/raid1/www/Hosts/bankrupt/TCRLA

/raid1/www/Hosts/bankrupt/TCRLA_Public/190327.mbx T R O U B L E D C O M P A N Y R E P O R T E R L A T I N A M E R I C A Wednesday, March 27, 2019, Vol. 20, No. 62 Headlines B R A Z I L BANCO VOTORANTIM: Moody's Affirms Ba2 Rating, Outlook Now Stable MURPHY OIL: Moody's Affirms Ba2 CFR & Alters Outlook to Stable NATURA COSMETICOS: S&P Places 'BB' Global Scale ICR on Watch Neg. D O M I N I C A N R E P U B L I C DOMINICAN REPUBLIC: Can Help Haiti Collect Its Due DOMINICAN REPUBLIC: Chinese VP Keeps Tabs on Pacts Signed DOMINICAN REPUBLIC: Drought Reveals Need to Build New Dams DOMINICAN REPUBLIC: IMF Says Economy Will Grow 5.5% M E X I C O AXTEL SAB: Fitch Affirms 'BB-' LT FC IDR, Outlook Stable P U E R T O R I C O FNJCC CORP: Unsecureds to Recoup 20% Over 60 Months Under Plan MANUEL BABILONIA: Selling Aguada Property for $235K V E N E Z U E L A VENEZUELA: PetroChina Expects Crude Imports to Fall 33% This Year X X X X X X X X LATAM: Public Revenues Rebound in 2017 After Dip in 2016 - - - - - =========== B R A Z I L =========== BANCO VOTORANTIM: Moody's Affirms Ba2 Rating, Outlook Now Stable ---------------------------------------------------------------- Moody's Investors Service has affirmed all of Banco Votorantim S.A.'s (BV) ratings, following the affirmation of the bank's ba3 baseline credit assessment (BCA). BV is rated Ba2 and Not Prime for long- and short-term local currency deposits, Ba3 and Not Prime for long- and short-term foreign currency deposits. Banco Votorantim S.A. (Nassau Branch)'s long-term senior unsecured foreign currency debt rating is affirmed at (P) Ba2. The outlook was changed to stable from negative. RATINGS RATIONALE TThe affirmation of BV's ba3 BCA and all its ratings, and the change in the outlook to stable, from negative, reflect the gradual improvement in asset quality and resulting increase in revenue generation. The rating action also incorporates Moody's expectation that BV's financial metrics, and particularly profitability and capitalization, will continue to improve over the next 12 to 18 months, benefiting from lower credit costs and a more diverse revenue structure, with a growing contribution from non-interest income from services. BV's strategy to focus on lending to corporate and commercial segments, specifically in the form of secured loans to mid-size companies, ensures gradual reduction in asset risk and yields better risk adjusted returns. The rating affirmation also reflects a credit positive trend in BV's capital position, backed by the reinvestment of growing profits. Despite that, BV's capitalization measured by Moody's preferred ratio of tangible common equity to risk weighted assets (TCE/RWA) is still low relative to its peers' ratios, at 6.1% in December 2018. The large stock of deferred tax assets (DTAs) in the bank's balance sheet is the main constraint on the ratio; however, sustained profitability will lead to further decline in DTAs and to a consistent improvement in capitalization up from a very low ratio of 2.9% in year-end 2015. Moody's also anticipates a continued improvement of the bank's asset risk metrics as BV expands its commercial loan book and gradually reduces borrower concentration risk. Loans overdue more than 90 days were 4.82% of total loans in December 2018, declining by 50 basis from the previous year. Write-offs have also declined materially. The relative stability of asset quality in the bank's predominant portfolio of vehicle financing has offset higher individual risks originated in its wholesale operations. The bank's ratings are still limited by the large share of wholesale debt and deposit instruments in total funding. Nonetheless, BV has continued to extend the maturity of its funding by issuing long-term banknotes in the domestic market, taking advantage of the market's high liquidity. At the same time, the bank has reduced the volume of loans sold to parent Banco do Brasil S.A. (Ba2 stable, ba2), a credit positive development that also supports its profitability. BV's long-term local currency deposit and foreign currency senior debt ratings of Ba2 incorporate one notch of affiliate support uplift from its ba3 BCA, to reflect Moody's view of the high likelihood of support from Banco do Brasil, which holds a 50% ownership stake in the bank. WHAT COULD CHANGE THE RATING -- DOWN/UP Upward pressure on BV's BCA could result from further strengthening of BV's profitability and asset quality and consistent improvement in the bank's capitalization. At the moment, there is limited upward pressure on BV's ratings owing to the stable outlook on its ratings, which is in line with the stable outlook on Brazil's sovereign rating, which also caps BV's deposit and debt ratings at Ba2. BV's BCA and ratings could be downgraded if the bank's asset quality and profitability weakens materially causing its capitalization ratio to declines,. A deterioration in funding and a meaningful reduction in liquid resources could also pressure its financial profile downward. METHODOLOGY USED The principal methodology used in these ratings was Banks published in August 2018. Banco Votorantim S.A., is headquartered in Sao Paulo, Brazil, and reported BRL101.2 billion in assets and BRL9.4 billion in shareholders' equity as of December 31, 2018. LIST OF AFFECTED RATINGS AND ASSESSMENTS The following ratings and assessments of