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/raid1/www/Hosts/bankrupt/TCRLA_Public/181129.mbx T R O U B L E D C O M P A N Y R E P O R T E R L A T I N A M E R I C A Thursday, November 29, 2018, Vol. 19, No. 239 Headlines B R A Z I L CITY OF RIO DE JANEIRO: S&P Withdraws BB-/B Issuer Credit Ratings ODEBRECHT ENGENHARIA: Weighs Restructuring Options ODEBRECHT ENGENHARIA: S&P Lowers Global Scale ICR to 'D' WAYPOINT LEASING: Files for Chapter 11 to Facilitate Asset Sale D O M I N I C A N R E P U B L I C DOMINICAN REPUBLIC: Expert Explains 'Brouhaha' Over Chicken Prices DOMINICAN REPUBLIC: A First, Zoning for the Dominican Capital J A M A I C A JAMAICA: Credit Increase to Private Sector P U E R T O R I C O PONCE REAL: Voluntary Chapter 11 Case Summary RELIANCE MANUFACTURING: Taps Tamarez CPA as Accountant YORAVI INVESTMENT: March 8 Plan Confirmation Hearing - - - - - =========== B R A Z I L =========== CITY OF RIO DE JANEIRO: S&P Withdraws BB-/B Issuer Credit Ratings ----------------------------------------------------------------- On Nov. 23, 2018, S&P Global Ratings withdrew its 'BB-/B' foreign currency and local currency issuer credit ratings on the City of Rio de Janeiro at the issuer's request. At the same time, S&P Global Ratings withdrew its 'brAAA' Brazil national scale rating on the city. At the time of the withdrawal, the outlook was stable. RATINGS LIST Ratings Withdrawn To From Rio de Janeiro (City of) Issuer credit rating NR BB-/Stable/B Brazil national scale NR brAAA/Stable/-- NR--Not rated. ODEBRECHT ENGENHARIA: Weighs Restructuring Options -------------------------------------------------- Aaron Weinman at Reuters reports that cash-strapped Brazilian construction firm Odebrecht Engenharia e Construcao (OEC) is analyzing options to restructure some US$3bn worth of bonds, after it missed a coupon payment that has bondholders prepping for significant losses on their investments. OEC, implicated in a multinational corruption scandal that has impacted countries in Latin America and Africa, hired Moelis & Co and law firm Cleary Gottlieb Steen & Hamilton to study potential restructuring alternatives after the company said it would skip an US$11.5 million coupon payment due on a bond maturing in 2025, according to Reuters. A spokesperson for Moelis declined to comment, while representatives for Cleary Gottlieb and Odebrecht did not respond to requests for comment before this article was published. Possible solutions to address the bond debt include exchanging and extending maturities on OEC's securities or rolling over shorter- term liabilities with bank loans, according to three sources monitoring the situation, the report notes. For the latter option, however, OEC would need strong support from parent company Odebrecht SA and to present banks and investors with assets, or construction contracts, that can be collateralized, the sources said, the report relays. The company said in a statement that the deferred coupon payment would preserve liquidity and better position OEC to recover a backlog of infrastructure projects and kick-start lagging cash generation, the report says. But since Marcelo Odebrecht, the former chief executive officer of the Odebrecht Group, was found guilty in 2016 of funneling at least US$785.5 million in bribes to politicians in return for construction contracts, investors are skeptical the company can obtain sufficient collateral to approach the market to restructure its debt, the report says. Rafael Elias, a director at investment bank Exotix Capital, said OEC was "underestimating" how tainted its name had become as a result of the scandal and doubted the company could compete with its peers in the region, the report discloses. "[The scandal] will weigh on anyone that sees an Odebrecht bid when it comes time to assign a project," the report quoted Mr. Elias as saying. "They have that albatross that is difficult to shake," he said. Odebrecht in May did raise BRL2.6 billion (US$670.3 million) from five Brazilian banks to roll-over short-term OEC liabilities, but to do so, the company used its stake in local petrochemicals company Braskem as collateral, the report notes. Odebrecht holds 50.1% of voting capital in Braskem, and it is considered the "best asset" the company has left, said Marcos Schmidt, a senior analyst with Moody's Investors Service, the report says. But relying on Braskem again may not prove enough to convince banks to lend Odebrecht more money, the report relays. The report notes that Mr. Schmidt said there was "not much else" for Odebrecht to use as collateral and expects bondholder losses to be "severe." The report discloses that while no concrete terms on a restructuring have been finalized, a distressed debt investor said OEC's bondholders would be "lucky to get a fair recovery" and added that the company's project pipeline would not be enough to restructure debt. "Odebrecht has fought hard and they've serviced debt longer than I thought they would," the