/raid1/www/Hosts/bankrupt/TCRAP

/raid1/www/Hosts/bankrupt/TCRAP_Public/061221.mbx T R O U B L E D C O M P A N Y R E P O R T E R A S I A P A C I F I C Thursday, December 21, 2006, Vol. 9, No. 253 Headlines A U S T R A L I A AUSCORP CONSTRUCTIONS: Federal Court Issues Wind-Up Order CRAIGHAVEN INVESTMENTS: Creditors' Proofs of Debt Due on Jan. 30 JULCRA TWO: Inability to Pay Debts Prompts Wind-Up LABSTAFF HOLDINGS: Members' Final Meeting Slated for Jan. 19 MACARTHUR ESTATE: Schedules Final Meeting on January 19 MULTIPLEX GROUP: Takes on Enforceable Agreement with ASIC NORD RESOURCES: Inks Settlement Pact with TMD Acquisition NORD RESOURCES: Amends Pact with Coyote Springs & Mimbres Owners PEABODY ENERGY: Moody's Rates Conv. Junior Sub. Debenture at Ba2 PRA PERSONNEL: To Declare Second and Final Dividend on Jan. 19 SOUTHERN CROSS: Members Resolve to Wind-Up Firm TASMANIAN MOTELS: Members to Receive Wind-Up Report on Jan. 9 TUTORMASTER: ASIC Obtains Wind-Up Orders from Court UBS DISCOUNT: Members to Hear Liquidators' Report UNILAP PTY: Liquidator to Present Wind-Up Report on Jan. 16 VILLAGE ROADSHOW: Tax Treatment of Proposed Capital Return WARRENMANG: Court Appoints McGrathNicol + Partners as Liquidator WESTPOINT GROUP: ASIC Updates Federal Court on Investigation WESTPOINT GROUP: N. Burnard Charged with 18 Criminal Offenses C H I N A & H O N G K O N G ANDREW CORP: Posts US$34.2 Million Net Loss in FY Ended Sept. 30 CASCADES INC: Norampac Acquisition Cues DBRS to Lower Ratings COUDERT BROTHERS: Seeks Extension of Excl. Plan-Filing Period COUDERT BROTHERS: Hires Kurtzman Carson as Claims Agent COUDERT BROTHERS: Panel Clamors for Ch. 11 Trustee Appointment D.R.A. TRADING: Faces Liquidation Proceedings DIA-BRILLIANT JEWELRY: Court Sets Wind-Up Hearing on Jan. 17 EMI GROUP: S&P Removes Ratings from Watch Neg. on Bid Rejection FERRO CORP: Declares US$0.145 Per Share Quarterly Dividend GEORGIA-PACIFIC: Fitch Rates New US$1.25-Bil. Senior Notes at B+ MGM MIRAGE: Moody's Rates New US$750-Million Senior Notes at Ba2 MGM MIRAGE: S&P Puts BB Rating on Proposed US$750 Mil. Sr. Notes PETROLEOS DE VENEZUELA: Oil Purchase Averages 703,000 Barrels PETROLEOS DE VENEZUELA: Inks Lubricants Supply Pact with Alba PETROLEOS DE VENEZUELA: May Bring in US$6.9B to Treasury in 2007 POPOLARE DI VERONA: Okays Merger with Banca Popolare Italiana POPOLARE DI VERONA: Merger Deal Sees 1,350 Job Cuts at New Group ROYAL CARIBBEAN: Names Steve Shaiken VP of Onboard Revenue SAKABUN (H.K.): Appoints Joint Liquidators SANMINA-SCI: Delays Form 10-K Filing for FY Ended Sept. 30, 2006 SANMINA-SCI CORP: S&P Holds BB- Rating on CreditWatch Negative SHAW: China Picks Westinghouse Consortium to Build Nuclear Plant WELL BOND: Court Appoints Joint Liquidators YING KONG: Joint Liquidators Cease to Act I N D I A AMERICAN AXLE: Moody's Holds Corporate Family Rating at Ba3 BALLY TECH: To File Form 10-Q Quarterly Reports by Dec. 22 BALLY TECH: Appoints Robert L. Guido to Board of Directors IFCI LTD: ABN Amro London Increases Stake to 5.09% IMAX CORPORATION: Moody's Affirms B3 Corporate Family Rating IMAX CORP: Focusing on Worldwide IMAX Network Growth INDIAN OIL: Raises US$200 Mil. to Refinance Term Loan Facility INDIAN OIL: Board to Consider Declaring Interim Dividend INDIAN OVERSEAS: Signs MOU on Infrastructure Funding with IIFC INDUSTRIAL DEVELOPMENT: To Receive US$336 Mil. in NPA Recovery INDUSTRIAL DEVELOPMENT BANK: Inks MOU with U.S.-Based IFC INDUSTRIAL DEVELOPMENT: Primary Dealership Unit Now Incorporated ITI LTD: Widens Net Loss to INR1.458 Bil. in 2006 3rd Quarter I N D O N E S I A BANK RAKYAT: Expects Profit To Increase 10% This Year HANOVER COMPRESSOR: Calls for Redemption of 7-1/4% Securities INTERNATIONAL NICKEL: To Clarify Lower Output MEDCO ENERGI: S&P Affirms 'B+' Corporate Credit Rating PERUSAHAAN GAS: S&P Revises Outlook to Positive; Affirms Ratings VERITAS DGC: Shareholders to Meet Jan. 9 to Vote on CGG Merger J A P A N DELPHI CORP: Investor Group Commits Up to US$3.4 Billion DELPHI CORP: Steering Unit Books US$3.3 Bil. in New Business SOLO CUP: Elects Four New Members to Board of Directors SOLO CUP: Launches Performance Improvement Program K O R E A PANTECH CO: Pantech&Curitel's Stock Resumes Trading WOORI BANK: To Sell 8.6-Mil. Shares in LG Card for KRW585 Bil. * Central Bank Requirement Cues Banks to Cut Forex Deposit Rates M A L A Y S I A ATMEL CORP: Intends to Sell UK, Germany Wafer Fabrication Plants ATMEL CORP: NASDAQ Conditionally Grants Continued Listing AVAYA INC: Earns US$48 Million in Fiscal Quarter Ended Sept. 30 FALCONBRIDGE: Xstrata's Chilean Union Snubs Wage Offer FOAMEX INTERNATIONAL: Wants Plan Solicitation Procedures Amended FOAMEX INTERNATIONAL: Files Supplements to Second Amended Plan FOAMEX INT'L: Pa. Revenue Dept. Opposes Amended 2nd Ch. 11 Plan SOLUTIA INC: Wants to Sell Texas Land to Shintech Inc. N E W Z E A L A N D ARCHILLES PROPERTIES: Court Appoints Joint Liquidators BACCHID BENEVOLENCY: Court to Hear Liquidation Petition BYRNE TRUST: Creditors Must Prove Debts by January 4 DEVOX SERVICES: Hearing of Liquidation Petition Set for March 8 ELITE HORSE: Court Sets Liquidation Hearing on March 1 H & P DEVELOPMENTS: Creditors Must Lodge Claims by Feb. 8 LEGACY MOTORS: Petition Hearing Slated for March 8 NATURE'S FOREST: Faces Liquidation Proceedings OSBORNE HOLDINGS: Creditors to Prove Debts by December 22 VALLEY ROYAL: Commences Liquidation Proceedings P H I L I P P I N E S METRO PACIFIC: MPIC Opens for Trading at the PSE PHILIPPINE LONG DISTANCE: DoCoMo to Increase Shares by 3.2% * Capital Intelligence Revises RP's Sovereign Rating Outlook S I N G A P O R E APOLLO ENTERPRISES: Liquidators to Receive Claims Until Jan. 9 HEXION SPECIALTY: ACC Completes Review of Orica Acquisition MAE ENGINEERING: Changes Location of Share and Warrant Registrar LINDETEVES-JACOBERG: Updates on Utilization of Rights Issue PETROLEO BRASILEIRO: Accelerating Ship Construction Tender PETROLEO BRASILEIRO: Approves Petros Plan Subscription Reopening PETROLEO BRASILEIRO: Authorizes Share Repurchase Program SEA CONTAINERS: Wants to Employ Appleby Hunter as Special Atty. T H A I L A N D BLOCKBUSTER INC: Improved Cash Flow Cues S&P's Stable Outlook DAIMLERCHRYSLER: U.S. Unit Ceases Production on Various Plants DAIMLERCHRYSLER: Unit Ordered to Pay US$350MM in U.S. Fraud Case FEDERAL-MOGUL: Court OKs Inter-company Equity Interest Transfers OMNOVA SOLUTIONS: Fitch Affirms Issuer Default Ratings at B+ - - - - - - - - ================= A U S T R A L I A ================= AUSCORP CONSTRUCTIONS: Federal Court Issues Wind-Up Order --------------------------------------------------------- On Dec. 1, 2006, the Federal Court of Australia ordered the wind up of Auscorp Constructions Pty Ltd's operations. Accordingly, Michael John Morris Smith was appointed as the official liquidator. The Official Liquidator can be reached at: Michael John Morris Smith Smith Hancock Chartered Accountants Level 4, 88 Phillip Street Parramatta, New South Wales 2150 Australia About Auscorp Constructions Auscorp Constructions Pty Ltd is a general contractor of single- family houses. The company is located in New South Wales, Australia. CRAIGHAVEN INVESTMENTS: Creditors' Proofs of Debt Due on Jan. 30 ---------------------------------------------------------------- Craighaven Investments Pty Ltd, which is in liquidation, will declare the first and final dividend for its unsecured creditors on Feb. 6, 2007. Accordingly, creditors are required to submit their proofs of claim by Jan. 30, 2007, or they will be excluded from sharing in the dividend distribution. The liquidator can be reached at: H. J. Kazar Suite 5, 32 Thesiger Court Deakin ACT 2600 Australia Telephone:(02) 6285 1310 About Craighaven Investments Located in New South Wales, Australia, Craighaven Investments Pty Ltd provides services. JULCRA TWO: Inability to Pay Debts Prompts Wind-Up -------------------------------------------------- At a general meeting held on Nov. 27, 2006, the members of Julcra Two Pty Ltd passed a special resolution to voluntarily wind up the company's operations due to its inability to pay debts. Accordingly, Richard Auricht was appointed as liquidator. The Liquidator can be reached at: Richard Auricht 242 Grenfell Street Adelaide, South Australia Australia About Julcra Two Julcra Two Pty Ltd -- trading as New Era Direct -- operates retail stores. The company is located in South Australia. LABSTAFF HOLDINGS: Members' Final Meeting Slated for Jan. 19 ------------------------------------------------------------ The final meeting of the members of Labstaff Holdings Pty Ltd, which is in liquidation, will be held on Jan. 19, 2007, at 11:30 a.m. At the meeting, Liquidator D. Hodgkinson will report on the company's wind-up proceedings and property disposal exercises. The Liquidator can be reached at: Damien Hodgkinson Pitcher Partners Level 3, 60 Castlereagh Street Sydney, New South Wales 2000 Australia About Labstaff Holdings Labstaff Holdings Pty Limited operates employment agencies. The company is located in New South Wales, Australia. MACARTHUR ESTATE: Schedules Final Meeting on January 19 ------------------------------------------------------- Macarthur Estate Wines Pty Ltd, which is in liquidation, will hold a final meeting for its members on Jan. 19, 2007, at 10:30 a.m., to consider the liquidator's final account of the company's wind-up proceedings. The liquidator can be reached at: William Croker BCP Accounting and Business Advisors Suites 1-8 Kellicar Lane Macarthur Square Campbelltown, New South Wales 2560 Australia About Macarthur Estate Macarthur Estate Wines Pty Ltd operates real estate investment trusts. The company is located in New South Wales, Australia. MULTIPLEX GROUP: Takes on Enforceable Agreement with ASIC --------------------------------------------------------- On December 20, 2006, the Australian Securities and Investments Commission has accepted an Enforceable Undertaking from Multiplex Group relating to the company's failure to disclose a material change in profit on the Wembley National Stadium project in London. The EU has secured a AU$32-million compensation fund for those investors affected by a failure of the Multiplex Group to meet its continuous disclosure obligations. ASIC Chairman Jeffrey Lucy said Multiplex has also agreed to improve compliance measures that will assist the company in meeting its continuous disclosure obligations in the future. "Multiplex has undertaken to commission an independent review of its disclosure policies and procedures and has agreed to implement recommendations generated from that independent review to ensure compliance with industry best practice," Mr. Lucy revealed. "ASIC also acknowledges the decision by Multiplex to move to a majority of independent directors within 12 months. This is in addition to those measures already agreed to be implemented by Multiplex," Mr. Lucy added. The EU also recognizes the commitment to accelerate payment of the AU$50 million indemnity previously extended to Multiplex by the Roberts family in respect to any loss that emerges on the Wembley project. These monies, discounted at the bank bill rate, will be paid by December 22, 2006, rather than by June 2007. The disclosure issue in question related to the February 2, 2005, meeting of the Multiplex Board, where the Board decided to adjust the profit forecast from the Wembley project from GBP35.7 million to zero. However, this material change in financial position was not disclosed to the market until February 24, 2005. When the announcement was finally made on February 24, the Multiplex share price dropped from the February 23 price of AU$5.57 (Volume Weighted Average Price) to AU$4.76 (VWAP) on the day of the announcement. The ASIC contends that the Multiplex Board's decision was price sensitive and should have been disclosed to the market before the commencement of trading on February 3, 2005, immediately following the resolution of the Board at its meeting on the afternoon of February 2, 2005. The EU has been entered into without admission by Multiplex. Multiplex contends that until its external auditors had completed