis Maria Campos 1111
Buenos Aires, Argentina
IMAGEN EN: Seeks for Reorganization Okay from Buenos Aires Court
----------------------------------------------------------------
Imagen en Salud S.A. has requested for reorganization approval
after failing to pay its liabilities.
The reorganization petition, once approved by the court, will
allow Imagen en Salud to negotiate a settlement with its
creditors in order to avoid a straight liquidation.
The case is pending in the National Commercial Court of First
Instance in Buenos Aires.
The debtor can be reached at:
Imagen en Salud S.A.
Marcelo T. de Alvear 768
Buenos Aires, Argentina
LONG REGENT: Files Reorganization Petition in Buenos Aires Court
----------------------------------------------------------------
Long Regent S.A. has requested for reorganization approval after
failing to pay its liabilities.
The reorganization petition, once approved by the court, will
allow Long Regent to negotiate a settlement with its creditors
in order to avoid a straight liquidation.
The case is pending in the National Commercial Court of First
Instance in Buenos Aires.
The debtor can be reached at:
Long Regent S.A.
Fray Justo Santa Maria de Oro 2881
Buenos Aires, Argentina
MENDOZA VEINTIUNO: Proofs of Claim Verification Is Until Nov. 23
----------------------------------------------------------------
Adriana del Carmen Gallo, the court-appointed trustee for
Mendoza Veintiuno S.A.'s reorganization proceeding, verifies
creditors' proofs of claim until Nov. 23, 2007.
Ms. Gallo will present the validated claims in court as
individual reports on Feb. 12, 2008. The National Commercial
Court of First Instance in Buenos Aires 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 Mendoza Veintiuno 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 Mendoza Veintiuno's
accounting and banking records will be submitted in court on
March 28, 2008.
The informative assembly will be held on Sept. 9, 2008.
Creditors will vote to ratify the completed settlement plan
during the assembly.
The debtor can be reached at:
Mendoza Veintiuno S.A.
Pedro Molina 315, Ciudad de Mendoza
Mendoza, Argentina
The trustee can be reached at:
Adriana del Carmen Gallo
Roque Saenz Pena 651
Buenos Aires, Argentina
NATUR FEM: Trustee Filing Individual Reports on Feb. 28, 2008
-------------------------------------------------------------
Noemi Zulema Vivares, the court-appointed trustee for Natur Fem
S.A.'s bankruptcy proceeding, will present the validated claims
as individual reports in the National Commercial Court of First
Instance in Buenos Aires on Feb. 28, 2007.
Ms. Vivares verifies creditors' proofs of claim until
Dec. 12, 2007. She will submit a general report containing an
audit of Natur Fem's accounting and banking records in court on
April 30, 2008.
Ms. Vivares is also in charge of administering Natur Fem's
assets under court supervision and will take part in their
disposal to the extent established by law.
The trustee can be reached at:
Noemi Zulema Vivares
Avenida Cordoba 2626
Buenos Aires, Argentina
=============
B A H A M A S
=============
BANK OF BARODA: Board to Consider Q2 Results on Oct. 31
-------------------------------------------------------
Bank of Baroda informed the Bombay Stock Exchange that its board
of directors will hold a meeting on Oct. 31, 2007, inter alia,
to consider the bank's unaudited financial results for the
second quarter and half year ended Sept. 30, 2007, and relevant
Segment Reporting.
As previously reported by the Troubled Company Reporter-Asia
Pacific, the bank doubled its net profit to INR3.31 billion for
the first quarter ended June 30, 2007, from the INR1.63 billion
earned in the same quarter in 2006.
Headquartered in Vadodara, India, Bank of Baroda --
http://www.bankofbaroda.com/-- is a provider of banking
services in India. The company's solutions includes personal
banking, which includes deposits, retail loans, credit cards,
debit card, lockers and other services; business banking, which
comprises working capital, term finance and traders loans;
corporate banking, which includes cash management and
remittances, multi-city cheques, appraisals and merchant
banking; international business, which includes import finance,
international treasury, export finance, correspondent banking
and other solutions; treasury banking, which comprises domestic
operations and forex operations, and rural banking, which
includes retail loan, small businesses and small scale
industries.
Bank of Baroda has branches in the Bahamas, Belgium, the Fiji
Islands, Mauritius, Republic of South Africa, Seychelles,
Singapore, Sultanate of Oman, United Arab Emirates, the United
Kingdom, and the United States of America.
* * *
As reported by the Troubled Company Reporter-Asia Pacific on
July 11, 2007, Standard & Poor's assigned its 'BB' issue rating
to Bank of Baroda's US$300 million upper Tier-II subordinated
notes due in 2022.
Fitch Ratings, on May 9, 2007, assigned 'BB' ratings to Bank of
Baroda's proposed unsecured subordinated Upper Tier 2 notes
(expected size: US$250 million plus greenshoe option), as well
as the hybrid Tier 1 debt to be issued under its USD1.5 billion
medium-term notes programme. Fitch said the outlook on all
ratings is stable.
===========
B E L I Z E
===========
CONTINENTAL AIRLINES: Bags New IT Services Deals with EDS & HP
--------------------------------------------------------------
Continental Airlines Inc. has won an award of new Information
Technology services contracts from EDS and HP. The multi-year
agreements represent an expansion of Continental's strategic
relationships with both companies.
Continental and EDS are partnering to migrate legacy airline
applications to modern platforms. EDS will also manage
Continental's compute environments, legacy applications, server
and network administration, help desk and field services. HP
will have the responsibility of updating Continental's airport
environment and will also provide servers, storage, software and
services for Continental's legacy application migration.
"These agreements allow Continental to take advantage of the
technology experience and strategic strengths of EDS and HP,"
said Ron Anderson-Lehman, chief information officer, Continental
Airlines. "Continental has always been at the forefront of
technology innovation, and we look forward to working with EDS
and HP in developing and delivering innovative business
solutions for our customers."
"The multi-supplier approach will allow Continental to fully
appreciate and gain benefit from the strength and capabilities
of our partners while increasing efficiency and reducing costs,"
said Bob Edwards, vice president, systems operations,
Continental Airlines.
Enaxis Consulting, a Houston-based management consulting and
technology advisory services firm assisted Continental in the
overall strategy, process, selection and execution of the
contract. During the 18-month engagement, Enaxis Consulting
assisted in defining the overall IT strategy, development of the
RFP and ultimately the final selection of EDS and HP.
"The success criteria for Continental Airlines was driven by
governance, strategic and cultural fit, the technical solution
and value proposition," said Dhiren Shethia, Co-founder and
Managing Partner at Enaxis Consulting. "The result meets all
the criteria for long term, successful partnerships."
About Continental Airlines
Continental Airlines Inc. (NYSE: CAL) -- http://continental.com/
-- is the world's fifth largest airline. Continental, together
with Continental Express and Continental Connection, has more
than 3,100 daily departures throughout Belize, Mexico, Europe
and Asia, serving 154 domestic and 138 international
destinations including Honduras and Bonaire. More than 400
additional points are served via SkyTeam alliance airlines.
With more than 44,000 employees, Continental has hubs serving
New York, Houston, Cleveland and Guam, and together with
Continental Express, carries about 67 million passengers per
year.
* * *
As of March 2007, Continental Airlines carries Moody's Investors
Service's B2 corporate family rating. The company also carries
Moody's B3 senior unsecured rating and Caa1 preffered stock
rating.
CONTINENTAL AIRLINES: Reaches New Deals with EDS & GE Aviation
--------------------------------------------------------------
Continental Airlines has reached new agreements with two of its
major suppliers, EDS and GE Aviation, which will deliver
significant cost savings and efficiencies to the airline. The
new contracts, together with several other smaller initiatives
currently being worked on by the company, are expected to reduce
costs by approximately US$100 million annually when fully
implemented.
Continental has signed an agreement with GE Aviation covering
maintenance and technical services for its existing 328 CFM56-7
engines, as well as 128 new CFM56-7 engines (including spares)
to be delivered with 64 new Boeing 737 Next Generation aircraft.
This contract runs through 2020. Under the agreement,
Continental will pay GE Aviation fixed rates per hour of engine
operation, and GE Aviation will handle overhaul and repair of
the engines.
"We continue to seek efficiency and cost savings throughout our
business, and working with long-time business partners like EDS
and GE Aviation helps us achieve our goals," said Jeff Misner,
chief financial officer.
About Continental Airlines
Continental Airlines Inc. (NYSE: CAL) -- http://continental.com/
-- is the world's fifth largest airline. Continental, together
with Continental Express and Continental Connection, has more
than 3,100 daily departures throughout Belize, Mexico, Europe
and Asia, serving 154 domestic and 138 international
destinations including Honduras and Bonaire. More than 400
additional points are served via SkyTeam alliance airlines.
With more than 44,000 employees, Continental has hubs serving
New York, Houston, Cleveland and Guam, and together with
Continental Express, carries about 67 million passengers per
year.
* * *
As of March 2007, Continental Airlines carries Moody's Investors
Service's B2 corporate family rating. The company also carries
Moody's B3 senior unsecured rating and Caa1 preffered stock
rating.
=============
B E R M U D A
=============
REFCO INC: Shareholders Sue Mayer Brown Over Role in Collapse
-------------------------------------------------------------
Refco Inc. shareholders have named Mayer Brown LLP, Refco's
former lead counsel, as defendant in a class action over the
brokerage business' collapse in 2005, CFO.com reports.
The shareholders, led by Pacific Investment Management Co., have
filed a lawsuit against Mayer Brown and Joseph Collins, one of
its senior partners. The suit includes investors who owned
Refco common stock and bonds from mid-2004 to October 2005. The
suit is in addition to one filed by Refco trustees earlier this
year.
Mayer Brown is accused of helping Refco hide US$430 million of
debt by preparing and editing Refco's "misleading" financial
statements and other disclosures aimed at investors.
Specifically, Mayer Brown allegedly helped Refco document a
transfer of at least US$70 million in uncollectible debt by
making it appear as though it was sold to Refco Group Holdings
Inc. The money would later appear to be a collectible
receivable from a third party on its books. This is allegedly
to fraudulently remove the problematic debt from Refco's books
and replace it with one that appeared collectible, claim the
shareholders.
CFO.com received a communication from Mayer Brown saying the
firm is in the process of looking at the complaint and plans to
defend itself "with vigor." Mayer Brown added that it doubts
whether the shareholders' suit could proceed against the firm,
as it was merely an outside adviser. Mr. Collins did not
respond to CFO.com's request for comment.
About Refco Inc.
Based in New York City, Refco Inc. -- http://www.refco.com/--
is a diversified financial services organization with operations
in 14 countries and an extensive global institutional and retail
client base. Refco's worldwide subsidiaries are members of
principal U.S. and international exchanges, and are among the
most active members of futures exchanges in Chicago, New York,
London and Singapore. In addition to its futures brokerage
activities, Refco is a major broker of cash market products,
including foreign exchange, foreign exchange options, government
securities, domestic and international equities, emerging market
debt, and OTC financial and commodity products. Refco is one of
the largest global clearing firms for derivatives.
The Company and 23 of its affiliates filed for chapter 11
protection on Oct. 17, 2005 (Bankr. S.D.N.Y. Case No. 05-60006).
J. Gregory Milmoe, Esq., at Skadden, Arps, Slate, Meagher & Flom
LLP, represent the Debtors in their restructuring efforts. Luc
A. Despins, Esq., at Milbank, Tweed, Hadley & McCloy LLP,
represents the Official Committee of Unsecured Creditors. Refco
reported US$16.5 billion in assets and US$16.8 billion in debts
to the Bankruptcy Court on the first day of its chapter 11
cases. The Court confirmed the Modified Joint Chapter 11 Plan
of Refco Inc. and certain of its direct and indirect
subsidiaries, including Refco Capital Markets Ltd. and Refco F/X
Associates LLC, on Dec. 15, 2006. That Plan became effective on
Dec. 26, 2006.
REFCO INC: Trusts Seek Return of US$400 Mln from Former Insiders
----------------------------------------------------------------
The Refco Litigation Trusts have filed a lawsuit seeking the
return of more than US$400 million from former Refco Inc.
insiders. The lawsuit, filed in the United States Bankruptcy
Court for the Southern District of New York, seeks return of
preferential and fraudulent transfers from former owners,
officers and directors of Refco who participated in a massive
scheme to strip assets out of Refco.
The complaint alleges that the preferences and fraudulent
transfers were concealed within and behind a number of
fraudulently engineered financial transactions, including
surreptitious profits participation agreement funneled through
Refco Group Holdings, Inc., a holding company controlled by
defendant Phillip R. Bennett. Other insiders named in the
action include Tone N. Grant, John D. Agoglia, Edwin L. Cox,
Sukhmeet "Mickey" Dhillon, Thomas H. Dittmer, Stephen Grady,
Eric Lipoff, Santo Maggio, Peter McCarthy, Joseph Murphy, Frank
Mutterer, William Sexton, and Robert Trosten. The lawsuit also
seeks to void the transfers of certain asset management
companies and other transfers to RGHI.
Another lawsuit was filed by the Trusts in the United States
District Court for the Southern District of New York against
former insider Thomas Hackl and companies controlled by Mr.
Hackl seeking the return of more than US$5 million transferred
to Mr. Hackl or companies controlled by him and for damages
resulting from Mr. Hackl's active participation in the fraud.
"The lawsuits filed today are in addition to five other lawsuits
filed by the Trusts and customers of Refco Capital Markets
seeking in the aggregate more than US$2 billion dollars of
damages to Refco and its creditors as a direct result of the
massive fraudulent scheme perpetrated for more than eight years
by Mr. Bennett, with the aid and assistance of numerous insiders
and third parties," Marc S. Kirschner, Trustee of the Refco
Trusts, said.
Over the last several days the Trusts also brought more than 180
lawsuits in the United States Bankruptcy Court for the Southern
District of New York seeking in the aggregate more than US$33
million from the return of preferential and fraudulent
transfers, collection of accounts receivables and other causes
of action against non-insiders.
About the Refco Litigation Trusts
The two Refco Litigation Trusts were created under the Refco
Plan of Liquidation, which became effective on Dec. 26, 2006.
Marc S. Kirschner, the former Chapter 11 Trustee for Refco
Capital Markets LLC, serves as Trustee for the Trusts. The
primary purpose of the Trusts is to pursue all Refco estate
claims and claims of certain electing creditors against third
parties, with recoveries to be distributed in accordance with
the terms of the Refco Plan of Liquidation. The Trusts have
US$25 million of funding to support their pursuit of such
claims. In February 2007, the Trusts retained the law firms
Milbank, Tweed, Hadley, & McCloy, LLP and Quinn Emanuel Urquhart
Oliver & Hedges, LLP to assist in their work and, since then,
have been engaged in a comprehensive investigation of potential
claims against third parties. The Trusts have filed three
lawsuits against third parties involved in the Refco frauds.
About Refco Inc.
Based in New York City, Refco Inc. -- http://www.refco.com/--
is a diversified financial services organization with operations
in 14 countries and an extensive global institutional and retail
client base. Refco's worldwide subsidiaries are members of
principal U.S. and international exchanges, and are among the
most active members of futures exchanges in Chicago, New York,
London and Singapore. In addition to its futures brokerage
activities, Refco is a major broker of cash market products,
including foreign exchange, foreign exchange options, government
securities, domestic and international equities, emerging market
debt, and OTC financial and commodity products. Refco is one of
the largest global clearing firms for derivatives.
The Company and 23 of its affiliates filed for chapter 11
protection on Oct. 17, 2005 (Bankr. S.D.N.Y. Case No. 05-60006).
J. Gregory Milmoe, Esq., at Skadden, Arps, Slate, Meagher & Flom
LLP, represent the Debtors in their restructuring efforts. Luc
A. Despins, Esq., at Milbank, Tweed, Hadley & McCloy LLP,
represents the Official Committee of Unsecured Creditors. Refco
reported US$16.5 billion in assets and US$16.8 billion in debts
to the Bankruptcy Court on the first day of its chapter 11
cases. The Court confirmed the Modified Joint Chapter 11 Plan
of Refco Inc. and certain of its direct and indirect
subsidiaries, including Refco Capital Markets Ltd. and Refco F/X
Associates LLC, on Dec. 15, 2006. That Plan became effective on
Dec. 26, 2006.
===========
B R A Z I L
===========
AAR CORP: Elects Norman R. Bobins as Director
---------------------------------------------
AAR Corp. disclosed that the company's stockholders have elected
Norman R. Bobins as the company's new director. Mr. Bobins is
currently serving as the Chairman Emeritus of LaSalle Bank
Corporation and previously served as Chairman, President and
Chief Executive Officer of LaSalle Bank and as the head of ABN
AMRO's North American Businesses.
Mr. Bobins is renowned in the Chicagoland area for his work in
business, financial and philanthropic communities.
"As one of Chicago's top bankers and civic leaders, Norm makes
an outstanding addition to AAR's Board of Directors," said David
P. Storch, Chairman and Chief Executive Officer of AAR CORP.
"We look forward to Norm's participation and contributions on
our Board as we grow the business and provide value for our
customers and stockholders."
About AAR Corp.
AAR Corp. (NYSE: AIR) -- http://www.aarcorp.com/-- provides
products and value-added services to the worldwide
aviation/aerospace industry. With facilities and sales
locations around the world, AAR uses its close-to-the-customer
business model to serve airline and defense customers through
Aviation Supply Chain; Maintenance, Repair and Overhaul;
Structures and Systems and Aircraft Sales and Leasing. In Asia
Pacific, the company has offices in Singapore, China, Japan and
Australia. In Latin America, the company has a sales office in
Rio de Janeiro, Brazil.
* * *
As reported on Oct. 18, 2006, Standard & Poor's Ratings Services
upgraded AAR Corp.'s corporate credit rating from 'BB-' to 'BB'.
The outlook is stable.
As reported on Dec. 5, 2006, that Moody's upgraded AAR's
corporate family rating and senior notes to Ba3 from B1,
in response to improving financial performance resulting from
the strong commercial and defense aviation supply and repair
environment. Moody's said the ratings outlook is stable.
BANCO NACIONAL: Inks Financing Agreement with IFC & IDB
-------------------------------------------------------
Banco Nacional de Desenvolvimento Economico e Social aka BNDES,
International Finance Corporation, and Inter-American
Development Bank have entered into an agreement on Oct. 19, for
the creation of a program aiming at destining financial and
technical resources to the structuring and modeling of
infrastructure projects under the modality of public concessions
and Public-Private Partnerships in Brazil and South America.
The program, denominated Brazil PSP Development Program,
provides for the creation of a fund with initial capital of
US$3.99 million, formed by BNDES, by means of BNDESPAR (US$1.99
million), IFC (US$1 million) and IDB (US$1 million). These
funds will be applied to finance the works and services for
technical structuring of the projects. It is forecasted an
additional funding in the amount of US$ 8 million, allowing the
fund to reach US$ 11.99 million. The additional funding will
occur when 75% of the initial funds are disbursed.
The program was launched at a ceremony in Washington (USA),
attended by the president of BNDES, Luciano Coutinho, the vice-
president of BID, Otaviano Canuto, and the executive vice-
president of IFC, Lars Thunnell -- representatives of the three
leading finance institutions of long-term projects in the world.
IFC is an arm of the World Bank (IBRD) to finance projects to
the private sector.
Therefore, the PSP Development Program combines IFC
international operation in the structuring of infrastructure
projects with IDB knowledge in investment finance in Latin
America and with BNDES experience in development projects in
Brazil.
"I hope that the money ends up quickly so that we may complete
the studies and subsequently finance the projects", said Mr.
Thunnell. In accordance with the president of BNDES, "Brazil
has entered into a sustainable development cycle and needs to
accelerate the investments in infrastructure. We need new
quality projects that may be completed through concessions or
PPPs". Coutinho emphasized that the initiative of the three
institutions is of great importance not only to Brazil but also
to South America.
Investments in infrastructure are a priority to the Brazilian
economy sustainable growth. There is a variety of projects
included in Multiannual Plans and in the Growth Acceleration
Program [PAC] of the federal government, in addition to state
and municipal investment programs, which may be subject to
public concessions and PPPs. The initiative of the three
institutions is of great importance because many of these
projects face difficulties to be executed, due to the complexity
to put them into practice, plus the lack of technical and
financial resources at the majority of governmental agencies.
Brazil PSP Development Program intends to fill such gap and make
viable the infrastructure projects with priority to Brazil.
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.
* * *
Banco Nacional currently carries a Ba2 foreign long-term bank
deposit rating from Moody's, and a BB+ long-term foreign issuer
credit rating from Standards and Poor's. The ratings were
assigned in August and May 2007, respectively.
BANCO NACIONAL: Okays BRL120-Mil. Loan for Neoenergia's 2 Plants
----------------------------------------------------------------
Banco Nacional de Desenvolvimento Economico e Social SA has
authorized a BRL120-million loan for two small hydro plants
Brazilian power firm Neoenergia is constructing in Goias,
Business News Americas reports.
