/raid1/www/Hosts/bankrupt/TCRLA_Public/080218.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
Monday, February 18, 2008, Vol. 9, No. 34
Headlines
A N T I G U A & B A R B U D A
DELTA AIR: Will Launch Non-Stop Flights To Antigua & Barbuda
A R G E N T I N A
AUTOPARTES Y SERVICIOS: Court Names Jose Eduardo Obes as Trustee
DANA CORP: NewCo Registers Post-Bankruptcy Common Stock
DANA CORP: US$1.35 Billion Term Loan Trades on Secondary Market
FORD MOTOR: Fitch Amends Ratings on Ford Credit Australia Ltd.
MALFATTI CONSTRUCCIONES: Claims Verification Ends on April 23
QUIKSILVER INC: CEO Robert McKnight Resumes Role as President
QUIKSILVER INC: S&P's BB- Rating Unmoved by Planned Asset Sale
SCO GROUP: Secures US$100 Mil. to Finance Plan of Reorganization
WENDY'S INT'L: S&P Ratings Unaffected by Bid for More Seats
B A H A M A S
KNOLL INC: Names Lynn Utter as North America Unit's President
B E R M U D A
ANNUITY & LIFE: Conn. Insurance Department Okays Subsidiary Sale
INTELSAT LTD: Fitch Cuts & Withdraws Ratings
MAGELLAN INSURANCE: Final Shareholders' Meeting Set March 11
SENSU LTD: Court Appoints Liquidators for Firm's Wind-Up Process
WALTON INSURANCE: First Contributories' Meeting Set February 27
B O L I V I A
* BOLIVIA: To Limit Natural Gas Supply for Brazil, FT Says
* BOLIVIA: U.S. House Panel Extends Trade Preference
B R A Z I L
ASPEN TECH: To Be Delisted From Nasdaq Effective Tomorrow
BRASIL TELECOM: Will Get 3G Infrastructure From Ericsson & ZTE
BRASIL TELECOM: Sues Opportunity Over Equity Investment in Unit
BRASKEM SA: Says 4th Quarter Results Weaker Than Third Quarter
COSAN SA: Completes Acquisition of Usina BenAlcool S.A.
FIAT SPA: Joint Venture With Credit Agricole Earns EUR119 Mln.
PROPEX INC: Committee Selects Baker Donelson as Counsel
PROPEX INC: Asks Court to Set July 7 as Claims Bar Date
SITEL WORLDWIDE: Weak Liquidity Cues Moody's Negative Outlook
STRATOS GLOBAL: Earns US$20 Million in Year Ended Dec. 31, 2007
TAM SA: Reports 67% International Market Share in January
TAM SA: Will Combine Frequent Flyer Programs With Lufthansa
UNIAO DE BANCOS: Board Approves New Stock Repurchase Program
UNIAO DE BANCOS: Earns BRL715 Million in 4th Quarter 2007
VALMONT INDUSTRIES: Earns US$94.7 Million in Fiscal Year 2007
WEIGHT WATCHERS: Earns US$201.2 Million in 2007
* BRAZIL: Energy Program to Create BRL2 Billion Annual Savings
* BRAZIL: Petrobras to Keep Gas Volume Imported From Bolivia
C A Y M A N I S L A N D S
DIAMOND REIT: Proofs of Claim Filing Is Until March 3
KUHN LIMITED: Proofs of Claim Filing Deadline Is March 4
NORODIN MARCO: Proofs of Claim Filing Deadline Is March 2
NORODIN MARCO RV: Proofs of Claim Filing Ends on March 2
TROPHOS INVESTMENTS: Proofs of Claim Filing Deadline Is March 4
C H I L E
AES GENER: Resumes US$350 Million Capital Increase
BOSTON SCIENTIFIC: Closes Sale of Two Units to Avista Capital
BUCYRUS INT'L: Declares US$0.05 Per Share Quarterly Dividend
BUCYRUS INT'L: Earns US$136.1 Million in 2007
ELECTRONIC DATA: Taps Palma as VP of Global Information Security
FIDELITY NAT'L: Earnings Up 20% to US$108.4MM in 4th Qtr. 2007
INGRAM MICRO: Moody's Rates New US$275-Mln Credit Facility Ba2
C O L O M B I A
GMAC LLC: Cerberus' Stephen Feinberg Warns of Difficulty Ahead
SOLUTIA INC: Challenges DuPont's US$1,394,718 Admin. Claim
SOLUTIA INC: Settles Bayer & Lanxess Claims' Treatment Dispute
* COLOMBIA: U.S. House Panel Extends Trade Preference
C O S T A R I C A
ORTHOFIX INT'L: Weak Cash Flow Prompts Moody's to Review Ratings
SIRVA INC: Wants to Employ Ernst & Young as Accountants
SIRVA INC: MLF Investments Discloses Ownership of Shares
SIRVA INC: Allowed to Continue Receivables Purchase Program
SIRVA INC: U.S. Trustee Objects to Hiring of Conflicts Counsel
SIRVA INC: Files Supplements to Chapter 11 Plan
D O M I N I C A N R E P U B L I C
* DOMINICAN REPUBLIC: Public Debt Increases by 15.9% to US$8.6B
E C U A D O R
* ECUADOR: U.S. House Panel Extends Trade Preference
E L S A L V A D O R
TARGUS GROUP: Improved Performance Cues Moody's Stable Outlook
G U A T E M A L A
AFFILIATED COMPUTER: No Default Occurred Under Debenture
AFFILIATED COMPUTER: To Buy SDS Biz From Waterland for US$67MM
H O N D U R A S
CHOICE HOTELS: Dec. 31 Balance Sheet Upside-Down by US$157 Mil.
M E X I C O
CALPINE CORP: New Stock Starts Trading the "Regular Way"
FOAMEX LP: Weak Profile Prompts S&P to Cut Credit Rating to B-
GRUPO MEXICO: Mexican Court Authorizes Miners' Protest
GRUPO MEXICO: Seeking to Regain Control of Asarco LLC
INTERNATIONAL RECTIFIER: Names O. Khaykin & R. Dahl as Directors
VISTEON CORP: Posts US$372 Million Net Loss in 2007
P A R A G U A Y
* PARAGUAY: Obtains US$1.1 Million Concessional Loan from IDB
P E R U
* PERU: U.S. House Panel Extends Trade Preference
P U E R T O R I C O
ADELPHIA COMMS: Former Headquarters Goes Back on Auction Block
ALLIED WASTE: Earns US$117.6MM from Operations in 4th Qtr. 2007
DEL LABS: Moody's Withdraws Ratings After Acquisition Completion
OWENS-ILLINOIS INC: Improved Cash Flow Cues S&P's Rating Upgrade
R&G FINANCIAL: U.S. SEC Okays Final Settlement on Financials
SEARS HOLDINGS: Diino to Provide Online Storage for Mexican Unit
SEARS HOLDINGS: Plans to Reduce Workers at Headquarters by 4%
S T L U C I A
AIR JAMAICA: Suspending Weekly Flights to St. Lucia on April 1
V E N E Z U E L A
CHRYSLER LLC: Court to Decide Fate of Tooling Dispute Tomorrow
CHRYSLER LLC: Partners With Health Alliance & Henry Ford
PETROLEOS DE VENEZUELA: Talks With ConcoPhillips Going Well
SHAW GROUP: Cash Flow Improvement Cues S&P's Positive Outlook
V I R G I N I S L A N D S
NBTY INC: Solid Performance Cues Moody's Positive Outlook
X X X X X X
* Beard Audio Bankruptcy Examiners & Identity Theft Conferences
* Fitch: Credit Crisis Will Still Affect Latin American Markets
* BOND PRICING: For the Week February 11 - February 15, 2008
- - - - -
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A N T I G U A & B A R B U D A
===============================
DELTA AIR: Will Launch Non-Stop Flights To Antigua & Barbuda
------------------------------------------------------------
Delta Air Lines will launch a non-stop service to Antigua &
Barbuda on June 12 with the support of that nation's tourism
authorities, Antigua Sun reports.
According to Antigua Sun, British West Indies Airlines used to
operate a similar non-stop service until the airline was shut
down in 2006.
Delta Air Lines' non-stop service will coincide with the launch
of Antigua and Barbuda's first International Music Festival,
Romantic Rhythms, Antigua Sun states.
Based in Atlanta, Georgia, Delta Air Lines Inc. (NYSE:DAL) --
http://www.delta.com/-- is the world's second-largest airline
in terms of passengers carried and the leading U.S. carrier
across the Atlantic, offering daily flights to 328 destinations
in 56 countries on Delta, Song, Delta Shuttle, the Delta
Connection carriers and its worldwide partners. Delta flies to
Argentina, Australia and the United Kingdom, among others. The
company and 18 affiliates filed for chapter 11 protection on
Sept. 14, 2005 (Bankr. S.D.N.Y. Lead Case No. 05-17923).
Marshall S. Huebner, Esq., at Davis Polk & Wardwell, represents
the Debtors in their restructuring efforts. Timothy R. Coleman
at The Blackstone Group L.P. provides the Debtors with financial
advice. Daniel H. Golden, Esq., and Lisa G. Beckerman, Esq., at
Akin Gump Strauss Hauer & Feld LLP, provide the Official
Committee of Unsecured Creditors with legal advice. John
McKenna, Jr., at Houlihan Lokey Howard & Zukin Capital and James
S. Feltman at Mesirow Financial Consulting, LLC, serve as the
Committee's financial advisors.
The Debtors filed a chapter 11 plan of reorganization and
disclosure statement explaining that plan on Dec. 19, 2007. On
Jan. 19, 2007, they filed revisions to the plan and disclosure
statement, and submitted further revisions to the plan on
Feb. 2, 2007. On Feb. 7, 2007, the Court approved the Debtors'
disclosure statement. In April 25, 2007, the Court confirmed
the Debtors' plan. That plan became effective on April 30,
2007. The Court entered a final decree closing 17 cases on
Sept. 26, 2007.
As of Sept. 30, 2007, the company's balance sheet showed total
assets of US$32.7 billion and total liabilities of
US$23 billion, resulting in a US$9.7 billion stockholders'
equity. At Dec. 31, 2006, deficit was US$13.5 billion.
(Delta Air Lines Bankruptcy News; Bankruptcy Creditors' Service,
Inc., http://bankrupt.com/newsstand/or 215/945-7000).
* * *
As reported in the Troubled Company Reporter on Jan. 17, 2008,
Standard and Poor's said that media reports that Delta Air Lines
Inc. (B/Positive/--) entered into merger talks with UAL Corp.
(B/Stable/--) and Northwest Airlines Corp. (B+/Stable/--) will
have no effect on the ratings or outlook on Delta, but that
confirmed merger negotiations would result in S&P's placing
ratings of Delta and other airlines involved on CreditWatch,
most likely with developing or negative implications.
=================
A R G E N T I N A
=================
AUTOPARTES Y SERVICIOS: Court Names Jose Eduardo Obes as Trustee
----------------------------------------------------------------
The National Commercial Court of First Instance No. 1 in Buenos
Aires has appointed Jose Eduardo Obes as trustee for Autopartes
y Servicios SRL's bankruptcy proceeding.
Mr. Obes will verify creditors' proofs of claim. He will
present the validated claims in court as individual reports.
The court will determine if the verified claims are admissible,
taking into account the trustee's opinion, and the objections
and challenges that will be raised by Autopartes y Servicios and
its creditors. Inadmissible claims may be subject to appeal in
a separate proceeding known as an appeal for reversal.
A general report that contains an audit of Autopartes y
Servicios' accounting and banking records will be submitted in
court.
Mr. Obes will also be in charge of administering Autopartes y
Servicios' assets under court supervision and will take part in
their disposal to the extent established by law.
Clerk No. 2 assists the court in this case.
The trustee can be reached at:
Jose Eduardo Obes
Lavalle 1619
Buenos Aires, Argentina
DANA CORP: NewCo Registers Post-Bankruptcy Common Stock
-------------------------------------------------------
After their Jan. 31, 2008, emergence from Chapter 11, Dana
Corporation, now named Dana Holding Corporation, registered a
new set of common and preferred stock with the U.S. Securities
and Exchange Commission.
Pursuant to Dana's Third Amended Joint Plan of Reorganization,
the reorganized company would issue 500,000,000 shares of
capital stock, consisting of 450,000,000 shares of common stock
and 50,000,000 shares of preferred stock.
Of the Preferred Stock, 2,500,000 shares would be designated as
Series A Preferred Stock, and 5,400,000 shares would be
designated as Series B Preferred Stock.
Common Stock
Holders of Common Stock would be entitled to dividends declared
from time to time by the board of directors out of legally
available funds. Each holder of common stock is entitled to one
vote for each share except for the election of directors, which
is to be elected by the holders of Series A Preferred Stock.
Holders of common stock are not entitled to cumulative voting
rights.
Marc Levin, acting general counsel and secretary for Dana
Holding, says that in the event of the company's liquidation,
dissolution or winding up, holders of common stock would be
entitled to share equally and ratably in any assets remaining
after the payment of all debt and liabilities, subject to the
prior rights of holders of any outstanding preferred stock.
Preferred Stock
Dana Holding would issue $250,000,000 in aggregate liquidation
preference of the Series A Preferred Stock to a private equity
firm, in consideration for the equity firm's investment to Dana
Holding. The company would also issue $540,000,000 in aggregate
liquidation preference of the Series B Preferred Stock to
certain qualified investors in consideration for their
investment to Dana Holding.
The price at which each share of Preferred Stock would be
convertible into Common Stock would be 83% of its distributable
market equity value per share. If, as result of that
determination:
(i) the holders of the Preferred Stock would own, on an as-
converted, fully diluted basis, less than 32.0% of Dana
Holdings' issued shares of Common Stock plus the number of
shares of Common Stock that would be issued upon
conversion of the Preferred Stock, necessary adjustments
would be made so holders of Preferred Stock would own
32.0% of the Fully Diluted Shares; or
(ii) the holders of the Preferred Stock would own, on an as-
converted, fully diluted basis, more than 36.3% of the
Fully Diluted Shares, necessary adjustments would be made
so holders of Preferred Stock would own 36.3% of the Fully
Diluted Shares.
Referred percentages are subject to adjustment to the extent
that Dana Holding's net debt plus the value of its minority
interests as of the Effective Date is an amount other than
US$525,000,000.
Shares of Series A Preferred Stock having an aggregate
liquidation preference of not more than $125,000,000 and the
Series B Preferred Stock would be convertible at any time at the
option of the applicable holder after the six-month anniversary
of the Effective Date.
In the event that the per share closing sales price of the
Common Stock exceeds 140% of the distributable market equity
value per share for at least 20 consecutive trading days
beginning on or after Jan. 31, 2013, Dana Holding would be able
to cause the conversion of all of the Preferred Stock.
The price at which the Preferred Stock is convertible would be
subject to adjustment as a result of stock splits and
combinations, dividends and distributions and certain issuances
of common stock or common stock derivatives.
The Preferred Stock would be entitled to dividends at an annual
rate of 4%, payable quarterly in cash. The shares would have
equal voting rights and would vote together as a single class
with the Common Stock on an as-converted basis, except that the
Series A Preferred Stock would be entitled to vote as a separate
class to elect three directors.
At the first annual meeting of stockholders after the Effective
Date, and as the initial holder of the Series A Preferred Stock
owns at least US$125,000,000 of the Series A Preferred Stock,
Dana
Holding's board of directors would be composed of nine members,
as follows:
(i) three directors designated by initial holder of the Series
A Preferred Stock and elected by holders of the Series A
Preferred Stock,
(ii) one independent director nominated by a special purpose
nominating committee composed of two designees of the
initial holder of the Series A Preferred Stock and one
other board member, and
(iii) five directors nominated by Dana Holding's board. With
the exception of the three directors elected by holders of
the Series A Preferred Stock, the remaining directors
would be elected by holders of Common Stock and any other
class of capital stock.
Holders of Preferred Stock would also have the right to elect
two directors in the event that six quarterly dividends on the
Preferred Stock are accrued but unpaid.
Additional Preferred Stock
Dana's Restated Certificate of Incorporation authorizes the
issuance of 50,000,000 shares of preferred stock. The Board is
authorized to provide for the issuance of shares of preferred
stock, in one or more series, and to fix for each series voting
rights.
The Board is authorized to issue shares of preferred stock and
determine its rights and preferences for the purpose of
eliminating delays associated with a stockholder vote on
specific issuances. "The issuance of preferred stock, while
providing flexibility in connection with possible acquisitions,
future financings and other corporate purposes, may discourages
or would make it more difficult for a third party to acquire a
majority of the outstanding voting stock of Dana Holding." he
concludes.
Mr. Levin, informs that the shares of preferred stock may also
be reissued by Dana Holding following redemption of their shares
or conversion of the holder's shares, as applicable.
Certain Anti-Takeover Effects
Certain provisions of the Restated Certificate of Incorporation
and Bylaws of Dana Holding, as well as the General Corporation
Law of the State of Delaware, may have the effect of delaying,
deferring or preventing a change in control of Dana Holding,
including those regulating the nomination of directors, limiting
who may call special stockholders' meetings and eliminating
stockholder action by written consent, together with the terms
of the Preferred Stock, may make it more difficult for other
persons, without the approval of Dana Holding's board of
directors to acquire substantial amounts of Common Stock or
other attempts for the stockholders' best interest.
About Dana
Based in Toledo, Ohio, Dana Corporation -- http://www.dana.com/
-- designs and manufactures products for every major vehicle
producer in the world, and supplies drivetrain, chassis,
structural, and engine technologies to those companies. Dana
employs 46,000 people in 28 countries. Dana is focused on being
an essential partner to automotive, commercial, and off-highway
vehicle customers, which collectively produce more than 60
million vehicles annually.
Dana has facilities in China in the Asia-Pacific, Argentina in
the Latin-American regions and Italy in Europe.
The company and its affiliates filed for chapter 11 protection
on March 3, 2006 (Bankr. S.D.N.Y. Case No. 06-10354). As of
Nov. 30, 2007, the Debtors listed US$7,131,000,000 in total
assets and US$7,665,000,000 in total debts resulting in a total
shareholders' deficit of US$534,000,000.
Corinne Ball, Esq., and Richard H. Engman, Esq., at Jones Day,
in Manhattan and Heather Lennox, Esq., Jeffrey B. Ellman, Esq.,
Carl E. Black, Esq., and Ryan T. Routh, Esq., at Jones Day in
Cleveland, Ohio, represented the Debtors. Henry S. Miller at
Miller Buckfire & Co., LLC, served as the Debtors' financial
advisor and investment banker. Ted Stenger from AlixPartners
served as Dana's Chief Restructuring Officer.
Thomas Moers Mayer, Esq., at Kramer Levin Naftalis & Frankel
LLP, represented the Official Committee of Unsecured Creditors.
Fried, Frank, Harris, Shriver & Jacobson, LLP served as counsel
to the Official Committee of Equity Security Holders. Stahl
Cowen Crowley, LLC served as counsel to the Official Committee
of Non-Union Retirees.
The Debtors filed their Joint Plan of Reorganization on
Aug. 31, 2007. On Oct. 23, 2007, the Court approved the
adequacy of the Disclosure Statement explaining their Plan.
Judge Burton Lifland of the U.S. Bankruptcy Court for the
Southern District of New York entered an order confirming the
Third Amended Joint Plan of Reorganization of the Debtors on
Dec. 26, 2007.
The Debtors' Third Amended Joint Plan of Reorganization was
deemed effective as of Jan. 31, 2008. Dana Corp., starting on
the Plan Effective Date, operated as Dana Holding Corporation.
(Dana Corporation Bankruptcy News, Issue No. 70; Bankruptcy
Creditors' Service Inc., http://bankrupt.com/newsstand/or
215/945-7000)
DANA CORP: US$1.35 Billion Term Loan Trades on Secondary Market
---------------------------------------------------------------
The US$1.35 billion term loan portion of Dana Holding Corp.'s
US$2 billion exit financing facility began trading on the
secondary market Feb. 7, with the price quoted at 90/91, William
Rochelle at Bloomberg News reports, citing Standard & Poor's.
As reported in the Troubled Company Reporter on Feb. 12, 2008,
Standard & Poor's Ratings Services assigned its 'BB-' corporate
credit rating to Dana Holding following the company's emergence
from Chapter 11 bankruptcy protection on Feb. 1, 2008. The
outlook is negative. "The ratings are based on the exit
financing, capital structure, and other terms and conditions
under Dana's plan of reorganization filed with the bankruptcy
court, which has now been consummated," said Standard & Poor's
credit analyst Nancy Messer.
At the same time, Standard & Poor's assigned Dana's $650 million
asset-based loan revolving credit facility due 2013 a 'BB+'
rating -- two notches higher than the corporate credit rating --
with a recovery rating of '1', indicating an expectation of very
high -- 90% to 100% -- recovery in the event of a payment
default. The loan was priced at the London Interbank Offered
Rate plus 375 basis points, Mr. Rochelle notes.
S&P also assigned a 'BB' bank loan rating to Dana's $1.43
billion senior secured term loan -- one notch above the
corporate credit rating -- with a recovery rating of '2',
indicating an expectation of average -- 70% to 90% -- recovery.
The bank loan ratings assume that any remaining conditions that
predate the bank facility are satisfied or waived.
Dana had US$1.6 billion of balance sheet debt outstanding at
emergence from bankruptcy. The capital structure also includes
US$792 million of 4% cash-pay convertible preferred stock, held
by Centerbridge Partners L.P. and certain prior creditors, which
Standard & Poor's views as equity.
The ratings reflect Dana's weak business profile and aggressive
financial profile, S&P explained. S&P said it could lower the
ratings over the next year if Dana fails to generate free cash
flow, whether because of slower restructuring efforts, more
adverse market conditions, or failure to install a strong
executive leadership team. In addition, S&P could lower the
ratings if Dana's strategic or financial policies take a more
aggressive turn under the new board of directors and executive
management team. Any of these occurrences could inhibit Dana's
free cash flow and the potential for reduced leverage in the
near term. S&P could revise the outlook to stable if market
conditions stabilize and Dana is able to modestly expand sales
and EBITDA in the next few years, and if restructuring
activities produce improved and sustainable adjusted EBITDA
margin in 2008 and 2009 at 10% or better. The assignment of a
stable outlook would also require S&P's confidence that the
financial policy and business strategy of Dana's new owners
would remain consistent with the current rating and that the
company would resolve prior accounting issues. S&P would also
need to see evidence, through the achievement of profitable new
business wins, that the company is establishing itself as a
credible long-term global competitor in its markets.
About Dana
Based in Toledo, Ohio, Dana Corporation -- http://www.dana.com/
-- designs and manufactures products for every major vehicle
producer in the world, and supplies drivetrain, chassis,
structural, and engine technologies to those companies. Dana
employs 46,000 people in 28 countries. Dana is focused on being
an essential partner to automotive, commercial, and off-highway
vehicle customers, which collectively produce more than 60
million vehicles annually.
Dana has facilities in China in the Asia-Pacific, Argentina in
the Latin-American regions and Italy in Europe.
The company and its affiliates filed for chapter 11 protection
on March 3, 2006 (Bankr. S.D.N.Y. Case No. 06-10354). As of
Nov. 30, 2007, the Debtors listed US$7,131,000,000 in total
assets and US$7,665,000,000 in total debts resulting in a total
shareholders' deficit of US$534,000,000.
Corinne Ball, Esq., and Richard H. Engman, Esq., at Jones Day,
in Manhattan and Heather Lennox, Esq., Jeffrey B. Ellman, Esq.,
Carl E. Black, Esq., and Ryan T. Routh, Esq., at Jones Day in
Cleveland, Ohio, represented the Debtors. Henry S. Miller at
Miller Buckfire & Co., LLC, served as the Debtors' financial
advisor and investment banker. Ted Stenger from AlixPartners
served as Dana's Chief Restructuring Officer.
Thomas Moers Mayer, Esq., at Kramer Levin Naftalis & Frankel
LLP, represented the Official Committee of Unsecured Creditors.
Fried, Frank, Harris, Shriver & Jacobson, LLP served as counsel
to the Official Committee of Equity Security Holders. Stahl
Cowen Crowley, LLC served as counsel to the Official Committee
of Non-Union Retirees.
The Debtors filed their Joint Plan of Reorganization on
Aug. 31, 2007. On Oct. 23, 2007, the Court approved the
adequacy of the Disclosure Statement explaining their Plan.
Judge Burton Lifland of the U.S. Bankruptcy Court for the
Southern District of New York entered an order confirming the
Third Amended Joint Plan of Reorganization of the Debtors on
Dec. 26, 2007.
The Debtors' Third Amended Joint Plan of Reorganization was
deemed effective as of Jan. 31, 2008. Dana Corp., starting on
the Plan Effective Date, operated as Dana Holding Corporation.
(Dana Corporation Bankruptcy News; Bankruptcy Creditors' Service
Inc., http://bankrupt.com/newsstand/or 215/945-7000)
FORD MOTOR: Fitch Amends Ratings on Ford Credit Australia Ltd.
--------------------------------------------------------------
Fitch Ratings has affirmed the Issuer Default Ratings of Ford
Motor Company and Ford Motor Credit Company at 'B', and
maintained the Rating Outlook at Negative. Ford continues to
make steady progress on its restructuring actions, but continued
weakness in the North American auto market, combined with
industry cost, pricing and supplier pressures continue to limit
the impact of structural cost improvements on the bottom line.
International operations have shown steady improvement,
benefiting the company's consolidated credit profile. Liquidity
remains healthy, and sufficient to weather a significant
downturn in 2008 United States industry sales, but will decline
through at least 2008. Cash outflows in 2008 will be material
as a result of operating losses in North America, restructuring
costs, and higher net interest expense. The funding of the
United Auto Workers VEBA will also impact liquidity in 2008,
although the benefits from healthcare savings will not be
realized until 2010. The Negative Rating Outlook is expected to
remain in place until a firmer path to positive free cash flow
is established.
In North America, revenues will remain under pressure,
particularly in the first half, due to economic conditions,
the impact of the housing market on pickup sales, projected
lower fleet sales and the trend to lower-priced, fuel-efficient
vehicles. The new UAW contract has provided the OEMs with
greater flexibility to cut production and manage inventories in
response to weaker market demand -- a factor that will also
result in increased production cyclicality going forward.
Ford has made material improvement in its cost structure,
although higher product and commodity costs have limited
the impact on the bottom line. Ford's earlier buyout program
extended through the third quarter of 2007, indicating that the
full realization of these cost savings will continue to flow
through reported results over the next several quarters.
Together with Ford's new buyout program, for all North American
UAW workers, that is weighted to the first quarter of 2008 and
the gradual growth in Tier-2 wage employees, Ford is positioned
to show demonstrable fixed cost savings through 2008. Although
commodity costs are not expected to wane, the rate of growth
should slow substantially, allowing structural cost savings to
become more evident. Continued improvement in material,
engineering and other product costs should augment margin
improvement projected from labor savings. North American
hourly workers could be reduced by more than 40% over the period
from yearend 2005-2009, with incremental wage and benefit
savings realized from the implementation of Tier-2 wages. The
reduction in personnel at the former Visteon assets, the
outsourcing of certain non-production functions and the
conversion of several plants to 100% Tier 2 wage levels will
also benefit Ford's cost structure. Tier 2 wage levels
incorporate meaningful reductions in long-term benefit accruals
through the lack of retiree health care and enrollment in
defined contribution pension plans.
Ford also faces the expiration of the Canadian Auto Workers
contract in September 2008. Given the terms of the recent UAW
agreement, the Detroit Three will certainly be targeting
additional wage, benefit and other cost-saving opportunities in
Canada. The Detroit Three may be seeking different goals under
a new contract, and talks may not be as smooth as the recent UAW
talks.
Ford showed healthy revenue growth in the third and fourth
quarters of 2007, aided by easy comparisons with 2006 and
support from a number of vehicle models: Fusion, Edge and
Escape. Ford's focus on managing production and inventory
levels has benefited results through progress on pricing and
residual values. Overall results were severely impacted by a
13% reduction in high-margin pickup sales.
Although Ford has shown decent balance across segments, the
company's product portfolio remains misaligned with market
trends that favor smaller, more fuel-efficient vehicles. The
transition to a more market-weighted product portfolio, along
with the efficiencies of fewer platforms and higher number of
products per platform, will not be achieved through 2010.
Although Ford's cost reduction programs are in line with
expectations, achievement of viable long-term operating margins
will require market share stability and eventual growth in
revenues. Achievement of these margin levels is not expected
through 2010. Ford has also made clear strides in quality,
which should benefit the company's market acceptance and pricing
if the trend is maintained. The company's Sync dashboard
technology developed with Microsoft, has also benefited the
company in terms of progressive technology.
Ford's international operations continue to show healthy
improvement. European operations have shown modest share
gains, improved pricing and growing profitability, resulting
from structural cost improvements and well-received product
introductions. Latin America has shown very strong
profitability, which is expected to continue although perhaps
not at the heights achieved in 2007. Further growth is also
expected in developing markets including China and Russia. In
total, Ford's international operations have transitioned from a
key risk factor several years ago into a moderate positive for
the company's credit position.
While FMCC has been profitable, Fitch believes that operating
performance will remain under pressure due to lower contract
volume and asset quality deterioration which is affecting all
auto lenders. Slower portfolio growth will tend to inflate
credit metrics further. Fitch also believes that FMCC access to
liquidity via the securitization markets will come at a higher
cost as the continual credit market dislocation widens.
A downgrade could result if Ford experiences:
-- A material problem with the launch of the new F-150.
-- A decline in U.S. industry sales below 14.5 million units
(light vehicle sales) combined with lack of projected fixed
cost reductions that result in a material deferral of the
anticipated timeline to positive free cash flow.
-- A significant decline in the U.S. market combined with a
reversal of operating profits across Ford's international
operations.
A downgrade could also result if Ford Credit experiences
restricted access to the securitization market.
A return to a Stable Rating Outlook would be anticipated in the
event that a clear path to positive free cash flow is
established. This scenario would include continued stability in
the company's retail market share, a solid F-150 launch,
realization of expected fixed cost reductions in North America,
stability or continued growth in the company's international
operations and maintenance of healthy liquidity. A projected
return to positive cash flow will likely require stabilization
of the housing market, due to the impact of pickup sales on
Ford's operating results.
Ford will continue to face increased cost and potential supply
disruptions from its stressed supply chains. Although most
Tier-1 suppliers have ample liquidity during 2008 due to timely
accessing of the leveraged loan market, lower-tier suppliers are
more exposed to projected production declines at the Detroit
Three, pricing and commodity cost pressures, and lack of access
to capital. The higher risk of production disruptions or
supplier liquidations will cause the OEM's and Tier-1 suppliers
to incur additional costs in order to address particular
situations.
Ford's liquidity has been boosted by substantial debt issuance
over the past eighteen months. Total automotive debt, including
US$6.3 billion of new debt associated with the UAW VEBA
agreement, is approximately US$33 billion (following a US$2.6
billion reduction in debt through two equity-for-debt
transactions). Total debt is now roughly US$20 billion more
than at yearend 2002. Net interest expense, augmented by the
expected decline in cash holdings and the associated decline in
interest income, will continue to represent a more material
claim on consolidated cash flows than in the past. Fitch
expects that even in a relatively harsh downturn in 2008,
liquidity would remain well above the level needed to finance
Ford's operations and its restructuring requirements.
