/raid1/www/Hosts/bankrupt/TCRLA_Public/080131.mbx
T R O U B L E D C O M P A N Y R E P O R T E R
L A T I N A M E R I C A
Thursday, January 31, 2008, Vol. 8, Issue 22
Headlines
A R G E N T I N A
ALITALIA SPA: Cargo Traffic Down 7.8% in December 2007
ALITALIA SPA: Deutsche Lufthansa May Bid for Malpensa Slots
BANCO HIPOTECARIO: Commences Tender Offer of Up to US$56 Million
FIDEICOMISO FINANCIERO: Moody's Gives Debt Securities Ba3 Rating
FIDEICOMISO (SECUPYME): Moody's Puts B1 Currency Rating
FORD MOTOR: At Ease with Tata Motors' Jaguar Brand Acquisition
GRAN MANZANA: Trustee Filing General Report Tomorrow
KONINKLIJKE AHOLD: Posts EUR6.6 Bln Net Sales in 4th Qtr 2007
NOSSE BOX: Proofs of Claim Verification Ends Tomorrow
PAN AMERICAN: Reports Increase in Cerro Dragon Reserves
SUN MICROSYSTEMS: Launching Package Software in Brazil
TYSON FOODS: Earns US$34 Million in Quarter Ended Dec. 29
B A H A M A S
METROPOLITAN BANK: Board Appoints Elizabeth D. Bondad as VP
TUPPERWARE BRANDS: Year-Over-Year 4Q Sales Up 19% to US$577-Mln
B E R M U D A
INTELSAT LTD: Increased Leverage Cues Moody's to Cut CFR to Caa1
B O L I V I A
COEUR D'ALENE: Reviews Strategic Alternatives for Rochester Mine
B R A Z I L
AAR CORP: Appoints Donald J. Wetekam as VP for MRO Segment
BANCO MODAL: Moody's Assigns Preliminary Junk & Low B Ratings
BANCO NACIONAL: Approves BRL95MM Loan for Beberibe Wind Farm
BANCO NACIONAL: Grants BRL95.2-Mln Loan to Companhia Brasileira
BANCO VOTORANTIM: Fitch Affirms Individual Rating at C/D
BRASIL TELECOM: Earns BRL205.6 Million for Fourth Quarter 2007
BUCKEYE TECH: Earns US$13.8 Mil. in Quarter Ended Dec. 31, 2007
COMPANHIA SIDERURGICA: Targets June for 1st Phase Completion
COSAN SA: Keen on Acquiring Esso's South American Assets
DELPHI CORP: Court Allows Committee Participation in Exit Loan
DELPHI CORP: Court Grants Final Approval of MDL Settlements
GOL LINHAS: Board Okays Share Buyback Program & Dividend Policy
HERCULES INC: Full Year Net Income Drops to US$28.5 Mln in 2007
IWT TESORO: Court Approves US$12.6-Million Sale to New Stream
JAPAN AIRLINES: To Boost Domestic Air Cargo Rates by 10%
PROPEX INC: Section 341(a) Creditors Meeting Set for March 4
PROPEX INC: US Trustee Appoints Five-Member Creditors' Committee
SANYO ELECTRIC: To Dissolve TV Joint Venture with Quanta
* BRAZIL: Petroleo Brasileiro Wants Esso's South American Assets
C A Y M A N I S L A N D S
AVENDIS GLOBAL: Grand Court Hearing Wind-Up Petition Tomorrow
CHINA ALPHA: Proofs of Claim Filing Ends on Feb. 7
CONTRA FUND: Proofs of Claim Filing Is Until Feb. 7
EARLSWOOD LTD: Proofs of Claim Filing Deadline Is Feb. 7
LOVAT INVESTMENTS: Proofs of Claim Filing Ends on Feb. 7
PAI HEDGED: Proofs of Claim Filing Deadline Is Feb. 6
PARMALAT SPA: Auditor Says Ex-CFO Alerted on Accounting Hole
PHZ GLOBAL: Proofs of Claim Filing Ends on Feb. 6
STABLE CREST: Proofs of Claim Filing Deadline Is Feb. 7
VISTA GENERAL: Proofs of Claim Filing Is Until Feb. 3
WILDRIVER FINANCE: Proofs of Claim Filing Deadline Is Tomorrow
C H I L E
NORSKE SKOGINDUSTRIER: Refutes S&P's BB Credit Rating Level
NORSKE SKOG: Strong Norwegian Currency Impacts Operating Result
ROCK-TENN CO: Moody's Confirms Ba3 Rating; Puts Ba2 on New Debt
C O L O M B I A
BANCOLOMBIA SA: Earns COP79.7 Million in December 2007
C O S T A R I C A
ANIXTER INT'L: Reports US$9.7MM Net Income in Qtr. Ended Dec. 28
D O M I N I C A N R E P U B L I C
JETBLUE AIRWAYS: Incurs US$4 Million Net Loss in Fourth Quarter
PRC LLC: Wants Jenner & Block as Special Conflicts Counsel
PRC LLC: Wants to Hire CXO LLC as Restructuring Advisors
PRC LLC: Wants Court Nod on Evercore Group as Investment Bankers
E C U A D O R
PETROECUADOR: Launches Contract Renegotiation with 5 Oil Firms
* ECUADOR: Receives US$1.6 Million Financing from MIF
M E X I C O
EL POLLO: Improved Liquidity Cues Moody's to Confirm B3 Rating
DURA AUTOMOTIVE: Seeks Ct. Consent for US$170MM Replacement Loan
FLEXTRONICS: Adjusted Net Income Up 84% to US$250MM in December
GREAT PANTHER: Output Increases 109% in 2007
GRUPO MEXICO: Earns US$207 Million in Fourth Quarter 2007
HARMAN INTERNATIONAL: Names John Stacey as VP & Chief HR Officer
MAZDA MOTOR: Launches Fully Redesigned Atenza
MOVIE GALLERY: Court Moves Exclusive Plan-Filing Period to June
MOVIE GALLERY: Disclosure Statement Hearing Adjourned to Feb. 5
MOVIE GALLERY: Wants to Perform Under Plan Support Pact
SUN MICROSYSTEMS: Managed Services Would be 35% of Revenues
U.S. STEEL: Board Increases Dividend Up to US$0.25 Per Share
U.S. Steel: Reports US$35 Million Net Income in Fourth Qtr. 2007
P A N A M A
CHIQUITA BRANDS: Moody's Affirms B3 Corporate Family Rating
NCO GROUP: Moody's Puts Ba3 Rating on US$139 Million Add-On Loan
* PANAMA: Fitch Affirms BB+ Issuer Default Ratings
P E R U
* PERU: Receives US$1.6 Million Financing from MIF
P U E R T O R I C O
ADELPHIA COMMS: Distributing US$216 Million & 737,476 Shares
CHATTEM INC: Fiscal Year 2007 Net Income Up to US$59.7 Million
ELECTRONIC DATA: Inks Management Deal with Breast Cancer Org.
LIN TV: Signs Pact with Cable One for Analog Retransmission
PILGRIM'S PRIDE: Posts US$32.3MM Net Loss in First Quarter 2008
SEARS HOLDINGS: CEO's Planned Departure Won't Affect S&P Ratings
V E N E Z U E L A
ARVINMERITOR INC: Fitch Drops Issuer Default Rating to B from B+
ARVINMERITOR: Incurs US$1MM Net Loss from Continuing Operations
PEABODY ENERGY: Board Declares US$0.06 Per Share Dividend
PETROLEOS DE VENEZUELA: Says Nation Safe from Economic Slowdown
* VENEZUELA: Faces Food Supply Problems, Says Nelson Maldonado
- - - - -
=================
A R G E N T I N A
=================
ALITALIA SPA: Cargo Traffic Down 7.8% in December 2007
------------------------------------------------------
Alitalia S.p.A.'s December 2007 traffic data compared to the
same period in 2006 showed no difference in passenger business
and a decrease in cargo business.
Passenger business showed traffic in line with the same period
of 2006 (+0.1%) with an increase of capacity offered by 0.7%.
December 2007 Cargo statistics, compared to December 2006,
showed a decrease in terms of goods flown (-7.8%) with capacity
offered down 5.7%.
Passengers Operations
Traffic, measured in Revenue Passenger Kilometers, showed levels
in line with 2006 (+0.1%) and the capacity, measured in
Available Seat Kilometres, increased by 0.7%.
Therefore load factor decreased by 0.4 percentage points
reaching 68.6%.
Alitalia carried 1.8 million passengers, up 1.2% compared to the
previous year.
Detailed comparisons with December 2006:
-- Domestic Passenger Network: traffic increased by 3.9%
with offered capacity up 6.2%. Load factor was 59.8%;
-- International Passenger Network: traffic decreased by
1.3% and offered capacity decreased by 0.7%. Load
factor was 62.6%.
-- Intercontinental Passenger Network: traffic (-0.2%) and
capacity offered (-0.1%) showed levels in line with
2006. Load factor was 76.6%.
Cargo Operations
December 2007 Cargo performance showed, compared to December
2006, a traffic decrease by 7.8% (traffic, measured in terms of
Revenue Ton Kilometers) while capacity was down 5.7%.
Overall Load factor was 71.2% with a decrease by 1.7 percentage
points. Regarding the All-Cargo sector, Load factor was 82.2%
with an increase by 5.6 percentage points compared with the same
period of 2006.
About Alitalia
Headquartered in Rome, Italy, Alitalia S.p.A. --
http://www.alitalia.it/-- provides air travel services for
passengers and air transport of cargo on national, international
and inter-continental routes. The Italian government owns 49.9%
of Alitalia. The company has operations in Argentina.
Despite a EUR1.4 billion state-backed restructuring in 1997,
Alitalia posted net losses of EUR256 million and EUR907 million
in 2000 and 2001 respectively. Alitalia posted EUR93 million in
net profits in 2002 after a EUR1.4 billion capital injection.
The carrier booked annual net losses of EUR520 million in 2003,
EUR813 million in 2004, EUR168 million in 2005, and
EUR625.6 million in 2006.
Italian Transport Minister Alessandro Bianchi has warned that
Alitalia may file for bankruptcy if the current attempt to sell
the government's 49.9% stake fails.
ALITALIA SPA: Deutsche Lufthansa May Bid for Malpensa Slots
-----------------------------------------------------------
Deutsche Lufthansa AG mulls bidding for some of Alitalia
S.p.A.'s slots at Milan's Malpensa airport, Marco Bertacche
writes for Bloomberg News, citing an unsourced La Stampa report.
According to La Stampa, Lufthansa plans to make Malpensa as its
southern European hub, adding that the German carrier's
executives will meet Jan. 29, 2008, with airport slot regulator
Assoclearance, to discuss flights at the Milan airport.
Alitalia has until Jan. 31, 2008, to confirm the Malpensa slots
it wants to keep.
As reported on Jan. 17, 2008, Alitalia and Italy have commenced
exclusive sale talks with Air France-KLM. The carriers have two
months to reach an agreement, which would be approved by the
government.
Tommaso Padoa Schioppa, Italy's finance minister, has delivered
a letter to Alitalia S.p.A. approving the commencement of
exclusive talks with Air France-KLM.
In its non-binding offer, Air France plans to:
-- acquire 100% of the shares of Alitalia through an
exchange offer;
-- acquire 100% of Alitalia convertible bonds; and
-- immediately inject at least EUR750 million into
Alitalia through a capital increase that will be open to
all shareholders and be fully underwritten by Air France.
Air France CEO Jean-Cyril Spinetta confirmed plans to cut 1,700
jobs and defended plans to downsize Alitalia's operations in
Milan's Malpensa airport.
Mr. Spinetta also revealed that should the French carrier
acquire 100% of Alitalia shares, Air France would list itself in
the Milan bourse.
Mr. Schioppa will represent the Italian government during sale
talks and will evaluate whether to sell to the state's majority
stake in Alitalia, Agenzia Giornalistica Italia says.
About Alitalia
Headquartered in Rome, Italy, Alitalia S.p.A. --
http://www.alitalia.it/-- provides air travel services for
passengers and air transport of cargo on national, international
and inter-continental routes. The Italian government owns 49.9%
of Alitalia. The company has operations in Argentina.
Despite a EUR1.4 billion state-backed restructuring in 1997,
Alitalia posted net losses of EUR256 million and EUR907 million
in 2000 and 2001 respectively. Alitalia posted EUR93 million in
net profits in 2002 after a EUR1.4 billion capital injection.
The carrier booked annual net losses of EUR520 million in 2003,
EUR813 million in 2004, EUR168 million in 2005, and
EUR625.6 million in 2006.
Italian Transport Minister Alessandro Bianchi has warned that
Alitalia may file for bankruptcy if the current attempt to sell
the government's 49.9% stake fails.
BANCO HIPOTECARIO: Commences Tender Offer of Up to US$56 Million
----------------------------------------------------------------
Banco Hipotecario S.A. has commenced a tender offer to purchase
for cash up to US$56 million aggregate principal amount of its
U.S. Dollar-Denominated Notes due 2013 and up to the equivalent
of US$56 million aggregate principal amount of its Euro-
Denominated Notes due 2013. Banco Hipotecario will conduct the
Tender Offer in accordance with the terms and conditions
described in its Offer to Purchase dated Jan. 29, 2008. The
Tender Offer will expire at 11:59 p.m., New York City time on
Feb. 27, 2008, unless extended or earlier terminated.
If the amount of validly tendered Eligible Notes for both series
is greater than the Offer Amounts for such series, there will be
a specific proration factor for each series based on the amount
of validly tendered Eligible Notes for each series. If the
amount of Eligible Notes validly tendered for one series is less
than the Offer Amount for such series and the amount of Eligible
Notes validly tendered for the other series exceeds the Offer
Amount for such other series, the bank will increase the Offer
Amount for the oversubscribed series by an amount equal to the
difference between the Offer Amount for the undersubscribed
series and the amount of validly tendered Eligible Notes
of such series. The bank will then calculate the proration
factor for the oversubscribed series, if any, based on
the Offer Amount for such series, as so increased.
Holders who validly tender Eligible Notes on or prior to 5:00
p.m., New York City time, on Tuesday, Feb. 12, 2008, will be
paid US$865 for each US$1,000 principal amount of USD Long Term
Notes, plus an early tender premium of US$30 for a total of
US$895, and EUR855 for each EUR1,000 principal amount of euro
Long Term Notes, plus an early tender premium of EUR30 for a
total of EUR885. Holders who validly tender Eligible Notes
after Feb. 12, 2008, but on or prior to Feb. 27, 2008, will not
receive an early tender premium and will be paid US$865 for each
US$1,000 principal amount of USD Long Term Note and EUR855 for
each EUR1,000 principal amount of euro Long Term Notes. In
addition, Banco Hipotecario will pay accrued and unpaid interest
on Eligible Notes validly tendered and accepted from the last
interest payment date to, but excluding, the date set for
settlement of the Tender Offer per the terms of the Offer to
Purchase.
Holders who validly tender Eligible Notes have withdrawal rights
only until Feb. 12, 2008, unless Banco Hipotecario materially
modifies the terms of the Tender Offer as described in the Offer
to Purchase under "Terms of the Offer-Withdrawal Rights." Upon
the expiration of the Early Tender Deadline on Feb. 12, 2008,
holders will not be able to withdraw their tenders received by a
Designated Clearing System or the Luxembourg Depositary per the
terms of the Offer to Purchase.
Banco Hipotecario's obligation to consummate the Tender Offer is
conditioned upon certain conditions set forth in the Offer to
Purchase.
Deutsche Bank Securities Inc. is acting as the Dealer Manager
for the Tender Offer, Deutsche Bank Luxembourg S.A. is acting as
the Luxembourg Depository and Global Bondholder Services
Corporation is acting as the Information Agent and Depositary,
each for the Tender Offer. Questions may be directed to
Deutsche Bank Securities Inc. toll free at (866) 627-0391 or
collect at (212) 250-2955, attention: Liability Management
Group. Requests for documents should be directed to the
Information Agent toll free at (866) 873-5600 or collect at
(212) 430-3774.
Headquartered in Buenos Aires, Argentina, Banco Hipotecario SA
-- http://www.hipotecario.com.ar-- is an Argentinean commercial
bank and specialty mortgage provider. Banco Hipotecario'
business lines include credit lines for consumers, short-term
financing for exporting companies, factoring services, deposit
accounts, purchase and sale of foreign currency, custodial
services, safe deposit box rentals, payroll bank accounts,
securities brokerage services and sales of insurance through
authorized agents and companies. The bank launched this new
series of products and services as an alternative to its
mortgage loans business, which as a result of the economic
crisis, came to a temporary halt in 2002. In late 2003, and in
the light of the favorable trends shown by economic variables,
Banco Hipotecario started to offer new housing mortgage loans.
The bank's subsidiaries consist of BHN Sociedad de Inversion
Sociedad Anonima.
* * *
As reported in the Troubled Company Reporter-Latin America on
June 21, 2007, Moody's Investors Service assigned a Ba1 global
local currency debt rating to Banco Hipotecario's US$200 million
senior unsecured Argentine peso-linked notes, which are due in
2010. Moody's also assigned a Aa1.ar local currency rating in
the Argentine national scale to the notes. Moody's said the
outlooks on the ratings are stable.
FIDEICOMISO FINANCIERO: Moody's Gives Debt Securities Ba3 Rating
----------------------------------------------------------------
Moody's Latin America has assigned a rating of Aaa.ar (Argentine
National Scale) and a Ba3 (Global Scale, Local Currency) to the
Debt Securities of Fideicomiso Financiero Tarjeta Privada IX,
issued by Banco de Valores S.A. (acting solely in its capacity
as Trustee). Moody's also assigned a rating of Ca.ar (Argentine
National Scale) and Ca (Global Scale, Local Currency) to the
subordinated Certificates.
The securities are backed by a pool of credit card receivables
originated by Banco Privado de Inversiones S.A. located in
Argentina. Interest and principal on the VDF are payable from
the cash flow of the credit card receivables.
The ratings assigned are based on these factors:
-- The credit quality of the securitized pool;
-- The credit enhancement provided through the 20% initial
subordination level;
-- The ability of Banco Macro Bansud to act as backup servicer
in the transaction;
-- The availability of several reserve funds; and,
-- The legal structure of the transaction.
Structure
Banco de Valores S.A. (Issuer and Trustee) issued one class of
peso-denominated, floating-rate bonds and a residual
certificate, all of them backed by a pool of credit card
receivables originated by Banco Privado. The VDF original
balance is equal to 80% of the original issuance amount. The
transaction has an expected maturity of 11 months.
At closing, the VDF were backed by credit card outstanding
balances generated by eligible accounts. The ownership of those
accounts remains with the originator but the receivables are
assigned to the trust. The transaction has five reserve funds:
an expense fund, a liquidity reserve fund, a backup servicer
replacement fund, and sinking funds for interest and principal.
During the first four months after closing, only interest is
paid monthly to VDF investors. The VDF will bear a floating
interest rate (Badlar + 375 bps) with a minimum rate of 18% and
a maximum rate of 27%. If an early amortization event occurs,
the revolving period will terminate automatically.
Beginning in the fifth month after closing, scheduled interest
and principal will be paid in that order, on each payment date.
Principal is scheduled to be paid in seven monthly installments.
If the scheduled principal is not paid on time, it will not
constitute an event of default under the terms of the
transaction documents, given that the promise to investors is to
receive ultimate principal before the legal final maturity date.
During the revolving period, collections will not be transferred
to the trust account but there will be an offset between the
collections to be submitted and the new receivables assigned to
the trust. This procedure was established to minimize trust
expenses.
Seller and Servicer
Banco Privado de Inversiones SA is the seller of the receivables
and the primary servicer of the transaction. The bank was
founded in 1993 to provide financial services to the middle-high
and high-income segment of the market. In 1996, the bank began
issuing MasterCard and Visa credit cards to its customers.
Banco Macro Bansud S.A. is the designated backup servicer. If a
servicer replacement trigger is hit, the trustee is obligated to
immediately notify Banco Macro and Visa and MasterCard. The
trustee, who receives pool and borrower data from the servicer
on a monthly basis, will transfer this information to the backup
servicer. In addition, Visa and MasterCard will also have
duplicate data, which they can transfer to Banco Macro, if
necessary. Given that the bank is a member of the Visa and
MasterCard system, the transfer of data should be
straightforward.
Banco Macro will be entitled to receive this information as the
new owner of the accounts according to the conditional
assignment contract which will become effective upon the
occurrence of a servicer replacement event. Thus, even if Banco
Privado's membership in the Visa and MasterCard networks is
terminated, credit card customers will not have their credit
lines suspended.
The servicer will transfer collections to the trust account on a
weekly basis. As a result, there is one week of commingling
risk at the originator/servicer level which may affect the deal
should the originator/servicer enter into a reorganization
procedure. This risk is mitigated by the ability of Banco
Macro, once it is appointed as backup servicer, to service the
receivables, and by the servicer replacement reserve account
that will be funded at closing with 0.5 times the next interest
payment.
Credit Enhancement
Moody's considered the credit enhancement provided in this
transaction through an initial subordination level of 20%, as
well as the historical performance of Banco Privado's pools. In
addition, Moody's considered factors common to all credit card
securitizations such as monthly principal payment rate, charge
offs, delinquencies and dilution, and specific factors related
to the Argentine market, such as the probability of a decrease
of the monthly payment rate and changes in the macroeconomic
scenario. The factors mentioned above are simulated in stress
situations, based on the variability that they have shown in the
past and on stress scenarios consistent with the rating levels
assigned.
Rating Action
Originator: Banco Privado de Inversiones SA
-- US$20.8 Million Pesos in Floating Rate Securities of
"Fideicomiso Financiero Tarjeta Privada IX", VDF rated
Aaa.ar (National Scale Rating) and Ba3 (Global Scale, Local
Currency).
-- US$5.2 Million Pesos in Certificates of "Fideicomiso
Financiero Tarjeta Privada IX", CP rated Ca.ar (National
Scale Rating) and Ca (Global Scale, Local Currency).
FIDEICOMISO (SECUPYME): Moody's Puts B1 Currency Rating
-------------------------------------------------------
Moody's Latin America has assigned a rating of Aa3.ar (Argentine
National Scale) and of B1 (Global Scale, Local Currency) to the
debt securities of Fideicomiso Financiero SECUPYME INDUSTRIA I
issued by Banco de Valores S.A. -- acting solely in its capacity
as Issuer and Trustee.
The rated securities are backed by a pool of bills of exchange
signed by small and middle size companies located in Argentina.
The bills of exchange are guaranteed by Garantizar S.G.R., which
is a financial guarantor in Argentina. Garantizar has a rating
of Aa3.ar (Argentine National Scale) and of B1 (Global Scale,
Local Currency).
The rating assigned to this transaction is primarily based on
the rating of Garantizar. Therefore, any future change in the
rating of the guarantor may lead to a change in the rating
assigned to this transaction. The rating addresses the payment
of interest and principal on or before the legal final maturity
date of the securities.
Banco de Valores S.A. (Issuer and Trustee) issued one class of
debt securities denominated in Argentine pesos. The rated
securities will bear a BADLAR interest rate plus 450 basis
points. The Floating Rate Debt Securities' interest rate will
never be higher than 27% or lower than 17%.
The rated securities will be repaid from cash flow arising from
the assets of the Trust, constituted by a pool of floating rate
bills of exchange denominated in Argentine pesos signed by small
and middle size companies and guaranteed by Garantizar S.G.R.
The bills of exchange will bear the same interest rate as the
rated securities.
If, eight days before each payment date, the funds on deposit in
the trust account are not sufficient to make payments to
investors, the Trustee is obligated to request Garantizar to
make payment under the bills of exchange. Garantizar, in turn,
will have five days to make this payment into the trust account.
Under the terms of the transaction documents, the trustee has up
to two days to distribute interest and principal payments to
investors. Interest on the securities will accrue up to the
date on which the funds are initially deposited by either
Garantizar, or the small and middle size companies.
FORD MOTOR: At Ease with Tata Motors' Jaguar Brand Acquisition
--------------------------------------------------------------
Ford Motor Company anticipates a return of its Jaguar brand to
profitability once it is sold, together with the Land Rover
brand, to preferred bidder Tata Motors Ltd., insisting that its
management is at ease at Tata Motor's operational capabilities,
John Griffiths of the Financial Times in London reports citing
Ford Director of Design Ian Callum.
As reported in the Troubled Company Reporter on Jan. 4, 2008,
Lewis Booth, executive vice president for Ford of Europe and
Premier Automotive Group (Chairman - Jaguar, Land Rover, Volvo
and Ford of Europe) stated that Ford is committed to focused
detailed talks with Tata Motors on the potential sale of its
Jaguar and Land Rover brands. He related that while no final
decision has been made, Ford will proceed with further
substantive discussions with Tata Motors over the coming weeks
with a view to securing an agreement that is in the best
interests of all parties concerned.
Headquartered in Dearborn, Michigan, Ford Motor Co. (NYSE: F)
-- http://www.ford.com/-- manufactures or distributes
automobiles in 200 markets across six continents. With about
260,000 employees and about 100 plants worldwide, the company's
core and affiliated automotive brands include Ford, Jaguar, Land
Rover, Lincoln, Mercury, Volvo, Aston Martin, and Mazda. The
company provides financial services through Ford Motor Credit
Company.
The company has operations in Japan in the Asia Pacific region.
In Europe, the company maintains a presence in Sweden, and the
United Kingdom. The company also distributes its brands in
various Latin American regions, including Argentina and Brazil.
* * *
As reported in the Troubled Company Reporter-Latin America on
Nov. 19, 2007, Moody's Investors Service affirmed the long-term
ratings of Ford Motor Company (B3 Corporate Family Rating, Ba3
senior secured, Caa1 senior unsecured, and B3 probability of
default), but changed the rating outlook to Stable from Negative
and raised the company's Speculative Grade Liquidity rating to
SGL-1 from SGL-3. Moody's also affirmed Ford Motor Credit
Company's B1 senior unsecured rating, and changed the outlook to
Stable from Negative. These rating actions follow Ford's
announcement of the details of the newly ratified four-year
labor agreement with the UAW.
GRAN MANZANA: Trustee Filing General Report Tomorrow
----------------------------------------------------
Norberto Aurelio Alvarez, the court-appointed trustee for Gran
Manzana S.R.L.'s bankruptcy proceeding, will present in the
National Commercial Court of First Instance in San Nicolas,
Buenos Aires, a general report containing an audit of the
company's accounting and banking records on Feb. 1, 2008.
Mr. Alvarez verified creditors' proofs of claim until
Oct. 3, 2007. He presented the validated claims in court as
individual reports on Nov. 15, 2007.
Mr. Alvarez is in charge of administering Gran Manzana's assets
under court supervision and will take part in their disposal to
the extent established by law.
The trustee can be reached at:
Norberto Aurelio Alvarez
Rodriguez Pena 189
Buenos Aires, Argentina
KONINKLIJKE AHOLD: Posts EUR6.6 Bln Net Sales in 4th Qtr 2007
-------------------------------------------------------------
Koninklijke Ahold N.V. disclosed consolidated net sales of
EUR6.6 billion for the fourth quarter ended Dec. 30, 2007.
Compared to the fourth quarter of 2006, net sales increased by
0.2% and increased by 6.5% at constant exchange rates.
For the full year, consolidated net sales of EUR28.2 billion
were 1.2% higher compared to 2006. At constant exchange rates,
consolidated net sales were up 6.1%.
In Europe, market conditions were favorable. In the United
States, the turbulent economic environment did not have a
significant impact on local market conditions. Price
investments related to the further rollout of the Value
Improvement Program, launched in September 2006 at Stop & Shop
and Giant-Landover, will continue to impact margins.
For full year 2007, Ahold reiterates that total retail operating
margin will be at the higher end of its 4.0% to 4.5% guidance.
Sales performance
Stop & Shop / Giant-Landover
* Fourth Quarter
-- net sales increased 2.0% to US$3.9 billion;
-- identical sales increased 2.7% at Stop & Shop (1.2%
excluding gasoline net sales). Identical sales
decreased 0.5% at Giant-Landover, impacted by lower
pharmacy sales;
-- comparable sales increased 3.1% at Stop & Shop and
decreased 0.3% at Giant-Landover.
* Full Year
-- net sales increased 1.5% to US$16.7 billion;
-- identical sales increased 1.3% at Stop & Shop (0.6%
excluding gasoline net sales) and decreased 1.1% at
Giant-Landover;
-- comparable sales increased 1.7% at Stop & Shop and
decreased 0.9% at Giant-Landover.
Giant-Carlisle
* Fourth Quarter
-- net sales increased 8.6% to US$1 billion, due in part
to the acquisition of the Clemens Markets stores in the
fourth quarter of 2006;
-- identical sales increased 4.8% (3.8% excluding gasoline
net sales);
-- comparable sales increased 5.7%.
* Full Year
-- net sales increased 13.0% to US$4.3 billion, due in
part to the acquisition of the Clemens Markets stores
in the fourth quarter of 2006;
-- identical sales increased 3.7% (3.2% excluding gasoline
net sales);
-- comparable sales increased 5.1%.
Albert Heijn
* Fourth Quarter
-- net sales increased 12.9% to EUR2 billion, due in part
to the acquisition of the Konmar stores in the fourth
quarter of 2006;
-- net sales at Albert Heijn supermarkets increased 12.6%
to EUR1.8 billion;
-- identical sales at Albert Heijn supermarkets increased
9.3%.
* Full Year
-- net sales increased 12.1% to EUR8 billion, due in part
to the acquisition of the Konmar stores in the fourth
quarter of 2006;
-- net sales at Albert Heijn supermarkets increased 12.3%
to EUR7.3 billion;
-- identical sales at Albert Heijn supermarkets increased
7.9%.
Albert/Hypernova (Czech Republic and Slovakia)
* Fourth Quarter
-- net sales increased 16.7% to EUR427 million (10.8% at
constant exchange rates);
-- identical sales increased 10.1%.
* Full Year
-- net sales increased 12.5% to EUR1.6 billion (9.1% at
constant exchange rates);
-- Identical sales increased 6.8%.
Schuitema
* Fourth Quarter
-- net sales increased 3.1% to EUR773 million;
-- identical sales increased 2.0%.
* Full Year
-- net sales increased 2.4% to EUR3.3 billion;
-- Identical sales increased 1.3%.
ICA (Unconsolidated joint venture)
* Fourth Quarter -- net sales increased 22.1% to
EUR2.4 billion, due in part to ICA's acquisition of the
full ownership of Rimi Baltic AB in December 2006 (21.9%
at constant exchange rates).
* Full Year -- net sales increased 22.2% to EUR8.9 billion,
due in part to ICA's acquisition of the full ownership of
Rimi Baltic AB in December 2006 (22.0% at constant
exchange rates).
About Ahold
Headquartered in Amsterdam, Koninklijke Ahold N.V. (fka Royal
Ahold) -- http://www.ahold.com/-- retails food through
supermarkets, hypermarkets and discount stores in North and
South America, Europe. It has operations in Argentina. The
company's chain stores include Stop & Shop, Giant, TOPS, Albert
Heijn and Bompreco. Ahold also supplies food to restaurants,
hotels, healthcare institutions, government facilities,
universities, stadiums, and caterers.
* * *
As of Nov. 19, 2007, Koninklijke Ahold carries BB+ Issuer
Default and senior unsecured ratings from Fitch Ratings. Fitch
said the outlook is positive. Its Short-term rating is B.
NOSSE BOX: Proofs of Claim Verification Ends Tomorrow
-----------------------------------------------------
Fernando Luis Greco, the court-appointed trustee for Nosse Box
S.R.L.'s reorganization proceeding, verifies creditors' proofs
of claim until Feb. 1, 2008.
Mr. Greco will present the validated claims in court as
individual reports on March 14, 2008. The National Commercial
Court of First Instance in Buenos Aires will determine if the
verified claims are admissible, taking into account the
trustee's opinion, and the objections and challenges that will
be raised by Nosse Box and its creditors.
