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/raid1/www/Hosts/bankrupt/TCRLA_Public/220527.mbx T R O U B L E D C O M P A N Y R E P O R T E R L A T I N A M E R I C A Friday, May 27, 2022, Vol. 23, No. 100 Headlines A R G E N T I N A ARGENTINA: Key Backers Onboard, Moves Closer to Joining BRICS C H I L E LATAM AIRLINES: White & Case Gives 7th Update on LATAM Bondholders C O L O M B I A CANACOL ENERGY: Provides Sales, Ops, and Medellin Pipeline Update GEOPARK LIMITED: Posts $249.2 Million Revenue for Q1FY22 D O M I N I C A N R E P U B L I C DOMINICAN REPUBLIC: Buys Power as Blackouts Linger M E X I C O SIXSIGMA NETWORKS: Moody's Alters Outlook on 'B2' CFR to Stable VINTE VIVIENDAS: S&P Lowers ICRs to 'BB-', Outlook Stable P U E R T O R I C O AMERICAN FLAMINGO: Files for Chapter 11 Bankruptcy Protection ECOLIFT CORPORATION: Court Confirms Reorganization Plan - - - - - ================= A R G E N T I N A ================= ARGENTINA: Key Backers Onboard, Moves Closer to Joining BRICS ------------------------------------------------------------- Buenos Aires Times reports that Argentina is increasingly closer to joining the BRICS group of nations, with entry to its New Development Bank all but virtually sealed following the Sino-Russian tour of President Alberto Fernandez in early February, Ambassador to Beijing Sabino Vaca Narvaja confirmed. Speaking at a BRICS videoconference summit, the envoy read out a letter by President Fernández saying that the group represents "an excellent alternative of cooperation in the face of a world order which functions for the benefit of a few," according to Buenos Aires Times. Government sources are confident that its entry into what was formerly known as the BRICS Development Bank could even come to pass in the next few months, the report notes. The support of Brazil, they said, has been crucial to accelerating the process, with China and India also in support, the report relays. The positions of Russia and South Africa -- the bloc's other members -- are unknown, the report discloses. The sources consulted assured that Argentina would be joining the political bloc next year, the report notes. Any such move is sure to raise eyebrows in Washington, with US President Joe Biden's administration firmly against any closer ties with Russia in the wake of the decision to invade Ukraine, the report relays. BRICS is seeking to expand its cooperation with other countries and even considering adhesion. Led by China, due to its great economic power, the bloc is seeking to open up internationally, not just for economic questions but also in the global context generated by the war in Ukraine with Russia playing a very important role in world diplomacy, the report says. 'Decisive Grouping' BRICS was formed in 2009 as a forum for economic and trade cooperation between the world's main emerging economies at that time in order to resist the international financial and trade organisations headed by Western countries, especially the United States, the report relays. The president said in his letter that "BRICS is beyond doubt a decisive grouping for world economic development. It is clear that global macroeconomic stability and economic growth pass and will increasingly pass through this group of countries," the report relays. He concluded: "The new development bank of BRICS in which my country could participate is for me the institutionalization of a new world order centred on development and far removed from the financial speculation which has caused so much damage to our countries," the report says. Argentina's Foreign Minister Santiago Cafiero had confirmed the country's ambitions, declaring it "has the will" to join the bloc "with an emerging agenda," the report relays. "The BRICS account for 40 percent of the world's population and 20 percent of the world's GDP. Argentina has the possibility of participating with an emerging agenda. This is the task we have set ourselves last year and the president has raised it with Xi Jinping," Cafiero told El Destape Radio, the report notes. "For Argentina, it is important to move towards greater coordination with the BRICS countries," the foreign minister said, the report discloses. The minister revealed that the government has been working on the aim since last year and argued that the BRICS group would benefit from "the incorporation of a Spanish-speaking country," the report relays. Diplomatic sources told the Telam state news agency on Thursday that the process of signing up is a "lengthy" one, but that the government had received