Ford has a light maturity schedule over the next three years,
and is unlikely to require external capital, although Ford may
seek opportunities to further boost liquidity if the markets
become receptive. The company may also continue to seek
opportunities to exchange equity for debt. The company retains
access to US$11.5 billion in credit lines, which contain no
financial tests. Access is subject to a borrowing base, which
would be expected to reduce availability in the event of further
deterioration in operating results. Recovery ratings remain in
the same range, as a decrease in healthcare liabilities has been
offset by an increase in debt. Fixed cost reductions that were
anticipated to be realized in a bankruptcy scenario have been
partially achieved through the new UAW contract. Recoveries
from international operations have also increased.
Fitch has affirmed these ratings with a Negative Rating Outlook:
Ford Motor Co.
-- Long-term IDR at 'B';
-- Senior secured credit facility at 'BB/RR1';
-- Senior secured term loan at 'BB/RR1';
-- Senior unsecured at 'B-/RR5'.
Ford Motor Co. Capital Trust II
-- Trust preferred stock at 'CCC+/RR6'.
Ford Holdings, Inc.
-- Long-term IDR at 'B';
-- Senior unsecured at 'B-/RR5'.
Ford Motor Co. of Australia
-- Long-term IDR at 'B';
-- Senior unsecured at 'B-/RR5'.
Ford Motor Credit Co.
-- Long-term IDR at 'B';
-- Short-term IDR at 'B';
-- Senior unsecured at 'BB-/RR2';
-- Commercial paper at 'B'.
FCE Bank Plc
-- Long-term IDR at 'B';
-- Senior unsecured at 'BB-/RR2';
-- Short-term IDR at 'B';
-- Commercial paper at 'B';
-- Short-term deposits at 'B'.
Ford Capital B.V.
-- Long-term IDR at 'B';
-- Senior unsecured at 'BB-/RR2'.
Ford Credit Canada Ltd.
-- Long-term IDR at 'B'.
-- Short-term IDR at 'B';
-- Commercial paper at 'B';
-- Senior unsecured at 'BB-/RR2'.
Ford Credit Australia Ltd.
-- Long-term IDR at 'B';
-- Short-term IDR at 'B';
-- Commercial paper at 'B'.
PRIMUS Financial Services (Japan)
-- Long-term IDR at 'B';
-- Short-term IDR at 'B'.
Ford Credit de Mexico, S.A. de C.V.
-- Long-term IDR at 'B';
-- Senior unsecured at 'BBB+'.
Ford Credit Co S.A. de CV
-- Long-term IDR at 'B'.
-- Senior unsecured at 'BB-/RR2'.
Ford Motor Credit Co. of New Zealand
-- Long-term IDR at 'B';
-- Senior unsecured at 'BB-/RR2';
-- Short-term IDR at 'B';
-- Commercial paper at 'B'.
Ford Motor Credit Co. of Puerto Rico, Inc.
-- Short-term IDR at 'B'.
About Ford Motor
Based 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, Brazil and
Mexico.
MALFATTI CONSTRUCCIONES: Claims Verification Ends on April 23
-------------------------------------------------------------
Francisco Costa, the court-appointed trustee for Malfatti
Construcciones' bankruptcy proceeding, will verify creditors'
proofs of claim until April 23, 2008.
Mr. Costa will present the validated claims in court as
individual reports. The National Commercial Court of First
Instance No. 11 in Buenos Aires, with the assistance of Clerk
No. 21, 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 Malfatti Construcciones
and its creditors. Inadmissible claims may be subject to appeal
in a separate proceeding known as an appeal for reversal.
A general report that contains an audit of Malfatti
Construcciones' accounting and banking records will be submitted
in court.
Mr. Costa is also in charge of administering Malfatti
Construcciones' assets under court supervision and will take
part in their disposal to the extent established by law.
The trustee can be reached at:
Malfatti Construcciones SRL
Rio Piedras 1717
Buenos Aires, Argentina
QUIKSILVER INC: CEO Robert McKnight Resumes Role as President
-------------------------------------------------------------
Quiksilver Inc. disclosed that Robert McKnight resumed his role
as president and remains both chairman of the board and chief
executive officer. Mr. McKnight will again direct the company's
operational initiatives.
The company also said that Bernard Mariette has resigned from
his position as president and as a director of the company in
order to pursue other interests, which may include attempting to
acquire the Rossignol group. As previously announced, J.P.
Morgan is conducting a process on behalf of the company to
reduce its exposure to the winter sports equipment business,
including a possible sale.
"Bernard Mariette has, for fifteen years, been invaluable to the
growth and success of this company," Robert B. McKnight, Jr.,
chairman of the board, president, and chief executive officer of
Quiksilver, Inc., commented. "He took Quiksilver Europe from
its development stage in 1994 and grew it to a EUR250 million
business by 2001 when he became president of the entire
company."
"Since 2001 Quiksilver has almost quadrupled in size and, under
Bernard's leadership, has established an infrastructure to
globalize Quiksilver's historically regional businesses and
cemented its position as a leading global lifestyle company,"
Mr. Mcknight added. "[Mr. Mariett] will be truly missed and we
wish him the best in the many accomplishments that lie ahead for
him."
"Our business objectives today are clear," Mr. McKnight
continued. "We will focus our attention on our Quiksilver, Roxy
and DC businesses, both to continue their healthy growth and to
improve their operating results."
"At the same time, we will seek to further reduce our exposure
to the winter sports equipment businesses we acquired in 2005,
including pursuing a sale of the businesses and we will work to
improve our balance sheet," Mr. McKnight stated. "As we move
forward, our entire organization is deeply committed to
executing this plan."
"We have many strengths, including tremendous untapped growth
opportunities in our core apparel and footwear brands," Mr.
McKnight further commented. "Our great brands, our global
operating platform and our leadership position in this
fragmented market are all among them."
"The two most important sources of strength, however, are a
deeply ingrained and powerful corporate culture and a tremendous
management team," Mr. McKnight went on to say. "I am confident
that each of these will serve us, as they always have, as a
deciding factor in our success."
The company noted that Mr. McKnight will have three corporate
officers and three regional presidents reporting directly to him
under the company's new management structure. Charlie Exon, who
serves as a director and the company's general counsel will also
assume the title of chief administrative officer, recognizing
his broader role in the areas of global communications and human
resources. David Morgan, chief operating officer, will continue
in his role, including overseeing the company's global sourcing
initiative and also serving as president of the company's
Rossignol subsidiary through a transition period. Joe Scirocco,
the company's chief financial officer, will continue to oversee
global finance initiatives and also report directly to Mr.
McKnight.
Mr. McKnight's three remaining direct reports will be
responsible for overseeing the company's regional businesses,
which operate the core brands of Quiksilver, Roxy and DC. Marty
Samuels will continue to lead Quiksilver Americas as its
president from headquarters in Huntington Beach, California.
Pierre Agnes will continue to serve as president of Quiksilver
Europe, based in St. Jean de Luz, France. Craig Stevenson, who
currently serves as global brand leader for the Quiksilver
brand, will assume additional responsibilities as president of
Quiksilver South Asia/Pacific, based in Torquay, Australia. All
three executives are long term employees of the company.
Under the terms of his separation agreement, Mr. Mariette will
remain available for a period of one year to advise on
transitional issues involving all aspects of the company's
brands and operations other than those of the Rossignol Group.
"Over the last 15 years at Quiksilver, it has been my pleasure
and honor to work with great people and see amazing athletes
showcase their natural talents," Mr. Mariette commented. "Under
Bob McKnight's leadership, we've been able to develop the best
outdoor brands in the world."
"I'm confident that Quiksilver is well positioned for future
success with its leadership, its lifestyle focus, and its
brands," Mr. Mariette continued. "While I will miss Bob and my
colleagues, I know that they will enjoy fantastic success in the
future."
"I have great confidence in our team, in our plan, and in our
ability to fully capitalize on the many opportunities that exist
for us," Mr. McKnight concluded. "I am proud and excited to
lead this effort on behalf of our many partners, most
particularly our shareholders, who I thank for their loyalty,
input, patience and understanding."
About Quicksilver
Quiksilver, Inc. -- http://www.quiksilver.com/-- is a globally
diversified company that designs, produces and distributes
branded apparel, wintersports equipment, footwear, accessories
and related products. Its products are sold in over 90 countries
in a range of distribution channels, including surf shops, ski
shops, skateboard shops, snowboard shops, its Boardriders Club
shops, other specialty stores and select department stores. The
Company has three operating segments, the Americas, Europe and
Asia/Pacific. The Americas segment includes revenues primarily
from the United States and Canada. The European segment includes
revenues primarily from Western Europe. The Asia/Pacific
segment includes revenues primarily from Australia, Japan, New
Zealand and Indonesia. In October 2007, the Company entered into
an agreement to sell its golf equipment business. This
transaction was completed in December 2007. The company has
operations in Argentina.
Standard & Poor's Ratings Services assigned a BB- rating on
Quiksilver Inc.
QUIKSILVER INC: S&P's BB- Rating Unmoved by Planned Asset Sale
--------------------------------------------------------------
Standard & Poor's Ratings Services said its ratings and outlook
on apparel company Quiksilver Inc. (BB-/Negative/--) are
unaffected by the company's announcement that its president has
resigned and that it is exploring a potential sale of its ski
equipment business.
Robert McKnight, chairman, CEO, and founder of the company, will
assume the role of president. S&P expects the company's
operating strategies and financial policies to remain the same
following the change in management. The company also said that
it has retained J.P. Morgan to assist with reducing its exposure
to the hard good equipment business, including selling its Skis
Rossignol S.A. operations, which it acquired in 2005 for about
US$303 million. (This included a majority interest in Cleveland
Golf, which was sold in December 2007). If a sale is
consummated, S&P expects most of the proceeds would be used to
repay debt; S&P estimates leverage would improve toward the
4.3x-4.5x area postdivestiture. For the fiscal year ended
Oct. 31, 2007, leverage (as measured by total debt to EBITDA)
was high at 5.2x; yet adjusted for the December 2007 sale of
Cleveland Golf, this ratio declines to about 4.7x.
S&P believes that a sale of the ski equipment business will
allow management to focus on its legacy apparel brands
(Quiksilver, Roxy, and DC Shoes). The Rossignol business is
capital intensive and provided a drag on operating results
because of an extremely poor winter season and weakening
economic trends. While S&P views the potential sale and debt
reduction as positive factors, the impact of a softening retail
environment on the company's apparel business remains a concern.
S&P will review the current negative outlook once a transaction
is announced. A more favorable revision would be dependent on
the actual proceeds and debt reduction, as well as the operating
performance of Quiksilver's apparel business.
Quiksilver, Inc. -- http://www.quiksilver.com/-- is a globally
diversified company that designs, produces and distributes
branded apparel, wintersports equipment, footwear, accessories
and related products. Its products are sold in over 90 countries
in a range of distribution channels, including surf shops, ski
shops, skateboard shops, snowboard shops, its Boardriders Club
shops, other specialty stores and select department stores. The
Company has three operating segments, the Americas, Europe and
Asia/Pacific. The Americas segment includes revenues primarily
from the United States and Canada. The European segment includes
revenues primarily from Western Europe. The Asia/Pacific
segment includes revenues primarily from Australia, Japan, New
Zealand and Indonesia. In October 2007, the Company entered into
an agreement to sell its golf equipment business. This
transaction was completed in December 2007. The company has
operations in Argentina.
SCO GROUP: Secures US$100 Mil. to Finance Plan of Reorganization
----------------------------------------------------------------
Stephen Norris Capital Partners and its partners from the Middle
East have agreed to provide up to $100 million to finance a plan
of reorganization for The SCO Group Inc.
As part of the financing, SNCP will take a controlling interest
in the company, while taking it private. As a result, SCO is
poised to emerge from Chapter 11 of the United States Bankruptcy
Code in the coming year. The board of directors of SCO has
unanimously determined that this financing and plan of
reorganization is in the best long-term interest of SCO and its
subsidiaries, well as its customers, shareholders, creditors and
employees.
"Not only will this deal position us to emerge from Chapter 11,
but it also marks an exciting future for our business," said
Jeff Hunsaker, president and chief operating officer of SCO
Operations. "This significant financial backing is positive news
for SCO's customers, partners and resellers who continue to
request upgrades and rely upon SCO's UNIX services to drive
their business forward."
SNCP has developed a business plan for SCO that includes
unveiling new product lines aimed at global customers. This
reorganization plan will also enable the company to see SCO's
legal claims through to their full conclusion.
"We saw a tremendous investment opportunity in SCO and its vast
range of products and services, including many new innovations
ready or soon to be ready to be released into the marketplace,"
Stephen Norris, managing partner for SNCP, said. "We expect to
quickly develop these opportunities, and to stand behind SCO's
existing base of customers and partners."
About Stephen Norris Partners
Stephen Norris & Co. Capital Partners, L.P. is a private equity
investment partnership formed to (i)"co-invest" alongside well
established and successful private equity and leveraged buyout
firms, (ii) take advantage of the business experience and
relationships of its Investment Committee, including Steve
Norris' long-standing relationships and substantial private
equity experience.
About SCO Group
Headquartered in Lindon, Utah, The SCO Group Inc. (Nasdaq: SCOX)
fka Caldera International Inc. -- http://www.sco.com/--
provides software technology for distributed, embedded and
network-based systems, offering SCO OpenServer for small to
medium business and UnixWare for enterprise applications and
digital network services.
The company has office locations in Australia, Austria,
Argentina, Brazil, China, Japan, Poland, Russia, the United
Kingdom, among others.
The company and its affiliate, SCO Operations Inc., filed for
Chapter 11 protection on Sept. 14, 2007, (Bankr. D. Del. Lead
Case No. 07-11337). Epiq Bankruptcy Solutions, LLC, acts as the
Debtors' claims and noticing agent. The United States Trustee
failed to form an Official Committee of Unsecured Creditors in
these cases due to insufficient response from creditors. The
Debtors' exclusive period to file a chapter 11 plan expires on
March 12, 2008. The Debtors' schedules of assets and
liabilities showed total assets of US$9,549,519 and total
liabilities of US$3,018,489.
* * *
As reported in the Troubled Company Reporter-Latin America on
Feb. 4, 2008, Tanner LC in Salt Lake City, Utah, expressed
substantial doubt about The SCO Group Inc.'s ability to continue
as a going concern after auditing the company's financial
statements for the year ended Oct. 31, 2007. The auditing firm
reported that the company is a debtor-in-possession under
Chapter 11 of the U.S. Bankruptcy Code, has experienced
significant and continuing net losses, and is faced with
substantial contingent liabilities as a result of certain
adverse legal rulings.
WENDY'S INT'L: S&P Ratings Unaffected by Bid for More Seats
-----------------------------------------------------------
Standard & Poor's Ratings Services disclosed that Trian
Partners' announcement that it will try to increase its
board representation has no immediate impact on Wendy's
International Inc.'s (BB-/Watch Neg/--) ratings profile.
On Feb. 11, Trian Partners, a 9.8% holder of the Wendy's shares,
gave notice that it would seek shareholder approval to expand
the size of the board from 13 to 15 members by increasing the
number of nominees at this year's annual meeting from four to
six directors. If these proposals are successful, Trian
Partners would gain a majority on the board, given the three
board members already in place.
Wendy's financial policies have become significantly more
aggressive since Highfield Capital Management, Sandell Asset
Management Corp., and Trian Fund Management L.P. acquired large
holdings in the company. In the past 18 months, the company has
sold real estate, spun off Tim Hortons to its shareholders, and
undertaken significant share repurchases.
By attempting to persuade Wendy's shareholders to vote for
Trian's nominees, Triarc Cos. Chairperson Nelson Peltz,
could be signaling that Triarc is no longer interested in
acquiring the company's since it would not need more board
seats to exercise control. While the ostensible reason for the
Trian initiative is to ensure compliance with a Feb. 11 filing
deadline, Trian's move, if successful, may also have the effect
of removing Wendy's Chief Executive Officer Kerrii Anderson,
from the board since she faces reelection at this year's annual
meeting.
These developments reinforce S&P's view that ratings on Wendy's
should remain on CreditWatch with Negative implications, where
they were placed on April 26, 2007, following the announcement
that a Special Committee of its Board of Directors would
undertake a strategic review including a possible sale of the
company. It is likely that Trian's efforts to gain control will
hasten the Special Committee decision for consideration by the
board. On Jan. 28, 2008, the company announced that the Special
Committee was in the final stages of its review. When the
company makes public its future plans, S&P will assess the
appropriateness of the current 'BB-' rating. S&P could lower
ratings if the company undertakes actions that deteriorate cash
flow protection measures or disadvantage bondholders.
Based in Dublin, Ohio, Wendy's International Inc. (NYSE: WEN) --
http://www.wendysintl.com/-- is one of the world's largest and
most successful restaurant operating and franchising companies,
with more than 6,300 Wendy's Old Fashioned Hamburgers
restaurants in North America and more than 300 international
Wendy's restaurants. It has restaurants in the United States,
Canada, Mexico, Argentina, among others.
=============
B A H A M A S
=============
KNOLL INC: Names Lynn Utter as North America Unit's President
-------------------------------------------------------------
Knoll Inc. appointed Lynn M. Utter as Knoll North America's new
president and chief operating officer. Ms. Utter will
officially join the company on or about March 3, 2008, and will
report to the company's chief executive officer, Andrew B.
Cogan.
Preceding her appointment, Ms. Utter, age 45, served as the
chief strategy officer at Coors Brewing Company, a business unit
of Molson Coors Brewing Company. Ms. Utter also is currently a
Director of WESCO International Inc.
Ms. Utter replaces Kathleen G. Bradley, who will retire from her
position, effective May 23, 2008.
About Knoll
Headquartered in East Greenville, Pennsylvania, Knoll Inc.
(NYSE: KNL) -- http://www.knoll.com/-- designs and manufactures
branded office furniture products and textiles, serves clients
worldwide. It distributes its products through a network of
more than 300 dealerships and 100 showrooms and regional
offices. The company has locations in Argentina, Australia,
Bahamas, Cayman Islands, China, Colombia, Denmark, Finland,
Greece, Hong Kong, India, Indonesia, Japan, Korea, Malaysia,
Philippines, Poland, Portugal and Singapore, among others.
* * *
Standard & Poor's placed Knoll Inc.'s long-term foreign and
local issuer credit ratings at 'BB' in July 2006. The ratings
still hold to date with a stable outlook.
=============
B E R M U D A
=============
ANNUITY & LIFE: Conn. Insurance Department Okays Subsidiary Sale
----------------------------------------------------------------
Annuity and Life Re (Holdings), Ltd., disclosed that the
Connecticut Insurance Department has approved the sale of its
subsidiary, Annuity & Life Reassurance, America, Inc.
The company announced the sale Aug. 8, 2007. The consummation
of the transaction was subject to certain closing conditions,
including the receipt of the approval by the Connecticut
Department of Insurance. As a result of this approval, the
parties now expect the transaction to close no later than
April 1, 2008.
Annuity and Life Re (Holdings), Ltd. -- http://www.alre.bm/or
http://www.annuityandlifere.com/-- provides annuity and life
reinsurance to insurers through its wholly owned subsidiaries,
Annuity and Life Reassurance, Ltd., and Annuity and Life
Reassurance America, Inc.
Going Concern Doubt
Chartered Accountants of Hamilton, Bermuda, raised substantial
doubt about Annuity and Life Re (Holdings), Ltd.'s ability to
continue as a going concern after it audited the company's
annual report for 2004. The auditor pointed to the company's
significant losses from operations and experience of liquidity
demands.
INTELSAT LTD: Fitch Cuts & Withdraws Ratings
--------------------------------------------
Fitch Ratings has downgraded the Issuer Default Rating of
Intelsat, Ltd. to 'CCC' from 'B'. In addition, Fitch has
removed Intelsat from Rating Watch Negative, where the ratings
were placed on June 20, 2007. Fitch is also withdrawing all
existing ratings of Intelsat and its subsidiaries.
These ratings are downgraded and withdrawn:
Intelsat, Ltd.
-- Issuer Default Rating to 'CCC' from 'B';
-- Senior unsecured notes to 'CC/RR6' from 'CCC/RR6'.
Intelsat (Bermuda), Ltd. (debt transferred to Intelsat Jackson
Holdings)
-- IDR to 'CCC' from 'B';
-- Senior unsecured guaranteed notes to 'B-/RR2' from
'BB-/RR2';
-- Guaranteed Term Loan to 'B-/RR2' from 'BB-/RR2';
-- Senior unsecured non-guaranteed notes to 'CCC-/RR5' from
'CCC+/RR6'.
Intelsat Intermediate Holding Company, Ltd.
-- IDR to 'CCC' from 'B';
-- Senior unsecured discount notes to 'CCC-/RR5' from
'B-/'RR5'.
Intelsat Subsidiary Holding Company, Ltd.
-- IDR to 'CCC' from 'B';
-- Senior secured credit facilities to 'B/RR1' from 'BB/RR1';
-- Senior unsecured notes to 'B-/RR2' from 'BB-/RR2'.
Intelsat Corporation (fka PanAmSat Corporation)
-- IDR to 'CCC' from 'B';
-- Senior secured credit facilities to 'B/RR1' from 'BB/RR1';
-- Senior secured notes to 'B/RR1' from 'BB/RR1';
-- Senior unsecured notes to 'CCC+/RR3' from 'B/RR4'.
Fitch did not rate the US$4.96 billion acquisition debt,
represented by the senior bridge loan and PIK election
bridge loan, assigned to and assumed by Intelsat (Bermuda).
Fitch's action follows the acquisition by funds controlled by
private equity firm BC Partners and certain other investors in a
highly leveraged transaction. The transaction increased debt by
approximately US$3.7 billion, resulting in pro forma debt-to-
EBITDA of approximately 9.4 times based on the last 12 months
EBITDA as of Sept. 30, 2007.
Headquartered in Bermuda, Intelsat is the largest fixed
satellite service operator in the world and is owned by Apollo
Management, Apax Partners, Madison Dearborn, and Permira. The
company has a sales office in Brazil.
MAGELLAN INSURANCE: Final Shareholders' Meeting Set March 11
------------------------------------------------------------
Magellan Insurance Company Ltd. will hold its final
shareholders' meeting on March 11, 2008, at 9:30 a.m., at
Canon's Court, 22 Victoria Street, Hamilton, Bermuda.
These matters will be taken up during the meeting:
-- receiving an account showing the manner in which
the winding-up of the company has been conducted
and its property disposed of and hearing any
explanation that may be given by the liquidator;
-- determination by resolution the manner in
which the books, accounts and documents of the
company and of the liquidator shall be
disposed; and
-- passing of a resolution dissolving the
company.
Magellan Insurance's shareholder decided to place the company
into voluntary liquidation under Bermuda's Companies Act 1981.
SENSU LTD: Court Appoints Liquidators for Firm's Wind-Up Process
----------------------------------------------------------------
The Supreme Court of Bermuda has appointed Michael Morrison and
Charles Thresh as liquidators for Sensu Ltd.'s winding up.
The Bermuda Monetary Authority filed the wind-up petition on
behalf of Sensu with the Supreme Court on Nov. 13, 2007. The
Supreme Court of Bermuda heard Sensu's wind-up petition on
Dec. 14, 2007.
The liquidators can be reached at:
Michael Morrison and Charles Thresh
KPMG Advisory Ltd.
Crown House
4 Par-la-Ville Road
Hamilton, Bermuda
WALTON INSURANCE: First Contributories' Meeting Set February 27
---------------------------------------------------------------
The first meeting of Walton Insurance Ltd.'s contributories and
creditors will be held on Feb. 27, 2008, at KPMG Advisory
Limited, Crown House, 4 Par-la-Ville Road, in Hamilton, Bermuda.
The contributories' meeting will be at 10:00 a.m., while the
creditors will convene at 10:30 a.m.
Proxy forms to be used at the meeting have been mailed to all
known contributories and creditors and must be lodged with the
provisional liquidator at KPMG Advisory Limited by 5:00 p.m.,
Bermuda time, on Feb. 25, 2008.
=============
B O L I V I A
=============
* BOLIVIA: To Limit Natural Gas Supply for Brazil, FT Says
----------------------------------------------------------
Bolivia's natural gas exports to Brazil's Petrobras are likely
to be capped during the coming southern winter, The Financial
Times reports.
The country is expected to increase supplies to Enarsa,
its Argentine counterpart, FT says.
According to FT, as the winter approaches, demand from both
customers will surge and exceed Bolivia's production capacity.
Other than supplying about 6m cubic metres per day for its
domestic demand, Bolivia has contracts to supply up to 30m cubic
metres of gas per day to Petrobras and 7.7m to Enarsa, but
the country is only supplying about 27m cubic metres per day to
Petrobras and about 3m to Enarsa, FT relates.
* * *
As reported in the Troubled Company Reporter-Latin America on
Dec. 26, 2007, Standard & Poor's Ratings Services assigned B-
long-term sovereign local and foreign currency ratings and C
short-term sovereign local and foreign currency ratings on
Bolivia.
* BOLIVIA: U.S. House Panel Extends Trade Preference
----------------------------------------------------
Colombia, Peru, Ecuador and Bolivia can continue to send most
products to the U.S. duty-free after a committee of the U.S.
House of Representatives voted to extend expiring trade
preferences for these countries, Mark Drajem of Bloomberg News
reports.
According to Bloomberg, the preferences are scheduled to expire
at the end of the month, but was extended through the end of
2008. "This extension will help build on the successful Andean
trade preference program and further our efforts to promote
stronger economic ties between these countries and our nation,''
Representative Charles Rangel, the panel's chairman, was cited
by Bloomberg as saying.
* * *
As reported in the Troubled Company Reporter-Latin America on
Dec. 26, 2007, Standard & Poor's Ratings Services assigned B-
long-term sovereign local and foreign currency ratings and C
short-term sovereign local and foreign currency ratings on
Bolivia.
===========
B R A Z I L
===========
ASPEN TECH: To Be Delisted From Nasdaq Effective Tomorrow
---------------------------------------------------------
Aspen Technology Inc. said that the Nasdaq Listing
Qualifications Panel has determined to delist the Company's
securities and will suspend trading of the company's securities
on the Nasdaq stock market effective at the opening of trading
on Feb. 19, 2008.
The company may request that the Nasdaq Listing and Hearing
Review Council review the decision of the Panel. If the Listing
Council determines to review this decision, it may affirm,
modify, reverse, dismiss, or remand the decision to the Panel.
The company is considering whether to make such a request.
However, such a request would not delay the Panel's
determination to delist the company's securities.
The company anticipates that its common stock will be quoted on
the Pink Sheet Electronic Quotation Service automatically and
immediately after Nasdaq suspends trading. The company expects
that the trading symbol of its common stock will remain the
same.
Mark Fusco, the company's Chief Executive Officer, said: "We are
disappointed that the time it has taken for the review we
initiated in connection with the restatement of our financial
statements has resulted in the delisting of our common stock.
We believe AspenTech remains a financially strong company as
evidenced by our cash and cash equivalents of US$131 million as
of Dec. 31, 2007, and we are committed to regaining compliance
with our filing requirements and applying to list our common
stock on a national exchange as soon as possible thereafter."
The company has previously issued several press releases and
filed several reports with the SEC including reports on Form
8-K, and investors are encouraged to read these in their
entirety for discussion of the delay in the company's filings.
About Aspen Technology
Based in Cambridge, Massachusetts, Aspen Technology Inc.
(Nasdaq: AZPN) -- http://www.aspentech.com/-- provides software
and professional services that help process companies improve
efficiency and profitability by enabling them to model, manage
and control their operations. The company has operations in
Brazil, Malaysia and France.
* * *
Aspen Technology carries Moody's B2 long-term corporate family
rating and Caa1 equity-linked rating. Moody's said the outlook
is stable.
The company carries Standard & Poor's B long-term foreign and
local issuer credit ratings, with negative outlook.
BRASIL TELECOM: Will Get 3G Infrastructure From Ericsson & ZTE
--------------------------------------------------------------
Brasil Telecom Participacoes SA said it has chosen telecoms
equipment supplier Ericsson and telecoms equipment producer ZTE
as suppliers for 3G network infrastructure.
Business News Americas relates that Ericsson will provide core
infrastructure for the network. About 80% of access equipment
will be installed in:
-- Goias,
-- Parana,
-- Santa Catarina,
-- Rio Grande do Sul, and
-- Distrito Federal.
According to BNamericas, ZTE will deploy access equipment in:
-- Acre,
-- Roraima,
-- Mato Grosso,
-- Mato Grosso do Sul, and
-- Tocantins.
Brasil Telecom would launch 3G operations next month, BNamericas
states.
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.
BRASIL TELECOM: Sues Opportunity Over Equity Investment in Unit
---------------------------------------------------------------
News service Agencia Estado reports that Brasil Telecom
Participacoes SA, along with its majority shareholder Citigroup,
has filed a lawsuit in New York against Brazilian investment
group Opportunity for failing to recognize its equity investment
in one of its units.
Business News Americas relates that Opportunity's unit,
Highlake, spent up to US$70 million in 2003 to acquire a 49%
stake in telecoms holding firm Telpart from Canada's Telesystem
International Wireless. Highlake also financed the deal with a
loan from Citigroup and cash from Brasil Telecom. Opportunity
was a major shareholder of Brasil Telecom at that time.
BNamericas notes that Citigroup and Brazilian pension funds
secured "boardroom control" of Telpart in 2006. It then sold
the unit's main holdings Telemig Celular and Amazonia Celular in
August 2007 to mobile operator Vivo.
According to BNamericas, Highlake was entitled to a significant
share of the US$644 million proceeds. However, Citigroup and
Brasil Telecom believe they are entitled to part of Highlake's
share due to their 2003 equity investment in that company.
The investment of Brasil Telecom and Citigroup wasn't converted
into Highlake stock as they had expected. They have not
received any part of Highlake's yield from the sale, BNamericas
states.
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.
BRASKEM SA: Says 4th Quarter Results Weaker Than Third Quarter
--------------------------------------------------------------
Braskem SA's financial director Carlos Jose Fadigas told
Business News Americas that the company's fourth quarter 2007
results won't be as good as the the results in the third quarter
2007.
BNamericas relates that Braskem reported BRL132 million in net
profits and BRL4.6 billion revenues in the third quarter 2007.
Braskem accrued significant debt from the conclusion of the
Petroquimica Paulinia project and initial investments in the
joint venture with Venezuelan state petrochemical company
Pequiven, BNamericas says, citing Mr. Fadigas.
Mr. Fadigas commented to BNamericas, "The fact is that we had a
lot of debts in the period, so the [quarterly] results won't be
as good as in the third quarter of 2006."
Mr. Fadigas told BNamericas that the depreciation of the US
dollar against the Brazilian real benefited Braskem "as much of
the debts are in (US) dollars."
Braskem will see positive consolidated results and growth for
the 12-month period ended on Dec. 31, 2007, while 2008 won't see
as much growth, BNamericas says, citing Mr. Fadigas.
"Although it's too early to predict anything, 2007 was very good
for the industry in general, so it will be really hard to beat
last year's performance," Mr. Fadigas told BNamericas.
Braskem (BOVESPA: BRKM5; NYSE: BAK; LATIBEX: XBRK) --
http://www.braskem.com.br/-- is a thermoplastic resins producer
in Latin American, and is among the three largest Brazilian-
owned private industrial companies. The company operates 13
manufacturing plants located throughout Brazil, and has an
annual production capacity of 5.8 million tons of resins and
other petrochemical products. The company reported consolidated
net revenues of about US$9 billion in the trailing twelve months
through Sept. 30, 2007.
