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 Monday, January 21, 2008, Vol. 8, Issue 14 Headlines A R G E N T I N A ACXIOM CORP: Board Appoints John Meyer as President & CEO SUN MICROSYSTEMS: Moody's Says MySQL Buyout Won't Affect Ratings SUN MICROSYSTEMS: S&P Ratings Unaffected by US$1 Bil. MySQL Deal TYSON FOODS: Inks Supply & Sponsorship Pact with Six Flags WR GRACE: Court Commences Asbestos Estimation Trial B A H A M A S BANK OF BARODA: To File Unaudited Q3 Results on Jan. 30 HARRAH'S ENTERTAINMENT: S&P Cuts Corporate Credit Rating to B+ METROPOLITAN BANK: Sells Off PHP4.63 Bil. in Bad Loans to Orix B E R M U D A ALEA GROUP: Reaches Commutation Terms Agreement ELAN CORP: US FDA Approves TYSABRI Biologics License Application FOSTER WHEELER: To Supply Heat Recovery Steam Generator in Spain MAGNA RE: Proofs of Claim Filing Is Until Tomorrow B O L I V I A * BOLIVIA: Comibol To Boost Gold Mining Complexes B R A Z I L AES CORP: Brazilian Unit Concludes Substations Automation ALCATEL-LUCENT: Inks BRL2B Maintenance Pact with Brasil Telecom BANCO DAYCOVAL: Capital Research Acquires 2.38% Stake in Firm BANCO ITAU: Subsidiary Inks Exclusive Pact with DAFRA BENCHMARK ELECTRONICS: Moody's Puts Ba2 Rating on US$100MM Debt BRASIL TELECOM: Inks BRL2B Maintenance Deal with Alcatel-Lucent COMPANHIA ENERGETICA: Sao Paulo Selling 33.37% Stake in February COMPANHIA SIDERURGICA: Takes Away Vale's Right To Buy Excess Ore DELPHI: ND Acquisition Offers US$44.2 Million for Bearing Biz DELTA AIR: Commences Merger Negotiations with Northwest & UAL GERDAU AMERISTEEL: KeyBanc Capital Pares Shares Rating to Buy IWT TESORO: Withdraws Exclusive Periods Extension Plea LYONDELL CHEMICAL: S&P Lowers Senior Secured Debt Rating to B MRS LOGISTICA: Will Invest BRL141 Million in 866 New Railcars NET SERVICOS: Moody's Assigns Ba2 Rating on US$200-Mln Sr. Notes SUN MICROSYSTEMS: Caris & Co. Maintains Above Rating on Firm TELE NORTE: Inks Contracts with Nokia Siemens & Huawei Tech VALMONT INDUSTRIES: Acquires PennSummit Tubular's Assets C A Y M A N I S L A N D S BRIDGE INVESTMENT: Holding Final Shareholders Meeting on Jan. 24 CABLE & WIRELESS: JP Morgan Maintains Neutral Rating on Firm COUTTS FINANCE: Sets Final Shareholders Meeting for Jan. 24 LINAVEN INVESTMENTS: Sets Final Shareholders Meeting for Jan. 24 MAJESTIC MOUNTAINS: Final Shareholders Meeting Is on Jan. 24 MEMBERSHIP III: To Hold Final Shareholders Meeting on Jan. 24 PYLOS III: Holding Final Shareholders Meeting on Jan. 24 ROOT BROKERS: Sets Final Shareholders Meeting for Jan. 24 SHOWINA INVESTMENT: Final Shareholders Meeting Is on Jan. 24 STAY-CALM LIMITED: Final Shareholders Meeting Is on Jan. 24 ZARANDI LIMITED: Final Shareholders Meeting Is on Jan. 24 C H I L E GOODYEAR TIRE: Holders Can Convert 4% Sr. Notes Until March 31 C O L O M B I A US AIRWAYS: Messrs. Ferayorni & Riccoboni Join IT Group C O S T A R I C A GRUPO M: Selling Dollar-Denominated Debt to Fund Expansion D O M I N I C A N R E P U B L I C AFFILIATED COMPUTER: Tennessee Medicaid Likely to Award New Deal E C U A D O R DOLE FOOD: Units Appoint Three New Managers PETROECUADOR: Budget Decreases 6% to US$4.8 Billion in 2008 * ECUADOR: To Invest US$2 Billion to Increase Oil Production G U A T E M A L A BANCO INDUSTRIAL: Banpais Buyout Cues Moody's to Change Outlook BRITISH AIRWAYS: Pilots May Protest Against OpenSkies' Launching J A M A I C A NATIONAL COMMERCIAL: Closing Cash Plus Accounts NATIONAL COMMERCIAL: Won't Honor World Wise' Managers Cheque M E X I C O ADVANCED MICRO: Posts US$1.7 Billion Net Loss in Fourth Quarter AMERICAN AXLE: UAW Associates Join Buffalo Separation Program AMERICA AXLE: Continues Driveline Deal for GM's Truck Program BURGER KING: Brings In Robert Perkins as Vice President CINRAM INT'L: Subsidiary Welcomes Four New Trustees on Board CORPORACION INTERAMERICANA: Launches Tender Offer on 8.87% Notes CORPORACION INTERAMERICANA: Moody's Cuts Corp. Family to Ba3 GENERAL MOTORS: Outlines Turnaround Progress & 2008 Priorities HARMAN INTERNATIONAL: Promotes Ken Yasuda as Japan Manager TRIMAS CORP: Operating Unit Bags Hi-Vol's Production Contracts UNITED RENTALS: Names John Fahey as Vice President-Controller N I C A R A G U A * NICARAGUA: In Cooperation Talks with Venezuela P E R U QUEBECOR WORLD: Interest Nonpayment Spurs S&P to Give D Ratings P U E R T O R I C O AVNET INC: Unit Signs Distribution Deal with Taiyo Yuden DORAL FINANCIAL: FDIC Lifts Cease & Desist Order with Unit PEP BOYS: Harry Yanowitz To Resign as Chief Financial Officer V E N E Z U E L A CITGO PETROLEUM: Lays Off Over 500 Contract Maintenance Workers PETROLEOS DE VENEZUELA: Chalmette Maintenance Work Is Until Feb. PETROLEOS DE VENEZUELA: El Palito's Cat Cracker Shuts Down PETROLEOS DE VENEZUELA: Investing US$15.6 Billion in 2008 * VENEZUELA: Hugo Chavez Proposes Food Supply Agreement for ALBA * VENEZUELA: To Evaluate Cooperation with Nicaragua * BOND PRICING: For the Week January 14 to January 18 - - - - - ================= A R G E N T I N A ================= ACXIOM CORP: Board Appoints John Meyer as President & CEO --------------------------------------------------------- Acxiom(R) Corporation's Board of Directors has named John Meyer to serve as the company's chief executive officer and president. Mr. Meyer has been president of the Global Services group of Alcatel-Lucent since 2003. Prior to joining Lucent, Mr. Meyer spent almost 20 years in a number of high-profile positions at EDS that included Chairman of the Europe, Middle East and Africa Operating Team, President of Diversified Financial Services and Credit Services Divisions, and CIO for the company's GMAC business. Mr. Meyer's global, multi-industry experience at EDS was marked by numerous successes, including doubling revenue in EMEA from US$3.6 billion to US$7.2 billion in four years. Before entering the business world, Mr. Meyer served as a flight commander and was selected as a captain in the U.S. Air Force. Michael Durham, Acxiom's non-executive chairman, said the board unanimously selected Meyer because of his demonstrated strong leadership skills, his broad experience in the information technology industry and his history of success in building shareholder value. "Since October, the board has been focused on the search for a new leader in its efforts to return Acxiom to sustained success," Mr. Durham said. "John commanded our attention because of his strong execution skills, his ability to lead high-performing teams and his track record in driving shareholder value. He has demonstrated these skills at both Alcatel-Lucent and EDS as he ran businesses that are substantially larger and more complex than Acxiom. As we learned more about John, we were equally impressed by his focus on developing internal talent while reaching outside for new skills. His straightforward style and integrity impressed us as it has his employees, clients and investors in his previous roles. John's track record has established him as one of the most accomplished services leaders in the technology industry." Mr. Meyer said that "Acxiom's position as the leading provider of offline and online marketing services is the envy of the market. Acxiom's proud history of innovation and delivery excellence has created value for its clients for decades. It is an honor to join the company and do all I can to build on its successes. I look forward to working with our associates to create value for our clients and shareholders." Mr. Meyer will join Acxiom on Feb. 4. He also will serve as a member of Acxiom's board of directors. He succeeds Charles Morgan, a 35-year company veteran who has been Chairman and Chief Executive Officer since 1975. Mr. Morgan, who announced his retirement in October, will remain a consultant to the company through 2010. "John's go-to-market, operational and technology skills in leading a large services business are impressive," Mr. Morgan said. "I leave Acxiom in the capable hands of a leader who has a strong client focus and will continue to bring out the best in the teams he leads." Mr. Meyer will be introduced to the financial analyst community during the company's third-quarter earnings call at 4:30 p.m. CST Jan. 23. Mr. Meyer, his wife Victoria and their three children live in Dallas, Texas and will be moving to Little Rock, Acxiom's headquarters, as soon as practical. Based in Little Rock, Arkansas, Acxiom(R) Corporation (Nasdaq: ACXM) -- http://www.acxiom.com/-- integrates data, services and technology to create and deliver customer and information management solutions for many of the largest, most respected companies in the world. The core components of Acxiom's solutions are Customer Data Integration technology, data, database services, IT outsourcing, consulting and analytics, and privacy leadership. Founded in 1969, Acxiom has locations throughout the United States, Europe, Australia and China. Acxiom has a team of specialists with sales and business development associates based in the largest Latin American markets: Brazil, Argentina and Mexico. * * * As reported in the Troubled Company Reporter-Latin America on Dec. 18, 2007, Moody's Investors Service has confirmed Acxiom Corp.'s Ba2 corporate family rating and assigned a negative rating outlook, concluding a review for possible downgrade initiated on May 17, 2007, following the company's announcement that it had entered into a definitive agreement to be acquired by Silver Lake and ValueAct Capital for US$3.0 billion. SUN MICROSYSTEMS: Moody's Says MySQL Buyout Won't Affect Ratings ---------------------------------------------------------------- Moody's has commented that Sun Microsystems, Inc.'s Ba1 corporate family and unsecured debt rating with a stable outlook would not be affected by the company's recent announcement that it has entered into a definitive agreement to acquire MySQL AB for approximately US$1 billion. MySQL is a privately held developer of high performance open-source database software experiencing fast growth in the US$15 billion relational database management systems market. Moody's believes the high purchase price is mitigated by the strategic nature of the acquisition and long-term growth opportunities in the relational database management systems market, which is growing roughly at 14% per annum. Having assembled nearly all of the elements for its web-based platform strategy, the MySQL acquisition is consistent with Sun Microsystems' solutions-based operating model of selling a broader, more integrated comprehensive offering of storage, servers, software and services based on open architecture standards. The company expects to: migrate its customers to MySQL's technology to deepen existing relationships; provide MySQL with access to its global infrastructure, channels and OEM partnerships to accelerate the growth of MySQL's mission critical deployment of applications for large-scale customers; and further exploit the secular shift in computing from desktop to web-based platforms through up-sell and cross-sell opportunities. Given MySQL's small relative size, Moody's does not expect it to be a major contributor to the company's operating earnings over the near term. However, its strong liquidity profile, improved credit protection measures and enhanced operating profile can absorb an acquisition of this size. "This pending transaction reflects the company's historical penchant to achieve growth through external means, which is currently factored into the Ba1 CFR. Despite potential revenue synergies, access to new untapped markets and cross-selling opportunities, Moody's believes that Sun's acquisition strategy poses challenges for the company to successfully integrate technologies and operations as the company seeks to expand its business model into the software space. Moody's