Inadmissible claims may be subject for appeal in a separate
proceeding known as an appeal for reversal.
A general report that contains an audit of Nosse Box's
accounting and banking records will be submitted in court on
May 2, 2008.
Creditors will vote to ratify the completed settlement plan
during the assembly on Nov. 25, 2008.
The debtor can be reached at:
Nosse Box S.R.L.
Almirante Segui 1251
Buenos Aires, Argentina
The trustee can be reached at:
Fernando Luis Greco
Arenales 2365
Buenos Aires, Argentina
PAN AMERICAN: Reports Increase in Cerro Dragon Reserves
-------------------------------------------------------
Pan American Energy told Dow Jones Newswires that reserves at
its Cerro Dragon field has increased 100 million barrels of oil
equivalent.
According to Dow Jones, Pan American will invest some US$1
billion in its Argentine operations in 2008.
Pan American told Dow Jones that its oil production increased to
219,640 barrels of oil equivalent a day in 2007 from 121,000
barrels of oil equivalent a day in 2000. Its Acambuco gas
production rose to nine million cubic meters a day in 2007, from
two million cubic meters a day in 2001.
Pan American Energy LLC is the second largest oil and gas
producer in Argentina. Also, PAE performs exploration and
production activities in Bolivia. Total Fiscal Year 2006
production of 242 thousand barrels of oil equivalent per day was
split 51:49 between oil and gas. Bolivia represented 23% of
proved reserves and 10% of both production and revenues at FY06.
The proved reserve life is 14 years and 60% of reserves are
developed. Outside E&P, other assets include participation in
oil transportation, storage and loading, gas distribution and
power generation in Argentina, Uruguay and Bolivia. Created in
1997 as a Delaware holding company, PAE is owned 60% by BP and
40% by Bridas. The Argentine Branch has historically been PAE's
primary subsidiary both in terms of assets and revenues and the
entity that assumes most of the financial debt for the whole
group.
* * *
As reported in the Troubled Company Reporter-Latin America on
June 12, 2007, Fitch Ratings has upgraded the foreign currency
Issuer Default Rating of Pan American Energy LLC to 'BB' from
'BB-' and the local currency IDR to 'BB+' from 'BB'. In
conjunction with this action, Fitch has upgraded the following
debt instruments and subsidiaries. The Rating Outlook for all
IDRs is Stable. Approximately US$1.0 billion of debt securities
are affected.
As reported in the Troubled Company Reporter-Latin America on
Oct. 26, 2007, Moody's Investors Service has upgraded Pan
American Energy LLC's global local currency issuer rating to Ba1
from Ba2. At the same time, Moody's upgraded Pan American
Energy LLC, Argentine Branch's foreign currency note ratings to
Ba2 from Ba3. The global local currency rating and foreign
currency note ratings have a stable outlook. The company's
foreign currency Corporate Family Rating of B2, positive
outlook, was not affected by the rating actions, as the foreign
currency Corporate Family Rating is constrained by Argentina's
B2 ceiling, which has a positive outlook.
SUN MICROSYSTEMS: Launching Package Software in Brazil
------------------------------------------------------
Sun Microsystems said in a statement that it is launching a
complete package of software in Brazil with US information
technology services firm Compuware.
Business News Americas relates that the package includes:
-- hardware,
-- software,
-- services, and
-- architecture for management of quad play services.
According to BNamericas, Sun Microsystems developed streaming
service Sun Streaming System, which is ideal for large video
services providers that offer infrastructure allowing these
applications of IPTV:
-- video on demand,
-- network personal video recording,
-- pay per view, and
-- interactivity services.
BNamericas notes that Compuware is offering the integrated
application Vantage Service Check. It helps suppliers ensure
broadband services and offers detailed and real-time monitoring
of final user experiences, allowing the operator's customer
service to point out the cause of problems affecting:
-- high-speed Internet,
-- IPTV,
-- voice on demand, and
-- mobile data services.
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, Singapore, among others.
* * *
Sun Microsystems Inc. carries Moody's "Ba1" probability of
default and long-term corporate family ratings with a stable
outlook. The ratings were placed on Sept. 22, 2006, and
Sept. 22, 2005, respectively.
Sun Microsystems also carries Standard & Poor's "BB+" long-term
foreign and local issuer credit ratings, which were placed on
March 5, 2004, with a stable outlook.
TYSON FOODS: Earns US$34 Million in Quarter Ended Dec. 29
---------------------------------------------------------
Tyson Foods, Inc. reported net income of US$34.0 million on
US$6.7 billion in sales for the first fiscal quarter ended
Dec. 29, 2007, compared to net income of US$57.0 million on
US$6.5 billion in sales in the same quarter last year. In the
first quarter of fiscal 2008, the company recorded an US$18
million non-operating gain on the sale of an investment.
Additionally, Tyson recorded US$6 million of severance charges
related to the FAST initiative.
"Given all we've faced, we delivered a solid first quarter,"
said Richard L. Bond, Tyson Foods president and chief executive
officer. "Sales were up US$200 million. Our Pork segment
delivered one of its best quarters ever with strong volume and
operating income nearly double compared to the first quarter of
fiscal 2007. We also achieved normalized earnings of nearly 5%
in the Prepared Foods segment. The Chicken segment struggled
with more than US$100 million in additional grain costs. The
Beef segment continues to face a very difficult operating
environment, which caused us to make the hard decision to cease
slaughter operations at our beef plant in Emporia, Kansas.
There continues to be far more beef slaughter capacity than
available cattle, and this is especially true for Emporia, as
cattle production has moved from eastern to western Kansas.
"In November, we projected an additional US$300 million in grain
costs for fiscal 2008," Mr. Bond said. "We now think this year-
over-year increase will exceed half a billion dollars. Because
of these unanticipated and extraordinarily high corn and soybean
meal costs, we have no choice but to raise prices substantially.
"The continued escalation of grain prices, driven largely by
government mandates for corn-based ethanol, has caused a domino
effect for other inputs. Cooking oil, flour and other feed
ingredients are all on the rise. For the foreseeable future,
consumers will pay more and more for food, especially protein,
because grain represents a proportionally higher percentage of
input costs compared to other foods.
"The commodity markets affecting our business are extremely
volatile and fluctuating tremendously on a daily basis. For
this reason, we have decided to temporarily withdraw our
previously issued earnings guidance. In this erratic and
unpredictable operating environment, it is virtually impossible
to make meaningful earnings forecast assumptions.
"We are facing unparalleled market dynamics that make our work
very challenging," Bond said. "We continue to believe our
strategies are sound, and we'd like to acknowledge Tyson team
members for their efforts in executing our business plans."
Balance Sheet
As of Dec. 29, 2007, the company's balance sheet showed total
assets of US$10.2 billion and total liabilities of US$5.4
billion, resulting in a US$4.7 billion stockholders' equity.
Equity at Sept. 29, 2007, was US$4.7 billion.
About Tyson Foods
Based in Springdale, Arkansas, Tyson Foods, Inc. (NYSE:TSN) --
http://www.tysonfoods.com/-- is a processor and marketer of
chicken, beef, and pork.
Tyson's U.S. beef plants are located in Amarillo, Texas; Dakota
City, Nebraska; Denison, Iowa; Finney County, Kansas; Joslin,
Illinois, Lexington, Nebraska and Pasco, Washington. The
company also has a beef complex in Canada, and is involved in a
vertically integrated beef operation in Argentina.
* * *
Tyson Foods Inc. continues to carry Moody's Ba1 corporate family
rating and Ba2 probability of default rating. Moody's said the
outlook is negative.
=============
B A H A M A S
=============
METROPOLITAN BANK: Board Appoints Elizabeth D. Bondad as VP
-----------------------------------------------------------
Elizabeth D. Bondad will serve as Metropolitan Bank & Trust
Co.'s vice president starting February 16, 2008.
Ms. Bondad was appointed by the bank's Board of Directors during
a meeting held on Monday, January 29.
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.
* * *
Moody's Investors Service gave Metrobank a:
* Foreign currency long-term deposit rating of B1
* Foreign currency hybrid tier-1 rating of Ba3
* BFSR of D
* Local currency deposit ratings of Baa2/P-2
* Local currency subordinated debt rating of Baa3, foreign
currency Not-Prime short-term deposit rating
* Foreign currency subordinated debt rating of Ba2
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.
TUPPERWARE BRANDS: Year-Over-Year 4Q Sales Up 19% to US$577-Mln
---------------------------------------------------------------
Tupperware Brands Corporation has reported that fourth-quarter
2007 sales grew 19% year over year (11% in local currency) to
US$577 million with strong growth in all five segments ranging
from 6% to 18% in local currency.
Tupperware Brands Chairperson and Chief Executive Officer, Rick
Goings commented, "We are encouraged with the progress we made
in the fourth quarter and the full year in further refining and
implementing our strategies, which are working and delivering
the positive results we expected to support long term growth.
This came through in the fourth quarter with our high-teen year-
over-year sales increase and our 35% increase in GAAP diluted
earnings per share. Our sales and profit were both well ahead
of our October outlook."
Mr. Goings said, "As we look ahead to 2008, we're planning to
capitalize on our year end sales force size advantage of 15% to
further grow our businesses, and expect to be in our long-term
outlook range for local currency sales growth of 5 to 7% per
year. This includes high single, to low double-digit, growth
from the 40% to 45% of our businesses that operate in emerging
markets and, on average, a low single digit growth rate from the
remainder of our businesses that operate in established
markets."
"We expect to grow net income even more with higher profit from
the segments and lower interest expense, as we benefit from the
credit agreement we closed at the end of the third quarter,
partially offset by a higher but still very favorable income tax
rate in the 23% range," Mr. Goings added.
Mr. Goings noted, "Included in our 2008 outlook is continued
investment to implement our strategies as we further develop our
branded portfolio of direct selling companies, working to
continue to innovate with our demonstrable product lines, our
contemporized selling situations and the right sales force
compensation plan in each market."
Excluding certain adjustment items, fourth-quarter earnings per
share rose to 93 cents from 74 cents in 2006, or 26%. Stronger
foreign currencies had a 10-cent positive impact on the year-
over-year comparison. Profit from the segments rose 29%,
interest expense was lower by over US$3 million, reflecting
lower borrowings along with a benefit from the new credit
agreement entered into in September, and unallocated expenses
rose by US$5 million, largely reflecting higher expenses
associated with management incentive programs. The quarter's
effective tax rate rose to 17% this year from 10% last year.
As of the end of the fourth quarter net debt was down to US$593
million, a reduction of US$88 million from US$681 million at the
end of 2006. Net cash provided by operating activities, net of
investing activities, for the full year was US$152 million,
ahead of October guidance of US$100 to US$110 million.
Fourth Quarter Segment Highlights
Tupperware Segments
In Europe, fourth quarter sales rose by 19% (6% in local
currency) over the prior year. The positive sales force trends
continued in the emerging markets leading to 22% growth in local
currency coming most notably in Russia, Turkey and South Africa.
Established markets grew 1% in local currency with Germany
achieving a 3% sales increase, following double-digit declines
in each of the first three quarters. The total sales force size
advantage for the whole segment at the end of the year was 21%.
The average active sales force increased 8%. Segment profit
increased 33% (18% in local currency) reflecting a greater than
2 point higher return on sales from improved value chains in
several of the markets in Western Europe and highermanufacturing
volume.
Asia Pacific achieved a 24% (16% in local currency) sales
increase with emerging markets up 30% in local currency and
established markets up 9% led by Australia. The number of
active sellers was up 11% led by Indonesia, Australia and Korea.
Operating profit increased 48% (36% in local currency) and
reflected a 3.7 pp improvement in return on sales. This
primarily reflected a higher share of sales from Australia, with
its high return on sales, and more efficient expense management
by Tupperware Japan, as well as 0.8 pp from lower purchase
accounting amortization.
In Tupperware North America, 12% (11% in local currency) higher
sales, reflected increases in all three markets, the United
States, Canada and Mexico. Although there was a drag in the
last 2 and 1/2 weeks of December in light of the warehouse fire
in the main U.S. warehouse, Tupperware United States and Canada
still achieved a 12% local currency sales increase in the
quarter. The total sales force size for the whole segment was
down at the end of the year, reflecting a decrease in Mexico as
the United States had a higher sales force count. Active
sellers in the segment were down slightly. There was a 4.5 pp
improvement in return on sales that brought the segment's profit
up over 100%, mainly reflecting an improved cost structure in
the United States.
Beauty Segments
In the Beauty North America segment, the 13% (12% in local
currency) sales increase reflected double-digit increases
by both units, Fuller Mexico and BeautiControl North America.
Both units also had double-digit total sales force size
advantages as of the end of the year, with the segment up 13%.
The active sales force was up 10%. Segment profit was up 9% (8%
in local currency), reflecting a lower return on sales,
principally from gross margin investment at BeautiControl to
sell through inventories and higher distribution costs that were
about offset by lower purchase accounting amortization.
The Beauty Other segment achieved a 30% (18% in local currency)
sales increase, reflecting higher sales forces and sales
throughout Central and South America, most notably in Venezuela
and Brazil. Fuller Philippines also had a double digit sales
increase. The Nutrimetics units were down as a group, with the
largest Nutrimetics market, Australia, down just slightly,
reflecting an improved trend from earlier in the year. The
total sales force in the segment was up 12% and the active sales
force was up 8% in the quarter. There was a loss of US$0.1
million that included US$1.2 million of purchase accounting
amortization. Excluding purchase accounting amortization from
both years, profit increased reflecting improved results in the
Philippines, Venezuela and Brazil.
Full-Year Results
For full-year 2007, total company sales grew 14% (9% in local
currency), to a record US$2.0 billion versus US$1.7 billion in
2006. The Tupperware brand segments grew by 14% (8% in local
currency) and the Beauty brand segments by 12% (10% in local
currency). The businesses operating in emerging markets had
sales growth of 21% (18% in local currency) and the remaining
businesses that operate in established markets had growth of 8%
(2% in local currency). Active sellers grew 5% for the year.
Profit from the operating segments rose 33% (26% in local
currency), 9 points of which was from lower purchase accounting
amortization. Diluted earnings per share was US$1.87, up 21%
(8% in local currency). Excluding certain adjustment items,
full year 2007 diluted earnings per share was US$2.25, up 26%
(14% in local currency).
2008 Outlook
Full year 2008 sales are expected to increase 8 to 10% (5 to 7%
in local currency) and GAAP diluted earnings per share is
expected to be US$2.37 to US$2.47, including a 10 to 12 cent
benefit versus 2007 from stronger foreign currencies. After
adjustments full-year diluted earnings per share is expected to
be US$2.50 to US$2.60 up 6% to 10% in local currency.
Sales in local currency in the Tupperware brand segments are
expected to increase in the mid-single-digit range and in the
Beauty brand segments are expected to increase in the high-
single-digit range. Excluding certain adjustment items, profit
in the segments is expected to grow in line, to slightly above
the rate of sales, except in Beauty Other where there was a loss
of US$3 million in 2007 and a small profit is expected in 2008.
Unallocated corporate costs in 2008 are expected to be about
even with 2007's US$44 million; interest expense is expected to
be US$33 to US$34 million, versus US$49 million in 2007, which
included US$10 million of expense associated with implementing
the new credit agreement; and the income tax rate is expected to
be about 23%, compared with 17% in 2007 on a GAAP basis and 18%
excluding certain items.
First Quarter 2008 Outlook
First quarter sales are expected to increase 13 to 15% (5 to 7%
in local currency) and diluted earnings per share is expected to
be 50 to 55 cents versus 32 cents last year. Excluding certain
adjustment items diluted earnings per share is expected to be 44
to 49 cents versus 36 cents last year. This includes a 5 to 7
cents benefit versus 2006 from stronger foreign currencies and a
lower effective tax rate.
Mr. Goings concluded, "Many analysts and investors are concerned
about the weakness of the U.S. dollar and the U.S. economy.
Upwards of 84% of our sales and even more of our profit come
from international markets. This means that our profit rises on
dollar weakness, and while we could see some impact from lower
consumer spending in the United States, the impact would be less
than for many other companies given the size of our businesses
here. To date we have not seen issues in our Tupperware United
States or BeautiControl businesses related to the consumer
spending environment."
About Tupperware
Headquartered in Orlando, Florida, Tupperware Brands Corporation
(NYSE: TUP) -- http://www.tupperware.com/-- is a portfolio of
global direct selling companies, selling premium innovative
products across multiple brands and categories through an
independent sales force of 2.0 million. Product brands and
categories include design-centric preparation, storage and
serving solutions for the kitchen and home through the
Tupperware brand and beauty and personal care products for
consumers through the Avroy Shlain, BeautiControl, Fuller,
NaturCare, Nutrimetics, Nuvo and Swissgarde brands.
The company has operations in Indonesia, Argentina, Australia,
Bahamas, Brazil, China, France, Germany, Philippines,
Spain, and Sweden, among others.
* * *
As reported in the Troubled Company Reporter-Latin America on
Sept. 19, 2007, Moody's Investors Service assigned a Ba1 rating
to Tupperware Brands Corporation proposed senior secured credit
facilities, consisting of a US$200 million revolving credit
facility and a US$550 million term loan A, both due 2012.
Moody's also affirmed the company's Ba2 corporate family rating
and Ba3 probability of default rating, and changed the outlook
to positive from stable.
=============
B E R M U D A
=============
INTELSAT LTD: Increased Leverage Cues Moody's to Cut CFR to Caa1
----------------------------------------------------------------
Moody's Investors Service has downgraded Intelsat Ltd.'s
corporate family rating by two notches to Caa1. The company's
speculative grade liquidity rating was downgraded to SGL-3
(adequate liquidity) from SGL-1 (very good liquidity). The
rating action reflects the impact of increased leverage
resulting from an additional US$5 billion in debt (US$3.7
billion incremental) that is being incurred to facilitate the
purchase of Intelsat's parent company's equity ownership by BC
Partners, Silver Lake Partners and certain other investors, and
repay certain outstanding indebtedness. Moody's expects the
majority of the new debt to be issued at Intelsat (Bermuda),
Ltd., while Intelsat (Bermuda), Ltd.'s existing assets and
liabilities will be transferred to a newly created holding
company, Intelsat Jackson Holdings, Ltd. Following closing, the
ratings agency expects all equity to be owned by BC Partners,
Silver Lake Partners, certain other investors and management.
The defining factor in the company's credit profile is the
increased leverage resulting from debt financing facilitating
the ownership changes, and risks that the company will not be
able to grow its cash flow stream in order that all of its
substantial interest burden, capital expenditures and periodic
cash income tax obligations can be met from operating cash flow.
The future opportunities to grow cash flow include increases to
EBITDA, plus permanent reductions in capital expenditures as the
company rationalizes its very large satellite constellation
fleet. In the interim, Moody's anticipates a modest cash flow
deficit. However, applicable bank credit agreements and trust
indentures feature relatively lax default triggers that may
provide time before creditors gain default rights. The company
has available sources of external liquidity, including the
revolving credit facilities at Intelsat Corporation and Intelsat
Subsidiary Holding Co. Ltd. For this reason, Moody's rates
Intelsat's liquidity arrangements as being adequate (SGL-3),
with the Caa1 CFR reflecting execution risks related to cash
flow growth including the potential that exogenous factors such
as a slowing global economy may retard necessary progress.
Since Intelsat issues debt from five legal entities, the rating
action also involved adjustments to ratings for several debt
instruments in other Intelsat entities. At closing, the ratings
on notes that will be repaid in full will be withdrawn.
However, the rating actions are based on assumptions
incorporated in the company's acquisition financing plan and on
very preliminary documentation. Accordingly, there is the
potential for minor adjustments to the instrument ratings should
the facts change. Ratings will be finalized in due course (the
transaction is tentatively scheduled to close on Feb. 4).
Instrument rated:
Intelsat Corp.:
-- Secured Bank Credit Facility, Rated B1 (LGD1 05)
- US$150 million incremental Term Loan B-2 due Jan. 3, 2014
Downgrades:
Intelsat Corp.:
-- Senior Secured Bank Credit Facility, Downgraded to B1 (LGD1
05) from Ba2 (LGD1 08)
* Senior Secured Revolving Facility due July 5, 2012
* US$329 million Term Loan A-3 due July 5, 2012
* US$1,623 million Term Loan B-2 due Jan. 3, 2014
-- Senior Secured Regular Bond/Debenture, Downgraded to B1
(LGD1 05) from Ba2 (LGD1 08)
* US$125 million 6.875% Senior Secured Notes due
Jan. 15, 2028
-- Senior Unsecured Regular Bond/Debenture, Downgraded to B3
(LGD3 33) from B2 (LGD3 45)
- US$656 million 9% Senior Unsecured Notes due
Aug. 15, 2014
- US$575 million 9% Senior Unsecured Notes due June 15, 2016
Intelsat Subsidiary Holding Co. Ltd.:
-- Senior Secured Bank Credit Facility, Downgraded to B1 (LGD1
05) from Ba2 (LGD1 08)
* Senior Secured Revolving Facility due July 5, 2012
* US$342 million guaranteed Term Loan B due July 5, 2013
-- Senior Unsecured Regular Bond/Debenture, Downgraded to B3
(LGD1 33) from B2 (LGD3 45)
* US$875 million 8.25% Senior Notes due Jan. 15, 2013
* US$675 million 8.625% Senior Notes due Jan. 15, 2015
Intelsat Intermediate Holding Company, Ltd.:
-- Senior Unsecured Regular Bond/Debenture, Downgraded to Caa1
(LGD4 53) from B3 (LGD5 72)
* US$388 million 9.25% Senior Discount Notes due
Feb. 1, 2015
Intelsat (Bermuda), Ltd. (to be re-named Intelsat Jackson
Holdings, Ltd.):
-- Senior Unsecured Bank Credit Facility, Downgraded to B3
(LGD3 33) from B2 (LGD3 45)
- US$1,000 million guaranteed Term Loan due 2014
-- Senior Regular Bond/Debenture, Downgraded to B3 (LGD3 33)
from B2 (LGD3 45)
* US$750 million 9.25% guaranteed Senior Notes due
June 15, 2016
-- Senior Unsecured Regular Bond/Debenture, Downgraded to Caa2
(LGD4 60) from Caa1 (LGD5 82)
- US$1,330 million 11.25% Senior Notes due June 15, 2016
Intelsat, Ltd.:
-- Probability of Default Rating, Downgraded to Caa1 from B2
-- Speculative Grade Liquidity Rating, Downgraded to SGL-3
from SGL-1
-- Corporate Family Rating, Downgraded to Caa1 from B2
-- Senior Unsecured Regular Bond/Debenture, Downgraded to Caa3
(LGD6 95) from Caa1 (LGD6 93)
- US$600 million 6.625% Senior Notes due April 15, 2012
- US$700 million 6.5% Senior Notes due Nov. 1, 2013
Outlook Actions:
Intelsat, Ltd.:
-- Outlook, Changed To Stable From Rating Under Review
Ratings to be withdrawn upon closing:
Intelsat (Bermuda), Ltd. (to be re-named Intelsat Jackson
Holdings, Ltd.):
-- Senior Unsecured Regular Bond/Debenture, currently rated
Caa1 (LGD5 82)
* US$260 million Floating Rate Senior Notes due
June 15, 2013
* US$600 million Floating Rate Senior Notes due
Jan. 15, 2015
Intelsat, Ltd.:
-- Senior Unsecured Regular Bond/Debenture, currently rated
Caa1 (LGD6 93)
* US$400 million 5.25% Senior Notes due Nov. 1, 2008
Stable outlook for approximately US$10 billion of rated debt
instruments.
Headquartered in Bermuda, Intelsat is the largest fixed
satellite service operator in the world and is currently
privately held by a group of financial investors: Apax Partners,
Apollo Management, Madison Dearborn Partners, and Permira.
=============
B O L I V I A
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COEUR D'ALENE: Reviews Strategic Alternatives for Rochester Mine
----------------------------------------------------------------
Coeur d'Alene Mines Corporation has disclosed that it is
reviewing strategic alternatives for its Rochester silver and
gold mine in Nevada. Strategic alternatives under consideration
include a possible sale of the subsidiary.
"We continue to believe that Rochester represents value given
the operation's low-costs and remaining exploration potential,"
said Dennis E. Wheeler, Coeur's Chairman, President, and Chief
Executive Officer. "That being said, Coeur's primary focus is
on maximizing value for our shareholders from our larger,
longer-life silver projects in Mexico (Palmarejo) and South
America (San Bartolome, Cerro Bayo, and Martha)."
About Coeur d'Alene
Coeur d'Alene Mines Corp. (NYSE:CDE) (TSX:CDM) --
http://www.coeur.com/-- is the world's largest primary silver
producer, as well as a significant, low-cost producer of gold.
The company has mining interests in Nevada, Idaho, Alaska,
Argentina, Chile, Bolivia and Australia.
* * *
Coeur d'Alene Mines Corp.'s US$180 Million notes due
Jan. 15, 2024, carry Standard & Poor's B- rating.
===========
B R A Z I L
===========
AAR CORP: Appoints Donald J. Wetekam as VP for MRO Segment
----------------------------------------------------------
Donald J. Wetekam was appointed as the Group Vice President of
AAR Corp.'s Maintenance, Repair and Overhaul segment. Mr.
Wetekam previously served as President and General Manager of
AAR's Aircraft maintenance facility in Oklahoma City. As Group
Vice President, Mr. Wetekam will oversee all of AAR's MRO
activities and be responsible for growing the company's domestic
and international MRO business and expanding its offerings to
government customers.
"Don is a proven leader with a wealth of experience leading MRO
operations," said Timothy J. Romenesko, President and Chief
Operating Officer of AAR. "His commitment to operational
excellence and process improvement will be invaluable as we grow
this part of the business and strengthen AAR's position as a
world-class MRO provider."
Prior to joining AAR, Mr. Wetekam served as Deputy Chief of
Staff for Installations and Logistics in the U.S. Air Force and
was a staunch advocate for the adoption of commercial process
improvement techniques, such as Lean and Six Sigma. He also
directed operations at Warner Robins Air Logistics Center and
played key leadership roles at the Oklahoma City Air Logistics
Center at Tinker Air Force Base.
In another move to strengthen and increase its MRO business, AAR
has appointed Mickey Cohen as Vice President of Commercial MRO
Group, reporting to Mr. Wetekam. In this expanded role,
Mr. Cohen will oversee all commercial MRO activities at AAR's
aircraft maintenance facilities in Indianapolis, Oklahoma City,
and Hot Springs, Arkansas. Mr. Cohen will also continue to
serve as Corporate Vice President, Operations and Engineering.
"Mickey understands our airline customers' operations and knows
what it takes to run an efficient and successful commercial MRO
business," Mr. Romenesko continued. "Since joining the company
in 2003, Mickey has been instrumental in building customer
relationships and instilling a culture of quality that has
contributed to the success of our MRO segment."
About AAR Corp.
AAR Corp. (NYSE: AIR) -- http://www.aarcorp.com/-- provides
products and value-added services to the worldwide
aviation/aerospace industry. With facilities and sales
locations around the world, AAR uses its close-to-the-customer
business model to serve airline and defense customers through
Aviation Supply Chain; Maintenance, Repair and Overhaul;
Structures and Systems and Aircraft Sales and Leasing. In Asia
Pacific, the company has offices in Singapore, China, Japan and
Australia. In Latin America, the company has a sales office in
Rio de Janeiro, Brazil.
* * *
As reported on Oct. 18, 2006, Standard & Poor's Ratings Services
upgraded AAR Corp.'s corporate credit rating from 'BB-' to 'BB'.
The outlook is stable.
As reported on Dec. 5, 2006, that Moody's upgraded AAR's
corporate family rating and senior notes to Ba3 from B1, in
response to improving financial performance resulting from the
strong commercial and defense aviation supply and repair
environment. Moody's said the ratings outlook is stable.
BANCO MODAL: Moody's Assigns Preliminary Junk & Low B Ratings
-------------------------------------------------------------
Moody's Investors Service has assigned a bank financial strength
rating of D- to Banco Modal S.A. Moody's also assigned long-
and short-term foreign- and local-currency deposit ratings of
Ba3 and Not Prime, as well as long- and short-term Brazilian
national scale deposit ratings of A3.br and BR-2. The outlooks
on all of these ratings are stable.
Moody's D- bank financial strength rating for Banco Modal
derives from its modest franchise value and market positioning
as a wholesale bank, and also from the relevant participation of
trading revenues in the earning mix, which limits the generation
of recurrent earnings. The rating is also challenged by the
lack of diversification in the bank's funding base, as well as
by the bank's reasonably concentrated loan portfolio when
compared with its domestic midsize bank peers.
Moreover, the rating might suffer from the deterioration of
margins as a result of increased competition in commercial
lending and in the structuring of asset-backed securities, which
are the bank's main business targets. Additionally, margins
could be compressed by increased funding costs if the market's
liquidity dries up.
On the other hand, the rating benefits from Banco Modal's lean
operating structure -- a function of its niche business profile
-- and from its partnership arrangement. In that regard, the
bank's management is closely involved in the bank's business
strategy and execution, and is challenged to maintain adequate
risk discipline and controls. Moody's added that ongoing
expansion initiatives, which involve the asset management and
middle-corporate lending units, are expected to diversify the
bank's funding structure by attracting more institutional
investors and fund managers to its depositors base.
The intrinsically volatile, largely trading-based, nature of the
bank's earnings results in profitability and efficiency
indicators that show some fluctuation. The rating agency noted
that Banco Modal's ability to enhance recurring earning-
generation businesses, as means to protect its profitability,
could eventually be a positive factor for its ratings.
Moody's Ba3 global local-currency deposit rating is based on the
bank's very modest participation in the Brazilian deposits
market. Moody's, therefore, assesses no probability of systemic
support to the bank in the event of stress that could affect its
ability to repay local currency deposits. Moreover, the bank
does not enjoy support from a parent company or economic group
because it is organized into a partnership, controlled by its
three founders. Therefore, the local currency rating of Ba3 is
mapped directly from Banco Modal's bank financial strength
rating of D-.
These ratings were assigned to Banco Modal SA:
-- Bank Financial Strength Rating: D-, with stable outlook.
-- Global Local-Currency Rating: Ba3 long-term local-currency
deposit rating and Not Prime short-term local-currency
deposit rating, with stable outlook.
-- Foreign Currency Deposit Rating: Ba3 long-term foreign-
currency deposit rating, and Not Prime, with stable
outlook.
-- Brazilian National Scale Deposit Ratings: A3.br long-term
deposit rating, and BR-2 short-term deposit rating; with
stable outlook.
Established in 1995, Banco Modal SA is headquartered in Rio de
Janeiro, Brazil. As of December 2007, the bank had total assets
of approximately BRL708 million (US$398 million) and equity of
BRL144 million (US$81 million).
BANCO NACIONAL: Approves BRL95MM Loan for Beberibe Wind Farm
------------------------------------------------------------
Banco Nacional de Desenvolvimento Economico e Social said in a
statement that it has authorized a BRL95 million loan for the
construction of the 25.6-megawatt Beberibe wind farm in Ceara.
Business News Americas relates that Beberibe is part of Brazil's
Proinfa program, which is designed to promote renewable
development in the country. The plant will sell power to
federal power holding Eletrobras under a 20-year contract.
US firm Econergy's special-purpose company Eco Energy Beberibe
will construct the plant, BNamericas states. The BRL95 million
loan is 67% of the project's BRL141 million total value.
Banco Nacional de Desenvolvimento Economico e Social is Brazil's
national development bank. It provides financing for projects
within Brazil and plays a major role in the privatization
programs undertaken by the federal government.
* * *
Banco Nacional currently carries a Ba2 foreign long-term bank
deposit rating from Moody's, and a BB+ long-term foreign issuer
credit rating from Standards and Poor's. The ratings were
assigned in August and May 2007, respectively.
