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/raid1/www/Hosts/bankrupt/TCRLA_Public/080326.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 26, 2008, Vol. 9, No. 60 Headlines A R G E N T I N A ALITALIA SPA: Lufthansa Mulls Joining AirOne's Counterbid COLEGIO SAINT JEAN: Seeks Court's Nod on Reorganization DELTA AIR: Unable to Reach Pilot Integration Pact with Northwest MENENDEZ HERMANOS: Files for Reorganization in Court MENENDEZ HNOS: Files for Reorganization in Buenos Aires Court B E R M U D A SECURITY CAPITAL: Suspends Declaration of Quarterly Dividend B R A Z I L ABITIBIBOWATER INC: Inks US$350 Mln Investment Deal with Fairfax ABITIBIBOWATER INC: Unit Amends Terms of US$496MM Exchange Offer ABITIBIBOWATER INC: S&P Puts 'B+' Rtg. on Unit's US$415MM Notes AES CORP: AES Eletropaulo Earns BRL713 Million in 2007 AES CORP: Units Will Increase Investments This Year AMERICAN AIRLINES: S&P Changes Outlook to Neg. on Weak Economy AMR CORP: S&P Revises Outlook to Negative on Expected Loss BANCO BMG: Launches BRL500 Million Receivables Fund Program BANCO BRADESCO: To Open Offices in Middle East & Asia This Year BANCO INDUSTRIAL: Will Get US$110 Million in Syndicated Loan BANCO ITAU: Will Launch Offices in Middle East & Asia This Year COMPANHIA ENERGETICA: Shares Drop Amid Speculation Sale May Fail DELPHI CORP: Wants to Continue Key Employee Compensation Program DELPHI CORP: Settles Alps Auto et al. Assumption Objections ELECTROPAULO METROPOLITANA: Fitch Holds BB- Issuer Default Rtgs. GOL LINHAS: GTA Unit Initiates New Flight Network Operations GOL LINHAS: VRG Unit Initiates New Domestic Flight Operations NET SERVICIOS: Launches Product Package for Lower Income Clients RHODIA SA: Sells Isocyanates Businesses to Perstorp Group SHARPER IMAGE: Resumes Merchandise Gift Card Policy SHARPER IMAGE: TomTom Wants Segregation of Portable GPS Systems SHARPER IMAGE: Wells Fargo Objects to Garmin Admin. Claim WEIGHT WATCHERS: S&P Changes Outlook to Stable on Debt Repayment XERIUM TECHNOLOGIES: Moody's Cuts Ratings on High Default Risk * BRAZIL: S&P Says Beef Embargo May Pressure Exporters' Credit C A Y M A N I S L A N D S GLOBAL YACHT: Proofs of Claim Filing is Until March 28 KGRF - XYL: Proofs of Claim Filing Deadline is Today LVHN ASSURANCE: Proofs of Claim Filing is Until March 31 NORODIN MARCO: Sets Final Shareholders Meeting for March 31 NORODIN MARCO RV: Final Shareholders Meeting is on March 31 PARMALAT SPA: Bologna Ruling Faces Appeal at Higher Court PARMALAT SPA: Shareholders Submit Board Nominees PREMIER OFFICE: Proofs of Claim Filing Deadline is Today THE HSBC PRIVATE: Proofs of Claim Filing Deadline is March 31 WICKAM FUND: Sets Final Shareholders Meeting for March 31 C H I L E AES CORP: Official Says Chilean Prices In Need of New Investment SPECTRUM BRANDS: 2008 Annual Shareholders Meeting Set on Apr. 29 C O L O M B I A DOLE FOOD: S&P Downgrades Corporate Credit Rating to B- From B GRAN TIERRA: Launches Test Operations on Costayaco-3 Well C O S T A R I C A SIRVA INC: Posts US$412.7 Mil. Net Loss for Year Ended Dec. 31 SIRVA INC: Ex Senior VP Wants Stay Lifted to Pursue Labor Case G U A T E M A L A BRITISH AIRWAYS: CEO Still Considers Bid for Iberia GOODYEAR TIRE: S&P Ups Rating on Class A-1 and A-2 Certs. to BB- J A M A I C A DIGICEL GROUP: Computerized Credit Network Collapses M E X I C O AMERICAN AXLE: CEO Receives US$10.1 Million as 2007 Compensation BLUE WATER: Parties Balk at Request to Assume Molding Contracts BLUE WATER: Wants to Hire Lambert Leser as Special Counsel BRISTOW GROUP: S&P Changes Outlook to Stable; Retains BB Rating CEMEX SAB: Home Sales Surges 5.7% in Mexico Trading in 7 Weeks DURA AUTOMOTIVE: Reveals Liquidation Analysis Under Ch. 11 Plan DURA AUTOMOTIVE: Ad Hoc Committee Seek to Inspect Records EMPRESAS ICA: Acquires Consorcio del Mayab for MXN870 Million INTERNATIONAL RECTIFIER: Covenant Defaults Waived Until July 31 MAXCOM TELECOM: Holds Annual Shareholder Meeting P E R U GRAN TIERRA: Launches Construction of Popa-2 Exploration Well P U E R T O R I C O DORAL FINANCIAL: Raymond James Downgrades Firm to Underperform GENESCO: Moody's Affirms B1 Ratings on Merger Suit Settlement V E N E Z U E L A NORTHWEST AIRLINES: Unable to Reach Pact for Pilots with Delta PETROLEOS DE VENEZUELA: To Ask Exxon Compensation for Damages PETROLEOS DE VENEZUELA: Draft Bill for Oil Profit Tax Now Ready - - - - - ================= A R G E N T I N A ================= ALITALIA SPA: Lufthansa Mulls Joining AirOne's Counterbid --------------------------------------------------------- Deutsche Lufthansa AG may join AirOne S.p.A. in a counteroffer for the Italian government's 49.9% stake in Alitalia S.p.A., Bloomberg News says, citing an unsourced La Stampa report. AirOne has declared it will submit an alternative bid for Alitalia in three weeks, stressing that it needs more time to draft a proposal since it was excluded from conducting due diligence on the national carrier, Agenzia Giornalistica Italia relates. "The Government has to decide if it wishes to receive other proposals because in such a complex operation it is impossible to present offers in the dark without at least a brief due diligence, lasting at least three weeks," AirOne said. Finance minister Tommaso Padoa-Schioppa, however, told The Financial Times that any new offer for Alitalia must be made in days, not weeks. "People keep dreaming there is more time, alternative buyers, alternative solutions," Mr. Padoa-Schioppa was quoted by FT as saying. "Alitalia has oxygen for a matter of weeks." As recently reported in the TCR-Europe, Alitalia and the present government have accepted Air France-KLM SA's binding offer, subject to several conditions including union approval. Air France, so far, has yet to convince the unions to accept its business plan, which foresees more than 2,000 job cuts. Former Prime Minister Silvio Berlusconi, expected to return to his post following thew upcoming election, has vowed to rejett Air France's offer, saying he prefer an Italian buyer for Alitalia. 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. COLEGIO SAINT JEAN: Seeks Court's Nod on Reorganization ----------------------------------------------------- Colegio Saint Jean Asociacion Civil has requested for reorganization approval after failing to pay its liabilities. The reorganization petition, once approved by the court, will allow Colegio Saint Jean to negotiate a settlement with its creditors in order to avoid a straight liquidation. The case is pending in the National Commercial Court of First Instance in Buenos Aires. The debtor can be reached at: Colegio Saint Jean Asociacion Civil Lavalle 1425 Buenos Aires, Argentina DELTA AIR: Unable to Reach Pilot Integration Pact with Northwest ---------------------------------------------------------------- Delta Air Lines Inc. and Northwest Airlines Corporation were unable to reach an agreement on an acceptable seniority list integration, Delta's Pilot Union Chairman Lee Moak disclosed in a letter addressed to rank-and-file Delta pilots, The Associated Press reports. AP says Mr. Moak's letter referred to discussions with the "other carrier" in the past tense, which suggests there won't be further talks -- at least for now. The "other carrier" is presumed to be Northwest, officials close to the talks have said, says the report. Mr. Moak confirmed in his letter that the other carrier was only willing to discuss its latest proposal, to which he declined, believing it would "jeopardize the seniority and career expectations of Delta pilots." Delta executives previously stated they would not move forward with any combination unless the seniority of their employees was protected, according to AP. Delta pilot leaders are frustrated that "the results of their efforts will never be actualized," Mr. Moak said. Northwest spokesman Greg Rizzuto, said that his union "still values any deal to help better the careers of all pilots involved in any type of future merger or acquisition with any pilot group and due to the rising cost of oil it is imperative that a fair integration of seniority lists be found between any group." A full-text copy of Moak's letter is available for free at: http://crewroom.alpa.org/dal/DesktopDefault.aspx?tabid=2421 Talks Resume After Brief Impasse As reported in the Troubled Company Reporter on March 13, 2008, Delta and Northwest Airlines pilot leaders resumed talks on March 4, 2008, to reach an agreement on how to "mesh" their unions. The meetings have involved a handful of senior pilots and are not formal negotiations. As widely reported, the pilot negotiators of both carriers had an impasse over the combination of seniority rankings for 12,000 pilots. A pilots' agreement is the last major step needed for the carriers to merge. "Nothing can be accomplished if they're not talking, so just getting them back together in the same room is a big step," Kit Darby, a retired United Airlines pilot who now runs Air Inc., an Atlanta-based career-counseling firm for pilots, said. "Pilots get their rewards from a contract that's governed by seniority. This is everything to them." About Northwest Airlines Northwest Airlines Corp. (NYSE: NWA) -- http://www.nwa.com/-- is the world's fourth largest airline with hubs at Detroit, Minneapolis/St. Paul, Memphis, Tokyo and Amsterdam, and about 1,400 daily departures. Northwest is a member of SkyTeam, an airline alliance that offers customers one of the world's most extensive global networks. Northwest and its travel partners serve more than 1000 cities in excess of 160 countries on six continents. Northwest and its travel partners serve more than 1000 cities in excess of 160 countries on six continents, including Italy, Spain, Japan, China, Venezuela and Argentina. The company and 12 affiliates filed for chapter 11 protection on Sept. 14, 2005 (Bankr. S.D.N.Y. Lead Case No. 05-17930). Bruce R. Zirinsky, Esq., and Gregory M. Petrick, Esq., at Cadwalader, Wickersham & Taft LLP in New York, and Mark C. Ellenberg, Esq., at Cadwalader, Wickersham & Taft LLP in Washington represent the Debtors in their restructuring efforts. The Official Committee of Unsecured Creditors has retained Akin Gump Strauss Hauer & Feld LLP as its bankruptcy counsel in the Debtors' chapter 11 cases. When the Debtors filed for bankruptcy, they listed US$14.4 billion in total assets and US$17.9 billion in total debts. On Jan. 12, 2007, the Debtors filed with the Court their Chapter 11 Plan. On Feb. 15, 2007, they Debtors filed an Amended Plan & Disclosure Statement. The Court approved the adequacy of the Debtors' Disclosure Statement on March 26, 2007. On May 21, 2007, the Court confirmed the Debtors' Plan. The Plan took effect May 31, 2007. (Northwest Bankruptcy News, Issue No. 88; Bankruptcy Creditors' Service Inc., http://bankrupt.com/newsstand/or 215/945-7000) About Delta Air Based in Atlanta, Georgia, Delta Air Lines Inc. (NYSE:DAL) -- http://www.delta.com/-- is the world's second-largest airline in terms of passengers carried and the leading U.S. carrier across the Atlantic, offering daily flights to 328 destinations in 56 countries on Delta, Song, Delta Shuttle, the Delta Connection carriers and its worldwide partners. Delta flies to Argentina, Australia and the United Kingdom, among others. The company and 18 affiliates filed for chapter 11 protection on Sept. 14, 2005 (Bankr. S.D.N.Y. Lead Case No. 05-17923). Marshall S. Huebner, Esq., at Davis Polk & Wardwell, represents the Debtors in their restructuring efforts. Timothy R. Coleman at The Blackstone Group L.P. provides the Debtors with financial advice. Daniel H. Golden, Esq., and Lisa G. Beckerman, Esq., at Akin Gump Strauss Hauer & Feld LLP, provide the Official Committee of Unsecured Creditors with legal advice. John McKenna, Jr., at Houlihan Lokey Howard & Zukin Capital and James S. Feltman at Mesirow Financial Consulting, LLC, serve as the Committee's financial advisors. The Debtors filed a chapter 11 plan of reorganization and disclosure statement explaining that plan on Dec. 19, 2007. On Jan. 19, 2007, they filed revisions to the plan and disclosure statement, and submitted further revisions to the plan on Feb. 2, 2007. On Feb. 7, 2007, the Court approved the Debtors' disclosure statement. In April 25, 2007, the Court confirmed the Debtors' plan. That plan became effective on April 30, 2007. The Court entered a final decree closing 17 cases on Sept. 26, 2007. (Delta Air Lines Bankruptcy News, Issue No. 92; Bankruptcy Creditors' Service, Inc., http://bankrupt.com/newsstand/or 215/945-7000). * * * As reported in the Troubled Company Reporter-Latin America on Jan. 18, 2008, Standard and Poor's said that media reports that Delta Air Lines Inc. (B/Positive/--) entered into merger talks with UAL Corp. (B/Stable/--) and Northwest Airlines Corp. (B+/Stable/--) will have no effect on the ratings or outlook on Delta, but that confirmed merger negotiations would result in S&P's placing ratings of Delta and other airlines involved on CreditWatch, most likely with developing or negative implications. MENENDEZ HERMANOS: Files for Reorganization in Court ---------------------------------------------------- Menendez Hermanos S.A. has requested for reorganization approval after failing to pay its liabilities. The reorganization petition, once approved by the court, will allow Menendez Hermanos to negotiate a settlement with its creditors in order to avoid a straight liquidation. The case is pending in the National Commercial Court of First Instance in Buenos Aires. MENENDEZ HNOS: Files for Reorganization in Buenos Aires Court ------------------------------------------------------------- Menendez Hnos. S.A. has requested for reorganization approval after failing to pay its liabilities. The reorganization petition, once approved by the court, will allow Menendez Hnos. to negotiate a settlement with its creditors in order to avoid a straight liquidation. The case is pending in the National Commercial Court of First Instance in Buenos Aires. The debtor can be reached at: Menendez Hnos. S.A. Oruro 1168 Buenos Aires, Argentina ============= B E R M U D A ============= SECURITY CAPITAL: Suspends Declaration of Quarterly Dividend ------------------------------------------------------------ Security Capital Assurance Ltd.�s board of directors elected not to declare either a quarterly dividend with respect to its common shares or a semi-annual dividend with respect to the Security Capital Assurance series A preference shares. The company expects that this election by the company�s board of directors will reduce cash outflow by approximately $9.9 million for the period ended March 31, 2008. Any future dividends will be subject to the discretion and approval of the board of directors, applicable law and regulatory requirements. As reported in the Troubled Company Reporter on Mar. 19, 2008, Security Capital reported results for the three-month and full- year periods ended Dec. 31, 2007. The net loss in the fourth quarter of 2007 was US$1.1 billion versus net income of US$35.8 million in the fourth quarter of 2006. For the full-year 2007, the company reported a net loss of US$1.2 billion versus net income of US$117.4 million for the full-year 2006. As of Dec. 31, 2007, the company had total shareholders' equity of US$427.1 million and common shareholders' equity of US$180.5 million. About Security Capital Assurance Security Capital Assurance Ltd. (NYSE: SCA) -- http://www.scafg.com-- is a Bermuda-domiciled holding company whose primary operating subsidiaries, XL Capital Assurance Inc. and XL Financial Assurance Ltd, provide credit enhancement and protection products to the public finance and structured finance markets throughout the United States and internationally. =========== B R A Z I L =========== ABITIBIBOWATER INC: Inks US$350 Mln Investment Deal with Fairfax ---------------------------------------------------------------- AbitibiBowater Inc. has entered into a definitive agreement with Fairfax Financial Holdings Limited for an investment by Fairfax and its designated subsidiaries in AbitibiBowater of US$350 million in the form of unregistered convertible debentures. The transaction, which is part of the Company's previously announced US$1.4 billion refinancing plan, is expected to address upcoming debt maturities and general liquidity needs of its Abitibi- Consolidated Inc. subsidiary. There is no financing condition to the obligations of Fairfax to fund the transaction. The US$350 million of convertible debentures is convertible into AbitibiBowater common shares at US$10.00 per share, carries an 8% cash coupon, has an ability for the Company to pay interest in the form of additional "pay-in-kind" debentures at a rate of 10%, and has a subsidiary guarantee. The debentures have a maturity of 5 years and are non-callable. The transaction, which is scheduled to close on March 31, 2008, is subject to certain conditions, including the receipt of various lender consents and the closing of the other components of the Company's US$1.4 billion refinancing plan. Under the Fairfax Purchase Agreement, Fairfax will have the right to appoint two directors to the Board of Directors of the Company. In connection with the approval of the Fairfax transaction by the Board of Directors of AbitibiBowater, and pursuant to an exception provided by the New York Stock Exchange stockholder approval policy, the Audit Committee of AbitibiBowater determined that a delay in the transaction in order to secure stockholder approval of the issuance of the convertible debentures, given the pending maturities of Abitibi- Consolidated's April 1 and June 20, 2008 senior notes, as well as the current state of the credit and capital markets, could seriously jeopardize the financial viability of AbitibiBowater. Accordingly, AbitibiBowater's Board of Directors and Audit Committee expressly approved the Company's decision not to seek stockholder approval of the issuance of the convertible debentures to Fairfax. The New York Stock Exchange has accepted AbitibiBowater's reliance on the exception and the Company, in reliance upon this exception, is mailing a letter to all stockholders notifying them of its intention to issue the convertible debentures without their prior approval. For AbitibiBowater, Troutman Sanders LLP acted as legal advisor to the Company and Cravath, Swaine & Moore LLP acted as legal advisor to the Company's independent directors. On behalf of Fairfax, Shearman & Sterling LLP and Torys LLP acted as co-legal advisors. About Fairfax Fairfax Financial Holdings Limited (TSX and NYSE: FFH) is a financial services holding company which, through its subsidiaries, is engaged in property and casualty insurance and reinsurance and investment management. About AbitibiBowater Headquartered in Montreal, Canada, AbitibiBowater Inc. (NYSE:ABH) -- http://www.abitibibowater.com/-- was formed as a result of the combination of Abitibi-Consolidated Inc. and Bowater Incorporated. Pursuant to the transaction, Abitibi- Consolidated Inc. and Bowater Incorporated became subsidiaries of AbitibiBowater. The company produces a range of forest products marketed in more than 80 countries around the world. The company's customers include many publishers, commercial printers, retailers, consumer products companies and building supply outlets. AbitibiBowater is also a recycler of newspapers and magazines. The company owns or operates 32 pulp and paper mills and 35 wood products facilities in North America and offshore. The company manages its business in five segments: coated papers, specialty paperBs, newsprint, market pulp and lumber. The company has operation in Brazil. ABITIBIBOWATER INC: Unit Amends Terms of US$496MM Exchange Offer ---------------------------------------------------------------- AbitibiBowater Inc.'s indirect subsidiary Abitibi-Consolidated Company of Canada amended certain terms of its private exchange offers with respect to an aggregate of approximately US$496 million of outstanding debt securities issued by ACCC, Abitibi-Consolidated Inc. or Abitibi-Consolidated Finance L.P., a subsidiary of Abitibi. An informal group of noteholders holding both 2008 notes and 2009 notes, representing approximately US$324 million in aggregate principal amount of the total US$496 million, negotiated and supports the terms of the revised exchange offer. ACCC is offering as consideration, in exchange for the tender of the ACI Notes, a combination of cash and new 15.5% unsecured senior notes due 2010 of ACCC. ACCC instituted a withdrawal deadline of 5:00 p.m., New York City time, on March 26, 2008, unless otherwise extended, and extended the consent payment deadline for the exchange offers for the ACI Notes and the concurrent consent solicitations. As a result, holders of such notes who wish to receive the total consideration offered pursuant to the exchange offers must validly tender and not validly withdraw their ACI Notes on or prior to 5:00 p.m., New York City time, on March 31, 2008, unless extended or earlier terminated. The ACI Notes consist of US$195.612 million principal amount of 6.95% Senior Notes due April 1, 2008, issued by Abitibi; US$150 million principal amount of 5.25% Senior Notes due June 20, 2008, issued by ACCC; and US$150 million principal amount of 7.875% Senior Notes due Aug. 1, 2009, issued by ACF. ACCC disclosed that, in addition to the extension of the Consent Payment Deadline, the terms of the exchange offers have been amended to: -- increase the consideration to be paid for the exchange of the ACI Notes on or prior to the Consent Payment Deadline; -- provide that the indenture for the Exchange Notes will include covenants substantially similar to those contained in the indenture for the new Senior Secured Notes being offered by ACCC in a concurrent