unofficial commitments from Brazil, China and India, the report says. Back in April, Brazilian Foreign Minister Paulo Guedes said President Jair Bolsonaro's government was ready to promote Argentina's candidacy for both the BRICS as a whole and the NDB development bank, the report notes. China Eyes Expansion Speaking on Thursday, Chinese Foreign Minister Wang Yi announced that the bloc needs to inject a new vitality in the cooperation of the organisation in the face of the new challenges of the international situation. The comments were made in the framework of Chinese President Xi Jinping sending a special invitation to Argentina to participate in the BRICS Summit, which began yesterday and will run until June 24. "Solidarity and cooperation with emerging and developing countries is an excellent tradition of BRICS countries, and it is also an inevitable path for the development and growth of the bloc's mechanism," said the Chinese minister, who said the bloc needed to "demonstrate even more openness and inclusion." Beijing "proposes to start the process of expanding the BRICS, discuss the standards and procedures of this expansion and gradually form a consensus," said the minister. Along these lines, Cafiero met with his colleagues saying: "The successive G20 presidencies of three emerging powers, Indonesia (2022), India (2023) and Brazil (2024), offer us an immediate opportunity to push a new focus and bring the world's attention to the needs of developing countries." Cafiero recently met up with Indian Prime Minister Narendra Modi, receiving his support for Argentina joining BRICS. "For Argentina, it's important to advance towards a greater coordination with BRICS. That's why we value this invitation and place ourselves at their disposal to keep building bridges between Argentina and BRICS," he outlined. The minister underlined that "only via the greater coordination of developing countries in such forums as the G20, the World Trade Organisation, the World Bank and the International Monetary Fund will we be able to consolidate an agenda where emerging economies must be the motor of an inclusive and sustainable economic recovery." ========= C H I L E ========= LATAM AIRLINES: White & Case Gives 7th Update on LATAM Bondholders ------------------------------------------------------------------ In the Chapter 11 cases of LATAM Airlines Group S.A., et al., the law firm of White & Case LLP submitted a seventh verified statement under Rule 2019 of the Federal Rules of Bankruptcy Procedure, to disclose an updated list of Ad Hoc Group of LATAM Bondholders that it is representing. As of May 9, 2022, members of the Ad Hoc Group and their disclosable economic interests are: Bardin Hill Investment Partners 299 Park Avenue, 24th Floor New York, New York 10171 * Holder of $14,200,000 of 2024 Bonds, $9,000,000 of 2026 Bonds, and $17,232,278 in Tranche C DIP commitments BICE VIDA Compania de Seguros S.A. Av. Providencia 1806, Metropolitana Chile Santiago, Region * Holder of $750,000 of 2024 Bonds BlackRock Financial Management 40 East 52nd Street New York, NY 10022 * Holder of $20,000,000 of 2024 Bonds and $2,000,000 of Tranche A DIP commitments BNP Paribas 787 Seventh Avenue, 2nd Floor New York, NY 10019 * Holder of $11,959,000 of 2024 Bonds, and $6,000,000 of 2026 Bonds Canyon Capital Advisors LLC 2727 N. Harwood Street, 2nd Floor Dallas, Texas 75201 * Holder of $127,390,000 of 2024 Bonds and $101,450,000 of 2026 Bonds, and $164,906,439.45 of Tranche C DIP commitments Caspian Capital L.P. 10 E. 53rd St. New York, NY 10022 * Holder of $47,199,000 of 2024 Bonds, $61,936,000 of 2026 Bonds, $52,664,772 of Tranche C DIP commitments Diameter Capital Partners, LP 24 W 40th Street, 5th Floor New York, NY 10018 * Holder of $10,000,000 of 2026 Bonds, $64,000,000 of Tranche A DIP commitments, $51,787,879 of Tranche C DIP commitments, and $11,262,354.26 of OpCo Claims DSC Meridian Capital LP 888 Seventh Ave. New York, NY 10016 * Holder of $4,502,000 of 2024 Bonds and $3,395,000 of 2026 Bonds Glendon Capital Management, L.P. 2425 Olympic Blvd., Suite 500E Santa Monica, CA 90404 * Holder of $5,500,000 of 2024 Bonds, $10,000,000 of 2026 Bonds, $25,250,000 of the Revolving Credit Facility4, $50,000,000 of Tranche A DIP commitments and $63,197,727.54 of Tranche C DIP Commitments HBK Capital Management 2300 North Field Street, Suite 2200 Dallas, Texas 75201 * Holder of $10,00,000 of 2024 Bonds, $3,000,000 of 2026 Bonds and $14,289,000 of OpCo Claims Mariner Investment Group, LLC 299 Park Avenue, 12th Floor New York, NY 10171 * Holder