As reported in the Troubled Company Reporter-Latin America on
Jan. 17, 2008, Fitch Ratings affirmed the 'BB+' foreign and
local currency issuer default ratings of Braskem S.A. Fitch
also affirmed the 'BB+' ratings on the company's senior
unsecured notes 2008, 2014, and senior unsecured notes 2017.
COSAN SA: Completes Acquisition of Usina BenAlcool S.A.
-------------------------------------------------------
Cosan S.A. Industria e Comercio disclosed that the negotiations
to acquire 100% of Usina Benalcool have ended. The total value
of the acquisition is BRL106.9 million, which will be paid
mainly with the company's cash resources.
Benalcool's main asset is its sugar and ethanol plant, with an
annual crushing capacity of 1.3 million tonnes of sugarcane.
The existing net debt, evaluated on Jan. 31, 2008, is
BRL34.0 million. On the same date, Benalcool's marketable
securities and cash equivalents totaled BRL6.5 million.
Usina Benalcool is located in the Aracatuba region, where Cosan
already owns four other production units. Through the
acquisition Cosan has strengthened its presence in this
producing region.
About Cosan
Headquartered in Sao Paulo, Brazil, Cosan S.A. Industria e
Comercio(Bovespa: CSAN3) -- http://www.cosan.com.br/--
is one of the largest producers of sugar and ethanol in the
world. With a crushing capacity of around 40 million tonnes
of sugar cane, the company holds over 8% of the local market.
* * *
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.
FIAT SPA: Joint Venture With Credit Agricole Earns EUR119 Mln.
--------------------------------------------------------------
Fiat Group Automobiles Financial Services, a 50-50 joint venture
of Fiat SpA and Credit Agricole, earned EUR119 million in its
first year of operations ending in Dec. 31. 2007, Forbes.com
reports, citing Thompson Financial.
According to Thompson Financial, the prospects for 2008 confirm
further growth, thanks to the growth in sales of autos by Fiat,
improvement of financial activities, and cross-selling with
Credit Agricole; and total financial activities grew 8% to EUR17
billion on a year to year basis from 2006.
The joint venture provides dealer finance as well as financing
for car purchases by Fiat customers, Thomson Financial relates.
About Fiat S.p.A.
Headquartered in Turin, Italy, Fiat S.p.A. --
http://www.fiatgroup.com/-- is one of the largest industrial
groups in Italy and the fourth largest European-based automobile
manufacturer, with revenues of EUR33.4 billion in the first nine
months of 2005. Fiat's creditors include Banca Intesa, Banca
Monte dei Paschi di Siena, Banca Nazionale del Lavoro,
Capitalia, Sanpaolo IMI, and UniCredito Italiano.
Fiat operates in Argentina, Australia, Austria, Belgium, Brazil,
Bulgaria, China, Czech Republic, Denmark, France, Germany,
Greece, Hungary, India, Ireland, Italy, Japan, Lituania,
Netherlands, Poland, Portugal, Romania, Russia, Singapore,
Spain, among others.
* * *
As reported in the TCR-Europe on Nov. 6, 2007, Moody's Investors
Service changed the outlook on Fiat S.p.A. and subsidiaries' Ba3
Corporate Family Rating to positive from stable and affirmed its
Ba3 long-term senior unsecured ratings as well as the short-term
non-Prime rating.
On Oct. 4, 2007, Fitch Ratings affirmed Fiat S.p.A.'s Issuer
Default and senior unsecured ratings at BB- and Short-term
rating at B.
The company carries Standard & Poor's Ratings Services' BB long-
term corporate credit rating. The compay also carries B short-
term rating. S&P said the outlook is stable.
PROPEX INC: Committee Selects Baker Donelson as Counsel
-------------------------------------------------------
The Official Committee of Unsecured Creditors seek the Court's
authority to retain Baker, Donelson, Bearman, Caldwell &
Berkowitz, as its counsel in connection with the Debtors'
Chapter 11 cases, effective Jan. 31, 2008.
Stephen Cooke, chairperson of the Committee, relates that the
Committee selected Baker Donelson as its counsel because of the
firm's experience and knowledge in the field of bankruptcy and
business reorganizations under the U.S. Bankruptcy Code, as well
as in other areas of law related to the Debtors' bankruptcy
cases.
As the Committee's counsel, Baker Donelson will:
* provide legal advice with respect to the Committee's powers
and duties in these cases;
* prepare, on behalf of the Committee, all necessary
applications, answers, orders, reports and other legal
papers;
* represent the Committee in any and all matters involving
contests with the Debtors, alleged secured creditors, and
other third parties;
* negotiate consensual plans of liquidation or
reorganization;
* assist the Committee in analyzing the claims of the
Debtors' creditors and the Debtors' capital structure and
in negotiating with holders of claims and equity interests;
* assist the Committee's investigation of the acts, conduct,
assets, liabilities and financial condition of the Debtors
and of the operations of the Debtors' businesses;
* assist and advise the Committee as to its communications to
the general creditor body regarding significant matters in
the Debtors' cases;
* review and analyze all applications, orders statements of
operations and schedules filed with the Court and advise
the Committee as to their propriety; and
* perform all other legal services for the Committee which
may be necessary and proper in these cases and related
proceedings.
Seven Baker Donelson professionals are presently expected to
have primary responsibility for providing services to the
Committee:
Professional Hourly Rates
------------ ------------
Richard B. Gossett US$375
John H. Rowland US$340
Nelwyn W. Inman US$335
Justin M. Sveadas US$240
William M. B. Carter, Jr. US$195
Sharon L. Simmons US$140
Charity J. Martin US$120
Baker Donelson intends to apply for compensation for
professional services it will render and reimbursement of
expenses it will incur in connection with the Debtors' Chapter
11 cases.
Richard B. Gossett, Esq., a partner at Baker Donelson, in
Chattanooga, Tennessee, assures the Court that his firm is a
"disinterested person," as the term is defined in Section
101(14) of the Bankruptcy Code.
About Propex Inc.
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. The Debtors' exclusive period to
file a plan of reorganization expires on May 17, 2008. (Propex
Bankruptcy News, Issue No. 5; Bankruptcy Creditors' Service
Inc., http://bankrupt.com/newsstand/or 215/945-7000)
PROPEX INC: Asks Court to Set July 7 as Claims Bar Date
-------------------------------------------------------
Pursuant to Rule 3003(c)(3) of the Federal Rules of Bankruptcy
Procedure, the bankruptcy court must fix the time within which
claims must be filed in Chapter 11 cases. Rule 3003(c)(2)
provides that any creditor whose claim is not scheduled or whose
claim is scheduled as disputed, contingent, or unliquidated must
file a claim.
Accordingly, Propex Inc. and its debtor-affiliates ask the U.S.
Bankruptcy Court for the Eastern District of Tennessee to
establish July 7, 2008, at 5:00 p.m. prevailing Eastern Time, as
the bar date for the submission of claims in their bankruptcy
cases.
The Debtors seek that each person or entity that asserts a claim
against them that arose prior to the Petition Date be required
to file an original, written proof of claim that substantially
conforms to Form B10 so as to be received by Epiq Bankruptcy
Solutions LLC, the Debtors' claims agent on or before the Bar
Date.
"The fixing of the date as the Bar Date will enable the Debtors
to receive, process, and begin their analysis of creditors'
claim in a timely and efficient manner," Mark W. Wege, Esq., at
King & Spalding, LLP, in Houston, Texas, points out.
The Debtors propose that these individuals or entities will not
be required to file a claim on or before the Bar Date:
* Any person or entity that has already properly filed, with
Epiq, or the Clerk of the Court, a claim using a claim form
that substantially conforms to Form B10.
* Any person or entity (i) whose claim is listed on the
Statements of Financial Affairs, Schedules of Assets and
Liabilities, and other related papers, (ii) whose claim is
not described as disputed, contingent, or unliquidated, and
(iii) who does not dispute the amount or nature of the
claim.
* Any person asserting a claim under Section 507(a)(2) of the
Bankruptcy Code as an administrative expense of the
Debtors' Chapter 11 cases, except as otherwise provided by
separate order of the Court.
* Any director, officer, or employee of the Debtors as of the
Petition Date that has or may have claims against the
Debtors for indemnification, contribution, subrogation, or
reimbursement.
* Any person or entity that holds claims that has been
allowed by an order of the Court entered on or before the
Bar Date.
The Debtors also propose that for any person or entity that
holds a claim that arises from the rejection of an executory
contract or unexpired lease, that person or entity must file a
claim based on the rejection on or before the Bar Date, unless
otherwise stated in the order authorizing the rejection.
If a person or entity failed to file a timely claim on or before
the Bar Date, that person or entity will not be treated as a
creditor of the Debtors for the purpose of voting upon any plan
or Plans of Reorganization of the Debtors. Moreover, that
person or entity will not be entitled to receive any payment or
distribution of property from the Debtors and will be barred
from asserting claims against the Debtors, their estates, or
their successors or assigns.
Additionally, the Debtors ask the Court to allow Epiq to
distribute a combined, single notice of both the Section 341
Creditors Meeting and the Bar Date to:
a. the office of the United States Trustee;
b. those persons on the master service list;
c. each member of the Official Committee of Unsecured
Creditors and its attorneys;
d. all state and local government authorities where the
Debtors maintain assets or conducted business operations
on the Petition Date or within three years prior to the
Petition Date;
e. all known potential holders of claims at the addresses
stated on the creditors' matrix; and
f. the district director of Internal Revenue for the Eastern
District of Tennessee.
The first meeting of creditors required under Section 341(a) of
the Bankruptcy Code is set for March 4, 2008, at 10:00 a.m., in
Chattanooga, Tennessee.
The proposed Bar Date Notice contains information regarding who
must file a proof of claim, the procedure for filing a proof of
claim, and the consequences for failing to timely file a proof
of claim.
The Debtors inform the Court that they intend to complete the
mailing of the Bar Date Notice, together with proof of claim
forms, to the parties on the matrix listing no later than
Feb. 15, 2008.
About Propex Inc.
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. The Debtors' exclusive period to
file a plan of reorganization expires on May 17, 2008. (Propex
Bankruptcy News, Issue No. 5; Bankruptcy Creditors' Service
Inc., http://bankrupt.com/newsstand/or 215/945-7000)
SITEL WORLDWIDE: Weak Liquidity Cues Moody's Negative Outlook
-------------------------------------------------------------
Moody's Investors Service changed the outlook of Sitel Worldwide
Corporation to negative from stable. The negative outlook
underscores the company's weak liquidity position, which may
require the company to seek relief in an available equity cure
under its credit agreement from its shareholders. The negative
outlook also reflects Moody's belief that despite the equity
cure, the company's EBITDA cushion under its financial covenants
will remain very tight, and a shortfall in the company's 2008
anticipated performance could require the company to seek
further equity cure or other relief.
These ratings are affirmed:
-- Corporate family rating -- B2
-- Probability of default rating -- B3
-- US$85 million first lien revolving credit facility -- B2,
LGD-3, 35%
-- US$675 million first lien term loan -- B2, LGD-3, 35%
Approximately US$762 million of debt securities affected.
Sitel's B2 corporate family rating reflects some on-going
integration risk, liquidity constrained by financial covenants
under the company's credit facility, break even to negative free
cash flow, and moderate client concentration. The ratings are
supported by the company's scale and position as one of the
largest provider within the highly competitive call center
outsourcing industry, and the favorable outlook for the call
center outsourcing industry.
The company has pro forma LTM December 2007 revenues of
approximately US$1.9 billion.
Headquartered in Nashville, Tennessee, Sitel Worldwide Corp. --
http://www.sitel.com/-- is a customer care business process
outsourcing vendor for voice services. It competes with larger
multinational companies (i.e. EDS, Accenture, and IBM) and a
host of like size companies (including Convergys, West,
Teletech, and Sykes) in the customer care call center and
business process outsourcing industry. The company has an
approximate 80:20 ratio of on/near shore to off shore operating
capacit and operates more than 155 locations in 27 countries,
including Brazil, Mexico and the Philippines.
STRATOS GLOBAL: Earns US$20 Million in Year Ended Dec. 31, 2007
---------------------------------------------------------------
Stratos Global Corporation released its financial results for
the year ended Dec. 31, 2007. On Dec. 11, 2007, CIP Investments
Inc. (CIP Canada) acquired beneficial ownership of 100 percent
of the Corporation's common shares.
Net earnings for 2007 were US$2.0 million compared with a net
loss of US$26.8 million in 2006. The results for 2007 were
negatively impacted by US$16.7 million of after-tax financial
advisory, legal, and other costs related to the transaction with
CIP Canada, which were partially offset by an after-tax gain of
US$3.8 million related to the previously described insurance
settlement during the second quarter and an after-tax gain on
sale of certain aeronautical assets of US$1.0 million. Results
for 2006 were adversely influenced by after-tax write-offs of
US$22.4 million related primarily to the acquisition of Xantic.
For the year ended Dec. 31, 2007, the Corporation achieved
revenue of US$594.3 million, an 11 percent increase compared
with US$537.8 million in 2006. This improvement primarily
reflects the growth in newer generation Inmarsat products and
the acquisition of Xantic, which was completed on Feb. 14, 2006.
Segment earnings for 2007 increased by 35 percent to
US$101.0 million compared with US$74.7 million for 2006. The
significant improvement in segment earnings was driven by the
increased revenue, higher volume discounts earned from Inmarsat
and cost reductions resulting from the integration of Xantic and
other initiatives to improve operating efficiencies.
Cash flow from operations (including working capital changes) in
2007 totaled US$57.3 million, compared with US$26.9 million
generated in 2006. The improvement primarily reflects higher
segment earnings, decreased investment in working capital,
increased interest costs related to the Xantic acquisition
financing and costs related to the transaction with CIP Canada.
Stratos Global Corporation -- http://www.stratosglobal.com/--
is a provider of a range of advanced mobile and fixed-site
remote telecommunications solutions for users operating beyond
the reach of traditional networks. The company serves the voice
and high-speed data connectivity requirements of a diverse array
of markets, including government, military, energy, industrial,
maritime, aeronautical, enterprise, media and recreational users
throughout the world. Stratos operates in two segments: Mobile
Satellite Services, which provides mobile telecommunications
services, primarily over the Inmarsat plc satellite system, and
Broadband Services, which provides very small aperture terminal
services, sourced on a wholesale basis from a number of the
fixed satellite system operators.
The company has offices in Italy, Germany, Norway, Spain, United
Kingdom, India, Hong Kong, Singapore, Australia, Japan and
Brazil.
* * *
As reported in the Troubled Company Reporter-Latin America on
Feb. 4, 2008, Moody's Investors Service affirmed Stratos Global
Corporation's B1 Corporate Family Rating, B1 Probability of
Default Rating, Ba2 Senior Secured Bank Rating and B3 Unsecured
Bonds Rating.
TAM SA: Reports 67% International Market Share in January
---------------------------------------------------------
TAM SA reported operating data for January 2008, as disclosed by
the Brazilian National Civil Aviation Agency.
According to ANAC, TAM registered 9.8% growth in domestic RPK
(demand) compared to the same period last year, and 11.0%
increase in domestic ASK (supply). In January, market demand
increased 6.7% and market supply increased 10.3%. TAM registered
domestic market share (RPK) of 48.6%, a 1.4 p.p. increase
compared to the same period in 2007. TAM's domestic load
factor was 73.4%, 1.8 p.p. higher than the market average of
71.6%.
In the international market, TAM registered 76.8% growth in RPK
and 65.1% in ASK, compared to January 2007. The company
attained market share of 67.0%, representing 8.2 p.p. growth
year on year. TAM attained 79.9% load factor, 6.5 p.p. higher
than the market average of 73.4%.
The company's operating data for January:
Operating data Jan 2008 Jan 2007 Var. %
Domestic Market
ASK (millions) - Supply 2,978 2,683 11.0%
RPK (millions) - Demand 2,185 1,989 9.8%
Load Factor 73.4% 74.1% -0.8 p.p.
Market share 48.6% 47.2% 1.4 p.p.
International Market
ASK (millions) - Supply 1,766 1,070 65.1%
RPK (millions) - Demand 1,411 798 76.8%
Load Factor 79.9% 74.6% 5.3 p.p.
Market share 67.0% 58.8% 8.2 p.p.
About TAM SA
TAM SA (Bovespa: TAMM4 and NYSE: TAM) -- http://www.tam.com.br/
-- operates regular flights to 47 destinations throughout
Brazil. It serves 72 different cities in the domestic market
through regional alliances. Additionally, it maintains code-
share agreements with international airline companies that allow
passengers to travel to a large number of destinations
throughout the world. TAM was the first Brazilian airline
company to launch a loyalty program. The program has over 3.3
million subscribers and has awarded more than 3.6 million
tickets.
* * *
As reported in the Troubled Company Reporter-Latin America on
Aug. 27, 2007, Standard & Poor's Ratings Services affirmed its
'BB' long-term corporate credit rating on Brazil-based airline
TAM S.A. S&P said the outlook is stable.
TAM SA: Will Combine Frequent Flyer Programs With Lufthansa
-----------------------------------------------------------
TAM and Lufthansa have initiated a partnership that will allow
customers to accumulate and redeem frequent flyer points on
Fidelidade TAM program and miles from Miles & More on flights
operated by both airlines. The combination of the frequent
flyer programs are part of the agreement signed between TAM and
Lufthansa last year, aiming to expand services offered to
customers. The companies are also planning to initiate
codeshare flights on national and international routes within
the first quarter of this year.
In this first phase of the partnership between the two
companies, TAM passengers can use points accumulated in the
Fidelidade TAM program to travel on any domestic or
international flight operated by Lufthansa. In the same way,
participants in Lufthansa's Miles & More program can convert
their miles into points to be used on TAM's domestic and
international flights.
TAM vice-president of Planning and Alliances, Paulo Castello
Branco affirms that the agreement with Lufthansa will bring
immediate benefits to passengers of both airlines. "The
integration of Fidelidade TAM program with Miles & More
strengthens our strategy of establishing partnerships with the
main airlines in the world, and also seeking to offer
individualized service to our customers," says Mr. Castello
Branco.
Lufthansa Group's office of the president member, Stephen Lauer,
who is in Sao Paulo, Feb. 14, said that he is very satisfied
with the partnership. "We are seeking through this agreement a
way to increase our flight offerings between Europe and Brazil,
which will come about through code sharing, as well as better
ways of serving our passengers, including faster connections
and, starting now, integration of our frequent flyer programs."
The Lufthansa Group, including SWISS, has 21 weekly flights
between Brazil and Europe, flying with Lufthansa from Sao Paulo
to Munich and Frankfurt daily, and with SWISS, from Sao Paulo to
Zurich daily. From these two hubs in Germany and Zurich,
Lufthansa offers connections to all of Europe, Asia and the
Middle East. Overall, the group serves 188 different
destinations in 79 countries, and is part of the Star Alliance.
Lufthansa's mileage program Miles & More was started 15 years
ago and has more than 14 million participants all over the
world. In Brazil, there are approximately 80 thousand members.
TAM is a pioneer among Brazil's airlines in launching its
Programa Fidelidade for frequent flyers. The company now has
4.5 million members and has already issued more than 5.2 million
tickets for frequent flyer points.
A market leader, TAM serves 47 cities in Brazil, including all
state capitals and the Federal District. Through business
agreements signed with regional companies, it reaches 81
different destinations in the national territory.
TAM operations abroad include direct flights to eleven
destinations: New York and Miami (US), Paris (France), London
(England), Milan (Italy), Frankfurt (Germany), Madrid (Spain),
Buenos Aires (Argentina), Santiago (Chile), Caracas (Venezuela)
and Montevideo (Uruguay). With TAM Mercosur, it flies to
Asuncion and Ciudad del Este (Paraguay), Cordoba (Argentina),
Santa Cruz de la Sierra and Cochabamba (Bolivia), among other
cities in South America.
TAM's daily flight to Frankfurt departing from Guarulhos
International Airport in Sao Paulo began service last November
30th. This flight is operated with the Airbus A340-500, with a
capacity for up to 267 passengers -- 42 seats in Executive Class
and 225 in Economy Class.
About TAM SA
TAM SA (Bovespa: TAMM4 and NYSE: TAM) -- http://www.tam.com.br/
-- operates regular flights to 47 destinations throughout
Brazil. It serves 72 different cities in the domestic market
through regional alliances. Additionally, it maintains code-
share agreements with international airline companies that allow
passengers to travel to a large number of destinations
throughout the world. TAM was the first Brazilian airline
company to launch a loyalty program. The program has over 3.3
million subscribers and has awarded more than 3.6 million
tickets.
* * *
As reported in the Troubled Company Reporter-Latin America on
Aug. 27, 2007, Standard & Poor's Ratings Services affirmed its
'BB' long-term corporate credit rating on Brazil-based airline
TAM S.A. S&P said the outlook is stable.
UNIAO DE BANCOS: Board Approves New Stock Repurchase Program
------------------------------------------------------------
Unibanco - Uniao de Bancos Brasileiros S.A.'s and Unibanco
Holdings S/A's Board of Directors approved the acquisition, by
Unibanco, of preferred shares issued by Unibanco, as well as
preferred shares issued by Unibanco Holdings. Such approvals
are in accordance with their By-Laws and the applicable legal
provisions. The shares to be acquired will be kept as treasury
stock, for further sale or cancellation, without share capital
reduction of Unibanco or Unibanco Holdings, remaining at the
discretion of Unibanco's Board of Officers the decision as to
the timing and volume of the acquisitions.
By meanings of the terms of the article 8th of the CVM Normative
Ruling N. 10/80, it is clarified that:
(i) Such acquisition of shares has, as its purpose, the
application of the resources available from Unibanco´s
balance of profits and reserves, except the legal
reserve. Unibanco and Unibanco Holdings believe that
the stock repurchase plan is in the best interest of
both Unibanco's and Unibanco Holdings' shareholders;
(ii) The amount of shares to be acquired must not exceed
20,000,000 preferred shares issued by Unibanco
and 20,000,000 preferred shares issued by Unibanco
Holdings;
(iii) The authorization will be valid for 12 months to be
counted from February 15, 2008; and
(iv) The acquisition of the shares will be carried out at
fair market value and through the broker Unibanco
Investshop Corretora de Valores Mobiliarios S.A.,
located in the city of Sao Paulo, State of Sao Paulo,
at Eusebio Matoso Avenue n.º 891, or another broker
to be determined by Unibanco's Board of Officers.
The acquisition of preferred shares issued by Unibanco and
Unibanco Holdings must be made solely through the acquisition
of Share Certificates (UNITS), traded in the Brazilian Market.
Thus, Unibanco is authorized to acquire up to 20,000,000 UNITS.
On Feb. 12, 2008, there are 1,123,463,276 outstanding preferred
shares issued by Unibanco, as well as 1,069,078,990 outstanding
preferred shares issued by Unibanco Holdings.
Based on the authorization obtained on August 8, 2007, 8,765,400
Units have been acquired. Currently, there are 17,346,328
preferred shares issued by Unibanco and 20,772,793 preferred
shares issued by Unibanco Holdings as treasury stocks.
About Unibanco
Headquartered in Sao Paulo, Brazil, Uniao de Bancos Brasileiros
SA -- http://www.unibanco.com/-- is a full-service financial
institution providing a range of financial products and services
to a diversified individual and corporate customer base
throughout Brazil. The company's businesses comprise segments:
Retail, Wholesale, Insurance and Pension Plans and Wealth
Management. Uniao de Bancos and its associated companies
FinInvest, LuizaCred, PontoCred and Tecban (Banco 24 Horas)
offer a network composed of 17,000 points of service. It also
counts on 7,580 automated teller machines and all 30 Hours'
products and services, including the telephone service and the
Internet banking. The company's international network consists
of branches in Nassau and the Cayman Islands; representatives
offices in New York; banking subsidiaries in Luxembourg, the
Cayman Islands and Paraguay; and a brokerage firm in New York --
Unibanco Securities Inc.
* * *
As reported in the Troubled Company Reporter-Latin America on
Feb. 12, 2007, Fitch changed the outlook of Unibanco-Uniao de
Bancos Brasileiros SA's 'BB+' Foreign currency IDR and 'BB+'
Local currency IDR to Positive from Stable.
UNIAO DE BANCOS: Earns BRL715 Million in 4th Quarter 2007
---------------------------------------------------------
Unibanco - Uniao de Bancos Brasileiros S.A. disclosed its
financial performance for the fourth quarter of 2007.
Unibanco's net income, excluding non recurring events,
reached BRL2,600 million in 2007 and BRL715 million in
fourth quarter 2007, up 17.6% and 24.1% when compared to
2006 and fourth quarter 2006, respectively.
Annualized return on average equity (ROAE) reached 26.8%
in fourth quarter 2007 and 24.5% in 2007.
Considering non recurring events, net income was
BRL3,448 million in 2007 and BRL827 million in fourth quarter
2007, with ROAE of 31.7% in the year and 31.4% in the quarter.
Balance Sheet Data
Unibanco's total assets reached BRL149,597 million, up 44.2%
when compared to December 31, 2006.
The BRL16.1 billion increase in total loans, particularly in
payroll loans, auto loans, credit cards and Small and Medium
Enterprises (SMEs) portfolio.
The loan portfolio reached BRL61,435 million in December 2007,
up 9.9% in the quarter and 35.4% in the year, higher than the
Brazilian Financial System (8.7% QoQ and 27.3% YoY). Retail
portfolio increased 13.2% in 4Q07, with highlight for growth in
auto loans, 22.6%, credit cards, 21.0%, and SMEs, 16.8%.
Wholesale portfolio grew 4.7% in the quarter and 16.4% in 2007,
despite the US dollar depreciation of 3.7% and 17.2% in the
respective periods.
The increase in lower risk portfolios, along with Unibanco's
risk management policy, has provided a continuous asset quality
improvement, reflected on the 11.0% reduction in provision for
loan losses, 2007 vis-à-vis 2006, and on the D to H portfolio
ratio reduction.
Financial Margin
The financial margin after provision for loan losses was
BRL2,293 million in fourth quarter 2007, up 9.2% when compared
to third quarter 2007 and 17.2% from the same period last year.
This evolution is mostly explained by a higher credit volume and
an improvement in the asset quality.
The financial margin after provision for loan losses reached
6.7% in 2007. When compared to 2006, there was a 100 b.p. drop,
despite the reduction of 321 b.p. in the average Selic interest
rate.
Provision for loan losses represented 20.5% of the financial
margin in 2007, compared to 24.9% in the previous year, with a
significant reduction of 441 b.p.
Unibanco's personnel and administrative expenses were
practically flat in 4Q07 vis-a-vis 4Q06, marginally influenced
by the reduction in Unibanco's participation in Redecard and
Serasa.
For companies under Unibanco's direct management, the variation
was only 2.0% when compared to 2006, due to efficiency gains and
budgetary discipline. As a consequence of operational
efficiency management, the cost to average assets ratio improved
from 5.7% in 2006 to 4.5% in 2007.
Stocks
Unibanco's Units gained 25% in 2007. The GDSs increased 50%
in the same period.
In 2007, the Units' and GDSs' average daily trading volume were
172.8% and 97.3% up when compared to 2006, reaching BRL85.1
million and BRL283.1 million, respectively.
Unibanco's market capitalization, based on the Unit (UBBR11)
closing quotation of BRL22.35, on Feb. 13, 2008, is BRL31
billion.
10 Years on NYSE
In 2007, Unibanco celebrated its 10th anniversary on NYSE.
It is the leader in the sector in financial trading volume of
ADRs at NYSE. Unibanco was the first Brazilian bank to have
shares listed in the American market.
About Unibanco
Headquartered in Sao Paulo, Brazil, Uniao de Bancos Brasileiros
SA (NYSE: UBB -- http://www.unibanco.com/-- is a full-service
financial institution providing a range of financial products
and services to a diversified individual and corporate customer
base throughout Brazil.
Unibanco is a subsidiary of Unibanco Holdings S.A.
* * *
As reported in the Troubled Company Reporter-Latin America on
Feb. 12, 2007, Fitch changed the outlook of Unibanco-Uniao de
Bancos Brasileiros SA's 'BB+' Foreign currency IDR and 'BB+'
Local currency IDR to Positive from Stable.
VALMONT INDUSTRIES: Earns US$94.7 Million in Fiscal Year 2007
-------------------------------------------------------------
Valmont Industries, Inc., reported sales for the fourth quarter
of US$384.9 million compared with US$328 million for the same
period of 2006. Fourth quarter 2007 net earnings were US$23.1
million versus fourth quarter 2006 net earnings of US$16.1
million. The company's fourth quarter tax rate was 34.8%. The
quarterly tax rate increased primarily due to changes in Mexican
and Chinese corporate tax laws, which resulted in a net US$1
million expense relating to certain deferred tax assets.
For fiscal 2007, sales were US$1.500 billion versus US$1.281
billion in 2006, an increase of 17%. The company's fiscal year
net earnings increased 54% to US$94.7 million compared with 2006
fiscal year earnings of US$61.5 million.
Fourth Quarter Review
"A 17% increase in sales and a 44% increase in net earnings for
the fourth quarter capped a solid year of performance for
Valmont," said Valmont's Chairperson and Chief Executive
Officer, Mogens C. Bay. "Revenue growth was broad-based and
operating income as a percent of sales rose almost two
percentage points in the fourth quarter compared with last
year."
"The Irrigation Segment performance was particularly strong, as
global demand for grains drove higher crop prices and farm
income. Sales in the Engineered Support Structures Segment were
higher due to solid demand in Europe and China, while North
American sales were slightly lower. Utility Support Structures
sales were higher in North America due to increased market
strength. Coatings Segment sales increased due to higher
internal and industrial demand." Mr. Bay noted.
"The key drivers behind the 45% increase in operating income
were the contribution of stronger sales and earnings globally in
the Irrigation Segment and positive trends in the utility
business." he added.
Fourth Quarter Segment Review
Engineered Support Structures Segment:
Sales were US$159.4 million, an increase of 9% from 2006 levels.
All of the sales gains were in international markets. China
sales of wireless communication products and utility structures
were supported by continued economic growth and investments in
infrastructure. In Europe, demand for Valmont's decorative
lighting structures was higher. Sales declined modestly in
North America, mostly due to lower sales of sign structures.
Operating income declined 2% to US$13.4 million and was 8.4% of
sales. Segment operating income was hampered by plant
consolidation costs in specialty structures.
Utility Support Structures Segment:
Sales increased 7% to US$79.3 million compared with US$74
million in 2006. The sales increase reflects higher volume and
improved pricing. Utilities continue to invest heavily in the
transmission grid.
Operating income increased 55% to US$12.8 million and was 16.1%
of sales due to increased volumes and factory productivity
improvements.
Coatings Segment:
Sales of US$33.6 million were 9.5% above last year's US$30.7
million. The sales increase reflects higher demand from both
internal and industrial customers.
Operating income rose 5% to US$5.8 million, or 17.4% of segment
sales.
Irrigation Segment:
Sales improved 47% to US$103.7 million compared with US$70.3
million in 2006. The strong agricultural economy drove global
demand. International sales also benefited from higher project
business and better economic conditions in certain key markets.
Operating income nearly tripled to US$13.9 million and was 13.4%
of segment sales. Manufacturing fixed costs were better
absorbed through higher volumes.
Beginning with the fourth quarter of 2007, results of the tubing
business are reported in the "Other" category.