private offering; and -- reduce the minimum tender condition with respect to the ACI Notes due in 2009 to 75% from 90%. The consideration offered by ACCC for each US$1,000 Principal Amount Exchanged: a) ACI Notes to be Exchanged: 6.95% Senior Notes due 2008 Outstanding Principal Amount: US$195.612 million If Tendered By the Consent Payment Deadline Principal Amount of New Senior Notes Due 2010: US$550 Cash: US$550 If Tendered After the Consent Payment Deadline Principal Amount of Senior Notes due 2010: $600 Cash: US$400 b) ACI Notes to be Exchanged: 5.25% Senior Notes due 2008 Outstanding Principal Amount: US$150 million If Tendered By the Consent Payment Deadline Principal Amount of New Senior Notes Due 2010: US$550 Cash: US$550 If Tendered After the Consent Payment Deadline Principal Amount of Senior Notes due 2010: US$600 Cash: US$400 c) ACI Notes to be Exchanged: 7.875% Senior Notes due 2009 Outstanding Principal Amount: US$150 million If Tendered By the Consent Payment Deadline Principal Amount of New Senior Notes Due 2010: US$850 Cash: US$250 If Tendered After the Consent Payment Deadline Principal Amount of Senior Notes due 2010: US$850 Cash: US$150 About AbitibiBowater Headquartered in Montreal, Canada, AbitibiBowater Inc. (NYSE:ABH) -- http://www.abitibibowater.com/-- was formed as a result of the combination of Abitibi-Consolidated Inc. and Bowater Incorporated. Pursuant to the transaction, Abitibi- Consolidated Inc. and Bowater Incorporated became subsidiaries of AbitibiBowater. The company produces a range of forest products marketed in more than 80 countries around the world. The company's customers include many publishers, commercial printers, retailers, consumer products companies and building supply outlets. AbitibiBowater is also a recycler of newspapers and magazines. The company owns or operates 32 pulp and paper mills and 35 wood products facilities in North America and offshore. The company manages its business in five segments: coated papers, specialty paperBs, newsprint, market pulp and lumber. The company has operation in Brazil. ABITIBIBOWATER INC: S&P Puts 'B+' Rtg. on Unit's US$415MM Notes --------------------------------------------------------------- Standard & Poor's Ratings Services assigned its issue and recovery ratings to Abitibi-Consolidated Co. of Canada's proposed US$415 million senior secured notes. ACCC is a subsidiary of Abitibi-Consolidated Inc. (B-/Watch Neg/--). S&P assigned a 'B+' issue-level rating to the notes (two notches above the corporate credit rating on Abitibi-Consolidated), with a recovery rating of '1', indicating the expectation for a very high (90%-100%) recovery in the event of a payment default. "The senior secured notes are part of the $1.1 billion proposed refinancing at Abitibi-Consolidated Inc.," said Standard & Poor's credit analyst Jatinder Mall. This refinancing is conditional on all three transactions taking place. "Based on an enterprise gross value of $1.5 billion in a default scenario, there are very high recovery prospects for the senior secured noteholders," Mr. Mall added. Abitibi-Consolidated is the subsidiary of AbitibiBowater Inc. (B-/Negative/--) and is engaged in the production of newsprint, commercial printing paper, and wood products. The ratings on Abitibi-Consolidated were place on CreditWatch negative on March 10, 2008, due to the uncertainty of refinancing given current credit market conditions. S&P could lower the ratings on Abitibi-Consolidated if the company is unable to meet its maturing debt obligations. Headquartered in Montreal, Canada, AbitibiBowater Inc. (NYSE:ABH) -- http://www.abitibibowater.com/-- was formed as a result of the combination of Abitibi-Consolidated Inc. and Bowater Incorporated. Pursuant to the transaction, Abitibi- Consolidated Inc. and Bowater Incorporated became subsidiaries of AbitibiBowater. The company produces a range of forest products marketed in more than 80 countries around the world. The company's customers include many publishers, commercial printers, retailers, consumer products companies and building supply outlets. AbitibiBowater is also a recycler of newspapers and magazines. The company owns or operates 32 pulp and paper mills and 35 wood products facilities in North America and offshore. The company manages its business in five segments: coated papers, specialty paperBs, newsprint, market pulp and lumber. The company has operation in Brazil. AES CORP: AES Eletropaulo Earns BRL713 Million in 2007 ------------------------------------------------------ AES Eletropaulo's net profit increased 91% to BRL713 million in 2007, compared to BRL373 million in 2006. AES Corp. owns majority of the stock in AES Etropaulo. AES Eletropaulo told Business News Americas that the increase in net profit indicates the end of actuarial liabilities with the firm's BRL2.4 billion pension fund, which generated BRL486 million in gross expenses per year, from 2002-2006. According to BNamericas, AES Eletropaulo said that its net revenue increased 3.1% to BRL7.13 billion in 2007, from BRL6.92 billion in 2006. Its operating expenses rose 7.6% to BRL5.53 billion and Ebitda declined 7.2% to BRL2.31 billion. BNamericas notes that AES Eletropaulo distributed some 39.9 terra watt-hours in 2007, about 4.6% greater than 38.2 terra watt-hours in 2006. AES Eletropaulo's sales to the regulated market and to free clients rose 2.9% and 12.7% to 7.35 terra watt-hours and 32.6 terra watt-hours respectively in 2007, compared to 2006, BNamericas states. About AES Eletropaulo AES Eletropaulo is a major Brazilian power distributor in Sao Paulo. Eletropaulo has around five million customers. Eletropaulo stock is traded on Bovespa, where it is part of the Ibovespa index. The company is majority owned by AES Corporation. About AES Corporation AES Corporation -- http://www.aes.com/-- a global power company, operates in South America, Europe, Africa, Asia and the Caribbean countries. Generating 44,000 megawatts of electricity through 124 power facilities, the company delivers electricity through 15 distribution companies. AES has been in Eastern Europe for over ten years, since it acquired three power plants in Hungary in 1996. Currently, AES has two distribution companies in Ukraine, which serve 1.2 million customers and generation plants in the Czech Republic and Hungary. AES is also the leading company in biomass conversion in Hungary, generating 37% of the nation's total renewable generation in 2004. The company has Latin America operations in Argentina, Brazil, Chile, Dominican Republic, El Salvador and Panama. * * * The AES Corporation still carries Moody's Investors Service's Corporate Family Rating and the senior unsecured rating assigned at B1. The company also carries Fitch Ratings' 'BB/RR1' rating on US$500 million issue of senior unsecured notes due 2017. As reported in the Troubled Company Reporter-Latin America on March 7, 2008, AES Corporation is in default under its senior secured credit facility and its senior unsecured credit facility due to a breach of representation related to its financial statements as set forth in the credit agreements. As a result, US$200 million of the debt under the company's senior secured credit facility will be classified as current on the balance sheet as of Dec. 31, 2007. There are no outstanding borrowings under the senior unsecured facility. AES CORP: Units Will Increase Investments This Year --------------------------------------------------- AES Corp.'s AES Eletropaulo and AES Tiete units will increase investments this year. AES Tiete's Chief Financial Officer Alexandre Inneco told Business News Americas that the company will invest BRL224 million in 2008, compared to BRL51 million in 2007. BNamericas relates that most of this year's investments will be used for the construction of three small-scale hydro plants on the Piabanha river in Rio de Janeiro. The plants will have total capacity of 52 megawatts. Mr. Inneco told BNamericas that the plants will begin operating in 2010. They will receive BRL141 million in investments this year and require BRL257 million overall. AES Tiete will invest about BRL13 million and BRL11 million for the construction of the Sao Jose and Sao Joaquim hydros in Sao Paulo. Both plants will start running in August 2009, BNamericas says. Mr. Inneco, who is also AES Eletropaulo's Chief Financial Officer, told BNamericas that the firm's investment will increase 26% to BRL544 million this year, compared to BRL434 million in 2007. According to BNamericas, most of AES Eletropaulo's investments will be allotted to the modernization of power distribution systems. They will be funded with company cash. AES Eletropaulo will also construct the Tiradentes substation and upgrade two other substations, BNamericas notes. Mr. Inneco commented to BNamericas, "Investments in Tiradentes and these other two substations will reach BRL41 million." AES Eletropaulo will invest to lessen power losses this year to 10.9% from 11.2%, BNamericas states. About AES Tiete AES Tiete SA (Bovespa: GETI3 and GETI4; OTC: AESAY and AESYY) is controlled by the Brasiliana holding company, which is a joint venture between US-based AES Corp. and Brazil's National Development Bank aka BNDES. It is a ten-dam hydroelectric generating company located in the State of Sao Paulo, Brazil. The company has been granted the right to operate the dams pursuant to a 30-year concession agreement. About AES Eletropaulo AES Eletropaulo is a major Brazilian power distributor in Sao Paulo. Eletropaulo has around five million customers. Eletropaulo stock is traded on Bovespa, where it is part of the Ibovespa index. The company is majority owned by AES Corporation. About AES Corporation AES Corporation -- http://www.aes.com/-- a global power company, operates in South America, Europe, Africa, Asia and the Caribbean countries. Generating 44,000 megawatts of electricity through 124 power facilities, the company delivers electricity through 15 distribution companies. AES has been in Eastern Europe for over ten years, since it acquired three power plants in Hungary in 1996. Currently, AES has two distribution companies in Ukraine, which serve 1.2 million customers and generation plants in the Czech Republic and Hungary. AES is also the leading company in biomass conversion in Hungary, generating 37% of the nation's total renewable generation in 2004. The company has Latin America operations in Argentina, Brazil, Chile, Dominican Republic, El Salvador and Panama. * * * The AES Corporation still carries Moody's Investors Service's Corporate Family Rating and the senior unsecured rating assigned at B1. The company also carries Fitch Ratings' 'BB/RR1' rating on US$500 million issue of senior unsecured notes due 2017. As reported in the Troubled Company Reporter-Latin America on March 7, 2008, AES Corporation is in default under its senior secured credit facility and its senior unsecured credit facility due to a breach of representation related to its financial statements as set forth in the credit agreements. As a result, US$200 million of the debt under the company's senior secured credit facility will be classified as current on the balance sheet as of Dec. 31, 2007. There are no outstanding borrowings under the senior unsecured facility. AMERICAN AIRLINES: S&P Changes Outlook to Neg. on Weak Economy -------------------------------------------------------------- Standard & Poor's Ratings Services revised its outlook on the long-term ratings on AMR Corp. (B/Negative/B-3) and subsidiary American Airlines Inc. (B/Negative/--) to negative from positive. S&P also lowered its short-term rating on AMR to 'B- 3' from 'B-2' and affirmed all other ratings on AMR and American. "The outlook revision and short-term rating downgrade are based on the expected impact of much higher jet fuel prices and a weakening U.S. economy, which we believe will cause AMR to report a loss this year," said Standard & Poor's credit analyst Philip Baggaley. "AMR's earnings, cash flow, and credit protection measures are likely to be materially lower in 2008 than last year, though the company continues to have adequate liquidity and projects $4.4 billion of unrestricted cash and short-term investments at March 31, 2008," the credit analyst continued. Ratings on Fort Worth, Texas-based AMR and subsidiary American Airlines reflect participation in the competitive, cyclical, and capital-intensive airline industry; a heavy debt and pension burden; and substantial capital spending needs to modernize the airline's fleet. Satisfactory liquidity, with US$4.5 billion of unrestricted cash and short-term investments at Dec. 31, 2007, and substantial market positions in the U.S. domestic, trans- Atlantic, and Latin American markets (though a minimal presence in the Pacific) are positives. American, like other large U.S. airlines, reported much improved earnings in 2006 and 2007, benefiting from cost-cutting and a more favorable balance of supply and demand, particularly on international routes. Fully adjusted EBITDA interest coverage improved to 2.0x and funds flow to debt to 11%, compared with 1.8x and 8% in 2006. However, the recent surge in fuel prices and rapidly weakening U.S. economy (which Standard & Poor's economists believe is already in a recession) are likely to result in materially worse results in 2008. If crude oil averages about US$97 per barrel, as S&P currently forecasts, and further fare increases become progressively more difficult to achieve because of the weak economy, AMR could lose more than US$1 billion this year. AMR currently has adequate liquidity, with unrestricted cash and short-term investments of US$4.5 billion (none of which is invested in auction-rate securities) at Dec. 31, 2007, and US$4.4 billion forecast (by the company) for March 31, 2008. American has access to an undrawn US$255 million revolving credit that matures June 17, 2009, part of a credit facility that includes also a US$440 million term loan due June 17, 2010. Key financial covenants under that facility include a quarterly cash flow coverage test (AMR consolidated EBITDAR divided by interest and rentals, on a 12-month rolling basis), of 1.4 to 1, stepping up to 1.5 to 1 in the second quarter of 2009. S&P estimates that a pretax loss that exceeds about US$450 million to US$500 million would trip the coverage covenant. Accordingly, if high fuel prices persist, the company may seek to amend or obtain a waiver of that covenant. Alternatively, American could borrow against unencumbered aircraft or use cash to pay down the remaining US$440 million term loan. Very high fuel prices and a weak economy could cause material losses and a potential covenant problem this year. S&P could lower ratings if it appears that a deep or prolonged downturn will erode liquidity or the company's financial profile. Based in Fort Worth, Texas, American Airlines Inc., a wholly owned subsidiary of AMR Corp., operates the largest scheduled passenger airline in the world with service throughout North America, the Caribbean, Latin America, Europe and Asia. The airline flies to Belgium, Brazil, Japan, among others. AMR CORP: S&P Revises Outlook to Negative on Expected Loss ---------------------------------------------------------- Standard & Poor's Ratings Services revised its outlook on the long-term ratings on AMR Corp. (B/Negative/B-3) and subsidiary American Airlines Inc. (B/Negative/--) to negative from positive. S&P also lowered its short-term rating on AMR to 'B- 3' from 'B-2' and affirmed all other ratings on AMR and American. "The outlook revision and short-term rating downgrade are based on the expected impact of much higher jet fuel prices and a weakening U.S. economy, which we believe will cause AMR to report a loss this year," said Standard & Poor's credit analyst Philip Baggaley. "AMR's earnings, cash flow, and credit protection measures are likely to be materially lower in 2008 than last year, though the company continues to have adequate liquidity and projects $4.4 billion of unrestricted cash and short-term investments at March 31, 2008," the credit analyst continued. Ratings on Fort Worth, Texas-based AMR and subsidiary American Airlines reflect participation in the competitive, cyclical, and capital-intensive airline industry; a heavy debt and pension burden; and substantial capital spending needs to modernize the airline's fleet. Satisfactory liquidity, with US$4.5 billion of unrestricted cash and short-term investments at Dec. 31, 2007, and substantial market positions in the U.S. domestic, trans- Atlantic, and Latin American markets (though a minimal presence in the Pacific) are positives. American, like other large U.S. airlines, reported much improved earnings in 2006 and 2007, benefiting from cost-cutting and a more favorable balance of supply and demand, particularly on international routes. Fully adjusted EBITDA interest coverage improved to 2.0x and funds flow to debt to 11%, compared with 1.8x and 8% in 2006. However, the recent surge in fuel prices and rapidly weakening U.S. economy (which Standard & Poor's economists believe is already in a recession) are likely to result in materially worse results in 2008. If crude oil averages about US$97 per barrel, as S&P currently forecasts, and further fare increases become progressively more difficult to achieve because of the weak economy, AMR could lose more than US$1 billion this year. AMR currently has adequate liquidity, with unrestricted cash and short-term investments of US$4.5 billion (none of which is invested in auction-rate securities) at Dec. 31, 2007, and US$4.4 billion forecast (by the company) for March 31, 2008. American has access to an undrawn US$255 million revolving credit that matures June 17, 2009, part of a credit facility that includes also a US$440 million term loan due June 17, 2010. Key financial covenants under that facility include a quarterly cash flow coverage test (AMR consolidated EBITDAR divided by interest and rentals, on a 12-month rolling basis), of 1.4 to 1, stepping up to 1.5 to 1 in the second quarter of 2009. S&P estimates that a pretax loss that exceeds about US$450 million to US$500 million would trip the coverage covenant. Accordingly, if high fuel prices persist, the company may seek to amend or obtain a waiver of that covenant. Alternatively, American could borrow against unencumbered aircraft or use cash to pay down the remaining US$440 million term loan. Very high fuel prices and a weak economy could cause material losses and a potential covenant problem this year. S&P could lower ratings if it appears that a deep or prolonged downturn will erode liquidity or the company's financial profile. Headquartered in Forth Worth, Texas, AMR Corporation (NYSE: AMR) operates with its principal subsidiary, American Airlines Inc. -- http://www.aa.com/-- a worldwide scheduled passenger airline. At the end of 2006, American provided scheduled jet service to about 150 destinations throughout North America, the Caribbean, Latin America, including Brazil, Europe and Asia. American is also a scheduled airfreight carrier, providing freight and mail services to shippers throughout its system. Its wholly owned subsidiary, AMR Eagle Holding Corp., owns two regional airlines, American Eagle Airlines Inc. and Executive Airlines Inc., and does business as "American Eagle." American Beacon Advisors Inc., a wholly owned subsidiary of AMR, is responsible for the investment and oversight of assets of AMR's U.S. employee benefit plans, as well as AMR's short-term investments. BANCO BMG: Launches BRL500 Million Receivables Fund Program ----------------------------------------------------------- Banco BMG's Chief Financial Officer Ricardo Gelbaum told Business News Americas that the bank has launched a two-part, BRL500 million receivables fund program. According to BNamericas, Mr. Gelbaum said that the program is a "faithful copy" of the FIDC receivables fund program in 2007, which raised almost BRL700 million. Mr. Gelbaum told BNamericas that Banco BMG has started the first tranche for BRL250 million. The bank could issue the second tranche within the first half of this year. Mr. Gelbaum commented to BNamericas, "We don't have a date set. Generally, we wait anywhere from 90 to 180 days." BNamericas relates that Banco BMG could sell an extra lot of 15% of the initial offering. Banco BMG would stick to BRL250 million for the first tranche, BNamericas says, citing Mr. Gelbaum. The receivables investment fund is backed by payroll and retirement loans. Loans to pensioners is up to 40% of the fund, loans to federal workers up to 35%, and loans to state and city workers up to 10%, BNamericas states. 