/raid1/www/Hosts/bankrupt/TCRLA_Public/080424.mbx
T R O U B L E D C O M P A N Y R E P O R T E R
L A T I N A M E R I C A
Thursday, April 24, 2008, Vol. 9, No. 81
Headlines
A R G E N T I N A
CAMPUS VIRTUAL: Seeks Bankruptcy Protection
CERVATRAS SA: Trustee to File General Report in Court Tomorrow
CUEROMAX SA: Trustee to File Individual Reports on April 25
DANA CORP: Inks Separation Pact with CEO & COO Michael Burns
DANA CORP: Ogre Wants Court to Overrule US$1.3MM Claim Objection
FUREX SA: Trustee to File Individual Reports in Court Tomorrow
INDUSAIRE SRL: Proofs of Claim Verification Deadline is June 23
LOS TACURUSES: Proofs of Claim Verification is Until June 18
MENENDEZ HERMANOS: Trustee to Verify Claims Until June 30
PARADOR EMPALME: Trustee to File General Report Tomorrow
PREVENCION Y SEGURIDAD: Trustee to Verify Claims Until June 16
SENDRA DANIEL: Trustee to File Individual Reports Tomorrow
SPI SRL: Proofs of Claim Verification Deadline is June 2
TELEFONICA DE ARGENTINA: Amends Stock Purchase Pact w/ Datacorp
TYSON FOODS: To Appeal Chicken Advertising Case
B A R B A D O S
BIOVAIL CORP: Bill Wells Assumes Chief Executive Officer Role
B E R M U D A
FAIRVIEW INSURANCE: Proofs of Claim Filing Deadline is May 7
FAIRVIEW INSURANCE: Sets Final Shareholders Meeting for May 27
WARNER CHILCOTT: To Issue First Quarter 2008 Earnings on May 9
XL CAPITAL: Posts Net Realized Loss on Investments of US$102.3MM
YRC WORLDWIDE: Agrees to Amendments on Aug. 17 Credit Agreement
YRC WORLDWIDE: Moody's Cuts CF Rating to Ba2; Outlook Negative
B R A Z I L
BANCO BRADESCO: BBVA Sells Stake in Bank for BRL2.29 Billion
BANCO ITAU: Roberto Setubal Won't Run Bank's Daily Operations
BRASIL TELECOM: Reports BRL248.3MM Net Income in First Qtr. 2008
COMPANHIA SIDERURGICA: Hires Goldman Sachs as Financial Advisor
ENERGIAS DO BRASIL: Power Distribution Rises 2.3% in 1st 3 Mos.
FLEXTRONICS INT'L: May Complete Phase 2 of Arima Deal This Month
GERDAU SA: To Invest US$180 Million in CCA Tie-Up
GERDAU SA: Quanex Shareholders Okay US$1.67 Billion Purchase
HEXCEL CORP: S&P Holds BB Corp. Credit Rating with Pos. Outlook
SHARPER IMAGE: Seeks to Employ RCR Real Estate Advisors
SHARPER IMAGE: Court OKs Womble Carlyle Employment as Counsel
C A Y M A N I S L A N D S
ABC CAYMAN: Proofs of Claim Filing is Until May 1
KELLET HOLDINGS: Proofs of Claim Filing Deadline is April 31
MUTSUKI GLOBAL: Proofs of Claim Filing Deadline is May 1
PARMALAT SPA: Can File Damages vs Citigroup, Says Parma Judge
PARMALAT SPA: Files EUR5-Billion Suit vs Hermes Asset Europe
PELOTON ABS: Proofs of Claim Filing Deadline is May 1
SAGAMINO GLOBAL: Proofs of Claim Filing is Until May 1
C O S T A R I C A
DOLE FOOD: Will Offset Carbon Emissions from Crop Transport
SIRVA INC: Committee to Challenge DIP Financing Order
SIRVA INC: OOIDA Insists Members Are Class 4 Creditors
SIRVA INC: Court Allows Triple Net's US$2 Million Claim
TERADYNE INC: Earns US$21.8 Million in First Quarter 2008
G U A T E M A L A
BANCO INDUSTRIAL: Fitch Puts 'B+(EXP)' Rating to Upcoming Notes
BANCO INDUSTRIAL: Moody's Rates Tier 1 Capital Notes at Ba3
J A M A I C A
NAT'L COMMERCIAL: Court Says No to Injunction Extension Plea
M E X I C O
ASARCO LLC: USW Examines Bankruptcy Status With Firm
BOWNE & CO: Improved Cash Flow Cues Moody's to Up Rating to Ba2
DIOMED HOLDINGS: Trustee Appoints 5-Member Creditors' Committee
DIOMED: Wants to Hire McGuireWoods as Bankruptcy Counsel
FEDERAL-MOGUL: Asbestos Trust Wants Pneumo Claims Holders Barred
FRONTIER AIRLINES: To Hire Davis Polk as Bankruptcy Counsel
FRONTIER AIRLINES: To Hire Togut Segal as Conflicts Counsel
GAP INC: March 2008 Net Sales Down 12% to US$1.37 Billion
GAP INC: Fitch Affirms IDR at BB+ on Considerable Liquidity
HASBRO INC: Earns US$37.5 Million in First Quarter 2008
PRIDE INTERNATIONAL: Board Drops Ownership Threshold to 10%
THERMADYNE HOLDINGS: Moody's Lifts CF Rating to B3 from Caa1
USG CORP: Mexican Unit's 1Q Operating Profit Falls to US$4 Mln.
P A R A G U A Y
MILLICOM INT'L: Posts US$158MM Net Income in Qtr. Ended March 31
P U E R T O R I C O
CARIBBEAN RESTAURANTS: S&P Lifts Rating to B- With Neg. Outlook
JETBLUE AIRWAYS: Loss Expectations Cue S&P to Cut Rating to B-
SEARS HOLDINGS: US$1 Bil. LOC End Won't Affect S&P's 'BB' Rating
U R U G U A Y
BANCO ITAU: Expects AFAP UnionCapital Buy to Get Regulators' OK
V E N E Z U E L A
CA LA ELECTRICIDAD: Fitch Upgrades Foreign and Local IDR to BB-
PETROLEOS DE VENEZUELA: Uruguay Unit Denies Wilson Relationship
PETROLEOS DE VENEZUELA: Inks Investment Project with ANCAP
PETROLEOS DE VENEZUELA: Gov't Approves Oil Sudden-Gains Tax
- - - - -
=================
A R G E N T I N A
=================
CAMPUS VIRTUAL: Seeks Bankruptcy Protection
-------------------------------------------
The National Commercial Court of First Instance No. 14 in Buenos
Aires is studying the merits of Campus Virtual SA's request to
enter bankruptcy protection.
Don Quijote filed a "Quiebra Decretada" petition, after failing
to pay its debts since April 12, 2008.
The petition, once approved by the court, will transfer control
of the company's assets to a court-appointed trustee who will
supervise the liquidation proceedings.
Clerk No. 28 assists the court in this case.
The debtor can be reached at:
Campus Virtual SA
Alicia Moreau de Justo 2030
Buenos Aires, Argentina
CERVATRAS SA: Trustee to File General Report in Court Tomorrow
--------------------------------------------------------------
Manuel Alberto Fada, the court-appointed trustee for Cervatras
S.A.'s bankruptcy proceeding, will present in the National
Commercial Court of First Instance in La Plata, Buenos Aires, a
general report containing an audit of the firm's accounting and
banking records on April 25, 2008.
Mr. Fada verified creditors' proofs of claim until
Oct. 22, 2007. He presented the validated claims as individual
reports in court on Dec. 4, 2007.
Mr. Fada is also in charge of administering Cervatras’ assets
under court supervision and will take part in their disposal to
the extent established by law.
The debtor can be reached at:
Cervatras S.A.
Athaona 3642, Barrio Parque San Vicente
Ciudad de Cordoba, Cordoba
Argentina
The trustee can be reached at:
Manuel Alberto Fada
Avenida General Paz 108
Cordoba, Argentina
CUEROMAX SA: Trustee to File Individual Reports on April 25
-----------------------------------------------------------
Rodolfo Fernando Daniel Torella, the court-appointed trustee for
Cueromax S.A.'s bankruptcy proceeding, will present in the
National Commercial Court of First Instance in Buenos Aires the
validated claims as individual reports on April 25, 2008.
Mr. Torella verified creditors' proofs of claim until
March 14, 2008. He will file in court a general report
containing an audit of Cueromax's accounting and banking records
on June 9, 2008.
Mr. Torella is also in charge of administering Cueromax's assets
under court supervision and will take part in their disposal to
the extent established by law.
The trustee can be reached at:
Rodolfo Fernando Daniel Torella
Arcos 3726
Buenos Aires, Argentina
DANA CORP: Inks Separation Pact with CEO & COO Michael Burns
------------------------------------------------------------
Michael Burns, on Jan. 31, 2008, tendered his resignation as
Dana Holding Corporation's president, chief executive officer,
chief operating officer, and member of the company's board of
directors. In line with Mr. Burns' resignation, Dana disclosed
in a filing with the U.S. Securities and Exchange Commission
that it has entered into a separation agreement with Mr. Burns
on March 27, 2008, pursuant to which Mr. Burns' employment
terminated on March 31, 2008.
In accordance with the terms of the Separation Agreement,
Mr. Burns continued to receive his base salary through March 31.
The Agreement also provides that Mr. Burns is entitled to:
(a) participate in all medical, dental, prescription drug,
hospitalization, life insurance and other welfare
coverages and benefits in which he was participating
immediately prior to the Resignation Date through the
Termination Date;
(b) a previously paid and disclosed incentive award earned in
2007 under Dana's 2007 Annual Incentive Plan;
(c) a previously disclosed incentive award earned in 2007
under Dana's 2007 Executive Incentive Compensation Plan;
(d) an accrued benefit plus interest in full satisfaction of
the Supplemental Retirement Benefit of which he will
receive 60% in cash and 40% in the form of an allowed
general unsecured claim;
(e) a payment in the amount of US$3,000,000 in consideration
for executing a Confidentiality, Non-Compete, Non-
Solicitation, Non-Disclosure and Non-Disparagement
Agreement with Dana Corporation;
(f) a payment in the amount of US$150,000 as additional
consideration for his obligations and commitments under
the Agreement, the Non-Compete Agreement and a release of
claims against Dana; and
(g) benefits under the Consolidated Omnibus Budget
Reconciliation Act commencing as of the Termination Date;
(h) payment of attorneys' fees reasonably incurred since
Nov. 1, 2007, in connection with his employment
arrangements or the termination, provided that the fees
will not exceed US$125,000; and
(i) all other or additional benefits to which Mr. Burns is
entitled in accordance with the applicable terms of any
applicable plan, program, agreement or arrangement of
Dana or any of its affiliates.
Under a Non-Compete Agreement, Mr. Burns has certain
confidentiality obligations and will be bound by certain
restrictive covenants, including one year non-competition and
non-solicitation restrictions that will prohibit him from
engaging in any business in competition with the businesses
conducted by Dana and from soliciting the customers and
employees of Dana. In addition, under the Release, Mr. Burns
will release any claims he might have against Dana.
A full-text copy of the Separation Agreement is available for
free at http://ResearchArchives.com/t/s?2ac9
About Dana Corp.
Based in Toledo, Ohio, Dana Corporation -- http://www.dana.com/
-- designs and manufactures products for every major vehicle
producer in the world, and supplies drivetrain, chassis,
structural, and engine technologies to those companies. Dana
employs 46,000 people in 28 countries. Dana is focused on being
an essential partner to automotive, commercial, and off-highway
vehicle customers, which collectively produce more than 60
million vehicles annually.
Dana has facilities in China in the Asia-Pacific, Argentina in
the Latin-American regions and Italy in Europe.
The company and its affiliates filed for chapter 11 protection
on March 3, 2006 (Bankr. S.D.N.Y. Case No. 06-10354). As of
Nov. 30, 2007, the Debtors listed US$7,131,000,000 in total
assets and US$7,665,000,000 in total debts resulting in a total
shareholders' deficit of US$534,000,000.
Corinne Ball, Esq., and Richard H. Engman, Esq., at Jones Day,
in Manhattan and Heather Lennox, Esq., Jeffrey B. Ellman, Esq.,
Carl E. Black, Esq., and Ryan T. Routh, Esq., at Jones Day in
Cleveland, Ohio, represented the Debtors. Henry S. Miller at
Miller Buckfire & Co., LLC, served as the Debtors' financial
advisor and investment banker. Ted Stenger from AlixPartners
served as Dana's Chief Restructuring Officer.
Thomas Moers Mayer, Esq., at Kramer Levin Naftalis & Frankel
LLP, represented the Official Committee of Unsecured Creditors.
Fried, Frank, Harris, Shriver & Jacobson, LLP served as counsel
to the Official Committee of Equity Security Holders. Stahl
Cowen Crowley, LLC served as counsel to the Official Committee
of Non-Union Retirees.
The Debtors filed their Joint Plan of Reorganization on
Aug. 31, 2007. On Oct. 23, 2007, the Court approved the
adequacy of the Disclosure Statement explaining their Plan.
Judge Burton Lifland of the U.S. Bankruptcy Court for the
Southern District of New York entered an order confirming the
Third Amended Joint Plan of Reorganization of the Debtors on
Dec. 26, 2007.
The Debtors' Third Amended Joint Plan of Reorganization was
deemed effective as of Jan. 31, 2008. Dana Corp., starting on
the Plan Effective Date, operated as Dana Holding Corporation.
(Dana Corporation Bankruptcy News, Issue No. 74; Bankruptcy
Creditors' Service Inc., http://bankrupt.com/newsstand/or
215/945-7000)
* * *
As reported in the Troubled Company Reporter-Latin America on
Feb. 13, 2008, Standard & Poor's Ratings Services assigned its
'BB-' corporate credit rating to Dana Holding Corp. following
the company's emergence from Chapter 11 on Feb. 1, 2008. S&P
said the outlook is negative.
At the same time, Standard & Poor's assigned Dana's
US$650 million asset-based loan revolving credit facility due
2013 a 'BB+' rating (two notches higher than the corporate
credit rating) with a recovery rating of '1', indicating an
expectation of very high recovery in the event of a payment
default.
In addition, S&P assigned a 'BB' bank loan rating to Dana's
US$1.43 billion senior secured term loan with a recovery rating
of '2', indicating an expectation of average recovery.
DANA CORP: Ogre Wants Court to Overrule US$1.3MM Claim Objection
----------------------------------------------------------------
Ogre Holdings, Inc., asks the U.S. Bankruptcy Court for the
Southern District of New York to overrule reorganized Dana
Corp.'s objection to Claim No. 14990 seeking damages as a result
of the rejection of a settlement agreement involving
environmental remediation at the Acraline Site in Tipton,
Indiana.
The Reorganized Debtors had objected to Claim No. 14990 and
asked the Court to estimate the Claim at US$1,300,000.
"Dana's arguments against Claim No. 14990 are off the mark,"
Frank J. Deveau, Esq., at Sommer Barnard PC, in Indianapolis,
Indiana, says.
Mr. Deveau asserts refutes the Reorganized Debtors' assertions
that they are only liable for 77.5% of any remediation costs at
the Tipton Site. He says now that the Reorganized Debtors have
rejected the settlement agreement, they are completely
responsible for the contamination at the Property. Mr. Deveau
tells the Court that the only reason why Ogre Holdings consented
to the settlement agreement was because Dana Corporation, now
Dana Holding Corporation, agreed to manage the remediation, pay
the bulk of the costs on an ongoing basis, and seek
reimbursement of all expenses from their insurers.
However, Mr. Deveau contends, due to the rejection of the
settlement agreement, Dana will not manage the remediation, will
not pay any costs on an ongoing basis, and will not seek any
reimbursement from insurers.
Ogre Holdings asserts that the amount sought in Claim No. 14990
is well supported by the reports and evaluations prepared by
Cornerstone Environmental, Health and Safety, Inc., an
environmental consulting firm who has spent nine years dealing
with the environmental issues and challenges posed by the
Property. Mr. Deveau says the approach espoused by Cornerstone
will remediate the Property to residential level closure
standards and will enable Ogre Holdings to obtain a covenant not
to sue.
Ogre Holdings says it intends to engage in discovery with the
Reorganized Debtors to determine what insurance coverage was
available as of the Petition Date to reimburse remediation
expenses at the Property. Ogre Holdings adds that it will
depose the Reorganized Debtors' environmental consultant,
Environmental Resources Management, with regard to its
remediation plan for the Property. Ogre Holdings says it will
present evidence from Cornerstone, Dr. Vicky Keramida, an
environmental engineer, and a municipal well-field expert, at
trial to support Claim No. 14990.
Based in Toledo, Ohio, Dana Corporation -- http://www.dana.com/
-- designs and manufactures products for every major vehicle
producer in the world, and supplies drivetrain, chassis,
structural, and engine technologies to those companies. Dana
employs 46,000 people in 28 countries. Dana is focused on being
an essential partner to automotive, commercial, and off-highway
vehicle customers, which collectively produce more than 60
million vehicles annually.
Dana has facilities in China in the Asia-Pacific, Argentina in
the Latin-American regions and Italy in Europe.
The company and its affiliates filed for chapter 11 protection
on March 3, 2006 (Bankr. S.D.N.Y. Case No. 06-10354). As of
Nov. 30, 2007, the Debtors listed US$7,131,000,000 in total
assets and US$7,665,000,000 in total debts resulting in a total
shareholders' deficit of US$534,000,000.
Corinne Ball, Esq., and Richard H. Engman, Esq., at Jones Day,
in Manhattan and Heather Lennox, Esq., Jeffrey B. Ellman, Esq.,
Carl E. Black, Esq., and Ryan T. Routh, Esq., at Jones Day in
Cleveland, Ohio, represented the Debtors. Henry S. Miller at
Miller Buckfire & Co., LLC, served as the Debtors' financial
advisor and investment banker. Ted Stenger from AlixPartners
served as Dana's Chief Restructuring Officer.
Thomas Moers Mayer, Esq., at Kramer Levin Naftalis & Frankel
LLP, represented the Official Committee of Unsecured Creditors.
Fried, Frank, Harris, Shriver & Jacobson, LLP served as counsel
to the Official Committee of Equity Security Holders. Stahl
Cowen Crowley, LLC served as counsel to the Official Committee
of Non-Union Retirees.
The Debtors filed their Joint Plan of Reorganization on
Aug. 31, 2007. On Oct. 23, 2007, the Court approved the
adequacy of the Disclosure Statement explaining their Plan.
Judge Burton Lifland of the U.S. Bankruptcy Court for the
Southern District of New York entered an order confirming the
Third Amended Joint Plan of Reorganization of the Debtors on
Dec. 26, 2007.
The Debtors' Third Amended Joint Plan of Reorganization was
deemed effective as of Jan. 31, 2008. Dana Corp., starting on
the Plan Effective Date, operated as Dana Holding Corporation.
(Dana Corporation Bankruptcy News, Issue No. 74; Bankruptcy
Creditors' Service Inc., http://bankrupt.com/newsstand/or
215/945-7000)
* * *
As reported in the Troubled Company Reporter-Latin America on
Feb. 13, 2008, Standard & Poor's Ratings Services assigned its
'BB-' corporate credit rating to Dana Holding Corp. following
the company's emergence from Chapter 11 on Feb. 1, 2008. S&P
said the outlook is negative.
At the same time, Standard & Poor's assigned Dana's US$650
million asset-based loan revolving credit facility due 2013 a
'BB+' rating (two notches higher than the corporate credit
rating) with a recovery rating of '1', indicating an expectation
of very high recovery in the event of a payment default.
In addition, S&P assigned a 'BB' bank loan rating to Dana's
US$1.43 billion senior secured term loan with a recovery rating
of '2', indicating an expectation of average recovery.
FUREX SA: Trustee to File Individual Reports in Court Tomorrow
--------------------------------------------------------------
Salomon S. Wilhelm, the court-appointed trustee for Furex S.A.'s
bankruptcy proceeding, will present in the National Commercial
Court of First Instance in Buenos Aires the validated claims as
individual reports on April 25, 2008.
Mr. Wilhelm verified creditors' proofs of claim until
March 7, 2007. He will file in court a general report
containing an audit of Furex's accounting and banking records
will be submitted in court on June 3, 2008.
Mr. Wilhelm is also in charge of administering Furex's assets
under court supervision and will take part in their disposal to
the extent established by law.
The trustee can be reached at:
Salomon S. Wilhelm
Lavalle 1290
Buenos Aires, Argentina
INDUSAIRE SRL: Proofs of Claim Verification Deadline is June 23
---------------------------------------------------------------
Susana Graciela Marino, the court-appointed trustee for
Indusaire SRL's bankruptcy proceeding, will be verifying
creditors' proofs of claim until June 23, 2008.
Ms. Marino will present the validated claims in court as
individual reports. The National Commercial Court of First
Instance No. 2 in Buenos Aires, with the assistance of Clerk
No. 3, will determine if the verified claims are admissible,
taking into account the trustee's opinion, and the objections
and challenges that will be raised by Indusaire and its
creditors.
Inadmissible claims may be subject for appeal in a separate
proceeding known as an appeal for reversal.
A general report that contains an audit of Indusaire's
accounting and banking records will be submitted in court.
La Nacion didn't state the submission dates for the reports.
Ms. Marino is also in charge of administering Indusaire's assets
under court supervision and will take part in their disposal to
the extent established by law.
The debtor can be reached at:
Indusaire SRL
Hidalgo 1370
Buenos Aires, Argentina
The trustee can be reached at:
Susana Graciela Marino
Uruguay 560
Buenos Aires, Argentina
LOS TACURUSES: Proofs of Claim Verification is Until June 18
------------------------------------------------------------
Norberto Perrone, the court-appointed trustee for Los Tacuruses
SA's bankruptcy proceeding, will be verifying creditors' proofs
of claim until June 18, 2008.