2007 Review
"During the year, we operated in very favorable markets," said
Mr. Bay. "This, combined with our focus both on growing
revenues and improving the quality of our earnings, led to
improvement in two important financial measures for Valmont
during 2007. Operating income as a percent of sales rose to
10.4% from 8.6% and return on invested capital rose to 14% from
11.1%."
Mr. Bay continued, "Turning to full-year segment results,
Engineered Support Structures Segment sales were driven by
solid growth across all regions. Profitability for the segment
improved largely due to volume increases, which offset a
disappointing performance in the North American specialty
structures operations. We have now consolidated the operations
of one facility into another plant, which should improve
efficiencies during 2008."
"The utility business posted record sales and operating income.
The current environment in the utility industry is driven by
increased investment in the transmission grid. This investment
is the result of public policy decisions to improve the
reliability of the electrical transmission grid, recognizing its
importance as a strategic resource to the American economy. We
expect this level of activity to continue," he added.
Sales in the Irrigation Segment increased due to the stronger
global farm economy. Tighter balances in the global supply and
demand for grains for human consumption and bio-fuels led to
rising crop prices. Higher crop prices drove increases in farm
income and resulted in stronger equipment sales. Continued
stresses on water availability further drove the demand for
irrigation equipment, he said.
Coatings Segment sales rose due to increased demand from
industrial markets and higher selling prices. Galvanizing
prices reflected higher zinc costs. Higher volumes led to
improved operating leverage.
Mr. Bay added, "Looking at the total year, our team executed
well by managing costs and getting fair prices for our products
and services. I am proud both of our management team and our
entire global network of employees."
2008 Outlook
"We expect 2008 to be another record year," Mr. Bay said, "We
are off to a strong start with good order flow and solid
backlogs in most of our businesses. A strong global
agricultural economy is driving our irrigation business and
infrastructure spending is driving demand for our structural
products.
"In early 2008 we have already seen inflationary pressures in
general. We will continue to monitor inflationary pressures on
our input costs and react accordingly," he said.
"In our Engineered Support Structures Segment, long term funding
programs for highway and transportation infrastructure should
provide solid support for our lighting, traffic and overhead
sign structures businesses. However the state of the U.S.
economy could adversely impact highway spending. We expect
continued strength in international infrastructure markets both
in Europe and Asia. In our North American utility business, we
expect growing transmission investment by electric utilities.
In the irrigation business, tight global grain stocks and
firm commodity prices are supportive of net farm income. This
should lead to increased grower investment in irrigation
equipment. In the coatings business, infrastructure spending
and trends in the industrial economy will drive results.
"We see many opportunities for growth in our global markets, and
we are building capacity to meet rising market demand. A third
pole plant is currently under construction in China, and an
expansion of our Polish pole plant will also begin in 2008. We
expect capital spending to exceed depreciation and amortization
for the year.
"We will continue to pursue our three value-enhancing
initiatives; getting the best value for our products in the
marketplace, building a lean enterprise and creating a more
productive workplace through employee engagement.
"Our current expectations are for double digit revenue growth
for 2008 and approximately another full percentage point
improvement in operating income for the year," Mr. Bay
concluded.
About Valmont Industries
Headquartered in Valley, Nebraska, Valmont Industries Inc. --
http://www.valmont.com/-- is engaged in the designing and
manufacturing poles, towers and structures for lighting and
traffic, wireless communication and utility markets, and a
provider of protective coating services. The company is a world
leader in mechanized irrigation equipment for agriculture,
enhancing food production while conserving and protecting
natural water resources. In addition, the company produces a
wide variety of tubing for commercial and industrial
applications. The company also operates in Brazil.
* * *
As reported in the Troubled Company Reporter-Latin America on
Jan. 17, 2008, Standard & Poor's Ratings Services raised its
ratings on metal products fabricator Valmont Industries Inc. and
removed them from CreditWatch, where they were placed with
positive implications on Nov. 20, 2007. The corporate credit
rating was raised to 'BB+' from 'BB'. S&P's outlook is stable.
WEIGHT WATCHERS: Earns US$201.2 Million in 2007
-----------------------------------------------
Weight Watchers International, Inc., released its financial
results for the fourth quarter and the full year ended Dec. 29,
2007.
Fourth Quarter 2007 Results
For the fourth quarter of 2007, net revenues increased 21%, or
US$58.6 million, to US$344 million. Fully diluted earnings per
share in the fourth quarter of 2007 were US$0.50 versus US$0.45
in the prior year period. The prior year included a benefit of
US$0.06 per share resulting from a US$6.3 million reversal of
tax reserves. Excluding this benefit, fully diluted earnings
per share increased by 28% to US$0.50 from US$0.39 in the prior
year's fourth quarter.
Net income in the fourth quarter of 2007 was US$39.8 million
versus US$44.3 million in the fourth quarter of 2006. As
previously explained, the company reversed a tax reserve in the
fourth quarter of 2006. In addition, during the first quarter
of 2007, the company increased its debt level to finance its
self-tender and repurchase of 19.1 million shares. As a result
of these transactions, interest expense in the fourth quarter of
2007 was US$26.7 million, up from US$13.6 million in the fourth
quarter of 2006, while fully diluted shares of the company in
the fourth quarter of 2007 decreased to 79.7 million shares from
98.1 million shares in the fourth quarter of 2006.
Full Year 2007 Results
For the full year 2007, net revenues increased 19%, or US$233.8
million, to US$1,467.2 million. Fully diluted earnings per
share were US$2.48 in 2007 versus US$2.11 in the prior year
period. Excluding non-recurring items in both years, fully
diluted earnings per share were up 21% to US$2.50 as compared to
US$2.06 in the prior year period. These items consist of early
extinguishment of debt expense in both years and a benefit
associated with the reversal of tax reserves in 2006.
Full year 2007 net income was US$201.2 million versus US$209.8
million in 2006. As previously explained, the company increased
its debt level during the first quarter of 2007. As a result,
interest expense in the full year 2007 was US$109.3 million, up
from US$49.5 million in the full year 2006, while fully diluted
shares of the company in the full year 2007 decreased 18%.
Full Year 2008 Guidance
The company provided full year 2008 earnings guidance of between
US$2.80 and US$3.00 per fully diluted share.
Commenting on the company's full year 2007 results and 2008
guidance, President and Chief Executive Officer, David
Kirchhoff said, "During 2007, we delivered solid financial
performance while taking the necessary steps to lay the
foundation that will enable us to realize our long-term
strategic goals. As I look to 2008, we again anticipate
solid financial performance as we continue to strengthen our
business and capitalize on our opportunities."
About Weight Watchers International Inc.
Headquartered in New York City, Weight Watchers International
Inc. (NYSE: WTW) -- http://www.weightwatchersinternational.com/
-- provides weight management services, with a presence in 30
countries around the world, including programs in Brazil, the
Netherlands, and New Zealand. The company serves its customers
through Weight Watchers branded products and services, including
meetings conducted by Weight Watchers International and its
franchisees.
* * *
As reported in the Troubled Company Reporter-Latin America on
Oct. 10, 2007, Weight Watchers International Inc.'s consolidated
balance sheet at June 30, 2007, showed US$1.04 billion in total
assets and US$2.04 billion in total liabilities, resulting in a
US$991,266 total stockholders' deficit.
In August 2001, Moody's Investor Services placed Weight Watchers
International Inc.'s long-term corporate family and bank loan
debt ratings at "Ba1". These ratings hold to date.
* BRAZIL: Energy Program to Create BRL2 Billion Annual Savings
--------------------------------------------------------------
Brazil can save as much as BRL2 billion per year in diesel-fuel
costs in its plan to expand its electric generation capacity,
Jeb Blount of Bloomberg News reports, citing Mauricio
Tolmasquim, head of the country's national energy research
agency, Empresa de Pesquisa Energetica.
According to Bloomberg, Brazil plans to auction rights to build
3,000 kilometers of power-transmission lines under a BRL7.9
billion plan that includes linking the country's remote Amazon
region to the national grid.
The plan, Bloomberg relates, includes a 2,366-kilometer,
4.5 billion real Amazon section linking the Tucurui dam
with the cities of Manaus and Macapa.
The Amazon line project is scheduled for completion by
September 2011, Bloomberg says.
* * *
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.
* BRAZIL: Petrobras to Keep Gas Volume Imported From Bolivia
------------------------------------------------------------
The directors of Petroleo Brasileiro SA aka Petrobras welcomed a
Bolivian delegation headed by Bolivia's vice-president, Alvaro
Garcia Linera, and by its Hydrocarbons Minister, Carlos
Villegas, at the company's main office building on Feb. 14.
They were received by Petrobras' president, Jose Sergio
Gabrielli de Azevedo, and by Gas & Energy director, Maria das
Gracas Foster, among other executives.
The event happened during a meeting held with a Bolivian
delegation deepened the negotiations regarding the Company's
investments in Bolivia.
Petrobras informed Bolivia's vice-president that it will not be
possible to reduce the maximum demand volume of 30 million cubic
meters of natural gas per day foreseen in the purchase agreement
signed with the Bolivian state-owned company, plus the volume of
gas that is required to operate the system.
The meeting advanced the negotiations between Petrobras and the
Bolivian government on issues of common interest. Discussions
included the conditions for Petrobras' investments in Bolivia,
among which the resources foreseen for the San Alberto and San
Antonio fields, where the company already operates, as well as
exploratory activities in the Ingre field, which have already
been kicked-off.
Headquartered in Rio de Janeiro, Brazil, Petroleo Brasileiro SA
aka Petrobras -- http://www2.petrobras.com.br/ingles/index.asp
-- was founded in 1953. The company explores, produces,
refines, transports, markets, distributes oil and natural gas
and power to various wholesale customers and retail distributors
in Brazil. Petrobras has operations in China, India, Japan, and
Singapore.
* * *
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
==========================
DIAMOND REIT: Proofs of Claim Filing Is Until March 3
-----------------------------------------------------
Diamond REIT Limited's creditors have until March 3, 2008, to
prove their claims to Kevin Chung Ying Hui, 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.
Diamond REIT's shareholders agreed 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:
Kevin Chung Ying Hui
16th Floor, Ocean Center
Harbor City, Canton Road
Kowloon, Hong Kong
KUHN LIMITED: Proofs of Claim Filing Deadline Is March 4
--------------------------------------------------------
Kuhn Limited's creditors have until March 4, 2008, to prove
their claims to Buchanan Limited, 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.
Kuhn's shareholders agreed on Jan. 24, 2008, to place the
company into voluntary liquidation under The Companies Law (2004
Revision) of the Cayman Islands.
The liquidators can be reached at:
Buchanan Limited
Attn: Francine Jennings
P.O. Box 1170, Grand Cayman KY1-1102
Cayman Islands
Telephone: (345) 949-0355
Fax: (345) 949-0360
NORODIN MARCO: Proofs of Claim Filing Deadline Is March 2
---------------------------------------------------------
Norodin Marco RV Master Fund Ltd.'s creditors have until
March 2, 2008, to prove their claims to Geoffrey Varga and
William Cheghorn, 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.
Norodin Marco's shareholder decided on Jan. 14, 2008, to place
the company into voluntary liquidation under The Companies Law
(2004 Revision) of the Cayman Islands.
The liquidators can be reached at:
Geoffrey Varga and William Cheghorn
Attn: Bernadette Bailey-Lewis
Kinetic Partners Cayman LLP
P.O. Box 10387 APO
Grand Cayman, Cayman Islands
Telephone: (345) 623 9903
Fax: (345) 623 0007
NORODIN MARCO RV: Proofs of Claim Filing Ends on March 2
--------------------------------------------------------
Norodin Marco RV Overseas Fund Ltd.'s creditors have until
March 2, 2008, to prove their claims to Geoffrey Varga and
William Cheghorn, 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.
Norodin Marco's shareholder decided on Jan. 14, 2008, to place
the company into voluntary liquidation under The Companies Law
(2004 Revision) of the Cayman Islands.
The liquidators can be reached at:
Geoffrey Varga and William Cheghorn
Attn: Bernadette Bailey-Lewis
Kinetic Partners Cayman LLP
P.O. Box 10387 APO
Grand Cayman, Cayman Islands
Telephone: (345) 623 9903
Fax: (345) 623 0007
TROPHOS INVESTMENTS: Proofs of Claim Filing Deadline Is March 4
---------------------------------------------------------------
Trophos Investments Ltd.'s creditors have until March 4, 2008,
to prove their claims to Buchanan Limited, 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.
Trophos Investments' shareholders agreed on Jan. 24, 2008, to
place the company into voluntary liquidation under The Companies
Law (2004 Revision) of the Cayman Islands.
The liquidators can be reached at:
Buchanan Limited
Attn: Francine Jennings
P.O. Box 1170, Grand Cayman KY1-1102
Cayman Islands
Telephone: (345) 949-0355
Fax: (345) 949-0360
=========
C H I L E
=========
AES GENER: Resumes US$350 Million Capital Increase
--------------------------------------------------
AES Gener said in a filing with the Santiago Stock Exchange that
it has resumed an up to US$350 million capital increase, which
was suspended in December 2007.
AES Gener told Dow Jones Newswires that it will ask its
shareholders to authorize the capital increase at an
extraordinary shareholders' meeting on March 8.
Dow Jones relates that AES Gener called off on Dec. 19, 2007, an
auction of about 540.4 million new shares on the local stock
exchange in light of market volatility. The share package AES
Gener was going to place represented the shares that parent AES
Corp. chose not to subscribe to in the postponed 674.6 million-
share capital increase.
AES Gener told Dow Jones that proceeds from the bond issue will
be used in funding expansion plans within Chile and to refinance
debt.
AES Gener is the second-largest electricity generation group in
Chile in terms of generating capacity (20% market share) with an
installed capacity of 2,428 megawatts. Gener serves both the
Central Interconnected System or SIC and the Northern
Interconnected System or SING through various subsidiaries and
related companies, including affiliate Guacolda and the
TermoAndes subsidiary. TermoAndes has a generation capacity of
642.8 megawatts, which while located in Argentina serves Chile's
SING via InterAndes transmission line. Gener also participates
in electricity generation in Colombia through Chivor
hydroelectric plant of 1,000 megawatts, and a 25% participation
in Itabo's facilities in the Dominican Republic (432.5
megawatts). Gener is 91.2% owned by AES (IDR rated 'B+' by
Fitch).
* * *
To date, AES Gener carries Moody's Ba2 long-term foreign bank
deposit rating with a stable outlook. The firm also carries
Standard & Poor's BB+ long-term foreign issuer credit rating
with a positive outlook.
BOSTON SCIENTIFIC: Closes Sale of Two Units to Avista Capital
-------------------------------------------------------------
Boston Scientific Corporation has completed the sale of its
Fluid Management and Venous Access businesses to Avista Capital
Partners for US$425 million in cash. The sale follows the
definitive agreement announced on Dec. 13, 2007.
The company expects to record an after-tax gain of approximately
US$120 million during the first quarter of 2008 in connection
with the transaction.
"The sale of the Fluid Management and Venous Access businesses
completes our previously announced plans to divest five non-
strategic businesses," said Boston Scientific President and
Chief Executive Officer, Jim Tobin. "These divestitures --
together with our expense and head count reductions and business
restructuring -- are helping to realign our cost structure and
simplify our operating model. The positive impact of these
efforts will help us achieve our overall goals of restoring
profitable growth, increasing shareholder value and
strengthening Boston Scientific for the future."
"I am very excited to work with this exceptional management team
to build on the strong leadership positions that the Fluid
Management and Venous Access businesses currently hold in the
cardiology, radiology and oncology markets," said Chairperson
and Chief Executive Officer of the new company, Ron Sparks. "We
look forward to leveraging these franchises' brands,
manufacturing facilities, sales forces, R&D capabilities and new
product pipelines to create a world-class, stand-alone medical
device company."
Avista Capital said financing for the transaction was arranged
by GE Capital Corporation and RBS Greenwich Capital. Ropes &
Gray LLP served as legal counsel and RBS Greenwich Capital
served as financial advisor to Avista Capital Partners.
About Avista Capital Partners
Founded in 2005, Avista Capital Partners --
http://www.avistacap.com-- is a private equity firm with
offices in New York and Houston. The company manages US$2.0
billion in private equity capital.
About Boston Scientific
Headquartered in Natick, Massachusetts, Boston Scientific
Corporation (NYSE: BSX) -- http://www.bostonscientific.com/--
develops, manufactures and markets medical devices used in a
broad range of interventional medical specialties. The company
has offices in Argentina, Chile, France, Germany, and Japan,
among others.
* * *
As reported in the Troubled Company Reporter-Latin America on
Jan. 11, 2008, Boston Scientific's corporate credit rating is
rated 'BB+' with a negative outlook by Standard and Poor's
Ratings Services.
BUCYRUS INT'L: Declares US$0.05 Per Share Quarterly Dividend
------------------------------------------------------------
Bucyrus International Inc.'s Board of Directors has declared
a quarterly dividend of US$0.05 per share on Bucyrus' Class A
common stock.
The dividend is payable March 17, 2008, to Bucyrus stockholders
of record on Feb. 29, 2008. Bucyrus' Class A common stock is
quoted on the NASDAQ Global Select Market under the symbol
"BUCY."
About Bucyrus International
Bucyrus International -- http://www.bucyrus.com/-- is a leading
manufacturer of electric mining shovels, walking draglines and
rotary blasthole drills and provides aftermarket replacement
parts and services for these machines. For the 12 months ended
Sept. 30, 2006, Bucyrus had sales of US$705 million. Bucyrus is
headquartered in South Milwaukee, Wisconsin. DBT has eight
facilities around the world and approximately 3,200 employees.
The company has operations in Brazil, Chile, China and Europe.
* * *
As reported in the Troubled Company Reporter-Latin America on
June 7, 2007, Standard & Poor's Ratings Services revised its
recovery rating on Bucyrus's credit facilities. The bank loan
rating remains 'BB-', however the recovery rating was revised to
'3' from '4', indicating S&P's expectation that these lenders
would receive meaningful recovery (50%-80%) in a payment
default. The paydown of more than US$300 million in the term
loan -- to US$500 million from US$825 million from proceeds of a
recent equity offering -- was the primary reason for the rating
change. The corporate credit rating on Bucyrus is
BB-/Positive/--
BUCYRUS INT'L: Earns US$136.1 Million in 2007
---------------------------------------------
Bucyrus International Inc. earned US$61.9 million for the fourth
quarter ended Dec. 31, 2007, compared with US$17.5 million for
the same period in 2006. Net earnings for the year ended
Dec. 31, 2007, were US$136.1 million compared with
US$70.3 million in 2006.
The net assets acquired and results of operations of DBT GmbH
since the May 4, 2007 date of acquisition are included in
Bucyrus' financial information presented below which, as a
result of the shortened reporting period, among other things,
may not be indicative of future results. The allocation of the
DBT purchase price is preliminary and is subject to final
adjustments. Bucyrus now has two reportable segments: surface
mining and underground mining. Prior to the acquisition of DBT,
all of Bucyrus' operations were in surface mining.
The overall increase in surface mining sales reflected the
ongoing global demand for Bucyrus' products and services, which
continues to be driven by the sustained strength in markets for
commodities mined by Bucyrus machines. Capacity constraints
continue to have an impact on surface mining sales, and the
ongoing expansion of Bucyrus' South Milwaukee facilities is
expected to be completed by the end of the first quarter of
2008. Underground mining sales were consistent with Bucyrus'
expectation for 2007 at the time of the DBT acquisition.
Gross profit for the fourth quarter of 2007 was
US$136.3 million, or 24.9% of sales, compared with
US$51.1 million, or 24.8% of sales, for the fourth quarter of
2006. Gross profit for the year ended Dec. 31, 2007 was
US$408.3 million, or 25.3% of sales, compared with
US$186.8 million, or 25.3% of sales, for the year ended
Dec. 31, 2006. Gross profit for the fourth quarter and year
ended Dec. 31, 2007 was reduced by US$7.1 million and US$22.2
million, respectively, of amortization of purchase accounting
adjustments as a result of the acquisition of DBT, which had the
effect of reducing the gross profit percentage for the fourth
quarter and year ended Dec. 31, 2007 by 1.3% and 1.4%,
respectively. The increases in gross profit were primarily due
to the acquisition of DBT and increased surface mining sales, as
well as improved gross margins on both surface mining original
equipment and aftermarket parts and services. Gross profit on
underground mining equipment was down slightly for the fourth
quarter of 2007 partially as a result of increased manufacturing
absorption losses.
Selling, general and administrative expenses for the fourth
quarter of 2007 were US$67.0 million, or 12.2% of sales,
compared with US$20.9 million, or 10.2% of sales, for the fourth
quarter of 2006. Selling, general and administrative expenses
for the year ended Dec. 31, 2007 were US$185.6 million, or 11.5%
of sales, compared with US$73.0 million, or 9.9% of sales,
for the year ended December 31, 2006. The increase in selling,
general and administrative expenses was primarily due to the
acquisition of DBT. Included in the fourth quarter of 2007 were
increased costs related to the SAP computer software upgrade in
our underground mining operations and one-time expenses related
to the continued integration of DBT.
Operating earnings for underground mining operations were
reduced by purchase accounting adjustments related to the
acquisition of DBT of US$18.3 million and US$49.1 million for
the fourth quarter and year ended Dec. 31, 2007, respectively.
The increase in consolidated operating earnings for the
quarter and year ended Dec. 31, 2007 was primarily due to the
acquisition of DBT and increased gross profit resulting from
increased sales volume related to surface mining operations.
Interest expense for the fourth quarter of 2007 was
US$9.6 million compared with US$1.6 million for the fourth
quarter of 2006. Interest expense for the year ended
Dec. 31, 2007 was US$27.7 million compared with US$3.7 million
for the year ended Dec. 31, 2006. The increase in interest
expense in 2007 was due to increased debt levels related to the
financing of the acquisition of DBT.
Income tax benefit for the fourth quarter of 2007 was US$22.6
million compared with expense of US$7.0 million for the fourth
quarter of 2006. Income tax expense for the year ended
Dec. 31, 2007 was US$10.4 million, or 7.1% of pre-tax earnings,
compared with US$26.9 million, or 27.7% of pre-tax earnings, for
the year ended Dec. 31, 2006. The effective tax rate for the
fourth quarter was impacted by significant one-time benefits
related to the underground mining operations. These include a
US$12.2 million deferred tax benefit resulting from a reduction
in the German statutory tax rate and a US$14.0 million foreign
tax credit benefit resulting from repatriation of German
earnings. Earnings in lower taxed jurisdictions resulted in
US$4.7 million of benefits and various other items resulted in
an additional US$4.7 million of benefits.
About Bucyrus International
Bucyrus International -- http://www.bucyrus.com/-- is a leading
manufacturer of electric mining shovels, walking draglines and
rotary blasthole drills and provides aftermarket replacement
parts and services for these machines. For the 12 months ended
Sept. 30, 2006, Bucyrus had sales of US$705 million. Bucyrus is
headquartered in South Milwaukee, Wisconsin. DBT has eight
facilities around the world and approximately 3,200 employees.
The company has operations in Brazil, Chile, China and Europe.
* * *
As reported in the Troubled Company Reporter-LAtin America on
June 7, 2007, Standard & Poor's Ratings Services revised its
recovery rating on Bucyrus's credit facilities. The bank loan
rating remains 'BB-', however the recovery rating was revised to
'3' from '4', indicating S&P's expectation that these lenders
would receive meaningful recovery (50%-80%) in a payment
default. The paydown of more than US$300 million in the term
loan -- to US$500 million from US$825 million from proceeds of a
recent equity offering -- was the primary reason for the rating
change. The corporate credit rating on Bucyrus is
BB-/Positive/--.
ELECTRONIC DATA: Taps Palma as VP of Global Information Security
----------------------------------------------------------------
Electronic Data Systems has appointed Bryan Palma as vice
president, Global Information Security. He is responsible for
driving growth, competitiveness and quality through end-to-end
product development and delivery across the company's Global
Information Security service line.
"With the explosive global growth of electronic commerce,
information security and regulatory compliance are fundamental
to any engagement with clients and prospects," said senior vice
president of Service Delivery Operations, Kevin Torgerson.
"Bryan brings a rare combination of high-level government and
global corporate experience and expertise to this position. We
look to Bryan and his team to keep EDS at the forefront in
providing innovative services in this critical area."
Mr. Palma will coordinate the company's information security
activities and lead in the design and deployment of information
security services and solutions to meet the ever-growing needs
of the company's global clients.
Mr. Palma joins the company from Ponic LLC, the Texas-based
global strategic consulting firm that he founded in early 2006,
which assists corporations with matters of security, compliance
and privacy . Prior to founding Ponic, Mr. Palma was chief
information security officer for PepsiCo. In that role, he
created the company's information security organization.
Mr. Palma began his career as a special agent with the United
States Secret Service and led many of the agency's early efforts
to combat electronic crime. As co-founder of the Washington
D.C. Electronic Crimes Taskforce, he also was influential in
developing similar organizations throughout the country. Mr.
Palma worked on numerous high-profile electronic crime
investigations, coordinated protective intelligence advances for
the President and Vice President of the United States, and
supervised numerous cyber assessments.
Mr. Palma holds a master of business administration degree from
Duke University, a master of education, counseling and personnel
services degree from the University of Maryland and a bachelor
of arts degree from the University of Richmond.
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.
FIDELITY NAT'L: Earnings Up 20% to US$108.4MM in 4th Qtr. 2007
--------------------------------------------------------------
Fidelity National Information Services, Inc., released its
financial results for the quarter and year ended Dec. 31, 2007.
Fourth quarter 2007 consolidated revenue increased 20% to US$1.3
billion, net earnings totaled US$108.4 million, and net earnings
per diluted share was US$0.55.
The company's fourth quarter 2007 results include approximately
US$140 million in revenue and approximately US$45 million in
EBITDA from eFunds. Excluding eFunds, the company reported
fourth quarter revenue growth of 7.4% and adjusted EBITDA growth
of 12.5%. Its adjusted cash earnings of US$0.68 per diluted
share increased 17.2% over the prior year period. eFunds was
neutral to cash earnings.
For the full year 2007, consolidated revenue totaled US$4.8
billion, net earnings totaled US$561.2 million and net earnings
per diluted share totaled US$2.86. These results include
revenue of approximately US$167 million and EBITDA of
approximately US$51 million attributable to eFunds, which was
acquired by the company in September 2007. Excluding eFunds,
full year revenue increased 11% to US$4.6 billion, compared to
pro forma revenue of US$4.1 billion in 2006. The increase was
driven by 10.5% growth in Transaction Processing Services and
11.2% growth in Lender Processing Services. A djusted EBITDA
increased 13% over 2006 pro forma results.
"It was a good quarter and great year for FIS," stated FIS
executive chairperson, William P. Foley, II. "Double
digit revenue growth in Transaction Processing Services and
Lender Processing Services enabled us to achieve excellent
financial performance in 2007, despite a highly challenging
economic environment. We expect to make significant progress
with the eFunds integration, and are on track to complete the
spin-off of our Lender Processing business by mid 2008."
The company's operating results are presented in accordance with
generally accepted accounting principles and on an adjusted pro
forma basis, which management believes provides more meaningful
comparisons between the periods presented. Its pro forma
results reflect a Jan. 1, 2006 effective date for the merger
between Fidelity and Certegy. The adjusted and adjusted pro
forma results exclude certain merger and acquisition and
integration expenses, certain stock compensation charges,
restructuring and other charges, and gains on the sale of
Covansys Corporation common stock, Property Insight and other
assets.
Segment Information
Transaction Processing Services generated revenue of US$875.3
million compared to US$694.7 million in the prior-year period,
an increase of 26%. EBITDA increased 35.6% to US$243 million.
The EBITDA margin was 27.8% compared to 25.8% in the fourth
quarter of 2006.
Excluding eFunds, TPS revenue increased 5.8% to US$735.3 million
driven by 21.2% growth in International to US$170.8 million and
5.2% growth in Integrated Financial Solutions to US$297.9
million. Enterprise Solutions' revenue totaled US$267.1
million, which is a 2% decrease compared to the prior year
quarter. The decline is attributable to significant core
banking customer implementations in the second half of 2006 and
reduced retail volumes in Check Services in 2007. Excluding
eFunds, EBITDA increased 7.6% to US$192.8 million. The EBITDA
margin increased 40 basis points to 26.2%, driven by improved
profitability in Integrated Financial Solutions and
International, partially offset by the lower retail volumes
within Check Services.
Lender Processing Services revenue increased 9.5% to US$454.8
million, driven by 13.4% growth in Information Services, which
continues to benefit from strong results within the default
solutions and appraisal product lines, and 8.7% growth in
Mortgage Processing revenues, driven by a net increase in non-
account based revenues which include termination fees. Lender
Processing Services' EBITDA increased to US$153.8 million, or
16.2% above the prior year quarter. The EBITDA margin improved
to 33.8% versus 31.9% in the prior year quarter. The increase
was driven by continued margin expansion within Default Services
and the aforementioned non-account based revenue.
Corporate expense, as adjusted, for the fourth quarter of 2007
totaled US$31.1 million compared to US$27.9 million in the
fourth quarter of 2006. The increase is primarily attributable
to the eFunds acquisition. The effective tax rate was 37%.
2008 Outlook
-- Revenue growth of 14% to 16% (6% to 8% excluding eFunds);
-- EBITDA growth of 15% to 17%;
-- Adjusted earnings per diluted share of US$2.15 to US$2.25;
-- Capital expenditures of US$280-US$300 million;
-- Total depreciation and amortization of approximately
US$530 million, including US$180 million in pre-tax
purchase amortization (US$114 million after-tax);
-- Free cash flow, which the company defines as net earnings
plus depreciation and amortization less capital
expenditures, of US$655-US$695 million;
-- Net interest expense of approximately US$237 million;
-- Corporate expense of approximately US$130 million;
-- Annual effective tax rate of 36.6%; and
-- Average diluted shares of 197.5 million.
The company's 2008 guidance for corporate expense includes
after-tax stock option expense of approximately US$33.5 million,
or US$0.17 per diluted share. This compares to after-tax stock
option expense of US$23.2 million, or US$0.12 per diluted share
in 2007. The guidance excludes approximately US$25 million in
integration expense and approximately US$25 million in
integration capital associated with the eFunds acquisition. The
guidance also excludes up-front costs associated with the spin-
off of the company's Lender Processing Services division, and
incremental operating expenses for the proposed stand-alone
entity.
In the first quarter of 2008, the company expects to achieve
earnings per diluted share of US$0.42 to US$0.45 and cash
earnings per diluted share of US$0.57 to US$0.60. This guidance
excludes integration expense associated with the eFunds
acquisition and up-front costs and operating expenses associated
with the spin-off of the Lender Processing Services division.
About Fidelity National Information Services
Based in Jacksonville, Florida, Fidelity National Information
Services, Inc. -- http://www.fidelityinfoservices.com/--
provides core processing for financial institutions; card issuer
and transaction processing services; mortgage loan processing
and mortgage related information products; and outsourcing
services to financial institutions, retailers, mortgage lenders
and real estate professionals. FIS has processing and
technology relationships with 35 of the top 50 global banks,
including nine of the top ten. Nearly 50% of all US residential
mortgages are processed using FIS software. FIS maintains a
strong global presence, serving over 9,000 financial
institutions in more than 80 countries worldwide, including
Brazil, Chile, Australia, Canada and Japan.
* * *
As reported in the Troubled company Reporter-Latin America on
Oct. 29, 2007, Standard & Poor's Ratings Services placed its
ratings, including the 'BB' corporate credit rating, on Fidelity
National Information Services Inc. on CreditWatch with negative
implications.