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 BRADESCO: To Open Offices in Middle East & Asia This Year --------------------------------------------------------------- Local financial daily Valor Economico reports that Banco Bradesco S.A. and Banco Itau Holding Financeira SA has planned to open brokers in the Middle East and Asia this year. One office in Dubai, Hongkong or Singapore would likely be operated by BBI, Bradesco's investment banking division, according to the report. The report adds that Itau would invest US$100 million to launch brokers in Tokyo and Dubai by September 2008. The bank would also open offices in Abu Dhabi, Singapore and Beijing to go along with existing operations in Shanghai. About Banco Itau Banco Itau Holding Financeira SA -- http://www.itau.com.br/-- is a private bank in Brazil. The company has four principal operations: banking -- including retail banking through its wholly owned subsidiary, Banco Itau SA(Itau), corporate banking through its wholly owned subsidiary, Banco Itau BBA SA (Itau BBA) and consumer credit to non-account hold customers through Itaucred -- credit cards, asset management and insurance, private retirement plans and capitalization plans, a type of savings plan. Itau Holding provides a variety of credit and non-credit products and services directed towards individuals, small and middle market companies and large corporations. The bank has offices in Miami, New York, Hongkong, Lisbon, Luxembourg, Bahamas, the Cayman Islands, Chile and Uruguay. About Banco Bradesco Headquartered in Sao Paulo, Brazil, Banco Bradesco S.A. (NYSE: BBD) -- http://www.bradesco.com.br/-- prides itself on serving low-and medium-income individuals in Brazil since the 1960s. Bradesco is Brazil's largest private bank, with more than 3,000 banking branches, and also a leader in insurance and private pension management. Bradesco has branches throughout Brazil as well as one in New York, and Japan. Bradesco offers Internet banking, insurance, pension plans, annuities, credit card services (including football-club affinity cards for the soccer- mad population), and Internet access for customers. The bank also provides personal and commercial loans, along with leasing services. * * * On Nov. 12, 2007, Moody's Investors Service assigned a Ba2 foreign currency deposit rating to Banco Bradesco. BANCO INDUSTRIAL: Will Get US$110 Million in Syndicated Loan ------------------------------------------------------------ Banco Industrial e Comercial S.A. will get at least US$110 million in a two-part syndicated loan that South Africa's Standard Chartered Bank and Wachovia Capital Markets arranged. Banco Industrial told Business News Americas that the loan could be increased to US$200 million. Banco Industrial said that it also ratified a US$300 million bond issue, which is part of its US$1 billion medium-term note program, BNamericas states. Banco Industrial will also make two or three bond issues for US$200 million apiece in 2008. The first issuance will be in March, Brazilian financial daily DCI states. * * * As reported in the Troubled Company Reporter-Latin America on March 1, 2007, Standard & Poor's Ratings Services assigned its 'B+' counter party credit rating to Banco Industrial e Comercial SA. S&P said the outlook is stable. BANCO ITAU: Will Launch Offices in Middle East & Asia This Year --------------------------------------------------------------- Local financial daily Valor Economico reports that Banco Bradesco S.A. and Banco Itau Holding Financeira SA has planned to open brokers in the Middle East and Asia this year. One office in Dubai, Hongkong or Singapore would likely be operated by BBI, Bradesco's investment banking division, according to the report. The report adds that Itau would invest US$100 million to launch brokers in Tokyo and Dubai by September 2008. The bank would also open offices in Abu Dhabi, Singapore and Beijing to go along with existing operations in Shanghai. About Banco Bradesco Headquartered in Sao Paulo, Brazil, Banco Bradesco S.A. (NYSE: BBD) -- http://www.bradesco.com.br/-- prides itself on serving low-and medium-income individuals in Brazil since the 1960s. Bradesco is Brazil's largest private bank, with more than 3,000 banking branches, and also a leader in insurance and private pension management. Bradesco has branches throughout Brazil as well as one in New York, and Japan. Bradesco offers Internet banking, insurance, pension plans, annuities, credit card services (including football-club affinity cards for the soccer- mad population), and Internet access for customers. The bank also provides personal and commercial loans, along with leasing services. About Banco Itau Banco Itau Holding Financeira SA -- http://www.itau.com.br/-- is a private bank in Brazil. The company has four principal operations: banking -- including retail banking through its wholly owned subsidiary, Banco Itau SA(Itau), corporate banking through its wholly owned subsidiary, Banco Itau BBA SA (Itau BBA) and consumer credit to non-account hold customers through Itaucred -- credit cards, asset management and insurance, private retirement plans and capitalization plans, a type of savings plan. Itau Holding provides a variety of credit and non-credit products and services directed towards individuals, small and middle market companies and large corporations. The bank has offices in Miami, New York, Hongkong, Lisbon, Luxembourg, Bahamas, the Cayman Islands, Chile and Uruguay. * * * As reported in the Troubled Company Reporter-Latin America on Feb. 12, 2007, Fitch changed the outlook of Banco Itau Holding Financiera S.A.'s 'BB+' foreign currency IDR rating to positive from stable. COMPANHIA ENERGETICA: Shares Drop Amid Speculation Sale May Fail ---------------------------------------------------------------- Companhia Energetica de Sao Paulo stock has dropped for at least 19 months on the Sao Paulo stock exchange on concerns that a planned sale of its common stock will fail to attract any bidders, Jeb Blount and Alexander Ragir of Bloomberg News report. The controlling shareholder, the Brazilian state of Sao Paulo, has bought CESP for a minimum of BRL6.6 billion (US$3.8 billion). The company rose 22% for the three month ended March 20, which expected that the winning bidder would pay a premium to buy out minority investors, the report adds. According to the Bloomberg, the Brazilian government has rejected to vow renewed licenses to operate three CESP hydroelectric dams. Saulo Sabba, investment director at Maxima Asset Management, disclosed that the prospect that licenses would expire is likely to deter bidding because two of the dams are responsible for 67 percent of CESP's capacity. Mr. Sabba said in a statement that the auction won't go through, adding that "There seems to be a lot of downside and little upside." The biggest decline of the preferred shares since July 2006, the company's most-traded class of stock fell BRL4.61, or 11 percent, to BRL38.79. Headquartered in Sao Paulo, Brazil, Companhia Energetica de Sao Paulo (BOVESPA: CESP3, CESP5 and CESP6) is the country's third largest power generator, majority owned by the State of Sao Paulo. CESP operates 6 hydroelectric plants with total installed capacity of 7,456 MW and reported net revenues of BRL1,983 million in the last twelve months through Sept. 30, 2006. * * * As reported in the Troubled Company Reporter-Latin America on Oct. 10, 2007, Standard & Poor's Ratings Services 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. DELPHI CORP: Wants to Continue Key Employee Compensation Program ---------------------------------------------------------------- Delphi Corp. and its debtor-affiliates seek authority from the U.S. Bankruptcy Court for the Southern District of New York to continue implementing their short-term, at-risk performance- based compensation program -- the Annual Incentive Plan -- for the period Jan. 1, 2008, through June 30, 2008. The AIP is a market-competitive program that provides at-risk incentive compensation opportunities linked to corporate- and division-level financial targets derived from the Debtors' current budget business plan, and to each eligible employee's individual performance. The design of the AIP for the first half of 2008 is essentially the same as those previously approved by the Court, John Wm. Butler, Jr., Esq., at Skadden, Arps, Slate, Meagher & Flom LLP, in Chicago, Illinois, relates. The principal terms and conditions of the AIP for the first half of 2008 are: (a) Covered Employees The AIP applies to all of the Debtors' employees holding executive positions in the United States during the first half of 2008, including the executive chairman of Delphi's Board of Directors. As of February 22, 2008, there were approximately 442 Covered Employees, including 21 members of the Delphi Strategy Board, Delphi's top policymaking group. (b) Financial Targets The AIP will not generate incentive compensation opportunities unless the Debtors meet or exceed established corporate- or division-level financial targets that were derived from the BBP and that were reviewed and approved by the Executive Development and Compensation Committee of Delphi's Board of Directors. Delphi's corporate-level target is measured in earnings before interest, taxes, depreciation, amortization, and restructuring items, and is set at US$871,700,000. The targets at the division level, which are measured in operating income before depreciation, amortization, and restructuring items, are: Division Target -------- ------ Powertrain US$180,200,000 Steering 43,600,000 Thermal 91,100,000 Electronics and Safety 232,000,000 Electrical & Electronic Architecture 262,600,000 Product and Service Solutions 23,700,000 Automotive Holdings Group 11,700,000 (c) Target Mix If a Covered Employee's responsibilities are limited to the corporate level, 100% of his or her incentive- compensation opportunity will be determined based on Delphi's corporate-level EBITDAR performance. For all other Covered Employees, 50% of the opportunity will be determined based on Delphi's corporate-level EBITDAR performance and 50% will be determined based on the relevant division's OIBDAR performance. (d) Incentive-Compensation Opportunities A Covered Employee's target incentive-compensation opportunity, including that associated with financial performance equal to 100% of the applicable target or targets, is based on the Covered Employee's level of responsibility. Opportunities increase as the Debtors' financial performance increases until they reach a cap of 150% of the target opportunity for DSB members and 200% of the target opportunity for all other Covered Employees. The aggregate target opportunities under the AIP for the first half of 2008 are approximately US$21,200,000 and the aggregate maximum opportunities are approximately US$39,100,000. (e) Payout Curves Under the payout curves for the first half of 2008, the maximum incentive-compensation opportunities are associated with corporate-level EBITDAR performance of at least US$1,292,700,000 billion and these division-level OIBDAR performance: Division Minimum Target -------- -------------- Powertrain US$273,100,000 Steering 90,300,000 Thermal 131,800,000 Electronics and Safety 321,400,000 Electrical & Electronic Architecture 368,400,000 Product and Service Solutions 49,300,000 Automotive Holdings Group 48,300,000 (f) Adjustment Protocol The BBP and the AIP financial targets incorporate assumptions concerning the financial impact of several items, including the Debtors' agreements with their labor unions and General Motors Corp. To ensure that incentive compensation is not affected in a positive or negative manner based on those agreements, the Debtors will make adjustments on a dollar-for-dollar basis to the extent the actual financial impact of the agreements differs from the assumptions. Thus, consistent with prior periods, the Covered Employees will not receive incentive compensation based on cost savings achieved through those agreements. The adjustment methodologies are set forth in an adjustment protocol that will also govern any adjustments arising from (i) the Debtors' divestiture of substantially all of the assets comprising their cockpits and interior systems and integrated closure systems businesses and their steering and halfshaft business, or (ii) adjustments to the BBP for the period from Jan. 1, 2008 through the date of emergence as a result of the Debtors' continued operation in Chapter 11 reorganization during that period. (g) Individual Performance The actual amount of incentive compensation paid to a Covered Employee will depend on his or her individual performance during the first half of 2008. A Covered Employee's incentive compensation can be adjusted downward to a minimum of zero or upward to a maximum of the applicable cap of 150% or 200% of the Covered Employee's target opportunity. The net impact of the adjustments cannot result in aggregate payments that exceed the aggregate earned opportunities, and an adjustment to a DSB member's incentive compensation cannot be funded by or fund an adjustment to the incentive compensation of a Covered Employee who is not a DSB member. (h) Prophylactic Measures The AIP includes a prophylactic measure that prevents Covered Employees who engage in misconduct from benefiting under the AIP, including Covered Employees who fail to act in good faith and in a manner consistent with the Debtors' best interests. If the Debtors do not emerge from Chapter 11 on or before Aug. 15, 2008, the Official Committee of Unsecured Creditors may review and raise objections to EBITDAR performance adjustments related to the Debtors' agreements with their labor unions and General Motors Corp., the timing of the Debtors' emergence from Chapter 11, and other adjustments. If the Debtors are unable to resolve the Creditors Committee's objections, the Creditors Committee may adjust by up to US$150,000,000 the Debtors' EBITDAR performance for purposes of the AIP. In no event, however, can the adjustment be used to decrease EBITDAR performance below the EBITDAR target. If the Debtors do not emerge from Chapter 11 on or before Aug. 15, 2008, and the Compensation Committee determines that it is in Delphi's best interests to make further adjustments to the AIP, the Debtors will review those adjustments with the Creditors Committee. If the Creditors Committee does not object to the adjustments, the Debtors may implement the adjustments without further Court order. If the Creditors Committee objects to the adjustments, the adjustments will not become effective unless approved by the Court. At-risk short-term incentive-compensation opportunities, along with salary, benefits, and at-risk long-term incentive- compensation opportunities, were an essential element of the Covered Employees' total compensation from the time of Delphi's separation from GM in 1999 until the Debtors filed their voluntary petitions for reorganization relief in October 2005. During the Debtors' bankruptcy cases, at-risk short-term incentive-compensation opportunities -- but not at-risk long- term incentive-compensation opportunities -- have continued as an essential element of total compensation through the AIP from Jan. 1, 2006, through Dec. 31, 2007. The design of the AIP is in line with market practice, Mr. Butler avers. If the Court will disapprove the Fourth AIP Supplement, the total compensation of the Covered Employees will include only salary and benefits, with no at-risk incentive- compensation elements whatsoever, he points out. About Delphi Corp. Headquartered in Troy, Michigan, Delphi Corporation (PINKSHEETS: DPHIQ) -- http://www.delphi.com/-- is the single supplier of vehicle electronics, transportation components, integrated systems and modules, and other electronic technology. The company's technology and products are present in more than 75 million vehicles on the road worldwide. Delphi has regional headquarters in Japan, Brazil and France. The company filed for chapter 11 protection on Oct. 8, 2005 (Bankr. S.D.N.Y. Lead Case No. 05-44481). John Wm. Butler Jr., Esq., John K. Lyons, Esq., and Ron E. Meisler, Esq., at Skadden, Arps, Slate, Meagher & Flom LLP, represent the Debtors in their restructuring efforts. Robert J. Rosenberg, Esq., Mitchell A. Seider, Esq., and Mark A. Broude, Esq., at Latham & Watkins LLP, represents the Official Committee of Unsecured Creditors. As of March 31, 2007, the Debtors' balance sheet showed US$11,446,000,000 in total assets and US$23,851,000,000 in total debts. The Court approved Delphi's First Amended Joint Disclosure Statement and related solicitation procedures for the solicitation of votes on the First Amended Plan on Dec. 20, 2007. The Court confirmed the Debtors' First Amended Plan on Jan. 25, 2008. (Delphi Bankruptcy News, Issue No. 119; Bankruptcy Creditors' Service Inc., http://bankrupt.com/newsstand/or 215/945-7000) * * * As reported in the Troubled Company Reporter-Latin America on March 18, 2008, Standard & Poor's Ratings Services still expects to assign a 'B' corporate credit rating to Delphi Corp. if the company emerges from bankruptcy in early April. S&P has revised its expected issue-level ratings because changes to the structure of the proposed financings have affected relative recovery prospects among the various term loans. S&P's expected ratings are: -- The US$1.7 billion "first out" first-lien term loan B-1 is expected to be rated 'BB-' (two notches higher than the expected corporate credit rating on Delphi), with a '1' recovery rating, indicating the expectation of very high (90%-100%) recovery in the event of payment default. -- The US$2 billion "second out" first-lien term loan B-2 is expected to be rated 'B' (equal to the corporate credit rating), with a '4' recovery rating, indicating the expectation of average (30%-50%) recovery in the event of payment default. -- The US$825 million second-lien term loan is expected to be rated 'B-' (one notch lower than the corporate credit rating), with a '5' recovery rating, indicating the expectation of modest (10%-30%) recovery in the event of payment default. 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 as: 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. DELPHI CORP: Settles Alps Auto et al. Assumption Objections ----------------------------------------------------------- Parties to various contracts with Delphi Corp. or its debtor- affiliates, including Alps Automotive, Inc., withdrew their objections on the Debtors' proposal to assume and assign executory contracts and purchase orders in connection with the sale of the Debtors' steering and halfshaft business to Steering Solutions Corp. The Debtors have asked the U.S. Bankruptcy Court for the Southern District of New York to adjourn the hearing on the remaining Assumption Objections to April 4, 2008, or April 30, 2008. After meeting and conferring with the Objecting Counterparties, the Debtors agreed to: -- pay six counterparties cure amounts: Counterparty Cure Amount ------------ ----------- Alps Automotive, Inc. US$2,873,130 BT Technologies Corp. 167,743 F&G Multi-Slide, Inc. 9,913 Metal-Matic Inc. 43,080 Robin Industries, Inc. 12,820 SKF USA Inc. 83,147 -- pay, in full and in the ordinary course of business, all liabilities related to the assumed purchase orders with S&Z Metalworks, Ltd., within the closing of the Sale; and -- incorporate the terms of an April 2007 letter agreement with Intermet Corp., as applicable, in the parties' assumed purchase orders. The Debtors and Steering Solutions also agreed to pay in full and in the ordinary course of business, all liabilities related to assumed purchase orders with The Timken Company and Timken U.S. Corp. Steering Solutions avers it will (i) assume and satisfy in the ordinary course of business any and all of the Debtors' outstanding obligations under the assumed contracts with Nissan North America, Inc.; and (ii) maintain the confidential nature of information received by the Debtors pursuant to those contracts. Negotiations are ongoing with the counterparties to the remaining Assumption Objections, John Wm. Butler, Jr., Esq., at Skadden, Arps, Slate, Meagher & Flom LLP, in Chicago, Illinois, informed the Hon. Robert Drain. About Delphi Corp. Headquartered in Troy, Michigan, Delphi Corporation (PINKSHEETS: DPHIQ) -- http://www.delphi.com/-- is the single supplier of vehicle electronics, transportation components, integrated systems and modules, and other electronic technology. The company's technology and products are present in more than 75 million vehicles on the road worldwide. Delphi has regional headquarters in Japan, Brazil and France. The company filed for chapter 11 protection on Oct. 8, 2005 (Bankr. S.D.N.Y. Lead Case No. 05-44481). John Wm. Butler Jr., Esq., John K. Lyons, Esq., and Ron E. Meisler, Esq., at Skadden, Arps, Slate, Meagher & Flom LLP, represent the Debtors in their restructuring efforts. Robert J. Rosenberg, Esq., Mitchell A. Seider, Esq., and Mark A. Broude, Esq., at Latham & Watkins LLP, represents the Official Committee of Unsecured Creditors. As of March 31, 2007, the Debtors' balance sheet showed US$11,446,000,000 in total assets and US$23,851,000,000 in total debts. The Court approved Delphi's First Amended Joint Disclosure Statement and related solicitation procedures for the solicitation of votes on the First Amended Plan on Dec. 20, 2007. The Court confirmed the Debtors' First Amended Plan on Jan. 25, 2008. (Delphi Bankruptcy News, Issue No. 119; Bankruptcy Creditors' Service Inc., http://bankrupt.com/newsstand/or 215/945-7000) * * * As reported in the Troubled Company Reporter-Latin America on March 18, 2008, Standard & Poor's Ratings Services still expects to assign a 'B' corporate credit rating to Delphi Corp. if the company emerges from bankruptcy in early April. S&P has revised its expected issue-level ratings because changes to the structure of the proposed financings have affected relative recovery prospects among the various term loans. S&P's expected ratings are: -- The US$1.7 billion "first out" first-lien term loan B-1 is expected to be rated 'BB-' (two notches higher than the expected corporate credit rating on Delphi), with a '1' recovery rating, indicating the expectation of very high (90%-100%) recovery in the event of payment default. -- The US$2 billion "second out" first-lien term loan B-2 is expected to be rated 'B' (equal to the corporate credit rating), with a '4' recovery rating, indicating the expectation of average (30%-50%) recovery in the event of payment default. -- The US$825 million second-lien term loan is expected to be rated 'B-' (one notch lower than the corporate credit rating), with a '5' recovery rating, indicating the expectation of modest (10%-30%) recovery in the event of payment default. 