/raid1/www/Hosts/bankrupt/TCRLA_Public/201217.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, December 17, 2020, Vol. 21, No. 252
Headlines
B A R B A D O S
BARBADOS: IMF Approves US$390 Million Loan
B R A Z I L
BRAZIL: Faces US$7BB Hole in Budget From Emergency Aid, Inflation
D O M I N I C A N R E P U B L I C
DOMINICAN REPUBLIC: Pandemic Caused Poverty Levels to Increase
[*] DOMINICAN REPUBLIC: Experts Agrees Economy Will Recover Soon
E C U A D O R
ECUADOR: IDB OKs $43MM to Boost Electric Vehicle Investment
M E X I C O
GRUPO AEROPORTUARIO: Sees No Passenger Traffic Recovery Before 2023
P U E R T O R I C O
ASCENA RETAIL: Projects Significant Decline in Q1 Revenue
FERRELLGAS PARTNERS: Posts $46.1 Million Net Loss in First Quarter
PUERTO RICO HOSPITAL: Court Won't Reinstate Oversight Board Claim
T R I N I D A D A N D T O B A G O
TRINIDAD & TOBAGO: Forex Woes Deepen
- - - - -
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B A R B A D O S
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BARBADOS: IMF Approves US$390 Million Loan
------------------------------------------
RJR News reports that the International Monetary Fund (IMF) has
approved US$390 million for Barbados after its executive board
concluded the fourth review of the extended arrangement under the
Extended Fund Facility.
The four-year extended arrangement was approved on October 1, 2018,
according to RJR News.
The IMF said including the augmentation approved by the Executive
Board, the extended arrangement is for an amount equivalent of
US$464 million the report notes.
IMF Deputy managing director, Tao Zhang, said prospects for
continued strong programme performance are good, but downside risks
will continue to pose challenges in the period ahead the report
relays.
As reported in the Troubled Company Reporter-Latin America on April
23, 2020, S&P Global Ratings affirmed its 'B-/B' long- and
short-term sovereign credit ratings on Barbados, and its 'B-'
issue-level ratings on Barbados' debt. In addition, S&P Global
Ratings affirmed its 'B-' transfer and convertibility assessment.
The outlook is stable.
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B R A Z I L
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BRAZIL: Faces US$7BB Hole in Budget From Emergency Aid, Inflation
-----------------------------------------------------------------
Rio Times Online reports that Brazil faces a R$35 billion (US$7
billion) hole in its 2021 budget due to emergency aid payments
being held over to next year and welfare benefits indexed to a
higher inflation rate than anticipated, a source on the
government's economic team said.
The actual figure has not been determined yet because this year's
emergency expenditures to tackle the COVID-19 crisis have not been
fully tallied. But it will put additional pressure on an already
critical fiscal situation, according to the source, according to
Rio Times Online.
About Brazil
Brazil is the fifth largest country in the world and third largest
in the Americas. Jair Bolsonaro is the current president, having
been sworn in on Jan. 1, 2019.
S&P Global Ratings affirmed on December 14, 2020, its 'BB-/B' long-
and short-term foreign and local currency sovereign credit ratings
on Brazil. The outlook on the long-term ratings remains stable.
Fitch Ratings' credit rating for Brazil stands at 'BB-' with a
negative outlook (November 2020). Moody's credit rating for Brazil
was last set at Ba2 with stable outlook (April 2018). DBRS's credit
rating for Brazil is BB (low) with stable outlook (March 2018).
As reported in the Troubled Company Reporter-Latin America, S&P
Global Ratings' stable outlook assumes that timely implementation
of fiscal adjustment and modest economic recovery will help
preserve market confidence and adequate funding conditions for the
government in local markets in the next two years, despite a
sustained increase in the debt burden.
===================================
D O M I N I C A N R E P U B L I C
===================================
DOMINICAN REPUBLIC: Pandemic Caused Poverty Levels to Increase
--------------------------------------------------------------
Dominican Today reports that according to a study by the Ministry
of Economic, the coronavirus pandemic has caused poverty levels in
some areas of the country to increase the most.
Indicators from the COVID-19 impact study highlight that by the
second quarter of 2020, the overall poverty rate increased in all
provinces compared to June 2019, according to Dominican Today.
The report entitled "Effects of COVID-19 on Monetary Poverty,
Inequality and the Labor Market" highlights that the southern
region continued to have the highest overall poverty rate at 33%,
followed by the eastern region, which became the second
macro-region with the highest overall poverty rate due to the
pandemic and the paralysis of the economy, the report notes.
The research reveals that the most significant increase in poverty
occurred in the east of the country, from 19.5% to 31.7%,
equivalent to 12.2 percentage points, the report relays.
"The eastern macro-region is made up of the planning regions of
Yuma and Higuamo. In the case of Yuma, the main sources of
employment are commerce and hospitality, the economic sectors most
affected by the crisis," say the authors of the study of the
Ministry of Economy, Planning, and Development (MEPyD), the report
notes.