According to Banco Nacional's statement, the bank will fund
about 66.3% of the total cost of the construction of 21-megawatt
Nova Aurora and 27-megawatt Goiandira.
BNamericas relates that Neoenergia hired engineering companies
Empresa Industrial Tecnica and Energ Power to start building
Nova Aurora and Goiandira in August 2007. The plants would
launch operations in
July 2009.
Neoenergia also secured in August 2007 the rights to construct
three other small-scale hydro plants in Bahia with total
installed capacity of 46 megawatts. The firm has about 11 hydro
plants under construction, BNamericas states.
About Neoenergia
Neoenergia is a power company in Rio de Janeiro, Brazil. It is
the holding company for Iberdrola assets in the country.
About Banco Nacional
Banco Nacional de Desenvolvimento Economico e Social is Brazil's
national development bank. It provides financing for projects
within Brazil and plays a major role in the privatization
programs undertaken by the federal government.
* * *
Banco Nacional currently carries a Ba2 foreign long-term bank
deposit rating from Moody's, and a BB+ long-term foreign issuer
credit rating from Standards and Poor's. The ratings were
assigned in August and May 2007, respectively.
BRASIL TELECOM: Reports BRL150.3 Million Third Quarter Earnings
---------------------------------------------------------------
Brasil Telecom Participacoes S.A. registered consolidated EBITDA
of BRL970.1 million for 2007 third quarter, 6.8% higher than in
third quarter of 2006. Consolidated EBITDA margin stood at
35.3%. Consolidated net revenue reached BRL2,748.3 million,
4.6% higher than in 2006 third quarter, and net income amounted
to BRL150.3 million, 134.7% up on 2006 third quarter.
Mobile telephony EBITDA totaled BRL34.0 million in 2007 third
quarter, an increase of BRL54.3 million over the same period the
previous year, while the EBITDA margin came to 7.6%, 13.3 p.p.
higher than in 2006 third quarter.
During 2007 third quarter, Brasil Telecom added 69,800 ADSL
users to its network, totaling 1,523,200 users in service at the
end of September 2007, up by 21.6% on 2006 third quarter. ADSL
users represented 18.9% of Brasil Telecom's network in service
in 2007 third quarter, versus 14.5% in 2006 third quarter. The
continuous growth of ADSL services was maintained during 2007
third quarter thanks to the widening of the portfolio
of Turbo services, with the launch of new speeds -- 2Mega,
4Mega, and 8Mega -- using ADSL 2+ technology, and to the
partnership with Sky. Brasil Telecom was the first telephone
company in Brazil to offer the IPTV service. Launched at the
end of September 2007, the product was dubbed Videon.
The Internet Group, which holds Brasil Telecom's Internet
services, recorded 1.3 million broadband clients nationwide in
2007 third quarter, up by 34.4% on 2006 third quarter,
maintaining its leadership in Region II.
Gross revenue from data communication and other services
amounted to BRL704.9 million, 20.3% higher than in 2006 third
quarter. This was chiefly due to the growth in the ADSL client
base.
BrT Mobile reached 4,023,800 mobile users in service at the end
of 2007 third quarter, with 255,300 net additions in this
quarter. At the end of 2007 third quarter, BrT Mobile's client
base was 31.9% higher than in 2006 third quarter and its market
share in Region II came to 13.3%, 1.9 p.p. higher than 2006
third quarter. The mobile telephony's total consolidated gross
revenue totaled BRL539.6 million, BRL478.8 million of which from
services and BRL60.8 million from the sales of handsets and
accessories.
Operating costs and expenses totaled BRL2,386.3 million, stable
in relation to the BRL2.386.3 million recorded in 2006 third
quarter. The ratio between losses with accounts receivable and
gross revenue was 1.4%, totaling R$56.0 million, 1.0 p.p. below
the 2.4% posted in 2006 third quarter. The reduction in losses
was due to more efficient billing.
In 2007 third quarter, Brasil Telecom's investments totaled
BRL334.6 million while net debt stood at BRL763.5 million, 49.4%
less than in September 2006.
About Brasil Telecom
Headquartered in Brasilia, Brazil, Brasil Telecom Participacoes
SA -- http://www.brasiltelecom.com.br-- is a holding company
that conducts substantially all of its operations through its
wholly owned subsidiary, Brasil Telecom SA. The fixed-line
telecommunications services offered to the company's customers
include local services, including all calls that originate and
terminate within a single local area in the region, as well as
installation, monthly subscription, measured services, public
telephones and supplemental local services; intra-regional
long-distance services, which include intrastate and interstate
calls; interregional and international long-distance services;
network services, including interconnection and leasing; data
transmission services; wireless services, and other services.
* * *
To date, Brasil Telecom carries Moody's Investors Service's Ba1
senior unsecured and credit default swap ratings.
BUCKEYE TECH: Earns US$13.5 Mil. in First Quarter Ended Sept. 30
----------------------------------------------------------------
Buckeye Technologies Inc. on Monday disclosed results of its
operations for the first quarter ended Sept. 30, 2007.
The company reported net earnings of US$13.5 million on net
sales of US$197.4 million for the July-September quarter,
compared to net earnings of US$15.9 million on net sales of
US$200.2 million in the same period last year. These results
include a US$2.2 million one-time favorable tax benefit related
to the recently enacted reduction in Germany's corporate tax
rate.
Chairman and chief executive officer John B. Crowe said, "As I
said in our performance update last week, first quarter net
sales were up 3% compared to the same period last year. The
earnings improvement is a combination of higher prices, better
mix and cost control. Nonwovens shipments were especially
strong with net sales up 10% compared to the same period last
year. Strong cash flow enabled us to reduce debt by US$26
million during the just completed quarter. Demand for our
specialty wood and cotton products, nonwoven materials and fluff
pulp continues to be strong."
At Sept. 30, 2007, the company's consolidated balance sheet
showed US$971.9 million in total assets, US$594.1 million in
total liabilities, and US$377.8 million in total stockholders'
equity.
About Buckeye Technologies
Headquartered in Memphis, Tennessee, Buckeye Technologies Inc.
(NYSE: BKI) -- http://www.bkitech.com/-- manufactures and
markets specialty fibers and nonwoven materials. The company
currently operates facilities in the United States, Germany,
Canada, and Brazil. Its products are sold worldwide to makers
of consumer and industrial goods.
* * *
As reported in the Troubled Company Reporter on June 19, 2007,
Moody's upgraded Buckeye Technologies Inc.'s corporate family
rating to B1 from B2 and maintained a stable outlook. All
otherratings were upgraded by one notch while the unsecured
notes were affirmed at B2.
COSAN SA: Prices Tender Offer for 9.00% Senior Notes
----------------------------------------------------
Cosan S.A. Industria e Comercio has determined the consideration
to be paid in its tender offer and consent solicitation for its
9.00% Senior Notes due 2009. The tender offer and consent
solicitation is subject to the terms and conditions set forth in
the company's Offer to Purchase and Consent Solicitation
Statement, dated Oct. 9, 2007.
The total consideration for each US$1,000 principal amount of
Notes validly tendered and not validly withdrawn prior to 5:00
p.m., New York City time, on Oct. 22, 2007, and accepted for
payment is US$1,088.74, plus accrued interest to but excluding
the applicable settlement date. This amount includes a consent
fee of US$10.00. The total consideration was determined by
reference to a fixed spread of 50 basis points over the yield on
the 3.375% U.S. Treasury Notes due Oct. 15, 2009, which was
determined at 2:00 p.m., New York City time, on Oct. 22, 2007.
The reference yield and the tender offer yield are 3.855% and
4.355%, respectively. The Tender Offer expires at Midnight, New
York City time, on Nov. 5, 2007, unless extended. For Notes
tendered after the Consent Date and prior to the Expiration
Date, the tender offer consideration will be US$1,078.74 for
each US$1,000 principal amount of Notes validly tendered and not
validly withdrawn and accepted for payment, plus accrued
interest to the applicable settlement date.
The company also announced that it has obtained the requisite
consents to the proposed amendments to the tendered Notes and
the indenture governing the Notes, described in more detail in
the Offer to Purchase, from the holders of at least 66 2/3% in
aggregate principal amount of the outstanding Notes. As of the
Consent Date, tenders and consents had been received with
respect to approximately 83.22% of the outstanding principal
amount of the Notes.
The completion of the tender offer and consent solicitation is
subject to the satisfaction or waiver by the Company of a number
of conditions. Further details concerning the tender offer and
consent solicitation are set forth in the Offer to Purchase.
The company has engaged Morgan Stanley & Co. Incorporated as
Dealer Manager and Solicitation Agent for the tender offer and
consent solicitation. Persons with questions regarding the
tender offer or the consent solicitation should be directed to
Morgan Stanley toll-free at (800) 624-1808 or collect at (212)
761-5384 (attention: Tate Forrester). Requests for documents
should be directed to the Information Agent, Global Bondholder
Services Corporation, toll-free at (866) 952-2200 or at (212)
430-3774.
Headquartered in Sao Paulo, Brazil, Cosan S.A. Industria e
Comercio, is the third largest sugar producer in the world. In
2004/2005 it crushed more than 26 million tons of sugar cane in
fourteen mills located in the Central South region of Brazil,
with sugar sales of 2.3 million tons and ethanol sales of 825
million liters.
* * *
As of February 2007, Cosan carries Moody's Ba2 global local
currency and foreign currency ratings and Standard and Poor's BB
corporate credit rating.
JAPAN AIRLINES: R&I Affirms BB+ Rating with Stable Outlook
----------------------------------------------------------
Rating and Investment Information, Inc., has affirmed its BB+
rating on Japan Airlines International Co., Ltd., with a stable
outlook.
Air Transportation Business of Japan Airlines Corp. (JAL) Group
is almost back on track for recovery with the return of
passengers once dropped following safety problems and with the
increased yield from upward fare revision and growth of business
travelers. Higher fuel cost pushed by a soaring crude oil
prices is offset by controlling fuel consumption through
reorganization of route network and fuel surcharges. R&I
evaluates FY2007-2010 Medium-Term Revival Plan essential for
promoting self-rehabilitation has been progressing as scheduled.
With the capital increase carried out in July 2006, the
consolidated capital equity ratio has improved to 14.9% as of
March 2007 and financial condition is more stable. R&I also
consider the group will continue to receive support from a
government-affiliated financial institution. Taken all the
above, R&I has affirmed the Issuer Ratings at BB+. The ratings
for bonds still reflect subordination in recovery risk by one
notch.
Funding for fiscal year 2007 has been virtually finalized and
R&I sees the company is free of financing difficulty in the
meantime. Nevertheless, the achievement of Medium-Term Revival
Plan is a requisite for securing future refinancing. Out of the
JPY50 billion reduction in personnel cost outlined in the Plan,
measures worthy of over JPY20 billion, such as modifying the
retirement benefit plan and improving capacity, are yet to be
employed, and some needs to draw up specific measures to
implement in the next term and after. Although JAL has taken
measures such as shifting to highly profitable routes and
strengthening overall product competitiveness, the synergy
effects have not shown up yet. There are also many issues to be
cleared before the business structure for generating stable
profit is established. Any delay in the implementation and
synergy effects will exert a huge downward pressure on its
rating. In the event the group faces a harsher funding
environment despite its efforts, it would be difficult to
maintain the current ratings.
R&I affirmed the same Issuer Ratings for JAL as the holding
company and Japan Airlines International Co., Ltd. as a core
operating company, given their strong integrity with the group.
U.S. Justice Department and European Commission are tightening
control over air cargo price fixing and JAL is now under
investigation. No such implication is factored into the current
rating as it is uncertain if any cartel fine will be imposed.
However, R&I considers this issue as business uncertainty and
will closely follow its progress.
About Japan Airlines
Tokyo-based Japan Airlines International Company, Limited --
http://www.jal.com/en/-- was created as a result of the merger
of Japan Airlines and Japan Air Systems to boost domestic
coverage. Japan Airlines flies to the United States, Brazil and
France.
PARANA BANCO: Will Buy Back 10% of Preferred Shares
---------------------------------------------------
Parana Banco said in a statement that it will buy back 10% of
its own preferred shares at market price.
Parana Banco told Business News Americas that it will purchase
4.16 million preferred shares of a total of 41.6 million by
Oct. 15, 2008. Later, it would either reissue or cancel the
shares.
Parana Banco debuted on the Sao Paulo stock exchange Bovespa in
June 2007, raising BRL529 million from the sale of 37.8 million
preferred shares at BRL14 apiece. It issued an additional 3.76
million shares in September 2007, bringing in BRL52.6 million,
BNamericas states.
Parana Banco is a niche bank in the segment of payroll discount
lending, primarily to public-sector employees. The bank's
adjusted total assets of US$375 million as of June 2006
represented less than 1% of total assets in the Brazilian
banking industry. The bank is a relevant part of a broader
conglomerate (J. Malucelli), with operations in different
sectors and concentrated in the South of Brazil. Standard &
Poor's does not assign ratings to any company in the J.
Malucelli group, and the ratings assigned to the bank do not
incorporate potential support from shareholders.
* * *
As reported in the Troubled Company Reporter-Latin America on
June 26, 2007, Standard & Poor's Ratings Services raised its
long-term counterparty credit rating and senior unsecured debt
rating on Parana Banco S.A. to 'B+' from 'B'. The ratings were
removed from CreditWatch Positive where they were placed
June 11, 2007. At the same time, S&P affirmed the 'B' short-
term counterparty credit rating on the bank. S&P said the
outlook is stable.
TELECOM ARGENTINA: Anatel Conditionally Okays Telefonica Deal
-------------------------------------------------------------
Anatel, Brazil's telecommunications regulator, approved Tuesday
a transaction that would transfer a 23.6% controlling stake in
Telecom Italia SpA to Telefonica SA for US$5.8 billion.
The agreement surpassed a major hurdle but there were 28
conditions to the buyout, Reuters says.
One of the major restrictions is for each of the companies
Brazilian entities would remain separate. Telefonica control's
Vivo Participacoes, while Telecom Italia owns Tim Participacoes,
the Associated Press states, citing Antonio Domingo Texeira
Bedran, one of Anatel's five directors.
The regulator has also prohibited Telefonica representatives
from participating in any Telecom Italia board meetings, Reuters
says.
Miguel Angel Garzon, Telefonica's spokesman, has guaranteed that
the local units' independence will be guaranteed, the AP
relates.
Brazil's communications minister, Helio Costa, has said that
Telefonica would have to reduce its investments in Vivo or
alternatively in Telecom Italia but did not give additional
information, Business News Americas says, citing Agencia Estado.
BNamericas and the AP add that the deal's approval also hinges
on the findings of Brazil's antitrust agency, Cade. The
agency's report would be published in 15 days.
Julio Puschel, senior analyst at Yankee Group, explains to
BNamericas that the deal won't give Telefonica power to
influence decision making in TIM Participacoes. However, the
stake would give Telefonica a blocking power against any attempt
to sell TIM to Telmex, its biggest rival in Latin America. Mr.
Puschel asserts that that is the main reason for the buyout.
About Telefonica
Telefonica, S.A., together with its subsidiaries and investees
(Telefonica Group), operates mainly in the telecommunications,
media and entertainment industries. The Telefonica Group is
also involved in the media and contact center activities through
investments in Telefonica de Contenidos and Atento. The company
operates through three segments: Telefonica Spain, Telefonica
Europe and Telefonica Latin America. Telefonica Spain oversees
the wireline and wireless telephony, broadband and data
businesses in Spain. Telefonica Latin America oversees the same
businesses in Latin America. Telefonica Europe oversees the
wireline, wireless, broadband and data businesses in the United
Kingdom, Germany, the Isle of Man, Ireland, the Czech Republic
and the Slovak Republic.
About Telecom Argentina
Headquartered in Buenos Aires, Telecom Argentina S.A. --
http://www.telecom.com.ar/index-flash.html-- is the fixed-line
operator for local and long-distance services in northern and
southern Argentina. It also provides cellular and PCS phone
services in Argentina, as well as in Paraguay through a 68%
stake in Nocleo. France Telecom formerly controlled the company
through its Nortel Inversora venture with Telecom Italia.
France Telecom sold most of its stake in 2003 to the Werthein
Group, an Argentine agricultural concern owned in part by vice
chairman Gerardo Werthein. Nortel continues to be Telecom
Argentina's largest shareholder with a 55% stake. Nortel is
owned by Sofora, a consortium owned by Telecom Italia (50%), the
Werthein Group (48%), and France Telecom (2%).
* * *
As reported on Oct 11, 2006, Standard & Poor's Ratings Services
raised Telecom Argentina S.A.'s counterparty credit rating to
B+/Stable/ from B/Stable following the upgrade of the Republic
of Argentina to 'B+' from 'B'.
TOWER AUTOMOTIVE: Court Oks PCT'S Bid for Deal with Plaintiffs
--------------------------------------------------------------
Honorable Allen L. Gropper of the U.S. Bankruptcy Court for the
Southern District of New York authorizes the Tower Automotive
Post-Consummation Trust to enter into and consummate a second
deal with the ERISA Plaintiffs.
The Court also authorizes the PCT to pay provisional settlement
payments and execute the release agreement with Federal
Insurance Company.
Headquartered in Grand Rapids, Michigan, Tower Automotive Inc.
-- http://www.towerautomotive.com/-- (OTC Bulletin Board:
TWRAQ) is a global designer and producer of vehicle structural
components and assemblies used by every major automotive
original equipment manufacturer, including BMW, DaimlerChrysler,
Fiat, Ford, GM, Honda, Hyundai/Kia, Nissan, Toyota, Volkswagen
and Volvo. Products include body structures and assemblies,
lower vehicle frames and structures, chassis modules and
systems, and suspension components. The company has operations
in Korea, Spain and Brazil.
The company and 25 of its debtor-affiliates filed voluntary
chapter 11 petitions on Feb. 2, 2005 (Bankr. S.D.N.Y. Case No.
05-10576 through 05-10601). James H.M. Sprayregen, Esq., Ryan
B. Bennett, Esq., Anup Sathy, Esq., Jason D. Horwitz, Esq., and
Ross M. Kwasteniet, Esq., at Kirkland & Ellis, LLP, represent
the Debtors in their restructuring efforts. Ira S. Dizengoff,
Esq., at Akin Gump Strauss Hauer & Feld LLP, represents the
Official Committee of Unsecured Creditors. When the Debtors
filed for protection from their creditors, they listed
US$787,948,000 in total assets and US$1,306,949,000 in total
debts.
On May 1, 2007, the Debtors filed their Chapter 11 Plan of
reorganization and Disclosure Statement explaining that plan.
On June 4, 2007, the Debtors submitted an Amended Plan and
Disclosure Statement. The Court approved the adequacy if the
Amended Disclosure Statement on June 5, 2007.
The company and its debtor subsidiaries' First Amended Joint
Plan of Reorganization became effective July 31, 2007.
TOWER AUTOMOTIVE: Dec. 10 Hearing Set for ERISA Suit Settlement
---------------------------------------------------------------
The U.S. District Court for the Southern District of New York
will hold a fairness hearing on Dec. 10, 2007 at 4:00 p.m. for
the proposed US$5.7 million settlement in the matter, "In re
Tower Automotive ERISA Litigation, C.A. No. 05-2184 (RWS)."
The hearing will be held before Judge Robert W. Sweet at the
U.S. District Court for the Southern District of New York, 500
Pearl Street, New York, in Courtroom 18C.
Any objections to the settlement must be made on or before
Nov. 29, 2007.
Case Background
Initially, six lawsuits alleging violations of the Employee
Retirement Income Security Act were filed (Class Action
Reporter, Jan. 12, 2006).
They are:
-- "Kowalewski, et al. v. The Administrative Committee of
the Tower Automotive Retirement Plan, et al., Case No.
05-CV-2215," filed on Feb. 17, 2005;
-- "Hill v. S.A. Johnson, et al., Case No. 05-CV-2184,"
filed on Feb. 17, 2005;
-- "McMillion, et al. v. S.A. Johnson, et al., Case No.
05-CV-2762," filed on May 10, 2005;
-- "Vanderhoof, et al. v. S.A. Johnson, et al., Case No.
05-CV-3637," filed on April 8, 2005;
-- "Argove, et al., v. S.A. Johnson et al., Case No.
05-CV-3641," filed on April 8, 2005; and
-- "Gryzelak, et al., v. S.A. Johnson, et al., Case No.
05-CV-3496," filed on April 8, 2005.
The six Actions have been consolidated under the caption, "In re
Tower Automotive ERISA Litigation, Case No. 05-CV-2184 (RWS)."
The action asserted claims for alleged violations of the
Employee Retirement Income Security Act of 1974, with respect to
the Tower Automotive Retirement Plan, Tower Automotive Union
401(k) Plan, Tower Automotive Products Savings Investment Plan,
and Tower Automotive Products Employee 401(k) Savings Plan
(together with any predecessor plans and any plans merged into
it).