expects the company will continue to make selective acquisitions to extend the reach of its products among software developers and corporate customers, and strengthen its position as a platform provider for the Web-based economy", stated Moody's Vice President-Senior Analyst, Gregory Fraser. Despite market share growth, improvements in profitability and margins, and higher levels of free cash flow in the company's recent past, the Ba1 rating reflects the company's aggressive acquisition strategy to grow beyond its core business. Sun Microsystems has stated in its public statements that it intends to be a consolidator in the IT industry. The company has had an active acquisition program to acquire small, emerging technology companies whose growth is restrained by resources, distribution and infrastructure that can benefit from its global sales force and services organization. The rating is constrained at Ba1, reflecting the ongoing transition of the company's operating model away from a direct product sale to a cross-product selling approach, which blends hardware, software, and services into a single offering. Though the solutions based sales approach focuses on the value proposition of the bundled sale rather than individual pricing of each component, by adapting to a strategy of selling lower priced servers in order to obtain longer term service revenue streams, the company is likely to witness operating margin pressure on the hardware component of the overall solution sale, while potentially generating future higher margin revenue streams. Moody's is also concerned about the sustainability of this operating model given that Sun's market share continues to be eclipsed by stronger rivals such as IBM and HP. Moody's expects that if the acquisition is consummated as proposed, the company would fund the transaction with approximately US$800 million in cash and assume US$200 million in MySQL options. The company expects the transaction to close in the third or fourth quarter of its fiscal 2008 subject to regulatory approvals. Moody's also expects that following the closing of the proposed transaction, Sun will maintain moderate share purchase activity. The company's liquidity position is strong, with roughly US$5 billion in cash and marketable securities. Balance sheet debt totals US$1.27 billion, comprised of a US$550 million note maturing in August 2009, a US$350 million convertible due 2012, a US$350 million convertible due 2014 and US$21 million in interest rate swaps. The company also maintains full access to US$391 million of uncommitted credit lines. Moody's notes that further cash usage for material acquisitions or stock purchases would likely have a negative impact on the company's liquidity profile and potential credit rating. The company's revenue and EBITDA for the twelve months ended Sept. 30, 2007 were US$13.9 billion and US$1.8 billion, respectively. Headquartered in Santa Clara, California, Sun Microsystems Inc. (NASDAQ: SUNW) -- http://www.sun.com/-- provides network computing infrastructure solutions that include computer systems, data management, support services and client solutions and educational services. It sells networking solutions, including products and services, in most major markets worldwide through a combination of direct and indirect channels. Sun Microsystems conducts business in 100 countries around the globe, including Brazil, Argentina, India, Hungary, United Kingdom, among others. SUN MICROSYSTEMS: S&P Ratings Unaffected by US$1 Bil. MySQL Deal ---------------------------------------------------------------- Standard & Poor's Ratings Services's ratings and outlook on Sun Microsystems Inc. (BB+/Stable/--) are not affected by the company's recent announcement that it has agreed to acquire MySQL AB for a total consideration of about US$1 billion (consisting of US$800 million in cash and US$200 million in options). The acquisition supports Sun's strategic intent to expand its position in the open-source software market; MySQL is an open- source developer of database software. S&P expects Sun to maintain a moderately leveraged financial profile and strong liquidity. As of Sept. 30, 2007, leverage was less than 2x and cash and investments totaled US$5.2 billion. Headquartered in Santa Clara, California, Sun Microsystems Inc. (NASDAQ: SUNW) -- http://www.sun.com/-- provides network computing infrastructure solutions that include computer systems, data management, support services and client solutions and educational services. It sells networking solutions, including products and services, in most major markets worldwide through a combination of direct and indirect channels. Sun Microsystems conducts business in 100 countries around the globe, including Brazil, Argentina, India, Hungary, United Kingdom, among others. TYSON FOODS: Inks Supply & Sponsorship Pact with Six Flags ---------------------------------------------------------- Tyson Foods, Inc., has reached a supply and sponsorship agreement with Six Flags, Inc. Under the agreement, Tyson Foods will become a Six Flags Corporate Alliance partner and Tyson chicken will become the Official Chicken of Six Flags. In addition, the two companies will collaborate on a number of marketing and advertising initiatives. The agreement makes Tyson Foods, the exclusive chicken supplier for all United States Six Flags parks and includes exclusive product placement on menu boards wherever Tyson products are sold, in-park signage, billboards and additional high-impact messaging via the Six Flags Media Networks. "Moms trust Tyson products and they trust Six Flags," said Six Flags Executive Vice President of Corporate Alliances, Lou Koskovolis. "Millions of families come to our parks every summer expecting industry leading attractions and friendly guest service; now when they dine in our restaurants, they'll immediately identify the Tyson brand for its own superior qualities. We're delighted that Tyson recognizes the Six Flags platform as a unique opportunity to connect with their key consumers." "We want to be where families live, work and play," said Tyson Senior Vice President of Food Service, Randy Smith. "Six Flags entertains millions of visitors every year and now those visitors can experience the same Tyson chicken they cook at home for their families at a Six Flags theme park. We're delighted to be partnering with a brand that resonates so strongly with Moms and kids." About Six Flags Inc. Six Flags, Inc. is the world's largest regional theme park company with 21 parks across the U.S., Mexico and Canada. Since 1961, Six Flags has provided world-class thrilling entertainment for millions of families. Six Flags, Inc. is a publicly traded corporation (NYSE: SIX) headquartered in New York City. About Tyson Foods, Inc. Based in Springdale, Arkansas, Tyson Foods, Inc. (NYSE:TSN) -- http://www.tysonfoods.com/-- is a processor and marketer of chicken, beef, and pork. The company produces a wide variety of protein-based and prepared food products, which are marketed under the "Powered by Tyson(TM)" strategy. The company has operations in China, Japan, Singapore, South Korea, and Taiwan. In Latin America, Tyson Foods has operations in Argentina. * * * As reported in the Troubled Company Reporter-Latin America on Aug. 24, 2007, Moody's Investors Service affirmed Tyson Foods Inc.'s ratings, including its Ba1 corporate family rating and Ba1 probability of default rating. Moody's said the rating outlook is negative. WR GRACE: Court Commences Asbestos Estimation Trial --------------------------------------------------- Estimation trial on W.R. Grace & Co.'s asbestos-related personal injury claims started on Jan. 14, 2008. The trial aims to establish the amount of Grace's current and future PI asbestos liabilities to allow the company to proceed with the confirmation of its Plan of Reorganization. The Jan. 14 Estimation Date was scheduled by Judge Judith Fitzgerald of the U.S. Bankruptcy Court for the District of Delaware in late July 2007. Judge Fitzgerald oversees Grace's bankruptcy case. All of Grace's personal injury issues are handled by Judge Ronald Buckwalter of the U.S. District Court for the Eastern District of Pennsylvania. Grace's PI issues were formerly handled by District Judge Wolin. Grace, a specialty chemicals and materials company, and 61 of its affiliates sought protection under Chapter 11 of the Bankruptcy Code in early April 2001 to resolve increasing asbestos-related liabilities. At the Petition Date, Grace reported total assets of US$2,323,500,000, and debts of US$2,397,800,000. In comparison, as of November 30, 2007, the Grace Debtors reported combined assets of US$3,335,000,000, and combined debts of US$3,712,000,000, resulting in equity of (US$376,300,000). Grace's Plan Grace filed its Plan of Reorganization on November 13, 2004, and amended it on January 13, 2005. Grace's current draft is labeled a Proposed First Amended Plan of Reorganization. Grace's Plan classifies asbestos claims into (i) personal injury claims that meet specified exposure and medical criteria or PI-SE Claims; (ii) personal injury claims that do not meet the exposure and medical criteria necessary to qualify as PI-SE Claims or PI-AO Claims; and (iii) property damage claims, including claims related to Grace's former Zonolite attic insulation product. Grace's Plan is premised on these principles: (1) Substantive Consolidation Grace and its debtor-affiliates will be substantively consolidated for limited purposes including claims allowance and treatment and distribution under the Plan. The deemed substantive consolidation will not affect (i) the Debtors' legal and organizational structure, (ii) the encumbrances that are required to be maintained under the Grace Plan, and (iii) the settlement agreements the Debtors entered separately with Sealed Air Corporation and Fresenius Medical Care Holdings, Inc. (2) Creation of Asbestos Trust and its Funding A Section 524(g) trust will be created for which all asbestos-related claims will be channeled and resolved. The Grace Asbestos Trust will be funded by payments from Sealed Air pursuant to the settlement agreement, which payments will consist of: * US$512,500,000 in cash, plus interest accrued from Dec. 21, 2005, until the Plan's effective date, at a rate of 5.5% per annum compounded annually; and * 18,000,000 shares of Sealed Air common stock, as adjusted to account for a two-for-one stock split implemented by Sealed Air in March 2007. As of Jan. 14 (Eastern Time), Sealed Air stocks are priced at US$20.77 per share, placing a value of about 373,860,000 on the settlement pact. The PI-AO Claims would be funded with warrants exercisable for that number of shares of Grace common stock, which, when added to the shares issued directly to the Asbestos Trust on the effective date of the Plan, would represent 50.1% of Grace's voting securities. If the common stock issuable on exercise of the warrants is insufficient to pay all PI-AO Claims, then Grace would pay any additional liabilities in cash. PI Claimants would have the option to litigate their claims against the trust or, if they meet specified eligibility criteria, accept a settlement amount based on the severity of their disease. PD Claimants, on the other hand, would be required to litigate their claims against the trust. On confirmation of Grace's Plan, all asbestos-related claims against Grace's Canadian operating subsidiary, Grace Canada, Inc., will be transferred to the Asbestos Trust along with all Asbestos Claims. As of Jan. 9, 2008, the Court has approved settlement agreements between Grace and two law firms representing PD Claimants. PD Claimants represented by the law firm Dies & Hile, LLP, received a US$60,000,000 settlement