Moody's Investors Service also placed these ratings on review
for possible downgrade: US$1.6 billion First Lien Senior Secured
Term Loan B Ba1; US$2.1 billion First Lien Senior Secured Term
Loan A Ba1; US$900 million First Lien Senior Revolving Credit
Facility Ba1; US$200 million 4.75% (Certegy) notes due
September 2008 Ba1; and Corporate Family Rating Ba1.
INGRAM MICRO: Moody's Rates New US$275-Mln Credit Facility Ba2
--------------------------------------------------------------
Moody's has affirmed Ingram Micro Inc.'s Ba1 corporate family
rating and assigned a Ba2 (LGD-5, 75%) rating to the company's
five-year US$275 million senior unsecured revolving credit
facility due 2012. The rating outlook is stable. Proceeds from
the credit facility, which was put in place in August 2007, are
intended to be used for working capital needs and general
corporate purposes. It replaces an unrated US$175 million
revolver that was set to expire in July 2008. The new credit
facility includes an accordion feature under which total
commitments may be increased up to US$450 million, subject to
approval by the bank syndicate, at any time prior to maturity
date.
The rating for the US$275 million senior unsecured revolver
reflects the overall probability of default of the company, to
which Moody's assigns a PDR of Ba1 based on a 50% expected
corporate family recovery rate. Under Moody's loss given
default methodology, the senior unsecured credit facility is
rated one notch below the Ba1 CFR due to higher expected loss
given its junior position in the company's capital structure
relative to a disproportionately large accounts payable balance
that is likely to persist. The facility contains financial
covenants requiring the maintenance of certain financial ratios.
Moody's expects the company to remain in compliance with these
covenants over the next twelve months.
This new rating was assigned:
-- US$275 million Senior Unsecured Revolving Credit Facility
due 2012 -- Ba2 (LGD-5, 75%)
These ratings were affirmed:
-- Corporate Family Rating -- Ba1
-- Probability of Default Rating -- Ba1
Approximately US$275 million of new debt rated.
Ingram Micro's Ba1 corporate family rating reflects its leading
position as the largest global technology distributor,
increasing scale and geographic breadth, solid performance in
core North American markets, expanded presence in the fast
growing Asia-Pacific region, solid liquidity position and
moderate leverage profile. The CFR is also constrained by the
challenges associated with the company's high volume, low margin
business profile. Importantly, the rating incorporates the very
thin, low single digit operating margins, significant supplier
concentration, limited pricing power, heightened competitive
environment, volatile cash flow generation trends and potential
further acquisition spending and/or share repurchase activity.
The stable outlooks reflects Moody's expectation that Ingram
Micro will continue to maintain its current gross profit and
operating margins and continue to receive support from its high
growth Asia-Pacific markets and improving EMEA operations, while
maintaining stable market share in its core North American
markets. The stable outlook also considers Moody's expectation
that the company will maintain a strong liquidity position
evidenced by ample cash balances, sufficient availability across
its various credit facilities and minimum retained cash flow to
debt ratio of 20%.
The company's revenues and adjusted EBITDA for the last twelve
months ended Sept. 30 2007, were US$33.9 billion and US$661
million, respectively.
Headquartered in Santa Ana, California, Ingram Micro Inc. (NYSE:
IM) -- http://www.ingrammicro.com/-- together with its
subsidiaries, distributes information technology products and
supply chain solutions worldwide. Its IT products include
peripherals, networking, software, and systems. The company has
Latin America operations in Brazil, Chile and Mexico.
===============
C O L O M B I A
===============
GMAC LLC: Cerberus' Stephen Feinberg Warns of Difficulty Ahead
--------------------------------------------------------------
Jason Kelly and Katherine Burton of Bloomberg News report that
the founder of private-equity firm Cerberus Capital Management
LP warned investors of possible "substantial difficulty" in GMAC
LLC, the auto and mortgage lender controlled by Cerberus.
Stephen Feinberg wrote in a Jan. 22 letter to investors, a copy
of which was obtained by Bloomberg News, that while Cerberus has
"detailed contingency plans in a continuing worsening
environment . . . if the credit markets continue to decline and
we find ourselves in a prolonged environment of capital market
shutdown, GMAC could run into substantial difficulty."
The letter outlines worst-case scenarios for investors, Cerberus
partner Tim Price told Bloomberg.
As reported by Troubled Company Reporter on Feb. 8, 2008, for
the full-year 2007, GMAC reported a net loss of US$2.3 billion,
compared to net income of US$2.1 billion for the full-year 2006.
Profitable results in the automotive and insurance businesses
were more than offset by a US$4.3 billion loss at its
Residential Capital mortgage unit.
Comparisons of full-year results are affected by the fourth
quarter significant items previously noted well as goodwill
impairments of US$455 million at ResCap in the third quarter
of 2007 and US$695 million at Commercial Finance in the third
quarter of 2006.
Liquidity and Capital
GMAC's consolidated cash and certain marketable securities were
US$22.7 billion as of Dec. 31, 2007, up from US$18.3 billion at
Dec. 31, 2006. Of these total balances, ResCap's consolidated
cash and cash equivalents were US$4.4 billion at year-end, up
from US$2 billion on Dec. 31, 2006.
During the fourth quarter, GMAC purchased in the open market
US$740 million of ResCap debt that was subsequently contributed
to ResCap and retired as a measure to support the capital
position at the mortgage unit.
As of Dec. 31, 2007, ResCap's equity base was $6 billion,
above the minimum tangible net worth requirements in its credit
facilities, and above the amount expected to be needed to
support its ongoing operations.
In addition, GMAC and ResCap may from time to time continue to
purchase outstanding GMAC or ResCap debt in open market
transactions or otherwise, as part of its liquidity and cash
management strategy.
Strategic Initiatives
GMAC and ResCap continue to investigate strategic alternatives
related to all aspects of ResCap's business. These strategic
alternatives include potential acquisitions as well as
dispositions, alliances, and joint ventures with a variety of
third parties with respect to some of ResCap's businesses.
GMAC and ResCap are in various stages of discussions with
respect to certain of these alternatives, including, in some
cases, execution of confidentiality agreements, indications of
interest, non-binding letters of intent and other exploratory
activities such as preliminary and confirmatory due diligence
and conceptual discussions.
GMAC and ResCap also have engaged advisers to explore the sale
of certain parts of ResCap's operations. There are no
substantive binding contracts, agreements or understandings with
respect to any particular transaction. Further, there can be no
assurances that any of these strategic alternatives will occur,
or if they do, that they will achieve their anticipated
benefits.
At Dec. 31, 2007, the company's total debt amounted to
US$193.15 billion compared to US$236.99 billion in 2006.
About GMAC
GMAC LLC -- http://www.gmacfs.com/-- formerly General Motors
Acceptance Corporation, is a global, diversified financial
services company that operates in approximately 40 countries in
automotive finance, real estate finance, insurance and other
commercial businesses. GMAC was established in 1919 and employs
approximately 26,700 people worldwide.
* * *
As reported in the Troubled Company Reporter on Nov. 27, 2007,
Moody's Investors Service placed GMAC LLC's Ba2 senior unsecured
rating on review for possible downgrade. The action was in
response to GMAC's affirmation of support for Residential
Capital LLC, as disclosed in ResCap's Nov. 21, 2007 debt tender
announcement. ResCap's ratings and outlook (Ba3 senior
unsecured, negative outlook) were not affected by the tender
announcement or this GMAC rating action.
As reported in the Troubled Company Reporter on Nov. 16, 2007,
Fitch Ratings placed GMAC LLC and its related subsidiaries
'BB+' long-term Issuer Default Ratings on Rating Watch Negative.
This action reflects the ongoing pressures in the company's
residential mortgage subsidiary, Residential Capital LLC
(ResCap, IDR 'BB+' by Fitch with Rating Watch Negative).
SOLUTIA INC: Challenges DuPont's US$1,394,718 Admin. Claim
----------------------------------------------------------
E.I. DuPont de Nemours and Company, Inc., sought payment of a
US$1,394,718 administrative claim, based on a contract pursuant
to which DuPont sold certain product on an exclusive basis to
Solutia Inc.
Representing the Debtors, Thomas L. Kent, Esq., at Paul,
Hastings, Janofsky & Walker LLP, in New York, stated that
DuPont's Claim is invalid because DuPont's basis for the Claim
is without merit. He insisted that Solutia complied with the
requirements of the parties' contract and the second amendment
to that contract is not "null and void."
Although the Second Amendment was subject to the satisfactory
conclusion of a third party auditor that the terms of the "Meet
or Release" clause of the Contract were met, neither the Second
Amendment nor any other agreement entered into between the
parties provided that BDO Seidman, LLP's -- the third party
auditor -- report was final and binding and not subject to court
review, Mr. Kent argued.
Until the Debtors have an opportunity to conduct discovery and
have an opportunity to challenge Dupont's Claim, the U.S.
Bankruptcy Court for the Southern District of New York should
not allow it, Mr. Kent asserted.
In the alternative, the Debtors asked the Court to set a
discovery schedule to allow the Debtors to collect the necessary
information to challenge BDO Seidman's finding.
About Solutia Inc.
Based in St. Louis, Missouri, Solutia Inc. (OTCBB:SOLUQ) --
http://www.solutia.com/-- and its subsidiaries, engage in the
manufacture and sale of chemical-based materials, which are used
in consumer and industrial applications worldwide. Solutia has
operations in Malaysia, China, Singapore, Belgium, and Colombia.
The company and 15 debtor-affiliates filed for chapter 11
protection on Dec. 17, 2003 (Bankr. S.D.N.Y. Case No. 03-17949).
When the Debtors filed for protection from their creditors, they
listed US$2,854,000,000 in assets and US$3,223,000,000 in debts.
Solutia is represented by Richard M. Cieri, Esq., Jonathan S.
Henes, Esq., and Michael A. Cohen, Esq., at Kirkland & Ellis
LLP, in New York, as lead bankruptcy counsel, and David A.
Warfield, Esq., and Laura Toledo, Esq., at Blackwell Sanders
LLP, in St. Louis Missouri, as special counsel. Trumbull Group
LLC is the Debtor's claims and noticing agent. Daniel H.
Golden, Esq., Ira S. Dizengoff, Esq., and Russel J. Reid, Esq.,
at Akin Gump Strauss Hauer & Feld LLP represent the Official
Committee of Unsecured Creditors, and Derron S. Slonecker at
Houlihan Lokey Howard & Zukin Capital provides the Creditors'
Committee with financial advice. The Official Committee of
Retirees of Solutia, Inc., et al., is represented by Daniel D.
Doyle, Esq., Nicholas A. Franke, Esq., and David M. Brown, Esq.,
at Spencer Fane Britt & Browne, LLP, in St. Louis, Missouri, and
Frank M. Young, Esq., Thomas E. Reynolds, Esq., R. Scott
Williams, Esq., at Haskell Slaughter Young & Rediker, LLC, in
Birmingham, Alabama.
On Feb. 14, 2006, the Debtors filed their Reorganization Plan &
Disclosure Statement. On May 15, 2007, they filed an Amended
Reorganization Plan and on July 9, 2007, filed a 2nd Amended
Reorganization Plan. The Bankruptcy Court approved the Debtors'
amended Disclosure Statement on Oct. 19, 2007. On
Oct. 22, 2007, the Debtor re-filed a Consensual Plan &
Disclosure Statement and on Nov. 29, 2007, the Court confirmed
the Debtors' Consensual Plan. (Solutia Bankruptcy News, Issue
No. 118; Bankruptcy Creditors' Service, Inc.,
http://bankrupt.com/newsstand/or 215/945-7000).
* * *
As reported in the Troubled Company Reporter-Latin America on
Dec. 10, 2007, Standard & Poor's Ratings Services assigned its
'B+' loan rating to Solutia Inc.'s (D/--/--) proposed
US$1.2 billion senior secured term loan and a '3' recovery
rating, indicating the likelihood of a meaningful (50%-70%)
recovery of principal in the event of a payment default. The
ratings are based on preliminary terms and conditions. S&P also
assigned its 'B-' rating to the company's proposed US$400
million unsecured notes.
Standard & Poor's expects to assign its 'B+' corporate credit
rating to Solutia if the company and its subsidiaries emerge
from Chapter 11 bankruptcy proceedings in early 2008 as planned.
S&P expect the outlook to be stable.
SOLUTIA INC: Settles Bayer & Lanxess Claims' Treatment Dispute
--------------------------------------------------------------
Bayer Corporation acquired Monsanto Company's styrenics business
pursuant to an Asset Purchase Agreement dated Dec. 31, 1995.
Monsanto later assigned the APA to Solutia Inc. in
September 1997, as part of Solutia's spin off from Monsanto.
Solutia and Bayer were parties to a Resimene Lease and Operating
Agreement dated July 29, 1999. Solutia terminated the Resimene
Agreement on June 28, 2000, with a termination fee of
US$2,922,300, payable to Bayer in 18 monthly installments. As
of the bankruptcy filing, Solutia owed US$432,761 to Bayer for
the two remaining installment payments.
Bayer and Monsanto were also parties to an Indian Orchard Lease
and Services Agreement dated Oct. 31, 1995. The agreement was
assigned to Solutia as part of the Spin Off. Bayer terminated
the Indian Orchard Agreement, and Solutia agreed to a
termination fee of US$1,191,101, payable by Bayer in 18 monthly
installments. As of the bankruptcy filing, Bayer owed
US$397,034 for the six remaining installment payments.
As of the bankruptcy filing, Bayer also owed Solutia $295,771
for certain purchases of adipic acid.
Since the bankruptcy filing, LANXESS Corporation, Bayer AG,
Bayer MaterialScience LLC, and Bayer, have undergone corporate
reorganizations, and as a result, Lanxess currently holds
certain claims of Bayer and MaterialScience.
Solutia objected to these Bayer/Lanxess Parties Claims:
(a) Claim No. 14473 for US$432,751 for damages arising out of
Solutia's termination of the Resimene Agreement;
(b) Claim No. 14483 in an unliquidated amount for any and all
damages arising under the APA;
(c) Claim No. 14480 in an unliquidated amount for any and all
damages arising under the APA;
(d) Claim No. 14479 in an unliquidated amount for any and all
damages arising under the APA; and
(e) Claim No. 14475 in an unliquidated amount for any and all
damages arising under the APA.
Solutia also filed Schedule No. 10115234 for US$339,771, for
amounts owed by Solutia to Bayer Polymers LLC, now known as
MaterialScience.
Following arm's-length negotiations regarding the resolution and
treatment of the Claims, the parties have agreed, among other
things, that:
* Bayer and Lanxess will be entitled to recoup or offset
US$372,034 against the US$397,034 owed to Solutia for the
Indian Orchard Termination Fee;
* the Bayer/Lanxess parties will pay Solutia US$320,771,
representing the US$25,000 balance of the Indian Orchard
Termination Fee after giving effect to the Set-Off, plus
the US$295,771 owed for adipic acid purchases;
* upon approval of the Stipulation, Claim No. 14473 will be
treated as an Allowed General Unsecured Claim in Class 13
in the reduced amount of US$60,727;
* upon approval of the Stipulation, the Bayer/Lanxess Parties
will waive and release the remainder of the Claims, without
impact to (i) the treatment of Claim Nos. 14474, 14476,
14477 and 14478, all of which have been classified as
Legacy Site and Retained Site Environment Liability Claims
under the Debtors' confirmed Fifth Amended Plan of
Reorganization, and (ii) Claim No. 7075 filed by Lanxess
subsequently sold and assigned to a third party;
* pursuant to a separate agreement between Solutia and the
claim buyer, Claim No. 7075 will be allowed as a general
unsecured non-priority claim of US$322,656; and
* Solutia's Objection will be deemed withdrawn with respect
to the Claims; and
* upon approval of the Stipulation, Solutia will be required
to reserve the amount of the Allowed Claim in the Disputed
Claims Reserve on account of the Claims.
About Solutia Inc.
Based in St. Louis, Missouri, Solutia Inc. (OTCBB:SOLUQ) --
http://www.solutia.com/-- and its subsidiaries, engage in the
manufacture and sale of chemical-based materials, which are used
in consumer and industrial applications worldwide. Solutia has
operations in Malaysia, China, Singapore, Belgium, and Colombia.
The company and 15 debtor-affiliates filed for chapter 11
protection on Dec. 17, 2003 (Bankr. S.D.N.Y. Case No. 03-17949).
When the Debtors filed for protection from their creditors, they
listed US$2,854,000,000 in assets and US$3,223,000,000 in debts.
Solutia is represented by Richard M. Cieri, Esq., Jonathan S.
Henes, Esq., and Michael A. Cohen, Esq., at Kirkland & Ellis
LLP, in New York, as lead bankruptcy counsel, and David A.
Warfield, Esq., and Laura Toledo, Esq., at Blackwell Sanders
LLP, in St. Louis Missouri, as special counsel. Trumbull Group
LLC is the Debtor's claims and noticing agent. Daniel H.
Golden, Esq., Ira S. Dizengoff, Esq., and Russel J. Reid, Esq.,
at Akin Gump Strauss Hauer & Feld LLP represent the Official
Committee of Unsecured Creditors, and Derron S. Slonecker at
Houlihan Lokey Howard & Zukin Capital provides the Creditors'
Committee with financial advice. The Official Committee of
Retirees of Solutia, Inc., et al., is represented by Daniel D.
Doyle, Esq., Nicholas A. Franke, Esq., and David M. Brown, Esq.,
at Spencer Fane Britt & Browne, LLP, in St. Louis, Missouri, and
Frank M. Young, Esq., Thomas E. Reynolds, Esq., R. Scott
Williams, Esq., at Haskell Slaughter Young & Rediker, LLC, in
Birmingham, Alabama.
On Feb. 14, 2006, the Debtors filed their Reorganization Plan &
Disclosure Statement. On May 15, 2007, they filed an Amended
Reorganization Plan and on July 9, 2007, filed a 2nd Amended
Reorganization Plan. The Bankruptcy Court approved the Debtors'
amended Disclosure Statement on Oct. 19, 2007. On
Oct. 22, 2007, the Debtor re-filed a Consensual Plan &
Disclosure Statement and on Nov. 29, 2007, the Court confirmed
the Debtors' Consensual Plan. (Solutia Bankruptcy News, Issue
No. 118; Bankruptcy Creditors' Service, Inc.,
http://bankrupt.com/newsstand/or 215/945-7000).
* * *
As reported in the Troubled Company Reporter-Latin America on
Dec. 10, 2007, Standard & Poor's Ratings Services assigned its
'B+' loan rating to Solutia Inc.'s (D/--/--) proposed
US$1.2 billion senior secured term loan and a '3' recovery
rating, indicating the likelihood of a meaningful (50%-70%)
recovery of principal in the event of a payment default. The
ratings are based on preliminary terms and conditions. S&P also
assigned its 'B-' rating to the company's proposed US$400
million unsecured notes.
Standard & Poor's expects to assign its 'B+' corporate credit
rating to Solutia if the company and its subsidiaries emerge
from Chapter 11 bankruptcy proceedings in early 2008 as planned.
S&P expect the outlook to be stable.
* COLOMBIA: U.S. House Panel Extends Trade Preference
-----------------------------------------------------
Colombia, Peru, Ecuador and Bolivia can continue to send most
products to the U.S. duty-free after a committee of the U.S.
House of Representatives voted to extend expiring trade
preferences for these countries, Mark Drajem of Bloomberg News
reports.
According to Bloomberg, the preferences are scheduled to expire
at the end of the month, but was extended through the end of
2008. "This extension will help build on the successful Andean
trade preference program and further our efforts to promote
stronger economic ties between these countries and our nation,''
Representative Charles Rangel, the panel's chairman, was cited
by Bloomberg as saying.
* * *
As reported in the Troubled Company Reporter-Latin America on
Dec. 27, 2007, Standard & Poor's Ratings Services assigned a
BB+ long-term sovereign foreign currency rating and B short-term
sovereign foreign currency rating on Colombia.
==================
C O S T A R I C A
==================
ORTHOFIX INT'L: Weak Cash Flow Prompts Moody's to Review Ratings
----------------------------------------------------------------
Moody's Investors Service placed the ratings of Orthofix
International N.V. and its subsidiary Orthofix Holdings Inc.
under review for possible downgrade.
The rating review for possible downgrade reflects weaker than
expected cash flow generation compared to Moody's expectations
at the time of Orthofix's acquisition of Blackstone Medical,
Inc. in September 2006. While Moody's acknowledges Orthofix's
history of debt repayment, moderate leverage and good liquidity,
Moody's believes that certain financial metrics may no longer be
consistent with the current rating under Moody's Global Medical
Product & Device Methodology.
In addition, the review reflects: (1) Moody's view that
Orthofix's acquisition appetite may be increasing based on
management's recent publicly stated goal of becoming the No. 2
player in the spinal market; and (2) increased litigation risk
stemming from the receipt of subpoenas regarding government
investigations into Blackstone's relationships with physicians
prior to its acquisition by Orthofix.
Moody's rating review will focus primarily on these factors:
(1) the company's ability to improve cash flow generation and
debt repayment in 2008;
(2) the company's current competitive position in its core
spine market and the strategic initiatives which the
company may pursue to improve its competitive position in
that market;
(3) the on-going risks of integrating Blackstone; and
(4) developments regarding litigation.
Ratings placed under review for possible downgrade:
Orthofix International N.V:
-- Corporate Family Rating, Ba3
-- Probability of Default Rating, B1
Orthofix Holdings Inc.
-- US$45 million senior secured revolver due 2012, Ba3 (LGD3,
34%)
-- US$330 million senior secured term loan due 2013, Ba3
(LGD3, 34%)
Founded in Verona, Italy, Orthofix -- http://www.orthofix.com--
is a provider of pre and post operative products to address bone
and joint health needs of patients. The company offers surgical
and non-surgical products primarily for the spine, orthopedics
and sports medicine market sectors. The company operates
primary manufacturing facilities in the United States and Italy,
as well as sales and marketing subsidiaries in France, Germany,
Switzerland, the United Kingdom, Belgium, Brazil, Costa Rica and
Mexico.
SIRVA INC: Wants to Employ Ernst & Young as Accountants
-------------------------------------------------------
SIRVA Inc. and its debtor-affiliates seek the authority of the
U.S. Bankruptcy Court for the Southern District of New York to
employ Ernst & Young LLP as their accountants, auditors, and tax
advisors in connection with their Chapter 11 cases, nunc pro
tunc to their Chapter 11 protection filing.
Eryk J. Spytek, senior vice president, general counsel and
secretary of SIRVA, Inc., tells the Court that Ernst & Young is
a national professional services firm, with more than 1,600
partners and over 17,000 professional staff. Significantly,
Ernst & Young has extensive experience in delivering accounting,
auditing, and tax services in Chapter 11 cases.
Mr. Spytek adds that the Debtors have previously employed Ernst
& Young for audit, accounting, and tax services, allowing the
firm to gain considerable knowledge and familiarity in the
Debtors' business affairs.
The Debtors disclose that 90 days immediately preceding the
Petition Date, they paid Ernst & Young US$1,574,573 in fees. As
of the Petition Date, the Debtors did not owe the firm any
amount in respect of prepetition services.
Also, as of the Petition Date, Ernst & Young held a retainer of
US$330,726. Upon approval of Ernst & Young's retention, the
firm will waive its right to receive any prepetition fees or
expenses incurred.
Ernst & Young has agreed to provide accounting, auditing, and
tax services, including integrated audit services; internal
control audit services; financial statement audit services; tax
advisory services relating to the Debtors' Chapter 11 filings;
tax compliance services; services relating to an earnings and
profit and basis study of the Debtors' foreign subsidiaries;
services relating to an Israel withholding tax project; and
miscellaneous tax advisory services.
In exchange for accounting and auditing services, the Debtors
will pay Ernst & Young:
Professional Hourly Rate
------------ -----------
Partners and Principals US$600
Executive Directors US$525
Senior Managers US$495
Managers US$375
Seniors US$285
Staff US$195
For tax compliance assistance services, the Debtors will pay:
Professional Hourly Rate
------------ -----------
Executive Director/ US$470-$US560
Principal/Partner
Senior Manager US$445-US$470
Manager US$400-US$445
Senior Staff US$295-US$320
Staff US$130-US$190
Client Serving Associate US$85-US$100
For earnings and profits, and basis study services, the Debtors
will pay:
Professional Hourly Rate
------------ -----------
National Executive/ US$700-US$925
Principal/Partner
Executive Director/ US$550-US$730
Principal/Partner
Manager/Senior Manager US$460-US$580
Senior/Staff US$150-US$370
James J. Doyle, a partner at Ernst & Young, assures the Court
that the firm is a "disinterested person," as the term is
defined in Section 101(14) of the Bankruptcy Code.
About SIRVA Inc.
Headquartered in Westmont, Illinois, SIRVA Inc. (Pink Sheets :
SIRV.PK) -- http://www.sirva.com/-- is a provider of relocation
solutions to a well-established and diverse customer base. The
company handles all aspects of relocation, including home
purchase and home sale services, household goods moving,
mortgage services and home closing and settlement services.
SIRVA conducts more than 300,000 relocations per year,
transferring corporate and government employees along with
individual consumers. SIRVA's brands include Allied, Allied
International, Allied Pickfords, Allied Special Products, DJK
Residential, Global, northAmerican, northAmerican International,
Pickfords, SIRVA Mortgage, SIRVA Relocation and SIRVA
Settlement. The company has operation in Costa Rica.
The company and 61 of its affiliates filed separate petitions
for Chapter 11 protection on Feb. 5, 2008 (Bankr. S.D.N.Y. Case
No. 08-10433). Marc Kieselstein, Esq. at Kirkland & Ellis,
L.L.P. is representing the Debtor. At its bankruptcy filing,
the company reported total assets of US$924,457,299 and total
debts of US$1,232,566,813 for the quarter ended Sept. 30, 2007.
(Sirva Inc. Bankruptcy News, Issue No. 4; Bankruptcy Creditors'
Services Inc. http://bankrupt.com/newsstand/or 215/945-7000)
SIRVA INC: MLF Investments Discloses Ownership of Shares
--------------------------------------------------------
In a regulatory filing with the Securities and Exchange
Commission dated February 11, 2008, Matthew L. Feshbach,
managing member of MLF Investments, LLC, disclosed that as of
Feb. 8, 2008:
* MLF Offshore Portolio Company, L.P., owned 349,541 shares
of SIRVA, Inc., common stock aggregating US$403,370, and
4,795,666 shares issuable upon conversion of 8% of SIRVA,
Inc.'s convertible perpetual preferred stock aggregating
US$14,387,348. The funds used to purchase the shares and
convertible preferred stock came from MLF Offshore's
working capital.
* MLF Partners 100, L.P., owned 9,425 shares aggregating
US$10,876 and convertible preferred stock convertible into
an additional 204,333 shares, aggregating US$612,652. The
funds used to purchase the shares and convertible preferred
stock came from MLF Partners 100's working capital.
At the close of business on February 8, 2008, Mr. Feshbach, MLF
Investments, MLF Holdings, LLC, and MLF Capital Management,
L.P., owned 5,358,965 shares -- including MLF Offshore's
4,795,666 shares and 204,333 shares issuable upon the conversion
of MLF Partners 100's convertible preferred stock --
constituting approximately 6.6% of the outstanding shares.
MLF Offshore and MLF Cayman GP, Ltd., owned 5,145,207 shares --
including MLF Offshore's 4,795,666 shares, issuable upon the
conversion of preferred stock within 60 days -- constituting
approximately 6.4% of the outstanding shares.
MLF Partners 100 owned 213,758 shares -- including 204,333
shares issuable upon the conversion of its preferred stock
within 60 days -- constituting less than one percent of the
outstanding shares.
MLF Investments, MLF Holdings, MLF Capital and Mr. Feshbach
share the power to vote and dispose of or to direct the vote and
disposition of 5,358,965 shares, or 6.6%, of the outstanding
shares. MLF Offshore and MLF Cayman has the power over
5,145,207 shares, or 6.4%, of the outstanding shares. MLF
Partners 100 has the power over 213,758 Shares, or less than one
percent, of the outstanding shares.
In a separate SEC filing dated Feb. 6, 2008, MLF Investments
disclosed that it disposed a total of 8,663,798 shares of common
stock at US$0.01 par value.
A total of 75,858,757 shares of SIRVA's common stock are
outstanding as of Nov. 1, 2007.
About SIRVA Inc.
Headquartered in Westmont, Illinois, SIRVA Inc. (Pink Sheets :
SIRV.PK) -- http://www.sirva.com/-- is a provider of relocation
solutions to a well-established and diverse customer base. The
company handles all aspects of relocation, including home
purchase and home sale services, household goods moving,
mortgage services and home closing and settlement services.
SIRVA conducts more than 300,000 relocations per year,
transferring corporate and government employees along with
individual consumers. SIRVA's brands include Allied, Allied
International, Allied Pickfords, Allied Special Products, DJK
Residential, Global, northAmerican, northAmerican International,
Pickfords, SIRVA Mortgage, SIRVA Relocation and SIRVA
Settlement. The company has operation in Costa Rica.
The company and 61 of its affiliates filed separate petitions
for Chapter 11 protection on Feb. 5, 2008 (Bankr. S.D.N.Y. Case
No. 08-10433). Marc Kieselstein, Esq. at Kirkland & Ellis,
L.L.P. is representing the Debtor. At its bankruptcy filing,
the company reported total assets of US$924,457,299 and total
debts of US$1,232,566,813 for the quarter ended Sept. 30, 2007.
(Sirva Inc. Bankruptcy News, Issue No. 4; Bankruptcy Creditors'
Services Inc. http://bankrupt.com/newsstand/or 215/945-7000)
SIRVA INC: Allowed to Continue Receivables Purchase Program
-----------------------------------------------------------
The U.S. Bankruptcy Court for the Southern District of New York
authorized SIRVA Inc. and its debtor-affiliates to assume their
obligations and continue performing under a Receivables Purchase
Program; and to enter into a waiver and first amendment to the
Receivables Sale Agreement.
Since June 2004, one or more of the Debtors and their non-debtor
affiliate, SIRVA Relocation Credit, LLC have maintained a
receivables purchase program with LaSalle Bank National
Association, as agent for certain purchasers participating in
the program.
Specifically, the Purchasers are LaSalle Bank; General Electric
Capital Corporation; Wells Fargo Bank; and Citizens Bank.
As of Dec. 22, 2006, the Debtors that sell Receivables, their
related collections, and the proceeds of the Program are SIRVA
Relocation LLC, Executive Relocation Corporation, and SIRVA
Global Relocation, Inc -- the Originators.
The Originators, as servicers, also continue to service the
Receivables and remit the Collections to SRC. Under the
Program, the Originators sell to SRC their right, title, and
interest in the Receivables, related collections and proceeds.
Until the earlier of Sept. 30, 2008, or the occurrence of
certain termination events, the Purchasers agree to
simultaneously purchase the Interests in the Receivables from
SRC.
The Program allows the Originators to convert the Receivables to
cash earlier than if the Originators awaited payment on the
Receivables under their stated terms. This provides the
Originators and the Debtors with a crucial source of liquidity.
In its absence, the Debtors will be forced to increase borrowing
elsewhere. The Program also decreases the Originators' credit
risk by shifting to the Purchasers the risk of nonpayment
arising from the bankruptcy, or other insolvency related
problems, of the obligors on the Receivables.
The Receivables arise from the Originators making loans and
advancing expenses to the customers' employees in connection
with the Relocation Services business.
