/raid1/www/Hosts/bankrupt/TCRLA

/raid1/www/Hosts/bankrupt/TCRLA_Public/151202.mbx T R O U B L E D C O M P A N Y R E P O R T E R L A T I N A M E R I C A Wednesday, December 2, 2015, Vol. 16, No. 238 Headlines B A H A M A S ULTRAPETROL (BAHAMAS): Taps Sebastian Villa to Board of Directors B R A Z I L BRAZIL: Plans Additional Budget Cuts BRAZIL: Analysts See Economy Contracting 3.19% CENTRAIS ELETRICAS: Fitch Affirms 'BB' LT Issuer Default Ratings C A Y M A N I S L A N D S BRETT HOLDINGS: Creditors' Proofs of Debt Due Today DOVER OFFSHORE: Commences Liquidation Proceedings HALO HOLDINGS: Creditors' Proofs of Debt Due Dec. 7 IEM VALUE: Creditors' Proofs of Debt Due Dec. 10 MARIGOLD ENTERPRISES: Creditors' Proofs of Debt Due Dec. 7 MASCALL GLOBAL: Creditors' Proofs of Debt Due Dec. 8 MIDWAY HARBOUR: Creditors' Proofs of Debt Due Dec. 7 MRV ASIA: Placed Under Voluntary Wind-Up NEW RUSSIA: Commences Liquidation Proceedings PICTON INTERNATIONAL: Commences Liquidation Proceedings SATURN (CAYMAN): Commences Liquidation Proceedings SHUBH (CAYMAN): Commences Liquidation Proceedings YKS HOLDINGS: Creditors' Proofs of Debt Due Dec. 2 J A M A I C A JAMAICA MORTGAGE: Makes Financial Turnaround After 2 Yrs of Losses JAMAICA PUBLIC: Pushing Ahead w/ 2018 Timetable for LNG Plant P E R U CHINA FISHERY: Fitch Lowers IDR to 'C' & Removes from Watch Neg. CHINA FISHERY: Moody's Lowers CFR to Ca; Outlook Still Negative CHINA FISHERY: S&P Lowers CCR to 'SD' on Missed Payment CHINA FISHERY: KPMG Appointed as Provisional Liquidators X X X X X X X X X LATAM: Fitch Sees Stable 2016 Outlook for Protein Sector - - - - - ============= B A H A M A S ============= ULTRAPETROL (BAHAMAS): Taps Sebastian Villa to Board of Directors ----------------------------------------------------------------- Ultrapetrol (Bahamas) Limited appointed of Mr. Sebastian Villa to the Company's Board of Directors. The addition of Mr. Villa will increase the Board's membership to six. Mr. Sebastian Villa is a Member of the Executive Committee of Southern Cross Group. He has served as a Board Member of HotelDO, MMCinemas, Planigrupo, Javer, MorePharma, and the Port of Barranquilla. Prior to joining Southern Cross, Mr. Villa held positions at Three Cities Research, a New York-based private equity firm, at Boston Consulting Group's Buenos Aires and Santiago offices, and at Royal Dutch Shell in Buenos Aires. Mr. Villa holds an Economics degree from the Universidad de San Andres, Buenos Aires and an MBA from Columbia University. Horacio Reyser, Chairman of Ultrapetrol, commented, "We are proud to welcome Sebastian Villa to Ultrapetrol's Board of Directors, where we expect to greatly benefit from his extensive experience throughout the region, and particularly in South American maritime trade. We believe that there is a great deal of value in Ultrapetrol, and the addition of Sebastian Villa to the Company's Board of Directors will support our efforts to unlock that value for the benefit of all shareholders." Ultrapetrol (Bahamas) Limited, headquartered in Nassau, Bahamas, is a publicly-traded, diverse international marine transportation company. The company operates in three segments: River, Offshore Supply, and Ocean. Last twelve months ended December 31, 2014 revenues totaled $364 million. The company is 85% owned by Sparrow Capital Investments Ltd., a subsidiary of Southern Cross Latin America Private Equity Funds III and IV. * * * As reported in the Troubled Company Reporter-Latin America on Sept. 16, 2015, Standard & Poor's Ratings Services said it lowered its ratings on Ultrapetrol (Bahamas) Ltd. to 'B-' from 'B'. At the same time, S&P lowered the issue-level rating on the company's senior secured notes to 'B-' from 'B'. The outlook on the issuer credit rating remains negative. =========== B R A Z I L =========== BRAZIL: Plans Additional Budget Cuts ------------------------------------ EFE News reports that the Brazilian government said in an executive order in the Official Daily that it was cutting spending by an additional BRL11 billion ($2.82 billion) this year. The move is part of an effort by the government to a budget deficit target of 1 percent of the gross domestic product, a goal agreed to during the last budget review, according to EFE News. Economists, however, say the goal is out of reach even with the additional spending cuts, the report notes. The report relays that the cuts will affect current spending in many areas in December since the government will postpone paying for different services, including water and electricity, until next year. The Central Bank, meanwhile, said that Brazil posted a primary budget deficit of BRL20 billion (about $5.24 billion) in the January-October period, the report notes. The report discloses that the deficit during the first 10 months of this year was larger than in the same period last year, when the figure came in at BRL11.6 billion (about $3.04 billion). The primary budget deficit, which excludes interest payments