/raid1/www/Hosts/bankrupt/TCRLA_Public/180126.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
Friday, January 26, 2018, Vol. 19, No. 19
Headlines
A R G E N T I N A
PAMPA ENERGIA: Oil Assets Sale Raises Business Risk, Fitch Says
B O L I V I A
BOLIVIA: President, Ex-FMs Discuss Sea-Dispute Case vs. Chile
B R A Z I L
BRAZIL: Ex-Leader 'Lula' Loses Appeal on Graft Conviction
BR PROPERTIES: Moody's Gives Ba3 GS Rating to BRL250MM Debentures
BR PROPERTIES: Moody's Affirms Ba3 Unsec. Rating, Outlook Neg.
CENTROVIAS SISTEMAS: Moody's Hikes CFR to Ba2; Outlook Stable
RB CAPITAL: Moody's Affirms Ba3 Rating on 59th Series of Certs
M E X I C O
MEXICO: Inflation Off to a Slow Start in 2018
MEXICO: To Put 37 Onshore Blocks on Offer in July Licensing Round
P U E R T O R I C O
BEBE STORES: B. Riley Financial Now Holds 29.4% of Capital Stock
BEBE STORES: B. Riley Financial Buys 29.5% Stake as of Jan. 12
SEASTAR HOLDINGS: Taps Stinson Leonard as Regulatory Counsel
TOYS R US: Taps PricewaterhouseCoopers as Tax Consultant
TOYS R US: Taps DJM Realty as Real Estate Consultant
TOYS R US: Affiliate Taps Zolfo Cooper as Financial Advisor
TOYS R US: Committee Taps Bennett Jones as Canadian Counsel
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A R G E N T I N A
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PAMPA ENERGIA: Oil Assets Sale Raises Business Risk, Fitch Says
---------------------------------------------------------------
Fitch Ratings views Pampa Energia's (IDR B/Positive) announced
sale of oil assets from its exploration and production segment as
a potential catalyst for lowering business risk and as marginally
credit positive for the company. Fitch, nevertheless, expects
Pampa Energia's (Pampa) long-term foreign currency Issuer Default
Rating to continue being constrained by the 'B' country ceiling of
the Republic of Argentina, which limits the foreign currency
rating of most Argentine corporates.
After the asset sale, the company expects oil production will
decrease by approximately 16,000 boe/d adjusted by ownership, and
the impact on the company's EBITDA will be a reduction of USD110
million adjusted by ownership. In September 2017, the company
reported LTM Adjusted EBITDA of USD1,053 million. Fitch's pro
forma LTM EBITDA contemplating the asset sale is USD943 million, a
change of -10%. Therefore, the pro forma gross leverage would
increase to 2.5x from 2.2x. This calculation assumes, the company
will not pay down debt and will use the net proceeds of the sale
for M&A opportunities and organic growth.
Fitch expects the company will reallocate up to USD75 million in
capex to increase gas production. After the sale, the company will
have approximately 5% -- 6% of shale acreage in Vaca Muerta, the
second largest shale reserve in the world. Fitch believes the
company is in a strong position to benefit from the recent
revision to natural gas (NG) subsidies, which guarantees gas
prices for new and incremental unconventional gas production in
the Neuquina and Austral basins through 2021.
On Jan. 16, 2018, Pampa announced it executed an agreement to sell
its direct ownership of 58.88% of Petrolera Entre Lomas S.A.
(Pelsa), 3.85% of Entre Lomas, Bajada del Palo and Agua Amarga
blocks, and 100% of Medanito S.E. and Jaguel de los Machos blocks
for USD360 million to Vista Oil & Gas S.A.B. de CV (Vista). The
transaction is subject to compliance of certain conditions,
including the approval of Vista's shareholders meeting.
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B O L I V I A
=============
BOLIVIA: President, Ex-FMs Discuss Sea-Dispute Case vs. Chile
-------------------------------------------------------------
EFE News reports that Bolivia's president met with a group of
former foreign ministers to prepare for the final phase of a sea-
access case brought against Chile before the International Court
of Justice in The Hague, Netherlands.
Evo Morales took part in the meeting at the presidential palace in
La Paz along with his vice president, Alvaro Garcia Linera, and
current foreign minister, Fernando Huanacuni, according to EFE
News.
As reported in the Troubled Company Reporter-Latin America on
Aug. 3, 2017, Moody's Investors Service has changed the outlook on
Bolivia's issuer and senior unsecured bond ratings to stable from
negative, and has affirmed the ratings at Ba3.
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B R A Z I L
===========
BRAZIL: Ex-Leader 'Lula' Loses Appeal on Graft Conviction
---------------------------------------------------------
Luciana Magalhaes and Samantha Pearson at The Wall Street Journal
report that leftist icon Luiz Inacio Lula da Silva lost a much-
awaited appeal to overturn a corruption conviction against him --
a ruling made on Wednesday, Jan. 24, by a Brazilian appeals court
that clouds his bid to run for president in an October election
that polls show he would win.
Mr. da Silva denied the charges and his lawyers vowed to "use all
legal methods possible" to appeal the decision, including taking
their battle to Brazil's top courts in an unprecedented scenario
that has prompted widespread debate among legal experts, according
to The Wall Street Journal.
The former leader's Workers' Party showed no signs of giving up
its impassioned fight to keep Mr. da Silva in the presidential
race, calling the ruling "the beginning of a long journey that --
thanks to the will of the people -- will return Comrade Lula to
the Presidency," the report relays.
However, in Sao Paulo's more upscale neighborhoods, small groups
of Brazilians took to the streets to celebrate Lula's defeat and
set off fireworks, while the stock market rallied 3.7% on hopes
that the ruling would crush Mr. da Silva's chances of a comeback,
the report notes.
Authorities in Porto Alegre earlier shut government buildings,
positioned patrol boats and closed the airspace above the court to
prepare for any violence in the ruling's wake, the report relays.
But heavy rain initially kept people off the streets, the report
says.
Mr. da Silva had been on a whirlwind campaign the past few months,
presenting himself as the savior of a country that has been mired
in recession and one corruption scandal after another, the report
notes. He has even posted videos of himself working out in the
gym in an apparent effort to counter concerns about his health
after surviving throat cancer, the report adds.
The Wall Street Journal cites that the unanimous decision from the
court's three-judge panel was the worst possible outcome for the
former president, who had governed from 2003 to 2010 and was
convicted of money laundering and corruption in July in the first
of nine cases against him, the report says.
Under Brazil's Clean Record law, anyone convicted of a crime who
loses his first appeal stands to be banned from political office
for eight years, The Wall Street Journal cites further. Lula
could also be forced to serve a 12-year jail sentence, but legal
experts said that wouldn't happen immediately, if at all, the
report relays. The Supreme Court has recently softened its
interpretation of a 2016 ruling that sends criminals to jail while
they continue to appeal their case, the report discloses.
As reported in the Troubled Company Reporter-Latin America on
Jan. 15, 2018, S&P Global Ratings lowered its long-term foreign
and local currency sovereign credit ratings on the Federative
Republic of Brazil to 'BB-' from 'BB'. The outlook on the ratings
is stable. At the same time, S&P affirmed its 'B' short-term
foreign and local currency ratings on Brazil. S&P also lowered the
transfer and convertibility assessment to 'BB+' from 'BBB-'. In
addition, S&P affirmed the 'brAA-' national scale rating and
revised the outlook to stable.
BR PROPERTIES: Moody's Gives Ba3 GS Rating to BRL250MM Debentures
-----------------------------------------------------------------
Moody's America Latina Ltda. assigned a Ba3/A2.br with a negative
outlook to BR Properties S.A's BRL250 million locally-issued,
senior unsecured debentures.
The following rating for BR Properties was assigned:
-- Global Scale, Local Currency Senior Unsecured Debentures Ba3
(global) / A2.br (national scale)
RATINGS RATIONALE
The Ba3 (global scale)/A2.br (national scale) senior unsecured
rating reflects BR Properties' dominant size and scale as one of
the largest owners of high-quality, office and industrial
properties in Brazil, its strengthening balance sheet and its
improved liquidity following a large equity boost in 3Q17. As of
September 30, 2017, the company owned interests in 46 commercial
properties, totaling approximately 685 thousand square meters (m2)
of gross lease area (GLA), that are predominantly concentrated in
and around the prime submarkets in Sao Paolo and Rio de Janeiro.