Mr. Perrone will present the validated claims in court as
individual reports. The National Commercial Court of First
Instance No. 23 in Buenos Aires, with the assistance of Clerk
No. 46, will determine if the verified claims are admissible,
taking into account the trustee's opinion, and the objections
and challenges that will be raised by Los Tacuruses and its
creditors.
Inadmissible claims may be subject for appeal in a separate
proceeding known as an appeal for reversal.
A general report that contains an audit of Los Tacuruses'
accounting and banking records will be submitted in court.
La Nacion didn't state the submission dates for the reports.
Mr. Perrone is also in charge of administering Los Tacuruses'
assets under court supervision and will take part in their
disposal to the extent established by law.
The debtor can be reached at:
Los Tacuruses SA
Esmeralda 819
Buenos Aires, Argentina
The trustee can be reached at:
Norberto Perrone
Constitucion 2894
Buenos Aires, Argentina
MENENDEZ HERMANOS: Trustee to Verify Claims Until June 30
---------------------------------------------------------
Estudio Aguilar, Pinedo, Rascado Fernandez y Asociados -- the
court-appointed trustee for Menendez Hermanos SA's
reorganization proceeding -- will be verifying creditors' proofs
of claim until June 30, 2008.
Estudio Aguilar will present the validated claims in court as
individual reports. The National Commercial Court of First
Instance No. 15 in Buenos Aires, with the assistance of Clerk
No. 22, will determine if the verified claims are admissible,
taking into account the trustee's opinion, and the objections
and challenges that will be raised by Menendez Hermanos and its
creditors.
Inadmissible claims may be subject for appeal in a separate
proceeding known as an appeal for reversal.
A general report that contains an audit of Menendez Hermanos'
accounting and banking records will be submitted in court.
La Nacion didn't state the reports submission deadlines.
Creditors will vote to ratify the completed settlement plan
during the assembly on April 15, 2009.
The debtor can be reached at:
Menendez Hermanos SA
Oruro 1168
Buenos Aires, Argentina
The trustee can be reached at:
Estudio Aguilar, Pinedo, Rascado Fernandez y Asociados
Montevideo 373
Buenos Aires, Argentina
PARADOR EMPALME: Trustee to File General Report Tomorrow
--------------------------------------------------------
Pablo Javier Kainsky, the court-appointed trustee for Parador
Empalme S.R.L.'s bankruptcy proceeding, will present in the
National Commercial Court of First Instance in Buenos Aires a
general report containing an audit of the firm's accounting and
banking records on April 25, 2008.
Mr. Kainsky verified creditors' proofs of claim until
Dec. 18, 2007. He presented the validated claims as individual
reports in court on March 7, 2008.
Mr. Kainsky is also in charge of administering Parador Empalme's
assets under court supervision and will take part in their
disposal to the extent established by law.
The trustee can be reached at:
Pablo Javier Kainsky
Reconquista 715
Buenos Aires, Argentina
PREVENCION Y SEGURIDAD: Trustee to Verify Claims Until June 16
--------------------------------------------------------------
Moises Gorelik, the court-appointed trustee for Prevencion y
Seguridad Total SRL's reorganization proceeding, will be
verifying creditors' proofs of claim until June 16, 2008.
Mr. Gorelik will present the validated claims in court as
individual reports. The National Commercial Court of First
Instance No. 15 in Buenos Aires, with the assistance of Clerk
No. 29, will determine if the verified claims are admissible,
taking into account the trustee's opinion, and the objections
and challenges that will be raised by Prevencion y Seguridad and
its creditors.
Inadmissible claims may be subject for appeal in a separate
proceeding known as an appeal for reversal.
A general report that contains an audit of Prevencion y
Seguridad's accounting and banking records will be submitted in
court.
La Nacion didn't state the reports submission deadlines.
Creditors will vote to ratify the completed settlement plan
during the assembly on April 1, 2009.
The debtor can be reached at:
Prevencion y Seguridad Total SRL
Paraguay 754
Buenos Aires, Argentina
The trustee can be reached at:
Moises Gorelik
Lavalle 1675
Buenos Aires, Argentina
SENDRA DANIEL: Trustee to File Individual Reports Tomorrow
----------------------------------------------------------
Carlos Antonio Palma, the court-appointed trustee for Sendra
Daniel C. y Juan J. Sendra S.H.'s bankruptcy proceeding, will
present in the National Commercial Court of First Instance in
Mendoza the validated claims as individual reports on
April 25, 2008.
Mr. Palma verified creditors' proofs of claim until
March 11, 2007. He will submit in court a general report
containing an audit of Sendra Daniel's accounting and banking
records on June 10, 2008.
Mr. Palma is also in charge of administering Sendra Daniel's
assets under court supervision and will take part in their
disposal to the extent established by law.
The trustee can be reached at:
Carlos Antonio Palma
9 de Julio 313, Ciudad de Mendoza
Mendoza, Argentina
SPI SRL: Proofs of Claim Verification Deadline is June 2
--------------------------------------------------------
Luis Di Cesare, the court-appointed trustee for SPI SRL's
bankruptcy proceeding, will be verifying creditors' proofs of
claim until June 2, 2008.
Mr. Di Cesare will present the validated claims in court as
individual reports. The National Commercial Court of First
Instance No. 23 in Buenos Aires, with the assistance of Clerk
No. 45, will determine if the verified claims are admissible,
taking into account the trustee's opinion, and the objections
and challenges that will be raised by SPI and its
creditors.
Inadmissible claims may be subject for appeal in a separate
proceeding known as an appeal for reversal.
A general report that contains an audit of SPI's accounting and
banking records will be submitted in court.
La Nacion didn't state the submission dates for the reports.
Mr. Di Cesare is also in charge of administering SPI's assets
under court supervision and will take part in their disposal to
the extent established by law.
The debtor can be reached at:
SPI SRL
Uruguay 43
Buenos Aires, Argentina
The trustee can be reached at:
Luis Di Cesare
Viamonte 1336
Buenos Aires, Argentina
TELEFONICA DE ARGENTINA: Amends Stock Purchase Pact w/ Datacorp
---------------------------------------------------------------
Telefonica de Argentina SA has amended its stock purchase
agreement with Telefonica Datacorp S.A., in which Datacorp will
sell to TASA the 14,948 Additional Shares representing 1.8578%
of Telefonica Data Argentina S.A.’s stock capital, to be
acquired by Datacorp.
In addition, the company and Datacorp agreed to:
(i) extend the term for the compliance of certain conditions
(including regulatory authorization and the completion of
the procedure for the acquisition of the minority
shareholders’ shares) for an additional 6-month period as
from June 17, 2008;
(ii) amend the price for the purchase and sale of the shares
to the amount of US$56 million for the shares
representing 97.89% of TDA S.A.’s capital stock, and
US$1 million for the shares to be acquired from TDA
S.A.’s minority shareholder,
(iii) subject the closing to the whole transaction to the
completion of the procedure for the acquisition of the
minority shareholders’ shares and the approval of this
amendment by the company’s Audit Committee and Board of
Directors, all of which should occur before Dec. 17,
2008.
Headquartered in Buenos Aires, Argentina, Telefonica de
Argentina SA -- http://www.telefonica.com.ar/-- provides
telecommunication services, which include telephony business
both in Spain and Latin America, mobile communications
businesses, directories and guides businesses, Internet, data
and corporate services, audiovisual production and broadcasting,
broadband and Business-to-Business e-commerce activities.
* * *
As reported in the Troubled Company Reporter-Latin America on
Feb. 21, 2008, Fitch Ratings upgraded its local currency issuer
default rating on Telefonica de Argentina to 'BB' from 'BB-'.
The ratings agency also affirmed its 'B+' foreign currency
issuer default rating on the telecom firm.
Telefonica de Argentina's foreign currency rating is rated B2 by
Moody's Latin America with a positive outlook.
TYSON FOODS: To Appeal Chicken Advertising Case
-----------------------------------------------
Tyson Foods Inc. will appeal the ruling of a federal judge in
Baltimore, who has granted a preliminary injunction against the
advertising Tyson uses to promote this line of products. The
company will also seek a stay to suspend the judge's instruction
to remove point of sale materials in stores that sell the
products.
"We strongly disagree with this decision and will appeal since
we firmly believe we have acted responsibly in the way we have
labeled and marketed our products," said Dave Hogberg, senior
vice president of Consumer Products for Tyson Foods. The
company will now take the legal dispute to the U.S. Court of
Appeals for the Fourth Circuit in Richmond, Virginia.
"Our company has complied with federal regulations throughout
the development of this product line and we intend to stand our
ground," Mr. Hogberg said. "Our chicken raised without
antibiotics that impact antibiotic resistance in humans is more
than a labeling and marketing program. It also represents a
change in the way our chickens are raised, as we work to provide
the kind of product nine out of ten of consumers tell us they
want."
After extensive consumer research and the appropriate government
approvals, Tyson started marketing its retail fresh chicken
under a USDA accepted "Raised Without Antibiotics" label in
summer 2007. After the USDA claimed an error in its approval of
a fully-disclosed antimicrobial feed ingredient under the
claim, the company later sought and received approval for a
modified label, which reads "Raised Without Antibiotics that
impact antibiotic resistance in humans."
The preliminary injunction does not affect the USDA-approved
product label used on Tyson's retail fresh chicken products. It
does affect Tyson advertising of the products, however, the
company is not currently running any ads and has none scheduled.
Company officials were not planning to resume advertising for
the campaign until just before the start of the summer grilling
season. The decision also affects point of sale materials, such
as posters and brochures, which are used in stores where the
product is sold. Since this issue directly impacts consumers
and customers, the company intends to seek a stay from the U.S.
Court of Appeals to suspend the judge's order.
"We've received overwhelming customer support for this product
line and intend to do everything possible to continue making it
available to our customers and consumers," said Scott Rouse,
senior vice president of Customer Development for Tyson Foods.
Based in Springdale, Arkansas, Tyson Foods, Inc. (NYSE:TSN) --
http://www.tysonfoods.com/-- is a processor and marketer of
chicken, beef, and pork.
The company makes a wide variety of protein-based and prepared
food products at its 123 processing plants. Tyson has
approximately 114,000 Team Members employed at more than 300
facilities and offices in 26 states and 80 countries.
Tyson's U.S. beef plants are located in Amarillo, Texas; Dakota
City, Nebraska; Denison, Iowa; Finney County, Kansas; Joslin,
Illinois, Lexington, Nebraska and Pasco, Washington. The
company also has a beef complex in Canada, and is involved in a
vertically integrated beef operation in Argentina.
* * *
As reported in the Troubled Company Reporter-Latin America on
April 8, 2008, Moody's Investors Service confirmed Tyson Foods,
Inc.'s corporate family rating and probability of default rating
at Ba1. Moody's said the rating outlook remains negative.
===============
B A R B A D O S
===============
BIOVAIL CORP: Bill Wells Assumes Chief Executive Officer Role
-------------------------------------------------------------
The board of directors of Biovail Corporation appointed Bill
Wells as chief executive officer, effective May 1, 2008. Mr.
Wells joined Biovail's board in 2005, and has been the company's
lead director since June 30, 2007. As CEO, Mr. Wells will
remain on the company's board.
The company also disclosed that the board has appointed
Dr. Douglas Squires as chairman of the board, effective May 1,
2008. Dr. Squires is the company's current interim chairman and
chief executive officer.
The appointments will conclude a year-long transition phase from
Eugene Melnyk, Biovail founder's exit, Donna Kardos of Wall
Street Journal reports.
According to WSJ, Mr. Melnyk resigned as chairman in May 2008,
as part of a settlement with the Ontario Securities Commission.
WSJ says that OSC alleged that he "repeatedly breached" Ontario
securities law by failing to file insider-trading reports on
more than 5,000 trades in Biovail shares earlier this decade.
Mr. Wells has extensive financial and leadership experience with
large companies, as chief financial officer of Loblaw Companies
Limited, Canada's food distributor and provider of general
merchandise, drugstore and financial products and services.
Prior to joining Loblaw, Mr. Wells was CFO of Bunge Limited in
the United States, a food and agri-business company. He led
Bunge's initial public offering on the New York Stock Exchange
and was a key member of the management team that grew Bunge's
market valuation from US$1.3 billion to over US$10 billion.
"Bill Wells brings a unique skill set to the CEO position at an
important time for the company and its shareholders," said
Dr. Squires. "[Mr. Wells] has gained intimate knowledge of the
company's business and operations from his service as a member
of the board and as lead director. He has significant
experience in strategic financial management for companies and
in the deployment of assets to maximize return on capital and
achieve key business objectives. [Mr. Wells] is exceptionally
well qualified to lead Biovail in this new phase of the
company's development."
"Biovail is a great company with outstanding potential to
deliver enhanced value for its shareholders," Mr. Wells said.
"I look forward to executing the company's new strategic plan,
which is being developed by the board and management."
"Loblaw has an outstanding group of people working on executing
Loblaw's turnaround plan, which I am confident will succeed,"
added Mr. Wells.
Consistent with Biovail's historical practice and its corporate,
operational and tax structure, Mr. Wells, as Biovail's key
decision maker, will be based in Barbados, where he will also
serve as president of Biovail Laboratories International SRL,
the company's principal operating subsidiary.
"We are pleased to have the benefit of Dr. Squires' extensive
pharmaceutical experience continue at the Board level with his
appointment as chairman," Michael Van Every, chairperson of
Biovail's audit committee, said. "We thank and commend
Dr. Squires for his strong leadership as CEO over the past three
years, a time of many challenges for the company, and we look
forward to his continued leadership in his role as chairman."
About Biovail Corporation
Based in Ontario, Canada, Biovail Corporation
(NYSE:BVF)(TSX:BVF) -- http://www.biovail.com/-- is a specialty
pharmaceutical company that applies advanced drug-delivery
technologies to improve the clinical effectiveness of medicines.
The company is engaged in the formulation, clinical testing,
registration, manufacture and commercialization of
pharmaceutical products. Its main therapeutic areas of focus
are central nervous system disorders, pain management and
cardiovascular disease. The primary markets for its products
are the United States and Canada. Biovail has a portfolio of
drug-delivery technologies includes controlled release, enhanced
absorption, rapid absorption, taste masking, and oral
disintegration technologies, among others.
Biovail operates R&D, manufacturing and clinical research
facilities in the U.S., Canada, Barbados, Puerto Rico and
Ireland. It markets its products directly in North American
through its marketing divisions Biovail Pharmaceuticals Inc. and
Biovail Pharmaceuticals Canada.
* * *
Standard & Poor's placed Biovail Corporation's long-term foreign
and local issuer credit ratings at 'BB'. The ratings still hold
to date with a stable outlook.
=============
B E R M U D A
=============
FAIRVIEW INSURANCE: Proofs of Claim Filing Deadline is May 7
------------------------------------------------------------
Fairview Insurance Group, Ltd.'s creditors have until
May 7, 2008, to prove their claims to Carolynn D. Hiron, 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.
Fairview Insurance's shareholders agreed on April 17, 2008, to
place the company into voluntary liquidation under The Companies
Law (2004 Revision) of the Cayman Islands.
The liquidator can be reached at:
Jennifer Y. Fraser
Canon's Court, 22 Victioria Street
Hamilton, Bermuda
FAIRVIEW INSURANCE: Sets Final Shareholders Meeting for May 27
--------------------------------------------------------------
Fairview Insurance Group, Ltd., will hold its final
shareholders' meeting on May 27, 2008, at 9:00 a.m. at Canon's
Court, 22 Victioria Street, Hamilton, Bermuda.
These matters will be taken up during the meeting:
-- receiving an account showing the manner in which
the winding-up of the company has been conducted
and its property disposed of and hearing any
explanation that may be given by the liquidator;
-- determination by resolution the manner in
which the books, accounts and documents of the
company and of the liquidator shall be
disposed; and
-- passing of a resolution dissolving the
company.
Fairview Insurance's shareholders agreed on April 17, 2008, to
place the company into voluntary liquidation under The Companies
Law (2004 Revision) of the Cayman Islands.
The liquidator can be reached at:
Jennifer Y. Fraser
Canon's Court, 22 Victioria Street
Hamilton, Bermuda
WARNER CHILCOTT: To Issue First Quarter 2008 Earnings on May 9
--------------------------------------------------------------
Warner Chilcott Ltd. will issue its first quarter 2008 financial
results prior to the market opening on May 9, 2008.
The company will host a conference call for all interested
parties on May 9, 2008 at 8:00 AM (Eastern Time) to review the
results. To participate in the call, please dial (877) 397-0297
in the United States and Canada or (719) 325-4913
internationally.
Investors and other interested parties may also access the
conference call via a simultaneous audio webcast by visiting
http://ir.wcrx.comand clicking on Events & Presentations.
A replay of the conference call will be available for two weeks
following the call and can be accessed by dialing (888) 203-1112
within the U.S. and Canada or (719) 457-0820 internationally.
The passcode for the replay is 6773545.
Headquartered in Hamilton, Bermuda, Warner Chilcott Ltd. --
http://www.warnerchilcott.com/-- is the holding company
for a host of pharmaceutical makers. Women's health care
products, including hormone therapies (femhrt and Estrace
Cream) and contraceptives (Estrostep, Loestrin, and OvCon), are
the company's largest segment. Other products include
dermatology treatments for acne (Doryx) and psoriasis (Dovonex
and Taclonex). United States subsidiary Warner Chilcott Inc.
makes prescription drugs for dermatology and women's health;
other subsidiaries provide services in data management systems,
pharmaceutical development, manufacturing, and chemical
development.
* * *
As reported in the Troubled Company Reporter-Latin America on
Jan. 8, 2008, Standard & Poor's Ratings Services revised its
outlook on specialty drug manufacturer Warner Chilcott Corp.,
Warner Chilcott Limited's subsidiary, to positive from stable.
The ratings, including B+ corporate credit rating, were
affirmed. "The outlook revision on the company reflects its
solid operational track record and improving financial profile
over the past two years," said S&P's credit analyst Arthur Wong.
XL CAPITAL: Posts Net Realized Loss on Investments of US$102.3MM
----------------------------------------------------------------
XL Capital Ltd reported net income available to ordinary
shareholders for the quarter ended March 31, 2008, of
US$211.9 million, or US$1.20 per ordinary share, compared with
US$549.7 million, or US$3.06 per ordinary share, for the quarter
ended March 31, 2007. The reduction in net income of
US$337.8 million is due primarily to:
-- A decrease in net income from investment affiliates of
US$107.1 million
-- Net realized losses on investments of US$102.3 million, as
compared to a gain of US$9.3 million in the prior year
quarter
-- A decrease in underwriting profit from Property and
Casualty operations of US$52.4 million
-- An increase in foreign exchange losses of US$44.2 million
-- A decrease in net income from financial operating
affiliates of US$39.6 million
Net income excluding net realized gains and losses for the first
quarter of 2008 was US$276.9 million, or US$1.57 per ordinary
share, compared with US$540 million, or US$3.01 per ordinary
share, for the prior year quarter.
Annualized return on ordinary shareholders' equity was 9.9% and
22.7% for the three months ended March 31, 2008 and 2007,
respectively. Return on ordinary shareholders' equity, based on
net income excluding net realized gains and losses was 12.9% and
22.3% for the three months ended March 31, 2008 and 2007,
respectively.
At March 31, 2008, diluted and basic book value per ordinary
share was US$46.11, as compared to diluted book value of
US$50.29 and basic book value of US$50.30 as of Dec. 31, 2007.
The decrease is due primarily to the increase in the net
unrealized losses on investments, which has more than offset net
income and positive currency translation adjustments.
Commenting on the current quarter results, President, Chief
Executive Officer and Acting Chairperson, Brian M. O'Hara said:
"Although XL is steadily navigating through some extremely
difficult global credit market conditions, which is reflected in
our lower investment performance relative to the outstanding
results in the prior year quarter, we have still achieved
another solid performance from our Insurance, Reinsurance, and
Life operations."
Segment Highlights:
First Quarter 2008 vs. First Quarter 2007
Insurance:
Underwriting profit for the quarter ended March 31, 2008, was
US$40.7 million compared with US$116.8 million in the prior year
quarter. Included in the current quarter's underwriting results
is net favorable prior year development of US$17.3 million, as
compared with US$20.2 million in the prior year quarter.
-- Gross premiums written increased 3.1% primarily due to
higher levels of long-term agreements, positive foreign
exchange movements, favorable customer retention, and
selective writing of new business. These increases have
been partially offset by the decline in premium rates
across most lines and lower premiums from the run off of
ICAT.
-- Net premiums earned decreased 4.1% mainly as a result of
an increase in ceded premiums related to the purchase of
an adverse development cover related to the company's
Lloyd's operations.
-- The combined ratio was 96.7% compared with 89.2% for the
prior year quarter. The loss ratio excluding the impact
of net prior year development for the current and prior
year quarter was 69.6% and 63.5%, respectively. The
increase in the loss ratio reflects an increase in
property risk and catastrophe losses in the current
quarter relative to the prior year quarter, as well as the
effect of the decline in premium rates.
Reinsurance:
Underwriting profit for the quarter ended March 31, 2008, was
US$67.4 million compared with US$43.6 million for the prior year
quarter. Included in the current quarter's underwriting results
is net favorable prior year development of US$49.7 million, as
compared with US$44.5 million in the prior year quarter.
-- Gross premiums written decreased by 22% due principally to
selective treaty cancellations and competitive market
conditions. Favorable foreign exchange movements offset
the impact of timing differences on certain large
contracts.
-- Net premiums earned decreased marginally by 0.4% primarily
due to lower net premiums written in previous quarters
that have been partially offset by the earned impact of
the decrease in the cession rate to Cyrus Re.
-- The combined ratio was 87.8% compared with 92% in the
prior year quarter. The loss ratio excluding the impact
of net prior year development for the current and prior
year quarter was 67.2% and 71.9%, respectively. The
decrease in the loss ratio is due mainly to a lower level
of property catastrophe losses in the current quarter
relative to the prior year quarter that included Windstorm
Kyrill.