Settlement Terms
The Class Settlement Amount consists of two parts. The first
part, called the "Part A Amount," is a payment of US$2,000,000
in cash by the Company.
The second part, called the "Part B Amount," is an additional
payment of US$3,700,000.
Plaintiffs have agreed that the Part A Amount will be paid in
full by the company. Plaintiffs also have agreed that the Part
B Amount will be paid solely by Federal Insurance Co. out of the
proceeds of an Insurance Policy issued by Federal.
The Class Settlement Amount, including interest, and after
payment of, and establishment of reserves for, any taxes and
Court-approved costs, attorney's fees, and expenses, including
any Court-approved compensation to be paid to the Plaintiffs,
will be paid to the Remaining Plans.
For more details, contact:
Mark Rifkin, Esq.
Wolf Haldenstein Adler Freeman & Herz
270 Madison Avenue
New York, New York 10016
Phone: 212-545-4600
Fax: 212-545-4653
E-mail: rifkin@whafh.com
Web site: http://www.whafh.com
Headquartered in Grand Rapids, Michigan, Tower Automotive Inc.
-- http://www.towerautomotive.com/-- (OTC Bulletin Board:
TWRAQ) is a global designer and producer of vehicle structural
components and assemblies used by every major automotive
original equipment manufacturer, including BMW, DaimlerChrysler,
Fiat, Ford, GM, Honda, Hyundai/Kia, Nissan, Toyota, Volkswagen
and Volvo. Products include body structures and assemblies,
lower vehicle frames and structures, chassis modules and
systems, and suspension components. The company has operations
in Korea, Spain and Brazil.
The company and 25 of its debtor-affiliates filed voluntary
chapter 11 petitions on Feb. 2, 2005 (Bankr. S.D.N.Y. Case No.
05-10576 through 05-10601). James H.M. Sprayregen, Esq., Ryan
B. Bennett, Esq., Anup Sathy, Esq., Jason D. Horwitz, Esq., and
Ross M. Kwasteniet, Esq., at Kirkland & Ellis, LLP, represent
the Debtors in their restructuring efforts. Ira S. Dizengoff,
Esq., at Akin Gump Strauss Hauer & Feld LLP, represents the
Official Committee of Unsecured Creditors. When the Debtors
filed for protection from their creditors, they listed
US$787,948,000 in total assets and US$1,306,949,000 in total
debts.
On May 1, 2007, the Debtors filed their Chapter 11 Plan of
reorganization and Disclosure Statement explaining that plan.
On June 4, 2007, the Debtors submitted an Amended Plan and
Disclosure Statement. The Court approved the adequacy if the
Amended Disclosure Statement on June 5, 2007.
The company and its debtor subsidiaries' First Amended Joint
Plan of Reorganization became effective July 31, 2007.
===========================
C A Y M A N I S L A N D S
===========================
BANK OF AYUDHYA: Selling Off THB25B in Bad Loans by Year-End
------------------------------------------------------------
Bank of Ayudhya PCL plans to sell THB25 billion in non-
performing loans by the end of 2007 as it expects to reduce NPLs
to THB63 billion from the current THB75 billion, Reuters
reports.
According to the report, BAY's chief financial officer, Janice
Van Ekeren, said that the bank will sell more NPLs by the first
half of 2008.
Headquartered in Bangkok, Thailand, Bank of Ayudhya Public Co.
Ltd. -- http://www.krungsri.com/-- provides a full range of
banking and financial services. The bank offers corporate and
personal lending, retail and wholesale banking; international
trade financing asset management; and investment banking
services to customers through its branches. It has branches in
Hong Kong, Vietnam, Laos, and the Cayman Islands.
Bank of Ayudhya's subordinated debts carry Fitch Ratings
Services' BB+ rating.
BANK OF INDIA: To Release Second Quarter Results on Oct. 29
-----------------------------------------------------------
The Bank of India will disclose on Oct. 29 its unaudited
financial results for the second quarter and half year ended
Sept. 30, 2007. To consider the results, the bank's board of
directors will hold a meeting on the same date.
In the quarter ended June 30, 2007, the bank posted a net profit
of INR3.15 billion for the first quarter ended
June 30, 2007.
Headquartered in Mumbai, India, Bank of India --
http://www.bankofindia.com-- 2628 branches in India spread over
all states/ union territories, including 93 specialized
branches. The bank provides a range of financial products and
services, including numerous credit schemes, deposit schemes,
cash management services, credit/debit cards, deposit vaults and
corporate bonds. It also extends finance to small and medium
enterprises and small-scale industries. It provides a variety of
loans, such as mortgage loans, educational loans, auto finance
loans, holiday loans, personal loans and home loans. The bank
offers Internet banking services for both the retail and
corporate clients.
The bank operates in the Cayman Islands, China, the Channel
Islands, France, Hong Kong, Indonesia, Japan, Kenya, Singapore,
the United Kingdom, the United States, and Vietnam.
* * *
Standard & Poor's Ratings Services assigned on March 26, 2007,
its 'BB' issue rating to the bank's Hybrid Tier I notes to be
issued by India's Bank of India (BOI; BBB-/Stable/A-3), acting
through its Jersey branch. These notes are being issued under
the bank's US$1 billion medium-term notes program.
BOMBAY CO: Gets Court Nod to Sell Bombay Furniture to Benix
-----------------------------------------------------------
The Bombay Company, Inc. received approval from the Ontario
(Canada) Superior Court of Justice to sell its wholly owned,
50-store subsidiary, Bombay Furniture Company of Canada, Inc.,
to a newly-formed subsidiary of Canadian retailer, Benix, Inc.
Stores will continue to be operated in-place and under the
Bombay brand. The transaction, which was arranged by Toronto-
based Hilco Consumer Capital, is expected to close on or about
Feb. 5, 2008.
Beginning immediately and until the date of closing, a joint
venture of Gordon Brothers Retail Partners, LLC and Hilco
Merchant Resources, LLC will manage all 50 Canadian stores, and
will conduct inventory promotions and clearance sales. Current
Bombay employees will be retained by the Joint Venture. Upon
closing, all stores will be transitioned from the Joint Venture
to the newly-formed subsidiary of Benix, which is expected to
keep all stores in-place and hire the vast majority of the then-
existing employees.
Fred Benitah, Chief Executive Officer of The B&C Group, which
owns and operates Benix as well as the Bowring retail chain with
a total of 150 stores across Canada, said, "We are excited about
this acquisition. Bombay represents one of the most respected
retail brands in Canada. Bombay Canada both complements our
existing retail brands and strengthens our position as Canada's
leading homeware retailer."
"This acquisition of Bombay Canada is very exciting and creates
great synergies among these three leading brands," Margaret
Morrison, President of Benix, added. "I look forward to working
with the Bombay management team."
"The Canadian market has always been very important to Bombay,"
Nigel Travis, Lead Director of the Bombay Board of Directors,
stated. "We are happy that the Bombay brand will continue into
the future as part of the Benix group and that our valued
employees will play an important role in ensuring the
transaction's long-term success. We will all work together for
a smooth and seamless transition, with the goal of minimizing
disruption to customers."
"It is very satisfying to have structured and successfully
completed this remarkably complex transaction," James "Jamie"
Salter, CEO of Hilco Consumer Capital, said. "Not only were we
able to create more value for Bombay's creditors in the
company's bankruptcy, we were also able to protect hundreds of
jobs and ensure the future integrity of a very respected brand
name."
Headquartered in Fort Worth, Texas, The Bombay Company Inc.,
(OTC Bulletin Board: BBAO) -- http://www.bombaycompany.com/
-- designs, sources and markets a unique line of home
accessories, wall decor and furniture through 384 retail outlets
and the Internet in the U.S. and internationally, including
Cayman Islands. The company and five of its debtor-affiliates
filed for Chapter 11 protection on Sept. 20, 2007 (Bankr. N.D.
Tex. Lead Case No. 07-44084). Jeff P. Prostok, Esq., at Forshey
& Prostok, LLP, represents the Official Committee of Unsecured
Creditors. As of May 5, 2007, the Debtors listed total assets
of US$239,400,000 and total debts of US$173,400,000.
FLEET FUNDING: Sets Final Shareholders Meeting for Nov. 2
---------------------------------------------------------
Fleet Funding II Limited will hold its final shareholders
meeting on Nov. 2, 2007, at:
Deutsche Bank (Cayman) Limited
Boundary Hall, Cricket Square
Grand Cayman KY1-1104, Cayman Islands
These agendas will be taken during the meeting:
1) accounting of the winding-up process of the company; and
2) giving any explanation thereof.
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:
David Dyer
P.O. Box 1984
Grand Cayman KY1-1104, Cayman Islands
Telephone: (345) 949-8244
Fax: (345) 949-5223
FOURTH SHARE: Holding Final Shareholders Meeting on Nov. 2
----------------------------------------------------------
The Fourth Share Holdings Company Limited will hold its final
shareholders meeting on Nov. 2, 2007, at:
Deutsche Bank (Cayman) Limited
Boundary Hall, Cricket Square
Grand Cayman KY1-1104, Cayman Islands
These agendas will be taken during the meeting:
1) accounting of the winding-up process of the company; and
2) giving any explanation thereof.
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:
David Dyer
P.O. Box 1984
Grand Cayman KY1-1104, Cayman Islands
Telephone: (345) 949-8244
Fax: (345) 949-5223
FRIENDSHIP INVESTMENT: Final Shareholders Meeting Is on Nov. 2
--------------------------------------------------------------
Friendship Investment Corp. will hold its final shareholders
meeting on Nov. 2, 2007, at:
Deutsche Bank (Cayman) Limited
Boundary Hall, Cricket Square
Grand Cayman KY1-1104, Cayman Islands
These agendas will be taken during the meeting:
1) accounting of the winding-up process of the company; and
2) giving any explanation thereof.
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:
David Dyer
P.O. Box 1984
Grand Cayman KY1-1104, Cayman Islands
Telephone: (345) 949-8244
Fax: (345) 949-5223
GALLERIA II: Will Hold Final Shareholders Meeting on Nov. 2
-----------------------------------------------------------
Galleria II Limited will hold its final shareholders meeting on
Nov. 2, 2007, at:
Deutsche Bank (Cayman) Limited
Boundary Hall, Cricket Square
Grand Cayman KY1-1104, Cayman Islands
These agendas will be taken during the meeting:
1) accounting of the winding-up process of the company; and
2) giving any explanation thereof.
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:
David Dyer
P.O. Box 1984
Grand Cayman KY1-1104, Cayman Islands
Telephone: (345) 949-8244
Fax: (345) 949-5223
SPARTACUS FINANCE: Holding Final Shareholders Meeting on Nov. 2
---------------------------------------------------------------
Spartacus Finance Limited will hold its final shareholders
meeting on Nov. 2, 2007, at:
Deutsche Bank (Cayman) Limited
Boundary Hall, Cricket Square
Grand Cayman KY1-1104, Cayman Islands
These agendas will be taken during the meeting:
1) accounting of the winding-up process of the company; and
2) giving any explanation thereof.
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:
David Dyer
P.O. Box 1984
Grand Cayman KY1-1104, Cayman Islands
Telephone: (345) 949-8244
Fax: (345) 949-5223
TA FUNDING: Sets Final Shareholders Meeting for Nov. 2
------------------------------------------------------
TA Funding Corporation will hold its final shareholders meeting
on Nov. 2, 2007, at:
Deutsche Bank (Cayman) Limited
Boundary Hall, Cricket Square
Grand Cayman KY1-1104, Cayman Islands
These agendas will be taken during the meeting:
1) accounting of the winding-up process of the company; and
2) giving any explanation thereof.
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:
David Dyer
P.O. Box 1984
Grand Cayman KY1-1104, Cayman Islands
Telephone: (345) 949-8244
Fax: (345) 949-5223
TAURUSFIVE CDS: Final Shareholders Meeting Is on Nov. 2
-------------------------------------------------------
Taurusfive CDS will hold its final shareholders meeting on
Nov. 2, 2007, at:
Deutsche Bank (Cayman) Limited
Boundary Hall, Cricket Square
Grand Cayman KY1-1104, Cayman Islands
These agendas will be taken during the meeting:
1) accounting of the winding-up process of the company; and
2) giving any explanation thereof.
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:
David Dyer
P.O. Box 1984
Grand Cayman KY1-1104, Cayman Islands
Telephone: (345) 949-8244
Fax: (345) 949-5223
TCIP COMPANY: Holding Final Shareholders Meeting on Nov. 2
----------------------------------------------------------
TCIP Company R, Inc., will hold its final shareholders meeting
on Nov. 2, 2007, at:
Deutsche Bank (Cayman) Limited
Boundary Hall, Cricket Square
Grand Cayman KY1-1104, Cayman Islands
These agendas will be taken during the meeting:
1) accounting of the winding-up process of the company; and
2) giving any explanation thereof.
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:
David Dyer
P.O. Box 1984
Grand Cayman KY1-1104, Cayman Islands
Telephone: (345) 949-8244
Fax: (345) 949-5223
TCW GEM: Sets Final Shareholders Meeting for Nov. 2
---------------------------------------------------
TCW Gem Ligos I, Limited, will hold its final shareholders
meeting on Nov. 2, 2007, at:
Deutsche Bank (Cayman) Limited
Boundary Hall, Cricket Square
Grand Cayman KY1-1104, Cayman Islands
These agendas will be taken during the meeting:
1) accounting of the winding-up process of the company; and
2) giving any explanation thereof.
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:
David Dyer
P.O. Box 1984
Grand Cayman KY1-1104, Cayman Islands
Telephone: (345) 949-8244
Fax: (345) 949-5223
TETHYS FINANCIAL: Will Hold Final Shareholders Meeting on Nov. 2
----------------------------------------------------------------
Tethys Financial GP will hold its final shareholders meeting on
Nov. 2, 2007, at:
Deutsche Bank (Cayman) Limited
Boundary Hall, Cricket Square
Grand Cayman KY1-1104, Cayman Islands
These agendas will be taken during the meeting:
1) accounting of the winding-up process of the company; and
2) giving any explanation thereof.
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:
David Dyer
P.O. Box 1984
Grand Cayman KY1-1104, Cayman Islands
Telephone: (345) 949-8244
Fax: (345) 949-5223
=========
C H I L E
=========
AES CORP: Shuts Down Alamitos Power Station's Unit 6
----------------------------------------------------
The AES Corp. has shut down the 495-megawatt Unit 6 at its
Alamitos natural gas-fired power station in California for
unplanned work, according to a report by the California
Independent System Operator.
Reuters relates that the 1,997-megawattAlamitos plant is in Long
Beach in Los Angeles County. It has six units, including:
-- 175-megawatt Unit 1,
-- 175-megawatt Unit 2,
-- 332-megawatt Unit 3,
-- 335-megawatt Unit 4,
-- 485-megawatt Unit 5, and
-- 495-megawatt Unit 6.
The other units are continuing operations, Reuters states.
AES Corp. -- http://www.aes.com/-- is a global power company.
The company operates in South America, Europe, Africa, Asia and
the Caribbean countries. Specifically, it also has operations
in India. Generating 44,000 megawatts of electricity through
124 power facilities, the company delivers electricity through
15 distribution companies. The company's Latin America business
group is comprised of generation plants and electric utilities
in Argentina, Brazil, Chile, Colombia, Dominican Republic, El
Salvador, Panama and Venezuela.
As reported in the Troubled Company Reporter-Latin America on
Oct. 12, 2007, Moody's Investors Service affirmed The AES
Corporation's Corporate Family Rating at B1 and the senior
unsecured rating assigned to its new senior unsecured notes
offering at B1 following its upsizing to USUS$2 billion from
USUS$500 million. LGD assessments are subject to change pending
the final capital structure.
As reported on Oct. 12, 2007, Fitch Ratings assigned a 'BB/RR1'
rating to AES Corporation's USUS$500 million issue of senior
unsecured notes due 2017. AES' long-term Issuer Default Rating
is rated 'B+' by Fitch. Fitch said the rating outlook is
stable.
HOUGHTON INTERNATIONAL: Signs Merger Pact with AEA Affiliate
------------------------------------------------------------
Houghton International Inc. has entered into an agreement to
merge with a newly formed affiliate of AEA Investors LLC. The
merger agreement is subject to shareholder approval and the
satisfaction of the various closing conditions, including
regulatory approvals, and is expected to close before the end of
the year. As Houghton is privately held, the terms of the
transaction were not disclosed.
Houghton does not anticipate any immediate changes in its
facilities, employment or range of product and service
offerings, and all of the members of senior management are
expected to continue on with the company. After the merger, the
business will continue to be conducted under the Houghton
International name.
"We are pleased to announce that our shareholders will be able
to realize significant value for their Houghton shares, while at
the same time, Houghton will be able to continue uninterrupted
in its long history of innovation in serving our customers
around the world," said William F. MacDonald Jr., president of
Houghton International. "Through the proposed partnership with
AEA Investors LLC, we expect to enjoy greater access to capital,
which will enable us to provide our customers with customized
metalworking fluids and chemical management services."
"The entire team at AEA is excited to partner with the
management team of Houghton International to continue the growth
and expansion of this long-standing industry leader," said Brian
Hoesterey, a partner at AEA. "We plan to support Houghton
through our experience in the chemical industry, global
footprint, operating resources and access to capital. We seek to
help management drive both organic and acquisition-based growth,
leveraging Houghton's strong positions in its key markets."
CIBC World Markets Corp. acted as exclusive financial advisor to
Houghton, and Morgan, Lewis & Bockius LLP acted as legal
counsel. Fried, Frank, Harris, Shriver & Jacobson LLP acted as
legal counsel to AEA Investors LLC.
About AEA
AEA -- http://www.aeainvestors.com/-- is one of the most
experienced international private equity investment firms with
investors that include former and current CEOs of major
multinational corporations, family groups, endowment funds and
institutions from around the world. With offices in New York,
London and Hong Kong, AEA invests in companies in four sectors:
value-added industrial products, specialty chemicals, consumer
products and services to those sectors.
About Houghton International
Headquartered in Valley Forge, Pennsylvania, Houghton
International Inc. -- http://www.houghtonintl.com/--
manufactures oils and specialty chemicals for lubrication in
most of the big Midwestern industries: metalworking, automotive,
and steel. Its products range from aluminum and steel rolling
lubricants to rust preventatives to fire-resistant hydraulic
fluids. The FLUIDCARE division helps manufacturers reduce costs
through chemical management and recycling. It maintains more
than 30 sales and manufacturing facilities in North and South
America, Europe, Africa, Australia, and Asia. The company was
founded in 1865. It has operations in Brazil and Chile.
* * *
As reported in the Troubled Company Reporter-Latin America on
Oct. 18, 2007, Standard & Poor's Ratings Services placed its
ratings on Houghton International Inc. on CreditWatch with
negative implications. The corporate credit rating on the
Valley Forge, Pennsylvania-based manufacturer and supplier of
industrial fluids and chemical management services is 'B+'.
Moody's Investors Service placed the ratings of Houghton
International Inc. under review for possible downgrade following
the announcement that it has entered into an agreement to merge
with a newly formed affiliate of AEA Investors LLC. The review
for downgrade reflects the likelihood of greatly increased
leverage following this transaction, which is expected to close
in the fourth quarter of 2007 and is subject to shareholder
approval and satisfaction of various closing conditions,
including regulatory review. The ratings under review are B2
Corporate family rating, B2 Probability of default rating, B2
rating od US$90 million Gtd Sr Sec Term Loan due 2011, and B2
rating of US$25 million Gtd Sr Sec Revolving Credit Facility due
2010.
===============
C O L O M B I A
===============
COMPANIA DE DESARROLLO: S&P Puts BB Long-Term Credit Rating
-----------------------------------------------------------
Standard & Poor's has assigned a BB long-term credit rating on
Compania De Desarrollo Eropuerto Eldorado S.A. with a stable
outlook.
In recent years, demand characteristics for rated airports --
including passenger traffic, aircraft landings, landed seats,
and maximum take-off weight, all of which support fundamental
credit quality -- have demonstrated solid growth globally (the
U.S., Europe, the U.K., Ireland, Canada, Australia, New Zealand,
and the Asia-Pacific region).
The demand for aviation infrastructure underpins the credit
ratings of Standard & Poor's global airports. Different
ownership structures internationally, combined with higher or
lower degrees of leverage and other rating factors, contribute
to the range of ratings outside the U.S., which are above and
below the U.S. median rating of 'A'.
Consistent with Standard & Poor's observations of rated
airports, passenger demand remains strong as traffic levels and
load factors approach record highs. The International Air
Transport Association reports that year-over-year international
passenger demand increased 8.6% for the month of August 2007,
the fastest growth rate for 16 months. Due partially to a lower
level in August 2006, when demand was affected by security
concerns in Europe, the trend is consistent with 2007 activity
as a whole and is fueled by economic activity, particularly in
the Asia-Pacific region. Internationally, load factors in
August remained a high 80.3%, the first time that average load
factors have been higher than 80% in a month other than July.