BANCO NACIONAL: Grants BRL95.2-Mln Loan to Companhia Brasileira
---------------------------------------------------------------
Banco Nacional de Desenvolvimento Economico e Social has
approved a BRL95.2-million financing for the expansion and
modernization project of the productive units of Companhia
Brasileira de Estireno S.A., in Cubatao. BNDES's financing
corresponds to 59% of the total investment amounting to BRL161.6
million.
The project aims at the increase of the ethylbenzene plant's
production capacity, from 122 thousand tons annually to 195
thousand tons/year, and the increase of the industrial plant of
styrene monomer, from the current 120 thousand tons/year to 180
thousand tons annually. In addition, social and environmental
investments amounting to BRL1.1 million will be carried out,
with the implementation of systems to monitor gas emissions in
the atmosphere and to monitor effluents.
Among the merits of the project, the following is highlighted:
* increase in the national production of styrene, reducing
the level of imports;
* reduction in the costs of production;
* increase in the energetic efficiency; and
* expansion of the productive capacity, reducing the
generation of residues without increasing the atmospheric
emission.
The Brazilian production of styrene is lower than the demand,
and a consumption growth, which is higher than 4.5% per year, is
expected for the market for the next ten years.
The styrene monomer, or styrene, is a product from the family of
colorless, liquid, aromatic and hydrocarbonates, which are used
in the manufacture of polystyrene, synthetic rubber, styrene
emulsions, polyester, styrenized oils, sulphonated resins and
other chemical derivatives. Its wide range of applications is
included in the production of plastic articles, toys, pneumatic
products, waterproof coatings, thermal insulators, water-based
inks, varnishes, glue, among others.
In order to manufacture styrene; first, it is necessary to
obtain ethylbenzene in its manufacturing process. Ethylbenzene,
on its turn, has the ethene and benzene as the raw materials.
CBE is part of Unigel group, a national controlled conglomerate
which operates in the areas of chemistry, plastics and packages,
playing an important role in the Petrochemical Complex of
Camacari, in Bahia.
About Banco Nacional
Banco Nacional de Desenvolvimento Economico e Social is Brazil's
national development bank. It provides financing for projects
within Brazil and plays a major role in the privatization
programs undertaken by the federal government.
* * *
Banco Nacional currently carries a Ba2 foreign long-term bank
deposit rating from Moody's, and a BB+ long-term foreign issuer
credit rating from Standards and Poor's. The ratings were
assigned in August and May 2007, respectively.
BANCO VOTORANTIM: Fitch Affirms Individual Rating at C/D
--------------------------------------------------------
Fitch Ratings has affirmed Banco Votorantim S.A.'s ratings at
Long-term foreign and local currency Issuer Default 'BBB-'and
Short-term foreign and local currency IDR 'F3'. At the same
time, Fitch has affirmed the National Long- and Short-term
ratings at 'AA+(bra)' and 'F1+(bra)', respectively. Fitch also
affirmed the bank's Individual rating at 'C/D' and Support
rating at '3'. The Outlooks for the Long-term IDRs and National
Long-term rating remain Stable.
Fitch has also affirmed the National Long-term rating of Banco
Votorantim Leasing Arrendamento Mercantil S.A.'s 1st and 2nd
issuances of debentures at 'AA+(bra)'.
The ratings of Banco Votorantim reflect the moderate probability
of support from the bank's ultimate parent, Votorantim
Participacoes S.A (Long-term local currency IDR 'BBB'/Outlook
Stable and National Long-term 'AAA(bra)'/Outlook Stable), in
case of need. Banco Votorantim's Long-term foreign currency IDR
is at Brazil's Country Ceiling, and the bank's Long-term local
currency IDR is above Brazil's sovereign 'BB+' rating, both
reflecting Fitch's opinion regarding the strength of Votorantim
Participacoes.
The Individual rating reflects Banco Votorantim's business
focus, capacity to manage risks, good cost control and
increasing revenue diversification, which is expected to
translate into more consistent earnings. On the other hand, the
rating also reflects the bank's concentration in government
securities and lower profitability relative to its peers. The
Individual rating could benefit in the medium term should the
bank improve and sustain its profitability relative to its
peers, while maintaining adequate levels of leverage and good
asset quality. The rating could be adversely affected should
the bank sustain its increasing leverage without a corresponding
gain in profitability.
Votorantim Participacoes SA is one of Latin America's largest
privately owned industrial conglomerates, and its Votorantim
brand is a well-respected name in Brazil. Its ratings reflect
Votorantim Participacoes' diverse operating asset and revenue
base, strong market position and conservative financial profile.
They also take into account the competitive cost structure of
Votorantim Participacoes' metals, cement, and pulp and paper
businesses.
Headquartered in Sao Paulo, Brazil, Banco Votorantim is a
medium-sized bank, which is involved in wholesale, treasury,
retail and asset management. The bank relies on a lean cost
structure, with total assets of BRL64.8 billion, total loans of
BRL23.6 billion, and equity of BRL5.8 billion as of
September 2007. Banco Votorantim Leasing is 99.9%-owned by
Banco Votorantim.
BRASIL TELECOM: Earns BRL205.6 Million for Fourth Quarter 2007
--------------------------------------------------------------
Brasil Telecom Participacoes S.A. has registered recurring
EBITDA of BRL980.1 million in the fourth quarter of 2007,
18.1% higher than the fourth quarter of 2006. Brasil Telecom's
consolidated quarterly EBITDA totaled BRL902.3 million,
accompanied by a consolidated EBITDA margin of 31.4%, versus
BRL947.1 million and 34.6%, respectively, in the fourth quarter
of 2006. Consolidated net revenue totaled BRL2,876.1 million in
the fourth quarter 2007, 4.9% up from the 2006, and Brasil
Telecom recorded fourth quarter 2007 net income of BRL205.6
million, equivalent to BRL0.5673 per share.
Sustaining the positive results reached in every quarter in
2007, BrT Movel's EBITDA stood at BRL10.3 million in the
fourth quarter 2007, BRL44.1 million up on the same period the
year before. The EBITDA margin of the mobile operations came to
2.1%, 10.2 p.p. up on the fourth quarter of 2006.
In the fourth quarter of 2007, Brasil Telecom added 44,600 ADSL
users to its network, totaling 1,567,800 users in service at the
end of the year, up by 19% year-on-year. ADSL users represented
19.5% of Brasil Telecom's network in the fourth quarter 2007,
versus 15.7% in the fourth quarter of 2006. Moving on with the
expansion of the broadband network, Brasil Telecom reached 80%
of the municipalities with ADSL coverage, the highest percentage
among large operators.
Another important front of innovation is the pursuit of
alternative solutions for broadband access in places difficult
to serve through physical means. The Brasil Telecom group is
thus testing Wi-Max technology, in pre-commercial phase, in the
cities of Curitiba and Porto Alegre (Wi-Max -- Worldwide
Interoperability for Microwave Access -- Wireless broadband
access with international interoperability standard).
The Internet Group, responsible for Brasil Telecom's Internet
services, recorded 1.4 million broadband clients nationwide at
the end of 2007, up by 26.3% on the same period the previous
year, maintaining its leadership in Region II.
Gross revenue from data communication amounted to BRL735.3
million in the fourth quarter 2007, 18.1% higher than in
2006. This was chiefly due to the growth of 19% in the ADSL
client base.
BrT Movel reached 4,262,700 mobile users at the end of the 2007
fourth quarter, with 238,900 net additions in this quarter. In
the fourth quarter 2007, BrT Movel's client base grew by 26.2%
year-on-year while the Brazilian market increased by 21.1%. Its
market share in Region II came to 13.2%, 1.1 p.p. higher than in
the previous year.
The mobile telephony's consolidated gross revenue totaled
BRL542.9 million in the fourth quarter 2007, BRL468.1 million of
which from services and BRL74.8 million from the sales of
handsets and accessories.
Operating costs and expenses totaled BRL2,559.8 million, 1.9%
higher than the BRL2.511.7 million recorded in the fourth
quarter of 2006. The ratio between losses with accounts
receivable and gross revenue was 2%, totaling BRL83.8 million,
0.4 p.p. below the figure recorded in the fourth quarter 2006.
The reduction in losses was due to the improved phone collection
performance.
In the 2007 fourth quarter, Brasil Telecom's investments totaled
BRL608.8 million while net debt stood at BRL489.9 million, 62.7%
less than in December 2006.
About Brasil Telecom
Headquartered in Brasilia, Brazil, Brasil Telecom Participacoes
SA -- http://www.brasiltelecom.com.br-- is a holding company
that conducts substantially all of its operations through its
wholly owned subsidiary, Brasil Telecom SA. The fixed-line
telecommunications services offered to the company's customers
include local services, including all calls that originate and
terminate within a single local area in the region, as well as
installation, monthly subscription, measured services, public
telephones and supplemental local services; intra-regional long-
distance services, which include intrastate and interstate
calls; interregional and international long-distance services;
network services, including interconnection and leasing; data
transmission services; wireless services, and other services.
* * *
To date, Brasil Telecom carries Moody's Investors Service's Ba1
senior unsecured and credit default swap ratings.
BUCKEYE TECH: Earns US$13.8 Mil. in Quarter Ended Dec. 31, 2007
---------------------------------------------------------------
Buckeye Technologies Inc. reported net income of US$13.8 million
on net sales of US$210.9 million for the three months ended
Dec. 31, 2007, compared to net income of US$3.8 million on net
sales of US$184.7 million for the same period in 2006.
Chairman and Chief Executive Officer John B. Crowe said, "We had
an exceptional quarter. Second quarter net sales were up 14%
compared to the same period last year. Sales of US$211 million
are our highest revenue quarter ever. The earnings improvement
is a combination of higher pricing, higher specialty wood volume
and cost control."
Mr. Crowe went on to say, "We are pleased with the quarter and
year-to-date revenue and income growth. Our markets remain
solid and we will benefit from price increases that we
implemented in January. In the current quarter, we anticipate
lower nonwovens production and revenue due to our previously
announced volume reduction from our Delta nonwovens facility.
Additionally, we expect higher manufacturing costs at our
Florida specialty wood facility due to planned maintenance
inspections. While the just completed quarter's earnings
performance will be difficult to repeat, we do anticipate strong
performance in the January-March quarter 2008."
About Buckeye Technologies
Headquartered in Memphis, Tennessee, Buckeye Technologies Inc.
(NYSE: BKI) -- http://www.bkitech.com/-- manufactures and
markets specialty fibers and nonwoven materials. The company
currently operates facilities in the United States, Germany,
Canada, and Brazil. Its products are sold worldwide to makers
of consumer and industrial goods.
* * *
As reported in the Troubled Company Reporter on June 19, 2007,
Moody's upgraded Buckeye Technologies Inc.'s corporate family
rating to B1 from B2 and maintained a stable outlook. All
otherratings were upgraded by one notch while the unsecured
notes were affirmed at B2.
COMPANHIA SIDERURGICA: Targets June for 1st Phase Completion
------------------------------------------------------------
Companhia Siderurgica Nacional said in a presentation to
investment bank Goldman Sachs that the first stage of Casa de
Pedra's expansion will be completed in June, Business News
Americas reports.
The project is aimed at increasing Casa de Pedra's iron ore
capacity to 21 million tons per year from 16 million tons per
year, BNamericas says, citing Companhia Siderurgica.
Companhia Siderurgica said in a filing with the Bovespa stock
exchange that it changed the timetable for the expansion.
Reports say that Companhia Siderurgica had wanted to start up
the 21-million-ton-per-year capacity in February.
BNamericas relates that the second stage of the expansion will
take Casa de Pedra's capacity to 40 million tons per year in the
last month of this year. The third phase will increase
production at the mine to 50 million tons per year in December
2009. In the fourth stage, iron ore capacity will be 70 million
tons per year in December 2011.
According to BNamericas, Companhia Siderurgica will deploy a
six-million-ton-per-year pellet unit in Minas Gerais. The unit
will be operational in 2010, in addition to a capacity increase
at its Itagua port terminal by 2012.
Investments in the three initiatives would total US$2.87
billion, BNamericas states.
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.
COSAN SA: Keen on Acquiring Esso's South American Assets
--------------------------------------------------------
Published reports say that Cosan SA is interested in purchasing
fuel firm Esso's South American assets.
News daily O Globo relates that Cosan is collaborating with
sugar and ethanol group Cristal for Esso's assets.
According to the reports, Brazilian state-run oil firm Petroleo
Brasileiro SA also wants to acquire the assets.
Petroleo Brasileiro's board decided on Jan. 28 to offer for
Esso, a source told O Globo.
Folha de S Paulo notes that Petroleo Brasileiro is considering
plans to collaborate with gas and petrochemicals group Ultra in
bidding for Esso.
O Globo states that these firms are also bidding for Esso:
-- Anglo-Dutch oil company Royal Dutch Shell,
-- Sao Paulo's private equity firm GP Investments, and
-- Houston's AEI.
About Petroleo Brasileiro
Headquartered in Rio de Janeiro, Brazil, Petroleo Brasileiro SA
aka Petrobras -- http://www2.petrobras.com.br/ingles/index.asp
-- was founded in 1953. The company explores, produces,
refines, transports, markets, and distributes oil and natural
gas and power to various wholesale customers and retail
distributors in Brazil. Petrobras has operations in China,
India, Japan, and Singapore.
About Cosan
Headquartered in Sao Paulo, Brazil, Cosan S.A. Industria e
Comercio, is the third largest sugar producer in the world. In
2004/2005 it crushed more than 26 million tons of sugar cane in
fourteen mills located in the Central South region of Brazil,
with sugar sales of 2.3 million tons and ethanol sales of 825
million liters.
* * *
As of February 2007, Cosan carries Moody's Ba2 global local
currency and foreign currency ratings and Standard and Poor's BB
corporate credit rating.
DELPHI CORP: Court Allows Committee Participation in Exit Loan
--------------------------------------------------------------
The Honorable Robert Drain of the U.S. Bankruptcy Court for the
Southern District of New York permits members of the Official
Committee of Unsecured Creditors and the Official Committee of
Equity Security Holders appointed in the bankruptcy cases of
Delphi Corp. and its debtor-affiliates to participate in any
syndicate of lenders assembled to provide exit financing
facilities for the Debtors' emergence from Chapter 11.
The Court directs all interested Statutory Committee members to:
(a) to make advanced written disclosure of their
participation in the Exit Loan Syndication to the
Debtors, counsel to each of the Statutory Committees, and
the U.S. Trustee;
(b) withhold any information with his or her institution, or
any lender or other party involved in the Exit Financing,
related to the Debtors' or Statutory Committees' strategy
regarding the Exit Financing; and
(c) abstain from any direct negotiations with the Debtors or
the Statutory Committees on the Exit Financing.
Participating Statutory Committee members will be screened on an
ongoing basis from any information relating to the Debtors' or
the Statutory Committees' strategy regarding, and any
deliberations by the applicable Statutory Committee in any
respect thereon, the Exit Financing, Judge Drain rules.
Nothing in the Court's order relieves any member of the
Statutory Committees from its obligations under any applicable
securities laws, Judge Drain clarifies.
As reported in the Troubled Company Reporter on Jan. 9, 2008,
the Debtors reduced their Exit Financing from the Court-approved
US$6.8 billion to US$6.1 billion. The reduced facilities
include:
(a) US$1.6 billion in an asset-backed revolving credit
facility;
(b) US$3.7 billion in a first-lien term loan facility; and
(c) US$825 million in a second lien term loan facility.
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 confirmed the Debtors' First Amended
Plan on Jan. 25, 2008.
(Delphi Bankruptcy News, Issue No. 108; Bankruptcy Creditors'
Service Inc., http://bankrupt.com/newsstand/or 215/945-7000)
* * *
As reported in the Troubled Company Reporter-Latin America on
Jan. 16, 2008, Moody's Investors Service assigned ratings to
Delphi Corporation for the company's financing for emergence
from Chapter 11 bankruptcy protection: Corporate Family Rating
of (P)B2; US$3.7 billion of first lien term loans, (P)Ba3; and
US$0.825 billion of 2nd lien term debt, (P)B3. In addition, a
Speculative Grade Liquidity rating of SGL-2 representing good
liquidity was assigned. Moody's said the outlook is stable.
As reported in the Troubled Company Reporter-Latin America on
Jan. 11, 2008, Standard & Poor's Ratings Services expects to
assign its 'B' corporate credit rating to Troy, Michigan-based
automotive supplier Delphi Corp. upon the company's emergence
from Chapter 11 bankruptcy protection, which may occur by the
end of the first quarter of 2008. S&P expects the outlook to be
negative.
In addition, Standard & Poor's expects to assign these
issue-level ratings: a 'B+' issue rating (one notch above the
corporate credit rating), and '2' recovery rating to the
company's proposed US$3.7 billion senior secured first-lien term
loan; and a 'B-' issue rating (one notch below the corporate
creditrating), and '5' recovery rating to the company's proposed
US$825 million senior secured second-lien term loan.
DELPHI CORP: Court Grants Final Approval of MDL Settlements
-----------------------------------------------------------
The U.S. Bankruptcy Court for the Southern District of New York
entered a final order on Jan. 25, 2008, approving the
Multidistrict Litigation Settlements among the Debtors, General
Motors Corp., and the lead plaintiffs in securities actions and
lawsuits brought under the Employee Retirement Income Security
Act consolidated before the U.S. District Court for the Eastern
District Of Michigan, Southern Division.
Pursuant to the MDL Settlements, the Debtors agreed to grant the
Lead Plaintiffs and ERISA Plaintiffs claims under their First
Amended Joint Plan of Reorganization. The Lead Plaintiffs are
the holders of Section 510(b) Note Claims under the Plan, while
the ERISA Plaintiffs are the holders of the Section 510(b)
Equity Claims. In exchange, the Lead Plaintiffs and the ERISA
Plaintiffs will release the Debtors from any and all claims in
connection with the Securities Litigation.
The Hon. Robert Drain authorizes the Debtors to release any and
all of their claims against the current and former officers and
directors of Delphi Corp. that relate to or arise out of any
alleged violations of the federal securities laws during the
period March 7, 2000, through March 3, 2005, inclusive.
Judge Drain permits the Debtors and the other MDL Settlement
parties to make nonmaterial modifications to the MDL Settlements
without further Court order provided that the Official Committee
of Unsecured Creditors and the Official Committee of Equity
Security Holders do not lodge an objection to any proposed
modification within five business days' notice.
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 confirmed the Debtors' First Amended
Plan on Jan. 25, 2008.
(Delphi Bankruptcy News, Issue No. 109; Bankruptcy Creditors'
Service Inc., http://bankrupt.com/newsstand/or 215/945-7000)
* * *
As reported in the Troubled Company Reporter-Latin America on
Jan. 16, 2008, Moody's Investors Service assigned ratings to
Delphi Corporation for the company's financing for emergence
from Chapter 11 bankruptcy protection: Corporate Family Rating
of (P)B2; US$3.7 billion of first lien term loans, (P)Ba3; and
US$0.825 billion of 2nd lien term debt, (P)B3. In addition, a
Speculative Grade Liquidity rating of SGL-2 representing good
liquidity was assigned. The outlook is stable.
As reported in the Troubled Company Reporter-Latin America on
Jan. 11, 2008, Standard & Poor's Ratings Services expects to
assign its 'B' corporate credit rating to Troy, Michigan-based
automotive supplier Delphi Corp. upon the company's emergence
from Chapter 11 bankruptcy protection, which may occur by the
end of the first quarter of 2008. S&P expects the outlook to be
negative.
In addition, Standard & Poor's expects to assign these
issue-level ratings: a 'B+' issue rating (one notch above the
corporate credit rating), and '2' recovery rating to the
company's proposed US$3.7 billion senior secured first-lien term
loan; and a 'B-' issue rating (one notch below the corporate
creditrating), and '5' recovery rating to the company's proposed
US$825 million senior secured second-lien term loan.
GOL LINHAS: Board Okays Share Buyback Program & Dividend Policy
---------------------------------------------------------------
GOL Linhas Aereas Inteligentes S.A. Board of Directors has
authorized a share buyback program and approved the company's
2008 dividend policy.
The Board of Directors, considering current share prices and the
free float, authorized management to implement a share
repurchase program of the company's preferred shares, at market
prices, up to 5,000,000 shares, representing 8.8% of the total
number of preferred shares outstanding in the market, in
accordance with the terms of CVM Instruction No. 10/80. The
purpose of the buyback is the purchase of preferred shares to be
held in treasury and subsequently resold or cancelled, without
reducing the company's capital. The period for these authorized
transactions is 365 days from Jan. 28, 2008.
The objective of this initiative is to capture an important
potential for value creation due to the current price of the
Company's shares. According to GOL Linhas Chief Executive
Officer, Constantino de Oliveira Junior, "This buyback program
is additional evidence of GOL's strategic vision to create value
for all of its shareholders and of its commitment to the
domestic and international capital markets."
With the objective of providing greater predictability of
dividend payments to shareholders, at a meeting held on
Jan. 28, 2007, the Board of Directors approved the distribution
of quarterly dividends in the fixed amount of BRL0.18 per common
and preferred share of the company during 2008. Regardless of
the fixed amount, it is assured the payment of the minimum
dividend of 25% of the corporate year's net profit, and if
necessary the company will make a year-end supplementary
dividend payment.
Based in Sao Paulo, Brazil, GOL Intelligent Airlines aka GOL
Linhas Areas Inteligentes S.A. (NYSE: GOL and Bovespa: GOLL4) --
http://www.voegol.com.br-- through its subsidiary, GOL
Transportes Aereos S.A., provides airline services in Brazil,
Argentina, Bolivia, Uruguay, and Paraguay. The company's
services include passenger, cargo, and charter services. As of
March 20, 2006, Gol Linhas provided 440 daily flights to 49
destinations and operated a fleet of 45 Boeing 737 aircraft.
The company was founded in 2001.
* * *
As reported in the Troubled Company Reporter-Latin America on
July 25, 2007, Fitch Ratings has affirmed the 'BB+' foreign and
local currency issuer default ratings of Gol Linhas Aereas
Inteligentes S.A. Fitch has also affirmed the outstanding
US$200 million perpetual bonds and US$200 million of senior
notes due 2017 at 'BB+' as well as the company's 'AA-' (bra)
national scale rating. Fitch said the rating outlook is stable.
HERCULES INC: Full Year Net Income Drops to US$28.5 Mln in 2007
---------------------------------------------------------------
Hercules Incorporated reported net income for the quarter ended
Dec. 31, 2007 of US$28.5 million as compared to net income of
US$242.1 million for the fourth quarter of 2006. The fourth
quarter of 2006 included US$242 million of one-time tax
benefits.
Net income for the year ended Dec. 31, 2007 was US$178.9 million
as compared to net income of US$238.7 million in 2006.
Net income from ongoing operations for the fourth quarter of
2007 was US$35.0 million, or US$0.31 per diluted share. Net
income from ongoing operations for the fourth quarter of 2006
was US$34.8 million, or US$0.31 per diluted share, including
US$0.04 of land sales and US$0.04 in favorable tax rate impacts.
The fourth quarter 2006 ongoing tax rate was 19%, whereas the
ongoing tax rate was 29% in the fourth quarter of this year.
Net income from ongoing operations for the year ended
Dec. 31, 2007, was US$169.9 million.
Cash flow from operations for the year ended Dec. 31, 2007, was
US$299.9 million, an increase of US$127.0 million as compared to
the prior year.
Net sales in the fourth quarter of 2007 were US$540.7 million,
an increase of 9% from the same period last year. Sales
increased due to 6% higher volume and 5% favorable rates of
exchange, partially offset by unfavorable mix of 2%. Pricing in
the aggregate was flat. Net sales for the year ended
Dec. 31, 2007 were US$2.136 billion, an increase of 9% as
compared to 2006, excluding the impact of the FiberVisions
transaction.
Net sales in the fourth quarter of 2007 increased in all regions
of the world. Sales increased 1% in North America, 14% in
Europe (3% excluding the strong Euro), 38% in Latin America and
17% in Asia Pacific as compared to the same period last year.
Reported profit from operations in the fourth quarter of 2007
was US$56.9 million, an increase of 6% compared with the same
period in 2006. Profit from ongoing operations in the fourth
quarter of 2007 was US$68.9 million, an increase of 10% compared
with US$62.7 million in the fourth quarter of 2006. Excluding
land sales, profit from ongoing operations increased 21% from
the fourth quarter of 2006.
"We continue to demonstrate strong growth in revenue, earnings
per share and cash flow," commented Craig A. Rogerson, President
and Chief Executive Officer. "Our employees, along with our
global market leadership and strong innovation, continue to
drive solid results."
During the quarter, the company purchased 1.65 million shares of
common stock for a cost of US$31.6 million. To date, the
Company has purchased 3.0 million shares for US$58.0 million
under its US$200 million share repurchase authorization.
Interest and debt expense was US$16.6 million in the fourth
quarter of 2007, down US$0.5 million compared with the fourth
quarter of 2006. Interest expense for the year ended
Dec. 31, 2007 was US$68.6 million, a decrease of US$2.6 million
from 2006.
Net debt, total debt less cash and cash equivalents, was
US$679.5 million at Dec. 31, 2007, a decrease of US$144.2
million from year-end 2006.
Capital spending was US$40.5 million in the fourth quarter and
US$118.3 million in 2007. This compares to US$44.4 million and
US$93.6 million in the fourth quarter and year 2006,
respectively. The increase in capital expenditures was
primarily for growth projects including expanded production
capacity.
The company completed the transition of its U.S. defined benefit
pension plan to a liability driven investment strategy in 2007.
The assets of the plan were transitioned from a portfolio that
had a strong equity bias to one where greater than 80% of the
assets are invested in fixed income securities. The funding
level improved from 90% at the end of 2006 to 96% at the end of
2007 on a projected benefit obligation basis.
Segment Results - Reported Basis
In the Aqualon Group, net sales increased 16% and profit from
operations increased 5% in the fourth quarter as compared with
the fourth quarter of 2006.
All Aqualon business units had increased sales in the fourth
quarter as compared to the prior year. In the aggregate, the
sales increase was driven by 14% higher volume (12% excluding an
acquisition), 1% increased pricing and 4% favorable rates of
exchange partially offset by 3% unfavorable mix.
"We continue to show strong growth outside of North America,
more than offsetting the challenging conditions experienced in
this region," commented Mr. Rogerson. "We made significant
progress with our expanded methylcellulose capacity in China.
While we experienced a setback due to an incident at the
facility in January, we expect to meet customer orders and
resume operations during the first quarter and be able to
support the growing demand in the Asia Pacific region and other
fast growing markets," noted Mr. Rogerson.
Coatings and construction sales increased 22% (or 17% excluding
an acquisition) in the fourth quarter of 2007 as compared to the
same period of last year, primarily due to 21% higher volume
(16% excluding an acquisition), 1% increased pricing and 7%
favorable rates of exchange, partially offset by 7% unfavorable
mix.
Coatings sales increased 26% (or 18% excluding an acquisition)
compared to last year with increases in all major regions of the
world except North America. Sales increased in Europe by 32%,
Asia Pacific by 19% and Latin America by 77%. North America was
up 14%, but down 11% versus the fourth quarter of 2006,
excluding the impact of an acquisition.
Sales into construction markets were up 20% globally (12% from
volume) compared to the prior year. Strong growth in Asia,
Europe and Latin America offset a decline in North America.
Asia sales growth of 34% reflected the improved operability of
our methylcellulose joint venture in China. The facility ran at
near capacity during the latter part of the fourth quarter.
Regulated Industries sales increased 6% in the fourth quarter of
2007 as compared to the same period of last year, primarily due
to a 4% favorable mix, and 3% favorable rates of exchange,
partially offset by 1% lower volume. Pricing was flat in the
aggregate. The improved sales mix reflects a higher portion of
sales in the higher priced pharmaceutical and personal care
markets. Volume was lower in the aggregate as growth achieved
in Europe and China was offset by declines in North America.
Energy & Specialties sales increased 18% in the fourth quarter
of 2007 as compared to the same period of last year. The
increase was due to 16% higher volume and 2% favorable rates of
exchange. Pricing and mix were flat from 2006. Specialty
volumes increased 30% and oilfield volumes increased
2%.
Aqualon Group's profit from operations for the fourth quarter of
2007 increased US$1.9 million due to higher volume and the
associated contribution margin and increased pricing, partially
offset by higher raw material, utility and severance and exit
costs and lower gains on land sales. Raw materials were US$3.1
million higher than the prior year, partially offset by
increased selling prices of US$1.4 million versus the prior
year. Margins were adversely impacted due to start up costs
associated with our CMC expansion in China and changes in VAT
treatment associated with export sales from China. Selling,
general and administrative (SG&A) costs were flat from the prior
year reflecting increased sales and marketing, business
management, and technology costs incurred to support growth
initiatives offset by lower corporate support costs. Severance
and exit costs, primarily associated with our business
infrastructure project, were US$1.5 million in the fourth
quarter of 2007, while severance costs in the prior year's
fourth quarter were US$0.1 million. Gain on sale of excess land
at operating sites was US$0.8 million in the quarter, lower than
the US$3.6 million recorded in the fourth quarter of the prior
year.
In the Paper Technologies and Ventures Group, net sales in the
fourth quarter increased 4% and profit from operations increased
4% compared with the same quarter of 2006.
Paper Technologies sales increased 3% primarily due to 6%
favorable rates of exchange, partially offset by an unfavorable
mix of 2% and lower pricing of 1%. Volume in the aggregate was
flat as compared to the prior year. Volume growth was achieved
in the Americas and Europe, whereas Asia was lower. Price
increases were achieved in North America, while pricing was
lower in both Europe and Asia.
Venture sales increased 8% primarily due to 1% higher volume, 4%
higher price and 4% favorable rates of exchange, partially
offset by 1% unfavorable mix. Sales increased in most of the
Venture businesses, while pricing increased across all of
Ventures. The unfavorable mix reflects higher sales of lower
priced building adhesives and tolled products.
PTV's increased profit from operations reflects favorable rates
of exchange, lower SG&A costs and increased pricing (Ventures
offsetting Paper Technologies), partially offset by higher raw
material, severance and other exit costs, and an unfavorable
product mix. Also, gains on land sales were US$2.9 million in
the fourth quarter of 2006. Price increases were US$0.4 million
in the aggregate, whereas raw material cost increases were
US$3.0 million. Severance, restructuring and other exit costs in
the fourth quarter of 2007 were US$3.2 million as compared to
US$2.3 million in the same period of 2006. SG&A costs were
lower than the prior year primarily due to lower bad debt,
incentive accruals and corporate support costs, partially offset
by increased legal and personnel costs.
"Strong performance in the Americas helped offset weaker
European and Asian performance. Our success with new product
launch and emphasis on productivity improvement continue to
support overall margins," commented Mr. Rogerson.
Outlook
"We remain confident in our growth strategy and expect to
continue to deliver double-digit ongoing EPS growth in 2008,"
said Mr. Rogerson. "Aqualon's increased capacities should
support the demand for our products in growing global markets.
PTV's margins are expected to be maintained and revenue grown
through the continuation of its successful New Product Launch
process and further penetration into emerging geographies and
markets. The many actions taken in 2007 establish a solid
foundation for continued success in 2008 and beyond."
About Hercules Inc.
Headquartered in Wilmington, Delaware, Hercules Inc. (NYSE:HPC)
-- http://www.herc.com/-- manufactures and markets chemical
specialties globally for making a variety of products for home,
office and industrial markets. The company has its regional
headquarters in China and Switzerland, and a production facility
in Brazil.
* * *
As reported in the Troubled Company Reporter-Latin America on
July 2, 2007, Standard & Poor's Ratings Services revised its
outlook on Wilmington, Delaware-based Hercules Inc. to positive
from stable and affirmed the existing 'BB' corporate credit
rating.