Banco Votorantim S.A. were affirmed: - Long-term global local currency deposit rating of Ba2, stable outlook - Short-term global local currency deposit rating of Not Prime - Long-term global foreign currency deposit rating of Ba3, stable outlook - Short-term global foreign currency deposit rating of Not Prime - Senior Unsecured Medium-Term Note Program of (P)Ba2 - Subordinate Regular Bond/Debenture of Ba3 - Pref. Stock Non-cumulative of B2(hyb) - Other Short Term of (P)Not Prime - Long-term global local currency counterparty risk rating of Ba1 - Short-term global local currency counterparty risk rating of Not Prime - Long-term global foreign currency counterparty risk rating of Ba1 - Short-term global foreign currency counterparty risk rating of Not Prime - Long-term Brazilian national scale deposit rating of Aa3.br - Short-term Brazilian national scale deposit rating of BR-1 - Long-term Brazilian national scale counterparty risk rating of Aaa.br - Short-term Brazilian national scale counterparty risk rating of BR-1 - Baseline credit assessment of ba3 - Adjusted baseline credit assessment of ba2 - Long-term counterparty risk assessment of Ba1(cr) - Short-term counterparty risk assessment of Not Prime(cr) Outlook Actions: - Outlook, changed to Stable from Negative(m) The following ratings and assessments of Banco Votorantim S.A. (Nassau Branch) were affirmed: - Long-term global local currency counterparty risk rating of Ba1 - Short-term global local currency counterparty risk rating of Not Prime - Long-term global foreign currency counterparty risk rating of Ba1 - Short-term global foreign currency counterparty risk rating of Not Prime - Long-term counterparty risk assessment of Ba1(cr) - Short-term counterparty risk assessment of Not Prime(cr) - Senior Unsecured Medium-Term Note Program of (P)Ba2 - Other Short Term of (P)Not Prime Outlook Actions: - Outlook, changed to Stable from Negative MURPHY OIL: Moody's Affirms Ba2 CFR & Alters Outlook to Stable -------------------------------------------------------------- Moody's Investors Service affirmed Murphy Oil Corporation's (Murphy) Ba2 Corporate Family Rating (CFR), its Ba2-PD probability of default rating (PDR) and Ba2 rating of its senior unsecured notes rating. The company's Speculative Grade Liquidity (SGL) Rating was affirmed at SGL-1. The outlook was changed to stable from positive. The rating action follows the announcement by Murphy that it has reached an agreement to sell its operations in Malaysia for $2.2 billion in cash to PTT Exploration & Production Public Co. Ltd. (PTTEP, rated Baa1 stable) and will use the proceeds to fund $500 million share repurchases and reduce debt by $750 million, as well as to fund future growth. The company expects to close the transaction in 2Q 2019. "The divestment of the large maturing asset brings forward substantial cash proceeds that Murphy requires to fund the development of its assets in North America, previously funded through reinvestment of FCF generated in Malaysia", commented Elena Nadtotchi, Vice President Senior Credit Officer at Moody's. "The Ba2 rating assumes that Murphy will use half of the proceeds to invest in growth, both organically and through acquisitions, and will increase its scale over the next several years, while keeping solid leverage profile". Outlook Actions: Issuer: Murphy Oil Corporation Outlook, Changed To Stable From Positive Affirmations: Issuer: Murphy Oil Corporation Probability of Default Rating, Affirmed Ba2-PD Speculative Grade Liquidity Rating, Affirmed SGL-1 Corporate Family Rating, Affirmed Ba2 Senior Unsecured Notes, Affirmed Ba2 (LGD4) RATINGS RATIONALE The change of the rating outlook to stable from positive reflects the reduced scale and lower operating cash flow and free cash flow generation, following the sale of the Malaysian assets. The stable outlook is supported by the projected sizable cash balances boosted by the divestment proceeds, that will underpin very good liquidity position of the company and help fund growth projects amid negative FCF in 2019 and 2020. Murphy's Ba2 CFR is based on the expectation that proposed $750 million reduction in debt will allow the company to maintain a solid leverage profile, with RCF/debt projected at around 35% and debt/production at around $19,000/boe in 2019, compared to 31% and $22,000/bbl achieved at the end of 2018. Compared to Moody's prior 2019 expectations, the divestment will reduce Murphy's average 2019 production by about 25% to 160 kboed and cut operating cash flow by about 35%, notwithstanding additional contribution from the joint venture with Petrobras America Inc. (PAI) in the Gulf of Mexico, acquired at the end of 2018. Taking into account stronger cash margins generated in Malaysia, Moody's now expects the company to generate cash margins of about $23/boe, down from $30/boe in 2018 and LFCR of 1.6x down from 2.6x in 2018. Moody's also expects the company to generate $200-$300 million in negative FCF in 2019 after $1.15 - $1.35 billion capex and sustained flat dividend. By comparison, Moody's was expecting Murphy to generate substantial free cash flow in 2019 with RCF/debt trending to 45% and a LFCR above 2x, when Murphy was upgraded to Ba2 and the positive outlook was maintained in December 2018. As an exploration driven business, Murphy has many opportunities to reinvest capital and retain its dual focus