Life Operations:
Gross premiums written were US$235 million compared with
US$213.3 million in the prior year quarter. The contribution to
earnings from life operations was US$27.4 million as compared
with US$23.1 million in the first quarter last year, due mainly
to business growth, higher net investment income and favorable
foreign exchange movements.
Investment Operations:
Net investment income from P&C operations, excluding investment
income from Structured Products, decreased 2% from the prior
year period to US$308 million primarily due to lower investment
yields. Net income from investment affiliates was US$11.8
million in the first quarter of 2008 compared with US$118.9
million in the first quarter of 2007. Net income from
investment manager affiliates was US$12.9 million as compared
with US$37.4 million for the prior year period.
Net realized losses on investments were US$102.3 million in the
current quarter. This includes charges of US$114.8 million for
other than temporary impairments.
Net unrealized losses on investments, net of tax, were US$1.4
billion at March 31, 2008, compared with net unrealized losses,
net of tax of US$332.5 million at Dec. 31, 2007. The increase
in net unrealized losses of US$1.1 billion for the quarter was
substantially due to continuing widening credit spreads on
corporate and structured credit investments, and unfavorable
foreign exchange rate movements, partially offset by declines in
interest rates.
Total investments available for sale decreased from US$36.3
billion at Dec. 31, 2007, to US$32.2 billion at March 31, 2008,
due mainly to asset sales to fund the redemption of the
company's muni-GIC liabilities.
Other Items
Total operating expenses were US$263.8 million for the first
quarter 2008, a decrease from US$280.5 million in the prior year
quarter. The decrease is primarily due to the inclusion of
US$24.1 million of operating expenses of Security Capital
Assurance Ltd. in the prior year quarter.
The quarter ended March 31, 2008, includes a foreign exchange
loss of US$67.7 million as compared with a loss of US$23.6
million in the prior year quarter. The current quarter loss is
primarily driven by the significant decline of the United States
Dollar against most European currencies. The overall impact of
foreign exchange movement has been accretive to shareholders'
equity, as the foreign exchange loss in the current quarter was
more than offset by currency translation gains.
The quarter ended March 31, 2007, included US$23.5 million of
net income from Security Capital Assurance Ltd. as a
consolidated subsidiary and US$11.1 million of income from XL's
share of earnings from Primus Guaranty Ltd. The current quarter
includes a charge of US$4.8 million related to the unwinding of
the discounted loss reserves ceded by Security Capital Assurance
Ltd. and no equity earnings from Security Capital or Primus
Guaranty.
The company declared a semi-annual dividend of US$32.50 per
share on its Fixed/Floating Series E Perpetual Non-Cumulative
Preference Shares on Feb. 22, 2008. The dividend was paid on
April 15, 2008.
About XL Capital Ltd.
Headquartered in Hamilton, Bermuda, XL Capital Ltd., --
http://www.xlcapital.com-- through its operating subsidiaries,
is a provider of global insurance and reinsurance coverages to
industrial, commercial and professional service firms, insurance
companies and other enterprises on a worldwide basis. As of
March 31, 2008, the company had consolidated assets of US$54.8
billion and consolidated shareholders' equity of US$9.3 billion.
* * *
As reported in the Troubled Company Reporter on April 3, 2008,
Fitch Ratings has downgraded and removed from Rating Watch
Negative two classes of subprime second lien residential
mortgage-backed securities C-BASS, series 2007-SL1 insured by
XLCA: Class A1 to 'BB' from 'A' and Class A2 to 'BB' from 'A'.
YRC WORLDWIDE: Agrees to Amendments on Aug. 17 Credit Agreement
---------------------------------------------------------------
On April 18, 2008, YRC Worldwide Inc. and certain of its foreign
subsidiaries entered into Amendment No. 1 to the credit
agreement, dated as of Aug. 17, 2007. The credit agreement, as
amended, continues to provide the company with a US$950 million
senior revolving credit facility, including sublimits available
for borrowings under certain foreign currencies, and a US$150
million senior term loan.
The credit agreement amendment will:
1. increase the company’s total leverage ratio from 3.0x to
3.75x for each of the fiscal quarters ended March 31,
June 30 and Sept. 30, 2008 and 3.5x for each fiscal quarter
thereafter, until such time as the company receives a
rating of BBB- or better from Standard & Poor’s and Ba1 or
better from Moody’s, in each case with a stable outlook.
This was a proactive amendment however, as the company’s
total leverage ratio for the fiscal quarter ended March 31,
2008 was below 3.0x;
2. increase the interest rates and fees applicable to the
revolving credit facility and term loan. The interest rate
on amounts outstanding under the revolving credit facility
and term loan is LIBOR plus 100 basis points and LIBOR plus
125 basis points and the facility fee for the revolving
credit facility is 25 basis points. The company expects
interest expense to increase US$1.5 – 4.0 million annually
with this amendment;
3. require the company and its domestic subsidiaries to pledge
these collateral:
a. receivables not secured by the ABS facility or the
company’s captive insurance companies,
b. intercompany notes not secured by the ABS facility,
c. fee-owned real estate parcels that have an estimated
internal market value of US$2.5 million or greater,
d. 100% of the stock of all domestic subsidiaries of the
company, and
e. 65% of the stock of first-tier foreign subsidiaries of
the company other than the company’s captive insurance
companies;
4. require the company and its subsidiaries to pledge
additional assets, including rolling stock and the
remaining real estate if the total leverage ratio exceeds
3.5x at the end of any test period or if the company
receives a rating of BB- or worse from Standard & Poor’s
and Ba3 or worse from Moody’s prior to the Fall Away Event;
5. require each domestic subsidiary of the company except for
YRRFC to guarantee the credit facility; and
6. modify certain negative covenants, and in certain instances
introduces new negative covenants, related to permitted
liens, permitted acquisitions, permitted asset sales, and
certain related mandatory prepayments from the proceeds
thereof, and restricted payments.
Upon the occurrence of the Fall Away Event, security interests
in pledged collateral will be released, all negative covenant
provisions,including the company’s total leverage ratio, and the
mandatory prepayment provision will revert to pre-credit
agreement amendment levels and concepts and only material
domestic subsidiaries and subsidiaries of the company that
guarantee certain other indebtedness of the company or its
subsidiaries will remain as guarantors.
USF and Roadway Bonds
The holders of USF Bonds and Roadway Bonds will receive an equal
and ratable lien, pursuant to the terms of the respective bond
indentures, in certain assets that are pledged under the credit
facility. Pursuant to Section 1008 of the USF Bond indenture,
holders of USF Bonds are entitled to an equal and ratable lien
with respect to stock of the 'significant' subsidiaries of YRC
Regional Transportation and any intercompany debt among Regional
and its 'significant' subsidiaries.
Currently, the 'significant' subsidiaries are USF Holland, USF
Reddaway and YRC Logistics Services. Pursuant to Section
4.06(a) of the Roadway Bond indenture, holders of Roadway Bonds
are entitled to an equal and ratable lien with respect to stock
of subsidiaries of Roadway LLC, intercompany debt among Roadway
and its subsidiaries and certain property owned by Roadway and
its subsidiaries, including certain real estate and rolling
stock. The description of the rights of the holders of USF
Bonds and Roadway Bonds is qualified by reference to the
respective indentures, which are filed as Exhibit 4.3.1 and
Exhibit 4.4.1 to the company’s form 10-K for the year ended Dec.
31, 2007, respectively.
About YRC Worldwide
YRC Worldwide Inc. (Nasdaq: YRCW) -- http://www.yrcw.com/-- is
the holding company for a portfolio of successful brands
including Yellow Transportation, Roadway, Reimer Express, YRC
Logistics, New Penn, USF Holland, USF Reddaway, and USF Glen
Moore. The enterprise provides global transportation services,
transportation management solutions and logistics management.
The portfolio of brands represents a comprehensive array of
services for the shipment of industrial, commercial and retail
goods domestically and internationally. Headquartered in
Overland Park, Kansas, YRC Worldwide employs approximately
60,000 people.
The company has subsidiaries in Bermuda, the United Kingdom,
Netherlands, Singapore, Hong Kong and Mexico.
YRC WORLDWIDE: Moody's Cuts CF Rating to Ba2; Outlook Negative
--------------------------------------------------------------
Moody's Investors Service has lowered the ratings of YRC
Worldwide Inc., Corporate Family Rating to Ba2 from Ba1. At the
same time, Moody's downgraded the ratings of YRC Regional
Transportation's senior notes and YRC Worldwide's convertible
notes to Ba3 from Ba1, and upgraded the ratings of the notes
issued by the company's Roadway subsidiary to Baa3 from Ba1.
Under the terms of "equal and ratable" provisions contained in
the indentures, these notes will be granted a security interest
in certain assets of the company that ranks pari passu with the
security interest granted on those assets under the company's
amended bank credit facility.
The rating outlook is negative. The downgrade of the Corporate
Family Rating considers the continued challenging operating
environment in the trucking sector which is expected to further
constrain YRC's earnings and cash flow, resulting in weaker
credit metrics. Moody's views favorably the company's
announcement that it has amended its senior revolving credit
facility to provide increased room under prescribed financial
covenants as well as the renewal and amendment of its Asset
Backed Securitization facility.
The ability to comply with prior covenant levels would have
become problematic for YRC in light of anticipated earnings
weakness. The amended covenants will enable the company to
maintain a good liquidity profile while implementing strategies
to improve operating performance.
According to David Berge, Vice President of Moody's, "there is
still significant headwind facing the company from what is
expected to be a deep and possibly prolonged recession in the
trucking market." Moody's expects that YRC, like most less than
truckload carriers, will report weak operating results through
2008. The company should benefit from recent cost saving
initiatives, including the closure of unprofitable business
units in its regional segment, and enhanced operating
flexibility available under its new labor agreement with the
Teamsters running through 2013. Nevertheless, cyclical
operating pressures will continue to weigh on overall financial
performance.
Key credit metrics such as Retained Cash Flow to Debt,
EBIT/Interest, and Debt to EBITDA are currently weaker than
those of many industry peers. YRC has reduced its balance sheet
debt since the 2005 acquisition of USF Corporation, yet with the
erosion of earnings during 2007 financial metrics have
deteriorated. Under Moody's analytic methodology, the company
carries a high debt burden related to adjustments for multi-
employer pension plans. While the multi-employer obligations
are viewed as debt-like in Moody's analysis, it is important to
note that they do not represent a large near term claim on cash.
Moody's anticipates that YRC will continue to apply free cash
flow to reduce indebtedness which should help to rebuild
financial metrics over time.
Moody's expects that the company will be able to generate
sufficient operating cash flow through 2008 to cover repayment
of the US$225 million of notes due in December. This will
likely require that operating ratios of at least 96-97% are
achieved for the second half of the year, and that cash
contributions from working capital in the fourth quarter follow
historical seasonal patterns. Given the challenges posed by the
weak business environment, the recent covenant amendment
provides important stability to the company's liquidity profile.
YRC maintains a modest cash balance, and typically experiences
seasonal variances in its working capital requirements; the
fourth quarter generally exhibits a significant cash inflow from
working capital reductions.
The company's US$950 million revolving credit facility and
US$150 million Term Loan contain a financial covenant limiting
its ratio of debt to EBITDA, as defined in the agreement, to
certain levels. While the company has remained in compliance
with the covenant through the first quarter of 2008, continued
earnings pressures might have resulted in the company being
unable to remain compliant in future quarters.
The recently announced amendment provides covenant headroom
which should enable the company to maintain an adequate
liquidity profile. In exchange for covenant relief, YRC is
providing a collateral package comprised of certain parcels of
real estate and accounts receivable not pledged to its
securitization facilities.
The company will also provide a pledge of 100% of stock of
domestic subsidiaries and 65% of stock of first tier foreign
subsidiaries. By virtue of the "equal and ratable" provision,
the Roadway and YRC Regional notes will gain a security interest
that ranks pari passu with the company's bank credit facility.
The outlook remains negative in recognition of the sensitivity
of cash flows and covenant cushion to changes in the company's
operating ratio. Considering YRC's and the LTL sector's overall
vulnerability to weaknesses in the U.S. economy and the
uncertainty surrounding the depth and duration of the current
economic downturn, Moody's believes there are significant
challenges facing the company in reaching its margin and cash
flow goals.
The change in ratings of the senior notes, which had been rated
the same as YRC's Corporate Family Rating prior to the amendment
of the credit facility, reflects the effect of both the
downgrade in the CFR as well as collateral protection granted
lenders under the Roadway notes, which is not afforded to the
YRC convertible notes. The indenture for the Roadway notes and
the indenture for the YRC Regional Transportation notes provides
that, in the event of YRC pledging collateral as security for
any other debt instrument, the Roadway notes and YRC Regional
Transportation notes will be secured equally and ratably by a
pledge of specified collateral.
However, Moody's views the collateral protection being afforded
to the Roadway notes as substantially superior to that of the
YRC Regional Transportation notes, effectively subordinating
these notes to the Roadway notes. Per Moody's Loss Given Default
methodology, the change in priority from senior unsecured class
of debt to senior secured has a substantial positive impact on
the expected recovery on these notes in the event of default.
Conversely, the effective subordination of the unsecured YRC
Convertible notes and the YRC Transportation notes to a
substantial level of secured debt implies weaker recovery under
those notes in the event of default.
The ratings could be downgraded if the free cash flow in 2008
were to fall substantially below US$200 million, therefore
requiring the company to rely more heavily on its revolving
credit facility to refinance the December maturities and likely
the notes maturing in May 2009 as well, assuming they cannot be
refinanced in the capital markets. Ratings could also be
lowered if weaker operating performance were to impair the
likelihood of compliance with the new financial covenants in the
company's credit facility, possibly requiring waivers or further
amendments of terms.
The ratings could be stabilized if free cash flows become
strongly positive in 2008 and 2009, with operating ratios
returning to the mid-90% range. The company will have to
demonstrate the maintenance of a solid liquidity position
throughout this period, with only minor and temporary reliance,
if any, on the revolving credit facility to cover note
maturities while maintaining ample cushion to covenants.
Downgrades:
Issuer: USF Corporation
-- Senior Notes due 2009-2010, to Ba3 (LGD4-63%) from Ba1
Issuer: YRC Worldwide Inc.
-- Probability of Default Rating, Downgraded to Ba2 from Ba1
-- Corporate Family Rating, Downgraded to Ba2 from Ba1
-- Senior Convertible Notes due 2023, to Ba3 (LGD4-63%) from
Ba1
Upgrades:
Issuer: Roadway LLC
-- Senior Notes due 2008, to Baa3 (LGD2-14%) from Ba1
YRC Worldwide Inc. (Nasdaq: YRCW) -- http://www.yrcw.com/-- is
the holding company for a portfolio of successful brands
including Yellow Transportation, Roadway, Reimer Express, YRC
Logistics, New Penn, USF Holland, USF Reddaway, and USF Glen
Moore. The enterprise provides global transportation services,
transportation management solutions and logistics management.
The portfolio of brands represents a comprehensive array of
services for the shipment of industrial, commercial and retail
goods domestically and internationally. Headquartered in
Overland Park, Kansas, YRC Worldwide employs approximately
60,000 people.
The company has subsidiaries in Bermuda, the United Kingdom,
Netherlands, Singapore, Hong Kong and Mexico.
===========
B R A Z I L
===========
BANCO BRADESCO: BBVA Sells Stake in Bank for BRL2.29 Billion
------------------------------------------------------------
Banco Bilbao Vizcaya Argentaria, S.A., aka BBVA has sold its
stake of 5% of the ordinary shares in Banco Bradesco SA for
BRL2.29 billion.
According to Banco Bradesco, BBVA exercised a sale option. The
stake was sold to NCF Participacoes, which is controlled by
Banco Bradesco majority shareholders Cidade de Deus and Fundacao
Bradesco.
Banco Bradesco told Business News Americas that Banco Espirito
Santo had purchased 1.5% of its ordinary shares for
BRL685 million and raised its stake in Banco Bradesco to 7.97%.
NCF Participacoes sold the shares.
About BBVA
Banco Bilbao Vizcaya Argentaria, S.A. is a diversified
international financial group with operations in retail banking,
asset management, private banking and wholesale banking. During
the year ended Dec. 31, 2007, the company was organized into
five business areas: Spain and Portugal, Global Businesses,
Mexico and the United States, South America and Corporate
Activities. On Jan. 3, 2007, the company acquired State
National Bancshares, Inc.
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 ITAU: Roberto Setubal Won't Run Bank's Daily Operations
-------------------------------------------------------------
Banco Itau Holding Financeira SA's spokesperson told Brazilian
financial daily Gazeta Mercantil that the bank's Chief Executive
Officer Roberto Setubal will no longer run daily operations.
According to Gazeta Mercantil, Mr. Setubal will continue as
Banco Itau's chief executive officer but he will concentrate on
"matters considered strategic to the bank."
Gazeta Mercantil relates that Geraldo Carbone will lead Banco
Itau's personal banking area. Capital markets chief Alfredo
Setubal will be in charge of the insurance and private pension
areas.
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.
BRASIL TELECOM: Reports BRL248.3MM Net Income in First Qtr. 2008
----------------------------------------------------------------
Brasil Telecom Participacoes S.A. registered consolidated net
revenue of BRL2,762 million in the first quarter of 2008 (2.6%
up on the first quarter of 2007) and net income of
BRL248.3 million.
BrT Movel's EBITDA stood at BRL14.7 million in the first quarter
2008, 236.3% up on the same period the year before. The EBITDA
margin of the mobile operations came to 3.4%, 2.3 p.p. up on the
first quarter 2007.
In the first quarter of 2008, Brasil Telecom added 69,500 ADSL
users to its network, totaling 1,637,300 users in service at the
end of the quarter, up by 18.3% year-on-year. ADSL users
represented 20.4% of Brasil Telecom's network in the first
quarter 2008, versus 16.7% in first quarter 2007.
The Internet Group, responsible for Brasil Telecom's Internet
services, recorded 1.3 million broadband clients nationwide at
the end of 2008 first quarter, up by 16.2% on the same period
the previous year.
Gross revenue from data communication amounted to BRL791 million
in first quarter 2008, 23% higher than in first quarter 2007.
BrT Movel reached 4,577,600 mobile users at the end of the first
quarter 2008, with 314,900 net additions in this quarter. In
the first quarter 2008, BrT Movel's client base grew by 25.8%
year-on-year. Its market share in Region II came to 13.7%, 0.8
p.p. higher than in the previous year.
Mobile telephony net revenue continued increasing, totaling
BRL426.1 million, 10.7% up year-on-year.
Operating costs and expenses totaled BRL2,397.6 million, 0.4%
lower than the BRL2.389 million recorded in the first quarter of
2007.
In the first quarter 2008, Brasil Telecom's investments totaled
BRL159.9 million while net debt stood at BRL513.5 million, 55.1%
less than in the first quarter 2007.
About Brasil Telecom
Headquartered in Brasilia, Brazil, Brasil Telecom Participacoes
SA -- http://www.brasiltelecom.com.br-- is a holding company
that conducts substantially all of its operations through its
wholly owned subsidiary, Brasil Telecom SA. The fixed-line
telecommunications services offered to the company's customers
include local services, including all calls that originate and
terminate within a single local area in the region, as well as
installation, monthly subscription, measured services, public
telephones and supplemental local services; intra-regional
long-distance services, which include intrastate and interstate
calls; interregional and international long-distance services;
network services, including interconnection and leasing; data
transmission services; wireless services, and other services.
* * *
To date, Brasil Telecom carries Moody's Investors Service's Ba1
senior unsecured and credit default swap ratings.
COMPANHIA SIDERURGICA: Hires Goldman Sachs as Financial Advisor
---------------------------------------------------------------
NoticiasFinancieras reports that Companhia Siderurgica Nacional
SA has hired Goldman Sachs as financial advisor for the
potential sale of its stake in mining firm Nacional Minerios SA.
Nacional Minerios will use its mineral and logistics resources,
including its own and outsourced iron ore, to increase its sales
and export capacity to 40 million tons per year from the current
14 million tons per year by 2012, NoticiasFinancieras states.
About Nacional Minerios
Nacional Minerios SA owns ore mines in Minas Gerais, Brazil,
with intermittent access to railway and maritime transport.
About Companhia Nacional
Headquartered Sao Paolo, Brazil, Companhia Siderurgica Nacional
S.A. -- http://www.csn.com.br/-- produces, sells, exports and
distributes steel products, like hot-dip galvanized sheets, tin
mill products and tinplate. The company also runs its own iron
ore, manganese, limestone and dolomite mines and has strategic
investments in railroad companies and power supply projects.
The group also operates in Brazil, Portugal and the U.S.
* * *
As reported in the Troubled Company Reporter-Latin America on
Dec. 27, 2007, Standard & Poor's Ratings Services revised its
outlook on Brazil-based steel maker Companhia Siderurgica
Nacional and related entity National Steel S.A. to positive from
stable. At the same time, Standard & Poor's affirmed its 'BB'
corporate credit rating on CSN and its 'B+' rating on NatSteel.
ENERGIAS DO BRASIL: Power Distribution Rises 2.3% in 1st 3 Mos.
---------------------------------------------------------------
Energias do Brasil S.A. increased power distribution by 2.3% to
6.29 terrawatt-hours in the first three months of 2008, compared
to 6.14 terrawatt-hours in the first three months of 2007.
Energias do Brasil told Business News Americas that its
distribution to residential and commercial customers rose 5.7%
to 1.37 terrawatt-hours and 3.7% to 845 gigawatt-hours
respectively in the first three months of 2008, compared to the
same period last year.
According to BNamericas, Energias do Brasil said that increased
distribution indicates new customers in the concession area and
an increase in gross domestic product.
Energias do Brasil's distribution to industrial customers
increased 3.8% to 1.08 terrawatt-hours in the first three months
of 2008, compared to the same period last year. Energias do
Brasil's rural consumers received 213 gigawatt-hours in the
first quarter 2008, about 7.2% higher compared to last year's
first quarter. The firm distributed power to its own operations
and conventional suppliers, BNamericas states.
Energias do Brasil S.A. is an integrated utility group
controlled by Energias de Portugal, with activities in
generation, distribution and commercialization of electricity.