According to preliminary data from the U.S. Department of
Transportation's Bureau of Transportation Statistics, U.S.
airlines carried 72.2 million scheduled domestic and
international passengers on their systems in July, a record high
for a single month and 2.2% higher than the previous record of
70.6 million in July 2005. U.S. carriers also set passenger
records in July in the separate domestic passenger and
international passenger categories. U.S. airlines carried 63.2
million domestic passengers in July, up 1.3% from the previous
high of 62.4 million in July 2005. U.S. airlines carried 8.9
million international passengers in July, up 3.2% from the
previous high of 8.7 million in July 2006.
In addition to the broad-based and solid demand backdrop among
global airports, improving airline customer credit quality and
manageable capital expenditure programs (supported by demand to
justify capital expansions) also underpin fundamental credit
quality. Despite this supportive environment and the lack of
any disruptive economic or external event risk, the number of
upgrades or positive outlooks for international airports has
remained relatively restrained. This is mostly due to an
increase in acquisition and financial restructuring activity,
which has the potential to adversely affect the financial
profile of various airport entities, in addition to heightened
regulatory risk at some facilities. This trend has occurred
more so in Europe and the U.K. than in the North America or
Asia-Pacific regions. In the U.S., the handful of upgrades
reflects improving financial performance for airport operators
and the resolution of several airline bankruptcies that provided
for improved operational stability.
===================
C O S T A R I C A
===================
ANIXTER INT'L: Third Qtr. Net Income Drops 15% to US$64.8 Mil.
--------------------------------------------------------------
Anixter International Inc. recorded net income of US$64.8
million for the three months ended Sept. 28, 2007, a declined of
15% from last year, compared to net income of US$76.2 million
for the three months ended Sept. 29, 2006.
Robert Grubbs, President and CEO, stated, "The 14 percent sales
growth generated in the current quarter was particularly
encouraging in light of the significant economic uncertainty
that existed during the quarter, especially relating to the
difficult credit environment in the U.S., our largest market.
Our growth reflects the fact that we continued to see strong
growth in most major geographies and end markets that we serve
on a global basis. Based on our results through the first nine
months we are in a good position to have another record setting
year of sales and earnings."
For the three-month period ended Sept. 28, 2007, the company had
sales of US$1.52 billion. Included in the current year's third
quarter results were sales of US$31.7 million from a series of
acquisitions completed in the past year. In the prior year
period, the company had sales of US$1.33 billion.
The third quarter 2006 results included US$22.8 million, or 53
cents per diluted share, of income primarily associated with a
refund received from the Internal Revenue Service. Excluding
the refund from the prior year third quarter, net income in the
current quarter increased 21%. This refund resulted from the
final settlement of income taxes covering the period of 1996
through 1998. The interest income portion of this settlement of
US$7.7 million (after-tax impact of US$4.7 million) was
reflected on the 'Other, net' line of the prior year quarter's
income statement. The remaining portion of the settlement was
recorded as an US$18.1 million reduction to the 2006 third
quarter tax provision.
Operating income in the third quarter increased 23% to US$118.2
million as compared to US$96.1 million in the year ago quarter.
For the latest quarter, operati0ng margins were a record 7.8
percent compared to 7.2 percent in the third quarter of 2006.
Recent Sales Trends
Commenting on recent sales trends, Mr. Grubbs said, "Third
quarter sales growth was very much in line with the expectation
we laid out when we reported our second quarter results. After
adjusting for a series of acquisitions completed in the past
year, as well as for the favorable foreign exchange impact of
US$35.9 million on third quarter 2007 sales, our third quarter
sales grew at a year-over-year organic rate of 9 percent.
Once again we want to highlight that the consecutive quarter
growth trend for the second quarter exceeded normal historical
growth patterns. We cautioned that as a result of this,
consecutive quarter growth from the second to third quarter
would likely be below normal historical patterns, which it was.
Looking at the second and third quarters together, we see a
growth pattern that in total through the first nine months was
similar to historical patterns."
Mr. Grubbs continued, "Sales growth in the current quarter was
especially positive in light of the economic uncertainty that
existed throughout much of the quarter, particularly in the U.S.
Once again the diversity of the end markets and geographies that
we serve, and the fact that a majority of these markets
performed well, contributed to good overall performance. The
factors driving our organic growth were consistent with those we
have seen during the past couple of years. In the most recent
quarter, we again experienced good levels of larger project
business, together with solid day-to-day trends throughout all
parts of the business. At the same time, we have continued to
experience strong growth in the security and OEM markets.
Copper prices had no meaningful impact on our organic growth in
the most recent quarter as year-on-year price fluctuations
stabilized. Market-based copper prices averaged approximately
US$3.48 per pound during the quarter compared to US$3.54 per
pound in the year ago third quarter."
"In North America we saw year-over-year sales grow by 8 percent
to US$1.07 billion in the most recent quarter," commented Mr.
Grubbs. "Foreign exchange rates generated an additional US$11.4
million in third quarter sales as compared to the year ago
quarter. During the quarter we saw a few project timing issues
that pushed out some business that we thought would finalize in
the third quarter to future dates. This delayed project timing,
however, was primarily confined to western Canada, where a very
strong economy and a concurrent tight labor market are causing
project construction timelines to slip. Thus, the market is
good and we remain confident in the overall probability of these
sales. At the same time we experienced very solid new order
flows in North America, particularly in the enterprise cabling
and security solutions market."
Mr. Grubbs went on to say, "In Europe, we saw sales climb by 32
percent, or an increase of US$77.5 million, versus the year ago
quarter, of which US$21.0 million was due to exchange rate
differences and US$31.7 million was due to acquisitions. Taking
out exchange rate differences and sales from acquisitions,
overall sales in Europe grew organically by approximately 10
percent as compared to the year ago quarter. More specifically,
our efforts to expand our presence in the electrical wire &
cable market in Europe resulted in sales of US$55.9 million in
the quarter as compared to US$42.3 million in the year ago
quarter. Excluding US$4.0 million of favorable foreign exchange
effects, sales in the European electrical wire & cable market
were approximately 23 percent higher than the year ago quarter."
"In the emerging markets of Latin America and Asia Pacific, we
saw a 38 percent increase in year-on-year sales, including a
favorable impact of US$3.5 million relating to currency exchange
rate effects. Growth was again particularly strong in Asia
Pacific, where we posted year-on-year growth of approximately 65
percent," continued Mr. Grubbs.
Third Quarter Operating Results
"As a result of solid sales growth, third quarter operating
margins were 7.8 percent as compared to 7.2 percent in the year
ago period," said Mr. Grubbs. "In North America, our operating
margins were 8.6 percent as compared to 7.8 percent in the year
ago quarter, with sales growth again producing additional
operating leverage."
Mr. Grubbs added, "In Europe, operating margins in the most
recent quarter were 4.9 percent as compared to 5.0 percent in
the year ago quarter. This slight decline in operating margins
reflects a drop in gross margins as we realized less benefit
from copper price volatility than we did in the year ago
quarter. Overall, we were again encouraged by the results in
the most recent quarter as well as the near-term outlook for our
business in Europe."
"Third quarter operating margins in the emerging markets were
7.8 percent as compared to 6.9 percent in the year ago quarter.
Continued sales growth throughout these markets once again
allowed us to leverage infrastructure costs that resulted in
improved operating margins," added Mr. Grubbs.
Cash Flow & Leverage
"In the third quarter we generated US$10.0 million in cash from
operations as compared to US$17.4 million used in operations in
the year ago quarter," said Dennis Letham, Executive Vice
President-Finance. "The positive cash flow in the quarter
reflects the slower consecutive growth rates we discussed above
and the related effects of that on additional working capital
needs."
"Increased working capital requirements associated with our
year-on-year sales growth, combined with two acquisitions
completed in the first nine months for total consideration of
US$41.7 million and the repurchase of US$162.7 million of our
outstanding shares during the first quarter of 2007, have
increased our debt-to-total capital ratio. At the end of the
third quarter that ratio was 49.6 percent as compared to 45.7
percent at the end of 2006. For the third quarter our weighted-
average cost of borrowed capital was 4.3 percent as compared to
5.5 percent in the year ago quarter. At the end of the third
quarter, approximately 78 percent of our total borrowings of
US$1.03 billion had fixed interest rates, either by the terms of
the borrowing agreements or through hedging contracts. We also
had US$246.9 million of available, unused credit facilities at
September 28, 2007, which provide us with the resources to
support continued strong organic growth and to pursue other
strategic alternatives, such as acquisitions, in the coming
quarters."
Business Outlook
Mr. Grubbs concluded, "The record sales and earnings performance
in the first nine months of 2007 is the result of many of the
same underlying trends that generated record performances over
the past couple of years. Assuming no significant deterioration
in the economy during the final months of 2007, we will again
have a record-setting year for sales, earnings and return on
equity. That said, we do expect that fourth quarter sales and
earnings, consistent with historical patterns for the fourth
quarter, will show a modest decline from the results we reported
for the recently completed third quarter. This projected
decline is exclusively based on the fact that there are fewer
working days in the fourth quarter due to the Thanksgiving and
Christmas holidays."
"As we look to the start of a new year, we remain focused on
building on our strategic initiatives of growing our security
and OEM supply businesses, adding to our supply chain services
offering, enlarging the geographic presence of our electrical
wire & cable business, and expanding our product offering," said
Mr. Grubbs. "There is no question that the uncertainties that
have developed in the credit markets in the past couple of
months have introduced an element of risk in evaluating future
growth. Nonetheless, if we continue to be successful with our
strategic initiatives we will be in a position to continue to
drive solid sales and earnings growth as we head into 2008."
About Anixter
Anixter International Inc. -- http://www.anixter.com/-- is the
world's largest distributor of communication products and
electrical and electronic wire and cable, and a leading
distributor of fasteners and other small parts ("C" class
inventory components) to original equipment manufacturers.
The company has nearly US$725 million in inventory of more than
325,000 products, logistics network of 197 warehouses with more
than 5 million square feet of space. It has operations in Latin
American countries including Mexico, Costa Rica, Brazil and
Chile.
* * *
Anixter International Inc. carries Moody's Investors Service's
Ba2 corporate family rating. Anixter Inc.'s USUS$200 million
guaranteed senior unsecured notes and its 3.25% LYON's notes
carry Moody's Ba1 and B1 ratings, respectively. Moody's said
the rating outlook is stable.
Anixter International Inc. carries Fitch's 'BB+' Issuer Default,
senior unsecured notes and senior unsecured bank credit facility
Ratings. Similarly, Anixter Inc. carries Fitch's 'BB+' issuer
default rating and 'BB-' senior unsecured debt rating. Fitch's
action affects about USUS$700 million of public debt securities.
Fitch said the rating outlook is stable.
=============
E C U A D O R
=============
* ECUADOR: Oil Export Revenues Decrease to US$625MM in August
-------------------------------------------------------------
Ecuador's oil-export revenues declined by 6% to US$625 million
in August 2007, compared to US$664 million in August 2006,
Mercedes Alvaro at MarketWatch reports, citing the Ecuadorian
central bank.
MarketWatch relates that Ecuador exported about 10.21 million
barrels in the first eighth months of this year, about 9% lesser
compared to some 11.21 million barrels shipped last year.
The central bank told MarketWatch that the average price of
crude in August 2007 rose 3% to US$61.22 per barrel, compared to
US$59.29 a barrel in August 2006. Of the total exported by
Ecuador in August 2007, some 4.41 million barrels, or 43%, were
sold by private firms in Ecuador, obtaining revenue of about
US$261 million. Ecuadorian state-run Petrolecuador exported the
remaining 57%.
According to MarketWatch, Ecuador's oil export revenues dropped
8% to US$4.403 billion from January through August 2007, from
US$4.781 billion in the same period last year.
Ecuador exported about 82.65 million barrels in the first eight
months of this year, about 8% lower compared to 89.90 million
barrels shipped last year, MarketWatch states.
* * *
As reported in the Troubled Company Reporter on Jan. 25, 2007,
Fitch Ratings downgraded the long-term foreign currency Issuer
Default Rating of Ecuador to 'CCC' from 'B-', indicating that
default is a real possibility in the near term.
In addition, these ratings were downgraded:
-- Uncollateralized foreign currency bonds to
'CCC/RR4' from 'B-/RR4';
-- Collateralized foreign currency Par and Discount
Brady bonds to 'CCC+/RR3' from 'B/RR3'; and
-- Short-term foreign currency IDR to 'C' from 'B'.
Fitch also affirmed the Country ceiling rating at 'B-'.
=====================
E L S A L V A D O R
=====================
MILLICOM CELLULAR: Earns US$138 Million in Third Quarter 2007
-------------------------------------------------------------
Millicom Cellular International's net profits have increased
165% to US$138 million in the third quarter 2007, from US$52
million in the same period in 2006, Business News Americas
reports.
Millicom Cellular said in a statement that revenues rose 77% to
US$686 million in the third quarter 2007, compared to US$388
million in the third quarter 2006.
BNamericas relates that Millicom Cellular's Ebitda grew 60% to
US$296 million in this year's third quarter, from US$186 million
in last year's third quarter. The Ebitda margin was 43%
compared to 48%.
According to BNamericas, Millicom Cellular's revenues from
operations in El Salvador, Guatemala and Honduras rose 45% to
US$300 million in the third quarter 2007, compared to US$207
million in the same period last year. The firm's clients grew
74% to 7.4 million.
Meanwhile, revenues from Millicom Cellular's operations in
Bolivia, Colombia and Paraguay increased 245% to US$215 million
in the third quarter 2007, from US$62.4 million in last year's
third quarter. Subscribers rose 170% to 5.3 million.
Millicom Cellular Chief Executive Officer Marc Beuls said in a
conference call that Capex rose 109% to US$347 million third
quarter 2007, compared to the same quarter last year. The firm
also raised its estimated capex for this year to over US$1
billion from US$800 million.
Mr. Beuls commented to BNamericas, "We're expecting capex for
2008 to be at a similar level."
Meanwhile, Millicom Cellular is transferring its remaining
networks that use CDMA and TDMA technology to GSM. At the end
of the third quarter 2007, there were less than 700,000 clients
using CDMA and TDMA technology. Migration to GSM will let the
firm release spectrum in the 850MHz and 900MHz bands for 3G
services, which the company would launch in 2008 and 2009,
BNamericas states, citing Mr. Beuls.
Headquartered in Bertrange, Luxembourg, and controlled by
Sweden's AB Kinnevik, Millicom International Cellular S.A.
-- http://www.millicom.com/-- is a global telecommunications
investor with cellular operations in Asia, Latin America and
Africa. It currently has cellular operations and licenses in 16
countries. The Group's cellular operations have a combined
population under license of around 391 million people.
The Central America Cluster comprises Millicom's operations in
El Salvador, Guatemala and Honduras. The population under
license in Central America at December 2005 is 26.4 million.
The South America Cluster comprises Millicom's operations in
Bolivia and Paraguay. The population under license in South
America at December 2005 is 15.2 million.
* * *
Standard & Poor's Ratings Services placed its 'B+' long-term
corporate credit rating and 'B-' senior unsecured debt ratings
on Luxembourg-headquartered emerging-markets wireless
telecommunications operator Millicom International Cellular S.A.
on CreditWatch with positive implications, following the signing
of an agreement for sale by Millicom of its 88.9% stake in
Paktel Ltd. to China Mobile Communications Corp.
Millicom International's 10% senior notes due 2013 carry Moody's
B3 rating and Standard & Poor's B- rating.
* * *
As reported in the Troubled Company Reporter-Latin America on
May 4, 2007, Moody's Investors Service confirmed its Ba3
Corporate Family Rating for Millicom International Cellular S.A.
Moody's also assigned a Ba3 probability of default rating to the
company.
=================
G U A T E M A L A
=================
ALCATEL-LUCENT: Dresdner Maintains Buy Rating on Firm's Shares
--------------------------------------------------------------
Dresdner Kleinwort analysts have kept their "buy" rating on
Alcatel-Lucent's shares, Newratings.com reports.
According to Newratings.com, the target price for Alcatel-
Lucent's shares was set at EUR8.
The analysts said in a research note that Alcatel-Lucent would
step up its restructuring efforts and dispose additional assets
to finance initiatives.
"Alcatel-Lucent may guide to robust revenue growth and operating
surplus for the seasonally-strong fourth quarter,"
Newratings.com states, citing the analysts.
Headquartered in Paris, France, Alcatel-Lucent --
http://www.alcatel-lucent.com/-- provides solutions that enable
service providers, enterprises and governments worldwide to
deliver voice, data and video communication services to end
users. Alcatel-Lucent maintains operations in 130 countries,
including, Austria, Germany, Hungary, Italy, Netherlands,
Ireland, Canada, United States, Costa Rica, Dominican Republic,
El Salvador, Guatemala, Peru, Venezuela, Indonesia, Australia,
Brunei and Cambodia. On Nov. 30, 2006, Alcatel and Lucent
Technologies Inc. completed their merger transaction, and began
operations as a communication solutions provider under the name
Alcatel-Lucent on Dec. 1, 2006.
* * *
The Troubled Company Reporter-Asia Pacific reported on
Sept. 19, 2007, that Standard & Poor's Ratings Services revised
its outlook on international equipment supplier Alcatel-Lucent
and related entity Lucent Technologies Inc. to stable from
positive. At the same time, the 'BB-' long-term corporate
credit ratings on the group were affirmed. The 'B' short-term
corporate credit rating on Alcatel-Lucent and 'B-1' short-term
rating on Lucent Technologies were also affirmed.
As reported on April 13, 2007, Fitch Ratings affirmed Alcatel-
Lucent's ratings at Issuer Default 'BB' with a Stable Outlook,
senior unsecured 'BB' and Short-term 'F2' and simultaneously
withdrawn them.
As of Feb. 7, 2007, Moody's Investor Services put a Ba2 rating
on Alcatel's Corporate Family and Senior Debt rating. Lucent
carries Moody's B1 Senior Debt rating and B2 Subordinated debt &
trust preferred rating.
BRITISH AIRWAYS: Seeks Closer Relationship with U.S. Partner
------------------------------------------------------------
British Airways plc is looking to establish a closer
relationship with oneworld alliance partner American Airlines
following an US$8 billion transatlantic joint venture deal
between Delta Air Lines and Air France, Reuters reports.
"American Airlines is a key partner for us and in the long term
we would like a closer relationship with them," a BA spokesman
was quoted by Reuters as saying. "But we're not going to go
into what those two words might mean."
However, the spokesman told the Associated Press, BA won't seek
anti-trust immunity at this stage.
BA tried to forge a transatlantic tie-up with American Airlines
twice but failed after competition regulators insisted it would
have to give up landing slots at London's Heathrow airport to
obtain approval, AP relates.
BA also denied that it was in talks with Sir Michael Bishop, the
controlling shareholder of its smaller rival bmi, which holds
13% of all Heathrow slots, Reuters says.
Meanwhile, Sir Richard Branson's Virgin Atlantic pledged to
oppose a third attempt by BA as "they would be incredibly
dominant in terms of market power. I don't think people would
be very happy about it at all," Virgin Atlantic chief executive
Steve Ridgway was cited by the Daily Telegraph's Alistair
Osborne.
As previously reported British Airways is eyeing a tie-up with a
US airline, although any transatlantic deal depends on the
relaxation of regulatory obstacles.
British Airways Chief Executive Willie Walsh has revealed that
US rules restricting foreign carriers to only minority stakes in
US airlines could be liberalized by 2010 as a condition of the
EU-US "open skies" deal.
"A link between a European and a US carrier is
transformational," Mr. Walsh said. "If that were possible it
would definitely be something worth chasing."
Headquartered in West Drayton, United Kingdom, British Airways
Plc -- http://www.ba.com/-- operates of international and
domestic scheduled and charter air services for the carriage of
passengers, freight and mail, and provides of ancillary
services. The British Airways group consists of British Airways
Plc and a number of subsidiary companies including in particular
British Airways Holidays Ltd. and British Airways Travel
Shops Ltd. BA has offices in India and Guatemala.
* * *
As reported on Aug. 16, 2007, Moody's Investors Service upgraded
the senior unsecured rating of British Airways plc to Ba1, one
notch lower than the Corporate Family Rating (upgraded to Baa3,
stable outlook), reflecting the subordination of unsecured debt
to a substantial portion of secured debt.
The debt instruments affected by the rating action are:
-- GBP100 million 10.875% senior unsecured notes due 2008 to
Ba1 from Ba2;
-- GBP250 million 7.25% senior unsecured notes due 2016 to
Ba1 from Ba2;
-- US$115 million 5.25% and US$85 million 7.625% senior
unsecured industrial revenue notes due 2032 to Ba1 from
Ba2;
-- EUR300 million 6.75% perpetual guaranteed preferred
securities to Ba2 from Ba3 issued by British Airways
Finance (Jersey) L.P.