As of year to date September 30, 2017, the company's total debt to
gross assets and net debt to EBITDA were 33% and 7.1x,
respectively, compared to approximately 41% and 8.1x at 2Q17 and
35% and 5.0x for the same nine-month period, as of 3Q16. The spike
in leverage in the first half of 2017 was primarily due to new
obligations that the company had incurred to fund several large
acquisitions, including Passeio Corporate Towers and Condominio
Plaza Centenario. The company used a substantial portion of the
approximately R$ 1.0 billion in total proceeds raised from a
follow-on equity offering in July 2017 to delever the balance
sheet. Over the next 24 months, the company aims to operate with
total debt below 35% of gross assets and a net debt to EBITDA
below 6.5x.
These strengths, however, are counterbalanced by the portfolio's
weak occupancy rate, its small, unencumbered asset pool as well as
its exposure to the macroeconomic and political challenges in
Brazil, including the government's growing fiscal constraints. At
3Q17, the company reported a portfolio physical occupancy rate of
approximately 70% and unencumbered assets represented
approximately 20% of gross assets. Excluding properties acquired
since December 2016, the same store portfolio was 80% occupied, as
of 3Q17. In its continued efforts to increase the portfolio's
occupancy levels, the company secured approximately 15,000 m2 of
new leases, representing a vacancy reduction of nearly 3% from
2Q17. Because of the high quality of the portfolio, BR Properties
is well positioned to benefit from the current changes in the real
estate cycle, especially in Sao Paulo, as the supply/demand
dynamics become more favorable towards property owners and as more
indicators of economic improvement and business confidence
continue to emerge in Brazil. Revenue ramp-up from a higher
portfolio occupancy rate and lower financing costs as a result of
interest rate cuts by the Central Bank will boost the company's
EBITDA and fixed charge coverage ratio.
The rating outlook for BR Properties incorporates Moody's view
that the company is well positioned to further delever and grow,
given its strong cash position, broad access to capital and
franchise power. Furthermore, Moody's expect the company's
operational performance will continue to improve as the management
team reduces the portfolio's vacancy levels. However, the outlook
on Brazil's sovereign bond rating effectively caps BR Properties'
ratings. The negative outlook reflects the potential adverse
effects of the persistent political uncertainty on the
government's reform agenda and on the prospects of the country's
growth over the medium term.
Positive movement for the ratings or the rating outlook for BR
Properties' would be predicated upon the following criteria on a
recurring basis: 1). total debt below 30% of gross assets; 2). net
debt to EBITDA approaching 5.5x; 3). maintenance of a strong cash
position; 4). unencumbered asset base above 30% of gross assets;
5). net cash interest expense coverage (excluding noncash items)
approaching 2.0x; 5). same store portfolio's occupancy level above
85%. Additionally, any positive rating movement would necessitate
an improvement in Moody's expectations for Brazil's credit
profile.
Downward rating pressure would likely result from the following
criteria on a consistent basis: 1). total debt to gross assets
approaching 40%; 2). net debt to EBITDA approaching 8.5x; 3).
unencumbered assets below 20%; 4). net cash interest expense
coverage below 1.2x; 5). same store portfolio (excluding new
acquisitions) physical occupancy level below 80%. A negative
change in Moody's view of Brazil's credit profile may also
potentially affect the company's ratings.
Moody's last rating action with respect to BR Properties S.A. was
on March 30, 2017 when Moody's newly assigned a Ba2 (global
currency) / Aa2.br (national scale) rating to the company's
existing R$ 520 million local, senior secured debentures.
BR Properties S.A. [BOVESPA: BRPR3], headquartered in Sao Paulo,
Brazil, is an owner, acquirer, manager, and developer of
commercial real estate, primarily office and industrial
properties, in the main economic regions of Brazil. As of
September 30, 217, the company held ownership interests in 46
commercial properties, including five land plots, totaling
approximately 685 thousand m2 of GLA.
The principal methodology used in these ratings was Global Rating
Methodology for REITs and Other Commercial Property Firms
published in July 2010.
BR PROPERTIES: Moody's Affirms Ba3 Unsec. Rating, Outlook Neg.
--------------------------------------------------------------
Moody's Investors Service affirmed BR Properties S.A's senior
unsecured rating at Ba3 with a negative outlook.
The following rating for BR Properties was affirmed:
-- Senior unsecured rating at Ba3
RATINGS RATIONALE
The Ba3 senior unsecured rating reflects BR Properties' dominant
size and scale as one of the largest owners of high-quality,
office and industrial properties in Brazil, its strengthening
balance sheet and its improved liquidity following a large equity
boost in 3Q17. As of September 30, 2017, the company owned
interests in 46 commercial properties, totaling approximately 685
thousand square meters (m2) of gross lease area (GLA), that are
predominantly concentrated in and around the prime submarkets in
Sao Paolo and Rio de Janeiro.
As of year to date September 30, 2017, the company's total debt to
gross assets and net debt to EBITDA were 33% and 7.1x,
respectively, compared to approximately 41% and 8.1x at 2Q17 and
35% and 5.0x for the same nine-month period as of 3Q16. The spike
in leverage in the first half of 2017 was primarily due to new
obligations that the company had incurred to fund several large
acquisitions, including Passeio Corporate Towers and Condominio
Plaza Centenario. The company used a substantial portion of the
approximately R$ 1.0 billion in total proceeds raised from a
follow-on equity offering in July 2017 to delever the balance
sheet. Over the next 24 months, the company aims to operate with
total debt below 35% of gross assets and a net debt to EBITDA
below 6.5x.
These strengths, however, are counterbalanced by the portfolio's
weak occupancy rate, its small, unencumbered asset pool as well as
its exposure to the macroeconomic and political challenges in
Brazil, including the government's growing fiscal constraints. At
3Q17, the company reported a portfolio physical occupancy rate of
approximately 70% and its unencumbered assets represented
approximately 20% of gross assets. Excluding properties acquired
since December 2016, the same store portfolio was 80% occupied, as
of 3Q17. In its continued efforts to increase the portfolio's
occupancy levels, the company secured approximately 15,000 m2 of
new leases, representing a vacancy reduction of nearly 3% from
2Q17. Because of the high quality of the portfolio, BR Properties
is well positioned to benefit from the current changes in the real
estate cycle, especially in Sao Paulo, as the supply/demand
dynamics become more favorable towards property owners and as more
indicators of economic improvement and business confidence
continue to emerge in Brazil. Revenue ramp-up from a higher
portfolio occupancy rate and lower financing costs as a result of
interest rate cuts by the Central Bank will boost the company's
EBITDA and fixed charge coverage ratio.
The rating outlook for BR Properties incorporates Moody's view
that the company is well positioned to further delever and grow,
given its strong cash position, broad access to capital and
franchise power. Furthermore, Moody's expect the company's
operational performance will continue to improve as the management
team reduces the portfolio's vacancy levels. However, the outlook
on Brazil's sovereign bond rating effectively caps BR Properties'
ratings. The negative outlook reflects the potential adverse
effects of the persistent political uncertainty on the
government's reform agenda and on the prospects of the country's
growth over the medium term.
Positive movement for the ratings or the rating outlook for BR
Properties' would be predicated upon the following criteria on a
recurring basis: (1) total debt below 30% of gross assets; (2) net
debt to EBITDA approaching 5.5x; (3) maintenance of a strong cash
position; (4) unencumbered asset base above 30% of gross assets;
(5) net cash interest expense coverage (excluding noncash items)
approaching 2.0x; (6) same store portfolio's occupancy level above
85%. Additionally, any positive rating movement would necessitate
an improvement in Moody's expectations for Brazil's credit
profile.
Downward rating pressure would likely result from the following
criteria on a consistent basis: (1) total debt to gross assets
approaching 40%; (2) net debt to EBITDA approaching 8.5x; (3)
unencumbered assets below 20%; (4) net cash Interest expense
coverage below 1.2x; (5) same store portfolio (excluding new
acquisitions) physical occupancy level below 80%. A negative
change in Moody's view of Brazil's credit profile may also
potentially affect the company's ratings.
Moody's last rating action with respect to BR Properties S.A. was
on March 30, 2017, when Moody's newly assigned a Ba2 (global
currency)/Aa2.br (national scale) rating to the company's existing
R$520 million local, senior secured debentures.