emerging markets-focused investor said. "Unless the parent steps in to support, I cannot see how this could be a smooth restructuring," the report relays. Despite its woes, OEC won a US$34.8 million public tender to modernize the port of Miami and it is also working on the expansion of the Tocumen International Airport in Panama City, Panama, the report adds. ODEBRECHT ENGENHARIA: S&P Lowers Global Scale ICR to 'D' -------------------------------------------------------- S&P Global Ratings lowered its global scale issuer credit rating on OEC to 'D' (default) from 'CC'. S&P said, "At the same time, we lowered our long-term national scale issuer credit rating on the company to 'D' from 'brCC'. We also lowered the short-term national scale rating to 'D' from 'brC'." In addition, S&P lowered its issue-level ratings on OEC's sister company, OFL, to 'D' from 'CC'. OEC fully guarantee OFL's notes. The '4' recovery rating on this debt, indicating S&P's expectation that lenders would receive average (30%) recovery of their principal in the event of a payment default, remains unchanged. The rating actions follow OEC's announcement that upon the expiration of the 30-day grace period applicable to the $11.5 million interest payment on the 2025 unsecured notes, OFL won't make this payment. Although the company has enough liquidity to make this interest payment, it decided to not make the payment in order to save liquidity for the company's operations. Through an out-of-court process, OEC is currently negotiating with its lenders a strategy to equalize its short- and long-term capital structure. In S&P's view, without a restructuring or renegotiation of its obligations, OEC will likely have to file for bankruptcy because its obligations are unsustainable in the longer run. S&P said, "We'll continue to monitor the situation and we expect to revise the ratings on OEC once it completes the debt restructuring. Our analysis will then incorporate the company's updated capital structure and liquidity position, as well as our updated forecast on OEC's operating and financial performance." WAYPOINT LEASING: Files for Chapter 11 to Facilitate Asset Sale --------------------------------------------------------------- Waypoint Leasing Holdings Ltd., the largest independent global helicopter leasing company, on Nov. 25 disclosed that it and certain of its subsidiaries have filed voluntary petitions for relief under Chapter 11 of the Bankruptcy Code in the U.S. Bankruptcy Court for the Southern District of New York. Waypoint expects to move through the restructuring process as expeditiously as possible and is committed to working with its lenders and all stakeholders towards a speedy and successful transformation. To this end, Waypoint has run a comprehensive sale process over the past months, has received bids from numerous parties, and expects to use the Chapter 11 process to facilitate the acquisition of Waypoint by a new owner with a continued focus on our customers. Over the past six months, Waypoint has been actively working with its lenders to de-lever its balance sheet and reposition the Company for strength and stability. Waypoint plans to continue that work during the Chapter 11 process, and in addition to de-levering, Waypoint will continue to implement strategic initiatives. Waypoint has filed a number of customary motions with the Court seeking authorization to support its operations during the restructuring process and ensure a smooth transition into Chapter 11. The Company expects to continue its support for its customers on an uninterrupted basis and to work with all vendors and suppliers in the ordinary course for all goods and services provided on or after the filing date. "Waypoint's Chapter 11 filing is the next step in our holistic transformation strategy and will provide us with the opportunity to emerge with a stronger, sustainable and more competitive balance sheet," said Hooman Yazhari, Chief Executive Officer of Waypoint. "It will further catalyze our ability to implement many of the innovative and evolutionary changes to our business model, allowing us to meet head-on the challenges and opportunities which our displaced industry presents. During our continued transformation, our team will work as hard as possible to demonstrate Waypoint's true value as the most dedicated and capable steward of our assets. We will also continue our intense focus to deliver on the needs and requirements of our customers. I am incredibly grateful for our supportive stakeholders, including our global customer base, OEM and MRO suppliers, other partners and our talented team of employees." Established in 2013, Waypoint's fleet is supported by over 40 employees based in eight offices worldwide. Waypoint's aircraft diversity and customization capabilities have led to the lessor's market-leading position across multiple mission segments including oil and gas, emergency medical services (EMS), government and humanitarian