a review of the adoption of a zero profit margin for the Wembley project, it would not be possible to issue a general statement on the profit on the Wembley project. On the ASIC's assessment of all the facts, it regarded the acceptance of an EU provided an appropriate regulatory outcome in this case rather than a Civil Penalty Order because: (a) a Civil Penalty would be confined to pecuniary penalty order of a maximum AU$1 million, with compensation not automatically following; (b) the undertaking produces a guaranteed and swift result that offers compensation to those who have suffered loss. Successful litigation would require a court to be convinced that a contravention of the law had occurred and that damages had resulted; and (c) the EU provides for Multiplex's disclosures policies to be consistent with industry best practice and monitored by an independent expert. Mr. Lucy said delivering some recourse for affected investors was a priority in the ASIC's negotiations with Multiplex. "This EU provides a swift and fair result that balances the regulatory imperatives, the interests of investors, and acknowledges the willingness of Multiplex to offer a constructive response to the regulator's concerns," Mr. Lucy noted. Settlement Offer The AU$32 million compensation fund will be available to investors who contracted to purchase and held Multiplex shares between February 3, 2005 -- the date ASIC believes the market should have been informed -- and February 24, 2005 -- the date the announcement was made. A Multiplex stapled security contracted to be purchased and held during this period is an Eligible Security under the compensation arrangements. The amount payable in respect to an Eligible Security will be calculated by dividing the AU$32 million fund by the total number of Eligible Securities that accept the offer. The maximum amount payable is 80.98 cents for each Eligible Security, which is the difference between the VWAP on February 23, 2005, and the VWAP on February 24, 2005. The final amount payable per Eligible Security under this formula cannot be calculated with certainty until all claims submitted to Multiplex have been assessed. The modeling suggests a return to investors of at least 60% and probably more. However, if the settlement is less than 60% (less than 48 cents per Eligible Security) participants will have an option to withdraw their acceptance. In return for compensation, shareholders who accept the offer will waive their right to take any legal action in respect to the issue. ASIC will be monitoring the compensation process to ensure monies that are paid to investors, both institutional and retail, are done so in a manner consistent with the intent of the EU. Shareholders who are related parties, like members of the Roberts family, directors of Multiplex, and executive staff at the relevant time, are excluded from applying for compensation under this undertaking. About Multiplex Headquartered at Miller's Point, in New South Wales, Australia, Multiplex Group -- http://www.multiplex.biz/-- derives its revenue from property funds management, construction, property development, and facilities management. The Group employs over 2,000 people and has established operations and offices throughout Australia, New Zealand, the United Kingdom and the Middle East. In December 2003, Multiplex Limited listed on the Australian Stock Exchange as a part of the Multiplex Group, raising a total of AU$1.2 billion. Multiplex Group was formed by combining the various businesses of Multiplex Limited and the newly established portfolio of investments held by Multiplex Property Trust. Early in 2005, Multiplex began facing cost pressures on its reconstruction project for the Wembley Stadium in London, prompting it to conduct its own internal investigation into the Wembley difficulties. Its auditor, KPMG, later conducted its own thorough review of the problems, leading to an unpredicted write-down. In February 2005, stunned investors sold down Multiplex shares after the Company reversed its stance on two United Kingdom projects, writing off AU$68.3 million from its profits. This started a series of profit downgrades throughout 2005. In May 2005, Multiplex admitted that its troubled Wembley Stadium construction project may end up with a multimillion loss. As of February 2006, the Company is faced with liquidity crisis after posting a massive AU$474 million loss on Wembley. The Troubled Company Reporter - Asia Pacific reported on Aug. 18, 2006, that Multiplex Group's financial results for the year ended June 30, 2006, noted that the Wembley project in the United Kingdom incurred a pretax loss of AU$364.3 million or AU$255 million after tax loss. The project loss position has remained unchanged since December 31, 2005. NORD RESOURCES: Inks Settlement Pact with TMD Acquisition --------------------------------------------------------- Nord Resources Corporation has entered into an agreement with TMD Acquisition Corporation to settle certain outstanding matters relative to the transactions to acquire assets comprising ASARCO Inc.'s Tennessee Mines Division zinc business. The TMD Settlement Agreement provides that the Company will reimburse the TMD Expenses upon the earlier of: (a) Dec. 22, 2006, and (b) the closing date of: (i) a registered equity offering and/or a debt project financing in which the Company raises not less than the aggregate amount of $25,000,000, or (ii) a significant corporate transaction in which any person, together with all affiliates and associates, becomes the beneficial owner of 51% or more of the outstanding shares of common stock, or there is a sale, lease, exchange or other transfer of assets valued at $12,000,000 or greater. The settlement also provides that if the Company receives any cash payment in full or partial settlement of the ASARCO Claim, it is required to first remit the portion of the cash payment to TMD Acquisition to fully pay the outstanding balance of the TMD Expenses. The principals of TMD Acquisition are Ronald Hirsch and Stephen Seymour. Mr. Hirsch serves as the Company's chairman of the board of directors, and Mr. Seymour is a director. Zinc Assets Transaction The Company pursued, in May 2004, an opportunity to acquire assets comprising ASARCO Inc.'s Tennessee Mines Division zinc business. ASARCO selected the Company with whom to negotiate the sale and purchase of the Zinc Assets. The Company, in Oct. 2004, entered into a secured bridge loan agreement with Regiment Capital III, L.P., the terms of which prevented an investment in the Zinc Assets without Regiment Capital's prior written consent. Regiment Capital did not consent to the direct acquisition of the Zinc Assets. Mr. Hirsch and Mr. Seymour, to assist the Company, entered into an Agreement pursuant to which they obtained the right to acquire the Zinc Assets. They subsequently assigned the right to TMD Acquisition, a private corporation formed by them to facilitate an asset purchase agreement with ASARCO. On Aug. 2, 2005, ASARCO purported to terminate the Acquisition Agreement and filed for Chapter 11 protection. To preserve any right of action that it may have against ASARCO and its bankruptcy trustee, the Company and TMD Acquisition entered into a settlement agreement pursuant to which the Company has taken an assignment of the Acquisition Agreement. About Nord Resources Headquartered in Dragoon, Arizona, Nord Resources Corporation (Pink Sheets:NRDS) -- http://www.nordresources.com/-- is a natural resource company focused on near-term copper production from its Johnson Camp Mine and the exploration for copper, gold and silver at its properties in Arizona and New Mexico. The company also owns approximately 4.4 million shares of Allied Gold Limited, an Australian company. In addition, the company maintains a small net profits interest in Sierra Rutile Limited, a Sierra Leone, West African company that controls the world's highest-grade natural rutile deposit. Going Concern Doubt Mayer Hoffman McCann PC expressed substantial doubt about Nord's ability to continue as a going concern after it audited the company's financial statements for the years ended Dec. 31, 2005, and 2004. The auditing firm pointed to the company's significant operating losses. Nord incurred a US$3,084,166 net loss for the year ended Dec. 31, 2005, in contrast to a US$864,357 net loss in the prior year. Nord Resources' balance sheet at June 30, 2006, showed US$4,214,657 in total assets and US$8,430,713 in total liabilities, resulting in a US$4,216,056 stockholders' deficit. The company had a US$3,120,573 deficit at March 31, 2006. NORD RESOURCES: Amends Pact with Coyote Springs & Mimbres Owners ---------------------------------------------------------------- Nord Resources Corporation entered into amendments to its stock option agreements with the Coyote Springs Owners and the Mimbres Owners. The Company's stock option agreements with each of the Coyote Springs Owners and the Mimbres Owners did not contain any provisions with respect to the treatment of the options in the event of a merger or any other significant corporate transaction involving the Company. Coyote Spring Amendment The Coyote Springs Owners Amendment Agreement dated Oct. 17, 2006, amends the terms of the Agreement, among others, as follows: -- in the event of a merger of the Company, its obligation to Coyote Springs Owners will be satisfied by the payment of the greater of the cash amount payable or the value of the number of "Substitute Shares" equal to the number of common shares issuable at the time under the Option Agreement multiplied by the "Conversion Ratio"; -- the payment will be made, at the election of the "Successor," either in cash or by the issuance of the number of Substitute Shares; -- in the event of a Qualifying Merger, the Company's obligation will be satisfied, at the option of the Successor, by either issuing to each of the Coyote Springs Owners the equivalent number of "Substitute Options" multiplied by the Conversion Ratio or a cash amount equal to the value of such Substitute Options; -- the exercise price of each Substitute Option will be 15% below the market price of the Substitute Shares on the date of issuance of the Substitute Options; The Company acquired an exclusive option from Thornwell Rogers, South Branch Resources, LLC, and MRPGEO, LLC, the Coyote Springs Owners, to purchase the leasehold rights and mining claims located in the Safford mining district in Graham County, Arizona, described as "Coyote Springs". Mimbres Amendment The Mimbres Owners Amendment Agreement, amends the terms of the Option Agreement, among others, as follows: -- in the event of a Qualifying Merger, the Company's obligation to each of the Mimbres Owners will be satisfied by the payment of the greater of the cash amount payable at that time under the Option Agreement or the value of the number of "Substitute Shares" at that time under the Mimbres Option Agreement multiplied by the "Conversion Ratio"; -- the foregoing payment will be made, at the election of the "Successor," either in cash or by the issuance of the number of Substitute Shares as so calculated; -- in the event of a Qualifying Merger, the Company's obligation to each of the Mimbres Owners will be satisfied, at the option of the Successor, by either issuing to each of the Mimbres Owners "Substitute Options" equal to the number of Options issuable at the time under the Option Agreement multiplied by the Conversion Ratio or paying to each of the Mimbres Owners a cash amount equal to the value of the Substitute Options; -- the exercise price of each Substitute Option will be 15% below the market price of the Substitute Shares on the date of issuance of the Substitute Options; The Company acquired an exclusive option from Thornwell Rogers, South Branch Resources and MRPGEO, the Mimbres Owners, to purchase the leasehold rights and mining claims for a porphyry copper exploration target known as the Mimbres property, located near Silver City, New Mexico. A full text-copy of the Coyote Springs Amendment may be viewed at no charge at http://ResearchArchives.com/t/s?1408 A