of $5,000,000 of 2024 Bonds, $6,000,000 of 2026 Bonds and $17,424,242.00 of Tranche C DIP commitments Redwood Capital Management, LLC 910 Sylvan Avenue Englewood Cliffs, NJ 07632 * Holder of $2,275,000 of 2024 Bonds, $6,699,000 of 2026 Bonds Taconic Capital Advisors L.P. 280 Park Avenue, 5th Floor New York, NY 10017 * Holder of $19,500,000 of 2024 Bonds and $29,311,000 of 2026 Bonds and $20,000,000 of Tranche UBS O'Connor LLC One North Wacker Drive 31st Floor Chicago, IL 60606 * Holder of $8,000,000 of 2026 Bonds and $17,424,242 of Tranche C DIP commitments VR Global Partners, L.P. 300 Park Avenue, 16th Floor New York, NY 10022 * Holder of $4,127,000 of 2024 Bonds, $15,000,000 of 2026 Bonds, and $24,393,939 of Tranche C DIP commitments Whitebox Advisors LLC 2022 Excelsior Blvd., Suite 500 Minneapolis, MN 55416 * Holder of $15,000,000 of 2026 Bonds, $323,076.95 of Parent Claims and $6,655,970.31 of OpCo Claims On June 15, 2020, the Ad Hoc Group retained Counsel to represent it in connection with the Debtors' Chapter 11 Cases. Each member of the Ad Hoc Group has consented to Counsel's representation. Counsel for the Ad Hoc Group of LATAM Bondholders can be reached at: White & Case LLP John K. Cunningham, Esq. Brian D. Peiffer, Esq. Gregory Starner, Esq. Joshua Weedman, Esq. Kathryn Sutherland-Smith, Esq. 1221 Avenue of the Americas New York, NY 10020 Telephone: (212) 819-8200 Facsimile: (212) 354-8113 E-mail: jcunningham@whitecase.com brian.pfeiffer@whitecase.com gstarner@whitecase.com jweedman@whitecase.com kathryn.sutherland.smith@whitecase.com Richard S. Kebrdle, Esq. Varoon Sachdev, Esq. Southeast Financial Center, Suite 4900 200 South Biscayne Boulevard Miami, FL 33131 Telephone: (305) 371-2700 Facsimile: (305) 358-5744 E-mail: rkebrdle@whitecase.com varoon.sachdev@whitecase.com A copy of the Rule 2019 filing is available at https://bit.ly/3Gakn7h at no extra charge. About LATAM Airlines Group LATAM Airlines Group S.A. -- http://www.latam.com/-- is a pan-Latin American airline holding company involved in the transportation of passengers and cargo and operates as one unified business enterprise. It is the largest passenger airline in South America. Before the onset of the COVID-19 pandemic, LATAM offered passenger transport services to 145 different destinations in 26 countries, including domestic flights in Argentina, Brazil, Chile, Colombia, Ecuador and Peru, and international services within Latin America as well as to Europe, the United States, the Caribbean, Oceania, Asia and Africa. LATAM and its 28 affiliates sought Chapter 11 protection (Bankr. S.D.N.Y. Lead Case No. 20-11254) on May 25, 2020. Affiliates in Chile, Peru, Colombia, Ecuador and the United States are part of the Chapter 11 filing. The Debtors disclosed $21,087,806,000 in total assets and $17,958,629,000 in total liabilities as of Dec. 31, 2019. The Hon. James L. Garrity, Jr., is the case judge. The Debtors tapped Cleary Gottlieb Steen & Hamilton LLP as bankruptcy counsel, FTI Consulting as restructuring advisor, Lee Brock Camargo Advogados as local Brazilian litigation counsel, and Togut, Segal & Segal LLP and Claro & Cia in Chile as special counsel. The Boston Consulting Group, Inc. and The Boston Consulting Group UK LLP serve as the Debtors' strategic advisors. Prime Clerk LLC is the claims agent. The official committee of unsecured creditors formed in the case tapped Dechert LLP as its bankruptcy counsel, Klestadt Winters Jureller Southard & Stevens, LLP as conflicts counsel, UBS Securities LLC as investment banker, and Conway MacKenzie, LLC as financial advisor. Ferro Castro Neves Daltro & Gomide Advogados is the committee's Brazilian counsel. The Ad Hoc Group of LATAM Bondholders tapped White & Case LLP as counsel. Glenn Agre Bergman & Fuentes, LLP, led by managing partner Andrew Glenn and partner Shai Schmidt, has been retained as counsel to the Ad Hoc Committee of Shareholders. =============== C O L O M B I A =============== CANACOL ENERGY: Provides Sales, Ops, and Medellin Pipeline Update ----------------------------------------------------------------- Canacol Energy Ltd. ("Canacol" or the "Corporation") (TSX:CNE; OTCQX:CNNEF; BVC:CNEC) is pleased to provide the following information concerning its April 2022 natural gas sales, near term drilling plans, and its Medellin gas pipeline project. Gas sales averaged 179 MMscfpd for April 2022 Realized contractual natural gas sales (which are gas produced, delivered, and paid for) were approximately 179 million standard cubic feet per day ("MMscfpd") for April 2022. Near