on the public debt, was BRL11.5 billion (nearly $3.02 billion) in October, marking the worst performance for the tenth month of a year in 13 years, the report relays. On a year-on-year basis through Oct. 31, the primary budget deficit totaled BRL40.9 billion (nearly $10.72 billion), or 0.71 percent of GDP, the report notes. The report discloses that Brazil's economy is headed for its worst economic performance since 1990, when it contracted by 4.35 percent. Brazil is in a recession, with GDP contracting for two consecutive quarters, notes EFE News. The South American country's economy contracted by 2.1 percent in the first half of this year. Economic growth has also been hampered by the spending cuts implemented by President Dilma Rousseff's administration to reduce the budget deficit and control inflation, the report adds. BRAZIL: Analysts See Economy Contracting 3.19% ---------------------------------------------- EFE News reports that analysts expect Brazil's economy to contract by 3.19 percent this year, with inflation hitting 10.38 percent, the Central Bank said. The gross domestic product (GDP) and inflation estimates come from the Boletin Focus, a weekly Central Bank survey of analysts from about 100 private financial institutions on the state of the national economy, according to EFE News. The report notes that the government started using the survey in preparing its own forecasts this year. Analysts said they expected Brazil's economy to contract by 3.15 percent this year and 2.01 percent in 2016, the report relays. Analysts revised their inflation estimates upward from 10.33 percent to 10.38 percent in the latest report, EFE News notes. In 2016, analysts now expect Latin America's largest economy to contract by 2.04 percent, with the inflation rate falling to 6.64 percent, the report discloses. Brazil's economy is headed for its worst economic performance since 1990, when it contracted by 4.35 percent, the report says. CENTRAIS ELETRICAS: Fitch Affirms 'BB' LT Issuer Default Ratings ---------------------------------------------------------------- Fitch Ratings has affirmed the Long-Term Issuer Default Ratings (IDRs) of Centrais Eletricas Brasileiras S.A. (Eletrobras) and its wholly owned subsidiary, Furnas Centrais Eletricas S.A. (Furnas) at 'BB'. The Rating Outlook is Stable. KEY RATING DRIVERS Eletrobras' IDRs continue to reflect some linkage with the Federal Republic of Brazil's sovereign rating ('BBB-', Outlook Negative). The sovereign holds 51% of company voting shares and guarantees 15% of its consolidated debt at the end of September 2015. Eletrobras is also considered as strategic to the country because of its prominent position within the Brazilian power sector due to its relevant market share in electricity generation, transmission and distribution. On a standalone basis, Eletrobras' IDRs would be lower, due to its still weak consolidated operational cash generation, high capital expenditures program, and deteriorated credit metrics for the current rating category. The decision to accept the early renewal of all of its generation and transmission power concessions expiring between 2015 and 2017 severely affected Eletrobras' consolidated credit profile. Positively, the group has been successful in reducing operational costs, while additional compensation for the renewed transmission and generation concessions, expected at BRL17 billion-BRL25 billion, will be added to its cash flow generation. Eletrobras' financial profile benefits from a strong liquidity position and an extended debt maturity profile. Eletrobras is exposed to political interference risks given its status as an entity controlled by the Brazilian government. The government can use the company to help it achieve certain macroeconomic and social objectives through price controls and/or subsidies and as manager of sector funds. Regulatory risk for the power sector is considered moderate in Brazil, while the hydrological risk is currently above average. Furnas' ratings are linked with its parent company (Eletrobras). Furnas is one of Eletrobras' largest subsidiaries, representing approximately 24% of the group's installed generation capacity and 32% of its transmission coverage in kilometers. Eletrobras has a centralized cash management policy and is the primary funding provider for Furnas. Furthermore, Eletrobras sets the company's strategic targets, such as corporate governance standards and investment plans. CASH GENERATION TO IMPROVE Eletrobras' EBITDA generation should achieve an annual average of BRL2.8 billion in the next three years, according to Fitch projections. The company's operational cash generation should benefit from a tariff increase to incorporate investments that are being made on the renewed concessions, additional compensations for the transmission concessions renewed, efficiency gains, and divestment of the distribution business. Eletrobras' current weak operational cash generation continues to reflect the