BR Properties S.A. [BOVESPA: BRPR3], headquartered in Sao Paulo,
Brazil, is an owner, acquirer, manager, and developer of
commercial real estate, primarily office and industrial
properties, in the main economic regions of Brazil. As of
September 30, 217, the company held ownership interests in 46
commercial properties, including five land plots, totaling
approximately 685 thousand m2 of GLA.
The principal methodology used in this rating was Global Rating
Methodology for REITs and Other Commercial Property Firms
published in July 2010.
CENTROVIAS SISTEMAS: Moody's Hikes CFR to Ba2; Outlook Stable
-------------------------------------------------------------
Moody's America Latina has upgraded the Corporate Family Ratings
assigned to Centrovias Sistemas Rodoviarios S.A.'s to Ba2/Aa2.br
from Ba3/A1.br (respectively, in global scale and Brazil's
national scale). At the same time, Moody's upgraded to Ba2/Aa2.br
from Ba3/A1.br the senior unsecured and senior secured ratings
assigned to the 2nd and 3rd issuances of debentures. Moody's
changed the outlook to stable from positive.
The upgrade reflects the improvement in traffic performance, with
Q2 and Q3 2017 (+0.8% and 5.9%, respectively, in contrast to same
period of previous year) already showing reversion in traffic
trends after 11 consecutive quarters of traffic decline.
Furthermore, the company continues to deleverage, largely as a
function of positive free cash flow generation aided by intra-
company loan receivable payments from the parent company. As a
result, Centrovias' leverage profile has improved and will further
improve substantially by June 2018 when 2/3 of the debt is due.
The short remaining maturity of the concession (expires in June
2019) provides visibility on the cash flow profile until full debt
repayment. Centrovias has limited ability to pursue additional
debt in light of the concession remaining maturity, unless new
addendums for concession extension are agreed upon with the
grantor.
The exposure to volume risks and the purely domestic nature of
Centrovias' operations links the company's credit profile to that
of the sovereign (Brazil, Ba2 negative). Nonetheless, the stable
outlook reflects the low leverage profile as of June 2018 (only
approximately BRL50 million of debt outstanding with annual
expected FFO of +BRL240 million) and the short horizon to full
debt maturity in June 2019, which provides for a limited level of
uncertainty to volume/cash flow profile in light of positive short
term macroeconomic expectations.
RATINGS RATIONALE
The Ba2/Aa2.br rating reflects the long history of tolling
operations of Centrovias and the company's strong credit metrics
for the rating category. Centrovias is located in a well-developed
and economically diversified region in the State of Sao Paulo
(Ba2, negative). Moody's expect Centrovias to post relatively
stable cash flows during the remaining life of the concession.
Centrovias' credit profile is underpinned by (i) a traffic profile
highly concentrated on heavy vehicles, which tends to be more
volatile and correlated with GDP trends; (ii) limited competition
within its service area (iii) a short remaining life, with
concession expiration in June 2019; and (iv) a financial policy
which somewhat links the credit profile to its parent company,
Arteris S.A., given the high balance of intracompany loan
receivables and high dividend distributions that is used to
managed liquidity across the group. Intra-company loan balances
are declining, with the parent company paying them back as
concession maturity approaches and debt balances get repaid.
What Could Change the Rating -- Up/ Down
Given the exposure to traffic volumes and the purely domestic
operation inherent to the toll road business, the company's credit
profile is linked to that of the sovereign. As such, additional
positive ratings pressure is unlikely.
A rapid or significant downturn in traffic profile or a very high
dividend distribution not-accompanied by intra-company loan
repayment that jeopardizes the company's liquidity could prompt a
rating downgrade. Incurrence of additional debt not accompanied by
extension of the concession agreement could likely provide
downward ratings pressure. In addition, a downgrade on Brazil's
rating would exert negative pressure on the ratings.
Centrovias is the company responsible for operating the toll road
system encompassing state toll roads, SP-310 (Sao Carlos to
Cordeiropolis) and SP-225 (Itapirina to Jau, and Jau to Bauru),
pursuant to a 20-year concession agreement granted by the State of
Sao Paulo in 1998. The operation of the roads covers for 218 km
and encompasses five toll plazas. The original concession
agreement was amended in 2006, to reestablish the contractual
equilibrium upon grantor fault, extending the concession term by
12 months with final expiration set for June 2019.
Centrovias is a subsidiary of Arteris, a holding company with
around 3,650 km of operating toll roads under concession in
Brazil, consisting of five concessions in the State of Sao Paulo
and five federal concessions. The combined average daily traffic
for Arteris reached 18,015 vehicles/day in the first nine months
of 2017, representing a 2.8% increase from a year-earlier period,
mainly driven by the improvement in light vehicle performance.
In the 12 months ended September 2017, Centrovias' revenue and
EBITDA represented 14% and 17% of Arteris' consolidated results,
respectively, as Centrovias reported net sales of 361.1 million
and EBITDA of BRL269.7 million as per Moody's standard
adjustments.
Arteris is controlled by Abertis Infraestructuras S.A. and
Brookfield Brazil Motorways Holdings SRL, through their respective
ownership of 51% and 49% in Participes en Brasil S.L., which owns
82.3% of Arteris. The remaining 17.7% is held by a vehicle called
Brookfield Aylesbury S.A.R.L.
The principal methodology used in these ratings was Privately
Managed Toll Roads published in October 2017.
RB CAPITAL: Moody's Affirms Ba3 Rating on 59th Series of Certs
--------------------------------------------------------------
Moody's America Latina, Ltda. has affirmed the Ba3 (global scale,
local currency) and upgraded to A2.br from A3.br (national scale)
the ratings of the 59th Series of real estate certificates
(certificados de recebiveis imobiliarios, CRI) issued by RB
Capital Securitizadora S.A. (RB Capital, NR). This rating action
follows Moody's decision to affirm BR Properties S.A.'s senior
unsecured rating at Ba3 and the assignment of Ba3/A2.br ratings to
a new senior unsecured debentures issuance from the company on
January 23, 2018.
The full rating action is:
Issuer: RB Capital Securitizadora S.A.
59th Series/1st Issuance of Certificates: affirmed at Ba3
(global scale, local currency), and upgraded to A2.br from A3.br
(national scale);
RATINGS RATIONALE
The 59th Series of Certificates (CRIs) issued by RB Capital are
backed by current and future tenancy agreements and are
collateralized by the real estate assets by means of a fiduciary
assignment ("alienacao fiduciaria de imoveis") and by a guarantee
issued by the sponsor of the transaction, BR Properties. The real
estate assets collateralizing the CRIs are two commercial
properties (office buildings).
The Ba3/A2.br ratings are mainly based on BR Properties' ability
to make payments under the guarantee, which covers for the timely
payment and the fulfillment of all other obligations of the credit
rights stipulated in the conditional tenancy agreements and the
assignment agreements upon legal final or upon early redemption of
the certificates. This is commensurate with BR Properties' senior
unsecured debt rating.
Factors that would lead to an upgrade or downgrade of the rating:
Any future changes to the senior unsecured debt rating of BR
Properties will lead to a change in the ratings assigned to the
certificates.
The principal methodology used in this rating was "Moody's
Approach to Rating Repackaged Securities" published in June 2015.
===========
M E X I C O
===========
MEXICO: Inflation Off to a Slow Start in 2018
---------------------------------------------
Anthony Harrup at The Wall Street Journal reports that inflation
in Mexico slowed sharply in the first half of January as the
impact from the previous year's jump in gasoline prices faded and
fruit and vegetable prices fell.
The consumer-price index rose 0.24% in the first two weeks of the
year, pushing the annual rate down to 5.51% from 6.77% at the end
of December, the National Statistics Institute said, according to
The Wall Street Journal.
The main reason for the slowdown was a smaller increase in energy
costs than that seen in the year-earlier period, when the
government raised gasoline prices as it prepared to remove price
controls on fuels, the report relays.
The price of regular gasoline rose 1.47% in the first two weeks of
January, compared with a 16.8% rise in the same period of 2017,
the report notes. Fresh fruit and vegetable prices fell 3.31%,
while airfares and tourism packages were cheaper after the holiday
season, the report says. A drop in prices of winter clothing also
helped, the report relays.
Core CPI, which excludes energy and fresh fruit and vegetables,
rose 0.17% in the first half of January, with the annual rate
falling to 4.63% from 4.87% at the end of last year, the report
notes.