IWT TESORO: Court Approves US$12.6-Million Sale to New Stream
-------------------------------------------------------------
The U.S. Bankruptcy Court for the Southern District of New York
has approved the sale of IWT Tesoro Corp. and its debtor-
affiliates' assets to stalking horse bidder New Stream Funding
LLC, Bill Rochelle of Bloomberg News reports. New Stream
offered US$12.6 million for the Debtors' assets.
The auction, Mr. Rochelle relates, was cancelled due to lack of
competing bids.
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.
JAPAN AIRLINES: To Boost Domestic Air Cargo Rates by 10%
--------------------------------------------------------
Japan Airlines International Co., Ltd., will raise air cargo
rates for domestic routes by 10% from April to counter higher
jet fuel costs, reports Cargo News Asia.
According to the report, although fierce competition from
trucking firms had previously dissuaded JAL from transferring
cost increases to domestic air cargo rates, the airlines has
decided to conduct the hike in view of surging fuel costs.
The report adds that this is the company's first increase in
domestic air cargo rates in 26 years.
Tokyo-based Japan Airlines International Company, Limited --
http://www.jal.com/en/-- was created as a result of the merger
of Japan Airlines and Japan Air Systems to boost domestic
coverage. Japan Airlines flies to the United States, Brazil and
France.
* * *
As reported on Feb. 9, 2007, that Standard & Poor's Ratings
Services affirmed its 'B+' long-term corporate credit and issue
ratings on Japan Airlines Corp. (B+/Negative/--) following the
company's announcement of its new medium-term management plan.
S&P said the outlook on the long-term corporate credit rating is
negative.
As reported on Oct. 10, 2006, that Moody's Investors Service
affirmed its Ba3 long-term debt ratings and issuer ratings for
both Japan Airlines International Co., Ltd and Japan Airlines
Domestic Co., Ltd. The rating affirmation is in response to the
planned restructuring of the Japan Airlines Corporation group on
Oct. 1, 2006 with the completion of the merger of JAL's two
operating subsidiaries, JAL International and Japan Airlines
Domestic. JAL International will be the surviving company.
Moody's said the rating outlook is stable.
Fitch Ratings Tokyo analyst Satoru Aoyama said that the
company's debt obligations and expenses for new aircraft have
placed it in an unfavorable financial position. Fitch assigned
a BB- rating on the company, which is three notches lower than
investment grade.
PROPEX INC: Section 341(a) Creditors Meeting Set for March 4
------------------------------------------------------------
Richard F. Clippard, the United States Trustee for Region 8,
will convene a meeting of the creditors of Propex, Inc.,
and its debtor subsidiaries at 10:00 a.m., on March 4, 2008, at
Basement Room 18, U. S. Bankruptcy Court, at 31 East 11th
Street, in Chattanooga, Tennessee.
This is the first meeting of creditors required under Section
341(a) of the Bankruptcy Code in the Debtors' bankruptcy cases.
Attendance by the Debtors' creditors at the meeting is welcome,
but not required. The Sec. 341(a) meeting offers the creditors
a one-time opportunity to examine the Debtors' representative
under oath about the Debtors' financial affairs and operations
that would be of interest to the general body of creditors.
Headquartered in Chattanooga, Tennessee, Propex Inc. --
http://www.propexinc.com/-- produces geosynthetic, concrete,
furnishing, and industrial fabrics and fiber. It is produces
primary and secondary carpet backing. Propex operates in North
America, Europe, and Brazil.
The company and its debtor-affiliates filed for Chapter 11
protection on Jan. 18, 2008 (Bankr. E.D. Tenn. Case No.
08-10249). The debtors' has selected Edward L. Ripley, Esq.,
Henry J. Kaim, Esq., and Mark W. Wege, Esq. at King & Spalding,
in Houston, Texas, to represent them. As of Sept. 30, 2007, the
debtors' balance sheet showed total assets of US$585,700,000 and
total debts of US$527,400,000. (Propex Bankruptcy News, Issue
No. 4; Bankruptcy Creditors' Service Inc.,
http://bankrupt.com/newsstand/or 215/945-7000)
PROPEX INC: US Trustee Appoints Five-Member Creditors' Committee
----------------------------------------------------------------
Richard F. Clippard, the United States Trustee for Region 8,
appoints five members to the Official Committee of Unsecured
Creditors of the Chapter 11 cases of Propex, Inc., and its
affiliates.
The Creditors Committee members are:
1. Wilmington Trust Company
Attn: James J. McGinley, Managing Director
520 Madison Avenue, 33rd floor
New York, N.Y. 10022
Tel No.: 212-415-0522
Fax No.: 212-415-0513
Cell No.: 917-446-0136
2. Pension Benefit Guaranty Corporation
Attn: Christopher Gran, Financial Analyst
1200 K Street, N.W., Suite 240
Washington, D. C 20005
Tel no.: 202-326-4070 ext. 3405
or 800-400-7242 ext. 3405
3. Total Petrochemicals USA, Inc.
Attn: Joel Anderson, Corporate Credit Manager
1201 Louisiana Street, Suite 1800
Houston, TX 77002
Tel No.: 713-483-5271
Fax No.: 713-483-5759
4. BP Corporation North America Inc.
Attn: Matt Linford
4101 Winfield Road
Warrenville, IL 60504
Tel No.: 630-821-3227
Fax No.: 630-821-3420
5. SMH Capital Advisors, Inc.
Attn: Stephen Cooke
4800 Overton Plaza, Suite 300
Fort Worth, TX 76109
Tel No.: 817-731-9559 ext. 248
Fax No.: 817-731-4641
The U.S. Trustee held an Organizational Meeting of the
Committee on Jan. 30, 2008, at 1:30 p.m., at the Miller & Martin
Conference Room in Chattanooga, Tennessee.
Headquartered in Chattanooga, Tennessee, Propex Inc. --
http://www.propexinc.com/-- produces geosynthetic, concrete,
furnishing, and industrial fabrics and fiber. It is produces
primary and secondary carpet backing. Propex operates in North
America, Europe, and Brazil.
The company and its debtor-affiliates filed for Chapter 11
protection on Jan. 18, 2008 (Bankr. E.D. Tenn. Case No.
08-10249). The debtors' has selected Edward L. Ripley, Esq.,
Henry J. Kaim, Esq., and Mark W. Wege, Esq. at King & Spalding,
in Houston, Texas, to represent them. As of Sept. 30, 2007, the
debtors' balance sheet showed total assets of US$585,700,000 and
total debts of US$527,400,000. (Propex Bankruptcy News, Issue
No. 4; Bankruptcy Creditors' Service Inc.,
http://bankrupt.com/newsstand/or 215/945-7000)
SANYO ELECTRIC: To Dissolve TV Joint Venture with Quanta
--------------------------------------------------------
Sanyo Electric Co. Ltd. plans to dissolve its television
development joint venture with Quanta Computer Inc., Reuters
reports, citing the Nikkei business daily.
Reuters recounts that Sanyo and notebook PC maker Quanta said in
March 2006 that they would set up a venture to make and sell
flat TVs.
However, Reuters notes, shortly after the announcement, Taiwan-
based AU Optronics Corp agreed to buy Quanta Computer's liquid
crystal display unit, Quanta Display.
According to the report, Sanyo and Quanta set up joint venture
Sanyo Visual Technology later in 2006 with a capitalization of
JPY100 million (US$937,300), but the scope of the venture was
limited to product development and joint procurement of parts
and materials.
Reuters notes that, according to the Nikkei, the announcement to
end the venture, which is 81% owned by Sanyo and the remainder
owned by Quanta, is set for Jan. 30.
Reuters cites a Sanyo spokesman as saying that the company is
studying a wide range of options to expand its TV business, but
that nothing has been decided on the future of its joint venture
with Quanta Computer.
Sanyo Electric
Headquartered in Osaka, Japan, Sanyo Electric Co., Ltd. --
http://www.sanyo.com/-- is one of the world's leading
manufacturers of consumer electronics products. The company has
global operations in Brazil, Germany, India, Ireland, Spain, the
United States and the United Kingdom, among others.
* * *
In March 2, 2007, Fitch Ratings placed SANYO Electric Co. Ltd.'s
BB+ long-term foreign and local currency issuer default and
senior unsecured ratings on rating watch negative.
The company also carries Standard & Poor's 'BB-' long-term
corporate credit rating.
* BRAZIL: Petroleo Brasileiro Wants Esso's South American Assets
----------------------------------------------------------------
Published reports say that Brazilian state-owned oil firm
Petroleo Brasileiro SA is interested in purchasing fuel firm
Esso's South American assets.
According to the reports, Brazilian state-run oil firm Petroleo
Brasileiro SA also wants to acquire the assets.
Petroleo Brasileiro's board decided on Jan. 28 to offer for
Esso, a source told news daily O Globo.
Folha de S Paulo notes that Petroleo Brasileiro is considering
plans to collaborate with gas and petrochemicals group Ultra in
bidding for Esso.
O Globo relates that Cosan is collaborating with sugar and
ethanol group Cristal for Esso's assets.
O Globo states that these firms are also bidding for Esso:
-- Anglo-Dutch oil company Royal Dutch Shell,
-- Sao Paulo's private equity firm GP Investments, and
-- Houston's AEI.
About Cosan
Headquartered in Sao Paulo, Brazil, Cosan S.A. Industria e
Comercio, is the third largest sugar producer in the world. In
2004/2005 it crushed more than 26 million tons of sugar cane in
fourteen mills located in the Central South region of Brazil,
with sugar sales of 2.3 million tons and ethanol sales of 825
million liters.
About Petroleo Brasileiro
Headquartered in Rio de Janeiro, Brazil, Petroleo Brasileiro SA
aka Petrobras -- http://www2.petrobras.com.br/ingles/index.asp
-- was founded in 1953. The company explores, produces,
refines, transports, markets, and distributes oil and natural
gas and power to various wholesale customers and retail
distributors in Brazil. Petrobras has operations in China,
India, Japan, and Singapore.
* * *
As reported in the Troubled Company Reporter-Latin America on
Dec. 26, 2007, Standard & Poor's Ratings Services assigned BB+
long-term sovereign foreign currency rating and B short-term
sovereign foreign currency rating on Brazil.
As reported in the Troubled Company Reporter-Latin America on
May 14, 2007, Fitch Ratings upgraded Brazil's long-term foreign
and local currency sovereign Issuer Default Ratings to 'BB+'
from 'BB' and the Country Ceiling to 'BBB-' from 'BB+'. In
addition, Fitch affirmed Brazil's Short-term IDR at 'B'. Fitch
said the rating outlook is stable.
===========================
C A Y M A N I S L A N D S
===========================
AVENDIS GLOBAL: Grand Court Hearing Wind-Up Petition Tomorrow
-------------------------------------------------------------
Avendis Global Fund Ltd.'s wind-up petition will be heard before
the Grand Court of the Cayman Islands at the Law Courts, George
Town, Grand Cayman, on Feb. 1, 2008, at 10:00 a.m.
Avendis Global presented a petition for wind-up to the court on
Aug. 31, 2007.
Those who want to attend the hearing must write about their
intention to do so by Jan. 31, 2008, at 4:00 p.m. to:
Walkers, Attorneys-at-Law
P.O. Box 265, George Town
Walker House, Mary Street
George Town, Grand Cayman
Cayman Islands
The company can be reached at:
Avendis Global Fund Ltd.
Q&H Corporate Services Ltd.
3rd Floor, Harbor Center
North Church Street, George Town
Grand Cayman, Cayman Islands
CHINA ALPHA: Proofs of Claim Filing Ends on Feb. 7
--------------------------------------------------
China Alpha Fund's creditors are given until Feb. 7, 2008, to
prove their claims to Stuart K. Sybersma and Ian A.N. Wight, the
company's liquidators, or be excluded from receiving any
distribution or payment.
In their proofs of claim, creditors must indicate their full
names, addresses, the full particulars of their debts or claims,
and the names and addresses of their lawyers, if any.
China Alpha's shareholder decided on Dec. 18, 2007, to place the
company into voluntary liquidation under The Companies Law (2004
Revision) of the Cayman Islands.
The liquidators can be reached at:
Stuart K. Sybersma
Ian A.N. Wight
Attention: Jessica Turnbull
Deloitte
P.O. Box 1787, George Town
Grand Cayman, Cayman Islands, B.W.I.
Telephone: (345) 949 7500
Fax: (345) 949 8258
CONTRA FUND: Proofs of Claim Filing Is Until Feb. 7
---------------------------------------------------
The Contra Fund Limited's creditors are given until
Feb. 7, 2008, to prove their claims to S.L.C. Whicker and K.D.
Blake, the company's liquidators, or be excluded from receiving
any distribution or payment.
In their proofs of claim, creditors must indicate their full
names, addresses, the full particulars of their debts or claims,
and the names and addresses of their lawyers, if any.
The Contra Fund's shareholders agreed on Dec. 17, 2007, to place
the company into voluntary liquidation under The Companies Law
(2004 Revision) of the Cayman Islands.
The liquidators can be reached at:
S.L.C. Whicker
K.D. Blake
Attention: Camele Burke
KPMG
P.O. Box 493, Grand Cayman KY1-1106
Cayman Islands
Telephone: 345-914-4325 / 345-949-4800
Fax: 345-949-7164
EARLSWOOD LTD: Proofs of Claim Filing Deadline Is Feb. 7
--------------------------------------------------------
Earlswood Limited's creditors are given until Feb. 7, 2008, to
prove their claims to Buchanan Limited, 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.
Earlswood Limited's shareholders agreed on Dec. 20, 2007, to
place the company into voluntary liquidation under The Companies
Law (2004 Revision) of the Cayman Islands.
The liquidator can be reached at:
Buchanan Limited
Attention: Francine Jennings
P.O. Box 1170
Grand Cayman KY1-1102, Cayman Islands
Telephone: (345) 949-0355
Fax: (345) 949-0360
LOVAT INVESTMENTS: Proofs of Claim Filing Ends on Feb. 7
--------------------------------------------------------
Lovat Investments (Cayman) Limited's creditors are given until
Feb. 7, 2008, to prove their claims to Maples and Calder, 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.
Lovat Investments' shareholders agreed on Dec. 21, 2007, to
place the company into voluntary liquidation under The Companies
Law (2004 Revision) of the Cayman Islands.
The liquidator can be reached at:
Maples and Calder
P.O. Box 309, George Town
Ugland House, South Church Street
George Town, Grand Cayman
Cayman Islands
PAI HEDGED: Proofs of Claim Filing Deadline Is Feb. 6
-----------------------------------------------------
Pai Hedged Value International Fund, Ltd.'s creditors are given
until Feb. 6, 2008, to prove their claims to John Cullinane and
Derrie Boggess, the company's liquidators, or be excluded from
receiving any distribution or payment.
In their proofs of claim, creditors must indicate their full
names, addresses, the full particulars of their debts or claims,
and the names and addresses of their lawyers, if any.
Pai Hedged's shareholder decided on Dec. 28, 2007, to place the
company into voluntary liquidation under The Companies Law (2004
Revision) of the Cayman Islands.
The liquidators can be reached at:
John Cullinane
Derrie Boggess
c/o Walkers SPV Limited
Walker House, 87 Mary Street
George Town, Grand Cayman KY1-9002
Cayman Islands
Telephone: (345) 914-6305
PARMALAT SPA: Auditor Says Ex-CFO Alerted on Accounting Hole
------------------------------------------------------------
Maurizio Bianchi, a former Grant Thornton auditor, told a court
in Milan, Italy, that he had alerted Parmalat S.p.A.'s former
Chief Financial Officer Fausto Tonna of a EUR170 million
accounting hole prior to its collapse in December 2003, the
Associated Press reports.
"But he told me to go ahead, and that the hole would have been
filled in three years," Mr. Bianchi was quoted by AP as saying.
"That was also my hope."
Milan prosecutors have charged Messrs. Bianchi and Tonna, as
well as Parmalat founder Calisto Tanzi and former group
executives and accountants, of market rigging, false accounting
and contravening local stock market laws.
Also in trial are Citigroup Inc., UBS AG, Deutsche Bank AG, and
Morgan Stanley. Milan prosecutors accused the banks of
disguising the terms of Parmalat bond sales and other financing
from investors, thus helping Parmalat conceal its financial
situation.
Mr. Bianchi has been sentenced to nine years in prison by a
Parma court for fraudulent bankruptcy, while Mr. Tonna has
reached a plea agreement for a two-and-a-half-year sentence.
Lawyers for the banks rejected claims that the concerned firms,
as well as their current and former managers, withheld
information on Parmalat's true financial situation prior to its
collapse.
Judge Gabriella Manfrin reset the hearing to March 7, 2008, to
allow more time to review the civil claims.
Headquartered in Milan, Italy, Parmalat S.p.A. --
http://www.parmalat.net/-- sells nameplate milk products that
can be stored at room temperature for months. It also has about
40 brand product lines, which include yogurt, cheese, butter,
cakes and cookies, breads, pizza, snack foods and vegetable
sauces, soups and juices.
The company's U.S. operations filed for chapter 11 protection on
Feb. 24, 2004 (Bankr. S.D.N.Y. Case No. 04-11139). Gary
Holtzer, Esq., and Marcia L. Goldstein, Esq., at Weil Gotshal &
Manges LLP, represent the Debtors. When the U.S. Debtors filed
for bankruptcy protection, they reported more than
US$200 million in assets and debts. The U.S. Debtors emerged
from bankruptcy on April 13, 2005.
Parmalat S.p.A. and its Italian affiliates filed separate
petitions for Extraordinary Administration before the Italian
Ministry of Productive Activities and the Civil and Criminal
District Court of the City of Parma, Italy on Dec. 24, 2003.
Dr. Enrico Bondi was appointed Extraordinary Commissioner in
each of the cases. The Parma Court has declared the units
insolvent.
On June 22, 2004, Dr. Bondi filed a Sec. 304 Petition, Case No.
04-14268, in the United States Bankruptcy Court for the Southern
District of New York.
Parmalat has three financing arms: Dairy Holdings Ltd., Parmalat
Capital Finance Ltd., and Food Holdings Ltd. Dairy Holdings and
Food Holdings are Cayman Island special-purpose vehicles
established by Parmalat S.p.A. The Finance Companies are under
separate winding up petitions before the Grand Court of the
Cayman Islands. Gordon I. MacRae and James Cleaver of Kroll
(Cayman) Ltd. serve as Joint Provisional Liquidators in the
cases. On Jan. 20, 2004, the Liquidators filed Sec. 304
petition, Case No. 04-10362, in the United States Bankruptcy
Court for the Southern District of New York. In May 2006, the
Cayman Island Court appointed Messrs. MacRae and Cleaver as
Joint Official Liquidators. Gregory M. Petrick, Esq., at
Cadwalader, Wickersham & Taft LLP, and Richard I. Janvey, Esq.,
at Janvey, Gordon, Herlands Randolph, represent the Finance
Companies in the Sec. 304 case.
The Honorable Robert D. Drain presides over the Parmalat
Debtors' U.S. cases. On June 21, 2007, the U.S. Court Granted
Parmalat Permanent Injunction.
PHZ GLOBAL: Proofs of Claim Filing Ends on Feb. 6
-------------------------------------------------
PHZ Global Trading Ltd.'s creditors are given until
Feb. 6, 2008, to prove their claims to John Cullinane and Derrie
Boggess, the company's liquidators, or be excluded from
receiving any distribution or payment.
In their proofs of claim, creditors must indicate their full
names, addresses, the full particulars of their debts or claims,
and the names and addresses of their lawyers, if any.
PHZ Global's shareholder decided on Jan. 3, 2008, to place the
company into voluntary liquidation under The Companies Law (2004
Revision) of the Cayman Islands.
The liquidators can be reached at:
John Cullinane
Derrie Boggess
c/o Walkers SPV Limited
Walker House, 87 Mary Street
George Town, Grand Cayman KY1-9002
Cayman Islands
Telephone: (345) 914-6305
STABLE CREST: Proofs of Claim Filing Deadline Is Feb. 7
-------------------------------------------------------
Stable Crest Company's creditors are given until Feb. 7, 2008,
to prove their claims to Robert M. Hopson II, 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.
Stable Crest's shareholder decided on Dec. 17, 2007, to place
the company into voluntary liquidation under The Companies Law
(2004 Revision) of the Cayman Islands.
The liquidator can be reached at:
Robert M. Hopson II
c/o Fayez Sarofim & Co.
Two Houston Center, Suite 2907
Houston, Texas 77010
USA
Telephone: 713 308 2734
Fax: 713 308 2991
VISTA GENERAL: Proofs of Claim Filing Is Until Feb. 3
-----------------------------------------------------
Vista General Reinsurance Limited's creditors are given until
Feb. 3, 2008, to prove their claims to Clifford G. Rager, 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.
Vista General's shareholder decided on Dec. 14, 2007, to place
the company into voluntary liquidation under The Companies Law
(2004 Revision) of the Cayman Islands.
The liquidator can be reached at:
Clifford G. Rager
President, Vista Life Insurance Company
One American Road, MD 7480
Dearborn, MI 48126
Contact for inquiries:
Virginia Czarnocki
Walkers, Walker House
87 Mary Street, George Town
Grand Cayman KY1-9001, Cayman Islands
Telephone: (345) 814 4649
E-mail: virginia.czarnocki@walkersglobal.com
WILDRIVER FINANCE: Proofs of Claim Filing Deadline Is Tomorrow
--------------------------------------------------------------
Wildriver Finance Company's creditors are given until
Feb. 1, 2008, to prove their claims to Jeremy Simon Spratt and
Finbarr Thomas O'Connell, the company's liquidators, or be
excluded from receiving any distribution or payment.
In their proofs of claim, creditors must indicate their full
names, addresses, the full particulars of their debts or claims,
and the names and addresses of their lawyers, if any.
Wildriver Finance's shareholder decided on Dec. 7, 2007, to
place the company into voluntary liquidation under The Companies
Law (2004 Revision) of the Cayman Islands.
The liquidators can be reached at:
Jeremy Simon Spratt
Finbarr Thomas O'Connell
KPMG LLP, 8 Salisbury Square
London EC4Y 8BB, United Kingdom
Contact for inquiries:
Beth Grayland
8 Salisbury Square
London, EC4Y 8BB
United Kingdom
Telephone: 01144 207 694 3731
Fax: 01144 207 694 3533
=========
C H I L E
=========
NORSKE SKOGINDUSTRIER: Refutes S&P's BB Credit Rating Level
-----------------------------------------------------------
Standard & Poor's Rating Services has revised its long-term
credit rating on Norske Skogindustrier ASA to BB, from earlier
BB+. The Negative Outlook is maintained. According to Standard
& Poor's press release, the rating action reflects challenging
market conditions, and that Norske Skog is underperforming to
S&P's financial requirements for the previous rating level.
According to Norske Skog, it does not have interest or covenants
linked to the rating level on the existing debt.
About Norske Skog
Headquartered in Lysaker, Norway, Norske Skogindustrier ASA --
http://www.norskeskog.com/-- manufactures paper and pulp. It
produces long and short fiber sulphate pulp, newsprint, bleached
Kraft paper and others. The Company owns and operates paper
mills in Europe, Asia, Australia, Africa and North and South
America. Norske has posted three consecutive annual net losses
of EUR116.3 million in 2004, EUR315.4 million in 2003, and
EUR849 million in 2002.
* * *
As reported on Nov. 6, 2007, Moody's Investors Service
downgraded the Corporate Family Rating of Norske Skogindustrier
ASA to Ba2 from Ba1 and placed all ratings on review for further
possible downgrade.
NORSKE SKOG: Strong Norwegian Currency Impacts Operating Result
---------------------------------------------------------------
Norske Skogindustrier ASA released preliminary financial results
for the fourth quarter of 2007.
The underlying operating result in the fourth quarter of 2007
before special items is somewhat lower than in the third
quarter. The main causes of this are the implemented production
curtailments, which have had a negative effect on the result of
about NOK30 million, and the effect of a stronger Norwegian
currency, which has had a negative effect of about NOK20
million.
The net effect on the result of energy hedging related to Norske
Skog's energy contracts is a gain of about NOK450 million in the
fourth quarter. This gain consists of unrealized changes in
value on long-term energy contracts in Norway and Brazil,
related to embedded derivatives. The amount is included in the
operating result, but is excluded from the segment results and
has no cash effect.
Total currency effects included under financial items amount to
a gain of about NOK25 million.
Norske Skog's trade-weighted currency basket ("The Norske Skog
index") had an average value of 82.3 in the fourth quarter of
2007, compared with 84.8 in the third quarter of 2007 and 90.1
in the fourth quarter of 2006. The final value of the index was
81.7 as of Dec. 31, 2007 against 81.3 as of Sept. 30, 2007. The
index starts at Jan. 1, 2002.
The recognition of energy contracts as income with a basis in
forward prices as of Dec. 31, 2007 gives a value of about
NOK4.5 billion after deducting "grunnrenteskatt." The amount
has been included in the group's operating result under IFRS,
but it has not been included in the segment results and has no
cash effect. A calculated tax cost of 28% will be deducted.
The preliminary calculation gave a value of about NOK5.2 billion
after "grunnrenteskatt" and it is the reduction in forward
prices that leads to this reduction.
As concerns the write-down of fixed assets, up-dated
calculations give a total write-down of about NOK4.8 billion in
the fourth quarter. This consists of a write-down, which is a
result of changed useful life and the effect of market energy
prices of NOK2 billion in total, and the write-down of goodwill
of about NOK 2.8 billion. The write-downs are in total 0.3
billion higher than estimated in the preliminary calculations.
Norske Skog's accounts for the fourth quarter of 2007 will be
made public on Feb. 7 at 8:00 a.m.
A webcasted presentation will be held at the company's premises
at 1:00 p.m. on the same date.
The silent period preceding the presentation will start on
Jan. 25.
About Norske Skog
Headquartered in Lysaker, Norway, Norske Skogindustrier ASA --
http://www.norskeskog.com/-- manufactures paper and pulp. It
produces long and short fiber sulphate pulp, newsprint, bleached
Kraft paper and others. The Company owns and operates paper
mills in Europe, Asia, Australia, Africa and North and South
America. Norske has posted three consecutive annual net losses
of EUR116.3 million in 2004, EUR315.4 million in 2003, and
EUR849 million in 2002.
ROCK-TENN CO: Moody's Confirms Ba3 Rating; Puts Ba2 on New Debt
---------------------------------------------------------------
Moody's Investors Service has confirmed Rock-Tenn Company's Ba2
corporate family rating and the Ba3 rating on the company's
existing senior notes. At the same time Moody's assigned a Ba2
rating to the company's new US$1 billion senior secured credit
facilities and a Ba3 rating to the company's new US$400 million
senior unsecured notes. Proceeds from the new debt offerings
will be used to fund, in part, the acquisition of Southern
Container Corp. and retire the company's existing senior secured
credit facilities. The rating confirmation concludes a review
initiated on Jan. 11, following the company's announcement that
it had signed a definitive agreement to acquire Southern
Container for US$851 in cash and US$142 million in assumed debt.
Southern Container is a private company that generated
approximately US$144 million of proforma EBITDA for the 52 weeks
ending Sept. 8, 2007, from a low-cost recycled containerboard
mill in Syracuse, New York and a corrugated box plant system in
the Northeast and Mid-Atlantic states. The company has received
Federal antitrust approval and the transaction is expected to
close in March 2008. The rating outlook is negative.
The ratings reflect the company's low cost vertically integrated
asset base and the expectation of strong operating and financial
performance after the acquisition of Southern Container. With
the substantial increase in debt load, Rock-Tenn will produce
significantly weaker leverage, coverage and cash flow protection
metrics over the next two to three years. While Southern
Container's higher margins and more stable revenue and cash flow
streams should help Rock Tenn's return and volatility measures,
these benefits are largely offset by the diminished financial
flexibility and heightened risks associated with company's more
levered financial position. Despite the enhanced presence in
the corrugated packaging space, the company will remain
predominately focused on the paper packaging industry segment.
The negative ratings outlook reflects the company's
significantly increased debt position and the concern over the
impact of a potential protracted slowdown in the United States
economy on the company's future operating performance. The
outlook also reflects the continued upward pressure on recycled
fiber, energy, and chemical costs, during an anticipated
flattening pricing environment that may erode the company's
ability to de-lever within its projected time frame.
Outlook Actions:
-- Changed to Negative from RURD
Ratings Confirmed:
-- Corporate Family Rating Ba2
-- Probability of Default Rating Ba2
-- US$250 million 8.20% Senior Unsecured Notes due 2011, Ba3
-- US$100 million 5.625% Senior Unsecured Notes due 2013, Ba3
Ratings Assigned:
-- US$450 million Secured Credit Facility due 2013, Ba2 (LGD3,
45%)
-- US$350 million Secured Term Loan A due 2014, Ba2 (LGD3,
45%)
-- US$200 million Secured Term Loan B due 2015, Ba2 (LGD3,
45%)
-- US$400 million Gtd. Senior Unsecured Notes due 2016, Ba3
(LGD4, 67%)
Upgrades:
-- US$250 million 8.20% Senior Unsecured Notes due 2011,
upgraded to LGD4, 63% from LGD 4, 67%
-- US$100 million 5.625% Senior Unsecured Notes due 2013,
upgraded to LGD4, 63% from LGD 4, 67%
Approximately US$1.75 Billion of Debt Securities Affected.
Headquartered in Norcross, Georgia, Rock-Tenn Company (NYSE:
RKT) -- http://www.rocktenn.com/-- provides a wide range of
marketing and packaging solutions to consumer products
companies, with operating locations in the United States,
Canada, Mexico, Argentina and Chile. The company is one of
North America's manufacturers of packaging products,
merchandising displays and bleached and recycled paperboard.
===============
C O L O M B I A
===============
BANCOLOMBIA SA: Earns COP79.7 Million in December 2007
------------------------------------------------------
Bancolombia S.A. reported unconsolidated net income of COP79,732
million during the past month of December.
During December, total net interest income, including investment
securities, amounted to COP190,896 million. Additionally, total
net fees and income from services totaled COP79,006 million.
Total assets amounted to COP33.20 trillion, total deposits
totaled COP21.13 trillion and Bancolombia's total shareholders'
equity amounted to COP5.07 trillion.
Bancolombia's (unconsolidated) level of past due loans as a
percentage of total loans was 2.81% as of Dec. 31, 2007, and the
level of allowance for past due loans was 144.52% as of the same
date.
Market Share
According to Asobancaria (Colombia's national banking
association), Bancolombia's market share of the Colombian
financial system as of December 2007 was as follows:
* 18.7% of total deposits,
* 21.5% of total net loans,
* 19.4% of total savings accounts,
* 22.3% of total checking accounts and
* 14.3% of total time deposits.
Bancolombia is Colombia's largest full-service financial
institution, formed by a merger of three leading Colombian
financial institutions. Bancolombia's market capitalization is
over US$5.5 billion, with US$13.8 billion asset base and US$1.4
billion in shareholders' equity as of Sept. 30, 2006.
Bancolombia is the only Colombian company with an ADR level III
program in the New York Stock Exchange.
* * *
As reported in the Troubled Company Reporter-Latin America on
June 27, 2007, Moody's Investors Service changed the outlook to
positive from stable on its Ba3 long-term foreign currency
deposit ratings and Ba1 long-term foreign currency subordinated
bond rating for Bancolombia, S.A.
As reported in the Troubled Company Reporter-Latin America on
May 4, 2007, Fitch Ratings downgraded and removed from Rating
Watch Negative Bancolombia's long-term and short-term local
currency Issuer Default Ratings and Individual rating:
-- Individual rating to 'C/D' from 'C';
-- Local currency long-term IDR to 'BB+' from 'BBB-'; and
-- Local currency short-term rating to 'B' from 'F3';
In addition, Fitch affirmed these ratings:
-- Foreign currency long-term IDR at 'BB+';
-- Foreign currency short-term rating at 'B'; and
-- Support rating at '3'.
Fitch says the rating outlook is stable.