Term Drilling Program The Corporation completed the drilling of the Chirimia 1 sidetrack well, which spud on April 6, 2022 and reached a TD of 9,412 feet measured depth on April 14, 2022. The well encountered approximately 20 feet true vertical depth of net gas pay within the Cienaga de Oro ("CDO") sandstone reservoir with average porosity of 23 percent. The well will be completed and placed on production within the next 4 weeks. The drilling rig has just spud the Alboka 1 exploration well located on the VIM 5 Exploration and Production ("E&P") contract. Alboka 1 is targeting gas bearing sands within the CDO sandstone reservoir. A second drilling rig has been contracted and is currently being mobilized to drill the Cornamusa 1 exploration well located on the VIM 21 E&P Contract, which is expected to spud in the second half of May 2022. The Cornamusa 1 exploration well is targeting gas bearing sands within the CDO sandstone reservoir. Both the Alboka 1 and Cornamusa 1 exploration wells should take approximately 5 weeks to drill, test, and complete. Medellin Pipeline Update On March 30, 2022, the Corporation's Jobo-Medellin Gas Pipeline project was declared as a Project of Strategic National Interest (PINE) by the Government of Colombia. This means that the entities of the Colombian state that have any influence or jurisdiction over matters that impact the project must support its efficient management and timely completion. In practice this designation should drastically improve the timing of the delivery of items critical to the project, including the issuance of the environmental license. The Corporation has received binding offers from four different international pipeline construction consortiums which are currently under evaluation. Several of the proposals have an option to upsize the initial 100 MMscfpd of transportation capacity to 200 MMscfpd at Canacol's request. As previously announced in August 2021 the Corporation executed an 11 year take or pay gas sales contract with Empresas Publicas de Medellin for 54 MMscfpd of the pipelines' initial capacity. The Corporation is currently negotiating additional long term take or pay contracts with clients located in the interior of Colombia to fill the remaining 46 MMscfpd of initial capacity. About Canacol Canacol is a natural gas exploration and production company with operations focused in Colombia. The Corporation's common stock trades on the Toronto Stock Exchange, the OTCQX in the United States of America, and the Colombia Stock Exchange under ticker symbol CNE, CNNEF, and CNE.C, respectively. As recently reported by the Troubled Company Reporter - Latin America, Fitch Ratings upgraded Canacol Energy Ltd.'s (CNE) Long-Term Foreign Currency and Local Currency Issuer Default Ratings (IDRs) and its senior unsecured notes to 'BB' from 'BB-'. Fitch has removed the 'RR4' Recovery Rating from the debt along with the upgrade. The Rating Outlook is Stable. GEOPARK LIMITED: Posts $249.2 Million Revenue for Q1FY22 -------------------------------------------------------- GeoPark Limited ("GeoPark" or the "Company") (NYSE: GPRK), a leading independent Latin American oil and gas explorer, operator and consolidator reports its consolidated financial results for the three-month period ended March 31, 2022 ("First Quarter" or "1Q2022"). All figures are expressed in US Dollars and growth comparisons refer to the same period of the prior year, except when specified. Definitions and terms used herein are provided in the Glossary at the end of this document. This release does not contain all of the Company's financial information and should be read in conjunction with GeoPark's consolidated financial statements and the notes to those statements for the period ended March 31, 2022, available on the Company's website. A full text copy of the company's financial results is available free at: https://bwnews.pr/3MHQZb4 As recently reported in the Troubled Company Reporter-Latin America, Fitch Ratings has affirmed GeoPark Limited's (GeoPark) Long-Term Foreign- and Local-Currency Issuer Default Ratings (IDRs) at 'B+'. The Rating Outlook is Stable. Fitch has also affirmed GeoPark's USD425 million senior notes due 2024 and USD500 million notes due 2027 at 'B+'/'RR4'. =================================== D O M I N I C A N R E P U B L I C =================================== DOMINICAN REPUBLIC: Buys Power as Blackouts Linger -------------------------------------------------- Dominican Today reports that the Dominican Republic Minister of Energy and Mines, Antonio Almonte, disclosed