===========
M E X I C O
===========
ALERIS INT'L: Merging Monterrey Unit to Monclova Plant in Mexico
----------------------------------------------------------------
Aleris International Inc. will consolidate the operations of its
Monterrey, Mexico facility into its Monclova, Mexico plant,
which was part of the recently acquired Wabash Alloys, LLC. In
addition, the operations of Wabash Alloy's Guelph, Canada
facility will be consolidated into the operations of Aleris and
former Wabash Alloys facilities. Both actions are currently
underway.
The Monterrey plant, which employed approximately 41 people,
produced specification aluminum alloys that were delivered to
customers in both ingot and molten form. The Guelph plant,
which employed approximately 50 people, produced niche
specification alloys, which were delivered primarily in ingot
form to customers in Canada and the United States.
"The closures are part of our ongoing initiatives to optimize
our production footprint and maximize productivity while
continuing to provide the highest quality products and services
to our valued customers," said Ed Hoag Vice President and
General Manager, Specification Alloys.
About Aleris International
Headquartered in Beachwood, Ohio, Aleris International Inc.
(NYSE: ARS) -- http://www.aleris.com/-- manufactures rolled
aluminum products and offers aluminum recycling and the
production of specification alloys. The company also
manufactures value-added zinc products that include zinc oxide,
zinc dust and zinc metal. The company operates 42 production
facilities in the United States, Brazil, Germany, Mexico and
Wales, and employs approximately 4,200 employees.
* * *
As reported in the Troubled Company Reporter on Sept. 21, 2007,
Standard & Poor's Ratings Services revised its outlook on Aleris
International Inc. to negative from stable. At the same time
S&P affirmed its 'B+' corporate credit rating and the other
ratings on the company. Concurrently, S&P assigned a 'B-'
rating to the company's recent US$105 million 9% senior notes
due 2014, which are an add-on to the company's existing $600
million 9% senior notes due 2014.
ARROW ELECTRONICS: Earns US$98.3 Million in 2007 Third Quarter
--------------------------------------------------------------
Arrow Electronics Inc. reported third quarter 2007 net income of
US$98.3 million on net sales of US$4.03 billion, compared with
net income of US$85.9 million on sales of US$3.45 billion for
the same period in 2006. Sales increased 17% year over year.
"We performed well in a market that was challenging. Our level
of sales, as well as working capital to sales, remained near
record levels and we generated the highest level of cash flow
for a third quarter in six years and the highest return on
working capital for a third quarter in seven years, all while we
continued to invest in the long-term future of Arrow," said
William E. Mitchell, chairman, president and chief executive
officer of Arrow Electronics.
Global enterprise computing solutions sales of US$1.17 billion
increased 97 percent year over year and decreased 8 percent
sequentially in the seasonally soft third quarter. Year-over-
year growth was aided by the impact of the acquisitions of
KeyLink Systems Group, Alternative Technology, Inc. and the
storage and security distribution business of InTechnology plc.
On a pro forma basis, sales increased 15% year over year. "We
again outgrew the market with strong double-digit performance in
industry standard servers, storage, software, and services, as
well as modest growth in proprietary servers. While we achieved
strong top-line performance with revenue near the high end of
our guidance, our mix of products and investments in the
business to accelerate future growth had an unfavorable impact
on profitability this quarter. We expect to continue to outgrow
the market and return to more normal levels of profitability in
the fourth quarter," said Mr. Mitchell.
Global components sales of US$2.86 billion increased 3 percent
compared with the second quarter and were flat year over year as
the well-publicized weakness within the large EMS customer base
continued. "We again gained market share on a worldwide basis
and added to our industry leading position in the face of an
increasingly more competitive market in all regions this
quarter. We were particularly pleased with our success in Asia
Pacific, where we generated record operating income dollars for
a third quarter as earnings increased 173 percent year over
year. We had good success with efficiency initiatives to drive
down our operating expenses worldwide going forward, and we will
continue to invest in strategic opportunities to build for the
future," Mr. Mitchell said.
"Based upon the information known to us today, we generally
expect normal seasonality in both of our businesses. We believe
that total fourth quarter sales will be between US$4.15 and
US$4.45 billion, with global component sales between US$2.65 and
US$2.85 billion and global enterprise computing solutions sales
between US$1.50 and US$1.60 billion. Earnings per share, on a
diluted basis, excluding any charges and including estimated
amortization of intangible assets of US$.02 to US$.03, are
expected to be in the range of US$.90 to US$.95, an increase of
25 percent to 32 percent from last year's fourth quarter," said
Paul J. Reilly, senior vice president and chief financial
officer.
About Arrow Electronics
Headquartered in Melville, New York, Arrow Electronics Inc.
-- http://www.arrow.com/-- provides products, services and
solutions to industrial and commercial users of electronic
components and computer products. Arrow serves as a supply
channel partner for nearly 600 suppliers and more than 130,000
original equipment manufacturers, contract manufacturers and
commercial customers through a global network of over 270
locations in 53 countries and territories.
The company operates in France, Spain, Portugal, Denmark,
Estonia, Finland, Ireland, Latvia, Lithuania, Norway, Sweden,
Italy, Germany, Austria, Switzerland, Belgium, the Netherlands,
United Kingdom, Argentina, Brazil, Mexico, Australia, China,
Hong Kong, Korea, Philippines and Singapore.
* * *
Arrow Electronics senior subordinated stock continues to carry
Moody's Investors Service's Ba1 rating. The company's senior
preferred stock is rated at Ba2.
DANA CORP.: Gets Go Signal to Begin Soliciting Votes on Plan
------------------------------------------------------------
Dana Corp. and its debtor-affiliates obtained the U.S.
Bankruptcy Court for the Southern District of New York's consent
to begin soliciting votes from creditors on their Joint Plan of
Reorganization.
In approximately one week, Dana expects to begin mailing
solicitation packages to eligible creditors, who are required to
submit their ballots by Nov. 28, 2007.
Before it could proceed with the solicitation process, Dana was
required to show that the disclosure statement attached to the
Plan contained "adequate information" necessary for parties
entitled to vote on the Plan make an informed judgment on the
Plan. Dana thrice amended the Plan and the Disclosure Statement
to address objections raised by parties-in-interest and provide
updates to recent developments in their Chapter 11 cases.
The Plan, as amended, provides for (i) the Debtors'
restructuring as a sustainable, viable business through several
restructuring initiatives that were undertaken during the
Chapter 11 cases; and (ii) a global settlement among the Debtors
and their unions, Centerbridge Partners, L.P., and certain
creditors.
In November 2006, Dana outlined its restructuring goals, aiming
to achieve a total of US$405,000,000 to US$540,000,000 in
combined annual cost and margin improvement. Among other
initiatives, Dana reached agreements for pricing adjustments
with its major customers General Motors Corp., Toyota Motor
Engineering & Manufacturing North America, Inc., Ford Motor
Company, and Chrysler Company, LLC.
The Plan provides for the disposal of preferred shares of
reorganized Dana, to be named New Dana Holdco after the Debtors'
emergence from Chapter 11, which is expected to raise
US$790,000,000 in new capital. Centerbridge and members of an
ad hoc steering committee, which hold in the aggregate
approximately US$800,000,000 in Dana bonds, have agreed to
backstop the rights offering, pursuant to the terms of a
commitment letter, which remains subject to Bankruptcy Judge
Burton R. Lifland's approval.
Centerbridge will (i) pay US$250,000,000 for New Series A
Preferred Stock of New Dana Holdco, and (ii) together with six
other backstop parties, invest up to US$540,000,000 for New
Series B Preferred Stock not purchased by "qualified investors",
which constitute holders of bonds and trade claims of at least
US$25,000,000.
The Plan provides for the full payment of administrative,
secured claims and reinstatement of Asbestos personal injury
claims but provides for zero recovery to holders of the existing
Dana stock Dana and subordinated claims. General unsecured
creditors will obtain 72% to 86% recovery, depending on the
total amount of claims that will ultimately be allowed in the
class. Dana expects to shell out 78 to 86 cents on the dollar
if the total allowed amount is between US$2,500,000,000 and
US$2,750,000,000, and notches lower at 72 to 78 cents on the
dollar if the total allowed amount is between US$2,750,000,000
and US$3,000,000,000.
Holders of general unsecured claims, including bondholder and
trade claims, will be entitled to vote on the Plan. The Debtors
will post the tabulated voting results on the Plan on
Dec. 6, 2007.
The Debtors have scheduled a hearing to seek confirmation of the
Plan on Dec. 10, 2007, at 10:00 a.m., Eastern Time. Objections
to the Plan's confirmation are due Nov. 28.
About Dana Corporation
Headquartered in Toledo, Ohio, Dana Corporation --
http://www.dana.com/ -- designs and manufactures products for
every major vehicle producer in the world, and supplies
drivetrain, chassis, structural, and engine technologies to
those companies. Dana employs 46,000 people in 28 countries.
Dana is focused on being an essential partner to automotive,
commercial, and off-highway vehicle customers, which
collectively produce more than 60 million vehicles annually.
Dana continues to close plants in North America, moving business
to other countries such as Mexico.
The company and its affiliates filed for chapter 11 protection
on Mar. 3, 2006 (Bankr. S.D.N.Y. Case No. 06-10354). As of
Sept. 30, 2005, the Debtors listed US$7,900,000,000 in total
assets and US$6,800,000,000 in total debts.
Corinne Ball, Esq., and Richard H. Engman, Esq., at Jones Day,
in Manhattan and Heather Lennox, Esq., Jeffrey B. Ellman, Esq.,
Carl E. Black, Esq., and Ryan T. Routh, Esq., at Jones Day in
Cleveland, Ohio, represent the Debtors. Henry S. Miller at
Miller Buckfire & Co., LLC, serves as the Debtors' financial
advisor and investment banker. Ted Stenger from AlixPartners
serves as Dana's Chief Restructuring Officer.
Thomas Moers Mayer, Esq., at Kramer Levin Naftalis & Frankel
LLP, represents the Official Committee of Unsecured Creditors.
Fried, Frank, Harris, Shriver & Jacobson, LLP serves as counsel
to the Official Committee of Equity Security Holders. Stahl
Cowen Crowley, LLC serves as counsel to the Official Committee
of Non-Union Retirees.
The Debtors filed their Joint Plan of Reorganization on
Aug. 31, 2007.
ENESCO GROUP: Plan Confirmation Hearing Set for Nov. 28
-------------------------------------------------------
The Hon. A. Benjamin Goldgar of the U.S. Bankruptcy Court for
the Northern District of Illinois set a hearing at 1:30 p.m., on
Nov. 28, 2007, to consider confirmation of the Second Amended
Plan of Liquidation filed Enesco Group, Inc. and its debtor-
affiliates.
Objections to the Plan, if any, are due Nov. 19.
Judge Goldgar had given his conditional approval on the adequacy
of the Disclosure Statement explaining the Plan and has also set
Nov. 19 as the last day to oppose the disclosure statement.
About Enesco Group
Based in Itasca, Illinois, Enesco Group, Inc. --
http://www.enesco.com/-- is a producer of giftware, and home
and garden decor products. Enesco's product lines include some
of the world's most recognizable brands, including Disney,
Heartwood Creek, Nickelodeon, Cherished Teddies, Lilliput Lane,
Border Fine Arts, among others.
Enesco distributes products to a wide array of specialty gift
retailers, home decor boutiques and direct mail retailers, as
well as mass-market chains. The company serves markets
operating in Europe, particularly in the United Kingdom and
France, as well in the Asia Pacific in Australia and Hong Kong.
The company also has Latin American operations in Mexico.
Enesco Group and its two affiliates, Enesco International Ltd.
and Gregg Manufacturing, Inc., filed for chapter 11 protection
on Jan. 12, 2007 (Bankr. N.D. Ill. Lead Case No. 07-00565).
Shaw Gussis Fishman Glantz Wolfson & Tow and Skadden, Arps,
Slate, Meagher & Flom LLP, represent the Debtors. Epiq
Bankruptcy Solutions, LLC, acts as the Debtors' claims and
noticing agent. In schedules of assets and debts filed with the
Court, Enesco disclosed total assets of US$61,879,068 and total
debts of US$231,510,180.
Chad H. Gettleman, Esq., and Brad A. Berish, Esq., at Adelman &
Gettleman, Ltd., represent the Official Committee of Unsecured
Creditors. William R. Baldiga, Esq., Jessica M. Paris, Esq.,
and Robert J. Stark, Esq., at Brown Rudnick Berlack Israels LLP;
and Thomas V. Askounis, Esq., at Askounis & Borst, PC, represent
the Ad Hoc Committee of Equity Security Holders.
ENESCO GROUP: Unsecured Creditors to Get 27% Under Amended Plan
---------------------------------------------------------------
Enesco Group, Inc. and its debtor-affiliates filed its second
amended Disclosure Statement with respect to its Second Amended
Plan of Liquidation with the U.S. Bankruptcy Court for the
Northern District of Illinois, on Oct. 10, 2007.
The Debtors relate that the Plan proposes to liquidate the
remaining assets of the Debtors and distribute the proceeds to
the holders of the allowed claims. The principal source of the
distributions will be:
a) cash on hand as of the effective date of the Plan;
b) proceeds from the Debtors' lender settlement;
c) proceeds and tax refunds arising out of the resolution of
the Hong Kong Tax Dispute;
d) proceeds from the Contingency Litigation Agreement; and
e) Litigation Trust Proceeds.
Summary Treatment of Claims Under The Plan
The Plan proposes that all holders of allowed administrative
claims, allowed priority claims, other than the Internal Revenue
Service, and the allowed non-tax priority claims will have their
allowed claims paid in full on or about the effective date of
the plan from the proceeds of the Lender Settlement.
In addition, within 60 days of the effective date, general
unsecured creditors will receive their pro-rate share of
US$480,000 from the proceeds of the Lender Settlement. The
Debtors say that general unsecured creditors are expected to
receive 27% of their claims. Unsecured creditors will further
be entitled to receive additional future distribution.
Within the same time frame, the Internal Revenue Service will
receive US$650,000 from the proceeds of the Lender Settlement
and will be entitled to receive additional future distribution.
Additional contributions, the Debtors say, are however,
contingent on future recoveries by the Debtors and are not
guaranteed. The Contingency Litigation Trust, the Debtors add,
are also not guaranteed.
Summary Creditor Treatment if Plan Is Not Confirmed
The Debtors tell the Court that if the Plan is not confirmed,
then they are not substantively consolidated for purposes of the
Plan or their cases are converted to ones under Chapter 7 of the
Bankruptcy Code.
At the conclusion of the Chapter 7 cases, administrative claims
will still be paid in full. However, tax priority claims
holders will only receive 4.9% of their claims. General
Unsecured Creditors on the other hand, will receive nothing.
The Debtors reveal that the primary reasons for the
significantly smaller distributions under this scenario are:
1) the proceeds and other benefits from the:
-- Lender Settlement;
-- the Contingency Litigation Agreement; and
-- the resolution of the Hong Kong Tax Dispute,
will be substantially compromised or lost, resulting
in a significantly smaller recovery by the Debtors'
estates; and
2) there will be additional administrative costs if the
Plan is not confirmed.
About Enesco Group
Based in Itasca, Illinois, Enesco Group, Inc. --
http://www.enesco.com/-- is a producer of giftware, and home
and garden decor products. Enesco's product lines include some
of the world's most recognizable brands, including Disney,
Heartwood Creek, Nickelodeon, Cherished Teddies, Lilliput Lane,
Border Fine Arts, among others.
Enesco distributes products to a wide array of specialty gift
retailers, home decor boutiques and direct mail retailers, as
well as mass-market chains. The company serves markets
operating in Europe, particularly in the United Kingdom and
France, as well in the Asia Pacific in Australia and Hong Kong.
The company also has Latin-American operations in Mexico.
Enesco Group and its two affiliates, Enesco International Ltd.
and Gregg Manufacturing, Inc., filed for chapter 11 protection
on Jan. 12, 2007 (Bankr. N.D. Ill. Lead Case No. 07-00565).
Shaw Gussis Fishman Glantz Wolfson & Tow and Skadden, Arps,
Slate, Meagher & Flom LLP, represent the Debtors. Epiq
Bankruptcy Solutions, LLC, acts as the Debtors' claims and
noticing agent. In schedules of assets and debts filed with the
Court, Enesco disclosed total assets of US$61,879,068 and total
debts of US$231,510,180.
Chad H. Gettleman, Esq., and Brad A. Berish, Esq., at Adelman &
Gettleman, Ltd., represent the Official Committee of Unsecured
Creditors. William R. Baldiga, Esq., Jessica M. Paris, Esq.,
and Robert J. Stark, Esq., at Brown Rudnick Berlack Israels LLP;
and Thomas V. Askounis, Esq., at Askounis & Borst, PC, represent
the Ad Hoc Committee of Equity Security Holders.
FIRST DATA: Subsidiary Reaches Agreement with Meijer
----------------------------------------------------
First Data Corp.'s subsidiary, TeleCheck Services, Inc., a
leading check acceptance company has reached an agreement to
offer TeleCheck Electronic Check Acceptance(R)(ECA(R)) Warranty
service at Meijer Supercenters in Michigan, Illinois, Indiana,
Kentucky and Ohio.
This agreement facilitates the rollout of ECA chain-wide, and
allows Meijer to cost-effectively authorize and process check
transactions electronically at the point of sale. Meijer
customers will benefit from increased security and convenience
as they present checks for payment.
"It's an honor to significantly expand our relationship with
Meijer. Meijer has built an outstanding reputation throughout
the Midwest as a value-driven, customer-oriented merchant, and
the imageless ECA solution they have chosen to deploy requires
little training for cashiers and is simple for their customers
to use," said TeleCheck president Brian Mooney. "Meijer's
decision to implement Electronic Check Acceptance allows the
company to more effectively meet the needs of its customers who
choose to pay by check and will significantly reduce the
company's risk for check fraud."
Expanding consumer choice and convenience at the point of sale
was a key factor for Meijer in adding the ECA service. "Checks
continue to be a preferred form of payment for many of our
customers," said Janet Emerson, executive vice president of
operations for Meijer. "Our relationship with TeleCheck will
allow us to provide an efficient and cost-effective way to
process checks, while still providing Meijer customers with the
high level of service they expect."
With a guarantee volume of US$25 billion and total electronic
check volume of US$37 billion, TeleCheck provides a broad suite
of electronic and paper check processing services. Today, over
40% of the more than 500 million transactions processed by
TeleCheck are ECA transactions processed at the point of
purchase. Approximately 149,000 merchant locations process with
ECA through TeleCheck. Steady growth of electronic check
services for merchants of all sizes has become a standard for
efficient check acceptance.
About Meijer
Meijer -- http://www.meijer.com/-- is a Grand Rapids, Mich.-
based retailer that operates 181 supercenters throughout
Michigan, Indiana, Illinois, Ohio and Kentucky. As the inventor
of the "one-stop shopping" concept, Meijer stores have evolved
through the years to include expanded fresh produce and meat
departments, as well as pharmacies, comprehensive electronics
departments, garden centers and apparel offerings.
About First Data
First Data Corp. (NYSE: FDC) -- http://www.firstdata.com/
-- provides electronic commerce and payment solutions for
businesses worldwide, including those in New Zealand, the
Netherlands and Mexico. The company's portfolio of services and
solutions includes merchant transaction processing services;
credit, debit, private-label, gift, payroll and other prepaid
card offerings; fraud protection and authentication solutions;
receivables management solutions; electronic check acceptance
services through TeleCheck; as well as Internet commerce and
mobile payment solutions. The company's STAR Network offers
PIN-secured debit acceptance at 2 million ATM and retail
locations.
* * *
As reported in the Troubled Company Reporter-Latin America on
Oct. 17, 2007, Fitch Ratings has assigned a 'B-' rating to First
Data Corp.'s proposed US$2 billion senior unsecured notes due
2015 offering.
As reported in the Troubled Company Reporter-Latin America on
Sept. 19, 2007, Moody's Investors Service has assigned these
ratings:
-- Corporate Family Rating - B2
-- US$2 billion senior secured revolving credit facility
(expires 2013) - Ba3, LGD2 (27%)
-- US$13 billion senior secured Term Loan B (due 2014) - Ba3,
LGD2 (27%).
FLEXTRONICS INT'L: Earns US$120.9 Mil. in Quarter Ended Sept. 28
----------------------------------------------------------------
Flextronics International Ltd. reported net income of US$120.9
million for the three months ended Sept. 28, 2007, compared to
net income of US$184.8 million for the three months ended
Sept. 29, 2006.
For the second quarter ended Sept. 28, 2007, net sales increased
from the year ago quarter by US$855 million, or 18%, to US$5.6
billion, which is at the high end of the company's previously
provided revenue guidance of US$5.3-US$5.6 billion.