===================
C O S T A R I C A
===================
ANIXTER INT'L: Reports US$9.7MM Net Income in Qtr. Ended Dec. 28
----------------------------------------------------------------
Anixter International Inc. has reported results for the quarter
ended Dec. 28, 2007.
Fourth Quarter Highlights
-- Sales of US$1.49 billion, including US$20.5 million of
incremental sales from a series of acquisitions completed
over the past twelve months, rose 15 percent compared to
sales of US$1.30 billion in the year ago quarter.
-- Quarterly operating income of US$114.4 million increased
27 percent from the US$90.4 million reported in the
fourth quarter of 2006.
-- Net income in the quarter, inclusive of a benefit of
US$9.7 million or 23 cents per share primarily related to
foreign tax benefits and the finalization of prior year's
tax returns, increased 34 percent, to US$70.5 million, or
US$1.69 per diluted share, from US$52.4 million, or
US$1.20 per diluted share, in last year's fourth quarter
when the company reported a benefit of US$4.2 million or
10 cents per share primarily related to tax benefits
associated with its foreign operations.
-- Cash flow generated from operations was US$92.9 million,
up significantly compared to US$17.0 million in the year
ago quarter.
Robert Grubbs, President and Chief Executive Officer, stated,
"We are very pleased with the strong financial results in the
quarter and the year. Our success in expanding our product and
supply chain offering, along with an intense focus on broadening
and diversifying our global customer base, drove record sales,
operating margins and net income in 2007. We enter 2008
confident in our ability to continue executing on our growth
strategies including further expanding our customer base as well
as growing with our existing customers."
Fourth Quarter Results
For the three-month period ended Dec. 28, 2007, sales of US$1.49
billion produced net income of US$70.5 million, or US$1.69 per
diluted share. Included in the current year's fourth quarter
results was US$20.5 million of incremental sales from a series
of acquisitions completed in the past year. After adjusting for
acquisitions and the favorable foreign exchange impact of
US$50.5 million, fourth quarter sales grew at a year-over-year
organic rate of 9 percent. Also included in the fourth quarter
results was a benefit of US$9.7 million, or 23 cents per diluted
share, of net income primarily related to foreign tax benefits
and the finalization of prior year's tax returns. Exclusive of
these tax related items, net income was US$60.8 million or
US$1.46 per diluted share.
In the prior year period, sales of US$1.30 billion generated net
income of US$52.4 million, or US$1.20 per diluted share. The
fourth quarter 2006 results include US$4.2 million, or 10 cents
per diluted share, of net income primarily related to tax
benefits for foreign operations. Included in the net income
associated with these tax benefits is US$0.8 million of interest
expense that is reflected as a part of the other, net line in
the accompanying income statement. Exclusive of these tax
benefits, net income was US$48.2 million or US$1.10 per diluted
share.
Operating income in the fourth quarter increased 27 percent to
US$114.4 million as compared to US$90.4 million in the year ago
quarter. For the latest quarter, operating margins were 7.7
percent compared to 7.0 percent in the fourth quarter of 2006.
Twelve-Month Results
For the twelve-month period ended Dec. 28, 2007, sales of
US$5.85 billion produced net income of US$253.5 million, or
US$6.00 per diluted share. The 2007 results include incremental
sales of US$125.5 million from a series of acquisitions
completed in the past year. After adjusting for acquisitions
and the favorable foreign exchange impact of US$139.3 million,
full year sales grew at a year-on-year organic rate of 13
percent. Net income in 2007 also includes US$11.8 million, or
28 cents per diluted share, primarily related to foreign tax
benefits and the finalization of prior year's tax returns.
Exclusive of these tax benefits, net income was US$241.7 million
or US$5.73 per diluted share.
In the prior year period, sales of US$4.94 billion produced net
income of US$209.3 million or US$4.86 per diluted share. In
addition to the previously discussed tax benefits recorded in
the prior year's fourth quarter associated with the company's
foreign operations, the 2006 twelve-month results include
US$22.8 million, or 53 cents per diluted share, of income
primarily associated with a refund from the United States
Internal Revenue. This refund was the result of the final
settlement of income taxes covering the period of 1996 through
1998. The interest income portion of this settlement of US$7.7
million (after-tax impact of US$4.7 million) is reflected on the
income statement in the other, net line. The remaining portion
of the settlement is recorded as an US$18.1 million reduction to
the tax provision. Excluding the tax benefits and the favorable
tax settlements, net income was US$182.3 million or US$4.23 per
diluted share.
Operating income in fiscal 2007 increased by 30 percent to
US$439.1 million as compared to US$337.1 million in the prior
fiscal year. Operating margins in 2007 were 7.5 percent as
compared to 6.8 percent in the prior year.
Fourth Quarter Operating Results
"As a result of solid sales growth, fourth quarter operating
margins were 7.7 percent as compared to 7.0 percent in the year
ago period," said Mr. Grubbs. "In North America, our operating
margins were 8.6 percent as compared to 8.2 percent in the year
ago quarter, with sales growth again producing additional
operating leverage."
Mr. Grubbs added, "In Europe, operating margins in the most
recent quarter were 4.9 percent as compared to 2.6 percent in
the year ago quarter. This improvement in operating margins
reflects improved gross margins and operating expense leverage
including the fact that the prior year quarter included US$1.3
million of expenses associated with certain facility
consolidations and pension plan restructuring costs. We were
again encouraged by the results in the most recent quarter as
operating profits more than doubled. Our investments in this
market in the past couple of years combined with our recent
success in organically growing this business enables us to feel
positive about the outlook for our business in Europe."
"Fourth quarter operating margins in the emerging markets were
6.8 percent as compared to 7.2 percent in the year ago quarter
as a result of further investment in personnel and
infrastructure to support future growth," added Mr. Grubbs.
Cash Flow and Leverage
"In the fourth quarter we generated US$92.9 million in cash from
operations, up significantly compared to the US$17.0 million
generated in the year ago quarter," said Finance Executive Vice
President, Dennis Letham. "The positive cash flow in the
quarter reflects the normal seasonal patterns associated with
the previously discussed slight drop in consecutive quarter
sales due to the number of holidays in the fourth quarter and
the related effects on working capital needs."
"During the fourth quarter the company repurchased 1,250,000 of
its outstanding shares at a total cost of US$82.1 million. When
combined with the 3,000,000 shares repurchased during the first
quarter of 2007 for US$162.7 million, the company repurchased
4,250,000, or 10.8 percent of the outstanding shares it had at
the start of 2007, for a total consideration of US$244.8 million
or an average of US$57.61 per share," continued Mr. Letham.
Mr. Letham added, "Working capital requirements associated with
our year-on-year sales growth consumed US$139.8 million of cash
during 2007. The company also completed two acquisitions for
total consideration of US$35.2 million. The share repurchases,
added working capital requirements and acquisition costs were
financed from a combination of a US$300 million convertible bond
offering completed in the first quarter of 2007 and added
borrowings under bank lines of credit. The company ended 2007
with a debt-to-total capital ratio of 49.4 percent as compared
to 45.7 percent at the end of 2006. For the fourth quarter the
weighted-average cost of borrowed capital was 4.3 percent as
compared to 5.4 percent in the year ago quarter. At the end of
the fourth quarter, approximately 77 percent of our total
borrowings of US$1.02 billion had fixed interest rates, either
by the terms of the borrowing agreements or through hedge
contracts. We also had US$243 million of available, unused
credit facilities at Dec. 28, 2007, which provide us with the
resources to support continued strong organic growth and to
pursue other strategic alternatives, such as acquisitions, in
the new year."
Business Outlook
Mr. Grubbs concluded, "The record sales and earnings performance
in 2007 was the result of many of the same underlying trends
that generated record performances over the past couple of
years, especially as relates to expansion of our customer base.
While 2008 begins with a well publicized, less certain overall
economic environment than 2007, recent activity levels suggest
the end markets we serve have remained strong and we are
comfortable they will continue to present opportunities for
growth in the coming year. As we look to the start of a new
year, we remain focused on building on our strategic initiatives
of growing our security and OEM supply businesses, initiating an
industrial automation network sales effort, adding to our supply
chain services offering, enlarging the geographic presence of
our electrical wire & cable business, and expanding our product
offering. We believe that if we continue to successfully
execute our strategic initiatives to grow our product and
service offerings and expand our customer base, we can drive
solid sales and earnings growth in 2008."
About Anixter
Anixter International Inc. -- http://www.anixter.com/-- is the
world's largest distributor of communication products and
electrical and electronic wire and cable, and a leading
distributor of fasteners and other small parts ("C" class
inventory components) to original equipment manufacturers.
The company has nearly US$725 million in inventory of more than
325,000 products, logistics network of 197 warehouses with more
than 5 million square feet of space. It has operations in Latin
American countries including Mexico, Costa Rica, Brazil and
Chile.
* * *
As reported in the Troubled Company Reporter-Latin America on
Nov. 2, 2007, Fitch Ratings has affirmed these ratings for
Anixter International Inc. and its wholly owned operating
subsidiary, Anixter Inc.:
Anixter International Inc.
-- Issuer Default Rating 'BB+';
-- Senior unsecured debt 'BB-'.
Anixter Inc.
-- Issuer Default Rating 'BB+';
-- Senior unsecured notes 'BB+';
-- Senior unsecured bank credit facility at 'BB+'.
===================================
D O M I N I C A N R E P U B L I C
===================================
JETBLUE AIRWAYS: Incurs US$4 Million Net Loss in Fourth Quarter
---------------------------------------------------------------
JetBlue Airways Corporation posted net loss for the fourth
quarter of 2007 of US$4 million compared with fourth quarter
2006 net income of US$17 million. For the full year 2007, net
income totaled US$18 million compared with a net loss of US$1
million for the full year 2006.
The company's operating revenues for the quarter totaled US$739
million, representing growth of 16.6% over operating revenues of
US$633 million in the fourth quarter of 2006. For the full
year, operating revenues totaled US$2.84 billion, representing
growth of 20.2% over operating revenues of US$2.36 billion for
the full-year 2006.
Operating income for the quarter was US$30 million, resulting in
a 4.1% operating margin, compared to an operating income of
US$64 million and a 10.2% operating margin in the fourth quarter
of 2006. For the full year 2007, operating income was US$169
million, resulting in an operating margin of 6.0%. This
compares with operating income of US$127 million and a 5.4%
operating margin for the full year 2006.
Pre-tax loss for the quarter was US$3 million, compared with
pre-tax income of US$30 million in the year-ago period. For the
full year, pre-tax income was US$41 million, compared with
pre-tax income of US$9 million for the full year 2006.
Cash and investment securities of US$834 million at the end of
the fourth quarter, which does not include Lufthansa's US$300
million investment in JetBlue.
"We are delighted to report a profit for 2007 -- our first full-
year profit since 2004 -- especially in light of the operational
challenges and record high fuel prices we faced during the
year," said Dave Barger, JetBlue's Chief Executive Officer.
"Although soaring fuel prices contributed to our fourth quarter
loss, we believe we are well positioned as we move into 2008
with a strong brand, superior product and solid financial
position."
Operational Performance
For the fourth quarter, revenue passenger miles increased 7.1%
year-over-year to 6.2 billion on a capacity increase of 11.5%,
resulting in a fourth quarter load factor of 76.6%, a decrease
of 3.1 points year over year. Yield per passenger mile in the
fourth quarter was 10.89 cents, up 6.7% compared to the fourth
quarter of 2006. Passenger revenue per available seat mile
(PRASM) for the fourth quarter 2007 increased 2.5% year-over-
year to 8.34 cents. For the full year 2007, PRASM increased
6.3% year over year.
JetBlue's operating expense per available seat mile (CASM) for
the fourth quarter increased 11.7% year-over-year to 8.73 cents.
Excluding fuel, CASM increased 4.5% to 5.48 cents. During the
quarter, JetBlue's realized fuel price was US$2.34 per gallon, a
21.8% increase over fourth quarter 2006 realized fuel price of
US$1.92.
Russ Chew, JetBlue's President and COO, commented, "Thanks to
the hard work and dedication of our crewmembers, we achieved
significant operational improvements during 2007. Our ability
to deliver exceptional customer service with a low cost
structure continues to differentiate us from the rest of the
industry."
Recent JetBlue highlights include:
* JetBlue and Lufthansa consummated their stock purchase
agreement transaction, and as a result, Lufthansa now
holds a 19 percent ownership interest in JetBlue.
* JetBlue launched new service from New York (JFK) to St.
Maarten and Puerto Plata, Dominican Republic,
strengthening its network in the Caribbean. In addition,
JetBlue announced that it will begin nonstop service from
Orlando to Cancun, Mexico and Santo Domingo, Dominican
Republic in March 2008. JetBlue now serves 17
destinations from Orlando.
* JetBlue continued its focus on innovation with the
introduction and testing of complimentary in-flight e-mail
and instant messaging services for its customers on
aircraft "BetaBlue." JetBlue is the first U.S. Domestic
carrier to provide such free in-flight connectivity.
LiveTV -- Continental Airlines Agreement
LiveTV, a wholly owned subsidiary of JetBlue, announced that it
has entered into a long-term agreement with Continental Airlines
to install and service its inflight entertainment system on
Continental's new generation Boeing 737 and 757-300 aircraft.
LiveTV has provided live television programming and other
services to JetBlue since its inception. LiveTV also
serves seven other airlines around the world with its inflight
entertainment products, including DIRECTV-based live television
programming and XM Satellite Radio, and wireless services,
including a handheld platform for in-cabin sales.
First Quarter & Full Year Outlook
Looking ahead, for the first quarter of 2008, JetBlue expects to
report an operating margin between zero and two percent based on
an assumed aircraft fuel cost per gallon of US$2.50, net of
hedges. Pre-tax margin for the quarter is expected to be
between negative five and negative three percent. PRASM is
expected to increase between 10 and 12 percent year over year.
CASM is expected to increase between 9 and 11 percent over the
year-ago period. Excluding fuel, CASM in the first quarter is
expected to decrease between two and zero percent year over
year. Capacity is expected to increase between 13 and 15
percent in the first quarter and stage length is expected to
increase roughly four percent over the same period last year.
For the full year 2008, JetBlue expects to report an operating
margin between six and eight percent based on an assumed
aircraft fuel cost per gallon of US$2.55, net of hedges. Pre-
tax margin for the full year is expected to be between one and
three percent. PRASM for the full year is expected to increase
between nine and 11 percent year over year. CASM for the full
year is expected to increase between 10 and 12 percent over full
year 2007. Excluding fuel, CASM in 2008 is expected to increase
between three and five percent year over year. Capacity for the
full year 2008 is expected to increase between five and eight
percent over 2007 and stage length is expected to increase about
one percent over full year 2007.
Headquartered in Forest Hills, New York, JetBlue Airways
(Nasdaq:JBLU) -- http://www.jetblue.com/-- is a passenger
airline that provides customer service on point-to-point routes.
As of Feb. 14, 2007, JetBlue operated approximately 502 daily
flights. The company serves 50 destinations in 21 states,
Puerto Rico, Mexico and the Caribbean. The company operates a
fleet of 98 Airbus A320 and 23 Embraer 190 aircrafts. The
company's operations primarily consists of transporting
passengers on its aircraft, with domestic United States
operations, including Puerto Rico, accounting for approximately
97.1% of its capacity during the year ended Dec. 31, 2006.
* * *
As reported in the Troubled Company Reporter-Latin America on
Aug. 15, 2007, Fitch Ratings affirmed these debt ratings of
JetBlue Airways Corp.: issuer default rating at 'B'; and senior
unsecured convertible notes at 'CCC' with a recovery rating of
'RR6'. Fitch said the rating outlook is stable.
PRC LLC: Wants Jenner & Block as Special Conflicts Counsel
----------------------------------------------------------
PRC LLC and its debtor-affiliates ask permission from the U.S.
Bankruptcy Court for the Southern District of New York to employ
Jenner & Block LLP, as their special conflicts counsel as of the
date of bankruptcy.
The Debtors selected Jenner & Block because of its extensive
experience and knowledge in the field of debtors' and creditors'
rights and business reorganizations under Chapter 11 of the
Bankruptcy Code. The Debtors add that the firm has acted as
conflicts counsel in several cases.
As conflicts counsel, Jenner & Block will represent the Debtors
on matters that may not be appropriately handled by Weil Gotshal
& Ganges, LLP, the Debtors' primary bankruptcy counsel.
According to the Debtors, Weil Gotshal is unable to represent
the Debtors in any matters concerning Verizon Communications,
Inc., or its affiliates due to a conflict of interest.
Weil Gotshal currently represents WorldCom, Inc., and its
debtor-affiliates in their Chapter 11 cases, which were
purchased by Verizon Communications in 2005.
The Debtors propose that Jenner & Block be paid on an hourly
basis and be reimbursed for the expenses it may incur for any
related works undertaken. The hourly rates of attorneys working
for the firm are:
Designation Hourly Rate
----------- -----------------
Partners US$525 - US$1,000
Associates US$325 - US$495
Paralegals US$220 - US$260
Daniel R. Murray, Esq., at Jenner & Block, in Chicago, Illinois,
assures the Court that his firm is a disinterested person" as
that phrase is defined in Section 101(14) of the Bankruptcy
Code, as modified by Section 1107(b).
About PRC LLC
Founded in 1982 and based in Fort Lauderdale, Florida, PRC, LLC
-- http://www.prcnet.com/-- is a leading provider of customer
management solutions. PRC markets its services to brand-
focused, Fortune 500 U.S. corporations and delivers these
services through a global network of call centers in the U.S.,
Philippines, India, and the Dominican Republic.
PRC is the sole member of each of PRC B2B, LLC, and Precision
Response of Pennsylvania, LLC, and the sole shareholder of
Access Direct Telemarketing, Inc., each of which is a debtor and
debtor-in-possession in PRC's joint Chapter 11 cases.
Panther/DCP Intermediate Holdings, LLC, is the sole member of
PRC.
PRC, together with its operating subsidiaries PRC B2B, Access
Direct, and PRC PA, is a leading provider of complex,
consultative, outsourced services in the Customer Care and Sales
& Marketing segments of the business process outsourcing
industry. Since 1982, the company has acquired and grown
customer relationships for some of the world's largest and most
brand-focused corporations in the financial services, media,
telecommunications, transportation, and retail industries.
The company and four of its affiliates filed for Chapter 11
protection on Jan. 23, 2008 (Bankr. S.D.N.Y. Lead Case No.
08-10239). Alfredo R. Perez, Esq., at Weil, Gotshal & Manges,
LLP, represents the Debtors in their restructuring efforts. The
Debtors chose Stephen Dube, at CXO LLC, as their restructuring
and turnaround advisor. Additionally, Evercore Group LLC
provides investment and financial counsel to the Debtors.
The Debtors' consolidated financial condition as of
Dec. 31, 2007, showed total assets of US$354,000,000 and total
debts of US$261,000,000. (PRC LLC Bankruptcy News, Issue No. 2;
Bankruptcy Creditors' Service, Inc.,
http://bankrupt.com/newsstand/or 215/945-7000)
PRC LLC: Wants to Hire CXO LLC as Restructuring Advisors
--------------------------------------------------------
PRC LLC and its debtor-affiliates asks authority from the U.S.
Bankruptcy Court for the Southern District of New York to employ
CXO LLC, to provide them with a chief restructuring officer and
temporary staff in accordance with Section 363 of the U.S.
Bankruptcy Code.
H. Philip Goodeve, the Debtors' chief financial officer, says
the CXO Professionals are well qualified to act on the Debtors'
behalf, and are also familiar with the Debtors' businesses and
financial affairs.
Pursuant to the parties' agreement dated Jan. 20, 2008, Stephen
R. Dube, a principal at CXO, will serve as chief restructuring
officer to to assist the Debtors. Pursuant to an engagement
letter, the CXO Professionals will:
(i) be engaged solely by the Debtors and will take direction
from the Debtors' board;
(ii) provide crisis and turnaround management services; and
(iii) assist in the direction and management of the Debtors'
restructuring efforts.
Before the bankruptcy filing, the Debtors advanced US$200,000 to
CXO for fees and expenses and also paid the pro-rata share of
US$200,000 per month for services rendered prepetition. The
Debtors propose to pay a US$200,000 aggregate flat monthly fee
to CXO for services rendered during the first full month after
the Petition Date.
For the second and third months after the filing of bankruptcy,
the Monthly Fee will be reduced to US$175,000 per month and
thereafter reduced further to US$150,000 per month for any and
all subsequent months. The monthly fee is a standard fee for
work of this nature and is set at a level designed to fairly
compensate CXO for the restructuring advisory and consulting
services that they provide to the Debtors, Mr. Goodeve says.
Mr. Dube assures the Court that neither CXO nor any professional
employee or independent contractor of CXO has any connection
with or any interest adverse to the Debtors, their creditors, or
any other party-in-interest. Mr. Dube says the firm is a
"disinterested person," as that term is defined in Section
101(14) of the Bankruptcy Code.
The additional CXO Professionals are:
1. Robert Gary, Finance;
2. John Ofenloch, Finance and bankruptcy administration;
3. Michael Katzenstein, Strategic planning; and
4. Brian Kushner, Strategic planning.
About PRC LLC
Founded in 1982 and based in Fort Lauderdale, Florida, PRC, LLC
-- http://www.prcnet.com/-- is a leading provider of customer
management solutions. PRC markets its services to brand-
focused, Fortune 500 U.S. corporations and delivers these
services through a global network of call centers in the U.S.,
Philippines, India, and the Dominican Republic.
PRC is the sole member of each of PRC B2B, LLC, and Precision
Response of Pennsylvania, LLC, and the sole shareholder of
Access Direct Telemarketing, Inc., each of which is a debtor and
debtor-in-possession in PRC's joint Chapter 11 cases.
Panther/DCP Intermediate Holdings, LLC, is the sole member of
PRC.
PRC, together with its operating subsidiaries PRC B2B, Access
Direct, and PRC PA, is a leading provider of complex,
consultative, outsourced services in the Customer Care and Sales
& Marketing segments of the business process outsourcing
industry. Since 1982, the company has acquired and grown
customer relationships for some of the world's largest and most
brand-focused corporations in the financial services, media,
telecommunications, transportation, and retail industries.
The company and four of its affiliates filed for Chapter 11
protection on Jan. 23, 2008 (Bankr. S.D.N.Y. Lead Case No.
08-10239). Alfredo R. Perez, Esq., at Weil, Gotshal & Manges,
LLP, represents the Debtors in their restructuring efforts. The
Debtors chose Stephen Dube, at CXO LLC, as their restructuring
and turnaround advisor. Additionally, Evercore Group LLC
provides investment and financial counsel to the Debtors.
The Debtors' consolidated financial condition as of
Dec. 31, 2007, showed total assets of US$354,000,000 and total
debts of US$261,000,000. (PRC LLC Bankruptcy News, Issue No. 2;
Bankruptcy Creditors' Service, Inc.,
http://bankrupt.com/newsstand/or 215/945-7000)
PRC LLC: Wants Court Nod on Evercore Group as Investment Bankers
----------------------------------------------------------------
PRC LLC and its debtor-affiliates seek permission from the U.S.
Bankruptcy Court for the Southern District of New York to employ
Evercore Group LLC as their investment bankers and financial
advisors.
H. Philip Goodeve, PRC LLC's Chief Financial Officer, says that
Evercore is familiar with the Debtors' businesses, financial
affairs, and capital structure. Since the firm's initial
retention in November 2007, Evercore has worked closely with the
Debtors' management, creditors, other professionals and advisors
in exploring various restructuring alternatives and otherwise
assisting in preparing for the bankruptcy filing.
The Debtors will look to Evercore to, among others:
-- review and analyze the Debtors' business, operations, and
financial projections;
-- evaluate the Debtors' potential debt capacity in light of
its projected cash flows;
-- assist in determining a capital structure for the Debtors,
and a range of values for the Debtors on a going concern
basis;
-- advise the Debtors on tactics and strategies for
negotiating with certain creditors;
-- render financial advice to the Debtors and participate in
meetings or negotiations with certain creditors or rating
agencies or other appropriate parties in connection with
any restructuring;
-- advise the Debtors on the timing, nature, and terms of new
securities, other consideration or other inducements to be
offered pursuant to a restructuring;
-- advise and assist the Debtors in evaluating potential
financing transactions; and
-- assist the Debtors in identifying and evaluating
candidates for a potential sale transaction, advise the
Debtors in connection with negotiations, and aid in the
consummation of a sale transaction.
The Debtors will pay Evercore a US$125,000 monthly fee.
Following the sixth month of the engagement, the monthly fee
will be lowered to US$100,000 for each successive month
thereafter.
Evercore will also receive a consummation fee, payable upon the
consummation of any Restructuring -- but not both:
(a) US$1,800,000 if the Restructuring is confirmed within six
months of the Debtors' filing for bankruptcy; or
(b) US$1,300,000 if any other Restructuring is confirmed
later.
The firm will be paid a Sale Transaction Fee if a Sale
Transaction is consummated. The fee is equal to a portion of
the Aggregate Consideration of a Sale Transaction:
Aggregate Consideration Percentage Fee
----------------------- --------------
Less than US$100 million 0.75%
US$100 to US$140 million 1.00%
Greater than US$140 million 1.25%
If the Aggregate Consideration is less than US$100,000,000 then
the Sale Transaction Fee should equal US$1,000,000. Any Sale
Transaction Fee paid will be credited against any Consummation
Fee payable. The credit will only apply to the extent that the
fees fees are approved in entirety by the Court.
The firm will get a Financing Fee, payable upon consummation of
any financing. The fee is equal to a portion of the total gross
proceeds of a financing:
Security Issued Percentage Fee
--------------- --------------
Senior Secured Debt 1.00%
Senior Debt 1.75%
Subordinated Debt 2.25%
Convertible Debt 2.50%
Preferred Stock
(convertible or otherwise) 3.75%
Common Stock 4.25%
Any Financing Fee paid will be credited against any Consummation
Fee payable. The credit will only apply to the extent that the
fees are approved in entirety by the Court.
Stephen Sieh, a Managing Director at Evercore, assures the Court
that neither Evercore nor any professional employee of Evercore
has any connection with or any interest adverse to the Debtors,
their creditors, or any other party-in-interest. Mr. Sieh says
the firm is a "disinterested person," as that term is defined in
Section 101(14) of the Bankruptcy Code.
About PRC LLC
Founded in 1982 and based in Fort Lauderdale, Florida, PRC, LLC
-- http://www.prcnet.com/-- is a leading provider of customer
management solutions. PRC markets its services to brand-
focused, Fortune 500 U.S. corporations and delivers these
services through a global network of call centers in the U.S.,
Philippines, India, and the Dominican Republic.
PRC is the sole member of each of PRC B2B, LLC, and Precision
Response of Pennsylvania, LLC, and the sole shareholder of
Access Direct Telemarketing, Inc., each of which is a debtor and
debtor-in-possession in PRC's joint Chapter 11 cases.
Panther/DCP Intermediate Holdings, LLC, is the sole member of
PRC.
PRC, together with its operating subsidiaries PRC B2B, Access
Direct, and PRC PA, is a leading provider of complex,
consultative, outsourced services in the Customer Care and Sales
& Marketing segments of the business process outsourcing
industry. Since 1982, the company has acquired and grown
customer relationships for some of the world's largest and most
brand-focused corporations in the financial services, media,
telecommunications, transportation, and retail industries.
The company and four of its affiliates filed for Chapter 11
protection on Jan. 23, 2008 (Bankr. S.D.N.Y. Lead Case No.
08-10239). Alfredo R. Perez, Esq., at Weil, Gotshal & Manges,
LLP, represents the Debtors in their restructuring efforts. The
Debtors chose Stephen Dube, at CXO LLC, as their restructuring
and turnaround advisor. Additionally, Evercore Group LLC
provides investment and financial counsel to the Debtors.
The Debtors' consolidated financial condition as of
Dec. 31, 2007, showed total assets of US$354,000,000 and total
debts of US$261,000,000. (PRC LLC Bankruptcy News, Issue No. 2;
Bankruptcy Creditors' Service, Inc.,
http://bankrupt.com/newsstand/or 215/945-7000)
=============
E C U A D O R
=============
PETROECUADOR: Launches Contract Renegotiation with 5 Oil Firms
--------------------------------------------------------------
Eric Watkins at PennEnergy Oil and Gas Journal reports that the
Ecuadorian government has launched renegotiating talks for
state-run oil firm Petroecuador's contracts with five
international oil companies.
According to PennEnergy Oil, officials are negotiating with
these firms:
-- US-based City Oriente,
-- Spain's Repsol YPF,
-- Brazil's Petroleo Brasileiro SA,
-- French-owned Perenco SA, and
-- Chinese company Andes Petroleum Corp.
As reported in the Troubled Company Reporter-Latin America on
Jan. 29, 2008, Ecuadorian President President Rafael Correa gave
oil firms until March 8 to agree to the changes in their
contracts with Petroecuador. The government wants to convert
existing participation contracts into service provider
agreements. Oil companies have to agree to either getting paid
for the oil they'll extract from the ground, or pay the
government a 99% tax for windfall profits above contract prices.
Should the company opt not to accept either of the two changes,
they can leave the country and get paid for their investments to
date.
Report shows that President Correa has previously inked a decree
in October, almost doubled the state's share of windfall oil
profits earnings on oil sold above prices fixed in company
contracts.
The Ecuadorian government has eyed for an revised pacts to allow
the state to pay firms a fee for their service, but making sure
the government owned all the oil, the Oil and Gas Journal
relates, citing Oil and Mines Minister Galo Chiriboga.
Mr. Chiriboga, referring to the IOCs, has claimed that the plan
is the best mechanism at the moment, the same paper says.
As reported in the Troubled Company Reporter-Latin America on
Jan. 21, 2008, the government is investing US$2 billion in an
attempt to boost oil production by 11%.
"We are the owners of this resource, and we are convinced that
this is the best mechanism, as much for us as it is for them, at
the moment," Ecuadorian oil and mines minister Galo Chiriboga
commented to PennEnergy Oil.
Headquartered in Quito, Ecuador, Petroecuador --
http://www.petroecuador.com.ec-- is an international oil
company owned by the Ecuador government. It produces crude
petroleum and natural gas.
In previous years, Petroecuador, according to published reports,
was faced with cash-problems. The state-oil firm has no funds
for maintenance, has no funds to repair pumps in diesel,
gasoline and natural gas refineries, and has no capacity to pay
suppliers and vendors. The government refused to give the much-
needed cash alleging inefficiency and non-transparency in
Petroecuador's dealings. In 2008, a new management team was
appointed to turn around the company's operations.
* ECUADOR: Receives US$1.6 Million Financing from MIF
-----------------------------------------------------
The Multilateral Investment Fund of the Inter-American
Development Bank has approved a financing for two non-
reimbursible technical cooperation projects in Peru and Ecuador,
totaling US$1.6 million and US$1.5 million, respectively. Both
projects will target inclusive business development at the base
of the economic pyramid in order to boost income and employment
levels for the low-income population. The two projects will
incorporate low-income entrepreneurs into the value chain of
private-sector enterprises.
More than 5,250 micro and small enterprises in Peru will receive
technical assistance and training enabling them to participate
in the value chains of seven anchor businesses committed to the
project. Beneficiaries in Ecuador will include more than 4,850
micro and small enterprises that will be incorporated into the
value chains of seven other anchor businesses.
The executing agencies for the projects will be the Peru and
Ecuador offices of SNV Netherlands Development Organisation.
Country counterpart financing will total about a million dollars
for each country.
"Inclusive business development is an area that seems very
promising to us as a mechanism for creating new economic
opportunities by incorporating people with low incomes into the
value chains of big businesses in a sustainable way," said IDB
team leader Daniel Shepherd. "In addition, these initiatives
facilitate strategic private-sector participation in solving
problems connected to poverty, while also promoting market
access for the population at the bottom of the economic
pyramid."