Despite the slowdown in inflation, which was widely anticipated,
the Bank of Mexico is still expected to raise interest rates again
at its Feb. 8 meeting to keep last year's cost-of-living increases
from contaminating inflation expectations and compromising its
efforts to bring inflation back to the 3% target, the report
discloses.
Twenty-one of the 26 banks polled by Citibanamex called for a
quarter percentage-point increase in the overnight interest rate
target next month to 7.5%, the report says. Inflation
expectations for all of 2018 were unchanged at 4.1%, just above
the central bank's 2%-4% target range, the report notes.
The rise in inflation last year to its highest level since mid-
2001 curbed some of the benefits of record formal private-sector
job creation and the decline in unemployment to its lowest rate in
more than a decade, since most wages rose less than consumer
prices, the report relays.
"Inflation is the most predatory tax there is. It punishes
everyone the same," said Vicente Yanez, president of the retail
association Antad whose members in 2017 saw sales grow the least
in three years, including a 1.5% decline in same-store sales after
inflation is taken into account, the report relays. "We hope the
Bank of Mexico and the finance ministry will take the necessary
measures so that inflation doesn't become part of the problem," he
added, the report notes.
MEXICO: To Put 37 Onshore Blocks on Offer in July Licensing Round
-----------------------------------------------------------------
Malaysian Digest reports that Mexico will look to further
consolidate its energy overhaul when it puts 37 onshore blocks on
offer in a licensing round in July, the Energy Secretariat said.
The blocks cover a total surface area of 9,513 sq. kilometres
(3,673 sq. miles), Energy Secretary Pedro Joaquin Coldwell said at
an event in Mexico City to announce the call for tenders,
according to Malaysian Digest.
Since the 2014 energy overhaul that ended state oil company
Pemex's decades-old exploration and production monopoly, a total
of seven licensing rounds -- three for blocks in onshore basins --
have been completed and 69 blocks have been awarded, the report
relays.
Those licenses are expected to lead to investments totaling US$52
billion over the life of the contracts, the report notes.
Roughly three-fourths of the winning companies in auctions for
onshore blocks have been Mexican.
The July licensing round -- known as Round 3.2 -- will offer 21
blocks in the Burgos Basin, nine in the Tampico-Misantla-Veracruz
basin, and seven in the Sureste Basins, the report relays.
Prospective reserves in the 37 blocks, which Deputy Energy
Secretary for Hydrocarbons Aldo Flores said are located in the
states of Nuevo Leon, Tamaulipas, Veracruz and Tabasco, are
estimated at 260 million barrels of oil equivalent, the report
discloses.
Mr. Coldwell said that provided there is "geological success", an
average investment outlay of $89 million per block will be
required to develop those areas, the report relays.
The blocks each will be awarded under a licensing model in which
the government will receive a proportion of the gross revenues
from each project in the form of an additional royalty, the report
relays.
The report discloses Mr. Coldwell said this arrangement would give
the participants "flexibility."
The contracts will be for a period of 30 years with the
possibility of two five-year extensions, the report relays.
The licensing round will take place on July 25.
Mexico recently overhauled its energy sector laws in a bid to
boost crude oil output, which has fallen from 3.4 million barrels
per day in 2004 to 1.95 million bpd at present, the report says.
According to the International Energy Agency, Mexico will require
$640 billion in energy investment to achieve production of 2.8
million bpd by 2040, the report relays.
The Mexican government cannot assume such a "colossal" amount of
investment on its own, Coldwell said, the report adds.
======================
P U E R T O R I C O
======================
BEBE STORES: B. Riley Financial Now Holds 29.4% of Capital Stock
----------------------------------------------------------------
bebe stores, inc. entered into a debt conversion, purchase and
sale agreement with B. Riley Financial, Inc. ("Purchaser") and The
Manny Mashouf Living Trust ("Seller") on Jan. 12, 2018.
Pursuant to the Purchase Agreement, (i) B. Riley acquired
2,819,528 shares of common stock of bebe stores, par value $0.001
per share, in exchange for cancellation of all of the outstanding
principal amount and accrued interest under the Loan and Security
Agreement, between the Company and the lenders thereto, dated as
of May 31, 2017, with one share of common stock issued to the
Purchaser for every $6.00 of outstanding principal amount or
accrued interest under the Loan and Security Agreement, (ii) the
Purchaser acquired 250,000 shares of common stock from the Company
for payment of $1,500,000 or $6.00 per share in cash and (iii) the
Purchaser acquired 250,000 shares of common stock from Seller for
payment of $1,500,000 or $6.00 per share in cash. Following the
closing of the Transactions, the Purchaser holds 3,319,528 shares
of common stock or approximately 29.4% of the outstanding capital
stock of the Company. Subject to mutual agreement between the
Purchaser and the Seller, the Purchaser has the right to acquire
up to 500,000 shares of common stock from the Seller for payment
of $6.00 per share in cash to Seller within 45 business days of
the Closing Date.
Pursuant to the Purchase Agreement, certain changes were made to
the composition of the Company's board of directors, including (i)
the size of the Board was set at five members, (ii) Brett Brewer
and Seth Johnson resigned from the Board effective as of the
Closing Date, (iii) Robert Galvin and Corrado Federico submitted
resignations to the Board to be effective upon acceptance by the
Board but no later than Oct. 1, 2018, (iv) Kenny Young and Nick
Capuano were appointed to the Board as designees of Purchaser and
(iv) the Company agreed to cause Nick Capuano to be appointed to
the board of directors of BB Brand Holdings LLC, a joint venture
of the Company.
The Purchase Agreement provides that the Company will at least
annually distribute a cash dividend to its shareholders from the
cash proceeds received by the Company from BB Brand Holdings LLC
after payment of or reasonable provision for any and all expenses
and liabilities of the Company.
Investor Agreement
On Jan. 12, 2018, the Purchaser, Manny Mashouf and certain
entities used by Mr. Mashouf to hold his shares in the Company,
entered into an Investor Agreement. The Investor Agreement
imposes certain acquisition and transfer restrictions on the
Mashouf Stockholders with respect to shares of common stock to
avoid an "ownership change" of the Company within the meaning of
Section 382 of the Internal Revenue Code of 1986, as amended, and
preserve certain net operating losses of the Company for U.S.
federal income tax purposes.
On Jan. 12, 2018, in connection with the Debt Conversion, the
Company and certain of its subsidiaries entered into a Termination
Agreement with the Purchaser (in its capacity as lender under the
Loan and Security Agreement pursuant to an assignment from GACP I,
L.P. on Jan. 5, 2018) and GACP Finance Co., LLC (in its capacity
as Administrative Agent under the Loan and Security Agreement) to
terminate all obligations of the Company under the Loan and
Security Agreement and take any action that is required to
evidence the termination of the Loan and Security Agreement and
the security interests and liens granted therewith.
Adpots Tax Benefit Preservation Plan
On Jan. 12, 2018, the Board adopted a Tax Benefit Preservation
Plan between the Company and Computershare Trust Company, N.A., as
rights agent in accordance with the terms of the Purchase
Agreement.
By adopting the Tax Plan, the Board is helping to preserve the
value of certain deferred tax benefits, including those generated
by net operating losses and certain other tax attributes. The
ability to use these Tax Benefits would be substantially limited
if the Company were to experience an "ownership change" as defined
under Section 382 of the Code. In general, an ownership change
would occur if there is a greater than 50-percentage point change
in ownership of securities by stockholders owning (or deemed to
own under Section 382 of the Code) 5% or more of a corporation's
securities over a rolling three-year period. The Tax Plan reduces
the likelihood that changes in the Company's investor base have
the unintended effect of limiting the use of the Company's Tax
Benefits. The Board believes it is in the best interest of the
Company and its stockholders that the Company provide for the
protection of the Tax Benefits by adopting the Tax Plan.
The Tax Plan is intended to act as a deterrent to any person
acquiring shares of the Company's securities equal to or exceeding
the Trigger Amount without the approval of the Board. This would
protect the Tax Benefits because changes in ownership by a person
owning less than 4.99% of the Company's stock are not included in
the calculation of "ownership change" for purposes of Section 382
of the Code. The Board has established procedures to consider
requests to exempt certain acquisitions of the Company's
securities from the Tax Plan if the Board determines that doing so
would not limit or impair the availability of the Tax Benefits or
is otherwise in the best interests of the Company.