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 as: 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. ELECTROPAULO METROPOLITANA: Fitch Holds BB- Issuer Default Rtgs. ---------------------------------------------------------------- Fitch Ratings affirms the National Scale rating of EleCtropaulo Metropolitana de Eletricidade de Sao Paulo S.A.'s 9th Issuance of debentures at 'A (bra)'. The 9th issuance of debentures has a face value of BRL250 million due 2018. Fitch rates Eletropaulo Metropolitana as: -- Local currency Issuer Default Rating 'BB-'; -- Foreign currency Issuer Default Rating 'BB-'; -- Senior unsecured notes Due 2010 'BB-' -- Debentures: 10th Issuance due 2013 at 'A(bra)' -- Debentures: 11th Issuance due 2018 at 'A(bra)' -- Syndicated Bank Credit Facility due 2015 at 'A(bra)' -- National long-term scale 'A(bra)'; The outlook is stable for the corporate ratings. Headquartered in Sao Paulo, Brazil, Eletropaulo Metropolitana de Eletricidade de Sao Paulo S.A. -- http://www.eletropaulo.com.br/-- is the largest electricity distribution company in Latin America in terms of revenues. The company is a natural monopoly and distributes electricity to approximately 5.5 million clients in 24 municipalities in the metropolitan region of greater Sao Paulo, Brazil. The company is indirectly controlled by the Companhia Brasiliana de Energia. Eletropaulo Metropolitana is a subsidiary of AES Corporation. GOL LINHAS: GTA Unit Initiates New Flight Network Operations ------------------------------------------------------------ GOL Linhas Aereas Inteligentes S.A., the parent company of Brazilian airlines GOL Transportes Aereos S.A. and VRG Linhas Aereas S.A., said that GOL Transportes Aereos begun operating its new flight network on March 24, 2008, including connections from Congonhas Airport, considered one of Brazil's major airports, to other cities in Brazil. As restrictions on connecting flights through Congonhas have been lifted, flights to nine destinations will now connect through the airport, including Navegantes (Santa Catarina), Uberlandia (MG), Goiania (GO), Campo Grande (Mato Grosso do Sul), Vitoria (Espirito Santo), Cuiaba (MT), Presidente Prudente (Sao Paulo), Joinville (Santa Catarina) and Rio de Janeiro (Santos Dumont's airport). Effective immediately, GOL Transportes Aereos will begin offering twelve new flight options. The company is increasing the number of daily flights to Cuiaba and Goiania, located in Western Brazil, through Congonhas and is also launching weekly flights to Ilheus, in Bahia State. Additionally, the company is launching a new route to connect Recife, the capital of Pernambuco State, with Salvador, the capital of Bahia State. This flight will operate daily, Monday through Saturday. "Additional connections and flight frequencies through Congonhas will provide our customers with additional options and more convenient travel schedules," says GOL's vice-president of planning and IT, Wilson Maciel Ramos. To ensure flights continue to operate on-time, GOL Transportes Aereos also adjusted all of its departure and arrival schedules; passengers are advised to consult the website for changes to existing reservations. The company operates 640 daily flights to 50 domestic and eight international destinations. 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. GOL LINHAS: VRG Unit Initiates New Domestic Flight Operations ------------------------------------------------------------- GOL Linhas Aereas Inteligentes S.A., the parent company of Brazilian airlines GOL Transportes Aereos S.A. and VRG Linhas Aereas S.A., says that its unit, VRG Linhas, has a new network of domestic flights. The changes, which were initiated to broaden the company's presence in high traffic business markets, will improve connectivity and distribution to several national destinations. Planning for the new network included the recent lift of previous restrictions on connecting flights to Congonhas Airport, in Sao Paulo. From this airport, VRG Linhas will serve Belo Horizonte (Confins), Brasilia, Curitiba, Florianopolis, Porto Alegre, Recife, Rio de Janeiro (Galeao and Santos Dumont) and Salvador. The most significant change is the creation of a distribution hub in Brasilia. Customers can now fly to Belo Horizonte (Confins), Fortaleza, Manaus, Porto Alegre, Recife, Rio de Janeiro (Galeao), Sao Paulo (Congonhas) and Salvador in direct flights from the federal capital. The number of flights to these destinations was also increased. Flights to Salvador, for example, now include three frequencies from Brasilia, two from Rio de Janeiro (Galeao) and three from Sao Paulo (Congonhas). "With the new hub in Brasilia and the return of connections to Congonhas, VRG will be able to offer more flight options to several destinations. The company is growing and gaining a wider national route network," says VRG's commercial director, Lincoln Amano. "The new network will allow the company to increase aircraft utilization, productivity, efficiency, and flight loads in an intelligent way. Most importantly, it will allow VRG to broaden its customer services." Operations to Brasilia and from Congonhas will primarily be carried out by Boeing 737-700 and 737-800 Next Generation aircraft, which have the largest space between seats in the Brazilian domestic market. 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. NET SERVICIOS: Launches Product Package for Lower Income Clients ---------------------------------------------------------------- NET Servicos de Comunicacao S.A. has started offering a package of services for lower income customers for US$23.12 per month, Brazilian news daily Valor Economico reports. Business News Americas relates that the package contains: -- fixed telephony service, -- broadband Internet connection of 100 kilobits per second, and -- quality TV signal to open public channels. Sales of the package are around 600 per day. President Jose Antonio Felix told BNamericas that Net Servicos wants to take advantage of already existing assets and that the company won't make additional investments. Net Servicos' infrastructure could serve nine million homes, while the actual number of television subscribers is at 2.5 million, BNamericas states. Headquartered in Sao Paulo, Brazil, Net Servicos de Comunicacao SA -- http://nettv.globo.com/NETServ/us/empr/sobr_visao.jsp-- is the largest pay-television operator in Latin America. The company operates in 79 Brazilian cities, including Sao Paulo, Rio de Janeiro, Belo Horizonte and Porto Alegre. It is also the leading provider of high-speed cable modem Internet access through Net Virtua service. Its advanced network of coaxial and fiber-optic cable covers over 44,000 kilometers and passes approximately 9 million homes. * * * As reported in the Troubled Company Reporter-Latin America on Jan. 21, 2008, Moody's Investors Service assigned a Ba2 foreign currency rating to the proposed up to US$200 million guaranteed long term senior unsecured notes to be issued by Net Servicos de Comunicacao S.A. The rating outlook is stable. RHODIA SA: Sells Isocyanates Businesses to Perstorp Group --------------------------------------------------------- Rhodia S.A. and Lyondell Chime TDI SCA announced, on March 19, 2008, that they have entered into exclusive negotiations for the sale of their Isocyanates businesses to the Perstorp Group. This divestment project includes Rhodia�s aliphatic Isocyanates activity producing a range of intermediates for industrial paints and coatings; and Lyondell�s aromatic isocyanates business with the production of intermediates for polyurethane foams, operated under contract by Rhodia. These activities are essentially based in Pont-de-Claix, France and in Freeport, USA and together employ around 680 people. The finalization of this divestment project should take place over the next few months, once consultations with the employees� representatives have been completed and the necessary authorizations required by law have been obtained. Headquartered in The Netherlands, Lyondell Chime TDI SCA -- http://www.lyondellbasell.com/-- is an affiliate of LyondellBasell Industries, one of the world's largest polymers, petrochemicals and fuels companies. LyondellBasell the global leader in polyolefins technology, production and marketing; a pioneer in propylene oxide and derivatives; a significant producer of advanced fuel products; and the owner of one of North America's largest full-conversion refineries. LyondellBasell is privately owned by Access Industries. Perstorp Group is a front-ranking player in the specialty chemicals industry. The group is present, in particular, in the markets for Paints & Coatings, Plastics, Agro-food and Lubricants. Perstorp has approximately 2,000 employees on a dozen production sites in Europe, Asia, North and South America and runs three research & development centers in Sweden, Finland and India. The group generated net sales of EUR928 million in 2007. About Rhodia Headquartered in Paris, France, Rhodia S.A. (NYSE: RHA) -- http://www.rhodia.com/-- is a global specialty chemicals company partnering with major players in the automotive, electronics, pharmaceuticals, agrochemicals, consumer care, tires, and paints and coatings markets. Rhodia offers tailor- made solutions combining original molecules and technologies to respond to customers' needs. The group generated sales of EUR4.8 billion in 2006 and employs around 16,000 people worldwide. Rhodia is listed on Euronext Paris and the New York Stock Exchange. The company has operations in Brazil. * * * As of Feb. 19, 2008, Rhodia S.A. carries Moody's long-term corporate family rating of Ba3 and senior unsecured debt rating of B1 with positive outlook. The company also carries Standard & Poor's BB- long-term foreign and local issuer credit ratings, and B short-term foreign and local issuer credit ratings. The ratings outlook is stable. Fitch Ratings assigned long-term issuer default rating at BB- and senior unsecured debt rating at BB- with outlook positive. SHARPER IMAGE: Resumes Merchandise Gift Card Policy --------------------------------------------------- Sharper Image Corp. has resumed redemption of all its customers' Gift Cards, Reward Cards, Gift Certificates and Merchandise Certificates for their full value. "We appreciate the Bankruptcy Court's prompt approval of our request to again honor all our customers' Gift Cards for their full value," said Robert Conway, Chief Executive Officer of the Debtor, in a statement. "While some conditions apply under the approved new voluntary policy, we hope our customers will consider this a fair solution." Under the Court approved new policy, all Gift Cards, etc., will be honored for their full value with two conditions: (1) they must be redeemed in full in one transaction -- no partial redemptions permitted, and (2) customers must purchase an item that costs double the value of the gift card or merchandise certificate. A complete summary of the Merchandise Gift Card Policy is available for viewing at http://www.sharperimage.comand in all the Debtor's stores. 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. 7, Bankruptcy Creditors' Service Inc., http://bankrupt.com/newsstand/or 215/945-7000) SHARPER IMAGE: TomTom Wants Segregation of Portable GPS Systems --------------------------------------------------------------- TomTom, Inc., seeks to revoke the credit it granted to Sharper Image Corp. and asserts its right for the reclamation of certain goods because of the Debtor's insolvency, pursuant to Section 546(c) of the Bankruptcy Code and Article 2-702(2) of the Uniform Commercial Code. TomTom demanded the segregation of the goods it supplied to the Debtor pursuant to a purchase order for goods received on January 10, 2008. TomTom's attorney, Lee Harrington, Esq., at Nixon Peabody, LLP, in Boston, Massachusetts, relates that the purchase order may indicate an order of 3,000 units of TomTom ONE 3rd Editions Portable GPS Systems, worth US$390,000. Based on the initial review of its books and records, TomTom notes that it only made a partial shipment to the Debtor of 1,308 units worth US$170,040 under the January 2008 Purchase Order. 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. 7, Bankruptcy Creditors' Service Inc., http://bankrupt.com/newsstand/or 215/945-7000) SHARPER IMAGE: Wells Fargo Objects to Garmin Admin. Claim --------------------------------------------------------- Wells Fargo Retail Finance, LLC, disputes Garmin USA, Inc.'s request for a US$568,784 administrative expense claim for goods the entity delivered to Sharper Image Corp. within 20 days before the Debtor's bankruptcy filing. Wells Fargo and certain other lenders provided a US$60,000,000 loan to the Debtor pursuant to the Court-approved DIP Loan and Security Agreement. The DIP Loan is secured by a superpriority lien in substantially all of the Debtor's assets. Garmin's Request for Administrative Claims Payment As reported in the Troubled Company Reporter on March 18, Garmin USA asked the U.S. Bankruptcy Court for the District of Delaware to allow an administrative expense claim in the full value of the goods that were received by the Debtor within 20 days before the Petition Date. Alternatively, pursuant to Section 2-702 of the Uniform Commercial Code and Section 546(c) of Bankruptcy Code, Garmin USA asked the Court to direct the Debtor to return of all Goods sold on credit and received within 45 days prior to the Petition Date. Dealer Agreement with Garmin Garmin USA entered into a domestic dealer agreement with Sharper Image on Dec. 29, 2004, whereby the Debtor agreed to be a non- exclusive independent dealer for Garmin USA's products. In the ordinary course of business, Garmin USA shipped goods to the Debtor for use by the Debtor in its business, including: Invoice Number Amount Date Shipped Date Received ------------- ------ ------------ ------------- 37770735 US$267,293 12/7/07 12/14/07 37770728 US$138,596 12/7/07 12/13/07 37838954 US$377,985 12/10/07 12/13/07 40973889 US$136,795 2/1/08 2/6/08 40973892 US$251,991 2/1/08 2/7/08 41033190 US$64,798 2/4/08 2/7/08 41033191 US$115,198 2/4/08 2/8/08 As of the Debtor's bankruptcy filing on Feb. 19, 2008, the Debtor owed Garmin USA US$2,132,222 for prepetition deliveries of goods. In the 20 days preceding the Petition Date, Garmin USA sold to the Debtor US$568,784 in Goods in the ordinary course of business. Wells Fargo Responds to Garmin's Request Mark D. Collins, Esq., at Richards, Layton & Finger, P.A., in Wilmington, Delaware, reminds the Court that pursuant to the terms of the Final DIP Order, Wells Fargo holds a prior security interest and prior administrative claim in Debtor's assets, including the Garmin Goods. Thus, Wells Fargo objects to payment of Garmin's administrative claim before Wells Fargo has been paid. To the extent that Garmin's Administrative Claim is valid, he asserts that it is subject to and subordinate to the DIP protections and the prepetition loan protections. "If Garmin's application is allowed, [the] payment of Garmin's Administrative Claim would reduce the loan availability to the Debtor under the DIP Loan Agreement, adversely affect the Budget approved by the Final DIP Order, and ultimately could prejudice the Debtor," Mr. Collins said. Other creditors who have served notices of reclamation and administrative expense claims may also insist on immediate payment if ever Garmin's Administrative Claim was paid at this time, Mr. Collins adds. Moreover, Section 503(b)(9) of the Bankruptcy Code does not entitle Garmin to immediate payment of its Administrative Claim. While Section 503(b)(9) permits the payment of certain administrative expenses upon proper application, the timing of any payment is subject to the discretion of the Court. In light of (i) Wells Fargo's superpriority claim entitlement over payments to Garmin, (ii) the terms of the Final DIP order, and (iii) the prejudice to both Wells Fargo and the Debtor that would result from the immediate payment of the Garmin Administrative Claim, Garmin is not entitled to immediate payment of its Administrative Claim and the Court should deny Garmin's Application, Mr. Collins emphasizes. "Since Wells Fargo has not consented to the return of any Garmin Goods, allowance of Garmin's Reclamation Claim would constitute an event of default under the DIP Loan Agreement," Mr. Collins points out. 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. 7, Bankruptcy Creditors' Service Inc., http://bankrupt.com/newsstand/or 215/945-7000) WEIGHT WATCHERS: S&P Changes Outlook to Stable on Debt Repayment ---------------------------------------------------------------- Standard & Poor's Ratings Services revised its outlook on New York City-based commercial weight-loss service provider Weight Watchers International Inc. to stable from negative. At the same time, Standard & Poor's affirmed its ratings on the company, including its 'BB' corporate credit rating. The outlook revision is based on meaningful debt repayment since the company's debt-financed $1 billion January 2007 modified Dutch auction share repurchase that weakened WWI's credit measures, as well as sustained operating performance in fiscal 2007. "Credit protection measures have improved in line with our expectation of achieving leverage close to 3.5x by the end of 2007," said Standard & Poor's credit analyst Mark Salierno. The ratings on WWI reflect the company's narrow business focus, its participation in the highly competitive weight-loss industry, leveraged financial profile, and aggressive financial policy. These factors are somewhat mitigated by the company's leading market position, its well-recognized brand name, geographic diversity, predictable cash flows, and favorable demographic trends. Headquartered in New York City, Weight Watchers International Inc. (NYSE: WTW) -- http://www.weightwatchersinternational.com/ -- provides weight management services, with a presence in 30 countries around the world, including programs in Brazil, the Netherlands, and New Zealand. The company serves its customers through Weight Watchers branded products and services, including meetings conducted by Weight Watchers International and its franchisees. XERIUM TECHNOLOGIES: Moody's Cuts Ratings on High Default Risk -------------------------------------------------------------- Moody's Investors Service downgraded Xerium Technologies, Inc.'s ratings due to the company's recent announcement that it expects to be non-compliant with its financial covenants in the first quarter of 2008 and future periods, without an amendment to its credit facility. Moody's specifically downgraded the company's corporate family rating to Caa1 from B2, its senior secured credit facilities to Caa1 from B2, its probability of default rating to Caa2 from B2, and its speculative grade liquidity rating to SGL-4 from SGL-3. The rating outlook is negative. The rating action reflects the heightened risk of a default under the company's credit agreement and the possibility of a bankruptcy filing if management is unsuccessful in obtaining financial covenant amendments from its lenders. The company is also in discussions with potential investors to raise equity securities that would be used to pay down debt. In addition, the company is in the process of assessing a potential impairment to its goodwill related to its roll covers business but may not be able to complete its analysis before the filing deadline for its Form 10-K. Moody's believes that the delayed filing of its Form 10-K may trigger a default under its credit agreement if the annual report is not filed by April 1, 2008. These matters create a high level of uncertainty surrounding Xerium's liquidity and the potential for triggering an event of default and, therefore, Moody's lowered the company's Probability of Default rating to Caa2, indicating an estimated 30% probability of default over a one-year time horizon. Xerium's corporate family rating and its senior secured debt ratings were lowered to Caa1 based on Moody's belief that creditors' recovery, in the event of default, would be relatively high. Moody's last rating occurred on Feb. 8, 2007, when Moody's downgraded the long-term debt and corporate family ratings of Xerium to B2 from B1 and maintained a stable outlook. Moody's continues to believe that Xerium's operating performance will remain weak. Xerium's customers continue to struggle operationally due to a slowdown in global paper production and significant overcapacity, especially in newsprint and fine paper. Moody's believes that this trend will continue with the closure of additional mills and further downtime at existing facilities in North America and Europe, Xerium's primary markets. Moody's also anticipates that previous volume losses will take longer than expected to recover and that recent investments in developing economies will take several years before they have a meaningful positive impact on cash flow. Downgrades: Issuer: Xerium Technologies, Inc. -- Corporate Family Rating, Downgraded to Caa1 from B2 -- Senior Secured Term Loan, Downgraded to Caa1 from B2 (LGD3, 33%) -- Senior Secured Revolving Credit Facility, Downgraded to Caa1 from B2 (LGD3, 33%) -- Probability of Default Rating, Downgraded to Caa2 from B2 -- Speculative Grade Liquidity Rating, Downgraded to SGL-4 from SGL-3 Outlook Actions: Issuer: Xerium Technologies, Inc. -- Outlook, Changed To Negative from Stable Headquartered in Wesborough, Massachusetts, Xerium Technologies, Inc. -- http://xerium.com/-- manufactures and supplies two types of products used primarily in the production of paper: clothing and roll covers. The company operates under a variety of brand names and owns a broad portfolio of patented and proprietary technologies to provide customers with tailored solutions and products, designed to optimize performance and