The report discloses that they add that Greater Santo Domingo is
the second macro-region that presents a high severity of poverty,
showing an increase of 7.5 percentage points. This macro-region is
made up of the National District and Santo Domingo, where the
largest proportion of the urban population is concentrated, the
segment that had the highest poverty rates, the report relays.
The Least Affected
According to the research that was coordinated by Rosa Canete
Alonso, the least significant increase was registered in the
southern macro-region with a rise of 3.1 percentage points, where
the planning regions of Valdesia, el Valle and Enriquillo are
located, the report notes. The dependence on agriculture and
livestock explains this behavior, a sector in which not only has
employment not decreased but has increased during the crisis, the
report relays.
In the provinces of Elias Pina and San Juan de la Maguana, exports
of their organic avocado crops, beans, and onions supported by
government purchases have increased, the report notes.
The report with the general name "COVID-19 under the magnifying
glass" shows that in the North Cibao macro-region, there was an
increase of 4.3%. This increase is lower than that of other
macro-regions because it is diversified in terms of economic
activity, the report adds.
About Dominican Republic
The Dominican Republic is a Caribbean nation that shares the
island of Hispaniola with Haiti to the west. Capital city Santo
Domingo has Spanish landmarks like the Gothic Catedral Primada de
America dating back 5 centuries in its Zona Colonial district.
Luis Rodolfo Abinader Corona is the current president of the
nation.
The Troubled Company Reporter-Latin America reported in April 2019
that the Dominican Today related that Juan Del Rosario of the UASD
Economic Faculty cited a current economic slowdown for the
Dominican Republic and cautioned that if the trend continues,
growth would reach only 4% by 2023. Mr. Del Rosario said that if
that happens, "we'll face difficulties in meeting international
commitments."
An ongoing concern in the Dominican Republic is the inability of
participants in the electricity sector to establish financial
viability for the system.
Standard & Poor's, on December 4, 2020, affirmed its 'BB-'
long-term foreign and local currency sovereign credit ratings on
the Dominican Republic. The outlook remains negative. S&P also
affirmed its 'B' short-term
sovereign credit ratings.
The negative outlook reflects S&P's view that it could lower the
ratings on the Dominican Republic over the next six to 18 months,
given the severe impact of the COVID-19 pandemic on the
sovereign's already vulnerable fiscal and external profiles, as
well as the potential for a weaker-than-expected economic
recovery.
Moody's credit rating for Dominican Republic was last set at Ba3
with stable outlook (July 2017). Fitch's credit rating for
Dominican Republic was last reported at BB- with negative outlook
(May 8, 2020).
[*] DOMINICAN REPUBLIC: Experts Agrees Economy Will Recover Soon
----------------------------------------------------------------
Think Economics 2020, an annual meeting organized by the
Dominican-Swiss Chamber of Commerce and Tourism, focused this year
on the global impact of the Covid-19 coronavirus pandemic and its
prospects, an activity in which most of its local and international
participants agreed that the Dominican economy would recover from
the first half of 2021, but recognized that its growth would depend
mainly on the behavior of the U.S. economy in the face of the
health crisis.
In the online forum, the following topics were discussed: A global
approach to the economy, with the health sector as a priority, a
geopolitical view of the region, with a clear focus on the
Dominican Republic. How will economic recovery be through tourism,
attracting foreign investment, reactivating production, and
public-private partnerships?
Among the experts participating in Think Economics 2020 were
Ricardo Castillo, Director, Head of Investments for Latin America,
Credit Suisse; Gustavo A. Flores-Macias, Associate Provost for
International Affairs, Cornell University; Steven Puig, President
of the BHD Leo n Bank; Víctor Ito Bisonó, Minister of Industry
and Commerce (MICM); Jaqueline Mora, Vice Minister of Tourism;
Gaetan Bucher, CEO Caelum Capital and president of the
Dominican-Swiss Chamber of Commerce and Tourism; Raul Ovalles,
Managing Partner of Analytica; Hugo Rivera, Vice Minister of
Economic Affairs of MIREX; and Sigmund Freund, Director of
Public-Private Partnerships in the country.
Flores-Macias, from Cornell University, explained the pandemic's
impact on a global scale and in the region. He said that in the
Dominican Republic, remittances, which represent 8% of GDP, had
fallen 33% due to the pandemic's impact. The 4% drop in Dominican
GDP is its "first recession in almost 25 years. He also indicated
that poverty and inequality would increase in the region. It is
estimated that the region will grow from 30% to 37%, which is
already the most unequal. That percentage implies that 45 million
people would be added to poverty and inequality. He suggests that
countries, including the Dominican Republic, continue to implement
"counter-cyclical policies" because they have been shown to help in
previous crises. He said that the counter-cyclical policies applied
in DR have helped, especially tourism.