Dividend of Preferred Stock Purchase Rights
In connection with its adoption of the Tax Plan, the Board
declared a dividend of one preferred stock purchase right for each
share of Common Stock, par value $0.001 of the Company outstanding
at the close of business on Jan. 26, 2018. As long as the Rights
are attached to the Common Stock, the Company will issue one Right
(subject to adjustment) with each new share of the Common Stock so
that all such shares will have attached Rights. When exercisable,
each Right will entitle the registered holder to purchase from the
Company one one-hundredth of a share of Series A Junior
Participating Preferred Stock, par value $0.001 per share, of the
Company at a price of $10.88 per one one-hundredth of a share of
Series A Preferred, subject to adjustment.
Transfer, "Flip In" and Exercise of the Rights
The Rights detach from the Common Stock and become exercisable if:
(i) at the close of business on the tenth business day following a
public announcement by the Company that a person or group of
affiliated or associated persons has acquired, or obtained the
right to acquire, beneficial ownership of 4.99% or more of the
Common Stock or (ii) at the close of business on the tenth
business day (or such later date as may be determined by action of
the Board prior to such time as any person or group of affiliated
persons becomes an Acquiring Person) following the commencement
of, or announcement by the Company of an intention to make, a
tender offer or exchange offer the consummation of which would
result in the beneficial ownership by a person or group of
affiliated or associated persons of shares of Common Stock equal
to or exceeding 4.99% of the outstanding Common Stock. The Board
may postpone the Distribution Date of the rights under certain
circumstances.
The Tax Plan provides that any person who beneficially owned
shares of Common Stock equal to or exceeding 4.99% of the
outstanding Common Stock immediately prior to the first public
announcement of the adoption of the Tax Plan, together with any
affiliates and associates of that person, will not be deemed to be
an "Acquiring Person' for purposes of the Tax Plan unless the
Existing Holder becomes the beneficial owner of one or more
additional shares of Common Stock (other than pursuant to a
dividend or distribution paid or made by the Company on the
outstanding Common Stock in Common Stock, pursuant to a split or
subdivision of the outstanding Common Stock). However, if upon
acquiring beneficial ownership of one or more additional shares of
Common Stock, the Existing Holder does not beneficially own shares
of Common Stock equal to or exceeding 4.99% of the Common Stock
outstanding, the Existing Holder shall not be deemed to be an
"Acquiring Person" purposes of the Tax Plan.
The Rights will be transferred only with the Common Stock until
the Distribution Date (or earlier redemption, exchange,
termination or expiration of the Rights). After the Distribution
Date, separate rights certificates will be issued evidencing the
Rights and become separately transferable apart from the Common
Stock.
Unless redeemed or exchanged earlier by the Company or terminated,
the rights will expire upon the earliest to occur of (i) the close
of business on Jan. 12, 2028, (ii) the close of business on the
effective date of the repeal of Section 382 of the Code if the
Board determines that the Tax Plan is no longer necessary or
desirable for the preservation of the Tax Benefits or (iii) the
time at which the Board determines that the Tax Benefits are fully
utilized or no longer available under Section 382 of the Code or
that an ownership change under Section 382 of the Code would not
adversely impact in any material respect the time period in which
the Company could use the Tax Benefits, or materially impair the
amount of the Tax Benefits that could be used by the Company in
any particular time period, for applicable tax purposes.
Rights and Preferences of Preferred Stock
Each share of Series A Preferred purchasable upon exercise of the
Rights will be entitled, when, as and if declared, to a minimum
preferential quarterly dividend payment of $1.00 per share or, if
greater, an aggregate dividend of 100 times the dividend, if any,
declared per share of Common Stock. In the event of liquidation,
dissolution or winding up of the Company, the holders of the
Series A Preferred will be entitled to a minimum preferential
liquidation payment of $100 per share (plus any accrued but unpaid
dividends), provided that such holders of the Series A Preferred
will be entitled to an aggregate payment of 100 times the payment
made per share of Common Stock. Each share of Series A Preferred
will have 100 votes and will vote together with the Common Stock.
Finally, in the event of any merger, consolidation or other
transaction in which shares of the Common Stock are exchanged,
each share of Series A Preferred will be entitled to receive 100
times the amount received per share of Common Stock. The Series A
Preferred will not be redeemable. These rights are protected by
customary antidilution provisions. Because of the nature of the
dividend, liquidation and voting rights of the Series A Preferred,
the value of one one-hundredth of a share of Series A Preferred
purchasable upon exercise of each Right should approximate the
value of one share of Common Stock.
The Purchase Price payable, and the number of shares of Series A
Preferred or other securities or property issuable, upon exercise
of the Rights are subject to adjustment from time to time to
prevent dilution (i) in the event of a stock dividend on, or a
subdivision, combination or reclassification of, the Series A
Preferred, (ii) upon the grant to holders of the Series A
Preferred of certain rights or warrants to subscribe for or
purchase Series A Preferred or convertible securities at less than
the then current market price of the Series A Preferred or (iii)
upon the distribution to holders of the Series A Preferred of
evidences of indebtedness, cash, securities or assets (excluding
regular periodic cash dividends at a rate not in excess of 125% of
the rate of the last regular periodic cash dividend theretofore
paid or, in case regular periodic cash dividends have not
theretofore been paid, at a rate not in excess of 50% of the
average net income per share of the Company for the four quarters
ended immediately prior to the payment of such dividend, or
dividends payable in shares of Series A Preferred (which dividends
will be subject to the adjustment described in clause (i) above))
or of subscription rights or warrants (other than those referred
to above).
Until a Right is exercised, the holder thereof, as such, will have
no rights as a stockholder of the Company beyond those as an
existing stockholder, including, without limitation, the right to
vote or to receive dividends.
Merger, Exchange or Redemption of the Rights
In the event that a Person becomes an Acquiring Person or if the
Company were the surviving corporation in a merger with an
Acquiring Person or any affiliate or associate of an Acquiring
Person and shares of the Common Stock were not changed or
exchanged, each holder of a Right, other than Rights that are or
were acquired or beneficially owned by the Acquiring Person (which
Rights will thereafter be null and void), will thereafter have the
right to receive upon exercise that number of shares of Common
Stock having a market value of two times the then current Purchase
Price of the Right. In the event that, after a Person has become
an Acquiring Person, the Company were acquired in a merger or
other business combination transaction or more than 50% of its
assets or earning power were sold, proper provision will be made
so that each holder of a Right will thereafter have the right to
receive, upon the exercise thereof at the then current Purchase
Price of the Right, that number of shares of common stock of the
acquiring company which at the time of such transaction would have
a market value of two times the then current Purchase Price of the
Right.
At any time after a Person becomes an Acquiring Person and prior
to the earlier of one of the events described in the last sentence
of the previous paragraph or the acquisition by such Acquiring
Person of 50% or more of the then outstanding Common Stock, the
Board of Directors may cause the Company to exchange the Rights
(other than Rights owned by an Acquiring Person which will have
become null and void), in whole or in part, for shares of Common
Stock at an exchange rate of one share of Common Stock per Right
(subject to adjustment).
The Rights may be redeemed in whole, but not in part, at a price
of $0.01 per Right by the Board of Directors at any time prior to
the time that an Acquiring Person has become such. The redemption
of the Rights may be made effective at such time, on such basis
and with such conditions as the Board of Directors in its sole
discretion may establish. Immediately upon any redemption of the
Rights, the right to exercise the Rights will terminate and the
only right of the holders of Rights will be to receive the
Redemption Price.
Amendment of Tax Benefit Preservation Plan
Any of the provisions of the Tax Plan may be amended by the Board
of Directors, or a duly authorized committee thereof, for so long
as the Rights are then redeemable, and after the Rights are no
longer redeemable, the Company may amend or supplement the Tax
Plan in any manner that does not adversely affect the interests of
the holders of the Rights (other than an Acquiring Person or any
affiliate or associate of an Acquiring Person).
About bebe stores inc.
Based in Brisbane, California, bebe stores inc. (NASDAQ: BEBE) --
http://www.bebe.com/-- is a women's retail clothier established
in 1976. The brand develops and produces a line of women's
apparel and accessories, which it markets under the Bebe,
BebeSport, and Bebe Outlet names.
Manny Mashouf founded bebe stores, inc. and has served as chairman
of the Board since the Company's incorporation in 1976. Mr.
