/raid1/www/Hosts/bankrupt/TCRLA_Public/080312.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
Wednesday, March 12, 2008, Vol. 9, No. 51
Headlines
A R G E N T I N A
ALITALIA SPA: New Gov't to OK Sale if Flagship Status Retained
ALITALIA SPA: Foreign Minister Warns of Possible Bankruptcy
DAMVIC SA: Proofs of Claim Verification is Until May 7
FORD MOTOR: Awards Stock of More than US$15MM to Top Executives
FRIGORIFICO REGIONAL: Files for Reorganization in Court
GRAHAM PACKAGING: Fitch Affirms B- Issuer Default Rating
MONROE 3132: Proofs of Claim Verification Deadline is May 2
OIS SA: Proofs of Claim Verification Deadline is April 9
SIMBOLO CIA: Trustee Will File Individual Reports on April 14
SOLUTION PROVIDER: Proofs of Claim Verification is Until May 19
TELECOM ARGENTINA: Telecom Italia May Take Control of Firm
TELECOM PERSONAL: Telecom Italia May Take Control of Firm
TELECOM PERSONAL: Earns ARS370 Million in 2007
TENNECO INC: Inks Purchase Agreement with Delphi Automotive
B A H A M A S
HARRAH'S ENETERTAINMENT: Pulls Out of Bahamas Resort Deal
KNOLL INC: Adopts Trading Plan for Expanded Repurchase Program
B E R M U D A
ALEA GROUP: Posts US$78.2 Million Net Loss in Year Ended Dec. 31
B R A Z I L
AMAZONIA CELLULAR: Moody's Lifts US$120-Mln Notes Rating to Ba3
AMBAC FINANCIAL: Prices US$1 Bln Public Offering of Common Stock
BANCO BMG: Moody's Rates ST Note Programme & LT Senior Notes Ba1
BANCO BMG: Raises US$250 Million From Two-Year Bond Issue
BANCO DO BRASIL: Concludes US$250MM Six-Year Flow Securitization
BANCO NACIONAL: Okays BRL7.1 Mil. Financing to HUCFF Annex
COMPANHIA ENERGETICA: Will Auction Shares on March 26
COMPANHIA SIDERURGICA: Net Income Up 150% to BRL2.9 Bil. in 2007
DELPHI CORP: Realigns Stake in Japanese & Hungarian Ventures
DELPHI CORP: Re-Launches Exit Financing to Include GM, Affiliate
DELPHI CORP: Inks US$10 Million Purchase Pact with Tenneco Inc.
GOL LINHAS: Signs Interline Agreement With TAP Portugal
GRAFTECH INT'L: Dec. 31 Balance Sheet Upside Down By US$112.7MM
PROPEX INC: U.S. Trustee Reacts to Panel Counsel's Hourly Rates
IMAX CORP: To Install 35 Projection Systems in Latin America
TELEMIG CELLULAR: Moody's Lifts US$120-Mln Notes Rating to Ba3
C A Y M A N I S L A N D S
HONJO GLOBAL: Will Hold Final Shareholders Meeting on March 18
IBEST HOLDING: Proofs of Claim Filing Deadline is March 18
JEFFERIES PARAGON: Sets Final Shareholders Meeting for March 18
JEFFERIES PARAGON FUND: Final Shareholders Meeting on March 18
PARMALAT SPA: Records EUR674.4 Million Net Profit in 2007
REDWOOD CAPITAL: Sets Final Shareholders Meeting for March 18
C H I L E
* CHILE: Fitch Publishes Annual Review and Outlook on Banks
C O L O M B I A
BANCOLOMBIA SA: Earns COP1,086.9 Billion in Year Ended Dec. 2007
BANCOLOMBIA SA: Shareholders Adopt Resolutions at Annual Meeting
SOLUTIA INC: Signs Three Credit Deals with Syndicate of Banks
D O M I N I C A N R E P U B L I C
TRICOM SA: Majority of Creditors Accepts Prepack Plan
TRICOM SA: Schedules Filing Deadline Extended to April 14
TRICOM SA: Wants to Employ Morrison Foerster as Counsel
TRICOM SA: Wants to Hire Thompson Hine as Conflicts Counsel
E C U A D O R
PETROECUADOR: Wants to Develop Pungarayacu With Ivanhoe Energy
G U A T E M A L A
BRITISH AIRWAYS: Expects 4-4.5% Revenue Growth in FY 2008/2009
BRITISH AIRWAYS: Traffic Figures Up 5.3% in February 2008
J A M A I C A
AIR JAMAICA: Gov't Will Privatize Airline by March 2009
DYOLL GROUP: Will Hold Shareholders' Special General Meeting
DYOLL INSURANCE: Will Make Third Payment to Creditors
NAT'L COMMERCIAL: Cash Plus Complains on Account Closure
NAT'L COMMERCIAL: To Launch Loans & Credit-Card Online Service
M E X I C O
AMERICAN AXLE: Strike No Effect on S&P's Auto Sector Ratings
ARAMARK CORPORATION: Fitch Holds IDR at 'B' with Stable Outlook
FEDERAL-MOGUL: Johns-Manville Case Forms Plan A Disfavor Basis
MBIA INC: CEO Jay Brown Asks Fitch to Withdraw Insurer Rating
MBIA INC: Fitch Ratings Comments on Chairman Jay Brown's Letter
SHARPER IMAGE: Files Motion for Order Against Cal. AG's Lawsuit
SMOBY-MAJORETTE SA: Court Names Simba Dickie as Buyer
N I C A R A G U A
DOLE FOOD: Judge Chaney Dismisses Tellez Case for US$1.58 Mil.
P A N A M A
GLOBAL CROSSING: Expands Undersea Cable System Capacity
P E R U
QUEBECOR WORLD: Court Gives 30 Days to Negotiate DIP Fund Terms
QUEBECOR WORLD: NYSE to Delist Subordinate Voting Shares
QUEBECOR WORLD: Abandons US$341 Mil. Sale of EURO Assets to RSDB
QUEBECOR WORLD: Wants Until June 4 to File Financial Schedules
P U E R T O R I C O
CARIBBEAN RESTAURANTS: Moody's Drops Corp. Family Rating to B3
R&G FINANCIAL: Will Pay US$39MM to Settle Investor Class Action
R&G FINANCIAL: Says Dividend Payments Unlikely
TURBO GASOLINE: Case Summary & 2 Largest Unsecured Creditors
V E N E Z U E L A
CHRYSLER LLC: Closes Belvidere; 1,000+ Workers Go Unemployed
CHRYSLER LLC: Closes Pacifica Design Center in California
- - - - -
=================
A R G E N T I N A
=================
ALITALIA SPA: New Gov't to OK Sale if Flagship Status Retained
--------------------------------------------------------------
The next Italian government will approve the sale of its 49.9%
stake in Alitalia S.p.A. to Air-France KLM S.A. if the carrier's
national identity is retained, various reports say citing former
Prime Minister and opposition leader Silvio Berlusconi.
"The idea of an Air France-KLM-Alitalia public company is
possible, but by maintaining Alitalia as a flagship carrier,
with its own symbol and offices around the world," the former
prime was quoted by Reuters as saying.
Mr. Berlusconi had been against a possible takeover by Air
France over Alitalia. He, however, stressed that an Italian
buyer is much preferred, Bloomberg News relates. Mr. Berlusconi
also reiterated his stand against downsizing Alitalia's
operations in Milan.
The former prime minister added that Italian may make a
temporary "sacrifice" under exceptional circumstances to save
Alitalia, Reuters relates.
As reported in the TCR-Europe on Feb. 18, 2008, Air France said
it will seek approval from the new Italian government chosen
following the April 13-14, 2008, snap elections, for any
agreement to acquire Italy stake in Alitalia. Air France
managing director Pierre Henri Gourgeon that the exclusive talks
may go beyond the April elections due to various procedural
steps.
The Forza Italia opposition party, headed by former Prime
Minister Silvio Berlusconi and seen to win the upcoming
election, said it will respect the possible sale of stake in
Alitalia to Air France if it emerges as the victor.
"If there were to be a contract already signed, it would be
respected," Renato Brunetta, deputy coordinator of Silvio
Berlusconi's Forta Italia, was quoted by Bloomberg News as
saying.
Alitalia and Air France-KLM SA have until mid-March to complete
exclusive talks and present a final binding offer to the Italian
government, which thereafter will decide whether to sell its
stake to the French carrier.
About Alitalia
Headquartered in Rome, Italy, Alitalia S.p.A. --
http://www.alitalia.it/ -- provides air travel services for
passengers and air transport of cargo on national, international
and inter-continental routes. The Italian government owns 49.9%
of Alitalia. The company has operations in Argentina.
Despite a EUR1.4 billion state-backed restructuring in 1997,
Alitalia posted net losses of EUR256 million and EUR907 million
in 2000 and 2001 respectively. Alitalia posted EUR93 million in
net profits in 2002 after a EUR1.4 billion capital injection.
The carrier booked annual net losses of EUR520 million in 2003,
EUR813 million in 2004, EUR168 million in 2005, and
EUR625.6 million in 2006.
Italian Transport Minister Alessandro Bianchi has warned that
Alitalia may file for bankruptcy if the current attempt to sell
the government's 49.9% stake fails.
ALITALIA SPA: Foreign Minister Warns of Possible Bankruptcy
-----------------------------------------------------------
Alitalia S.p.A. may succumb to bankruptcy if the talks to sell
the Italian government's 49.9% stake in the carrier to Air
France-KLM SA fails, MF-Dow Jones Newswire reports, citing
outgoing foreign minister Massimo D'Alema.
According to the report, Mr. D'Alema was commenting on remarks
of former prime minister Silvio Berlusconi -- poised to return
to power after April's snap election -- that Alitalia should be
sold to a group of Italian investors.
Alitalia and Air France-KLM SA have until mid-March to complete
exclusive talks and present a final binding offer to the Italian
government, which thereafter will decide whether to sell its
stake to the French carrier.
About Alitalia
Headquartered in Rome, Italy, Alitalia S.p.A. --
http://www.alitalia.it/ -- provides air travel services for
passengers and air transport of cargo on national, international
and inter-continental routes. The Italian government owns 49.9%
of Alitalia. The company has operations in Argentina.
Despite a EUR1.4 billion state-backed restructuring in 1997,
Alitalia posted net losses of EUR256 million and EUR907 million
in 2000 and 2001 respectively. Alitalia posted EUR93 million in
net profits in 2002 after a EUR1.4 billion capital injection.
The carrier booked annual net losses of EUR520 million in 2003,
EUR813 million in 2004, EUR168 million in 2005, and
EUR625.6 million in 2006.
Italian Transport Minister Alessandro Bianchi has warned that
Alitalia may file for bankruptcy if the current attempt to sell
the government's 49.9% stake fails.
DAMVIC SA: Proofs of Claim Verification is Until May 7
------------------------------------------------------
Alfredo Mardikian, the court-appointed trustee for Damvic SA's
bankruptcy proceeding, verifies creditors' proofs of claim until
May 7, 2008.
Mr. Mardikian will present the validated claims in court as
individual reports. The National Commercial Court of First
Instance No. 7 in Buenos Aires, with the assistance of Clerk
No. 13, 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 Damvic and its
creditors.
Inadmissible claims may be subject for appeal in a separate
proceeding known as an appeal for reversal.
A general report that contains an audit of Damvic's accounting
and banking records will be submitted in court.
La Nacion didn't state the reports submission deadlines.
Mr. Mardikian is also in charge of administering Damvic's assets
under court supervision and will take part in their disposal to
the extent established by law.
The debtor can be reached at:
Damvic SA
Esmeralda 55
Buenos Aires, Argentina
The trustee can be reached at:
Alfredo Mardikian
Avenida Cordoba 1247
Buenos Aires, Argentina
FORD MOTOR: Awards Stock of More than US$15MM to Top Executives
---------------------------------------------------------------
Ford Motor Co. granted Chief Executive Officer Alan Mullaly and
14 other executive officers a total of 2 million stock units
worth almost US$15 million and more than 6 million, two days
after the company disclosed performance bonuses for North
American employees, The Wall Street Journal reports citing U.S.
Securities and Exchange Commission filings. Stock unit value is
based on Ford's Wednesday closing price of US$6.14.
WSJ relates that Mr. Mullaly received 715,230 stock units valued
at more than US$4 million and 3.56 million stock options.
As reported in the Troubled Company Reporter on Monday, Ford
will dole out performance bonuses to all its hourly and salaried
employees in North America despite incurring a US$2.7 billion
loss in 2007. Hourly workers will get a lump sum payment of
US$1,000 beginning March 13, while salaried employees' perk will
be based on payment grade and leadership level. The move was
instigated to boost morale amid a difficult turnaround. While
Ford didn't meet profit and market share goals for 2007, it did
improve its cost performance, quality, automotive cash flow and
financial results.
Headquartered in Dearborn, Michigan, Ford Motor Co. (NYSE: F)
-- http://www.ford.com/-- manufactures or distributes
automobiles in 200 markets across six continents. With about
260,000 employees and about 100 plants worldwide, the company's
core and affiliated automotive brands include Ford, Jaguar, Land
Rover, Lincoln, Mercury, Volvo, Aston Martin, and Mazda. The
company provides financial services through Ford Motor Credit
Company.
The company has operations in Japan in the Asia Pacific region.
In Europe, the company maintains a presence in Sweden, and the
United Kingdom. The company also distributes its brands in
various Latin American regions, including Argentina and Brazil.
* * *
As reported in the Troubled Company Reporter-Latin America on
Feb. 15, 2008, Fitch Ratings affirmed the Issuer Default Ratings
of Ford Motor Company and Ford Motor Credit Company at 'B', and
maintained the Rating Outlook at Negative.
As reported in the Troubled Company Reporter on Nov. 19, 2007,
Moody's Investors Service affirmed the long-term ratings of Ford
Motor Company (B3 Corporate Family Rating, Ba3 senior secured,
Caa1 senior unsecured, and B3 probability of default), but
changed the rating outlook to Stable from Negative and raised
the company's Speculative Grade Liquidity rating to SGL-1 from
SGL-3. Moody's also affirmed Ford Motor Credit Company's B1
senior unsecured rating, and changed the outlook to Stable from
Negative. These rating actions follow Ford's announcement of
the details of the newly ratified four-year labor agreement with
the UAW.
FRIGORIFICO REGIONAL: Files for Reorganization in Court
-------------------------------------------------------
Frigorifico Regional General Las Heras SA has requested for
reorganization approval after failing to pay its liabilities
since Oct. 30, 2007.
The reorganization petition, once approved by the court, will
allow Frigorifico Regional to negotiate a settlement with its
creditors in order to avoid a straight liquidation.
The case is pending in the National Commercial Court of First
Instance No. 26 in Buenos Aires. Clerk No. 52 assists the court
in this case.
The debtor can be reached at:
Frigorifico Regional General Las Heras SA
25 de Mayo 555
Buenos Aires, Argentina
GRAHAM PACKAGING: Fitch Affirms B- Issuer Default Rating
--------------------------------------------------------
Fitch Ratings affirmed Graham Packaging Company, L.P.'s Issuer
Default Rating and ratings on the senior secured credit facility
and senior subordinated notes as follows:
Graham Packaging Company, L.P and subsidiary GPC Capital Corp. I
-- IDR 'B-';
-- Senior secured revolving credit facility 'B/RR3';
-- Senior secured term loan 'B/RR3';
-- Senior subordinated notes 'CCC/RR6'.
Fitch has also revised this rating:
-- Senior unsecured notes downgraded to 'CCC/RR6' from
'CCC+/RR5'.
The Rating Outlook is Stable. Approximately US$2.5 billion of
debt is covered by the ratings.
The affirmation of Graham's 'B-' IDR and current ratings are
supported by the company's leading market shares across its
product categories, strong customer relationships, on-site
integration with many customers, investment in proprietary
technology, and favorable product packaging trends toward
plastics. Rating concerns include high leverage, weak free cash
flow, resin price volatility, customer concentration, and
moderate or declining sales growth in three out of four product
categories, as well as moderating growth in the historically
strongest food and beverage segment.
The Stable Outlook reflects the relatively steady demand in
Graham's key end markets, and the company's ability to generate
improving (though still weak) free cash flow in recent quarters.
The Recovery Ratings and notching in the debt structure reflect
Fitch's recovery expectations under a scenario in which Graham's
operating performance has been stressed, and the distressed
enterprise value is allocated to the various debt classes. The
ratings action on the senior unsecured notes was taken following
a recent update to Fitch's recovery analysis for Graham, in
which the allocation of the estimated distressed enterprise
value was modified. Previously, Fitch assumed there would be
concession payments to holders of unsecured and subordinated
debt obligations, but Fitch now estimates that concession
payments to junior noteholders are not likely given that in
Fitch's distressed scenario the senior secured bank debt would
possibly not obtain full recovery and is rated 'RR3' (estimated
51% to 70% recovery). Without concession payments, the
unsecured and subordinated classes are likely to obtain very
little, if any recovery, qualifying both classes as 'RR6'
(estimated 0% to 11% recovery). The downgrade to 'CCC' from
'CCC+' is based on Fitch's recovery methodology wherein the
notching for a debt obligation rated 'RR6' is two levels below
the IDR.
As of Sept. 30, 2007 Graham had liquidity of US$318 million
consisting of US$78.7 million of cash and US$239.3 million of
revolver availability. By Fitch calculations, LTM operating
EBITDA of US$382.5 million grew 9.6% over the fiscal year-end
2006 figure, while margin improved 162 basis points to 15.46%.
Total Debt to operating EBITDA improved to 6.6 times (x) at
Sept. 30, 2007 from 7.3x at Dec. 31, 2006. Covenant compliance
EBITDA was US$434.3 million at Sept. 30, 2007, yielding a total
leverage ratio of 5.8x.
Fitch will conduct further analysis of Graham's financial
performance when fiscal 2007 results are released in the next
few weeks.
About Graham Packaging
Based in York, Pennsylvania, Graham Packaging Company, LP,
formerly known as Graham Packaging Holdings I LP, --
http://www.grahampackaging.com/-- designs and manufactures
customized blow-molded plastic containers for branded food and
beverages, household and personal care products, and automotive
lubricants. The company has approximately 8,700 employees at 87
plants in 15 countries and 350+ production lines. Aside from
the U.S., the company has a technological center in France and
Poland. The company also has filed sales offices in Canada,
France, Argentina, Brazil, and Poland. Graham Packaging has 4
plants in Mexico.
The company has no assets, liabilities or operations other than
its direct and indirect investments in the Operating Company and
its ownership of GPC Capital Corp. II, its wholly owned
subsidiary.
MONROE 3132: Proofs of Claim Verification Deadline is May 2
-----------------------------------------------------------
Estudio Bejar, Pantin y Asoc., the court-appointed trustee for
Monroe 3132 S.A.'s bankruptcy proceeding, will be verifying
creditors' proofs of claim until May 2, 2008.
Estudio Bejar will present the validated claims in court as
individual reports on June 16, 2008. The National Commercial
Court of First Instance in Buenos Aires will determine if the
verified claims are admissible, taking into account the
trustee's opinion, and the objections and challenges that will
be raised by Monroe 3132 and its creditors.
Inadmissible claims may be subject for appeal in a separate
proceeding known as an appeal for reversal.
A general report that contains an audit of Monroe 3132's
accounting and banking records will be submitted in court.
Estudio Bejar is also in charge of administering Monroe 3132's
assets under court supervision and will take part in their
disposal to the extent established by law.
The trustee can be reached at:
Estudio Bejar, Pantin y Asoc.
Suipacha 211
Buenos Aires, Argentina
OIS SA: Proofs of Claim Verification Deadline is April 9
--------------------------------------------------------
Ana Beatriz Bravo, the court-appointed trustee for O.I.S. S.A.'s
bankruptcy proceeding, will be verifying creditors' proofs of
claim until April 9, 2008.
Ms. Bravo will present the validated claims in court as
individual reports on June 5, 2008. The National Commercial
Court of First Instance in Buenos Aires will determine if the
verified claims are admissible, taking into account the
trustee's opinion, and the objections and challenges that will
be raised by O.I.S. and its creditors.
Inadmissible claims may be subject for appeal in a separate
proceeding known as an appeal for reversal.
A general report that contains an audit of O.I.S.'s accounting
and banking records will be submitted in court on July 25, 2008.
Ms. Bravo is also in charge of administering O.I.S.'s assets
under court supervision and will take part in their disposal to
the extent established by law.
The debtor can be reached at:
O.I.S. S.A.
Presidente Peron 456
Buenos Aires, Argentina
The trustee can be reached at:
Ana Beatriz Bravo
25 de Mayo 596
Buenos Aires, Argentina
SIMBOLO CIA: Trustee Will File Individual Reports on April 14
-------------------------------------------------------------
Banco Central de la Republica Argentina, Letrado Apoderado: Dr.
Antonio Juez Perez -- the court-appointed trustee for Simbolo
Cia. Financiera S.A.'s bankruptcy proceeding -- will present the
validated claims in court as individual reports in the National
Commercial Court of First Instance in San Miguel de Tucuman,
Tucuman, on April 14, 2008.
Banco Central verified creditors' proofs of claim until Feb. 22,
2008.
Mr. Trejo is also in charge of administering Simbolo Cia.'s
assets under court supervision and will take part in their
disposal to the extent established by law.
The debtor can be reached at:
Simbolo Cia. Financiera S.A.
San Martin 799, San Miguel de Tucuman
Tucuman, Argentina
The trustee can be reached at:
Banco Central de la Republica Argentina
Letrado Apoderado: Dr. Antonio Juez Perez (h)
Lamadrid 486, San Miguel de Tucuman
Tucuman, Argentina
SOLUTION PROVIDER: Proofs of Claim Verification is Until May 19
---------------------------------------------------------------
Emilio Gallego, the court-appointed trustee for Solution
Provider SRL's bankruptcy proceeding, will be verifying
creditors' proofs of claim until May 19, 2008.
Mr. Gallego will present the validated claims in court as
individual reports on June 30, 2008. The National Commercial
Court of First Instance in Buenos Aires will determine if the
verified claims are admissible, taking into account the
trustee's opinion, and the objections and challenges that will
be raised by Solution Provider and its creditors.
Inadmissible claims may be subject for appeal in a separate
proceeding known as an appeal for reversal.
A general report that contains an audit of Solution Provider's
accounting and banking records will be submitted in court on
Aug. 26, 2008.
Mr. Gallego is also in charge of administering Solution
Provider's assets under court supervision and will take part in
their disposal to the extent established by law.
The debtor can be reached at:
Solution Provider SRL
Alsina 943
Buenos Aires, Argentina
The trustee can be reached at:
Emilio Gallego
Esmeralda 1066
Buenos Aires, Argentina
TELECOM ARGENTINA: Telecom Italia May Take Control of Firm
----------------------------------------------------------
Telecom Italia will be able to take control of Telecom Argentina
S.A. in 2009 if it exercises call option rights for control of
Sofora Telecomunicaciones, Business News Americas reports.
BNamericas relates that Sofora Telecomunicaciones is the holding
company that controls Telecom Argentina. Telecom Italia owns
50% of Sofora, while 48% of its shares are controlled by
investment group Grupo Werthein and the remaining 2% by France
Telecom.
Argentine stock brokerage Grupo SBS analyst Mariano Kruskevich
told BNamericas that the call option Telecom Italia has is “in-
the-money and that in this case the strike price is below the
current trading price.”
Sofora Telecomunicaciones controls Telecom Argentina and Telecom
Personal through its 68% stake in Nortel Inversora, which owns
54.7% of Telecom Argentina, BNamericas states.
Headquartered in Buenos Aires, Telecom Argentina S.A. --
http://www.telecom.com.ar/index-flash.html-- provides
telephone-related services, such as international long-distance
service and data transmission and Internet services, and through
its subsidiaries, wireless telecommunications services,
international wholesale services and telephone directory
publishing. As of December 31, 2006, its telephone system
included approximately 4.09 million lines in service.
As of 2007, current approximate ownership of Telecom Argentina
is: * 54.74% by Nortel Inversora S.A., itself a consortium made
up of: -- Werthein Group (48%) -- Telecom Italia -- France
Telecom group (2%); * 41.5% publicly traded; and * 4.21%
employee stock ownership program France Telecom sold its part of
Telecom Argentina to the WertheinGroup, an Argentine
agricultural concern owned in part by vice chairman Gerardo
Werthein. As of 2007, current approximate ownership of Telecom
Argentina is: * 54.74% by Nortel Inversora S.A., itself a
consortium made up of: -- Werthein Group (48%) -- Telecom Italia
group (50%) -- France Telecom group (2%); * 41.5% publicly
traded; and * 4.21% employee stock ownership program.
* * *
As reported in the Troubled Company Reporter-Latin America on
Feb. 21, 2008, Fitch Ratings upgraded Telecom Argentina's
foreign and local currency issuer default ratings to 'B+' from
'B'. Fitch said the outlook is positive.
TELECOM PERSONAL: Telecom Italia May Take Control of Firm
---------------------------------------------------------
Telecom Italia will be able to take control of Telecom Personal
SA in 2009 if it exercises call option rights for control of
Sofora Telecomunicaciones, Business News Americas reports.
BNamericas relates that Sofora Telecomunicaciones is the holding
company controlling Telecom Personal. Telecom Italia owns 50%
of Sofora, while 48% of its shares are controlled by investment
group Grupo Werthein and the remaining 2% by France Telecom.
Argentine stock brokerage Grupo SBS analyst Mariano Kruskevich
told BNamericas that the call option Telecom Italia has is “in-
the-money and that in this case the strike price is below the
current trading price.”
Sofora Telecomunicaciones controls Telecom Argentina and Telecom
Personal through its 68% stake in Nortel Inversora, which owns
54.7% of Telecom Argentina, BNamericas states.
Headquartered in Buenos Aires, Telecom Personal SA --
http://www.personal.com.ar/-- is the wireless provider of
incumbent operator Telecom Argentina, providing services in
Argentina and Paraguay over a GSM network. The company has 11.7
million users, 10.2 million in Argentina, representing an
estimated 30% market share, as of Sept. 30, 2007. For the LTM
ended Sept. 30, 2007, revenues and EBITDA accounted for ARS5.4
billion and ARS1.2 billion, respectively.
* * *
As reported in the Troubled Company Reporter-Latin America on
Feb. 21, 2008, Fitch Ratings upgraded Telecom Personal's foreign
and local currency issuer default ratings to 'B+' from 'B'.
Fitch said the outlook is positive.
TELECOM PERSONAL: Earns ARS370 Million in 2007
----------------------------------------------
Telecom Personal SA's net profit increased 497% to
ARS370 million in 2007, compared to ARS62 million in 2006.
Business News Americas relates that Telecom Personal's revenue
rose 34% to ARS5.79 billion in 2007, from ARS4.33 billion in
2006.
According to BNamericas, Telecom Personal's investments
increased 3% to ARS649 million in 2007, from 2006, mainly to
increase capacity of its GSM network as well as to launch 3G
services. Investment in Argentina totaled ARS553 million while
investment in Paraguay was ARS96 million.
BNamericas relates that Telecom Personal's client base in
Argentina and Paraguay rose 28% to 12.3 million in 2007,
compared to 2006. Its Argentine clients grew 27% to 10.7
million -- 66% of them were prepaid subscribers.
Telecom Argentina Chief Operating Officer Marco Patuano said in
a conference call, "We have been able to keep the contribution
of the postpaid customers at the same level as 2006."
Telecom Personal's Paraguayan unit Nucleo had 1.6 million users
-- 90% prepaid clients and 10% postpaid customers -- in 2007,
about 40% more than 2006, BNamericas says.
Telecom Personal's average revenue per unit in Argentina was
ARS39 in 2007, almost flat compared to 2006, while in Paraguay
its average revenue per unit dropped 26% to US$7, BNamericas
relates.
Revenues from value added services represented 27% of total
service revenues last year, BNamericas states, citing Mr.
Patuano.
Headquartered in Buenos Aires, Telecom Personal SA --
http://www.personal.com.ar/-- is the wireless provider of
incumbent operator Telecom Argentina, providing services in
Argentina and Paraguay over a GSM network. The company has 11.7
million users, 10.2 million in Argentina, representing an
estimated 30% market share, as of Sept. 30, 2007. For the LTM
ended Sept. 30, 2007, revenues and EBITDA accounted for ARS5.4
billion and ARS1.2 billon, respectively.
* * *
As reported in the Troubled Company Reporter-Latin America on
Feb. 21, 2008, Fitch Ratings Service upgraded Telecom Personal
SA's foreign and local currency issuer default ratings to 'B+'
from 'B'. Fitch said the outlook is positive.
TENNECO INC: Inks Purchase Agreement with Delphi Automotive
-----------------------------------------------------------
Tenneco Inc. has entered into a purchase agreement with Delphi
Automotive Systems LLC to acquire certain ride control assets
and inventory at Delphi’s Kettering, Ohio facility. This
purchase agreement has been filed with the bankruptcy court as
part of Delphi’s bankruptcy court proceedings.