This project is also one of the first programs launched by the
MIF under the IDB's "Opportunities for the Majority" initiative,
which promotes and finances business innovations and
partnerships to help improve income and quality of life in Latin
America's low-income communities.
The MIF, an autonomous fund administered by the IDB, promotes
development of micro- and small enterprise in Latin America and
the Caribbean. It has supported the expansion and
professionalization of microfinance in the region since its
creation.
The SNV is an organization that seeks to help reduce poverty and
improve governability by developing local capacities.
* * *
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
Ecuador.
As reported in the Troubled Company Reporter-Latin America on
Nov. 1, 2007, Fitch Ratings affirmed and removed from Rating
Watch Negative the long-term foreign currency Issuer Default
Rating of Ecuador at 'CCC', the country ceiling at 'B-' and the
short-term IDR at 'C'. Fitch said the rating outlook is stable.
In addition, these bond ratings were affirmed:
-- Uncollateralized foreign currency bonds at 'CCC/RR4';
-- Collateralized foreign currency Par and Discount Brady
bonds at 'CCC+/RR3'.
===========
M E X I C O
===========
EL POLLO: Improved Liquidity Cues Moody's to Confirm B3 Rating
--------------------------------------------------------------
Moody's Investors Service has confirmed El Pollo Loco, Inc.'s
corporate family rating of B3, as well as the Ba3 rating on the
company's senior credit facilities and Caa1 rating on the
company's senior unsecured notes. The speculative grade
liquidity rating remains as SGL-4 and the rating outlook is
negative. The rating action concludes the review for downgrade
initiated on Dec. 5, 2007.
This confirmation follows Moody's last rating action when El
Pollo's ratings were placed on review for downgrade in December
2007, which was prompted by concerns on the company's liquidity
primarily stemming from an unfavorable judgment entered in a
trademark dispute against the company.
The rating action reflects the company's recently improved
liquidity primarily because of a cash infusion from a new
equity investor as well as its success in posting a bond for
appealing against the judgment.
The company was able to post the required bond and hence, appeal
the court's verdict. The bond of approximately US$24 million
was fully collateralized by letters of credit, a large portion
of which was issued by El Pollo's financial sponsor, Trimaran
Fund II, LLC, on the company's behalf. Further, in late
December 2007, a third-party private equity firm made a US$45
million equity investment in exchange of common stock at the
company's indirect parent company, which could provide
additional liquidity to the company. The company intends to
accelerate its national store expansion by using some of the
proceeds, majority of which was located at El Pollo's non-
guarantor parent company as of Dec. 26, 2007.
The negative outlook incorporates challenges the company may
face in the coming 12-18 months considering the difficult
operating environment for restaurant operators especially in
California, El Pollo's home state, which range from stagnant
consumer spending and higher commodity prices and labor costs.
"The negative outlook also reflects the company's still weak
liquidity, largely due to the relatively large amount of the
potential payment arising from a final non-appealable judgment
and the tightening financial covenants under its credit
agreement," stated Moody's analyst John Zhao.
Moody's said that the payment upon a final unfavorable judgment
could be substantial compared to the company's cash flow
generation and the timing is unpredictable. Additionally, the
final judgment exceeding a certain threshold amount could lead
to a technical default under both the bank agreement and the
bond indenture should it remained unsatisfied in a specified
time frame.
Further, the financial covenants remain tight, in particular,
the total leverage covenant, which will step down by a half turn
to 4.5 in the fourth quarter of 2008.
"Per our estimate, the company may need to obtain a waiver or
relief from its bank or to prepay a sizable amount of debt to
stay in compliance absent a significant improvement in operating
cash flow in the next few quarters, which Moody's views as
unlikely at this time," added Mr. Zhao.
These ratings are confirmed:
-- B3 Corporate family rating,
-- B3 Probability of default rating
-- Ba3 for the US$104.5 million senior secured term loan B
maturing in 2011,
-- Ba3 for the US$25 million senior secured revolver maturing
in 2010,
-- Caa1 for the US$123.4 million senior unsecured notes
maturing in 2013.
LGD Rating/Assessment revised:
-- LGD rating on the senior credit facilities to LGD2, 17%
from LGD2 18%;
-- LGD rating on the senior unsecured notes to LGD4, 69% from
LGD5 71%.
The rating outlook is negative. Approximately US$255 million
debt affected.
El Pollo Loco -- http://www.elpolloloco.com/-- pronounced "L
Po-yo Lo-co" and Spanish for "The Crazy Chicken," is the United
States' leading quick-service restaurant chain specializing in
flame-grilled chicken and Mexican-inspired entrees. Founded in
Guasave, Mexico, in 1975, El Pollo Loco's long-term success
stems from the unique preparation of its award-winning "pollo"
-- fresh chicken marinated in a special recipe of herbs, spices
and citrus juices passed down from the founding family.
DURA AUTOMOTIVE: Seeks Ct. Consent for US$170MM Replacement Loan
----------------------------------------------------------------
DURA Automotive Systems, Inc., and its debtor-affiliates ask the
U.S. Bankruptcy Court for the District of Delaware's permission
to obtain US$170 million replacement financing and amend their
US$300 million existing postpetition financing facility.
The Debtors have obtained commitments from Ableco Finance LLC on
Jan. 21, 2008, for a Replacement Term Loan DIP Facility, which
would
(i) extend the maturity date of DIP loans by six months to
July 31, 2007, and
(ii) would allow the Debtors to enter into a replacement
facility in order borrow US$170 million to pay off
US$104.5 million due under the existing term loan
facility, and pay outstanding balance under its DIP
revolver and pay fees and expenses associated with the
replacement term loan facility.
Immediately after seeking for Chapter 11 protection, and in
order to fund their operations while in bankruptcy, the Debtors
obtained Court permission to enter into with Goldman Sachs
Capital Partners L.P., General Electric Capital Corporation, and
other lender parties:
-- up to US$130 million asset based revolving credit
facility, subject to borrowing base and availability
terms, with a US$5 million sublimit for letters of credit;
and
-- up to US$170 million Fixed Asset Facilities consisting of:
* up to US$150 million tranche B term loan; and
* up to US$20 million pre-funded synthetic letter of
credit facility.
Due to their failure to obtain confirmation of their Joint Plan
of Reorganization by their mid-December 2007 target, the Debtors
had obtained an extension of their Existing DIP Facilities until
Jan. 31, 2008. The Debtors missed their target mainly because
of its failure to obtain full syndication of its US$425 million
exit financing, due to tighter credit conditions.
Daniel J. DeFranceschi, Esq., at Richards, Layton & Finger,
P.A., in Wilmington, Delaware, relates that the Debtors have
been working with a number of potential replacement DIP lenders
to solicit proposals for potential replacement DIP facilities.
These efforts culminated in the Debtors obtaining a commitment
letter from Ableco Finance on Jan. 21, 2008 for the Replacement
Term Loan DIP Facility.
The parties are negotiating and finalizing a form of the
Replacement Term Loan DIP Facility based on the existing Term
Loan DIP Facility, i.e., premised substantially on "stepping
into the shoes" of the lenders under the existing Term Loan DIP
Facility, along with the pledge of 100% of the stock of the
Debtors' foreign non-debtor subsidiaries, an increase from the
existing pledge of 66% under the existing Term Loan DIP
Facility.
The material terms of the Revolver DIP Amendments are:
Term Description
---- -----------
Aggregate
Commitments Reduced to US$90 million.
New Maturity Date July 31, 2008.
Interest Rate Subject to pending negotiations.
New Collateral Enhanced Foreign Stock Pledge.
Other Terms Certain additional terms, including
Revolver DIP Facility covenants, are
being negotiated and finalized.
Carve-out Subject to pending negotiations.
The salient terms of the Replacement Term Loan DIP Facility are:
Term Description
---- -----------
Fees US$1,275,000 commitment fee,
US$1,275,000 closing fee, and reasonable
out-of-pocket fees and expenses incurred
by Ableco, including already-paid
US$175,000 advance expense deposit.
Interest Rate The Term Loan will bear interest at the
rate per annum equal to (i) the
Reference Rate plus 7% of which 3% will
be paid-in-kind or (ii) the 30-, 60- or
90-day LIBOR plus 10% of which 3% will
be paid-in-kind. Interest will be
payable monthly in arrears.
"Reference Rate" means the rate of
interest publicly announced from time to
time by JPMorgan Chase in New York, New
York as its reference rate, base rate or
prime rate, provided that at no time
will the Reference Rate be less than
6.75% "LIBOR" means the London Interbank
Rate, provided that at no time will the
LIBOR rate referred to above be less
than 3.75%. All interest and fees will
be computed on the basis of a year of
360 days for the actual days elapsed.
If any Event of Default occurs and is
continuing, interest will accrue at a
rate per annum equal to 2% above the
rate previously applicable to the
obligation, payable on demand.
Total Facility US$170 million -- approximately US$105
million to replace existing Term Loan
DIP Facility, approximately US$45
million additional term loan financing
for paying down the Revolver DIP
Facility, and a US$20 million synthetic
letter of credit facility.
Interim Facility Same as total facility.
New Maturity Date July 31, 2008
Use of Proceeds To (i) repay the Debtors' existing
debtor-in-possession term loan of
approximately US$104.5 million and
replace the existing debtor-in-
possession synthetic letter of credit
facility; (ii) fund general corporate
needs, including working capital needs;
and (iii) pay fees and expenses related
to this transaction and the Chapter 11
cases.
New Collateral Enhanced Foreign Stock Pledge.
Covenants Customary covenants.
Events of Default Customary events of default.
Curve-out Subject to pending negotiations.
Mr. DeFranceschi relates that the credit market conditions in
which the Debtors are seeking to extend and amend postpetition
secured financing facilities have deteriorated markedly since
November 2006, when the Court entered the Final DIP Order. As a
result, the cost of obtaining DIP financing has increased
substantially, he avers.
Mr. DeFranceschi adds that the Debtors will suffer immediate and
irreparable harm if the Court does not authorize them to enter
into the Replacement Term Loan DIP Facility on an interim basis
prior to the Jan. 31, 2008, maturity date of the existing DIP
Term Loan Facility. On Jan. 31, the Debtors' obligations under
the existing DIP Term Loan Facility would become immediately due
and payable, and the existing DIP Term Loan lenders would be
entitled to exercise all remedies available to them under the
Final DIP Order.
About DURA Automotive
Rochester Hills, Mich.-based DURA Automotive Systems Inc.
(Nasdaq: DRRA) -- http://www.DURAauto.com/-- is an independent
designer and manufacturer of driver control systems, seating
control systems, glass systems, engineered assemblies,
structural door modules and exterior trim systems for the global
automotive industry. The company is also a supplier of similar
products to the recreation vehicle and specialty vehicle
industries. DURA sells its automotive products to North
American, Japanese and European original equipment manufacturers
and other automotive suppliers.
The company has three locations in Asia -- China, Japan and
Korea. It has locations in Europe and Latin America,
particularly in Mexico, Germany and the United Kingdom.
The Debtors filed for chapter 11 petition on Oct. 30, 2006
(Bankr. D. Del. Case No. 06-11202). Richard M. Cieri, Esq.,
Marc Kieselstein, Esq., Roger James Higgins, Esq., and Ryan
Blaine Bennett, Esq., of Kirkland & Ellis LLP are lead counsel
for the Debtors' bankruptcy proceedings. Mark D. Collins, Esq.,
Daniel J. DeFranseschi, Esq., and Jason M. Madron, Esq., of
Richards Layton & Finger, P.A. Attorneys are the Debtors' co-
counsel. Baker & McKenzie acts as the Debtors' special counsel.
Togut, Segal & Segal LLP is the Debtors' conflicts counsel.
Miller Buckfire & Co., LLC is the Debtors' investment banker.
Glass & Associates Inc., gives financial advice to the Debtor.
Kurtzman Carson Consultants LLC handles the notice, claims and
balloting for the Debtors and Brunswick Group LLC acts as their
Corporate Communications Consultants for the Debtors. As of
July 2, 2006, the Debtor had US$1,993,178,000 in total assets
and US$1,730,758,000 in total liabilities. (Dura Automotive
Bankruptcy News, Issue No. 44; Bankruptcy Creditors' Service
Inc., http://bankrupt.com/newsstand/or 215/945-7000)
FLEXTRONICS: Adjusted Net Income Up 84% to US$250MM in December
---------------------------------------------------------------
Flextronics has announced results for its third quarter ended
Dec. 31, 2007:
Third Quarter Results
Revenue increased US$3.7 billion, or 67%, from the year ago
quarter to a record high US$9.1 billion in the December 2007
quarter. Adjusted operating profit increased US$139 million, or
86%, from the year ago quarter to US$300 million in the December
2007 quarter while adjusted operating margin improved 30 basis
points from 3.0% to 3.3% over the same time period. Adjusted
net income increased US$114 million, or 84%, from the year ago
quarter to US$250 million in the December 2007 quarter while
adjusted EPS increased 30% from US$0.23 to US$0.30 over the same
time period.
Cash amounted to US$1.8 billion at Dec. 31, 2007. Operating
cash flow generated US$534 million and US$1.05 billion in the
three and nine-month periods ended Dec. 31, 2007, respectively.
Free cash flow amounted to US$470 million and US$840 million in
the three and nine-month periods ended Dec. 31, 2007,
respectively.
"Overall demand in the December quarter was exceptionally strong
as revenues and earnings exceeded the high end of our guidance,"
said Flextronics chief financial officer, Thomas Smach. "Actual
revenue in the quarter was US$9.1 billion versus our guidance of
US$8.5 billion and adjusted EPS was US$0.30 versus our guidance
of US$0.26."
"Our strong financial position provides us with substantial
flexibility to make synergistic investments to enhance our
competitiveness, expand our capabilities, drive revenue growth
and enhance profitability," Flextronics chief executive officer,
Mike McNamara said. "We remain intensely focused on generating
a higher return on capital while growing our business, as
evidenced by the return on invested capital of 11.9%, which
increased 70 basis points from the previous quarter."
Mr. McNamara concluded, "I am very proud of the dedication and
hard work of our employees and management across the globe in
making this a record quarter for Flextronics while successfully
integrating Solectron, the largest acquisition in our company's
history."
Guidance
The company reiterated its previously provided March 2008
quarter guidance of revenue in the range of US$7.5 - US$7.9
billion and adjusted EPS in the range of US$0.22 - US$0.24.
GAAP earnings per share are expected to be lower than the
guidance provided herein by approximately US$0.05 for quarterly
intangible amortization and stock-based compensation expense and
by approximately US$0.19 - US$0.27 per share for the previously
announced remaining restructuring and other charges relating to
the Solectron acquisition.
About Flextronics
Headquartered in Singapore, Flextronics International Ltd.
(NasdaqGS: FLEX) -- http://www.flextronics.com/-- is an
Electronics Manufacturing Services provider focused on
delivering design, engineering and manufacturing services to
automotive, computing, consumer digital, industrial,
infrastructure, medical and mobile OEMs. Flextronics helps
customers design, build, ship, and service electronics products
through a network of facilities in over 30 countries on four
continents including Brazil, Mexico, Hungary, Sweden, United
Kingdom, among others.
* * *
As reported in the Troubled Company Reporter-Latin America on
Oct. 4, 2007, Fitch Ratings has completed its review of
Flextronics International Ltd. following the company's
acquisition of Solectron Corp. and resolved Flextronics' Rating
Watch Negative status by affirming these ratings: Issuer Default
Rating at 'BB+'; and Senior unsecured credit facility at 'BB+'.
Fitch also rated Flextronics' new senior unsecured Term B loan
at 'BB+'. Additionally, Fitch has downgraded the rating on
Flextronics' senior subordinated notes from 'BB' to 'BB-'.
Fitch said the rating outlook is negative.
At the same time, Moody's Investors Service confirmed the
ratings of Flextronics International Ltd. with a negative
outlook and assigned a Ba1 rating to the company's new US$1.75
billion delayed draw unsecured term loan in response to the
closing of the Solectron acquisition. The initial draw on the
term loan (US$1.1 billion) will finance the cash portion of the
merger consideration.
GREAT PANTHER: Output Increases 109% in 2007
--------------------------------------------
Great Panther Resources said in a statement that its production
has increased 109% to 1.34 million silver equivalent ounces in
2007 compared to 2006.
Business News Americas relates that Great Panther production
from its Mexican mines Guanajuato and Topia last year included:
-- 800,666 ounces of silver,
-- 4,437 ounces of gold,
-- 1.62 million pounds of lead, and
-- 1.87 million pounds of zinc.
According to BNamericas, the Guanajuato mine in Guanajuato
produced some 710,903 ounces of silver equivalent last year,
about 358% more than 2006. Topia in Durango produced 625,726
ounces of silver equivalent during the year, about 29% more than
2006.
BNamericas notes that Great Panther wants to boost production at
both operations and reach 1.75 million ounces of silver
equivalent in 2008.
The report says that Great Panther's overall output for the
fourth quarter 2007 rose 50% to 346,729 ounces of silver
equivalent, from the fourth quarter 2006.
Great Panther told BNamericas that Guanajuato produced some
127,624 ounces of silver and 946 ounces gold from 45,773 tons of
ore in the fourth quarter 2007. "Despite 33% lower throughput
in October-December owing to new grade control measures at
Guanajuato, monthly production actually increased by 55% in the
quarter," BNamericas says, citing Great Panther.
Output at Topia rose 16% quarter-over-quarter to 171,823 ounces
silver equivalent, or 82,850 ounces of silver, 241 ounces of
gold, 427,700 pounds of lead and 445,300 pounds of zinc,
BNamericas states.
Headquartered in Vancouver, Canada, Great Panther Resources
Limited (TSX: GPR) -- http://www.greatpanther.com/-- is a
mining and exploration company. The company's current
activities are focused on the mining of precious and base metals
from its wholly owned properties in Mexico. In addition, Great
Panther is also involved in the acquisition, exploration and
development of other properties in Mexico.
Going Concern Doubt
KPMG LLP, in Vancouver, Canada, expressed substantial doubt
about Great Panther Resources Ltd.'s ability to continue as a
going concern after auditing the company's consolidated
financial statements for the year ended Dec. 31, 2006, and 2005.
The auditing firm pointed to the company's recurring losses and
operating cash flow deficiencies.
GRUPO MEXICO: Earns US$207 Million in Fourth Quarter 2007
---------------------------------------------------------
Grupo Mexico SA, de C.V.'s net profit declined 54% to US$207
million in the fourth quarter 2007, from US$453 million in the
same quarter in 2006, Reuters reports.
According to Reuters, Grupo Mexico's revenue dropped 17% to
US$1.558 billion in the fourth quarter 2007, compared to the
fourth quarter 2006.
Reuters relates that Grupo Mexico's copper output decreased 30%
in the fourth quarter 2007, compared to the same period in 2006,
mainly due to the workers' strike at the Cananea mine.
Meanwhile, Grupo Mexico's earnings before interest, tax,
depreciation and amortization declined 31% to US$767 million in
the fourth quarter 2007, from the fourth quarter 2006, Reuters
notes.
Copper and zinc prices decreased in the fourth quarter 2007,
compared to the third quarter 2007, partly due to the slowdown
of the US economy, Reuters says, citing Grupo Mexico.
"Nevertheless, there is a continued demand for these
commodities, particularly in China, and inventories are low on a
global scale, currently representing only five days of
consumption," Grupo Mexico told Reuters.
Grupo Mexico SA de C.V. -- http://www.grupomexico.com/--
through its ownership of Asarco and the Southern Peru Copper
Company, Grupo Mexico is the world's third largest copper
producer, fourth largest silver producer and fifth largest
producer of zinc and molybdenum.
* * *
As reported in the Troubled Company Reporter-Latin America on
Dec. 29, 2006, Fitch upgraded the local and foreign currency
Issuer Default Rating assigned to Grupo Mexico, S.A. de C. V. to
'BB+' from 'BB'. Fitch said the rating outlook is stable.
HARMAN INTERNATIONAL: Names John Stacey as VP & Chief HR Officer
----------------------------------------------------------------
Harman International Industries Incorporated has appointed John
Stacey as its Vice President and Chief Human Resources Officer,
effective Feb. 25, 2008. He will report to the Chief Executive
Officer and serve as a member of the Group Executive Committee.
Mr. Stacey, a Canadian national, is a veteran of more than 20
years in the human resources field, serving currently as Vice
President, People - North America for leading beverage
manufacturer Labatt/Inbev. He has held a series of similar key
positions in the United States, Canada, and Europe, with
extensive focus on organizational development, compensation,
training and development, recruitment and selection,
restructuring, and collective bargaining. Mr. Stacey holds a
degree in Business Administration from Memorial University of
Newfoundland, with a focus on Human Resources and Industrial
Relations.
"I am delighted to welcome John Stacey to the Harman senior
management team," said Dinesh C. Paliwal, Harman Chief Executive
Officer. "We are committed to achieving new efficiencies in our
human resources strategy, while continuing to attract the top
talent necessary to operate as an industry leader. I look
forward to working with John to unlock the vital energy of our
people toward achieving their full potential."
Headquartered in Washington, D.C., Harman International
Industries Inc. (NYSE: HAR) -- http://www.harman.com/-- makes
audio systems through auto manufacturers, including
DaimlerChrysler, Toyota/Lexus, and General Motors. Also the
company makes audio equipment, like studio monitors, amplifiers,
microphones, and mixing consoles for recording studios, cinemas,
touring performers, and others. Harman Int'l has operations in
Japan, Mexico and France.
* * *
As reported in the Troubled Company Reporter-Latin America on
Oct. 26, 2007, Standard & Poor's Ratings Services revised its
CreditWatch implications for the 'BB-' corporate credit rating
on Harman International Industries Inc. to positive from
developing.
MAZDA MOTOR: Launches Fully Redesigned Atenza
---------------------------------------------
Mazda Motor Corporation launched its fully remodeled Mazda
Atenza (known as the all-new Mazda6 overseas) in Japan.
Available in three body styles -- Sedan, Sport (5-door
hatchback), and Sport Wagon -- Mazda's globally acclaimed mid-
size car goes on sale from today at all Mazda and Mazda Anfini
dealerships throughout Japan.
Developed in line with Mazda's Zoom-Zoom evolution concept, the
all-new Mazda Atenza's design theme is "Bold & Exquisite." The
exterior look expresses a combination of athleticism and
delicate grace in all three body styles. Sporty and
sophisticated interior design creates an environment in which
drivers can experience real driving pleasure, comfort and a
feeling of security.
Launched in Japan in May 2002, the first generation Atenza
combined unique and attractive styling with exceptional driving
performance. Now, the second generation model takes these
characteristics one step further through substantially enhanced
environmental and safety performance. With top class
aerodynamics, it features improved high speed stability, ride
quality and quietness, providing enhanced comfort levels worthy
of the "ultimate high speed long-distance touring car."
Mazda's newly developed MZR 2.5-liter in-line four-cylinder
engine, mated to five-speed and six-speed automatic
transmissions which are newly combined with Active Adaptive
Shift (AAS) control*1, further evolve the exceptional driving
dynamics that were highly acclaimed on the first Atenza. The
all-new Atenza is larger than its predecessor, but increased use
of high tensile steel has helped reduce the overall vehicle
weight. In combination with the top-class aerodynamics, this
contributes to improved fuel economy. To lower running costs,
the use of regular gasoline is now recommended for all model
grades.
Safety features on the all-new Mazda Atenza include Japan's
first rear vehicle monitoring system. When driving at speeds
over 60 kilometers per hour, this system uses radar to detect
vehicles approaching from behind and alerts the driver. Another
new feature is CF-Net (Cross Functional Network) functionality,
a combination of switches on the steering wheel with a
centralized display at the top of the instrument panel, which
provide simple control of all systems, including air
conditioning and audio. This helps the driver focus on the road
and reduces hand movement away from the steering wheel. Other
safety attributes include Dynamic Stability Control and Mazda's
Traction Control System as standard equipment on all the 2.5-
liter model grades. Mazda's enhanced safety equipment and
functionality promote safe and comfortable driving.
About Mazda Motor
Headquartered in Hiroshima Prefecture, in Japan, Mazda Motor
Corporation -- http://www.mazda.co.jp/-- together with its
subsidiaries and associates, is primarily involved in the
manufacture and distribution of automobiles. The company
manufactures passenger cars and commercial vehicles. Mazda
Motor distributes its products in both domestic and overseas
markets. The company has 58 subsidiaries. It has overseas
operations in the United States, Canada, Mexico, Germany,
Belgium, France, the United Kingdom, Switzerland, Portugal,
Italy, Spain, Austria, Russia, Columbia, New Zealand, Thailand,
Indonesia and China. The Company has a global network.
* * *
As reported on April 27, 2007, Standard & Poor's Ratings
Services raised Mazda Motor Corp.'s long-term corporate credit
rating and the company's long-term senior unsecured debt to:
* Corporate Credit Rating: BB /Stable/
* Company's Long-term Senior Unsecured Debt: BB+
MOVIE GALLERY: Court Moves Exclusive Plan-Filing Period to June
---------------------------------------------------------------
The Honorable Douglas O. Tice of the U.S. Bankruptcy Court for
the Eastern District of Virginia extended, until June 13, 2008,
the exclusive period wherein Movie Gallery and its debtor-
affiliates can file a plan of reorganization.
Judge Tice also fixed the Debtors' deadline to solicit
acceptances of that plan on Aug. 13, 2008.
Counsel for the Debtors related that the sheer size and
complexity of the Debtors' bankruptcy cases provides sufficient
cause to extend the exclusive periods. Currently, the Debtors
are paying their postpetition obligations, as evidenced by the
dearth of administrative claims.
The Debtors maintained that an extended exclusive period will
enable them to focus on confirming the current consensual Plan
and negotiate outstanding issues without potential distraction
of competing plans.
About Movie Gallery
Based in Dothan, Alabama, Movie Gallery Inc. --
http://www.moviegallery.com/-- is a home entertainment
specialty retailer. The company owns and operates 4,600 retail
stores that rent and sell DVDs, videocassettes and video games.
It operates over 4,600 stores in the United States, Canada, and
Mexico under the Movie Gallery, Hollywood Entertainment, Game
Crazy, and VHQ banners.
The company and its debtor-affiliates filed for Chapter 11
protection on Oct. 16, 2007 (Bankr. E.D. Va. Case Nos. 07-33849
to 07-33853. Anup Sathy, Esq., Marc J. Carmel, Esq., and
Richard M. Cieri, Esq., at Kirkland & Ellis LLP, represent the
Debtors. Michael A. Condyles, Esq., and Peter J. Barrett, Esq.,
at Kutak Rock LLP, is the Debtors' local counsel. The Debtors'
claims & balloting agent is Kutzman Carson Consultants LLC.
When the Debtors' filed for protection from their creditors,
they listed total assets of US$891,993,000 and total liabilities
of US$1,419,215,000.
The Official Committee of Unsecured Creditors has selected
Robert J. Feinstein, Esq., James I. Stang, Esq., Robert B.
Orgel, Esq., and Brad Godshall, Esq., at Pachulski Stang Ziehl &
Jones LLP, as its lead counsel, and Brian F. Kenney, Esq., at
Miles & Stockbridge PC, as its local counsel.
The Debtors' spokeswoman Meaghan Repko said that the company
does not expect to exit bankruptcy protection before the second
quarter of 2008. (Movie Gallery Bankruptcy News Issue No. 16;
Bankruptcy Creditors' Service Inc.;
http://bankrupt.com/newsstand/or 215/945-7000)
MOVIE GALLERY: Disclosure Statement Hearing Adjourned to Feb. 5
---------------------------------------------------------------
The Honorable Douglas O. Tice of the U.S. Bankruptcy Court for
the Eastern District of Virginia adjourned, to Feb. 5, 2008, at
10:00 a.m., prevailing Eastern Time, the hearing to consider the
adequacy of the Disclosure Statement explaining Movie Gallery,
Inc. and its debtor-affiliates' plan of reorganization.
About Movie Gallery
Based in Dothan, Alabama, Movie Gallery Inc. --
http://www.moviegallery.com/-- is a home entertainment
specialty retailer. The company owns and operates 4,600 retail
stores that rent and sell DVDs, videocassettes and video games.
It operates over 4,600 stores in the United States, Canada, and
Mexico under the Movie Gallery, Hollywood Entertainment, Game
Crazy, and VHQ banners.
The company and its debtor-affiliates filed for Chapter 11
protection on Oct. 16, 2007 (Bankr. E.D. Va. Case Nos. 07-33849
to 07-33853. Anup Sathy, Esq., Marc J. Carmel, Esq., and
Richard M. Cieri, Esq., at Kirkland & Ellis LLP, represent the
Debtors. Michael A. Condyles, Esq., and Peter J. Barrett, Esq.,
at Kutak Rock LLP, is the Debtors' local counsel. The Debtors'
claims & balloting agent is Kutzman Carson Consultants LLC.
When the Debtors' filed for protection from their creditors,
they listed total assets of US$891,993,000 and total liabilities
of US$1,419,215,000.
The Official Committee of Unsecured Creditors has selected
Robert J. Feinstein, Esq., James I. Stang, Esq., Robert B.
Orgel, Esq., and Brad Godshall, Esq., at Pachulski Stang Ziehl &
Jones LLP, as its lead counsel, and Brian F. Kenney, Esq., at
Miles & Stockbridge PC, as its local counsel.
The Debtors' spokeswoman Meaghan Repko said that the company
does not expect to exit bankruptcy protection before the second
quarter of 2008. The Debtors have until June 13, 2008 to file
their plan of reorganization. (Movie Gallery Bankruptcy News
Issue No. 16; Bankruptcy Creditors' Service Inc.;
http://bankrupt.com/newsstand/or 215/945-7000)
MOVIE GALLERY: Wants to Perform Under Plan Support Pact
-------------------------------------------------------
Movie Gallery Inc. and its debtor-affiliates ask permission from
the Honorable Douglas O. Tice of the U.S. Bankruptcy Court for
the Eastern District of Virginia to perform under a plan support
agreement with Sopris Capital Advisors LLC.
The Plan Support Agreement is intended to further the Debtors'
attempts to negotiate a consensual Plan of Reorganization, in
light of the Debtors' Disclosure Statement and Plan filed on
Dec. 22, 2007, Kimberly A. Pierro, Esq., at Kutak Rock LLP, in
Richmond, Virginia, says.
Essentially, the Plan Support Agreement provides that:
(a) Sopris, the first and second lien holders and the 11%
senior noteholders agree to support the Plan; and
(b) Sopris agrees to the Backstop Commitment in accordance
with the Plan and the Rights Offering Term Sheet.
Pursuant to the Plan Support Agreement and a separate
escrow agreement, Sopris has placed US$50,000,000 into
escrow to secure the Backstop Commitment.
Sopris Capital holds the majority of the debt under the Second
Lien Credit Agreement and the 11% Senior Notes Indenture; the
first lien holders; the second lien holders; and the 11% senior
noteholders.
According to Ms. Pierro, securing the participation of the
consenting holders for a consensual Chapter 11 plan will allow
the Debtors to emerge from their cases successfully and
expeditiously and maximize value for the benefit of their
estates and creditors.
"By permitting the Debtors to perform under the Plan Support
Agreement, the Court will enable the Debtors to continue towards
confirmation and consummation of a Plan that is supported by the
consenting holders, who constitute several major constituencies
in the Chapter 11 cases," Ms. Pierro tells Judge Tice.
The Debtors have provided adequate and reasonable notice to
parties-in-interest regarding their request. Moreover, the Plan
Support Agreement was negotiated in good faith and at arm's-
length with the consenting holders, Ms. Pierro adds.
Ms. Pierro avers that through the Plan Support Agreement, the
Debtors can continue their current progress with respect to
their various constituencies. The Agreement, she continues, is
also deemed to help confirm the Plan for the Debtors to
consummate in a timely manner.
A full-text copy of the Plan Support Agreement is available for
free at http://researcharchives.com/t/s?277a
About Movie Gallery
Based in Dothan, Alabama, Movie Gallery Inc. --
http://www.moviegallery.com/-- is a home entertainment
specialty retailer. The company owns and operates 4,600 retail
stores that rent and sell DVDs, videocassettes and video games.