Mike McNamara, chief executive officer of Flextronics, stated,
"We continue to maintain a strong financial position with over
US$1 billion in cash, no short term debt maturities, and a
record low debt to capital leverage ratio of 19%. Inventory
turns improved to 8.0x while cash conversion cycle improved by
two days sequentially to an industry leading 11 days. We remain
intensely focused on generating a higher return on capital while
growing our business, as evidenced by our return on invested
capital of 11.2%, which increased 80 basis points from the
previous quarter." Mr. McNamara concluded by stating, "I am
very proud of the dedication and hard work of our employees and
management across the globe in making this a very successful
quarter for Flextronics. We believe we are executing very well
on the controllable aspects of the business, which should
provide an excellent foundation to add the capabilities of
Solectron into the Flextronics framework."
About Flextronics International
Headquartered in Singapore, Flextronics International Ltd.
(NasdaqGS: FLEX) -- http://www.flextronics.com/-- is an
Electronics Manufacturing Services provider focused on
delivering design, engineering and manufacturing services to
automotive, computing, consumer digital, industrial,
infrastructure, medical and mobile OEMs. Flextronics helps
customers design, build, ship, and service electronics products
through a network of facilities in over 30 countries on four
continents.
The company has operations in Brazil and Mexico.
* * *
As reported in the Troubled Company Reporter-Latin America on
Oct. 4, 2007, Fitch Ratings has completed its review of
Flextronics International Ltd. following the company's
acquisition of Solectron Corp. and resolved Flextronics' Rating
Watch Negative status by affirming these ratings:
-- Issuer Default Rating at 'BB+';
-- Senior unsecured credit facility at 'BB+'.
Fitch also rated Flextronics' new senior unsecured Term B loan
at 'BB+'. Additionally, Fitch has downgraded the rating on
Flextronics' senior subordinated notes from 'BB' to 'BB-'.
Fitch said the rating outlook is negative.
MOVIE GALLERY: Releases Proposed Restructuring Term Sheet
---------------------------------------------------------
Movie Gallery, Inc. and its debtor-affiliates disclosed its
restructuring plans on a restructuring term sheet delivered on
the date of bankruptcy.
The term sheet outlines the proposed restructuring transaction
and other material terms of their joint plan of reorganization.
The documents have the support of majority of the holders of the
Debtors' 11% senior notes and majority of the second lien
lenders.
According to the term sheet, the Debtors will file their Plan,
Disclosure Statement, and all related solicitation materials on
or before Nov. 15, 2007.
The Debtors also intend to ask the U.S. Bankruptcy Court for the
Eastern District of Virginia to set the hearing to consider:
(a) approval of their Disclosure Statement on or before
Dec. 15, 2007; and
(b) confirmation of their Plan no later than 40 days after
entry of an order approving the Disclosure Statement.
The Debtors said they will use commercially reasonable efforts
to obtain entry of the confirmation order no later than 45 days
after entry of the order approving the Disclosure Statement.
Plan Terms
As disclosed in the term sheet, the Plan:
* will provide that the Reorganized Debtors will enter into
an exit facility, which provides for a US$100,000,000
revolving credit facility and may include a US$25,000,000
million letter of credit supplement, upon commercially
reasonable terms reasonably acceptable to Sopris Capital
Advisors;
* contemplates using proceeds from the Exit Facility and
Rights Offering to fund certain Cash payments to be made
pursuant to the Plan, as well as the Debtors' post-
emergence operations; and
* provides for the issuance of the New MG Common Stock to
Holders of certain Claims and Interests.
The Plan will be predicated on the Debtors raising US$50,000,000
through the Rights Offering. It is contemplated that the Rights
Offering will dilute the New MG Common Stock issued on account
of Claims and Interests under the Plan.
Moreover, the Reorganized Movie Gallery will issue on the
effective date of the Plan up to 20,000,000 shares of New MG
Common Stock to certain Holders of Allowed Claims and Interests
in full satisfaction of the Claims and Interests.
The Plan will also provide for 10% of the New MG Common Stock,
on a fully-diluted basis, to be reserved for issuance as grants
of equity, restricted stock or options in connection with the
Reorganized Debtors' Management and Director Equity Incentive
Program. At a minimum, 50% of the awards wi0ll be granted not
later than 60 days after the Plan Effective Date. It is
contemplated that the Reorganized Debtors' Management and
Director Equity Incentive Program will dilute the New MG Common
Stock issued through the Rights Offering and on account of
Claims and Interests under the Plan.
Classification and Treatment of Claims
Under the Debtors' proposed Plan, all Claims against the
Debtors, other than Administrative Claims, DIP Facility Claims
and Priority Tax Claims, are grouped into nine separate classes.
Class Description
----- -----------
1 Other Priority Claims
2 Other Secured Claims
3 First Lien Claims
4 Second Lien Claims
5 Studio Claims
6A 11% Senior Note Claims against Movie Gallery, Inc.
6B 11% Senior Note Claims against Movie Gallery US, LLC
6C 11% Senior Note Claims against M.G.A. Realty I, LLC
6D 11% Senior Note Claims against M.G. Digital, LLC
6E 11% Senior Note Claims against Hollywood
Entertainment
6F 11% Senior Note Claims against M.G. Automation LLC
7A General Unsecured Claims against Movie Gallery, Inc.
7B Movie Gallery US, LLC General Unsecured Claims
7C M.G.A. Realty I, LLC General Unsecured Claims
7D M.G. Digital, LLC General Unsecured Claims
7E Hollywood Entertainment Corp. General Unsecured
Claims
7F MG Automation LLC General Unsecured Claims
8 Equity Interests
9 Intercompany Interests
Classes 1, 2 and 9 are unimpaired and are conclusively deemed to
have accepted the Plan. Hence, holders of Classes 1, 2 and 9
are not entitled to vote to accept or reject the Plan.
Classes 3, 4, 5, 6, 7 and 8 are impaired, and are entitled to
vote to accept or reject the Plan.
Holders of Allowed Class 1 Claims will receive payment of the
Allowed Class 1 Claim in full in Cash on the Plan Effective
Date.
Holders of Allowed Class 2 Claims will be paid in full in Cash
or otherwise made Unimpaired, in full and final satisfaction of
the Allowed Class 2 Claims.
Holders of Allowed Class 3 Claims will receive their pro rata
share of the Company's obligations under the Amended and
Restated First Lien Credit Agreement.
Class 4 consists of Second Lien Claims against the Debtors,
including the Reinstated Second Lien Claims and the Sopris
Second Lien Claims. Holders of Allowed Reinstated Second Lien
Claims will receive their pro rata share of the Company's
obligations under the Amended and Restated Second Lien Credit
Agreement. The Allowed Sopris Second Lien Claims will receive
the Second Lien Conversion Equity Allocation, in full and final
satisfaction of the Allowed Class 4 Claims.
Class 5 consists of Claims of Studios who have entered into
Accommodation Agreements with the Debtors. Holders of Allowed
Class 5 Claims will receive the consideration contained in each
Holder's Accommodation Agreement.
Holders of Allowed Class 6A, 6B, 6C, 6D, 6E, 6F Claims will
receive their pro rata share of [__]% of the Unsecured Claim
Equity Allocation, subject to dilution by the issuance of
options, equity or equity-based grants in connection with the
Reorganized Debtors' Management and Director Equity Incentive
Program.
Holders of Allowed Class 7A Claims will receive, at their
option, either (a) their pro rata share of [__%] of the
Unsecured Claim Equity Allocation, or (b) in exchange for
assigning to Sopris the Holder's Allowed Class 7 Claim, an
amount in Cash to be paid by Sopris equal to that Holder's pro
rata percentage of the total Allowed Class 7 Claims multiplied
by [US$__].
If Class 8 votes to accept the Plan, Allowed Class 8 Equity
Interest holders will receive their pro rata share of 5% of the
Unsecured Claim Equity Allocation. Otherwise, holders will not
receive any distribution on account of the Allowed Class 8
Equity Interests.
Class 9 Intercompany Interests will be retained and the legal,
equitable, and contractual rights to which the Holder of the
Intercompany Interest is entitled will remain unaltered.
The Debtors and Sopris will work together to appropriately
allocate the Pre-Money Equity Value among the Debtors. Holders
of Claims in Classes 6A through 6F and Classes 7A through 7F
will receive, in the aggregate, 95% of the Unsecured Claim
Equity Allocation and Class 8 will receive, in the aggregate, 5%
of the Unsecured Claim Equity Allocation so long as Class 8
votes to accept the Plan.
If Class 8 votes to reject the Plan, holders of Claims in
Classes 6A through 6F and Classes 7A through 7F will receive, in
the aggregate, 100% of the Unsecured Claim Equity Allocation and
Class 8 will receive no distribution.
The Unsecured Claim Equity Allocation will be allocated among
the Debtors in the same proportion that the Pre-Money Equity
Value is ascribed to each Debtor. The Debtors will also
determine, in consultation with Sopris, an estimate of the
General Unsecured Claims against each Debtor. The Debtors, in
consultation with Sopris, will then take the Unsecured Claim
Equity Allocation for each Debtor and divide the allocation pro
rata between the 11% Senior Note Claims against the Debtor and
the estimated General Unsecured Claims against the Debtor in the
same proportion as their relative claims against the Debtor.
The holders of 11% Senior Note Claims will be entitled to assert
the full amount of their claims against each of the Debtors.
The General Unsecured Claims will be entitled to receive their
recoveries on the Effective Date, or as soon thereafter as
practical, subject to appropriate reserves for disputed claims,
and the balance upon the resolution of the final amount of
allowed claims in the particular class.
Furthermore, in the case of each Debtor, the cash election
contemplated for Classes 7A through 7F will be calculated by
Sopris, in consultation with the Debtors, in an amount designed
to be at a discount to the implied value of the portion of the
Unsecured Claim Equity Allocation that the creditor would
receive on account of its claim. The aggregate amount of cash
to be made available by Sopris to fund cash elections for any
given class of claims will be capped at an amount to be
determined by Sopris.
Intercompany Claims will be allowed in their Debtor class and
will receive the same treatment as General Unsecured Claims
against that Debtor, but no cash option. If one of Classes
6A through 6F or 7A through 7F rejects the Plan but Class 8
accepts the Plan, the recovery for Class 8 will be decreased by
an amount equal to the pro rata percentage of the Unsecured
Claim Equity Allocation allocated to the non-consenting Class.
Board of Directors
The initial board of directors of the Reorganized Movie Gallery
will consist of seven directors, consisting of:
(a) Joe Malugen, current chairman of the Board, president
and CEO of the Debtors;
(b) 4 directors designated by Sopris in its sole discretion;
and
(c) 2 directors designated by Sopris, subject to the
reasonable approval of the Debtors.
Any directors designated pursuant to clause (b) or (c) will be
subject to approval of the Bankruptcy Court.
A full-text copy of the restructuring term sheet is available
for free at http://researcharchives.com/t/s?246e
About Movie Gallery
Based in Dothan, Alabama, Movie Gallery Inc. --
http://www.moviegallery.com/-- is a home entertainment
specialty retailer. It operates over 4,600 stores in the United
States, Canada, and Mexico under the Movie Gallery, Hollywood
Entertainment, Game Crazy, and VHQ banners.
The company and its debtor-affiliates filed for Chapter 11
protection on Oct. 16, 2007 (Bankr. E.D. Va. Case Nos. 07-33849
to 07-33853. Anup Sathy, Esq., Marc J. Carmel, Esq., and
Richard M. Cieri, Esq., at Kirkland & Ellis LLP, represent the
Debtors. Michael A. Condyles, Esq., and Peter J. Barrett, Esq.,
at Kutak Rock LLP, serve as the Debtors' local counsel. The
Debtors' claims & balloting agent is Kutzman Carson Consultants
LLC.
When the Debtors' filed for protection from their creditors,
they listed total assets of US$891,993,000 and total liabilities
of US$1,419,215,000. (Movie Gallery Bankruptcy News, Issue
No. 4; Bankruptcy Creditors' Service Inc.;
http://bankrupt.com/newsstand/or 215/945-7000)
MOVIE GALLERY: US Trustee Appoints Seven-Member Creditors Panel
---------------------------------------------------------------
W. Clarkson McDow, Jr., the U.S. Trustee for Region 4, appoints
seven members to the Official Committee of Unsecured Creditors
in the Chapter 11 cases of Movie Gallery, Inc., and its debtor-
affiliates.
The Creditors Committee members are:
(a) US Bank National Assoc. as Indentured Trustee
Attn: Laura L. Moran, VP
One Federal St., 3rd Floor
Boston, MA 02110
Tel: (617) 603-6429
Fax: (617) 603-6640
(b) Paramount Home Entertainment
Attn: Andi Marygold, SVP
555 Melrose Avenue
Bluhdorn #213
Hollywood, CA 90038
Tel: (323) 956-5489
Fax: (323) 862-1183
(c) The Inland Real Estate Group of Companies, Inc.
Attn: Craig B. Young, Esq.
Connolly, Bove, Lodge & Hutz, LLP
1875 Eye Street, Northwest 11th Floor
Washington, D.C. 20006
Tel: (202) 572-0313
Fax: (202) 293-6229
(d) Coca-Cola Enterprises Bottling Companies
Attn: William Kaye, Senior Bankruptcy Analyst
31 Rose Lane
East Rockaway, NY 11518
Tel: (516) 374-3705
Fax: (516) 569-6531
(e) Southern Development of Mississippi
Attn: Robert N. Graham, President
P.O. Box 1207
Purvis, MS 39475
Tel: (601)-794-2253
Fax: (601) 794-5468
(f) Twentieth Century Fox Home Entertainment
Attn: Al Leonard, Credit Manager
2121 Avenue of the Stars, Suite 2500
Los Angeles, CA 90067
Tel: (310) 369-7289
Fax: (310) 969-0545
(g) The Bank of New York Trust Company, N.A.
c/o The Bank of New York
Attn: Gary Bush, Vice President
101 Barclay Street
Floor 8 West
New York, NY 10286
Tel: (212) 815-2747
Fax: (732) 667-4734
Pursuant to Section 1103 of the Bankruptcy Code, the Creditors
Committee may:
-- consult with the Debtor concerning the administration of
the bankruptcy case;
-- investigate the acts, conduct, assets, liabilities, and
financial condition of the Debtors, the operation of the
Debtors' business and the desirability of the
continuance of the business, and any other matter
relevant to the case or to the formulation of a plan of
reorganization for the Debtors;
-- participate in the formulation of a plan, advise its
constituents regarding the Committee's determinations as
to any plan formulated, and collect and file with the
Court acceptances or rejections of the plan;
-- request the appointment of a trustee or examiner; and
-- perform other services as are in the interest of its
constituents.
The Creditors Committee may retain counsel, accountants, or
other agents, to represent or perform services for the group.
About Movie Gallery
Based in Dothan, Alabama, Movie Gallery Inc. --
http://www.moviegallery.com/-- is a home entertainment
specialty retailer. It operates over 4,600 stores in the United
States, Canada, and Mexico under the Movie Gallery, Hollywood
Entertainment, Game Crazy, and VHQ banners.
The company and its debtor-affiliates filed for Chapter 11
protection on Oct. 16, 2007 (Bankr. E.D. Va. Case Nos. 07-33849
to 07-33853. Anup Sathy, Esq., Marc J. Carmel, Esq., and
Richard M. Cieri, Esq., at Kirkland & Ellis LLP, represent the
Debtors. Michael A. Condyles, Esq., and Peter J. Barrett, Esq.,
at Kutak Rock LLP, serve as the Debtors' local counsel. The
Debtors' claims & balloting agent is Kutzman Carson Consultants
LLC.
When the Debtors' filed for protection from their creditors,
they listed total assets of US$891,993,000 and total liabilities
of US$1,419,215,000. (Movie Gallery Bankruptcy News, Issue
No. 4; Bankruptcy Creditors' Service Inc.;
http://bankrupt.com/newsstand/or 215/945-7000)
MOVIE GALLERY: Wants To Assume Great American Consulting Pact
-------------------------------------------------------------
The U.S. Bankruptcy Court for the Eastern District of Virginia
authorized Movie Gallery, Inc. and its debtor-affiliates to
assume the consulting agreement between the Debtors and Great
American Group, LLC. The agreement allows Great American to
continue providing the Debtors with its store closing services.
Prior to the Debtors' filing for bankruptcy, Movie Gallery US,
LLC and Hollywood Entertainment Corporation entered into a store
closing consulting agreement on Oct. 2, 2007, with Great
American. Under the agreement, Great American was retained as
an agent to conduct "store closing sales" at approximately 500
of the Debtors' retail locations throughout the United States.
Great American is currently in the process of conducting the
store closing sales.
The Debtors' believe Great American's efforts could potentially
result in the recognition of approximately US$18,000,000 in
value resulting from the sale of the merchandise.
All sales of merchandise will be made on behalf of the Debtors
and run through Debtors' POS system. Great American does not
have, nor will it have, any right, title or interest in the
merchandise. All sales of merchandise will be by cash, credit
card, gift card or check, and will be marked "final."
Great American will also:
a. recommend and implement advertising, promotion and sign
programs to sell effectively the merchandise during the
sales.
b. recommend and implement appropriate pricing, display and
discounting of Merchandise, as well as recommend
appropriate staffing levels of employees for the closing
stores.
c. recommend and implement the transfer and balancing of
inventory between the closing stores to maximize results
during the sales.
d. monitor the closing stores' performance and the physical
layout of the closing stores and recommend and assist in
the implementation of merchandising and visual
presentation recommendations.
e. assist with and direct sale of the fixtures and the
equipment located in the closing stores.
f. provide other related services deemed necessary or
prudent by the Debtors in their sole discretion and
agreed upon by Great American, under the circumstances
giving rise to the sales.
In consideration for services relating to the store closing
sales, Great American will be paid a base fee of US$1,950 per
Store, and performance-based incentive fee calculated as a
percentage of the net proceeds received from the sales. The
Incentive Fee would be payable as earned. Great American's
total fee for the base fee and the incentive fee will not exceed
US$1,500,000.00. The Incentive Fee will be calculated as:
Consultant's
Net Proceeds Incentive Fee
------------ --------------
Up to US$14,800,000 0%
From US$14,800,000 to 15,800,000 20%
From US$15,800,000 to 16,800,000 25%
From US$16,800,000 to 17,800,000 30%
The Debtors will be responsible for the payment of all
reasonable and necessary expenses incurred in conducting the
sales. The sales expenses include:
(a) payroll, benefits and incentive pay for all store
employees used in conducting the sales;
(b) signs, banners, advertising and all other promotional
costs;
(c) costs of consolidating Merchandise between the closing
stores;
(d) credit card fees, charge backs and discounts;
(e) per diem occupancy costs related to the closing stores;
and
(f) all costs of Great American's supervisors, including
fees, reasonable travel expenses and other out of pocket
expenses.
Great American will also sell closing store fixtures and
equipment for a commission of 25% of the proceeds from the sale
of the assets, plus reimbursement of its actual out-of-pocket
expenses incurred in connection with the sale. Great American
will leave the stores broom swept with any unsold fixtures moved
to a corner of the store. To the extent that any fixtures or
equipment cannot be sold, Great American will dispose of the
fixtures or equipment to allow for the Debtors' prompt exit from
the closing stores at the Debtors' discretion and cost.
Prior to commencement of the sales, the parties will agree on a
budget setting forth the sales expenses over which Great
American has control, and agree on other sales expenses, for
purposes of calculating the net proceeds. For further clarity,
any cost of goods related to revenue sharing agreements or
otherwise, as well as any store closing costs incurred after the
conclusion of the sales, will not be considered a sales expense.
About Movie Gallery
Based in Dothan, Alabama, Movie Gallery Inc. --
http://www.moviegallery.com/-- is a home entertainment
specialty retailer. It operates over 4,600 stores in the United
States, Canada, and Mexico under the Movie Gallery, Hollywood
Entertainment, Game Crazy, and VHQ banners.
The company and its debtor-affiliates filed for Chapter 11
protection on Oct. 16, 2007 (Bankr. E.D. Va. Case Nos. 07-33849
to 07-33853. Anup Sathy, Esq., Marc J. Carmel, Esq., and
Richard M. Cieri, Esq., at Kirkland & Ellis LLP, represent the
Debtors. Michael A. Condyles, Esq., and Peter J. Barrett, Esq.,
at Kutak Rock LLP, serve as the Debtors' local counsel. The
Debtors' claims & balloting agent is Kutzman Carson Consultants
LLC.
When the Debtors' filed for protection from their creditors,
they listed total assets of US$891,993,000 and total liabilities
of US$1,419,215,000. (Movie Gallery Bankruptcy News, Issue
No. 4; Bankruptcy Creditors' Service Inc.;
http://bankrupt.com/newsstand/or 215/945-7000)
SPANSION INC: Inks Pact with SMIC To Form MirrorBit(R) Products
---------------------------------------------------------------
Spansion Inc. has intensified its focus in the China market by
partnering with foundry leader, Semiconductor Manufacturing
International Corporation. Spansion will transfer its 65nm
MirrorBit(R) technology to SMIC for foundry services on 300mm
wafers in China. SMIC and Spansion have also signed a
preliminary memorandum of understanding which would allow SMIC
to enter selected segments of the Flash memory market with a
license to manufacture and sell 90nm and 65nm and potentially
future Spansion MirrorBit(R) Quad products for the China content
delivery market.