highly negative impact of its decision to accept the early renewal of all of its generation and transmission power concessions. In the last 12 months (LTM) ended Sept. 30, 2015, recurring EBITDA was BRL1.8 billion, which excludes a BRL3.4 billion non-recurring impairment provision at the Eletronuclear subsidiary. CAPEX TO PRESSURE FCF Eletrobras' free cash flow (FCF) generation is expected to remain negative, even though capex and investment have been revised and reduced as part of a new business strategy. Fitch views as positive that the company's subsidiaries did not participate in the recent transmission and generation bids promoted by the government. Eletrobras' Strategic Plan for 2016-2019 considers BRL37.1 billion of capex and capital injection in subsidiaries. Expansion plans pose a challenge and will need to be funded through new debt and cash generation. Fitch does not expect Eletrobras to pay dividends until 2017. The company's consolidated cash flow from operations (CFFO) of BRL4.3 billion during the LTM Sept. 30, 2015 was not sufficient to cover capex of BRL8.7 billion and dividends of BRL24 million, leading to negative FCF of BRL4.4 billion. CFFO saw a positively impact in the last quarter of 2014 from a suppliers credit of BRL7.2 billion from Amazonas Distribuidora de Energia S.A. (Amazonas Energia) with Petroleo Brasileiro S.A. (Petrobras) for fuel supply. MANAGEABLE DEBT MATURITY PROFILE Eletrobras' consolidated risk profile benefits from an extended debt maturity schedule. Total adjusted debt, excluding the Reserva Global de Reversao (RGR), increased to BRL44.8 billion as of September 2015. The company's consolidated financial obligations are composed of international bonds (28%), BNDES loans (17%), funds raised from international multilateral agencies (7%) and by Federal Government Banks (BNDES, Banco do Brasil and CEF; 33%) and others. The federal government has supported the company through guarantees to part of the latter debts, reducing Eletrobras' cost of funds and benefitting its cash flow. As of September 2015, Eletrobras guaranteed BRL405 million of the debt of its subsidiaries. APPROVAL OF RENEWAL COMPENSATION VALUES Fitch sees the recent approval by Agencia Nacional de Energia Eletrica (ANEEL) of the claimed compensation values for Eletrobras' transmission assets existing before 2000, after the concessions renewal as positive. The company is claiming approximately BRL20.3 billion for its transmission subsidiaries and ANEEL has already approved BRL10 billion. Eletrobras expects ANEEL to approve a total of approximately BRL 17 billion-19 billion until the end of 2015. Claims for generation assets in the amount of BRL 6 billion may be approved only after 2016. DIVESTMENT OF DISTRIBUTION COMPANIES POSITIVE Fitch believes the divestment of Eletrobras' distribution companies (DisCos) is positive for its cash flow generation. CELG D should be privatized during 1H16 and the remaining six DisCos by 2018. Eletrobras expects to sell its stake/control at CELG D for a minimum BRL1.4 billion. However, although privatization of the other six DisCos may not bring any significant cash to Eletrobras, it will avoid approximately BRL2 billion/year of cash disbursement on CAPEX and OPEX. HIGH IMPORTANCE TO BRAZIL Eletrobras has a strong position as the largest electricity generation and transmission company in Brazil, with 32% of installed generation capacity and 48.6% of transmission lines as of September 2015. Its size and active presence in the most relevant energy projects under construction in Brazil makes it strategically important to the country's economy and development. KEY ASSUMPTIONS Fitch's key assumptions within our rating case for Eletrobras include: -- Receipt of BRL17 billion as compensation value for the transmission concession renewal over 10 years, starting in 2016; -- Receipt of BRL1.4 billion from the divestment of CELG D in 2016; -- Capex (including capital injection in subsidiaries) of BRL26 billion from 2016 to 2019; -- Dividends: no payment in 2015 and 2016; 25% of net profit after 2017; -- No capital injection from the government. RATING SENSITIVITIES Factors that could potentially lead to a negative rating action are: -- A downgrade of the sovereign; -- Weakening of Brazilian government support; -- The inability to conclude divestment of the DisCos; -- Deterioration on the company's liquidity position. Factors that could potentially lead to a positive rating action are: -- Sustained recovery of the group's operational cash flow generation; -- The Brazilian government's continuous support in order to strengthen the linkage between the group and the Federal Republic of Brazil. LIQUIDITY Eletrobras has historically maintained a strong liquidity position. As of Sept. 30, 2015, the company's consolidated liquidity ratios, as measured by cash/short-term debt and cash plus CFFO/short-term debt, were robust, at 1.5x and 2.2x, respectively, while net leverage was negative. Eletrobras' liquidity