on unconventional and offshore oil generation. The company will need to demonstrate that it is able to balance shareholder demands, regain its scale and keep solid credit profile. Murphy's Ba2 ratings could be upgraded if the company demonstrates consistent production growth funded within its cash flow, while sustaining solid leverage profile with RCF/Debt above 40% and a leveraged full-cycle ratio (LFCR) of at least 2x. Murphy's ratings could be downgraded if retained cash flow to debt falls towards 25% or the LFCR falls below 1.5x or the company generates sustained negative FCF beyond 2020. Murphy's SGL-1 Speculative Grade Liquidity Rating reflects its very good liquidity through 2019. The liquidity position is supported by sizable cash balances that stood at $387 million and $1.6 billion unsecured revolving credit facility with outstandng borrowings of $325 million and $25 million in letters of credit issued as of end of 2018. The company expects to close the transaction in Q2 2019 and use cash proceeds to boost its cash balances and repay amounts outstanding under the bank facility. The revolving credit facility matures in 2023. Moody's expects the company to remain well in compliance with its financial covenants of EBITDAX/Interest coverage no less than 2.5x and debt/EBITDAX of less than 4.0x. Murphy's next maturity is $500 million and $600 million of senior notes maturing in 2022. Murphy's senior unsecured notes are rated Ba2, at the CFR rating level. Moody's notes that the company's revolving facility benefits from upstream guarantees from the operating companies, that make the senior notes structurally subordinated to the claims under the facility. Moody's does not expect Murphy to actively use the facility. In addition, the company's asset coverage of debt will remain strong. Accordingly, Moody's believes that the Ba2 rating is more appropriate for the notes than the rating suggested by the Moody's Loss Given Default Methodology. A more active use of the facility than expected could result in the downgrade of the notes. Murphy Oil Corporation is an independent E&P company with producing and/or exploration activities in the US and Canada, as well as Mexico, Brunei, Australia, Brazil and Vietnam. As of December 31, 2018, Murphy had 846 MMboe of proved reserves and its production averaged 170 Kboed (before factoring acquisition of producing assets in the Gulf of Mexico in December 2018). NATURA COSMETICOS: S&P Places 'BB' Global Scale ICR on Watch Neg. ----------------------------------------------------------------- S&P Global Ratings placed its 'BB' global scale and 'brAAA' national scale issuer and issue credit ratings on Natura on CreditWatch with negative implications. S&P expects to resolve the CreditWatch listing following a formal announcement of a transaction that would lead S&P to reassess Natura's credit quality. S&P said, "The CreditWatch placement reflects our view that an M&A transaction with Avon could potentially hurt Natura's credit quality. The CreditWatch reflects the challenges of ramping up Avon's operations, which have been declining over the past several years, on top of a likely increase in consolidated leverage, depending on the transaction's terms and conditions. "We expect to resolve the CreditWatch listing following the announcement of a transaction and after we reassess Natura's credit quality, including any potential impact on the company's leverage, competitive position, liquidity, and final capital structure." =================================== D O M I N I C A N R E P U B L I C =================================== DOMINICAN REPUBLIC: Can Help Haiti Collect Its Due -------------------------------------------------- One island, two states, but there is a world of difference between the Republic of Haiti and the Dominican Republic, Dominican Today reports. The socioeconomic disparities, the asymmetry of trade between the two countries are open secrets, as well as the lack of political will to combat the smuggling that deprives the Haitian state of hundreds of millions of US dollars per year, according to Dominican Today. The Dominican Republic is happy. Haiti suffers, the report relays. Because the Association of Industries of Haiti (ADIH), the United States Chamber of Commerce in Haiti (AMCHAM), the Chamber of Commerce of the West . . . and the young wolves of the private sector reject that contraband and its adverse effects in the State and the population are inevitable, the problem, taken to the shores of the Potomac, moves the lines, the report says. Last February, the United States Congress voted a text that instructs US officials to work with the governments of Haiti and the Dominican Republic to develop plans to strengthen security and border control, the report discloses. The improvement of security, customs operations, the strengthening of transparency to curb corruption and the necessary financing should be in these plans, these strategies for Haiti, the poorest state in the hemisphere, to capture hundreds of millions of dollars not collected due to smuggling, the report notes. Following these advances, one of Washington's most prominent think tanks; the Center for Strategic and International Studies conducted a study and published a report with a series of recommendations for states, the private sector and the civil society of the two countries that share the island, the report relays. 