services, utility and firefighting, search and rescue (SAR) and wind farm support. Waypoint's portfolio includes more than 160 aircraft flying with 36 customers in 34 countries. Weil, Gotshal & Manges LLP is serving as legal counsel, Houlihan Lokey is serving as investment banker, and FTI Consulting, Inc. and Seabury Corporate Services LLC are serving as restructuring advisors. About Waypoint Leasing Waypoint -- http://www.waypointleasing.com-- is a global helicopter leasing company that provides operating lease and financing solutions to helicopter operators worldwide. Headquartered in Limerick, Ireland, Waypoint differentiates itself with a senior management team that has direct helicopter operating and leasing experience in key helicopter markets around the world, having leased helicopters across Africa, Asia, Australia, Europe, and North and South America. Waypoint serves a wide range of sectors including oil and gas, emergency medical service, search and rescue, governmental and humanitarian services, utility and firefighting and wind farm support. In addition to Ireland, Waypoint has offices in London, the United States, Canada, Hong Kong, Brazil and South Africa. =================================== D O M I N I C A N R E P U B L I C =================================== DOMINICAN REPUBLIC: Expert Explains 'Brouhaha' Over Chicken Prices ------------------------------------------------------------------ Dominican Today reports that the price of chicken is returning to their previous levels, poultry consultant Enriquillo Rivas affirmed noting that the in-farm pound of live birds went down to RD$16.00 three months ago, which he said caused losses of RD$1.0 billion to poultry farmers. He said traders never dropped the price of frozen and fresh chicken from 26 to 32 pesos per pound and the large supermarket chains kept the price between 49 and 52 pesos per pound chopped and wrapped, according to Dominican Today. "The maximum prices of chicken in butcher shops since June were: I live at RD$36.62, fresh RD$45.80; July: RD$36.08 and RD$45.26; August, at RD$33.18 and RD$ 41.57; September at RD$26.14 and RD$32.67; October to RD$29.75 and RD$37.29. On average live at RD$32.35 and fresh RD$40.52," the report quoted Mr. Rivas as saying. "In these days there is a "brouhaha" between government agencies and poultry producers with the subsequent echo of the media. Reason: the price of chicken," Mr. Rivas added. "It's an unfair concern, because you have to understand numbers and situations. Firstly, it is said to have gone up ten pesos per pound. True: just 3 months ago the price plunged by half, was 30 pesos live on farms and reached 16 pesos per pound. We must take into account that a live chicken of 4 and a half pounds slaughtered loses 20% in feathers, blood, guts, legs and neck, net 3.6 pounds on which they must recover acquisition costs, administrative, processing, packaging, cold, transport and profitability," Mr. Rivas said, the report adds. As reported in the Troubled Company Reporter-Latin America on Sept. 24, 2018, Fitch Ratings affirmed Dominican Republic's Long-Term, Foreign-Currency Issuer Default Rating (IDR) at 'BB-' with a Stable Outlook. DOMINICAN REPUBLIC: A First, Zoning for the Dominican Capital ------------------------------------------------------------- Dominican Today reports that the Dominican Capital will have a Territorial Zoning Plan for the first time, prepared by the National District City Council with the support of the of the US Embassy, the Bloomberg Foundation and the UN Development Program. Mayor David Collado said the Plan is "the main goal that laid out in the strategic route and post vision for the 2030 to reach the capital's City Hall," according to Dominican Today. The report relays that he said, together with a team of young people and experienced professionals the city of Santo Domingo is being transformed. "This team is taking clear steps to comply with the strategic plan, which means the beginning of the end of the problems that have affected the city in the last 30 years," he added. "Everything we do as a team is part of fulfilling the vision we have proposed," said Mr. Collado, as quoted by Listin Diario, the report notes. As reported in the Troubled Company Reporter-Latin America on Sept. 24, 2018, Fitch Ratings affirmed Dominican Republic's Long-Term, Foreign-Currency Issuer Default Rating (IDR) at 'BB-' with a Stable Outlook. ============= J A M A I C A ============= JAMAICA: Credit Increase to Private Sector ------------------------------------------ RJR News reports that Data from the Bank of Jamaica has revealed that commercial banks provided more credit to the private sector during the July to September quarter. Commercial bank credit expanded at an annual rate of 16.2 per cent for the quarter, above the previous projections, according to RJR News. The increase in credit was reflected in loans and advances to both businesses and individuals, the report relays. Business