of BRL9 billion at the end of 3Q15, compared with BRL6.1 of short-term debt, may be reinforced by an additional BRL17 billion-BRL19 billion of complimentary compensation for the early renewal of the transmission concessions and the sale of CELG D. FULL LIST OF RATING ACTIONS Fitch has affirmed the following: Eletrobras -- Foreign Currency LT IDR at 'BB'; -- Local Currency LT IDR at 'BB'; -- National Scale LT rating at 'AA-(bra)'; -- USD1 billion senior unsecured notes due 2019 at 'BB'; -- USD1.75 billion senior unsecured notes due 2021 at 'BB'. Furnas -- Foreign Currency LT IDR at 'BB'; -- Local Currency LT IDR at 'BB'; -- National Scale LT rating at 'AA-(bra)'. ========================== C A Y M A N I S L A N D S ========================== BRETT HOLDINGS: Creditors' Proofs of Debt Due Today ---------------------------------------------------- The creditors of Brett Holdings Limited are required to file their proofs of debt today, Dec. 2, 2015, to be included in the company's dividend distribution. The company commenced liquidation proceedings on Sept. 28, 2015. The company's liquidator is: Appleby Trust (Cayman) Ltd. c/o Richard Gordon Telephone: +1 (345) 949 4900 75 Fort Street P.O. Box 1350 Grand Cayman KY1-1108 Cayman Islands DOVER OFFSHORE: Commences Liquidation Proceedings ------------------------------------------------- On Sept. 30, 2015, the sole shareholder of Dover Offshore Fund, Ltd. resolved to voluntarily liquidate the company's business. Only creditors who were able to file their proofs of debt by Nov. 21, 2015, will be included in the company's dividend distribution. The company's liquidator is: Morna Chisholm Mourant Ozannes Cayman Liquidators Limited Attorneys-at-Law for the Company Reference: NDL 94 Solaris Avenue Camana Bay P.O. Box 1348 Grand Cayman KY1-1108 Cayman Islands Telephone: (+1) 345 949 4123 Facsimile: (+1) 345 949 4647; or HALO HOLDINGS: Creditors' Proofs of Debt Due Dec. 7 --------------------------------------------------- The creditors of Halo Holdings Ltd. are required to file their proofs of debt by Dec. 7, 2015, to be included in the company's dividend distribution. The company commenced wind-up proceedings on Oct. 19, 2015. The company's liquidator is: Morval Bank & Trust Cayman Ltd. P.O. Box 30622 Grand Cayman KY1-1203 Cayman Islands Telephone: +1 (345) 949-9808 IEM VALUE: Creditors' Proofs of Debt Due Dec. 10 ------------------------------------------------ The creditors of IEM Value Generation Capital Ltd are required to file their proofs of debt by Dec. 10, 2015, to be included in the company's dividend distribution. The company commenced wind-up proceedings on Oct. 19, 2015. The company's liquidator is: Trinity Fund Administration (Cayman) Ltd c/o Angela Nightingale Telephone: (345) 946 6620 Facsimile: (345) 946 6720 Harbour Place, 2nd Floor P.O. Box 10364 Grand Cayman KY1-1004 Cayman Islands MARIGOLD ENTERPRISES: Creditors' Proofs of Debt Due Dec. 7 ---------------------------------------------------------- The creditors of Marigold Enterprises Inc. are required to file their proofs of debt by Dec. 7, 2015, to be included in the company's dividend distribution. The company commenced wind-up proceedings on Oct. 19, 2015. The company's liquidator is: Morval Bank & Trust Cayman Ltd. P.O. Box 30622 Grand Cayman KY1-1203 Cayman Islands Telephone: +1 (345) 949-9808 MASCALL GLOBAL: Creditors' Proofs of Debt Due Dec. 8 ---------------------------------------------------- The creditors of Mascall Global Opportunity Fund are required to file their proofs of debt by Dec. 8, 2015, to be included in the company's dividend distribution. The company commenced liquidation proceedings on Oct. 15, 2015. The company's liquidator is: Rolf Kung IFIT Fund Services AG Voltastrasse 61 P.O. Box 371 CH-8044, Zurich Switzerland Telephone: +41 44 366 4016 Facsimile: +41 44 366 4039 MIDWAY HARBOUR: Creditors' Proofs of Debt Due Dec. 7 ---------------------------------------------------- The creditors of Midway Harbour Corp. are required to file their proofs of debt by Dec. 7, 2015, to be included in the company's dividend distribution. The company commenced wind-up proceedings on Oct. 19, 2015. The company's liquidator is: Morval Bank & Trust Cayman Ltd. P.O. Box 30622 Grand Cayman KY1-1203 Cayman Islands Telephone: +1 (345) 949-9808 MRV ASIA: Placed Under Voluntary Wind-Up ---------------------------------------- On Oct. 19, 2015, the members of MRV Asia Capital Fund resolved to voluntarily wind up the company's operations. Only creditors who were able to file their proofs of debt by Dec. 1, 2015, will be included in the company's dividend distribution. The company's liquidator is: Richard Fear c/o Ryan Charles Telephone: (345) 814 7364 Facsimile: (345) 945 3902 P.O. Box 2681 Grand Cayman KY1-1111 Cayman Islands NEW RUSSIA: Commences Liquidation Proceedings --------------------------------------------- On Oct. 21, 2011, the sole shareholder of The New Russia Growth Fund, Ltd resolved to