Its power distribution subsdiaries Bandeirante, Escelsa and
Enersul represent altogether some 64% of consolidated total
assets, while the power generation assets represent some 31%.
* * *
In May 2007, Moody's Investors Service placed a Ba2 long-term
corporate family rating on Energias do Brasil.
FLEXTRONICS INT'L: May Complete Phase 2 of Arima Deal This Month
----------------------------------------------------------------
Flextronics International Limited said that it expects to close
the second phase of its two-phase acquisition of Arima Computer
Corporation notebook and server businesses in April of this
year.
Flextronics completed phase one on March 18, 2008. Phase one
include the acquisition of the design and services group of
Arima.
The second phase will include the acquisition of Arima's
notebook and server manufacturing facility in WuJiang China, and
is expected to close this month. Arima Computer's notebook and
server business will become part of the Flextronics Computing
segment. Upon completion of the two-phase transaction,
Flextronics will have acquired all of the Arima's design,
manufacturing and service resources related to notebook and
servers.
"Closing phase one of this acquisition significantly enhances
our ODM server offering and significantly strengthens our
position in the rapidly growing notebook market," said Sean
Burke, president of Flextronics Computing. "We are pleased to
welcome Arima's talented design and service employees to our
team, as we continue to strengthen our world-class solutions for
the computing marketplace."
About Flextronics
Headquartered in Singapore, Flextronics International Ltd.
(NasdaqGS: FLEX; Singapore Reg. No. 199002645H) --
http://www.flextronics.com/-- is an Electronics Manufacturing
Services provider focused on delivering design, engineering and
manufacturing services to automotive, computing, consumer
digital, industrial, infrastructure, medical and mobile OEMs.
Flextronics helps customers design, build, ship, and service
electronics productsthrough a network of facilities in over 30
countries on four continents.
As of the year ended March 31, 2007, the company's regulatory
filing with the U.S. SEC showed that it had subsidiaries in
Austria, Brazil, China, France, Hong Kong, Hungary, Malaysia,
Mexico and the United States, among others. The company has yet
to submit its annual report for the year ended March 31, 2008.
* * *
Flextronics International Ltd. continues to carry Moody's
"Ba1" probability of default and long-term corporate family
ratings with a negative outlook.
The company also carries Standard & Poor's "BB+" long-term
local and foreign issuer credit ratings with a negative
outlook.
GERDAU SA: To Invest US$180 Million in CCA Tie-Up
--------------------------------------------------
Gerdau SA has teamed up with Central American steel corporation
CCA. According to Gerdau, it will own a 30% stake and invest
some US$180 million in CCA.
Gerdau's President Andre Gerdau Johannpeter commented to
Business News Americas, "The association listed Grupo Gerdau as
a leading company in Central America and the Caribbean. The
region is strategic and of special importance to the group."
About CCA
CCA is a steel corporation in Central America. It has a steel
plant in Guatemala, four rolling units in Guatemala and Honduras
and commercial offices in Guatemala, Honduras, and El Salvador.
The corporation also has distribution units in Guatemala,
Belize, El Salvador, Honduras, and Nicaragua. CCA has installed
capacity of 500,000 tons per year of steel and 690,000 tons per
year of rolled products and also holds a minority share in
Honduran company Intrefica.
About Gerdau
Headquartered in Porto Alegre, Brazil, Gerdau SA
-- http://www.gerdau.com.br/-- produces and distributes crude
steel and related long rolled products, drawn products, and long
specialty products. In addition to Brazil, Gerdau operates in
Argentina, Canada, Chile, Colombia, Uruguay, India and the
United States.
* * *
As reported in the Troubled Company Reporter-Latin America on
Nov. 26, 2007, Moody's Investors Service affirmed Gerdau S.A.'s
Ba1 corporate family rating and stable outlook.
GERDAU SA: Quanex Shareholders Okay US$1.67 Billion Purchase
------------------------------------------------------------
Quanex Corp. told the Associated Press that its shareholders
have authorized Gerdau SA to purchase the firm for
US$1.67 billion.
As reported in the Troubled Company Reporter-Latin America on
Feb. 22, 2008, Quanex set a special meeting of stockholders for
March 31, 2008, to approve and adopt the agreement and plan of
its merger with a subsidiary of Gerdau. Stockholders of record
as of the close of business on Feb. 29, 2008, were entitled to
vote at the special meeting.
The AP relates that "with about 90% of the shares represented,
over 99% were voted for the deal."
Quanex's unit Quanex Building Products Corp. was "spun off from
the parent." It will replace Quanex in the Standard & Poor's
SmallCap 600, the AP states.
About Quanex Corp.
Quanex Corp., formerly Michigan Seamless Tube Company, is
engaged in the production of engineered carbon and alloy steel
bars, heat treated bars, aluminum flat-rolled products, flexible
insulating glass spacer systems, extruded profiles, and
precision-formed metal and wood products. The two markets
served by the Company include vehicular products and building
products. The segments served by the Company include Vehicular
Products, Engineered Building Products and Aluminum Sheet
Building Products. Quanex has 27 manufacturing facilities in 12
states in the United States.
About Gerdau
Headquartered in Porto Alegre, Brazil, Gerdau SA
-- http://www.gerdau.com.br/-- produces and distributes crude
steel and related long rolled products, drawn products, and long
specialty products. In addition to Brazil, Gerdau operates in
Argentina, Canada, Chile, Colombia, Uruguay, India and the
United States.
* * *
As reported in the Troubled Company Reporter-Latin America on
Nov. 26, 2007, Moody's Investors Service affirmed Gerdau S.A.'s
Ba1 corporate family rating and stable outlook.
HEXCEL CORP: S&P Holds BB Corp. Credit Rating with Pos. Outlook
---------------------------------------------------------------
Standard & Poor's Ratings Services revised its outlook on
aerospace supplier Hexcel Corp. to positive from stable. At the
same time, S&P affirmed ratings, including the 'BB' corporate
credit rating, on the company. About US$370 million of debt is
outstanding.
"The outlook revision is based on improving profitability and
credit protection measures, benefiting from growth in core
markets, operational leverage, and debt reduction, despite high
levels of capital spending," said Standard & Poor's credit
analyst Roman Szuper.
The ratings on Hexcel reflect participation in the cyclical and
competitive commercial aerospace industry, significant
investment in carbon fiber capacity needed to support increasing
jetliner production rates, and uncertainty arising from on
ongoing proxy contest over director nominations. Those factors
are partly offset by the company's position as the world's
largest manufacturer of advanced composite materials, generally
favorable market conditions, and financial profile that is
somewhat better than average for the rating.
The outcome of a proxy contest over director nominations remains
uncertain until the annual meeting of stockholders, which is
scheduled for May 8, 2008. OSS Capital, an activist hedge fund,
is proposing three nominees for the board of directors and is
opposing three members proposed by Hexcel. OSS, which owns 5.5%
of Hexcel's common stock, stated its main concern as Hexcel's
financial underperformance; as a consequence, OSS alleges that
shareholder value is not maximized. OSS offers no specific
actions to address its concerns, aside from its proposal for
board nominees.
The nominating and governance committee of Hexcel's board
offered to add one of the OSS candidates to the existing board,
but the offer was rejected. S&P will monitor the situation and
any potential adverse effect on credit quality.
Continued favorable conditions in core markets, ongoing gains in
operating efficiency, and further strengthening in credit
protection measures could lead to a ratings upgrade over the
next 12 months. S&P could revise the outlook to stable if the
slowing global economy has a greater-than-expected effect on the
company's sales and profits. Hexcel's financial policy or
strategic direction may change somewhat if OSS representatives
join the board of directors either through a proxy win or a
settlement with the company. S&P would assess the rating
outlook if Hexcel's financial policy becomes more aggressive.
Stamford, Conn.-based Hexcel is a leader in the composites
industry, producing lightweight, high-performance carbon fibers,
industrial fabrics, specialty reinforcements, carbon prepregs,
structural adhesives, honeycomb, and composite structures for
the commercial aerospace, defense and space, and industrial
sectors. The company concentrates on serving growing markets in
which it has competitive advantage.
Headquartered in Stamford, Connecticut, Hexcel Corporation
(NYSE: HXL) -- http://www.hexcel.com/-- is an advanced
composites company. The company develops, manufactures and
markets lightweight, high-performance structural materials,
including carbon fibers, reinforcements, prepregs, honeycomb,
matrix systems, adhesives and composite structures, used in
commercial aerospace, space and defense and industrial
applications such as wind turbine blades. The company has
subsidiaries in Austria, the United Kingdom, Spain, Hong Kong,
Japan and Brazil.
SHARPER IMAGE: Seeks to Employ RCR Real Estate Advisors
-------------------------------------------------------
Sharper Image Corporation has determined that it requires the
assistance of an experienced real estate consultant in
addressing a variety of real estate issues that are sure to
arise in its bankruptcy case, like analysis, assessment,
marketing and disposition of its leased and owned properties,
Steven K. Kortanek, Esq., at Womble Carlyle Sandridge & Rice,
PLLC, in Wilmington, Delaware, relates.
Accordingly, the Debtor asks the U.S. Bankruptcy Court for the
District of Delaware for permission to hire RCS Real Estate
Advisors as its exclusive real estate consultant in its Chapter
11 case.
The Debtor's primary purpose of employing RCS is to get RCS'
assistance in assessing its properties in a way that maximizes
value.
Before the Petition Date, RCS had been engaged by the Debtor to
conduct value analysis on its array of leases, and RCS has since
been valuing the Debtor's own property in Arkansas. RCS' close
coordination with the Sharper Image's management has made it
well acquainted with the Debtor's businesses and property, Mr
Kortanek explains.
It is for these reasons and for the best interest of Sharper
Image, its property, its creditors and all other interested
parties, that it wisher to employ RCS.
As real estate consultant, RCS will:
(1) analyze all real estate assets owned by the Debtor and
to conduct a review of the occupancy cost of each in
relation to sales, volume and profitability. RSC is
bound to discuss its findings and recommendations with
Sharper Image after the review;
(2) create a portfolio book for the Debtor's leases,
indicating the current lease terms, sales, profits,
occupancy cost and the store's contribution in relation
to sales;
(3) create a site ranking report by contribution, revenues,
occupancy costs, for all or selected leases;
(4) perform a rejection claim analysis on all or selected
leases;
(5) assist the Debtor in developing real estate goals --
the Real Estate Action Plan -- to determine which stores
to close, renegotiate or retain under renegotiated terms,
and existing stores to go forward with;
(6) negotiate with landlords for the reduction of rents,
for the modification or extension of terms for all or
certain leases;
(7) work with landlords and the Debtor for the accurate
documentation of all lease modification proposals; to
provide accurate and timely status reports regarding the
status of these proposals;
(8) attend in all court hearings, to meet with the
Statutory Creditors' Committee and to meet with Sharper
Image and its counsel;
(9) coordinate with the Debtor, its counsel and affected
landlords on all real estate matters particularly the
status and on going changes of the Real Estate Action
Plan;
(10) perform desktop leasehold valuations for certain
assets, to negotiate waivers, payout terms for
prepetition cure amounts due to landlords in the case of
lease assumptions, and conduct negotiations with respect
to mitigating allowed rejection claims in the case of
lease rejections; and
(11) dispose all properties of the Debtor, by sale
or otherwise, on the Debtor's terms and conditions, and
subject to its sole authority and discretion by:
-- reviewing all documents,
-- marketing the Disposition Properties pursuant to a
marketing program and budget,
-- communicating with parties interested in the
Disposition Property,
-- responding, informing and negotiating with
prospective buyers, and making recommendations to the
Debtor,
-- providing guidance to Sharper Image on methods to
resolve issues that pertain to Disposition properties,
-- working closely with the Debtor's counsel with regards
to the hearing or auction, to obtain the attendance of
all the interested parties through direct
communications, supplementing the required notice
process,
-- working with the attorneys responsible for the
implementation of the proposed transaction, reviewing
documents, negotiating and assisting in resolving
problems which may arise, and
-- to appear in court during the term of retention, to
testify or consult with the Debtor in matters
involving the marketing or disposition of a
Disposition Property.
Inasmuch as RCS is employed by Sharper Image to perform highly
specialized tasks, its compensation is result-oriented and
directly related to the benefits received by the Debtor's estate
in every transaction, requiring RCS to file periodic fee
applications pursuant to Sections 330 and 331 of the Bankruptcy
Code and in compliance with Rule 2016 of the Federal Rules of
Bankruptcy Procedure, Mr. Kortanek says.
RCS will be compensated on a per transaction basis based on a
fee structure set forth in the parties' Retention Agreement. A
copy of the Retention Agreement was not available as of press
time.
Given the transactional nature of RCS's engagement and the
flat fee, percentage-based fee structure, the Debtor submits
that recording and submission of detailed time entries for
services rendered in this case is unnecessary and would be
unduly burdensome to RCS. RCS will, however, file a final fee
application in accordance with applicable Bankruptcy Rules and
Local Rules.
Ivan L. Friedman, president and chief executive officer of RCS,
assures the Court that RCS is a "disinterested person," as that
term is defined in the Bankruptcy Code and holds no interest
adverse to Sharper Image and its estate.
About Sharper Image
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
UnsecuredCreditors 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. 8; Bankruptcy Creditors'
Service, Inc., http://bankrupt.com/newsstand/or 215/945-7000)
SHARPER IMAGE: Court OKs Womble Carlyle Employment as Counsel
-------------------------------------------------------------
The U.S. Bankruptcy Court for the District of Delaware
authorizes Sharper Image Corp. to employ Womble Carlyle
Sandridge & Rice, PLLC as its counsel, effective as of the
Debtor's bankruptcy filing. However, absent further Court
order, the retainer to be held by Womble Carlyle as security
until the firm files its final fee application will only be
applied to costs and expenses incurred in connection with the
Chapter 11 case, Judge Kevin Gross said.
Steven K. Kortanek, Esq., at Womble Carlyle Sandridge & Rice,
PLLC, in in Wilmington, Delaware, discloses that his firm does
not maintain a separate firm policy or practice in making
conflict-related determinations.
Mr. Kortanek states that as a general philosophy, Womble Carlyle
refrains from suing other professionals without the firm
management's prior approval. The firm's position in this regard
only addresses direct lawsuits, and does not prevent the firm
from otherwise taking a position adverse to any professional in
the Debtor's case or in any related proceeding, he says.
As reported by the Troubled Company Reporter on March 10, in its
motion to employ the firm, it is stated that in exchange for the
contemplated legal services, Womble Carlyle will be paid based
on its applicable hourly rates:
Professional Hourly Rate
------------ -----------
Attorney US$120 to US$750
Paraprofessionals US$30 to US$450
Rebecca L. Roedell, executive vice president and chief financial
officer of Sharper Image, stated that Womble Carlyle received a
US$40,000 retainer from the Debtor as security for payment of
the firm's fees and expenses for professional services to be
performed relating to the preparation for and prosecution of the
Chapter 11 case.
Prior to the Petition Date, Womble Carlyle incurred a total of
US$19,341 in fees and expenses which was paid prepetition from
the Retainer.
About Sharper Image
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
UnsecuredCreditors 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. 8; Bankruptcy Creditors'
Service, Inc., http://bankrupt.com/newsstand/or 215/945-7000)
==========================
C A Y M A N I S L A N D S
==========================
ABC CAYMAN: Proofs of Claim Filing is Until May 1
-------------------------------------------------
ABC Cayman Banking Ltd.'s creditors have until May 1, 2008, to
prove their claims to Anis Chacur Neto and Jose Eduardo Cintra
Laloni, 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.
ABC Cayman's shareholders agreed on March 10, 2008, to place the
company into voluntary liquidation under The Companies Law (2004
Revision) of the Cayman Islands.
The liquidators can be reached at:
Anis Chacur Neto and Jose Eduardo Cintra Laloni
Avenida Presidente Juscelion Kubitschek
1400 – 4th Floor, Sao Paulo, Brazil
Contact for inquiries:
Kim Charaman
Close Brothers (Cayman) Limited
Fourth Floor, Harbour Place
P.O. Box 1034, Grand Cayman KY1-1102
Telephone: (345) 949 8455
Fax: (345) 949 8499
KELLET HOLDINGS: Proofs of Claim Filing Deadline is April 31
------------------------------------------------------------
Kellet Holdings Limited's creditors have until April 31, 2008,
to prove their claims to Royhaven Secretaries 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.
Kellet Holdings' shareholders agreed on March 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:
Royhaven Secretaries Limited
Attn: Sharon Meghoo
Coutts House, 1446 West Bay Road
P.O. Box 707, Grand Cayman KY1-1107
Cayman Islands
Telephone: 945-4777
Fax: 945-4799
MUTSUKI GLOBAL: Proofs of Claim Filing Deadline is May 1
--------------------------------------------------------
Mutsuki Global Investment Limited's creditors have until
May 1, 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.
Mutsuki Global's shareholder decided on March 20, 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
PARMALAT SPA: Can File Damages vs Citigroup, Says Parma Judge
-------------------------------------------------------------
Judge Paola Artusi of a court in Parma, Italy, issued a ruling
April 21, 2008, admitting Parmalat S.p.A. as a civil party to a
criminal case against 10 Citigroup Inc. executives in connection
to the dairy group's bankruptcy in December 2003, various
reports say.
According to Thomson Financial, the Citigroup managers are
facing charges of fraudulent bankruptcy and abetting Parmalat's
financial collapse. In another related case, 24 former
executives of Parmalat, including founder Calisto Tanzi and CFO
Fausto Tonna, are facing charges of fraudulent bankruptcy and
criminal association that carry a maximum 15 years in prison.
Enrico Bondi, Parmalat CEO, filed the request for inclusion as
civil party in the criminal case, Bloomberg News reports.
The court will next hear the case on May 28, 2008.
EUR14 Billion Damages
Marco De Luca, a lawyer for Mr. Bondi, told Bloomberg News that
the CEO will seek EUR14 billion in damages, justifying the
amount to the "exceptional seriousness and causal effect that
these matters had on the entire Parmalat fraud."
"This was not a matter of a single episode which is coming to
trial, but rather something that was a product of the Citigroup
organization," Mr. De Luca added to Bloomberg News.
Milan Trial
As reported in the TCR-Europe on April 22, 2008, a judge in
Milan, Italy, issued a ruling April 18, 2008, excluding Parmalat
as civil party in the market rigging lawsuit against Citigroup
Inc., UBS AG, Deutsche Bank AG, Morgan Stanley and nine
individuals.
Milan prosecutors accused the banks of disguising the terms of
Parmalat bond sales and other financing from investors, thus
helping the dairy company conceal its financial situation. The
trial commenced in January and will resume in July.
Parmalat said the Milan ruling has no effect on its ability to
claim damages, since these will be its object in the bankruptcy
proceedings pending before a court in Parma, Italy.
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: Files EUR5-Billion Suit vs Hermes Asset Europe
------------------------------------------------------------
Parmalat S.p.A. Chief Executive Officer Enrico Bondi has filed
in Parma, Italy, a EUR5-billion damages suit against Hermes
Asset Management Europe, claiming it played a role on its
financial collapse in December 2003, various reports say.
According to Il Sole 24 Ore, Hermes questioned several
transactions in Parmalat's accounts in 2002, when the fund held
a 2.2% stake in the food group. The fund sold its stake shortly
before Parmalat declared bankruptcy in 2003.
Mr. Bondi claims in the suit that Hermes could have exposed
false accounting at Parmalat a year earlier if the fund did not
accept the company's explanations during an annual general
meeting in 2003, Il Sole 24 Ore adds.
Hermes, meanwhile, said the lawsuit was groundless and in
retaliation for Hermes' participation in class action suits
against Parmalat in the U.S., Bloomberg News relates.
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.
PELOTON ABS: Proofs of Claim Filing Deadline is May 1
-----------------------------------------------------
Peloton ABS Master Fund's creditors have until May 1, 2008, to
prove their claims to Gordon I. MacRae and G. James Cleaver, 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.
Peloton ABS' shareholders agreed on March 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:
Gordon I. MacRae and G. James Cleaver
Attn: Chris Sharpe
Kroll (Cayman) Limited
4th Floor, Bermuda House
Dr. Roy’s Drive, Grand Cayman
Cayman Islands
Telephone: +1 (345) 946-4015
Fax: +1 (345) 946-0082
SAGAMINO GLOBAL: Proofs of Claim Filing is Until May 1
------------------------------------------------------
Sagamino Global Investment Limited's creditors have until
May 1, 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.
Sagamino Global's shareholder decided on March 20, 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
==================
C O S T A R I C A
==================
DOLE FOOD: Will Offset Carbon Emissions from Crop Transport
-----------------------------------------------------------
Fresh Plaza reports that the Dole Food Co. Inc. will offset
carbon emissions from the transport of bananas and pineapples in
Costa Rica.
According to Fresh Plaza, Dole Food said that its Costa Rican
unit Standard Fruit Company de Costa Rica S.A. will buy "carbon
offsets from the Costa Rican government’s program in amounts
equal to the carbon dioxide emissions generated by the inland
transport of Dole produced bananas and pineapples."
Fresh Plaza notes that the Dole Food signed in August 2007 an
agreement with the Costa Rican Environment and Energy Ministry
and the National Strategy for Climate Change for the production
of a carbon neutral supply chain for bananas and pineapples.
The Dole Food's President and Chief Executive Officer David A.
DeLorenzo commented to Fresh Plaza, "Dole is determined to take
the lead in environmentally friendly production and distribution
methods. We are committed to helping the Government of Costa
Rica achieve their sustainability ambitions."
Environment and Energy Minister Roberto Dobles told Fresh Plaza,
"This agreement that Dole signed today [April 22] is an
important first step within a global vision. It is a first step
toward a great contribution by Dole for the consolidation of the
country strategy to be climate neutral for our bicentennial."
The National Forestry Financing Fund will offer the Dole Food
carbon credits "from government-certified forestry projects"
that will take every year an equivalent amount of carbon from
the atmosphere "as that emitted by fossil fuel use in road and
rail transportation. In essence, the Dole products will be
carbon neutral with regards to transportation from company-owned
packing plants to the ports of export in Costa Rica."