lending increased by 16.8 per cent, notes RJR News. However, the Bank of Jamaica said in real terms, private sector credit issued by commercial banks grew by 11.6 per cent at September 2018, lower than the growth of 26.1 per cent at September 2017, the report relays. It said change in business activities and more favorable interest rates continued to support growth in overall financing in Jamaica, the report adds. As reported in the Troubled Company Reporter-Latin America on Sept. 27, 2017, Moody's Investors Service has upgraded the Government of Honduras' foreign currency and local currency issuer and senior unsecured ratings to B1 from B2. The rating outlook was moved to stable from positive. ====================== P U E R T O R I C O ====================== PONCE REAL: Voluntary Chapter 11 Case Summary --------------------------------------------- Debtor: Ponce Real Estate Corp. PO Box 7071 Ponce, PR 00732 Business Description: Ponce Real Estate Corp. is a real estate company headquartered in Ponce, Puerto Rico. Chapter 11 Petition Date: November 24, 2018 Court: United States Bankruptcy Court District of Puerto Rico (Ponce) Case No.: 18-06805 Debtor's Counsel: Javier Vilarino, Esq. VILARINO & ASSOCIATES LLC PO Box 9022515 San Juan, PR 00902 Tel: 787-565-9894 Email: jvilarino@vilarinolaw.com Estimated Assets: $1 million to $10 million Estimated Liabilities: $1 million to $10 million The petition was signed by Francisco Vilarino, president. The Debtor failed to include in the petition a list of its 20 largest unsecured creditors. A full-text copy of the petition is available for free at: http://bankrupt.com/misc/prb18-06805.pdf RELIANCE MANUFACTURING: Taps Tamarez CPA as Accountant ------------------------------------------------------ Reliance Manufacturing, Inc. seeks approval from the U.S. Bankruptcy Court for the District of Puerto Rico to hire Tamarez CPA, LLC as its accountant. The services to be provided by the firm include the preparation of supporting documents for the Debtor's Chapter 11 reorganization plan; reconciliation of financial information to assist Debtor in the preparation of monthly operating reports; reconciliation and clarification of proof of claims filed and amount due to creditors; and general accounting and tax services to prepare year-end reports. Tamarez will charge these hourly fees: Albert Tamarez Vasquez $150 CPA Supervisor $100 Senior Accountant $85 Staff Accountant $65 The firm received a retainer in the sum of $5,000. Albert Tamarez Vasquez, the accountant employed with Tamarez who will be providing the services, disclosed in a court filing that he is "disinterested" as defined in section 101(14) of the Bankruptcy Code. The firm can be reached through: Albert Tamarez Vasquez Tamarez CPA LLC P.O. Box 194136 San Juan, PR 00919-4136 Phone: (787) 795-2855 Fax: (787) 200-7912 Email: atamarez@tamarezcpa.com About Reliance Manufacturing Reliance Manufacturing, Inc., is a privately-held home builder in San Juan, Puerto Rico. Reliance Manufacturing sought protection under Chapter 11 of the Bankruptcy Code (Bankr. D.P.R. Case No. 18-05778) on Oct. 1, 2018. In the petition signed by Gilberto Media Safon, president, the Debtor disclosed $441,201 in assets and $2,788,977 in liabilities. Judge Hon. Brian K. Tester presides over the case. The Debtor tapped MRO Attorneys at Law, LLC as its legal counsel. YORAVI INVESTMENT: March 8 Plan Confirmation Hearing ---------------------------------------------------- Judge Edward A. Godoy of the U.S. Bankruptcy Court for the District of Puerto Rico, approved the amended disclosure statement with respect to Yoravi Investment, Inc.'s amended Chapter 11 plan dated August 31, 2018. The Confirmation Hearing is scheduled to be conducted on March 8, 2019, at 9:30 a.m. Objections to confirmation of the Plan must be filed on or before February 1, 2019. At the Confirmation Hearing the Court will conclude the estimated date for "substantial consummation" of the Plan as defined in 11 USC 1101(2). The debtor in possession or moving party shall submit to the Court the information necessary to enter a final decree, as set forth in LBR 3022-1. About Yoravi Investment Yoravi Investments, Inc., owns a real estate property at Centro Comercial Turabo Gardens valued at $1.10 million. Yoravi Investments sought protection under Chapter 11 of the Bankruptcy Code (Bankr. D.P.R. Case No. 17-05446) on Aug. 1, 2017. In the petition signed by Rafael E. Acosta Santiago, vice-president and treasurer, the Debtor disclosed $1.15 million in assets and $714,000 in liabilities. Judge Edward A. Godoy presides over the case. The Debtor tapped Godreau & Gonzalez Law, LLC, as its bankruptcy counsel, and Enrique Peral Soler, Esq., as special counsel. *********** 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, Julie Anne L. Toledo, Ivy B. Magdadaro, and Peter A. Chapman, Editors. Copyright 2018. 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. . * * * End of Transmission * * *