full text-copy of the Mimbres Amendment may be viewed at no charge at http://ResearchArchives.com/t/s?1409 About Nord Resources Headquartered in Dragoon, Arizona, Nord Resources Corporation (Pink Sheets:NRDS) -- http://www.nordresources.com/-- is a natural resource company focused on near-term copper production from its Johnson Camp Mine and the exploration for copper, gold and silver at its properties in Arizona and New Mexico. The company also owns approximately 4.4 million shares of Allied Gold Limited, an Australian company. In addition, the company maintains a small net profits interest in Sierra Rutile Limited, a Sierra Leone, West African company that controls the world's highest-grade natural rutile deposit. Going Concern Doubt Mayer Hoffman McCann PC expressed substantial doubt about Nord's ability to continue as a going concern after it audited the company's financial statements for the years ended Dec. 31, 2005, and 2004. The auditing firm pointed to the company's significant operating losses. Nord incurred a US$3,084,166 net loss for the year ended Dec. 31, 2005, in contrast to a US$864,357 net loss in the prior year. Nord Resources' balance sheet at June 30, 2006, showed US$4,214,657 in total assets and US$8,430,713 in total liabilities, resulting in a US$4,216,056 stockholders' deficit. The company had a US$3,120,573 deficit at March 31, 2006. PEABODY ENERGY: Moody's Rates Conv. Junior Sub. Debenture at Ba2 ---------------------------------------------------------------- On December 14, 2006, Moody's Investors Service assigned Peabody Energy Corporation's proposed US$500 million convertible junior subordinated debentures a rating of Ba2. Moody's also revised Peabody's outlook to stable from negative. At the same time, Moody's affirmed Peabody's Ba1 corporate family rating and the Ba1 senior unsecured rating on its existing revolver, term loan and notes. The ratings reflect the overall probability of default of the company, to which Moody's affirms a PDR of Ba1. The convertible junior subordinated debentures (Debentures) rating of Ba2 reflects a loss given default of LGD-6 (95%). The senior unsecured rating of Ba1 reflects a loss given default of LGD-3 (47%). Moody's also affirmed Peabody's SGL-1 Speculative Grade Liquidity rating. The revision in outlook reflects the 75% equity component that Moody's credits to the "Basket D" convertible junior subordinated debentures, and the related notional reduction in debt. The proceeds of the US$500 million Debentures, along with proceeds of the recent US$900 million senior unsecured notes and drawings under the company's term loan, are being used to provide the long term funding of Peabody's recent acquisition of Australian coal miner, Excel Coal Limited, for US$1.9 billion, including assumption of debt and fees. The acquisition of Excel will significantly expand Peabody's operation in Australia and its penetration of both the export metallurgical and thermal coal markets. Excel expects to increase its production from about 6 million tons currently to 15 to 20 million tons in 2007 and 2008. The Ba1 corporate family rating reflects Peabody's: 1) favorable debt to EBITDA and good earnings ratios, 2) diversified low-cost operations, 3) extensive and geographically diversified reserves of high quality coal, 4) strong management, and 5) portfolio of long-term coal supply agreements with a large number of electricity generation customers. However, the rating also reflects the significant increase in debt to fund the Excel acquisition, which increases Peabody's pro forma September 30, 2006, debt to EBITDA ratio to 3.4x from 2.3x, and, giving equity credit of US$375 million to the Debentures, the debt to capitalization ratio to 55.8% from 49.9%. The rating also considers the volatile nature of the coal mining business, and operating and development cost pressures that could continue to constrain Peabody's weak free cash flow. The Debentures will, in Moody's view, have sufficient equity- like features to allow it to receive basket "D" treatment, i.e. 75% equity and 25% debt, for financial leverage purposes (please refer to Moody's Rating Methodology "Refinements to Moody's Tool Kit: Evolutionary, not Revolutionary!" of February 2005). This basket designation will shift from "D" to "C" in ten years, i.e. when the Debentures have less than fifty years to maturity. The basket will shift again to "B" after 20 years and "A" after the next 10 years. The basket allocation is based on these rankings for the three dimensions of equity: (i) No maturity: Moderate -- The Debentures have a 60-year final maturity with a scheduled redemption after 35 years, subject to a Replacement Capital Covenant. The RCC, which obligates Peabody not to redeem or repurchase the Debenture unless it has previously issued qualifying new equity, will be put in place at inception, but will not be operational until year 35. At year 35, Peabody is required to use its commercially reasonable efforts, subject to a market disruption event, to raise sufficient net proceeds from the issuance of qualifying capital securities and redeem the Debentures in full on each succeeding interest payment date prior to the final 60-year maturity. If a qualifying replacement security (a Basket "B" security, 75% debt & 25% equity, at a minimum) can't be issued, the maturity extends from interest payment date to interest payment date until the final maturity in 60 years. For the first 35 years, the security can be called subject to intent-based replacement language where Peabody Energy intends to replace the security with the same or more equity-like security. The Debentures are also convertible into Basket D preferred stock at the option of the investor. (ii) No ongoing payments: Strong -- There is optional deferral of distributions for a maximum of 10 years and mandatory deferral tied to the breach of covenants (Debt to EBITDA >6x and EBITDA to Interest <2x for three consecutive quarters), without giving rise to an event of default and without causing acceleration. If mandatorily deferred or if there is optional deferral for 5 years, distributions must be settled with the issuance of warrants or benign preferred stock (defined as truly non-cumulative perpetual preferred stock either callable with an RCC or with a mandatory deferral trigger and intent-based replacement language). For warrants, there is an 84 million share cap, and for benign preferred stock, 25% of the principal amount. In bankruptcy, any distributions not settled with warrants or benign preferred stock are limited to a claim of two years. (iii) Loss absorption: Moderate -- The Debenture will be the most junior subordinated debt of all existing debt, with limited rights and limited ability to cause acceleration. Moody's last rating action on Peabody was to rate its US$900 million senior unsecured notes Ba1 in October 2006. Peabody Energy Corporation -- http://www.peabodyenergy.com/-- headquartered in St. Louis, Missouri, is the world's largest private-sector coal company with revenues in 2005 of US$4.6 billion. Its coal products fuel 10% of all US and 3% of worldwide electricity. The company has coal operations in Australia. PRA PERSONNEL: To Declare Second and Final Dividend on Jan. 19 -------------------------------------------------------------- PRA Personnel Pty Ltd, which is subject to a deed of company arrangement, will declare the second and final dividend on Jan. 19, 2007. In this regard, creditors are required to submit their proofs of claim by Jan. 10, 2007, or they will be excluded from sharing in the distribution. The deed administrator can be reached at: John Irving SimsPartners Chartered Accountants Level 4, 12 Pirie Street Adelaide, South Australia 5000 Australia About PRA Personnel PRA Personnel Pty Ltd operates employment agencies. The company is located in South Australia. SOUTHERN CROSS: Members Resolve to Wind-Up Firm ----------------------------------------------- On Nov. 23, 2006, the members of Southern Cross Trading Pty Ltd met and resolved to voluntarily wind up the company's operations. Tarquin Raoul Koch was subsequently appointed as liquidator. The Liquidator can be reached at: Tarquin Raoul Koch Chartered Accountants Ground Floor, 91 Hutt Street Adelaide, South Australia 5000 Australia Telephone: 8232 8885 Facsimile: 8232 8886 Email: info@matthewsassociates.com.au About Southern Cross Southern Cross Trading Pty Ltd operates beauty shops. The company is located in South Australia. TASMANIAN MOTELS: Members to Receive Wind-Up Report on Jan. 9 ------------------------------------------------------------- The members of Tasmanian Motels Ltd will meet on Jan. 9, 2007, at 11:30 a.m., to receive a report regarding the company's wind- up proceedings from Liquidator J. W. Woods. As reported by the TCR-AP, the company's members decided to shut down the company's operations on Sept. 4, 2006. The Liquidator can be reached at: John W. Woods Wilson Woods & Partners Chartered Accountant 30 Davey Street Hobart, Tasmania 7000 Australia Telephone: 03 6223 4343 About Tasmania Motels Tasmania Motels Pty Ltd is an accommodation provider. The company is located in Tasmania, Australia. TUTORMASTER: ASIC Obtains Wind-Up Orders from Court --------------------------------------------------- On December 19, 2006, the Australian Securities and Investments Commission has obtained orders from the Supreme Court of New South Wales to wind up tutoring companies, Tutormaster Pty Ltd and ABC Tutors Pty Ltd, on just and equitable grounds. The ASIC's action follows an investigation into the two companies after numerous complaints were received from parents who had their credit card debited for services not provided and from tutors who were owed payment for sessions with students. The ASIC's investigation revealed that the companies advertised tutoring services for school students in local newspapers. The companies also advertised for tutors who were subsequently matched with students. In support of its application to wind up the companies, the ASIC relied on evidence that Tutormaster and ABC Tutors had not paid tutors for tutoring services they had provided and that tutors had been unable to get in contact with anyone from the companies. The ASIC also provided evidence to the Court that the companies did not have any presence at their registered office in Sydney's CBD and that the sole registered director of both companies -- Salvador Paje -- did not reside at the address which had been provided to the ASIC. Accordingly, the court appointed Stephen Parbery and Mark Robinson of Prentice Parbery Barilla as liquidators of the two companies. The ASIC previously issued consumer warnings regarding Tutormaster in February 2006 and ABC Tutors in July 2006. Under the Corporations Act, a company is required to: (a) have a registered office and to lodge notice of any change in its registered office with the ASIC; and (b) lodge the address details of directors with the ASIC and to notify ASIC of any changes to these details. Tutormaster Pty Ltd is based in Queensland offers after-hours school and university tuition in New South Wales, with fees based on qualifications of the tutor and the contracted hours. UBS DISCOUNT: Members to Hear Liquidators' Report ------------------------------------------------- The members of UBS Discount Investments Australia Pty Ltd, which is in liquidation, will meet on Jan. 19, 2007, at 10:00 a.m., to hear the liquidators' report regarding the company's wind-up proceedings and property disposal exercises. The liquidators can be reached at: David Clement Pratt Timothy James Cuming PricewaterhouseCoopers Level 15, 201 Sussex Street Sydney, New South Wales 1171 Australia About UBS Discount UBS Discount Investments Australia Pty Ltd is an investor relations company. The company is located in New South Wales, Australia. UNILAP PTY: Liquidator to Present Wind-Up Report on Jan. 16 ----------------------------------------------------------- Unilap Pty Ltd, which is in liquidation, will hold a final meeting for its members and creditors on Jan. 15, 2007, at 12:00 p.m. During the meeting, Liquidator