Standard Fruit's General Manager Danilo Roman told Fresh Plaza,
"Among the many steps we have taken to reduce emissions at
source is optimization of fertilizers to deliver nutrients more
effectively. In this way, we can directly reduce the emission
of nitrous-oxide, a potent green-house gas. We expect that this
program will decrease emissions by over 12% or nearly 9,000 tons
of CO2 [carbon dioxide] equivalents per year."
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.
As reported in the Troubled Company Reporter-Latin America on
April 22, 2008, Standard & Poor's Ratings Services assigned
recovery ratings to Dole Food Co. Inc.'s unsecured debt issues
and raised the issue-level ratings on this debt. The issue-
level ratings on the unsecured debt were raised to 'B-' from
'CCC+'.
SIRVA INC: Committee to Challenge DIP Financing Order
-----------------------------------------------------
The Official Committee of Unsecured Creditors in the bankruptcy
case of Sirva Inc. and its debtor-affiliates seeks authority
from the U.S. Bankruptcy Court for the Southern District of New
York to challenge various stipulations, admissions, and
provisions of the Final DIP Financing Order, and prosecute
certain preference and avoidance actions.
As reported by the Troubled Company Reporter on March 5, 2008,
the Court approved, on a final basis, the debtor-in-possession
credit facility of the Debtors, allowing them to obtain up to
US$150,000,000 of postpetition financing, to provide for the
Debtors' working capital, and for other general corporate
purposes.
Representing the Committee, Ilan D. Scharf, Esq., at Pachulski
Stang Ziehl & Jones LLP, in New York, relates that, under the
Final DIP Financing Order, the Debtors agreed to various
stipulations and admissions for the benefit of the Prepetition
Credit Facility Agent, the Prepetition Credit Facility Lenders,
and other related parties, except to the extent that the
Committee challenges the stipulations or admissions and the
Court authorizes the Committee to pursue the challenge on behalf
of the estates.
The Prepackaged Joint Plan of Reorganization provides that Class
5 general unsecured claims will receive no payments while Class
4 general unsecured claims will be paid in full. The Creditors
Committee has objected to the Plan arguing that the claims
classification system is "farcical" and has no legal basis.
The Committee asserts that for the Debtors to carry their burden
at Plan confirmation, they must produce sufficient financial
information about themselves, their assets and liabilities, and
their prospects to permit the Court to judge whether the "best
interests of creditors" test pursuant to Section
1129(a)(7)(A)(ii) of the Bankruptcy Code has been satisfied. To
satisfy the burden, the Debtors must present evidence as to the
current value of all of their assets, including assets available
for recovery in a Chapter 7 case.
Without the presentment of evidence, the Committee says,
creditors will be denied the benefit of the value of any of the
challenges and claims in the Plan confirmation "best interest
creditor" test calculus, which determines whether those
creditors are receiving at least as much through the Plan as
they would in a Chapter 7. The values achievable from
prosecution of just the challenges and claims could total
US$171,000,000, Mr. Scharf says.
The Committee believes that its prospects for success as to the
challenges and claims are high. The stipulations and
acknowledgments in the Final DIP Financing Order were overbroad,
Mr. Scharf says. He points out that the stipulations included
that the Debtors are obligated with respect to the Prepetition
Credit Facility Obligations, yet the Debtors and Lenders know
that 40% of the 60 affiliated Debtors have no prepetition
obligations.
Mr. Scharf asserts that the challenges and claims are lost if
not afforded to the Committee.
The Committee also tells the Court that BDO Seidman, LLP, has
prepared expert valuation reports indicating a potential
preference liability of US$39,000,000, to US$126,000,000, among
others. The Debtors capitulations to its lenders in connection
with the DIP Financing Motion and Plan make clear that it is
incapable of challenging its lenders, Mr. Scharf argues.
Moreover, the Plan and Disclosure Statement include no
suggestion that the Debtors intend to pursue those assets from
preference and avoidance claims. The Committee says it has
already begun preference investigations.
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. 12; Bankruptcy Creditors'
Services Inc. http://bankrupt.com/newsstand/or 215/945-7000)
SIRVA INC: OOIDA Insists Members Are Class 4 Creditors
------------------------------------------------------
The Owner Operator Independent Drivers Association Class tells
the U.S. Bankruptcy Court for the Southern District of New York
that Sirva Inc. and its debtor-affiliates have placed them in an
"untenable conundrum." The OOIDA Class insist that they are
Class 4 Creditors and not Class 5 Creditors, whom the Debtors
have ceased ongoing business relationships with.
According to Daniel E. Cohen, Esq., at The Cullen Law Firm,
PLLC, in Washington, D.C., the Debtors have sought to deny,
without explanation, a Class 4 status to the OOIDA Class, an
action that constitutes a deviation from the terms of the Plan.
In response to the OOIDA Class' request seeking a legal ruling
on the status, the Debtors asked the Court to take no action
until the Plan Confirmation Hearing, stating that the OOIDA
Class seeks a "free preview of the Debtors' arguments in support
of [the] confirmation."
The OOIDA Class merely seeks a clarification on whether the
Debtors can alter its entitlement as Class 4 Creditors, Mr.
Cohen maintains. Without clarification, the OOIDA Class cannot
ascertain whether, at the Confirmation Hearing, they should
present their evidence as Class 4 Creditors, as Class 5
Creditors, or a combination of both, Mr. Cohen adds.
Mr. Cohen agues that the OOIDA Class have met the criterion
specified in the Plan for treatment as Class 4 Creditors and are
therefore entitled to US$5,000,000. He tells Judge James M.
Peck that it is offensive to the basic principles of due process
and fair play for the Debtors to treat the OOIDA Class as Class
5 Creditors, who are entitled to nothing.
Accordingly, the OOIDA Class asks the Court to rule that they
are entitled to Class 4 treatment, to be paid in full under the
Plan.
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. 12; Bankruptcy Creditors'
Services Inc. http://bankrupt.com/newsstand/or 215/945-7000)
SIRVA INC: Court Allows Triple Net's US$2 Million Claim
-------------------------------------------------------
Judge James M. Peck approved the stipulation between Sirva Inc.,
its debtor-affiliates and Triple Net Investments IX, LP,
allowing Triple Net's claim as a general administrative claim
for US$2,021,546.
On March 22, 1999, Debtor North American Van Lines, Inc., and
Triple Net Investments IX, LP, entered into a lease commencing
on November 10, 1999, for premises known as the NAVL-Boston
Facility, located in Devens, Massachusetts. The Lease has a
15-year term that runs until November 30, 2014.
As reported by the Troubled Company Reporter on April 21,
pursuant to an order by the U.S. Bankruptcy Court for the
Southern District of New York authorizing the Debtors to reject
unexpired leases of nonresidential real property dated Feb. 26,
2008, the Debtors and Triple Net agreed to a US$10,218 allowed
administrative claim for postpetition rent for February 2008.
According to the parties, the only amounts due and owing are for
damages for the remaining seven years under the Lease, as a
result of the Lease Rejection Order. The parties have agreed
that:
a. Triple Net's Claim is fixed, and allowed as a general
unsecured claim for US$2,021,546;
b. Triple Net waives the right to modify or alter the amount,
validity, or priority of the Claim, or to file additional
claims; and
c. Triple Net has the right, upon notice to Debtors' counsel
and other parties-in-interest, to seek to modify the Claim
to include attorney's fees, provided that the Debtors
expressly reserve all rights to contest any modification
of the Claim.
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. 12; Bankruptcy Creditors'
Services Inc. http://bankrupt.com/newsstand/or 215/945-7000)
TERADYNE INC: Earns US$21.8 Million in First Quarter 2008
---------------------------------------------------------
Teradyne, Inc., reported sales of US$297 million in the first
quarter of 2008. Net income for the first quarter was
US$21.8 million, or US$0.12 per diluted share, on a non-GAAP
basis, which excludes amortization of acquired intangible assets
and special items, and US$2.4 million or US$0.01 per diluted
share on a GAAP basis. Bookings for the first quarter were
US$321 million, and included a full quarter of Nextest bookings
of US$33 million.
"We're off to a good start in 2008, with order growth in System
on Chip (SOC) test and a strong showing by our new memory test
business unit,” said Mike Bradley, Teradyne president and CEO.
“Wireless solutions dominated our first quarter bookings, as
FLEX (R) test systems once again cracked the 100-unit mark. In
addition, our new product pipeline in both SOC and memory test
showed good momentum on the design-in front.”
Guidance for the second quarter of 2008 is for sales of US$310
million to US$330 million, with earnings per diluted share
between US$0.14 and US$0.19 on a non-GAAP basis, and US$0.07 to
US$0.12 on a GAAP basis. Non-GAAP guidance excludes US$8
million of estimated restructuring and other charges, net, as
well as acquired intangible amortization of US$5 million.
About Teradyne, Inc.
Teradyne Inc. (NYSE:TER) -- http://www.teradyne.com/-- is a
supplier of Automatic Test Equipment used to test complex
electronics used in the consumer electronics, automotive,
computing, telecommunications, and aerospace and defense
industries. In 2007, Teradyne had sales of US$1.1 billion and
currently employs about 3,700 people worldwide. The company has
direct subsidiaries in these countries, Costa Rica, the United
Kingdom, Mexico, Korea, France and China.
* * *
Teradyne Inc. still carries S&P's "B+" long term foreign issuer
credit and long term local issuer credit ratings which was
placed on Dec. 13, 2002.
=================
G U A T E M A L A
=================
BANCO INDUSTRIAL: Fitch Puts 'B+(EXP)' Rating to Upcoming Notes
---------------------------------------------------------------
Fitch has assigned an expected rating of 'B+(EXP)' with a
Positive Outlook to an upcoming issue of Non-cumulative
Fixed/Floating Rate Step-up Tier 1 Capital Notes of Guatemala's
Banco Industrial for an amount to be determined.
The expected 'B+' rating assigned to Banco Industrial's hybrid
securities reflects that these notes will rank junior to all of
the bank's senior obligations. These hybrid securities will
likely be considered class-E and receive 100% equity-credit
under Fitch's approach for capital assessment, in view of its
strong loss-absorption features, long tenor of 60 years; high
degree of subordination; non-cumulative optional and mandatory
deferral mechanisms; and an acceptable step-up and call option).
A proposed three months look-back, which is related to the
quarterly payment feature, is not considered a significant
constraint for the optional deferral feature. Moreover, this
look-back is largely mitigated by a relatively strong mandatory
deferral mechanism. The rating and equity-class of the
securities will be made final by Fitch upon receipt and revision
of the final documentation of this issue.
The ratings of Banco Industrial S.A. were affirmed as:
-- Long-term foreign and local currency Issuer Default Rating
at
'BB';
-- Short-term foreign and local currency rating at 'B';
-- Individual at 'D';
-- Support at '3';
-- Support Rating Floor at 'BB-';
-- National-scale long-term rating at 'AA-(gtm)';
-- National-scale short-term rating at 'F1(gtm)';
The long-term IDRs and national scale ratings Outlook is
Positive.
The bank's ratings reflect its strong franchise in Guatemala,
adequate asset quality and ample deposits and liquidity. The
ratings are limited by the company's tight capitalization and
reserve levels and relatively low profitability.
Founded in 1968, Banco Industrial recently-acquired Banco del
Quetzal. The company also maintains a dominant position in
total loans and total deposits, holding a market share of
approximately 24.9% and 27.4%, respectively. While the bank has
historically had a corporate orientation with primary business
lines including retail and international banking, it is a full-
service commercial bank and offers a wide array of universal
banking services to a rapidly-growing client base. In recent
years, it has notably expanded its retail business.
Banco Industrial SA is the largest bank in Guatemala. As of
June 30, 2007, it had consolidated assets of approximately
US$4.5 billion and equity of US$373.3 million. As of
Sept. 30, 2007, Banpais had US$925 million in assets,
US$600 million in deposits, and earnings of approximately
US$22 million.
BANCO INDUSTRIAL: Moody's Rates Tier 1 Capital Notes at Ba3
-----------------------------------------------------------
Moody's Investors Service has assigned a Ba3 foreign currency
subordinated debt rating to Banco Industrial S.A.'s non-
cumulative fixed/floating rate step up Tier 1 capital notes with
a final bullet maturity of 2068. Both principal and interest on
the notes will be payable in United States dollars.
Moody's noted that the Ba3 subordinated debt rating assigned to
the notes is three notches below the bank's Baa3 global local
currency deposit rating, in line with Moody's notching
guidelines for bank junior securities. The rating is
unconstrained by Guatemala's Ba1 foreign currency country
ceiling for bonds and notes.
Banco Industrial's local currency deposit rating of Baa3 takes
into account the bank's baseline credit assessment of Ba2 that
is mapped from the D bank financial strength rating. The local
currency deposit rating is then lifted to Baa3 based on Moody's
assumption of a very high probability of systemic support for
the bank's local currency deposit obligations in the event of
high stress.
Rating assigned to Banco Industrial's Tier 1 capital notes:
-- Foreign currency subordinated debt rating: Ba3, with
stable outlook
Headquartered in Guatemala City, Guatemala, Banco Industrial
S.A. is the country's largest bank as of Dec. 31, 2007, with
consolidated assets of US$5 billion and equity of US$402.5
million. It is a full-service commercial bank providing a wide
range of financial services to over one million customers. The
bank's main business lines include corporate, retail and
international banking, as well as private banking and credit
cards. It maintains a dominant presence in Guatemala with a
market shares of approximately 29%, 25% and 27% of total assets,
total loans, and total deposits, respectively.
=============
J A M A I C A
=============
NAT'L COMMERCIAL: Court Says No to Injunction Extension Plea
------------------------------------------------------------
The High Court Judge Roy Jones has refused to grant an extension
of an injunction that blocks the National Commercial Bank
Jamaica Limited from closing Olint Limited's accounts, Radio
Jamaica reports.
As reported in the Troubled Company Reporter-Latin America on
March 4, 2008, Jamaica's High Court Judge Roy Jones extended the
injunction alternative investment scheme Olint Limited secured
to block the National Commercial from closing its accounts. The
Supreme Court extended the injunction until Feb. 15, preventing
the bank from closing Olint's accounts. Olint had taken out the
injunction on Jan. 11, 2008, when the National Commercial had
planned to close Olint's accounts, alleging that the company was
unregulated and was operating in breach of the Securities Act.
Radio Jamaica notes that Olint's legal representatives went to
court last week to seek another extension of the injunction.
Judge Jones, however, denied the extension because there was no
merit in any of the claims Olint is making against National
Commercial.
Olint's attorney Georgia Gibson-Henlin told RJR News that they
appealed the decision to seek for a longer injunction.
Appellate court Judge Karl Harrison will rule next Wednesday,
Radio Jamaica relates.
Olint's attorney Georgia Gibson-Henlin commented to Radio
Jamaica, "Our effort today was to convince the court that Olint
had good and substantial grounds to appeal and on that basis the
court should continue the injunction pending that hearing [on
whether the injunction should be lifted]."
The National Commercial was wrong to ask Olint for audited
financial statements in the manner which it did because at the
time when the bank asked for the statements Olint had been in
existence for quite some time, Radio Jamaica notes, citing Ms.
Gibson-Henlin.
Headquartered in Kingston, Jamaica, the National Commercial Bank
Jamaica Limited -- http://www.jncb.com/-- provides commercial
and retail banking, wealth management services. The company's
services include personal banking, business banking, mortgage
loans, wealth management and insurance services. Founded in
1977, the bank primarily operates in West Indies and the UK.
* * *
As reported in the Troubled Company Reporter-Latin America on
Dec. 18, 2006, Standard & Poor's Rating Services affirmed its
'B/B' counterparty credit and CD ratings on National Commercial
Bank Jamaica Ltd. S&P said the outlook is stable.
As reported in the Troubled Company Reporter-Latin America on
May 2, 2007, Fitch Ratings affirmed these ratings on Jamaica-
based National Commercial Bank Jamaica Limited: long-term
foreign and local currency Issuer Default at 'B+'; short-term
foreign and local currency rating at 'B'; individual at 'D'; and
support at 4. The rating outlook on the bank's ratings is
stable, in line with Fitch's view of the sovereign's
creditworthiness.
===========
M E X I C O
===========
ASARCO LLC: USW Examines Bankruptcy Status With Firm
----------------------------------------------------
The United Steelworkers (USW) union released a report examining
Grupo Mexico S.A. de C.V.'s record and based on that record, the
potential impact on the long term viability of ASARCO LLC and on
United States workers, communities and the environment if Grupo
Mexico were to regain control of ASARCO when it exits bankruptcy
in the coming months.
The report, titled "Grupo Mexico and ASARCO: The Record Speaks
for Itself," looks at a number of Grupo Mexico's past business
practices, as described in various lawsuits brought against the
company and independent media reports. They include allegations
that Grupo Mexico stripped ASARCO of its most valuable assets,
leaving the company insolvent and unable to pay millions in
asbestos and environmental liabilities; disregard for the health
and safety of its employees and their communities; a poor
environmental record; and poor employee relations.
The outcome of the reorganization process will have dramatic
impact on ASARCO's most significant stakeholders -- its
employees and the Department of Justice, on behalf of the
nation's taxpayers, who are the company's largest creditors.
The Steelworkers contend that any reorganization plan must
promote both sustainable employment and a credible plan for
addressing ASARCO's environmental legacy.
According to USW District 12 Director, Terry Bonds, "Based on
Grupo Mexico's record, we believe it is clear that Grupo's
resumption of control of ASARCO would be detrimental to the
interests of U.S. workers and communities and the nation's
taxpayers. This is something that the public needs to know."
The full report can be downloaded from:
http://www.usw.org/usw/program/adminlinks/docs/USW_Report_on_Gru
po_Mexico_and_ASARCO.pdf
About ASARCO
Based in Tucson, Arizona, ASARCO LLC -- http://www.asarco.com/
-- is an integrated copper mining, smelting and refining
company. Grupo Mexico S.A. de C.V. is ASARCO's ultimate parent.
The Company filed for chapter 11 protection on Aug. 9, 2005
(Bankr. S.D. Tex. Case No. 05-21207). James R. Prince, Esq.,
Jack L. Kinzie, Esq., and Eric A. Soderlund, Esq., at Baker
Botts L.L.P., and Nathaniel Peter Holzer, Esq., Shelby A.
Jordan, Esq., and Harlin C. Womble, Esq., at Jordan, Hyden,
Womble & Culbreth, P.C., represent the Debtor in its
restructuring efforts. Lehman Brothers Inc. provides the ASARCO
with financial advisory services And investment banking
services. Paul M. Singer, Esq., James C. McCarroll, Esq., and
Derek J. Baker, Esq., at Reed Smith LLP give legal advice to the
Official Committee of Unsecured Creditors and David J. Beckman
at FTI Consulting, Inc., gives financial advisory services to
the Committee. When the Debtor filed for protection from its
creditors, it listed US$600 million in total assets and
US$1 billion in total debts.
The Debtor has five affiliates that filed for chapter 11
protection on April 11, 2005 (Bankr. S.D. Tex. Case Nos. 05-
20521 through 05-20525). They are Lac d'Amiante Du Quebec Ltee,
CAPCO Pipe Company, Inc., Cement Asbestos Products Company, Lake
Asbestos of Quebec, Ltd., and LAQ Canada, Ltd. Details about
their asbestos-driven chapter 11 filings have appeared in the
Troubled Company Reporter since Apr. 18, 2005.
Encycle/Texas, Inc. (Bankr. S.D. Tex. Case No. 05-21304),
Encycle, Inc., and ASARCO Consulting, Inc. (Bankr. S.D. Tex.
Case No. 05-21346) also filed for chapter 11 protection, and
ASARCO has asked that the three subsidiary cases be jointly
administered with its Chapter 11 case. On Oct. 24, 2005,
Encycle/Texas' case was converted to a Chapter 7 liquidation
proceeding. The Court appointed Michael Boudloche as
Encycle/Texas, Inc.'s Chapter 7 Trustee. Michael B. Schmidt,
Esq., and John Vardeman, Esq., at Law Offices of Michael B.
Schmidt represent the Chapter 7 Trustee.
ASARCO's affiliates, AR Sacaton LLC, Southern Peru Holdings LLC,
and ASARCO Exploration Company Inc., filed for Chapter 11
protection on Dec. 12, 2006 (Bankr. S.D. Tex. Case No. 06-20774
to 06-20776).
The Debtors have until June 10, 2008 to file a Chapter 11 plan
of reorganization. (ASARCO Bankruptcy News, Issue No. 70;
Bankruptcy Creditors' Service, Inc.,
http://bankrupt.com/newsstand/or 215/945-7000).
BOWNE & CO: Improved Cash Flow Cues Moody's to Up Rating to Ba2
---------------------------------------------------------------
Moody's Investors Service upgraded the corporate family rating
of Bowne & Co., Inc. to Ba2 from Ba3 and the rating on its
convertible subordinated notes to B1 from B2. In conjunction
with the upgrade, Moody's changed the ratings outlook to stable
from positive.
The action follows substantial improvement in free cash flow
generation (free cash flow-to-debt exceeded 20% for 2007), some
margin improvement, and a moderation of the share repurchase
program. Furthermore, the company has developed adequate
business diversification to withstand the downturn in capital
markets, in Moody's view. The stable outlook assumes that Bowne
will continue to generate free cash flow in excess of 5% of
debt, margins will remain above 12% (all metrics as per Moody's
standard adjustments), and the company will maintain strong
liquidity. The current ratings level could tolerate continued
cash financed acquisitions in line with the historic pattern
(less than
US$50 million purchase price) provided leverage remains around 3
times debt-to-EBITDA (as per Moody's standard adjustments) and
margins do not contract.
Bowne & Co., Inc.