The closing of this purchase is subject to certain closing
conditions, including bankruptcy court approval.
As part of the purchase agreement, Tenneco would pay
approximately US$10 million for existing ride control components
inventory and approximately US$9 million for certain machinery
and equipment. Tenneco would also lease a portion of the
Kettering facility from Delphi.
In connection with the purchase agreement, Tenneco has entered
into an agreement with the International Union of Electrical
Workers, which represents the Delphi workforce at the Kettering
plant. The agreement was ratified by the IUE’s rank and file in
August 2007.
Tenneco has also entered into a long-term supply agreement with
General Motors Corporation to continue to supply passenger car
shock and strut business to General Motors from the Kettering
facility.
About Tenneco
Based in Lake Forest, Illinois, Tenneco Inc., (NYSE: TEN) --
http://www.tenneco.com/-- manufactures automotive ride and
emissions control products and systems for both the original
equipment market and aftermarket. Brands include Monroe(R),
Rancho(R), and Fric Rot ride control products and Walker(R) and
Gillet emission control products. The company has operations in
Argentina, Japan, and Germany, with its European operations
headquartered in Brussels, Belgium. The company has
approximately 21,000 employees worldwide.
* * *
As reported in the Troubled Company Reporter-Latin America on
Nov. 6, 2007, Fitch Ratings assigned a rating of 'BB-' to
Tenneco Inc.'s new senior unsecured notes due 2015. The new
notes replace a portion of the company's existing US$475 million
in 10.25% senior secured second-lien notes for which the company
is tendering. Fitch said the rating outlook is positive.
=============
B A H A M A S
=============
HARRAH'S ENETERTAINMENT: Pulls Out of Bahamas Resort Deal
---------------------------------------------------------
Harrah's Entertainment Inc. has withdrawn from an over
US$2 billion, six-hotel resort deal in Bahamas because it has
taken too long to organize, David Mcfadden at the Associated
Press reports.
The report relates that Harrah's Entertainment had agreed to
team up with developer Baha Mar Resorts Ltd. and Starwood Hotels
& Resorts Worldwide to build a mega-resort along Nassau's famed
Cable Beach. The joint venture called for 57 percent to be
owned by Baha Mar Resorts and 43 percent by a Harrah's unit,
effective on confirmation by the Bahamian government of certain
required approvals and concessions.
The planned resort will be situated in a 1,000-acre beachfront
site that included an investment of over US$2 billion in its
initial phase, with an expected work force of about 10,000
people upon its completion in 2011.
However, plans for the complex have stalled, AP says, citing
Harrah's Entertainment.
Harrah's Entertainment said, "Unfortunately, it has taken Baha
Mar Development Company longer to organize the project than
anticipated and circumstances have changed such that it is
simply not prudent to move forward."
Baha Mar told AP that it was committed to proceeding with the
project and that Harrah Entertainment's withdrawal from the deal
was a “breach of faith.”
According to AP, Baha Mar challenged Harrah's Entertainment's
ability to "unilaterally terminate the arrangements." Baha Mar
said, "We hope they will reconsider their action before they
cause harm to both Baha Mar and the Bahamas."
"We were of the view that the project was going as scheduled.
This will definitely have an impact on our work force, and I'm
getting many calls from people trying to figure out what is
happening here," Bahamas Hotel Managerial Association's head
Obie Ferguson told AP.
Headquartered in Las Vegas, Nevada, Harrah's Entertainment
Inc.(NYSE: HET) -- http://www.harrahs.com/-- through its wholly
owned subsidiary Harrah's Operating Company Inc., provides
branded casino entertainment. Since its beginning in Reno,
Nevada 70 years ago, Harrah's has grown through development of
new properties, expansions and acquisitions, and now owns or
manages casinos on four continents. The company's properties
operate primarily under the Harrah's(R), Caesars(R) and
Horseshoe(R) brand names; Harrah's also owns the London Clubs
International family of casinos. In January 2007, it signed a
joint venture agreement with Baha Mar Resorts Ltd. to operate a
resort in Bahamas.
* * *
As reported in the Troubled Company Reporter-Latin America on
Jan. 21, 2008, Standard & Poor's Ratings Services lowered its
ratings on Harrah's Entertainment Inc. and its wholly owned
subsidiary, Harrah's Operating Co. Inc. The corporate credit
rating on each entity was lowered to 'B+' from 'BB'. In
addition, S&P's senior unsecured and subordinated debt ratings
on approximately US$4.6 billion of existing notes, which will be
rolled over as part of the transaction, were both lowered to
'B-', from 'BB' and 'B+'. The ratings were removed from
CreditWatch, where they were placed with negative implications
on Oct. 2, 2006. The rating outlook is stable.
KNOLL INC: Adopts Trading Plan for Expanded Repurchase Program
--------------------------------------------------------------
Knoll Inc. adopted a written trading plan under Rule 10b5-1 of
the Securities Exchange Act of 1934 on March 6, 2008, to
facilitate purchases during the months of March and April 2008,
under its expanded repurchase program disclosed in February
2008.
Under the Company 10b5-1 Plan, Banc of America Securities LLC
will have the authority to repurchase up to an aggregate of
approximately US$10 million worth of Knoll common stock on
behalf of the company during the period. The Company 10b5-1
Plan does not require that any shares be purchased, and there
can be no assurance that any shares will be purchased.
Purchases may be made under the Company 10b5-1 Plan beginning
March 7, 2008. The Share Repurchase Plan will continue to be in
effect after the expiration of the Company 10b5-1 Plan, which
expires on the earlier of April 21, 2008, or the date on which
purchases are completed.
A 10b5-1 plan allows the company to repurchase shares at times
when it would ordinarily not be in the market because of the
company's trading policies or the possession of material non-
public information.
About Knoll
Based in East, Greenville, Pennsylvania, Knoll Inc. (NYSE:KNL)
-- http://www.knoll.com/-- designs and manufactures office
furniture products and textiles. Knoll offers a portfolio of
office furniture, textiles and leather across five product
categories: office systems, which are typically modular and
moveable workspaces with functionally integrated panels, work
surfaces, desk components, pedestal and other storage units,
power and data systems and lighting; specialty products,
including high-image side chairs, sofas, desks and tables for
the office and home, textiles, accessories and leathers and
related products; seating; files and storage, and desks,
casegoods and tables. The company sells its products primarily
in North America. In October 2007, Knoll Inc. completed the
acquisition of Teddy and Arthur Edelman, Limited.
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 rating
still holds to date with a stable outlook.
=============
B E R M U D A
=============
ALEA GROUP: Posts US$78.2 Million Net Loss in Year Ended Dec. 31
----------------------------------------------------------------
Alea Group Holdings (Bermuda) Ltd. posted a net loss of
US$78.2 million on net revenues of US$94.4 million for the year
ended Dec. 31, 2007, compared to a net loss of US$0.8 million on
net revenues of US$310.7 million in 2006.
The company's insurance contracts liabilities decreased by 20.2%
from US$1,941.5 million at Dec. 31, 2006 to US$1,549.9 million
at Dec. 31, 2007.
Investment income of US$73.1 million reflecting a decrease in
invested assets as cash is used for claims payments and
commutations.
Other operating expenses for 2007 were US$59.7 million, which
includes US$11.9 million of one-time transaction related
expenses, which on a per share basis was US$0.07.
Subsequent to Dec. 31, 2007, the company repaid all of its
outstanding bank loans. Staff headcount reduced to 105 as at
Dec. 31, 2007 down from 137 as at Dec. 31, 2006.
Directorate Changes & Corporate Actions
Several events in 2007 resulted in a significant change in both
the ownership and Alea Group's Board of Directors. Following
the acquisition by FIN Acquisition Limited of approximately 67%
of the Company's shares in issue, on July 6, 2007, the company
announced the resignation of each of John Reeve, Timothy Faries,
James Fisher, Todd Fisher, Perry Golkin, R. Glenn Hilliard, and
Scott Nuttall as directors of the company with effect from
July 5, 2007. The company further announced the appointment of
Robert Kauffman, Randal Nardone and Greg Share as non-executive
directors of the Company with simultaneous effect. Mr Kauffman
was also appointed Chairman of the Board.
On July 10, 2007, the company announced the conversion of the
currency in which the company's shares trade on the London Stock
Exchange from pounds sterling to US dollars. On July 18, 2007,
the Group announced it had posted a circular to its shareholders
relating to the conversion of the Company's listing on the
Official List of the UK Listing Authority from a primary listing
to a secondary listing, with an effective date of Aug. 16, 2007.
On July 23, 2007, FIN Acquisition Limited announced it had
closed to further acceptances on July 20, 2007, its recommended
cash offer to acquire the shares of Alea Group, which increased
its ownership to 72.4%.
Dividend
The company has not proposed a dividend for the 2007 financial
year.
About Alea Group
Alea Group Holdings (Bermuda) Ltd. is a global provider of
insurance and reinsurance products and services, Alea Group
faced a tough year in 2005. With catastrophes such as
Hurricanes Katrina and Rita in the US and flooding in Europe
greatly affecting the company, Alea decided to run off its
property/casualty business. It has already sold or runoff some
of its lines, including its European property/casualty treaty
portfolio and Alea Alternative Risk. Headquartered in Bermuda,
the company has additional offices in Australia, Europe, and
North America. Investment firm Kohlberg Kravis Roberts & Co.
holds a nearly 40% stake in the company. Fortress Investment
Group has announced it intends to buy Alea for US$320 million.
* * *
On Feb. 1, 2006, A.M. Best Co. downgraded the financial strength
rating to B from B++ and the issuer credit rating to "bb" from
"bbb" of the insurance and reinsurance operating subsidiaries of
Alea Group Holdings (Bermuda) Ltd. (collectively referred to as
Alea Group or Alea).
Subsequently, A.M. Best withdrew all ratings and assigned an
NR-4 (Company Request) to the Alea Group companies.
The downgrade followed significant deterioration in the
company's consolidated risk-adjusted capitalization as a result
of worse than anticipated performance in 2005 due to run-off
charges, catastrophe losses and further adverse reserve
development. A.M. Best believed that the company is likely to
continue to be affected by high expenses related to the
transition of Alea Group into run off and the continuing
possibility of adverse reserve development.
===========
B R A Z I L
===========
AMAZONIA CELLULAR: Moody's Lifts US$120-Mln Notes Rating to Ba3
---------------------------------------------------------------
Moody's Investors Service upgraded the foreign currency rating
of the US$120 million in senior unsecured notes units due 2009
issued by Amazonia Celular S.A. and Telemig Celular S.A. to Ba3
from B2. The rating outlook is now positive. This action
concludes the review initiated on Aug. 7, 2007, begun at the
time the acquisition of the issuers was announced.
The rating action follows the approval by industry regulator
Anatel of the acquisition of Amazonia by Telemar Norte Leste
S.A. (Telemar; Baa2/outlook stable), and reflects Moody's
expectation that Amazonia will benefit from the stronger credit
profile of its new controlling shareholder.
The Ba3 rating assigned to the notes units is based on the
credit quality of Amazonia because 1/3 of the debt service of
the notes units depends on payments from Amazonia and are not
guaranteed by Telemig, which has a stronger credit profile. The
rating assumes that both Telemig and Amazonia will continue to
exist as individual entities and anticipates a reasonable level
of financial and operational support from their respective
shareholders. The debt rating is not constrained by Brazil's
sovereign ceiling for foreign currency bonds and notes of Baa3.
The rating is constrained by Amazonia's exposure to an intense
competitive environment in the company's concession area that
has gradually eroded its market share. The unfavorable
demographics and lack of population density in its extensive
concession area also limit the rating. Free cash flow is
currently positive (16% of total adjusted debt; total adjusted
debt includes derivatives, pension fund obligations, leases and
financial obligations with Telemig), but is likely to turn
negative in the coming years due to higher capex to deploy 3G
services and improve network quality. Amazonia's considerable
refinancing risk deriving from the relatively high amount of
short term debt maturities, including the maturity of the rated
bonds in January 2009, is somewhat mitigated by expected support
from the new controlling shareholder, Telemar. As of Dec. 31,
2007, Amazonia had cash of BRL30 million, last twelve month free
cash flow of BRL48 million, short term debt of BRL98 million and
the January 2009 maturity of the rated notes and related
derivatives transactions, currently totaling BRL117 million.
Fitch expects that Telemar will be supportive in securing the
funds necessary to refinance Amazonia's debt maturities.
As part of Telemar, the largest telecommunications company in
Brazil by revenues, Fitch expects Amazonia will be able to
dilute fixed expenses and better negotiate the cost of equipment
and handsets. The positive outlook incorporates likely synergy
gains favoring both margins and cash flows of Amazonia over the
next few quarters, as the integration process with Telemar
materializes.
The rating could be upgraded if there is further evidence of
explicit support from Telemar to Amazonia.
Headquartered in Belem, Brazil, Amazonia Celular SA provides
mobile communications services in the states of Maranhao, Para,
Amazonas, Amapa and Roraima in the northern region of Brazil.
With 1.4 million subscribers and a 20% market share in its
concession area as of Dec. 31, 2007, Amazonia reported net
revenues of BRL487 million (about US$285 million) in 2007.
AMBAC FINANCIAL: Prices US$1 Bln Public Offering of Common Stock
----------------------------------------------------------------
Ambac Financial Group Inc. priced its US$1.155 billion public
offering of 171,111,111 shares of common stock, par value
US$0.01 per share, at US$6.75 per share and has granted the
underwriters a 30-day option to purchase up to an additional
25,666,667 shares of common stock to cover over-allotments, if
any.
In addition, Ambac concurrently priced its US$250 million public
offering of 5 million equity units, with a stated amount of
US$50 per unit. The equity units carry a total distribution
rate of 9.5%. The threshold appreciation price of the equity
units is US$7.97 which represents a premium of approximately 18%
over the concurrent public offering price of Ambac's common
stock of
US$6.75 per share. Ambac has granted the underwriters a 13-day
option to purchase up to an additional 750,000 equity units to
cover over-allotments, if any.
Ambac also placed 14,074,074 shares of common stock in a private
placement for US$95 million with two financial institutions.
"With this US$1.5 billion capital raise and our other capital
strengthening actions and risk management initiatives, we
believe that our Ambac Assurance subsidiary will maintain its
triple-A financial strength ratings with Moody's and Standard &
Poor's," Michael Callen, Chairman and CEO of Ambac Financial
Group, commented that. "This is a most important step in
restoring the confidence of our customers in the stability of
our ratings and our inherent financial strength."
Ambac intends to contribute the net proceeds from these
offerings to its insurance company subsidiary Ambac Assurance
Corporation in order to increase its capital position, less
approximately US$100 million, which it intends to retain at
Ambac to provide incremental holding company liquidity to pay
principal and interest on its indebtedness, to pay its operating
expenses and to pay dividends on its capital stock.
Proceeds from the settlement of the purchase contracts forming a
part of the equity units, in May 2011, will be used to repay
US$142.5 million of the company's debt maturing Aug. 1, 2011, to
the extent that the cash proceeds of such settlement are
sufficient for such repayment. The remaining proceeds will be
retained at Ambac. Proceeds from the settlement of the purchase
contracts will not be used to repurchase common stock.
Credit Suisse Securities (USA) LLC, Citigroup Global Markets
Inc., Banc of America Securities LLC and UBS Investment Bank are
acting as joint book-running managers, and Keefe, Bruyette &
Woods Inc., Dresdner, Kleinwort Securities LLC, BNY Capital
Markets Inc. and KeyBanc Capital Markets Inc. are acting as co-
managers, for the common stock offering.
Credit Suisse Securities (USA) LLC, Citigroup Global Markets
Inc., Banc of America Securities LLC and UBS Investment Bank are
acting as joint book-running managers, and Keefe, Bruyette &
Woods Inc. is also acting as a co-manager, for the equity units
offering. Sandler O'Neill + Partners L.P. served as independent
financial advisor to Ambac with respect to these offerings.
Copies of the prospectus supplements and the accompanying base
prospectuses relating to these offerings may be obtained from:
-- Credit Suisse Securities (USA) LLC
Eleven Madison Avenue
New York, NY 10004
Tel (800) 221-1037
Fax (212) 325-8057
-- Citigroup Global Markets Inc.
Brooklyn Army Terminal
8th Floor, 140 58th Street
Brooklyn, NY 11220
Tel (718) 765-6732
Fax (718) 765-6734
-- Banc of America Securities LLC
Capital Markets Operations
3rd Floor, 100 West 33rd Street
New York, NY 10001
Tel (800) 294-1322
E-mail dg.prospectus_distribution@bofasecurities.com
-- UBS Investment Bank
Attn: Prospectus Department
299 Park Avenue
New York, NY 10171
Tel (888) 827-7275
About Ambac Financial
Based in New York City, Ambac Financial Group, Inc. is a holding
company whose affiliates provide financial guarantees and
financial services to clients in both the public and private
sectors around the world. The company has operation in Brazil.
For the nine months ended Sept. 30, 2007, Ambac reported net
income of US$26 million. As of Sept. 30, 2007, Ambac had
shareholders' equity of approximately US$5.65 billion.
* * *
On Jan. 18, Fitch Ratings downgraded Ambac to double-A after the
insurer put off plans to raise equity capital.
As reported in the Troubled company Reporter on Feb. 25, 2008,
Fitch Ratings downgraded AbitibiBowater Inc. and subsidiaries
as: Abitibi-Consolidated Inc.; IDR to 'CCC' from 'B-'; senior
unsecured debt to 'CCC/RR4 from 'B-/RR4'; secured revolver to
'CCC+/RR3' from 'B/RR3'. Bowater Incorporated; IDR to 'CCC'
from 'B-'; senior unsecured debt to 'CCC/RR4' from 'B-/RR4';
secured revolver to 'B/RR1' from 'BB-/RR1'. Bowater Canadian
Forest Products Inc.; IDR to 'CCC' from 'B-'; senior unsecured
debt to 'B-/RR2' from 'B+/RR2; secured revolver to 'B/RR1' from
'BB-/RR1'. All ratings have been placed on rating watch
negative.
BANCO BMG: Moody's Rates ST Note Programme & LT Senior Notes Ba1
----------------------------------------------------------------
Moody's Investors Service assigned long and short-term foreign
currency ratings of Ba1 and Not Prime, respectively, to Banco
BMG S.A.'s US$1,000,000,000 Short-Term Note Programme. Moody's
also assigned a Ba1 long-term foreign currency debt rating to
the senior unsecured notes due March 2010 issued under the
program in the amount of US$250,000,000. The outlook on the
ratings is stable.
These ratings were assigned to Banco BMG SA:
-- US$1 billion STN Programme: Long and short-term foreign-
currency rating of Ba1/Not Prime, stable outlook.
-- US$250 million 2-year Senior Unsecured Notes: Long-term
foreign currency debt rating of Ba1, stable outlook.
Headquartered in Minas Gerais, Brazil, Banco BMG is the banking
arm of Grupo BMG, which also has real estate, food manufacturing
and agro industry holdings. It also offers leasing and asset
management services. Banco BMG had BRL6.60 billion
(approximately US$3.86 billion) in total assets and
BRL1.33 billion in equity (US$778 million) as of year-end 2007.
BANCO BMG: Raises US$250 Million From Two-Year Bond Issue
---------------------------------------------------------
Banco BMG has raised some US$250 million from a two-year bond
issue on the Luxembourg stock exchange.
As reported in the Troubled Company Reporter-Latin America on
March 7, 2008, Banco BMG wanted to raise at least US$100 million
from the two-year bond issue. The offering closed this week,
with U.S. investment bank BCP Securities handling the sale. The
notes will mature in March 2010 and will pay a fixed coupon of
7%. Banco BMG said it would decide by July whether or not to
conduct an initial public offering on the Sao Paulo stock
exchange Bovespa.
Banco BMG Chief Financial Officer Ricardo Gelbaum commented to
Business News Americas, "Two weeks ago, we went on a non-deal
road show and although the market was on edge, we saw it was in
need of short-term issues backed by high-quality assets."
Mr. Gelbaum further told BNamericas that the overall demand for
the bond was 20% above the US$250 million eventually placed,
with 52% of investors from the U.S., 23% from Europe, 18% from
Latin America -- Chile, Mexico, Peru and Brazil -- and 7% from
Asia.
Banco BMG will use all of the money raised to pay for increased
payroll loans, BNamericas says, citing Mr. Gelbaum.
According to BNamericas, Banco BMG expanded its loan book by
44.5% to BRL12.5 billion in 2007, generating BRL6.13 billion in
new loans with BRL4.02 billion going to new payroll and
retirement loans.
Moody's Investors Service Vice President and Senior Analyst
Ceres Lisboa commented to BNamericas, "The recent two-year bond
issue by BMG seems to show there is a relative window of
opportunity, principally with investors interested in medium-
term notes. This is certainly good news in the area of funding
alternatives for mid-size banks. Our expectations, however, are
for investors to remain selective in their appetite for risks."
Moody's gave the US$250 million debt a long-term foreign
currency debt rating of Ba1.
Banco BMG is the banking arm of Grupo BMG, which also has real
estate, food manufacturing and agro industry holdings. The bank
is a niche player focused on loans to civil servants, with
repayments taken monthly from payrolls. BMG operates mainly
through in-house representatives in state companies. It also
offers leasing and asset management services.
* * *
As reported in the Troubled Company Reporter-Latin America on
June 26, 2007, Standard & Poor's Ratings Services raised its
long-term counterparty credit rating on Banco BMG S.A. to 'BB-'
from 'B+'. The rating was removed from CreditWatch Positive
where it was placed June 11, 2007. S&P said the outlook is
stable.
On March 10, 2008, Moody's Investors Rating gave Banco BMG's
US$250 million issue a Ba1 long-term foreign currency debt
rating with a stable outlook and the bank's US$1 billion note
program a Ba1 long-term foreign currency rating with a stable
outlook and a Not Prime short-term foreign currency rating.
BANCO DO BRASIL: Concludes US$250MM Six-Year Flow Securitization
----------------------------------------------------------------
Banco do Brasil's International Director Sandro Kohler Marcondes
told Business News Americas that the bank has concluded a
US$250 million, six-year future flow securitization with a
coupon equal to three-month Libor plus 55 basis points.
Banco do Brasil will use the money for export financing for mid-
sized firms and will consider more issues abroad this year to
help satisfy the growing demand for credit in Brazil, BNamericas
says, citing Mr. Marcondes.
According to BNamericas, BNP Paribas was the placement agent.
Moody's Vice President and senior analyst Ceres Lisboa commented
to BNamericas, "Big banks, which are frequent issuers on the
international market, can have relatively easy access to
investors. The recent future flow securitizations by BB [Banco
do Brasil] and Bradesco certainly gives them access to funding
at longer terms, complementing their solid base of cheap and
recurring deposits."
Banco do Brasil is Brazil's federal bank and is the largest in
Latin America with some 20 million clients and more than 7,000
points of sale (3,200 branches) in Brazil, and 34 offices and
partnerships in 26 other countries. In addition to its
traditional retail banking services, Banco do Brasil underwrites
and sells bonds, conducts asset trading, offers investors
portfolio management services, conducts financial securities
advising, and provides market analysis and research.
* * *
On Feb. 29, 2008, Moody's Investors Rating Service assigned a
Ba2 foreign currency deposit rating to Banco do Brasil.
BANCO NACIONAL: Okays BRL7.1 Mil. Financing to HUCFF Annex
----------------------------------------------------------
Banco Nacional de Desenvolvimento Economico e Social has
approved a BRL7.1 million financial support for the construction
of an outpatient care center annex to Hospital Universitario
Clementino Fraga Filho, assistencial arm of Universidade Federal
do Rio de Janeiro linked to the Ministry of Education and to
Sistema Unico de Saude [Single Health System]. The resources,
originated from BNDES Social Fund, not refundable, shall be used
to assist hematological and oncological outpatients, as well as
those who suffer from sickle cell anemia. Further to this unit,
investments shall be carried out for installation of an
additional six beds in the bone marrow transplantation unit
currently existing at HUCFF.
The contract for financial support to the project was signed on
March 7, by BNDES president, Luciano Coutinho, and by the
general director of HUCFF, Alexandre Pinto Cardoso, as part of
the commemorations for the 30 years of foundation of HUCFF.
The implementation of the new outpatient unit shall allow
increased productivity in the areas of hematology and oncology,
reduced hospital internments, integration of health teams and
better conditions for capturing funds for clinical researches.
The project should further contribute for academic formation.
The new facilities will enable a 22% increase in the number of
beds for bone marrow transplantations in the State of Rio de
Janeiro, allowing a 55% increase of the capacity to carry out
such kind of transplantation at HUCFF, until 2010.
The new outpatient unit shall operate on an integrated basis
with the bone marrow transplantation unit and shall be
complementary to the operations of Rede BrasilCord (umbilical
cord and placentary blood bank), under the coordination of
Instituto Nacional do Cancer [National Institute of Cancer].
Both, HUCFF bone marrow transplantation unit and umbilical cord
and placentary blood bank), were projects supported by BNDES.
The first one received a BRL4.8 million financing, in 2000. The
second one was contracted in 2006, for the amount of
BRL27 million.
The outpatient unit shall be installed in:
* a two-floor building with eleven clinic consultation rooms,
with capacity to assist around 265 patients per day;
* clinic hematology laboratory for collection and tests;
* outpatient chemotherapy;
* day-care services, with two physician’s offices, 12
armchairs and two stretchers for assistance after bone
marrow transplantation and high complexity chemotherapy
treatment;
* a group of rooms for manipulation and preparation of
chemotherapy medications;
* room for specialized dentistry care for patients
under chemotherapy treatment;
* room for invasive clinical procedures; and
* a clinical research room, besides rooms for hematology and
oncology service instructors and physicians.
HUCFF – The hospital carries out over 108 thousand specialized
interventions per year and 10 thousand high complexity
procedures, with an average ratio of 75% occupation rate.
Adding teaching, research and services provided, in 2007,
HUCFF surpassed the mark of outpatient consultations recorded in
2006, assisting over 20,900 patients in its 49 medical
specialties. Among the high complexity procedures (organ
transplantations, stem cell therapies, bariatric surgeries,
etc), the number surpassed 10 thousand, a result much higher
than target, slightly above 7 thousand.
Banco Nacional de Desenvolvimento Economico e Social is Brazil's
national development bank. It provides financing for projects
within Brazil and plays a major role in the privatization
programs undertaken by the federal government.
* * *
Banco Nacional currently carries a Ba2 foreign long-term bank
deposit rating from Moody's Investors Service, and a BB+ long-
term foreign issuer credit rating from Standards and Poor's
Ratings Services. The ratings were assigned in August and May
2007.
COMPANHIA ENERGETICA: Will Auction Shares on March 26
-----------------------------------------------------
Companhia Energetica de Sao Paulo will auction seven million
preferred and 85.9 million ordinary shares in the company on
March 26, 2008, Business News Americas reports.
Tractebel Energia Chief Financial Officer Marc Verstraete said
in a Web cast that the company is considering competing in the
auction.
Mr. Verstraete commented to BNamericas, "I cannot say much about
our participation, but I can say we are studying the company
full time. We are currently in the due diligence process to
create a model to take part in the auction."
Once Tractebel Energia decides to bid for the shares, it will do
so with partners and without the help of its controlling
shareholder Suez, BNamericas says, citing Mr. Verstraete.
"We would not bid alone for Cesp [Companhia Energetica]. We
need partners in order to mitigate risks as Cesp owns generation
assets with concession expiring in 2015," Mr. Verstraete told
BNamericas.
About Tractebel Energia
Tractebel Energia SA is an electric energy generation company in
Brazil. The company supplies 5,860 megawatts of power from its
operations at 13 plants located in the states of Parana, Santa
Catarina, Rio Grande do Sul, Matto Grosso do Sul and Goias. Its
principal clients are distributors of electricity and industry
across Brazil. In addition to the sale of electric energy,
Tractebel Energia further offers services in the monitoring of
energy quality, the operation and maintenance of generation
equipment, co-generation, steam generation, the change of
voltage in connection equipment to networks and the sale of
energy surpluses.
About Companhia Energetica
Headquartered in Sao Paulo, Brazil, Companhia Energetica de Sao
Paulo (BOVESPA: CESP3, CESP5 and CESP6) is the country's third
largest power generator, majority owned by the State of Sao
Paulo. It operates 6 hydroelectric plants with total installed
capacity of 7,456 MW and 3,916 MW of assured energy. The
company reported net revenues of BRL1,983 million in the last
twelve months through Sept. 30, 2006.
* * *
As reported in the Troubled Company Reporter-Latin America on
Oct. 10, 2007, Standard & Poor's Ratings Services raised its
ratings on electricity generator Companhia Energetica de Sao
Paulo, including its corporate credit rating to 'B' from 'B-'.
At the same time, S&P raised its Brazil national scale ratings
on CESP to 'brBBB-' from 'brBB'. S&P said the outlook remains
positive on both scales.
COMPANHIA SIDERURGICA: Net Income Up 150% to BRL2.9 Bil. in 2007
----------------------------------------------------------------
Companhia Siderurgica Nacional has reported its results for the
fourth quarter of 2007.