Public-Private Partnership
Sigmund Freund talked about the Pedernales plan. He said that in
the first half of 2021, the first phase would begin with an initial
investment of US$1 billion, with an investment fund through a trust
that will allow the construction of 3,000 new rooms, a new airport
in Cabo Rojo, and new investments in electric energy, an aqueduct,
and houses for the workers. He said that the Pedernales Development
Plan would impact the border area and Barahona and incorporate a
new tourist destination. Freund also agreed that economic activity
would be reactivated in 2021 and stated that there are three
transcendental projects of the mandate of President Luis Abinader
Corona: The Development Plan of Pedernales, the Development Plan of
Puerto Plata, and the Amber Highway. He cited, among other
projects, the Port of Manzanillo and the shipyards.
Commercial relations
Vice Minister Hugo Rivera Fernandez highlighted that they are
working together with the Ministry of Industry and Commerce and
Mipymes, with ProDominicana, with the Ministry of Tourism, and
other entities. "We will work like a symphony orchestra for all
investors to come to the Dominican Republic," he said. He recalled
that the missions abroad’ objective is trading, attracting
investment, including more tourism investment.
He detailed the three axes of Commercial Diplomacy for 2021,
prioritizing the attraction of foreign investment. He spoke of the
high average growth of the economy before Covid-19. He assured that
it is the most diversified in the region. It is not only of Sun and
Beach but also that the Dominican economy is one of tourism, real
estate, free zones, mining, financial sector, and commercial
activities. He revealed that between January and July of this year,
FDI has been accumulating to reach US$1,202 million, which is the
average for ten years, despite the pandemic. He assures that DR
exceeds investments from Central American countries, including
Costa Rica.
Foreign Trade
Commercial Diplomacy
The Deputy Minister of Economic Affairs and International
Cooperation of the Ministry of Foreign Affairs, Hugo Rivera
Fernandez, highlighted the growth achieved in exports and the work
carried out in Commercial Diplomacy, as well as the new commercial
sections with which it works and the help of Foreign Minister
Roberto Alvarez to attract new investments. He also spoke about the
scope of trade agreements such as the DRCafta with the United
States and Central America, and the EPA with Europe. He said he was
optimistic.
Participants
Other participants in the forum were Jacqueline Mora, Vice Minister
of Tourism; Steven Puig, President of the BHDLeon Bank; Minister
Victor-Ito-Bisono, who spoke about industrialization, among others
who discussed health, Novartis Y, investment funds; and the Swiss
Ambassador, Urs Schnider and Gaetan Bucher, President of the
CCTDS.
About Dominican Republic
The Dominican Republic is a Caribbean nation that shares the
island of Hispaniola with Haiti to the west. Capital city Santo
Domingo has Spanish landmarks like the Gothic Catedral Primada de
America dating back 5 centuries in its Zona Colonial district.
Luis Rodolfo Abinader Corona is the current president of the
nation.
The Troubled Company Reporter-Latin America reported in April 2019
that the Dominican Today related that Juan Del Rosario of the UASD
Economic Faculty cited a current economic slowdown for the
Dominican Republic and cautioned that if the trend continues,
growth would reach only 4% by 2023. Mr. Del Rosario said that if
that happens, "we'll face difficulties in meeting international
commitments."
An ongoing concern in the Dominican Republic is the inability of
participants in the electricity sector to establish financial
viability for the system.
Standard & Poor's, on December 4, 2020, affirmed its 'BB-'
long-term foreign and local currency sovereign credit ratings on
the Dominican Republic. The outlook remains negative. S&P also
affirmed its 'B' short-term
sovereign credit ratings.
The negative outlook reflects S&P's view that it could lower the
ratings on the Dominican Republic over the next six to 18 months,
given the severe impact of the COVID-19 pandemic on the
sovereign's already vulnerable fiscal and external profiles, as
well as the potential for a weaker-than-expected economic
recovery.
Moody's credit rating for Dominican Republic was last set at Ba3
with stable outlook (July 2017). Fitch's credit rating for
Dominican Republic was last reported at BB- with negative outlook
(May 8, 2020).
=============
E C U A D O R
=============
ECUADOR: IDB OKs $43MM to Boost Electric Vehicle Investment
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Ecuador will increase financing available for private sector
investment in electric vehicles with a $43 million Conditional
Credit Line for Investment Projects and an initial credit under
this arrangement for $33 million approved by the Inter-American
Development Bank (IDB).
The aim of the credit line is to reduce fossil fuel consumption and
greenhouse gas (GHG) emissions by encouraging investment in
electric vehicles.