amount, while Claimants represented by the law firm Motley Rice, LLC, received a US$17,900,000 settlement amount. Grace is currently litigating the remaining PD Claims. (3) US$1,613,000,000 Maximum Value of Asbestos-Related Claims As a condition to the effectiveness of the Grace Plan, the Debtors want the Court to establish that their aggregate Asbestos PI-SE Claims, Asbestos PD Claims, and Asbestos Trust Expenses is not greater than US$1,483,000,000, and their Asbestos PI-AO Claims not greater than US$130,000,000. (4) Treatment of Non-Asbestos Claims All allowed administrative or priority claims would be paid 100% in cash and all general unsecured claims, other than those covered by the asbestos trust, would be paid 85% in cash and 15% in Grace common stock. Grace estimates that claims with a recorded value of US$1,241,000,000, including interest accrued through Dec. 31, 2006, would be satisfied in the manner pursuant to Grace's Plan at the effective date of that Plan. Grace estimates that their allowed non-asbestos claims will total: Administrative Claims US$138,000,000 Priority Tax Claims 232,000,000 Secured Claims 90,000,000 Unsecured Employee-Related Claims 191,000,000 General Unsecured Claims 951,000,000 -------------- US$1,602,000,000 ============== Grace would finance these payments with US$150,000,000 of cash on hand, US$115,000,000 from the settlement agreement with Fresenius Medical Care Holdings, Inc., US$800,000,000 in new debt, and US$143,000,000 in value of Grace common stock. Grace would satisfy other non-asbestos related liabilities, estimated to be US$508,000,000, primarily environmental, tax, pension and retirement medical obligations, as they become due and payable over time. Proceeds from available product liability insurance would supplement operating cash flow to service new debt and liabilities not paid on the effective date of the Plan. (5) Treatment of Equity Interests Grace common stock will remain outstanding at the effective date of the company-proposed Plan, but interests of existing shareholders would be subject to dilution by additional shares of common stock issued under the Plan. (6) Estimated Value of Reorganized Debtors In their Joint Plan, the Debtors estimate that their reorganized value ranges from US$2,200,000,000 to US$2,600,000,000. A full-text copy of Grace's Reorganization Plan is available for free at http://ResearchArchives.com/t/s?2712 A full-text copy of the Disclosure Statement is available for free at http://ResearchArchives.com/t/s?2713 PI Committee/FCR's Competing Plan On Nov. 5, 2007, the Official Committee of Asbestos Personal Injury Claimants and David T. Austern, the Court-appointed future claims representative, filed a competing joint plan of reorganization. Judge Fitzgerald terminated Grace's exclusivity periods in July 2007 noting that despite the company's more than six years under bankruptcy protection, it still has not negotiated a consensual resolution of its asbestos liabilities with interested parties. The Competing Plan conditions its effectivity on the Bankruptcy Court finding that Grace's pending and future asbestos liabilities is not less than US$4,000,000,000. Asbestos PI Claims, under the Competing Plan, will be resolved in accordance with an Asbestos Trust Agreement and Trust Distribution Procedures. The Asbestos Trust will be funded by: * the Sealed Air Payment -- US$512,500,000 cash, plus interest, and 9,000,000 shares of Sealed Air common stock; * any proceeds from insurance policies covering Grace's asbestos liabilities; * cash, in an amount equal to the Distributable Cash Percentage multiplied by the Estimated PI Amount, reduced by the Sealed Air Payment Amount; and * a number of shares of Grace's common stock. The Competing Plan provides that certain classes of claims will be paid in full or reinstated, including: -- priority claims, -- secured claims, -- unsecured pass-through employee-related claims, -- workers' compensation claims, -- intercompany claims, -- Zonolite Attic Insulation claims, and -- equity interests in the Debtors other than W.R. Grace & Co, the parent company. A full-text copy of the PI/FCR Plan is available for free at: http://ResearchArchives.com/t/s?2504 Asbestos Personal Injury Claims Valuation Grace -- US$385,000,000 to US$1,314,000,000 Grace will ask the Court to find that the value of its pending and future PI liabilities ranges from US$385,000,000 to US$1,314,000,000. Grace has maintained throughout its bankruptcy case that many PI Claimants have not submitted evidence showing they have handled any of the company's asbestos-containing products or evidence showing a link between asbestos and any medical problems. Grace's expert, Dr. B. Thomas Florence, who has 30 years of experience in management consulting and research, estimates that, as of April 2001, the net present value of the company's pending and future asbestos PI claims is within a range of US$385,000,000 to US$1,314,000,000, through 2049, with a median of US$712,000,000. To arrive at his estimate, Dr. Florence used: * 5.36% discount rate, * 2.5% inflation rate, and * 1.5% claim value deflation rate. Dr. Florence also used a set of assumptions based on the premise that only claimants whose claims meet certain criteria would be able to sustain their burden of proof that their claims against the Debtors are valid, and therefore should be valued as part of the estimation process. The evidentiary criteria used are: 1. a proof of claim; 2. minimum exposure criteria: nature of exposure to Grace asbestos containing products must be either because claimant is a worker who personally mixed Grace asbestos- containing products or because claimant is a worker who personally installed Grace asbestos-containing product; 3. minimum causation criteria for Lung Cancer claims of (i) diagnosis of asbestosis based on the B-Reader report of a reliable B-Reader, and (ii) reproducible ILO score of 1/0 or greater; 4. minimum medical criteria for Other Cancer claims of diagnosis of laryngeal cancer; 5. minimum medical criteria for all Non-malignant claims of (i) diagnosis of asbestosis or diffuse pleural thickening based on the B-Reader report of a reliable B-reader, and (ii) ILO score of 1/0 or greater for asbestosis; 6. minimum impairment criteria for Severe Asbestosis claims of (i) diagnosis of asbestosis based on the B-Reader report of a reliable B-Reader, (ii) ILO score of 2/1 or greater, (iii) Pulmonary Function Test results of TLC <65% or complying with American Thoraic Society standards; and 7. minimum impairment criteria for Asbestosis claims of (i) diagnosis of asbestosis or diffuse pleural thickening based on the B-Reader report of a reliable B-Reader, (ii) ILO score of 1/0 or greater, and (iii) PFT results of TLC <80% or complying with ATS standards. Throughout Grace's bankruptcy case, the Official Committee of Unsecured Creditors has been supportive of the Debtors' case management proposal saying that it is a reasonable means to determine the "true scope of Grace's liability to asbestos claimants and then provide for the payment of valid claims on a basis that preserves Grace's still strong core business operations." The Official Committee of Equity Security Holders, who represents holders of more than 70,000,000 shares of Grace's common stock, has maintained that Grace is solvent. The Equity Committee believes that the estimation trial will demonstrate that, as a matter of logic and epidemiological science, the number of individuals who could realistically have developed true asbestos-related disease from Grace products is diminishingly small. PI Committee -- US$4,700,000,000 to US$6,200,000,000 The PI Committee's expert, Dr. Mark Peterson, a trial lawyer and social psychologist, estimates that Grace's pending and future PI liabilities range from US$4,700,000,000 to US$6,200,000,000. According to Dr. Peterson, he used standard forecasting methods regularly accepted by courts, asbestos trusts and businesses for establishing asbestos liabilities. Grace's asbestos liability is estimated as the product of (i) the number of claims, (ii) the fraction of claims that get paid, and (iii) the paid values of those claims. Present Value of Grace Liability for Pending and Future Claims (in millions) Other Non- Period Meso Lung Cancer Malignant Total ------ ---- ---- ------ --------- ----- Pending US$249 US$91 US$12 US$228 US$578 Future US$3,149 US$474 US$71 US$1,364 US$5,106 ----- ---- ------ --------- ------ US$3,445 US$565 US$83 US$1,562 US$5,684 ----- ---- ------ --------- ------ FCR -- US$7,900,000,000 The FCR's expert, Jennifer L. Biggs, an actuarian, estimates that Grace's liabilities is US$7,900,000,000, on an undiscounted basis. She estimates that, when reduced to present value as of the Petition Date using a 5.2% interest rate, Grace's PI liabilities is US$3,700,000,000. Ms. Biggs based her estimate by projecting the quantity and type of future PI Claims against Grace for up to 54 years after the Petition Date. The estimate also includes a provision for the known pending PI Claims filed against the Debtors on or before the Petition Date. Ms. Biggs calculated the total liability by multiplying the known pending and projected future claims filings by the expected average payment amounts that the Debtors would pay to claimants in each of the years in projection. About W.R. Grace Headquartered in Columbia, Md., W.R. Grace & Co. (NYSE:GRA) -- http://www.grace.com/-- supplies catalysts and silica products, especially construction chemicals and building materials, and container products globally, including Argentina, Australia and Ireland. The Company and its debtor-affiliates filed for chapter 11 protection on April 2, 2001 (Bankr. D. Del. Case No. 01-01139). David M. Bernick, P.C., Esq., at Kirkland & Ellis, LLP, and Laura Davis Jones, Esq., at Pachulski Stang Ziehl & Jones, LLP, represent the Debtors in their restructuring efforts. The Debtors hired Blackstone Group, L.P., for financial advice. PricewaterhouseCoopers LLP is the Debtors' accountant. Stroock & Stroock & Lavan, LLP, and Duane Morris, LLP, represent the Official Committee of Unsecured Creditors. The Creditors Committee tapped Capstone Corporate Recovery LLC for financial advice. David T. Austern, the legal representative of future asbestos personal injury claimants, is represented by Orrick Herrington & Sutcliffe LLP and Phillips Goldman & Spence, PA. Elihu Inselbuch, Esq., at Caplin & Drysdale, Chartered, and Marla R. Eskin, Esq., at Campbell & Levine, LLC, represent the Official Committee of Asbestos Personal Injury Claimants. The Asbestos Committee of Property Damage Claimants tapped Scott Baena, Esq., and Jay M. Sakalo, Esq., at Bilzin Sumberg Baena Price & Axelrod, LLP, to represent it. Thomas Moers Mayer, Esq., at Kramer Levin Naftalis & Frankel, LLP, represents the Official Committee of Equity Security Holders. The Debtors' filed their Chapter 11 Plan and Disclosure Statement on Nov. 13, 2004. On Jan. 13, 2005, they filed an Amended Plan and Disclosure Statement. The hearing to consider the adequacy of the Debtors' Disclosure Statement began on Jan. 21, 2005. The Debtors' exclusive period to file a chapter 11 plan expired on July 23, 2007. Estimation of W.R. Grace's asbestos personal injury liabilities commenced on January 14, 2008. At Dec. 31, 2006, the W.R. Grace's balance sheet showed total assets of US$3,620,400,000 and total debts of US$4,189,100,000. As of November 30, 2007, W.R. Grace's balance sheet showed total assets of US$3,335,000,000, and total debts of US$3,712,000,000. (W.R. Grace Bankruptcy News, Issue No. 147; Bankruptcy Creditors' Service, Inc., http://bankrupt.com/newsstand/or 215/945-7000). ============= B A H A M A S ============= BANK OF BARODA: To File Unaudited Q3 Results on Jan. 30 ------------------------------------------------------- Bank of Baroda's board of directors, on Jan. 30, 2008, will consider and approve, among others, the bank's unaudited financial results for the third quarter ended Dec. 31, 2007. In the same quarter last year, the bank recorded a net profit of INR3.29 billion on revenues aggregating of INR27.21 billion. On Jan. 30, the board will also be considering the bank's results for the nine months ended Dec. 31, 2007, and relevant segment reporting. Headquartered in Vadodara, India, Bank of Baroda -- http://www.bankofbaroda.com/-- is a provider of banking services in India. 