Specifically, the Receivables generally consist of loans or
other payments that an Originator makes as pasrt of its
Relocation Services business. The loans and payments are used
to cover moving expenses, the employee's down payment on a new
home, as well as to advance certain reimbursable expenses of the
employee.
Generally, the corporate customer reimburses the Originator the
amounts paid, and indemnifies the Originator for losses arising
from a relocating employee's failure to repay owed amounts to
the Originator. In addition, many of the loans and equity
payments are supported by a deed to the home out of which the
employee is moving as part of the relocation.
Program Mechanics
The Program involves two complementary sets of transactions: (1)
the Originators sell the Receivables to SRC, and (2) the
Purchasers purchase interests in pools of those Receivables from
SRC.
The Originators sell the Receivables on a daily basis to SRC
pursuant to a Purchase Agreement. Under the Purchase Agreement
and a Receivables Sale Agreement, the Servicers agree to service
the Receivables, for which they are paid a fee. As the
Receivables are collected by the Servicers, those Collections
are deposited in a "Collection Account." The Agent may then
invest certain amounts in the Collection Account in approved
investments, which are deposited in an "Investment Account."
The Purchase Agreement expressly states that the transfers of
Receivables from each Originator to SRC are intended to be true
sales of the Receivables, and not merely an extension of credit
by SRC to the Originator secured by a pledge of the Receivables.
Under the Receivables Sale Agreement, SRC sells undivided
ownership interests in the Receivables to the Purchasers, which
are unaffiliated third parties.
The Receivables Sale Agreement has two tranches:
(a) the Aggregate Class A Commitment, which provides for
advances of up to 85% of the face value of the Receivable
pools purchased by the Purchasers, and has an aggregate
limit of US$163,000,000; and
(b) the Aggregate Class B Commitment, which provides advance
rates of up to 95% of the face value of the Receivable
pools purchased by the Purchasers and has an aggregate
limit of US$19,500,000.
The Purchasers commit up to US$182,500,000 to purchase
Receivables from the Originators. Although the outstanding
principal amount of Receivables varies, depending on the state
of the Originators' business, the outstanding amounts advanced
to the Debtors from SRC is approximately US$164,000,000. The
principal balance of the Receivables sold to SRC as of
Dec. 31, 2007, net of ineligible Receivables, was approximately
US$184,000,000.
Debtors Worldwide and North American Van Lines, Inc. -- indirect
parent companies of the Originators -- have guaranteed the
performance of the Originators' obligations under the Purchase
Agreement and the Receivables Sale Agreement, pursuant to a
Second Amended and Restated Guaranty in favor of SRC, dated as
of Dec. 22, 2006.
The Guaranty covers, among other things, the Originators'
servicing obligations; obligation to pay SRC for deemed
collections -- Receivables or portions of Receivables that are
purchased by SRC that do not comply with certain eligibility
requirements; and contractual indemnification obligations.
However, the Guaranty does not extend to credit-related losses
on the Receivables.
The Amendments
Prior to the Petition Date, the Guarantors, the Originators,
SRC, LaSalle Bank, and the Purchasers engaged in extensive
arm's-length negotiations to continue the Program, subject to
certain amendments.
The Amendments were negotiated to provide the Purchasers
assurance that the Program would continue to be treated in
accordance with the parties' intent -- as a true sale
transaction -- and to provide protection from the uncertainty of
a chapter 11 case.
The Amendments include:
(1) The Purchasers will waive the Termination Date triggered
by the filing of the bankruptcy cases and related
Termination Events;
(2) The Aggregate Class B Commitment must be fully repaid in
cash by the effective date of the Plan of Reorganization;
(3) The Plan must become effective by April 30, 2008, or a
Termination Date will occur under the Receivables Sale
Agreement, and the Program will terminate unless the
Purchasers will waive the Termination Date;
(4) SIRVA Relo, in its capacity as the Master Servicer, has
agreed to pay certain fees to SRC upon the occurrence of
certain servicing deficiencies;
(5) The frequency of inspections that the Agent is entitled
to schedule is doubled to four a year, with the next
inspection scheduled for April 2008, provided that the
Agent may request an unscheduled audit at any time, in
its sole discretion, with the costs payable by SRC;
(6) SRC is obligated to purchase all Receivables owed by an
individual obligor if it has previously purchased any
Receivables owed by that obligor;
(7) The Debtors have agreed to certain information sharing
guidelines in the Chapter 11 cases;
(8) Changes to the Proposed DIP Facility, the proposed exit
facility, and the Plan of Reorganization without the
consent of the Agent and the Purchasers;
(9) Various other events can cause the Program to go into
amortization, including defaults under the Proposed DIP
Facility or under the exit facility, which will be cross-
defaulted to the Receivables Sale Agreement; and
(10) The Amendments' effectiveness is conditioned on a variety
of matters, including payment of various fees,
affirmative votes from at least two-thirds in amount and
one-half in number of the prepetition lenders that vote
on the Plan of Reorganization, and delivery of certain
legal opinions.
Judge James M. Peck authorized the Debtors to:
(i) to assume their obligations and continue performing
under the Purchase Program in accordance with the terms
of the the Receivables Sale Agreement, the Guaranty, and
any related transaction documents; and
(ii) to enter into a waiver and first amendment to the
Receivables Sale Agreement.
Judge Peck ruled that:
(1) the Originators, the Servicers and the Guarantors are
authorized to continue performing under the Receivables
Sale Agreement, the Guaranty, and related Transaction
Documents, as amended;
(2) the parties are authorized to enter into the Amendments;
(3) there is good faith under Sections 363(m) and 364(e) of
the Bankruptcy Code, in the event that the sales of
Receivables are recharacterized as financings;
(4) all amounts advanced to the Debtors from the Collection
Account or the Investment Account after the Petition Date
not exceeding US$19,500,000 are granted a superpriority
administrative expense claim as adequate protection,
under Section 364(c)(1);
(5) the Receivables are granted a security interest under
Section 364(c)(2), in case the transactions are
recharacterized as financings;
(6) the relevant Debtors will assume all the Transaction
Documents to which they are parties, subject to a
challenge provision;
(7) the prepetition transactions were true sales, subject to
a challenge provision; and
(8) all of the claims of SRC, the Agent and Purchasers will
be treated under the documents against the relevant
Debtors as administrative expense claims, under
Section 503, subject to a challenge provision.
A full-text copy of the First Amendment to the Third Amended and
Restated Receivables Sale Agreement is available for free at
http://bankrupt.com/misc/Sirva1stAmendedRSA.pdf
About SIRVA Inc.
Headquartered in Westmont, Illinois, SIRVA Inc. (Pink Sheets :
SIRV.PK) -- http://www.sirva.com/-- is a provider of relocation
solutions to a well-established and diverse customer base. The
company handles all aspects of relocation, including home
purchase and home sale services, household goods moving,
mortgage services and home closing and settlement services.
SIRVA conducts more than 300,000 relocations per year,
transferring corporate and government employees along with
individual consumers. SIRVA's brands include Allied, Allied
International, Allied Pickfords, Allied Special Products, DJK
Residential, Global, northAmerican, northAmerican International,
Pickfords, SIRVA Mortgage, SIRVA Relocation and SIRVA
Settlement. The company has operation in Costa Rica.
The company and 61 of its affiliates filed separate petitions
for Chapter 11 protection on Feb. 5, 2008 (Bankr. S.D.N.Y. Case
No. 08-10433). Marc Kieselstein, Esq. at Kirkland & Ellis,
L.L.P. is representing the Debtor. At its bankruptcy filing,
the company reported total assets of US$924,457,299 and total
debts of US$1,232,566,813 for the quarter ended Sept. 30, 2007.
(Sirva Inc. Bankruptcy News, Issue No. 4; Bankruptcy Creditors'
Services Inc. http://bankrupt.com/newsstand/or 215/945-7000)
SIRVA INC: U.S. Trustee Objects to Hiring of Conflicts Counsel
--------------------------------------------------------------
The U.S. Trustee for Region 2 objects to the employment of Togut
Segal & Segal LLP as conflicts counsel for Sirva Inc. and its
debtor-affiliates in their Chapter 11 cases, nunc pro tunc to
their bankruptcy filing.
"[T]he Debtors have not disclosed any conflicts necessitating
the employment of conflicts counsel," Diana G. Adams, United
States Trustee for Region 2, tells the Court.
Togut Segal & Segal LLP seeks to perform services upon the
approval of its retention, which at this juncture would solely
be to enable to stay ahead of the learning curve to obviate the
need for them to come up to speed later in the case if an actual
conflict is disclosed, Paul K. Schwartzberg, Esq., trial
attorney for the U.S. Trustee, says.
Mr. Schwartzberg argues that the determinative question in
approving the employment of a professional is whether it is
reasonably necessary to have that professional employed.
Togut Segal is a reputable law firm with experienced lawyers,
and can quickly come up to speed if the need arises, Mr.
Schwartzberg points out.
The U.S. Trustee believes that retention of conflicts counsel
does not appear necessary at this time, and the Debtors' estate
should not bear Togut Segal's auditing costs until an actual
conflict occurs.
According to Mr. Schwartzberg, a Court order approving a
professionals' retention does not establish a right to be paid
from the debtor's estate. The professional must demonstrate
that it's services were necessary and made a beneficial
contribution to the estate.
In the event the Court grants the application, the U.S. Trustee
reserves all rights to object to Togut Segal's fees, including
those fees for services prior to the disclosure of an actual
conflict.
Motion to Hire TS&S as Conflicts Counsel
As reported in the Troubled Company Reporter on Feb. 13, 2008,
the Debtors propose that Togut Segal will perform services on
matters that the Debtors may encounter which are not
appropriately handled by Kirkland & Ellis LLP, the Debtors'
proposed counsel, and other professionals because of a potential
conflict of interest or, alternatively, which can be more
efficiently handled by the firm.
Eryk J. Spytek, senior vice president, general counsel and
secretary of SIRVA, points out that Togut Segal will not perform
the usual scope of services, other than to maintain a
familiarity with the case and progress of the Debtors'
reorganization. In the event there is a conflict of interest
requiring immediate attention, the firm is able to assume its
duties without impeding the progress of the bankruptcy case.
In exchange for the contemplated services, the Debtors will pay
Togut Segal based on the firm's applicable hourly rates:
Professional Hourly Rates
------------ ------------
Partners US$725 - US$845
Paralegals/Associates US$125 - US$625
Counsel US$630 - US$650
Albert Togut, Esq., a partner at Togut Segal, assures the Court
that the firm is a "disinterested person," as the term is
defined in Section 101(14) of the Bankruptcy Code.
About SIRVA Inc.
Headquartered in Westmont, Illinois, SIRVA Inc. (Pink Sheets :
SIRV.PK) -- http://www.sirva.com/-- is a provider of relocation
solutions to a well-established and diverse customer base. The
company handles all aspects of relocation, including home
purchase and home sale services, household goods moving,
mortgage services and home closing and settlement services.
SIRVA conducts more than 300,000 relocations per year,
transferring corporate and government employees along with
individual consumers. SIRVA's brands include Allied, Allied
International, Allied Pickfords, Allied Special Products, DJK
Residential, Global, northAmerican, northAmerican International,
Pickfords, SIRVA Mortgage, SIRVA Relocation and SIRVA
Settlement. The company has operation in Costa Rica.
The company and 61 of its affiliates filed separate petitions
for Chapter 11 protection on Feb. 5, 2008 (Bankr. S.D.N.Y. Case
No. 08-10433). Marc Kieselstein, Esq. at Kirkland & Ellis,
L.L.P. is representing the Debtor. At its bankruptcy filing,
the company reported total assets of US$924,457,299 and total
debts of US$1,232,566,813 for the quarter ended Sept. 30, 2007.
(Sirva Inc. Bankruptcy News, Issue No. 4; Bankruptcy Creditors'
Services Inc. http://bankrupt.com/newsstand/or 215/945-7000)
SIRVA INC: Files Supplements to Chapter 11 Plan
-----------------------------------------------
Sirva Inc. and its debtor-affiliates delivered to the U.S.
Bankruptcy Court for the Southern District of New York exhibits
to their Chapter 11 Plan of Reorganization.
A. Exit Financing Terms and Conditions
The Debtors' Debtor-in-Possession Credit Agreement contains an
option for the Debtors to convert the DIP Financing into an exit
financing facility after they exit Chapter 11.
The Debtors have included, as an exhibit to their Plan, a
summary of terms and conditions for the proposed revolving
credit and term loan exit facilities. The document is deemed
confidential and for discussion purposes only -- not a
commitment to lend.
The salient terms of the revolving credit and term loan exit
facilities are:
1. Reorganized SIRVA Worldwide, Inc., will be the borrower.
Reorganized SIRVA, Inc., CMS Holding, LLC, RS Acquisition
Holding, LLC, and other parties to the Debtor-in-
Possession Credit Agreement will be the guarantors.
2. JPMorgan Chase Bank, N.A. will serve as as administrative
agent for the revolving credit and term loan exit
facilities. J.P. Morgan Securities Inc. will serve as
sole lead arranger and sole bookrunner for the Exit
Facility. The Lenders will consist of a syndicate of
financial institutions, to be arranged by J.P. Morgan
Securities.
3. The Exit Facility will be up to US$215,000,000, comprised
of a term loan facility of up to US$85,000,000, and a
revolving credit facility of up to US$130,000,000. The
Exit Facility will have a sublimit of US$20,000,000 for
swingline loans, and US$60,000,000 for letters of credit.
Standby letters of credit that are outstanding on the
closing of the Exit Facility under the DIP Credit
Agreement or the Prepetition Credit Agreement will be
deemed to be issued under the Exit Facility.
4. Proceeds of Exit Facility will be:
(i) deemed to repay in full all amounts outstanding on
the Exit Closing Date under the Borrower's existing
DIP Credit Agreement;
(ii) used to fund distributions under the Plan on the
Exit Closing Date; and
(iii) used for working capital and general corporate
purposes of the Borrower and its subsidiaries.
The Debtors note that the Exit Credit Agreement will contain
representations and warranties; covenants -- including a
covenant to deliver to the Agent, no later than Sept. 30, 2008;
a five-year business plan which reflects new management's view
and is reasonably acceptable to the Agent and the Exit Lenders;
mandatory prepayment events and events of default -- based on
the DIP Credit Agreement -- customary for exit financings and
otherwise reasonably deemed appropriate by the Exit Lenders.
The pricing, terms and structure contained in the Term Sheet are
subject to modification to ensure a successful syndication of
the Exit Facility.
A full-text copy of the Summary of Terms and Conditions of the
Exit Credit Agreement is available for free at:
http://bankrupt.com/misc/SirvaExitFinancingTerms.pdf
B. Financial Projections
The Debtors' financial projections predict the company will
have a shareholders' deficit through the end of the projections
in 2012.
The financial projections show that completing the prepackaged
Chapter 11 reorganization on March 31, 2008, will result in a
balance sheet with assets of US$951,300,000 and debt totaling
US$1,081,400,000, with stockholders' deficit of US$130,200,000.
The deficit will be reduced to US$103,000,000 by 2012.
A full-text copy of the Debtors' Financial Projections is
available for free at
http://bankrupt.com/misc/SirvaFinancialProjections.pdf
C. Liquidation Analysis
The Debtors' liquidation analysis is based on the consolidated
forecasted assets and liabilities of the Debtors as of
Nov. 30, 2007, and estimates the net proceeds available for
distribution if the Debtors were liquidated under Chapter 7 of
the Bankruptcy Code.
(In Thousands)
Recovery
Nov. 2007
Net Asset Percent Amount
--------- ------- --------
Current Assets
Cash & Equivalents US$20,358 100% US$20,358
Investments-ST 38,120 29% 11,210
Net A/R
Relocation A/R 54,905 52% 28,354
Moving A/R 155,333 39% 59,816
Corporate & Other A/R (339 0% -
--------- ------- --------
US$210,238 42% US$88,170
Relo Properties Receivables 103 0% -
Relo Mortgages Held For Sale 2,758 0% -
Relo Properties Held For Resale 36,522 17% 6,152
Deferred Income Tax-ST 509 0% -
DO-Assets Held For Sale 219 60% 131
Other Current Assets 27,552 13% 3,554
--------- ------- --------
Total Current Assets US$336,379 39% US$129,575
Long Term Assets
Property, Plant and Equipment
Relocation US$9,970 10% US$1,002
Moving NA 17,562 24% 4,239
Corporate 15,052 31% 4,721
--------- ------- --------
US$42,585 23% US$9,963
Intangible Assets 153,558 9% 14,334
Other Long-Term Assets 52,916 85% 45,140
Goodwill 227,193 0% -
--------- ------- --------
Total Long Term Assets 476,252 15% 69,436
--------- ------- --------
Gross Liquidation Proceeds US$812,631 24% US$199,011
--------- ------- --------
Liquidation Costs
Wind-Down/Liquidation Expense US$1,500
Trustee Fees 5,360
Professional Fees and Commissions 8,000
--------
Total Liquidation Costs 14,860
--------
Net Liquidation Proceeds US$184,152
--------
Chapter 7 Administrative & Priority Claims
Post-Petition Transactions US$2,340
Post-Petition Salaries, Wages, and Benefits 14,784
Post-Petition Lease Obligations 2,824
Post-Petition Other Executory Contracts -
Post-Petition Taxes and Other 300
--------
Total Chapter 7 Admin. & Priority Claims 20,248
--------
Proceeds Available for Distribution
to Senior Lenders US$163,904
--------
Total Senior Bank Debt US$487,000
--------
Net Recovery to Senior Lenders 34%
========
A full-text copy of the Debtors' Liquidation Analysis Summary is
available for free at:
http://bankrupt.com/misc/SirvaLiquidationAnalysis.pdf
About SIRVA Inc.
Headquartered in Westmont, Illinois, SIRVA Inc. (Pink Sheets :
SIRV.PK) -- http://www.sirva.com/-- is a provider of relocation
solutions to a well-established and diverse customer base. The
company handles all aspects of relocation, including home
purchase and home sale services, household goods moving,
mortgage services and home closing and settlement services.
SIRVA conducts more than 300,000 relocations per year,
transferring corporate and government employees along with
individual consumers. SIRVA's brands include Allied, Allied
International, Allied Pickfords, Allied Special Products, DJK
Residential, Global, northAmerican, northAmerican International,
Pickfords, SIRVA Mortgage, SIRVA Relocation and SIRVA
Settlement. The company has operation in Costa Rica.
The company and 61 of its affiliates filed separate petitions
for Chapter 11 protection on Feb. 5, 2008 (Bankr. S.D.N.Y. Case
No. 08-10433). Marc Kieselstein, Esq. at Kirkland & Ellis,
L.L.P. is representing the Debtor. At its bankruptcy filing,
the company reported total assets of US$924,457,299 and total
debts of US$1,232,566,813 for the quarter ended Sept. 30, 2007.
(Sirva Inc. Bankruptcy News, Issue No. 4; Bankruptcy Creditors'
Services Inc. http://bankrupt.com/newsstand/or 215/945-7000)
===================================
D O M I N I C A N R E P U B L I C
===================================
* DOMINICAN REPUBLIC: Public Debt Increases by 15.9% to US$8.6B
---------------------------------------------------------------
The Dominican Republic's public debt grew by 15.9%, or US$1.2
billion, to US$8.6 billion in 2007, from US$7.4 billion in 2004,
DR1 Newsletter reports.
The Ministry of Hacienda told Listin Diario that about 88.3% of
the debt is external debt, while 11.7% is internal debt.
According to DR1 Newsletter, the debt doesn't include the DOP184
billion in central bank certified stock. The public debt was
US$8.6 billion in 2007, DR1 Newsletter notes.
* * *
As reported in the Troubled Company Reporter-Latin America on
Feb. 12, 2008, Standard & Poor's Ratings Services placed its
'B+' long- and 'B' short-term sovereign credit ratings on the
Dominican Republic on CreditWatch with negative implications.
=============
E C U A D O R
=============
* ECUADOR: U.S. House Panel Extends Trade Preference
----------------------------------------------------
Colombia, Peru, Ecuador and Bolivia can continue to send most
products to the U.S. duty-free after a committee of the U.S.
House of Representatives voted to extend expiring trade
preferences for these countries, Mark Drajem of Bloomberg News
reports.
According to Bloomberg, the preferences are scheduled to expire
at the end of the month, but was extended through the end of
2008. "This extension will help build on the successful Andean
trade preference program and further our efforts to promote
stronger economic ties between these countries and our nation,''
Representative Charles Rangel, the panel's chairman, was cited
by Bloomberg as saying.
* * *
As reported in the Troubled Company Reporter-Latin America on
Dec. 26, 2007, Standard & Poor's Ratings Services assigned a
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's rating outlook is stable.
====================
E L S A L V A D O R
====================
TARGUS GROUP: Improved Performance Cues Moody's Stable Outlook
--------------------------------------------------------------
Moody's Investors Service changed the outlook of Targus Group
International, Inc. to stable from negative and affirmed the
Caa1 Corporate Family Rating. The change in outlook
acknowledges improvements in operating performance including
solid top line growth in the last two completed quarters,
particularly in Latin America, Asia and Eastern Europe. The
change in outlook also takes into account the company's leading
market position, albeit in a relatively narrow segment, as well
as progress in inventory management and improved liquidity.
The ratings continue to be constrained by high leverage, with
adjusted debt to EBITDA of about 6.2 times for the twelve months
ended Dec. 31, 2007, and weak interest coverage with EBIT to
interest coverage of about 1.1 times. Cash interest coverage is
stronger, with EBITDA less capital expenditures to interest of
about 1.4 times. Adjustments include Moody's standard
adjustments for operating leases but exclude the effect of an
additional US$33 million of senior unsecured PIK notes due 2013
at the parent, Targus Holdings, Inc. which would bring the
adjusted debt to EBITDA ratio closer to seven times and EBIT
interest coverage to about one time. The ratings also reflect
the potential for lower demand for computer cases and
accessories in a weakening economy in the United States.
Offsetting these risks are the revenue diversity from a
worldwide geographic footprint, three separate distribution
channels and the favorable growth trends for notebook cases and
computer accessories as global notebook computer unit sales
continue to increase. The company has minimal capital
expenditures and generated positive adjusted free cash flow of
about 3.5% of adjusted debt in the twelve months ended Dec. 31,
2007.
Moody's took these rating actions:
-- Affirmed the Caa1 Corporate Family Rating;
-- Affirmed the Caa1 Probability of Default Rating;
-- Affirmed the B2 (LGD-2, 27%) rating on the first-lien
secured bank facilities which consist of a US$40 million
revolver due 2011 and US$185 million term loan due 2012;
-- Affirmed the Caa2 (LGD-4, 69%) rating on the US$85 million
second-lien secured term loan due 2013;
-- Changed the outlook to stable from negative.
Increased leverage materially beyond current levels, combined
with negative free cash flow generation for more than two
quarters could lead to a downgrade. Moody's will continue to
monitor bank loan covenant compliance as these tighten further
at the end of the 2008 fiscal year and liquidity considerations
could also put pressure on the ratings.
Given the likely weakness in economic conditions in the United
States and potentially elsewhere, Moody's believes that the
company could face challenging conditions. Nonetheless,
continued sustainable free cash flow generation and successful
debt reduction is likely to lead to upward pressure on the
ratings in the near term.
Targus Group International Inc. -- http://www.targus.com/--
invented the notebook case and continues to advance the mobile
accessories category with innovative and relevant solutions for
today's mobile lifestyle. Founded in 1983, Targus headquarters
are located in Anaheim, California, with offices worldwide and
distribution agreements in more than 100 countries, including
Germany, France, Italy, Spain and United Kingdom. The company
has Latin America operations in Argentina, Barbados, Costa Rica
and El Salvador.
=================
G U A T E M A L A
=================
AFFILIATED COMPUTER: No Default Occurred Under Debenture
--------------------------------------------------------
Affiliated Computer Services Inc. disclosed that on Feb. 12,
2008, the United States District Court for the Northern District
of Texas, Dallas Division, granted the company's Motion for
Summary Judgment in a declaratory relief action and entered a
judgment that no default occurred under Section 4.03(a) of its
indenture with certain noteholders.
The company filed the lawsuit because certain holders of its
4.70% Senior Notes due June 1, 2010, and its 5.20% Senior Notes
due June 1, 2015, sent various notices alleging that the company
was in default of its covenants under the related Indenture
dated June 6, 2005, along with any Supplemental Indentures, as
the result of the company's failure to timely file its Annual
Report on Form 10-K for the period ending June 30, 2006, by
Sept. 13, 2006.
Subsequently, those noteholders declared an acceleration of the
Senior Notes, as a result of the company's failure to remedy the
purported default set forth in their earlier notices and
demanded payment of all amounts owed in respect of the Senior
Notes.
About Affiliated Computer Services
Headquartered in Dallas, Texas, Affiliated Computer Services
Inc. (NYSE:ACS) -- http://www.acs-inc.com/-- provides business
process outsourcing and information technology services to
commercial and government clients. The company has two segments
based on the clients it serves: commercial and government. The
company provides services to a variety of clients including
healthcare providers and payers, manufacturers, retailers,
wholesale distributors, utilities, entertainment companies,
higher education institutions, financial institutions, insurance
and transportation companies. The company has global operations
in Brazil, China, Dominican Republic, India, Guatemala, Ireland,
Philippines, Poland, and Singapore.
* * *
As reported in the Troubled Company Reporter-Latin America on
Jan. 30, 2008, Moody's Investors Service confirmed Affiliated
Computer Services' Ba2 corporate family rating with a stable
rating outlook. The rating confirmation concluded a review for
possible downgrade initiated on March 20, 2007. The ratings of
ACS remained under review for possible downgrade.
AFFILIATED COMPUTER: To Buy SDS Biz From Waterland for US$67MM
--------------------------------------------------------------
Affiliated Computer Services, Inc., has signed an agreement to
acquire sds business services GmbH, a Germany-based provider of
data center, infrastructure services, and application-related
solutions, from Waterland Private Equity Investments. The
acquisition is expected to close in March 2008 following
regulatory approval. Affiliated Computer will pay approximately
US$67 million (EUR46 million), including the assumption of
liabilities, to purchase sds. The transaction will be funded
with a combination of existing cash on hand and borrowings under
the company' existing credit facility.
The addition of sds strengthens Affiliated Computer's global
information technology outsourcing presence by providing IT
operations and capabilities in Germany. The acquisition
continues to strengthen the company's position as a leading
provider of responsive, reliable, and flexible IT Outsourcing
services and solutions to the world market.
"This acquisition demonstrates ACS' commitment to growing our
business in continental Europe while improving our ability to
compete where multi-national capabilities are essential for
success," said ACS senior managing director of IT Outsourcing,
Derrell James. "With facilities and infrastructure in place in
Mulheim an der Ruhr and a reputable list of clients, sds
strengthens our global delivery model, enabling us to provide
our European and international clients with multi-scope IT
services on a global scale."
The European ITO market is approximately a EUR70 billion
industry with an estimated compound annual growth rate of
about 7 percent over the next two years. Affiliated recently
completed the acquisition of Syan Holdings Limited, a U.K.-based
provider of IT Outsourcing services and one of the United
Kingdom's largest IBM Business Partners, for approximately US$60
million (GBP30.5 million).
Founded in 1969, sds specializes in fully outsourced data center
and infrastructure services, including application hosting and
maintenance, system design and integration, IT consulting, and
IT lifecycle management. Additionally, it has broad expertise
in SAP consulting and integration services, as well as
customized software development. Over time, Affiliated Computer
will integrate its full suite of IT Outsourcing service
offerings into the sds portfolio for delivery to its global
clientele.
Waterland acquired sds in 2005 from Stinnes AG and turned the
company into an independent provider of IT services. "After the
successful transformation from a former Stinnes Group IT
provider to an independent player, proactively marketing its
services to new customers, the joining of forces between sds and
ACS will offer the company new opportunities," said Waterland
Private principal, Joerg Dreisow.
"The combination of sds and ACS strengthens our ability to
pursue global and European business and emphasizes our
commitment to developing efficient and innovative solutions that
meet our clients' unique needs," said sds managing director and
chief executive officer, Albrecht Held. "Our Germany-based
global clients will be backed by a FORTUNE 500 company with
global delivery capabilities, and we will be able to deliver an
expanded suite of IT Outsourcing and BPO services to our global
customers."
For the twelve-month period ending Dec. 31, 2007, sds had
revenues of approximately US$40 million. The business will
continue to be managed by sds' existing executive team, adding
approximately 160 employees to ACS Europe.
Waterland Private Equity Investments is an independent private
equity firm operating in The Netherlands, Belgium, and Germany,
with EUR620 million in funds under management. Waterland
Private focuses on consolidation strategies, investing in
fragmented growth markets in the services sector that are
undergoing transformation as a consequence of one or more of the
following trends: outsourcing & efficiency, aging population,
and leisure and luxury. The company's portfolio includes a.o.
Fa-Med (medical A/R management in The Netherlands), Senior
Living Group (private retirement and nursing homes in Belgium),
and Loewen Play (games arcade operator in Germany). Waterland
operates from offices in Bussum (The Netherlands), Antwerp
(Belgium), and Dusseldorf (Germany).
About Affiliated Computer Services Inc.
Headquartered in Dallas, Texas, Affiliated Computer Services
Inc. (NYSE:ACS) -- http://www.acs-inc.com/-- provides business
process outsourcing and information technology services to
commercial and government clients. The company has two segments
based on the clients it serves: commercial and government. The
company provides services to a variety of clients including
healthcare providers and payers, manufacturers, retailers,
wholesale distributors, utilities, entertainment companies,
higher education institutions, financial institutions, insurance
and transportation companies.
* * *
As reported in the Troubled Company Reporter on Jan. 30, 2008,
Moody's Investors Service confirmed Affiliated Computer
Services' Ba2 corporate family rating with a stable rating
outlook. This rating confirmation concludes a review for
possible downgrade initiated on March 20, 2007. The ratings of
ACS remained under review for possible downgrade.
===============
H O N D U R A S
===============
CHOICE HOTELS: Dec. 31 Balance Sheet Upside-Down by US$157 Mil.
---------------------------------------------------------------
Choice Hotels International Inc.'s balance sheet at Dec. 31,
2007, showed total assets of US$328.38 million and total
liabilities of US$485.44 million, resulting to a total
shareholders' deficit of US$157.06 million.
The company reported the financial results for the fourth
quarter and full-year ended Dec. 31, 2007.
For three months, the company reported US$27.95 million net
income compared with US$24.63 million net income for the same
period in the previous quarter.
For full-year 2007, the company generated US$111.30 million net
income, compared to US$112.79 million net income in 2006.
"2007 was another very strong year for the company, as we
continued to successfully execute our strategy of profitably
growing our franchise system and domestic market share of
branded hotel rooms," Charles A. Ledsinger, Jr., vice chairman
and chief executive officer, said. "We achieved another record
year for new domestic hotel franchise contract sales, which
highlights our ability to attract owners to our family of ten
powerful brands by leveraging our size, scale, and distribution
to deliver guests and create opportunities for our franchisees
to achieve exceptional returns on their investment."
Use of Free Cash Flow
For the year ended Dec. 31, 2007, the company paid US$40.1
million of cash dividends to shareholders. The annual dividend
rate per common share is US$0.68.
For the three months ended Dec. 31, 2007, the company purchased
approximately 0.8 million shares of its common stock at an
average price of US$36.16 for a total cost of US$28.7 million
under its share repurchase program.