Mashouf became the chief executive officer starting February 2016.
He previously served as the Company's CEO from 1976 to February
2004 and again from January 2009 to January 2013. Mr. Mashouf is
the uncle of Hamid Mashouf, the Company's chief information
officer. The Company operated brick-and-mortar stores in the
United States, Puerto Rico and Canada. The Company had 142 retail
stores before ending all retail operations in the U.S. by May 27,
2017. As of July 1, 2017, the Company had no remaining stores and
had fully impaired, all of its remaining long-lived assets at its
corporate offices and distribution center because of the shut-down
of its operations.
bebe stores reported a net loss of $138.96 million on $0 of net
sales for the fiscal year ended July 1, 2017, compared to a net
loss of $27.48 million on $0 of net sales for the fiscal year
ended July 2, 2016. As of Sept. 30, 2017, bebe stores had $30.87
million in total assets, $39.21 million in total liabilities and a
total shareholders' deficit of $8.34 million.
The report from the Company's independent registered public
accounting firm Deloitte & Touche LLP, in San Francisco,
California, for the year ended Dec. 31, 2016, included an
explanatory paragraph stating that the Company has incurred
recurring losses from operations and negative cash flows from
operations and expects significant uncertainty in generating
sufficient cash to meet its obligations and sustain its
operations, which raises substantial doubt about its ability to
continue as a going concern.
BEBE STORES: B. Riley Financial Buys 29.5% Stake as of Jan. 12
--------------------------------------------------------------
B. Riley Financial, Inc. reported to the U.S. Securities and
Exchange Commission that as of Jan. 12, 2018, it beneficially owns
3,319,528 shares of common stock of bebe stores, inc.,
constituting 29.45% of the shares outstanding. The address of the
principal offices of the Reporting Person is 21255 Burbank
Boulevard, Suite 400, Woodland Hills, California 91367.
B. Riley Financial acquired an aggregate of 3,319,528 shares of
Common Stock pursuant to the terms of a Debt Conversion and
Purchase and Sale Agreement, dated as of Jan. 12, 2018, by and
among B. Riley Financial, bebe stores and The Manny Mashouf Living
Trust.
Under the terms of the DCA, bebe stores issued 2,819,528 shares of
Common Stock to the Reporting Person in exchange for the Reporting
Person's cancelling $16,917,168 of indebtedness of the Issuer held
by the Reporting Person. The Reporting Person also purchased
250,000 shares of Common Stock from each of the Issuer and the
Mashouf Trust for cash consideration in the aggregate amount of
$3,000,000. Those shares of Common Stock were acquired with the
working capital of the Reporting Person.
The aggregate percentage of Shares reported owned by B. Riley
Financial is based upon 11,270,293 shares of Common Stock issued
and outstanding as of Jan. 12, 2018 following the transactions
effected pursuant to the DCA.
A full-text copy of the regulatory filing is available at:
https://is.gd/wZCin5
About bebe stores inc.
Based in Brisbane, California, bebe stores inc. (NASDAQ: BEBE) --
http://www.bebe.com/-- is a women's retail clothier established
in 1976. The brand develops and produces a line of women's
apparel and accessories, which it markets under the Bebe,
BebeSport, and Bebe Outlet names.
Manny Mashouf founded bebe stores, inc. and has served as chairman
of the Board since the Company's incorporation in 1976. Mr.
Mashouf became the chief executive officer starting February 2016.
He previously served as the Company's CEO from 1976 to February
2004 and again from January 2009 to January 2013. Mr. Mashouf is
the uncle of Hamid Mashouf, the Company's chief information
officer. The Company operated brick-and-mortar stores in the
United States, Puerto Rico and Canada. The Company had 142 retail
stores before ending all retail operations in the U.S. by May 27,
2017. As of July 1, 2017, the Company had no remaining stores and
had fully impaired, all of its remaining long-lived assets at its
corporate offices and distribution center because of the shut-down
of its operations.
bebe stores reported a net loss of $138.96 million on $0 of net
sales for the fiscal year ended July 1, 2017, compared to a net
loss of $27.48 million on $0 of net sales for the fiscal year
ended July 2, 2016. As of Sept. 30, 2017, bebe stores had $30.87
million in total assets, $39.21 million in total liabilities and a
total shareholders' deficit of $8.34 million.
The report from the Company's independent registered public
accounting firm Deloitte & Touche LLP, in San Francisco,
California, for the year ended Dec. 31, 2016, included an
explanatory paragraph stating that the Company has incurred
recurring losses from operations and negative cash flows from
operations and expects significant uncertainty in generating
sufficient cash to meet its obligations and sustain its
operations, which raises substantial doubt about its ability to
continue as a going concern.
SEASTAR HOLDINGS: Taps Stinson Leonard as Regulatory Counsel
------------------------------------------------------------
SeaStar Holdings, Inc., and its affiliates seek approval from the
U.S. Bankruptcy Court for the District of Delaware to hire Stinson
Leonard Street LLP as special regulatory counsel to provide the
Debtors with legal services in connection with certain regulatory
matters and obligations with respect to certain regulatory
authorities, including governmental entities and airports, and
related matters.
As of the Petition Date, Stinson held unapplied retainer funds
previously provided by the Debtors in the amount of $20,000.00
from which Stinson expects to be compensated for its initial
post-petition fees and expenses.
David F. Rifkind, partner at Stinson Leonard Street LLP, attests
that his firm does not represent or hold any interest adverse to
the Debtors or their estates with respect to the matters on which
Stinson is to be employed.
The counsel can be reached through:
David F. Rifkind, Esq.
Stinson Leonard Street LLP
1775 Pennsylvania Ave. NW, Suite 800
Washington, DC 20006
Phone: 202-785-9100
Email: david.rifkind@stinson.com
About SeaStar Holdings
Based in Puerto Rico, SeaStar Holdings, Inc., doing business as
Seaborn Airlines, serves local passengers within the Caribbean and
connecting traffic to numerous locations within or outside the
United States through code share or interline arrangements with
multiple airline partners. The Company's fleet consists of seven
34-seat Saab 34088s and one 15-seat Twin Otter Seaplane. The
majority of the Company's inter-island flights are via the Saab
fleet. The Seaplane serves as the primary air transportation
between St. Croix and St. Thomas in the U.S. Virgin Islands.
SeaStar Holdings, Inc., along with affiliates Seaborne Virgin
Islands, Inc., and Seaborne Puerto Rico, LLC, sought Chapter 11
protection (Bankr. D. Del. Lead Case No. 18-10039) on Jan. 8,
2018. The Hon. Christopher S. Sontchi is the case judge.
SeaStar Holdings estimated assets of $1 million to $10 million and
debt of $10 million to $50 million as of the bankruptcy filing.
Adam G. Landis, Esq., Kerri K. Mumford, Esq., and Travis J.
Ferguson, Esq., at Landis Rath & Cobb LLP, serve as the Debtors'
bankruptcy counsel. Sonoran Capital Advisors LLC is the Debtors'
restructuring advisor. Stinson Leonard Street LLP is the special
regulatory counsel. Seabury Corporate Advisors LLC is the
investment banker. Rust Consulting/Omni Bankruptcy is the claims
and noticing agent.
TOYS R US: Taps PricewaterhouseCoopers as Tax Consultant
--------------------------------------------------------
Toys "R" Us, Inc., seeks approval from the U.S. Bankruptcy Court
for the Eastern District of Virginia to hire
PricewaterhouseCoopers LLP as its tax and accounting advisory
consultant.
The firm will provide international assignment tax compliance
services to Toys "R" Us and its affiliates, which include the
preparation of individual income tax returns and consultation on
tax matters of international assignees who are authorized
employees of the Debtors.
PwC will receive fixed-fee payments, which depend upon the number
of individual income tax returns requested by the Debtors:
Unit Fee
--------
U.S. Federal Income Tax Return $1,500
U.S. State Income Tax Returns $250
Foreign (Non-U.S.) Income Tax Return $1,000 to $3,000
Tax Equalization Calculation $650
Application for Federal/State Extensions $475
Assignee Meetings/Consultations $600
Report of Foreign Bank Accounts $600
The firm will also provide additional tax services, including tax
planning projects, preparation of reports summarizing the tax
implications of certain compensation of benefits plans offered to
expatriate and local-national employees, certain technology
projects or services, and assistance with tax authority audits or
examinations; and accounting advisory services in connection with
the Debtors' emergence from bankruptcy.