-- The company reported a net income of BRL2.9 billion in
2007, a new annual record and 150% more than in 2006.
-- Annual steel product sales volume stood at 5.4 million
tons, 23% more than in 2006 and also company record. In
the 2007 fourth quarter alone, sales volume totaled 1.4
million tons, 18% up year-on-year.
-- Net revenue reached an impressive BRL11.4 billion in 2007,
27% more than in 2006 and yet another record.
-- Annual EBITDA stood at BRL4.9 billion, 54% up on the year
before 2006. Once again, this was the company's highest
ever EBITDA figure.
-- Companhia Siderurgica's shares recorded annual
appreciation of 157%, the highest upside of all the
companies making up the Ibovespa Index. Its ADRs recorded
an even more substantial upturn of 216%, the highest
figure among all the Latin American firms traded on the
NYSE.
-- Annual crude steel production totaled more than 5.3
million tons, 52% up on 2006.
-- In 2007, the company and its subsidiary NAMISA produced
and acquired from third parties more than 21 million
tons of iron ore. Iron ore sales totaled 10.5 million
tons in Brazil and abroad, in addition to the 7.1 million
tons consumed internally by the Presidente Vargas
Steelworks.
-- The net debt/EBITDA ratio, based on EBITDA in the last 12
months, continued to decline, falling from 1.74 in
December 2006, to 0.99 at the close of 2007. In monetary
terms, the net debt fell by 28%, from BRL6.7 billion to
BRL4.8 billion.
Headquartered Sao Paolo, Brazil, Companhia Siderurgica Nacional
S.A. -- http://www.csn.com.br/-- produces, sells, exports and
distributes steel products, like hot-dip galvanized sheets, tin
mill products and tinplate. The company also runs its own iron
ore, manganese, limestone and dolomite mines and has strategic
investments in railroad companies and power supply projects.
The group also operates in Brazil, Portugal and the U.S.
* * *
As reported in the Troubled Company Reporter-Latin America on
Dec. 27, 2007, Standard & Poor's Ratings Services revised its
outlook on Brazil-based steel maker Companhia Siderurgica
Nacional and related entity National Steel S.A. to positive from
stable. At the same time, S&P affirmed its 'BB' corporate
credit rating on Companhia Siderurgica and its 'B+' rating on
National Steel.
DELPHI CORP: Realigns Stake in Japanese & Hungarian Ventures
------------------------------------------------------------
As part of its restructuring efforts to reduce its compressor
business cost structure and strengthen its global footprint,
Delphi Corp. realigned its share holdings in two compressor
joint ventures with Japan-based Calsonic Kansei Corporation.
Delphi purchased the remaining 10% venture shares from Calsonic
Kansei Europe plc in Delphi Calsonic Hungary Ltd., and sold its
remaining 49% shares in its Japan-based venture, Calsonic
Harrison Co., Ltd. to Calsonic Kansei. The dissolution of the
two joint ventures will help the company to become more focused
and cost competitive on a global basis.
"We have enjoyed a long-running relationship with Calsonic
Kansei, which has allowed us to provide customers with the very
best advanced solutions for their compressor needs," said Ron
Pirtle, Delphi Thermal Systems President. "Delphi has recently
expanded its compressor footprint in Mexico and has a planned
plant opening in China this year. This expansion, coupled with
the announcement of our Hungary plant, well positions Delphi to
serve the needs of the local markets and meet increasing
customer demand."
The Hungary-based venture is located in Balassagyarmat and
manufactures compact variable compressors. Customers,
suppliers, employees and other parties associated with the plant
will not be impacted by the share purchase.
Delphi formed its first joint venture with Calsonic Kansei in
Japan in 1986 and created its joint venture in Hungary in 1999.
About GM
Headquartered in Detroit, Michigan, General Motors Corp. (NYSE:
GM) -- http://www.gm.com/-- was founded in 1908. GM employs
about 266,000 people around the world and manufactures cars and
trucks in 35 countries. In 2007, nearly 9.37 million GM cars
and trucks were sold globally under the following brands: Buick,
Cadillac, Chevrolet, GMC, GM Daewoo, Holden, HUMMER, Opel,
Pontiac, Saab, Saturn, Vauxhall and Wuling. GM's OnStar
subsidiary is the industry leader in vehicle safety, security
and information services.
About Delphi Corp.
Headquartered in Troy, Michigan, Delphi Corporation (PINKSHEETS:
DPHIQ) -- http://www.delphi.com/-- is the single supplier of
vehicle electronics, transportation components, integrated
systems and modules, and other electronic technology. The
company's technology and products are present in more than
75 million vehicles on the road worldwide. Delphi has regional
headquarters in Japan, Brazil and France.
The company filed for chapter 11 protection on Oct. 8, 2005
(Bankr. S.D.N.Y. Lead Case No. 05-44481). John Wm. Butler Jr.,
Esq., John K. Lyons, Esq., and Ron E. Meisler, Esq., at Skadden,
Arps, Slate, Meagher & Flom LLP, represent the Debtors in their
restructuring efforts. Robert J. Rosenberg, Esq., Mitchell A.
Seider, Esq., and Mark A. Broude, Esq., at Latham & Watkins LLP,
represents the Official Committee of Unsecured Creditors. As of
March 31, 2007, the Debtors' balance sheet showed
US$11,446,000,000 in total assets and US$23,851,000,000 in total
debts.
The Court approved Delphi's First Amended Joint Disclosure
Statement and related solicitation procedures for the
solicitation of votes on the First Amended Plan on Dec. 20,
2007. The Court confirmed the Debtors' First Amended Plan on
Jan. 25, 2008.
(Delphi Bankruptcy News; Bankruptcy Creditors' Service Inc.,
http://bankrupt.com/newsstand/or 215/945-7000)
* * *
As reported in the Troubled Company Reporter-Latin America on
Jan. 16, 2008, Moody's Investors Service assigned ratings to
Delphi Corporation for the company's financing for emergence
from Chapter 11 bankruptcy protection: Corporate Family Rating
of (P)B2; US$3.7 billion of first lien term loans, (P)Ba3; and
US$0.825 billion of 2nd lien term debt, (P)B3. In addition, a
Speculative Grade Liquidity rating of SGL-2 representing good
liquidity was assigned. The outlook is stable.
As reported in the Troubled Company Reporter on Jan. 11, 2008,
Standard & Poor's Ratings Services expects to assign its 'B'
corporate credit rating to Troy, Michigan-based automotive
supplier Delphi Corp. upon the company's emergence from Chapter
11 bankruptcy protection, which may occur by the end of the
first quarter of 2008. S&P expects the outlook to be negative.
In addition, Standard & Poor's expects to assign these
issue-level ratings: a 'B+' issue rating (one notch above the
corporate credit rating), and '2' recovery rating to the
company's proposed US$3.7 billion senior secured first-lien term
loan; and a 'B-' issue rating (one notch below the corporate
creditrating), and '5' recovery rating to the company's proposed
US$825 million senior secured second-lien term loan.
DELPHI CORP: Re-Launches Exit Financing to Include GM, Affiliate
----------------------------------------------------------------
Delphi Corp. will be relaunching its exit financing structure,
which will include participation from General Motors Corp., as
well as a new commitment from an affiliate of GM, to also
support the company's planned emergence from Chapter 11
reorganization. The company will host a conference call for
potential lenders today, March 11, 2008, to discuss the
company's exit financing and related timetable. The proposed
exit facilities are being arranged on a best efforts basis by
J.P. Morgan Securities, Inc., and Citigroup Global Markets,
Inc., in accordance with prior orders entered by the United
States Bankruptcy Court for the Southern District of New York.
As reported in the Troubled Company Reporter on March 6, 2008,
the company's US$6.1 billion exit financing package includes a
US$1.6 billion asset-backed revolving credit facility, at least
US$1.7 billion of first-lien term loan, an up to US$2.0 billion
first-lien term note to be issued to an affiliate of GM (junior
to the US$1.7 billion first-lien term loan), and an US$825
million second-lien term loan, of which any unsold portion would
be issued to GM and its affiliates consistent with the terms of
the company's Investment Agreement with its plan investors.
On March 7, 2008, because certain of Delphi's plan investors had
advised the company that they believed the proposed exit
financing, including GM's increased participation, would not
comply with the Investment Agreement, Delphi presented a motion
in the Bankruptcy Court under section 1142 of the Bankruptcy
Code which permits the Court to consider matters and issue
orders in furtherance of a confirmed plan of reorganization.
At the hearing, during which the Court did not grant the
specific relief sought by the company, the Court said that while
GM could not directly provide incremental exit financing to
Delphi without the consent of the plan investors, the
prohibition against additional agreements with GM did not extend
to incremental financing provided through GM subsidiaries or
pursuant to certain other structures. In its ruling, the
Bankruptcy Court also observed that the company had been given
sufficient guidance by the Court to proceed to seek exit
financing on terms that are potentially achievable. Although
certain of the Investors continue to object to the proposed exit
financing, Delphi believes its proposed exit financing is
consistent with the Court's guidance and previously issued
confirmation order and will be moving forward with the
syndication efforts to raise
US$6.1 billion in financing.
About GM
Headquartered in Detroit, Michigan, General Motors Corp. (NYSE:
GM) -- http://www.gm.com/-- was founded in 1908. GM employs
about 266,000 people around the world and manufactures cars and
trucks in 35 countries. In 2007, nearly 9.37 million GM cars
and trucks were sold globally under the following brands: Buick,
Cadillac, Chevrolet, GMC, GM Daewoo, Holden, HUMMER, Opel,
Pontiac, Saab, Saturn, Vauxhall and Wuling. GM's OnStar
subsidiary is the industry leader in vehicle safety, security
and information services.
About Delphi Corp.
Headquartered in Troy, Michigan, Delphi Corporation (PINKSHEETS:
DPHIQ) -- http://www.delphi.com/-- is the single supplier of
vehicle electronics, transportation components, integrated
systems and modules, and other electronic technology. The
company's technology and products are present in more than
75 million vehicles on the road worldwide. Delphi has regional
headquarters in Japan, Brazil and France.
The company filed for chapter 11 protection on Oct. 8, 2005
(Bankr. S.D.N.Y. Lead Case No. 05-44481). John Wm. Butler Jr.,
Esq., John K. Lyons, Esq., and Ron E. Meisler, Esq., at Skadden,
Arps, Slate, Meagher & Flom LLP, represent the Debtors in their
restructuring efforts. Robert J. Rosenberg, Esq., Mitchell A.
Seider, Esq., and Mark A. Broude, Esq., at Latham & Watkins LLP,
represents the Official Committee of Unsecured Creditors. As of
March 31, 2007, the Debtors' balance sheet showed
US$11,446,000,000 in total assets and US$23,851,000,000 in total
debts.
The Court approved Delphi's First Amended Joint Disclosure
Statement and related solicitation procedures for the
solicitation of votes on the First Amended Plan on Dec. 20,
2007. The Court confirmed the Debtors' First Amended Plan on
Jan. 25, 2008.
(Delphi Bankruptcy News; Bankruptcy Creditors' Service Inc.,
http://bankrupt.com/newsstand/or 215/945-7000)
* * *
As reported in the Troubled Company Reporter-Latin America on
Jan. 16, 2008, Moody's Investors Service assigned ratings to
Delphi Corporation for the company's financing for emergence
from Chapter 11 bankruptcy protection: Corporate Family Rating
of (P)B2; US$3.7 billion of first lien term loans, (P)Ba3; and
US$0.825 billion of 2nd lien term debt, (P)B3. In addition, a
Speculative Grade Liquidity rating of SGL-2 representing good
liquidity was assigned. The outlook is stable.
As reported in the Troubled Company Reporter on Jan. 11, 2008,
Standard & Poor's Ratings Services expects to assign its 'B'
corporate credit rating to Troy, Michigan-based automotive
supplier Delphi Corp. upon the company's emergence from Chapter
11 bankruptcy protection, which may occur by the end of the
first quarter of 2008. S&P expects the outlook to be negative.
In addition, Standard & Poor's expects to assign these
issue-level ratings: a 'B+' issue rating (one notch above the
corporate credit rating), and '2' recovery rating to the
company's proposed US$3.7 billion senior secured first-lien term
loan; and a 'B-' issue rating (one notch below the corporate
creditrating), and '5' recovery rating to the company's proposed
US$825 million senior secured second-lien term loan.
DELPHI CORP: Inks US$10 Million Purchase Pact with Tenneco Inc.
---------------------------------------------------------------
Tenneco Inc. entered into a purchase agreement with Delphi
Automotive Systems LLC to acquire certain ride control assets
and inventory at Delphi's facility in Kettering, Ohio. This
purchase agreement has been filed with the bankruptcy court as
part of Delphi's bankruptcy court proceedings.
The closing of this purchase is subject to certain closing
conditions, including bankruptcy court approval.
As part of the purchase agreement, Tenneco would pay
approximately US$10 million for existing ride control components
inventory and approximately US$9 million for certain machinery
and equipment. Tenneco would also lease a portion of the
Kettering facility from Delphi.
In connection with the purchase agreement, Tenneco has entered
into an agreement with the International Union of Electrical
Workers, which represents the Delphi workforce at the Kettering
plant. The agreement was ratified by the IUEÂ’ s rank and file
in August 2007.
Tenneco has also entered into a long-term supply agreement with
General Motors Corp. to continue to supply passenger car shock
and strut business to General Motors from the Kettering
facility.
About Tenneco Inc.
Based in Lake Forest, Illinois, Tenneco Inc., (NYSE: TEN) --
http://www.tenneco.com/-- manufactures automotive ride and
emissions control products and systems for both the original
equipment market and aftermarket. Brands include Monroe(R),
Rancho(R), and Fric Rot ride control products and Walker(R) and
Gillet emission control products. The company has operations in
Argentina, Japan, and Germany, with its European operations
headquartered in Brussels, Belgium. The company has
approximately 19,000 employees worldwide.
About Delphi Corp.
Headquartered in Troy, Michigan, Delphi Corporation (PINKSHEETS:
DPHIQ) -- http://www.delphi.com/-- is the single supplier of
vehicle electronics, transportation components, integrated
systems and modules, and other electronic technology. The
company's technology and products are present in more than
75 million vehicles on the road worldwide. Delphi has regional
headquarters in Japan, Brazil and France.
The company filed for chapter 11 protection on Oct. 8, 2005
(Bankr. S.D.N.Y. Lead Case No. 05-44481). John Wm. Butler Jr.,
Esq., John K. Lyons, Esq., and Ron E. Meisler, Esq., at Skadden,
Arps, Slate, Meagher & Flom LLP, represent the Debtors in their
restructuring efforts. Robert J. Rosenberg, Esq., Mitchell A.
Seider, Esq., and Mark A. Broude, Esq., at Latham & Watkins LLP,
represents the Official Committee of Unsecured Creditors. As of
March 31, 2007, the Debtors' balance sheet showed
US$11,446,000,000 in total assets and US$23,851,000,000 in total
debts.
The Court approved Delphi's First Amended Joint Disclosure
Statement and related solicitation procedures for the
solicitation of votes on the First Amended Plan on Dec. 20,
2007. The Court confirmed the Debtors' First Amended Plan on
Jan. 25, 2008.
(Delphi Bankruptcy News; Bankruptcy Creditors' Service Inc.,
http://bankrupt.com/newsstand/or 215/945-7000)
* * *
As reported in the Troubled Company Reporter-Latin America on
Jan. 16, 2008, Moody's Investors Service assigned ratings to
Delphi Corporation for the company's financing for emergence
from Chapter 11 bankruptcy protection: Corporate Family Rating
of (P)B2; US$3.7 billion of first lien term loans, (P)Ba3; and
US$0.825 billion of 2nd lien term debt, (P)B3. In addition, a
Speculative Grade Liquidity rating of SGL-2 representing good
liquidity was assigned. The outlook is stable.
As reported in the Troubled Company Reporter on Jan. 11, 2008,
Standard & Poor's Ratings Services expects to assign its 'B'
corporate credit rating to Troy, Michigan-based automotive
supplier Delphi Corp. upon the company's emergence from Chapter
11 bankruptcy protection, which may occur by the end of the
first quarter of 2008. S&P expects the outlook to be negative.
In addition, Standard & Poor's expects to assign these
issue-level ratings: a 'B+' issue rating (one notch above the
corporate credit rating), and '2' recovery rating to the
company's proposed US$3.7 billion senior secured first-lien term
loan; and a 'B-' issue rating (one notch below the corporate
creditrating), and '5' recovery rating to the company's proposed
US$825 million senior secured second-lien term loan.
GOL LINHAS: Signs Interline Agreement With TAP Portugal
-------------------------------------------------------
GOL Linhas Aereas Inteligentes S.A., the parent company of
Brazilian airlines GOL Transportes Aereos S.A. and VRG Linhas
Aereas S.A., has reported an interline agreement between VRG
Linhas and TAP Portugal. Passengers of both airlines can
purchase tickets to all destinations served by VRG Linhas and
TAP Portugal.
VRG Linhas currently serves two of the most important
destinations in Europe: Madrid and Paris. Through this new
partnership, the company's passengers will now also have access
to additional destinations through TAP Portugal's route network,
including Portugal, Denmark, England, Germany, Italy and
Switzerland.
Since September 2007, VRG Linhas has participated in
Multilateral Interline Traffic Agreement (MITA), an IATA network
of airlines from around the world. All MITA members have the
option to enter interline agreements with other member airlines.
In addition to this new partnership, VRG maintains interline
agreements with Brazil's GOL, France's Air France, Germany's
Hahn Air, Greece's Aegean, Holland's KLM, Hungary's Malev,
Israel's El Al, Italy's Air One, Japan Airlines, Mexico's
Mexicana, Air Moldova, Poland's LOT Polish Airlines, South
Korea's Korean Air, Spain's Iberia and Air Comet, Qatar Airways,
the Czech Republic's CSA Czech Airlines, Ukraine International
Airlines and the United States' Delta Air Lines.
Passengers traveling under the Smiles frequent flier program can
only accumulate miles on flights operated by VRG Linhas Aereas
SA.
Based in Sao Paulo, Brazil, GOL Intelligent Airlines aka GOL
Linhas Areas Inteligentes S.A. (NYSE: GOL and Bovespa: GOLL4) --
http://www.voegol.com.br-- through its subsidiary, GOL
Transportes Aereos S.A., provides airline services in Brazil,
Argentina, Bolivia, Uruguay, and Paraguay. The company's
services include passenger, cargo, and charter services. As of
March 20, 2006, Gol Linhas provided 440 daily flights to 49
destinations and operated a fleet of 45 Boeing 737 aircraft.
The company was founded in 2001.
* * *
As reported in the Troubled Company Reporter-Latin America on
July 25, 2007, Fitch Ratings affirmed the 'BB+' foreign and
local currency issuer default ratings of Gol Linhas Aereas
Inteligentes S.A. Fitch also affirmed the outstanding US$200
million perpetual bonds and US$200 million of senior notes due
2017 at 'BB+' as well as the company's 'AA-' (bra) national
scale rating. Fitch said the rating outlook is stable.
GRAFTECH INT'L: Dec. 31 Balance Sheet Upside Down By US$112.7MM
---------------------------------------------------------------
GrafTech International Ltd. reported that at Dec. 31, 2007, the
company's balance sheet reflected total assets of
US$866.7 million, total liabilities of US$979.4 million,
resulting to a total stockholders' deficit of US$112.7 million.
For the 2007 fourth quarter ended Dec. 31, the company's net
income is at US$39.9 million from US$77.2 million of the 2006
fourth quarter. For the 2007 fiscal year ended Dec. 31, the
company reported net income of US$153.7 million from US$91.3
million income of fiscal 2006.
Net sales for the 2007 fourth quarter were US$269.4 million an
increase of US$34 million or 14% from US$235.4 million total
sales for the 2006 fourth quarter. For the fiscal year 2007,
the company's net sales were US$1,004.8 million from
US$855.4 million sales in 2006.
"The significant improvement in the results was enabled by
better price realization and the team's relentless pursuit of
cost reductions and increased production efficiencies," Craig
Shular, chief executive officer of GrafTech, commented.
"Operating cash flow more than doubled to US$131 million,
allowing us to complete the year with net debt of US$370
million, the lowest in our company's history."
"Finally, growing sales by 18% while at the same time reducing
selling and administrative costs by 11 percent rounded out a
solid year," Mr. Shular added.
For the 2007 fourth quarter, gross profit increased
approximately 17%, to US$81 million, or 30.1% of net sales, as
compared to US$69 million, or 29.4% of net sales, in the fourth
quarter of 2006. Gross profit in the quarter was negatively
impacted by a one-time US$5 million charge associated with the
termination and closure of our defined benefit South African
pension plan. Excluding the impact of this charge, gross margin
for the quarter would have been 32.0%.
Income from continuing operations was US$39 million versus
US$26 million in the 2006 fourth quarter. Income from
continuing operations before special items was US$44 million as
compared to
US$21 million in the 2006 fourth quarter. The year on year
change included the benefit of a seven percentage point
improvement in the company's effective income tax rate from 28%
to 21%. Net cash provided by operating activities increased to
US$55 million, versus US$20 million in the 2006 fourth quarter.
Selling and administrative and research and development expenses
were US$24 million in the 2007 fourth quarter, as compared to
US$29 million in the 2006 fourth quarter. The decrease resulted
largely from realized benefits associated with restructuring and
productivity projects.
Interest expense was US$7 million in the 2007 fourth quarter or
US$4 million lower than the same period in the prior year as a
result of successful deleveraging efforts.
Other expense, net, was US$2 million in the 2007 fourth quarter,
as compared to other income, net, of US$8 million in the same
period in 2006. The change in the quarter is largely due to
inter-company loan currency translation losses.
About Graftech International
Based Parma, Ohio, in GrafTech International Ltd. (NYSE: GTI) --
http://www.graftech.com-- manufactures graphite electrodes,
products essential to the production of electric arc furnace
steel, and various other ferrous and non-ferrous metals. The
company manufactures natural graphite products enabling thermal
management solutions for the electronics industry, and fuel cell
solutions for the transportation and power generation
industries. GTI also manufactures and provides graphite and
carbon products, as well as related technical services,
including graphite and carbon materials for the semiconductor,
transportation, petrochemical and other metals markets. GTI has
four major product categories: graphite electrodes, advanced
graphite materials, and carbon refractories and natural
graphite. On Dec. 5, 2006, GTI completed the sale of its
cathode business, including its 70% equity interest in Carbone
Savoie S.A.S. to Alcan France. The company has operations in
China, France and Brazil.
* * *
As reported in the Troubled Company Reporter on Jan. 18, 2008,
Standard & Poor Ratings Services said that its rating and
outlook on graphite electrodes manufacturer Graftech
International Ltd. (B+/Positive/--) are not affected at this
time by the company's announcement that it will redeem
US$125 million of its outstanding 10.25% senior notes due 2012.
PROPEX INC: U.S. Trustee Reacts to Panel Counsel's Hourly Rates
---------------------------------------------------------------
Richard F. Clippard, the United States Trustee for Region 8,
relates that Akin Gump Strauss Hauer & Feld, LLP has been asked
to cap the hourly rates of the attorneys of the Official
Committee of Unsecured Creditors of Propex Inc. and its debtor-
affiliates at US$675 per hour. However, Akin Gump declined to
do so.
Kimberly C. Swafford, Esq., attorney for the U.S. Trustee,
states that the U.S. Trustee does not oppose the employment of
Akin Gump as counsel for the Debtors' creditors committee.
However, the U.S. Trustee does not believe that Akin Gump's
hourly rates are reasonable and would like to reserve objection
until the time a fee application is filed.
The U.S. Bankruptcy Court for the Eastern District of Delaware
had authorized the creditors committee to retain Akin Gump as
its counsel, effective as of Jan. 30, 2008.
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. 7; Bankruptcy Creditors'
Service Inc., http://bankrupt.com/newsstand/or 215/945-7000)
IMAX CORP: To Install 35 Projection Systems in Latin America
------------------------------------------------------------
IMAX Corporation has reported an agreement with Giencourt
Investments S.A., a member of the RACIMEC International Group,
to purchase and install 35 IMAX(R) Digital projection systems in
Central and South America and the Caribbean over the next six
years. The agreement marks the largest international theatre
deal, and second largest overall theatre deal, in IMAX's
history, following on the heels of AMC's 100-theatre North
America deal announced in December.
Under the terms of the agreement, RACIMEC will provide an
initial down payment and a firm commitment to install a minimum
of 35 IMAX theatres with fixed payment dates and opening dates.
RACIMEC plans to contribute the IMAX theatre systems to its
partners -- developers, exhibitors and other entertainment
operators -- for negotiated economic terms and work with them to
identify the best locations based on market demographics and
cultural trends, ultimately building a substantial network of
IMAX(R) theatres throughout the region.
"This important partnership with RACIMEC will result in a robust
network of IMAX theatres in South and Central America," said
IMAX Co-Chief Executive Officers and Co-Chairpersons Richard L.
Gelfond and Bradley J. Wechsler. "RACIMEC is a well-respected
business innovator, and we are thrilled to expand our
relationship with them at this level. As the industry moves
toward digital and developers as well as exhibitors seek new
ways to attract moviegoers, we are confident that RACIMEC's
experience and expertise are an ideal match for increasing
IMAX's presence in this critical market."
"Based on the growing network of successful IMAX theatres and
the introduction of IMAX's digital projection system, we believe
this is a perfect time to aggressively develop the South and
Central American and Caribbean markets, said RACIMEC
International Group President, Miguel Sfeir. "We want to
capitalize on the momentum IMAX has with its pending digital
projection system and its robust array of Hollywood content to
bring the ultimate movie-going experience to consumers in this
part of the world."
In 2005, RACIMEC signed a deal to install three IMAX theatre
systems into new entertainment retail developments in Chile and
Venezuela. Two IMAX theatres are being built and developed in
Santiago, Chile, in addition to one in Caracas, Venezuela, and
all are expected to open by mid-2009.
The highly anticipated IMAX Digital projection system will
further enhance The IMAX Experience(R) and help to drive
profitability for studios, exhibitors and IMAX theatres by
virtually eliminating the need for film prints, increasing
program flexibility and ultimately increasing the number of
movies shown on IMAX screens.
IMAX has already secured important parts of its film slate for
2008, 2009 and 2010 through agreements with major Hollywood
studios including: The Spiderwick Chronicles (in theatres now),
Shine A Light (April 4, 2008), Speed Racer (May 9, 2008), Kung
Fu Panda (June 6, 2008), The Dark Knight (July 19, 2008), Under
the Sea 3D (February 2009), Monsters vs. Aliens 3D (March 2009),
Hubble 3D (working title, February 2010), How to Train Your
Dragon 3D (March 2010), and Shrek Goes Forth 3D (May 2010).
About RACIMEC International Group
Founded in Rio de Janeiro, Brazil, in August 1966, RACIMEC is a
prominent entertainment and public gaming company which develops
gaming applications such as Lotto and Soccer Lottery, for
various Latin American countries including Brazil, Chile,
Argentina, Venezuela, Colombia and Paraguay. The RACIMEC group
has reached outstanding success in various countries with its
starring game KINO, a pre-printed ticket game with a real time
live TV show, crossing over the 4 billion dollar barrier during
the last decade. The company has been identified by the Lottery
market as the creator of new standards in game operation and
safety in the different countries where it operates.
About IMAX Corp.
Based in New York City and Toronto, Canada, IMAX Corporation
(NASDAQ:IMAX) -- http://www.imax.com/-- is an entertainment
technology company, with emphasis on film and digital imaging
technologies including 3D, post-production and digital
projection. IMAX is a fully-integrated, out-of-home
entertainment enterprise with activities ranging from the
design, leasing, marketing, maintenance, and operation of
IMAX(R) theatre systems to film development, production, post-
production and distribution of large-format films. IMAX also
designs and manufactures cameras, projectors and consistently
commits significant funding to ongoing research and development.
IMAX has locations in Guatemala, India, Italy, among others.
* * *
As reported in the Troubled Company Reporter-Latin America on
Jan. 14, 2008, IMAX Corp.'s consolidated balance sheet at Sept.
30, 2007, showed US$212.7 million in total assets and US$289.5
million in total liabilities, resulting in a US$76.8 million
total stockholders' deficit.
TELEMIG CELLULAR: Moody's Lifts US$120-Mln Notes Rating to Ba3
--------------------------------------------------------------
Moody's Investors Service upgraded the foreign currency rating
of the US$120 million in senior unsecured notes units due 2009
issued by Amazonia Celular S.A. and Telemig Celular S.A. to Ba3
from B2. The rating outlook is now positive. This action
concludes the review initiated on Aug. 7, 2007, begun at the
time the acquisition of the issuers was announced.
The rating action follows the approval by industry regulator
Anatel of the acquisition of Amazonia by Telemar Norte Leste
S.A. (Telemar; Baa2/outlook stable), and reflects Moody's
expectation that Amazonia will benefit from the stronger credit
profile of its new controlling shareholder.