reduce operational costs. With 35 manufacturing facilities in 15 countries, including Austria, Brazil and Japan, Xerium Technologies has approximately 3,900 employees. * BRAZIL: S&P Says Beef Embargo May Pressure Exporters' Credit -------------------------------------------------------------- The strict embargoes issued by the European Union on Brazilian fresh beef exports could pressure companies' credit stance in the short-term, said a report released by Standard & Poor's Ratings Services titled, "The EU Embargo On Brazilian Beef Will Test Exporters' Credit Quality." The more severe sanitary conditions imposed on Brazilian producers and the more difficult access to "certified" cattle will most likely cause further consolidation in Brazil's beef industry. This may strengthen larger and more capitalized producers' business profiles. On the other hand, S&P believes the current margin pressure and companies' willingness to anticipate market consolidation could result in more pressure on liquidity. This, in turn, could negatively affect companies' financial risk profiles. "Even though an inevitable increase in international prices will somewhat compensate for lower volumes, we believe that rated companies will suffer deteriorating margins and cash-flow generation as they try to redirect exports or reduce idle capacity," said S&P's credit analyst Vivian Zietemann. ========================== C A Y M A N I S L A N D S ========================== GLOBAL YACHT: Proofs of Claim Filing is Until March 28 ------------------------------------------------------ Global Yacht Ltd.'s creditors have until March 28, 2008, to prove their claims to S. Clark Butler, the company's liquidator, or be excluded from receiving any distribution or payment. In their proofs of claim, creditors must indicate their full names, addresses, the full particulars of their debts or claims, and the names and addresses of their lawyers, if any. Global Yacht'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 liquidator can be reached at: S. Clark Butler 2306 SW 13th Street, 2nd Floor Gainesville, Floriad 32608 USA Phone: (+352) 372 6060 Fax: (+352) 372 7028 KGRF - XYL: Proofs of Claim Filing Deadline is Today ---------------------------------------------------- KGRF - XYL Limited's creditors have until March 26, 2008, to prove their claims to John Cullinane and Derrie Boggess, the company's liquidators, or be excluded from receiving any distribution or payment. In their proofs of claim, creditors must indicate their full names, addresses, the full particulars of their debts or claims, and the names and addresses of their lawyers, if any. KGRF - XYL's shareholder decided on Feb. 25, 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 George Town, Grand Cayman KY1-9002 Cayman Islands Telephone: (345) 914-6305 LVHN ASSURANCE: Proofs of Claim Filing is Until March 31 -------------------------------------------------------- LVHN Assurance Company's creditors have until March 31, 2008, to prove their claims to Seamus Tivnan and Nicholas Gale of Marsh Management Services Cayman Ltd., 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. LVHN Assurance's shareholder decided on Feb. 5, 2008, to place the company into voluntary liquidation under The Companies Law (2004 Revision) of the Cayman Islands. The liquidators can be reached at: Seamus Tivnan and Nicholas Gale Marsh Management Services Cayman Ltd. P.O. Box 1051, George Town Governors Square, 23 Lime Tree Bay Avenue George Town, Grand Cayman Cayman Islands NORODIN MARCO: Sets Final Shareholders Meeting for March 31 ----------------------------------------------------------- Norodin Marco RV Master Fund Ltd. will hold its final shareholders' meeting on March 31, 2008, at 10:30 a.m., at Kinetic Partners Cayman LLP located at Strathvale House, 90 North Church Street, 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 six years from the dissolution of the company, after which they may be destroyed. Norodin Marco's shareholders agreed on Jan. 16, 2008, to place the company into voluntary liquidation under The Companies Law (2004 Revision) of the Cayman Islands. The liquidator can be reached at: Geoffrey Varga Attn: Bernadette Bailey-Lewis Kinetic Partners P.O. Box 10387, Grand Cayman KY1-1004 Cayman Islands Telephone: (345) 623 9900 Fax: (345) 623 0007 NORODIN MARCO RV: Final Shareholders Meeting is on March 31 ----------------------------------------------------------- Norodin Marco RV Master Fund Ltd. will hold its final shareholders' meeting on March 31, 2008, at 10:00 a.m., at Kinetic Partners Cayman LLP located at Strathvale House, 90 North Church Street, 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 six years from the dissolution of the company, after which they may be destroyed. Norodin Marco's shareholders agreed on Jan. 16, 2008, to place the company into voluntary liquidation under The Companies Law (2004 Revision) of the Cayman Islands. The liquidator can be reached at: Geoffrey Varga Attn: Bernadette Bailey-Lewis Kinetic Partners P.O. Box 10387, Grand Cayman KY1-1004 Cayman Islands Telephone: (345) 623 9900 Fax: (345) 623 0007 PARMALAT SPA: Bologna Ruling Faces Appeal at Higher Court --------------------------------------------------------- Parmalat S.p.A. disclosed that an appeal has been filed to the Italian Corte di Cassazione against the decision of the Court of Appeal of Bologna which had affirmed the decision of the lower court that had approved the Concordata. It should be noted that the decision of the Court of Parma approving the Concordato is provisionally enforceable and produces its effects vis-a-vis all creditors for claims, facts, entitlements or causes preceding the opening of the extraordinary administration. The appeal of the decision does not suspend the effects of enforceability. As reported in the TCR-Europe on Jan. 21, 2008, the Appeal Court of Bologna rejected the appeal of a number of bondholders against the judgment that ratified the Parmalat Composition with Creditors. 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. PARMALAT SPA: Shareholders Submit Board Nominees ------------------------------------------------ Parmalat S.p.A.'s shareholders -- Angelo, Gordon & Co., L.P. Lehman Brothers International (Europe), MKM Longboat Strategy Master Fund Ltd., Stark Criterion Master Fund Ltd., Stark Global Opportunities Master Fund Ltd., Stark Master Fund Ltd., and Zenit Fund, representing 6.385% of the share capital, have deposited a list of candidates for the Board of Directors and Board of Statutory Auditors to be presented at the Shareholders� meeting called for April 8 & 9, 2008, respectively in the first, and if necessary, in the second call. Board of Directors Nominees 1. Raffaele Picella, 2. Massimo Confortini (independent), 3. Enrico Bondi, 4. Vittorio Mincato (independent), 5. Marzio Saa (independent), 6. Carlo Secchi (independent), 7. Ferdinando Superti Furga (independent), 8. Piergiorgio Alberti (independent), 9. Marco De Benedetti (independent), 10. Andrea Guerra (independent), and 11. Erder Mingoli (independent) Board of Statutory Auditors Candidates Effective Statutory Auditors 1. Alessandro Dolcetti, 2. Enzio Bermani, and 3. Mario Magenes Alternates Auditors 4. Massimo Colavolpe 5. Marco Benvenuto Lovati 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. PREMIER OFFICE: Proofs of Claim Filing Deadline is Today -------------------------------------------------------- Premier Office Property I Funding Corporation's creditors have until March 26, 2008, to prove their claims to John Cullinane and Derrie Boggess, the company's liquidators, or be excluded from receiving any distribution or payment. In their proofs of claim, creditors must indicate their full names, addresses, the full particulars of their debts or claims, and the names and addresses of their lawyers, if any. Premier Office's shareholder decided on Feb. 25, 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 George Town, Grand Cayman KY1-9002 Cayman Islands Telephone: (345) 914-6305 THE HSBC PRIVATE: Proofs of Claim Filing Deadline is March 31 ------------------------------------------------------------- The HSBC Private Equity Fund 2 Limited's creditors have until March 31, 2008, to prove their claims to Private Equity Management BVI 2 Limited, the company's liquidator, or be excluded from receiving any distribution or payment. In their proofs of claim, creditors must indicate their full names, addresses, the full particulars of their debts or claims, and the names and addresses of their lawyers, if any. The HSBC Private's shareholders agreed on Jan. 14, 2008, to place the company into voluntary liquidation under The Companies Law (2004 Revision) of the Cayman Islands. The liquidator can be reached at: Private Equity Management BVI 2 Limited Attn: Cereita Lawrence Maples Finance Limited P.O. Box 1093, Boundary Hall Cricket Square, Grand Cayman KY1-1102 Cayman Islands WICKAM FUND: Sets Final Shareholders Meeting for March 31 --------------------------------------------------------- Wickam Fund will hold its final shareholders' meeting on March 31, 2008, at 10:00 a.m., at the 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. Wickam Fund's shareholders agreed on Feb. 15, 2008, to place the company into voluntary liquidation under The Companies Law (2004 Revision) of the Cayman Islands. The liquidator can be reached at: Derek Earl Grant Thornton, 24 � 26 City Quay Dublin 2, Ireland Telephone: (00353) 6805805 Fax: (00353) 6805806 ========= C H I L E ========= AES CORP: Official Says Chilean Prices In Need of New Investment ---------------------------------------------------------------- Business News Americas reports that U.S. official at AES Corp. said that power prices in Chile are in need for new investment. "The recent gas cutoffs from Argentina and node price increases of 45% in 2007 have confirmed our view there is a near-term opportunity to add new capacity, particularly non-gas fired," the official said during a conference call with the investors. According to the official familiar with the matter, the high marginal cost of power in the northern SING and central SIC grids, has showed a shortage of efficient generation capacity, BNamericas relates. The report adds that 2007's average marginal cost on the SIC grid has boosted to US$170/MWh compared to US$46/MWh last year. The company has planned in advanced development in Chile adding 700MW to projects already under production, the official said in a statement. In addition, a 470MW Angamos coal-fired coal plant in region II has been planned. The company staff disclosed that the contracts have been signed and the power purchase pacts have almost completed, the report states. Construction, the report notes, would begin this year for the plant to come online by the end of 2011. About AES Corporation AES Corporation -- http://www.aes.com/-- a global power company, operates in South America, Europe, Africa, Asia and the Caribbean countries. Generating 44,000 megawatts of electricity through 124 power facilities, the company delivers electricity through 15 distribution companies. AES has been in Eastern Europe for over ten years, since it acquired three power plants in Hungary in 1996. Currently, AES has two distribution companies in Ukraine, which serve 1.2 million customers and generation plants in the Czech Republic and Hungary. AES is also the leading company in biomass conversion in Hungary, generating 37% of the nation's total renewable generation in 2004. The company has Latin America operations in Argentina, Brazil, Chile, Dominican Republic, El Salvador and Panama. * * * The AES Corporation still carries Moody's Investors Service's Corporate Family Rating and the senior unsecured rating assigned at B1. The company also carries Fitch Ratings' 'BB/RR1' rating on US$500 million issue of senior unsecured notes due 2017. As reported in the Troubled Company Reporter-Latin America on March 7, 2008, AES Corporation is in default under its senior secured credit facility and its senior unsecured credit facility due to a breach of representation related to its financial statements as set forth in the credit agreements. As a result, US$200 million of the debt under the company's senior secured credit facility will be classified as current on the balance sheet as of Dec. 31, 2007. There are no outstanding borrowings under the senior unsecured facility. SPECTRUM BRANDS: 2008 Annual Shareholders Meeting Set on Apr. 29 ---------------------------------------------------------------- Spectrum Brands, Inc., will hold its annual shareholders' meeting on Tuesday, April 29, 2008 at 8:00 a.m. ET at the Westin Atlanta Perimeter North, located at 7 Concourse Parkway in Atlanta, Georgia. Shareholders of record as of March 15, 2008 will be entitled to vote at the meeting. Headquartered in Atlanta, Georgia, Spectrum Brands Inc. (NYSE: SPC) -- http://www.spectrumbrands.com/-- is a supplier of batteries, portable lighting, lawn and garden products, household insect control, shaving and grooming products, personal care products and specialty pet supplies. The company operates in 13 Latin American nations including El Salvador, Chile, Dominican Republic, Guatemala, Honduras, Costa Rica, Colombia and Nicaragua. The company's consolidated balance sheet at Dec. 30, 2007, showed US$3.27 billion in total assets and US$3.41 billion in total liabilities, resulting in a US$141.2 million total stockholders' deficit. * * * As reported in the Troubled Company Reporter on March 12, 2008, Spectrum Brands Inc. disclosed in a regulatory filing that it has entered into a confidentiality and standstill agreement with Harbinger Capital Partners Master Fund I Ltd. in order to provide Harbinger with confidential information relating to certain of the company's strategic operating assets in connection with Harbinger's evaluation of a possible acquisition. In the third quarter of Spectrum Brands Inc.'s fiscal year ended Sept. 30, 2006, the company engaged advisors to assist it in exploring possible strategic options including divesting certain assets, in order to sharpen its focus on strategic growth businesses, reduce its outstanding indebtedness and maximize long-term shareholder value. =============== C O L O M B I A =============== DOLE FOOD: S&P Downgrades Corporate Credit Rating to B- From B -------------------------------------------------------------- Standard & Poor's Ratings Services lowered its corporate credit rating on Westlake Village, California-based Dole Food Co. Inc. and Dole Holding Co. LLC, to 'B-' from 'B'. The corporate credit ratings were removed from CreditWatch, where they were placed along with the company's issue-level ratings on Nov. 27, 2007, with negative implications, following third-quarter operating results and credit measures that did not meet Standard & Poor's prior expectations. At the same time, Standard & Poor's lowered the rating on Dole's unsecured debt issues to 'CCC+' (one notch lower than the corporate credit rating, from 'B-') and lowered the ratings on Dole's senior secured term loans to 'B+' (two notches above the corporate credit rating) from 'BB-'. These issues remain on CreditWatch with negative implications pending finalized recovery ratings. The outlook is negative. "The downgrade reflects Dole's fourth-quarter operating results and credit measures below our prior expectations, as well as our concerns about refinancing risk over the next year," said Standard & Poor's credit analyst Alison Sullivan. Leverage was 9.1x at fiscal 2007 year-end, versus Standard & Poor's expectation of closer to 7.0x-7.5x. "We expect EBITDA improvement in 2008, and assume assets held for sale will be applied to debt reduction," said Ms. Sullivan. "However, credit measures are likely to still be very weak." While liquidity is currently adequate, Dole has moderate refinancing requirements in each of the next three years. The ratings on Dole reflect its highly leveraged financial profile and participation in the competitive, commodity- oriented, and volatile fresh produce industry, which is subject to seasonality, political and economic risks. Based in Westlake Village, California, Dole Food Company Inc. -- http://www.dole.com/-- is the world's largest producer and marketer of high-quality fresh fruit, fresh vegetables and fresh-cut flowers. Dole markets a growing line of packaged and frozen foods and is a produce industry leader in nutrition education and research. 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. GRAN TIERRA: Launches Test Operations on Costayaco-3 Well --------------------------------------------------------- Gran Tierra Energy has launched test operations on the Costayaco-3 well in Colombia, Business News Americas reports. BNamericas relates that Gran Tierra also started drilling the Costayaco-4 well. According to Gran Tierra, the company expects test operations to take about a month and that the Costayaco-4 drilling will take six weeks. The testing of Costayaco-4 will follow. Gran Tierra has already budgeted drilling of Costayaco-5, 6, and 7 for this year, BNamericas states. Headquartered in Calgary, Canada, Gran Tierra Energy Inc. (OTCBB: GTRE.OB) -- http://www.grantierra.com/-- is an international oil and gas exploration and production company with substantial interests and prospective properties in Argentina, Colombia and Peru. * * * In a 10-Q filing dated Nov. 8, 2007 with the U.S. Securities and Exchange Commission, Gran Tierra Energy Inc.'s management disclosed that the company's ability to continue as a going concern is dependent upon obtaining the necessary financing to acquire, explore and develop oil and natural gas interests and generate profitable operations from its oil and natural gas interests in the future. The company incurred a net loss of US$10,630,571 for the nine months ended Sept. 30, 2007, and had an accumulated deficit of US$18,673,955 as at Sept. 30, 2007. The company expects to incur substantial expenditures to further its capital investment programs and the company's existing cash balance and cash flow from operating activities may not be sufficient to satisfy its current obligations and meet its capital investment commitments. To provide financing for Gran Tierra's ongoing operations, the company said it secured a US$50 million credit facility with Standard Bank Plc on Feb. 28, 2007, which will provide additional financing for the company's future operations. As at Sept. 30, 2007, the company said it has not drawn-down on this facility. The company's intention is to build a portfolio of oil and natural gas production, development, and exploration opportunities using the capital raised during 2006, cash provided by future operating activities and by using the available credit facility. However, the company said it may need to secure additional sources of capital to fund its future operating activities. ================== C O S T A R I C A ================== SIRVA INC: Posts US$412.7 Mil. Net Loss for Year Ended Dec. 31 -------------------------------------------------------------- Sirva Inc. reported a net loss of $412.7 million for the year ended Dec. 31, 2007. Liquidity and Capital Resources -- Long-term Debt The company said it has US$490.6 million senior credit facility through its subsidiary, SIRVA Worldwide, Inc. This Credit Facility with JPMorgan Chase Bank and a consortium of other lenders consists of a US$315.6 million term loan obligation and a US$175.0 million revolving credit facility. Borrowings under the revolving credit facility were US$85.0 million and US$29.0 million as of Dec. 31, 2007 and 2006, respectively. As a result of the Chapter 11 filing of the company, the entire amount of the Term Loan and Revolving Credit Facility as of Dec. 31, 2007 has been classified as a current liability. The company had outstanding letters of credit of US$23.1 million and US$18.6 million as of Dec. 31, 2007 and 2006, respectively. It had available credit of US$66.9 million and US$127.4 million as of Dec. 31, 2007 and 2006, respectively. -- Convertible Perpetual Preferred Stock On Aug. 23, 2007, the company's stockholders approved the conversion of the Convertible Notes into shares of Convertible Preferred Stock and the related issuances of the Convertible Preferred Stock and common stock. As a result, the Convertible Notes automatically converted into an aggregate of 75,000 shares of Convertible Preferred Stock. -- Short-term Debt Sirva Inc.'s subsidiary, SIRVA Mortgage, Inc., utilizes a flexible early purchase facility and a warehousing credit and security agreement to fund mortgage loans held for resale. The flexible early purchase facility is the primary means for SIRVA Mortgage to fund its traditional residential first mortgage lending. The outstanding balance against the flexible early purchase facility was US$40.4 million and US$85.6 million as of December 31, 2007 and 2006, respectively. The outstanding balance against the warehousing credit and security agreement was US$21.9 million and US$39.4 million as of December 31, 2007 and 2006, respectively. The outstanding balance under the flexible early purchase facility at the end of February 2008 was approximately US$19.3 million and is anticipated to be fully paid on or before June 1, 2008. On December 21, 2007, SIRVA Mortgage executed a loan participation sale agreement with Colonial Bank, N.A., as a new mortgage lender for a US$175.0 million loan participation facility. No amounts were outstanding under this facility as of December 31, 2007. Also on December 21, 2007, SIRVA Mortgage executed a master repurchase agreement with Colonial Bank, N.A. for a US$25.0 million committed revolving mortgage loan facility with the same new lender. This facility expires in December 2008. The outstanding balance