PwC will charge these hourly rates for additional tax services:
Partner/Managing Director $580
Director/Senior Manager $466
Manager $380
Staff $200 - $238
The hourly rates for accounting advisory services are:
Partner/Managing Director $746 - $956
Director/Senior Manager $577 - $776
Manager $416 - $604
Staff $255 - $576
Administrative $144
Scott Gehsmann, a partner at PwC, disclosed in a court filing that
his firm is a "disinterested person" as defined in Section 101(14)
of the Bankruptcy Code.
The firm can be reached through:
Scott Gehsmann
PricewaterhouseCoopers LLP
300 Madison Avenue
New York, NY 10017-6204
Telephone: [1] (646) 471-3000
Telecopier: [1] (813) 286-6000
About Toys "R" Us
Toys "R" Us, Inc., is an American toy and juvenile-products
retailer founded in 1948 and headquartered in Wayne, New Jersey,
in the New York City metropolitan area. Merchandise is sold in
880 Toys "R" Us and Babies "R" Us stores in the United States,
Puerto Rico and Guam, and in more than 780 international stores
and more than 245 licensed stores in 37 countries and
jurisdictions. Merchandise is also sold at e-commerce sites
including Toysrus.com and Babiesrus.com.
On July 21, 2005, a consortium of Bain Capital Partners LLC,
Kohlberg Kravis Roberts and Vornado Realty Trust invested $1.3
billion to complete a $6.6 billion leveraged buyout of the
company. Toys "R" Us is now a privately owned entity but still
files with the Securities and Exchange Commission as required by
its debt agreements.
The Company's consolidated balance sheet showed $6.572 billion in
assets, $7.891 billion in liabilities, and a stockholders' deficit
of $1.319 billion as of April 29, 2017.
Toys "R" Us, Inc., and certain of its U.S. subsidiaries and its
Canadian subsidiary voluntarily filed for relief under Chapter 11
of the Bankruptcy Code (Bankr. E.D. Va. Lead Case No. Case No.
17-34665) on Sept. 19, 2017. In addition, the Company's Canadian
subsidiary voluntarily commenced parallel proceedings under the
Companies' Creditors Arrangement Act ("CCAA") in Canada in the
Ontario Superior Court of Justice. The Company's operations
outside of the U.S. and Canada, including its 255 licensed stores
and joint venture partnership in Asia, which are separate
entities, are not part of the Chapter 11 filing and CCAA
proceedings.
Grant Thornton is the monitor appointed in the CCAA case.
Judge Keith L. Phillips presides over the Chapter 11 cases.
In the Chapter 11 cases, Kirkland & Ellis LLP and Kirkland & Ellis
International LLP serve as the Debtors' legal counsel. Kutak Rock
LLP serves as co-counsel. Toys "R" Us employed Alvarez & Marsal
North America, LLC as its restructuring advisor; and Lazard Freres
& Co. LLC as its investment banker. It hired Prime Clerk LLC as
claims and noticing agent. A&G Realty Partners, LLC, serves as
its real estate advisor.
On Sept. 26, 2017, the U.S. Trustee for Region 4 appointed an
official committee of unsecured creditors. The Committee retained
Kramer Levin Naftalis & Frankel LLP as its legal counsel; Wolcott
Rivers, P.C. as local counsel; FTI Consulting, Inc. as financial
advisor; and Moelis & Company LLC as investment banker.
TOYS R US: Taps DJM Realty as Real Estate Consultant
----------------------------------------------------
Toys "R" Us, Inc., seeks approval from the U.S. Bankruptcy Court
for the Eastern District of Virginia to hire DJM Realty Services,
LLC as its real estate consultant.
DJM will assist the company and its affiliates in negotiating with
landlords related to effecting lease modification agreements; and
will implement a marketing program for the sale, lease or sublease
of the properties and the assignment or disposition of the leases.
The firm will also assist the Debtors' counsel and persons
responsible for the documentation of proposed transactions,
including reviewing documents and assisting in resolving problems
that may arise.
DJM will be compensated in accordance with the terms of its
services agreement with the Debtors.
As to assignments, subleases or other transfers of leases that
have an area of 15,000 square feet, a "lease transaction fee" per
lease in the amount of $2 per square foot of space in the property
will be earned by the firm, increased to $3 per square foot or
such other amount if another broker that is not affiliated with
the firm is involved in the transaction.
As to assignments, subleases or other transfers of leases that
have an area of less than 15,000 square feet of space in the
leased property, DJM will receive a lease transaction fee per
lease in the amount equal to 6% of the base rent to be paid by the
assignee or sublessee during the remaining term of the lease or
the initial term of the sublease (not including option terms),
increased to 7% or such other amount if another broker that is not
affiliated with the firm is involved.
In the event a lease is terminated early in exchange for a payment
by a landlord, a lease transaction fee per lease in the amount
equal to 2% of the "savings" and 2% of any key money paid to the
Debtors by the landlord.
As to sales of "owned properties," a sales transaction fee in a
dollar amount equal to 5% of the gross proceeds received by the
Debtors from such transaction, increased to 6% if another broker
that is not affiliated with DJM is involved in the transaction.
Gross proceeds means the total value of all payments of any kind
received by the Debtors as a result of the transaction.
Mackenzie Shea, associate general counsel of DJM's parent Gordon
Brothers Group LLC, disclosed in a court filing that the firm does
not hold or represents any interest adverse to the Debtors or
their
estates.
The firm can be reached through:
Mackenzie L. Shea
Prudential Tower
DJM Realty Services, LLC
Prudential Tower
800 Boylston Street, 27th Floor
Boston, MA 02199
Phone: (617) 422-6519/(888) 424-1903
E-mail: mshea@gordonbrothers.com
info@gordonbrothers.com
About Toys "R" Us
Toys "R" Us, Inc., is an American toy and juvenile-products
retailer founded in 1948 and headquartered in Wayne, New Jersey,
in the New York City metropolitan area. Merchandise is sold in
880 Toys "R" Us and Babies "R" Us stores in the United States,
Puerto Rico and Guam, and in more than 780 international stores
and more than 245 licensed stores in 37 countries and
jurisdictions. Merchandise is also sold at e-commerce sites
including Toysrus.com and Babiesrus.com.
On July 21, 2005, a consortium of Bain Capital Partners LLC,
Kohlberg Kravis Roberts and Vornado Realty Trust invested $1.3
billion to complete a $6.6 billion leveraged buyout of the
company. Toys "R" Us is now a privately owned entity but still
files with the Securities and Exchange Commission as required by
its debt agreements.
The Company's consolidated balance sheet showed $6.572 billion in
assets, $7.891 billion in liabilities, and a stockholders' deficit
of $1.319 billion as of April 29, 2017.
Toys "R" Us, Inc., and certain of its U.S. subsidiaries and its
Canadian subsidiary voluntarily filed for relief under Chapter 11
of the Bankruptcy Code (Bankr. E.D. Va. Lead Case No. Case No.
17-34665) on Sept. 19, 2017. In addition, the Company's Canadian
subsidiary voluntarily commenced parallel proceedings under the
Companies' Creditors Arrangement Act ("CCAA") in Canada in the
Ontario Superior Court of Justice. The Company's operations
outside of the U.S. and Canada, including its 255 licensed stores
and joint venture partnership in Asia, which are separate
entities, are not part of the Chapter 11 filing and CCAA
proceedings.
Grant Thornton is the monitor appointed in the CCAA case.
Judge Keith L. Phillips presides over the Chapter 11 cases.
In the Chapter 11 cases, Kirkland & Ellis LLP and Kirkland & Ellis
International LLP serve as the Debtors' legal counsel. Kutak Rock
LLP serves as co-counsel. Toys "R" Us employed Alvarez & Marsal
North America, LLC as its restructuring advisor; and Lazard Freres
& Co. LLC as its investment banker. It hired Prime Clerk LLC as
claims and noticing agent. A&G Realty Partners, LLC, serves as
its real estate advisor.
On Sept. 26, 2017, the U.S. Trustee for Region 4 appointed an
official committee of unsecured creditors. The Committee retained
Kramer Levin Naftalis & Frankel LLP as its legal counsel; Wolcott
Rivers, P.C. as local counsel; FTI Consulting, Inc. as financial
advisor; and Moelis & Company LLC as investment banker.