A. R. M. Taylor will present a report regarding the company's wind-up proceedings and property disposal activities. The Liquidator can be reached at: A. R. M. Taylor Meertens Chartered Accountants Level 1, 49 Woods Street Darwin NT 0800 Australia About Unilap Pty Unilap Pty Ltd operates automotive repair shops. The company is located in Darwin, NT, Australia. VILLAGE ROADSHOW: Tax Treatment of Proposed Capital Return ---------------------------------------------------------- As reported in the Troubled Company Reporter - Asia Pacific on November 14, 2006, the Board of Directors of Village Roadshow Limited proposed a capital return of 15 cents per ordinary share and 15 cents per A Class preference share. This return of capital is subject to the approval by ordinary and preference shareholders of a special resolution at a General Meeting on December 22, 2006. The TCR-AP noted that a tax ruling has been sought for the benefit of shareholders to confirm the tax treatment of the capital return. The tax ruling may result in all or part of the 15 cents per share capital return being deemed to be an unfranked dividend for tax purposes. The return of capital will not involve the cancellation of any shares and, if approved by shareholders, is expected to be paid by early January 2007. In an update, Village Roadshow has received a draft class ruling from the Australian Taxation Office in accordance with the company's application. In the draft class ruling, the ATO advises that no part of the proposed return of capital will be taken to be a dividend for income tax purposes. The draft class ruling has been issued subject to final ATO review and cannot be relied upon until the final class ruling is published by the ATO and the relevant notice appears in the Government Gazette. It is anticipated that publication and notification will occur on December 20, 2006. About Village Roadshow Headquartered in Melbourne, Australia, Village Roadshow Limited -- http://www.villageroadshow.com.au/-- is an international media and entertainment company that operates core businesses in cinema, movie production, film distribution, radio, and theme parks. The Company's troubles began in 2003 when it offered to buy back its preference shares to head off a litigation threat by some preference shareholders who were angered at the Company's suspension of dividend payments. Village Roadshow's reported and budgeted profitability would not allow it to comfortably fund about AU$42 million worth of ordinary and preference share dividends out of annual earnings. For the past years, the Company has been facing major litigation brought by former business partners, who had invested in its film investment scheme. In December 2005, the Film Production division undertook a substantial restructure. As part of this restructure, a US$115 million Promissory Note was issued to Crescent Film Holdings and options to acquire a 50% shareholding in the Hollywood film production and related film exploitation business, Village Roadshow Pictures Group, were granted to Crescent and its affiliates. This initiative, together with the release of a US$70 million security deposit (replaced by a etter of Credit), returned significant cash reserves to Village Roadshow. By January 2006, Village Roadshow had advised that VRPG had reached agreement with its financiers to increase its film production facility from US$900 million to US$1.4 billion. VRPG will continue to co-produce and co-finance films with its principal production partner, Warner Bros. The revolving period of the facility has also been extended for a further three years. As a result, drawdowns will now be available under the facility until January 2011 (previously February 2008) with the debt now scheduled to be fully repaid by January 2015 (previously January 2012). * * * The Troubled Company Reporter - Asia Pacific reported on September 18, 2006, Village Roadshow Limited recorded an after tax loss of AU$35.1 million for the year ended June 30, 2006, consistent with guidance previously provided by the Company. The result compared to a profit re-stated under Australian Equivalents to International Financial Reporting Standards of AU$49.3 million for the year ended June 30, 2005. WARRENMANG: Court Appoints McGrathNicol + Partners as Liquidator ---------------------------------------------------------------- On December 20, 2006, the Australian Securities and Investments Commission obtained orders from the Federal Court of Australia directing the wind-up of Warrenmang Limited's operations. Under the orders, Justice Finkelstein appointed Colin McIntosh Nicol, of McGrathNicol + Partners, as the company's liquidator. The action follows an investigation into the affairs of Warrenmang. The probe was recently commenced by the ASIC. Concerns have been raised that the company may not have refunded all the application money owed to subscribers following an unsuccessful capital raising. The pre-initial public offering is believed to have raised AU$1 million in seed capital. The initial public offer is believed to have raised over AU$2.2 million. The ASIC successfully obtained an extension of previous interim orders in the Federal Court of Australia, in Melbourne, restraining Warrenmang's Chairman and Director, Robert Graeme Pritchard from leaving Australia and from coming within one hundred meters of an Australian point of overseas departure. This action followed the ASIC's concerns that Mr. Pritchard may have intended to leave Australia and reside in the United Kingdom. The Troubled Company Reporter - Asia Pacific reported on November 27, 2006, Justice Finkelstein appointed Colin McIntosh Nicol, of McGrathNicol+ Partners, as the provisional liquidator for Warrenmang. The Federal Court has set a final hearing on March 20, 2007. The ASIC's ongoing investigation is not related to the Warrenmang Vineyard and Resort in Bendigo, Victoria. About Warrenmang Warrenmang was incorporated on September 1, 2003, as a vehicle to acquire wine businesses in Victoria. Warrenmang issued a prospectus in December 2003 to raise a minimum of AU$6 million with a view to listing the company on the Australian Stock Exchange. This prospectus stated that the funds raised would be used to acquire and consolidate various wine and vineyard businesses. Warrenmang failed to raise the minimum subscription and list on the ASX. In March 2004, a supplementary prospectus was issued to extend the offer period for a further three months. Warrenmang was again unsuccessful in raising the minimum amount and the planned public float never took place. The law requires that application money received from investors be held in a trust account until the securities are issued or application money returned to the investors. The ASIC commenced its investigation following complaints received in October 2006. The investigation is not related to businesses proposed to be acquired by Warrenmang as described in the prospectus. WESTPOINT GROUP: ASIC Updates Federal Court on Investigation ------------------------------------------------------------ On December 18, 2006, the Australian Securities and Investments Commission updated the Federal Court in Perth on its Westpoint investigations to support its application to extend orders freezing the assets of key identities in the failed property group. ASIC is seeking to extend the orders against Normanan Carey and various corporate entities for a period of six months, after which the Court will review the orders. Richard Beck, John Dixon, and Graeme Rundle have indicated they will agree to an extension of the preservation orders. ASIC tendered an affidavit sworn by its Deputy Executive Director of Enforcement, Allen Turton, to support its application. The affidavit outlines, to the fullest extent possible, the nature of ASIC's current investigations. The affidavit reveals that ASIC has already referred a brief of evidence to the Commonwealth Director of Public Prosecutions in respect to one of its investigations. The affidavit identifies three major investigations focusing on: 1. Fundraising The Fundraising Investigation focuses on representations made in newsletters and information memoranda promoting the Westpoint Group and related mezzanine companies issued from about May 2000. Aspects of these documents being investigated include the non- disclosure of risks, the non-disclosure of oversubscriptions, the non-disclosure of conflicts of interest, and the use of funds raised. ASIC advised the Court that it expects this complex stream of investigation to be completed over the next 12 to 18 months. 2. Asset Stripping The Asset Stripping Investigation is inquiring into eight unusual transactions that do not appear to have been performed in the normal course of business and were designed to move assets and transfer liabilities to the detriment of Westpoint investors and creditors. Transactions being investigated include a payment of AU$3.25 million from several Westpoint mezzanine companies to entities controlled by Norman Carey, his brother, or his sister. ASIC is also investigating the creation of interests benefiting Norman Carey, his brother or his sister over assets of the Westpoint Group that materialized after wind-up proceedings had commenced. The regulator advised the Court that it expected to have completed its investigation into asset stripping within the next six months. 3. Document Destruction ASIC is also investigating an allegation that thousands of files were deleted from computer servers belonging to Westpoint Group companies. The alleged deletion of these files occurred shortly after the Federal Court made orders giving company receivers access to the computers. It is anticipated that this aspect of ASIC's investigation will be completed within the next four months. Other investigations focus on the role of licensed and unlicensed financial advisors in relation to investments in the Westpoint Group and the promotion, distribution, and sale of investments in the Westpoint Group. ASIC is also examining the non-disclosure of commissions and misleading and deceptive conduct in the promotion of the promissory notes issued by the Westpoint mezzanine companies. In pursuing its investigations, ASIC has: (a) received and reviewed more documents relating to Westpoint than all of ASIC's investigations combined for one year and compiled a database of 4.8 million pages of Westpoint documents. The database is a significant investigative tool for ASIC, and potentially for liquidators and receivers, as it allows documents of relevance to be readily identified and retrieved; (b) interviewed about 50 witnesses across Australia; and (c) conducted approximately 20 compulsory examinations, varying in duration from half a day to seven days. ASIC told the Court it was seeking an extension to the asset freezing orders while its investigations continued because it is concerned that there is a real risk that the assets of various individuals and companies associated with Westpoint might be shifted or dissipated to the detriment of creditors. In addition to substantive offences that the CDPP may prosecute, other remedies available include pecuniary penalty orders under the Proceeds of Crime Act 2002 (Cth) as well as forfeiture and restraining orders. About Westpoint Group Headquartered in Perth, Western Australia, the Westpoint Group - - http://westpoint.com.au/-- is engaged in property development and owns or manages retail and commercial properties with a total value of over AU$300 million. The Group's troubles began in 2005 when the Australian Securities and Investments Commission commenced investigations on 160 companies within the Westpoint Group. The ASIC's investigation led to ASIC initiating action in late 2005 in the Federal Court of Australia against a number of mezzanine companies in the Westpoint Group, including winding up proceedings. The ASIC contends that Westpoint projects are suffering from significant shortfall of assets over liabilities so that hundreds of investors are at serious risk of not receiving repayment of their investments. The ASIC also sought wind-up orders after the Westpoint