that 250 megawatts will enter to supply the demand for energy that has been affected in recent weeks by the shutdown of several power generation plants. These megawatts will be purchased from the companies Falcondo, Sultana del Este and Barrick Gold at the same price as Punta Catalina, according to Dominican Today. "As of the weekend, the Estrella del Mar III generator will be integrating some 150 more megawatts and that means that the situation will be normalizing between now and next Monday," Almonte revealed, the report notes. The official offered these statements after leading a meeting with the main representatives of the energy sector, in order to respond to the energy crisis and said that the blackouts are the fault of past government administrations that neither planned nor worked in time for the Installation of new generation units, the report relays. 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. TCRLA 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. Fitch Ratings, in December 2021, revised the Outlook on Dominican Republic's Long-Term Foreign-Currency Issuer Default Rating (IDR) to Stable from Negative and affirmed the IDRs at 'BB-'. The revision of the Outlook to Stable reflects the narrowing of Dominican Republic's government deficit and financing needs since Fitch's last review resulting in the stabilization of the government debt/GDP ratio, as well as the investment-driven economic momentum, reflected in the faster-than-expected economic recovery in 2021 that Fitch expects to carry into above-potential GDP growth during 2022 and 2023. Standard & Poor's, also in December 2021, revised its outlook on the Dominican Republic to stable from negative. S&P also affirmed its 'BB-' long-term foreign and local currency sovereign credit ratings and its 'B' short-term sovereign credit ratings. The stable outlook reflects S&P's expectation of continued favorable GDP growth and policy continuity over the next 12 to 18 months that will likely stabilize the government's debt burden, despite lack of progress with broader tax reforms, S&P said. A rapid economic recovery from the downturn because of the pandemic should mitigate external and fiscal risks. Moody's affirmed the Dominican Republic's long-term issuer and senior unsecured ratings at Ba3 and maintained the stable outlook in March 2021. =========== M E X I C O =========== SIXSIGMA NETWORKS: Moody's Alters Outlook on 'B2' CFR to Stable --------------------------------------------------------------- Moody's Investors Service has affirmed SixSigma Networks Mexico, S.A. de C.V.'s (KIO) B2 corporate family rating and the B2 senior unsecured rating on its global notes due 2025. At the same time, Moody's changed the rating outlook to stable from negative. Affirmations: Issuer: SixSigma Networks Mexico, S.A. de C.V. Corporate Family Rating, Affirmed B2 Senior Unsecured Global Notes, Affirmed B2 Outlook Actions: Issuer: SixSigma Networks Mexico, S.A. de C.V. Outlook, Changed To Stable From Negative RATINGS RATIONALE "The action reflects our view that, through capitalizations from I Squared Capital, KIO has reduced leverage, improved liquidity and implemented key initiatives to boost growth. Therefore, its credit profile will strengthen through 2023." said Sandra Beltran, VP Senior Analyst of Moody's. KIO has very limited track record of free cash flow (FCF) generation and there is no room for improvement over the next 12 months considering the company's investment plans; nevertheless, they will strengthen KIO's position to attend the increasing data centers demand in the longer term. "Going forward, we expect I Squared to continue to support KIO through capitalizations and funding access, providing runway through recovery" added Beltrán. KIO's business plan considers expanding its corporate private customer base. Moody's considers the resulting declining exposure to the Mexican government a credit positive. Summary KIO's B2 ratings reflect its position as one of the top independent data center operators in Mexico, offering a wide range of IT solutions for private and public customers. The company is well positioned to compete for large contracts to provide solutions to firms and government-related entities. Moreover, the mission-critical nature of most of the services ensures cash stability. At the same time, KIO's ratings are constrained by its relatively small scale, and lower geographical diversification than that of its peers; the high volatility in its results compared to its peers, primarily because of its large exposure to the