For the year ended Dec. 31, 2007, the company purchased
approximately 4.9 million shares of its common stock at an
average price of US$37.47 for a total cost of US$184 million.
At Dec. 31, 2007, the company had authorization to purchase up
to an additional 3.2 million shares under the share repurchase
program.
Repurchases will continue to be made in the open market and
through privately negotiated transactions subject to market
and other conditions. No minimum number of shares has been
fixed. Since Choice disclosed its stock repurchase program on
June 25, 1998, the company has repurchased 38.6 million shares
of its common stock for a total cost of US$895.9 million through
Dec. 31, 2007. Considering the effect of a two-for-one stock
split in October 2005, the company has repurchased 71.5 million
shares under the share repurchase program at an average price of
US$12.52 per share.
About Choice Hotels International Inc.
Based in Silver Spring, Maryland, Choice Hotels International
Inc. (NYSE:CHH) -- http://www.choicehotels.com/-- franchises
more than 5,500 hotels, representing more than 450,000 rooms, in
the United States and 37 countries and territories. As of
Dec. 31, 2007, 1,004 hotels are under development in the United
States, representing 79,342 rooms, and an additional 89 hotels,
representing 8,640 rooms, are under development in more than 15
countries and territories. The company's Comfort Inn, Comfort
Suites, Quality, Sleep Inn, Clarion, Cambria Suites, MainStay
Suites, Suburban Extended Stay Hotel, Econo Lodge and Rodeway
Inn brands serve guests worldwide. The company has hotels in
Brazil, Costa Rica, El Salvador, Guatemala and Honduras.
===========
M E X I C O
===========
CALPINE CORP: New Stock Starts Trading the "Regular Way"
--------------------------------------------------------
The common stock of reorganized Calpine Corp. began trading the
"regular way" on Feb. 7 on the New York Stock Exchange under the
symbol CPN, Bill Rochelle of Bloomberg News reports.
Company officials rang the NYSE opening bell on Feb. 8, 2008, to
commemorate the relisting and successful emergence from
Chapter 11.
"Calpine is proud to once again be traded on the New York Stock
Exchange," said Robert P. May, Calpine's Chief Executive
Officer. "We have streamlined our operations and strengthened
our balance sheet, and we are returning to the NYSE as a
stronger and more competitive power company with one of the
cleanest generating fleets in the United States. We are
confident that the new Calpine is well positioned in the market
and poised for success as a corporate leader in the nation's
energy industry."
As reported in the Troubled Company Reporter on Jan. 16, 2008,
common stock to be issued by Calpine Corp. pursuant to its Sixth
Amended Joint Plan of Reorganization began "when issued" trading
on the New York Stock Exchange on Jan. 16, 2008.
Based in San Jose, California, Calpine Corporation (OTC Pink
Sheets: CPNLQ) -- http://www.calpine.com/-- supplies customers
and communities with electricity from clean, efficient, natural
gas-fired and geothermal power plants. Calpine owns, leases and
operates integrated systems of plants in 21 U.S. states and in
three Canadian provinces. Its customized products and services
include wholesale and retail electricity, gas turbine components
and services, energy management and a wide range of power plant
engineering, construction and maintenance and operational
services.
The company and its affiliates filed for chapter 11 protection
on Dec. 20, 2005 (Bankr. S.D.N.Y. Lead Case No. 05-60200).
Richard M. Cieri, Esq., Matthew A. Cantor, Esq., Edward
Sassower, Esq., and Robert G. Burns, Esq., Kirkland & Ellis LLP
represent the Debtors in their restructuring efforts. Michael
S. Stamer, Esq., at Akin Gump Strauss Hauer & Feld LLP,
represents the Official Committee of Unsecured Creditors. As of
Aug. 31, 2007, the Debtors disclosed total assets of
US$18,467,000,000, total liabilities not subject to compromise
of US$11,207,000,000, total liabilities subject to compromise of
US$15,354,000,000 and stockholders' deficit of US$8,102,000,000.
On Feb. 3, 2006, two more affiliates, Geysers Power Company,
LLC, and Silverado Geothermal Resources, Inc., filed voluntary
chapter 11 petitions (Bankr. S.D.N.Y. Case Nos. 06-10197 and 06-
10198). On Sept. 20, 2007, Santa Rosa Energy Center, LLC,
another affiliate, also filed a voluntary chapter 11 petition
(Bankr. S.D.N.Y. Case No. 07-12967).
On June 20, 2007, the Debtors filed their Chapter 11 Plan and
Disclosure Statement. On Aug. 27, 2007, the Debtors filed their
Amended Plan and Disclosure Statement. Calpine filed a Second
Amended Plan on Sept. 19, 2007 and on Sept. 24, 2007, filed a
Third Amended Plan. On Sept. 25, 2007, the Court approved the
adequacy of the Debtors' Disclosure Statement and entered a
written order on Sept. 26. On Dec. 19, 2007, the Court
confirmed the Debtors' Plan.
Calpine's Amended Plan was deemed effective as of Jan. 31, 2008.
FOAMEX LP: Weak Profile Prompts S&P to Cut Credit Rating to B-
--------------------------------------------------------------
Standard & Poor's Ratings Services has lowered its corporate
credit rating on Foamex L.P. to 'B-' from 'B' and placed the
rating on CreditWatch with negative implications. The bank loan
ratings were also lowered and placed on CreditWatch.
"The downgrade reflects the declining trend in Foamex's
operating performance due to soft demand in key end markets,
which has weakened the financial profile beyond our expectations
at the previous ratings," said S&P's credit analyst Henry
Fukuchi.
Specifically, lower volumes have been driven by reduced demand
for furniture, mattress, and carpet cushion products. In
addition, tighter margins reflect elevated raw material costs
and lower average selling prices for some products. S&P expects
the foam and carpet cushion segments to continue to be weak due
to the depressed residential housing market and the economic
slowdown.
The CreditWatch listing indicates that another downgrade is
possible if operating performance does not improve, or if the
company does not take additional steps to solidify its financial
profile at the current level. While Foamex reduced debt in 2007
and management remains committed to further improvement, the
company's ability to improve its operating results in the
current difficult environment and to restore credit quality to
acceptable levels remains uncertain.
The company expects to be able to maintain compliance with its
financial covenants for all of 2008 after receiving commitments
for up to US$20 million of additional investments from D.E. Shaw
Laminar Portfolios L.L.C., Goldman Sachs & Co., and Sigma
Capital Management LLC. However, S&P notes that financial
covenants will remain a concern for 2009 as maximum leverage
requirements in the company's credit loan agreements step down
to a more restrictive level. S&P expects the company to take
the necessary steps to remedy any potential covenant issues if
business conditions do not begin to improve soon.
The CreditWatch will be resolved after a further review of
operating prospects for 2008 or following any new actions
that could improve the financial profile in the face of ongoing
business challenges. S&P could affirm the ratings at the
current level if the company takes steps to reduce debt or to
address potential covenant issues beyond 2008.
Headquartered in Linwood, Pennsylvania, Foamex International
Inc. (FMXIQ.PK) -- http://www.foamex.com/-- produces cushioning
for bedding, furniture, carpet cushion and automotive markets.
The company also manufactures polymers for the industrial,
aerospace, defense, electronics and computer industries.
Foamex has Asian locations in Malaysia, Thailand and China. The
company's Latin American subsidiary is in Mexico.
The company and eight affiliates filed for chapter 11 protection
on Sept. 19, 2005 (Bankr. Del. Case Nos. 05-12685 through
05-12693). Attorneys at Paul, Weiss, Rifkind, Wharton &
Garrison LLP, represent the Debtors in their restructuring
efforts. Houlihan, Lokey, Howard and Zukin and O'Melveny &
Myers LLP are advising the ad hoc committee of Senior Secured
Noteholders. Kenneth A. Rosen, Esq., and Sharon L. Levine,
Esq., at Lowenstein Sandler PC and Donald J. Detweiler, Esq., at
Saul Ewings, LP, represent the Official Committee of Unsecured
Creditors. As of July 3, 2005, the Debtors reported
US$620,826,000 in total assets and US$744,757,000 in total
debts.
On Feb. 2, 2007, the Court confirmed the Debtors' Second Amended
Joint Plan of Reorganization. The Plan of Reorganization of
Foamex International Inc. became effective and the company
emerged from chapter 11 bankruptcy protection on Feb. 12, 2007.
At July 1, 2007, Foamex International Inc.'s balance sheet
showed total assets of US$566.2 million and total liabilities of
US$823.5 million, resulting to a total stockholders' deficit of
US$257.3 million.
Foamex International Inc. has opened a fabrication and
distribution branch in Albuquerque, New Mexico. Operations will
commence at the new location in February 2008.
GRUPO MEXICO: Mexican Court Authorizes Miners' Protest
------------------------------------------------------
A court in Mexico has authorized workers at Grupo Mexico SA, de
C.V.'s Cananea mine to continue their protest, the Associated
Press reports.
As reported in the Troubled Company Reporter-Latin America on
Jan. 18, 2008, the Mexican labor board declared that the five-
month strike by workers at Cananea was illegal. The strikers
had obtained in December 2007 authorization from a Mexican court
to continue their protests over contracts and safety at the
mine. The Mexican national mining-metalworkers union STMMRM
launched demonstrations against the labor ministry's decision.
Reuters relates that the court overturned the labor board's
ruling, siding with the union's appeal.
Cristina Rocha, an attorney for Grupo Mexico, commented to
Reuters, "This ruling says that those who want to keep working
can, and those who are on strike can stay on strike. But this
is not a definitive ruling."
Reuters notes that if the workers' strike was declared illegal,
Grupo Mexico would be able to dismiss employees who walked off
the job.
The court's ruling doesn't stop Grupo Mexico from hiring
temporary contract workers to continue operations at Cananea,
Reuters says, citing Ms. Rocha.
The Mexican Labor Department said in a statement that the case
now goes to a federal arbitration board, who will determine the
legality of the strike.
Grupo Mexico will appeal the injunction, and it could take up to
three months to be resolved, Reuters states, citing Ms. Rocha.
Grupo Mexico SA de C.V. -- http://www.grupomexico.com/--
through its ownership of Asarco and the Southern Peru Copper
Company, 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'. The rating still holds to date with a stable
outlook.
GRUPO MEXICO: Seeking to Regain Control of Asarco LLC
-----------------------------------------------------
Grupo Mexico SA, de C.V., told Dow Jones Newswires that it wants
to regain control of its US unit, Asarco LLC.
According to Dow Jones, Grupo Mexico said it is against Asarco's
plans to sell all of its assets. Asarco owns copper mines and
refining and smelting facilities, according to Reuters.
Dow Jones relates that Asarco said earlier in February that it
would sell its assets after discussions with creditors, and
would seek bids from interested buyers.
Grupo Mexico said in a filing with the Mexican Stock Exchange
that it is making every effort to contest the proposal, and will
seek to recover management control and bring Asarco out of
Chapter 11.
According to Reuters, Grupo Mexico is positive that it can save
Asarco if a court grants it control of the US firm.
Grupo Mexico said in a statement, "Asarco has proved its
capacity to generate sufficient cash flow to totally pay all its
creditors and maintain considerable value for its stockholders.
It is unreasonable from a business standpoint to auction all its
operating assets. An ongoing business always has a higher value
than that obtained from the selling off of its parts."
Asarco's revenues totaled US$1.68 billion in 2007, with earnings
before interest, taxes, depreciation and amortization of over
US$530 million and a net profit of over US$330 million. This
indicate Asarco's solvency, liquidity and capacity to pay its
liabilities, once they have been clearly defined, Reuters says,
citing Grupo Mexico.
Grupo Mexico told Dow Jones that Asarco was placed into Chapter
11 to determine the total liabilities the company faced.
Initially some US$25 billion in liabilities were registered, but
liabilities are now estimated at US$1.7 billion. Asarco had
US$1.68 billion in sales last year, earnings before interest,
taxes, depreciation and amortization, or Ebitda, of US$530
million, and net profit in excess of US$330 million.
Reuters notes that Grupo Mexico doesn't have decision-making
control over Asarco's board.
US judges will hear Asarco's proposed asset sale on March 10,
Reuters states.
About ASARCO
Based in Tucson, Arizona, ASARCO LLC -- http://www.asarco.com/
-- is an integrated copper mining, smelting and refining
company. Grupo Mexico S.A. de C.V. is ASARCO's ultimate parent.
The Company filed for chapter 11 protection on Aug. 9, 2005
(Bankr. S.D. Tex. Case No. 05-21207). James R. Prince, Esq.,
Jack L. Kinzie, Esq., and Eric A. Soderlund, Esq., at Baker
Botts L.L.P., and Nathaniel Peter Holzer, Esq., Shelby A.
Jordan, Esq., and Harlin C. Womble, Esq., at Jordan, Hyden,
Womble & Culbreth, P.C., represent the Debtor in its
restructuring efforts. Lehman Brothers Inc. provides the ASARCO
with financial advisory services And investment banking
services. Paul M. Singer, Esq., James C. McCarroll, Esq., and
Derek J. Baker, Esq., at Reed Smith LLP give legal advice to the
Official Committee of Unsecured Creditors and David J. Beckman
at FTI Consulting, Inc., gives financial advisory services to
the Committee. When the Debtor filed for protection from its
creditors, it listed US$600 million in total assets and
US$1 billion in total debts.
About Grupo Mexico
Grupo Mexico SA de C.V. -- http://www.grupomexico.com/--
through its ownership of Asarco and the Southern Peru Copper
Company, 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'. The rating still holds to date with a stable
outlook.
INTERNATIONAL RECTIFIER: Names O. Khaykin & R. Dahl as Directors
----------------------------------------------------------------
International Rectifier Corporation has elected Oleg Khaykin,
the company's newly appointed Chief Executive Officer, and
Richard J. Dahl to its Board of Directors.
Mr. Dahl, 56, has since 2004 served as a Director of the NYSE
listed IHOP Corporation where he presides as Chairman of the
Audit Committee and was Chairman of the Special Committee of the
Board formed to oversee IHOP's successful bid to acquire
Applebee's International. From 2002 to 2007, he was employed by
the Dole Food Company. He held various executive level
positions with Dole including President, Chief Operating Officer
and Director from 2004 to 2007 and Senior Vice President, Chief
Financial Officer and Director positions from 2002 to 2004.
Prior to his work at Dole, Mr. Dahl was President and Chief
Operating Officer of NYSE listed Bank of Hawaii Corporation.
"As an accomplished leader with extensive managerial and
financial experience and expertise, Richard will be a strong
addition to our board," said International Rectifier's Lead
Director Jack Vance. "His unique and broad perspective on
driving operational excellence and international growth, and his
deep understanding of finance and audit will greatly benefit
the Board in addition to the entire IR organization."
Mr. Dahl was elected to serve with a Board term expiring at the
company's 2008 annual meeting. Mr. Khaykin, 43, appointed Chief
Executive Officer effective March 1, 2008, was elected to serve
with a Board term expiring at the company's 2009 annual meeting.
International Rectifier Corporation (NYSE:IRF) --
http://www.irf.com/-- provides power management technology.
IR's analog, digital, and mixed signal ICs, and other advanced
power management products, enable high performance computing and
save energy in a wide variety of business and consumer
applications. Manufacturers of computers, energy efficient
appliances, lighting, automobiles, satellites, aircraft, and
defense systems rely on IR's power management solutions to power
their next generation products. The company has manufacturing
facilities in the U.S., Mexico, United Kingdom, Germany and
Italy; and has subsidiaries in Japan and Singapore.
* * *
In September, 2007, Standard & Poor's Ratings Services said that
its 'BB' corporate credit rating on International Rectifier
Corp. remains on CreditWatch with negative implications.
VISTEON CORP: Posts US$372 Million Net Loss in 2007
---------------------------------------------------
Visteon Corp. has released its fourth quarter and full-year 2007
results. For fourth quarter 2007, the company reported a net
loss of US$43 million on sales from continuing operations of
US$2.9 billion. The fourth quarter net loss includes US$30
million of non-cash asset impairments and US$32 million of
restructuring expenses that were not eligible for reimbursement
from the escrow account. For fourth quarter 2006, the company
reported a net loss of US$39 million on sales from continuing
operations of US$2.8 billion.
EBIT-R for fourth quarter 2007 was US$15 million, an improvement
of US$52 million over the same period of 2006.
The company generated US$331 million of cash from operating
activities during fourth quarter 2007, an increase of US$92
million or 38 percent compared to fourth quarter 2006. Free
cash flow was US$187 million for fourth quarter 2007, an
increase of US$56 million over fourth quarter 2006.
"For the fourth quarter and full year 2007, Visteon delivered on
the financial guidance we provided," said chairperson and chief
executive officer, Michael F. Johnston. "We continue to
progress with our restructuring activities as planned, and have
now completed 18 of the 30 items that are part of our three-year
plan. By implementing our restructuring and continuing to
improve our operations and global capabilities, we are
positioning Visteon for long- term success."
Restructuring and Business Improvements
During the fourth quarter 2007, Visteon completed the closure of
its climate facility in Connersville, Indiana, and notified
workers at its interiors facility in Bellignat, France, of its
intention to exit the facility during the first quarter 2008.
The company plans to address eight facilities during 2008,
including closing its Bellignat, France, and Bedford, Indiana,
facilities and selling its non-core chassis facility located in
Swansea, Wales -- the completion of which is subject to the
negotiation and execution of definitive agreements and customary
approvals. Additionally, during January 2008, the company
announced plans to close the Concordia, Missouri, fuel tank
assembly plant, with closure expected to be completed during the
third quarter 2008. Upon completion of these items, 22 of the
30 facility restructuring actions included in the company's
three-year improvement plan will have been addressed.
On Feb. 1, 2008, the company announced the sale of its non-core
North American-based aftermarket underhood and remanufacturing
operations, including a manufacturing plant in Sparta, Tennessee
and two facilities in Reynosa, Mexico. The Sparta facility
manufactures starters and alternators for aftermarket customers
and the two Reynosa facilities manufacture aftermarket climate
products including radiators, compressors and condensers, and
also remanufacture steering pumps and gears. These facilities
had revenues totalling about US$130 million in 2007.
New Business Wins
Visteon continues to win new business from a diverse group of
customers across each of its core product lines. For the full
year 2007, the company had wins of nearly US$1 billion; about 25
percent of these wins were in Asia and the balance in North
America and Europe. In addition, the company's non-consolidated
affiliates won approximately US$370 million of business,
primarily in Asia.
"Winning nearly US$1 billion for the second consecutive year
demonstrates that our customers recognize the strength of
Visteon's product capability and our global engineering and
manufacturing footprints," said president and chief operating
officer, Donald J. Stebbins.
Fourth Quarter 2007 Results
Fourth quarter 2007 sales from continuing operations were US$2.9
billion, a slight increase over the US$2.8 billion recorded in
the fourth quarter 2006. Fourth quarter 2007 product sales of
US$2.7 billion included US$168 million of favorable foreign
currency, which offset the impact of facility closures and
divestitures. Product sales to Ford Motor Co. declined 10
percent, or US$108 million, to US$960 million, reflecting lower
North American production volumes, divestitures, sourcing
actions and product mix. Product sales to other customers
increased 10 percent, or US$154 million, to US$1.76 billion and
represented 65 percent of total product sales.
The fourth quarter 2007 net loss of US$43 million compares to a
fourth quarter 2006 net loss of US$39 million. Fourth quarter
2007 results include US$30 million of non-cash asset impairments
and US$32 million of restructuring expenses that were not
reimbursed from the escrow account, as the company is now in the
50 percent reimbursement phase of the Escrow Agreement.
EBIT-R of US$15 million for the fourth quarter 2007 was an
improvement of US$52 million over the negative US$37 million
EBIT-R reported in fourth quarter 2006. These improvements were
driven by favorable cost performance resulting from the
company's ongoing restructuring and cost-reduction efforts.
Cash provided by operating activities totaled US$331 million for
fourth quarter 2007, increasing US$92 million from US$239
million a year ago. Capital expenditures for fourth quarter
2007 were US$144 million compared with US$108 million for fourth
quarter 2006. Free cash flow was US$187 million for fourth
quarter 2007 compared with US$131 million for the same period in
2006.
Full Year 2007 Results
Sales from continuing operations were US$11.3 billion for both
full-year 2007 and 2006.
Product sales for the full year 2007 were US$10.7 billion,
including favorable foreign currency of approximately US$570
million, which offset the impact of facility closures and
divestitures. During 2007, product sales to customers other
than Ford increased 11 percent, or US$674 million, to US$6.6
billion and represented 61 percent of total product sales.
Product sales to Ford in 2007 declined 14 percent, or US$659
million, to US$4.1 billion, reflecting lower North American
production volumes, divestitures, sourcing actions and product
mix.
Visteon reported a net loss of US$372 million for the full year
2007. The net loss for 2007 includes US$107 million of non-cash
asset impairments and US$32 million of restructuring expenses
that were not reimbursed from the escrow account. For full year
2006, the company recorded a net loss of US$163 million which
included US$22 million of non-cash asset impairments. EBIT-R
was negative US$49 million for full year 2007 compared with
positive US$27 million in the same period of 2006. Lower 2007
EBIT-R primarily reflects lower customer volumes and unfavorable
product mix, principally in North America, and the non-
recurrence of certain 2006 benefits including relief of employee
retirement benefit obligations and favorable commercial
agreements, partially offset by improved cost performance.
For full year 2007, cash provided from operations totaled US$293
million, compared with US$281 million for full year 2006.
Capital expenditures for full year 2007 were US$376 million,
resulting in free cash flow of negative US$83 million compared
with free cash flow for full year 2006 of negative US$92
million.
Cash and Liquidity
As of Dec. 31, 2007, the company had cash balances totaling
US$1.76 billion, of which approximately US$1.2 billion was
located in the United States. Total company debt was US$2.84
billion as of Dec. 31, 2007. Additionally, no amounts were
drawn on the company's US$350 million asset-based U.S. revolving
credit facility, and the company had availability of about
US$150 million under its US$325 million European receivables
securitization facility.
Full Year 2008 Outlook
The company expects EBIT-R for full year 2008 to be in the range
of negative US$25 million to positive US$25 million on product
sales of about US$9.7 billion. Free cash flow is projected to
be in the range of negative US$350 million to negative US$250
million.
"The progress Visteon is making, combined with what we will
execute in 2008, lays the foundation for Visteon to be free cash
flow positive in 2009," Mr. Johnston concluded. "With almost
US$1.8 billion of cash as of year-end 2007 and additional
available liquidity, Visteon has flexibility to execute its
plans."
About Visteon Corporation
Based in Van Buren Township, Michigan, Visteon Corp. (NYSE: VC)
-- http://www.visteon.com/-- is a global automotive supplier
that designs, engineers and manufactures innovative climate,
interior, electronic, and lighting products for vehicle
manufacturers, and also provides a range of products and
services to aftermarket customers.
With corporate offices in the Michigan (U.S.); Shanghai, China;
and Kerpen, Germany; the company has facilities in 26 countries,
including Argentina, Brazil, Mexico and India, and employs
approximately 41,500 people.
* * *
On March 26, 2007, Moody's affirmed Visteon Corp.'s Corporate
Family Rating of B3, term loan rating of Ba3, and Speculative
Grade Liquidity rating of SGL-3, but changed the ratings outlook
to negative from stable.
===============
P A R A G U A Y
===============
* PARAGUAY: Obtains US$1.1 Million Concessional Loan from IDB
-------------------------------------------------------------
The Inter-American Development Bank has approved a
US$1.1 million concessional loan to Paraguay to support and
consolidate the government procurement system.
The Public Procurement Directorate will carry out the
modernization of the Public Procurement Information System. The
program will strengthen the institutional capacity of the agency
and increase the capacity of public entities and subnational
governments to manage procurement. It will also improve the
mechanisms for management control by the procurement operating
units and for citizen participation.
The modernization of the system, training of contracting
entities' personnel and the development of control mechanisms
will benefit the private sector by providing a more transparent,
efficient environment for expanding business opportunities. The
public sector will benefit through improved management and
fiscal savings. The program will also enhance citizen
oversight.
Local counterpart funds will total US$950,000.
* * *
As reported in the Troubled Company Reporter-Latin America on
Dec. 26, 2007, Standard & Poor's Ratings Services assigned B
long- and short-term sovereign local and foreign currency
ratings on Paraguay.
Moody's meanwhile assigned these ratings on Paraguay: CC LT
Foreign Bank Deposit, Caa2; CC LT Foreign Currency Debt, Caa1;
CC ST Foreign Bank Deposit, NP; CC ST Foreign Currency Debt, NP;
and LC Currency Issue. Moody's have placed the rating under
review for likely upgrade.
=======
P E R U
=======
* PERU: U.S. House Panel Extends Trade Preference
-------------------------------------------------
Colombia, Peru, Ecuador and Bolivia can continue to send most
products to the U.S. duty-free after a committee of the U.S.
House of Representatives voted to extend expiring trade
preferences for these countries, Mark Drajem of Bloomberg News
reports.
According to Bloomberg, the preferences are scheduled to expire
at the end of the month, but was extended through the end of
2008. "This extension will help build on the successful Andean
trade preference program and further our efforts to promote
stronger economic ties between these countries and our nation,''
Representative Charles Rangel, the panel's chairman, was cited
by Bloomberg as saying.
* * *
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: Former Headquarters Goes Back on Auction Block
--------------------------------------------------------------
After all of the buzz and excitement surrounding the online
auction of Adelphia Communications Corp.'s former headquarters,
the class A office building is back on the "virtual" auction
block.
Although having sold and closed more than 60 other properties in
Adelphia's real estate portfolio, the LFC Group of Companies is
auctioning Adelphia's 'crown jewel,' once again, on its Web site
LFC Online -- http://www.LFC.com/715R2-- as the original
winning bidder/buyer has defaulted. The minimum bid for the
property is US$3,000,000, just a fraction of the US$30,000,000
value recorded on a recent appraisal document, ordered by the
previous buyer.
Built in 2002, the 72,000-square-foot, three-story office
building has a fully finished basement and 80,000 square feet of
paved parking space. Just off of Route 6 connecting Coudersport
to eastern and western Pennsylvania, the building is fully
networked to house more than 275 employees.
"It's quite an ironic story actually," comments Jack Ukropina,
senior auction manager. "After bidding closed the first time
around, we had numerous investors and other interested buyers
step forward with offers. They came to realize what a steal
this property was and wanted to buy it, but by then, it was too
late. Now their wish has come true. These prospective buyers
have another chance, but they better move quickly as the bid
deadline is approaching," continues Mr. Ukropina.
About the LFC Group of Companies
For more than 30 years, the LFC Group of Companies --
http://www.LFC.com/-- has served numerous Fortune 500
companies, real estate developers, investors, financial
institutions and government agencies by auction marketing
thousands of commercial, industrial, land and residential
properties with an aggregate value well in excess of
us$5,000,000,000
About the Adelphia Recovery Trust
The Adelphia Recovery Trust is a Delaware Statutory Trust that
was formed pursuant to the ACOM Debtors' First Modified Fifth
Amended Joint Plan of Reorganization, which became effective
Feb. 13, 2007. The ART holds certain litigation claims
transferred pursuant to the Plan against various third parties
and exists to prosecute the causes of action transferred to it
for the benefit of holders of ART interests.
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. 184; Bankruptcy Creditors'
Service, Inc., http://bankrupt.com/newsstand/or 215/945-7000).
ALLIED WASTE: Earns US$117.6MM from Operations in 4th Qtr. 2007
---------------------------------------------------------------
Allied Waste Industries, Inc. reported financial results for its
fourth quarter and year-ended Dec. 31, 2007. For the quarter,
income from continuing operations was US$117.6 million. Prior
year earnings from continuing operations of US$8.2 million,
include charges associated with tax related matters,
divestitures and asset impairments. For the quarter, adjusted
earnings per share from continuing operations increased 41% over
the prior year.
Total revenue for the fourth quarter was US$1.52 billion, an
increase of US$54.8 million, or 3.7%, over prior year revenue of
US$1.47 billion. Higher revenue for the quarter was driven by a
5.7% increase in average price as the company continued to
benefit from ongoing implementation of its strategic pricing
program. In addition, the company's fuel recovery fee increased
50 basis points in the fourth quarter compared with the prior
year which reflects the impact of higher diesel fuel costs.
Higher prices for the period were partially offset by a 3.8%
decrease in volumes related primarily to the continued slowing
of the economy.
"This past year saw an acceleration in key business performance
measures including earnings growth, margin expansion, cash flow
generation and, in turn, debt reduction," said Chairperson and
Chief Executive Officer, John Zillmer. "By strengthening our
core capabilities, we have been able to deliver excellent
financial results, while building an operating and financial
platform that supports the future growth of Allied Waste."
Gross profit for the quarter was US$586.7 million, up US$47
million, or 8.7%, over the comparable period last year. Gross
profit as a percentage of revenue increased to 38.6%. The 180
basis point expansion in gross margins reflects the positive
impact of higher prices, the systematic elimination of low-
margin business and the company's continued success in flexing
down costs in response to lower volumes. Operating income for
the quarter increased 17.6% to US$294.6 million, compared with
US$250.5 million last year. Fourth quarter operating income as
a percent of revenue was 19.4%, an increase of 230 basis points
over the same period last year.
Fourth quarter cash flow from operations was US$324.3 million,
compared with US$289.8 million in the prior year, as the quarter
benefited from higher operating income, partially offset by
changes in working capital. Free cash flow for the quarter
gained 14% to US$164.2 million, as increased cash flow from
operations was partially offset by higher capital expenditures.
Free cash flow for the full year increased 92% to US$479
million, compared with US$250.1 million for the prior year,
resulting primarily from the strong increase in operating income
and favorable changes in working capital.
For the year ended Dec. 31, 2007, Allied Waste's revenue was
US$6.07 billion, an increase of US$160.2 million, or 2.7%, over
prior year. Continued strong pricing for the year of 6% was
partially offset by a 3.5% decline in annual volumes driven
primarily by a slowdown in housing construction.
Operating income for the year increased 10.6% to US$1.06
billion, as operating margins expanded 120 basis points to
17.4%. Income from continuing operations in 2007 doubled to
US$309.8 million, compared with 2006 income of US$155.8
million.
Allied Waste ended the year with debt, net of cash, of US$6.4
billion, down US$404.5 million from 2006, and a debt-to-total
capital ratio of 63%, which was a 280 basis point improvement
from the prior year. Subsequent to the close of the year, the
company used accumulated cash to retire US$161.2 million of
outstanding senior notes, which matured on Jan. 15, 2008.
2008 Outlook
"The strong business performance achieved in 2007 reflects the
continued success of key programs designed to strengthen our
core capabilities and drive greater operating efficiency," said
Mr. Zillmer. "Our success in 2007 has put the company in a
strong position heading into what is forecast to remain a
challenging economic environment. This strong market position,
combined with actions already in progress to further reduce our
costs, should enable us to deliver improved financial results in
2008, while continuing to advance our strategic pricing,
customer service and people development initiatives."
Based on its 2007 financial results and expectations for the
year ahead, Allied Waste announced these outlook for 2008:
-- Revenue growth of approximately 1.5% to 3%, comprised of
price growth of approximately 4.5%, partially offset by a
potential decrease in annual volume of 1.5% to 3%;
-- Operating income in the range of US$1.145 billion to
US$1.185 billion;
-- Depreciation and amortization of approximately US$575
million;
-- Free cash flow of approximately US$400 million;
-- Capital expenditures of approximately US$650 million; and
-- Dividends on preferred stock of US$9.4 million, based on
the mandatory conversion of this security on March 1,
2008.