against the committed revolving mortgage loan facility was US$12.7 million as of December 31, 2007. A subsidiary, SIRVA Finance Limited, and various international subsidiaries of SIRVA Relocation LLC, maintain relocation financing facilities with various European banks of US$36.6 million at December 31, 2007. The outstanding balance of these facilities was US$19.4 million and US$24.1 million at December 31, 2007 and 2006, respectively. After the company's bankruptcy filing, outstanding obligations under the Credit Facility amounted to US$511.0 million. On February 6, 2008, the entered into a Credit and Guarantee Agreement that provides up to US$150.0 million in financing, comprised of a term loan facility of up to US$65.0 million and a revolving credit facility of up to US$85.0 million. The DIP Facility has a sublimit of US$60.0 million for letters of credit to be issued for purposes that are reasonably satisfactory to the DIP Agent. Cash flows The most significant cash flows from discontinued operations are the proceeds in 2006 from disposition of the Business Services Division in the United Kingdom and Ireland for US$85.7 million and the proceeds in 2005 from the disposition of the Australian and New Zealand Pickfords Records Management businesses for US$79.0 million. Net cash provided by operating activities was US$18.4 million in 2007 compared to a net use of cash of US$111.5 million and US$6.1 million in 2006 and 2005, respectively. Net cash used by investing activities was US$8.9 million in 2007 compared to net cash provided of US$84.7 million and US$77.8 million in 2006 and 2005, respectively. The net cash proceeds from dispositions for the years ended December 31, 2007, 2006 and 2005, are US$5.3 million in 2007, US$87.3 million in 2006, and US$114.2 million in 2005. Net cash used for financing activities was US$15.3 million and US$111.7 million in 2007 and 2005, respectively, compared to net cash provided of 31.4 million in 2006. Balance Sheet The company reported total assets of US$894.4 million, total liabilities of US$1,149.0 million and total stockholders' deficit of US$325.0 million for the year ended Dec. 31, 2007. About Sirva Inc. Headquartered in Westmont, Illinois, SIRVA Inc. (Pink Sheets : SIRV.PK) -- http://www.sirva.com/-- is a provider of relocation solutions to a well-established and diverse customer base. The company handles all aspects of relocation, including home purchase and home sale services, household goods moving, mortgage services and home closing and settlement services. SIRVA conducts more than 300,000 relocations per year, transferring corporate and government employees along with individual consumers. SIRVA's brands include Allied, Allied International, Allied Pickfords, Allied Special Products, DJK Residential, Global, northAmerican, northAmerican International, Pickfords, SIRVA Mortgage, SIRVA Relocation and SIRVA Settlement. The company has operations in Costa Rica. The company and 61 of its affiliates filed separate petitions for Chapter 11 protection on Feb. 5, 2008 (Bankr. S.D.N.Y. Case No. 08-10433). Marc Kieselstein, Esq. at Kirkland & Ellis, L.L.P. is representing the Debtor. An official Committee of Unsecured Creditors has been appointed in this case. When the Debtors filed for bankruptcy, it reported total assets of US$924,457,299 and total debts of US$1,232,566,813 for the quarter ended Sept. 30, 2007. The combined hearing on the adequacy of the disclosure statement and the confirmation of the Debtors' proposed Plan of Reorganization is set April 18, 2008. (Sirva Inc. Bankruptcy News, Issue No. 9; Bankruptcy Creditors' Services Inc. http://bankrupt.com/newsstand/or 215/945-7000) SIRVA INC: Ex Senior VP Wants Stay Lifted to Pursue Labor Case -------------------------------------------------------------- Robert Noia filed a complaint against SIRVA, Inc., and SIRVA Relocation, LLC, in the United States District Court for the District of Connecticut, seeking damages for wrongful discharge, among other claims. Mr. Noia asserts that he was discharged from his position as senior vice-president for client development in January 2006. At the time of his discharge, SIRVA had an Employment Practices Liability Insurance Policy, issued by the Illinois National Insurance Company Policy, which provides for wrongful discharge actions of up to US$3,000,000, including defense costs. Illinois National has issued a Reservation of Rights letter indicating that it is providing defense cost coverage as well as coverage of the wrongful discharge claim to SIRVA. Against this backdrop, Mr. Noia asks the Court to lift the stay to pursue his wrongful termination claim against SIRVA, to the extent his claim is covered by the Illinois Insurance. About Sirva Inc. Headquartered in Westmont, Illinois, SIRVA Inc. (Pink Sheets : SIRV.PK) -- http://www.sirva.com/-- is a provider of relocation solutions to a well-established and diverse customer base. The company handles all aspects of relocation, including home purchase and home sale services, household goods moving, mortgage services and home closing and settlement services. SIRVA conducts more than 300,000 relocations per year, transferring corporate and government employees along with individual consumers. SIRVA's brands include Allied, Allied International, Allied Pickfords, Allied Special Products, DJK Residential, Global, northAmerican, northAmerican International, Pickfords, SIRVA Mortgage, SIRVA Relocation and SIRVA Settlement. The company has operations in Costa Rica. The company and 61 of its affiliates filed separate petitions for Chapter 11 protection on Feb. 5, 2008 (Bankr. S.D.N.Y. Case No. 08-10433). Marc Kieselstein, Esq. at Kirkland & Ellis, L.L.P. is representing the Debtor. An official Committee of Unsecured Creditors has been appointed in this case. When the Debtors filed for bankruptcy, it reported total assets of US$924,457,299 and total debts of US$1,232,566,813 for the quarter ended Sept. 30, 2007. The combined hearing on the adequacy of the disclosure statement and the confirmation of the Debtors' proposed Plan of Reorganization is set April 18, 2008. (Sirva Inc. Bankruptcy News, Issue No. 9; Bankruptcy Creditors' Services Inc. http://bankrupt.com/newsstand/or 215/945-7000) ================= G U A T E M A L A ================= BRITISH AIRWAYS: CEO Still Considers Bid for Iberia --------------------------------------------------- British Airways Plc CEO Willie Walsh is still considering on making a bid for Spain's Iberia Lineas Aereas de Espana SA, published reports say. According to Mr. Walsh, British Airways wants to enter the South American market but only if the price is right, the reports say. British Airways had bought 28,745,767 shares in Iberia Lineas SA for GBP52 million, increasing its stake to 13.15%. Mr. Walsh also disclosed that a British Airways management team went to Spain to talk with executives at Caja Madrid, which owns 23% of the Iberia, BreakingNews.ie relates. As reported in the TCR-Europe on November 2007, BA and TPG consortium have withdrawn their interest in bidding for Iberia, after a hostile reception from major shareholder Caja Madrid. In May 2007 BA has joined with TPG Capital, Vista Capital, Inversiones Ibersuizas and Quercus Equity to investigate a possible consortium offer for the Spanish carrier. 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. GOODYEAR TIRE: S&P Ups Rating on Class A-1 and A-2 Certs. to BB- ---------------------------------------------------------------- Standard & Poor's Ratings Services raised its ratings on the class A-1 and A-2 certificates from the US$46 million Corporate Backed Trust Certificates Goodyear Tire & Rubber Note-Backed Series 2001-34 Trust to 'BB-' from 'B'. The upgrades reflect the March 19, 2008, raising of the rating on the 7% notes due March 15, 2028, issued by Goodyear Tire & Rubber Co. to 'BB-' from 'B'. Corporate Backed Trust Certificates Goodyear Tire & Rubber Note- Backed Series 2001-34 Trust is a pass-through transaction, the ratings on which are based solely on the rating assigned to the underlying collateral, Goodyear Tire & Rubber Co.'s 7% notes due March 15, 2028 ('BB-'). Headquartered in Akron, Ohio, The Goodyear Tire & Rubber Company (NYSE: GT) -- http://www.goodyear.com/-- is the world's largest tire company. The company manufactures tires, engineered rubber products and chemicals in more than 90 facilities in 28 countries. Goodyear's operations are located in Argentina, Austria, Chile, Colombia, France, Italy, Guatemala, Jamaica, Peru, Russia, among others. Goodyear employs more than 80,000 people worldwide. ============= J A M A I C A ============= DIGICEL GROUP: Computerized Credit Network Collapses ---------------------------------------------------- The computerized credit network of Digicel Group's Jamaican unit has collapsed due to an overload caused by eager clients trying to capitalize on a discount program that offered bonus call credit on the weekend, Shelly-Ann Thompson at The Jamaica Gleaner reports. The Gleaner relates that many clients were unable to add credit to their phones on the Easter weekend due to the network crash. Digicel's Chief Executive Officer David Hall told The Gleaner that the firm was working to solve the problem by upgrading the capacity of the system. Clients could still add credit to their phones using the electronic top-up methods like Web Flex and Direct Flex, The Gleaner says, citing Mr. Hall. Digicel will launch another bonus-credit promotion this week to compensate clients for the inconvenience, Mr. Hall told The Gleaner. Digicel Ltd. is a wireless services provider in the Caribbean region founded in 2000, and controlled by Denis O'Brien. The company started operations in Jamaica in April 2001 and now offers GSM mobile services in Caribbean countries including Jamaica, St. Lucia, St. Vincent, Aruba, Grenada, Barbados, Bermuda, Cayman, and Curacao among others. Digicel finished FY2005 with 1.722 million total subscribers -- 97% pre-paid -- estimated market share of 67% and revenues and EBITDA of US$478 million and US$155 million, respectively. * * * As reported in the Troubled Company Reporter-Latin America on Feb. 20, 2007, Fitch Ratings Service assigned 'CCC+/RR5' rating on Digicel Group Ltd.'s proposed US$1.4 billion senior subordinated notes due 2015. Digicel Ltd. is a wireless services provider in the Caribbean region founded in 2000, and controlled by Denis O'Brien. The company started operations in Jamaica in April 2001 and now offers GSM mobile services in Caribbean countries including Jamaica, St. Lucia, St. Vincent, Aruba, Grenada, Barbados, Bermuda, Cayman, and Curacao among others. Digicel finished FY2005 with 1.722 million total subscribers -- 97% pre-paid -- estimated market share of 67% and revenues and EBITDA of US$478 million and US$155 million, respectively. * * * In February 2007, Moody's Investors Service affirmed Caa2 senior unsecured rating to Digicel Group Limited's US$1.4 billion senior unsecured notes offering. =========== M E X I C O =========== AMERICAN AXLE: CEO Receives US$10.1 Million as 2007 Compensation ---------------------------------------------------------------- American Axle & Manufacturing Holdings Inc. disclosed in a Securities and Exchange Commission filing that its co-founder, Chairman and Chief Executive Officer, Richard E. Dauch, received a total of US$10.1 million in compensation, which includes US$3.9 million bonuses, for 2007. The regulatory filing indicated that a total of US$30 million was paid, in 2007, to four other senior executives, who contribute to the long-term growth and profitability of the company and who are in a position to make significant contributions to the company and its subsidiaries. The executive payment disclosure came as 3,650 union workers continue their month-long strike asking for wage hikes and more benefits. As reported in the Troubled Company Reporter on March 12, 2008, United Auto Workers union representatives weren't happy with the terms proposed by the auto parts company. American Axle, which earned US$37 million on US$3.25 billion sales in 2007, wants a deal like those UAW gave General Motors Corp., Ford Motor Co., Chrysler LLC, and parts makers Delphi Corp. and Dana Corp., insisting that cutting labor costs is essential to be competitive, The Associated Press relates. The auto parts supplier is asking the union to approve US$20 to US$30 hourly wage cuts from US$73 per hour to US$27 per hour, arguing that its original U.S. locations incurred losses for three years. Strike Impact on Automakers GM has about 29 facilities affected by the strike at Axle as the supplier attempts to negotiate with the union. GM president and COO Frederick Henderson said GM won't meddle in the labor dispute between AAM and the UAW. Chrysler is temporarily closing its vehicle assembly facility in Newark, Delaware as the strike among UAW union members at AAM stretches. AAM supplies Chrysler components for the Dodge Durango and Chrysler Aspen sport utility vehicles in Newark and two versions of the Dodge Ram pickup made in Saltillo, Mexico. About American Axle 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. * * * As reported in the Troubled Company Reporter on March 19, 2008, Standard & Poor's Ratings Services placed the ratings on General Motors Corp., American Axle & Manufacturing Holdings Inc., Lear Corp., and Tenneco Inc. on CreditWatch with negative implications. The CreditWatch placement reflects S&P's decision to review the ratings in light of the extended American Axle (BB/Watch Neg/--) strike. In November 2007, American Axle carries Moody's Investors Service's Corporate Family rating of Ba3. The company's notes and term loan also carries Moody's senior unsecured rating of Ba3. The outlook is stable and the Speculative Grade Liquidity rating of SGL-1 is renewed. BLUE WATER: Parties Balk at Request to Assume Molding Contracts --------------------------------------------------------------- Several parties filed objections to the request of Blue Water Automotive and its debtor-affiliates to assume molding contracts. As reported in the Troubled Company Reporter on March 7, 2008, the Debtors sought permission from the U.S. Bankruptcy Court for the Eastern District of Michigan to assume molding contracts and contracts for the design or testing services necessary to the fabrication and approval of the molds. In the ordinary course of their businesses, the Debtors issue purchase orders with various molding contractors that provide the terms and conditions of, among other things, manufacture, payment and delivery. The Debtors need molds to launch new programs or continue existing programs, and they must obtain them in a timely manner to meet their production schedule with the original equipment manufacturers. If the molds are not produced or are delivered late, the Debtors could be in breach of their obligations to the OEMs, Judy A. O'Neill, Esq., at Foley & Lardner LLP, in Detroit, Michigan, said. In that event, the OEMs could be forced to shut down production lines or miss launch dates because the Debtors were not able to timely deliver component parts, leading to significant damage claims from the OEMs, Ms. O'Neill added. The Debtors stand to lose considerable business and loss of reputation if any OEM production lines are shut down, Ms. O'Neill said. A. Creditors Committee The Official Committee of Unsecured Creditors avers that: (a) the assumption of the molding contracts will add enormous administrative expenses to the Debtors' estates without any clear plan how to pay these expenses; (b) the Debtors have not shown that the proposed assumption is beneficial to the Debtors' estates or creditors; and (c) the Debtors' proposed order has authorize the customer to pay for the molds by set-off or against before and after Petition Date receivables of the Debtors without any determination of whether those offsets or recoupment are valid under Section 553 of the Bankruptcy Code. Ryan D. Heilman, Esq., at Schafer and Weiner, PLLC, in Bloomfield Hills, Michigan, posits that the Debtors' proposed order would permit their customers to exercise rights of set-off or recoupment to pay for the molds without any oversight by the Court or by the Committee. Aside from the fact that a set-off of a prepetition debt is a violation of the automatic stay, the proposed order would authorize the Debtors to reach agreements with the customers for relief from the automatic stay, Mr. Heilman adds. Further, the Committee asks the Court to (i) adjourn the hearing on the Assumption Motion on a date after the final hearing on the Debtors' DIP Financing Motion; (ii) require complete transparency in the Debtors' agreements and negotiations with their customers; and (iii) require the Debtors or customers to file a motion with appropriate notice before exercising any purported setoff or recoupment. B. Molding Contractors Eight molding contractors assert that the Debtors' assumption motion failed to address proper cure amounts in any manner other than by payment of cash in the proper cure amounts and did not provide specific details regarding adequate assurances of payments and future performance of the molding contracts: (a) H.S.Die & Engineering, Inc., (b) Superior Mold Services, Inc., (c) Radiance Mold & Engineering, Inc., (d) Innovate Mold, Inc., (e) PME Companies, Inc., (f) Kimastle Corporation, (g) Mold-Tech, Inc., and (h) St. Clair Packaging, Inc. Representing H.S. Die, Patrick E. Mears, Esq., at Barnes & Thornburg LLP, in Grand Rapids, Michigan asserts that the Debtors owe H.S. Die US$147,550 under their contracts. On behalf of Superior Mold, Steven F. Alexsy, Esq., at Seyburn, Kahn, Ginn, Bess and Serlin, P.C. in Southfield, Michigan, relates that the Debtors did not propose sufficient payment to cure the default owed to Superior Mold of US$501,601. Radiance Mold, Mold-Tech, and Kimastle require the Debtors to pay in full the due amounts as of the effective date of assumption and establish feasible, clear and enforceable procedures for adequate assurance of future performance. Innovate Mold and PME aver that the Assumption Motion contains inaccurate cure amounts and information about their contracts and that the Debtors should modify the proposed order to clarify the effectuation of a set-off or recoupment by the customers. St. Clair Packaging, Inc., maintains that the proposed assumption of molding contracts sacrifices its administrative claim in preference to the Debtors' payment of other postpetition obligations, evidencing the Debtors' inability to reorganize. In response to Superior Mold's objection, the Debtors proposed to pay US$113,145, to cure their defaults under contracts with Superior Mold. * * * The Court authorizes the Debtors to assume the molding contracts. The Court rules that the amount to cure the Debtors' defaults under the Superior Mold contracts is US$113,145, unless Superior Mold timely object to the Cure Amount. With respect to the tooling used for products supplied to the Debtors' major customers, Chrysler LLC, General Motors Corporation and Visteon Corporation, the Major Customers, in the event they dispute a Cure Amount or future amount owed under the Mold Contracts, the funding of which will be provided by the Major Customers, as applicable. In that event, the Debtors will notify the respective Contractors of the different Cure Amount or future amount owed under the Mold Contracts as indicated by the Debtors and, if not resolved by agreement of the Contractor, the Debtors and their applicable customer, that dispute will be heard by the Court. Superior Mold Wants Correct Cure Amount According to Superior Mold's books and records, the Debtors' cure amount of US$113,145 does not include US$81,055 in outstanding invoices. The total Cure Amount that must be paid to Superior under the Order, therefore, should be US$194,200, Mr. Alexsy asserts. Because the Debtors' cure amount is smaller than the cure amount calculated by Superior Mold based on its own books and records, Superior Mold objects to the current Cure Amount of US$113,145 as alleged by Debtors. Before the objection was filed, representatives of Superior Mold and the Debtors conferred to discuss their differences in the calculation of the Cure Amount. Superior Mold has also sought written confirmation from the Debtors that the OEMs would be making direct payments or escrowed payments promptly to Superior Mold for the Cure Amount and all future amounts, including payments for molds currently in possession of Superior Mold. The parties were not able to reach a final resolution of these issues before the five-day objection deadline in the Order. About Blue Water Automotive Blue Water Automotive Systems, Inc. designs and manufactures engineered thermoplastic components and assemblies for the automotive industry. The company's product categories include airflow management, full interior trim/sub-systems, functional plastic components, and value-added assemblies. They are supported by full-service design, program management, manufacturing and tooling capabilities. With more than 1,400 employees, Blue Water operates eight manufacturing and product development facilities and has annual revenues of approximately US$200 million. The company's headquarters and technology center is located in Marysville, Mich. The company has operations in Mexico. In 2005, KPS Special Situations Fund II, L.P., and KPS Special Situations Fund II(A), L.P., acquired Blue Water Automotive through a stock purchase transaction. In 2006, the company acquired the automotive assets and operations of Injectronics, Inc., a manufacturer of thermoplastic injection molded components and assemblies. KPS then set about reorganizing the company. The company implemented a program to improve