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: Chinese VP Keeps Tabs on Pacts Signed --------------------------------------------------------- Dominican Today reports that nine of the 18 agreements signed in November 2018 by the leaders of China and the Dominican Republic are well advanced, according to Foreign minister Miguel Vargas Maldonado, after concluding a meeting with Chinese Vice Premier Hu Chunhua to follow up on the pacts. He said that Hu's meeting with president Danilo Medina and the ministers that signed agreements with the Asian country, focused on cooperation and trade, according to Dominican Today. "Above all, an important scenario for the country, for our producers and, in that sense, we advance a lot," Mr. Vargas said at the end of the meeting in the National Palace, the report notes. Although the Chinese official's agenda was not announced, Vargas said Hu will visit the free zones, the Colonial Zone and will meet with the Chinese community in the country, 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: Drought Reveals Need to Build New Dams ---------------------------------------------------------- Dominican Today reports that drought has exposed the need to build new dams, since the country stores less than 10% of runoff water and less than 25% of its annual demand. To the proposal of at least two reservoirs needed in the Northwest, experts also recommend a third in northern Gaspar Hernandez, which would supply piped water to Santiago and Espaillat provinces, according to Dominican Today. He said the new dams would allow the Tavera-Bao hydroelectric to irrigate crops, the report notes. Santiago Development Association (APEDI), director Saul Abreu, noted that the rains in a given year average 73 billion cubic meters of water, of which around 28 billion are available, the report relays. From that figure, it is established that 2.5 billion seeps to the soil and 23.5 billion is runoff, the report says. "Of these, only 2.191 million cubic meters are stored when the demand for water is 9 billion cubic meters," the report quoted Mr. Abreu as saying. Wasting Water The report notes that Mr. Abreu added that the basins upper, where water is captured and stored, must be rescued and protected. "In short, not enough is stored and what is stored isn't used efficiently, since we waste more than 70 percent of the water we manage," he added, says Dominican Today. 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: IMF Says Economy Will Grow 5.5% --------------------------------------------------- Dominican Today reports that the International Monetary Fund (IMF) expects Dominican Republic's economy will grow 5.5 percent this year but warns it could face adverse conditions stemming from a slowdown in the world economy, "although domestic demand could be stronger than expected, supported by a solid growth of income and credit." The IMF mission issued its report at the conclusion of the Article IV mission of 2019 for the Dominican Republic, in which it affirms that to maintain the robust economic performance "a new push is needed for the reforms to face the pending structural obstacles and promote the country towards a more rapid convergence of income to levels of developed countries," according to Dominican Today. It stressed that the pending challenges include strengthening the supervision of financial intermediation cooperatives along with the banking system and continuing with the transition to international banking regulations and accounting standards, 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. =========== M E X I C O =========== AXTEL SAB: Fitch Affirms 'BB-' LT FC IDR, Outlook Stable -------------------------------------------------------- Fitch Ratings has affirmed Axtel S.A.B de C.V.'s Long-Term (LT) Foreign Currency (FC) Issuer Default Rating (IDR) at 'BB-', its Local Currency (LC) IDR at 'BB-', and its National LT Rating at 'A-(mex)'. The Rating Outlook is Stable. Fitch has also affirmed the ratings on the company's senior unsecured debt, including the 2024 notes. The ratings reflect the company's steady performance in the enterprise and government telecom segment in Mexico, achieved through a merger with Alestra in 2016. The ratings are tempered by Axtel's small operational scale and leverage profile, which Fitch expects to continue declining from its 2016 peak. KEY RATING DRIVERS Gradual Leverage Reduction: Axtel's leverage has been trending down in line with Fitch's expectations, although it is still elevated for the rating category. The company's Total Adjusted Net Debt / EBITDAR declined to 3.8x at year-end 2018, compared with 4.4x at year-end 2016 on a pro forma basis of the merger. Fitch adds off-balance-sheet debt of approximately MXN5.3 billion to the company's reported MXN15.5 billion to account for operating lease & rental expenses of around MXN880 million capitalized at 6x. The company sold most of its non-core FTTx business in December 2018 for approximately MXN4.7 billion, which was used to pay down MXN denominated loans. Fitch expects this ratio to fall further to 3.4x, as internal cash generation improves, commensurate with the current rating level and in line with pre-merger leverage. Axtel's financial target is to reduce its net leverage to 2.5x over the long term. Size and Competitive Landscape: Axtel's operates in a