As part of its outlook, the company also noted that in 2008 it
expects to pay taxes and interest of approximately US$315
million, net of tax benefit, associated with its BFI-related tax
dispute and other state tax matters. With interest accruing on
these matters at a statutory rate of up to 9%, compared with the
company's incremental borrowing rate of less than 5% today, the
company sees a clear economic benefit to opportunistically
taking this action in 2008. Making the payments does not in any
way change the company's legal position.
Allied Waste has filed supplemental data on Form 8-K that is
accessible on the company's website or through the Securities
and Exchance Commmission EDGAR System.
About Allied Waste
Headquartered in Scottsdale, Arizona, Allied Waste Industries
Inc. -- http://www.alliedwaste.com/and http://www.disposal.com/
-- (NYSE: AW) provides waste collection, transfer, recycling,
and disposal services for residential, commercial, and
industrial customers in over 100 major markets spanning 37
states and Puerto Rico. The company has 24,000 employees.
* * *
Moody's Investor Services placed Allied Waste Industries Inc.'s
long term corporate family and probability of default ratings at
'B1' in February 2007. The ratings still hold to date with a
positive outlook.
DEL LABS: Moody's Withdraws Ratings After Acquisition Completion
----------------------------------------------------------------
Moody's Investors Service has withdrawn the B3 corporate family
rating and all other ratings for Del Laboratories, Inc. These
actions reflect the successful completion of Coty, Inc.'s
acquisition of the company, as well as its redemption for all of
the company's outstanding US$185 million senior secured floating
rate notes due 2011 and outstanding US$175 million 8% senior
subordinated notes due 2012. This action concludes a review for
possible upgrade that was initiated on Dec. 7, 2007.
These ratings of Del Laboratories, Inc. were withdrawn:
-- Corporate family rating , B3
-- Probability of default rating , B3
-- US$185 million floating rate senior secured notes due 2011,
B1 (LGD 2, 28%)
-- US$175 million 8% senior subordinated notes due 2012, Caa2
(LGD 5, 81%)
-- Speculative Grade Liquidity Rating of SGL-3
The company's reported revenues of approximately US$450 million
for the twelve months ended Sept. 30, 2007.
Del Laboratories, Inc., with headquarters in Uniondale, New
York, is a leading manufacturer and marketer of cosmetics and
over-the-counter pharmaceuticals, primarily under the Sally
Hansen and Orajel brands. The company has worldwide offices in
Canada and Puerto Rico.
OWENS-ILLINOIS INC: Improved Cash Flow Cues S&P's Rating Upgrade
----------------------------------------------------------------
Standard & Poor's Ratings Services raised its ratings on Owens-
Illinois Inc., including the corporate credit rating to 'BB'
from 'BB-'. The outlook is stable.
"The upgrade follows the company's improved operating results
and better-than-expected free cash generation in 2007, which
coupled with proceeds from the sale of its plastics packaging
business resulted in about US$1.9 billion of debt reduction in
2007," said S&P's credit analyst Liley Mehta.
Credit measures have improved substantially with funds from
operations to total debt at 22% at year-end 2007. These
improvements, together with management's commitment to preserve
improved credit metrics and adequate liquidity, should enable
the company to maintain a financial profile commensurate with
the higher rating. Total debt was about US$4.8 billion at
Dec. 31, 2007.
The ratings on the company and related entities reflect the its
satisfactory business position and attractive profitability,
offset by an improving, but still aggressive financial profile
and concerns regarding its asbestos liability. In July 2007,
the company sold its plastics packaging business to Rexam PLC
for a total consideration of about US$1.82 billion, with sale
proceeds used to repay senior secured notes maturing in 2009,
2011, and 2012.
Solid business prospects, an expected continuation of earnings
and cash flow improvement, and management's focus on continued
productivity improvements and cost reduction support the
ratings. Improved earnings and cash generation should support
continued strengthening of the company's credit measures despite
ongoing pressures of asbestos-related liabilities. S&P expects
the company to maintain a balanced approach toward potential
acquisitions to preserve an appropriate financial profile.
While not expected at this time, S&P could revise the outlook to
negative if large acquisitions or other strategic actions result
in a deterioration of the financial profile such that FFO to
total adjusted debt declines to below 15%. The company's still
aggressive financial profile limits further upside ratings
potential.
Based in Perrysburg, Ohio, Owens-Illinois Inc. (NYSE:OI) --
http://www.o-i.com/-- is a manufacturer of packaging products
and glass containers with operations in Europe, North America,
Asia Pacific and South America. The company is also a
manufacturer of healthcare packaging, including plastic
prescription containers and medical devices, and plastic closure
systems, including tamper-evident caps and child-resistant
closures, with operations in the United States, Mexico, Puerto
Rico, Brazil, Hungary, Malaysia and Singapore.
R&G FINANCIAL: U.S. SEC Okays Final Settlement on Financials
------------------------------------------------------------
R&G Financial Corp. reported on Feb. 13, 2008, that the U.S.
Securities and Exchange Commission approved a final settlement
with the company, which resolves the SEC's investigation of the
company in connection with its previously announced restatement
of its financial statements.
Reuters relates that the SEC had filed a complaint in the U.S.
district Court of Manhattan, alleging that R&G inflated net
income by US$180 million by improperly accounting for
transactions in 2002, 2003, and 2004. SEC claimed that R&G
Financial's board had subsequently made significant management
changes, restated the company's financials and taken other
remedial action, including entering into consent orders with the
Federal Reserve and the Federal Deposit Insurance Corp.
Under the settlement approved by the SEC, R&G Financial agreed,
without admitting or denying any wrongdoing, to be enjoined from
future violations of certain provisions of the securities laws.
The SEC did not impose a financial penalty in connection with
this settlement. The company has consented to the entry of a
final judgment to implement the terms of the agreement. The
U.S. District Court for the Southern District of New York must
consent to the entry of the final judgment in order to
consummate the settlement.
Headquartered in San Juan, Puerto Rico, R&G Financial Corp.
(PNK: RGFC.PK) -- http://www.rgonline.com/-- is a financial
holding company with operations in Puerto Rico and the United
States, providing banking, mortgage banking, investments,
consumer finance and insurance through its wholly owned
subsidiaries, R-G Premier Bank, R-G Crown Bank, R&G Mortgage
Corporation, Puerto Rico's second largest mortgage banker, R-G
Investments Corporation, the company's Puerto Rico broker-
dealer, and R-G Insurance Corporation, its Puerto Rico insurance
agency. The company operates 37 bank branches in Puerto Rico,
36 bank branches in the Orlando, Tampa/St. Petersburg and
Jacksonville, Florida and Augusta, Georgia markets, and 44
mortgage offices in Puerto Rico, including 36 facilities located
within R-G Premier Bank's banking branches.
* * *
As reported in the Troubled Company Reporter-Latin America on
Sept. 26, 2007, Fitch downgraded the long-term issuer default
rating of R&G Financial Corporation to 'CCC' from 'BB-'.
Further, R&G was placed on rating watch negative. In addition,
the long-term IDR of R-G Premier Bank has been downgraded to 'B'
from 'BB-'.
SEARS HOLDINGS: Diino to Provide Online Storage for Mexican Unit
----------------------------------------------------------------
Diino has partnered with the retail giant Sears. Diino will
provide Sears customers in Mexico with online storage
capabilities when purchasing computers, mobile phones and
digital cameras. An estimated 50,000 new customers are expected
during the partnership's initial quarter.
"The agreement between Sears and Diino is further executing on
the strategy to deliver online storage to Mexico and South
America and to further solidify our position as the market
leader in that region," says Diino Vice President of Sales,
Marcus Hartwall. "Teaming up with Sears is not only a great
opportunity for Diino, but it also provides added value to the
end users purchasing electronic goods."
"After evaluating several providers of online storage services
we decided to work with Diino. Their solution for storing and
sharing information online is the best on the market and will
provide our customers with a secure backup of their files," says
Sears Mexico Marketing Manager, Erwin Kuechel.
Sears is the second largest partnership in Latin America for
Diino to date. In March 2007 Diino became an official value
added service provider to Telmex, the leading operator in Latin
America. The partnership has so far acquired more than 65, 000
customers for Diino. The goal is to roll out the service with
Telmex in Argentina and Chile during this year.
The online storage market is poised to show strong growth in the
upcoming years. The growth will be fuelled by a combination of
factors, including the tremendous growth in digital data
generated by both individuals and small businesses. IDC said it
estimated that revenue for this emerging market would reach
US$715 million by 2011, representing a 33.3% compound annual
growth between 2006 and 2011. (IDC, 2008)
About Diino
Diino is one of the leading providers of secure online storage
and file sharing technologies. The company has offices in
Atlanta, London, Mexico City, and Stockholm has over the past
five years developed storage and file sharing technologies with
18 patents claims. Diino has more than 800,000 users worldwide.
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.
* * *
As reported in the Troubled Company Reporter-Latin America on
Jan. 28, 2008, Fitch Ratings has affirmed its ratings of Sears
Holdings Corporation, icluding its Long-term IDR and Senior
notes at 'BB'. Fitch also revised the rating outlook to
negative from stable. Approximately US$4 billion of total debt
was outstanding as of Nov. 3, 2007.
SEARS HOLDINGS: Plans to Reduce Workers at Headquarters by 4%
-------------------------------------------------------------
Some 200 of the 5,000 workers at Sears Holdings Corporation's
headquarters will lose their jobs, The Associated Press reports,
based on a Tuesday memo issued by Interim chief executive
officer W. Bruce Johnson. The job cut at Sears' headquarters is
part of Chairman Edward Lampert's plan to cut expenses owed to
the decline in revenues, AP relates.
Sears spokesman, Chris Brathwaite told AP that the the jobs to
be cut are in the Support arm. Sears, AP recalls, had
previously disclosed a plan to spin off into five separate
companies, and Support is among the five spun off companies.
Mr. Brathwaite refused to the specific support positions to be
cut but said that among them are marketing, store operations,
customer strategy and finance, AP reveals.
Sears' job cut disclosure follows that of Macy's Inc.'s, J.C.
Penney Co.'s and Home Depot Inc.'s.
About Sears Holdings
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.
* * *
As reported in the Troubled Company Reporter-Latin America on
Jan. 30, 2008, 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.
==============
S T L U C I A
==============
AIR JAMAICA: Suspending Weekly Flights to St. Lucia on April 1
--------------------------------------------------------------
Air Jamaica will suspend its three weekly flights to St. Lucia
on April 1, 2008, as part of its restructuring efforts, Radio
Jamaica reports.
Air Jamaica's marketing and sales senior vice president Paul
Pennicook told Radio Jamaica that the airline was forced to
suspend the flights because of its corporate restructuring,
which entails streamlining and route rationalization.
St. Lucia's tourism and civil aviation minister Allen Chastanet
told Radio Jamaica that the nation will welcome Air Jamaica back
anytime as it has done the country and the Caribbean proud with
its commitment to excellence even during the tough aviation
climate in the region.
Headquartered in Kingston, Jamaica, Air Jamaica --
http://www.airjamaica.com/-- was founded in 1969. It flies
passengers and cargo to almost 30 destinations in the Caribbean,
Europe, and North America. Air Jamaica offers vacation packages
through Air Jamaica Vacations. The company closed its intra-
island services unit, Air Jamaica Express, in October 2005. The
Jamaican government assumed full ownership of the airline after
an investor group turned over its 75% stake in late 2004. The
government had owned 25% of the company after it went private in
1994. The Jamaican government does not plan to own Air Jamaica
permanently.
* * *
As reported in the Troubled Company Reporter-Latin America on
June 12, 2007, Moody's Investors Service assigned a rating of B1
to Air Jamaica Limited's guaranteed senior unsecured notes.
On July 21, 2006, Standard & Poor's Rating Services assigned a
"B" long-term foreign issuer credit rating on Air Jamaica Ltd.,
which is equal to the long-term foreign currency sovereign
credit rating on Jamaica, based on the government's
unconditional guarantee of both principal and interest payments.
=================
V E N E Z U E L A
=================
CHRYSLER LLC: Court to Decide Fate of Tooling Dispute Tomorrow
--------------------------------------------------------------
The Honorable Phillip Shefferly of the U.S. Bankruptcy Court for
the Eastern District of Michigan will rule on the tooling
dispute between Plastech Engineered Products Inc. and its
debtor-affiliates, and Chrysler LLC, on Feb. 19, 2008, Reuters
reports.
For the meantime, Judge Shefferly urged the parties to reach an
interim agreement for the next few days, since the last interim
tooling agreement expires today. He told the parties he would
be "very disappointed" if they do not reach a temporary accord
over the weekend, relates Reuters.
Chrysler said it was not sure when it could talk with Plastech
about extending the interim pact, Reuters says, citing Kevin
Frazier, a Chrysler representative.
As reported in the Troubled Company Reporter on Feb. 14, 2008,
the parties threw objection after objection against each other
in a two-day hearing before the Court, with Plastech challenging
Chrysler to prove its "ownership" of the tooling parts.
About Plastech Engineered
Based in Dearborn, Michigan, Plastech Engineered Products, Inc.
-- http://www.plastecheng.com/-- is full-service automotive
supplier of interior, exterior and underhood components. It
designs and manufactures blow-molded and injection-molded
plastic products primarily for the automotive industry.
Plastech's products include automotive interior trim, underhood
components, bumper and other exterior components, and cockpit
modules. Plastech's major customers are General Motors, Ford
Motor Company, and Toyota, as well as Johnson Controls, Inc.
Plastech is a privately held company and is the largest family-
owned company in the state of Michigan. The company is
certified as a Minority Business Enterprise by the state of
Michigan. Plastech maintains more than 35 manufacturing
facilities in the midwestern and southern United States. The
company's products are sold through an in-house sales force.
The company and eight of its affiliates filed for Chapter 11
protection on Feb. 1, 2008 (Bankr. E.D. Mich. Lead Case No. 08-
42417). Gregg M. Galardi, Esq., at Skadden Arps Slate Meagher &
Flom LLP, and Deborah L. Fish, Esq., at Allard & Fish, P.C.,
represent the Debtors in their restructuring efforts. The
Debtors chose Jones Day as their special corporate and
litigation counsel. Lazard Freres & Co. LLC serves as the
Debtors' investment bankers, while Conway, MacKenzie & Dunleavy
provide financial advisory services. The Debtors also employed
Donlin, Recano & Company as their claims and noticing agent.
An Official Committee of Unsecured Creditors has been appointed
in the Debtors' cases.
As of Dec. 31, 2006, the company's books and records
reflected assets totaling US$729,000,000 and total liabilities
of US$695,000,000.
About Chrysler LLC
Based in Auburn Hills, Michigan, Chrysler LLC --
http://www.chrysler.com/-- a unit of Cerberus Capital
Management LP, produces Chrysler, Jeep(R), Dodge and Mopar(R)
brand vehicles and products. The company has dealers worldwide,
including Canada, Mexico, U.S., Germany, France, U.K.,
Argentina, Brazil, Venezuela, China, Japan and Australia.
* * *
As reported in the Troubled Company Reporter on Nov. 12, 2007,
Standard & Poor's Ratings Services affirmed its 'B' corporate
credit rating on Chrysler LLC and DaimlerChrysler Financial
Services Americas LLC and removed it from CreditWatch with
positive implications, where it was placed Sept. 26, 2007. S&P
said the outlook is negative.
CHRYSLER LLC: Partners With Health Alliance & Henry Ford
--------------------------------------------------------
In 2007, Chrysler LLC partnered with Health Alliance Plan and
the Henry Ford Medical Group provider network to pilot the
"We've Got Your Back" program at Chrysler's Auburn Hills
headquarters. This holistic approach utilizes complementary and
alternative medicine in a group model in the convenience of the
workplace.
Using modalities such as group feedback, guided relaxation and
somatic movement reduction (teaching the brain to maintain
control of the nerve and muscle system and release over-
contracted muscles), the program treats a large number of
individuals at one time while minimizing time missed from work.
Chrysler recruited more than 200 employees meeting eligibility
criteria to participate in the pilot program. Employees were
randomized to intervention or untreated control groups and their
health status was measured at the start, middle and end of the
five-month project period.
Health Alliance and Henry Ford Medical officials believe this
innovative group model has great potential for growth throughout
Southeast Michigan workforces and beyond. Health Alliance has
developed tools to allow for easy implementation, tailoring, and
adapting in any worksite setting.
As a result of the successful pilot, Chrysler will continue to
offer the program to its employees and will also pilot a
separate program using similar complementary and alternative
medical techniques to reduce stress. Other southeast Michigan
companies have also jumped at the opportunity to bring the
program to their employees. The 17,000-employee Henry Ford
Health System launched an expanded version of the program in
January 2008.
According to the authors of the JAMA study, the United States
spent nearly US$86 billion on treatment of back and neck
problems in 2005, an increase of 65 percent from 1997, after
adjusting for inflation. Individuals with spine problems spent
over US$2,500 more on medical care in 2005 than those without
spine problems.
About Health Alliance Plan
Headquartered in Detroit, Health Alliance Plan is a nonprofit
health plan serving more than 540,000 members and 2,000 employer
groups. The plan is a subsidiary of the Henry Ford Health
System and serves companies of all sizes through the flagship
HMO, PPOs, Medicare Advantage plans, experience-rated, fully
insured and self-funded products, and consumer-driven health
plans with compatible health savings accounts. The National
Committee for Quality Assurance awarded the plan's commercial
HMO and Health Alliance Senior Plus, its Medicare Advantage HMO,
Excellent Accreditation.
About Henry Ford Medical Group
The Henry Ford Medical Group is one of the nation's largest
group practices, with 1,000 physicians and researchers in 40
specialties who staff Henry Ford Hospital and 25 Henry Ford
medical centers. Henry Ford's 25 medical centers are located in
Wayne, Oakland, Macomb and Washtenaw counties. The Medical
Group is a national leader in using e-Prescribing, an innovative
electronic computer program that allows physicians to write
prescriptions from a personal computer or wireless device and
send them directly to a pharmacy. It has improved patient
safety, increase generic medication rates, and reduce costs for
the patient and health system. E-visits, another unique
program, allows patients to communicate with their physician via
e-mail.
About Chrysler LLC
Based in Auburn Hills, Michigan, Chrysler LLC --
http://www.chrysler.com/-- a unit of Cerberus Capital
Management LP, produces Chrysler, Jeep(R), Dodge and Mopar(R)
brand vehicles and products. The company has dealers worldwide,
including Canada, Mexico, U.S., Germany, France, U.K.,
Argentina, Brazil, Venezuela, China, Japan and Australia.
* * *
As reported in the Troubled Company Reporter on Nov. 12, 2007,
Standard & Poor's Ratings Services affirmed its 'B' corporate
credit rating on Chrysler LLC and DaimlerChrysler Financial
Services Americas LLC and removed it from CreditWatch with
positive implications, where it was placed Sept. 26, 2007. S&P
said the outlook is negative.
PETROLEOS DE VENEZUELA: Talks With ConcoPhillips Going Well
-----------------------------------------------------------
Venezuelan state-run oil firm Petroleos de Venezuela's director
Eulogio Del Pino told Reuters that the company's negotiations
with ConocoPhillips over compensation for a crude project
nationalized in 2007 are "going very well."
According to Reuters, ConocoPhillips had said it hoped to
conclude the talks this year.
Dispute over Petroleos de Venezuela's payments for
ConocoPhillips' nationalized oil project would have an "amicable
outcome," Dow Jones Newswires relates, citing Venezuelan oil
minister Rafael Ramirez.
Minister Ramirez commented to Dow Jones, "In the case of Conoco
we have maintained conversations that allow for an amicable
resolution to this dispute."
Conoco told Reuters that it won't be filing any lawsuit against
Petroleos de Venezuela.
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.
PDVSA is one of the top exporters of oil to the US with proven
reserves of 77.2 billion barrels of oil -- the most outside the
Middle East -- and about 150 trillion cu. ft. of natural gas.
PDVSA's exploration and production take place in Venezuela, but
the company also has refining and marketing operations in the
Caribbean, Europe, and the US.
* * *
As of Feb. 14, 2008, Fitch Ratings held Petroleos de Venezuela
SA's long term issuer default rating and local currency long
term issuer default rating at BB-. Fitch said the ratings
outlook was negative.
SHAW GROUP: Cash Flow Improvement Cues S&P's Positive Outlook
-------------------------------------------------------------
Standard & Poor's Ratings Services has revised its outlook on
The Shaw Group Inc. to positive from stable. At the same time,
S&P affirmed its 'BB' corporate credit rating on the company.
"The outlook revision reflects Shaw's improved cash flow and
favorable prospects in its end markets," said S&Ps credit
analyst Dan Picciotto. The company has accumulated a sizable
US$14 billion backlog.
The ratings on Shaw Group continue to reflect the company's weak
business risk profile, marked by exposure to cyclical end
markets, although it has leading market positions in some
segments. The company also has an aggressive financial risk
profile.
S&P could raise the ratings if the company continues to
demonstrate solid cash flow and a disciplined financial policy.
About Shaw Group
Based in Baton Rouge, Louisiana, The Shaw Group Inc. (NYSE: SGR)
-- http://www.shawgrp.com/-- provides services to the
environmental, infrastructure and homeland security markets,
including consulting, engineering, construction, remediation and
facilities management services to governmental and commercial
customers. It is also a vertically integrated provider of
engineering, procurement, pipe fabrication, construction and
maintenance services to the power and process industries. The
company segregates its business activities into four operating
segments: Environmental & Infrastructure; Energy & Chemicals;
Maintenance, and Fabrication, Manufacturing & Distribution. In
January 2005, the company sold substantially all of the assets
of its Shaw Power Technologies, Inc. and Shaw Power Technologies
International, Ltd. units to Siemens Power Transmission and
Distribution Inc., a unit of Siemens AG.
The company has operations in Chile, China, Malaysia, the United
Kingdom and, Venezuela, among others.
==========================
V I R G I N I S L A N D S
==========================
NBTY INC: Solid Performance Cues Moody's Positive Outlook
---------------------------------------------------------
Moody's Investors Service has affirmed all ratings for NBTY,
Inc. -- including its Ba2 corporate family rating -- and changed
the rating outlook to positive from stable. The change in
outlook to positive reflects the company's continued overall
solid operating performance which has resulted in strong credit
metrics, healthy profitability, and solid liquidity.
The Ba2 corporate family rating reflects the company's solid
credit metrics -- which are at investment grade levels -- good
liquidity, and its industry leading profitability. The rating
is also supported by the company's low seasonality and
international diversification with slightly over 30% of its
sales being generated by its European Retail division.
Constraining the rating category is the volatility of its
product demand and the potentially adverse impact of the
occasional product-safety issues associated with the vitamin,
mineral, and nutritional supplement industry. The rating is
also constrained by the company's small scale, the high
likelihood of further acquisitions, and the continued
underperformance of its direct response business which
represents less than 10% of sales.
These ratings are affirmed:
-- Corporate family rating at Ba2;
-- Probability of default rating at Ba2;
-- Senior subordinated notes rating at Ba3 (LGD5, 72%).
The ratings outlook is positive.
The positive outlook reflects the company's strong credit
metrics and healthy profitability. In addition the positive
outlook reflects NBTY's solid liquidity which allows for the
company to increase its level of share repurchases using
internally generated cash and increases the likelihood that the
company should be able to maintain a conservative capital
structure while continuing to be acquisitive.
As a result of the company's small scale and the potential for
volatility given its focus on the vitamin, mineral, and
nutritional supplement industry, Moody's expects the company to
maintain credit metrics that are strong for its rating category.
Ratings could be upgraded should the company sustain its solid
performance trend while maintaining debt to EBITDA below 3.0
times and EBITA to interest expense above 6.0 times while also
demonstrating prudent financial policies.
Headquartered in Bohemia, New York, NBTY Inc. (NYSE: NTY) --
http://www.NBTY.com/-- manufactures, markets and distributes
nutritional supplements in the United States and throughout the
world. As of Sept. 30, 2005, it operated 542 Vitamin World and
Nutrition Warehouse retail stores in the United States, Guam,
Puerto Rico, and the Virgin Islands.
===========
X X X X X X
===========
* Beard Audio Bankruptcy Examiners & Identity Theft Conferences
---------------------------------------------------------------
The Beard Group Law and Business Publishers and the Troubled
Company Reporter announce two live, 90-minute teleconferences,
each with unlimited enrollment per call-in site.
Examining the Examiners:
Pros and Cons of Using Examiners in Chapter 11 Proceedings
Wednesday, February 27, 2008
1:30 p.m. -- 3:00 p.m. Eastern Time
Do examiners help or hinder a restructuring case? Are their
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New "Red Flag" Identify Theft Rules:
Assessing Your Risks and Managing Your Liabilities
Thursday, February 28, 2008
1:30 p.m. -- 3:00 p.m. Eastern Time
New federal rules -- called the "Red Flag Regulations" --
require all financial institutions as well as providers of
credit to adopt extensive identity theft policies and
programs. These sweeping new rules impact all businesses
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Can't make the scheduled date and time?
Order the Audio CD recording of either conference. Or get the
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Press Release
Contact: Martin L. Heavner
martin@beard.com
* Fitch: Credit Crisis Will Still Affect Latin American Markets
---------------------------------------------------------------
While Latin American structured finance markets were affected by
the global credit crisis, overall collateral performance and
issuance volumes were not impacted to the same degree as the
United States and global securitization markets, according to a
Fitch Ratings Special Report, "Latin American Structured Finance
2007 Year in Review and 2008 Outlook". However, while not
directly related to Latin American, the continued global credit
and liquidity crisis will continue to have effects within the
Latin American local markets.
"In 2007, Fitch saw another strong year in terms of performance
and issuance for Latin American structured finance as these
markets were not overly exposed to the performance issues of
CDOs, SIVs and subprime mortgages," said Latin America
Structured Finance Group Managing Director, Greg Kabance.
"Similarly, while RMBS transactions make up the single largest
asset class within the region, the performance of the underlying
collateral continued to perform in line with expectations."
Overall issuance volume for 2007 was approximately flat compared
with 2006. However, there were significant pockets of growth,
including Mexican residential mortgage-backed securities (RMBS),
Argentine consumer loans and cross-border issuance, across
various asset classes. O n the cross-border side, actual
issuance increased to US$4.6 billion in 2007 compared with
US$3.7 billion in 2006, with a significant drop-off during the
second half of the year. Local market issuance in the second-
half of the 2007 totaled US$7 billion, surpassing first-half
issuance levels of US$6 billion. However, that total of US$13
billion was lower than the previous year.
"Local markets remained fairly insulated from the global credit
crisis for most of 2007, but the effects are starting to become
more apparent in 2008," said Mr. Kabance. "If the opening
months of 2008 are any indication, issuance in Latin America
will be challenged to grow significantly during the year,
although collateral performance within the region should remain
stable."
Despite upheaval in the global credit markets, Latin America saw
no major negative credit events in 2007. As a reflection of the
generally positive macroeconomic credit conditions, Fitch did
not have a single downgrade within our cross-border structured
finance portfolio in 2007. There were 18 upgrades to individual
tranches within Fitch's Latin American portfolio. Following the
upgrades on sovereign ratings within the year, including Brazil,
Colombia, Mexico and Uruguay, certain structured transactions
within those countries were also revised upward.
Fitch expects continued healthy performance within the
sovereigns of Latin America in a base case for 2008. This
will be an important lynchpin for the continued performance
within the cross-border and local securitization markets.
However, Fitch will continue to monitor the Latin American
sovereigns in the context of the ongoing global credit crisis
and the overall health of the U.S. and global economies.
* BOND PRICING: For the Week February 11 - February 15, 2008
------------------------------------------------------------
Issuer Coupon Maturity Currency Price
------ ------ -------- -------- -----
ARGENTINA
---------
Argnt-Bocon PR11 2.000 12/3/10 ARS 64.33
Argnt-Bocon PR13 2.000 3/15/24 ARS 67.27
Arg Boden 2.000 9/30/08 ARS 29.78
Argent-Par 0.630 12/31/38 ARS 41.78
BRAZIL
------
CESP 9.750 1/15/15 BRL 58.77
CAYMAN ISLANDS
--------------
Vontobel Cayman 3.000 2/18/08 JPY 74.90
Vontobel Cayman 7.000 3/31/38 USD 73.65
Vontobel Cayman 7.250 3/29/49 USD 60.87
Vontobel Cayman 7.250 6/27/08 CHF 74.50
Vontobel Cayman 7.450 2/22/08 CHF 51.40
Vontobel Cayman 7.900 2/22/08 CHF 59.95
Vontobel Cayman 8.250 4/25/08 CHF 68.80
Vontobel Cayman 8.250 7/28/08 CHF 60.20
Vontobel Cayman 8.300 3/20/08 CHF 71.70
Vontobel Cayman 8.500 3/27/08 CHF 62.05
Vontobel Cayman 8.700 3/27/08 CHF 66.35
Vontobel Cayman 8.750 3/27/08 CHF 59.35
Vontobel Cayman 8.900 3/27/08 CHF 70.50
Vontobel Cayman 9.050 7/1/08 CHF 59.05
Vontobel Cayman 9.100 10/31/08 CHF 70.40
Vontobel Cayman 9.250 2/22/08 CHF 66.55
Vontobel Cayman 9.600 2/22/08 CHF 42.05
Vontobel Cayman 10.000 10/24/08 CHF 70.40
Vontobel Cayman 10.200 2/15/08 CHF 72.60
Vontobel Cayman 10.350 2/22/08 EUR 74.30
Vontobel Cayman 10.400 7/8/08 CHF 67.00
Vontobel Cayman 10.450 2/22/08 CHF 71.70
Vontobel Cayman 10.800 9/26/08 CHF 60.20
Vontobel Cayman 10.850 3/27/08 EUR 59.55
Vontobel Cayman 10.900 9/26/08 CHF 71.20
Vontobel Cayman 11.000 2/19/08 JPY 74.90
Vontobel Cayman 11.000 6/20/08 CHF 55.60
Vontobel Cayman 11.150 2/15/08 CHF 74.40
Vontobel Cayman 11.400 2/15/08 CHF 60.60
Vontobel Cayman 11.500 6/27/08 EUR 63.15
Vontobel Cayman 12.250 6/27/08 EUR 63.55
Vontobel Cayman 13.500 2/22/08 CHF 38.60
PUERTO RICO
-----------
Puerto Rico Cons. 5.900 4/15/34 USD 63.00
Puerto Rico Cons. 6.000 12/15/34 USD 65.00
VENEZUELA
---------
Petroleos de Ven 5.250 4/12/17 USD 73.50
Petroleos de Ven 5.375 4/12/27 USD 61.75
Petroleos de Ven 5.500 4/12/37 USD 59.78
***********
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. Marie Therese V. Profetana, Sheryl Joy P. Olano,
Rizande de los Santos, and Pamella Ritah K. Jala, Editors.
Copyright 2008. All rights reserved. ISSN 1529-2746.
This material is copyrighted and any commercial use, resale or
publication in any form (including e-mail forwarding, electronic
re-mailing and photocopying) is strictly prohibited without
prior written permission of the publishers.
Information contained herein is obtained from sources believed
to be reliable, but is not guaranteed.
The TCR Latin America subscription rate is US$625 per half-year,
delivered via e-mail. Additional e-mail subscriptions for
members of the same firm for the term of the initial
subscription or balance thereof are US$25 each. For
subscription information, contact Christopher Beard at
240/629-3300.
* * * End of Transmission * * *