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. * * * On July 2007, Standard & Poor's assigned its 'BB' issue rating to Bank of Baroda's US$300 million upper Tier-II subordinated notes due 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 program. Fitch said the outlook on all ratings is stable. HARRAH'S ENTERTAINMENT: S&P Cuts Corporate Credit Rating to B+ -------------------------------------------------------------- Standard & Poor's Ratings Services has lowered its ratings on Las Vegas-based Harrah's Entertainment Inc. and its wholly owned subsidiary, Harrah's Operating Co. Inc. The corporate credit rating on each entity was lowered to 'B+' from 'BB'. In addition, S&P's senior unsecured and subordinated debt ratings on approximately US$4.6 billion of existing notes, which will be rolled over as part of the transaction, were both lowered to 'B-', from 'BB' and 'B+', respectively. The ratings were removed from CreditWatch, where they were placed with negative implications on Oct. 2, 2006. The rating outlook is stable. S&P's ratings on the remaining existing debt, which totals nearly US$7.6 billion, will remain on CreditWatch. These issues will be refinanced with proceeds from proposed new debt, and the ratings will be withdrawn upon the close of the transaction. At the same time, S&P assigned ratings to the operating company's proposed US$9.25 billion senior secured bank facility, consisting of a US$2 billion revolving credit facility due 2014 and a US$7.25 billion term loan due 2015. The facility was rated 'BB' with a recovery rating of '1', indicating the expectation for very high (90% to 100%) recovery in the event of a payment default. S&P also assigned its 'B-' rating to the operating company's proposed US$6.775 billion senior unsecured notes offering, which will consist of US$5.275 billion of cash pay notes due 2016 and US$1.5 billion of toggle notes due 2018. Although both the currently existing senior unsecured and subordinated notes issues are structurally subordinated to the proposed new senior notes, all debt issues are rated 'B-'. This is because, when comparing the proposed level of senior secured debt in the capital structure to Harrah's adjusted tangible assets, the level exceeds S&P's threshold of 30%, resulting in all other debt being rated two notches below the corporate credit rating. The 30% threshold is surpassed whether the calculation is performed only at Harrah's Operating Co., or on a consolidated basis. The corporate credit rating downgrade reflects S&P's expectation for substantially weaker credit metrics following the completion of the proposed acquisition of Harrah's by Apollo Management LP and Texas Pacific Group for approximately US$31.2 billion, including the assumption of a portion of existing debt, fees, and expenses. Furthermore, given the importance of capital spending in the gaming industry, S&P believes that Harrah's business risk profile is slightly weakened by the limitations on both free cash flow generation and financial flexibility imposed by its post-LBO capital structure. Proceeds from the proposed debt offerings, along with up to US$6.5 billion of CMBS financing, US$4.6 billion of rollover debt, and US$6.1 billion of new equity (consisting of US$4.1 billion of common equity and US$2 billion of PIK preferred equity), will be used to fund the transaction. The current 'B+' rating reflects Harrah's high debt leverage and S&P's expectation that the company will not generate positive free operating cash flow over the next few years, given a relatively aggressive pipeline of development activities and heightened debt service obligations. Still, the company maintains a strong business profile, with a well-diversified and good-quality portfolio of assets, a solid brand identity, and an effective customer loyalty program. Harrah's Entertainment, Inc., through its wholly-owned subsidiary, Harrah's Operating Co., Inc., owns or manages approximately 50 casinos that comprise around 40,000 hotel rooms, three million square feet of gaming space and two million square fee of convention center space. HET generated consolidated revenues of US$10.6 billion for the last twelve months ended Sept. 30, 2007. Affiliates of Apollo LLC and Texas Pacific Group (the Sponsors) are expected to close the US$31 billion leverage buy-out of HET within the next month or so. The transaction will be financed with equity, new bank and bond issuance, rollover of existing debt and issuance of a CMBS loan. Headquartered in Las Vegas, Nevada, Harrah's Entertainment Inc. (NYSE: HET) -- http://www.harrahs.com/-- has grown through development of new properties, expansions and acquisitions, and now owns or manages casino resorts on four continents and hosts over 100 million visitors per year. The company's properties operate under the Harrah's, Caesars and Horseshoe brand names; Harrah's also owns the London Clubs International family of casinos and the World Series of Poker. Harrah's also owns the London Clubs International family of casinos. In January, it signed a joint venture agreement with Baha Mar Resorts Ltd. to operate a resort in Bahamas. METROPOLITAN BANK: Sells Off PHP4.63 Bil. in Bad Loans to Orix -------------------------------------------------------------- The Metropolitan Bank & Trust Co. has sold PHP4.63 billion of non-performing loans to the Japanese financial services group Orix Corp. through the Special Purpose Vehicle Framework, the Philippine Daily Inquirer reports. The bank has now disposed of PHP8.85 billion in bad assets since last year, the Inquirer says. The Inquirer also adds that the bank is seen to incur a nonperforming loan ratio of 4.6% versus 7.1% in 2006 with this sale. The bank's non-performing loan ratio will also go below the 5.26% industry average as recorded by the Bangko Sentral ng Pilipinas as of October 31 last year, the report says. Metropolitan Bank and Trust Company -- http://www.metrobank.com.ph/-- is the flagship company of the Metrobank Group. Metrobank provides a host of deposit, savings, and loan products as well as electronic banking services like Internet banking, mobile banking, and phone banking, as well as its huge ATM network. Metrobank is also the leading provider of trade finance in the Philippines, and its overseas branch network has enabled it to service the fund remittances of Filipino overseas contract workers. The bank has 583 local branches and 35 international branches and offices located in Taiwan, China, Japan, Korea, Guam, United States, Hong Kong, Singapore, Bahamas, and in Europe. * * * In November 2006, Moody's Investors Service revised the outlook of Metropolitan Bank & Trust Co.'s foreign currency long-term deposit rating of B1 and foreign currency subordinated debt rating of Ba3 from negative to stable. The outlooks for Metropolitan Bank's foreign currency Not-Prime short-term deposit rating and bank financial strength rating of "D" remain stable. On Sept. 21, 2006, Fitch Ratings upgraded Metrobank's Individual rating to 'D' from 'D/E'. All the bank's other ratings were affirmed: Long-term Issuer Default rating 'BB-' with a stable Outlook; Short-term rating 'B'; and Support rating '3. On March 3, 2006, Standard and Poor's Rating Service assigned a CCC+ rating on Metrobank's US$125-million non-cumulative capital securities, whereas Moody's Investors Service Rating Agency issued a B- rating on the same capital instruments. ============= B E R M U D A ============= ALEA GROUP: Reaches Commutation Terms Agreement ----------------------------------------------- Alea Group Holdings (Bermuda) Ltd., has reached agreement to fully and finally commute all exposure under an excess of loss reinsurance treaty. Alea Group expects to record an after- tax loss of approximately US$8.8 million in the fourth quarter of 2007, pursuant to the commutation terms. Alea Group Holdings (Bermuda) Ltd. is a global provider of insurance and reinsurance products and services, Alea Group faced a tough year in 2005. With catastrophes such as Hurricanes Katrina and Rita in the US and flooding in Europe greatly affecting the company, Alea decided to run off its property/casualty business. It has already sold or runoff some of its lines, including its European property/casualty treaty portfolio and Alea Alternative Risk. Headquartered in Bermuda, the company has additional offices in Australia, Europe, and North America. Investment firm Kohlberg Kravis Roberts & Co. holds a nearly 40% stake in the company. Fortress Investment Group has announced it intends to buy Alea for US$320 million. * * * On Feb. 1, 2006, A.M. Best Co. downgraded the financial strength rating to B from B++ and the issuer credit rating to "bb" from "bbb" of the insurance and reinsurance operating subsidiaries of Alea Group Holdings (Bermuda) Ltd. (collectively referred to as Alea Group or Alea). Subsequently, A.M. Best withdrew all ratings and assigned an NR-4 (Company Request) to the Alea Group companies. The downgrade followed significant deterioration in the company's consolidated risk-adjusted capitalization as a result of worse than anticipated performance in 2005 due to run-off charges, catastrophe losses and further adverse reserve development. A.M. Best believed that the company is likely to continue to be affected by high expenses related to the transition of Alea Group into run off and the continuing possibility of adverse reserve development. ELAN CORP: US FDA Approves TYSABRI Biologics License Application ---------------------------------------------------------------- The U.S. Food and Drug Administration has approved the supplemental Biologics License Application of Elan Corporation plc and Biogen Idec for TYSABRI(R) (natalizumab). TYSABRI is approved for inducing and maintaining clinical response and remission in adult patients with moderately to severely active Crohn's disease with evidence of inflammation who have had an inadequate response to, or are unable to tolerate, conventional CD therapies and inhibitors of TNF-alpha. TYSABRI will be available for the treatment of CD upon the completion of key implementation activities related to the approved risk management plan. The companies anticipate TYSABRI will be available to Crohn's patients by the end of February 2008. "The FDA's approval of TYSABRI is an important step forward in the treatment of Crohn's disease," Dr. Stephen Hanauer, professor of Medicine & Clinical Pharmacology & chief of the Section of Gastroenterology at the University of Chicago Pritzker School of Medicine, said. "A significant number of patients either fail or cannot tolerate current therapies. The unique mechanism of action of TYSABRI affords us a new class of therapy in our fight against this debilitating disease." The FDA granted approval based on its review of TYSABRI CD clinical trial data and overall safety data. The approval is accompanied by robust labeling with safety warnings; and a CD- specific risk management plan (including the mandatory TOUCH(TM) Prescribing Program) designed to inform prescribers, patients and infusion centers about the use of TYSABRI and to minimize