-- Corporate Family Rating, Upgraded to Ba2 from Ba3
-- Probability of Default Rating, Upgraded to Ba2 from Ba3
-- Subordinate Convertible Bonds, Upgraded to B1 from B2
-- Outlook, Changed To Stable From Positive
Bowne's strong liquidity, moderate leverage (2.9 times debt-to-
EBITDA for 2007, as per Moody's standard adjustments, including
treatment of pension obligations as debt), and considerable
stream of recurring revenue support its Ba2 corporate family
rating. The rating also reflects the seasonality and volatility
of its free cash flow, its exposure to the capital markets
cycle, some vulnerability to the reduction in demand for printed
products, and some execution and acquisition risk.
Bondholders could put the US$75 million convertible notes to
Bowne for cash in October of 2008. Moody's believes Bowne has
adequate liquidity from its balance sheet cash (approximately
US$100 million as of 2007 year end) and US$150 million revolving
credit facility to satisfy this potential obligation, should
bondholders exercise this option.
Headquartered in New York City, Bowne & Co. Inc. (NYSE: BNE)
-- http://www.bowne.com/ -- provides financial, marketing and
business communications services around the world. The company
has 3,200 employees and 60 offices worldwide. The company's
Latin American offices are located in Argentina, Brazil and
Mexico. Its annual revenue is approximately US$850 million.
DIOMED HOLDINGS: Trustee Appoints 5-Member Creditors' Committee
---------------------------------------------------------------
The United States Trustee for Region appointed five members to
the Official Committee of Unsecured Creditors in Diomed Holdings
Inc. and Diomed Inc.'s Chapter 11 cases.
These members include:
1) Pioneer Optics Co.
c/o Ron Hille, President
35 Griffin Road South
Bloomfield, CT 06002
Tel: (860) 286-0071
Fax: (860) 286-0171
2) Stradis Healthcare
d/b/a Professional Sterile Concepts
c/o Bret T. Buhler, President
805 Marathon Parkway
Lawrenceville, GA 30045
Tel: (770) 962-2425
Fax: (770) 962-2391
3) Endovenous Laser Associates
c/o Robert J. Min, M.D.
29 Witherbee Avenue
Pelham Manor, NY 10803
Tel: (914) 576-6484
Fax: (212) 746-8596
4) Endolaser Associates, LLC
c/o Luis Navarro
327 East 65th Street
New York, NY 10021
Tel: (212) 249-6117
Fax: (212) 517-5630
5) Luminetx Corporation
c/o Rodney Schutt
1256 Union Avenue, 3rd Floor
Memphis, TN 38104
Tel: (901) 252-3700
Fax: (901) 252-3701
About Diomed Holdings
Based in Andover, Massachussetts, Diomed Holdings Inc. (AMEX:
DIO) -- http://www.evlt.com/and http://www.diomedinc.com/--
develops and commercializes minimal and micro-invasive medical
procedures that use its proprietary laser technologies and
disposable products. Diomed's EVLT(R) laser vein ablation
procedure is used in varicose vein treatments. Diomed also
provides photodynamic therapy for use in cancer treatments, and
dental and general surgical applications. The company sell its
products through a direct sales force, and a network of
distributors in the EU, Latin America and Mexico, the UK, the
US, Japan, Australia, South Korea, the Peoples' Republic of
China, and Canada.
The company and its affiliate filed for Chapter 11 protection on
March 14, 2008 (Bankr. D. Mass. Case Nos. 08-40750 and 08-
40749). Douglas R. Gooding, Esq., at Choate Hall & Stewart,
represents the Debtors in their restructuring efforts. When the
Debtors filed for protection from their creditors, they listed
estimated assets and liabilities of US$10 million to US$50
million.
DIOMED: Wants to Hire McGuireWoods as Bankruptcy Counsel
--------------------------------------------------------
Diomed Holdings Inc. and Diomed Inc. ask permission from the
U.S. Bankruptcy Court for the District of Massachusetts to
employ McGuireWoods LLP as their general bankruptcy counsel.
McGuireWoods will, among other things, advise the Debtors with
respect to their powers and duties as debtors-in-possession in
the continued management and operation of their business and
properties.
Mark E. Freedlander, Esq., a partner at the firm, tells the
Court that the firm's professionals bill:
Attorneys US$325 - US$710
Paralegals US$175
Mr. Freedlander assures the Court that the firm is disinterested
as that term is defined in Section 101(14) of the U.S.
Bankruptcy Code.
About Diomed Holdings
Based in Andover, Massachussetts, Diomed Holdings Inc. (AMEX:
DIO) -- http://www.evlt.com/and http://www.diomedinc.com/--
develops and commercializes minimal and micro-invasive medical
procedures that use its proprietary laser technologies and
disposable products. Diomed's EVLT(R) laser vein ablation
procedure is used in varicose vein treatments. Diomed also
provides photodynamic therapy for use in cancer treatments, and
dental and general surgical applications. The company sell its
products through a direct sales force, and a network of
distributors in the EU, Latin America and Mexico, the UK, the
US, Japan, Australia, South Korea, the Peoples' Republic of
China, and Canada.
The company and its affiliate filed for Chapter 11 protection on
March 14, 2008 (Bankr. D. Mass. Case Nos. 08-40750 and 08-
40749). Douglas R. Gooding, Esq., at Choate Hall & Stewart,
represents the Debtors in their restructuring efforts. When the
Debtors filed for protection from their creditors, they listed
estimated assets and liabilities of US$10 million to
US$50 million.
FEDERAL-MOGUL: Asbestos Trust Wants Pneumo Claims Holders Barred
----------------------------------------------------------------
The Asbestos Personal Injury Trust established under Federal-
Mogul Corp. and its debtor-affiliates' Fourth Amended Joint Plan
of Reorganization asks the U.S. Bankruptcy Court for the
Southern District of New York to issue a preliminary injunction
restraining and enjoining more than 20,000 holders of Pneumo
Asbestos Claims, both known and unknown, from commencing or
continuing prosecution, enforcement or recovery of their claims
against Cooper and Pneumo Abex until the Court enters a ruling
regarding a Plan A Settlement.
The Reorganized Debtors' Fourth Amended Joint Plan of
Reorganization provides for the implementation of two
alternative settlement agreements as a means of resolving the
claims asserted by Cooper Industries, LLC, and Pneumo Abex, LLC,
and other Pneumo Asbestos Claimants.
The Plan A Settlement requires Cooper and Pneumo Abex to make
approximately US$756 million in contributions to the Pneumo Abex
Subfund of the Asbestos Personal Injury Trust and extends a
third party injunction pursuant to Section 524(g)(4)(A)(ii) of
the Bankruptcy Code to Cooper, Pneumo Abex and certain of their
affiliates. The Plan B Settlement resolves Cooper's and Pneumo
Abex's claims in return for a US$140 million payment from the
Asbestos PI Trust.
As reported in the Troubled Company Reporter on Nov. 12, 2007,
the Court confirmed the Fourth Amended Plan and approved the
Plan B Settlement. The Plan became effective the following
month but the Plan B Settlement has not been implemented pending
the Court's ruling on the Plan A Settlement. Pursuant to the
Plan B Settlement, the Asbestos Trust placed the US$140 million
Settlement Amount in an escrow account. The Settlement Amount
will either be released to Cooper and Pneumo Abex, in the event
the Plan B Settlement is implemented, or returned to the Trust
for distribution to its beneficiaries if the Court approves the
Plan A Settlement.
While the decision regarding the Plan A Settlement is pending,
Cooper and Pneumo Abex continue to incur expenses defending
Pneumo Asbestos Claims in the tort system, Kathleen Campbell
Davis, Esq., at Campbell & Levine, LLC, in Wilmington, Delaware,
relates.
On April 10, 2008, Cooper advised the Asbestos Trust in writing
that unless an injunction is in place staying Pneumo Asbestos
Claims by May 31, 2008, it will send a notice causing the Plan B
Settlement Agreement to become effective. Cooper added that it
would forbear from sending that notice for so long as the
injunction remains in place and is effective.
Ms. Davis says the Plan B Settlement gives Cooper the unilateral
right to terminate the Plan A Settlement and cause the Plan B
Settlement to be implemented after giving notice to Pneumo Abex,
Federal-Mogul Corp., the Official Committee of Asbestos
Claimants, and the Future Claims Representative.
A list of the known Pneumo Asbestos Claimants is available for
free at http://bankrupt.com/misc/fmc_pneumoclaimants.pdf
Ms. Davis says in the absence of injunctive relief, the Asbestos
Trust will suffer substantial and irreparable injury consisting
of, among other things, the loss of the US$140 million
Settlement Amount that would otherwise be available for
distribution to Trust beneficiaries. She contends that an
injunctive relief will provide the necessary breathing room to
keep all parties to the Plan A Settlement committed to the
Settlement and allow time for the Court to fully develop its
decision regarding the Plan A Settlement.
The Asbestos Trust believes that the Plan A Settlement is far
more advantageous to its beneficiaries than the Plan B
Settlement, Ms. Davis tells the Court. To recall, more than 95%
of Pneumo Asbestos Claimants voted in favor of the Plan A
Settlement and the FCR and the Asbestos Committee have also
expressed their belief on the record that the Plan A Settlement
provides fair and equitable treatment to Pneumo Asbestos
Claimants, Ms. Davis says.
A temporary injunction will not result in any undue hardship to
the Pneumo Asbestos Claimholders who may ultimately receive the
benefit of the Plan A Settlement, or, at worst, return to the
tort system, Ms. Davis avers.
About Federal-Mogul
Federal-Mogul Corporation -- http://www.federal-mogul.com/--
(OTCBB: FDMLQ) is a global supplier, serving the world's
foremost original equipment manufacturers of automotive, light
commercial, heavy-duty, agricultural, marine, rail, off-road and
industrial vehicles, as well as the worldwide aftermarket.
Founded in Detroit in 1899, the company is headquartered in
Southfield, Michigan, and employs 45,000 people in 35 countries.
Aside from the U.S., Federal-Mogul also has operations in other
locations which includes, among others, Mexico, Malaysia,
Australia, China, India, Japan, Korea, and Thailand.
The Company filed for chapter 11 protection on Oct. 1, 2001
(Bankr. Del. Case No. 01-10582). Lawrence J. Nyhan Esq., James
F. Conlan Esq., and Kevin T. Lantry Esq., at Sidley Austin Brown
& Wood, and Laura Davis Jones Esq., at Pachulski, Stang, Ziehl &
Jones, P.C., represent the Debtors in their restructuring
efforts. When the Debtors filed for protection from their
creditors, they listed US$10.15 billion in assets and US$8.86
billion in liabilities. Federal-Mogul Corp.'s U.K. affiliate,
Turner & Newall, is based at Dudley Hill, Bradford. Peter D.
Wolfson, Esq., at Sonnenschein Nath & Rosenthal; and Charlene D.
Davis, Esq., Ashley B. Stitzer, Esq., and Eric M. Sutty, Esq.,
at The Bayard Firm represent the Official Committee of Unsecured
Creditors.
On March 7, 2003, the Debtors filed their Joint Chapter 11 Plan.
They submitted a Disclosure Statement explaining that plan on
April 21, 2003. They submitted several amendments and on
June 6, 2004, the Bankruptcy Court approved the Third Amended
Disclosure Statement for their Third Amended Plan. On
July 28, 2004, the District Court approved the Disclosure
Statement. The estimation hearing began on June 14, 2005. The
Debtors submitted a Fourth Amended Plan and Disclosure Statement
on Nov. 21, 2006, and the Bankruptcy Court approved that
Disclosure Statement on Feb. 6, 2007. The Fourth Amended Plan
was confirmed by the Bankruptcy Court on Nov. 8, 2007, and
affirmed by the District Court on Nov. 14. Federal-Mogul
emerged from Chapter 11 on Dec. 27, 2007. (Federal-Mogul
Bankruptcy News, Issue No. 166; Bankruptcy Creditors' Service
Inc., http://bankrupt.com/newsstand/or 215/945-7000)
* * *
As reported in the Troubled Company Reporter-Latin America on
Jan. 10, 2008, Moody's Investors Service confirmed the ratings
of the reorganized Federal-Mogul Corporation -- Corporate Family
Rating, Ba3; Probability of Default Rating, Ba3; and senior
secured bank credit facilities, Ba2. Moody's said the outlook
is stable. The financing for the company's emergence from
Chapter 11 bankruptcy protection has been funded in line with
the structure originally rated by Moody's in a press release
dated Nov. 28, 2007.
As reported on Jan. 7, 2008, Standard & Poor's Ratings Services
assigned its 'BB-' corporate credit rating to Southfield,
Michigan-based Federal-Mogul Corp. following the company's
emergence from Chapter 11 on Dec. 27, 2007. S&P said the
outlook is stable.
FRONTIER AIRLINES: To Hire Davis Polk as Bankruptcy Counsel
-----------------------------------------------------------
Frontier Airlines Holdings Inc. and its subsidiaries seek
permission from the U.S. Bankruptcy Court for the Southern
District of New York to employ Davis Polk & Wardwell as their
counsel, nunc pro tunc to April 10, 2008.
Edward M. Christie, III, the Debtors' senior vice president for
finance, says they have selected DPW as their lawyers because
of the firm's:
-- extensive experience and knowledge in both
corporate transactional work and in litigation;
-- recognized expertise in bankruptcy and restructuring,
credit, corporate finance, capital markets, mergers and
acquisitions, tax, executive compensation and employee
benefits, equipment financing and many other areas;
-- familiarity with the Debtors' businesses and
financial affairs which makes it well qualified to provide
the services required by the Debtors in their chapter 11
cases; and
-- significant relevant experience to deal effectively
and efficiently with the primary legal issues and problems
that are likely to arise in the context of the Debtors'
chapter 11 cases.
Mr. Christie further notes that DPW has provided advice to the
Debtors on a range of issues. The most recent of these is its
assistance and advice to the Debtors in an extraordinarily
compressed time frame, in connection with the Debtors'
preparation for, and commencement of the Chapter 11 cases.
The Debtors believe that DPW is both well-qualified and uniquely
able to represent them in their Chapter 11 cases in an efficient
and effective manner. If the Debtors are required to employ
lead counsel other than DPW, the Debtors, their estates and all
parties-in-interest will be unduly prejudiced by the risk, the
time and expense necessary to enable a counsel other than DPW to
become familiar with the Debtors' extensive business, operations
and capital structure, Mr. Christie states.
In order to enable the Debtors to faithfully execute their
duties as debtors and debtors-in-possession, and to implement
the restructuring and reorganization of the Debtors, DPW will:
(a) take necessary or appropriate actions to protect and
preserve the Debtors' estates, including the prosecution
of actions on the Debtors' behalf, the defense of any
actions commenced against the Debtors, the negotiation of
disputes in which the Debtors are involved, and the
preparation of objections to claims filed against the
Debtors' estates;
(b) prepare on behalf of the Debtors, as debtors-in-
possession, necessary or appropriate motions,
applications, answers, orders, reports and other
papers in connection with the administration of the
Debtors' estates;
(c) provide advice, representation, and preparation of
necessary documentation and pleadings regarding debt
restructuring, statutory bankruptcy issues, postpetition
financing, securities laws, real estate, employee
benefits, environmental, business and commercial
litigation, tax, aircraft financing and, as
applicable, asset dispositions;
(d) counsel the Debtors with regard to their rights and
obligations as debtors-in-possession, and their powers
and duties in the continued management and operations of
their businesses and properties;
(e) take necessary or appropriate actions in connection
with a plan or plans of reorganization and related
disclosure statements and all related documents, and
further actions as may be required in connection with the
administration of the Debtors' estates; and
(f) act as general bankruptcy counsel for the Debtors and
perform all other necessary or appropriate legal services
in connection with the Chapter 11 cases.
DPW will be paid based on it its hourly rates:
Partners and counsel US$620 to US$960
Associates US$305 to US$675
Paraprofessionals and staff US$100 to US$355
DPW will be reimbursed for all actual, necessary expenses it
incurs in providing its services in connection with the Debtors'
Chapter 11 cases.
During the 12-month period prior to the bankruptcy filing, DPW
received from the Debtors an aggregate of US$955,304 for
professional services performed and expenses incurred.
As of the bankruptcy filing, DPW was not a creditor of the
Debtors because DPW waived any unpaid amounts -- believed to be
zero -- for services it performed before the bankruptcy filing.
Prior to the Chapter 11 filing, the Debtors had established a
retainer balance with DPW. Subsequently, DPW issued a final
pre-filing invoice to the Debtors and drew down the amount due
from the retainer. DPW held a retainer as of the bankruptcy
filing equal to US$510,740.
Marshall S. Huebner, Esq., at Davis Polk & Wardwell, assures the
court that DPW is a "disinterested person" as defined in Section
101(14), as modified by Section 1107(b) of the Bankruptcy Code.
The firm neither holds nor represents any interests adverse to
the Debtors and their estates, Mr. Heubner says.
Based in Denver, Colorado, Frontier Airlines Holdings Inc.
(NASDAQ:FRNT) -- http://www.frontierairlines.com/-- is the
parent company of Frontier Airlines. Frontier Airlines is the
second-largest jet service carrier at Denver International
Airport, employing approximately 6,000 aviation professionals.
Frontier Airline's mainline operation has 62 aircraft with one
of the youngest Airbus fleets in North America.
In conjunction with its regional jet fleet, operated by Republic
Airlines, and a fleet of ten Bombardier Q-400 aircraft operated
by Lynx Aviation, a subsidiary of Frontier Airlines Holdings
Inc., Frontier offers routes linking its Denver hub to 70
destinations, including 62 U.S. cities in 36 states spanning the
nation from coast to coast; six cities in Mexico; one in Canada
and one in Costa Rica.
The Debtor and its debtor-affiliates filed for Chapter 11
protection on April 10, 2008, (Bankr. S.D. N.Y. Case No.: 08-
11297 thru 08-11299.) Togul, Segal & Segal LLP is the Debtors'
Conflicts Counsel, Faegre & Benson LLP is the Debtors' Special
Counsel, Epiq Bankruptcy LLC is Debtors' Notice & Claims Agent
and Kekst and Company is the Debtors' Communications Advisors.
At Dec. 31, 2007, Frontier Airlines Holdings Inc. and its
subsidiaries' total assets was US$1,126,748,000 and total debts
was US$933,176,000. (Frontier Airlines Bankruptcy News, Issue
No. 3; Bankruptcy Creditors' Service, Inc.,
http://bankrupt.com/newsstand/or 215/945-7000)
FRONTIER AIRLINES: To Hire Togut Segal as Conflicts Counsel
-----------------------------------------------------------
Frontier Airlines Holdings Inc. and its subsidiaries seek
permission from the U.S. Bankruptcy Court for the Southern
District of New York to employ Togut Segal & Segal LLP as their
conflicts counsel nunc pro tunc to April 10, 2008.
Edward M. Christie, III, the Debtors' senior vice president for
finance, says the Debtors have selected Togut Segal because of
the firm's experience and knowledge in the field of debtors'
protections and creditors' rights and complex business
reorganizations under Chapter 11 of the Bankruptcy Code. In
addition, the firm has been actively involved in major
Chapter 11 cases and has represented debtors in many cases.
Mr. Christie notes that the Debtors are hiring Davis Polk &
Waldwell as their attorneys to represent them in their Chapter
11 cases. However, it is anticipated that there may be matters
with respect to which DPW cannot represent the Debtors because
of a conflict.
Hence, the services of Togut Segal, as the Debtors' conflicts
counsel, is necessary with respect to the efficient handling of
matters that the Debtors may encounter which are not
appropriately handled by DPW and other professionals because of
a potential conflict of interest, says Mr. Christie.
The firm's scope of services are:
(a) advise the Debtors regarding their powers and duties as
Debtors and debtors-in-possession in the continued
management and operation of their businesses and
properties;
(b) attend meetings and negotiate with representatives of
creditors and other parties-in-interest;
(c) take necessary action to protect and preserve the
Debtors' estates and to represent the Debtors' interests
in negotiations concerning litigation in which the
Debtors are involved, including, but not limited to
objections to claims files against the estates;
(d) prepare on the Debtors' behalf, motions, applications,
adversary proceedings, answers, orders, reports and
papers necessary to the administration of the estates;
(e) advise the Debtors in connection with any potential sale
of the assets;
(f) appear before the Court and to protect the interests of
the Debtors' estates before the Court; and
(g) perform other necessary legal services and provide other
necessary advice to the Debtors in connection with the
Chapter 11 cases.
The firm will perform the duties of counsel to the Debtors on
all
matters where DPW cannot perform its services, making the the
firm's service complimentary rather than duplicative to DPW's
role as bankruptcy and reorganization counsel, says Mr.
Christie.
The Debtors will pay Togut Segal based on the firm's hourly
rates and will be reimbursed for its actual, necessary expenses.
The firm's hourly rates are:
Partners US$725 to US$845
Associates and Counsel 245 to 650
Paralegals and Law Clerks 125 to 245
Alber Togut, Esq., a member of Togut Segal, assures the court
that his firm is "disinterested" as that term is defined in
Section 101(14) of the Bankruptcy Code.
Based in Denver, Colorado, Frontier Airlines Holdings Inc.
(NASDAQ:FRNT) -- http://www.frontierairlines.com/-- is the
parent company of Frontier Airlines. Frontier Airlines is the
second-largest jet service carrier at Denver International
Airport, employing approximately 6,000 aviation professionals.
Frontier Airline's mainline operation has 62 aircraft with one
of the youngest Airbus fleets in North America.
In conjunction with its regional jet fleet, operated by Republic
Airlines, and a fleet of ten Bombardier Q-400 aircraft operated
by Lynx Aviation, a subsidiary of Frontier Airlines Holdings
Inc., Frontier offers routes linking its Denver hub to 70
destinations, including 62 U.S. cities in 36 states spanning the
nation from coast to coast; six cities in Mexico; one in Canada
and one in Costa Rica.
The Debtor and its debtor-affiliates filed for Chapter 11
protection on April 10, 2008, (Bankr. S.D. N.Y. Case No.: 08-
11297 thru 08-11299.) Hugh R. McCullough, Esq. at Davis Polk &
Wardwell represent the Debtors in their restructuring efforts.