The Ba3 rating assigned to the notes units is based on the
credit quality of Amazonia because 1/3 of the debt service of
the notes units depends on payments from Amazonia and are not
guaranteed by Telemig, which has a stronger credit profile. The
rating assumes that both Telemig and Amazonia will continue to
exist as individual entities and anticipates a reasonable level
of financial and operational support from their respective
shareholders. The debt rating is not constrained by Brazil's
sovereign ceiling for foreign currency bonds and notes of Baa3.
The rating is constrained by Amazonia's exposure to an intense
competitive environment in the company's concession area that
has gradually eroded its market share. The unfavorable
demographics and lack of population density in its extensive
concession area also limit the rating. Free cash flow is
currently positive (16% of total adjusted debt; total adjusted
debt includes derivatives, pension fund obligations, leases and
financial obligations with Telemig), but is likely to turn
negative in the coming years due to higher capex to deploy 3G
services and improve network quality. Amazonia's considerable
refinancing risk deriving from the relatively high amount of
short term debt maturities, including the maturity of the rated
bonds in January 2009, is somewhat mitigated by expected support
from the new controlling shareholder, Telemar. As of Dec. 31,
2007, Amazonia had cash of BRL30 million, last twelve month free
cash flow of BRL48 million, short term debt of BRL98 million and
the January 2009 maturity of the rated notes and related
derivatives transactions, currently totaling BRL117 million.
Fitch expects that Telemar will be supportive in securing the
funds necessary to refinance Amazonia's debt maturities.
As part of Telemar, the largest telecommunications company in
Brazil by revenues, Fitch expects Amazonia will be able to
dilute fixed expenses and better negotiate the cost of equipment
and handsets. The positive outlook incorporates likely synergy
gains favoring both margins and cash flows of Amazonia over the
next few quarters, as the integration process with Telemar
materializes.
The rating could be upgraded if there is further evidence of
explicit support from Telemar to Amazonia.
Headquartered in Belem, Brazil, Amazonia Celular SA provides
mobile communications services in the states of Maranhao, Para,
Amazonas, Amapa and Roraima in the northern region of Brazil.
With 1.4 million subscribers and a 20% market share in its
concession area as of Dec. 31, 2007, Amazonia reported net
revenues of BRL487 million (about US$285 million) in 2007.
Headquartered in Belo Horizonte, Brazil, Telemig Celular is the
leading provider of mobile communications services in the state
of Minas Gerais, Brazil. As of November 2007, Telemig Celular
had 3.5 million customers, with a market share of 30% in its
concession area.
==========================
C A Y M A N I S L A N D S
==========================
HONJO GLOBAL: Will Hold Final Shareholders Meeting on March 18
--------------------------------------------------------------
Honjo Global will hold its final shareholders' meeting on
March 18, 2008, at 10:30 a.m. at the registered office of the
company.
These matters will be taken up during the meeting:
1) accounting of the winding-up process; and
2) authorizing the liquidator to retain the records
of the company for a period of five years from
the dissolution of the company, after which they
may be destroyed.
Honjo Global's shareholders agreed on Feb. 7, 2008, to place the
company into voluntary liquidation under The Companies Law (2004
Revision) of the Cayman Islands.
The liquidators can be reached at:
John Cullinane and Derrie Boggess
c/o Walkers SPV Limited
Walker House, 87 Mary Street
P.O. Box 908, Grand Cayman KY1-9002
Cayman Islands
IBEST HOLDING: Proofs of Claim Filing Deadline is March 18
----------------------------------------------------------
Ibest Holding Corporation's creditors have until March 18, 2008,
to prove their claims to Luiz Francisco Tenorio Perrone, 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.
Ibest Holding's shareholder decided on Jan. 10, 2008, to place
the company into voluntary liquidation under The Companies Law
(2004 Revision) of the Cayman Islands.
The liquidators can be reached at:
Luiz Francisco Tenorio Perrone
c/o Maples and Calder, Attorneys-at-law
P.O. Box 309, George Town
Ugland House, South Church Street
George Town, Grand Cayman, Cayman Islands
JEFFERIES PARAGON: Sets Final Shareholders Meeting for March 18
---------------------------------------------------------------
Jefferies Paragon Master Fund, Ltd., will hold its final
shareholders' meeting on March 18, 2008, at 10:30 a.m. at dms
Corporate Services Ltd, Ansbacher House, 20 Genesis Close,
George Town, Grand Cayman.
These matters will be taken up during the meeting:
1) accounting of the winding-up process; and
2) authorizing the liquidator to retain the records
of the company for a period of five years from
the dissolution of the company, after which they
may be destroyed.
Jefferies Paragon's shareholders agreed on Feb. 18, 2008, to
place the company into voluntary liquidation under The Companies
Law (2004 Revision) of the Cayman Islands.
The liquidator can be reached at:
dms Corporate Services Ltd.
Attn: Neil Ross
Ansbacher House, 2nd Floor
P.O. Box 1344, Grand Cayman KY1-1108
Cayman Islands
Telephone: (345) 946 7665
Fax: (345) 946 7666
JEFFERIES PARAGON FUND: Final Shareholders Meeting on March 18
--------------------------------------------------------------
Jefferies Paragon Fund (Cayman), Ltd., will hold its final
shareholders' meeting on March 18, 2008, at 10:00 a.m. at dms
Corporate Services Ltd, Ansbacher House, 20 Genesis Close,
George Town, Grand Cayman.
These matters will be taken up during the meeting:
1) accounting of the winding-up process; and
2) authorizing the liquidator to retain the records
of the company for a period of five years from
the dissolution of the company, after which they
may be destroyed.
Jefferies Paragon's shareholders agreed on Feb. 18, 2008, to
place the company into voluntary liquidation under The Companies
Law (2004 Revision) of the Cayman Islands.
The liquidator can be reached at:
dms Corporate Services Ltd.
Attn: Neil Ross
Ansbacher House, 2nd Floor
P.O. Box 1344, Grand Cayman KY1-1108
Cayman Islands
Telephone: (345) 946 7665
Fax: (345) 946 7666
PARMALAT SPA: Records EUR674.4 Million Net Profit in 2007
---------------------------------------------------------
The Parmalat Group released its consolidated financial results
for the full year ended Dec. 31, 2007.
The Parmalat Group posted EUR674.4 million in net profit on
EUR3.89 billion in net revenues in 2007, compared with
EUR195.4 million in net profit on EUR3.70 billion in net
revenues in 2006.
The improvement in net revenues is chiefly the result of higher
unit sales in Canada and Italy. Sales were up also in South
Africa, aided in part by the growth of the local economy. In
Italy, the launch of new functional products helped boost
shipments of fruit juices by 16.3% compared with 2006, while in
Canada the overall increase in unit sales was driven mainly by
an 8.5% gain in shipments of cheese products.
An improved sales mix, with a greater preponderance of higher
value added products and a reduction in operating costs are the
main reasons for improvement in EBITDA (EUR366.6 million, up
5.4%), which was achieved despite a worldwide increase in the
price of raw milk recouped also through list price increases.
In addition to the positive performance of the industrial
operations and the contribution provided by lawsuit settlements,
the improvement in net result is also the result of lower net
financial expenses made possible by a decrease in the average
cost of borrowings, a reduction in indebtedness and an increase
in the liquidity invested by the Group’s Parent Company.
The Group’s net financial position improved sharply in 2007,
moving from net borrowings of EUR170 million to net financial
assets of EUR855.8 million, for an overall positive change of
EUR1.0258 million compared with Dec. 31, 2006.
The main reasons for this positive change include:
* cash flow from operations, which, net of changes in
operating working capital, amounted to EUR152.3 million;
* cash flow from lawsuits of EUR699.5 million, which is the
net result of proceeds from settlements reached in 2007
totaling EUR754.5 million, less EUR55 million in legal
costs attributable both to 2006 and 2007;
* cash flow from extraordinary transactions totaling
EUR230 million, which is the net result of proceeds from
the disposal of non-strategic assets (EUR249.2 million),
less outlays to purchase holdings in associates
(EUR16.3 million) and the payment of claims in composition
with creditors proceedings (EUR11.6 million); and
* cash flow from financial transactions, which includes
EUR3.5 million in net financial income, dividend payments
totaling EUR43.7 million and proceeds of EUR7.5 million
generated by the exercise of warrants, with sundry items
accounting for the difference.
Parmalat S.p.A.
Parmalat S.p.A. posted EUR554.7 million in net profit on
EUR894.7 million in net revenues in 2007, compared with
EUR125.6 million in net profit on EUR872.7 million in net
revenues in 2006.
Net financial assets were up sharply in 2007, rising from
EUR341.4 million to EUR1.2313 billion, a net change of
EUR889.9 million. The improvement reflects both the
contribution of cash flow from operations and the effect of
proceeds from extraordinary transactions described in the
comments to the Groups’ results.
Business Outlook and 2008 Forecast Data
In the early months of 2008, the more mature markets in which
the Group operates have been experiencing significant
competitive pressure, which is having an impact both on sales
volumes and prices.
Group Companies are responding well thanks to the launch of new
products helped by marketing initiatives and also by a
rationalization process both in industrial and operational
costs.
At the same time, starting in the current year, the process of
simplifying the Group’s structure will enable the Group’s Parent
Company to receive an additional flow of profits generated by
the industrial subsidiaries of more than EUR40 million.
These developments, along with the proceeds generated by
settlements of pending actions, should enable the Company to
reserve adequate resources for its shareholders, while pursuing
a growth strategy focused on strengthening its presence in the
more mature markets and expanding in the emerging markets.
The Board of Directors, moreover, has reviewed the 2008 forecast
data which show a projected growth rate of between 3% and 5%
(net sales revenues). EBITDA is expected to grow at a
rate of between 7% to 10%.
About Parmalat
Headquartered in Milan, Italy, Parmalat S.p.A.
-- http://www.parmalat.net/-- sells nameplate milk products
that can be stored at room temperature for months. It also has
about 40 brand product lines, which include yogurt, cheese,
butter, cakes and cookies, breads, pizza, snack foods and
vegetable sauces, soups and juices.
The company's U.S. operations filed for chapter 11 protection on
Feb. 24, 2004 (Bankr. S.D.N.Y. Case No. 04-11139). Gary
Holtzer, Esq., and Marcia L. Goldstein, Esq., at Weil Gotshal &
Manges LLP, represent the Debtors. When the U.S. Debtors filed
for bankruptcy protection, they reported more than US$200
million in assets and debts. The U.S. Debtors emerged from
bankruptcy on April 13, 2005.
Parmalat S.p.A. and its Italian affiliates filed separate
petitions for Extraordinary Administration before the Italian
Ministry of Productive Activities and the Civil and Criminal
District Court of the City of Parma, Italy on Dec. 24, 2003.
Dr. Enrico Bondi was appointed Extraordinary Commissioner in
each of the cases. The Parma Court has declared the units
insolvent.
On June 22, 2004, Dr. Bondi filed a Sec. 304 Petition, Case No.
04-14268, in the United States Bankruptcy Court for the Southern
District of New York.
Parmalat has three financing arms: Dairy Holdings Ltd., Parmalat
Capital Finance Ltd., and Food Holdings Ltd. Dairy Holdings and
Food Holdings are Cayman Island special-purpose vehicles
established by Parmalat S.p.A. The Finance Companies are under
separate winding up petitions before the Grand Court of the
Cayman Islands. Gordon I. MacRae and James Cleaver of Kroll
(Cayman) Ltd. serve as Joint Provisional Liquidators in the
cases. On Jan. 20, 2004, the Liquidators filed Sec. 304
petition, Case No. 04-10362, in the United States Bankruptcy
Court for the Southern District of New York. In May 2006, the
Cayman Island Court appointed Messrs. MacRae and Cleaver as
Joint Official Liquidators. Gregory M. Petrick, Esq., at
Cadwalader, Wickersham & Taft LLP, and Richard I. Janvey, Esq.,
at Janvey, Gordon, Herlands Randolph, represent the Finance
Companies in the Sec. 304 case.
The Honorable Robert D. Drain presides over the Parmalat
Debtors' U.S. cases. On June 21, 2007, the U.S. Court Granted
Parmalat Permanent Injunction.
REDWOOD CAPITAL: Sets Final Shareholders Meeting for March 18
-------------------------------------------------------------
Redwood Capital IX Ltd. will hold its final shareholders'
meeting on March 18, 2008, at 10:30 a.m. at HSBC Financial
Services (Cayman) Limited, P.O. Box 1109, George Town, Grand
Cayman, Cayman Islands.
These matters will be taken up during the meeting:
1) accounting of the winding-up process; and
2) authorizing the liquidator to retain the records
of the company for a period of five years from
the dissolution of the company, after which they
may be destroyed.
Redwood Capital's shareholders agreed on Jan. 29, 2008, to place
the company into voluntary liquidation under The Companies Law
(2004 Revision) of the Cayman Islands.
The liquidators can be reached at:
Scott Aitken and Sylvia Lewis
P.O. Box 1109, Grand Cayman KY1-1102
Cayman Islands
Telephone: 949-7755
Fax: 949-7634
=========
C H I L E
=========
* CHILE: Fitch Publishes Annual Review and Outlook on Banks
-----------------------------------------------------------
According to a Fitch special report titled "Chilean Banks,
Annual Review and Outlook", stable domestic economic performance
allowed Chilean Banks to continue their lending growth in 2007,
albeit at a slower pace when compared with 2006 and 2005. The
2007 loan mix focused on retail and mortgage lending, although
commercial loans to SMEs have become more relevant to Chilean
banks' total portfolios as the economy continues to grow,
driving additional investment in the sector.
"Margins in the industry continue to improve, fueled by a larger
component of retail lending, higher leverage and the recent
decrease in technical reserve requirements, which resulted in a
reduced effective cost of funds," said Fitch's Latin America
Financial Institutions Group Director, Carola Saldias.
Fitch believes the operating environment in 2008 will be more
challenging for banks as a consequence of tighter liquidity, due
to the reduction in financing from pension funds, lower spreads
as a consequence of increased competition and the resulting
increase in funding costs. Fitch expects a reduction in
profitability due to the less-favorable economic environment and
steady high volatility in capital markets.
Even though asset quality indicators are strong, there are signs
of deterioration centered in consumer lending, due to the
natural maturity of the portfolio, as well as the incorporation
of riskier debtors in low-income segments, following the
aggressive commercial approach banks are developing in order to
improve their market penetration. Capitalization ratios remain
solid, with an average Basel ratio of 12.18% at year-end 2007,
although they are decreasing due to higher risk-weighted assets.
As a result, the use of hybrid instruments to build capital has
become an important strategy in order to support forecasted
growth and to fund the higher mortgage portfolios.
New players are entering the market, and several mergers and
acquisitions between local and international banks have
increased competition, causing changes in business strategies.
Foreign banks see an adequate risk-return ratio in Chile and
domestic banks foresee market opportunities in segments that
have not been well attended by current players.
===============
C O L O M B I A
===============
BANCOLOMBIA SA: Earns COP1,086.9 Billion in Year Ended Dec. 2007
----------------------------------------------------------------
Bancolombia S.A. reported its financial results for the fourth
quarter of fiscal year 2007 ended Dec. 31, 2007.
Highlights:
-- For the fourth quarter of 2007 net income amounted to
COP322.5 billion. Net income for the year ended Dec. 31,
2007, totaled COP1,086.9 billion, increasing 31% as
compared to the pro forma COP829.5 billion for the year
ended Dec. 31, 2006.
-- As of Dec. 31, 2007, Bancolombia net loans totaled
COP36,245 billion, increasing 6% as compared to the
COP34,188 billion in the previous quarter. On a year-to-
year basis, this represents an increase of 24.1% as
compared to the pro forma COP29,208 billion as of Dec. 31,
2006.
-- Return on average equity was 24.41% for the year 2007.
-- For the year ended Dec. 31, 2007, net interest income
amounted to COP2,808.3 billion, increasing 32.9% as
compared to the pro forma figures for the year ended Dec.
31, 2006.
-- Net fees and income from services for the quarter ended
Dec. 31, 2007, totaled COP348.8 billion, which represents
an increase of 19.9% as compared to the pro forma figures
for the last quarter of 2006.
-- Total operating expenses for the year ended Dec. 31,
2007, amounted to COP2,201.3 billion, increasing 6.1% as
compared to the COP2,074.6 billion pro forma figures for
the year ended Dec. 31, 2006. Efficiency, measured as the
ratio between operating expenses and net operating income,
reached 53.0% for the year ended Dec. 31, 2007.
-- Provisions for loan and accrued interest losses for the
year ended Dec. 31, 2007, amounted to COP708 billion,
increasing 117.9% when compared to the same period of
2006.
-- Bancolombia's ratio of past due loans to total loans as of
Dec. 31, 2007, was 2.9%, and the ratio of allowances to
past due loans was 134.9%.
Bancolombia is Colombia's largest full-service financial
institution, formed by a merger of three leading Colombian
financial institutions. Bancolombia's market capitalization is
over US$5.5 billion, with US$13.8 billion asset base and US$1.4
billion in shareholders' equity as of Sept. 30, 2006.
Bancolombia is the only Colombian company with an ADR level III
program in the New York Stock Exchange.
* * *
As reported in the Troubled Company Reporter-Latin America on
June 27, 2007, Moody's Investors Service changed the outlook to
positive from stable on its Ba3 long-term foreign currency
deposit ratings and Ba1 long-term foreign currency subordinated
bond rating for Bancolombia, S.A.
BANCOLOMBIA SA: Shareholders Adopt Resolutions at Annual Meeting
----------------------------------------------------------------
At the annual general shareholders meeting of Bancolombia S.A.,
its shareholders adopted these resolutions:
1. Approval of the unconsolidated and consolidated financial
statements as of Dec. 31, 2007, and their respective
notes, as well as the annual report of management.
2. Approval of the distribution of the 2007 profits,
following a proposal made by the Board of Directors of
Bancolombia. The shareholders approved a distribution of
dividends in an amount equivalent to COP142 per share, per
quarter, which will be payable as of the first business
day of each calendar quarter (April 1, July 1, Oct. 1,
2008, and Jan. 2, 2009). The aggregate amount of annual
dividends to be distributed is COP568 per share, which
represents an increase of 7% with respect to the dividends
paid in 2007. The total aggregate amount of dividends to
be distributed is COP447,485,737,704. Bancolombia notes
that 81% of the amount paid as dividends does not
constitute taxable income under Colombian regulations.
In order to contribute to Bancolombia's growth during
2008, the shareholders also approved an allocation of
COP370,226,878,372.83 to increase the legal reserves.
3. Designation of PricewaterhouseCoopers as external auditor
of Bancolombia for the period beginning on April 2008 and
ending on March 2010.
Bancolombia is Colombia's largest full-service financial
institution, formed by a merger of three leading Colombian
financial institutions. Bancolombia's market capitalization is
over US$5.5 billion, with US$13.8 billion asset base and US$1.4
billion in shareholders' equity as of Sept. 30, 2006.
Bancolombia is the only Colombian company with an ADR level III
program in the New York Stock Exchange.
* * *
As reported in the Troubled Company Reporter-Latin America on
June 27, 2007, Moody's Investors Service changed the outlook to
positive from stable on its Ba3 long-term foreign currency
deposit ratings and Ba1 long-term foreign currency subordinated
bond rating for Bancolombia, S.A.
SOLUTIA INC: Signs Three Credit Deals with Syndicate of Banks
-------------------------------------------------------------
On the effective date of their fifth amended joint plan of
reorganization, Solutia Inc. and its subsidiaries entered into
three credit agreements with a syndicate of banks and other
financial institutions led by Citigroup Global Markets Inc.,
Goldman Sachs Credit Partners LP, and Deutsche Bank Securities
Inc.
In a regulatory filing with the U.S. Securities and Exchange
Commission, Rosemary L. Klein, Solutia's senior vice president,
general counsel and secretary, relates that the exit lenders
have agreed to provide these facilities:
(a) Credit Agreement (Term Loan), dated as of February 28,
2008, by and among Solutia Inc., the lender parties
thereto, Citibank, N.A., as Administrative Agent and
Collateral Agent, Goldman Sachs Credit Partners L.P., as
Syndication Agent, Deutsche Bank AG New York Branch, as
Documentation Agent, and Citigroup Global Markets Inc.,
Goldman Sachs Credit Partners L.P. and Deutsche Bank
Securities Inc., as Joint Lead Arrangers and as Joint
Bookrunners. The Term Loan Facility is a senior secured
term loan facility in an aggregate principal amount of
US$1,200,000,000 with a maturity of six years; and
(b) Credit Agreement (Asset Based Revolving Credit Facility),
dated as of Feb. 28, 2008, by and among Solutia Inc.,
Solutia Europe SA/NV and Flexsys SA/NV, the lender
parties thereto, Citibank, N.A., as Administrative Agent
and Collateral Agent, Citibank International PLC, as
European Collateral Agent, Deutsche Bank AG New York
Branch, as Syndication Agent, Goldman Sachs Credit
Partners L.P., as Documentation Agent, and Citigroup
Global Markets Inc., Goldman Sachs Credit Partners L.P.
and Deutsche Bank Securities Inc., as Joint Lead
Arrangers and as Joint Bookrunners. The ABL Facility is
a senior secured asset-based revolving credit facility in
the aggregate principal amount of US$450,000,000 with a
maturity of five years, which includes borrowing capacity
available for letters of credit in the aggregate
principal amount of US$175,000,000, and for borrowings on
same-day notice, referred to as swingline loans in the
aggregate principal amount of US$50,000,000.
(c) Credit Agreement (Bridge Facility), dated as of
Feb. 28, 2008, by and among Solutia Inc., the lender
parties thereto, Citibank, N.A., as Administrative Agent,
Goldman Sachs Credit Partners L.P., as Syndication Agent,
Deutsche Bank AG New York Branch, as Documentation Agent,
and Citigroup Global Markets Inc., Goldman Sachs Credit
Partners L.P. and Deutsche Bank Securities Inc., as Joint
Lead Arrangers and as Joint Bookrunners. The Bridge Loan
Facility is a bridge loan facility in an aggregate
principal amount of US$400,000,000, and will have an
initial maturity date of Feb. 28, 2009, provided it may
be extended by six years if certain conditions are
complied.
Loans made under the Term Loan Facility and the Bridge Facility
will be denominated in United States Dollars only. Loans made
under the ABL Facility may be denominated in United States
Dollars, Euros or Sterling.
Solutia will be required to pay interest on outstanding
principal under the credit facilities:
-- The interest rates per annum applicable to loans
denominated in United States Dollars, other than
swingline loans, under the ABL and Term Loan Facilities
will be, at Solutia's option, equal to either an
alternate base rate or an adjusted Eurocurrency rate for
a one-, two-, three- or six-month interest period, in
each case, plus an applicable margin.
-- The interest rate per annum applicable to loans
denominated in Euros or Sterling, other than swingline
loans, under the ABL and Term Loan Facilities will be
equal to an adjusted Eurocurrency rate for a one-, two-,
three- or six-month interest period, plus an applicable
margin.
-- The interest rates per annum applicable to swingline
loans denominated in United States Dollars under the ABL
Facility will be an alternate base rate plus an
applicable margin. The interest rates per annum
applicable to swingline loans denominated in Euros or
Sterling under the ABL Facility will be an adjusted
Eurocurrency rate plus an applicable margin.
-- The interest rate per annum applicable to loans under the
Bridge Facility is 15.50%; provided, however, that (A)
for the period commencing on the Effective Date and
ending on the day immediately preceding the first
anniversary of the Effective Date, no more than 3.50% per
annum may be paid in the form of payment-in-kind
interest, (B) for the period commencing on the first
anniversary of the Effective Date and ending on the day
immediately preceding the second anniversary of the
Effective Date, no more than 2.50% per annum may be paid
in the form of payment-in-kind interest and (C)
commencing on the second anniversary of the Effective
Date and there after, no more than 1.50% per annum may be
paid in the form of payment-in-kind interest.
In addition to paying interest on outstanding principal, Solutia
is required to pay letter of credit fronting fees and other
customary letter of credit fees to the letter of credit issuers
and a commitment fee to the lenders under the ABL Facility in
respect of un-utilized commitments.
Solutia is also required to prepay the outstanding amount of the
Term Loan Facility, subject to certain exceptions.
The Term Loan Facility will amortize each year in an amount
equal to 1% per annum in equal quarterly installments for the
first five years and nine months, with the remaining amount
payable on the date that is six years from the date of the
closing of the Senior Secured Facilities.
Principal amounts outstanding under the ABL Facility will be due
and payable in full at maturity, five years from the date of the
closing of the ABL Facility.
Principal amounts outstanding under the Bridge Facility will be
due and payable in full on the initial maturity date, one year
from the date of the closing of the Bridge Facility, provided
that unless certain events of default exist under the Bridge
Facility, principal amounts outstanding will be automatically
extended to be payable on seventh anniversary of the closing
date of the Bridge Facility.
A full text copy of the Term-Loan Agreement is available for
free at: http://ResearchArchives.com/t/s?28eb
A full-text of the ABL Facility Agreement is available for free
at: http://ResearchArchives.com/t/s?28ec
A full-text copy of the Bridge Loan Agreement is available for
free at: http://ResearchArchives.com/t/s?28ed
Solutia Inc. and its debtor-affiliates have emerged from Chapter
11 reorganization, pursuant to an agreement with their lenders
who will provide exit financing to the Debtors.
Exit Financing and Bankruptcy Emergence
As reported in the Troubled Company Reporter on Feb. 29, 2008,
that the Debtors have emerged from Chapter 11 reorganization,
pursuant to an agreement with their lenders who will provide
them with exit financing.
The TCR related on Feb. 26, 2008, that the Debtors reached an
agreement with Citigroup Global Markets Inc., Goldman Sachs
Credit Partners L.P., and Deutsche Bank Securities Inc. to fund
Solutia's exit financing package and scheduled a closing date on
Feb. 28, 2008.
About Solutia Inc.
Based in St. Louis, Missouri, Solutia Inc. (OTCBB: SOLUQ) (NYSE:
SOA-WI) -- 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. Lead 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 emerged from chapter 11 protection
Feb. 28, 2008. (Solutia Bankruptcy News, Issue No. 121;
Bankruptcy Creditors' Service, Inc.,
http://bankrupt.com/newsstand/or 215/945-7000).
* * *
As reported in the Troubled Company Reporter-Latin America on
March 5, 2008, Standard & Poor's Ratings Services raised its
corporate credit rating on Solutia Inc. to 'B+' from 'D',
following the company's emergence from bankruptcy on Feb. 28,
2008, and the implementation of its financing plan. S&P said
the outlook is stable.
S&P also affirmed its 'B+' rating and '3' recovery
rating on Solutia's proposed senior secured term loan. In
addition, S&P assigned its 'B-' rating to Solutia's US$400
million unsecured bridge loan facility. S&P also withdrew its
'B-' rating on the proposed US$400 million unsecured notes,
which have been replaced by the bridge facility in Solutia's
capital structure.
===================================
D O M I N I C A N R E P U B L I C
===================================
TRICOM SA: Majority of Creditors Accepts Prepack Plan
-----------------------------------------------------
Robert Q. Klamser, vice president at Kurtzman Carson Consultants
LLC, proposed claims and balloting agent of Tricom S.A. and its
U.S. affiliates, reports that 100% of the Class 3 Credit Suisse
Existing Secured Claims and the Class 6 Unsecured Financian
Claims voted to accept the Debtors' Plan of Reorganization.
Mr. Klamser adds that 99.9% in amount and 97% in number of Class
6 Claims voted to accept the Plan. The Debtors' solicitation
process concluded on February 28, 2008.
The Ad Hoc Senior Notes Committee is composed of Capital Markets
Financial Services, Inc., Stark Investments, Deltec Asset
Management, Argo Funds, Octavian Funds, UBS, Deutsche Bank, and
Farallon Capital.
As reported in the Troubled Company Reporter on March 5, Judge
Stuart M. Bernstein of the U.S. Bankruptcy Court for the
Southern District of New York will convene a hearing on
April 15, 2008, to consider confirmation of the Debtors'
prepackaged Plan.
At the Confirmation Hearing, Judge Bernstein will determine (i)
the adequacy of the Debtors' solicitation procedures, and (ii)
whether the Disclosure Statement accompanying the Plan contains
"adequate information" as defined in Section 1125 of the
Bankruptcy Code.
The Debtors' Plan, delivered to the Court on March 3, 2008,
provides that all claims against the Debtors, other than
Administrative Claims and Tax Claims are classified into nine
separate classes:
Class Description Claim Treatment
----- ----------- ---------------
1 Priority Claims Unimpaired.
Estimated Recovery: 100%
2 Banco del Progreso Unimpaired
Existing Secured Claims Claim Amount: US$5,000,000
Estimated Recovery: 100%
3 Credit Suisse Existing Impaired
Secured Claims Claim Amount: US$25,529,781
Estimated Recovery: 100%
4 GE Existing Secured Claims Unimpaired
Claim Amount: US$4,642,760
Estimated Recovery: 100%
5 Non-Lender Secured Claims Unimpaired
Claim Amount: US$0
Estimated Recovery: 100%
6 Unsecured Financial Claims Impaired
Claim Amount: US$635,900,000
Estimated Recovery: 38.5%
7 General Unsecured Claims Unimpaired
Claim Amount: --
Estimated Recovery: 100%
8 Statutorily Subordinated Impaired
Claims Claim Amount: US$0
Estimated Recovery: 0%
9 Existing Tricom Equity Impaired. Equity interests
Interests will be canceled.