competitive landscape that constrains its ratings to the BB rating category. Axtel is the #2 player in the telecom services segment with approximately 20% market share, and competes with Telefonos de Mexico S.A.B. de C.V. (Telmex), a strong competitor with market share above 60%. In IT services, Axtel's market share is approximately 9%, but the competitive position is more balanced given the more fragmented nature of this business segment. Axtel's addressable market of enterprise and government ICT services is approximately MXN80 billion to MXN85 billion; telecom represents MXN50-55 billion and IT represent MXN30-35 billion. While the overall market is expected to continue growing at a healthy pace, the company's size remains a concern in its ability to maintain and improve its position in this competitive environment over the long term. A macroeconomic slowdown in Mexico or reduction in government ICT demand would also negatively impact the company. Enterprise-Driven Growth: Enterprise telecom clients comprise more than two thirds (70%) of the company's revenues. Fitch expects this segment's growth prospects will be in the low single digits over the in the medium term. The business segment provides the company with stable cash flow due to the recurrent nature of this business and the relatively high cost to switch to another service provider. IT solution services for Axtel's enterprise clients, which account for 10% of revenues, should remain solid given good demand prospects in Mexico. The government segment's revenues (20% of revenues) fell by approximately 4% in 2018, driven by a steep drop in the fourth quarter versus the prior year which had several large one off projects. Fitch does not expect the new administration to drastically cut spending on existing IT and telecom services, although additional growth prospects from government agencies are uncertain. Concentrated Focus, Reduced Diversification: In 2018, the company wound down its wireless mass market service, which accounted for 5% of consolidated revenues in 2017. In December 2018, Axtel sold most of its residential fiber-to-the-home (FTTH) to Grupo Televisa S.A.B. (Televisa, BBB+/Stable), including 4.4 thousand km of FTTH network serving 227,000 subscribers, for MXN4.7 billion (USD234 million). These assets generated revenue of approximately MXN1.9 billion on an LTM basis. While the divestiture reduces the company's service diversification, Fitch views Axtel's strategic refocusing positively, given the company's scale in the residential segment. DERIVATION SUMMARY Axtel's 'BB-' ratings reflect the company's leverage profile, which is higher than the other 'BB' rated telecom operators in the region, such as Colombia Telecomunicaciones SA (BB+/Stable), Millicom International Cellular SA and its operating subsidiaries in Central America (BB+/Stable). The company's market position and a small scale of operations constrain the ratings, as with with Empresa de Telecomunicaciones de Bogota (BB+/Stable), although the latter has lower leverage. Axtel's renewed enterprise focus somewhat offsets these concerns, as the company's market position and prospects in that segment were better than in the residential market, which it largely exited in 2018. Axtel is a subsidiary of Alfa S.A.B. de C.V. (Alfa, BBB-/Stable), but Fitch does not view the ties as strong and so Axtel's ratings are based on its stand-alone credit profile. KEY ASSUMPTIONS Fitch's Key Assumptions Within Its Rating Case for the Issuer -- IT revenues to grow in the 7-10% range, telecom revenues to grow in the 1-3% range (including fixed-line voice); -- EBITDA margins to remain stable in the medium term; -- Capital expenditures and investments of around 19%, declining modestly over time; -- Fitch's base case for 2019 does not include additional asset sales (e.g. of remaining FTTx business). RATING SENSITIVITIES Developments That May, Individually or Collectively, Lead to Positive Rating Action -- Continued deleveraging, with Total Adjusted Debt / EBITDAR falling to 3.0x and Total Adjusted Net Debt / EBITDAR falling to 2.5x, due to strong demand for enterprise and government ICT services -- Sustained growth in enterprise, government, and SME market shares above 25%. Developments That May, Individually or Collectively, Lead to Negative Rating Action -- Total Adjusted Debt / EBITDAR rising towards 5.0x or Total Adjusted Net Debt / EBITDAR rising above 4.5x, due to a combination of slower-than-expected demand for ICT services and/or a sustained contraction in government revenues, and continued negative free cash flow generation. LIQUIDITY Adequate Liquidity: Axtel's liquidity profile is adequate. The company's cash balance was MXN2.2 billion at YE2018, following the sale of 80% of the company's FTTx network to Grupo Televisa SAB (BBB+/Stable), against short-term debt and capital lease obligations of approximately MXN342 million. Fitch expects approximately 40% of the cash to be use for a special dividend and to reduce other obligations. Fitch expects positive free cash flow from 2020 onwards, as cash flow from operations will generally cover investments, which are expected to decline in the medium term. The company's debt primarily comprises its 2024 senior unsecured notes (USD500 million, 63% of total), along with a long-term peso denominated Bancomext loans (MXN3.3 billion, 21% of total). The