companies failed to comply with its requirement to lodge accounts for certain financial years. These wind-up actions are still continuing. In February 2006, the Federal Court in Perth issued a wind-up order against Westpoint Corporation Pty Ltd. The ASIC had applied to wind up the company on grounds of insolvency. The ASIC believes that Westpoint Corporation is responsible for arranging, managing and coordinating Westpoint Group's property projects as well as holding money for other group companies. The ASIC was concerned that Westpoint Corporation was unable to pay its debts, including its obligations under the guarantees given to the mezzanine companies to make good expected shortfalls in the repayment of amounts owed to investors. The Westpoint Group's collapse is considered by many as the largest of its type in recent years, with small investors being the biggest group affected. Investors are currently joining forces to commence a class action against Westpoint and its advisors. WESTPOINT GROUP: N. Burnard Charged with 18 Criminal Offenses ------------------------------------------------------------- Jeffrey Lucy, Chairman of the Australian Securities and Investments Commission announced the first criminal charges to be brought as part of the ASIC's continuing investigation into the collapse of Westpoint Corporation Pty Ltd and related entities. On December 19, 2006, Neil Austin Burnard appeared in the Downing Centre Local Court charged with 18 criminal offences relating to the raising of investor funds on behalf of Westpoint by his company Palentia Pty Ltd, formerly known as Kebbel (NSW) Pty Ltd. Mr. Burnard has been charged with four counts of engaging in dishonest conduct in relation to a financial product in the course of carrying on a financial services business under the Corporations Act and 14 counts of obtaining money by false or misleading statements under the Crimes Act of NSW. The ASIC alleged that Mr. Burnard engaged in dishonest conduct in the course of carrying on a financial services business, namely providing financial product advice, by representing to investors that "Kebbel Investment Bank" existed when in fact it does not. These charges were brought under the Corporations Act. The ASIC also alleged that Mr. Burnard, with intent to obtain a financial advantage for various Westpoint "mezzanine" companies, made or published a statement, which he knew to be false or misleading in a material particular, in that it purported that an entity "Kebbel Investment Bank" existed when in fact it does not. In addition, the ASIC alleged that Mr. Burnard described himself as a director of "Kebbel Investment Bank" and made or published statements referring to 'Kebbel Investment Bank', which he knew to be false or misleading. These charges were brought under the Crimes Act. The ASIC has previously obtained orders in the Supreme Court of New South Wales restraining Mr. Burnard from leaving Australia and requiring him to deliver up all passports, as well as orders preventing him from disposing of his assets. These orders were initially made on June 2, 2006, after the ASIC learned that Mr. Burnard had boarded a plane for the United States, despite telling investigators that he would be available to speak to them. Mr. Burnard later returned to Australia having been refused entry into the United States. These orders are continued until January 29, 2007. The charges against Mr. Burnard have been adjourned to the Downing Centre Local Court on February 20, 2007, for mention. The Commonwealth Director of Public Prosecutions is prosecuting the matter. About Westpoint Group Headquartered in Perth, Western Australia, the Westpoint Group -- http://westpoint.com.au/-- is engaged in property development and owns or manages retail and commercial properties with a total value of over AU$300 million. The Group's troubles began in 2005 when the Australian Securities and Investments Commission commenced investigations on 160 companies within the Westpoint Group. The ASIC's investigation led to ASIC initiating action in late 2005 in the Federal Court of Australia against a number of mezzanine companies in the Westpoint Group, including winding up proceedings. The ASIC contends that Westpoint projects are suffering from significant shortfall of assets over liabilities so that hundreds of investors are at serious risk of not receiving repayment of their investments. The ASIC also sought wind-up orders after the Westpoint companies failed to comply with its requirement to lodge accounts for certain financial years. These wind-up actions are still continuing. In February 2006, the Federal Court in Perth issued a wind-up order against Westpoint Corporation Pty Ltd. The ASIC had applied to wind up the company on grounds of insolvency. The ASIC believes that Westpoint Corporation is responsible for arranging, managing and coordinating Westpoint Group's property projects as well as holding money for other group companies. The ASIC was concerned that Westpoint Corporation was unable to pay its debts, including its obligations under the guarantees given to the mezzanine companies to make good expected shortfalls in the repayment of amounts owed to investors. The Westpoint Group's collapse is considered by many as the largest of its type in recent years, with small investors being the biggest group affected. Investors are currently joining forces to commence a class action against Westpoint and its advisors. ================================ C H I N A & H O N G K O N G ================================ ANDREW CORP: Posts US$34.2 Million Net Loss in FY Ended Sept. 30 ---------------------------------------------------------------- Andrew Corp. reported a US$34.2 million net loss for the fiscal year ended Sept. 30, 2006, compared with net income of US$38.8 million for fiscal 2005. The loss is primarily due to the US$79 million increase in income tax expense as a result of the recording of a valuation allowance on its U.S. deferred tax assets. Sales for fiscal 2006 of US$2.1 billion increased from US$1.9 billion fiscal 2005. The sales increase resulted from higher sales in Antenna and Cable Products and Base Station Subsystems offset by an expected sales decline in Network Solutions. The company's top 25 customers accounted for 69% of sales in fiscal 2006, 2005, and 2004. In fiscal 2006 and 2005, major OEMs accounted for 39% of sales. No single customer accounted for more than 10% of sales in fiscal 2006. In fiscal 2005, Cingular Wireless accounted for 11% of total sales. Gross profit margins decreased slightly from 22.3% in fiscal 2005 to 22.1% in fiscal 2006 due primarily to higher commodity costs, especially copper, and the expected decrease in Network Solutions margin contribution resulting from the completion of U.S. E-911 upgrade installations. Operating expenses were US$390 million in fiscal 2006, or 18.2% of sales, compared with US$359 million in fiscal 2005, or 18.3% of sales. Operating expenses increased US$30.8 million compared with fiscal 2005 due primarily to higher sales and administrative costs, which increased from 11.4% of sales in fiscal 2005 to 11.9% of sales in fiscal 2006. Research and development expenses increased US$5.1 million in fiscal 2006 versus fiscal 2005, but decreased as a percentage of sales from 5.5% in fiscal 2005 to 5.3% in fiscal 2006. Sales by Major Geographic Region Sales in the Americas increased 6% in fiscal 2006 compared to fiscal 2005 due to strong growth in antenna and cable products, power amplifiers and filter sales which were offset by sales decreases in geolocation equipment and satellite products. Europe, Middle East, and Africa sales increased 8% in fiscal 2006 compared to fiscal 2005 due to strong Antenna and Cable Group sales, primarily resulting from the acquisition of Precision Antenna Ltd., offset by lower Base Station Subsystems Group sales. Asia Pacific sales increased 28% in fiscal 2006 compared to fiscal 2005 due to increased Antenna and Cable Group sales, primarily in India, Indonesia, and China. With the anticipated issuance of 3G licenses in fiscal 2006, Chinese operators slowed their investment in wireless infrastructure in fiscal 2005. Gross Profit Gross profit as a percentage of sales was 22.1% in fiscal 2006 and 22.3% in fiscal 2005. Two of the more significant factors driving the margin decrease were the company's changing product mix and increased commodity costs. Over the last three years, Andrew's gross profit percentages have changed as its product offering has evolved from primarily passive components to complete system solutions, including more active electronic components. Additionally, higher margin geolocation sales have decreased over the past three years as U.S. service providers have implemented and completed E-911 upgrade installations. In fiscal 2006, the company used approximately 70 million pounds of copper. The company's average cost per pound of copper increased by approximately US$0.45 throughout fiscal 2006, resulting in an increase in cost of products sold of approximately US$32 million or 1.5% of sales. In addition, in fiscal 2005, product recall costs associated with one of the company's Base Station Subsystem products resulted in a charge of US$17 million or 0.8% of sales. Liquidity and Capital Resources In fiscal 2006 the company had cash flow from operations of US$91.8 million. Cash and cash equivalents were US$169.6 million at Sept. 30, 2006, a decrease of US$19.2 million from Sept. 30, 2005. Working capital was US$585 million at Sept. 30, 2006, compared with US$639 million at Sept. 30, 2005. The company's balance sheet at Sept. 30, 2006, showed total assets of US$2.4 billion, total liabilities of US$900 million, and total shareholders' equity of US$1.5 billion. A full text-copy of the company's annual report on Form 10-K may be viewed at no charge at http://ResearchArchives.com/t/s?1729 Headquartered in Westchester, Illinois, Andrew Corporation (NASDAQ: ANDW) -- http://www.andrew.com/-- designs, manufactures and delivers innovative and essential equipment and solutions for the global communications infrastructure market. The company serves operators and original equipment manufacturers from facilities in 35 countries including, among others, manufacturing locations in China and India. Andrew is an S&P 500 company founded in 1937. * * * Standard & Poor's Ratings Services revised its CreditWatch implications on Andrew Corp. to negative from developing. The 'BB' corporate credit rating and other ratings on the company were placed on CreditWatch developing on Aug. 7, 2006. CASCADES INC: Norampac Acquisition Cues DBRS to Lower Ratings ------------------------------------------------------------- Dominion Bond Rating Service downgraded the Senior Unsecured Debt rating of Cascades Inc. to BB (high) from BBB (low). The trend is now Stable. The rating action follows a full review of Cascades' acquisition of the outstanding 50% interest in Norampac Inc., which was reported on Dec. 5, 2006, and is expected to close by the end of 2006. This rating action removes the company from Under Review with Negative Implications where it was placed on Dec. 5, 2006. DBRS determined that the impact of increased acquisition-related leverage, in addition to the uncertainty regarding a measurable improvement in currently challenging industry conditions, more than offset the positive attributes of the transaction. Cascades' credit metrics were considered aggressive for an investment-grade rating prior to the acquisition, and have further weakened with the increase in debt. In addition, challenging industry conditions, including high input costs, relatively soft demand, and relative strength in the Canadian dollar are expected to persist. As a result, Cascades' credit profile is no longer considered adequate for an investment-grade rating. On a pro forma basis, debt-to-capital increases to 59% and cash flow-to-debt modestly declines to 0.13, which includes 50% of Norampac's outstanding debt and US$310 million in debt financing. The impact on Cascades' financial profile is relatively modest, particularly given the company's decision to