Estimated Recovery: 0%
Holders of Credit Suisse Existing Secured Claims and Unsecured
Financial Claims are impaired under the Plan and are entitled to
vote on the Plan. Holders of Priority Claims, Banco del
Progreso Existing Secured Claims, GE Existing Secured Claims,
Non-Lender Secured Claims, and General Unsecured Claims are
unimpaired under the Plan and deemed to accept the Plan and are
not entitled to vote to accept or reject the Plan.
The Plan also provides that holders of Statutorily Subordinated
Claims and Existing Tricom Equity Interests are impaired under
the Plan, will neither receive nor retain any distributions or
value under the Plan, and are deemed to reject the Plan.
Holders of the Credit Suisse Existing Secured Claims will
receive Pro Rata Shares of the US$25,529,781, Credit Suisse New
Secured Debt to be issued by Tricom. Holders of Unsecured
Financial Claims will receive their Pro Rata Share of (a) a
US$105,000,000, New Secured Notes, and (b) the 10,000,000,
shares to be issued by a Holding Company, which will be created
on the effective date of the Plan.
Holding Company
On the Effective Date, the Debtors will incorporate a "Holding
Company", which will directly own 100% of Tricom's equity, and
100% of the equity of TCN and Tricom USA, in Bermuda. The
Debtors are reviewing alternative jurisdictions in which to
incorporate the Holding Company in the event they determine that
Bermuda is not a feasible jurisdiction.
The Holding Company will have a nine-member Board of Directors.
Members of the Board will be elected to initial three-year
terms. Holders of Holding Company Class A Stock will be
entitled to elect six members of the Holding Company Board, and
holders of Holding Company Class B Stock will be entitled to
elect three members of the Holding Company Board, including the
chairperson of the Holding Company Board.
On or before the Effective Date, the Holding Company and a
"Transition Services Company" will execute and deliver a
transition services agreement, which will have an initial three-
year term and will provide that, for so long as Holding Company
Class B Stock is entitled to elect the chairperson of the
Holding Company Board of Directors, Manuel Arturo Pellerano
Pena, controller of the majority stockholders of Tricom, will be
entitled to serve as chairperson.
In exchange for the provision of services to be furnished under
the Transition Services Agreement, Transition Services Company
will receive 300,000 restricted shares of Holding Company Class
B Stock, which will vest in equal quarterly installments over a
three-year period on the satisfaction of the conditions
described in the Transitions Services Agreement; provided that
all restricted shares of Holding Company Class B Stock will
immediately vest upon a change of control of Holding Company.
Restructuring Dilution Options
Under the Plan, Class 9 Existing Tricom Equity Interests are
impaired and Holders of Existing Tricom Equity Interests will
neither receive nor retain any effective value under the Plan.
Hector Castro Noboa, president of Tricom, S.A., says that,
because neither Dominican insolvency nor corporate law provides
a mechanism for the outright cancellation of all of the Existing
Tricom Equity Interests, the Plan provides for the dilution of
Existing Tricom Equity Interests to a 1% or less ownership
interest in Tricom.
As of January 28, 2008, Tricom has an authorized capital of
RD$800,000,000, divided into 55,000,000 shares of Tricom Class A
Stock and 25,000,000 shares of Tricom Class B Stock with a par
value of RD$10 each. There are 45,458,045 shares of Tricom
Class A Stock currently issued and outstanding and 9,541,955
shares unissued. There are 19,144,544 shares of Tricom Class B
Stock currently issued and outstanding and 5,855,456 shares
unissued.
If, assuming the current capital structure of Tricom, the
Restructuring Dilution were to be accomplished exclusively by
Capital Increase, Mr. Noboa says Tricom would likely have to
increase its authorized capital by up to RD$30,000,000,000, to
have the practical effect of diluting the Existing Tricom Equity
Interests to a de minimis amount with de minimis value. This,
in turn, would result in Holding Company owning approximately
99% or more of the Tricom Equity Interests.
Liquidation Analysis
The Debtors prepared a liquidation analysis to create a
reasonable good-faith estimate of the proceeds that might be
generated if their estates were liquidated under Chapter 7 of
the Bankruptcy Code.
If no Chapter 11 Plan is confirmed, the Debtors' Chapter 11
cases would be converted to cases under Chapter 7. In this
event, a trustee will be appointed to liquidate the Debtors'
assets. The Liquidation Analysis is based on projected balance
sheet sheets as of June 30, 2008. The Chapter 7 liquidation
period is assumed to be eight to 12 months after the appointment
of a Chapter 7 trustee.
A full-text copy of Tricom's liquidation analysis is available
at no charge at
http://bankrupt.com/misc/tricom_LiquidationAnalysis.pdf
Financial Projections
The Debtors' management also prepared projected financial
projections based on a number of assumptions, including the
Effective Date of the Plan to be on June 30, 2008, with allowed
Claims and Equity Interests treated in accordance with the
treatment proposed in the Plan. The Debtors' fiscal year 2007
and 2008 first and second quarter projections were prepared as
of Dec. 31, 2007.
A full-text copy of the Tricom's Financial Projections is
available for free at:
http://bankrupt.com/misc/tricom_FinancialProjections.pdf
Valuation Analysis
The Debtors, with the help of their restructuring consultant,
FTI Consulting, Inc., prepared a valuation analysis of the
Reorganized Debtors.
In connection with delivering the valuation analysis, FTI has,
among other things (i) analyzed financial statements and other
non-public financial and operating data relating to the Debtors;
(ii) discussed appropriate capital structure requirements with
management; and (iii) compared the financial performance of the
Debtors with the financial performance of a selected group of
peer companies, and evaluated the prices and valuation multiples
of the peer companies.
With respect to the valuation of the Reorganized Debtors, the
enterprise valuation assumes the pro forma debt levels to
calculate an equity value. FTI also relied on the assumption
that the Debtors will emerge from Chapter 11 on or before June
30, 2008.
As a result of the analyses, reviews, discussions,
considerations and assumptions, FTI estimates that the total
enterprise value of the Reorganized Debtors ranges from a
minimum of about US$215,000,000, to a maximum of approximately
US$304,000,000.
The estimated values, according to Mr. Noboa, represent the
estimated hypothetical value of the Reorganized Debtors derived
through the application of various valuation techniques.
FTI further estimates that the enterprise value of the
Reorganized Debtors is US$275,000,000. As a result, and taking
into account that the value of the total long-term debt of the
Reorganized Debtors as of the Effective Date is US$135,100,000,
which includes US$105,000,000 in New Secured Notes,
US$25,500,000, of the Credit Suisse New Secured Debt, and the
US$4,600,000 GE Existing Secured Debt, the Debtors estimate that
the equity value of the Reorganized Debtors as of the Effective
Date will be equal to US$140,100,000.
Feasibility of the Plan
The Bankruptcy Code requires a debtor to demonstrate that
confirmation of a plan of reorganization is not likely to be
followed by the liquidation or the need for further financial
reorganization of a debtor unless so provided by the plan of
reorganization. To determine whether the Plan meets the
"feasibility" requirement, the Debtors have analyzed their
ability to meet their obligations as contemplated under the
Plan.
According to Mr. Noboa, the Debtors have prepared the financial
projections and the valuation analysis. The projections are
based on the assumption that the Plan will be confirmed by the
Bankruptcy Court and, for projection purposes, that the
Effective Date of the Plan and its substantial consummation will
take place on or about June 30, 2008. The projections include
balance sheets, statements of operations and statements of cash
flows. Based on the projections, the Debtors believe they will
be able to make all payments required to be made pursuant to the
Plan.
The Debtors believe the Plan will satisfy the "fair and
equitable" requirement of the Bankruptcy Code notwithstanding
that claimholders under Classes 8 and 9 are deemed to reject the
Plan because no class that is junior to the dissenting classes
will receive or retain any property on account of the claims or
equity interests in that class, says Mr. Noboa.
The Debtors reserve the right to seek confirmation of the Plan,
notwithstanding the rejection of the Plan by any Class entitled
to vote. In the event a Class votes to reject the Plan, the
Debtors will request the Court to rule that the Plan meets the
requirements specified in Section 1129(b) with respect to that
Class. The Debtors will also seek that ruling with respect to
each Class that is deemed to reject the Plan.
Parties have until April 2, 2008, to file objections to the
Plan. The Debtors will file their brief in support of
confirmation of the Plan, and their reply to Objections, no
later than April 11.
Waiver of 341 Meeting and Monthly Report
The meeting of creditors pursuant to Section 341(a) of the
Bankruptcy Code will not be convened and is cancelled unless the
Plan is not confirmed by the Court on or prior to May 29, 2008.
In the event that the Section 341(a) Meeting is convened, the
Debtors will promptly consult with the Office of the U.S.
Trustee with respect to setting an appropriate date for the
Section 341 Meeting as required by the Bankruptcy Rules, the
Local Rules, and any applicable Court order.
The Debtors are also not required to file or provide any
periodic operating reports pursuant to the Bankruptcy Code, the
Bankruptcy Rules, or the Local Rules, except as may be
specifically provided in the Plan or an order confirming the
Plan, unless the Plan is not confirmed by the Court on or prior
to May 29.
A full-text copy of the Tricom Plan of Reorganization is
available for free at:
http://bankrupt.com/misc/TricomChap11Plan.pdf
A full-text copy of the Disclosure Statement explaining the
Tricom Plan is available for free at:
http://bankrupt.com/misc/TricomDiscStatement.pdf
About Tricom
Tricom, S.A., was incorporated in the Dominican Republic on
January 25, 1988, as a Sociedad Anonima. Tricom is one of the
pre-eminent full service communications services providers in
the Dominican Republic. Headquartered in Santo Domingo, Tricom
offers local, long distance, and mobile telephone services,
cable television and broadband data transmission and Internet
services, which are provided to more than 729,000 customers.
Tricom's wireless network covers about 90% of the Dominican
Republic's population. Tricom's local service network is 100%
digital. The Company also owns interests in undersea fiber-
optic cable networks that connect and transmit
telecommunications signals between Central America, the
Caribbean, the United States and Europe.
Tricom USA, Inc., a wholly owned subsidiary of Tricom, was
incorporated in Delaware in 1992, and at that time was known as
Domtel Communications. A name change was effected in 1997 and
Domtel Communications formally became Tricom USA, Inc.
Tricom USA originates, transports and terminates international
long-distance traffic using switching stations and other
telecommunications equipment located in New York and Florida.
Tricom S.A. and its U.S. affiliates filed for Chapter 11
protection on Feb. 29, 2008 (Bankr. S.D. N.Y. Case No. 08-
10720). Larren M. Nashelsky, Esq., at Morrison & Foerster LLP,
in New York City, represent the Debtors. When the Debtors'
filed for protection from their creditors, they listed total
assets of US$327,600,000 and total debts of US$764,600,000.
(Tricom Bankruptcy News, http://bankrupt.com/newsstand/or
215/945-7000)
TRICOM SA: Schedules Filing Deadline Extended to April 14
---------------------------------------------------------
At the behest of Tricom S.A. and its U.S. debtor-affiliates, the
U.S. Bankruptcy Court for the Southern District of New York
extended the period within which the Debtors may file their
schedules of assets and liabilities, and statements of financial
affairs until April 14, 2008.
The Debtors have asserted that they are not in a position to
complete the Schedules and Statements within the time specified
in Rule 1007(c) of the Federal Rules of Bankruptcy Procedure
given the numerous critical operational matters that their staff
of accounting and legal personnel must address in the early days
of their Chapter 11 cases.
The Debtors added that the purposes of filing the Schedules and
Statements generally have been fulfilled by other means and that
the completion of the Schedules and Statements cannot be
justified given the costs to the Debtors' estates in terms of
the expenditure of financial and human resources. Filing of the
Schedules and Statements represents an unnecessary burden on the
estates, proposed counsel to the Debtors, Larren M. Nashelsky,
Esq., at Morrison & Foerster LLP, in New York, asserted.
Mr. Nashelsky told the Court that much of the information that
would be contained in the Debtors' Schedules and Statements are
already available in the Debtors Disclosure Statement explaining
their Plan of Reorganization. To require the Debtors to file
the Schedules and Statements would be duplicative and
unnecessarily burdensome to the their estates, he contended.
About Tricom
Tricom, S.A., was incorporated in the Dominican Republic on
January 25, 1988, as a Sociedad Anonima. Tricom is one of the
pre-eminent full service communications services providers in
the Dominican Republic. Headquartered in Santo Domingo, Tricom
offers local, long distance, and mobile telephone services,
cable television and broadband data transmission and Internet
services, which are provided to more than 729,000 customers.
Tricom's wireless network covers about 90% of the Dominican
Republic's population. Tricom's local service network is 100%
digital. The Company also owns interests in undersea fiber-
optic cable networks that connect and transmit
telecommunications signals between Central America, the
Caribbean, the United States and Europe.
Tricom USA, Inc., a wholly owned subsidiary of Tricom, was
incorporated in Delaware in 1992, and at that time was known as
Domtel Communications. A name change was effected in 1997 and
Domtel Communications formally became Tricom USA, Inc.
Tricom USA originates, transports and terminates international
long-distance traffic using switching stations and other
telecommunications equipment located in New York and Florida.
Tricom S.A. and its U.S. affiliates filed for Chapter 11
protection on Feb. 29, 2008 (Bankr. S.D. N.Y. Case No. 08-
10720). Larren M. Nashelsky, Esq., at Morrison & Foerster LLP,
in New York City, represent the Debtors. When the Debtors'
filed for protection from their creditors, they listed total
assets of US$327,600,000 and total debts of US$764,600,000.
(Tricom Bankruptcy News, http://bankrupt.com/newsstand/or
215/945-7000)
TRICOM SA: Wants to Employ Morrison Foerster as Counsel
-------------------------------------------------------
Tricom S.A. and its U.S. affiliates seek permission from the
U.S. Bankruptcy Court for the Southern District of New York to
employ Morrison & Foerster LLP as their lead bankruptcy counsel,
nunc pro tunc to Feb. 29, 2008.
Hector Castro Noboa, president of Tricom, S.A., relates that the
Debtors engaged Morrison & Foerster in January 2006 to provide
them assistance and legal advice in the negotiations with an ad
hoc committee of the holders of 11-3/8% Senior Notes and certain
affiliated creditors on the plan support and lock-up agreement.
Morrison & Foerster also evaluated and advised the Debtors on
restructuring alternatives and certain litigation.
Because Morrison & Foerster had worked closely with the Debtors
in their restructuring efforts and other legal matters, Mr.
Noboa believes that the firm has become extraordinarily familiar
with the Debtors' business and the potential legal issues that
may arise in their Chapter 11 cases.
As bankruptcy counsel, Morrison & Foerster will:
(a) advise the Debtors with respect to their powers and
duties as debtors-in-possession in the continued
management and operation of their businesses and
properties;
(b) attend meetings and negotiate with representatives of the
Ad Hoc Committee, the Affiliated Creditors, any official
creditors' committee appointed in the Chapter 11 cases,
and other creditors and parties-in-interest;
(c) take all necessary action to protect and preserve the
Debtors' estates, including prosecuting actions on the
Debtors' behalf, defending any action commenced against
the Debtors, and representing the Debtors' interests in
negotiations concerning all litigation in which the
Debtors are involved, including, but not limited to,
objections to claims filed against the estates;
(d) manage and maintain the Debtors' trademark registration
portfolio, including filing and prosecuting applications
for new trademarks and monitoring deadlines for renewals
and registrations, and assist the Debtors with an ongoing
trademark opposition proceeding in Europe;
(e) prepare all motions, applications, answers, orders,
reports, and papers necessary to the administration of
the Chapter 11 cases;
(f) take any necessary action on behalf of the Debtors to
obtain approval of the Disclosure Statement and
confirmation of the Plan;
(g) advise the Debtors in connection with any potential sale
of assets;
(h) provide U.S. tax advice to the Debtors regarding
restructuring matters;
(i) appear before the Court, any appellate courts, and the
United States Trustee and protect the interests of the
Debtors' estates before the courts and the U.S. tates
Trustee;
(j) perform other necessary legal services to the Debtors in
connection with the Chapter 11 cases, including (i)
analyze the Debtors' leases and executory contracts and
the assumption or assignment thereof, (ii) analyze the
validity of liens against the Debtors, and (iii) advise
on corporate, litigation, and other legal matters; and
(k) take all steps necessary and appropriate to cause the
Effective Date to occur and to bring the Chapter 11 cases
to conclusion.
The Debtors will pay Morrison & Foerster according to the firm's
customary hourly rates:
Professionals Hourly Rates
------------- ------------
Partners US$575 to US$900
Of counsel US$395 to US$695
Associates US$280 to US$615
Paraprofessionals US$165 to US$270
These Morrison & Foerster professionals are expected to take a
lead in providing legal services to the Debtors:
Professional Position Hourly Rate
------------ -------- -----------
Larren M. Nashelsky Partner US$825
Norman S. Rosenbaum Of Counsel US$625
Jason C. DiBattista Of Counsel US$600
Rafael Hernandez Mayoral Of Counsel US$595
Julie D. Dyas Associate US$540
Renee L. Freimuth Associate US$485
Justin Imperato Associate US$440
Laura Guido Paraprofessional US$210
The Debtors will also reimburse Morrison & Foerster for any
necessary out-of-pocket expenses it incurs while providing legal
services to the Debtors.
Larren M. Nashelsky, Esq., a partner at Morrison & Foerster,
assures the Court that his firm does not represent any interest
adverse to the Debtors or their estates, and is a "disinterested
person" as the term is defined in Section 101(14) of the
Bankruptcy Code.
Mr. Nashelsky, however, discloses that Morrison & Foerster has
or is currently representing certain parties-in-interest in the
Debtors' Chapter 11 cases. He says that, among the list of
clients, Bank of America and UPS, who are also creditors of the
Debtors, each represented 1% or more of Morrison & Foerster's
client billings for the 2007 fiscal year. He adds that Morrison
& Foerster has represented Citigroup Financial Products, Inc.,
in the trading of the Debtors' commercial debt. However, he
says, the work Morrison did for Citigroup did not involve direct
negotiations with the Debtors in any way.
Mr. Nashelsky also discloses that from the period beginning one
year before the Petition Date, Morrison & Foerster billed and
received from the Debtors US$4,992,664, as payment for fees and
reimbursement of expenses. Also, in January 2006, Mr. Nashelsky
says Morrison & Foerster received a US$300,000 retainer, and an
additional US$200,000 retainer in February 2008. He says a
portion of the retainer was used to pay the prepetition fees and
expenses.
About Tricom
Tricom, S.A., was incorporated in the Dominican Republic on
January 25, 1988, as a Sociedad Anonima. Tricom is one of the
pre-eminent full service communications services providers in
the Dominican Republic. Headquartered in Santo Domingo, Tricom
offers local, long distance, and mobile telephone services,
cable television and broadband data transmission and Internet
services, which are provided to more than 729,000 customers.
Tricom's wireless network covers about 90% of the Dominican
Republic's population. Tricom's local service network is 100%
digital. The Company also owns interests in undersea fiber-
optic cable networks that connect and transmit
telecommunications signals between Central America, the
Caribbean, the United States and Europe.
Tricom USA, Inc., a wholly owned subsidiary of Tricom, was
incorporated in Delaware in 1992, and at that time was known as
Domtel Communications. A name change was effected in 1997 and
Domtel Communications formally became Tricom USA, Inc.
Tricom USA originates, transports and terminates international
long-distance traffic using switching stations and other
telecommunications equipment located in New York and Florida.
Tricom S.A. and its U.S. affiliates filed for Chapter 11
protection on Feb. 29, 2008 (Bankr. S.D. N.Y. Case No. 08-
10720). Larren M. Nashelsky, Esq., at Morrison & Foerster LLP,
in New York City, represent the Debtors. When the Debtors'
filed for protection from their creditors, they listed total
assets of US$327,600,000 and total debts of US$764,600,000.
(Tricom Bankruptcy News, http://bankrupt.com/newsstand/or
215/945-7000)
TRICOM SA: Wants to Hire Thompson Hine as Conflicts Counsel
-----------------------------------------------------------
Tricom S.A. and its U.S. debtor-affiliates ask the U.S.
Bankruptcy Court for the Southern District of New York for
authority to employ Thompson Hine LLP as their U.S. corporate
and securities, and conflicts counsel, nunc pro tunc to their
bankruptcy filing.
Larren M. Nashelsky, Esq., at Morrison & Foerster LLP, in New
York, the Debtors' proposed counsel, relates that Thompson Hine
has been providing services to the Debtors since May 2007 on
U.S. corporate and securities matters, including:
* providing legal advice to the Debtors regarding U.S.
corporate and securities law matters,
* preparing filings with the U.S. Securities and Exchange
Commission on behalf of the Debtors,
* representing the Debtors on U.S. corporate and securities
issues arising during the negotiation of the Debtors'
restructuring, and
* evaluating the Debtors' U.S. corporate and securities law
matters.
Mr. Nashelsky contends that Thompson Hine has become familiar
with the Debtors' business in the course of its work, and with
related securities law that may arise in connection with the
Debtors' restructuring bankruptcy cases.
As corporate and conflicts counsel, Thompson Hine will:
(a) continue to advise the Debtors on U.S. corporate and
securities matters in general;
(b) advise the Debtors on U.S. corporate and securities
matters as they pertain to the prepackaged Plan of
Reorganization; and
(c) represent and advise the Debtors on matters related to
the Chapter 11 cases in which Morrison & Foerster LLP, is
prevented from doing so due to actual or potential
conflicts of interest.
The Debtors will pay Thompson Hine according to the firm's
billing charges:
Professional Hourly Rates
------------ ------------
Partners US$310 to US$740
Associates US$205 to US$510
Paralegals US$175 to US$270
Four Thompson Hine professionals will take a lead role in
representing the Debtors:
Name of Counsel Position Hourly Rate
--------------- -------- -----------
John M. Clapp Partner US$595
Benjamin D. Feder Partner US$590
Cristina M. Bonuso Associate US$240
Lauren M. McEvoy Associate US$240
The Debtors will also reimburse Thompson Hine for any necessary
out-of-pocket expenses it incurs.
Benjamin Feder, Esq., a partner at Thompson Hine LLP, in New
York, assures the Court that his firm does not represent any
interest adverse to the Debtors or their estates, and is a
"disinterested person" as that term is defined in Section
101(14) of the Bankruptcy Code.
Mr. Feder discloses that from the period beginning one year
prior to the Petition Date, Thompson Hine billed and received
from the Debtors US$800,396, for prepetition services rendered
and expenses incurred. In addition, in May, 2007, Thompson Hine
received a US$75,000, retainer. Mr. Feder says that any
prepetition amounts received by Thompson Hine in excess of fees
for services rendered and expenses incurred have been added to
the Retainer. Thompson Hine continues to hold an amount equal
to the Retainer as of the Petition Date.
About Tricom
Tricom, S.A., was incorporated in the Dominican Republic on
January 25, 1988, as a Sociedad Anonima. Tricom is one of the
pre-eminent full service communications services providers in
the Dominican Republic. Headquartered in Santo Domingo, Tricom
offers local, long distance, and mobile telephone services,
cable television and broadband data transmission and Internet
services, which are provided to more than 729,000 customers.
Tricom's wireless network covers about 90% of the Dominican
Republic's population. Tricom's local service network is 100%
digital. The Company also owns interests in undersea fiber-
optic cable networks that connect and transmit
telecommunications signals between Central America, the
Caribbean, the United States and Europe.
Tricom USA, Inc., a wholly owned subsidiary of Tricom, was
incorporated in Delaware in 1992, and at that time was known as
Domtel Communications. A name change was effected in 1997 and
Domtel Communications formally became Tricom USA, Inc.
Tricom USA originates, transports and terminates international
long-distance traffic using switching stations and other
telecommunications equipment located in New York and Florida.
Tricom S.A. and its U.S. affiliates filed for Chapter 11
protection on Feb. 29, 2008 (Bankr. S.D. N.Y. Case No. 08-
10720). Larren M. Nashelsky, Esq., at Morrison & Foerster LLP,
in New York City, represent the Debtors. When the Debtors'
filed for protection from their creditors, they listed total
assets of US$327,600,000 and total debts of US$764,600,000.
(Tricom Bankruptcy News, http://bankrupt.com/newsstand/or
215/945-7000)
=============
E C U A D O R
=============
PETROECUADOR: Wants to Develop Pungarayacu With Ivanhoe Energy
--------------------------------------------------------------
Petroecuador President Fernando Zurita told reporters that the
company wants to sign in April an accord with Ivanhoe Energy for
the development and exploitation of its Pungarayacu oil field.
Dow Jones Newswires relates that Petroecuador will sign with
Ivanhoe a contract for specific services.
Mr. Zurita told Dow Jones that Pungarayacu has reserves of up to
4.0 billion barrels of crude of around 8 API gravity degrees and
Ivanhoe has special technology to transform the heavy crude
“into somewhat lighter grades of 23 API.”
According to Dow Jones, Petroecuador wants an 80% participation
in Pungarayacu's production.
Dow Jones notes that the contract between Petroecuador and
Invanhoe Energy will be effective for 20 years, but can be
extended by another 10 years. The first stage, of around a
year, will be for the evaluation of Pungarayacu and will cost
US$100 million. The second stage will be for the approval of
the results and will cost some US$500 million.
Mr. Zurita told Dow Jones that if one of the two stages indicate
that the project is not feasible, the agreement will be ended.
Oil production at the field will start in the fourth year with
30,000 barrels per day and could increase to 120,000 barrels per
day, Dow Jones states.
About Ivanhoe Energy
Ivanhoe Energy Inc. is an independent international heavy oil
development and production company. The company is exploring an
opportunity to monetize stranded gas reserves through the
application of the conversion of natural gas-to-liquids using a
technology (GTL Technology or GTL) licensed from Syntroleum
Corporation. Its core operations are in the United States and
China. Ivanhoe Energy’s heavy oil upgrading technology upgrades
heavy oil and bitumen by producing crude oil, along with by-
product energy, which can be used to generate steam or
electricity. The company’s principal oil and gas properties are
located in California’s San Joaquin Basin and Sacramento Gas
Basin, the Midland Basin in Texas and the Hebei and Sichuan
Provinces in China.
About Petroecuador
Headquartered in Quito, Ecuador, Petroecuador --
http://www.petroecuador.com.ec-- is an international oil
company owned by the Ecuador government. It produces crude
petroleum and natural gas.
* * *
In previous years, Petroecuador, according to published reports,
was faced with cash-problems. The state-oil firm has no funds
for maintenance, has no funds to repair pumps in diesel,
gasoline and natural gas refineries, and has no capacity to pay
suppliers and vendors. The government refused to give the much-
needed cash alleging inefficiency and non-transparency in
Petroecuador's dealings. In 2008, a new management team was
appointed to turn around the company's operations.
=================
G U A T E M A L A
=================
BRITISH AIRWAYS: Expects 4-4.5% Revenue Growth in FY 2008/2009
--------------------------------------------------------------
British Airways plc's revenue for the financial year 2008/2009
is forecast to increase by 4-4.5% to over GBP9.1 billion, based
on capacity measured in available-seat-kilometers up 2.4%.
Fuel costs are expected to be up by some GBP450 million to
GBP2.5 billion, an increase of 20%. Non-fuel costs are expected
to rise 3-3.5%. Total costs, excluding fuel, are forecast to be
up GBP200 million. As a result the company is forecasting an
operating margin of about 7% for 2008/2009.
"The outlook for next year is consistent with economic slowdown,
the impact of increased fuel costs and one-off Terminal 5
transition costs, all of which analysts have already factored in
to their expectations," Keith Williams, chief financial officer
of British Airways, said.
About British Airways
Headquartered in West Drayton, United Kingdom, British Airways
Plc -- http://www.ba.com/-- operates of international and
domestic scheduled and charter air services for the carriage of
passengers, freight and mail, and provides of ancillary
services. The British Airways group consists of British Airways
plc and a number of subsidiary companies including in particular
British Airways Holidays Ltd. and British Airways Travel
Shops Ltd. BA has offices in India and Guatemala.
* * *
As of Jan. 2, 2008, British Airways Plc carries a senior
unsecured debt rating of Ba1 from Moody's Investors' Service
with a stable outlook.
BRITISH AIRWAYS: Traffic Figures Up 5.3% in February 2008
---------------------------------------------------------
British Airways plc reported traffic and capacity statistics for
February 2008.