potential risk of progressive multifocal leukoencephalopathy and other opportunistic infections. "We are delighted that TYSABRI will be available for Crohn's patients and their physicians, who continue to need new therapeutic options with novel mechanisms of action," Gordon Francis, MD, senior vice president, Global Clinical Development, Elan, said. "We are committed to providing therapeutic choice to those patients who can benefit from TYSABRI, and will continue to work with the FDA and the medical community to implement the TOUCH(TM) Prescribing Program for Crohn's patients." "We are pleased with the FDA's decision to make TYSABRI available to Crohn's patients suffering from this chronic, debilitating disease," Evan Beckman, MD, senior vice president, Immunology Research and Development, Biogen Idec, said. "Despite the therapeutic advances of the TNF-alpha inhibitors in CD, there remains a significant unmet need for Crohn's patients who have inadequate responses to, or are unable to tolerate, current CD therapies." TOUCH(TM) Prescribing Program The TOUCH(TM) (TYSABRI Outreach: Unified Commitment to Health) Prescribing Program was developed in conjunction with the FDA to facilitate appropriate use of TYSABRI and to assess, on an ongoing basis, the incidence and risk factors for PML and other serious opportunistic infections associated with TYSABRI treatment. This program represents Elan and Biogen Idec's commitment to making the unique benefits of TYSABRI available in a responsible manner. The program already has been implemented for patients receiving TYSABRI therapy for MS. About TYSABRI Data from the ENCORE trial showed that TYSABRI induced response and remission among patients with moderately to severely active Crohn's disease, and objective evidence of inflammation, as measured by elevated C-reactive protein. After 12 weeks of therapy, 60% of TYSABRI-treated patients attained response, compared to 44% of placebo treated patients, and 48% of patients had sustained response at both weeks 8 and 12, compared to 32% of placebo treated patients (p less than 0.005 for both). Among the patients who had inadequate response to prior treatment with inhibitors of TNF-alpha, 38% achieved sustained response at weeks 8 and 12. Data from the ENACT-2 showed that an additional year of TYSABRI therapy sustained response and remission among patients with an initial response to TYSABRI after 3 months in ENACT-1. Of patients with response in ENACT-1, sustained response during ENACT-2 was seen in 61% of patients treated with TYSABRI at every visit through an additional 6 months of therapy, compared to 29% for placebo. This treatment difference was also sustained through 12 months of additional therapy (54% vs. 20%). Remission was sustained at every visit with an additional 6 months or 12 months of TYSABRI in 45% and 40% of patients, respectively, compared to 26% and 15% of placebo treated patients (p less than 0.005 for all comparisons). Among the patients that had previously failed TNF-inhibitors, response and remission was sustained at every visit through an additional 6 months of TYSABRI in 52% and 30% of patients, respectively. Among patients on steroids and in whom a clinical response was achieved, approximately two-thirds were able to discontinue steroids within 10 weeks of beginning to taper steroids. TYSABRI increases the risk of PML, an opportunistic viral infection of the brain that usually leads to death or severe disability. Other serious adverse events that have occurred in TYSABRI-treated patients included hypersensitivity reactions (e.g., anaphylaxis) and infections. Serious opportunistic and other atypical infections have been observed in TYSABRI-treated patients, some of whom were receiving concurrent immunosuppressants. Herpes infections were slightly more common in patients treated with TYSABRI. In MS and CD clinical trials, the incidence and rate of other serious adverse events, including serious infections, were similar in patients receiving TYSABRI and those receiving placebo. Common adverse events reported in TYSABRI-treated MS patients include headache, fatigue, infusion reactions, urinary tract infections, joint and limb pain, and rash. Other common adverse events reported in TYSABRI-treated CD patients include respiratory tract infections and nausea. Clinically significant liver injury has been reported in patients treated with TYSABRI in the post-marketing setting. TYSABRI has previously been approved for relapsing forms of MS in the United States and relapsing-remitting MS in the European Union. According to data that have been published in the New England Journal of Medicine, after two years, TYSABRI treatment led to a 68% relative reduction (p less than 0.001) in the annualized relapse rate compared to placebo and reduced the relative risk of disability progression by 42-54% (p less than 0.001). In addition to the United States and European Union, TYSABRI is also approved for MS in Switzerland, Canada, Australia, New Zealand and Israel. TYSABRI was discovered by Elan and is co-developed with Biogen Idec. About the Company Headquartered in Ireland, Elan Corporation plc (NYSE: ELN) -- http://www.elan.com/-- is a neuroscience-based biotechnology company. Elan shares trade on the New York, London and Dublin Stock Exchanges. The company has locations in Bermuda and Japan. * * * As reported on Oct. 15, 2007, Standard & Poor's Ratings Services revised its outlook on Elan Corp. PLC to positive from stable and affirmed the ratings on the company and its subsidiaries, including the 'B' corporate credit rating. In April 2007, in connection with the implementation of its new Probability-of-Default and Loss-Given-Default rating methodology for the corporate families in the Gaming, Lodging and Leisure, Manufacturing, and Energy sectors, Moody's Investors Service confirmed its B3 Corporate Family Rating for Elan Corporation plc and assigned a B2 probability-of-default rating to the company. Debt ratings remain unchanged in conjunction with the implementation of Moody's Loss Given Default and Probability of Default rating methodology for existing non-financial speculative-grade corporate issuers in Europe, Middle East and Africa. * Issuer: Elan Finance plc Projected Debt LGD Loss-Given Debt Issue Rating Rating Default ---------- ------- ------- -------- US$300M Senior Unsecured Regular Bond/Debenture Due 2011 B3 LGD4 65% US$300M Senior Unsecured Regular Bond/Debenture Due 2011 B3 LGD4 65% US$150M Senior Unsecured Regular Bond/Debenture Due 2013 B3 LGD4 65% US$850M 7.75% Senior Unsecured Regular Bond/Debenture Due 2011 B3 LGD4 65% US$465M 8.875% Senior Unsecured Regular Bond/Debenture Due 2013 B3 LGD4 65 FOSTER WHEELER: To Supply Heat Recovery Steam Generator in Spain ---------------------------------------------------------------- Foster Wheeler Ltd. announced that Foster Wheeler Energia, S.A., a Spanish subsidiary of its Global Power Group, has been awarded a contract for a heat recovery steam generator through SENER, IngenierIa y Sistemas, S.A. for PETRONOR. The boiler will be integrated in a cogeneration plant that REPSOL-YPF/PETRONOR is constructing at the Petronor Refineria de Somorrostro in Bilbao, Spain. REPSOL-YPF owns 85% of the Petronor Refinery. Foster Wheeler has received a full notice to proceed on this contract. The terms of the award were not disclosed, and the contract will be included in the company's bookings for the fourth-quarter of 2007. Foster Wheeler will design, supply and erect the HRSG, and will also provide start-up supervision for the HRSG, which will be coupled to a General Electric PG-6581 combustion turbine, with a total installed capacity of 42 MWe (gross megawatt electric). The HRSG will produce medium- and low-pressure steam for the refinery process. Commercial operation of the HRSG is scheduled for the second quarter of 2009. About Foster Wheeler Foster Wheeler Ltd. (Nasdaq: FWLT) -- http://www.fwc.com/-- offers a broad range of engineering, procurement, construction, manufacturing, project development and management, research and plant operation services. Foster Wheeler serves the refining, upstream oil and gas, LNG and gas-to-liquids, petrochemical, chemicals, power, pharmaceuticals, biotechnology and healthcare industries. The corporation is based in Hamilton, Bermuda, and its operational headquarters are in Clinton, New Jersey. * * * As reported in the Troubled Company Reporter on Dec. 18, 2006, Standard & Poor's Ratings Services revised its outlook on Foster Wheeler Ltd. to positive from stable. At the same time, Standard & Poor's affirmed its 'B+' corporate credit rating and other ratings on the company. The company had about US$217 million of total debt at Sept. 29, 2006. MAGNA RE: Proofs of Claim Filing Is Until Tomorrow -------------------------------------------------- Magna Re Ltd.'s creditors are given until Jan. 22, 2008, to prove their claims to Orlando A. Smith, the company's liquidator, or be excluded from receiving any distribution or payment. In their proofs of claim, creditors must indicate their full names, addresses, the full particulars of their debts or claims, and the names and addresses of their lawyers, if any. Magna Re's shareholder decided on Dec. 14, 2007, to place the company into voluntary liquidation under Bermuda's Companies Act 1981. The liquidator can be reached at: Orlando A. Smith Milligan-Whyte & Smith Mintflower Place, 2nd Floor 8 Par-la-Ville Road Hamilton, Bermuda HM 08 ============= B O L I V I A ============= * BOLIVIA: Comibol To Boost Gold Mining Complexes ------------------------------------------------- Bolivian state-owned mining company Comibol will boost gold mining complexes to take advantage of high gold prices on the international market, state news agency Agencia Boliviana de Informacion reports. Comibol head Hugo Miranda commented to Agencia Boliviana, "Our [production] costs never rise above US$900/oz so we think that if prices carry on at this rate, they are going to benefit the country." Comibol will buy machinery and equipment, provide economic support and help with exploration in specific areas to reactivate units, Mr. Miranda told Business News Americas. * * * As reported in the Troubled Company Reporter-Latin America on Dec. 26, 2007, Standard & Poor's Ratings Services has assigned B- long-term sovereign local and foreign currency ratings and C short-term sovereign local and foreign currency ratings on Bolivia. =========== B R A Z I L =========== AES CORP: Brazilian Unit Concludes Substations Automation --------------------------------------------------------- AES Eletropaulo, The AES Corp.'s Brazilian power distributor, said in a statement that it has completed the automation at all of its 141 substations. AES Eletropaulo told Business News Americas that the automation process involved linking substations to AES Eletropaulo's operations center, which is able to turn substations on and off as required. Investments for the automation totaled BRL9.45 million, BNamericas states. About AES Eletropaulo AES Eletropaulo is a major Brazilian power distributor in Sao Paulo. The company's full name is Eletropaulo Metropolitana Eletricidade de Sao Paulo. Eletropaulo has around five million customers. Eletropaulo stock is traded on Bovespa, where it is part of the Ibovespa index. The company is majority owned by AES Corporation. About AES Corp. 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 has operations in India. Generating 44,000 megawatts of electricity through 124 power facilities, the company delivers electricity through 15 distribution companies. 