increase the equity-funded share of the US$560 million transaction to US$250 million. However, an improvement in Cascades' credit metrics to levels considered more appropriate for an investment-grade rating is unlikely over the near term. The acquisition of the remaining 50% equity interest in Norampac has strengthened Cascades' business profile. Positive attributes of the transaction include an increased presence in the packaging sector, which has historically generated relatively stable earnings at Norampac, and a more balanced mix of revenue. The company will now have access to Norampac's cash flow, which will help to reduce the company's debt load. In addition, packaging industry capacity curtailments have been implemented and are expected to support price increases. Cascades is expected to generate modest earnings growth over the near to medium term despite industry challenges, which largely underpins the Stable trend. Founded in 1964, Cascades Inc. -- http://www.cascades.com/-- produces, transforms, and markets packaging products, tissue paper and fine papers, composed mainly of recycled fibers. Cascades employs nearly 15,600 men and women who work in some 140 modern and flexible production units located in North America, in Europe and in Asia. Cascades' management philosophy, its more than 40 years of experience in recycling, its continued efforts in research and development are strengths which enable the company to create new products for its clients and thus offer superior performance to its shareholders. The Cascades shares trade on the Toronto stock exchange under the ticker symbol CAS. The company has operations in Hong Kong, Colombia, and Europe. COUDERT BROTHERS: Seeks Extension of Excl. Plan-Filing Period ------------------------------------------------------------- The U.S. Bankruptcy Court for the Southern District of New York convened a hearing on Dec. 20, 2006, to consider Coudert Brothers LLP's request to extend its exclusive periods to file a Plan of Reorganization and solicit acceptances of that Plan. The Debtor wanted the Court to extend until May 20, 2007, its exclusive plan-filing period; and until July 19, 2007, its period to solicit plan acceptances. Tracy L. Klestadt, Esq., at Klestadt & Winters, LLP, tells the Court that the Debtor's prepetition status as a multi-national law firm creates numerous unique complexities that must be confronted prior to creation a plan of liquidation. These include: a) determining the proper procedures for destruction or on- going retention of years of client's legal records and documents in storage; b) developing procedures to notify Coudert's previous clients of its pending liquidation and disposition of client files; c) preparing for and litigating malpractice suits currently pending against Coudert in other courts around the country; d) litigating in foreign jurisdictions to reclaim assets that were wrongfully removed or converted from the estate; and e) liquidating any remaining receivables and assets located in both domestic and foreign jurisdictions. The Debtor argued that the sheer scope of these pending collection and malpractice actions, as well as the inherent delay in prosecuting and defending them in various forums, warrant the extension of the exclusive periods. * * * Coudert Brothers LLP was an international law firm specializing in complex cross border transactions and dispute resolution. The firm had operations in Australia and China. The Debtor filed for Chapter 11 protection on Sept. 22, 2006, (Bankr. S.D.N.Y. Case No. 06-12226). John E. Jureller, Jr., Esq., and Tracy L. Klestadt, Esq., at Klestadt & Winters, LLP, represents the Debtor in its restructuring efforts. In its schedules of assets and debts, Coudert listed total assets of US$29,968,033 and total debts of US$18,261,380. The Debtor's exclusive period to file a chapter 11 plan expires on Jan. 20, 2007. COUDERT BROTHERS: Hires Kurtzman Carson as Claims Agent ------------------------------------------------------- The Honorable Robert D. Drain of the U.S. Bankruptcy Court for the Southern District of New York authorized Coudert Brothers LLP to retain Kurtzman Carson Consultants LLC as its claims agent. The Debtor tells the Court that Kurtzman Carson's assistance will expedite the service of notices, streamline the claims administration process, and permit the Debtor to focus efficiently on its reorganization efforts. As claims agent, Kurtzman Carson will: a) maintain an official copy of the Debtor's schedules of assets and liabilities and statement of financial affairs listing the Debtor's known creditors and the amounts owed them; b) notify all potential creditors of the existence and amount of their respective claims as evidenced by the Debtor's books and records and as set forth in the Schedules; c) furnish a notice of the last date for the filing of proofs of claims and a form for the filing of a proof of claim; d) file with the Clerk an affidavit or certificate of service with a copy of the notice, a list of persons to whom it was mailed, and the date the notice was mailed, within 10 days of service; e) docket all claims received, maintain the official claims register for the Debtor on behalf of the Clerk, and provide the Clerk with certified duplicate unofficial Claims Register on a monthly basis; f) specify, in the Claims Register, these information for each claim docketed: -- the claim number assigned; -- the date received; -- the name and address of the claimant and agent, if applicable, who filed the claim; and -- the classification(s) of the claim; g) relocate, by messenger, all of the actual proofs of claim filed to KCC, not less than weekly; h) record all transfers of claims and provide any notices of such transfers required by Rule 3001 of the Federal Rules of Bankruptcy Procedure; i) make changes in the Claims Register pursuant to Court Order; j) upon completion of the docketing process for all claims received to date by the Clerk's office, turn over to the Clerk copies of the Claims Register for the Clerk's review; k) maintain the official mailing list for the Debtor of all entities that have filed a proof of claim; l) assist with, among other things, solicitation and calculation of votes and distribution as required in furtherance of confirmation of the chapter 11 plan; and m) at the close of the case, box and transport all original documents in proper format, as provided by the Clerk's office, to the Federal and Record Administration. Applicable fees for Kurtzman Carson's professionals are: Designation Hourly Rate ----------- ----------- Clerical US$40 to US$65 Project Specialist US$75 to US$115 Consultant US$125 to US$195 Sr. Consultant / Sr. Managing Consultant US$205 to US$250 Technology / Programming Consultant US$115 to US$195 Kurtzman Carson assures the Court that it does not hold any interest adverse to the Debtor's estate and is a "disinterested person" as that term is defined in section 101(14) of the Bankruptcy Code. A copy of Kurtzman Carson's engagement agreement is available for free at: http://researcharchives.com/t/s?1745 * * * Coudert Brothers LLP was an international law firm specializing in complex cross border transactions and dispute resolution. The firm had operations in Australia and China. The Debtor filed for Chapter 11 protection on Sept. 22, 2006 (Bankr. S.D.N.Y. Case No. 06-12226). John E. Jureller, Jr., Esq., and Tracy L. Klestadt, Esq., at Klestadt & Winters, LLP, represents the Debtor in its restructuring efforts. Brian F. Moore, Esq., and David J. Adler, Esq., at McCarter & English, LLP, represent the Official Committee Of Unsecured Creditors. In its schedules of assets and debts, Coudert listed total assets of US$29,968,033 and total debts of US$18,261,380. The Debtor's exclusive period to file a chapter 11 plan expires on Jan. 20, 2007. COUDERT BROTHERS: Panel Clamors for Ch. 11 Trustee Appointment -------------------------------------------------------------- The Official Committee of Unsecured Creditors of Coudert Brothers, LLP, asks the U.S. Bankruptcy Court for the Southern District of New York to appoint a Chapter 11 Trustee in the Debtor's bankruptcy case. David J. Adler, Esq., at McCarter & English, LLP, tells the Court that a Chapter 11 trustee will: a) investigate the circumstances that led to the Debtor's demise and to determine if the estate has claims against others that may be pursued for the benefit of creditors. b) complete the liquidation of the estate and perform the traditional bankruptcy tasks of receivables collection, miscellaneous asset disposition, claims administration and distribution; and c) pursue and defend litigation on behalf of the estate. The Committee complains that the Debtor has "recklessly" engineered a wind down designed to protect its partners at the expense of its creditors. Because of this reckless wind down, the Committee says the Debtor's financial condition continues to deteriorate. The Committee argues that only an independent trustee can fairly and competently liquidate the Debtor's remaining assets. * * * Coudert Brothers LLP was an international law firm specializing in complex cross border transactions and dispute resolution. The firm had operations in Australia and China. The Debtor filed for Chapter 11 protection on Sept. 22, 2006 (Bankr. S.D.N.Y. Case No. 06-12226). John E. Jureller, Jr., Esq., and Tracy L. Klestadt, Esq., at Klestadt & Winters, LLP, represents the Debtor in its restructuring efforts. Brian F. Moore, Esq., and David J. Adler, Esq., at McCarter & English, LLP, represent the Official Committee Of Unsecured Creditors. In its schedules of assets and debts, Coudert listed total assets of US$29,968,033 and total debts of US$18,261,380. The Debtor's exclusive period to file a chapter 11 plan expires on Jan. 20, 2007. D.R.A. TRADING: Faces Liquidation Proceedings --------------------------------------------- On Nov. 16, 2006, Rajeshkumar Nareshchandra Kantilal -- trading as K. L. Gems -- filed a wind up petition against D.R.A. Trading Ltd. The High Court of Hong Kong will hear the petition on Jan. 17, 2007, at 9:30 a.m. The solicitors for the Petitioner can be reached at: Johnson Stokes & Master 18/F, Prince's Building 10 Chater Road, Central Hong Kong DIA-BRILLIANT JEWELRY: Court Sets Wind-Up Hearing on Jan. 17 ------------------------------------------------------------ The High Court of Hong Kong will hear a wind-up petition against Dia-Brilliant Jewelry Company Ltd on Jan. 17, 2007, at 9:30 a.m. Angel Diamonds Ltd filed the petition with the Court on Nov. 16, 2006. The solicitors for the Petitioner can be reached at: Johnson Stokes & Master 18/F, Prince's Building 10 Chater Road, Central Hong Kong EMI GROUP: S&P Removes Ratings from Watch Neg. on Bid Rejection --------------------------------------------------------------- Standard & Poor's Ratings Services affirmed its 'BB/B' long- and short-term corporate credit and 'BB' senior unsecured debt ratings on U.K.