voluntarily liquidate the company's business. Creditors are required to file their proofs of debt to be included in the company's dividend distribution. The company's liquidator is: Pavel Nazariyan 3, Boulevard du Price Henri L-1724 Luxembourg Telephone: +011 (352) 2647 0623 PICTON INTERNATIONAL: Commences Liquidation Proceedings ------------------------------------------------------- On Oct. 16, 2015, the shareholder of Picton International Corp. resolved to voluntarily liquidate the company's business. Only creditors who were able to file their proofs of debt by Nov. 6, 2015, will be included in the company's dividend distribution. The company's liquidator is: Amicorp Cayman Fiduciary Limited c/o Nicole Ebanks-Sloley The Grand Pavilion Commercial Centre, 2nd Floor 802 West Bay Road P.O. Box 10655 Grand Cayman KY1-1006 Cayman Islands Telephone: (345) 943-6055 SATURN (CAYMAN): Commences Liquidation Proceedings -------------------------------------------------- On Oct. 19, 2015, the shareholders of Saturn (Cayman) Holdings resolved to voluntarily liquidate the company's business. Only creditors who were able to file their proofs of debt by Dec. 1, 2015, will be included in the company's dividend distribution. The company's liquidator is: Mourant Ozannes TRG Venture Capital International Partnership G.P. Limited c/o Jo-Anne Maher Telephone: (345) 814-9255 Facsimile: (345) 949-4647 94 Solaris Avenue, Camana Bay P.O. Box 1348 Grand Cayman KY1-1108 Cayman Islands SHUBH (CAYMAN): Commences Liquidation Proceedings ------------------------------------------------- On Oct. 19, 2015, the shareholders of Shubh (Cayman) Holding resolved to voluntarily liquidate the company's business. Only creditors who were able to file their proofs of debt by Dec. 1, 2015, will be included in the company's dividend distribution. The company's liquidator is: Mourant Ozannes TRG Venture Capital International Partnership G.P. Limited c/o Jo-Anne Maher Telephone: (345) 814-9255 Facsimile: (345) 949-4647 94 Solaris Avenue, Camana Bay P.O. Box 1348 Grand Cayman KY1-1108 Cayman Islands YKS HOLDINGS: Creditors' Proofs of Debt Due Dec. 2 -------------------------------------------------- The creditors of YKS Holdings Limited are required to file their proofs of debt by Dec. 2, 2015, to be included in the company's dividend distribution. The company commenced liquidation proceedings on Oct. 19, 2015. The company's liquidator is: Xiao Siqing c/o Richard Gordon Appleby (Cayman) Ltd., 75 Fort Street P.O. Box 1350 Grand Cayman KY1-1108 Cayman Islands Telephone: +1 (345) 949 4900 ============= J A M A I C A ============= JAMAICA MORTGAGE: Makes Financial Turnaround After 2 Yrs of Losses ------------------------------------------------------------------ RJR News reports that Jamaica Mortgage Bank has made a financial turnaround after two years of consecutive losses. According to its 2015 annual report, it made $25.7 million net profit, the report relates. It said the focus is on its delinquent loan portfolio to recover more than $644 million of non-performing loans. This will be used to strengthen the Mortgage Bank's liquidity in order to meet project funding demands, according to RJR News. The entity is responsible for mobilizing funds to lend to developers and other institutions for the development of housing island-wide, the report notes. JAMAICA PUBLIC: Pushing Ahead w/ 2018 Timetable for LNG Plant ------------------------------------------------------------- RJR News reports that the Jamaica Public Service Company (JPS) has expressed confidence that the timeline for construction of its 190 megawatt LNG plant is still likely to be met despite the preferred bidder facing financial challenges. JPS wants the plant built and commissioned by 2018, but with Spanish firm Abengoa, which is the preferred bidder to build the plant in Old Harbor, St. Catherine, recently filing for bankruptcy protection, questions have arisen as to whether this target can be met, according to RJR News. Kelly Tomblin, JPS President, told RJR News, however, that every effort will be made to keep construction plans on schedule. Reiterating that it was only recently that the Abengoa SA was announced as the preferred bidder to construct the power plant, she said some of the other bidders continue to express keen interest in the project, the report relates. "In fact, when we announced the preferred bidder, the other bidders have kept writing us letters, saying they believe they can build the power plant, better, cheaper, faster," she revealed, notes the report. The company is, therefore, on standby to activate an alternative plan if the arrangement with Abengoa SA falls through, with a decision to be made as early as this week, says RJR News. Headquartered in Kingston, Jamaica, Jamaica Public Service Company Limited is an integrated electric utility company and the sole distributor of electricity in Jamaica. The company is engaged in the generation, transmission and distribution of