remaining portion comprises a syndicated loan facility (MXN1.6 billion) and capital leases. There is no legal linkage between Alfa and Axtel, in terms of debt guarantees; the ratings do not reflect any expectation of support from the parent. FULL LIST OF RATING ACTIONS Fitch has affirmed the following ratings: Axtel S.A.B de C.V. -- LT FC and LC IDRs at 'BB-'; -- National LT Ratings at 'A-(mex)'; -- Senior unsecured debt at 'BB-'. ===================== P U E R T O R I C O ===================== FNJCC CORP: Unsecureds to Recoup 20% Over 60 Months Under Plan -------------------------------------------------------------- FNJCC Corp. d/b/a Panaderia y Pizzeria San Miguel filed a small business disclosure statement describing its plan of reorganization dated March 15, 2019. The Debtor is engaged in the business of pizza, bakery, and deli since April 15, 2017 in Las Delicias, Ponce, Puerto Rico. General unsecured creditors under the plan are classified in Class 3 and will receive a distribution of 20% of its allowed claims, to be distributed pro-rata as follows: $625 per month for 60 months. Payments and distributions under the plan will be funded from the Debtor's post-petition income from the operation of its business. A copy of the Disclosure Statement dated March 15, 2019 is available at http://tinyurl.com/y56ovm3mfrom Pacermonitor.com at no charge. About FNJCC Corp. FNJCC Corporation sought protection under Chapter 11 of the Bankruptcy Code (Bankr. D.P.R. Case No. 18-05552) on Sept. 26, 2018. At the time of the filing, the Debtor estimated assets of less than $50,000 and liabilities of less than $500,000. The Debtor tapped Modesto Bigas Law Office as its legal counsel. MANUEL BABILONIA: Selling Aguada Property for $235K --------------------------------------------------- Manuel M. Babilonia-Santiago and Mirta Cortes Ramos filed with the U.S. Bankruptcy Court for the District of Puerto Rico a notice of their proposed private sale of the real property, Land Parcel number 8,283 Aguada, in the Property Registry of Aguadilla, Puerto Rico; recorded at page 214 of volume 307, to Ramon Miguel Raun-Byberg and Jennifer Irene Lindsey for $235,000. The parties have executed their purchase promise agreement on Feb. 15, 2019. Pursuant to the terms of such agreement, the sales price of the property is $235,0000, of which the Debtors have already received an advanced of $10,000 to secure the closing of the transaction. The closing is scheduled for March 20, 2019 in Moca, Puerto Rico at the office of attorney Victor Soto Hernandez who will be the acting notary of the transaction. Mr. Soto's offices are located at Road No. 110 KM 13.0, in the Pueblo Ward of Moca, Puerto Rico. The property will be sold free and clear of liens and encumbrances. The costs associated with the transaction which will be incurred by the Debtors are: $2,350 for the notary's fees and $262 for the deed's stamps. The broker's commission will be paid by the Buyer. Pursuant to the Property Registry, the property is encumbered with a mortgage in favor of the Cooperativa de Ahorro y Credito San Rafael for an amount of $175,000, a lien in favor of the IRS for $3,531.45, and a statutory lien for state property taxes for an amount of $295 in favor of Centro de Recaudaciones de Impuestos Municipales ("CRIM"). All liens will attach to the proceeds of the sales and payment will be made accordingly, once evidence is provided of such the amount owed. Regarding San Rafael's lien, there is currently a contested matter between the such creditor and the Debtor's regarding how San Rafael is amortizing of such debt. Pursuant to a debt certification issued San Rafael, the payoff balance of such debt is $169,992. The Debtors, however, understand that the debt should be significantly less. Nevertheless, to proceed with the sale, the Debtors request that $170,000 of the sales price be consigned with the Court until the resolution of the payoff dispute. By consigning the funds, the sale can occur and San Rafael's interest in the property is safeguarded. If the Court does not grant Debtors' request for consignment, the real estate broker will serve as escrow agent. Such broker is Mr. Manuel M. Parez, real estate broker dully licensed in Puerto Rico, license number C-6237. Such broker will retain the amount in favor the San Rafael until Debtors and San Rafael settle the dispute over the amortization of the debt. The sales transaction is in furtherance of the confirmed plan, thus, pursuant to 11 USC Section 1146(a) the sale and cancelation of liens is free from transfer stamp taxes imposed by the Property Registry to complete this transaction. The Debtors ask that the Court entertains the Motion and that the prosed sale be approved free and clear of liens and encumbrances, and that the consignment of the funds be approved. Objections, if any, must be filed no less than seven days before the date set for the proposed sale transaction. A copy of the Agreement attached to the Notice is available for free at: http://bankrupt.com/misc/MANUEL_SANTIAGO_314_Sales.pdf Manuel M. Babilonia-Santiago and Mirta Cortes Ramos manage a motel business which is incorporated and doing business as Motel Tropical Inc., a related entity that filed for relief on Feb. 11, 2016 (Bankr. D.P.R. Case No. 16-00966). There is also another related entity which filed for protection B & D Enterprises