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 US$2 billion from US$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 US$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. ALCATEL-LUCENT: Inks BRL2B Maintenance Pact with Brasil Telecom --------------------------------------------------------------- Alcatel-Lucent has signed an almost BRL2 billion contract with Brasil Telecom Participacoes for maintenance of network, Brasil Telecom said in a statement. Dow Jones Newswires relates that Alcatel-Lucent won the two-year contract against Ericsson and Nokia Siemens Networks. The contract can be extended. Alcatel-Lucent will be responsible for the administration and maintenance of Brasil Telecom's fixed-line and wireless telephony infrastructure and data transmission network. Brasil Telecom hopes it will lessen costs. The network's maintenance is one of Brasil Telecom's principle outlays, representing almost 10% of all expenses in the first nine months of 2007, Dow Jones states. 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. About Alcatel-Lucent 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. * * * As reported in the Troubled Company Reporter-Latin America on Nov. 9, 2007, Moody's Investors Service downgraded to Ba3 from Ba2 the Corporate Family Rating of Alcatel-Lucent. The ratings for senior debt of the group were equally lowered to Ba3 from Ba2 and the trust preferred notes of Lucent Technologies Capital Trust I have been downgraded to B2 from B1. At the same time, Moody's affirmed its Not-Prime rating for short-term debt of Alcatel-Lucent. Moody's said the outlook for the ratings is stable. Alcatel-Lucent's Long-Term Corporate Credit rating and Senior Unsecured Debt carry Standard & Poor's Ratings Services' BB rating. Its Short-Term Corporate Credit rating stands at B. BANCO DAYCOVAL: Capital Research Acquires 2.38% Stake in Firm ------------------------------------------------------------- Banco Daycoval said in a filing with Brazilian securities regulator Comissao de Valores Mobiliarios that US investment management company Capital Research and Management Company has acquired further 2.38% stake in the bank, increasing its control in the bank to 4.24% from 1.86%. Business News Americas relates that Capital Research's preferred shares in Banco Daycoval now has increased to nearly 11.8% from 5.17%. Banco Daycoval's net profits rose 103% to BRL58.7 million in the third quarter 2007, compared to the third quarter of 2006, BNamericas states. About Capital Research Capital Research and Management Co. is an institutional shareholder in several newspaper companies. About BAnco Daycoval Headquartered in Sao Paulo, Brazil, Banco Daycoval started its activities in 1968, with the creation of Daycoval DTVM and Valco Corretora de Valores. Brothers Ibrahim and Sasson Dayan control the bank. It is the core business of its shareholders and specialises in financing small- and medium-sized companies, backed by receivables. It also operates with consignment lending for payroll deduction and consumer financing. Since June 2007, the bank has had 29% of its shares traded at Bovespa on the New Brazilian Stock Market. These shares enjoy a tag- along privilege, giving minority shareholders 100% of the value of the block of controlling shares in the event of the sale of the institution. As reported in the Troubled Company Reporter-Latin America on Nov. 27, 2007, Fitch Ratings assigned Banco Daycoval S.A. these ratings: -- Long-term foreign currency Issuer Default Rating 'BB-'; Outlook Stable -- Long-term local currency IDR 'BB-'; Outlook Stable -- Short-term foreign currency IDR 'B' -- Short-term local currency IDR 'B' -- Individual rating 'C/D' Banco Daycoval's other ratings are National Long-term rating 'A(bra)' with Positive Outlook, National Short-term rating 'F1(bra)' and Support rating '5'. BANCO ITAU: Subsidiary Inks Exclusive Pact with DAFRA ----------------------------------------------------- Banco Itau Holding Financeira S.A., through its subsidiary, Banco Itau S.A., and Dafra da Amazonia Industria e Comercio de Motocicletas Ltda., have signed a "Memorandum of Understanding" establishing the requirements for the constitution of a partnership, which will offer on an exclusive basis: a) the financing of promotional campaigns for the acquisition of DAFRA motorcycles; and b) a working capital loan to the dealerships for the distribution of motorcycles. In addition, DAFRA will recommend ITAU's products and financial, insurance and private pension services to its dealerships. ITAU will pay BRL20 million to DAFRA for these exclusive rights over a period of ten years, this agreement being eligible for renewal. In line with past practices, the payment shall be registered as an anticipated expense and recognized in ITAU's results pro rata over the period of the partnership. DAFRA is a component of the Itavema Group, which operates in several sectors. These include plastics, vehicle rentals, transportation and logistics and vehicle dealerships (made up of multi-brand name vehicle and motorcycle dealerships, with 64 sales outlets nationwide). DAFRA is to manufacture the motorcycles in Manaus, state of Amazonas, its focus being on machines of up to 250 cc. The partnership between ITAU and DAFRA has the potential to leverage the sales of motorcycles and related financial products and services, strengthening the position of ITAU with a stake in this significant growth market. About Banco Itau Banco Itau Holding Financeira SA -- http://www.itau.com.br/-- is a private bank in Brazil. The company has four principal operations: banking -- including retail banking through its wholly owned subsidiary, Banco Itau SA(Itau), corporate banking through its wholly owned subsidiary, Banco Itau BBA SA (Itau BBA) and consumer credit to non-account hold customers through Itaucred -- credit cards, asset management and insurance, private retirement plans and capitalization plans, a type of savings plan. Itau Holding provides a variety of credit and non-credit products and services directed towards individuals, small and middle market companies and large corporations. * * * As reported in the Troubled Company Reporter-Latin America on Feb. 12, 2007, Fitch changed the outlook of these ratings of Banco Itau Holding Financiera S.A.: -- Foreign currency IDR at 'BB+'; Outlook to Positive from Stable; -- Local currency IDR at 'BBB-'; Outlook to Positive from Stable; and -- National Long-term rating at 'AA+(bra)'; Outlook to Positive from Stable. BENCHMARK ELECTRONICS: Moody's Puts Ba2 Rating on US$100MM Debt --------------------------------------------------------------- Moody's Investors Service has assigned a Ba2 (LGD-3, 39%) rating to Benchmark Electronics, Inc.'s new 5-year US$100 million senior secured revolving credit facility due 2012 and affirmed the company's Ba3 corporate family rating. The rating outlook is stable. Proceeds from the new credit facility are intended to be used for working capital needs and general corporate purposes. It replaces an unrated US$100 million revolver that was set to expire in January 2008. The new credit facility includes an accordion feature under which total commitments may be increased by an additional US$100 million. The rating for the US$100 million senior secured revolver reflects the overall probability of default of the company, to which Moody's assigns a probability of default rating of Ba3. Under Moody's Loss Given Default methodology, the new senior secured credit facilities are rated one notch above the Ba3 CFR given that they receive sufficient support from the company's senior unsecured non-debt obligations, which provide debt cushion for any drawings under the secured bank credit facility. The credit facility is guaranteed by the borrower's domestic subsidiaries, and is secured by: (1) substantially all assets of the borrower, subsidiary guarantors and the holding company; (2) 100% of the capital stock of the borrower and domestic subsidiaries; and (3) 65% of the voting capital stock of foreign subsidiaries. The facility contains financial covenants requiring the maintenance of certain financial ratios (i.e., financial leverage equal to or less than 2.75 debt to EBITDA, 1.2 minimum fixed charge coverage and minimum consolidated tangible net worth). These new ratings were assigned: -- Probability of Default Rating -- Ba3 -- US$100 Million Senior Secured Revolving Credit Facility due 2012 -- Ba2 (LGD-3, 39%) This rating was affirmed: -- Corporate Family Rating -- Ba3 Benchmark Electronics' Ba3 CFR reflects the company's minimal leverage and niche position as a Tier 1 electronics manufacturing services provider of products in the non-consumer computing, telecommunications and medical devices markets. While the company has historically generated operating margins in the upper range for the industry (4-5% range), the company experienced margin erosion in the third quarter of 2007 due to a decrease in activity for its largest customer, slower program ramps and softer end-market demand. The weakness in the most recent quarter illustrates the volatility inherent within the electronics manufacturing services industry, exacerbated by client concentration and heightened competition from industry consolidation (i.e., Flextronics' acquisition of Solectron). Furthermore, Moody's expects the company to continue to face pricing pressures from OEM customers as well as from Asian competitors. Moody's rating outlook is stable, reflecting the expectation that: (1) revenue levels will bounce back in the near term once new programs begin to ramp up; (2) bookings levels will remain healthy, which was the case during the third quarter of 2007 with approximately US$100-US$125 million of new bookings; and (3) Benchmark Electronics should continue to be free cash flow positive in 2008. The stable outlook also reflects Moody's view that it does not expect the company's credit profile to change significantly over the intermediate term. The company's revenue and EBITDA for the twelve months ended Sept. 30, 2007 were US$2.9 billion and US$168 million, respectively. Based in Angleton, Texas, Benchmark Electronics Inc. (NYSE: BHE) -- http://www.bench.com/-- manufactures electronics and provides services to original equipment manufacturers of computers and related products for business enterprises, medical devices, industrial control equipment, testing and instrumentation products, and telecommunications equipment. The company's global operations include facilities in The Netherlands, Romania, Ireland, Brazil, Mexico, Thailand, Singapore, and China. BRASIL TELECOM: Inks BRL2B Maintenance Deal with Alcatel-Lucent --------------------------------------------------------------- Brasil Telecom said in a statement that it has signed an almost BRL2 billion contract with Alcatel-Lucent for the maintenance of its network. Dow Jones Newswires relates that Alcatel-Lucent won the two-year contract against Ericsson and Nokia Siemens Networks. The contract can be extended. Alcatel-Lucent will be responsible for the administration and maintenance of Brasil Telecom's fixed-line and wireless telephony infrastructure and data transmission network. Brasil Telecom hopes it will lessen costs. The network's maintenance is one of Brasil Telecom's principle outlays, representing almost 10% of all expenses in the first nine months of 2007, Dow Jones states. About Alcatel-Lucent 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. 