It operates over 4,600 stores in the United States, Canada, and
Mexico under the Movie Gallery, Hollywood Entertainment, Game
Crazy, and VHQ banners.
The company and its debtor-affiliates filed for Chapter 11
protection on Oct. 16, 2007 (Bankr. E.D. Va. Case Nos. 07-33849
to 07-33853. Anup Sathy, Esq., Marc J. Carmel, Esq., and
Richard M. Cieri, Esq., at Kirkland & Ellis LLP, represent the
Debtors. Michael A. Condyles, Esq., and Peter J. Barrett, Esq.,
at Kutak Rock LLP, is the Debtors' local counsel. The Debtors'
claims & balloting agent is Kutzman Carson Consultants LLC.
When the Debtors' filed for protection from their creditors,
they listed total assets of US$891,993,000 and total liabilities
of US$1,419,215,000.
The Official Committee of Unsecured Creditors has selected
Robert J. Feinstein, Esq., James I. Stang, Esq., Robert B.
Orgel, Esq., and Brad Godshall, Esq., at Pachulski Stang Ziehl &
Jones LLP, as its lead counsel, and Brian F. Kenney, Esq., at
Miles & Stockbridge PC, as its local counsel.
The Debtors' spokeswoman Meaghan Repko said that the company
does not expect to exit bankruptcy protection before the second
quarter of 2008. The Debtors have until June 13, 2008 to file
their plan of reorganization. (Movie Gallery Bankruptcy News
Issue No. 16; Bankruptcy Creditors' Service Inc.;
http://bankrupt.com/newsstand/or 215/945-7000)
SUN MICROSYSTEMS: Managed Services Would be 35% of Revenues
-----------------------------------------------------------
Sun Microsystems' country manager Eduardo Gutierrez told
Business News Americas that the firm's Mexican unit sees managed
services to account for up to 35% of revenues within the next
three years.
BNamericas relates that the unit's main source of revenue comes
from systems and servers. Mr. Gutierrez sees large firms and
the public sector information technology acquisitions evolving
to a "pay as you go" method.
Mr. Gutierrez commented to BNamericas, "We see Mexico's
government putting a lot of effort into reinforcing its
infrastructure. And the government is doing this in a more
service-oriented manner, that is, paying rent for IT
[information technology] infrastructure."
According to BNamericas, Mr. Gutierrez expects the Mexican
managed services market to reach maturity in three years. He
commented to BNamericas, "I think this is a trend in the region
as well. Basically we expect that this year there will be more
companies buying products as a service, as well as others, like
the government, who are buying these services more
aggressively."
Mr. Gutierrez told BNamericas that last year, the unit's sales
increased in the "high double digits" resembling rates in other
Sun Microsystems' Indian, Chinese and Western European units.
Sun Microsystems will invest in human resources this year,
especially engineers specialized in the telecommunications and
financial services verticals, to be able to accommodate growth,
the report says.
Mr. Gutierrez commented to BNamericas, "Traditionally, our
largest market share comes from the systems and server area, but
we are aggressively growing on the storage side and we'll have a
very good opportunity with Solaris. In fact, Solaris [Sun
Microsystems' proprietary operating system] is probably seeing
the most demand."
None of Sun Microsystems' clients run mission-critical
applications over Solaris, BNamericas notes. Mr. Gutierrez
expects this to slowly change as more customers become
increasingly intent on using open source systems and
applications.
"Customers are looking to this type of operating system mainly
because it represents a better cost-effective solution and they
will have support from companies like Sun behind them," Mr.
Gutierrez told BNamericas.
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, Singapore, among others.
* * *
Sun Microsystems Inc. carries Moody's "Ba1" probability of
default and long-term corporate family ratings with a stable
outlook. The ratings were placed on Sept. 22, 2006, and
Sept. 22, 2005, respectively.
Sun Microsystems also carries Standard & Poor's "BB+" long-term
foreign and local issuer credit ratings, which were placed on
March 5, 2004, with a stable outlook.
U.S. STEEL: Board Increases Dividend Up to US$0.25 Per Share
------------------------------------------------------------
United States Steel Corporation Board of Directors has declared
a dividend of 25 cents per share on U. S. Steel Common Stock, an
increase of 5 cents per share. The dividend is payable
March 10, 2008, to stockholders of record at the close of
business Feb. 13, 2008.
Headquartered in Pittsburgh, Pennsylvania, United States Steel
Corporation (NYSE: X) -- http://www.ussteel.com/-- manufactures
a wide variety of steel sheet, tubular and tin products; coke,
and taconite pellets; and has a worldwide annual raw steel
capability of 26.8 million net tons. U.S. Steel's domestic
primary steel operations are: Gary Works in Gary, Indiana; Great
Lakes Works in Ecorse and River Rouge, Michigan; Mon Valley
Works, which includes the Edgar Thomson and Irvin plants, near
Pittsburgh and Fairless Works near Philadelphia, Pennsylvania;
Granite City Works in Granite City, Illinois; Fairfield Works
near Birmingham, Alabama; Midwest Plant in Portage, Indiana; and
East Chicago Tin in East Chicago, Indiana. The company also
operates two seamless tubular mills, Lorain Tubular Operations
in Lorain, Ohio; and Fairfield Tubular Operations near
Birmingham, Alabama.
U.S. Steel produces coke at Clairton Works near Pittsburgh, at
Gary Works and Granite City Works. On Northern Minnesota's
Mesabi Iron Range, U.S. Steel's iron ore mining and taconite
pellet operations, Minnesota Taconite and Keewatin Taconite,
support the steelmaking effort, and its subsidiary ProCoil
Company provides steel distribution and processing services.
U.S. Steel's steelmaking subsidiaries U.S. Steel Kosice, s.r.o.,
in Kosice, Slovakia and U.S. Steel Serbia, d.o.o, in Sabac and
Smederevo, Serbia. Acero Prime, the company's joint venture
with Feralloy Mexico, S.R.L. de C.V. and Intacero de Mexico,
S.A. de C.V., provides Mexico's automotive and appliance
manufacturers with total supply chain management services
through its slitting and warehousing facility in San Luis Potosi
and its warehouse in Ramos Arizpe.
* * *
As reported in the Troubled Company Reporter-Latin America on
Dec. 11, 2007, Standard & Poor's Ratings Services assigned its
'BB+' senior unsecured rating to the proposed offering of up to
US$400 million in senior unsecured notes due Feb. 1, 2018, of
United States Steel Corp. (BB+/Negative/--). These notes are
being issued under the company's unlimited shelf registration
filed on March 5, 2007.
U.S. Steel: Reports US$35 Million Net Income in Fourth Qtr. 2007
----------------------------------------------------------------
United States Steel Corporation has reported fourth quarter 2007
net income of US$35 million, or US$0.29 per diluted share,
compared to third quarter 2007 net income of US$269 million, or
US$2.27 per diluted share, and fourth quarter 2006 net income of
US$297 million, or US$2.50 per diluted share. Fourth quarter
2007 net income was reduced by US$117 million, or US$0.98 per
diluted share, due to inventory transition effects and a
workforce reduction charge.
For full-year 2007, U. S. Steel reported net income of US$879
million or US$7.40 per diluted share, which was reduced by
US$158 million, or US$1.33 per diluted share, from inventory
transition effects, a workforce reduction charge, early debt
redemption expense and several discrete tax charges. Full-year
2006 net income was US$1,374 million, or US$11.18 per diluted
share.
U.S. Steel Chairperson and Chief Executive Officer, John P.
Surma said, "This past year was an important period of growth
for our company as we completed major acquisitions in both our
flat-rolled and tubular businesses and commissioned our new
automotive galvanizing line in Europe. We are making steady
progress with integration activities on both acquisitions, and
we still expect to achieve the anticipated synergies."
The company reported fourth quarter 2007 income from operations
of US$116 million, compared with income from operations of
US$360 million in the third quarter of 2007 and US$341 million
in the fourth quarter of 2006. For the year 2007, income from
operations was US$1,213 million versus income from operations of
US$1,785 million for the year 2006.
Other items not allocated to segments in the fourth quarter of
2007 consisted of a US$69 million pre-tax charge related to
inventory transition effects following the two major
acquisitions and a US$57 million pre-tax charge resulting from a
voluntary early retirement program at U. S. Steel Kosice (USSK).
These items decreased fourth quarter 2007 net income by US$117
million, or 98 cents per diluted share. In the third quarter of
2007, a US$27 million pre-tax charge related to inventory
acquired in the Lone Star acquisition was not allocated to
segments, and the tax provision included several discrete
charges totaling US$11 million. These items reduced third
quarter 2007 net income by US$28 million, or 23 cents per
diluted share. In the fourth quarter of 2006, net interest and
other financial costs included a US$32 million pre-tax charge
related to the early redemption of debt. This item and other
items not allocated to segments decreased net income by US$33
million or 28 cents per diluted share.
Reportable Segments and Other Businesses
Management believes segment income from operations is a key
measure to evaluate ongoing operating results and performance.
U.S. Steel's reportable segments and Other Businesses reported
segment income from operations of US$257 million, or US$43 per
ton, in the fourth quarter of 2007, compared with US$433
million, or US$78 per ton, in the third quarter of 2007 and
US$414 million, or US$85 per ton, in the fourth quarter of 2006.
Flat-rolled's fourth quarter results were significantly lower
than the third quarter and included the operating results of
U.S. Steel Canada effective Oct. 31. Flat-rolled operated at 82
percent of capability, including only 60 percent for U.S. Steel
Canada, as we completed a number of blast furnace repair
outages, both planned and unplanned, during the quarter. Lower
average realized prices compared to the third quarter primarily
reflected a shift in product mix to hot-rolled and semi-finished
with the Canadian acquisition. In addition, production costs
increased due mainly to higher raw material, natural gas, outage
and modernization-related costs. U.S. Steel Canada added
557,000 tons to fourth quarter Flat-rolled shipments under
commercial arrangements in place at the time of acquisition. An
operating loss was incurred as unplanned blast furnace outages
limited shipments and resulted in high unit production costs.
The decrease in fourth quarter 2007 European income from
operations compared to the third quarter was mainly due to
a decline in euro-based prices as high imports, particularly
from China, and high service center inventories pressured spot
prices and order rates. Operating rates were curtailed to 79
percent of capability as a result of two planned blast furnace
outages. Shipments were reduced by the outages and outbound
rail transportation service disruptions late in the quarter.
Additionally, raw material and energy costs increased.
Fourth quarter Tubular results improved slightly from the third
quarter due mainly to higher average realized prices resulting
from a change in product mix, and improved overall cost
performance. These were partially offset by lower shipments.
Additional Fourth Quarter 2007 Items
In December 2007, U.S. Steel and the United Steelworkers agreed
that U.S. Steel will provide health care and life insurance
benefits to certain former National Steel employees and their
eligible dependents under a U.S. Steel insurance plan, using
funds that had been accrued based on a provision of the 2003
Basic Labor Agreement. Funds totaling US$468 million were
contributed to the company's trust for retiree health care and
life insurance in December.
As a result of this agreement, its other postretirement benefits
obligation increased by US$314 million. While a funding
obligation continues through the Aug. 31, 2008 expiration of the
2003 Basic Labor Agreement, the profit-based expense has been
eliminated beginning with the fourth quarter of 2007 as
reflected in "retiree benefit expenses."
Net interest and other financial costs increased by US$22
million in the fourth quarter of 2007 compared to the third
quarter, mainly reflecting interest expense resulting from debt
incurred to fund the Stelco acquisition.
The company's effective tax rate for the year was higher than
projected at the end of the third quarter as a result of the
inclusion of U.S. Steel Canada and a change in the profile of
global earnings. As a result, the tax provision in the fourth
quarter included approximately US$20 million to apply this
higher tax rate to income for the prior three quarters.
Outlook
Commenting on U.S. Steel's outlook, Mr. Surma said, "We expect
first quarter results to continue to reflect the volatile cost
and pricing dynamics in our three major segments. Overall, we
should be in a good position as 2008 progresses to take
advantage of favorable supply side conditions, our expanded
product and geographic positions in North America, and our new
galvanizing line at USSK."
For Flat-rolled, the company expects improvement from fourth
quarter results as shipments and operating rates are expected to
increase compared to the fourth quarter, with the inclusion of
U.S. Steel Canada for the full quarter and the completion of the
blast furnace projects. The facilities in Canada have been
operating much more reliably. Prices are also expected to be
higher as increasing spot market prices will be realized
throughout the quarter. In addition, customer commitments in
place at U.S. Steel Canada at the time of the acquisition are
being completed and new commitments consistent with U.S. Steel's
commercial policies are being made. It also expects significant
cost increases for raw materials, particularly for purchased
scrap, coke and alloys.
For U.S. Steel Europe, the company expects higher euro-based
prices; and shipments should increase as a result of higher
facility availability in the quarter. Escalating raw material
costs are expected to partially offset these improvements.
-- Shipments and prices for the Tubular segment are expected
to remain in line with the fourth quarter, and semi-
finished steel costs will increase.
-- Other Businesses will reflect the normal unfavorable
seasonal effects of the closing of the Great Lakes for
taconite pellet shipments.
-- Capital expenditures for 2008 are expected to total
approximately US$940 million.
-- Total costs for pension plans and other postretirement
benefits are expected to be approximately US$200 million in
2008 compared to US$266 million in 2007, primarily due to
lower pension expense.
-- Volatility in net interest and other financial costs could
increase going forward as a result of foreign currency
accounting remeasurement effects, primarily on a US$1.2
billion intercompany loan to a European affiliate, related
to the acquisition of U.S. Steel Canada. As this
intercompany loan is repaid, the company's exposure will
decrease. Also, the company expects to mitigate a portion
of this volatility with its normal hedging activity.
Common Stock Repurchase Program
The company repurchased 295,000 shares of U.S. Steel common
stock for US$30 million during the fourth quarter, bringing
total repurchases to 14.3 million shares for US$812 million
since the repurchase program was originally authorized in July
2005. As of Dec. 31, 2007, 6.5 million shares remained
authorized for repurchase under its stock repurchase program.
About U.S. Steel
Headquartered in Pittsburgh, Pennsylvania, United States Steel
Corporation (NYSE: X) -- http://www.ussteel.com/-- manufactures
a wide variety of steel sheet, tubular and tin products; coke,
and taconite pellets; and has a worldwide annual raw steel
capability of 26.8 million net tons. U.S. Steel's domestic
primary steel operations are: Gary Works in Gary, Indiana; Great
Lakes Works in Ecorse and River Rouge, Michigan; Mon Valley
Works, which includes the Edgar Thomson and Irvin plants, near
Pittsburgh and Fairless Works near Philadelphia, Pennsylvania;
Granite City Works in Granite City, Illinois; Fairfield Works
near Birmingham, Alabama; Midwest Plant in Portage, Indiana; and
East Chicago Tin in East Chicago, Indiana. The company also
operates two seamless tubular mills, Lorain Tubular Operations
in Lorain, Ohio; and Fairfield Tubular Operations near
Birmingham, Alabama.
U.S. Steel produces coke at Clairton Works near Pittsburgh, at
Gary Works and Granite City Works. On Northern Minnesota's
Mesabi Iron Range, U.S. Steel's iron ore mining and taconite
pellet operations, Minnesota Taconite and Keewatin Taconite,
support the steelmaking effort, and its subsidiary ProCoil
Company provides steel distribution and processing services.
U.S. Steel's steelmaking subsidiaries U.S. Steel Kosice, s.r.o.,
in Kosice, Slovakia and U.S. Steel Serbia, d.o.o, in Sabac and
Smederevo, Serbia. Acero Prime, the company's joint venture
with Feralloy Mexico, S.R.L. de C.V. and Intacero de Mexico,
S.A. de C.V., provides Mexico's automotive and appliance
manufacturers with total supply chain management services
through its slitting and warehousing facility in San Luis Potosi
and its warehouse in Ramos Arizpe.
* * *
As reported in the Troubled Company Reporter-Latin America on
Dec. 11, 2007, Standard & Poor's Ratings Services assigned its
'BB+' senior unsecured rating to the proposed offering of up to
US$400 million in senior unsecured notes due Feb. 1, 2018, of
United States Steel Corp. (BB+/Negative/--). These notes are
being issued under the company's unlimited shelf registration
filed on March 5, 2007.
===========
P A N A M A
===========
CHIQUITA BRANDS: Moody's Affirms B3 Corporate Family Rating
-----------------------------------------------------------
Moody's Investors Service has affirmed the ratings of Chiquita
Brands International, Inc., including its B3 corporate family
rating and B3 probability of default rating, following the
company's announcement that it is reviewing its capital
structure. The rating outlook remains negative.
Ratings affirmed:
Chiquita Brands International, Inc.
-- Corporate family rating at B3
-- Probability of default rating at B3
-- US$250 million 7.5% senior unsecured notes due 2014 at
Caa2 (LGD5, 89%)
-- US$225 million 8.875% senior unsecured notes due 2015 at
Caa2 (LGD5, 89%)
Chiquita Brands, LLC
-- US$200 million senior secured revolving credit agreement
at B1(LGD2,26%)
-- Senior secured Term Loan C at B1(LGD2,26%)
Rating withdrawn (debt repaid):
Chiquita Brands, LLC
-- Senior unsecured Term Loan B at B1 (LGD2, 26%)
The company is considering a potential amendment or refinancing
of its senior secured bank agreement and is also considering a
convertible senior unsecured note offering at the holding
company level. Proceeds from the potential new convertible
issue will be used for the partial repayment of Term Loan C.
Upon issuance of convertible notes and application of proceeds
to Term Loan C, Moody's may upgrade the ratings of the company's
existing senior secured revolving credit and Term Loan C; upon
issuance of a senior unsecured convertible note at the holding
company, the amount of debt that is effectively subordinated to
the senior secured bank facility will increase while the amount
of senior secured bank debt will decline, resulting in a lower
expected loss on the bank debt.
The affirmation of the company's ratings is based on the fact
that fiscal year 2007 reported EBIT is expected to stabilize at
a level close to that of fiscal 2006, adding back certain non-
recurring charges in both years; and that the 2007 restructuring
is expected to generate cost savings of US$60 million to US$80
million in fiscal 2008.
Chiquita Brands' B3 corporate family rating incorporates the
company's weak credit metrics and challenged operating
performance. Ratings also reflect continued uncertainty with
regard to long term structural changes occurring in the
company's key European Union banana market such as greater
competition following the elimination of volume restrictions
under a tariff only import fee regime effective Jan. 1, 2006;
the need to improve results at the company's salads and healthy
snacks to historical levels; and continued pressure from rising
input costs. Ratings are supported by the company's solid
franchise as one of the largest global fresh fruit and vegetable
companies with strong market shares and good diversification in
terms of product offerings, geographic reach, and raw material
supply.
About Chiquita Brands
Cincinnati, Ohio-based Chiquita Brands International Inc. (NYSE:
CQB) -- http://www.chiquita.com/-- markets and distributes
fresh food products including bananas and nutritious blends of
green salads. The company markets its products under the
Chiquita(R) and Fresh Express(R) premium brands and other
related trademarks.
Chiquita employs approximately 25,000 people operating in more
than 70 countries worldwide, including Colombia, Panama and the
Philippines.
NCO GROUP: Moody's Puts Ba3 Rating on US$139 Million Add-On Loan
----------------------------------------------------------------
Moody's Investors Service confirmed all the credit ratings of
NCO Group, Inc., concluding a review for possible downgrade
initiated on Dec. 13, 2007. Moody's also assigned a Ba3 rating
to the US$139 million add-on term loan B, which will be used
along with a US$210 million equity contribution from One Equity
Partners and its co-investors, to finance the acquisition of
Outsourcing Solutions, Inc. Moody's downgraded NCO Group's
speculative grade liquidity rating to SGL-3 from SGL-2
reflecting material revolver borrowings and a projected
tightening of headroom under financial covenants during 2008.
The rating outlook is stable.
Moody's views the acquisition of Outsourcing Solutions favorably
since it will be financed with a large equity component (about
60% of acquisition financing) and provides increased scale and
significant cost saving opportunities. The confirmation of the
B2 Corporate Family Rating reflects the company's sizeable
revenue base, leading market position in the accounts receivable
outsourcing industry, a large global platform of on-shore and
off-shore offerings and adequate credit metrics pro forma for
the Outsourcing Solutions acquisition. The ratings are
constrained by economic pressures that may continue to weaken
performance in the contingent collection and portfolio
management businesses as well as limited business line diversity
and moderate customer concentration.
Moody's took these rating actions:
-- Assigned US$139 million add-on term loan B, Ba3 (LGD 3,
31%)
-- Confirmed US$465 million senior secured term loan due 2013,
Ba3 (to LGD 3, 31% from LGD 2, 29%)
-- Confirmed US$100 million senior secured revolver due 2011,
Ba3 (to LGD 3, 31% from LGD 2, 29%)
-- Confirmed US$165 million senior floating rate notes, B3 (to
LGD 4, 67% from LGD 4, 63%)
-- Confirmed US$200 million senior subordinated notes, Caa1
(to LGD 6, 91% from LGD 6, 90%)
-- Confirmed Corporate Family Rating, B2
-- Confirmed Probability of Default Rating, B2
-- Downgraded Speculative Grade Liquidity rating, to SGL-3
from SGL-2
Approximately US$1.1 billion of rated debt securities affected.
Headquartered in Horsham, Pennsylvania, NCO Group Inc. --
http://www.ncogroup.com/-- provides business process
outsourcing services including accounts receivable management,
customer relationship management and other services. NCO
provides services through over 100 offices in the United States,
Canada, the United Kingdom, Australia, India, the Philippines,
the Caribbean and Panama.
* PANAMA: Fitch Affirms BB+ Issuer Default Ratings
--------------------------------------------------
Fitch Ratings has affirmed the Republic of Panama's long-term
foreign currency and local currency Issuer Default Ratings of
'BB+' and simultaneously revised the Rating Outlook to Positive
from Stable. Fitch has also affirmed the short-term foreign
currency IDR of 'B' and the country ceiling of 'BBB+'.
The revision of Panama's Rating Outlook to Positive reflects the
virtuous circle of growth momentum and fiscal consolidation,
which has put Panama's public and external debt indicators on a
downward path. As such, Fitch believes that Panama should be
able to absorb future increases in public debt related to the
expansion of the canal without precipitating downward pressure
on the ratings given its solid economic growth prospects and the
expectation that fiscal discipline will be maintained.
"Panama's credit story continues to develop in a positive
direction, with growth exceeding 8% for a second year in a
row, which has contributed to the convergence of per capita
income with that of low investment grade sovereigns," according
to Senior Director in Fitch's Latin American Sovereign Ratings
team, Theresa Paiz Fredel.
An established track record of macroeconomic stability
underpinned by dollarization, a stable financial system,
moderate debt service needs, and the government's considerable
financial and land assets support the sovereign's IDR at 'BB+'.
Panama's main credit weakness remains its high level of
government debt, although key public debt metrics have been
improving at a steady pace since 2005. Furthermore, a
manageable debt service profile and the low probability of a
devaluation induced increase in debt ratios sufficiently offset
this weakness relative to similarly rated peers. In addition,
the Torrijos administration's efforts to strengthen public
finances are bearing fruit and Fitch estimates that the non-
financial public sector will likely report a surplus in 2007
while public debt levels and financing needs continued to trend
downward.
Even though Fitch expects benign trends in growth and public
finances to continue, Panama's level of public and external
sector indebtedness remains elevated compared not only to higher
rated sovereigns but relative to 'BB' rated peers as well.
Panama's government debt/GDP ratio fell by almost 4% of GDP to
an estimated 54% last year, but still significantly exceeded the
'BB' median of 35%. Similarly, the government debt/revenue
ratio of 209% has declined markedly from a peak of 324% in 2004,
a positive trend toward closing the gap with the 'BB' median of
146%.
The government's sizable deposits (equivalent to around 16% of
GDP) reduce Panama's net general government debt as a
proportion of GDP and revenues to an estimated 38% and 58%
respectively, which is better than many similarly rated
peers. While the net public external debt to current account
receipts ratio remains high at 27.8% compared with a peer median
of 0.1%, this partly reflects Panama's monetary regime whereby
the authorities do not technically maintain international
reserves. Despite the high debt burden, the government's
financing needs remain manageable at an estimated 2.1% of GDP in
2008, among the lowest of 'BB' rated sovereigns and further
supporting creditworthiness.
Fitch believes that if managed appropriately, the long-term
economic benefits of expanding the Canal outweigh the short- to
medium-term costs of increased public debt. Sustained growth
momentum and resilience of Panama's macroeconomic policy
framework in the context of deteriorating external demand could
be positive for creditworthiness. More clarity on the Canal
expansion project's financing as well as further reductions of
general government debt ratios could also benefit
creditworthiness.
=======
P E R U
=======
* PERU: Receives US$1.6 Million Financing from MIF
--------------------------------------------------
The Multilateral Investment Fund of the Inter-American
Development Bank has approved a financing for two non-
reimbursible technical cooperation projects in Peru and Ecuador,
totaling US$1.6 million and US$1.5 million, respectively. Both
projects will target inclusive business development at the base
of the economic pyramid in order to boost income and employment
levels for the low-income population. The two projects will
incorporate low-income entrepreneurs into the value chain of
private-sector enterprises.
More than 5,250 micro and small enterprises in Peru will receive
technical assistance and training enabling them to participate
in the value chains of seven anchor businesses committed to the
project. Beneficiaries in Ecuador will include more than 4,850
micro and small enterprises that will be incorporated into the
value chains of seven other anchor businesses.
The executing agencies for the projects will be the Peru and
Ecuador offices of SNV Netherlands Development Organisation.
Country counterpart financing will total about a million dollars
for each country.
"Inclusive business development is an area that seems very
promising to us as a mechanism for creating new economic
opportunities by incorporating people with low incomes into the
value chains of big businesses in a sustainable way," said IDB
team leader Daniel Shepherd. "In addition, these initiatives
facilitate strategic private-sector participation in solving
problems connected to poverty, while also promoting market
access for the population at the bottom of the economic
pyramid."
This project is also one of the first programs launched by the
MIF under the IDB's "Opportunities for the Majority" initiative,
which promotes and finances business innovations and
partnerships to help improve income and quality of life in Latin
America's low-income communities.
The MIF, an autonomous fund administered by the IDB, promotes
development of micro- and small enterprise in Latin America and
the Caribbean. It has supported the expansion and
professionalization of microfinance in the region since its
creation.
The SNV is an organization that seeks to help reduce poverty and
improve governability by developing local capacities.
* * *
As reported in the Troubled Company Reporter-Latin America on
Jan. 16, 2008, Fitch assigned BB+ Long-Term Issuer Default
Rating and B Short-Term Issuer Default Rating to Peru. Fitch
said the rating outlook is stable.
As reported on Dec. 26, 2007, Standard & Poor's Ratings Services
assigned BB+ long-term currency rating on Peru.
=====================
P U E R T O R I C O
=====================
ADELPHIA COMMS: Distributing US$216 Million & 737,476 Shares
------------------------------------------------------------
Adelphia Communications Corporation has announced subsequent
distributions of US$216 million in cash and 737,476 shares of
TWC Class A Common Stock to holders of Allowed Claims against
the parent Adelphia Communications Corp. pursuant to the First
Modified Fifth Amended Joint Chapter 11 Plan of Reorganization
of Adelphia Communications Corp. and Certain Affiliated Debtors,
dated as of Jan. 3, 2007, as Confirmed. The 737,476 shares of
TWC Class A Common Stock to be distributed have a "Deemed Value"
under the Plan of US$28 million and a fair market value as of
Jan. 28, 2008, of US$18 million.
A chart summarizing the distribution of cash and shares of TWC
Class A Common Stock to be made to classes of ACC Claims is
available in the Important Documents section of the company's
website at http://www.adelphiarestructuring.com.
The chart does not reflect additional distributions that may be
made over time as a result of the release of escrows, reserves
and holdbacks. The amount and timing of such distributions as a
result of the release of escrows, reserves and holdbacks are
subject to the terms and conditions of the Plan and numerous
other conditions and uncertainties, many of which are outside
the control of Adelphia and its subsidiaries.
Creditor inquiries regarding distributions under the Plan should
be directed to creditor.inquiries@adelphia.com.
About Adelphia Comms
Based in Coudersport, Pennsylvania, Adelphia Communications
Corporation (OTC: ADELQ) -- http://www.adelphia.com/--
is a cable television company. Adelphia serves customers in 30
states and Puerto Rico, and offers analog and digital video
services, Internet access and other advanced services over its
broadband networks. The company and its more than 200
affiliates filed for Chapter 11 protection in the Southern
District of New York on June 25, 2002. Those cases are jointly
administered under case number 02-41729. Willkie Farr &
Gallagher represents the Debtors in their restructuring efforts.
PricewaterhouseCoopers serves as the Debtors' financial advisor.
Kasowitz, Benson, Torres & Friedman, LLP, and Klee, Tuchin,
Bogdanoff & Stern LLP represent the Official Committee of
Unsecured Creditors.
Adelphia Cablevision Associates of Radnor, L.P., and 20 of its
affiliates, collectively known as Rigas Manged Entities, are
entities that were previously held or controlled by members of
the Rigas family. In March 2006, the rights and titles to these
entities were transferred to certain subsidiaries of Adelphia
Cablevision LLC. The RME Debtors filed for chapter 11
protection on March 31, 2006 (Bankr. S.D.N.Y. Case Nos. 06-10622
through 06-10642). Their cases are jointly administered under
Adelphia Communications and its debtor-affiliates' chapter 11
cases. The Bankruptcy Court confirmed the Debtors' Modified
Fifth Amended Joint Chapter 11 Plan of Reorganization on
Jan. 5, 2007. That plan became effective on Feb. 13, 2007.
(Adelphia Bankruptcy News, Issue No. 182; Bankruptcy Creditors'
Service, Inc., http://bankrupt.com/newsstand/or 215/945-7000).
CHATTEM INC: Fiscal Year 2007 Net Income Up to US$59.7 Million
--------------------------------------------------------------
Chattem Inc. has announced its financial results for the fiscal
fourth quarter and year ended Nov. 30, 2007.
Fiscal Year 2007 Financial Results
Total revenues for fiscal 2007 rose to a record US$423.4
million, an increase of 40.9%, compared to total revenues of
US$300.5 million in fiscal 2006. Revenue growth for the fiscal
year was driven by the five acquired brands and continued growth
of the Gold Bond and Icy Hot businesses, offset by declines in
the Icy Hot Pro-Therapy(R) and Dexatrim(R) franchises, the
latter of which was impacted by unprecedented competition in the
weight loss category as well as difficult comparisons to the
fiscal 2006 launch period of Dex Max2O(R). Excluding the impact
of the acquired brands and Icy Hot Pro-Therapy, total revenues
increased 5% compared to fiscal 2006.
Net income for the fiscal year increased to a record US$59.7
million, compared to US$45.1 million for fiscal 2006, and
earnings per share were US$3.08, compared to US$2.34 for fiscal
2006. Net income for fiscal 2007 included a loss on early
extinguishment of debt and SFAS 123R employee stock option
expense. Net income for fiscal 2006 included a debt
extinguishment charge, litigation settlement items and SFAS 123R
employee stock option expense. As adjusted to exclude these
items, net income for fiscal 2007 was US$65.1 million, compared
to US$37.5 million for fiscal 2006, and earnings per share were
US$3.36 compared to US$1.95 for fiscal 2006, a 72.3% increase.
Fourth Quarter Financial Results
Total revenues for the fourth quarter of fiscal 2007 were
US$100.6 million, compared to total revenues of US$65.1 million
in the prior year quarter, representing a 54.5% increase.