Faegre & Benson LLP is the Debtors' Special Counsel, Epiq
Bankruptcy LLC is Debtors' Notice & Claims Agent and Kekst and
Company is the Debtors' Communications Advisors. At Dec. 31,
2007, Frontier Airlines Holdings Inc. and its subsidiaries'
total assets was US$1,126,748,000 and total debts was
US$933,176,000. (Frontier Airlines Bankruptcy News, Issue
No. 3; Bankruptcy Creditors' Service, Inc.,
http://bankrupt.com/newsstand/or 215/945-7000)
GAP INC: March 2008 Net Sales Down 12% to US$1.37 Billion
---------------------------------------------------------
Gap Inc. reported net sales of US$1.37 billion for the five-week
period ended April 5, 2008, which represents a 12% decrease
compared with net sales of US$1.55 billion for the same period
ended April 7, 2007. The company's comparable store sales for
March 2008 decreased 18% compared with a 6% increase for
March 2007.
Comparable store sales by division for March 2008 were:
* Gap North America: negative 14% versus positive 4% last
year;
* Banana Republic North America: negative 8% versus positive
8% last year;
* Old Navy North America: negative 27% versus positive 10%
last year; and
* International: negative 3% versus negative 5% last year.
"Overall March traffic and sales results across our brands were
disappointing, particularly at Old Navy," Sabrina Simmons, chief
financial officer of Gap Inc., said. "With our continued
inventory discipline across the brands, we delivered merchandise
margins above last year. As we execute our strategy of
delivering healthier earnings through improved margins and cost
management, we remain comfortable with our previously
communicated 2008 annual earnings per share guidance of US$1.20-
US$1.27."
Year-to-date net sales of US$2.28 billion for the nine weeks
ended April 5, 2008, dropped 7% compared with net sales of
US$2.46 billion for the nine weeks ended April 7, 2007. The
company's year-to-date comparable store sales decreased 13%
compared with a 2% increase in the prior year.
The company reiterated that it expects diluted earnings per
share of US$1.20 to US$1.27 for fiscal year 2008.
The company will report April sales on May 8, 2008.
Headquartered in San Francisco, California, Gap Inc. (NYSE: GPS)
-- http://www.gapinc.com/-- is an international specialty
retailer offering clothing, accessories and personal care
products for men, women, children and babies under the Gap,
Banana Republic, Old Navy, Forth & Towne and Piperlime brand
names. Gap Inc. has subsidiaries in the United Kingdom, Canada,
France, Ireland, Japan, Hong Kong, Bermuda and Mexico, among
others. In addition, Gap Inc. is expanding its international
presence with franchise agreements for Gap and Banana Republic
in Southeast Asia and the Middle East.
GAP INC: Fitch Affirms IDR at BB+ on Considerable Liquidity
-----------------------------------------------------------
Fitch has affirmed its ratings on The Gap, Inc, (NYSE: GPS) as:
-- Issuer Default Rating at 'BB+';
-- Senior unsecured notes at 'BB+'.
The Rating Outlook is revised to Stable from Negative. The
rating action affects approximately US$188 million of debt.
Gap's rating reflects its considerable liquidity as reflected in
cash of US$1.9 billion against debt of US$188 million at the
fiscal year ending Feb. 2, 2008. The company is expected to be
debt free after Mar. 1, 2009. Gap has been a strong cash
generator. Free cash flow (operating cash flow less capital
expenditures and dividends) has been positive in the past seven
years ranging from a low of US$301 million in the poor retail
year of 2001 to as high as US$1.8 billion in 2003. Fitch
expects that the company will remain free cash flow positive in
the intermediate term.
The rating also encompasses the significant pressure placed on
the top line given poor same store sales trends which has been
negative in each of the past three fiscal years. The negative
trend continues into the current fiscal year with -6% in
February 2008 and -18% in March 2008. The slide in top line
performance is of concern as it has long term negative
implications for the business.
The company has significantly scaled back new store additions
domestically, which means that top line growth is reliant on
same store sales growth, international expansion and online
operations. Additionally, the macro-economic environment and
management turnover at the brand level - particularly at Old
Navy - is not favorable towards a reversal of these trends.
Nevertheless, there is additional focus on return on invested
capital at the store level, inventory discipline, and cost
containment.
Management is committed to maintaining significant cash balances
at a current minimum of US$1.2 billion. Fitch expects that Gap
will maintain on a clean balance sheet, keep liquidity high, and
will pull back on discretionary spending as needed. Gap's minor
debt burden and strong liquidity underpin the rating.
Despite a weak economy and expected sales decline, the Stable
Outlook is based on the company's ability to comfortably meet
its capital and investment requirements as well as the
expectation that liquidity will remain strong and remaining debt
will be repaid by Mar. 1, 2009. The risk to note-holders is
low.
For the fiscal year ended Feb. 2, 2008, the company continued to
experience sales declines of 1.1% to US$15.8 billion. The EBIT
margin improved 60 basis points to 8.3% due to tighter inventory
management and more regular price selling. Free cash flow was
up US$734 million to US$1.1 billion helped by the improvement in
margins and working capital. As a result, both FFO fixed charge
coverage of 2.2 times (x) and total adjusted debt/EBITDAR
improved of 3x was an improvement over the previous year.
Headquartered in San Francisco, California, Gap Inc. (NYSE: GPS)
-- http://www.gapinc.com/-- is an international specialty
retailer offering clothing, accessories and personal care
products for men, women, children and babies under the Gap,
Banana Republic, Old Navy, Forth & Towne and Piperlime brand
names. Gap Inc. has subsidiaries in the United Kingdom, Canada,
France, Ireland, Japan, Hong Kong, Bermuda and Mexico, among
others. In addition, Gap Inc. is expanding its international
presence with franchise agreements for Gap and Banana Republic
in Southeast Asia and the Middle East.
HASBRO INC: Earns US$37.5 Million in First Quarter 2008
-------------------------------------------------------
Hasbro, Inc. reported net earnings of US$37.5 million
or US$0.25 per diluted share, compared to US$32.9 million or
US$0.19 per diluted share in first quarter ended March 30, 2008.
The company has net revenues of US$704.2 million, an increase of
US$78.9 million or 13% compared to US$625.3 million a year ago,
or an increase of 9%, net of the favorable foreign exchange
impact of US$25.4 million.
* Net revenues of US$704.2 million, an increase of US$78.9
million or 13% compared to US$625.3 million a year ago, or
an increase of 9% absent the impact of foreign exchange;
* Net earnings of US$37.5 million, or US$0.25 per diluted
share, compared to US$32.9 million, or US$0.19 per diluted
share last year;
* Growth driven primarily by TRANSFORMERS and LITTLEST PET
SHOP, as well as PLAYSKOOL, STAR WARS, BABY ALIVE, MY
LITTLE PONY and board games;
* During the quarter, the Company spent a total of US$156.0
million to repurchase 6.1 million shares of common stock
at an average price of US$25.63 per share.
“We had a strong 2007 and the momentum continues in 2008, with
growth driven primarily by TRANSFORMERS and LITTLEST PET SHOP,
as well as PLAYSKOOL, STAR WARS, BABY ALIVE, MY LITTLE PONY and
board games,” said Alfred J. Verrecchia, President and Chief
Executive Officer.
“While it’s early in the year and there is still a lot of
business to be done, our first quarter performance reinforces
the confidence we have in achieving our full-year financial
goals,” Verrecchia concluded.
Effective at the beginning of fiscal 2008, the Company
reorganized the reporting structure of its operating segments.
The Company’s Mexican operations have been transferred from the
North American segment to the International segment, and the
North American segment has been renamed the U.S. and Canada
segment. The attached schedule provides a summary of 2007
segment results reclassified in the 2008 segment reporting
format.
Net revenues for the U.S. and Canada segment for the quarter
were US$428.5 million, an increase of 6% compared to
US$406.1 million in 2007, with strong performances from
TRANSFORMERS, LITTLEST PET SHOP, STAR WARS and board games. The
U.S. and Canada segment reported an operating profit of US$37.3
million compared to US$45.8 million last year. The decrease in
operating profit is primarily due to investments the Company is
making to grow its business, including the Wizards of the Coast
digital initiative and the CRANIUM acquisition.
Net revenues for the International segment for the quarter were
US$248.3 million, an increase of 22% compared to US$202.7
million in 2007, or an increase of 12%, net of the favorable
foreign exchange impact of US$21.9 million. All major product
categories were up significantly, reflecting growth in core
brands including TRANSFORMERS, LITTLEST PET SHOP, PLAYSKOOL, MY
LITTLE PONY and board games. The International segment reported
an operating profit of US$13.0 million compared to a (US$1.8)
million loss in 2007. This improvement is primarily a
reflection of higher revenues.
“We are very pleased with the results we reported and we
continue to believe we should grow both revenues and earnings
per share in 2008. Our balance sheet is strong and we continue
to generate good cash flow, which is being returned to
shareholders via our increased dividend and the share buyback
program,” said David Hargreaves, Executive Vice President and
Chief Financial Officer.
During the quarter, the Board of Directors increased the
May 2008 quarterly dividend by US$0.04 per share, or 25%, to
US$0.20 per share. This is the fifth consecutive annual
increase and the highest it has been in the history of the
Company. Additionally, the Company spent a total of US$156.0
million to repurchase 6.1 million shares of common stock at an
average price of US$25.63 per share.
About Hasbro
Headquartered in Pawtucket, Rhode Island, Hasbro, Inc. (NYSE:
HAS) -- http://www.hasbro.com/-- provides children's and family
leisure time entertainment products and services, including the
design, manufacture and marketing of games and toys ranging from
traditional to high-tech. The company has operations in
Australia, France, Hong Kong, and Mexico, among others.
* * *
Moody's Investors Service affirmed the Baa3 long-term debt
rating of Hasbro, Inc., and changed the ratings outlook to
positive from stable to reflect the expectation for continued-
strong operating performance and cash flows, leading to further
debt reduction and credit metric improvement over the near-to-
intermediate-term. Ratings affirmed include the Baa3 senior
unsecured debt rating and the (P)Ba1 rating for subordinated
debt.
PRIDE INTERNATIONAL: Board Drops Ownership Threshold to 10%
-----------------------------------------------------------
Pride International Inc.'s Board of Directors has taken action
under the company's Stockholder Rights Plan to lower, solely
with respect to Seadrill Limited and its affiliates and
associates, the threshold level of beneficial ownership of the
company's common stock that would trigger the rights from 15% to
10%.
Pride also announced that it has been notified by Seadrill of
Seadrill's and its affiliates' acquisition, through undisclosed
forward purchase contracts and other acquisitions from
undisclosed parties, of approximately 9.9% of the company's
outstanding common stock. Seadrill has advised the Company that
it has made a filing under the Hart-Scott-Rodino Antitrust
Improvements Act of 1976 to permit Seadrill to acquire Pride
securities, but has neither provided the company with a copy of
the filing nor informed the Company at what notification
threshold the filing was made under the Act. Despite requests
by the company, Seadrill has not provided information about its
intentions, plans or proposals with respect to Pride or its
acquisition of the common stock; any agreements, arrangements or
understandings it has with third parties regarding Pride
securities; the terms of the forward purchase contracts; the
reasons for its Hart-Scott-Rodino filing; or the maximum
ownership level specified in the filing. Seadrill also
requested that Pride not publicly disclose its acquisition of
Pride securities or its Hart-Scott-Rodino filing.
Pride's Stockholder Rights Plan is intended to protect the
company's stockholders from open-market accumulations and other
abusive takeover activities. The Board of Directors of the
company has taken the action with respect to the rights plan
because Seadrill has not provided the Company with any
information about its intentions, and the Board wants to make
sure that all stockholders are protected appropriately. The
plan was adopted in 2001 in connection with the Company's merger
with Marine Drilling Companies to replace a similar plan in
effect at Pride since 1998.
About Pride International
Headquartered in Houston, Texas, Pride International Inc.
(NYSE: PDE) -- http://www.prideinternational.com/-- provides
onshore and offshore contract drilling and related services in
more than 25 countries, operating a diverse fleet of 277 rigs,
including two ultra-deepwater drillships, 12 semisubmersible
rigs, 28 jackups, 16 tender-assisted, barge and platform rigs,
and 214 land rigs. The company maintains worldwide operations
in France, Mexico, Kazakhstan, India, and Brazil, among others.
* * *
As reported in the Troubled Company Reporter-Latin America on
Nov. 22, 2007, Standard & Poor's Ratings Service raised its
corporate credit rating on offshore contract drilling firm Pride
International Inc. to 'BB+' from 'BB'. At the same time, S&P
raised the rating on the company's unsecured debt to 'BB+' from
'BB-'. S&P said the outlook is stable.
THERMADYNE HOLDINGS: Moody's Lifts CF Rating to B3 from Caa1
------------------------------------------------------------
Moody's Investors Service upgraded Thermadyne Holdings
Corporation's corporate family rating to B3 from Caa1 and the
rating on the US$175 million 9.25% senior unsecured subordinated
notes due 2014 to Caa1 from Caa2. The outlook is stable. The
rating action is predicated on the significant improvement of
Thermadyne's operating performance and financial metrics in 2007
and Moody's expectation of an adequate financial profile for the
rating category in the near term.
Moody's recognized Thermadyne's successful turnaround in 2007,
illustrated by material margins improvement and working capital
efficiencies. The company also generated positive free cash
flow for the first time since 2003 and significantly improved
its financial metrics. Total debt/EBITDA, as adjusted by
Moody's, declined to 4.4 times as of Dec. 31, 2007 from 6.2
times as of Dec. 31, 2006, driven by both debt reduction and
EBITDA enhancement.
While the cash flow improvement is recent -- a large portion of
free cash flow was generated in the fourth quarter of 2007 - and
the end market demand could weaken in the short to intermediate
term, affecting the company's cyclical operations, Moody's
believes that Thermadyne's financial profile and liquidity will
remain commensurate with the rating category, hence the stable
outlook.
Ratings upgraded:
-- Corporate Family Rating to B3
-- Probability of Default Rating to B3
-- Rating of Senior Subordinated Notes due 2014 to Caa1
(LGD assessment revised to LGD5/70% from LGD5/72%)
Headquartered in St. Louis Missouri, Thermadyne Holdings
Corporation -- http://www.thermadyne.com/-- is a multi-national
manufacturer of welding and cutting products. The company has
operations in Malaysia, Indonesia, Singapore, Philippines,
Italy, Mexico, Chile and Brazil. In 2007, its revenues totaled
approximately US$494 million.
USG CORP: Mexican Unit's 1Q Operating Profit Falls to US$4 Mln.
---------------------------------------------------------------
USG Corporation reported first quarter 2008 net sales of US$1.2
billion and a net loss of US$45 million based on 99.1 million
average shares outstanding. For the same period a year ago, the
corporation recorded net sales of US$1.3 billion and net
earnings of US$41 million based on 91.7 million average shares
outstanding.
"The recession in the housing market continues to have a
significant impact on our financial results," said Chairperson
and Chief Executive Officer, William C. Foote. "Our domestic
wallboard business, which is closely tied to the new residential
and home remodeling segments, has been hardest hit. L&W Supply,
our distribution business, which serves both residential and
commercial markets, has also seen sales and profitability
decline due to the slowdown in its residential business. Our
ceilings business, which is focused on the non-residential
market, grew both sales and profits. We reported increased net
sales in Canada, Europe and Mexico, where construction activity
was buoyant."
"Throughout this market downturn, we have moved to reduce
manufacturing costs by scaling our operations for market
conditions, removing older, less-efficient production capacity
from our network and focusing on our newest and most efficient
assets," explained Mr. Foote. "Over the course of the last
seven quarters, we have announced closures and implemented
curtailments totaling 3.5 billion square feet of the oldest and
least efficient wallboard manufacturing capacity in our network.
Rationalizing high cost capacity is an ongoing process and over
the last several weeks, we announced plans to suspend operations
at a wallboard line in Iowa and at a paper mill in Ohio. Our
new wallboard plant in Norfolk, Virginia and new paper mill in
Otsego, Michigan, which are both in a start-up phase, will
operate at a significantly lower cost than the operations they
are replacing."
"The USG management team also remains keenly focused on reducing
selling, general and administrative expenses and other costs,"
continued Mr. Foote. "Most recently, on April 1, we initiated
another workforce reduction plan that will eliminate
approximately 500 salaried positions. This program, combined
with other actions, will bring the total number of positions
eliminated since the beginning of the downturn in the housing
market to approximately 1,750."
Commenting on management actions, Mr. Foote explained, "In a
very difficult market environment, the management team's focus
on the controllable factors within the business is producing
positive results. We have made significant reductions in
overhead costs and other discretionary spending, the operating
efficiencies at our plants are near record levels and customer
satisfaction metrics remain high. Longer term, we will be well-
positioned for the market rebound with efficient new plants that
will replace the older operations we have closed during the
downturn. We expect to emerge from this downturn operationally
stronger, with closer ties to our customers."
The corporation's consolidated first quarter 2008 results
included US$12 million (US$7 million after-tax) in startup
expenses at new plants. Results in the first quarter of 2008
also included restructuring charges totaling US$4 million (US$2
million after-tax) primarily associated with severance related
to the shutdown of several North American Gypsum manufacturing
facilities and additional salaried workforce reductions in
response to current market conditions.
The effective tax benefit rate for the first quarter of 2008 was
43.6 percent compared to a tax rate of 30.2 percent in the first
quarter of 2007. The 2008 tax benefit results from the
company's anticipated carry-forward of the loss in the first
quarter of 2008 to offset United States and federal income taxes
in future years. The higher effective tax rate in 2008 is a
result of the relative weighting of the loss in 2008 and the
income in 2007 between the U.S., with a higher total tax rate,
and lower taxed foreign jurisdictions. In addition, first
quarter 2007 results included a US$6.6 million favorable tax
adjustment resulting from a correction of the Dec. 31, 2006,
deferred tax balances.
Business Outlook
The housing market continues to be very challenging. New
residential construction has shown signs of stabilizing at
or around the current level, which is down about 50 percent from
the peak in 2005. The market is likely to remain weak into 2009
as the inventory of unsold homes remains at historically high
levels. The corporation expects declines in residential repair
and remodeling expenditures and non-residential construction
activity. The corporation has aggressively reduced overhead
costs, cut discretionary spending and reduced staffing to
mitigate the impact of weak market conditions and potential
increases in manufacturing costs such as energy.
Core Business Results
North American Gypsum:
USG's North American Gypsum business recorded first quarter 2008
net sales of US$618 million and an operating loss of US$57
million, which included the previously mentioned US$12 million
of startup costs for new plants. Results in the first quarter
of 2008 also included restructuring charges of US$4 million. For
the first quarter of 2007, net sales were US$757 million and
operating profit was US$93 million.
United States Gypsum Company reported first quarter 2008 net
sales of US$514 million and an operating loss of US$64 million.
This compares with 2007 net sales of US$661 million and
operating profit of US$81 million. The decline in net sales was
attributable to sharply lower selling prices for SHEETROCK(R)
brand gypsum wallboard. Operating profit was adversely affected
by both lower selling prices and higher manufacturing costs,
particularly for wastepaper and other raw materials.
During the quarter, U.S. Gypsum realized an average selling
price of US$104.41 per thousand square feet for its SHEETROCK
gypsum wallboard, compared to US$110.29 in the fourth quarter of
2007 and US$164.12 in the first quarter of 2007. The company
announced and successfully implemented an increase in the price
of its wallboard products near the end of the first quarter.
U.S. Gypsum shipped 2.1 billion square feet of SHEETROCK gypsum
wallboard during the first quarter of 2008 compared with 2.2
billion square feet shipped during last year's first quarter and
2.1 billion shipped in the fourth quarter of 2007. Giving
effect to plant closures and additions, U.S. Gypsum's wallboard
plants operated at 76 percent of capacity during the quarter
compared with a 75 percent capacity utilization rate for the
same period a year ago. The company estimates that the industry
operated at 67 percent of capacity during the first quarter of
2008.
Overall first quarter 2008 profit for the company's
complementary product lines was lower compared to the first
quarter of 2007, largely due to lower volumes and higher
manufacturing costs. Partially offsetting these negative
factors was improvement in certain product lines, such as
FIBEROCK(R) brand gypsum fiber panels, where both shipments and
selling prices were higher, and manufacturing cost were reduced,
compared to the first quarter of 2007.
The gypsum business of Canada-based CGC Inc. reported first
quarter 2008 net sales of US$84 million, an increase of US$7
million compared with the first quarter of 2007. Net sales
improved despite lower shipments and realized selling prices for
gypsum wallboard largely due to the favorable effects of
currency translation. The higher net sales also reflected
higher selling prices and shipments for joint compound products.
First quarter 2008 operating profit of US$4 million was US$2
million lower than last year's first quarter primarily due to
the lower average realized selling prices and shipments of
gypsum wallboard.
USG Mexico, S.A. de C.V., USG's Mexico-based gypsum business,
reported first quarter 2008 net sales of US$47 million compared
with US$43 million achieved a year ago. Sales improved largely
due to higher shipments of cement board and construction
plaster. First quarter 2008 operating profit was US$4 million
compared to US$7 million reported in the same period last year.
Operating profit fell due to lower realized selling prices for
gypsum wallboard as well as higher energy and raw material
costs.
Building Products Distribution:
L&W Supply Corporation, USG's building products distribution
business, reported first quarter 2008 net sales of US$490
million, a decline of US$14 million, or 3 percent, versus the
first quarter of 2007. This decline primarily reflects lower
selling prices and shipments for gypsum wallboard, partially
offset by the positive impact of the late March 2007 acquisition
of California Wholesale Material Supply, Inc., or CALPLY. On a
same-location basis, net sales for the first quarter of 2008
decreased 24 percent compared with the prior year's first
quarter as a result of weak residential construction demand,
which lowered wallboard selling prices and volumes.
During the first quarter of 2008, gypsum wallboard shipments
declined by 8 percent compared with last year's first quarter.