operating performance and address its liquidity issues. During 2007, the company replaced senior management, closed two facilities, and reduced overhead spending by one third. Blue Water Automotive and four affiliates filed for chapter 11 bankruptcy protection Feb. 12, 2008, before the United States Bankruptcy Court Eastern District of Michigan (Detroit) (Case No. 08-43196). Judy O'Neill, Esq., and Frank DiCastri, Esq., at Foley & Lardner, LLP, serves as the Debtors' bankruptcy counsel. Administar Services Group LLC acts as the Debtors' claims, noticing, and balloting agent. Blue Water's bankruptcy petition lists assets and liabilities each in the range of US$100 million to US$500 million. (Blue Water Automotive Bankruptcy News, Bankruptcy Creditors' Service Inc., http://bankrupt.com/newsstand/or 215/945-7000) BLUE WATER: Wants to Hire Lambert Leser as Special Counsel ---------------------------------------------------------- Pursuant to Section 327(a) of the Bankruptcy Code, Blue Water Automotive and its debtor-affiliates seek authority from the the United States Bankruptcy Court Eastern District of Michigan to employ Lambert, Leser, Isackson, Cook & Giunta, P.C., as special bankruptcy counsel for purposes of representing them in matters that would potentially be of conflict to the matters already handled by Foley & Lardner, LLP, their primary bankruptcy counsel. The Debtors believe that Lambert Leser's extensive experience in bankruptcy matters will play an integral and crucial role in their Chapter 11 case. As the Debtors' special purpose counsel, Lambert Leser will represent the Debtors in conflict matters including: (a) preparation of pleadings and other papers only at the direction of the Debtors; (b) appearance at hearings at the request of and direction of the Debtors to implement strategy they devised; (c) performance of other tasks at the specific request of the Debtors, but only at the direction of and under the supervision of the Debtors' general counsel; and (d) non-formulation of strategy in the Chapter 11 proceedings as that task will be performed solely by Foley & Lardner. The Debtors will pay these Lambert Leser professionals according to their customary hourly rates: Professional Hourly Rate ------------ ----------- Susan M. Cook US$350 Rozanne M. Giunta US$350 Keith A. Schofner US$300 Winnifred P. Boylan US$250 John E. Gannon US$250 Adam D. Bruski US$175 Susan M. Cook, a member at Lambert Leser, assures the Court that the firm is a "disinterested person" as that term is defined in Section 101(14) of the Bankruptcy Code, and the firm does not hold any interest adverse to all parties-in-interest. About Blue Water Automotive Blue Water Automotive Systems, Inc. designs and manufactures engineered thermoplastic components and assemblies for the automotive industry. The company's product categories include airflow management, full interior trim/sub-systems, functional plastic components, and value-added assemblies. They are supported by full-service design, program management, manufacturing and tooling capabilities. With more than 1,400 employees, Blue Water operates eight manufacturing and product development facilities and has annual revenues of approximately US$200 million. The company's headquarters and technology center is located in Marysville, Mich. The company has operations in Mexico. In 2005, KPS Special Situations Fund II, L.P., and KPS Special Situations Fund II(A), L.P., acquired Blue Water Automotive through a stock purchase transaction. In 2006, the company acquired the automotive assets and operations of Injectronics, Inc., a manufacturer of thermoplastic injection molded components and assemblies. KPS then set about reorganizing the company. The company implemented a program to improve operating performance and address its liquidity issues. During 2007, the company replaced senior management, closed two facilities, and reduced overhead spending by one third. Blue Water Automotive and four affiliates filed for chapter 11 bankruptcy protection Feb. 12, 2008, before the United States Bankruptcy Court Eastern District of Michigan (Detroit) (Case No. 08-43196). Judy O'Neill, Esq., and Frank DiCastri, Esq., at Foley & Lardner, LLP, serves as the Debtors' bankruptcy counsel. Administar Services Group LLC acts as the Debtors' claims, noticing, and balloting agent. Blue Water's bankruptcy petition lists assets and liabilities each in the range of US$100 million to US$500 million. (Blue Water Automotive Bankruptcy News, Bankruptcy Creditors' Service Inc., http://bankrupt.com/newsstand/or 215/945-7000) BRISTOW GROUP: S&P Changes Outlook to Stable; Retains BB Rating --------------------------------------------------------------- Standard & Poor's Ratings Services revised its outlook on helicopter services provider Bristow Group Inc. to stable from negative. At the same time, S&P affirmed all ratings, including the 'BB' corporate credit rating, on the company. As of Dec. 31, 2007, Bristow had approximately $779 million in debt, adjusted for guarantees, operating leases, and postretirement benefit obligations. "The outlook revision reflects the improvement in Bristow's operating performance and financial leverage, and expectations that its new fleet additions in the currently robust market should allow it to continue to deleverage," said Standard & Poor's credit analyst Aniki Saha-Yannopoulos. The ratings reflect Bristow's participation in the highly cyclical and volatile oil and gas industry, exposure to weather and seasonal fluctuations that might limit flight hours, large capital spending program, and lack of free cash flow. These weaknesses are partially mitigated by the oligopolistic industry structure, Bristow's significant market share, and its geographic diversity. Headquartered in Houston, Texas, Bristow Group Inc. (NYSE:BRS) -- http://www.bristowgroup.com/-- fka Offshore Logistics Inc., provides helicopter transportation services to the worldwide offshore oil and gas industry with operations in the United States Gulf of Mexico and the North Sea. The company also has operations, both directly and indirectly, in offshore oil and gas producing regions of the world, including Alaska, Australia, Mexico, Nigeria, Russia and Trinidad. The company also provides production management services for oil and gas production facilities in the United States Gulf of Mexico. CEMEX SAB: Home Sales Surges 5.7% in Mexico Trading in 7 Weeks -------------------------------------------------------------- Cemex SAB has climbed 5.7% to MXN28.28 on home sales in Mexico City trading for seven weeks, William Freebairn of Bloomberg News reports. Deutsche Bank strategist Guilherme Paiva has named Cemex as one of his three "favorite stocks," adding that the company would benefit as the U.S. economy recovers later this year, the report says. Mr. Paiva, Bloomberg relates, has expected U.S. economy "will bottom" in the 2008 first quarter, boosting Mexican growth. Following Mr. Paiva's recommendation of investors to overweight Mexican stocks, Cemex was on the top in the Bolsa stock index, the report adds. Headquartered in Mexico, Cemex SA -- http://www.CEMEX.com/-- is a growing global building solutions company that provides high quality products and reliable service to customers and communities in more than 50 countries throughout the world, including Argentina, Colombia and Venezuela. Commemorating its 100th anniversary in 2006, CEMEX has a rich history of improving the well-being of those it serves through its efforts to pursue innovative industry solutions and efficiency advancements and to promote a sustainable future. * * * On May 30, 2005, Moody's Investors Service revised the ratings outlook on Cemex S.A. de C.V.'s Ba1 ratings to positive from stable. Ratings affected include the company's Ba1 ratings on approximately US$110 million in senior unsecured Euro notes and its senior implied rating. DURA AUTOMOTIVE: Reveals Liquidation Analysis Under Ch. 11 Plan --------------------------------------------------------------- DURA Automotive Systems, Inc., and its debtor affiliates 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. As reported in the Troubled Company Reporter on March 19, 2008, the Debtors filed an amended First Revised Joint Plan of Reorganization and Disclosure Statement explaining the Plan on March 13, 2008. The Hon. Kevin Carey of the U.S. Bankruptcy Court for the District of Delaware will convene a hearing on April 3, 2008, to determine whether the Disclosure Statement contains adequate information. Disclosure Statement Objections must be filed by March 28. The Debtors will begin soliciting votes on the Revised Plan upon approval of the Disclosure Statement. Pursuant to the liquidation analysis, 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 assumes that each of the Debtors' cases will convert to Chapter 7 on June 1, 2008. Liquidation Analysis Dura Automotive Systems, Inc. & affiliates As of June 1, 2007 (in thousands) Hypothetical Recovery Amount ---------------------------- Low High Midpoint -------- -------- -------- Cash and Cash Equivalents 8,339 8,339 8,339 Accounts Receivable 64,980 74,939 69,960 Inventory 29,203 35,920 32,562 Plant, Property and Equipment, net 49,973 58,018 53,995 Other Assets 2,843 3,056 2,949 Preference Analysis 8,900 21,800 15,350 Intercompany Receivables 179,869 186,829 183,349 -------- -------- -------- Equity Value - Non-Debtors 200,030 211,871 205,951 -------- -------- -------- Total Proceeds from Assets 544,137 600,772 572,455 Costs Associated With Liquidation: Chapter 7 Trustee Fees 16,290 17,815 17,052 Other Professionals 7,200 5,400 6,300 Wind -Down Costs 15,960 15,420 15,690 -------- -------- -------- Total 39,450 38,635 39,042 Estimated Net Proceeds Available for Distribution US$504,687 US$562,138 US$533,412 DIP Facility Claims: DIP Revolver 44,680 44,680 44,680 DIP Term 151,500 151,500 151,500 Professional Fee Carve Out 13,000 13,000 13,000 -------- -------- -------- Total 209,180 209,180 209,180 Recovery Rate 100% 100% 100% -------- -------- -------- Estimated Net Proceeds Available for Distribution 295,507 352,958 324,232 Prepetition Secured Debt 228,589 228,589 228,589 Recovery Rate 100% 100% 100% -------- -------- -------- Estimated Net Proceeds Available for Distribution 66,919 124,369 95,644 Administrative Claims: Lease Rejection Claims 1,311 1,463 1,387 Post-Petition Trade Payables 30,839 34,413 32,626 Other Postpetition Liabilities 30,776 34,342 32,559 503(b)(9) 1,461 1,631 1,546 Intercompany Payables/Notes 2,471 2,757 2,614 Other 61 68 64 -------- -------- -------- Total 66,919 74,674 70,797 Recovery Rate 90% 100% 95% -------- -------- -------- Estimated Net Proceeds Available for Distribution - 49,695 24,847 Priority Prepetition Unsecured Claims: Tax obligations - 5,433 2,716 Other - 8 4 -------- -------- -------- Total - 5,441 2,721 Recovery Rate 0% 100% 50% -------- -------- -------- Estimated Net Proceeds Available for Distribution - 44,254 22,127 General Unsecured Claims: Rejection Damage Claims - 241 121 Prepetition Trade Payables - 1,099 550 Prepetition Intercompany Payables/Notes - 621 310 Pension Claims - 1,129 565 Senior Unsecured Notes - 15,761 7,881 Senior Subordinated Notes - 21,108 10,554 Convertible Trust Securities - 2,196 1,098 Employee Benefits - 1,364 682 Other - 734 367 -------- -------- -------- Total - 44,254 22,127 Recovery Rate 0.0% 3.8% 1.9% Senior Unsecured Notes - Including Subordinated Debt - 39,066 19,533 Proceeds 0.0% 9.3% 4.7% A full-text copy of the Liquidation Analysis is available for free at http://bankrupt.com/misc/DURALiquidationAnalysis.pdf About DURA Rochester Hills, Michigan-based DURA Automotive Systems Inc. (Nasdaq: DRRA) -- http://www.DURAauto.com/-- is an independent designer and manufacturer of driver control systems, seating control systems, glass systems, engineered assemblies, structural door modules and exterior trim systems for the global automotive industry. The company is also a supplier of similar products to the recreation vehicle and specialty vehicle industries. DURA sells its automotive products to North American, Japanese and European original equipment manufacturers and other automotive suppliers. The company has three locations in Asia -- China, Japan and Korea. It has locations in Europe and Latin-America, particularly in Mexico, Germany and the United Kingdom. The Debtors filed for chapter 11 petition on Oct. 30, 2006 (Bankr. D. Del. Case No. 06-11202). Richard M. Cieri, Esq., Marc Kieselstein, Esq., Roger James Higgins, Esq., and Ryan Blaine Bennett, Esq., of Kirkland & Ellis LLP are lead counsel for the Debtors' bankruptcy proceedings. Mark D. Collins, Esq., Daniel J. DeFranseschi, Esq., and Jason M. Madron, Esq., of Richards Layton & Finger, P.A. Attorneys are the Debtors' co- counsel. Baker & McKenzie acts as the Debtors' special counsel. Togut, Segal & Segal LLP is the Debtors' conflicts counsel. Miller Buckfire & Co., LLC is the Debtors' investment banker. Glass & Associates Inc., gives financial advice to the Debtor. Kurtzman Carson Consultants LLC handles the notice, claims and balloting for the Debtors and Brunswick Group LLC acts as their Corporate Communications Consultants for the Debtors. As of July 2, 2006, the Debtor had US$1,993,178,000 in total assets and US$1,730,758,000 in total liabilities. The Debtors have asked the Court to extend their plan filing period to April 30, 2008. (Dura Automotive Bankruptcy News, Issue No. 49; Bankruptcy Creditors' Service Inc., http://bankrupt.com/newsstand/or 215/945-7000) DURA AUTOMOTIVE: Ad Hoc Committee Seek to Inspect Records --------------------------------------------------------- James W. Korth -- managing partner at J.W. Korth & Company, on behalf of an ad hoc committee of holders of more than US$100,000,000 of 8-5/8% Senior Bonds and 9.0% Subordinated Bonds issued by DURA Automotive Systems, Inc. -- seeks permission from the U.S. Bankruptcy Court for the District of Delaware to examine the books and records of DURA under Rule 2004 of the Federal Rules of Bankruptcy Procedure to independently assess the value of the Debtors. Under DURA's Plan of Reorganization, noteholders are going to receive either 19.0% value of their investments or nothing depending on whether they own the senior or junior bonds. The Ad Hoc Committee also asks the Court to extend the time for parties-in-interest to file objections to the Plan and the Disclosure Statement explaining the Plan until April 10, 2008. The Ad Hoc Committee wants to examine and retain copies of certain DURA documents, including: * the monthly income statements and balance sheets of each subsidiary of DURA, or subsidiaries of subsidiaries, and subsidiaries of subsidiaries of subsidiaries, of DURA for the past two years until the end of February 2008; * the general ledger for each subsidiary for the past two years up until the end of February 2008; * the detail of the analysis of the goodwill of each subsidiary whereby the Debtor last certified that goodwill and then wrote off that goodwill in November 2006; * the notes and aggregation statements that form the basis for all Monthly Operating Reports filed in the Court; * a specific written statement line by line from the Debtor on how the planned Fresh Start balance sheet will differ from the balance sheet included in the Monthly Operating Reports and justification for the differences; * the contracts and any amendments with the Debtors and Alix Partners and Miller Buckfire and Kirkland & Ellis LLP; * the background notes and compilations that went into creating the latest Disclosure Statement; * copies of the presentation to potential lenders for the failed Exit Financing in December 2007; * the original underwriting files for the bonds including all notes regarding the creation of each issue's indenture and the original proposals by the underwriters for those issues along with the underwriting agreements; * detailed analysis behind the income projections for the next three years as stated in the Disclosure Statement; and * invoices and notes from the trustees for the senior or subordinated bonds. About DURA Rochester Hills, Mich.-based DURA Automotive Systems Inc. (Nasdaq: DRRA) -- http://www.DURAauto.com/-- is an independent designer and manufacturer of driver control systems, seating control systems, glass systems, engineered assemblies, structural door modules and exterior trim systems for the global automotive industry. The company is also a supplier of similar products to the recreation vehicle and specialty vehicle industries. DURA sells its automotive products to North American, Japanese and European original equipment manufacturers and other automotive suppliers. The company has three locations in Asia -- China, Japan and Korea. It has locations in Europe and Latin-America, particularly in Mexico, Germany and the United Kingdom. The Debtors filed for chapter 11 petition on Oct. 30, 2006 (Bankr. D. Del. Case No. 06-11202). Marc Kieselstein, P.C., Esq., Roger James Higgins, Esq., and Ryan Blaine Bennett, Esq., at Kirkland & Ellis LLP are lead counsel for the Debtors' bankruptcy proceedings. Daniel J. DeFranseschi, Esq., and Jason M. Madron, Esq., at Richards Layton & Finger, P.A. Attorneys are the Debtors' co-counsel. Baker & McKenzie acts as the Debtors' special counsel. Togut, Segal & Segal LLP is the Debtors' conflicts counsel. Miller Buckfire & Co., LLC is the Debtors' investment banker. Glass & Associates Inc., gives financial advice to the Debtor. Kurtzman Carson Consultants LLC handles the notice, claims and balloting for the Debtors and Brunswick Group LLC acts as their Corporate Communications Consultants for the Debtors. As of July 2, 2006, the Debtor had US$1,993,178,000 in total assets and US$1,730,758,000 in total liabilities. The Debtors have asked the Court to extend their plan filing period to April 30, 2008. (Dura Automotive Bankruptcy News, Issue No. 49; Bankruptcy Creditors' Service Inc., http://bankrupt.com/newsstand/or 215/945-7000) EMPRESAS ICA: Acquires Consorcio del Mayab for MXN870 Million ------------------------------------------------------------- Empresas ICA S.A.B. de C.V. is acquiring Consorcio del Mayab for MXN870 million, paper El Financiero reports. According to ICA, the acquisition would be merging the investment into its financial results, including the 2.13 billion pesos debt, with payment deadlines in 2019 and 2020. The debt would be paid off with toll charges on the Kantunil highway, of which Consorcio del Mayab was concessionaire. ICA disclosed that on Dec. 31, 2007, the average daily traffic on the highway was 2,658 vehicles, an 11% increase over 2006 traffic. The report says that ICA would begin the concession on March 31, 2008. Empresas ICA -- http://www.ica.com.mx/-- the largest engineering, construction, and procurement company in Mexico, was founded in 1947. ICA has completed construction and engineering projects in 21 countries. ICA's principal business units include civil construction and industrial construction. Through its subsidiaries, ICA also develops housing, manages airports, and operates tunnels, highways, and municipal services under government concession contracts and/or partial sale of long-term contract rights. * * * As reported in the Troubled Company Reporter-Latin America on Sept. 20, 2007, Standard & Poor's Ratings Services affirmed its 'BB-' long-term corporate credit rating on Empresas ICA S.A.B. de C.V. S&P said the outlook is stable. INTERNATIONAL RECTIFIER: Covenant Defaults Waived Until July 31 --------------------------------------------------------------- International Rectifier Corp. said in a regulatory filing with the Securities and Exchange Commission Friday, that on Dec. 14, 2007, the company, certain lenders and JPMorgan Chase Bank National Association, entered into Amendment No. 4 to their revolving credit agreement dated as of Nov. 6, 2006. Amendment No. 4 provides for the Revolver Banks' agreement that, in light of the ongoing investigation on accounting irregularities at the company's Japan subsidiary, conducted at the request of the Audit Committee of its Board of Directors by independent investigators hired by outside legal counsel, the company will not be deemed in default in respect of certain representations, warranties, covenants and reporting requirements during a period ending not later than March 31, 2008 (the "Amendment Period"). In addition, the Fourth Amendment provides that the Revolver Banks shall have no obligation to make any extensions of credit under the Revolver Agreement (other than the renewal of currently outstanding letters of credit in existing amount) until (i) the company's investigation has been concluded, (ii) the Revolver Banks have received a report of the results thereof and revised audited consolidated financial statements of the company, reasonably satisfactory to the Revolver Banks, and (iii) no other Default exists. On March 17, 2008, the company and the Revolver Banks entered into Amendment No. 5 to the Revolving Agreement, pursuant to which the term of the Amendment Period was extended (on substantially identical terms as the Fourth Amendment) through July 31, 2008. The Revolver Agreement, dated as of Nov. 6, 2006, provides for, among other things, a revolving credit facility with total commitments in the principal amount of US$150,000,000. At March 17, 2008, the company had no borrowings and approximately US$4.3 million in letters of credit outstanding under the Revolver Agreement. A full-text copy of Amendment No. 5 to the Revolving Agreement, executed and delivered as of March 17, 2008, is available for free at http://researcharchives.com/t/s?2968 About International Rectifier Based in El Segundo, California, International Rectifier Corporation (NYSE:IRF) -- http://www.irf.com/-- is a designer, manufacturer and marketer of power management product devices, which use power semiconductors. The company's products are used in a variety of end applications, including computers, communications networking, consumer electronics, energy- efficient appliances, lighting, satellites, launch vehicles, aircraft and automotive diesel injection. Its products consist of Power Management Integrated Circuits (Power Management ICs), Power Components and Power Systems. It summarizes its segments in two groups: Focus Products and Non-Focus Products. The company has manufacturing facilities in the U.S., Mexico, United Kingdom, Germany and Italy; and has subsidiaries in Japan and Singapore. * * * International Rectifier Corporation continues to carry Standard & Poor's 'BB' long term foreign and local issuer credit ratings, which were placed in April 2007. MAXCOM TELECOM: Holds Annual Shareholder Meeting ------------------------------------------------ Maxcom Telecomunicaciones, S.A.B. de C.V. held its annual shareholder meeting on March 24, 2008, in which its shareholders approved, among other, these items: -- The 2007 annual report by the Chief Executive Officer and the Board of Directors. -- The 2007 audited financial statements. -- The stock buy-back plan for 2008. -- The appointment of new directors to the board. After PricewaterhouseCoopers finished their auditing process of the 2007 financial statements, Maxcom adopted new accounting criteria to recognize the cost of stock options related to the consummation of the company's initial public offering. As a result, the cost of such options was recognized when it was granted instead of when the option was exercised, as originally stated in Maxcom's Initial Public Offering Prospectus dated Oct. 18, 2007; thereby, booking such cost in the fourth quarter of 2007 rather than beginning second quarter of 2008. This cost represented a non-cash item for the company in the amount of MXN24 million. Additionally, a stock buy-back plan was approved for up to MXN36 million. The plan will operate locally, under the Mexican Stock Exchange rules, and other than providing liquidity to the stock from time to time, it may also be used to provide shares for the different stock option plans the company has in place, partially offsetting the dilution effect of such plans. Finally, the shareholders nominated and appointed Gabriel Vazquez as director, and Efrain Ruvalcaba and Jorge Vazquez as alternate directors to the board. Therefore, the Maxcom's new board is comprised of: Directors Alternate Directors ------------------------------------------------------------ Adrian Aguirre Gomez (Chair) Maria Guadalupe Aguirre Gomez Eduardo Vazquez (Vice-Chair) Jorge Vazquez Gabriel Vazquez Efrain Ruvalcaba Perez Lauro Gonzalez Moreno (Vacant) Rodrigo Guerra Botello (Vacant) Jacques Gliksberg Marco Viola Rene S. Sagastuy F. (Vacant) Marco Provencio Munoz (Vacant) Alfonso Gonzalez Migoya (Vacant) Headquartered in Mexico City, Mexico, Maxcom Telecomunicaciones, SA de CV, is a facilities-based telecommunications provider using a "smart-build" approach to deliver last-mile connectivity to micro, small and medium-sized businesses and residential customers in the Mexican territory. Maxcom Telecomunicaciones launched commercial operations in May 1999 and is currently offering Local, Long Distance and Internet & Data services in greater metropolitan Mexico City, Puebla and Queretaro. * * * As reported in the Troubled Company Reporter-Latin America on Feb. 4, 2008, Moody's Investors Service confirmed Maxcom Telecomunicaciones, S.A. de C.V.'s corporate family rating at B3. At the same time, Moody's confirmed its B3 rating on the company's US$200 million in Senior Unsecured notes due in 2014. Moody's said the outlook for all ratings is now positive. Moody's rating action concludes the review for upgrade initiated in November 2007. ======= P E R U ======= GRAN TIERRA: Launches Construction of Popa-2 Exploration Well ------------------------------------------------------------- Gran Tierra Energy has started building the Popa-2 exploration well in the Rio Magdalena block. According to Gran Tierra, drilling for the well will begin in April. Meanwhile, planning continues for the work-over of the Palmera-1 well in the Azar block, BNamericas notes. Testing for Palmera-1 will start in the second quarter, BNamericas states. Headquartered in Calgary, Canada, Gran Tierra Energy Inc. (OTCBB: GTRE.OB) -- http://www.grantierra.com/-- is an international oil and gas exploration and production company with substantial interests and prospective properties in Argentina, Colombia and Peru. * * * In a 10-Q filing dated Nov. 8, 2007 with the U.S. Securities and Exchange Commission, Gran Tierra Energy Inc.'s management disclosed that the company's ability to continue as a going concern is dependent upon obtaining the necessary financing to acquire, explore and develop oil and natural gas interests and generate profitable operations from its oil and natural gas interests in the future. The company incurred a net loss of US$10,630,571 for the nine months ended Sept. 30, 2007, and had an accumulated deficit of US$18,673,955 as at Sept. 30, 2007. The company expects to incur substantial expenditures to further its capital investment programs and the company's existing cash balance and cash flow from operating activities may not be sufficient to satisfy its current obligations and meet its capital investment commitments. To provide financing for Gran Tierra's ongoing operations, the company said it secured a US$50 million credit facility with Standard Bank Plc on Feb. 28, 2007, which will provide additional financing for the company's future operations. As at Sept. 30, 2007, the company said it has not drawn-down on this facility. The company's intention is to build a portfolio of oil and natural gas production, development, and exploration opportunities using the capital raised during 2006, cash provided by future operating activities and by using the available credit facility. However, the company said it may need to secure additional sources of capital to fund its future operating activities. ==================== P U E R T O R I C O ==================== DORAL FINANCIAL: Raymond James Downgrades Firm to Underperform -------------------------------------------------------------- US investment bank Raymond James has downgraded Doral Financial Corp. to "underperform" from "market perform," Business News Americas reports. According to BNamericas, the downgrade was due to: -- disconcerting credit quality trends, -- poor earnings visibility, and -- lofty valuation level. Raymond James said in a report, "We believe a fair market valuation is closer to US$10 per share than US$20 per share. However, the stock price has benefited from a low float, which has fueled short squeezes and speculative price changes." Raymond James told BNamericas that Doral Financial's non- performing assets increased to over 13% of total loans while net charge-offs almost tripled in the fourth quarter 2007, compared to the third quarter 2007. "Although the new management team has made substantial progress in restructuring and recapitalizing the company, we still project quarterly operating losses through 2009," Raymond James commented to BNamericas. Based in New York City, Doral Financial Corp. (NYSE: DRL) -- http://www.doralfinancial.com/-- is a diversified financial services company engaged in mortgage banking, banking, investment banking activities, institutional securities and insurance agency operations. Its activities are principally conducted in Puerto Rico and in the New York City metropolitan area. Doral is the parent company of Doral Bank, a Puerto Rico based commercial bank; Doral Securities, a Puerto Rico based investment banking and institutional brokerage firm; Doral Insurance Agency Inc. and Doral Bank FSB, a federal savings bank based in New York City. * * * As reported in the Troubled Company Reporter-Latin America on Dec. 28, 2007, Standard & Poor's Ratings Services said that its 'B' long-term counterparty credit rating on Doral Financial Corp. remains on CreditWatch Positive, where it was placed July 20, 2007. GENESCO: Moody's Affirms B1 Ratings on Merger Suit Settlement ------------------------------------------------------------- Moody's Investors Service confirmed Genesco Inc.'s corporate family and probability of default ratings at B1. The rating outlook is stable. The confirmation reflects that the company's credit profile is unchanged by the successful settlement between Genesco, Finish Line, and UBS of the lawsuits surrounding the disputed plan of merger between Genesco and Finish Line. While the settlement agreement results in Genesco receiving US$175 million in cash, all of the after tax proceeds will be distributed to shareholders and therefore has no impact on the company's financial metrics. This action concludes the review for possible downgrade that was initiated on April 20, 2007. These ratings are confirmed: -- Corporate family rating at B1; -- Probability of default rating at B1; -- US$86 million convertible senior subordinated debentures at B2 (LGD5; 72%). Moody's does not rate Genesco's US$200 million asset-based revolving credit facility. The B1 corporate family rating reflects the company's moderately weak credit metrics, as well as Moody's expectation for a further modest weakening in credit metrics over the next twelve months as a result of an overall soft retail sales environment. The rating is also constrained by both the company's very high business risk given its very narrow product niches and its high seasonality. The rating also incorporates the company's national geographic presence, its reasonable level of profitability, its average size and scale, its moderate financial policies and its adequate liquidity. The stable outlook reflects Moody's expectation that the company will maintain adequate liquidity and that its current rating level incorporates the expectation for a modest level of additional deterioration in credit metrics given the current weak retail sales environment. Headquartered in Nashville, Tennessee, Genesco Inc. (NYSE: GCO) -- http://www.genesco.com/-- is a specialty retailer of footwear, headwear and accessories in more than 1,900 retail stores in the U.S., Canada and Puerto Rico In addition, Genesco also is a wholesaler of branded footwear. For the fiscal year ended Feb. 2, 2008 revenues were approximately US$1.5 billion. ================= V E N E Z U E L A ================= NORTHWEST AIRLINES: Unable to Reach Pact for Pilots with Delta -------------------------------------------------------------- Northwest Airlines Corporation and Delta Air Lines Inc. were unable to reach an agreement on an acceptable seniority list integration, Delta's Pilot Union Chairman Lee Moak disclosed in a letter addressed to rank-and-file Delta pilots, The Associated Press reports. AP says Mr. Moak's letter referred to discussions with the "other carrier" in the past tense, which suggests there won't be further talks -- at least for now. The "other carrier" is presumed to be Northwest, officials close to the talks have said, says the report. Mr. Moak confirmed in his letter that the other carrier was only willing to discuss its latest proposal, to which he declined, believing it would "jeopardize the seniority and career expectations of Delta pilots." Delta executives previously stated they would not move forward with any combination unless the seniority of their employees was protected, according to AP. Delta pilot leaders are frustrated that "the results of their efforts will never be actualized," Mr. Moak said. Northwest spokesman Greg Rizzuto, said that his union "still values any deal to help better the careers of all pilots involved in any type of future merger or acquisition with any pilot group and due to the rising cost of oil it is imperative that a fair integration of seniority lists be found between any group." A full-text copy of Moak's letter is available for free at: http://crewroom.alpa.org/dal/DesktopDefault.aspx?tabid=2421 Talks Resume After Brief Impasse As reported in the Troubled Company Reporter on March 13, 2008, Delta and Northwest Airlines pilot leaders resumed talks on March 4, 2008, to reach an agreement on how to "mesh" their unions. The meetings have involved a handful of senior pilots and are not formal negotiations. As widely reported, the pilot negotiators of both carriers had an impasse over the combination of seniority rankings for 12,000 pilots. A pilots' agreement is the last major step needed for the carriers to merge. "Nothing can be accomplished if they're not talking, so just getting them back together in the same room is a big step," Kit Darby, a retired United Airlines pilot who now runs Air Inc., an Atlanta-based career-counseling firm for pilots, said. "Pilots get their rewards from a contract that's governed by seniority. This is everything to them." About Delta Air Based in Atlanta, Georgia, Delta Air Lines Inc. (NYSE:DAL) -- http://www.delta.com/-- is the world's second-largest airline in terms of passengers carried and the leading U.S. carrier across the Atlantic, offering daily flights to 328 destinations in 56 countries on Delta, Song, Delta Shuttle, the Delta Connection carriers and its worldwide partners. Delta flies to Argentina, Australia and the United Kingdom, among others. The company and 18 affiliates filed for chapter 11 protection on Sept. 14, 2005 (Bankr. S.D.N.Y. Lead Case No. 05-17923). Marshall S. Huebner, Esq., at Davis Polk & Wardwell, represents the Debtors in their restructuring efforts. Timothy R. Coleman at The Blackstone Group L.P. provides the Debtors with financial advice. Daniel H. Golden, Esq., and Lisa G. Beckerman, Esq., at Akin Gump Strauss Hauer & Feld LLP, provide the Official Committee of Unsecured Creditors with legal advice. John McKenna, Jr., at Houlihan Lokey Howard & Zukin Capital and James S. Feltman at Mesirow Financial Consulting, LLC, serve as the Committee's financial advisors. The Debtors filed a chapter 11 plan of reorganization and disclosure statement explaining that plan on Dec. 19, 2007. On Jan. 19, 2007, they filed revisions to the plan and disclosure statement, and submitted further revisions to the plan on Feb. 2, 2007. On Feb. 7, 2007, the Court approved the Debtors' disclosure statement. In April 25, 2007, the Court confirmed the Debtors' plan. That plan became effective on April 30, 2007. The Court entered a final decree closing 17 cases on Sept. 26, 2007. (Delta Air Lines Bankruptcy News, Issue No. 92; Bankruptcy Creditors' Service, Inc., http://bankrupt.com/newsstand/or 215/945-7000) About Northwest Airlines Northwest Airlines Corp. (NYSE: NWA) -- http://www.nwa.com/-- is the world's fourth largest airline with hubs at Detroit, Minneapolis/St. Paul, Memphis, Tokyo and Amsterdam, and about 1,400 daily departures. Northwest is a member of SkyTeam, an airline alliance that offers customers one of the world's most extensive global networks. Northwest and its travel partners serve more than 1000 cities in excess of 160 countries on six continents. Northwest and its travel partners serve more than 1000 cities in excess of 160 countries on six continents, including Italy, Spain, Japan, China, Venezuela and Argentina. The company and 12 affiliates filed for chapter 11 protection on Sept. 14, 2005 (Bankr. S.D.N.Y. Lead Case No. 05-17930). Bruce R. Zirinsky, Esq., and Gregory M. Petrick, Esq., at Cadwalader, Wickersham & Taft LLP in New York, and Mark C. Ellenberg, Esq., at Cadwalader, Wickersham & Taft LLP in Washington represent the Debtors in their restructuring efforts. The Official Committee of Unsecured Creditors has retained Akin Gump Strauss Hauer & Feld LLP as its bankruptcy counsel in the Debtors' chapter 11 cases. When the Debtors filed for bankruptcy, they listed US$14.4 billion in total assets and US$17.9 billion in total debts. On Jan. 12, 2007, the Debtors filed with the Court their Chapter 11 Plan. On Feb. 15, 2007, they Debtors filed an Amended Plan & Disclosure Statement. The Court approved the adequacy of the Debtors' Disclosure Statement on March 26, 2007. On May 21, 2007, the Court confirmed the Debtors' Plan. The Plan took effect May 31, 2007. (Northwest Bankruptcy News, Issue No. 88; Bankruptcy Creditors' Service Inc., http://bankrupt.com/newsstand/or 215/945-7000) PETROLEOS DE VENEZUELA: To Ask Exxon Compensation for Damages ------------------------------------------------------------- Petroleos de Venezuela SA's President and Venezuelan Oil and Energy Minister Rafael Ramirez has indicated that the company will seek compensation for damages that Exxon Mobil Corp.'s lawsuit brought to the firm, Venezuelanalysis.com reports. Minister Ramirez told Venezuelanalysis.com that damages include a sharp drop in bond ratings after the asset freeze. As reported in the Troubled Company Reporter-Latin America on March 24, 2008, Judge Paul Walker of London Court dissolved an injunction freezing US$12 billion assets belonging to Petroleos de Venezuela. Petroleos de Venezuela won the legal battle because the dispute has no connection with the U.K. Exxon, which has battled in arbitration to bag compensation for an oil field President Hugo Chavez seized last year. According to Venezuelanalysis.com, the Venezuelan government gave Exxon Mobil until last Thursday to undo the damage it had done to the international reputation of Petroleos de Venezuela for pursuing a US$12 billion freeze of its assets during international arbitration in a dispute over the nationalization of the Orinoco Oil Belt project. Minister Ramirez told Venezuelanalysis.com that Exxon repeatedly tried to deceive the court by claiming that Petroleos de Venezuela isn't a state enterprise, that it is broken, and that the Venezuelan government has brought it "to a state of financial precariousness." Exxon Mobil could be obligated to pay over US$1 billion in damages to Petroleos de Venezuela, which would cancel out what the Venezuelan firm owed the US company's nationalized stake in the Cerro Negro project, and Exxon Mobil would have to deal with "grave consequences, not only in terms of international prestige... but in what they will face with their stockholders," Venezuelanalysis.com notes, citing David Paravisini, Venezuelan Ambassador to Guatemala and an engineer and expert on petroleum policy. Reports say that Exxon Mobil legal representative Alan Jeffers said that no appeal will be made on Judge Walker's decision. The court decision didn't challenge Exxon Mobil's overall goals against Petroleos de Venezuela, but instead established that the London court lacked jurisdiction over the case, Mr. Jeffers told Venezuelanalysis.com. Petroleos de Venezuela SA -- http://www.pdv.com/-- is Venezuela's state oil company in charge of the development of the petroleum, petrochemical and coal industry, as well as planning, coordinating, supervising and controlling the operational activities of its divisions, both in Venezuela and abroad. The company has a commercial office in China. PDVSA is one of the top exporters of oil to the US with proven reserves of 77.2 billion barrels of oil -- the most outside the Middle East -- and about 150 trillion cu. ft. of natural gas. PDVSA's exploration and production take place in Venezuela, but the company also has refining and marketing operations in the Caribbean, Europe, and the US. * * * As of Feb. 14, 2008, Fitch Ratings held Petroleos de Venezuela SA's long-term issuer default rating and local currency long term issuer default rating at BB-. Fitch said the ratings outlook is negative. PETROLEOS DE VENEZUELA: Draft Bill for Oil Profit Tax Now Ready --------------------------------------------------------------- The draft bill for the implementation of a tax on sudden profits obtained by oil companies like Petroleos de Venezuela SA is now ready, Prensa Latina reports, citing Venezuela's President Hugo Chavez. President Chavez commented to Prensa Latina, "Only the percentages are still without definition." Foreign oil firms in Venezuela and even Petroleos de Venezuela are earning more money than they expected, Prensa Latina notes, citing President Chavez. President Chavez told Prensa Latina, "These additional incomes come from the increase in crude oil prices and has its origin in factors outside new investments, or extraordinary efforts." Petroleos de Venezuela SA -- http://www.pdv.com/-- is Venezuela's state oil company in charge of the development of the petroleum, petrochemical and coal industry, as well as planning, coordinating, supervising and controlling the operational activities of its divisions, both in Venezuela and abroad. The company has a commercial office in China. PDVSA is one of the top exporters of oil to the US with proven reserves of 77.2 billion barrels of oil -- the most outside the Middle East -- and about 150 trillion cu. ft. of natural gas. PDVSA's exploration and production take place in Venezuela, but the company also has refining and marketing operations in the Caribbean, Europe, and the US. * * * As of Feb. 14, 2008, Fitch Ratings held Petroleos de Venezuela SA's long-term issuer default rating and local currency long term issuer default rating at BB-. Fitch said the ratings outlook 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 publication in any form (including e-mail forwarding, electronic re-mailing and photocopying) is strictly prohibited without prior written permission of the publishers. Information contained herein is obtained from sources believed to be reliable, but is not guaranteed. The TCR Latin America subscription rate is US$625 per half-year, delivered via e-mail. 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