Spansion has been investing in China for over 10 years and is
now a leading Flash memory provider to the top consumer
electronics and wireless OEMs in the region. The investment
started with the establishment by AMD, Spansion's former parent
company, of the Suzhou final manufacturing facility - now one of
the world's largest producers of memory Multi-chip Packages.
Since then, Spansion has added local design centers in Suzhou
and Beijing, and sales and marketing offices in Beijing,
Shanghai and Shenzhen. Through the foundry agreement with SMIC,
Spansion will have wafer-manufacturing capabilities in China.
"By partnering with SMIC, a leading foundry in China, we can
better serve our customers, with products made in China for the
China market," said Bertrand Cambou, president and CEO of
Spansion Inc. "As a result of our team's success, we have the
opportunity to take our business to the next level and expand
opportunities in this exploding region."
As the market leader in China, SMIC provides a complete
integrated circuit foundry solution to help its customers
fulfill their China Strategy. SMIC has diversified its memory
portfolio to include NAND Flash, NOR Flash, and Specialty DRAM
as part of its growth strategy to enter potential market
segments. SMIC has also announced development of 90nm 2Gb
NAND Flash and 2Gb- TSOP products based on Saifun 2-bit-per-cell
as well as the Quad NROM four- bit-per-cell technology,
scheduled to enter commercial production as early as the fourth
quarter 2007.
"As Spansion has made strategic plans for the China market, SMIC
has made great strides anticipating the growing Flash memory
market. Our partnership with the NOR Flash memory technology
leader fortifies these strategic synergies," said Dr. Richard
Chang, president and CEO of SMIC. "With the booming China
consumer electronics market comes the opportunity to create and
nurture the growth of various Flash memory services and markets.
We look forward to collaborating with Spansion to manufacture
its leading-edge MirrorBit technology and develop Flash-based
content delivery applications."
Spansion In China
Spansion has more than 1,300 employees in Greater China who
continue to build momentum with the top OEMs, as demonstrated by
the awards Spansion has received. For the third consecutive
year, Lenovo awarded Spansion Best Supplier for 2006 and
Inventec, a leading ODM/OEM awarded Spansion Best Partner
earlier this year. Spansion's other leading partners in the
Greater China region include ARCA Technology Corporation and
MediaTek, Inc., one of the world's top ten fabless semiconductor
companies for wireless communications and digital media
solutions. Spansion has a final manufacturing facility in
Suzhou, one of the world's largest memory producers of Multi-
chip Packages (MCPs), design centers in Suzhou and Beijing and
sales and marketing offices in Beijing, Shanghai and Shenzhen.
About SMIC
Headquartered in Shanghai, China, Semiconductor Manufacturing
International Corporation (NYSE: SMI; SEHK: 0981.HK) --
http://www.smics.com/-- is one of the leading semiconductor
foundries in the world and the largest and most advanced foundry
in Mainland China, providing integrated circuit (IC)
manufacturing service at 0.35um to 90nm and finer line
technologies. SMIC has a 300mm wafer fabrication facility (fab)
under pilot production and three 200mm wafer fabs in its
Shanghai mega-fab, two 300mm wafer fabs in its Beijing mega-fab,
a 200mm wafer fab in Tianjin, and an in-house assembly and
testing facility in Chengdu. SMIC also has customer service and
marketing offices in the U.S., Europe, and Japan, and a
representative office in Hong Kong. In addition, SMIC manages
and operates a 200mm wafer fab in Chengdu owned by Cension
Semiconductor Manufacturing Corporation and a 300mm wafer fab
under construction in Wuhan owned by Wuhan Xinxin Semiconductor
Manufacturing Corporation.
About Spansion
Spansion Inc. -- http://www.spansion.com/-- (Nasdaq: SPSN),
headquartered in Sunnyvale, California, and parent of Spansion
LLC, is a leading provider of flash memory semiconductors that's
after its initial public offering in December 2005, is owned
approximately 38% by Advanced Micro Devices and 25% by Fujitsu
Limited.
The company has European operations in France, Asia-Pacific
facilities in Japan, China, Malaysia and Thailand, as well as
sales offices in Latin American countries including Brazil and
Mexico.
* * *
As reported in the Troubled Company Reporter-Latin America on
May 18, 2007, Fitch Ratings has assigned a rating of 'B+/RR2' to
Spansion Inc.'s US$550 million senior secured floating- rate
notes due 2013 issued pursuant to Rule 144A, the net proceeds
from which will be used to repay the outstanding obligations
under the company's US$500 million senior secured term loan
facility due 2012. The remainder of net proceeds will be used
for general corporate purposes, including capital expenditures
and working capital.
Fitch has withdrawn the 'BB-/RR1' rating of the approximately
US$500 million senior secured term loan facility in anticipation
of Spansion's repayment of this tranche of debt. Additionally,
Fitch has downgraded the US$175 million senior secured revolving
credit facility due 2010 to 'B+/RR2' from 'BB-/RR1.' In
conjunction with the refinancing, Fitch has affirmed these
ratings:
-- Issuer Default Rating of 'B-';
-- US$250 million of 11.75% senior unsecured notes due 2016
at 'CCC+/RR5'; and
-- US$207 million of 2.25% convertible senior subordinated
debentures due 2016 at 'CCC/RR6'.
Fitch said the rating outlook remains negative. Approximately
US$1.1 billion of total debt is affected by Fitch's actions.
SPANSION INC: Names Gary Wang as President for China Unit
---------------------------------------------------------
Spansion Inc. has appointed Gary Wang, previously corporate vice
president of Asia Pacific Sales and Marketing, to the newly
created position of president, Spansion Greater China.
Reporting directly to the Office of the CEO, Mr. Wang will serve
as a liaison with strategic customers, government officials, and
alliance partners and ensure Spansion's business strategies are
aligned to meet the requirements in China.
"Gary and his team have done an outstanding job in increasing
our revenue and share in the region," said Bertrand Cambou,
president and CEO of Spansion Inc. "We now look forward to
Gary's leadership in expanding our strategic relationships to
enable Spansion to capitalize on new market opportunities in the
rapidly growing China consumer electronics and wireless
markets."
Spansion is one of the leading Flash memory solution providers,
working with the top consumer electronics OEMs and wireless
handset manufacturers in the Greater China region. Spansion has
over 1,300 employees located in China with a final manufacturing
facility in Suzhou, design centers in Suzhou and Beijing and
sales and marketing offices in Beijing, Shanghai and Shenzhen.
"I look forward to further collaborating with our customers,
partners and the government in the region," said Mr. Wang.
"China is revving up for an electronics revolution that will
drive a new wave of growth in Flash memory and I am confident
that our relationships in the region will create new innovations
to meet demand."
About Spansion
Spansion Inc. -- http://www.spansion.com/-- (Nasdaq: SPSN),
headquartered in Sunnyvale, California, and parent of Spansion
LLC, is a leading provider of flash memory semiconductors that's
after its initial public offering in December 2005, is owned
approximately 38% by Advanced Micro Devices and 25% by Fujitsu
Limited.
The company has European operations in France, Asia-Pacific
facilities in Japan, China, Malaysia and Thailand, as well as
sales offices in Latin American countries including Brazil and
Mexico.
* * *
As reported in the Troubled Company Reporter-Latin America on
May 18, 2007, Fitch Ratings has assigned a rating of 'B+/RR2' to
Spansion Inc.'s US$550 million senior secured floating- rate
notes due 2013 issued pursuant to Rule 144A, the net proceeds
from which will be used to repay the outstanding obligations
under the company's US$500 million senior secured term loan
facility due 2012. The remainder of net proceeds will be used
for general corporate purposes, including capital expenditures
and working capital.
Fitch has withdrawn the 'BB-/RR1' rating of the approximately
US$500 million senior secured term loan facility in anticipation
of Spansion's repayment of this tranche of debt. Additionally,
Fitch has downgraded the US$175 million senior secured revolving
credit facility due 2010 to 'B+/RR2' from 'BB-/RR1.' In
conjunction with the refinancing, Fitch has affirmed these
ratings:
-- Issuer Default Rating of 'B-';
-- US$250 million of 11.75% senior unsecured notes due 2016
at 'CCC+/RR5'; and
-- US$207 million of 2.25% convertible senior subordinated
debentures due 2016 at 'CCC/RR6'.
Fitch said the rating outlook remains negative. Approximately
US$1.1 billion of total debt is affected by Fitch's actions.
VOLKSWAGEN AG: To Restructure Auto Parts Venture in China
---------------------------------------------------------
Volkswagen AG will begin a restructuring program to strengthen
its management over the auto parts suppliers in China, China
Knowledge reports.
The restructuring plan, which is called "Qualification Supplier
China Program", will help Volkswagen to enhance its control on
the product quality and to optimize the costs when expanding its
sales scale in China, a statement from the German firm said.
Volkswagen will join hands with a third party to carry out
supervision and training over the domestic auto parts suppliers,
the news agency says. Meanwhile, the domestic auto parts
suppliers will be asked to provide future development plans and
find the defects in aspects of the production, technology,
management and workflow.
More and more Chinese suppliers will be included in Volkswagen's
global sourcing system.
Volkswagen set a foot in China in 1985. Currently it has
already had 300 auto parts suppliers in China. The value of its
sourcing from China amounted to be US$1 billion in 2006,
supplying its Chinese venture with Shanghai Automotive Industry
Corp and First Automotive Works Group. The company has adjusted
its sales target upward by 26% to 900,000 in China this year.
About Volkswagen Group
Headquartered in Wolfsburg, Germany, the Volkswagen Group --
http://www.volkswagen.de/-- is one of the world's leading
automobile manufacturers and the largest carmaker in Europe.
With 47 production plants in eleven European countries and
further seven countries in the Americas, like Mexico, Africa,
and Asia. Volkswagen has more than 343,000 employees producing
over 21,500 vehicles or are involved in vehicle- related
services on every working day.
* * *
Volkswagen has been carrying out measures to cut costs and raise
profits, which could affect up to 30,000 jobs. The potential
job cuts represent about a third of the carmaker's workforce and
three times higher than initial estimates made by former Chief
Executive Bernd Pischetsrieder and former Volkswagen brand head,
Wolfgang Bernhard.
In November 2006, Volkswagen maintained its 2005 earnings
guidance amid rumors it may lower targets. The company predicts
a year-on-year improvement in both operating profit after
special items and profit before tax this year. Rumors flew that
the company would slash full-year earnings forecast due to
higher restructuring costs. The company said the impact of its
workforce reduction measures, which will be charged as special
items in the fourth quarter, will be lower than last year's.
The company also admitted there were no significant improvements
in the economic environment in the first nine months of 2005,
and the overall situation in the important automotive markets
remained difficult. It also expected tougher competition in the
Chinese and U.S. markets, and the rise in fuel prices to
influence consumer confidence.
=================
N I C A R A G U A
=================
XEROX CORP: Denies Speculations on Lexmark International Bid
------------------------------------------------------------
Xerox Corp., along with Dell Inc., is said to be eyeing Lexmark
International Inc. However, Xerox CEO Anne Mulcahy denies the
speculation, stating that Lexmark will not enhance shareholder
value. Rather, Xerox aims to acquire software, distribution and
services.
Analysts say that Lexmark is likely to consider a leverage
buyout after the company disclosed missed second quarter
revenues and income goals, and deferred third quarter results.
In addition, shares dropped 32% over the past year.
Eastman Kodak Company, which is believed to be a Lexmark suitor,
doens't have plans to acquire a company.
Headquartered in Stamford, Connecticut, Xerox Corp. --
http://www.xerox.com/-- develops, manufactures, markets,
services and finances a range of document equipment, software,
solutions and services. Xerox operates in over 160 countries
worldwide and distributes products in the Western Hemisphere
through divisions, wholly owned subsidiaries and third-party
distributors. The company maintains operations in France,
Japan, Italy, Nicaragua, among others.
* * *
Standard & Poor's Ratings Services revised its rating outlook on
Xerox Corp. to positive from stable on May 2007. Ratings on the
company, including the 'BB+' long-term and 'B-1' short-term
corporate credit ratings, were affirmed. The ratings still hold
to date.
=======
P E R U
=======
FREEPORT MCMORAN: Deutsche Bank Reaffirms Buy Rating on Shares
--------------------------------------------------------------
Deutsche Bank has reaffirmed its "buy" rating on US miner
Freeport McMoRan Copper & Gold's shares, Business News Americas
reports.
According to BNamericas, Deutsche Bank raised its target price
for Freeport McMoRan shares by 32% to US$145 from US$110.
Deutsche Bank said in a statement that a positive outlook for
copper prices and Freeport McMoRan's good leverage support the
recommendation and target price.
Freeport McMoRan has sturdy position. However, the firm could
still face the possibility of lower-than-expected copper prices
and production cost pressures, BNamericas states, citing
Deutsche Bank.
Freeport-McMoRan Copper & Gold Inc. (NYSE: FCX) --
http://www.fcx.com/-- is an international mining industry
leader based in North America with large, long-lived,
geographically diverse assets and significant proven and
probable reserves of copper, gold and molybdenum. Freeport-
McMoRan has one of the most dynamic portfolios of operating,
expansion and growth projects in the copper mining industry.
The Grasberg mine in Indonesia, the world's largest copper and
gold mine in terms of reserves, is the company's key asset.
Freeport-McMoRan also operates significant mining operations in
North and South America and is developing the world-class Tenke
Fungurume project in the Democratic Republic of Congo.
The completion of Freeport-McMoran's acquisition further expands
the company's global operations. The former Phelps Dodge Corp.
has mining operations in Chile, Peru, Colombia, Venezuela and
Ecuador, among others.
* * *
As reported in the Troubled Company Reporter-Asia Pacific
reported on July 16, 2007, that Fitch Ratings upgrades these
ratings of Freeport-McMoRan Copper & Gold Inc.
FCX
-- US$1 billion Secured Bank Revolver to 'BB+' from 'BB';
-- 6.875% secured notes due 2014 to 'BB+' from 'BB';
-- Unsecured notes due 2015 and 2017 to 'BB' from 'BB-';
-- 7% convertible notes due 2011 to 'BB' from 'BB-'.
In addition, Fitch affirms these ratings on FCX:
-- Issuer Default Rating at 'BB';
-- US$500 million PT Freeport Indonesia/FCX Secured Bank
Revolver at 'BBB-';
-- Convertible Preferred Stock at 'B+'.
Fitch also assigns a rating of 'BB+' to FCX's new US$2.45
billion five-year term loan A. Proceeds of the loan were used
to repay the US$2.45 billion remaining under the term loan due
March 2014. The term loan amortizes at 10% per annum with the
remainder due at maturity.
Fitch said the rating outlook remains positive.
On March 29, 2007, Moody's Investors Service upgraded Freeport-
McMoRan Copper & Gold Inc.'s or Freeport's corporate family
rating to Ba2 from Ba3.
As reported in the Troubled Company Reporter on March 27, 2007,
Standard & Poor's Ratings Services assigned its 'B' preferred
stock rating to the proposed US$2.5 billion US6.75% mandatory
convertible preferred stock offering of Freeport-McMoRan Copper
& Gold Inc.
=====================
P U E R T O R I C O
=====================
ADELPHIA COMMUNICATIONS: ACOM Debtors File Objection to Claims
--------------------------------------------------------------
Stephen V. Saia, Esq., in Pembroke, Massachusetts, argues that
contrary to the contentions of Adelphia Communications Corp.,
Claim Nos. 21, 13109, 13110, 13111, and 13112 do not interfere
with the timely distribution of the Debtors' estate.
Gilbert Dibbern maintains that the Debtors sought to
significantly reduce his represented class' estimated damages
by, among other things:
(1) limiting the number of affected subscribers to only
subscribers of Harron Communications, Corp., in a
particular geographic area within the Commonwealth of
Massachusetts, thereby ignoring millions of affected
subscribers;
(2) shortening the time frame within which the Debtors failed
to properly notify subscribers that they did not need to
rent a box to view non-scrambled programming on their
cable-ready TVs or VCRs; and
(3) overlooking their violation of the negative option billing
requirement under Section 543(f) of the Telegraphs,
Telephones, and Radiotelegraphs Code.
Mr. Saia points out that the salient issue with respect to the
Dibbern Class Claims is not complex. That issue pertains to the
date when ACOM integrated the Harron subscribers onto its
existing system and ceased scrambling its expanded basic or
basic plus service.
Mr. Dibbern has not failed to pursue class certification for his
represented class, Mr. Saia maintains. The purpose of the
Dibbern Class Claims, he explains, is to make sure that there
are funds available to provide a remedy in connection with the
class action Mr. Dibbern initiated against certain of the ACOM
Debtors in August 2002.
Mr. Saia contends that the Dibbern Class Claims can be
maintained as a Class Action and that the Dibbern Class
satisfies the requirements Rule 23(a) of the Federal Rules of
Civil Procedure.
Accordingly, Mr. Dibbern asks the Court to:
(a) overrule the Debtors' claim objection;
(b) certify the Dibbern Class; and
(c) allow the Dibbern Class Claims.
The Dibbern Class Action and the Dibbern Class Claims are the
most efficient methods to provide relief for all class members,
Ms. Saia avers. "This is a straight forward case where the
proof as to the class is easily accomplished by determining when
[the] Debtor ceased scrambling its expanded basic service, and
mathematically determining thedamages related to the unnecessary
rental of converter boxes."
Based in Coudersport, Pennsylvania, Adelphia Communications
Corporation (OTC: ADELQ) -- http://www.adelphia.com/-- is a
cable television company. Adelphia serves customers in 30
states and Puerto Rico, and offers analog and digital video
services, Internet access and other advanced services over its
broadband networks. The company and its more than 200
affiliates filed for Chapter 11 protection on June 25, 2002
(Bankr. S.D.N.Y. Lead Case No. 02-41729). Willkie Farr &
Gallagher represents the Debtors in their restructuring efforts.
PricewaterhouseCoopers serves as the Debtors' financial advisor.
Kasowitz, Benson, Torres & Friedman, LLP, and Klee, Tuchin,
Bogdanoff & Stern LLP represent the Official Committee of
Unsecured Creditors.
On Jan. 5, 2007, the Court entered a written confirmation order
for Adelphia Communication's Modified 5th Amended Chapter 11
Plan. The Plan became effective on Feb. 13, 2007.
Century Communications Corporation, Adelphia's wholly owned
indirect subsidiary, filed for Chapter 11 protection on
June 10, 2002. Century's case has been jointly administered to
Adelphia Communications proceedings. Century operates cable
television services in Colorado, California and Puerto Rico.
Lawyers at Willkie, Farr & Gallagher represent Century.
Century/ML Cable Venture, a New York joint venture of Century
Communications and ML Media Partners, LP, filed for Chapter 11
protection on Sept. 30, 2002. Century/ML is a holder of the
cable franchise in Leviton, Puerto Rico. Lawyers at Willkie,
Farr & Gallagher represent Century/ML. On Sept. 7, 2005, the
Court confirmed Century/ML's Plan.
Devon Mobile Communications, L.P., which is 49% owned by
Adelphia Communications, filed for Chapter 11 protection on
Aug. 19, 2002 (Bankr. D. Del. Case No. 02-12431). Saul Ewing,
LLP, is represents Devon.
Adelphia Business Solutions, Inc., and its debtor-affiliates
filed for Chapter 11 protection petitions on March 27, 2002.
These debtors' restructurings are jointly administered under
case number 02-11388 and these debtors are represented by
lawyers at Weil, Gotshal & Manges. Adelphia Business is a 2001
spin-out from Adelphia Communications Corporation. In March
2003, ABIZ began doing business as TelCove. The Court confirmed
their 3rd Amended Plan on Dec. 19, 2003 and Adelphia Business
emerged from chapter 11 on April 7, 2004.
Adelphia Cablevision Associates of Radnor, L.P., and 20 of its
affiliates, collectively known as Rigas Manged Entities, are
entities that were previously held or controlled by members of
the Rigas family. In March 2006, the rights and titles to these
entities were transferred to certain subsidiaries of Adelphia
Cablevision, LLC. The RME Debtors filed for chapter 11
protection on March 31, 2006 (Bankr. S.D.N.Y. Case Nos. 06-10622
through 06-10642). Their cases are jointly administered under
Adelphia Communications and its debtor-affiliates chapter 11
cases. (Adelphia Bankruptcy News, Issue Number 177; Creditors'
Service Inc., http://bankrupt.com/newsstand/or 215/945-7000)
ADELPHIA COMMUNICATIONS: Trust Counsel Seeks Recovery Payments
--------------------------------------------------------------
The counsel of Adelphia Recovery Trust seeks recovery payments
from ADC Telecommunications, Inc. for goods sold by the Company
to Adelphia Communications Corp. subsidiaries.
The Company, in July 2007, received a letter from the counsel of
the Trust.