The first operation of this credit line will promote financing of
private investment in electric vehicles and encourage the
replacement of internal combustion vehicles. The project will
include concessional resources from the Clean Technology Fund (CTF)
as well as IDB resources to enable offering long-term credit to
finance the acquisition of electric vehicles. In addition, the
operation has a gender inclusive orientation that will benefit
women entrepreneurs in the taxi sector. The credits will be
channeled through the Corporación Financiera Nacional (CFN,
National Financial Corporation), the public development bank that
supports private activities in the country.
This first operation will also help provide scrappage certificates
or bonds to those who in addition to purchasing an electric vehicle
agree to withdraw their internal combustion cars from circulation,
significantly enhancing the project’s environmental benefits. The
scrappage bonds management will be coordinated by the Ministry of
Transportation and Public Works.
With these actions, the program takes an integral approach to the
promotion of electric vehicles. On the one hand, it tackles the
issue of financing costs and terms by offering more affordable and
longer-term credit to reflect the longer amortization period of
electric vehicles. On the other hand, it will foster the retrieval
of more polluting vehicles from circulation, stimulating the
renewal of Ecuador’s automobile fleet.
The project expects to finance the purchase of approximately 80
buses and 370 taxis in the country, which will provide a clean
public transportation service.
In addition, the program has an accompanying non-reimbursable
technical cooperation component of approximately $1 million to help
fund the technical, financial, and legal structuring of the
projects in support of national and municipal government agencies
and transport operators.
The first credit of the IDB’s Conditional Credit Line for
Investment Projects consists of a $10 million tranche from the
Bank’s ordinary capital for a 25-year term, a 6-year grace
period, and an interest rate based on LIBOR. The $33 million
concessional component from the CTF will have a 40-year
amortization period and a 10.5-year period of grace.
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M E X I C O
===========
GRUPO AEROPORTUARIO: Sees No Passenger Traffic Recovery Before 2023
-------------------------------------------------------------------
RJR News reports that passenger traffic at Mexican airport operator
Grupo Aeroportuario del Pacifico (GAP), which manages the Norman
Manley and Sangster International Airports, is unlikely to recover
to pre-pandemic levels before 2023 at the earliest.
That's the forecast from GAP's Chief Executive Officer Raul
Revuelta, according to RJR News.
As with its peers, GAP's operations have been hammered by lockdown
measures to contain the coronavirus the report notes.
Between January and November, GAP registered 24.4 million travelers
at the 14 hubs it operates in Mexico and Jamaica the report
relays.
That was a decline from the 48.7 million passengers it logged
during all of last year, the report notes.
Last month, GAP announced a 20-month delay in its spending plans,
which include more than 21 billion pesos worth of outlays at its
airports the report discloses.
As a result, it now expects work to conclude in mid-2026 instead of
December 2024, the report adds.
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P U E R T O R I C O
=====================
ASCENA RETAIL: Projects Significant Decline in Q1 Revenue
---------------------------------------------------------
Ascena Retail Group, Inc., said in a regulatory filing that it
currently estimates that revenue for its 2021 fiscal first quarter
ended October 31, 2020 will be in the range of $565 million to $585
million, down from $1.061 billion in the fiscal first quarter of
the prior year. As a result of the sales decline, the Company
expects to report a significant decline in its operating income for
the 2021 fiscal first quarter.
As previously disclosed, on July 23, 2020, the Company and certain
of the Company's direct and indirect subsidiaries commenced
voluntary cases under chapter 11 of title 11 of the United States
Code in the United States Bankruptcy Court for the Eastern District
of Virginia. In connection with the Chapter 11 Cases, the Company
obtained new debtor-in-possession ("DIP") financing, which is
discussed in more detail in Note 2 to the Company's Annual Report
on Form 10-K for the fiscal year ended August 1, 2020 (the "2020
Form 10-K"). The Company ended the fiscal first quarter with
outstanding pre-petition term loan debt of approximately $1,109
million and outstanding borrowings under its new DIP term loan
credit facility of approximately $312 million. Additionally, the
Company currently estimates that it will report cash and cash
equivalents as of October 31, 2020 in the range of $375-$385
million. The Chapter 11 Cases could have a material effect on the
Company\'s cash and debt balances.
The revenue data for the three months ended October 31, 2020 and
the cash and debt balances as of October 31, 2020 are preliminary
and have been prepared on the basis of currently available
information. The estimated 2021 fiscal first quarter information
presented above is subject to the completion of the Company's
standard procedures for the preparation and completion of its
quarterly financial statements. Given that these reviews are
ongoing, the Company may make further adjustments and there can be
no assurance that final results as of and for the three months
ended October 31, 2020 will not differ materially from the
estimates provided herein. In addition, the Company's independent
registered public accounting firm has not audited or reviewed, and
does not express an opinion or any other form of assurance with
respect to, this data.
About Ascena Retail Group Inc.