In February 2008, passenger capacity, measured in Available-
Seat-Kilometers, was 4.4% above February 2007. Traffic,
measured in Revenue-Passenger-Kilometers, rose by 5.3%. This
resulted in a passenger load factor increase of 0.6 points
versus last year, to 68.4%. Traffic comprised a 15.1% increase
in premium traffic and a 3.4% rise in non-premium traffic.
Comparatives between February 2007 and 2008 are difficult due to
the additional day in the month and the lingering effects of the
threat of industrial action on the first few days of February
2007.
Cargo, measured in Cargo-Ton-Kilometers, rose by 19.8%.
Market Conditions
Longhaul premium traffic remains strong, while shorthaul premium
and longhaul non-premium continue to show weakness.
Strategic Developments
British Airways said it will launch double daily business class-
only flights from London City airport to New York next year.
The new flights will operate on Airbus A318 aircraft with 32
seats onboard.
British Airways announced it is to partner with the London
Olympic Games Organising Committee to become the "Official
Airline of the London 2012 Olympic and Paralympic Games" and a
Top Tier sponsor of the London 2012 Games. The deal combines
air travel for Britain's Olympic hopefuls as well as financial
support for staging the London 2012 Olympic and Paralympic
Games.
British Airways increased its fuel surcharge on all longhaul
tickets issued from Monday, February 25, 2008. The decision
reflected continuing high oil prices. The surcharge for
longhaul flights of less than nine hours increased by GBP5 per
flight from GBP48 to GBP53 (GBP106 return) and flights of more
than nine hours increased by GBP6 from GBP58 to GBP64 per flight
(GBP128 return). There was no change to the shorthaul fuel
surcharge which remained at GBP10 per flight (GBP20 return).
British Airways and Virgin Atlantic agreed in principle a
settlement to resolve the class action litigation pending in the
United States District Court for the Northern District of
California, brought on behalf of U.S. and U.K. passengers
relating to alleged overcharges on longhaul passenger fuel
surcharges.
British Airways became the first airline to achieve the City &
Guilds Approved Centre Status. New entrants on the cabin crew-
training programme are now eligible to obtain a National
Vocational Qualification Level 2 - equivalent to 5 GCSE's.
About British Airways
Headquartered in West Drayton, United Kingdom, British Airways
Plc -- http://www.ba.com/-- operates of international and
domestic scheduled and charter air services for the carriage of
passengers, freight and mail, and provides of ancillary
services. The British Airways group consists of British Airways
plc and a number of subsidiary companies including in particular
British Airways Holidays Ltd. and British Airways Travel
Shops Ltd. BA has offices in India and Guatemala.
* * *
As of Jan. 2, 2008, British Airways Plc carries a senior
unsecured debt rating of Ba1 from Moody's Investors' Service
with a stable outlook.
=============
J A M A I C A
=============
AIR JAMAICA: Gov't Will Privatize Airline by March 2009
-------------------------------------------------------
The Jamaican government has set a March 2009 deadline for Air
Jamaica's privatization, Radio Jamaica reports.
Jamaica's Finance Minister Audley Shaw told Radio Jamaica that
the government is on track with arrangements for the sale of Air
Jamaica.
A divestment committee was formed and is being supervised by
Minister Without Portfolio in the Finance Ministry Senator Don
Wehby, RJR News Center says, citing Minister Shaw.
"Among other things he has put together a divestment committee
which involves a sub-committee of the board and some other
people to work with the international Finance Corporation of the
World Bank in the entire divestment program of Air Jamaica. But
there are certain features of that divestment that we (desire)
to be maintained, for instance, the name Air Jamaica," Minister
Shaw commented to Radio Jamaica.
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.
DYOLL GROUP: Will Hold Shareholders' Special General Meeting
------------------------------------------------------------
Dyoll Group will hold a special general meeting with
shareholders to discuss the company's winding up.
Radio Jamaica relates that Dyoll Group has started making
arrangements for the winding up.
According to Radio Jamaica, Dyoll Group will ask a Jamaican
court to appoint a liquidator by April 25, 2008.
Meanwhile, Andrew Issa resigned from Dyoll Group's board of
directors effective Feb. 29, 2008, Radio Jamaica states.
Dyoll Group Ltd. is a Jamaica-based company that is principally
engaged in the insurance business. Jamaica's Financial Services
Commission has assumed temporary management of the Jamaica-based
Dyoll Insurance Co. Ltd. in March 7, 2005, in order to establish
the true position of the Company, address the matter of
settlement to its claimants and ensure that its policies will
remain in force after a high level of insurance claims were
leveled on the company as a result of the hurricane Ivan.
Kenneth Tomlinson was appointed temporary manager. Jamaica's
Supreme Court ordered for the distribution of a US$653 million
fund held by the FSC in accordance with the Insurance Act 2001,
section 59, which says that the prescribed deposit, on the
winding up of an insurance company, should be applied first to
settle the claims of local policyholders.
DYOLL INSURANCE: Will Make Third Payment to Creditors
-----------------------------------------------------
Dyoll Insurance Company will make its third payment to creditors
on April 7, Radio Jamaica reports, citing the company's joint
liquidators John Lee and Kenneth Krys.
The pay out will continue for six months, Radio Jamaica states.
Dyoll Group Ltd. is a Jamaica-based company that is principally
engaged in the insurance business. Jamaica's Financial Services
Commission has assumed temporary management of the Jamaica-based
Dyoll Insurance Co. Ltd. in March 7, 2005, to establish
the true position of the Company, address the matter of
settlement to its claimants and ensure that its policies will
remain in force after a high level of insurance claims were
leveled on the company as a result of the hurricane Ivan.
Kenneth Tomlinson was appointed temporary manager. Jamaica's
Supreme Court ordered for the distribution of a US$653 million
fund held by the FSC in accordance with the Insurance Act 2001,
section 59, which says that the prescribed deposit, on the
winding up of an insurance company, should be applied first to
settle the claims of local policyholders.
NAT'L COMMERCIAL: Cash Plus Complains on Account Closure
--------------------------------------------------------
Cash Plus Ltd. is questioning the closure of its accounts by the
National Commercial Bank Jamaica Ltd. as no banking laws nor
rules were breached, Radio Jamaica reports.
Cash Plus' Taxation, Audit and Payroll Vice President Dorothy
Essor told Radio Jamaica the closure of the alternative
investment scheme's accounts by the National Commercial affected
the payment of salaries and suppliers.
As reported in the Troubled Company Reporter-Latin America on
Feb. 5, 2008, Jamaica's Justice Marva McIntosh refused to extend
Cash Plus' injunction that prevented the National Commercial
Bank Jamaica from closing its remaining seven accounts. The
injunction expired last week.
Cash Plus had obtained the injunction blocking the National
Commercial from closing its accounts last year. The attorneys
for Cash Plus sought another injunction against the National
Commercial before the Jamaican court. The National Commercial's
management allegedly implemented precautionary measures to
protect its workers from angry supporters of alternative
investment schemes. The management instructed the workers not
to wear their uniforms to work. The instruction was reportedly
issued on Wednesday when persons accusing the National
Commercial of taking part of a plot to destroy alternative
investment schemes threatened the bank. Justice Marva McIntosh
granted Cash Plus Limited a nine-day injunction, blocking the
National Commercial from closing the 16 accounts held with the
bank. The injunction effectively prevented the National
Commercial from closing Cash Plus' accounts at its Duke Street
and Barry Street unit in Kingston by Dec. 4.
Ms. Essor told Radio Jamaica that Cash Plus employees now have
to be paid by cash instead of cheque.
According to Radio Jamaica, the workers held demonstrations as
they were sent home without being told when they would be paid
late salaries and other benefits.
The closure of the accounts also “crippled” the payment of Cash
Plus suppliers, Radio Jamaica states.
About Cash Plus
Cash Plus Limited is a financial arm of the Cash Plus Group of
Companies, a business conglomerate established in 2002 by
mortgage banker Carlos Hill. Cash Plus Lmited offers its
participants the opportunity to participate in the group's
ventures which include mergers and numerous acquisitions.
About National Commercial
Headquartered in Kingston, Jamaica, the National Commercial Bank
Jamaica Limited -- http://www.jncb.com/-- provides commercial
and retail banking, wealth management services. The company's
services include personal banking, business banking, mortgage
loans, wealth management and insurance services. Founded in
1977, the bank primarily operates in West Indies and the UK.
* * *
As reported in the Troubled Company Reporter-Latin America on
Dec. 18, 2006, Standard & Poor's Rating Services affirmed its
'B/B' counterparty credit and CD ratings on National Commercial
Bank Jamaica Ltd. S&P said the outlook is stable.
As reported in the Troubled Company Reporter-Latin America on
May 2, 2007, Fitch Ratings affirmed these ratings on Jamaica-
based National Commercial Bank Jamaica Limited: long-term
foreign and local currency Issuer Default at 'B+'; short-term
foreign and local currency rating at 'B'; individual at 'D'; and
support at 4. The rating outlook on the bank's ratings is
stable, in line with Fitch's view of the sovereign's
creditworthiness.
NAT'L COMMERCIAL: To Launch Loans & Credit-Card Online Service
--------------------------------------------------------------
The National Commercial Bank of Jamaica Limited will launch
online loan and credit-card applications this year, The Jamaica
Gleaner reports.
According to The Gleaner, the National Commercial expects that
about 10% of its clients will use the service and that it will
lessen the time customers seeking credit currently spend in a
branch to complete such transactions.
The Gleaner notes that the online service will be limited to an
application for credit. Customers will still have to go to the
National Commercial to complete the process.
"The online service will accommodate applications for personal
loans and credit-card facilities. The system will primarily
facilitate the completion of the credit-application form online
at the customer's convenience. Internationally, the percentage
of applications submitted via the Internet channel does not
exceed 10%. As a result, our expectations for usage are in line
with this trend," The National Commercial's Communications
Assistant General Manager Sheree Martin commented to The
Gleaner.
Headquartered in Kingston, Jamaica, the National Commercial Bank
Jamaica Limited -- http://www.jncb.com/-- provides commercial
and retail banking, wealth management services. The company's
services include personal banking, business banking, mortgage
loans, wealth management and insurance services. Founded in
1977, the bank primarily operates in West Indies and the UK.
* * *
As reported in the Troubled Company Reporter-Latin America on
Dec. 18, 2006, Standard & Poor's Rating Services affirmed its
'B/B' counterparty credit and CD ratings on National Commercial
Bank Jamaica Ltd. S&P said the outlook is stable.
As reported in the Troubled Company Reporter-Latin America on
May 2, 2007, Fitch Ratings affirmed these ratings on Jamaica-
based National Commercial Bank Jamaica Limited: long-term
foreign and local currency Issuer Default at 'B+'; short-term
foreign and local currency rating at 'B'; individual at 'D'; and
support at 4. The rating outlook on the bank's ratings is
stable, in line with Fitch's view of the sovereign's
creditworthiness.
===========
M E X I C O
===========
AMERICAN AXLE: Strike No Effect on S&P's Auto Sector Ratings
------------------------------------------------------------
Standard & Poor's Ratings Services said that the American Axle &
Manufacturing Holdings Inc. (BB/Negative/--) work stoppage, now
in its second week, does not yet affect auto sector ratings.
The strike at American Axle's U.S. United Auto Workers plants
has already forced closure of many General Motors Corp. (GM;
B/Stable/B-3) plants, as well as plants of certain GM suppliers
other than American Axle. GM suppliers Lear Corp.
(B+/Negative/--) and Tenneco Inc. (BB-/Stable/--) have laid off
workers. The strike follows the expiration of the four-year
master labor agreement with American Axle.
"We still expect American Axle and the UAW to reach an agreement
that will reflect more competitive labor costs, but the timing
is unknown," said Standard & Poor's credit analyst Robert
Schulz. The two sides resumed negotiations yesterday.
If S&P came to believe that the work stoppage would drag on more
than another week or so, S&P could place on CreditWatch the
ratings on GM, American Axle, and certain other suppliers that
depend heavily on GM production. GM is the largest U.S.
automaker, so an extensive, prolonged strike by American Axle's
workers would create a large ripple effect through GM that would
touch most of the U.S. automotive industry, including smaller
suppliers. The failure of small suppliers could, in turn,
affect larger suppliers that may have little direct exposure to
GM. In addition, Chrysler LLC (B/Negative/--) is American
Axle's second-largest customer, after GM, so the strike could
eventually reduce production at Chrysler and affect some of
Chrysler's suppliers that may have little business with GM.
The ultimate cash impact for companies affected by the GM plant
closures will depend on how much production is made up after the
strike and on how much, if any, cash is used to assist smaller,
second- and third-tier suppliers.
Headquartered in Detroit, Michigan, American Axle &
Manufacturing Holdings Inc. (NYSE:AXL) -- http://www.aam.com/--
and its wholly owned subsidiary, American Axle & Manufacturing,
Inc., manufactures, engineers, designs and validates driveline
and drivetrain systems and related components and modules,
chassis systems and metal-formed products for light trucks,
sport utility vehicles and passenger cars. In addition to
locations in the United States (in Michigan, New York and Ohio),
the company also has offices or facilities in Brazil, China,
Germany, India, Japan, Luxembourg, Mexico, Poland, South Korea
and the United Kingdom.
ARAMARK CORPORATION: Fitch Holds IDR at 'B' with Stable Outlook
---------------------------------------------------------------
Fitch Ratings has affirmed ARAMARK Corporation's ratings as:
-- Long-term Issuer Default Rating 'B';
-- US$600 million revolving senior secured credit facility
due 2013 'BB-/RR2';
-- US$4.15 billion senior secured term loans due 2014
'BB-/RR2';
-- US$200 million senior secured synthetic letter of credit
facility due 2014 'BB-/RR2';
-- US$1.78 billion senior unsecured notes due 2015 'B-/RR5';
-- US$250 million senior unsecured notes due 2012
'CCC+/RR6'.
The Rating Outlook is Stable.
Fitch has simultaneously withdrawn the IDR rating for ARAMARK
Services, Inc., which is no longer a debt issuing entity.
These rating actions affect approximately US$6.0 billion of debt
at Dec. 28, 2007.
ARAMARK's ratings and Outlook incorporate its high financial
leverage, below average operating risk and Fitch's expectations
that credit statistics will remain at levels consistent with the
company's current ratings in the near term. ARAMARK
significantly increased debt levels following its US$8.6 billion
management-led leverage buy-out in 2007. However, ARAMARK's
strong global market share in food service, entrenched position
in the North American uniform rental business and high customer
retention rates provide considerable and relatively stable on-
going cash flow generation.
For the latest twelve month period ended Dec. 28, 2007,
ARAMARK's total debt-to-operating earnings before interest,
taxes, depreciation and amortization (EBITDA) ratio was 5.8
times (x) and its operating EBITDA-to-gross interest expense
ratio was 2.1x. Total adjusted debt-to-operating earnings
before interest, taxes, depreciation, amortization and rental
expense (EBITDAR), which accounts for operating leases and
balances outstanding under ARAMARK's US$250 million accounts
receivable securitization program, was 6.3x.
During this same period, ARAMARK generated approximately US$500
million of cash flow from operations and US$180 million of free
cash flow. ARAMARK's funds from operations (FFO) fixed charge
coverage ratio was 1.8x. Although ARAMARK's debt obligations
increased considerably over the previous 12 month period, Fitch
views its credit protection measures as adequate for the current
ratings level. Good liquidity, a proven ability to manage
through various economic cycles and a diversified customer base
should help mitigate any negative ramifications from above
average food cost inflation and a slowing U.S. economy.
ARAMARK is in compliance with all of its debt covenants. The
most significant financial covenant in ARAMARK's bank facility
is a maximum consolidated secured debt ratio of 5.875x through
March 31, 2008, stepping down to 4.25x by Dec. 31, 2013. At
Dec. 28, 2007, the actual ratio was 3.86x, leaving the company
significant cushion under this agreement. ARAMARK's ability to
incur additional debt and make restricted payments is limited by
a minimum interest coverage ratio of 2.0x. At Dec. 28, 2007, the
actual ratio was 2.1x.
The recovery ratings for ARAMARK's debt consider bondholder
recovery in a distressed situation. Given assumptions regarding
the company's enterprise value as a going concern, Fitch
anticipates 71%-90% or superior recovery for ARAMARK's first
priority secured bank debt and 11%-30% or below average recovery
for its 8.5% and floating rate unsecured notes due 2015.
Conversely, the recovery rating for ARAMARK's 5% unsecured notes
due 2012 has been notched lower at 'RR6' to reflect their
subordinate position in the company's capital structure and
Fitch's expectation that recovery for these bondholders would be
negligible in a financial restructuring. Unlike the 2015 notes,
which are fully and unconditionally guaranteed by substantially
all of the companies domestic material subsidiaries, the 2012
notes are only guaranteed by ARAMARK and its holding company.
Headquartered in Philadelphia, Pennsylvania, Aramark Corp.
(NYSE: RMK) -- http://www.aramark.com/-- is a professional
services organization, providing food services, facilities
management, hospitality services, and uniforms and career
apparel to health care institutions, universities and school
districts, stadiums and arenas, businesses, prisons, senior
living facilities, parks and resorts, correctional institutions,
conference centers, convention centers, and public safety
professionals around the world. Aramark also has operations in
Belgium, Canada, China, Czech Republic, Chile, Germany, Ireland,
Japan, Korea, Mexico, Spain, and the United Kingdom.
FEDERAL-MOGUL: Johns-Manville Case Forms Plan A Disfavor Basis
--------------------------------------------------------------
In a letter addressed to the U.S. Bankruptcy Court for the
District of Delaware, Craig Goldblatt, Esq., counsel for
Hartford Accident and Indemnity Company, First State Insurance
Company, and New England Insurance Company, called Judge Judith
Fitzgerald's attention to the Second Circuit's recent decision
in In re Johns-Manville Corp., No. 06-2099 (2d Cir. Feb. 15,
2008).
Mr. Goldblatt believes that the Second Circuit's decision bears
directly on the permissibility of the modifications to the
Section 524(g) injunction sought by the Reorganized Debtors and
the other Plan Proponents under the Plan A Settlement. The
Second Circuit issued its decision after the close of briefing
on the modifications to the Plan A Settlement.
In Johns-Manville, the Second Circuit, relying heavily on the
Third Circuit's decision in In re Combustion Engineering, Inc.,
391 F.3d 190 (3d Cir. 2004), held that a bankruptcy court did
not have authority to enjoin claims that run against non-debtor
third parties merely because those claims shared a common
factual nexus with claims against the debtor, Mr. Goldblatt
notes. Rather, the Second Circuit held that "a bankruptcy court
only has jurisdiction to enjoin third-party non-debtor claims
that directly affect the res of the bankruptcy estate." For
that reason, the Second Circuit ruled that the Johns-Manville
bankruptcy court lacked authority to enjoin "direct action"
claims against Travelers, notwithstanding the bankruptcy court's
factual findings that Travelers learned virtually everything it
knew about asbestos from its relationship with Manville, Mr.
Goldblatt points out.
The principal basis for the Second Circuit's conclusion,
according to Mr. Goldblatt, was that the claims enjoined did not
run "against an asset of the bankruptcy estate, nor [did the
claims] affect the estate." Instead, just like the claims
asserted against Pneumo Abex in the Debtors' bankruptcy
proceedings, the claims sought to recover directly from
Traveler, the alleged wrongdoer, on account of Travelers'
alleged "own independent wrongdoing." Mr. Goldblatt notes that
in language fully applicable to the Debtors' cases, the Second
Circuit pointed out that "a nondebtor release is a device that
lends itself to abuse. By it, a nondebtor can shield itself
from liability to third parties. In form, it is a release; in
effect, it may operate as a bankruptcy discharge arranged
without a filing and without the safeguards of the Code."
In concluding that the Johns-Manville bankruptcy court lacked
the jurisdiction to enter the proposed injunction, the Second
Circuit pointed directly to Section 524(g) of the Bankruptcy
Code, which it said "must be interpreted in the same manner,"
Mr. Goldblatt relates. The Second Circuit, he says, explained
that the central problem with the injunction it was reviewing
was that the claims against Travelers that were enjoined "are
not derivative of Manville's liability, but rather seek to
recover directly from Travelers for its own alleged misconduct."
Section 524(g) does not allow that. "While Congress enacted
Section 524(g) to reflect the injunction/channeling mechanism
that the Manville bankruptcy court developed in response to
various derivative claims, the provision was not intended to
reach non-derivative claims. Because the claims here are non-
derivative and have no effect on the res, they are outside the
limits of Section 524(g)," Mr. Goldblatt quotes the Second
Circuit as saying. The Second Circuit concluded by noting that
while it was sympathetic to the "bankruptcy court's desire to
facilitate global finality for Travelers," the desire for
finality was not a basis for the entry of an injunction that
exceeded the bankruptcy court's authority.
The same situation is true in the Debtors' bankruptcy cases, Mr.
Goldblatt tells Judge Fitzgerald. The Johns-Manville opinion --
which makes unmistakably clear that the injunction contemplated
by the Plan A settlement will exceed the Bankruptcy Court's
authority -- breaks no new doctrinal ground, he contends. The
opinion, he says, amplifies the fact that the Plan A injunction
will have no effect on the Reorganized Debtors and has no
relation to any of the Debtors' property beyond the
impermissible connection that a third party will make a
financial contribution to the estate in exchange for obtaining
that injunction. The Johns-Manville opinion provide ample basis
to deny approval of Plan A, Mr. Goldblatt argues.
Allianz Global Corporate & Specialty AG, Allianz Global Risks
U.S. Insurance Company, and Allianz Underwriters Insurance
Company join in Mr. Goldblatt's contentions.
Plan Proponents Disagree
In response to Mr. Goldblatt's letter, the Plan Proponents argue
that contrary to Mr. Goldblatt's broad reading of the Manville
Opinion, the opinion is a narrow ruling on facts distinct from
those in the Debtors' bankruptcy cases, and thus, provides no
basis for denying approval of the Plan A Settlement.
In Manville, the Second Circuit dealt with claims brought by
asbestos plaintiffs against certain of Manville's insurers,
Peter Van N. Lockwood, Esq., at Caplin & Drysdale, Chartered, in
Washington, D.C., relates. "These claims did not concern the
Manville insurance policies or policy proceeds, but rather
involved separate and independent tort actions against the
insurers," Mr. Lockwood points out.
In the Johns-Manville case, asbestos claimants alleged that the
insurers had violated direct duties to warn the plaintiffs of
asbestos hazards learned as a consequence of insuring Manville.
The Second Circuit ruled that because the plaintiffs sought a
recovery from the insurers, and not with respect to Manville's
policies, the claims did not affect the res of the bankruptcy
estate and the bankruptcy court therefore lacked jurisdiction to
enjoin the claims, Mr. Lockwood notes.
In addition, and in dictum, the Second Circuit said that Section
524(g), enacted in response to the 1986 Manville injunction,
"must be interpreted in the same manner," Mr. Lockwood informs
Judge Fitzgerald. The Second Circuit also, in dictum, referred
to the Combustion Engineering's use of the term "derivative
liability" in discussing the scope of Section 524(g), he adds.
"None of this has any bearing on the situation here," Mr.
Lockwood contends. The claims at issue in Manville merely
shared a "common factual nexus" with the claims alleged against
Manville, he argues. In contrast to the Debtors' bankruptcy
cases, the Pneumo Asbestos Claims asserted against the Pneumo
Protected Parties do not involve separate and independent
claims, unrelated to those asserted against the Debtors.
Instead, the Pneumo Asbestos Claims assert the very same
liability against the Pneumo Protected Parties as that asserted
against the Debtors -- liability that allegedly derives from the
manufacture and sale of asbestos-containing products by the Abex
Brake Business, a business that the Debtors now own, Mr.
Lockwood emphasizes. The Pneumo Asbestos Claims involve the
same alleged contaminated products, the same alleged conduct,
the same alleged wrongdoing, and thus the same alleged claims as
those asserted against the Debtors themselves, he points out.
Accordingly, the Pneumo Protected Parties' alleged liability for
Pneumo Asbestos Claims squarely fits the requirements of Section
524(g)(4)(a)(ii), and presents a paradigm case of what the
Second Circuit, and the Third Circuit in Combustion Engineering,
refer to as "derivative" liability, Mr. Lockwood argues.
The Plan Proponents maintain that the Bankruptcy Court
unquestionably has subject matter jurisdiction over the Pneumo
Asbestos Claims. Unlike the claims asserted against the
insurers in Manville, the Pneumo Asbestos Claims are "actions
that affect the estate" and "have [an] effect on the res [of the
estate]," the Plan Proponents aver. Unlike Manville where the
claims of the plaintiffs against the insurers were not alleged
to create claims on the part of the insurers against the
Manville estate, every dollar paid on a Pneumo Asbestos Claim
will give rise to an indemnity claim by Cooper or Pneumo against
the Debtors' estates absent the Plan A or Plan B Settlement, Mr.
Lockwood relates.
Approval of Plan A, Mr. Lockwood maintains, is entirely
consistent with the Manville Opinion to the extent that decision
applies beyond its limited facts.
About Federal-Mogul
Federal-Mogul Corporation -- http://www.federal-mogul.com/--
(OTCBB: FDMLQ) is a global supplier, serving the world's
foremost original equipment manufacturers of automotive, light
commercial, heavy-duty, agricultural, marine, rail, off-road and
industrial vehicles, as well as the worldwide aftermarket.
Founded in Detroit in 1899, the company is headquartered in
Southfield, Michigan, and employs 45,000 people in 35 countries.
Aside from the U.S., Federal-Mogul also has operations in other
locations which includes, among others, Mexico, Malaysia,
Australia, China, India, Japan, Korea, and Thailand.
The Company filed for chapter 11 protection on Oct. 1, 2001
(Bankr. Del. Case No. 01-10582). Lawrence J. Nyhan Esq., James
F. Conlan Esq., and Kevin T. Lantry Esq., at Sidley Austin Brown
& Wood, and Laura Davis Jones Esq., at Pachulski, Stang, Ziehl &
Jones, P.C., represent the Debtors in their restructuring
efforts. When the Debtors filed for protection from their
creditors, they listed US$10.15 billion in assets and US$8.86
billion in liabilities. Federal-Mogul Corp.'s U.K. affiliate,
Turner & Newall, is based at Dudley Hill, Bradford. Peter D.
Wolfson, Esq., at Sonnenschein Nath & Rosenthal; and Charlene D.
Davis, Esq., Ashley B. Stitzer, Esq., and Eric M. Sutty, Esq.,
at The Bayard Firm represent the Official Committee of Unsecured
Creditors.
On March 7, 2003, the Debtors filed their Joint Chapter 11 Plan.
They submitted a Disclosure Statement explaining that plan on
April 21, 2003. They submitted several amendments and on
June 6, 2004, the Bankruptcy Court approved the Third Amended
Disclosure Statement for their Third Amended Plan. On July 28,
2004, the District Court approved the Disclosure Statement. The
estimation hearing began on June 14, 2005. The Debtors
submitted a Fourth Amended Plan and Disclosure Statement on
Nov. 21, 2006, and the Bankruptcy Court approved that Disclosure
Statement on Feb. 6, 2007. The Fourth Amended Plan was
confirmed by the Bankruptcy Court on Nov. 8, 2007, and affirmed
by the District Court on Nov. 14.
* * *
As reported in the Troubled Company Reporter-Latin America on
Jan. 10, 2008, Moody's Investors Service confirmed the ratings
of the reorganized Federal-Mogul Corporation -- Corporate Family
Rating, Ba3; Probability of Default Rating, Ba3; and senior
secured bank credit facilities, Ba2. The outlook is stable.
The financing for the company's emergence from Chapter 11
bankruptcy protection has been funded in line with the structure
originally rated by Moody's in a press release dated Nov. 28,
2007.
As reported in the Troubled Company Reporter on Jan. 7, 2008,
Standard & Poor's Ratings Services assigned its 'BB-' corporate
credit rating to Southfield, Michigan-based Federal-Mogul Corp.
following the company's emergence from Chapter 11 on Dec. 27,
2007. The outlook is stable.
MBIA INC: CEO Jay Brown Asks Fitch to Withdraw Insurer Rating
-------------------------------------------------------------
On March 7, 2008, Jay Brown, chairman and chief executive
officer of MBIA Inc., wrote a letter to Fitch Ratings stating:
"As a result of the tremendous market disruption and its effect
on the value of the Insurance Financial Strength rating, MBIA
began a thorough evaluation of the impact each rating has in the
various global marketplaces in which we operate, the rating
methodologies used by each rating agency, and the costs
associated with maintaining the ratings."
Mr. Brown also expressed in the letter that MBIA'S review has
led them to these conclusions:
-- MBIA has decided to withdraw Fitch's Insurance Financial
Strength credit ratings on these MBIA companies:
- MBIA Insurance Corporation
- MBIA Insurance Corp. of Illinois
- MBIA UK Insurance Limited
- MBIA Assurance SA
- MBIA Mexico SA de CV (both the global and national scale)
- Capital Markets Assurance Corp.