-based music major EMI Group PLC. The long-term and debt ratings were removed from CreditWatch, where they had been placed with negative implications on Nov. 28, 2006, when the group reported a takeover approach. The outlook is negative. "EMI's announcement ending buyout talks removes the group's financial risk profile from the immediate threat posed by a potentially highly leveraged bid, against debt protection metrics that are already stretched for the ratings," said Standard & Poor's credit analyst Patrice Cochelin. "Nevertheless, we are concerned that EMI's top management -- but not necessarily its divisional management -- might continue to focus on takeover activity." The group recently announced an agreement on a 45% minority buyout of the Japanese recorded music operations of Toshiba Corp. (BBB/Negative/A-2). Although the transaction will increase EMI's control over an important subsidiary; improve cash flow circulation within the group; and reduce minority interest dividend "leakage" at a critical time, as asset disposals recently generated considerable cash proceeds in Japan; the GBP93 million cash outflow (about 9% of group net debt) will further depress EMI's debt measures in the near term. Proforma for the transaction, EMI's net fully adjusted debt at Sept. 30, 2006, was about 5.0x EBITDA. At Sept. 30, 2006, EMI had consolidated gross and net debt of GBP1.2 billion and GBP1 billion, respectively. Gross and net financial derivatives liabilities were GBP106 million and GBP66 million, respectively, at the same date. "We are concerned about EMI's ability to further improve its stretched financial profile in challenging market conditions," added Mr. Cochelin. "Recent free cash flow generation has been limited, and dividends are set to stay relatively high, constraining the scope for debt reduction from internally generated funds." The ratings could be lowered if prospects for a material improvement recede further. Conversely, the outlook could return to stable if the group shows significant free cash flow improvement and debt reduction. Standard & Poor's will continue to closely monitor EMI's acquisition plans. Headquartered in London, United Kingdom, EMI Group PLC -- http://www.emigroup.com/-- is the world's largest independent music company, operating directly in 50 countries and with licensees in a further 20. The group has operations in China, Brazil, and Hungary. The group employs over 6,600 people. Revenues in 2005 were near EUR2 billion and operating profit generated was over EUR225 million. FERRO CORP: Declares US$0.145 Per Share Quarterly Dividend ---------------------------------------------------------- Ferro Corp.'s board of directors has declared a regular quarterly dividend of 14.5 cents per share of common stock. The dividend is payable on March 9, 2007, to shareholders of record on Feb. 15, 2007. * * * Headquartered in Cleveland, Ohio, Ferro Corporation -- http://www.ferro.com-- is a global producer of an array of performance materials sold to a range of manufacturers in approximately 30 markets throughout the world. Ferro applies certain core scientific expertise in organic chemistry, inorganic chemistry, polymer science and material science to develop coatings for ceramics and metal; materials for passive electronic components; pigments; enamels, pastes and additives for the glass market; glazes and decorating colors for the dinnerware market; specialty plastic compounds and colors; polymer additives; specialty chemicals for the pharmaceuticals and electronics markets, and active ingredients and high-purity carbohydrates for pharmaceutical formulations. The company's products are classified as performance materials, rather than commodities, because they are formulated to perform specific and important functions both in the manufacturing processes and in the finished products of its customers Ferro Corp. has global locations in Argentina, Australia, Europe, and Asia, including China. On October 5, 2006, the Troubled Company Reporter - Asia Pacific reported that Standard & Poor's Ratings Services' 'B+' long-term corporate credit and 'B' senior unsecured debt ratings on Ferro Corp. remained on CreditWatch with negative implications, where they were placed Nov. 18, 2005. Standard & Poor's said it will resolve the CreditWatch after Ferro files its 2005 full year and 2006 quarterly financial statements, which are expected by Sept. 30th and Dec. 31st, respectively. GEORGIA-PACIFIC: Fitch Rates New US$1.25-Bil. Senior Notes at B+ -------------------------------------------------------------- Fitch rated Georgia-Pacific's new senior unsecured guaranteed notes due 2015 and 2017 aggregating US$1.25 billion 'B+'. Fitch also affirms these GP ratings: -- Issuer Default Rating 'B+'; -- Senior unsecured 'B+/RR4'; -- Senior secured revolver 'BB/RR2'; and, -- First lien term Loan. 'BB/RR2'. GP's Rating Outlook remains Stable. The rating on GP's Second Lien Term Loan has been withdrawn in anticipation of repayment. GP issued the new notes to repay its US$2.25 billion Second Lien Term Loan concurrent with a US$1 billion increase in its First Lien Term Loan B, bringing the latter's balance to approximately US$6.2 billion. This frees assets from US$1.25 billion of liens, which favors unsecured debtors. However, in Fitch's opinion this does not substantively change the recovery prospects of unsecured debtors in an event of bankruptcy, which is the distinguishing feature between secured and unsecured ratings. GP's new note issues will benefit from upstream guarantees by select subsidiaries, which, together with the issuer, in aggregate directly hold 75% of GP's consolidated total assets. This attribute differentiates the new notes from the majority of GP's other notes and bonds issued before its acquisition by Koch Industries, Inc. However, as a going concern the guarantees do not enhance the prospects of timely repayment and therefore do not justify a rating different from other senior unsecured indebtedness. GP's IDR of 'B+' is based on a review of the prospects for GP's various businesses, which have been performing well. Heading into next year, in Fitch's opinion, GP will likely suffer from the decline in the U.S. housing market which has had a very negative impact on the prices for lumber, plywood, oriented strand board and gypsum wallboard. However, GP's other businesses, in particular domestic bathroom tissue and towels and corrugated containers, are currently strong and on a positive trend which is the basis for the Stable Outlook. GP was taken private by Koch last year in a transaction valued at just over US$21 billion, financed with approximately US$11 billion in new debt and US$7 billion in equity. Headquartered in Atlanta, Georgia, Georgia-Pacific Corporation - - http://www.gp.com/-- is a privately owned global leader in tissue and other consumer products, and has significant operations in building products and paper-based packaging. The company has offices in Switzerland, Uruguay, and Hong Kong. MGM MIRAGE: Moody's Rates New US$750-Million Senior Notes at Ba2 ---------------------------------------------------------------- Moody's Investors Service assigned a Ba2 rating to the new US$750 million senior unsecured guaranteed notes due 2017, raised the SGL rating to SGL-2 from SGL-3 and affirmed MGM Mirage's other existing ratings. The new notes will rank pari- passu with existing senior unsecured debt and proceeds of the notes will be used to term out existing bank revolver debt. MGM is expected to be a net borrower over the next few years due to high capital spending needs for maintenance, CityCenter in Las Vegas, a permanent gaming facility in Detroit, as well as investment spending for joint venture projects. Nevertheless, Moody's expects that MGM will continue to grow its return on assets and maintain Debt/EBITDA and EBITDA to interest around 5.5x, and 2.5x, respectively, over the next two years. On a last twelve months basis debt to EBITDA and EBITDA to interest stood at about 5.6x and 3.0x, respectively. Pursuant to Moody's published Gaming Rating Methodology, the company's credit metrics and level of geographic diversification are below average for the current rating. However, the company's size, significant and successful development profile and solid EBITDA margins offset these risks. The upgrade of the speculative grade liquidity rating to SGL-2 from SGL-3 is based on the additional liquidty cushion that MGM will have following the US$750 million note issuance and the subsequent repayment of outstanding revolver loans. This added liquidity materially helps improve MGM's ability to meet upcoming debt amortizations and capital spending plans with internal cash flow and committed borrowing sources. The rating outlook is stable reflecting the positive operating conditions in the company's primary markets, and Moody's expectation that returns on development spending will be sufficient to maintain the company's current credit profile. The ratings could be downgraded if leverage rises above 6x or if the company pursues significant share repurchases. Upward rating momentum is limited given that the company will be a net borrower over the next several years and is pursuing other potential development opportunities. Rating assigned: -- US$750 million senior unsecured guaranteed bonds due 2013 at Ba2, LGD 3, 43%. Rating changed: -- Speculative grade liquidity rating changed to SGL-2 from SGL-3. Las Vegas, Nev.-based, MGM Mirage -- http://www.mgmmirage.com/- - owns and operates 12 casino resorts located in Nevada, Mississippi, Michigan, and Australia, and has investments in three other casino resorts in Nevada, New Jersey, and Macau. MGM MIRAGE: S&P Puts BB Rating on Proposed US$750 Mil. Sr. Notes ---------------------------------------------------------------- Standard & Poor's Ratings Services assigned its 'BB' rating to MGM Mirage's proposed US$750 million senior unsecured notes due 2017, which will be sold pursuant to a prospectus dated May 9, 2006. Proceeds from the proposed offerings will be used to repay amounts outstanding under the company's revolving credit facility and for general corporate purposes. At the same time, Standard & Poor's affirmed its ratings on the company, including the 'BB' corporate credit rating. The outlook is stable. Consolidated debt outstanding at Sept. 30, 2006, was about US$13 billion. Las Vegas, Nev.-based, MGM Mirage -- http://www.mgmmirage.com/- - owns and operates 12 casino resorts located in Nevada, Mississippi, Michigan, and Australia, and has investments in three other casino resorts in Nevada, New Jersey, and Macau. PETROLEOS DE VENEZUELA: Oil Purchase Averages 703,000 Barrels ------------------------------------------------------------- Petroleos de Venezuela SA, the state-owned oil firm of Venezuela, said in a filing with the U.S. Securities and Exchange Commission that it has purchased 703,000 barrels per day on average in 2004 from other companies to keep its refineries producing. A strike that began on December 2002 at Petroleos de Venezuela's refining plants weakened its operations, reducing the company's output by as much as 90%. The national strike unsuccessfully sought for the resignation of President Hugo Chavez, resulting in the dismissal of at least 18,000 Petroleos de Venezuela workers. Business News Americas relates that Petroleos de Venezuela supplied its plants in Venezuela and abroad with 2.15 million barrels of crude daily. The firm refined about 2.85 million barrels per day in 2004 at wholly or partially owned refineries. Petroleos de Venezuela said in the SEC filing that Venezuela satisfied 75% of the crude demanded at the refineries in 2004. The company was able to meet 78% of demand in 2003, and 81% in 2002. According to BNamericas, the global refining capacity of Petroleos de Venezuela is currently at 3.3 million barrels per day. Petroleos de Venezuela told BNamericas that it will no longer file reports with SEC, saying that it violates Venezuela's sovereignty. Petroleos de Venezuela SA -- http://www.pdv.com/-- is Venezuela's state oil company in charge of the development of the petroleum, petrochemical and coal industry, as well as planning, coordinating, supervising and controlling the operational activities of its divisions, both in Venezuela and abroad. The company has a commercial office in China. * * * Standard & Poor's Ratings Services revised the CreditWatch implications on its 'B+' long-term foreign currency corporate credit rating on Petroleos de Venezuela SA to positive from developing. The revision of the CreditWatch status on Petroleos de Venezuela reflects S&P's expectations that downgrade risk has receded, and the issuer credit rating will either be raised and equalized with the rating on Petroleos de Venezuela's owner, the Bolivarian Republic of Venezuela (BB-/Positive/B), or affirmed at 'B+'. PETROLEOS DE VENEZUELA: Inks Lubricants Supply Pact with Alba ------------------------------------------------------------- Petroleos de Venezuela, the state-owned oil firm of Venezuela, told Business News Americas that PDV Caribe, its fuel distribution subsidiary, has signed a lubricants supply accord with Alba Petroleos de El Salvador. BNamericas relates that PDV Caribe and Enepasa, an El Salvadorian municipalities association, created Alba