Ascena Retail Group, Inc. (Nasdaq: ASNA) is a national specialty
retailer offering apparel, shoes, and accessories for women under
the Premium Fashion (Ann Taylor, LOFT, and Lou & Grey), Plus
Fashion (Lane Bryant, Catherines and Cacique), and Value Fashion
(Dressbarn) segments, and for tween girls under the Kids Fashion
segment (Justice). Ascena, through its retail brands, operates
ecommerce websites and approximately 2,800 stores throughout the
United States, Canada, and Puerto Rico. Visit
http://www.ascenaretail.com/for more information.
Ascena Retail reported a net loss of $661.4 million for the fiscal
year ended Aug. 3, 2019, a net loss of $39.7 million for the year
ended Aug. 4, 2018, and a net loss of $1.06 billion for the year
ended July 29, 2017.
On July 23, 2020, Ascena Retail Group and its affiliates sought
Chapter 11 protection (Bankr. E.D. Va. Case No. 20-33113). As of
Feb. 1, 2020, Ascena Retail had $13,690,710,379 in assets and
$12,516,261,149 in total liabilities.
The Hon. Kevin R. Huennekens is the case judge.
The Debtors tapped Kirkland & Ellis LLP and Cooley LLP as
bankruptcy counsel, Guggenheim Securities, LLC, as financial
Advisor, and Alvarez and Marsal North America, LLC as
Restructuring advisor. Prime Clerk, LLC is the claims agent.
* * *
In September 2020, FullBeauty Brands Operations, LLC, won an
auction to acquire Ascena's Catherines intellectual property assets
for a base purchase price of $40.8 million and potential upward
adjustment for certain inventory.
In November 2020, Ascena won approval to to sell the intellectual
property of its Justice Brand and other Justice brand assets to
Justice Brand Holdings LLC, an entity formed by Bluestar Alliance
LLC (a leading brand management company), for $90 million.
The Company continues to operate its Ann Taylor, LOFT, Lane Bryant,
and Lou & Grey brands as normal through a reduced number of retail
stores and online.
FERRELLGAS PARTNERS: Posts $46.1 Million Net Loss in First Quarter
------------------------------------------------------------------
Ferrellgas Partners, L.P. filed with the Securities and Exchange
Commission its Quarterly Report on Form 10-Q disclosing a net loss
attributable to the company of $46.06 million on $300,894 of total
revenues for the three months ended Oct. 31, 2020, compared to a
net loss attributable to the company of $45.34 million on $293,214
of total revenues for the three months ended Oct. 31, 2019.
As of Oct. 31, 2020, the Company had $1.65 billion in total assets,
$1.12 billion in total current liabilities, $1.64 billion in
long-term debt, $83.34 million in operating lease liabilities,
$49.54 million in other liabilities, and a total partners' deficit
of $1.24 billion.
The Company continued its strong operational performance during the
first quarter of fiscal 2021, leading to a $7.1 million increase in
operating income and setting a foundation for continued growth in
fiscal 2021. The Company implemented strategies to deliver gallons
more efficiently leading to significant decreases in operating
expense during the quarter. The Company sold 167.6 million propane
gallons for the quarter, compared to 179.9 million in the prior
year quarter. However, these overall volume decreases were
partially offset by a continued increase in Blue Rhino tank
exchange sales due to increased strategies in marketing and "stay
at home" buying trends. Margin per gallon for the year was $.08,
or 10% higher than the prior year, attributable to strategic
product placement, sound supply chain logistics strategies and
lower wholesale propane prices. Overall, the increase in margin,
increase in tank exchange volumes and customer growth were
partially offset by decreased retail sales volumes due to a
relatively weaker economy. This has resulted in an increase in
gross margin dollars of $4.1 million or 2.6% higher than prior
year. Operating expenses decreased $5.5 million or 5% due to the
strategies to deliver gallons more efficiently.
The Company continues to implement numerous initiatives to increase
efficiency and profitability. These initiatives produced strong
results in the first quarter and enable continued high performance
in the areas of growth and operational expense management. Strong
execution by a leaner and more agile workforce of essential workers
is driving high performance throughout the Company, both in the
field and in corporate locations.
Adjusted EBITDA, a non-GAAP measure, increased by $8.8 million, or
35%, to $33.9 million in the current quarter compared to $25.1
million in the prior year quarter. "I could not be more proud of
our people as we continue the transformation of the company. If
you compare our financial results with first quarter last year you
can see why," said James E. Ferrell, interim chief executive
officer and president of Ferrellgas.
As previously disclosed, the Company entered into a Transaction
Support Agreement with a majority of the holders of the Company's
8.625% Senior Notes Due 2020 on Dec. 10, 2020. The TSA sets forth
a restructuring process to satisfy the obligations under the 2020
Notes and refinance the balance sheet of the Company and its
operating partnership. The transactions contemplated by the TSA
are intended to de-lever the Company's balance sheet, consistent
with the Company's strategy to create a solid financial foundation
for future growth.