S.E. (Case No. 16-00978). Ms. Cortes presently rents out her home under the Home Away programs. In it personal capacity Mr. Babilonia also has a hostel comprising of six rooms which are rented on short term basis. Manuel M. Babilonia-Santiago and Mirta Cortes Ramos filed for Chapter 11 bankruptcy protection (Bankr. D.P.R. Case No. 16-01148) on Feb. 18, 2016. GARCIA-ARREGUI & FULLANA PSC is the Debtors' counsel. ================= V E N E Z U E L A ================= VENEZUELA: PetroChina Expects Crude Imports to Fall 33% This Year ----------------------------------------------------------------- Hellenicshipping News reports that PetroChina Ltd, the listed subsidiary of state-owned CNPC, expects its crude imports from Venezuela to drop by about a third to around 10 million mt (about 186,000 b/d) in 2019 from 15 million mt in 2018, a senior executive said. The decline in Venezuelan crude flows to China, among the biggest buyers of PDVSA's crude oil, underscores the impact of US sanctions despite supply commitments under oil-for-loan agreements with PetroChina, according to Hellenicshipping News. The trading business with Venezuela is operating as usual, but crude import volumes will be at slightly over 10 million mt this year, due to supply issues in Venezuela, Hou Qijun, PetroChina's executive director and president, said on the sidelines of the company's annual briefing in Hong Kong, the report notes. The report discloses that state-owned PetroChina, which executed the loan-for-oil deal for China, received around 15 million mt of Venezuelan crude in 2018, executives said last year. The volume accounted for 90% of China's total crude imports of 16.63 million mt from the South American producer in 2018. In 2017, China imported around 21.77 million mt of crudes from Venezuela, out of which around 70% was imported by PetroChina in return for loans, the report says. Venezuelan crude exports have been falling sharply since US sanctions were imposed on state-owned PDVSA in January, crimping not just payment mechanisms but also the supplies of diluent needed to dilute heavy Venezuelan grades to enable exports, the report notes. PetroChina's international trading arm Chinaoil (Hong Kong) sold a cargo of 975,000 barrels of Nigerian Agbami crude for April 18-20 delivery to PDVSA as a diluent for the extra-heavy crude from the Orinoco Belt, Platts reported, the report says. This is an ad-hoc purchase by PDVSA that was carried out under a compensation mechanism, with Chinaoil receiving 1.8 million barrels of Merey 16 crude in a March 19-21 window in return, PDVSA sources said, the report notes. No Political Risks For Upstream Project Meanwhile, PetroChina's investment in upstream Venezuela is being "run more or less as normal and there should be no [political] risk in the projects," Mr. Hou told Platts, adding that the only impact was from electricity cuts, the report relays. "The project has been approved by the government and parliament," Mr. Hou said, the report notes. In 2008, CNPC Exploration and Development Co Ltd, a 50:50 joint venture between PetroChina and a fully-owned subsidiary of CNPC, acquired a 40% stake in the Carabobo block in Monagas State in Venezuela, the report says. The other 60% stake in the block, which produces heavy crude, is held by PDVSA, which is also the operator of the block, the report relays. For the year ended December 31, 2017, the block accounted for around 1.4% of PetroChina's total profit, according to filings with the US SEC in April 2018, the report adds. =============== X X X X X X X X =============== LATAM: Public Revenues Rebound in 2017 After Dip in 2016 -------------------------------------------------------- The average tax-to-GDP ratio in Latin America and the Caribbean (LAC) rose to 22.8% in 2017, a gain of 0.2 percentage points from 2016, according to Revenue Statistics in Latin America and the Caribbean 2019. The report, launched today at the XXXI Regional Fiscal Seminar in Santiago, Chile, finds that the rebound was primarily driven by Caribbean countries and in particular Guyana and Barbados, on the back of tax policy and administration reforms. The LAC average remained 11.4 percentage points below the average of OECD member countries (34.2% of GDP in 2017) but the difference between the two regions has declined from 16.4 percentage points in 1990. Revenue Statistics in Latin America and the Caribbean is a joint publication by the Inter-American Centre of Tax Administrations (CIAT), the Economic Commission for Latin America and the Caribbean (ECLAC), the Inter-American Development Bank (IDB), the Organisation for Economic Co-operation and Development (OECD) Centre for Tax Policy and Administration and the OECD Development Centre. This is the seventh edition and the first produced through the European Union's Regional Facility for Development in Transition for Latin America and the Caribbean. This year's edition covers 25 countries, although only partial data are available for Venezuela. The increase in the unweighted average tax-to-GDP ratio in the LAC region in 2017 reversed a year-on-year decline of 0.1 percent points in 2016 and reflected an overall recovery in the regional economy. However, the year-on-year change was uneven across the region: while tax revenues increased as a proportion of GDP in 12 countries, they declined in 10 and remained unchanged in