electricity, and also purchases power from five Independent Power Producers. ======= P E R U ======= CHINA FISHERY: Fitch Lowers IDR to 'C' & Removes from Watch Neg. ---------------------------------------------------------------- Fitch Ratings has downgraded China Fishery Group Limited's Issuer Default Rating to 'C' from 'B-'. It has also downgraded the senior unsecured rating and the rating on the USD300 mil. senior unsecured notes issued by CFG Investment S.A.C. to 'C' from 'B-', with Recovery Ratings of 'RR4'. All the ratings have been removed from Rating Watch Negative. The downgrade follows HSBC's application to the High Court of Hong Kong to appoint provisional liquidators to China Fishery and China Fisheries International Ltd. This winding-up petition, if successful, will result in the liquidation of China Fishery and its ratings will then be downgraded to 'D'. RATING SENSITIVITIES Negative: Future developments that may, individually or collectively, lead to negative rating action include: -- Approval of the winding up petition by the Hong Kong court will result in the IDR being downgraded to 'D'. Positive: Future developments that may, individually or collectively, lead to positive rating action include: -- Rejection by the Hong Kong court of the winding-up petition -- China Fishery has secured sufficient bank facilities for refinancing and its operational needs -- Redemption of USD300 mil. notes due 2019 and other debt is not accelerated China Fishery is a producer of fishmeal and fish oil through its processing plants located along Peru's coastal areas. China Fishery makes over 60% of its total revenue from operations in northern Peru, Moody's said in a press release in October. CHINA FISHERY: Moody's Lowers CFR to Ca; Outlook Still Negative --------------------------------------------------------------- Moody's Investors Service has downgraded to Ca from Caa2 China Fishery Group Limited's corporate family rating and the rating on the senior unsecured bonds issued by its subsidiary -- CFG Investment S.A.C. -- and guaranteed by China Fishery. The outlook on the ratings remains negative. RATINGS RATIONALE "The downgrade reflects the consideration that the recovery prospects for senior unsecured bondholders could fall further after actions taken by a lender for the group," says Lina Choi, a Moody's Vice President and Senior Credit Officer. On Nov. 26, 2015, Pacific Andes International Holdings Limited (unrated), the parent of China Fishery, suspended trading in its shares and announced that one of the lenders of China Fishery had taken certain actions. At the same time, Moody's notes from the auditing firm KPMG's website that Edward Middleton, Fergal Power, and Kris Beighton -- all KPMG employees -- have been appointed by the High Court of Hong Kong as joint and several provisional liquidators of China Fishery. While the appointment of the provisional liquidators is intended to preserve the assets of the company, it also indicates that the process of debt restructuring has become more challenging. In addition, the appointment of the provisional liquidators has triggered the acceleration of the repayment of its senior unsecured bonds due July 2019. Looking ahead, China Fishery's debt restructuring will likely involve its lending banks, bond holders and potentially any other creditors which would be admitted to the negotiations on the basis that they sought an acceleration in payments. With the increased complexity and lengthening of the debt- restructuring process, the company will be deprived of normal credit. Its cash flow will also weaken substantially and its assets will erode. As a result, the recovery rate for bond holders will likely fall further. The negative ratings outlook reflects the risk of a further decline in recovery prospects for bondholders. Further downward ratings pressure could emerge if the company goes into receivership or commences liquidation. Upward ratings pressure could arise if it takes measures to significantly improve its liquidity position or enters into a satisfactory debt restructuring that provides improved recovery prospects for bond holders. The principal methodology used in these ratings was Global Protein and Agriculture Industry published in May 2013. China Fishery Group Limited is headquartered in Hong Kong and listed in Singapore. It is engaged in the Peruvian fishmeal and fish oil business and fishing fleet operations. China Fishery is 46.5% effectively owned by the Pacific Andes group, through Pacific Andes International Holdings Limited (PAIH, unrated), a Hong Kong-listed integrated fish and seafood products processor. The Carlyle Group, a global alternative asset management firm, holds a 6.02% stake in China Fishery Group. CHINA FISHERY: S&P Lowers CCR to 'SD' on Missed Payment ------------------------------------------------------- Standard & Poor's Ratings Services said that it had lowered its long-term corporate credit rating on China Fishery Group Ltd. to 