The TSA executed between the Company and its noteholders will
permit Ferrellgas to remain an independent, employee-owned business
under current management while restructuring substantially all of
its debt. Importantly, the restructuring will have no impact on
the Company's operations, will not inhibit its ability to provide
propane to its almost 800,000 customers throughout the United
States and Puerto Rico, and will allow its premier Blue Rhino tank
exchange business to continue to expand beyond the current 60,000
selling locations.
As previously announced, the Company indefinitely suspended its
quarterly cash distribution as a result of not meeting the required
fixed charge coverage ratio contained in the senior unsecured notes
due 2020.
Going Concern
Ferrellgas Partners has $357.0 million in unsecured notes due June
15, 2020, which Ferrellgas Partners failed to repay, that are
classified as current in the condensed consolidated financial
statements. Additionally, Ferrellgas, L.P. has $500.0 million in
unsecured notes due May 1, 2021, that are also classified as
current in the condensed consolidated financial statements. The
ability of Ferrellgas Partners to restructure, refinance or
otherwise satisfy these notes is uncertain considering the level of
other outstanding indebtedness. Given these concerns, Ferrellgas
Partners believes there is substantial doubt about the entity's
ability to continue as a going concern. Ferrellgas has engaged
Moelis & Company LLC as its financial advisor and the law firm of
Squire Patton Boggs LLP to assist in its ongoing process to reduce
existing debt and address its debt maturities. On Dec. 10, 2020,
Ferrellgas Partners, Ferrellgas Partners Finance Corp., the
operating partnership and additional Ferrellgas entities entered
into a Transaction Support Agreement with certain holders of, or
investment advisors, sub-advisors, or managers of discretionary
accounts that hold, claims arising under, derived from or based
upon the indenture governing the Ferrellgas Partners Notes due June
15, 2020. There is no assurance that the transactions contemplated
by the TSA will be consummated and the outcome of Ferrellgas' debt
reduction strategy continues to remain uncertain.
A full-text copy of the Form 10-Q is available for free at:
https://www.sec.gov/Archives/edgar/data/922358/000155837020014376/fgp-20201031x10q.htm
About Ferrellgas
Ferrellgas Partners, L.P. (www.ferrellgas.com), through its
operating partnership, Ferrellgas, L.P., and subsidiaries, serves
propane customers in all 50 states, the District of Columbia, and
Puerto Rico.
* * *
As reported by the TCR on June 23, 2020, S&P Global Ratings lowered
its issuer credit rating on Kansas-based propane distributor
Ferrellgas Partners L.P. to 'SD' (selective default) from 'CC'.
The downgrade reflects Ferrellgas Partners' decision not to make
the final maturity payment on its senior unsecured notes due June
15 and its subsequent decision to enter into a forbearance
agreement with the noteholders on June 7.
PUERTO RICO HOSPITAL: Court Won't Reinstate Oversight Board Claim
-----------------------------------------------------------------
A motion to vacate the court's order which granted the debtor's
objection to the Commonwealth of Puerto Rico's proof of claim was
denied by Judge Enrique S. Lamoutte in the case captioned IN RE:
PUERTO RICO HOSPITAL SUPPLY INC, Chapter 11, Debtor, Case No.
19-01022 (Bankr. D.P.R.). The motion was filed by the Special
Claims Committee of the Financial Oversight Management Board
("SCC").
Seeking the avoidance of constructive and fraudulent transfers, the
SCC, as representative for the Commonwealth of Puerto Rico, filed
its Proof of Claim No. 72 on July 8, 2019, for the amount of
$5,613,160.
On May 7, 2020, the debtor filed its objection to the proof of
claim. It argued that the claim was filed without adequate
supporting documentation and that the claimant had failed to
request relief from the automatic stay to timely file the alleged
avoidance actions and was, therefore, legally time barred to do
so.
Upon the claimant's failure to reply, the court granted the
debtor's objection on June 12, 2020.
On August 27, 2020, the SCC sought to vacate the court's order. The
SCC argued that its failure to timely respond was the result of
excusable neglect. It alleged the Covid-19 global pandemic and
associated disruption and disablement of law offices from normal
procedures should be considered by the court to be a "unique or
extraordinary circumstance" worthy of relief under Fed. R. Civ. P.
60(b).
The court found that the SCC failed to reach the demanding standard
of excusable neglect. While the court acknowledged that the
Covid-19 pandemic was beyond the SCC's control and that the sudden
changes in office practices may not have been foreseeable, the
court still held that the Covid-19 pandemic cannot be a
justification for the SCC to forgo its ongoing duty to inquire into
the status of the case.
A full-text copy of Judge Lamoutte's opinion and order dated
December 4, 2020 is available at https://tinyurl.com/y4pud3lo from
Leagle.com.