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. COMPANHIA ENERGETICA: Sao Paulo Selling 33.37% Stake in February ---------------------------------------------------------------- The Sao Paulo state will be selling its 33.37% stake in Companhia Energetica de Sao Paulo next month, reports say, citing state deputy finance minister George Tormin. As reported in the Troubled Company Reporter-Latin America on Jan. 4, 2008, Companhia Energetica said that the Sao Paulo state government scheduled a public hearing to provide further information on the sale of its stake in the firm on Jan. 15. The Sao Paulo state's privatization board recommended the state to sell its 33.37% stake in Companhia Energetica by the end of the first quarter 2008. Business News Americas relates that the 33.37% stakes represents 109 million shares. A BRL55 price would put Sao Paulo's stake at BRL6.01 billion. BNamericas relates that Brazilian brokerage Unibanco Corretora is positive that the minimum price range for Companhia Energetica's shares will be up to BRL55. Unibanco Corretora market analyst Fernando Abdalla said in a report, "In our view, a market price below BRL45 per share is an interesting buy opportunity. However, if the stock price surpasses BRL50s a share, the company's shares do not offer an attractive upside potential." Mr. Tormin told BNamericas that the edict for the sale will be published in two weeks. The minimum price hasn't been determined yet. Other state-run power firms in Brazil won't be allowed to present bids for the stake, BNamericas states. Headquartered in Sao Paulo, Brazil, Companhia Energetica de Sao Paulo (BOVESPA: CESP3, CESP5 and CESP6) is the country's third largest power generator, majority owned by the State of Sao Paulo. CESP operates 6 hydroelectric plants with total installed capacity of 7,456 MW and reported net revenues of BRL1,983 million in the last twelve months through Sept. 30, 2006. As reported in the Troubled Company Reporter-Latin America on Oct. 10, 2007, Standard & Poor's Ratings Services has raised its ratings on electricity generator Companhia Energetica de Sao Paulo, including its corporate credit rating to 'B' from 'B-'. At the same time, S&P raised its Brazil national scale ratings on CESP to 'brBBB-' from 'brBB'. S&P said the outlook remains positive on both scales. COMPANHIA SIDERURGICA: Takes Away Vale's Right To Buy Excess Ore ---------------------------------------------------------------- Companhia Siderurgica Nacional told Reuters that it has removed iron ore mining and metals group Companhia Vale do Rio Doce's preference rights to purchase excess ore from its Casa de Pedra iron ore mine in Minas Gerais. Companhia Siderurgica said in a statement that it obeyed the Braziliain antitrust agency Cade's decision over rights to excess production at Casa de Pedra. Reuters notes that that Companhia Vale lost all legal challenges to overturn a regulatory ruling on the issue. Business News Americas relates that Cade forced Brazilian mining and metals group Vale in 2005 to give up its right to buy excess iron ore from Casa de Pedra or divest iron ore miner Ferteco. The Mining Journal Online explains that Cade found that Companhia Vale's dominance of the domestic market was increasing. BNamericas says that Companhia Vale lost multiple appeals in 2007. It had an injunction canceled that had allowed it to disregard Cade's decision. According to Companhia Siderurgica's statement, the firm filed a statement of compliance with Cade to keep itself from conducting contractual provisions concerning the rights of first refusal of Vale related to Casa de Pedra. The Mining Journal Online states that Cade fined Companhia Vale BRL33.6 million and ordered the firm to surrender give up ore rights at Casa de Pedra. Cade also fined Companhia Vale for its delay in indicating its preferred response to the regulator's initial 2005 order, which resulted from the firm's acquisition of five Brazilian mining companies. Companhia Siderurgica's mining head Juarez Saliba admitted last year that Companhia Vale's rights to Casa de Pedra has hurt Companhia Siderurgica's efforts to boost production at the mine to 40 million tons yearly by 2009 and 60 million tons per year by 2010, The Mining Journal Online says. Companhia Vale said in a statement that it would continue fighting Cade's order in court and knew of no legal authority that would let it be fined. About Companhia Vale Headquartered in Rio de Janeiro, Brazil, Companhia Vale do Rio Doce -- http://www.cvrd.com.br/-- engages primarily in mining and logistics businesses. It engages in iron ore mining, pellet production, manganese ore mining, and ferroalloy production, as well as in the production of nonferrous minerals, such as kaolin, potash, copper, and gold. About Companhia Siderurgica Headquartered Sao Paolo, Brazil, Companhia Siderurgica Nacional S.A. -- http://www.csn.com.br/-- produces, sells, exports and distributes steel products, like hot-dip galvanized sheets, tin mill products and tinplate. The company also runs its own iron ore, manganese, limestone and dolomite mines and has strategic investments in railroad companies and power supply projects. The group also operates in Brazil, Portugal and the U.S. As reported in the Troubled Company Reporter-Latin America on Dec. 27, 2007, Standard & Poor's Ratings Services revised its outlook on Brazil-based steel maker Companhia Siderurgica Nacional and related entity National Steel S.A. to positive from stable. At the same time, Standard & Poor's affirmed its 'BB' corporate credit rating on CSN and its 'B+' rating on NatSteel. DELPHI: ND Acquisition Offers US$44.2 Million for Bearing Biz ------------------------------------------------------------- Delphi Automotive Systems LLC and Delphi Technologies, Inc., debtor-subsidiaries of Delphi Corp., intend to sell their global bearings business to ND Acquisition Corp., or to another party submitting a higher and better offer for the business. ND Acquisition, a wholly owned subsidiary of private equity investment firm Resilience Capital Partners LLC, has agreed to submit a stalking horse bid of US$44,200,000, subject to adjustments, for the Bearings Business. The Bearings Business produces both wheel bearings and roller clutch product lines. It is the leading producer of Gen III wheel bearings in North America and the primary North American supplier of those parts to General Motors. The Bearings Business occupies a 1.3-million square foot plant set on 133 acres in Sandusky, Ohio. The Debtors have invested more than US$140,000,000 in new tooling and refurbishment for older equipment and new state-of- the-art machinery and equipment since 2000. The Bearings Business employs approximately 1,000 people, including approximately 775 Hourly Employees. The hourly workforce is represented by the International Union, United Automobile, Aerospace and Agricultural Implement Workers of America. Marketing Efforts for Non-Core Businesses As previously reported, to achieve the necessary cost savings and operational effectiveness envisioned in its transformation plan, Delphi is streamlining its product portfolio to capitalize on its world-class technology and market strengths and make the necessary manufacturing realignment consistent with its new focus. As part of the company's transformation plan, the company identified the Bearings Business as a non-core business subject to disposition. The Debtors believe that as a standalone business, the Bearings Business could become more profitable and competitive, and thus, have determined that the value of the Bearings Business would be maximized through its divestiture, relates John Wm. Butler, Jr., Esq., at Skadden, Arps, Slate, Meagher & Flom LLP, in Chicago, Illinois. The Debtors, according to Mr. Butler, have actively marketed the Bearings Business since February 2007. After evaluating proposals submitted by potential buyers, the Debtors concluded that ND Acquisition offered the most advantageous terms and the greatest economic benefit. Pursuant to a Sale and Purchase Agreement, entered into on Jan. 15, 2008, the Debtors have agreed to sell the Bearings Business to ND Acquisition for US$44,200,000, subject to certain adjustments, and subject to higher or otherwise better offers. Bidding Procedures The Debtors will accept and consider competing bids for the Bearings Business. The proposed Bidding Procedures provide, in relevant part: (a) Participation Requirements: To ensure that only bidders with financial ability and a serious interest in the purchase of the Acquired Assets participate in the Bidding Process, the Bidding Procedures provide for certain requirements for a potential bidder to become a "Qualified Bidder", including the submission of certain financial assurances. (b) Due Diligence: All Qualified Bidders would be afforded an opportunity to participate in the diligence process. (c) Bid Deadline: All bids would have to be received not later than 11:00 a.m. prevailing Eastern time, by Feb. 11, 2008. The Debtors would provide the UAW with notice of all Qualified Bidders and their contact information. (d) Bid Requirements: All bids would be required to include certain documents, including a good-faith deposit of US$750,000. (e) Qualified Bids: To be deemed a "Qualified Bid," a bid would be required to be received by the Bid Deadline and, among other things, (i) be on terms and conditions that are substantially similar to, and are not materially more burdensome or conditional to the Debtors than, those contained in the Agreement, (ii) have a value of the Purchase Price plus the amount of the US$1,500,000 Break- Up Fee and the Expense Reimbursement, plus US$500,000 in the case of an initial Qualified Bid, plus US$250,000 in the case of any subsequent Qualified Bids over the immediately preceding highest Qualified Bid. (f) Conduct Of Auction: If the Debtors receive at least one Qualified Bid in addition to that of ND Acquisition, they would conduct an auction of the Acquired Assets at 10:00 a.m. (prevailing Eastern time) on Feb. 13, 2008, or at a later date. (g) Selection Of Successful Bid: After the conclusion of the Auction, the Debtors, in consultation with their advisors, would review each Qualified Bid and identify the highest or otherwise best offer for the Acquired Assets and the bidder making the bid. The Debtors would sell the Acquired Assets for the highest or otherwise best bid to the Successful Bidder upon the approval of the Court after the sale hearing. (h) Sale Hearing: The Debtors request that the hearing to consider the sale to ND Acquisition, or the winning bidder, be scheduled for Feb. 21, 2008, at 10:00 a.m., prevailing Eastern time. If the highest bidder fails to consummate the sale for specified reasons, then the second highest bid would be deemed to be the successful bid. About Delphi Corp. Headquartered in Troy, Michigan, Delphi Corporation (PINKSHEETS: DPHIQ) -- http://www.delphi.com/-- is the single supplier of vehicle electronics, transportation components, integrated systems and modules, and other electronic technology. The company's technology and products are present in more than 75 million vehicles on the road worldwide. Delphi has regional headquarters in Japan, Brazil and France. The company filed for chapter 11 protection on Oct. 8, 2005 (Bankr. S.D.N.Y. Lead Case No. 05-44481). John Wm. Butler Jr., Esq., John K. Lyons, Esq., and Ron E. Meisler, Esq., at Skadden, Arps, Slate, Meagher & Flom LLP, represent the Debtors in their restructuring efforts. Robert J. Rosenberg, Esq., Mitchell A. Seider, Esq., and Mark A. Broude, Esq., at Latham & Watkins LLP, represents the Official Committee of Unsecured Creditors. As of March 31, 2007, the Debtors' balance sheet showed US$11,446,000,000 in total assets and US$23,851,000,000 in total debts. The Court approved Delphi's First Amended Joint Disclosure Statement and related solicitation procedures for the solicitation of votes on the First Amended Plan on Dec. 20, 2007. The Court will convene the hearing to consider confirmation of the Plan on Jan. 17, 2008. (Delphi Bankruptcy News, Issue No. 107; Bankruptcy Creditors' Service Inc., http://bankrupt.com/newsstand/or 