two. Moreover, tax-to-GDP ratios across the LAC region vary significantly, ranging from 12.4% in Guatemala to 40.6% in Cuba. The LAC region continues to rely on taxes on goods and services, with value-added taxes alone accounting for 27.9% of total tax revenues on average in 2017, equivalent to 6.0% of GDP. Over the past decade, corporate income tax (CIT) revenues have declined as a percentage of GDP whereas revenues from personal income tax (PIT) have steadily increased, respectively reaching 3.4% and 2.2% of GDP on average in 2017. However, while CIT revenues remain higher than the OECD average (2.9% of GDP), PIT revenues are still well below the OECD average (8.2% of GDP). Overall, the average tax structure in LAC has evolved to be closer to the average OECD structure, thanks to an increase in revenues from income taxes and value-added tax (VAT) and a decline in revenues from taxes on trade. Environmentally related taxes are an emerging source of revenues in a number of LAC countries. Across the 22 countries for which data are available, revenues from this source averaged 1.1% of GDP, versus an OECD average of 1.6%. In recent years, Chile, Mexico and Colombia have introduced significant green tax reforms. A special feature for the 2019 edition highlights differing trends in hydrocarbons and mining fiscal revenues in 2017. Hydrocarbon revenues stabilised during the year, at their 2016 level of 2.3% of GDP, after falling sharply between 2014 and 2016. Mining revenues rose from 0.3% of GDP in 2016 to 0.4% in 2017 as CIT receipts surged. Fiscal revenues from non-renewable natural resources, both from hydrocarbons and mining, are estimated to have grown in 2018 as international prices remained strong in the first half of the year; a substantial price correction in the second half of the year put into question the sustainability of this recovery. A second special feature highlights that property tax levels are low relative to OECD countries and are not at the level required to help local governments meet the challenges of increasing decentralisation, extensive urbanisation and growth in informal settlements. Key findings Tax levels: Between 2016 and 2017, the average tax-to-GDP ratio in the LAC region increased by 0.2 percentage points to 22.8%. The average tax-to-GDP ratio also increased by 0.2 percentage points in the OECD area over the same period, to 34.2% of GDP. In 2017, the tax-to-GDP ratios of 24 countries covered by the report ranged from 12.4% in Guatemala to 40.6% in Cuba. Brazil and Barbados had the highest tax-to-GDP ratios after Cuba, at 32.3% and 31.8% respectively, while Paraguay (13.8%) and Dominican Republic (13.9%) had the lowest tax-to-GDP ratios after Guatemala. In 2017, tax revenues as a percentage of GDP increased in 12 of the countries in the report, declined in 10 and were stable in two. Average tax-to-GDP ratios vary significantly across the LAC sub-regions: in 2017, the average for the Caribbean region exceeded the LAC average while the average for South America was in line with the LAC average and the tax-to-GDP ratio of Central America (including Mexico) trailed the regional average. Tax structures: At 27.9% of total tax revenues, VAT was the largest source of revenue on average in the LAC region in 2017, followed by revenues from taxes on income and profits (27.1%) and from other taxes on goods and services (21.8%). Between 1990 and 2017, revenue from VAT as a percentage of GDP more than doubled for LAC countries on average, from 2.3% of GDP in 1990 to 6.0% in 2017. The share of revenues from taxes on incomes and profits grew by 6.9 percentage points (from 20.1% to 27.1% of total tax revenues) between 1990 and 2017. In the 22 LAC countries for which data are available, environmentally related tax revenues amounted to 1.1% of GDP on average in 2017, versus an OECD average of 1.6% of GDP (2016 figure). Special feature: Non-renewable natural resource revenues Hydrocarbon-related revenues in eight oil-exporting countries remained steady as a percentage of GDP in 2017, at 2.3% of GDP, with an increase in non-tax revenues in the sector offsetting a slight decline in tax revenues. Revenues from mining in the region rebounded in 2017, rising to 0.37% of GDP on average from 0.28% of GDP in 2016 across the nine countries analysed. Revenues from hydrocarbons and mining are estimated to have increased in 2018 despite a sharp correction in prices over the second half of the year. Special feature: recurrent taxes on immovable property in Latin America: Revenues generated by recurrent taxes on immovable property in Latin America are a critical mechanism for the provision of basic services but are low relative to OECD countries and not achieving the level required to help local governments meet the challenges of an increasing decentralization of public expenditure, extensive urbanisation and growth in informal settlements. As a percentage of GDP, these revenues varied significantly between countries in 2016 -- from 0.1% of GDP in Ecuador and 0.2% in Mexico and Peru to 0.8% of GDP in Colombia and 0.9% in Uruguay in 2016. On average across the region, revenues on recurrent taxes on immovable property were equivalent to around 0.3% of GDP, versus an OECD average of 1.1% of GDP. ********* 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 2019. 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 * * *