Reflecting the relative strength of the commercial construction
market and the acquisition of CALPLY, sales of L&W Supply's
ceiling, construction metal and insulation products were up 24
percent compared with the first quarter of 2007.
L&W Supply reported an operating loss of US$1 million in the
first quarter of 2008 compared with an operating profit of US$26
million reported in last year's first quarter, largely due to
lower shipments and margin for gypsum wallboard. Results in the
first quarter of 2008 also included a US$3 million charge
related to a LIFO adjustment. As part of the company's ongoing
efforts to reduce its cost structure in light of market
conditions, L&W Supply closed 10 centers during the quarter.
Since the start of the downturn in construction, L&W has closed
or 16 locations. At the end of the first quarter of 2008, L&W
Supply operated 238 locations.
Worldwide Ceilings
USG's Worldwide Ceilings business reported first quarter 2008
net sales of US$211 million, an increase of US$14 million versus
the first quarter of 2007. Operating profit in the first
quarter of 2008 improved US$8 million to US$22 million compared
to the first quarter of 2007.
USG's domestic ceilings business, USG Interiors, Inc., reported
first quarter 2008 net sales of US$135 million, an increase of
US$10 million compared with last year's first quarter. USG
Interiors' first quarter 2008 operating profit almost doubled to
US$15 million versus the US$8 million reported in the first
quarter of 2007. These results reflect higher selling prices
and shipments for ceiling tile and grid. Manufacturing
efficiencies were also achieved but were partially offset by
higher energy and raw material costs.
USG International reported net sales of US$73 million in the
first quarter of 2008 compared with US$69 million for the same
period a year earlier, reflecting increased demand for ceiling
grid and joint compound in Europe and the favorable effects of
currency translation. Operating profit of US$4 million in the
first quarter of 2008 was unchanged from last year's first
quarter primarily as a result of favorable ceiling grid and
joint compound gross profit margins in Europe and the favorable
impact of currency translation offset by higher selling and
administrative expenses.
The ceilings division of CGC Inc. reported net sales of US$15
million and operating profit of US$3 million in the first
quarter of 2008. These results compare with net sales of US$15
million and operating profit of US$2 million for the same period
a year ago.
Other Consolidated Information
First quarter 2008 selling and administrative expenses totaled
US$102 million, a decrease of US$15 million, or 13 percent,
compared to the first quarter of 2007. Expenses were lower in
the 2008 period primarily due to a company-wide emphasis on
reducing expenses including the impact of the 2007 salaried
workforce reductions. As a percent of net sales, selling and
administrative expenses were 8.8 percent in the first quarter of
2008, down from 9.3 percent in the comparable 2007 period.
On April 1, the corporation initiated a workforce reduction
program that is expected to eliminate about 500 positions across
the corporation. The anticipated cash cost of the program is
between US$15 million and US$20 million. These costs will be
charged against results from operations beginning in the second
quarter of this year.
Interest expense was US$17 million for the first quarter of 2008
compared with US$44 million for the first quarter of 2007.
First quarter 2007 interest expense was higher due to a higher
level of borrowings as well as a US$10 million pretax charge to
write off deferred financing fees related primarily to the
corporation's repayment of a US$1.065 billion tax bridge loan in
March 2007.
As of March 31, 2008, USG had US$190 million of cash and cash
equivalents on a consolidated basis. This compared with US$297
million reported as of Dec. 31, 2007. Total debt amounted to
US$1.283 billion as of March 31, 2008, up from US$1.238 billion
as of Dec. 31, 2007. Capital expenditures in the first quarter
of 2008 were US$105 million compared with US$111 million in the
corresponding 2007 period.
About USG Corporation
Based in Chicago, Illinois, USG Corporation --
http://www.usg.com/-- through its subsidiaries, manufactures
and distributes building materials producing a wide range of
products for use in new residential, new nonresidential and
repair and remodel construction, as well as products used in
certain industrial processes. The company has manufacturing and
distribution facilities in Argentina, Aruba, Bahamas, Barbados,
Belize, Bermuda, Bolivia, Brazil, Cayman Islands, Chile,
Colombia, Costa Rica, Curacao, Dominican Republic, Ecuador, El
Salvador, Guatemala, Haiti, Honduras, Jamaica, Mexico,
Nicaragua, Panama, Paraguay, Peru, Puerto Rico, Suriname,
Trinidad, Uruguay and Venezuela.
The company filed for chapter 11 protection on June 25, 2001
(Bankr. Del. Case No. 01-02094). When the Debtors filed for
protection from their creditors, they listed US$3,252,000,000 in
assets and US$2,739,000,000 in debts. The Debtors emerged from
bankruptcy protection on June 20, 2006.
* * *
As reported in the Troubled Company Reporter-Latin America on
Feb. 29, 2008, Moody's Investors Service downgraded the debt
ratings of USG to Ba2 reflecting the ongoing pressure on the
company's financial performance caused by the sharp contraction
in the new home construction market. At the same time a
corporate family rating of Ba2 and a speculative grade rating of
SGL-2 were assigned. The ratings outlook is negative.
As reported by the TCR on Feb. 1, 2008, USG reported fourth
quarter 2007 net sales of US$1.2 billion and a net loss of
US$28 million.
===============
P A R A G U A Y
===============
MILLICOM INT'L: Posts US$158MM Net Income in Qtr. Ended March 31
----------------------------------------------------------------
Millicom International Cellular S.A. reported net income of
US$158.1 million on net revenues of US$800.7 million for the
three months ended March 31, 2008, compared to net income of
US$345.2 million on net revenues of US$562.7 million for the
same period in 2007.
The March 31 balance sheet showed a working capital deficit with
total current assets of US$1.8 million and total current debts
of US$2 million.
Marc Beuls, CEO of Millicom, commented; “Millicom recorded the
second best quarter in its history in terms of net subscriber
additions, adding 2.8 million in the quarter, following the
exceptional final quarter of 2007. We are also particularly
pleased with the first quarter year-on-year revenue growth of
42%, which is higher than the 41% growth in the previous
quarter, and with the net profit of $158 million for the
quarter, reflecting a very strong margin of 20%.”
“Given that Q1 has historically been the weakest quarter of the
year, owing to the seasonality of our business, our results show
that we have achieved real traction across our markets as a
result of sustained and heavy investment in sales and marketing,
distribution and our networks in the last few years. It is
encouraging to see the EBITDA margin improve to 42% from 40% in
the previous quarter given this high level of investment. In
2008 it is our intention to increase capex still further and we
are forecasting capex in excess of one billion U.S. dollars for
the year, which underlines our belief that we can continue to
grow both our subscriber base and market share as the
penetration rates rise across all our markets.”
“Millicom's strategy continues to be to build a mass market pre-
paid business in all sixteen of its markets and it is important
to understand, as we have often mentioned, that in order to
drive penetration and subscriber growth we need to target
customers with less disposable income. In Q1 we delivered
higher than expected subscriber growth, a record for a first
quarter, by aggressively targeting these customers. Firstly,
the percentage of net new subscriber additions from Africa and
Asia has risen from 39% in Q1 2007 to 45% in Q1 2008. Secondly,
in Latin America as we continue to drive mobile voice
penetration levels beyond the current levels, we need to
increasingly target those customers with limited disposable
incomes. Our low cost pre-paid business model is ideally suited
to attracting a high volume of this mass market segment.”
“We will continue to improve affordability for our customers
which will result in a gradual decline in ARPUs and will sustain
our market leading rates of revenue growth. This will also help
improve our EBITDA margin as we achieve economies of scale from
higher volumes.”
“The prospects for the business continue to be excellent.”
About Millicom International
Headquartered in Bertrange, Luxembourg, and controlled by
Sweden's AB Kinnevik, Millicom International Cellular S.A.
-- http://www.millicom.com/-- is a global telecommunications
investor with cellular operations in Asia, Latin America and
Africa. It currently has cellular operations and licenses in 16
countries. The Group's cellular operations have a combined
population under license of around 391 million people.
The Central America Cluster comprises Millicom's operations in
El Salvador, Guatemala and Honduras. The population under
license in Central America at December 2005 is 26.4 million.
The South America Cluster comprises Millicom's operations in
Bolivia and Paraguay. The population under license in South
America at December 2005 is 15.2 million.
* * *
As reported in the Troubled Company Reporter-Europe on
Nov. 16, 2007, Moody's Investors Service upgraded ratings of
Millicom International Cellular S.A. The corporate family
rating was upgraded to Ba2 from Ba3 and the rating on the
existing senior notes was upgraded to B1 from B2. Moody's said
the outlook on the ratings is stable.
====================
P U E R T O R I C O
====================
CARIBBEAN RESTAURANTS: S&P Lifts Rating to B- With Neg. Outlook
---------------------------------------------------------------
Standard & Poor's Ratings Services raised the ratings on
Caribbean Restaurants LLC to 'B-' from 'CCC+.' The outlook
remains negative.
"The upgrade reflects diminished expectations for a default due
to CRI's recently amended credit agreement that loosens
financial covenants," explained S&P's credit analyst Jackie E.
Oberoi. Term loan pricing will increase 200 basis points (bps)
and consenting lenders were paid a 50-bp fee. "We expect
cushion over covenants to return to historical levels once
covenant levels are loosened in the first quarter of fiscal
2008," added Ms. Oberoi.
Based in San Juan, Puerto Rico, Caribbean Restaurants, LLC,
through an exclusive territorial development agreement with
Burger King Corporation, is the sole franchisee of Burger King
restaurants in Puerto Rico with approximately 170 units as of
fiscal year-end April 30, 2007.
JETBLUE AIRWAYS: Loss Expectations Cue S&P to Cut Rating to B-
--------------------------------------------------------------
Standard & Poor's Ratings Services lowered its ratings on
JetBlue Airways Corp., including lowering the long-term
corporate credit rating to 'B-' from 'B'. "The downgrade is
based on expectations that the company will incur a significant
loss in 2008," said Standard & Poor's credit analyst Betsy
Snyder. "We expect the loss could approach US$100 million if
fuel prices remain at high levels and demand weakens in the
second half of the year because of the slowing economy,
consistent with trends facing the industry," the analyst
continued.
As a result, the company's financial profile will weaken,
despite cost and revenue initiatives undertaken in response to
the external pressures. JetBlue continues to benefit from
nonfuel operating costs that are among the lowest in the
industry, and its liquidity has been aided by proceeds from
aircraft sales and a US$300 million equity investment by
Deutsche Lufthansa AG (BBB/Stable/A-2) in January 2008. The
outlook is stable.
The ratings on JetBlue reflect high debt levels undertaken to
finance its previously high growth rate, and participation in
the cyclical, price-competitive, and capital-intensive airline
industry. Ratings also incorporate the airline's low cost
structure. Forest Hills, New York-based JetBlue is a midsize
U.S. airline that started operating in 1999 from its main hub at
New York's JFK International Airport. Despite the company's low
operating costs, since 2004 its earnings have been hurt by high
fuel prices, more effective competition from large airlines, and
the need to keep fares low to fill seats in its rapidly
expanding fleet.
The company plans to substantially reduce capacity growth and
has implemented revenue-generating initiatives, but these
efforts will be dwarfed by the effect of higher fuel expense.
As a result, S&P expect the company to generate a substantial
loss in 2008, which
will weaken its financial profile. However, S&P expect JetBlue
to benefit from cooperation opportunities with Lufthansa, which
invested US$300 million (19% equity stake) in JetBlue, beginning
over the next several months.
JetBlue serves 53 destinations in the U.S., Puerto Rico, Mexico,
and the Caribbean. Its primary hub is at JFK, with smaller
focus cities at Long Beach, California; Fort Lauderdale,
Florida; Boston; and Washington's Dulles International Airport.
At Dec. 31, 2007, the company's fleet consisted of 104 Airbus
A320 aircraft and 30 Embraer 190 100-seat regional jets.
S&P expect JetBlue, like other U.S. airlines, to report a
substantial loss in 2008. However, the company's cash, proceeds
from aircraft sales, and commitments to finance its aircraft
deliveries should enable it to meet debt maturities and capital
spending needs in 2008. S&P could revise the outlook to
negative if higher-than-expected fuel prices or further economic
weakness continue to erode the company's financial profile. An
outlook revision to positive is unlikely unless industry
conditions begin to improve, and S&P see evidence of margin
improvement.
Based in Forest Hills, New York, JetBlue Airways Corporation
(Nasdaq:JBLU) -- http://www.jetblue.com/-- is a passenger
airline that provides customer service on point-to-point routes.
As of Feb. 14, 2007, JetBlue operated approximately 502 daily
flights. The company serves 50 destinations in 21 states,
Puerto Rico, Mexico and the Caribbean. The company operates a
fleet of 98 Airbus A320 and 23 Embraer 190 aircrafts. The
company's operations primarily consists of transporting
passengers on its aircraft, with domestic United States
operations, including Puerto Rico, accounting for approximately
97.1% of its capacity during the year ended Dec. 31, 2006.
SEARS HOLDINGS: US$1 Bil. LOC End Won't Affect S&P's 'BB' Rating
----------------------------------------------------------------
Standard & Poor's Ratings Services said that the termination of
a US$1 billion letter of credit facility has no important impact
on Sears Holdings Corp.'s (BB/Stable/--) liquidity.
Bank of America N.A. advised the Hoffman Estates, Illinois-based
company that it would not agree to renew the LOC agreement under
its existing terms. The current term of the agreement, which is
a 364-day secured facility with a commitment amount of up to
US$1 billion, is scheduled to end in July 2008. At April 18,
2008, only US$1.6 million in LOCs was outstanding under the
facility. Substantially all of Sears Holdings' outstanding LOCs
are issued under its US$4 billion, five-year revolving credit
facility (expiring March 2010), which has a US$1.5 billion LOC
sublimit.
Based in Hoffman Estates, Illinois, Sears Holdings Corporation
(NASDAQ: SHLD) -- http://www.searsholdings.com/-- parent of
Kmart and Sears, Roebuck and Co., is a broadline retailer with
approximately 3,800 full-line and specialty retail stores in the
United States, Canada and Puerto Rico. Key proprietary brands
include Kenmore, Craftsman and DieHard, and a broad apparel
offering, including such well-known labels as Lands' End, Jaclyn
Smith and Joe Boxer, as well as the Apostrophe and Covington
brands. It also has Martha Stewart Everyday products, which are
offered exclusively in the U.S. by Kmart and in Canada by Sears
Canada.
=============
U R U G U A Y
=============
BANCO ITAU: Expects AFAP UnionCapital Buy to Get Regulators' OK
---------------------------------------------------------------
Banco Itau Uruguay S.A.'s Deputy General Manager Carlos Ham told
Business News Americas that the bank expects regulators to
approve its purchase of private pension fund manager AFAP
UnionCapital in no more than 90 days.
According to BNamericas, Mr. Ham said that two Uruguayan central
bank units gave "the green light" to the acquisition.
As reported in the Troubled Company Reporter-Latin America on
April 23, 2008, Banco Itau reached an accord to acquire 100% of
shares in private pension fund manager AFAP UnionCapital.
Mr. Ham commented to BNamericas, "The purchase of UnionCapital
moves forward our strategy of consolidation and growth in
Uruguay's financial retail segment through the bank, credit card
administrator OCA and now the AFAP."
Banco Itau Uruguay S.A. is a multi-product commercial bank, with
a branch network throughout the country. As of June 2007 the
bank had UYU21.1 billion of assets and UYU1.9 billion of equity.
As of Jan. 4, 2008, Moody's said that Banco Itau Uruguay's B2
foreign currency deposit rating is constrained by Uruguay's
foreign currrency country ceiling for deposits. Banco Itau
Uruguay's Aa2.uy local currency national scale deposit rating is
directly linked to the local currency deposit rating of Ba1.
As reported in the Troubled Company Reporter-Latin America on
Sept. 25, 2007, Moody's Investors Service upgraded to Ba1 from
Ba2 the long-term global local currency deposit ratings of Banco
Itau Uruguay S.A.
=================
V E N E Z U E L A
=================
CA LA ELECTRICIDAD: Fitch Upgrades Foreign and Local IDR to BB-
---------------------------------------------------------------
Fitch Ratings has upgraded both the foreign currency and local
currency issuer default ratings for C.A. La Electricidad de
Caracas to 'BB-' from 'B+.' In addition, Fitch has assigned a
'BB-' rating to the proposed issuance of up to US$650 million
senior unsecured notes due 2018 to be issued by EDC. Fitch has
upgraded the long-term national scale rating of EDC to
'AAA(ven)' from 'AA-(ven)' and the short- term national scale
rating to 'F1+(ven)' from 'F1(ven)'. The rating outlook remains
negative.
The upgrade is based upon the implicit support from both PDVSA
and the government in the form of investment assistance, access
to foreign currency and government assistance with capital
expenditure programs. C.A. La Electricidad is inextricably
linked to both its new majority shareholder, Petroleos de
Venezuela S.A. and the Bolivarian Republic of Venezuela.
Petroleos de Venezuela currently owns 93.62% of the company. It
is important to underscore that the upgrade is based upon new
ownership and support by the Venezuelan government and Petroleos
de Venezuela. On a standalone basis, the company's leverage can
be expected to increase, and tariff increases in 2008 are
uncertain. In addition, the adverse effects of inflation and
currency devaluation could be expected to continue.
Since the nationalization of the Venezuelan electricity sector,
C.A. La Electricidad's senior management is now comprised of
senior Petroleos de Venezuela management. The company has
retained most operating level management from its prior
ownership under U.S.-based AES Corporation. The new management
has also provided high level government access that C.A. La
Electricidad didn't have under its prior AES ownership. Based
on the Decree No 5,330, C.A. La Electricidad and the rest of
government electric power and energy assets will be part of the
National Electric Corporation by the year 2010. Even if some
changes on the property could be in place by that time, the
ultimate shareholder of the company will continue being the
Venezuelan government.
C.A. La Electricidad will, as expected, begin to pay dividends
to PDVSA in the near term. Fitch anticipate a payout ratio in
the 90% to 100% range to Petroleos de Venezuela. Unlike
Petroleos de Venezuela, the company will not be expected to make
payments dedicated toward Venezuelan social programs. If any
contributions toward social programs are made, such
contributions are expected to be modest.
Since the nationalization, the electricity sector is undergoing
significant transition. The sector is still operating under the
regulatory framework that established the last tariff increase
in 2003. In the government's attempt to curb inflation, the
sector has not received a tariff increase which is adversely
impacting infrastructure due to lack of investment. C.A. La
Electricidad's decrease in revenues and cash flow is primarily
due to the lack of tariff increase. Even if the company
anticipates some tariff increase in the near tern, that tariff
increase is still uncertain. The adverse effects of inflation
and currency devaluation are significant and mitigate any growth
in sales.
The ratings also incorporate the many adverse economic and
political challenges that have pressured the credit quality of
the company and Venezuelan sovereign including increasing
inflation, currency devaluation and a high dependence on the
petroleum sector.
Headquartered in Caracas, Venezuela, CA La Electricidad De
Caracas is a subsidiary of AES Corporation and is engaged
in providing electricity services. The company operates in
Caracas, Guarenas, Guatire in Miranda State and San Felipe in
Yaracuy State. As of May 11, 2007, CA La Electricidad de
Caracas is a subsidiary of Petroleos de Venezuela, S.A.
PETROLEOS DE VENEZUELA: Uruguay Unit Denies Wilson Relationship
---------------------------------------------------------------
Miguel Castellan, Petroleos de Venezuela SA's legal counsel,
told Montevideo's daily newspaper El Pais, that PDVSA's
Uruguayan subsidiary has declined any relationship with
Venezuelan businessman Guido Antonini Wilson, El Universal
reports, citing Ansa.
The attorney, who appeared to testify in a Montevideo's court in
connection with the US$800,000 suitcase scandal, said in a
statement that Mr. Antonini does not belong or did not belong to
the company, adding that he did not make any business with Pdvsa
Uruguay, the report states.
The company did not pay for Antonini's stay in Uruguay, said Mr.
Castellan.
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: Inks Investment Project with ANCAP
----------------------------------------------------------
Petroleos de Venezuela will sign a memorandum of understanding
with Uruguayan Administracion Nacional de Combustibles,
Alcoholes y Portland (ANCAP) state oil company on the technical
project and investment plan for the operation of part of the
Ayacucho oilfield in the Venezuelan state of Anzoategui, Prensa
Latina reports.
According to the report, both parties will agree on the terms
for the joint exploitation of a sector of the latters Orinoco
Strip early in May.
The Uruguayan investment, the report says, would not exceed
10 percent of the total, while Venezuela's would be over
60 percent in each well.
The project's operations will start by 2011. The report shows
that it would meet Uruguayan oil demand from fifty to eighty
percent, presently at one million barrels per month.
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: Gov't Approves Oil Sudden-Gains Tax
-----------------------------------------------------------
Venuzuela's lawmakers have given their final nods to a new tax
on windfall profits of Petroleos de Venezuela SA and other oil
companies, Dow Jones Newwires reports.
According to the report, the lawmakers gave their final approval
on Apr. 15 to a law that required companies that export crude
from Venezuela to share a portion of their sudden gains to the
government. The levy will also apply to PdVSA's foreign
partners including Total SA, StatoilHydro ASA, BP Plc, and
Chevron Corp, Dow Jones states.
The government will take in about 92 cents for every extra
dollar when world prices are above US$70 a barrel and then 97
cents when they are above US$100 a barrel, Reuters cites Oil
Minister Rafael Ramirez as saying. World oil prices hit a
record above US$114 a barrel on April 15, the news agency points
out.
The tax is expected to contribute US$9 billion to the
government's yearly revenues.
About Petroleos de Venezuela SA
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. Tara Eliza E. Tecarro, Sheryl Joy P. Olano,
Rizande de los Santos, and Pamella Ritah K. Jala, Editors.
Copyright 2008. All rights reserved. ISSN 1529-2746.
This material is copyrighted and any commercial use, resale or
publication in any form (including e-mail forwarding, electronic
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Information contained herein is obtained from sources believed
to be reliable, but is not guaranteed.
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subscription or balance thereof are US$25 each. For
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