Government of Mexico (Baa1 negative) and to some large contracts; its high leverage (7.0x for the 12 months that ended September 2021, Moody's-adjusted), which Moody's expects to decline to below 6.0x in the next 12 months, pro forma for the capitalizations from I Squared; its exposure to pricing risk at contract renewals; and the long-term risks arising from strong competition in Mexico. Mexican communication technology companies were severely affected by the current administration's austerity stance that, since 2018, has resulted in reduced revenues. Companies like Axtel, S.A.B. de C.V. (Ba3 stable) and KIO have since then had difficulties to sustain growth. Moreover, the pandemic induced cost saving measures from corporate customers further pressured their credit metrics. Since 2021, the private sector has resumed growth and Moody's expects to sustain it given the ongoing digital transformation. The COVID pandemic accelerated IT adoption, fueling high-growth services, such as cybersecurity, system integration, managed networks, collocation and public cloud. Since 2020, KIO has focused on expanding its private sector customer base, mainly through the Data Center business unit. For the nine months ended in September 2021, KIO's revenue from services rendered, reached MXN4.3 million, a decrease of 11.9% when compared to the same period in 2020. The decrease was attributed to lower revenues in public sector contracts. However, during this same period, private sector revenue grew 10%, accounting for 61% of total revenue, already above the 49% of total revenue reported in 2019. From 1H22, KIO will commission additional Data Center space in the Querétaro and Tultitlan facilities, that is currently under construction. Economic growth that will continue to be subdued in Mexico poses downside risks. The Mexican economy rebounded in the second half of 2020 and early 2021 driven by a recovery in the US and private consumption. However, supply chain constraints tempered economic activity in the last two quarters. In 2021, GDP expanded 4.8%, but still was lower than its 2019 level and Moody's does not expect to return to its pre-pandemic level until 2024. An important driver of the slow recovery is weak investment and inflation that will weigh on private consumption. Global supply chain constraints would also pose additional downside risk. For 2022, Moody's forecasts growth at 1.1% and to range 2.0%-2.5% in 2023. KIO's liquidity has been historically weak, strained by high working capital needs and short-term maturities under finance leases. As of the end of the third quarter of 2021, KIO held MXN329 million in cash and cash equivalents, while its short-term debt amounted to MXN3.2 billion. Since then, KIO has received equity injections from I Squared amounting some MXN3 billion. The majority of these proceeds were used to reduce short term debt. Aside of the $300 million senior (MXN6 billion) bond due in May 2025, the only relevant portion of debt outstanding is a MXN1 bank line maturing in 2023. Proceeds from the capitalizations will also be used to fund data centers expansions. As KIO recovers and resumes growth, I Squared Capital support will remain key, considering that over the past few years, cash generation has also been sensitive to delays in accounts receivable collection. At times, these delays have prevented KIO from covering short-term maturities under finance leases with internal sources. As a result, the company has relied significantly on bank lines and capital contributions to cover these needs. The stable rating outlook reflects Moody's expectation that KIO will experience a stronger recovery in demand through the end of 2023. Although cash generation will continue to be strained during the period due to high capital investments and gradual rebound of services demand, support from I Squared will result in adequate liquidity that will provide runway to recovery. FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS Factors that could lead to an upgrade -- Increase in revenues from services rendered to pre-pandemic levels -- Funds from operations (FFO) margin closer to 30% -- Debt-to-EBITDA ratio approaching 4x -- EBITDA-minus-Capex-to-interest ratio above 2.0x. Factors that could lead to a downgrade -- A deterioration in liquidity, with cash falling below $300 million because of cash burn -- Debt-to-EBITDA ratio remaining above 6.0x -- FFO margin below 20% -- EBITDA-minus-Capex-to-interest ratio below 1.0x The principal methodology used in these ratings was Communications Infrastructure