Additionally, Mr. Brown also stated that the company would also
like Fitch to continue to rate the actual outstanding debt
obligations of these for MBIA Inc. and its related entities:
-- MBIA Insurance Corporation subordinated debt rating: 'AA'
Rating Watch Negative:
- US$1 billion of 14% surplus notes.
-- MBIA Inc. long-term debt ratings: 'AA' Rating Watch
Negative:
- CHF 175 million 4.50% senior unsecured notes due 2010;
- US$100 million 9.38% senior unsecured notes due 2011;
- US$297 million 6.40% senior unsecured debt due 2022;
- US$75 million 7.0% senior unsecured debentures due 2025;
- US$100 million 7.15% senior unsecured debentures due
2027;
- US$150 million 6.63% senior unsecured debentures due
2028;
- US$350 million 5.70% senior unsecured notes due 2034.
"Before I address why we are asking that you withdraw just the
IFS ratings, let me explain what I observe happening in the
capital markets," Mr. Brown said. "The IFS ratings were
developed to allow investors to evaluate the credit protection
provided by a financial guaranty insurance company when it
enhanced or "wrapped" an underlying debt instrument.
"From an issuer's perspective, this rating is an important part
of the valuation of insurance on its ability to access the
capital markets and at what price," Mr. Brown continued. "From
an investor's perspective, the decision to buy, sell or own the
credit-enhanced instrument is a function of both the underlying
rating and the IFS rating.
"In particular, it is this dual assessment of the wrapped
instrument that results in the vast range in spreads for the
thousands of individual transactions we insure over a multitude
of assets as investors evaluate the credit risk of each
security," Mr. Brown went on to say. "Unfortunately the global
capital markets are currently not functioning in this manner as
we have gone through the credit cyclone of the past 6 months.
"In effect, the IFS ratings have taken on a life of their own,
totally disconnected from the underlying credit instruments that
they enhance," Mr. Brown explained. "In the 24/7 information-
driven markets of today, the mere rumor of a potential change in
ratings methodology or a rating committee meeting can drive the
equity market, the CDS markets, and cause wild speculative
pricing in the extremely low frequency-of-loss U.S. public
finance market.
"As such, the actual value of the IFS rating to investors who
either hold or are interested in purchasing credit-enhanced
instruments or are interested in purchasing has been overwhelmed
by the forces of trading markets in unrelated securities on the
financial guarantor itself," Mr. Brown elaborated. "Consistent
with the recommendation I made to you in my February 27th
letter, we believe at this point in time, that it is more
valuable to investors to have access to a security's underlying
rating information without the Fitch IFS rating on them (for
those securities for which Fitch actually provides an underlying
rating).
"Of course, investors can then see for themselves if the value
of the MBIA enhancement is viewed as added protection or the
entire protection," Mr. Brown stated. "For the holding company
(and its related entities), given the modest amount of actual
debt outstanding, we believe that Fitch Ratings and their
ratings market share of other financial institutions still offer
value to investors in those securities.
"We request that you continue to rate these securities," Mr.
Brown expressed.
In the letter, Mr. Brown also made mention of its review, which
supports MBIA's contentions, and MBIA's evaluation that led to a
number of observations that Mr. Brown wishes to express to
Fitch.
According to Mr. Brown:
-- First, Fitch's coverage of the underlying credit quality of
MBIA's insured portfolio is extremely limited. Based on
MBIA's research and internal data, about one-third of
MBIA's total insured net par outstanding, and less than 20%
of its insured structured finance transactions, carries an
underlying rating assessment from Fitch. In contrast, over
85% of MBIA's total insured portfolio is covered by each of
the other two major rating agencies that do fundamental
credit analysis on underlying transactions. As a result,
Fitch's capital modeling approach heavily leverages the
ratings information of these agencies, but does so in a
manner that results in inappropriate capital requirements
for MBIA, more specifically the use of "lower of" ratings,
Mr. Brown wrote.
Because Fitch does not actually do the fundamental credit
analysis on these transactions, Mr. Brown said, it is
virtually impossible for MBIA to understand why Fitch's
approach generates charges inconsistent with the market and
other agency models. MBIA believes the assessment of
transaction-level credit quality is a critical element of
portfolio risk and capital allocation analysis for a
financial guarantor and, as previously discussed, is an
important consideration in the investment decisionmaking
process of fixed-income investors who own both credit
enhanced and unenhanced securities.
-- Second, and related to the first issue, Fitch's capital
model assumptions for public finance risks are inconsistent
with MBIA's view, the markets in which these securities
trade, and the views of the other major rating agencies.
As MBIA announced previously, over a five-year period it
will transform its insurance business into discrete public
finance and structured finance operating entities. As MBIA
evaluates the capital structure for a stand-alone public
finance business entity, Fitch's capital allocation is
approximately half that of the other rating agency capital
models. MBIA believes this level of capitalization at the
Triple-A level is inappropriate and would pose a serious
financial threat to our insured policyholders.
MBIA's concern is underscored by the fact that there are
existing financial guarantors and new entrants that will
focus exclusively on public finance business. Using
Fitch's methodology, MBIA believes these companies will not
maintain a level of capitalization consistent with the
Triple-A standards that have been long-standing for this
industry, and they will not assist the industry in bringing
stability back to this important constituency.
"On the structured finance side of our business, as you know, we
have announced a six-month moratorium for writing structured
finance business, and we are in the process of refining our risk
management framework that will, among other things, focus on
selected asset classes within the global structured finance
markets that we believe are consistent with Triple-A
underwriting standards," Mr. Brown imparted. "Given Fitch's low
market share in the asset classes we intend to underwrite in the
future and the fact that we will not be issuing any new
structured products for at least six months, we see limited
value to fixed-income investors who invest in MBIA-guaranteed
debt instruments to have an IFS rating at this time."
-- Mr. Brown's in his letter also states that Fitch's capital
model for financial guarantee insurance companies presents
severe operational challenges for capital planning and
pricing of our product. The letter also contained that
heavy data management requirements, long run time, and the
inability to produce stable calculations of transaction-
level marginal capital requirements make this model a less
useful tool for managing MBIA's business. MBIA believes it
is inappropriate to expose its policyholders and
shareholders to the potential volatility in capital
requirements that could occur as a result of these model
limitations.
-- Finally, and in consideration of the above reasons, MBIA
can no longer justify the high cost of the Fitch Insurer
Financial Strength rating. Mr Brown's letter also contains
that the fee proposal Fitch gave MBIA is three times the
amount Fitch charged in 2005, a rate of growth well in
excess of similar fees charged by the other major rating
agencies. While MBIA said it recognizes the investment
Fitch has made in its financial guarantors rating group in
recent years, MBIA said it has an obligation to continually
evaluate its cost structure and control expense growth in
an effort to maintain the highest level of profitability.
"We appreciate the service Fitch has provided to MBIA in the
past," Mr. Brown expressed. "As we continue to evaluate our
five-year transformation plan, and with the expectation of a
return to normalcy in the market's valuation of the IFS rating,
we look forward to obtaining a Fitch rating for any and all
insurance entities that could be established to target specific
marketplaces around the globe."
"As you might expect, we are making a formal request for you to
cease utilizing and immediately destroy or return all non-public
information that we supplied on those transactions that you did
not rate, including the non-public ratings those transactions
received from other rating agencies," Mr. Brown requested Fitch.
"Consistent with our license agreement governing the use of your
capital model, we will cease use of your program and delete all
copies from our computers."
"We will send you a separate letter certifying destruction of
the program and return the CD ROM within five business days,"
Mr. Brown concluded.
About MBIA Inc.
Headquartered in Armonk, New York, MBIA Inc. (NYSE:MBI) --
http://www.mbia.com-- provides financial guarantee insurance,
investment management services, and municipal and other
servicesto public finance and structured finance clients on a
globalbasis. The company conducts its financial guarantee
business through its wholly owned subsidiary, MBIA Insurance
Corporation and provides investment management products and
financial services through its wholly owned subsidiary MBIA
Asset Management, LLC.
MBIA manages its activities primarily through two principal
business operations: insurance and investment management
services. In February 2007, MBIA Corp. formed a new subsidiary,
MBIA Mexico, S.A. de C.V. During the year ended Dec. 31, 2006,
MBIA discontinued its municipal services operations. These
operations included MBIA MuniServices Company. On Dec. 5, 2006,
the company completed the sale of MBIA MuniServices Company.
MBIA INC: Fitch Ratings Comments on Chairman Jay Brown's Letter
---------------------------------------------------------------
Fitch learned of MBIA's request that the Insurer Financial
Strength Rating be withdrawn and that MBIA intended to announce
their request at the close of the market on March 7, 2008, but
that they would like Fitch to continue their debt ratings.
Fitch is disappointed and surprised to learn of MBIA's request.
In commenting on MBIA's letter to Fitch in which MBIA criticized
Fitch's analysis and its fees, Stephen Joynt, President and CEO
of Fitch Ratings, commented that "Fitch believes that our
analysis is of the highest quality and our understanding of
MBIA's municipal and structured exposure is very strong."
It is unclear to us at this time as to whether MBIA will
continue to cooperate with us in the rating process to allow us
to maintain their IFS and debt ratings. While, in general,
Fitch believes that they can rate companies based upon publicly
available information, the unique nature of the financial
guaranty sector could make maintaining the MBIA IFS and debt
ratings difficult without access to the non-public details on
their insured portfolio.
Fitch will evaluate its ability to maintain coverage on MBIA
over the next few days and make a final announcement after that
evaluation.
Headquartered in Armonk, New York, MBIA Inc. (NYSE:MBI) --
http://www.mbia.com-- provides financial guarantee insurance,
investment management services, and municipal and other
servicesto public finance and structured finance clients on a
globalbasis. The company conducts its financial guarantee
business through its wholly owned subsidiary, MBIA Insurance
Corporation and provides investment management products and
financial services through its wholly owned subsidiary MBIA
Asset Management, LLC.
MBIA manages its activities primarily through two principal
business operations: insurance and investment management
services. In February 2007, MBIA Corp. formed a new subsidiary,
MBIA Mexico, S.A. de C.V. During the year ended Dec. 31, 2006,
MBIA discontinued its municipal services operations. These
operations included MBIA MuniServices Company. On Dec. 5, 2006,
the company completed the sale of MBIA MuniServices Company.
SHARPER IMAGE: Files Motion for Order Against Cal. AG's Lawsuit
---------------------------------------------------------------
Sharper Image Corp. asks the Superior Court of California,
County of Alameda to make a determination that the attorney
general of the State of California have violated automatic stay
by filing an Action alleging violation of a state statute.
On behalf of Edmund G. Brown, Jr., the attorney general of the
State of California, Margaret E. Reiter, the supervising deputy
attorney general of the State of California, initiated an action
against the Debtor on March 5, 2008.
The Action, brought before the Court alleges a violation of
California's gift certificate statute and seeks to require the
Debtor to honor pre-bankruptcy filing liabilities.
The Debtor had sought the Court's authority to honor its gift
certificates and merchandise certificates only to the extent
that a customer seeking to redeem the certificates purchases an
item that costs double the value of the Gift Certificate or
Merchandise Certificate. The Attorney General opposes the
modified certificate program.
The Debtor believes that the Attorney General's position is
confusing, because participation is voluntary, as customers may
choose to (i) participate in the Modified Certificate Program,
(ii) retain their Gift Certificate or Merchandise Certificate
for potential redemption at a later date, or (iii) retain their
Gift Certificate or Merchandise Certificate and file a proof of
claim in the Chapter 11 case.
Furthermore, the Debtors note, the Modified Certificate Program
was established to satisfy the Debtor's participating customers
while not impairing the rights of customers who do not wish to
participate.
Proposed counsel for the Debtor, Steven K. Kortanek, Esq., at
Womble Carlyle Sandridge & Rice, PLLC, in Wilmington, Delaware,
asserts that the Action filed against the Debtor is in direct
violation of the automatic stay.
"While Ms. Reiter and the Attorney General argue that the Action
falls within the purview of the police or regulatory power
exception to the automatic stay, section 362(b)(4) of the
Bankruptcy Code, the Action is nothing more than an effort to
enforce and compel payment of prepetition claims against Sharper
Image," Mr. Kortanek says.
Accordingly, the Debtor asks the Court to make a determination
that Ms. Reiter and the Attorney General have violated the
automatic stay. In addition, the Debtor asks that the
commencement of the Action and all other actions taken by Ms.
Reiter and the Attorney General in violation of the automatic
stay be deemed null and void ab initio.
Mr. Kortanek further notes that the Debtor does not seek to
sanction or hold Ms. Reiter or the Attorney General in contempt
for their stay violation.
About Sharper Image Corp.
Based in San Francisco, California, Sharper Image Corp. --
http://www.sharperimage.com/-- is a multi-channel specialty
retailer. It operates in three principal selling channels: the
Sharper Image specialty stores throughout the U.S., the Sharper
Image catalog and the Internet. The company has operations in
Australia, Brazil and Mexico. In addition, through its Brand
Licensing Division, it is also licensing the Sharper Image brand
to select third parties to allow them to sell Sharper Image
branded products in other channels of distribution. The company
filed for Chapter 11 protection on Feb. 19, 2008 (Bankr. D.D.,
Case No. 08-10322). Steven K. Kortanek, Esq. at Womble,
Carlyle, Sandridge & Rice, P.L.L.C. represents the Debtor in its
restructuring efforts. An Official Committee of Unsecured
Creditors has been appointed in the case. When the Debtor filed
for bankruptcy, it listed total assets of US$251,500,000 and
total debts of US$199,000,000.
(Sharper Image Bankruptcy News Issue No. 6, Bankruptcy
Creditors' Service Inc., http://bankrupt.com/newsstand/or
215/945-7000)
SMOBY-MAJORETTE SA: Court Names Simba Dickie as Buyer
-----------------------------------------------------
Simba Dickie Group has been selected by the Commercial Court of
Lons-le-Saunier as the buyer for Smoby-Majorette S.A., Bloomberg
News reports.
The German toymaker offered to retain 401 of Smoby's around
1,100 employees in France as well as the resumption of
production at four French sites.
"The judge considered that to keep the toy company going in
France, another toymaker would be best," Simba Managing Director
Uwe Weiler told Bloomberg News. "The problems of Smoby weren't
from the basic business but from acquiring business after
business without getting it all under the same roof."
The sale ends Smoby's bankuptcy proceedings.
MGA Entertainment, which bought 51% of Smoby in May 2007 but
failed to reach an agreement with Smoby's creditors, didn't make
an offer for the company.
As reported in the TCR-Europe on Jan. 8, 2008, the Court of
Appeal in Besancon rejected the recovery plan presented by MGA
Entertainment Inc. for Smoby-Majorette, maintaining the decision
of the Commercial Court of Lons-le-Saunier to place the company
under receivership on Oct. 9, 2007.
The appellate court gave interested parties until at latest
Jan. 20, 2008, to submit offers for Smoby. Around 30 parties
have sought information on Smoby and its units.
About Smoby
Headquartered in Lavans les Saint-Claude, France, Smoby --
http://www.smoby.fr/-- specializes in the creation,
development, production and distribution of toys for children
from birth to age 10. Smoby has a presence in over 90 countries
globally, with commercial and/or industrial operations in South
America, Asia and throughout Europe. The Company's products are
sold worldwide through a network of 18 subsidiaries, with 65% of
sales generated outside of France. In France, the Company
employs 1, 300 workers. Its Latin America operations are found
in Argentina, Brazil and Mexico.
The Commercial Court of Lons-le-Saunier opened bankruptcy
proceedings against Smoby on March 19, 2007, upon the Debtor's
request. Smoby was hoping to snag an investor who will inject
fresh capital yet remain a minority, as the company grapples
with a EUR330-million debt. The company reported a net loss of
EUR15.87 million for the year ended March 31, 2006, compared
with a net profit of EUR1.56 million in 2005
=================
N I C A R A G U A
=================
DOLE FOOD: Judge Chaney Dismisses Tellez Case for US$1.58 Mil.
--------------------------------------------------------------
Dole Food Company Inc. disclosed that Judge Victoria Gerrard
Chaney of the Los Angeles Superior Court found for Dole in the
Tellez case by dismissing all punitive damages and finding that
“any punitive damages award would be so arbitrary as to be
grossly excessive, and thus violative of the Due Process Clause
of the Fourteenth Amendment” of the United States Constitution.
Judge Chaney further held that “viewing the evidence in the
light most favorable to plaintiffs, the evidence compels a
verdict for [Dole] as a matter of law.” The plaintiffs had
alleged that Dole acted with malice against workers in the use
of Dow Chemical’s agricultural chemical DBCP on contracted
banana farms in Nicaragua nearly 30 years ago.
As a result of this and the court’s other favorable rulings on
March 7, 2008, the original verdicts which totaled US$5 million
against Dole have now been reduced to US$1.58 million.
As reported in the Troubled Company Reporter-Latin America on
Nov. 21, 2007, at a jury hearing held Nov. 14 in Los Angeles
Superior Court Judge Chaney's chamber, Dole Food was asked to
pay five former Nicaraguan employees US$2.5 million for punitive
damages. These workers also got a US$3.2 million compensatory
damages for suffering sterility due to exposure to the pesticide
DBCP on Dole's banana plantations in Nicaragua. Most of the
compensatory award will be paid by Dole, while the rest will
come from Dow Chemical Co., which manufactured the pesticide.
“We always have maintained that punitive damages are
inappropriate in these cases and would violate fundamental
constitutional principles,” said C. Michael Carter, Dole's
executive vice president and general counsel. “The rationale of
Judge Chaney’s ruling clearly appears to preclude the award of
punitive damages against Dole in any of the other cases pending
in California, regardless of whether the plaintiffs are from
Nicaragua or any other foreign country.”
As a result of these proceedings, the court found in Dole’s
favor against seven of the 12 hand-picked plaintiffs in the
Tellez case; and the court granted Dole’s motion for a new trial
as to the claims of one of the other plaintiffs. Only the
compensatory verdicts for four plaintiffs remain, subject to
Dole’s appeal.
Dole is committed to a fair and reasonable resolution of claims
by male banana workers in Nicaragua, who meet minimum criteria
consistent with the reliable science. In Honduras, Dole, worker
unions and the Government of Honduras have implemented a
successful program to deal with these claims.
Headquartered in Westlake Village, California, Dole Food
Company, Inc. -- http://www.dole.com/-- is a producer and
marketer of fresh fruit, fresh vegetables and fresh-cut flowers,
and markets a line of packaged foods. The company has four
primary operating segments. The fresh fruit segment produces
and markets fresh fruit to wholesale, retail and institutional
customers worldwide. The fresh vegetables segment contains
operating segments that produce and market commodity vegetables
and ready-to-eat packaged vegetables to wholesale, retail and
institutional customers primarily in North America, Europe and
Asia. The packaged foods segment contains several operating
segments that produce and market packaged foods, including
fruit, juices and snack foods. Dole's fresh-cut! flowers
segment sources, imports and markets fresh-cut flowers, grown
mainly in Colombia and Ecuador, primarily to wholesale florists
and supermarkets in the U.S.
* * *
As reported in the Troubled Company Reporter-Asia on
Feb. 28, 2008, Moody's Investors Service lowered Dole Food
Company, Inc.'s corporate family rating and probability of
default ratings to B3 from B2, and downgraded the ratings of the
company's unsecured shelf filings. Moody's said the rating
outlook is stable.
===========
P A N A M A
===========
GLOBAL CROSSING: Expands Undersea Cable System Capacity
-------------------------------------------------------
Global Crossing Ltd. has expanded capacity on its South American
Crossing undersea fiber-optic cable system to meet rapidly
growing demand for Internet Protocol and Ethernet transport in
Central and South America.
Global Crossing's Chief Executive Officer John Legere said, "Our
carrier and service provider customers are requesting increased
capacity to handle the huge demand for Internet Protocol
connectivity and broadband services, including emerging services
such as IPTV and mobile broadband. We continue to make
strategic investments in network infrastructure in support of
strong growth around the world, and this particular upgrade was
necessitated both by increasing demand in general and by Global
Crossing's acquisition of Impsat last year, which brought a
significant number of new customers to the company."
Latin America is among the fastest growing regions of the world
for international Internet traffic. TeleGeography Research has
estimated 87 percent growth in international Internet traffic in
the region during 2007.
Global Crossing has added 100 Gigabits per second (Gbps) of
transport capacity on the SAC submarine cable system with the
addition of new terminal equipment. The SAC system is a four-
fiber-pair repeatered system providing 10 Gbps transport with a
current design capacity of 1.2 Terabits. The new capacity will
enable 10 Gbps IP ports and also Synchronous Transfer Mode (STM)
at rates up to 10 Gbps (STM-64).
The system includes:
-- 12,000 route miles of fiber-optic cable and landing
stations in St. Croix, USVI;
-- Fortaleza, Brazil; Rio de Janeiro, Brazil;
-- Santos, Brazil; Las Toninas, Argentina;
-- Valparaiso, Chile;
-- Lurin, Peru; Fort Amador, Panama; and
-- Puerto Viejo, Venezuela.
Fort Amador and Puerto Viejo are shared by Global Crossing's Pan
American Crossing (PAC)/Cook's Crossing undersea systems.
"Latin America's international Internet traffic growth remains
among the strongest in the world, driven by increased broadband
penetration and availability of high-bandwidth applications. We
anticipate the pace of growth in Latin America to remain strong
in the coming years," said TeleGeography Senior Analyst Eric
Schoonover.
About 100 Gbps of new capacity is available now.
Headquartered in Florham Park, New Jersey, Global Crossing Ltd.
(NASDAQ: GLBC) -- http://www.globalcrossing.com/-- provides
telecommunication services over the world's first integrated
global IP-based network. Global Crossing serves many of the
world's largest corporations, providing a full range of managed
data and voice products and services. The company filed for
chapter 11 protection on Jan. 28, 2002 (Bankr. S.D.N.Y. Case No.
02-40188). When the Debtors filed for protection from their
creditors, they listed US$25,511,000,000 in total assets and
US$15,467,000,000 in total debts. Global Crossing emerged from
chapter 11 on Dec. 9, 2003.
Global Crossing's Latin American business has operations in
Argentina, Brazil, Chile, Colombia, Ecuador, Panama, Peru,
Mexico, Venezuela and the United States (Florida). It also has
operations in the United Kingdom.
* * *
At Sept. 30, 2007, Global Crossing Ltd.'s balance sheet showed
total assets of US$2.6 billion, total debts of US$2.7 billion
and a US$74 million stockholders' deficit.
As reported in the Troubled Company Reporter-Latin America on
Nov. 8, 2007, Global Crossing Ltd. said in a statement that its
net loss increased 75% to US$89 million in the third quarter
2007, compared to US$51 million in the third quarter 2006.
=======
P E R U
=======
QUEBECOR WORLD: Court Gives 30 Days to Negotiate DIP Fund Terms
---------------------------------------------------------------
The Hon. James Peck of the U.S. Bankruptcy Court for the
Southern District of New York adjourned the hearing on Quebecor
World (USA) Inc. and its debtor-affiliates' request for final
approval of a US$1,000,000,000 loan package from a syndicate of
lenders led by Credit Suisse Securities (USA), LLC, and Morgan
Stanley Senior Funding, Inc.
According to Bloomberg News, Judge Peck gave Quebecor World 30
days to negotiate the final terms of the loan.
"Parties will need some additional time to conclude what appear
to be constructive although at this point inconclusive
negotiations," Judge Peck said at the March 6 final DIP hearing.
Quebecor World obtained interim approval from the Bankruptcy
Court on Jan. 23, 2008, to borrow US$750,000,000 under the Loan,
but various parties, including noteholders and unsecured
creditors, sought revisions to the terms of the loan.
The Honorable Justice Robert Mongeon at the Superior Court of
Justice (Commercial Division), for the Province of Quebec,
according a March 3, 2008 report by The Canadian Press, has
already given approval to Quebecor World, Inc., and the U.S.
Debtors to enter into the US$1,000,000,000 loan.
More Objections
The Official Committee of Unsecured Creditors, an ad hoc group
of holders of more than US$1,000,000,000 of the unsecured notes
issued by the Debtors, and the Royal Bank of Canada, as
administrative agent for certain Prepetition RBC Secured
Lenders, object to the DIP Financing Motion.
(1) Creditors Committee
The Creditors Committee says the Debtors seek to provide the DIP
Lenders with more protection than they are entitled to, to the
detriment of the Debtors' estates and their unsecured creditors,
and in contravention of provisions of the Bankruptcy Code and
principles of equity.
The Creditors Committee acknowledges the Debtors' need for
postpetition financing and supports approval of the loan
provided that the proposed Final DIP Order or DIP Credit
Agreement, as applicable, contain these modifications:
(a) The Final DIP Order should make clear that neither the
DIP Lenders' liens and claims nor the adequate protection
liens or superpriority claims can be satisfied from
Avoidance Actions or their proceeds.
(b) The requirement for the Debtors to waive their right to
seek to surcharge, pursuant to Section 506 of the
Bankruptcy Code, must be stricken or altered to confer
the authority on the Creditors Committee.
(c) The Creditors Committee should be allowed to investigate
and, if necessary, pursue causes of action utilizing
proceeds of the DIP Facilities, including the Carve-Out,
for bad acts like fraud, willful misconduct or gross
negligence by the Secured DIP Creditors and the Agents,
with respect to the Debtors.
(d) Parties-in-interest, including, but not limited to, the
Creditors Committee, should be permitted to raise any
issues, which may serve to maximize estate assets, and
the Court should be the arbiter of all facts relevant to
the circumstances giving rise to a hearing.
(e) To the extent the Debtors seek to make any "material"
amendments to the DIP Credit Agreement or the DIP Loan
Documents, the Debtors should be required to obtain the
prior written consent of the Creditors Committee or, in
the absence of a consent, approval by the Court. For any
other "immaterial" amendments, the Debtors and the DIP
Lenders should be required to provide counsel to the
Creditors Committee with two business days' advance
written notice of the modifications or amendments.
(f) The DIP Agents and the Arrangers should be required to
submit monthly invoices for all fees and expenses of
their professionals and that the Final DIP Order provide
a mechanism for appropriate review of those fees and
expenses by the Debtors and the Creditors Committee and,
following an attempt by the parties to resolve any
disagreements regarding the reasonableness of those fees,
the Court.
The Creditors Committee also wants additional modifications,
including:
* modification of the definitions of "Borrowing Base
Availability" and "DIP Borrowing Base" so that certain
"Reserves" are only deducted once in the calculation of the
Borrowing Base Availability;
* modification of provisions in the DIP Credit Agreement
related to Employee Retirement Security Act Events so that
those events will no longer constitute Events of Default;
* elimination of the Administrative Agent's unilateral
ability to determine whether an order is material for
purposes of determining an Event of Default;
* clarification that the filing by the Debtors of a motion or
any pleadings seeking authority to pay off the DIP
Financing will not be an Event of Default; and
* limitation of the Debtors' ability to implement any hedging
programs or enter into Hedge Agreements without advance
input and approval from the Creditors Committee.
(2) Royal Bank of Canada
RBC, which is owed US$735,000,000 as of Jan. 11, 2008, pursuant
to a prepetition revolving credit facility provided to the
Debtors, relates that it has worked closely with the Debtors and
the other principal constituencies to negotiate a Proposed Final
Order that would be acceptable to all parties. Richard A. Levy,
Esq., at Latham & Watkins LLP, in Chicago, Illinois, said that
those negotiations are ongoing and will likely continue until
just before the March 6 hearing. Mr. Levy explained a number of
RBC's substantive issues remain unresolved, including:
(a) The Debtors' rights to amend the DIP Facility Agreement
without Court approval should be limited to "immaterial"
amendments;
(b) RBC should receive copies of all invoices of the DIP
Agent's and Arranger's professionals, and have an
opportunity to object to the allowance and payment of any
of those fees as unreasonable;
(c) The Proposed Final DIP Order should explicitly preserve
RBC's rights to seek Court authority for the segregation
or payment of some or all of the proceeds of the
collateral to the Prepetition RBC Secured Lenders without
regard to the provisions or limitations of the DIP Credit
Agreement;
(d) The Proposed Final Order should require the Debtors to
deliver information to RBC to monitor their Prepetition
Collateral and any use or their diminution;
(e) The Proposed Final Order should provide protections as
necessary to ensure that the Debtors honor and maintain
the integrity of each Debtor's estate, including:
-- requiring the tracking of and accounting for each
Debtor's borrowings under the DIP Credit Facility
and all postpetition intercompany transactions
between and among the Debtors and between the
Debtors and their non-debtor affiliates;
-- providing for liens and superpriority claims for
intercompany lenders, as appropriate; and
-- restricting intercompany transfers from Debtors to
non-debtor affiliates, as appropriate; and
(f) The Creditors Committee's right to assert certain claims
and objections on behalf of the Debtors should be limited
to apply only to claims made on behalf of U.S. Debtors.
Societe Generale(Canada), as lender under the prepetition SocGen
Facility, joins in RBC's objections to the DIP Financing Motion.
SocGen is owed US$155,000,000, as of the bankruptcy filing,
under its equipment financing agreement with the Debtors.