'SD' from 'CCC+'. At the same time, S&P lowered its issue rating on the senior unsecured notes due 2019 issued by CFG Investment S.A.C. to 'CC' from 'CCC+'; China Fishery guarantees the notes. S&P also lowered its Greater China regional scale ratings on China Fishery to 'SD' from 'cnCCC+' and on the outstanding notes to 'cnCC' from 'cnCCC+'. S&P removed all the ratings from CreditWatch, where they were placed with negative implications on Oct. 19, 2015. China Fishery is a Singapore-listed fishing company with operations or business in Peruvian, Russian, and African waters. "We downgraded China Fishery to 'SD' (selective default) because we believe the company failed to repay a US$31 million principal installment on its US$650 million club loan facility due earlier this month," said Standard & Poor's credit analyst Lillian Chiou. The missed payment resulted in one of the lenders filing a petition in the Hong Kong high court to liquidate China Fishery. The court has appointed provisional liquidators and is seeking to wind up the company. S&P views China Fishery's failure to repay the principal installment as a default on the club loan. However, the company has serviced all interest payments on its guaranteed senior unsecured bonds to this point. The missed principal installment was originally due on Sept. 28, 2015, according to the amortization schedule of the club loan. The company has been able to obtain multiple, successive waivers from its lenders. However, S&P believes that the company has missed such a payment, and one of the lenders is no longer willing to participate in further discussions and filed a liquidation petition with the court in Hong Kong. "The missed payment and appointment of provisional liquidators may trigger events of default on the company's guaranteed US$300 million senior unsecured notes due 2019," said Ms. Chiou. Principal and unpaid interest payments may be accelerated if the company fails to obtain a waiver from a majority of the noteholders in time. S&P believes the company currently does not have the means to repay the outstanding notes if they become due immediately. Therefore, such an event may trigger a general default whereby the ratings on the notes may be lowered to 'D' from 'CC' and the issuer to 'D' from 'SD'. China Fishery's liquidity position is vulnerable, in S&P's opinion. S&P understands the company was already in the process of amending the installment schedule of its club loan. S&P expects China Fishery will not meet the installments in the next 12 months. S&P's view is based on the company's low cash balance and weak operating performance at its Peruvian operation, which accounts for 55%-60% of its total revenues and most of its EBITDA. A meaningful recovery in China Fishery's operating cash flows is unlikely because the total allowable catch in Peru is low for this season, less than half of the amount in the prior season. China Fishery and its parent companies are also under investigation by financial regulators in both Hong Kong and Singapore. Information on the direction and scale of the investigation is not transparent. Any material and negative rulings from such regulators may lead to business disruptions for China Fishery and could result in further weakening in the company's prospects. CHINA FISHERY: KPMG Appointed as Provisional Liquidators -------------------------------------------------------- Lianting Tu at Bloomberg News reports China Fishery Group Ltd. failed to repay a $31 million installment due earlier this month on a $650 million loan, according to Standard & Poor's. "As a result, one of the lenders successfully applied for provisional liquidators, indicating that the lender is unwilling to negotiate for further extensions or waivers," Bloomberg quotes S&P as saying in a statement on Nov. 26. Moody's Investors Service cut its rating by two levels to Ca on Nov. 27 as a Hong Kong court appointed three executives from KPMG as provisional liquidators, Bloomberg relates. The grade indicates the company is likely in, or very near default, the report notes. According to Bloomberg, HSBC Holdings Plc, one of the lenders to the loan, has filed an application to the High Court of Hong Kong to appoint provisional liquidators to the Singapore-listed fishing group. China Fishery, with operations in Peru, has seen a decline in profits since the beginning of this year. Its cash position dwindled to $41.3 million as at June 28 from $170.5 million half a year earlier, Bloomberg notes. Its 9.75 percent notes due 2019 fell 0.18 cent to a record 31.85 cents on the dollar as of 4:53 p.m. [Nov. 27] in Hong Kong, on Bloomberg-compiled prices show. Singapore Investigation In August, China Fishery and its parent Pacific Andes International Holdings Ltd. said they had received notices from the Monetary Authority of Singapore and the Commercial Affairs Department stating they were being investigated for an offense under the Securities and Futures Act, Bloomberg recalls. "We