published in February 2022. Headquartered in Mexico City, SixSigma Networks Mexico, S.A. de C.V. (KIO) provides managed IT infrastructure services to government and corporate customers, primarily in Mexico. The company was founded in 2002 and has since been engaged in managed IT infrastructure service solutions, critical connectivity, collocation and cloud computing. For the 12 months that ended September 2021, its revenue was close to MXN6.2 billion (around $304 million). The company is privately owned, controlled by I Squared Capital, an independent global infrastructure investment manager. VINTE VIVIENDAS: S&P Lowers ICRs to 'BB-', Outlook Stable --------------------------------------------------------- S&P Global Ratings, on May 25, 2022, lowered its long-term global issuer credit ratings on Mexican homebuilder, Vinte Viviendas Integrales S.A.B. de C.V. (Vinte) to 'BB-' from 'BB' and its national scale ratings to 'mxA-' from 'mxA'. The stable outlook reflects S&P's view that Vinte will maintain steady operating and financial performance in the next 12 months, with an adequate liquidity position. S&P said, "The downgrade reflects our expectation that Vinte's adjusted leverage will remain above 2.0x in the next 12-18 months. Vinte's adjusted leverage has been well above our 2.0x rating threshold for more than two years, affected mainly by a lower EBITDA margin since the start of the pandemic, as well as by the additional debt in its balance sheet after consolidating the Mayakoba project (related to construction loans with no recourse to Vinte, only with land guarantees from the project). In our updated base case, we no longer forecast a rapid deleveraging path below 2.0x unless the company's equity follow-on offering for up to MXN2.0 billion materializes. In recent months, the equity follow-on has been delayed amid volatile economic and geopolitical conditions. Therefore, we now estimate the company will maintain adjusted net debt to EBITDA of 2.0x-3.0x with revenue growth near 10% and gradually improving profitability." However, its discretionary cash flow (DCF) to debt (after working capital and dividend payments) should remain below 5% because Vinte will continue to invest in land development and construction while maintaining its dividend distribution policy. On the other hand, the ratings also take into account the company's solid liquidity position, supported by its extended debt maturity profile, proven proactive liability management strategy, and its access to committed credit facilities with maturities beyond 12 months. S&P said, "We expect Vinte's revenues to keep growing near 10%, thanks to its high-quality product, and for its profitability to gradually recover despite the volatile economy. Our base-case scenario assumes Vinte's housing unit sales will pick up in the coming quarters and that the company will maintain an efficient pricing strategy, with capacity to pass through some of the increases in building material and construction costs. This would result in revenue growth near 10% for the next 12 months. Moreover, we estimate the company's profitability will gradually improve, despite high inflation, as we saw in the first quarter of 2022. "In our view, Vinte's sustained long-term growth will be driven by its attractive and flexible product offering, its leading position in sustainable housing, its innovative digital platforms, and its property technology ("proptech") ventures, which although nascent, position Vinte to expand in nontraditional housing as well. We consider that housing demand bottomed in 2020 and housing starts should moderately grow in the next few years. In our view, Mexico's large housing deficit, its supportive population demographics, and mortgage financing availability will continue to keep housing demand steady, despite an expected economic slowdown and potentially some minor adjustments in mortgage rates following interest rate hikes from the Mexican central bank." The potential materialization of the equity follow-on offering will be key for Vinte to quickly decrease net leverage and improve its credit profile. In September 2021, Vinte announced an equity follow-on offering for up to MXN2.0 billion. Net new funding for the company will be MXN1.4 billion because the remaining MXN600 million is part of a secondary offering from current shareholders. Depending on the offering's final amount, Vinte's net leverage metrics could materially improve, with adjusted net debt to EBITDA below 2.0x, which would lead S&P to revise its base-case scenario. However, for S&P