(3) Ad Hoc Noteholders Committee
The Ad Hoc Committee -- comprising of holders of more than
US$1,000,000,000 of approximately US$1,400,000,000 of unsecured
notes issued by the Debtors -- tells the Court that it has not
received from the Debtors information about some of the basic
economic terms of the proposed DIP facility, without which the
Committee cannot assess whether the proposed financing is fair
or reasonable.
The Ad Hoc Committee points out that the proposed DIP Credit
Agreement contained "overreaching" terms that go beyond what is
fair, reasonable, and appropriate under certain circumstances.
It adds that many provisions constitute "extraordinary relief"
for which there is no justification, including:
* Section 506(c) Waiver,
* DIP Lenders' liens on Avoidance Actions and their proceeds,
* DIP Amendments without Court approval and limited notice,
* Limitations on challenges to prepetition obligations, and
* the overly broad definition of "Change of Control."
DIP Lenders Respond to Committee Objection
Credit Suisse, the Debtors' administrative agent to senior
secured superpriority DIP credit agreement, says two provisions
in the agreement -- (i) the grant of liens and superpriority
claims to secured DIP creditors on the proceeds of avoidance
actions and (ii) waiver by the Debtors of their rights under
Section 506(c) of the Bankruptcy Code -- are supported by
bankruptcy law and routinely approved in major Chapter 11 cases.
Credit Suisse argues that the Committee's objection fails to
properly distinguish between avoidance actions and the proceeds
of avoidance actions. According to Andrew Tenzer, Esq., at
Shearman & Sterling LLP, in New York, the Committee's objection
rests on a mistaken premise that the proceeds of avoidance
actions are exclusively for the benefit of general unsecured
creditors in any circumstance rather than recovered for the
whole "estate", which includes unsecured creditors with
superiority claims, as set forth in Section 551 of the
Bankruptcy Code.
Mr. Tenzer relates that even without a lien on proceeds of
avoidance actions, the DIP Lenders still have the right to be
paid ahead of general unsecured creditors as a consequence of
the Superpriority Claim; a provision expressly entitled under
Section 364(c)(1) of the Bankruptcy Code.
Mr. Tenzer also clarifies that the DIP Credit Facility is not a
"rollup", since the DIP Lenders are not prepetition lenders nor
the target of any potential avoidance action. He says the the
DIP Lenders are new lenders who simply seek their entitlement to
first priority claims against the Debtors and first priority
liens on all unencumbered assets. "This is not a case where
there is a risk that liens on the proceeds of avoidance actions
will insulate prepetition lenders from the consequences of the
avoidance of their liens and security interests," he adds.
Additionally, Mr Tenzer notes it is well-settled in the Southern
District of New York that a DIP lender may obtain a waiver of
surcharges under Section 506(c). He avers the waivers are
necessary because the DIP Lenders are unwilling to lend in
circumstances where they cannot know the limit to the charges
that could be made against their collateral. "To rule that a
DIP lender may not require a 506(c) waiver to provide financing
would cause a chilling effect on DIP lending," Mr. Tenzer
concludes.
About Quebecor World
Based in Montreal, Quebec, Quebecor World Inc. (TSX: IQW) (NYSE:
IQW), -- http://www.quebecorworldinc.com/-- provides market
solutions, including marketing and advertising activities, well
as print solutions to retailers, branded goods companies,
catalogers and to publishers of magazines, books and other
printed media. It has 127 printing and related facilities
located in North America, Europe, Latin America and Asia. In
the United States, it has 82 facilities in 30 states, and is
engaged in the printing of books, magazines, directories, retail
inserts, catalogs and direct mail. In Canada it has 17
facilities in five provinces, through which it offers a mix of
printed products and related value-added services to the
Canadian market and internationally. The company has operations
in Mexico, Brazil, Colombia, Chile, Peru, Argentina and the
British Virgin Islands.
The company is an independent commercial printer in Europe with
19 facilities, operating in Austria, Belgium, Finland, France,
Spain, Sweden, Switzerland and the United Kingdom. In March
2007, it sold its facility in Lille, France. Quebecor World
(USA) Inc. is its wholly owned subsidiary.
Quebecor World and 53 of its subsidiaries, including those in
Canada, filed a petition under the Companies' Creditors
Arrangement Act before the Superior Court of Quebec, Commercial
Division, in Montreal, Canada, on Jan. 20, 2008. The Honorable
Justice Robert Mongeon oversees the CCAA case. Francois-David
Pare, Esq., at Ogilvy Renault, LLP, represents the Company in
the CCAA case. Ernst & Young Inc. was appointed as Monitor.
On Jan. 21, 2008, Quebecor World (USA) Inc., its U.S.
subsidiary, along with other U.S. affiliates, filed for chapter
11 bankruptcy on Jan. 21, 2008 (Bankr. S.D.N.Y Lead Case No.
08-10152). Anthony D. Boccanfuso, Esq., at Arnold & Porter LLP
represents the Debtors in their restructuring efforts. The
Official Committee of Unsecured Creditors is represented by Akin
Gump Strauss Hauer & Feld LLP.
Based in Corby, Northamptonshire, Quebecor World PLC --
http://www.quebecorworldplc.com/-- is the U.K. subsidiary of
Quebecor World Inc. that specializes in web offset magazines,
catalogues and specialty print products for marketing and
advertising campaigns. The company employs around 290 people.
Quebecor PLC was placed into administration with Ian Best and
David Duggins of Ernst & Young LLP appointed as joint
administrators effective Jan. 28, 2008.
As of Sept. 30, 2007, Quebecor World's unaudited consolidated
balance sheet showed total assets of US$5,554,900,000, total
liabilities of US$3,964,800,000, preferred shares of
US$175,900,000, and total shareholders' equity of
US$1,414,200,000.
The company has until May 20, 2008, to file a plan of
reorganization in the Chapter 11 case. The Debtors' CCAA stay
has been extended to May 12, 2008. (Quebecor World Bankruptcy
News, Issue No. 7; Bankruptcy Creditors' Service, Inc.,
http://bankrupt.com/newsstand/or 215/945-7000)
* * *
As reported in the Troubled Company Reporter-Latin America on
Feb. 13, 2008, Moody's Investors Service assigned a Ba2 rating
to the US$400 million super priority senior secured revolving
term loan facility of Quebecor World Inc. as a Debtor-in-
Possession. The related US$600 million super priority senior
secured term loan was rated Ba3 (together, the DIP facilities).
The RTL's better asset value coverage relative to the TL
accounts for the ratings' differential.
QUEBECOR WORLD: NYSE to Delist Subordinate Voting Shares
--------------------------------------------------------
New York Stock Exchange LLC notified the U.S. Securities and
Exchange Commission of its intention to remove the entire class
of Subordinate Voting Shares of Quebecor World Inc., from
listing and registration on the Exchange at the opening of
business on March 13, 2008, pursuant to the provisions of Rule
12d2-2(b) of the Securities Exchange Act of 1934.
NYSE LLC said, in its opinion, the Voting Shares are no longer
suitable for continued listing and trading on the New York Stock
Exchange. The delisting, according to the notice, is being
taken in view of the company's Jan. 21, 2008 announcement that
it, together with certain of its subsidiaries, voluntarily filed
for creditor protection under the Companies' Creditors
Arrangement Act in Canada as well as in the United States under
Chapter 11 of the United States Bankruptcy Code.
NYSE Regulation also considered the 'abnormally low' trading
level of the subordinate voting shares, which closed in New York
at US$0.32 on Jan. 18, 2008, with a resultant market
capitalization of US$27,200,000.
About Quebecor World
Based in Montreal, Quebec, Quebecor World Inc. (TSX: IQW) (NYSE:
IQW), -- http://www.quebecorworldinc.com/-- provides market
solutions, including marketing and advertising activities, well
as print solutions to retailers, branded goods companies,
catalogers and to publishers of magazines, books and other
printed media. It has 127 printing and related facilities
located in North America, Europe, Latin America and Asia. In
the United States, it has 82 facilities in 30 states, and is
engaged in the printing of books, magazines, directories, retail
inserts, catalogs and direct mail. In Canada it has 17
facilities in five provinces, through which it offers a mix of
printed products and related value-added services to the
Canadian market and internationally. The company has operations
in Mexico, Brazil, Colombia, Chile, Peru, Argentina and the
British Virgin Islands.
The company is an independent commercial printer in Europe with
19 facilities, operating in Austria, Belgium, Finland, France,
Spain, Sweden, Switzerland and the United Kingdom. In March
2007, it sold its facility in Lille, France. Quebecor World
(USA) Inc. is its wholly owned subsidiary.
Quebecor World and 53 of its subsidiaries, including those in
Canada, filed a petition under the Companies' Creditors
Arrangement Act before the Superior Court of Quebec, Commercial
Division, in Montreal, Canada, on Jan. 20, 2008. The Honorable
Justice Robert Mongeon oversees the CCAA case. Francois-David
Pare, Esq., at Ogilvy Renault, LLP, represents the Company in
the CCAA case. Ernst & Young Inc. was appointed as Monitor.
On Jan. 21, 2008, Quebecor World (USA) Inc., its U.S.
subsidiary, along with other U.S. affiliates, filed for chapter
11 bankruptcy on Jan. 21, 2008 (Bankr. S.D.N.Y Lead Case No.
08-10152). Anthony D. Boccanfuso, Esq., at Arnold & Porter LLP
represents the Debtors in their restructuring efforts. The
Official Committee of Unsecured Creditors is represented by Akin
Gump Strauss Hauer & Feld LLP.
Based in Corby, Northamptonshire, Quebecor World PLC --
http://www.quebecorworldplc.com/-- is the U.K. subsidiary of
Quebecor World Inc. that specializes in web offset magazines,
catalogues and specialty print products for marketing and
advertising campaigns. The company employs around 290 people.
Quebecor PLC was placed into administration with Ian Best and
David Duggins of Ernst & Young LLP appointed as joint
administrators effective Jan. 28, 2008.
As of Sept. 30, 2007, Quebecor World's unaudited consolidated
balance sheet showed total assets of US$5,554,900,000, total
liabilities of US$3,964,800,000, preferred shares of
US$175,900,000, and total shareholders' equity of
US$1,414,200,000.
The company has until May 20, 2008, to file a plan of
reorganization in the Chapter 11 case. The Debtors' CCAA stay
has been extended to May 12, 2008. (Quebecor World Bankruptcy
News, Issue No. 7; Bankruptcy Creditors' Service, Inc.,
http://bankrupt.com/newsstand/or 215/945-7000)
* * *
As reported in the Troubled Company Reporter-Latin America on
Feb. 13, 2008, Moody's Investors Service assigned a Ba2 rating
to the US$400 million super priority senior secured revolving
term loan facility of Quebecor World Inc. as a Debtor-in-
Possession. The related US$600 million super priority senior
secured term loan was rated Ba3 (together, the DIP facilities).
The RTL's better asset value coverage relative to the TL
accounts for the ratings' differential.
QUEBECOR WORLD: Abandons US$341 Mil. Sale of EURO Assets to RSDB
----------------------------------------------------------------
Quebecor World Inc., scrapped its plans to sell its European
assets to RSDB NV for US$341,000,000, The Canadian Press
reports.
The sale was halted following RDSB's stock holders' to decision
to reject the purchase. The sale, announced in early November
2007, was endorsed by both RSDB's management and supervisory
boards but was still subject to approval by the Dutch company's
shareholders.
"Notwithstanding the outcome of [] vote by RSDB's shareholders,
Quebecor World continues to believe that the overall terms of
the transaction represented fair value for all affected
stakeholders," Montreal-based Quebecor World said in a release,
according to Canadian Press.
"The company will continue to actively explore its strategic
options for its European operations, including consolidation
opportunities and other initiatives to enhance value."
About Quebecor World
Based in Montreal, Quebec, Quebecor World Inc. (TSX: IQW) (NYSE:
IQW), -- http://www.quebecorworldinc.com/-- provides market
solutions, including marketing and advertising activities, well
as print solutions to retailers, branded goods companies,
catalogers and to publishers of magazines, books and other
printed media. It has 127 printing and related facilities
located in North America, Europe, Latin America and Asia. In
the United States, it has 82 facilities in 30 states, and is
engaged in the printing of books, magazines, directories, retail
inserts, catalogs and direct mail. In Canada it has 17
facilities in five provinces, through which it offers a mix of
printed products and related value-added services to the
Canadian market and internationally. The company has operations
in Mexico, Brazil, Colombia, Chile, Peru, Argentina and the
British Virgin Islands.
The company is an independent commercial printer in Europe with
19 facilities, operating in Austria, Belgium, Finland, France,
Spain, Sweden, Switzerland and the United Kingdom. In March
2007, it sold its facility in Lille, France. Quebecor World
(USA) Inc. is its wholly owned subsidiary.
Quebecor World and 53 of its subsidiaries, including those in
Canada, filed a petition under the Companies' Creditors
Arrangement Act before the Superior Court of Quebec, Commercial
Division, in Montreal, Canada, on Jan. 20, 2008. The Honorable
Justice Robert Mongeon oversees the CCAA case. Francois-David
Pare, Esq., at Ogilvy Renault, LLP, represents the Company in
the CCAA case. Ernst & Young Inc. was appointed as Monitor.
On Jan. 21, 2008, Quebecor World (USA) Inc., its U.S.
subsidiary, along with other U.S. affiliates, filed for chapter
11 bankruptcy on Jan. 21, 2008 (Bankr. S.D.N.Y Lead Case No.
08-10152). Anthony D. Boccanfuso, Esq., at Arnold & Porter LLP
represents the Debtors in their restructuring efforts. The
Official Committee of Unsecured Creditors is represented by Akin
Gump Strauss Hauer & Feld LLP.
Based in Corby, Northamptonshire, Quebecor World PLC --
http://www.quebecorworldplc.com/-- is the U.K. subsidiary of
Quebecor World Inc. that specializes in web offset magazines,
catalogues and specialty print products for marketing and
advertising campaigns. The company employs around 290 people.
Quebecor PLC was placed into administration with Ian Best and
David Duggins of Ernst & Young LLP appointed as joint
administrators effective Jan. 28, 2008.
As of Sept. 30, 2007, Quebecor World's unaudited consolidated
balance sheet showed total assets of US$5,554,900,000, total
liabilities of US$3,964,800,000, preferred shares of
US$175,900,000, and total shareholders' equity of
US$1,414,200,000.
The company has until May 20, 2008, to file a plan of
reorganization in the Chapter 11 case. The Debtors' CCAA stay
has been extended to May 12, 2008. (Quebecor World Bankruptcy
News, Issue No. 7; Bankruptcy Creditors' Service, Inc.,
http://bankrupt.com/newsstand/or 215/945-7000)
* * *
As reported in the Troubled Company Reporter-Latin America on
Feb. 13, 2008, Moody's Investors Service assigned a Ba2 rating
to the US$400 million super priority senior secured revolving
term loan facility of Quebecor World Inc. as a Debtor-in-
Possession. The related US$600 million super priority senior
secured term loan was rated Ba3 (together, the DIP facilities).
The RTL's better asset value coverage relative to the TL
accounts for the ratings' differential.
QUEBECOR WORLD: Wants Until June 4 to File Financial Schedules
--------------------------------------------------------------
Quebecor World Inc. and its debtor-affiliates ask the U.S.
Bankruptcy Court for the Southern District of New York to grant
them another extension of their deadline to file schedules of
assets and liabilities, schedules of current income and
expenditures, schedules of executory contracts and unexpired
leases, and statements of financial affairs. The Debtors seek
to extend their deadline to June 4, 2008.
The Debtors were due to submit their schedules on March 20,
2008.
Michael Canning, Esq., at Arnold & Porter LLP, in New York,
believes that an extension is necessary because of the volume of
material that must be compiled and reviewed by the Debtors'
limited staff and the Debtors' desire to compile and file
complete and accurate SAL's and SOFA's. "Given the size and
complexity of their business operations, the number of
creditors, and the fact that certain prepetition invoices may
still be in process, the Debtors . . . have not yet finished
compiling the information required to complete the SAL's and
SOFA's," Mr. Canning says.
The Court will convene a hearing on March 20, 2008, to consider
the Debtors' request.
About Quebecor World
Based in Montreal, Quebec, Quebecor World Inc. (TSX: IQW) (NYSE:
IQW), -- http://www.quebecorworldinc.com/-- provides market
solutions, including marketing and advertising activities, well
as print solutions to retailers, branded goods companies,
catalogers and to publishers of magazines, books and other
printed media. It has 127 printing and related facilities
located in North America, Europe, Latin America and Asia. In
the United States, it has 82 facilities in 30 states, and is
engaged in the printing of books, magazines, directories, retail
inserts, catalogs and direct mail. In Canada it has 17
facilities in five provinces, through which it offers a mix of
printed products and related value-added services to the
Canadian market and internationally. The company has operations
in Mexico, Brazil, Colombia, Chile, Peru, Argentina and the
British Virgin Islands.
The company is an independent commercial printer in Europe with
19 facilities, operating in Austria, Belgium, Finland, France,
Spain, Sweden, Switzerland and the United Kingdom. In March
2007, it sold its facility in Lille, France. Quebecor World
(USA) Inc. is its wholly owned subsidiary.
Quebecor World and 53 of its subsidiaries, including those in
Canada, filed a petition under the Companies' Creditors
Arrangement Act before the Superior Court of Quebec, Commercial
Division, in Montreal, Canada, on Jan. 20, 2008. The Honorable
Justice Robert Mongeon oversees the CCAA case. Francois-David
Pare, Esq., at Ogilvy Renault, LLP, represents the Company in
the CCAA case. Ernst & Young Inc. was appointed as Monitor.
On Jan. 21, 2008, Quebecor World (USA) Inc., its U.S.
subsidiary, along with other U.S. affiliates, filed for chapter
11 bankruptcy on Jan. 21, 2008 (Bankr. S.D.N.Y Lead Case No.
08-10152). Anthony D. Boccanfuso, Esq., at Arnold & Porter LLP
represents the Debtors in their restructuring efforts. The
Official Committee of Unsecured Creditors is represented by Akin
Gump Strauss Hauer & Feld LLP.
Based in Corby, Northamptonshire, Quebecor World PLC --
http://www.quebecorworldplc.com/-- is the U.K. subsidiary of
Quebecor World Inc. that specializes in web offset magazines,
catalogues and specialty print products for marketing and
advertising campaigns. The company employs around 290 people.
Quebecor PLC was placed into administration with Ian Best and
David Duggins of Ernst & Young LLP appointed as joint
administrators effective Jan. 28, 2008.
As of Sept. 30, 2007, Quebecor World's unaudited consolidated
balance sheet showed total assets of US$5,554,900,000, total
liabilities of US$3,964,800,000, preferred shares of
US$175,900,000, and total shareholders' equity of
US$1,414,200,000.
The company has until May 20, 2008, to file a plan of
reorganization in the Chapter 11 case. The Debtors' CCAA stay
has been extended to May 12, 2008. (Quebecor World Bankruptcy
News, Issue No. 7; Bankruptcy Creditors' Service, Inc.,
http://bankrupt.com/newsstand/or 215/945-7000)
* * *
As reported in the Troubled Company Reporter-Latin America on
Feb. 13, 2008, Moody's Investors Service assigned a Ba2 rating
to the US$400 million super priority senior secured revolving
term loan facility of Quebecor World Inc. as a Debtor-in-
Possession. The related US$600 million super priority senior
secured term loan was rated Ba3 (together, the DIP facilities).
The RTL's better asset value coverage relative to the TL
accounts for the ratings' differential.
====================
P U E R T O R I C O
====================
CARIBBEAN RESTAURANTS: Moody's Drops Corp. Family Rating to B3
--------------------------------------------------------------
Moody's Investors Service has downgraded Caribbean Restaurants,
LLC's Corporate Family Rating to B3 from B2, probability of
default rating to B3 from B2, and changed rating outlook to
negative. Concurrently, Moody's affirmed the B1 rating of the
company's US$210 million senior secured credit facilities.
The downgrade of CFR to B3 reflects the company's continuously
declining operating performance is resulting in deteriorating
credit metrics that are more commensurate with a low single B
rating. Moody's anticipates that the key contributing factors
to the company's underperformance, such as recessionary economic
conditions in Puerto Rico, a high inflationary environment and
the ever-intensified competitions among quick service
restaurants, are likely to persist over an extended period, thus
keeping the company from improving its performance and credit
metrics within the rating horizon. The rating action also
reflects Moody's increasing concern on the company's liquidity
position as it approaches a potential covenant violation under
its credit agreement. The B3 CFR continues to incorporate the
strong name recognition and leading position of Burger King
brand in the Puerto Rico quick service restaurant segment and
the company's exclusive development agreement within Puerto
Rico, offset by its geographic concentration and limited scale
and revenue base.
The negative ratings outlook encompasses challenges Caribbean
Restaurants may face in the coming 12-18 months to stabilize its
margin and improve cash flow. Moody's expects the unfavorable
macroeconomic conditions, such as the local recession along with
the escalating unemployment rate and rising inflation will
likely continue to weigh on incomes and hurt consumers'
disposable income, thus imposing further strains on the
company's operating performance. The outlook also incorporates
the company's weakening liquidity position as represented by its
very tight covenant. Moody's cautions that the continued weak
operating results may force the company to seek a waiver or
amendment from its lenders to avoid the covenant breach. A
failure of obtaining an amendment could result in further
negative rating action.
The B1 rating on the senior secured credit facilities reflect
the facilities' perfected first lien priority security interest
in substantially all the assets of the company as well as
guarantee provided by its parent and subsidiaries. The B1
rating on the facilities benefits from their priority position
in the capital structure relative to its substantial junior debt
obligation such as US$73.5 million subordinated notes, lease
obligation and trade payables.
These ratings are affected:
-- Corporate Family Rating: downgraded to B3 from B2,
-- Probability of Default rating: downgraded to B3 from B2,
-- US$210 million senior secured credit facilities due July
2009: affirmed at B1,
-- Rating Outlook: changed to negative from stable
Based in San Juan, Puerto Rico, Caribbean Restaurants, LLC,
through an exclusive territorial development agreement with
Burger King Corporation, is the sole franchisee of Burger King
restaurants in Puerto Rico with approximately 170 units as of
fiscal year-end April 30, 2007.
R&G FINANCIAL: Will Pay US$39MM to Settle Investor Class Action
---------------------------------------------------------------
R&G Financial Corporation and other settling defendants will pay
plaintiffs an aggregate of US$39 million, as part of an
agreement reached to settle all claims with the lead plaintiffs
in a shareholder class action originally filed in 2005.
The terms of the settlement is subject to notice provided to the
class and final approval by the United States District Court for
the Southern District of New York.
The company also disclosed that it has reached an agreement in
principle to settle all claims in the shareholder derivative
litigation filed against the company in 2005. The derivative
settlement is also subject to notice and approval from the
United States District Court for the Southern District of New
York.
In connection with these settlements, the company agreed to
certain corporate governance enhancements which will, among
other things, impose additional director independence
requirements. As part of the settlement, the company will pay
approximately US$29 million and the company's insurers and
certain individual defendants will pay an aggregate of
approximately US$11 million.
"I am pleased with the settlement that we reached with the
plaintiffs," Rolando Rodriguez, president and chief executive
officer of the company, said. "This is another significant step
in our efforts to fully address our pending legal and regulatory
matters."
The company had been in discussions, led by a mediator, with the
lead plaintiffs and the derivative plaintiffs regarding a
settlement.
About R&G Financial Corp.
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. At June 30, 2006, the company operated 37 bank branches
in Puerto Rico, 35 bank branches in the Orlando, Tampa/St.
Petersburg and Jacksonville, Florida and Augusta, Georgia
markets, and 49 mortgage offices in Puerto Rico, including 37
facilities located within R-G Premier Bank's banking branches.
* * *
R&G Financial Corporation continues to carry Fitch's 'CCC' long-
term issuer default rating which was assigned in September 2007.
R&G FINANCIAL: Says Dividend Payments Unlikely
----------------------------------------------
R&G Financial Corp. said that the payment of dividends and
distribution of its outstanding preferred stock or its trust
preferred securities is unlikely in the foreseeable future.
As reported in the Troubled Company Reporter-Latin America on
March 11, 2008, R&G Financial received regulatory permission to
make dividend payments for March on its four outstanding series
of preferred stock and distributions for March on its trust
preferred securities issues.
Business News Americas relates that the permission given to the
company was conditional on the financial support provided by
Director and former Chairman and Chief Executive Officer Victor
Galan through his purchase of US$5.2 million of delinquent
loans, which will assist in the funding of March dividend
payments.
"Based on these events, the company believes it is very
uncertain that future dividends and distributions will be
approved absent material improvements to the company's
liquidity, capital and cash flows," R&G Financial said.
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 of September 2007, R&G Financial carried Fitch Ratings' CCC
long-term issuer default rating.
TURBO GASOLINE: Case Summary & 2 Largest Unsecured Creditors
------------------------------------------------------------
Debtor: Turbo Gasoline, Inc.
P.O. Box 1815
Hatillo, PR 00659
Bankruptcy Case No.: 08-01417
Chapter 11 Petition Date: March 7, 2008
Court: U.S. Bankruptcy Court for the District of Puerto Rico
(Old
San Juan)
Judge: Gerardo Carlo
Debtors' Counsel: Jose Ramon Cintron
605 Calle Condado Suite 602
San Juan, PR 00907
Phone: 787 725-4027
Fax: 787-725-1709
E-mail: jrcintron@prtc.net
Estimated Assets: US$1,582,500
Estimated Debts: US$1,200,000
List of Largest Unsecured Creditors:
Entity Nature of Claim Claim Amount
------ --------------- ------------
Toral Petroleum Trade debt US$65,000
P.O. BOX 9335
Bayamon, PR 00960
Hermanos Torres Trade debt US$35,000
P.O. Box 209
Mercedita, PR 00715
=================
V E N E Z U E L A
=================
CHRYSLER LLC: Closes Belvidere; 1,000+ Workers Go Unemployed
------------------------------------------------------------
Around 1,100 workers were laid-off as Chrysler LLC formally
shuts down its plant in Belvidere, Illinois, various reports
say.
The closure of the plant, which produces the company's line of
Dodge Caliber, Jeep Patriot, and Jeep Compass brands, is part of
the automaker's move to consolidate operations, streamline
production, and generally reduce costs, The Detroit News
reports. Chrysler already took measures such as tossing away
duplicative car models, moving far-flung operations to its
headquarters, and made deals with Daimler AG to access new
technology.
The company's moves came after it lost its tooling battle with
Plastech Engineered Products Inc. As reported in the Troubled
Company Reporter on Feb. 20, 2008, the U.S. Bankruptcy Court for
the Eastern District of Michigan denied the company's request to
pull out tooling equipment from Plastech's plants. However, the
parties have agreed to subsequent supply deals.
The Belvidere plant's third shift workers began work in July
2006 when Chrysler decided to turn off its robotic body shop,
BusinessRockford.com relates. As their employment drew to a
close, the company stationed extra security at their plant to
prevent rumored violence when the workers went out.
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: Closes Pacifica Design Center in California
---------------------------------------------------------
Chrysler LLC disclosed in a media blog that it is closing its
Pacifica Advance Product Design Center outside Diego, and
consolidate the advanced design studio to its home base in
Auburn Hills, Michigan.
Increasingly, the company is leveraging resources worldwide,
forming new joint ventures and alliances and consolidating
operations in order to better achieve global balance and manage
fixed costs. These moves, Chrysler says, are designed to help
it become a more globally focused manufacturer, with design,
engineering, and sourcing, as well as a local presence to serve
local customers.
Chrysler adds that the Advance Design remains an integral part
of its future design efforts. These changes set the stage for
Chrysler's future global growth efforts, which also include its
intent to establish global expertise in design, engineering and
sourcing through centers of excellence. These actions will help
the company meet its long-term globalization goals, Chrysler
explains.
The company's move came after it agreed with supplier Plastech
Engineered Products Inc. to extend their supply agreement to
March 17, 2008. As reported in the Troubled Company Reporter on
Feb. 20, 2008, the U.S. Bankruptcy Court for the Eastern
District of Michigan denied Chrysler's request to pull out
tooling equipment from Plastech's plants.
David Barnas, a Chrysler representative, told Reuters that the
changes come as part of Chrysler's intent to cut costs and
streamline production. As reported in the Troubled Company
Reporter on Feb. 27, 2008, Chrysler LLC also tossed away the
"car cloning" concept in its production lines and concentrated
on selling its remaining unique models.
"These changes set the stage for Chrysler's future global growth
efforts," Reuters quotes Mr. Barnas as saying.
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-Latin America 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.
***********
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. Sheryl Joy P. Olano, Rizande delos Santos,
Pamella Ritah K. Jala, Tara Eliza Tecarro, Frauline S. Abangan,
and Peter A. Chapman, Editors.
Copyright 2008. All rights reserved. ISSN 1529-2746.
This material is copyrighted and any commercial use, resale or
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Information contained herein is obtained from sources believed
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