TOYS R US: Affiliate Taps Zolfo Cooper as Financial Advisor
-----------------------------------------------------------
Toys "R" Us Delaware, Inc., seeks approval from the U.S.
Bankruptcy Court for the Eastern District of Virginia to hire
Zolfo Cooper, LLC, as its financial advisor.
The firm will provide services to Alan Carr and Neal Goldman,
directors of Toys "R" Us Delaware, on matters in which a
conflict exists between the company and its shareholders,
affiliates, directors and officers.
The firm's hourly rates in effect as of Jan. 1 range from $850 to
$1,035 for managing directors, $320 to $850 for professional staff
and $70 to $300 for support personnel.
Scott Winn, senior managing director of Zolfo Cooper, disclosed in
a court filing that his firm is a "disinterested person" as
defined in Section 101(14) of the Bankruptcy Code.
Zolfo Cooper can be reached through:
Scott W. Winn
Zolfo Cooper, LLC
Grace Building
1114 Avenue of the Americas, 41st Floor
New York, 10036
Tel: + 1 212-561-4030 / +1 212-561-4000
Fax: +1 212-213-1749
E-mail: swinn@zolfocooper.com
About Toys "R" Us
Toys "R" Us, Inc., is an American toy and juvenile-products
retailer founded in 1948 and headquartered in Wayne, New Jersey,
in the New York City metropolitan area. Merchandise is sold in
880 Toys "R" Us and Babies "R" Us stores in the United States,
Puerto Rico and Guam, and in more than 780 international stores
and more than 245 licensed stores in 37 countries and
jurisdictions. Merchandise is also sold at e-commerce sites
including Toysrus.com and Babiesrus.com.
On July 21, 2005, a consortium of Bain Capital Partners LLC,
Kohlberg Kravis Roberts and Vornado Realty Trust invested $1.3
billion to complete a $6.6 billion leveraged buyout of the
company. Toys "R" Us is now a privately owned entity but still
files with the Securities and Exchange Commission as required by
its debt agreements.
The Company's consolidated balance sheet showed $6.572 billion in
assets, $7.891 billion in liabilities, and a stockholders' deficit
of $1.319 billion as of April 29, 2017.
Toys "R" Us, Inc., and certain of its U.S. subsidiaries and its
Canadian subsidiary voluntarily filed for relief under Chapter 11
of the Bankruptcy Code (Bankr. E.D. Va. Lead Case No. Case No.
17-34665) on Sept. 19, 2017. In addition, the Company's Canadian
subsidiary voluntarily commenced parallel proceedings under the
Companies' Creditors Arrangement Act ("CCAA") in Canada in the
Ontario Superior Court of Justice. The Company's operations
outside of the U.S. and Canada, including its 255 licensed stores
and joint venture partnership in Asia, which are separate
entities, are not part of the Chapter 11 filing and CCAA
proceedings.
Grant Thornton is the monitor appointed in the CCAA case.
Judge Keith L. Phillips presides over the Chapter 11 cases.
In the Chapter 11 cases, Kirkland & Ellis LLP and Kirkland & Ellis
International LLP serve as the Debtors' legal counsel. Kutak Rock
LLP serves as co-counsel. Toys "R" Us employed Alvarez & Marsal
North America, LLC as its restructuring advisor; and Lazard Freres
& Co. LLC as its investment banker. It hired Prime Clerk LLC as
claims and noticing agent. A&G Realty Partners, LLC, serves as
its real estate advisor.
On Sept. 26, 2017, the U.S. Trustee for Region 4 appointed an
official committee of unsecured creditors. The Committee retained
Kramer Levin Naftalis & Frankel LLP as its legal counsel; Wolcott
Rivers, P.C. as local counsel; FTI Consulting, Inc. as financial
advisor; and Moelis & Company LLC as investment banker.
TOYS R US: Committee Taps Bennett Jones as Canadian Counsel
-----------------------------------------------------------
The official committee of unsecured creditors of Toys "R" Us,
Inc., and its affiliates seeks approval from the U.S. Bankruptcy
Court for the Eastern District of Virginia to hire Bennett Jones
LLP as its Canadian counsel.
The firm will advise the committee regarding the restructuring
proceeding filed by the company's Canadian subsidiary Toys "R" Us
(Canada) Ltd. under the Companies' Creditors Arrangement Act
before the Ontario Superior court of Justice in Toronto, Ontario.
The firm's hourly rates are:
Partners CAD$675 - CAD$1,150
Associates CAD$345 - CAD$645
Students CAD$225 - CAD$240
Kevin Zych, Esq., disclosed in a court filing that his firm is a
"disinterested person" as defined in Section 101(14) of the
Bankruptcy Code.
In accordance with Appendix B-Guidelines for reviewing fee
applications filed by attorneys in larger Chapter 11 cases, Mr.
Zych disclosed that his firm has not agreed to any variations
from, or alternatives to, its standard or customary billing
arrangements; and that no Bennett Jones has varied his rate based
on the geographic location of the Debtors' bankruptcy cases.
Mr. Zych also disclosed that Bennett Jones did not represent the
committee before its formation and that the firm is developing a
budget and staffing plan that will be presented for approval by
the committee.
Bennett Jones can be reached through:
Kevin Zych, Esq.
Bennett Jones LLP
3400 One First Canadian Place
P.O. Box 130
Toronto, Ontario
M5X 1A4 Canada
Tel: 416.863.1200 / 416.777.5738
Fax: 416.863.1716
E-mail: zychk@bennettjones.com
About Toys "R" Us
Toys "R" Us, Inc., is an American toy and juvenile-products
retailer founded in 1948 and headquartered in Wayne, New Jersey,
in the New York City metropolitan area. Merchandise is sold in
880 Toys "R" Us and Babies "R" Us stores in the United States,
Puerto Rico and Guam, and in more than 780 international stores
and more than 245 licensed stores in 37 countries and
jurisdictions. Merchandise is also sold at e-commerce sites
including Toysrus.com and Babiesrus.com.
On July 21, 2005, a consortium of Bain Capital Partners LLC,
Kohlberg Kravis Roberts and Vornado Realty Trust invested $1.3
billion to complete a $6.6 billion leveraged buyout of the
company. Toys "R" Us is now a privately owned entity but still
files with the Securities and Exchange Commission as required by
its debt agreements.
The Company's consolidated balance sheet showed $6.572 billion in
assets, $7.891 billion in liabilities, and a stockholders' deficit
of $1.319 billion as of April 29, 2017.
Toys "R" Us, Inc., and certain of its U.S. subsidiaries and its
Canadian subsidiary voluntarily filed for relief under Chapter 11
of the Bankruptcy Code (Bankr. E.D. Va. Lead Case No. Case No.
17-34665) on Sept. 19, 2017. In addition, the Company's Canadian
subsidiary voluntarily commenced parallel proceedings under the
Companies' Creditors Arrangement Act ("CCAA") in Canada in the
Ontario Superior Court of Justice. The Company's operations
outside of the U.S. and Canada, including its 255 licensed stores
and joint venture partnership in Asia, which are separate
entities, are not part of the Chapter 11 filing and CCAA
proceedings.
Grant Thornton is the monitor appointed in the CCAA case.
Judge Keith L. Phillips presides over the Chapter 11 cases.
In the Chapter 11 cases, Kirkland & Ellis LLP and Kirkland & Ellis
International LLP serve as the Debtors' legal counsel. Kutak Rock
LLP serves as co-counsel. Toys "R" Us employed Alvarez & Marsal
North America, LLC as its restructuring advisor; and Lazard Freres
& Co. LLC as its investment banker. It hired Prime Clerk LLC as
claims and noticing agent. A&G Realty Partners, LLC, serves as
its real estate advisor.
On Sept. 26, 2017, the U.S. Trustee for Region 4 appointed an
official committee of unsecured creditors. The Committee retained
Kramer Levin Naftalis & Frankel LLP as its legal counsel; Wolcott
Rivers, P.C. as local counsel; FTI Consulting, Inc. as financial
advisor; and Moelis & Company LLC as investment banker.
***********
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.
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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
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USA, Marites O. Claro, Joy A. Agravante, Rousel Elaine T.
Fernandez, Julie Anne L. Toledo, Ivy B. Magdadaro, and Peter A.
Chapman, Editors.
Copyright 2018. All rights reserved. ISSN 1529-2746.
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* * * End of Transmission * * *