Attorney for the Debtors:
CHARLES A. CUPRILL P.S.C. LAW OFFICES
356 Fortaleza Street, Second Floor
San Juan, PR 00901
Tel: (787) 977-0515
Fax: (787) 977-0518
E-mail: ccuprill@cuprill.com
About Puerto Rico Hospital Supply
Puerto Rico Hospital Supply, Inc., distributes medical supplies in
Puerto Rico. Customed Inc., founded in 1991, manufactures surgical
appliances and supplies.
Puerto Rico Hospital Supply, Inc. and Customed, Inc., filed
voluntary Chapter 11 petitions (Bankr. D.P.R. Case Nos. 19-01022
and 19-01023) on Feb. 26, 2019. The petitions were signed by Felix
B. Santos, president. The cases are assigned to Judge Enrique S.
Lamoutte Inclan.
At the time of the filing, Puerto Rico Hospital estimated $50
million to $100 million in assets and $10 million to $100 million
in liabilities while Customed, Inc. estimated $10 million to $50
million in both assets and liabilities. Alexis Fuentes
Hernandez, Esq., at Fuentes Law Offices, represents the Debtors.
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T R I N I D A D A N D T O B A G O
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TRINIDAD & TOBAGO: Forex Woes Deepen
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Trinidad Express reports that multiple importers and manufacturers
whose products are sold on the local market are complaining that
the availability of foreign exchange to pay for imported goods is
approaching crisis proportions.
"We would know it's a crisis when importers begin to close down
their businesses and declare bankruptcy. We are not there yet, but
we are heading in the wrong direction," one director of a large
importer told the Sunday Express, according to Trinidad Express.
"As foreign currency becomes less available, our regular sourcing
and merchandising of imported goods may be affected in our clubs,"
said one of Trinidad and Tobago's largest importers, the membership
warehouse club PriceSmart, in a notice on its Facebook page on
December 3, the report notes.
And Scotiabank warned the holders of its business credit cards last
month of the introduction of further limits on foreign currency
transactions to a maximum of US$500 as of December 1, 2020 the
report relays.
"The reduced availability of US dollars continues to be a challenge
for the market. While not an easy decision, it has become necessary
to apply limits to foreign currency transactions," said the
majority Canadian-owned bank, which is listed on the local stock
exchange the report says.
The cause of the reduced availability of foreign exchange is that
T&T's 13 authorised foreign exchange dealers -- comprising eight
commercial banks, four non-bank financial institutions and the ExIm
Bank of T&T -- have less foreign exchange to sell in 2020 than they
had in 2019 the report notes.
Forex Demand And Supply
In its 2014 Article IV assessment of the T&T economy, the
International Monetary Fund (IMF) reported that since the fourth
quarter of 2013, market participants have reported fairly
widespread and persistent foreign exchange shortages the report
says. But importers are clear that the availability of foreign
exchange in the fourth quarter of 2020 is the worst in the last
seven years the report notes.
The Central Bank, in consultation with Finance Minister Colm
Imbert, determines the exchange rate of US dollars (with a limit at
$6.7993 to US$1). The bank also provides marginal amounts of
foreign exchange to the market via its own sales to authorised
dealers the report relays.
Statistics provided by the Central Bank to the Sunday Express
indicate the authorised dealers sold 25 per cent less foreign
exchange to the public for the first ten months of 2020 than for
the same period in 2019 the report relays.
For the period January to October 2020, foreign exchange sales to
the T&T public by all authorized dealers amounted to US$3.757
billion the report notes. That's 25 per cent less than the US$5.01
billion sold to the public for the first ten months of 2019 the
report recalls.
The authorized dealers purchase their foreign exchange from the
public - mostly from energy companies and large exporters the
report notes.
But for the last five years, the Central Bank has been forced to
intervene in the foreign exchange market on a fortnightly basis, as
the traditional supply of foreign exchange has not been enough to
satisfy the demand by T&T for foreign currency the report says.
For the first ten months of 2020, the public sold US$2.804 billion
to authorized dealers. But that was 22 per cent less than the
US$3.608 billion sold by the public to the authorized dealers in
2019 the report recalls.
And the Central Bank's intervention in T&T's foreign exchange
market has also been at a lower level in 2020 than in 2019. Between
January and October 2020, the Central Bank sold US$1.069 billion to
authorised dealers, the report notes. But that was 16 per cent
less than the US$1.270 billion the Central Bank sold to authorised
dealers for the first ten months of 2019, the report discloses.
That means for the first ten months of 2020, authorised dealers
purchased US$2.804 billion from the public and US$1.069 billion
from the Central Bank, for a total of US$3.873 billion, the report
relates. That is a little more than the US$3.75 billion the
authorised dealers sold to the public, the report notes.
For the first ten months of 2019, authorised dealers purchased
US$3.608 billion from the public and US$1.270 billion from the
Central Bank for a total of US$4.878 billion, the report notes.