to potentially raise the rating, it will need to assess Vinte's expected timing of capital deployment and cash flow. The company plans to use the proceeds to develop sustainable housing communities, including acquiring land and investing in infrastructure, urbanization, and homebuilding. The stable outlook reflects S&P's expectation that Vinte will maintain its flexible business model to adapt its product offerings to the evolving housing market conditions in Mexico. In its view, this will allow the company to deliver revenue growth near 10% and solid profitability, with an EBITDA margin recovering to 17%-18% in the next 12 months. Moreover, S&P expects Vinte to maintain its prudent financial policy and moderate use of debt, translating into: -- Adjusted net debt-to-EBITDA ratio of 2.0x-3.0x; and -- DCF to debt below 5%. S&P could lower the rating in the next 12 months if Vinte's credit metrics deviate from our expectations, either due to an unexpected deterioration in its revenues and EBITDA margin, or if the company carries out a more aggressive debt-financed strategy and higher dividend payouts. This scenario could occur if: -- Its adjusted net debt-to-EBITDA is above 4.0x on a sustained basis; or -- Its adjusted net debt-to-EBITDA is above 3.0x, coupled with EBITDA interest coverage below 3.0x. S&P said, "We could upgrade Vinte in the next 12 months if its net leverage metrics decrease consistently. This could happen if the company concludes its equity follow-on offering and proceeds are large enough to effectively decrease leverage. Although less likely in the next 12 months, we could also raise the rating if we see a significant improvement in its operations, namely recovering profitability with EBITDA margins above 20% and positive cash flow after debt repayment and dividend distributions." The upgrade could occur if: -- Vinte's adjusted net debt-to-EBITDA ratio remains consistently below 2.0x; or -- Its DCF to debt is above 10% in a consistent manner. ===================== P U E R T O R I C O ===================== AMERICAN FLAMINGO: Files for Chapter 11 Bankruptcy Protection ------------------------------------------------------------- Single Asset Real Estate American Flamingo LLC filed for chapter 11 protection in the District of Puerto Rico. According to court filings, American Flamingo estimates between 1 and 49 unsecured creditors. A telephonic meeting of creditors under 11 U.S.C. Sec. 341(a) is slated for June 13, 2022 at 11:00 a.m. About American Flamingo American Flamingo LLC is a Single Asset Real Estate (as defined in 11 U.S.C. Sec. 101(51B). American Flamingo sought Chapter 11 bankruptcy protection (Bankr. D.P.R. Case No. 22-01290) on May 5, 2022. In the petition filed by John Hanratty, as member, American Flamingo estimated assets between $500,000 and $1 million and estimated liabilities between $500,000 and $1 million. Hector Eduardo Pedrosa Luna, of The Law Offices of Hector Eduardo Pedrosa Luna, is the Debtor's counsel. ECOLIFT CORPORATION: Court Confirms Reorganization Plan ------------------------------------------------------- Judge Edward A. Godoy has entered an order confirming Ecolift Corporation's Plan of Reorganization dated January 14, 2022. On Jan. 14, 2022, debtor Ecolift Corporation filed with the U.S. Bankruptcy Court for the District of Puerto Rico a Disclosure Statement referring to Chapter 11 Plan. On March 15, 2022, Judge Edward A. Godoy approved the Disclosure Statement and ordered that: Previously, Judge Godoy approved the Disclosure Statement on March 15, 2022. The hearing for the consideration of confirmation of the Plan was May 11, 2022. A full-text copy of the order dated March 15, 2022, is available at https://bit.ly/3qjBFbo from PacerMonitor.com at no charge. Attorney for the Debtor: Carmen D. Conde Torres C. CONDE & ASSOC. San Jose Street #254, 5th Floor San Juan, P.R. 00901-1253 Tel: (787) 729-2900 Fax: (787) 729-2203 E-mail: condecarmen@microjuris.com About Ecolift Corp. Ecolift Corp. is a manufacturer of aircraft parts and equipment. Ecolift Corp. sought Chapter 11 protection (Bankr. D.P.R. Case No. 21-02751) on Sept. 17, 2021. In the petition signed by Ernesto Di Gregorio as president, Ecolift estimated assets of between $1 million and 10 million and liabilities of between $1 million and $10 million. Carmen D. Conde Torres, Esq., C. CONDE & ASSOC., is the Debtor's counsel. ********* 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 2022. 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. 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