The Trust was formed to pursue certain purported litigation
claims against various third parties, and to prosecute such
purported claims transferred to the Trust pursuant to Adelphia's
plan of reorganization for the benefit of holders of Trust
interests.
The letter indicates that the Trust seeks to recover payments of
about US$27.2 million that were allegedly made between
June 25, 2001, and June 25, 2002, for goods sold by the Company
to Adelphia operating subsidiaries prior to the Adelphia
bankruptcy.
A complaint has not yet been filed in this matter.
In its latest 10-Q Form filed with Securities and Exchange
Commission, the Company said that the Trust is seeking recovery
of these payments because the goods were sold to the Adelphia
operating subsidiaries but paid for by Adelphia or one of its
non-operating subsidiaries.
ADC Telecommunications, Inc. provides communications network
infrastructure solutions and services worldwide. The Company is
headquartered in Eden Prairie, Minn.
Adelphia Business Solutions, Inc., and its debtor-affiliates
filed for Chapter 11 protection petitions on March 27, 2002.
These debtors' restructurings are jointly administered under
case number 02-11388 and these debtors are represented by
lawyers at Weil, Gotshal & Manges. Adelphia Business is a 2001
spin-out from Adelphia Communications Corporation. In March
2003, ABIZ began doing business as TelCove. The Court confirmed
their 3rd Amended Plan on Dec. 19, 2003 and Adelphia Business
emerged from chapter 11 on April 7, 2004.
Adelphia Cablevision Associates of Radnor, L.P., and 20 of its
affiliates, collectively known as Rigas Manged Entities, are
entities that were previously held or controlled by members of
the Rigas family. In March 2006, the rights and titles to these
entities were transferred to certain subsidiaries of Adelphia
Cablevision, LLC. The RME Debtors filed for chapter 11
protection on March 31, 2006 (Bankr. S.D.N.Y. Case Nos. 06-10622
through 06-10642). Their cases are jointly administered under
Adelphia Communications and its debtor-affiliates chapter 11
cases. (Adelphia Bankruptcy News, Issue Number 177; Creditors'
Service Inc., http://bankrupt.com/newsstand/or 215/945-7000)
CHATTEM INC: Dec. Trial Set for Dexatrim Liability Suit in CA
-------------------------------------------------------------
The Dexatrim with ephedrine products liability lawsuit pending
against the Company is set for trial in Santa Monica, California
on Dec. 3, 2007.
That lawsuit is styled Grace Gunduz v. Herbalife International
of America, Inc., et al., Superior Court of the State of
California, County of Los Angeles.
In the case, the plaintiff seeks compensation for primary
pulmonary hypertension, a condition she allegedly developed
after ingesting ephedrine-containing products manufactured by
Herbalife International of America, Inc., EAS and the Company.
The Company did not provide further details on this suit in its
latest quarterly report filed on Form 10-Q with the U.S.
Securities and Exchange Commission.
Chattanooga, Tenn.-based Chattem Inc. manufactures and markets
branded consumer products, including over-the-counter healthcare
products and toiletries and skin care products. Its products
include Gold Bond medicated powder, Icy Hot topical analgesic,
Dexatrim appetite suppressant, and Bullfrog sunblock. Chattem
has operations in the U.K., Australia, and Puerto Rico.
* * *
Chattem Inc.'s 7% Exchange Senior Subordinated Notes due 2014
carry Moody's Investors Service's 'B2' rating and Standard &
Poor's 'B' rating.
CENTENNIAL COMM: Lehman Keeps Overweight Rating on Firm's Shares
----------------------------------------------------------------
Lehman Brothers analyst Brett Feldman has kept his "overweight"
rating on Centennial Communications Corporation's shares,
Newratings.com reports.
According to Newratings.com, the target price for Centennial
Communications' shares was also increased to US$15 from US$12.
Mr. Feldman said in a research note that Centennial
Communications had strong earnings for the fiscal first quarter
2008.
Mr. Feldman told Newratings.com that Centennial Communications'
US average revenues per user could continue to increase.
Average revenues per users at Centennial Communications' PR
wireless unit "is trending significantly ahead of the estimates,
while churn is at all-time lows, and EBITDA growth at the unit
is expected to accelerate from -7% in fiscal first quarter 2008
to +20% in fiscal second half of 2008, Newratings.com relates,
citing Lehman Brothers.
The earnings per share estimate for next year was decreased to
US$0.41 from US$0.46, Newratings.com states.
Headquartered in Wall, New Jersey, Centennial Communications
Corp. (NASDAQ: CYCL) -- http://www.centennialwireless.com/--
provides regional wireless and integrated communications
services in the United States and the Puerto Rico with
approximately 1.1 million wireless subscribers and 387,500
access lines and equivalents. The US business owns and operates
wireless networks in the Midwest and Southeast covering parts of
six states. Centennial's Puerto Rico business owns and operates
wireless networks in Puerto Rico and the U.S. Virgin Islands and
provides facilities-based integrated voice, data and Internet
solutions. Welsh, Carson, Anderson & Stowe and an affiliate of
the Blackstone Group are controlling shareholders of Centennial.
* * *
As reported in the Troubled Company Reporter-Latin America on
July 13, 2007, Standard & Poor's Ratings Services raised its
ratings on Wall, New Jersey-based Centennial Communications
Corp., including the corporate credit rating, which was raised
to 'B' from 'B-'.
At Feb. 28, 2007, the company's balance sheet showed
USUS$1,393 million in total assets, USUS$2,482.8 million in
total liabilities, and USUS$3.9 million in minority interest in
subsidiaries, resulting in a USUS$1,093.7 million total
stockholders' deficit.
GLOBAL HOME: Court Approves Expansion of PwC's Tax Services
-----------------------------------------------------------
The Honorable Kevin Gross of the U.S. Bankruptcy Court for the
District of Delaware gave Global Home Products LLC and its
debtor-affiliates, permission to expand PricewaterhouseCoopers
LLP's retention as tax services provider.
PwC's expanded scope of engagement includes:
a) preparation of the Debtors' U.S. income tax returns for
the fiscal year ending March 31, 2007;
b) provide daily tax functions including responding to tax
notices, calculating tax depreciation, computing
reconciliation for management, preparing foreign tax
returns; and
c) provide other tax-related consulting services as may be
requested by the Debtors.
The Debtors discloses that it will pay PwC a fixed fee of
US$155,400 for completion of the tax returns. For any services
in addition to preparation of the tax returns, the firm's
professionals rates are:
Designation Hourly Rate
----------- -----------
National office Partner/Director US$550
Local Office Partner US$525
Director US$400
Manager US$325
Senior US$225
Staff US$175
The Debtors assures the Court that the firm holds no interest
adverse to the Debtors estates and is disinterested as the term
is defined in Section 101(14) of the Bankruptcy Code.
Previous Employment
As reported in the Troubled Company Reporter on Oct. 24, 2006,
the Court gave approval for PwC top provide tax services for the
Debtors.
The firm will provide an Ohio investment tax credit analysis in
two phases:
a) phase one: consist of high level review and
calculation for additions during Jan. 1, 2005 through
Dec. 31, 2005.
b) phase two consist of:
-- review of based period;
-- detailed calculation of credit;
-- preparation of credit attachment for the 2006 Ohio
franchise tax report;
-- filing of notice of intent to claim the
manufacturer's credit for Jan. 1, 2005, through
Dec. 31, 2005, if necessary; and
-- potential plan tour for determination of qualifying
assets.
The firm will provide Ohio personal property tax return
services, including, but not limited to: prepare and sign as
preparer of the 2006 Ohio county return of taxable business
property for Anchor Hocking Consumer Glass Operating Company
LLC, Anchor Hocking Consumer Glass Corporation, Mirro Operating
Company LLC and GHP Operating Company LLC.
The firm will provide tax services, including, but not limited
to:
a) prepare and sign as preparer of the U.S. partnership
income tax return, Form 1065, for the Debtors for the
tax year starting April 1, 2005, through March 31, 2006;
b) prepare and sign as preparer of required federal and
state income tax returns for April 1, 2005, through
March 31, 2006;
c) prepare estimated tax payments and extensions due on or
after the signing of the April 25 engagement letter in
connection with the tax returns; and
d) provide special tax services related to the preparation
of the tax returns, including but not limited to, fixed
assets depreciation, intangible asset amortization,
accounting for differences in tax and audit year end,
and state apportionment analysis.
In addition, the Debtors tells the Court that, from time to
time, it may ask the firm to perform tax advisory services
outside of the scope mentioned.
About Global Home
Headquartered in Westerville, Ohio, Global Home Products LLC
-- http://www.anchorhocking.com/and --
http://www.burnesgroup.com/-- sells houseware and home products
and manufactures high quality glass products for consumers and
the food services industry. The company also designs and
markets photo frames, photo albums and related home decor
products. The company and 16 of its affiliates, including
Burnes Puerto Rico, Inc., and Mirro Puerto Rico, Inc., filed for
Chapter 11 protection on April 10, 2006 (Bankr. D. Del. Case No.
Lead 06-10340).
Laura Davis Jones, Esq., David Bertenthal, Esq., Bruce Grohsgal,
Esq., and Joshua Fried, Esq, at Pachulski Stang Ziehl & Jones
LLP, represent the Debtors. Attorneys at Dinsmore & Shohl, LLP,
and Frost Brown Todd LCC are the Debtors' special counsel. Epiq
Bankruptcy Solutions, LLC acts as the Debtors' claims agent.
Ronald F. Stengel, Conway Del Genio Gries & Co., LLC, is the
Debtors' chief restructuring officer. Plante & Moran is the
Debtors' 401(k) plan auditors. PricewaterhouseCoopers LLP and
Deloitte Tax LLP provide tax services. Houlihan Lokey Howard &
Zukin Capital is Debtors' the investment bankers while Johnson
Associates Inc. is the special compensation advisor
Sharon Levine, Esq., and Bruce Buechler, Esq., at Lowenstein
Sandler PC; and David M. Fournier, Esq., at Pepper Hamilton LLP,
represent the Official Committee of Unsecured Creditors.
Attorneys at Basham, Ringer y Correa, SC is the Committee's
special counsel. Huron Consulting Services LLC acts as the
Committee's financial advisors.
Jesse H. Austin, III, Esq., at Paul, Hastings, Janofsky & Walker
LLP, and Robert J. Dehney, Esq., at Morris, Nichols, Arsht &
Tunnell LLP, represent Medeleine LLC. Global Home Products
Investors LLC, Cerberus Partners, LP, and Cerberus Capital
Management, LP, is represented in these bankruptcy proceedings
by Lawrence V. Gelber, Esq., and Sophie S. Kim, Esq., at Schulte
Roth & Zabel LLP; and Adam G. Landis, Esq., and Kerri Mumford,
Esq., at Landis Rath & Cobb LLP.
ROYAL CARIBBEAN: Earns US$395 Million in Quarter Ended Sept. 30
---------------------------------------------------------------
Royal Caribbean Cruises Ltd. disclosed Monday results for its
third quarter ended Sept. 30, 2007.
The company reported net income of US$395.0 million for the
third quarter of 2007, compared to net income of US$345.4
million in 2006. These results were better than expected mainly
due to stronger late bookings driving better yields. Revenues
for the third quarter 2007 increased to US$2.0 billion from
revenues of US$1.6 billion in the third quarter 2006.
"It was a very encouraging finish for the quarter and augurs
well for upcoming periods," said Richard Fain, chairman and
chief executive officer. "It is very satisfying that, despite
higher fuel prices and other challenges, we produced record
results."
The company expects to have a 12.4% increase in capacity in
2007, driven by Pullmantur, the April delivery of Liberty of the
Seas, and a full year of Freedom of the Seas.
"Building on a solid third quarter, we are encouraged by the
strength of our late-season European itineraries, and the
continuing recovery in the Caribbean pricing environment," Fain
said.
As of Sept. 30, 2007, liquidity was US$1.6 billion, comprising
US$400.0 million in cash and cash equivalents and US$1.2 billion
in available credit on the company's unsecured revolving credit
facility.
At Sept. 30, 2007, the company's consolidated balance sheet
showed US$15.16 billion in total assets, US$8.51 billion in
total liabilities, and US$6.65 billion in total shareholders'
equity.
The company's consolidated balance sheet at Sept. 30, 2007, also
showed strained liquidity with US$1.06 billion in total current
assets available to pay US$2.57 billion in total current
liabilities.
About Royal Caribbean
Headquartered in Miami, Royal Caribbean Cruises Ltd. (NYSE: RCL)
-- http://www.royalcaribbean.com/-- is a global cruise vacation
company that operates Royal Caribbean International, Celebrity
Cruises and Pullmantur Cruises, Azamara Cruises and CDF
Croisieres de France. The company has a combined total of 35
ships in service and seven under construction. It also offers
unique land-tour vacations in Alaska, Asia, Australia, Canada,
Europe, Latin America and New Zealand. The company has
operations in Puerto Rico.
* * *
Moody's still carries Royal Caribbean Cruises Ltd.'s 'Ba1' long
term corporate family rating last placed on Feb. 22, 2005.
Moody's said the outlook is stable.
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V E N E Z U E L A
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SHAW GROUP: Appeals IRS Adjustments for 2002-2003 Tax Returns
-------------------------------------------------------------
The Shaw Group, Inc.'s appeal from the Internal Revenue
Service's proposed adjustments to the amounts reflected by the
Company on its tax returns for the fiscal years ending
Aug. 31, 2002, and Aug. 31, 2003.
In connection with the regular examination of the Company's tax
returns by the IRS for the fiscal years ending Aug. 31, 2002,
and Aug. 31, 2003, the IRS formally assessed in April 2007
certain adjustments to the amounts reflected by the Company on
those returns.
The Company does not agree with those adjustments and has filed
a timely appeal in June 2007.
The items primarily relate to the sourcing of income relating to
foreign procurement of one of the Company's overseas entities,
and the extraterritorial income exclusion.
The outcome of the IRS appeal is uncertain at this time;
however, should the IRS prevail in its position, the Company's
federal income tax due would increase by US$37.2 million, plus
interest.
The ultimate amount of cash taxes paid would be reduced by the
utilization of net operating loss carryforwards available.
The Company has approximately US$134.2 million of federal NOLs
as of May 31, 2007. In addition, the company has accrued
additional expense related to foreign tax matters pertaining to
basis adjustments, until such matters are filed and settled.
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.
SHAW GROUP: Stone Acquisition-Related Appeal Still Pending
----------------------------------------------------------
The Shaw Group, Inc.'s appeal from the judgment rendered by the
U.S. District Court in Delaware in favor of Saudi American Bank
in the dispute stemming from the company's acquisition of Stone
& Webster, Inc. in July 2000 remains pending.
In 2005, the District Court rendered a judgment against the
Company and in favor of Saudi American Bank in the amount of
US$6.7 million. Saudi American Bank claimed that as part of the
Company's acquisition of Boston-based Stone & Webster, it had
assumed the estate company's liability under a loan agreement
and guarantee.
The Company has filed a notice of appeal, and is seeking to have
the judgment overturned.
Saudi American Bank has sought interest and attorneys' fees,
bringing its total claim to US$11.4 million plus legal interest
while the appeal is pending.
The Company may also incur additional attorneys' fees for the
appeal, although it expects to prevail on appeal.
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.
SHAW GROUP: Continues Review of Accounting for Acquisitions
-----------------------------------------------------------
The Shaw Group, Inc., will continue to conduct a detailed review
of its accounting for acquisitions in relation with the U.S.
Securities and Exchange Commission's inquiry into the Company's
financial statements.
On June 1, 2004, the Company was notified by the Staff of the
SEC that the Staff is conducting an informal inquiry relating to
its financial statements. The SEC has not advised the company
as to either the reason for the inquiry or its precise scope.
However, the initial requests for information the Company
received appear to primarily relate to the purchase method of
accounting for various acquisitions.
The Company has cooperated with the SEC during the course of
this inquiry, including providing documents and responding to
requests for voluntary production, as well as conducting a
detailed review of its accounting for acquisitions.
Subsequent to an internal review which led to the restatement of
the Company's financial statements for the second quarter of
2006, as reflected in its Current Report on Form 8-K filed on
July 10, 2006, the SEC also requested information related to the
restatement. This included information regarding the clerical
error in the computation of the amount of revenue recognized on
a construction contract and the misapplication of GAAP in the
Company's accounting for a minority interest in a joint venture.
The Company provided the information requested.
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.
SILGAN HOLDINGS: Moody's Affirms Ba2 Ratings
--------------------------------------------
Moody's Investors Service affirmed the corporate family rating
for Silgan Holdings Inc. at Ba2, the ratings on the company's
senior secured first lien credit facilities at Ba2 and the
subordinated notes at B1. The outlook was affirmed at stable.
In affirming the Ba2 corporate family rating and stable outlook,
Moody's considered Silgan Holdings' maintenance of moderate
financial leverage, strong interest coverage and its solid
competitive position in a generally healthy industry. The
company has a longstanding customer base that faces barriers to
switching suppliers due to Silgan's dominant market position
(50% share of the U.S. market for food cans) in a predominantly
consolidated industry. The ratings also benefit from Silgan's
long-term contracts with its major customers that allow for the
pass-through of raw material costs (primarily aluminum and
steel). Although the ratio of free cash flow to debt has
declined in the twelve months ended June 30, 2007, Moody's
expects free cash flow generation to return to historic levels
in fiscal 2007. Adjusted free cash flow to debt deteriorated as
the company built their finished goods inventory ahead of labor
negotiations and temporarily increased capital expenditures to
expand their easy open end manufacturing capacity.
The ratings outlook is stable. As of the 12 months ended
June 30, 2007, Silgan Holdings is weakly positioned in the
rating category due to one-time increases in working capital and
capital expenditures, which depressed free cash flow. However,
free cash flow is expected to improve to historic levels over
the near term and the company is expected to move solidly into
the rating category. Additionally, Silgan Holdings' acquisition
strategy could also negatively impact the outlook.
Moody's took these rating actions:
Issuer: Silgan Holdings Inc.
-- US$450-million senior secured first lien revolver
due 2011, to Ba2 LGD3 40% from Ba2 LGD 3 41%;
-- US$345-million senior secured first lien term loan
A due 2011, to Ba2 LGD3 40% from Ba2 LGD 3 41%;
-- US$44-million senior secured first lien term loan B
due 2012, to Ba2 LGD3 40% from Ba2 LGD 3 41%;
-- EUR200-million senior secured first lien term loan,
to Ba2 LGD3 40% from Ba2 LGD 3 41%;
-- US$200 million 6.75% senior subordinated notes due
2013, to B1 LGD 6 94% from B1 LGD 6 93%;
-- affirmed corporate family rating at Ba2; and
-- affirmed probability of default rating at Ba2.
Issuer: Silgan Plastics Canada Inc.
-- CAD$90-million Canadian term loan due 2012, to Ba2
LGD3 40% from Ba2 LGD 3 41%
The outlook was affirmed at stable.
Headquartered in Stamford, Connecticut, Silgan Holdings Inc.
-- http://www.silganclosures.com/-- is a leading North American
manufacturer of consumer goods packaging products with annual
net sales of US$2.5 billion in 2005. Silgan operates 64
manufacturing facilities in the U.S., Canada and Europe. In
North America, Silgan is the largest supplier of metal
containers for food products and a leading supplier of plastic
containers for personal care products. In addition, Silgan is a
leading supplier of metal, composite and plastic vacuum closures
for food and beverage products in North America and Europe.
The firm has operations in Latin America, particularly in
Venezuela.
* VENEZUELA: Strengthening Energy & Trade Pacts with Puerto Rico
----------------------------------------------------------------
The Trinidad Guardian reports that a Venezuelan delegation has
met with Puerto Rican officials to hold talks on strengthening
energy, trade and political ties between nations.
Venezuelan ambassador to the Organization of American States
Jorge Valero and a manager of state-run oil firm Petroleos de
Venezuela SA told The Guardian that they want to meet with the
chief of Puerto Rico's power authority to discuss the
possibility of energy cooperation.
Mr. Valero said in a press conference, "You, the Puerto Ricans,
have much to offer and we have much to offer."
The Guardian notes that Mr. Valero was asked if Puerto Rico's
status as a US commonwealth would deter increased cooperation
with Venezuela.
Venezuelan President Hugo Chavez wants "to start a new era in
diplomatic relations" with Puerto Rico, The Guardian states,
citing Mr. Valero.
* * *
As reported in the Troubled Company Reporter-Latin America on
Oct. 22, 2007, Fitch Ratings revised the rating outlook on
Venezuela's long-term foreign and local currency Issuer Default
Ratings to Negative from Stable. At the same time, the agency
affirmed the IDRs at 'BB-', the short-term foreign currency
rating at 'B', and the country ceiling at 'BB-'.
***********
S U B S C R I P T I O N I N F O R M A T I O N
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de los Santos, and Pamella Rita K. Jala, Editors.
Copyright 2007. All rights reserved. ISSN 1529-2746.
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