215/945-7000) DELTA AIR: Commences Merger Negotiations with Northwest & UAL ------------------------------------------------------------- Delta Air Lines Inc. obtained approval from its board of directors on Jan. 11, 2007, to engage in formal merger talks with both Northwest Airlines Corp. and UAL Corp., The Wall Street Journal reports. WSJ says Delta, which is in the early stages of discussions with both Northwest and UAL, hopes to reach an agreement with one of them over the next two weeks. Delta is anticipating a deal announcement as early as mid- February following Delta's board meeting scheduled early in the month, says the report. "A special committee of the board is working with management to explore strategic options, including potential consolidation transactions. However, we are not providing updates, while this process is ongoing," Delta spokeswoman Betsy Talton said. Northwest and UAL declined to comment. A UAL-Delta or a Northwest-Delta merger, which would likely be a stock for stock transaction, would make Delta the largest airline in the world, according to reports. Experts in the airline industry, however, believe that a Northwest-Delta merger is more likely as Delta's Chief Executive Richard Anderson was previously CEO at Northwest, and is already well acquainted with Northwest's operations. Senator Johnny Isakson, a Georgia Republican, said that Mr. Anderson told him in December that if there's a merger or an acquisition, Delta would keep its name and Atlanta hub, Bloomberg News reports. About Delta Air Based in Atlanta, Georgia, Delta Air Lines Inc. (NYSE:DAL) -- http://www.delta.com/-- is the world's second-largest airline in terms of passengers carried and the leading U.S. carrier across the Atlantic, offering daily flights to 328 destinations in 56 countries on Delta, Song, Delta Shuttle, the Delta Connection carriers and its worldwide partners. Delta flies to Argentina, Australia and the United Kingdom, among others. The company and 18 affiliates filed for chapter 11 protection on Sept. 14, 2005 (Bankr. S.D.N.Y. Lead Case No. 05-17923). Marshall S. Huebner, Esq., at Davis Polk & Wardwell, represents the Debtors in their restructuring efforts. Timothy R. Coleman at The Blackstone Group L.P. provides the Debtors with financial advice. Daniel H. Golden, Esq., and Lisa G. Beckerman, Esq., at Akin Gump Strauss Hauer & Feld LLP, provide the Official Committee of Unsecured Creditors with legal advice. John McKenna, Jr., at Houlihan Lokey Howard & Zukin Capital and James S. Feltman at Mesirow Financial Consulting, LLC, serve as the Committee's financial advisors. The Debtors filed a chapter 11 plan of reorganization and disclosure statement explaining that plan on Dec. 19, 2007. On Jan. 19, 2007, they filed revisions to the plan and disclosure statement, and submitted further revisions to the plan on Feb. 2, 2007. On Feb. 7, 2007, the Court approved the Debtors' disclosure statement. In April 25, 2007, the Court confirmed the Debtors' plan. That plan became effective on April 30, 2007. The Court entered a final decree closing 17 cases on Sept. 26, 2007. As of Sept. 30, 2007, the company's balance sheet showed total assets of US$32.7 billion and total liabilities of US$23 billion, resulting in a US$9.7 billion stockholders' equity. At Dec. 31, 2006, deficit was US$13.5 billion. (Delta Air Lines Bankruptcy News; Bankruptcy Creditors' Service, Inc., http://bankrupt.com/newsstand/or 215/945-7000). * * * As reported in yesterday's Troubled Company Reporter, according to Standard and Poor's, media reports that Delta Air Lines Inc. (B/Positive/--) entered into merger talks with UAL Corp. (B/Stable/--) and Northwest Airlines Corp. (B+/Stable/--) has no effect on its ratings or outlook on Delta, but that confirmed merger negotiations would result in S&P's placing ratings of Delta and other airlines involved on CreditWatch, most likely with developing or negative implications. GERDAU AMERISTEEL: KeyBanc Capital Pares Shares Rating to Buy ------------------------------------------------------------- KeyBanc Capital Markets analysts have downgraded Gerdau Ameristeel Corporation's shares to "buy" from "aggressive buy," Newratings.com reports. Newratings.com relats that the target price for Gerdau Ameristeel was decreased to US$15 from US$18. KeyBanc Capital said in a research note that Gerdau Ameristeel has low exposure to the domestic flat-rolled markets, an area of upside for the domestic steel industry. The analysts told Newratings.com that the lack of dividend yield and share buyback might lessen Gerdau Ameristeel's ability to underpin its share price if the macro sentiment deteriorates. The earnings per share estimate for this year was decreased to US$1.80 from US$1.95, Newratings.com states. About Gerdau Ameristeel Headquartered in Tampa, Florida, Gerdau Ameristeel Corporation (NYSE: GNA; TSX: GNA.TO) -- http://www.ameristeel.com/-- is a mini-mill steel producer in North America. Through its vertically integrated network of 17 mini-mills, 17 scrap recycling facilities and 52 downstream operations, Gerdau Ameristeel serves customers throughout North America. The company's products are sold to steel service centers, steel fabricators, or directly to original equipment manufactures for use in a variety of industries, including construction, cellular and electrical transmission, automotive, mining and equipment manufacturing. Gerdau Ameristeel is a unit of Brazilian firm Gerdau SA. * * * As reported in the Troubled Company Reporter on Nov. 26, 2007, Moody's Investors Service affirmed Gerdau S.A.'s Ba1 corporate family rating and stable outlook, following the announcement of an agreement to acquire the specialty steel operations of Quanex Corporation, mainly represented by its MacSteel division for some US$1.46 billion in cash. All other ratings related to the company were affirmed. Ratings affirmed are: Issuer: Gerdau S.A. -- Ba1 Global Local Currency Corporate Family Rating -- US$600 million Senior Unsecured Guaranteed Perpetual Notes: Ba1 Foreign Currency Rating Issuer: Gerdau Brazil (fictitious entity representing the Brazilian operations of Gerdau S.A. comprising Gerdau Acominas S.A., Gerdau Acos Longos S.A., Gerdau Acos Especiais S.A., and Gerdau Comercial de Acos S.A.). -- Ba1 Global Local Currency Corporate Family Rating Issuer: Gerdau Ameristeel Corporation -- Ba1 Probability of Default Rating -- Ba1 Corporate Family Rating -- US$405 million Senior Unsecured Regular Bond: Ba1, LGD4 59% Issuer: Jacksonville Economic Development Comm. -- US$23 million Senior Unsecured Revenue Bonds guaranteed by Gerdau Ameristeel: Ba1, LGD4 59% Outlook for all ratings: stable IWT TESORO: Withdraws Exclusive Periods Extension Plea ------------------------------------------------------ IWT Tesoro Corporation and its debtor-affiliates have withdrawn, without prejudice, their request to further extend their exclusive periods. Paper filed with the United States Bankruptcy Court for the Southern District of New York did not cite any reasons why the request was withdrawn. As reported in the Troubled Company Reporter on Jan. 2, 2008, the Debtors asked the Court to further extend their exclusive period to file a plan for 120 days, and solicit acceptances of that plan for 180 days. The Debtors told the Court that they need sufficient time to formulate a consensual Chapter 11 plan of reorganization as they continue their negotiations with their proposed funder, KMA Capital, and the Official Committee of Unsecured Creditors. I.W.T. Tesoro Corporation, fka Ponca Acquisition Company, -- http://www.iwttesoro.com/-- is headquartered in New York City. The company and its subsidiaries distribute building materials, specifically hard floor and wall coverings. They are wholesalers and do not sell directly to any end user. Their products consist of ceramic, porcelain and natural stone floor, wall and decorative tile. They import a majority of these products from suppliers and manufacturers in Europe, South America (Brazil), and the Near and Far East. Their markets include the United States and Canada. They also offer private label programs for branded retail sales customers, buying groups, large homebuilders and home center store chains. The Debtor and its debtor-affiliates, International Wholesale Tile, Inc. and American Gres, Inc., filed for Chapter 11 bankruptcy protection on Sept. 6, 2007 (Bankr. S.D. NY Lead Case No. 07-12841). John K. Sherwood, Esq., at Lowenstein Sandler P.C., represents the Official Committee of Unsecured Creditors. As of June 30, 2007, the Debtors had total assets of US$39,798,579 and total debts of US$47,940,983. LYONDELL CHEMICAL: S&P Lowers Senior Secured Debt Rating to B ------------------------------------------------------------- Standard & Poor's Ratings Services has revised its recovery ratings on the US$100 million notes due 2010 and the US$225 million notes due 2020 issued by Lyondell Chemical Co. to '5' from '1'. The senior secured debt rating on these instruments have been lowered to 'B' from 'BB', one notch lower than the corporate credit rating on the company's parentLyondellBasell Industries AF S.C.A. (formerly Basell AF S.C.A. B+/Stable/--). The recovery ratings of '5' indicate S&P's expectation of modest (10%-30%) recovery in the event of a payment default. At the same time, the recovery rating on subsidiary Equistar Chemicals L.P.'s US$150 million senior notes due 2026 has been revised to '4' from '1' and the senior secured debt rating on these issues lowered to 'B+' from 'BB', the same level as the corporate credit rating. The recovery rating of '4' indicates S&P's expectation of average (30%-50%) recovery in the event of a payment default. In addition, the 'B-' senior unsecured debt rating on the proposed US$2.5 billion senior unsecured notes originally to be issued by LyondellBasell Finance Co. Ltd. have been withdrawn, pending finalization of the structure of the debt facilities to refinance the existing US$8 billion bridge loan. The recovery rating on the proposed US$5.5 billion second-lien notes to be issued by LyondellBasell Finance Co. Ltd. has been revised to '5' from '4' and the issue rating lowered to 'B' from 'B+', one notch lower than the corporate credit rating. The recovery rating of '5' indicates S&P's expectation of modest (10%-30%) recovery in the event of a payment default. The ratings on the new US$12.45 billion senior secured debt facilities issued by Basell Holdings B.V., Lyondell Chemical Co., and certain of their subsidiaries, and guaranteed by LyondellBasell Industries AF S.C.A., and certain of their subsidiaries, remain unchanged at 'BB', two notches higher than the corporate credit rating, with a recovery rating of '1'. The recovery rating of '1' reflects S&P's expectation of very high (90%-100%) recovery in the event of a payment default. The ratings on the following instruments remain unchanged at 'B-', two notches lower than the corporate credit rating on the guarantor, LyondellBasell Industries AF S.C.A.: -- The US$1.3 billion equivalent bonds due 2015 issued by LyondellBasell Industries AF S.C.A. and the US$300 million bonds due 2027 issued by Basell Finance Co. B.V. -- The US$250 million senior unsecured notes due 2026 issued by related subsidiary Millennium America Inc. At the same time, the ratings have been withdrawn on all debt facilities issued by the group that had been refinanced as part of the recent acquisition and new debt issuance. The rating actions follow S&P's review of the security structure, with the benefit of final documentation. The security package for the legacy Equistar and Lyondell bonds is considerably weaker than originally envisaged. The security provided is shared with the senior secured term debt, which leads to