believe creditor banks might have found it difficult to roll over the maturing debt given a lack of transparency of the investigations and the potential impact of El Nino," Bloomberg quotes JPMorgan Chase & Co. analyst Daniel Fan as saying in a Nov. 26 research note. "The key focus is more about whether China Fishery's rights-to-catch in Peru is being affected on the latest round of negative developments, which is more important than asset coverage." The process of debt restructuring at China Fishery has become more challenging after KPMG employees Edward Middleton, Fergal Power and Kris Beighton were appointed provisional liquidators, Moody's said in a statement, citing information posted on the accounting firm's website, Bloomberg relays. "With the increased complexity and lengthening of the debt restructuring process, the company will be deprived of normal credit," Moody's said. "Its cash flow will also weaken substantially and its assets will erode. As a result, the recovery rate for bond holders will likely fall further."The process of debt restructuring at China Fishery has become more challenging after KPMG employees Edward Middleton -- edward.middleton@kpmg.com.hk -- Fergal Power -- fergal.power@kpmg.com -- and Kris Beighton -- krisbeighton@kpmg.ky -- were appointed provisional liquidators, Moody's said in a statement, citing information posted on the accounting firm's website. "With the increased complexity and lengthening of the debt restructuring process, the company will be deprived of normal credit," Moody's said. "Its cash flow will also weaken substantially and its assets will erode. As a result, the recovery rate for bond holders will likely fall further." ================= X X X X X X X X X ================= LATAM: Fitch Sees Stable 2016 Outlook for Protein Sector -------------------------------------------------------- Fitch Ratings says the outlook for the Latin American Protein sector in 2016 is stable for both the sector and for issuer ratings. This reflects our expectation that Fitch-rated Latin American protein operators' credit profiles are expected to remain broadly stable in 2016. Exporters will capture the benefit of the weak real and higher demand from the resumption of beef imports from countries such as China, Saudi Arabia and the U.S. Domestic players will continue to struggle due to the subdued local consumption and higher cost of funding in Brazil. *********** Monday's edition of the TCR-LA delivers a list of indicative prices for bond issues that reportedly trade well below par. Prices are obtained by TCR-LA editors from a variety of outside sources during the prior week we think are reliable. Those sources may not, however, be complete or accurate. The Monday Bond Pricing table is compiled on the Friday prior to publication. Prices reported are not intended to reflect actual trades. Prices for actual trades are probably different. Our objective is to share information, not make markets in publicly traded securities. Nothing in the TCR-LA constitutes an offer or solicitation to buy or sell any security of any kind. It is likely that some entity affiliated with a TCR-LA editor holds some position in the issuers' public debt and equity securities about which we report. Tuesday's edition of the TCR-LA features a list of companies with insolvent balance sheets obtained by our editors based on the latest balance sheets publicly available a day prior to publication. At first glance, this list may look like the definitive compilation of stocks that are ideal to sell short. Don't be fooled. Assets, for example, reported at historical cost net of depreciation may understate the true value of a firm's assets. A company may establish reserves on its balance sheet for liabilities that may never materialize. The prices at which equity securities trade in public market are determined by more than a balance sheet solvency test. Submissions about insolvency-related conferences are encouraged. Send announcements to conferences@bankrupt.com *********** 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., Washington, D.C., USA, Marites O. Claro, Joy A. Agravante, Rousel Elaine T. Fernandez, Valerie U. Pascual, Julie Anne L. Toledo, and Peter A. Chapman, Editors. Copyright 2015. All rights reserved. ISSN 1529-2746. This material is copyrighted and any commercial use, resale or publication in any form (including e-mail forwarding, electronic re-mailing and photocopying) is strictly prohibited without prior written permission of the publishers. Information contained herein is obtained from sources believed to be reliable, but is not guaranteed. The TCR Latin America subscription rate is US$775 per half-year, delivered via e-mail. Additional e-mail subscriptions for members of the same firm for the term of the initial subscription or balance thereof are US$25 each. For subscription information, contact Peter A. Chapman at 215-945-7000 or Nina Novak at 202-362-8552. * * * End of Transmission * * *