Revenue growth for the quarter was led by the five acquired
brands as well as strong performances from Gold Bond and
Icy Hot. Offsetting these increases was a reduction in sales of
Dexatrim and lower sales of Icy Hot Pro-Therapy. Excluding the
impact of the acquired brands and Icy Hot Pro-Therapy, total
revenues increased 3% compared to the prior year quarter.
Net income for the quarter rose to US$14.8 million, compared to
US$4.9 million for the prior year quarter. Net income for the
fourth quarter of fiscal 2007 included SFAS 123R employee stock
option expense. Net income for the fourth quarter of fiscal
2006 included litigation settlement items and SFAS 123R employee
stock option expense. As adjusted to exclude these items, net
income for the fourth quarter of fiscal 2007 was US$15.8
million, compared to US$6.0 million for the prior year quarter.
In the fourth quarter of fiscal 2007, the Company increased the
reserves for Icy Hot Pro-Therapy retail and in-house inventory
exposure by approximately US$7.0 million, or US$0.24 per share,
which resulted in lower revenue and reduced gross margins during
the fourth quarter of fiscal 2007. This increase in reserves
was based on a detailed evaluation of the Icy Hot Pro-Therapy
business. Management believes this amount fully addresses any
significant product return or in-house inventory obsolescence
exposure.
"The company experienced the most successful year in its 128
year history," said Zan Guerry, Chattem's Chairman and Chief
Executive Officer. "Early in the year, we made the exciting
acquisition of five brands from Johnson & Johnson and were able
to integrate those brands into our organization smoothly and
ahead of schedule. The acquisition, combined with the growth
of our existing business, resulted in a 41% increase in total
revenues for the year to a record US$423 million and even more
impressive earnings growth," Mr. Guerry stated. "In reference
to the balance sheet," Guerry commented further, "we were able
to finance the acquisition of the five brands on very favorable
terms and have put in place a very solid and effective capital
structure. Our strong operating cash flows for fiscal 2007
enabled us to reduce debt more rapidly than we anticipated at
the time of the acquisition while also repurchasing over 400,000
shares of our common stock for US$23.6 million, or an average
cost of US$58.98 per share."
"Looking to fiscal 2008," Mr. Guerry continued, "we have
tremendous momentum and robust advertising support planned for
our Big 6 brands, Gold Bond(R), Icy Hot(R), ACT(R), Cortizone-
10(R), Selsun(R) and Unisom(R), which accounted for
approximately 72% of our total revenues in fiscal 2007. The
strength of our Big 6 brands, together with an impressive line
up of new products, expected gross margin improvement and the
ability to rapidly deleverage with strong cash flows, has led us
to increase our earnings per share guidance for fiscal 2008 to a
range of $4.00 to $4.20 per share before SFAS 123R and debt
extinguishment charges."
Key Highlights:
* Gross margin for the quarter rose to 70.0%, compared to
68.2% for the prior year quarter, and 69.5% for fiscal
2007, compared to 68.7% for fiscal 2006. Gross margin for
fiscal 2008 is expected to approach historical levels as a
result of the full year impact of the in-house
manufacturing of certain of the five acquired brands and
product mix.
* Advertising and promotion expense (A&P) for the quarter
increased by US$5.5 million to US$26.0 million, or 25.8%
as a percentage of total revenues, and rose by US$16.1
million to US$112.2 million, or 26.5% of total revenues,
for the fiscal year, compared to US$96.1 million, or 32.0%
of total revenues in fiscal 2006. The decline in A&P
expense as a percentage of total revenues from fiscal 2006
reflected unusually high A&P expenses in fiscal 2006 due
primarily to the launch of Icy Hot Pro-Therapy. The
company anticipates A&P spending to increase significantly
on a dollar basis for fiscal 2008 and remain consistent
with historical levels of 26% to 28% as a percentage of
total revenues.
* Selling, general and administrative expenses (SG&A)
decreased to 15.3% of total revenues for the quarter,
compared to 20.0% for the prior year quarter, and to 13.6%
of total revenues for the fiscal year, compared to 15.6%
for fiscal 2006. For fiscal 2008, SG&A expenses are not
expected to rise commensurate with increases in total
revenues as the company continues to leverage its
operating infrastructure.
* For the fiscal year, cash flows from operations increased
59.4% to US$86.7 million compared to US$54.4 million for
fiscal 2006. Free cash flow, defined as cash flows from
operations less capital expenditures, was US$80.4 million,
up 61.8%, compared to US$49.7 million for fiscal 2006.
Capital expenditures for the fiscal year were US$6.3
million with more than half of these expenditures
attributable to the integration of in-house
manufacturing for certain of the five acquired brands.
* Earnings before interest, taxes, depreciation and
amortization (EBITDA) increased 139% to US$32.2 million,
or 32.0% of total revenues, for the quarter and increased
82.6% to US$133.9 million, or 31.6% of total revenues, for
the fiscal year, compared to US$73.3 million, or 24.4% of
total revenues in fiscal 2006.
* Since acquiring the five brands on Jan. 2, 2007, the
company has reduced total debt by US$62.5 million to
US$508.0 million as of Nov. 30, 2007. During that same
period, the company funded the purchase of a net bond
hedge of US$12.1 million in connection with the issuance
of the 1.625% senior convertible notes in April 2007;
acquired the ACT business in Western Europe and the
worldwide trademark rights to ACT for US$4.1 million; and
repurchased 400,129 shares of the Company's common stock
for US$23.6 million, or an average cost of US$58.98 per
share.
Fiscal 2008 Guidance
The company currently expects earnings per share for fiscal 2008
to be in the range of US$4.00 to US$4.20 as compared to our
earlier estimate of US$3.90 to US$4.10, in each case excluding
stock option expense under SFAS 123R and any loss on debt
extinguishment. Stock option expense under SFAS 123R for fiscal
2008 is estimated to be US$0.21 per share.
Chattanooga, Tenn.-based Chattem Inc. manufactures and markets
branded consumer products, including over-the-counter healthcare
products and toiletries and skin care products. Its products
include Gold Bond medicated powder, Icy Hot topical analgesic,
Dexatrim appetite suppressant, and Bullfrog sunblock. Chattem
has operations in the U.K., Australia, and Puerto Rico.
* * *
Chattem Inc.'s 7% Exchange Senior Subordinated Notes due 2014
carry Moody's Investors Service's 'B2' rating and Standard &
Poor's 'B' rating.
ELECTRONIC DATA: Inks Management Deal with Breast Cancer Org.
-------------------------------------------------------------
Electronic Data Services Corp. has announced a five-year, server
management services agreement with Susan G. Komen for the Cure,
the world's largest and most progressive grassroots network of
breast cancer survivors and activists. The contract was signed
in the fourth quarter of 2007, and financial terms of the
agreement are not being disclosed.
Under this new agreement, Electronic Data will manage Komen for
the Cure's server environment, including planning, configuring,
hosting and ongoing server support, allowing the organization to
remain focused on being the global leader in the fight against
breast cancer.
"Strengthening our information technology infrastructure gives
Susan G. Komen for the Cure the foundation to deliver new
capabilities that will accelerate the promise to end breast
cancer," said Komen information technology vice president,
Justin Ricketts. "EDS' cost-effective and secure solution
provides us with the server agility and reliability needed to
change and flex as our organization grows."
The company's Server Management Services optimally deploy,
monitor and manage servers through standardization,
virtualization, automation and ITIL-based best practices. "EDS
has developed a strong relationship with Susan G. Komen for the
Cure -- first by supporting the Susan G. Komen Race for the
Cure(R) globally and now through information technology
services," said Electronic Data's Global Healthcare Industry
vice president, Sean Kenny. "By entrusting its enterprise
server environment to EDS, Komen can stay focused on its goals
of finding the cures for breast cancer and serving those around
the world touched by the disease."
In addition to supporting Komen through IT services, Electronic
Data employees participated in more than 16 Susan G. Komen Race
for the Cure events around the world in 2007, including Races in
Germany and Italy. The company has been the local presenting
sponsor of the Komen North Texas Race for the Cure(R) since
2004. Last year, with more than 12,000 participants, the North
Texas Race was held at the company's global headquarters in
Plano, Texas. The company will once again host this year's
Race, put on by Komen's North Texas Affiliate, on June 7, 2008.
About Susan G. Komen for the Cure
Nancy G. Brinker promised her dying sister, Susan G. Komen, she
would do everything in her power to end breast cancer forever.
In 1982, that promise became Susan G. Komen for the Cure and
launched the global breast cancer movement. Today, Komen for
the Cure is the world's largest grassroots network of breast
cancer survivors and activists fighting to save lives, empower
people, ensure quality care for all and energize science to find
the cures. Thanks to events like the Komen Race for the Cure,
the organization invested nearly US$1 billion to fulfill its
promise, becoming the largest source of nonprofit funds
dedicated to the fight against breast cancer in the world. For
more information about Susan G. Komen for the Cure, breast
health or breast cancer, visit
http://www.komen.orgor call 1-877 GO KOMEN.
About Electronic Data System
Based in Plano, Texas, Electronic Data System Corp. (NYSE: EDS)
-- http://www.eds.com/-- is a global technology services
company delivering business solutions to its clients. The
company founded the information technology outsourcing industry
more than 40 years ago. The company delivers a broad portfolio
of information technology and business process outsourcing
services to clients in the manufacturing, financial services,
healthcare, communications, energy, transportation, and consumer
and retail industries and to governments around the world. The
company has locations in Argentina, Australia, Brazil, China,
Chile, Hong Kong, India, Japan, Malaysia, Mexico, Puerto Rico,
Singapore, Taiwan, Thailand and South Korea.
* * *
Moody's placed EDS Corp.'s senior unsecured debt rating at 'Ba1'
in July 2004, and its probability of default rating at 'Ba1' in
September 2006. Moody's said the outlook is positive. The
ratings still hold to date.
LIN TV: Signs Pact with Cable One for Analog Retransmission
-----------------------------------------------------------
LIN TV Corp. has reached an agreement with Cable One for
retransmission of its broadcast stations in both analog and in
high-definition.
"We are pleased with the outcome of our negotiations," said
Vincent L. Sadusky, president and chief executive officer of LIN
TV Corp. "Our stations are leaders in their markets and we've
made substantial investments to bring our viewers high
definition digital programming. The agreement reflects fair
value to both parties and is in the best interest of the
consumer."
The agreement with Cable One enables subscribers to watch LIN
TV's Albuquerque FOX affiliate KASA-TV, and New Mexico's only
primetime local news at 9:00 pm, along with Super Bowl XLII and
American Idol. KASA-TV also airs highly-rated primetime
programming, such as House and Are You Smarter Than a 5th
Grader, along with popular syndicated programming such as The
Simpsons.
Headquartered in Providence, Rhode Island, LIN Television Corp.
(NYSE: TVL) -- http://www.lintv.com/-- owns and operates 31
television stations in 18 mid-sized markets in the United States
and Puerto Rico. The company had US$866.4 million of debt as of
Sept. 30, 2007.
* * *
As reported in the Troubled Company Reporter-Latin America on
Dec. 27, 2007, Standard & Poor's Ratings Services affirmed its
ratings on LIN TV Corp., including the 'B+' corporate credit
rating, and revised the outlook to stable from negative.
PILGRIM'S PRIDE: Posts US$32.3MM Net Loss in First Quarter 2008
---------------------------------------------------------------
Pilgrim's Pride Corporation has reported a net loss of US$32.3
million, or US$0.49 per share, on net sales of US$2.09 billion
for the first fiscal quarter ended Dec. 29, 2007, compared to a
pro forma net loss of US$42.9 million, or US$0.64 per share, on
pro forma net sales of US$1.86 billion in the same period last
year. The pro forma amounts assume the acquisition of Gold Kist
Inc., which closed on Dec. 27, 2006, was completed on
Sept. 30, 2006, and included in the operating results for the
quarter. The results for the first quarter of fiscal 2008
include a non-recurring income tax charge of approximately
US$13.0 million, or US$0.20 per share, related to an adjustment
in deferred taxes as a result of a newly enacted tax law in
Mexico. For the first quarter of fiscal 2007, the company
reported a net loss of US$8.7 million, or US$0.13 per share, on
total sales of US$1.34 billion.
"Our results in the first quarter of fiscal 2008 reflect the
significant challenge posed by higher feed-ingredient costs,
which have climbed sharply over the past few months and
currently show no signs of abating in 2008," said Pilgrim's
Pride chairperson and interim president, Ken Pilgrim. "Our
feed-ingredient costs for the quarter, on a pro forma basis,
rose 24%, or US$157 million, when compared to the same period a
year ago. Those cost increases -- when coupled with labor
shortages, higher production, freight and fuel costs during the
quarter -- offset most of the improvements in market pricing and
product mix."
Mr. Pilgrim said the company's consumer retail business
continued to post good growth as a result of increased
penetration of supermarket meat and deli cases and new business
from a number of large customers. In addition, export demand
remained solid and the company was able to reduce its commodity
pounds by upgrading product into higher-margin, value-added
chicken items.
Looking ahead, Mr. Pilgrim said that based on the current
commodity futures markets, the company's total feed-ingredient
costs for fiscal 2008 would be up more than US$700 million from
last fiscal year. Mr. Pilgrim saidhe believes that surging feed
costs make it unlikely that the U.S. chicken industry in 2008
will grow at the 3% rate projected by the United States
Department of Agriculture last fall.
"Given the unprecedented run-up in feed-ingredient costs, we
believe the industry will have to take a much closer look at
production levels for 2008 and that overall production is not
likely to grow at the rate previously projected by the USDA. We
will continue to closely monitor industry fundamentals and take
whatever actions we feel are necessary to better balance our
supply and demand and to position our company for sustained,
profitable growth," said Mr. Pilgrim.
About Pilgrim's Pride
Headquartered in Pittsburgh, Texas, Pilgrim's Pride Corporation
(NYSE: PPC) -- http://www.pilgrimspride.com/-- produces,
distributes and markets poultry processed products through
retailers, foodservice distributors and restaurants in the U.S.,
Mexico and in Puerto Rico. Pilgrim's Pride employs about 40,000
people and has major operations in Texas, Alabama, Arkansas,
Georgia, Kentucky, Louisiana, North Carolina, Pennsylvania,
Tennessee, Virginia, West Virginia, Mexico and Puerto Rico, with
other facilities in Arizona, Florida, Iowa, Mississippi and
Utah.
* * *
Pilgrim's Pride Corp. carries Moody's Investors Service's B1
senior unsecured credit rating, B2 senior subordinated notes,
and Ba3 corporate family ratings. PPC's planned new US$250
million senior unsecured notes also bears Moody's B1 rating and
its new US$200 million senior subordinated notes bears Moody's
B2 rating. Moody's said the outlook on all ratings is stable.
Standard & Poor's Ratings Services gave Pilgrim's Pride Corp. a
'BB-' corporate credit rating.
SEARS HOLDINGS: CEO's Planned Departure Won't Affect S&P Ratings
----------------------------------------------------------------
Sears Holdings Corp.'s (BB/Stable/--) announcement that Aylwin
Lewis (currently CEO and president) will leave the company has
no immediate impact on Sears' credit rating or outlook. W.
Bruce Johnson (currently executive vice president, supply chain
and operations) has been appointed interim CEO and president.
Led by Edward Lampert, chairman of Sears and CEO of ESL
Investments Inc., which owns approximately 42% of Sears' common
stock (as of Feb. 3, 2007), a search has begun for a permanent
CEO.
Since its formation in 2005, Hoffman Estates, Illinois-based
Sears Holdings, which is the combination of Sears, Roebuck and
Co. and Kmart, has made progress in cutting costs, but has not
been able to show improvement in sales. Recently, the company
said that it would reorganize into five business units. S&P
continues to believe that top-line growth will be very
challenging, despite the reorganization and change in
management.
Based in Hoffman Estates, Illinois, Sears Holdings Corporation
(NASDAQ: SHLD) - http://www.searsholdings.com/-- parent of
Kmart and Sears, Roebuck and Co., is a broadline retailer with
approximately 3,800 full-line and specialty retail stores in the
United States, Canada and Puerto Rico.
=================
V E N E Z U E L A
=================
ARVINMERITOR INC: Fitch Drops Issuer Default Rating to B from B+
----------------------------------------------------------------
Fitch Ratings has taken these actions on ArvinMeritor Inc.'s
credit ratings:
-- Issuer Default Rating downgraded to 'B' from 'B+';
-- Senior secured revolver affirmed at 'BB/RR1;
-- Senior unsecured notes downgraded to 'B/RR4' from 'B+/RR4.
The ratings affect approximately US$1.1 billion of outstanding
debt. The Rating Outlook is Stable.
The downgrades reflect ArvinMeritor's expectation of negative
cash flow in an amount greater than previously expected, which
along with economic conditions and uncertain progress on its
restructuring plan, will defer any return to positive free cash
flow. Although Fitch previously projected negative cash flow
for fiscal 2008, changes to the company's working capital
position will require a greater use of cash and result in higher
net financing costs. Ancillary one-off items related to
warranty reserves, discontinued operations, a modest acquisition
and ongoing restructuring costs will exacerbate outflows.
Capital expenditures will also increase in 2008 from the
restrained levels of the past several years.
Although segment-operating margins showed modest progress in the
first fiscal quarter, low Light Vehicle Systems margins
demonstrate that any progress from the company's restructuring
efforts has been largely offset by pricedowns and other negative
industry trends. The working capital intensity of the business
indicates that any volatility in production or financial flows
can have material operating and cash flow repercussions. Fitch
is concerned that economic weakness, production volatility and
second-tier supplier stresses have not yet peaked in 2008,
leading to potential further cash flow reductions.
Commercial Vehicle Systems operations should continue to rebound
from 2007 cyclical trough levels, although economic concerns
have muted the pace and extent of the rebound. European
operations have experienced higher than expected demand but
ArvinMeritor was unable to capitalize on the higher volume due
to capacity and production inefficiencies. The company will be
increasing capital investment in Commercial Vehicle Systems
Europe in 2008 to increase operational flexibility. The
company's Light Vehicle Systems operations will be affected by
domestic volume declines, although Detroit Three light-vehicle
sales in North America only account for 8% of total consolidated
revenue. Unlike recent economic cycles, Fitch expects the
domestic manufacturers to be much more aggressive in cutting
production in order to better manage inventory levels, in part
due to greater flexibility gained in the recent UAW contract.
The cyclical upturn in heavy-duty trucks, although likely to be
moderated by economic weakness, could return ArvinMeritor to
positive free cash flow in fiscal 2009. Limited margin
improvement in Light Vehicle Systems indicates that any free
cash generation on a consolidated basis is likely to be modest,
with limited capacity to reduce expanded debt levels.
ArvinMeritor maintains good liquidity, with US$164 million in
cash as of Dec. 31, 2007, and substantial undrawn bank and
receivables facilities. With the exception of the company's
US$700 million revolver, which expires in 2011, the company has
no substantial maturities in the next five years. The company's
recently amended and downsized its revolver, leaving adequate
flexibility under its financial covenant. Total debt, including
outstanding securitizations and factoring, declined slightly in
fiscal 2007 due to asset sales, offsetting negative operating
cash flow. The company has also expanded its utilization of
European securitizations and factoring.
The Recovery Ratings and associated notching in the debt
structure reflect Fitch's recovery expectations in a scenario in
which distressed enterprise value is allocated to the various
debt classes. The assignment of the 'RR1' recovery rating to
the senior secured revolving credit facility indicates an
expectation of full recovery. The secured facility benefits
from first-lien status on certain United States assets and a 15%
carve-out of consolidated net tangible assets. The 'B/RR4'
rating on ArvinMeritor's unsecured debt reflects an expectation
that unsecured debtholders would receive, after administrative,
priority, trade creditor and secured claims, 31% to 50% of their
investment, which is about average recovery in a distressed
scenario.
Headquartered in Troy, Michigan, ArvinMeritor, Inc. (NYSE: ARM)
-- http://www.arvinmeritor.com/-- supplies integrated systems,
modules and components to the motor vehicle industry. The
company serves light vehicle, commercial truck, trailer and
specialty original equipment manufacturers and certain
aftermarkets. ArvinMeritor employs about 29,000 people at more
than 120 manufacturing facilities in 25 countries. These
countries are: China, India, Japan, Singapore, Thailand,
Australia, Venezuela, Brazil, Argentina, Belgium, Czech
Republic, France, Germany, Hungary, Italy, Netherlands, Spain,
Sweden, Switzerland, United Kingdom, among others.
ARVINMERITOR: Incurs US$1MM Net Loss from Continuing Operations
---------------------------------------------------------------
ArvinMeritor, Inc. has reported financial results for its first
fiscal quarter ended Dec. 30, 2007.
First-Quarter Highlights
-- Sales from continuing operations of US$1.7 billion, up
US$95 million from the same period last year.
-- On a GAAP basis, net loss from continuing operations of
US$1 million or US$0.01 per diluted share, compared to net
income from continuing operations of US$10 million or
US$0.14 per diluted share in the same period last year.
-- Net income from continuing operations, before special
items, of US$6 million, or US$0.08 per diluted share,
compared to US$12 million, or US$0.17 per diluted share,
in the same period last year.
-- Free cash outflow of US$305 million compared to an outflow
of US$64 million in the first quarter of fiscal year 2007.
This represents negative cash flow from operations (US$271
million and US$33 million, respectively) and capital
expenditures (US$34 million and US$31 million,
respectively).
Chairperson, Chief Executive Officer and president, Chip McClure
said, "We demonstrated stronger operating performance this
quarter despite Class 8 volumes being down approximately 50
percent in North America. The actions we have implemented
through our Performance Plus program, particularly in Europe,
are gaining traction and driving improved EBITDA and margins."
First-Quarter Fiscal Year 2008 Results
For the first quarter of fiscal year 2008, ArvinMeritor posted
sales from continuing operations of US$1.7 billion. Despite a
weak economy in North America and challenging global industry
conditions, sales were up compared to the first quarter of last
year for both Commercial Vehicle Systems (CVS) and Light Vehicle
Systems (LVS), due in part to favorable currency exchange rates.
EBITDA, before special items, was US$82 million, up US$10
million from the same period last year. This increase is
primarily due to improved CVS operating results driven by the
company's Performance Plus program.
On a GAAP basis, the company's net loss from continuing
operations was US$1 million or US$0.01 per diluted share,
compared to net income from continuing operations of US$10
million or US$0.14 per diluted share in the same period last
year.
Income from continuing operations, before special items, was
US$6 million, or US$0.08 per diluted share, compared to US$12
million, or US$0.17 per diluted share, a year ago. Special
items for the quarter include charges associated with the
company's previously announced restructuring program. The
decrease in earnings this quarter reflects certain charges
incurred during the first quarter of fiscal year 2008, including
US$0.09 per diluted share for a legal and commercial dispute
with an LVS customer, US$0.08 per diluted share resulting from
certain tax charges; and US$0.03 per diluted share related to
amendments to the company's credit agreement, all partially
offset by US$0.13 per diluted share relating to changes in
certain employee benefit policies.
Business Highlights
-- Increased CVS EBITDA margins by six-tenths of a percentage
point in the first quarter of fiscal year 2008 compared to
the same period last year.
-- Acquired Mascot Truck Parts Ltd., a remanufacturer of
transmissions, drive axle carriers, steering gears and
drivelines, to drive the company's strategy to grow its
Commercial Vehicle Aftermarket business.
-- Awarded new business to supply more than four million
window regulator motors, 700,000 plastic door modules, and
700,000 Next Generation latch sets annually to Hyundai
Motor Company beginning in 2010.
-- Amended the company's senior secured credit facility to
offer greater flexibility and access to increased
liquidity.
Outlook
The company reduced its calendar year 2008 forecast for light
vehicle sales to 15.5 million vehicles in North America, down
from 15.7 million vehicles forecasted in its last update in
December. The company's forecast for Western Europe is 17.1
million vehicles, unchanged from the last update.
ArvinMeritor's fiscal year 2008 forecast for North American
Class 8 truck production is in the range of 210,000 to 230,000
units. The company's fiscal year 2008 forecast for heavy and
medium truck volumes in Western Europe is 530,000 to 540,000,
equal to the previous forecast. On a calendar year basis, the
company anticipates North America Class 8 truck production to be
in the range of 235,000 to 255,000 units; and heavy and medium
truck volumes in Western Europe to be in the range of 540,000 to
550,000.
The company anticipates sales from continuing operations in
fiscal year 2008 in the range of US$6.9 billion to US$7.1
billion due to continued growth outside the U.S. and favorable
foreign exchange movements. The outlook for full-year EBITDA
from continuing operations, before special items, is expected to
be in the range of US$385 million to US$405 million for the
fiscal year. ArvinMeritor reaffirms its forecast for diluted
earnings per share from continuing operations, before special
items, to be in the range of US$1.40 to US$1.60. This guidance
is based on the assumption of 2.2 percent U.S. GDP growth, and
excludes gains or losses on divestitures and restructuring
costs.
ArvinMeritor is revising its forecast for free cash flow to be
in the range of negative US$75 million to negative US$125
million due in large part to increased working capital
requirements driven by higher sales volumes in Europe and Asia
Pacific.
"The improvement in our operating performance this quarter
indicates that the actions we are implementing, driven
primarily through our Performance Plus profit improvement
program, are taking effect," said Mr. McClure. "We are on
track to achieve cost-savings of US$75 million this year, and
are pleased that ideas already implemented total US$58 million
in savings on an annual run rate basis."
"In addition, greater operational efficiencies, improved pricing
terms, execution of our global footprint plan, expansion in
emerging markets, and new business awards all demonstrate the
significant work being accomplished by our talented global
team." Mr. McClure concluded.
About ArvinMeritor
Headquartered in Troy, Michigan, ArvinMeritor, Inc. (NYSE: ARM)
-- http://www.arvinmeritor.com/-- supplies integrated systems,
modules and components to the motor vehicle industry. The
company serves light vehicle, commercial truck, trailer and
specialty original equipment manufacturers and certain
aftermarkets. ArvinMeritor employs about 29,000 people at more
than 120 manufacturing facilities in 25 countries. These
countries are: China, India, Japan, Singapore, Thailand,
Australia, Venezuela, Brazil, Argentina, Belgium, Czech
Republic, France, Germany, Hungary, Italy, Netherlands, Spain,
Sweden, Switzerland, United Kingdom, among others.
* * *
As reported in the Troubled Company Reporter-Latin America on
Jan. 14, 2008, Fitch Ratings has taken these rating
actions on ArvinMeritor Inc.:
-- Issuer Default Rating downgraded to 'B+' from 'BB-';
-- Senior secured revolver affirmed at 'BB' and assigned
'RR1';
-- Senior unsecured notes affirmed at 'B+' and assigned
'RR4'.
Fitch said the rating outlook is negative. The ratings affect
approximately US$1.1 billion of outstanding debt.
PEABODY ENERGY: Board Declares US$0.06 Per Share Dividend
---------------------------------------------------------
The board of directors of Peabody Energy Corp. has declared a
regular quarterly dividend on its common stock of US$0.06 per
share. The dividend is payable on March 4, 2008, to holders of
record on Feb. 12, 2008.
Headquartered in St. Louis, Missouri, Peabody Energy Corporation
(NYSE: BTU) -- http://www.peabodyenergy.com/-- is the world's
largest private-sector coal company, with 2005 sales of 240
million tons of coal and US$4.6 billion in revenues. Its coal
products fuel 10% of all U.S. and 3% of worldwide electricity.
The company has coal operations in Australia and Venezuela.
* * *
As reported in the Troubled Company Reporter-Latin America on
Nov. 15, 2007, Fitch has affirmed these ratings for Peabody
Energy Corporation's:
-- Issuer Default Rating at 'BB+';
-- Senior unsecured notes at 'BB+';
-- Senior unsecured revolving credit and term loan at 'BB+';
-- Convertible junior subordinated debentures due 2066 at
'BB-'.
Fitch's outlook is stable.
PETROLEOS DE VENEZUELA: Says Nation Safe from Economic Slowdown
---------------------------------------------------------------
Venezuelan energy and oil minister and state-run oil firm
Petroleos de Venezuela SA's head Rafael Ramirez said in a
statement that the nation won't be affected by any possible
global economic slowdown that could cause oil revenues to
fluctuate.
Any serious decline in oil price on world markets would put
President Hugo Chavez under severe pressure, Business News
Americas relates, citing many analysts.
Minister Ramirez told BNamericas that Venezuela's
nationalization of oil-producing assets "established a floor
that guarantees state revenue." The government gets 86% of the
price of the revenue for every barrel of oil sold, allowing the
government to endure any unstable situation and won't be
affected by global economic fluctuations.
The Organization of the Petroleum Exporting Countries, of which
Venezuela is a member, also must be careful about increasing oil
output, BNamericas states, citing Minister Ramirez. The market
fundamentals show there is sufficient crude on the market.
Petroleos de Venezuela SA -- http://www.pdv.com/-- is
Venezuela's state oil company in charge of the development of
the petroleum, petrochemical and coal industry, as well as
planning, coordinating, supervising and controlling the
operational activities of its divisions, both in Venezuela and
abroad. The company has a commercial office in China.
* * *
In March 2007, Standard & Poor's Ratings Services assigned its
'BB-' senior unsecured long-term credit rating to Petroleos de
Venezuela S.A.'s US$2 billion notes due 2017, US$2 billion notes
due 2027, and US$1 billion notes due 2037.
As reported in the Troubled Company Reporter-Latin America on
Jan. 30, 2008, Moody's Investors Service said that the reported
increase in Petroleos de Venezuela's total consolidated
debt to US$16 billion in 2007, from approximately US$2.9 billion
at the end of 2006, will not affect the company's B1 global
local currency issuer rating with a stable outlook, based on the
company's low financial leverage and the level of its current
credit rating, the latter of which reflects Venezuelan sovereign
risk and control over the state oil company's operations.
* VENEZUELA: Faces Food Supply Problems, Says Nelson Maldonado
--------------------------------------------------------------
The Venezuelan Council for Trades and Services Chairman Nelson
Maldonado said that Venezuela has encountered "serious problems
regarding food supply," adding that the government should keep
an eye on the concept of smuggling, El Universal reports.
"Thirty percent of the food we eat in Venezuela comes from
Colombia, and I am talking about food items such as eggs, beef,
etc. All of this is produced in Colombia," the same paper
relates, citing Mr. Maldonado.
Tense Venezuela-Colombia relations were particularly going to
affect consumers and traders, Mr. Maldonado noted.
El Universal states that Mr. Maldonado slashed out at President
Hugo Chavez's intervention in the economy and the 2008 forecast
year would be marked by "uncertainty."
* * *
As reported in the Troubled Company Reporter on Nov. 20, 2006,
Fitch Ratings affirmed Venezuela's long-term foreign and local
currency Issuer Default Ratings at 'BB-'. At the same time, the
agency also affirmed the short-term foreign currency IDR at
'B'and the Country Ceiling at 'BB-'. Fitch said the outlook on
the ratings remains stable.
* * *
As reported in the Troubled Company Reporter-Latin America on
Dec. 27, 2007, Standard & Poor's Ratings Services has assigned
BB+ long-term sovereign foreign currency rating and B short-term
sovereign foreign currency rating on Colombia.
As reported in the Troubled Company Reporter-Latin America on
June 15, 2007, Standard & Poor's Ratings Services assigned its
'BB+' long-term senior unsecured rating to the Republic of
Colombia's proposed 2027 Global Titulos de Tesoreria bond, a
bond denominated in Colombian pesos but payable in US dollars.
***********
S U B S C R I P T I O N I N F O R M A T I O N
Troubled Company Reporter - Latin America is a daily newsletter
co-published by Bankruptcy Creditors' Service, Inc., Fairless
Hills, Pennsylvania, USA, and Beard Group, Inc., Frederick,
Maryland USA. Marjorie C. Sabijon, Sheryl Joy P. Olano, Rizande
de los Santos, and Pamella Ritah K. Jala, Editors.
Copyright 2008. All rights reserved. ISSN 1529-2746.
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