That's a little less than the US$5.01 billion the authorised
dealers sold to the public in that period, the report says.
Asked about the availability of foreign exchange and the possible
impact of the Covid-19 pandemic, a Central Bank spokesperson said
on November 19, "The Covid-19 situation is still evolving and the
bank does not have precise estimates of its net foreign exchange
impact, the report notes.
"In recent months, foreign exchange supply has been adversely
affected, principally due to the effect of softening global energy
prices on Government energy tax revenue (received in US$) and the
sluggishness of exports of goods and services related to trade and
travel restrictions.
"At the same time, the demand for foreign exchange is likely to
have declined, similarly in line with trade/travel restrictions,
and also due to the more generalised slowdown in domestic demand,"
the report says.
Predictable or Not?
Questioned on whether the Central Bank has reduced the sale of
foreign exchange to T&T's largest commercial bank, Republic Bank,
since the onset of the Covid-19 pandemic, a spokesperson for the
commercial bank said on November 23: "The Central Bank continues to
support the market through bi-monthly interventions.
"This predictability and source of foreign exchange supply into the
foreign exchange market has proven to be very helpful with aiding
with trade-related demand.
"Since the onset of the Covid-19 pandemic, the level of support has
remained consistent with what it was immediately before the
onset," the report says.
While the Central Bank's supply of foreign exchange to Republic
Bank may be predictable, a director of one of T&T's large importers
complained bitterly about the unpredictability of the supply of
foreign exchange to the company from all of the authorised dealers,
the report notes.
For the director, who insisted on anonymity to protect
relationships, both internal and external, the main problems are
both the unpredictability of the supply of foreign exchange and the
fact that the banks do not supply enough of it to pay import bills
in full and on time, the report relays.
The foreign exchange situation may force the importer to stop
importing goods that are either lower margined or slower selling,
the report discloses.
"Once you drop any line of goods, you are losing income and,
therefore, you have to reduce expenditure, which may include
reducing employment, which we are loath to do, of course," said
the importer, the report relays.
The director also noted as a result of the unpredictability of the
supply of foreign exchange, his company is forced to purchase it
when it becomes available. While that might sound acceptable, the
importer said holding on to US dollars that are not put to quick
use comes at a cost, the report notes.
He also pointed out that some commercial banks are requiring
companies to get a letter of credit to be able to access foreign
exchange to pay suppliers, the report relays. Pointing out that
the traditional use of a letter of credit is when an importer is
dealing with a new supplier, the importer noted that letters of
credit come with fees that push up the costs of imports, the report
notes.
An executive of an importing firm told the Sunday Express that
euros have become more easily available than US dollars for imports
in the last few months. He noted not all suppliers are willing to
accept euros, and they are not willing to accept the foreign
exchange volatility risk of being paid in the European currency,
the report discloses.
"The margin between the selling and buying prices for euros is
wider than for US dollars, which means the average price that we
are paying for foreign exchange to pay our suppliers is now north
of $7 to US$1," the importer added," notes the report.
Acknowledging the foreign exchange crunch has meant some suppliers
have not been paid on time, the importer said this has caused the
company to hold back on ordering until accounts have been paid.
This has led to an overall rationalisation of the products that are
being imported, with some lines being dropped, the report notes.
Imbert on Devaluation
Addressing the Spotlight on the Budget and Economy 2021 forum on
September 28, Finance Minister Colm Imbert said: "We continue to
believe that no useful purpose would be served by devaluation,
especially at this time when US-dollar inflows are extremely low.
And they are extremely low as a result of Covid-19 because it has
depressed oil and gas prices and production.
"And, therefore, the inflows we were getting in 2018 and 2019 are
now significantly less and, therefore, if you devalue, what
happens? You convert your US dollars to TT dollars at a higher
rate; you get more TT dollars. But if you are getting minimal
inflows of US dollars, it is insufficient to counteract the effects
of devaluation, which are increased cost of raw materials for your
manufacturing sector, increased cost of food imports, wage demands
from trade unions, who would quite naturally want to get a wage
increase because the cost of living will go up, your international
debt servicing will go up because your debt is in US dollars . .
."
IMF's Analysis
In the last Article IV assessment of the local economy in August
2018, the IMF said the failure to address foreign exchange
shortages would continue to reinforce existing macroeconomic
imbalances, the report notes.
Under the rubric expected impact, the Fund said: "Difficult to
measure the extent of the problem since shortages consist of
foreign exchange sales that are not made.
"Nonetheless, there are concerns that local businesses' failure to
deliver on payments to suppliers undermine non-energy sector
activity and harm trade and growth. Constrained access to foreign
exchange, mostly by non-price means, distorts resource allocation
and undermines market confidence and the country's sovereign credit
ratings, the report says.
"Foreign exchange shortages engenders precautionary demand,
exacerbating capital outflows," adds the report.
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