Petroleos earlier this year to distribute Venezuelan crude and fuels in El Salvador. Petroleos de Venezuela said in a statement that the agreement covers 27 types of lubricants and falls under the Petrocaribe energy cooperation model. The first shipment will arrive in El Salvador in two weeks and initially will be distributed at service stations and sector companies in capital San Salvador and the country's west and east, according to a Petroleos de Venezuela statement. Petroleos de Venezuela SA is Venezuela's state oil company in charge of the development of the petroleum, petrochemical and coal industry, as well as planning, coordinating, supervising and controlling the operational activities of its divisions, both in Venezuela and abroad. * * * Standard & Poor's Ratings Services revised the CreditWatch implications on its 'B+' long-term foreign currency corporate credit rating on Petroleos de Venezuela SA to positive from developing. The revision of the CreditWatch status on Petroleos de Venezuela reflects S&P's expectations that downgrade risk has receded, and the issuer credit rating will either be raised and equalized with the rating on Petroleos de Venezuela's owner, the Bolivarian Republic of Venezuela (BB-/Positive/B), or affirmed at 'B+'. PETROLEOS DE VENEZUELA: May Bring in US$6.9B to Treasury in 2007 ---------------------------------------------------------------- Petroleos de Venezuela, the state-run oil firm of Venezuela, is expected to deposit US$6.9 billion to the Venezuelan treasury next year, El Universal reports, citing Rodrigo Cabeza, head of the National Assembly Finance Committee. El Universal relates that the government, Central Bank and Petroleos de Venezuela will continue to implement measures in 2007 to curb liquidity. Once extraordinary revenues start next year, Petroleos de Venezuela is expected to make new deposits in a special account of the treasury. Mr. Cabeza told El Universal, "These funds will not be monetized (will not be delivered to central bank), but they will be sold when extraordinary expenses need to be afforded." According to El Universal, the Venezuelan oil sector has made transfers to the special account over the last quarter of 2006 to prevent the funds from affecting liquidity. Authorities decided to boost the legal reserve and implement liquidity absorption measures by issuing deposit slips, to lead financial institutions into giving more funds to loans, El Universal states. Petroleos de Venezuela SA is Venezuela's state oil company in charge of the development of the petroleum, petrochemical and coal industry, as well as planning, coordinating, supervising and controlling the operational activities of its divisions, both in Venezuela and abroad. * * * Standard & Poor's Ratings Services revised the CreditWatch implications on its 'B+' long-term foreign currency corporate credit rating on Petroleos de Venezuela SA to positive from developing. The revision of the CreditWatch status on Petroleos de Venezuela reflects S&P's expectations that downgrade risk has receded, and the issuer credit rating will either be raised and equalized with the rating on Petroleos de Venezuela's owner, the Bolivarian Republic of Venezuela (BB-/Positive/B), or affirmed at 'B+'. POPOLARE DI VERONA: Okays Merger with Banca Popolare Italiana ------------------------------------------------------------- The Boards of Directors of Banco Popolare di Verona e Novara and Banca Popolare Italiana have approved the merger between the two companies, Reuters reports. As reported in the TCR-Europe on Oct. 17, the Board of Directors of BPI accepted a EUR8.2-billion takeover offer from larger rival BPVN. BPI and BPVN will form a holding company that will launch a share swap to stakeholders of the groups: -- 0.43 share for every BPI share, and -- a share for every BPVN share. Aside from the share swap, BPI would distribute an extraordinary dividend of EUR2 per share, for a total cash of EUR1.5 billion, to existing shareholders. The share-and-cash offer values BPI at EUR12 per share, based on BPVN's share price of EUR22.81 on Oct. 13. BPI shareholders have yet to confirm the agreement with due diligence. According to BPI, the merger will generate annual pretax synergies of EUR500 million starting 2010, but integration costs will reach an overall EUR300 million before tax. The merged group, BPI added, will have a market capitalization of EUR15.5 billion, 2,183 branches and more than 2.4 million clients. The merged company will be called Banco Popolare and will concentrate on savings and loans in northern Italy, Reuters reports. The merger, the banks added, will raise BPI's productivity and overall income. The companies forecasted an 18.9% hike in operating profit in 2006-2010 and a 45% cost-to-income in 2010. The payout ratio will be around 50% in 2010. About Banca Popolare Italiana Headquartered in Lodi, Italy, Banca Popolare Italiana -- http://www.bancapopolareitaliana.it/-- attracts deposits and offers commercial banking services. The Bank offers securities brokerage, asset management, mortgage loans, insurance, lease financing and treasury services and manages mutual funds. Through a subsidiary, Banca Popolare Italiana offers merchant banking services and medium- and long-term lending. About Banco Popolare di Verona Headquartered in Verona, Italy, Banco Popolare di Verona e Novara (BPVN) -- http://www.bpv.it/-- offers private banking, investment banking and asset management services, as well as other services in the tax and real estate sectors. The company's banking network comprises over 1,170 branches, which are spread throughout the Italian regions of the Veneto, Emilia- Romagna, Piedmont and Lombardy, and internationally in London, Luxembourg, Hong Kong,and Shanghai. * * * Moody's Investors Service placed on review for possible downgrade the A2 long-term and Prime-1 short-term senior debt and bank deposit ratings of Banco Popolare di Verona e Novara, as well as its C+ financial strength rating, following the announcement that BPVN's proposal to merge with Banca Popolare Italiana has been approved by BPI's board of directors. At the same time, Moody's placed on review for possible upgrade BPI's Baa2 long-term and Prime-2 short-term bank deposit and debt ratings and its D financial strength rating, as well as the Baa3/Prime-3/D ratings of Efibanca, BPI's medium- and long-term lending and investment banking subsidiary. Ratings placed on review for possible downgrade: Banco Popolare di Verona e Novara: * long-term debt and deposits at A2 * short-term deposit and debt ratings at Prime-1 * commercial paper rating at Prime-1 * subordinated debt at A3; junior subordinated debt at A3 * Tier 3 debt at Baa1 Banco Popolare di Verona e Novara, London: * short-term deposit and debt ratings at P-1 Ratings placed on review for possible upgrade: Banca Popolare Italiana: * Long-term debt and deposit ratings at Baa2 * Short-term debt and deposit ratings at Prime-2 * Financial Strength Rating at D * subordinated debt rating at Baa3 * junior subordinated debt at Ba1 * Tier III debt at Ba2 Banca Popolare di Lodi Investor Trust III: * non-cumulative guaranteed Trust Preferred Securities at Ba2 Efibanca: * Long-term deposit rating at Baa3 * Short-Term deposit rating at Prime-3 * Financial Strength Rating at D * backed long-term debt at Baa2 * backed subordinated debt at Baa3 Fitch Ratings placed Banco Popolare di Verona's A+ Issuer Default rating and B Individual rating on Rating Watch Negative. Its other ratings are affirmed at Short-term F1 and Support 3. At the same time, the agency placed Banca Popolare Italiana's BBB IDR, F3 Short-term and C Individual ratings on Rating Watch Positive. Its Support rating is affirmed at 3. The rating action follows the announcement by BPI's board of directors that it has accepted a merger offer by BPVN. Fitch will resolve the Rating Watches on completion of the merger, expected for March 2007. POPOLARE DI VERONA: Merger Deal Sees 1,350 Job Cuts at New Group ---------------------------------------------------------------- The approved merger between Banca Popolare Italiana and Banco Popolare di Verona e Novara will lead to around 1,350 job cuts at the new group, AFX News reports citing BPVN CEO Fabio Innocenzi. Mr. Innocenzi revealed that 840 of the job cuts would be done through incentive departures while 510 through natural wastage. The Board of Directors of the companies have approved the merger, which would commence on July 1, 2007. As reported in the TCR-Europe on Oct. 17, the Board of Directors of BPI accepted an EUR8.2-billion takeover offer from larger rival BPVN. BPI and BPVN will form a holding company that will launch a share swap to stakeholders of the groups: -- 0.43 share for every BPI share, and -- a share for every BPVN share. Aside from the share swap, BPI would distribute an extraordinary dividend of EUR2 per share, for a total cash of EUR1.5 billion, to existing shareholders. The share-and-cash offer values BPI at EUR12 per share, based on BPVN's share price of EUR22.81 on Oct. 13. BPI shareholders have yet to confirmed with due diligence the agreement. According to BPI, the merger will generate annual pretax synergies of EUR500 million starting 2010, but integration costs will reach an overall EUR300 million before tax. The merged group, BPI added, will have a market capitalization of EUR15.5 billion, 2,183 branches and more than 2.4 million clients. The companies expected revenue synergies to reach EUR146 million. The banks forecast synergies of EUR70 million in 2007, EUR270 million in 2008, EUR413 million in 2009 and EUR500 million in 2010, Reuters relates. Mr. Innocenzi said that the merged group could generate EUR215 million more in synergies in a "best case scenario" excluded in the plan. The companies' shareholders will met on March 10, 2007, to approve the merger to a new company, which will be called Banco Popolare. About Banca Popolare Italiana Headquartered in Lodi, Italy, Banca Popolare Italiana -- http://www.bancapopolareitaliana.it/-- attracts deposits and offers commercial banking services. The Bank offers securities brokerage, asset management, mortgage loans, insurance, lease financing and treasury services and manages mutual funds. Through a subsidiary, Banca Popolare Italiana offers merchant banking services and medium- and long-term lending. About Banco Popolare di Verona Headquartered in Verona, Italy, Banco Popolare di Verona e Novara (BPVN) -- http://www.bpv.it/-- offers private banking, investment banking and asset management services, as well as other services in the tax and real estate sectors. The company's banking network comprises over 1,170 branches, which are spread throughout the Italian regions of the Veneto, Emilia- Romagna, Piedmont and Lombardy, and internationally in London, Luxembourg, Hong Kong and Shanghai. * * * Moody's Investors Service placed on review for possible downgrade the A2 long-term and Prime-1 short-term senior debt and bank deposit ratings of Banco Popolare di Verona, as well as its C+ financial strength rating, following the announcement that BPVN's proposal to merge with Banca Popolare Italiana has been approved by BPI's board of directors. At the same time, Moody's placed on review for possible upgrade BPI's Baa2 long-term and Prime-2 short-term bank deposit and debt ratings and its D financial strength rating, as well as the Baa3/Prime-3/D ratings of Efibanca, BPI's medium- and long-term lending and investment banking subsidiary. Ratings placed on review for possible downgrade: Banco Popolare di Verona e Novara: * long-term debt and deposits at A2 * short-term deposit and debt ratings at Prime-1 * commercial paper rating at Prime-1 * subordinated debt at A3; junior subordinated debt at A3 * Tier 3 debt at Baa1 Banco Popolare di Verona e Novara, London: * short-term deposit and debt ratings at P-1 Ratings placed on review for possible upgrade: Banca Popolare Italiana: * Long-term debt and deposit ratings at Baa2 * Short-term debt and deposit ratings at Prime-2 * Financial Strength Rating at D * subordinated debt rating at Baa3 * junior subordinated debt at Ba1 * Tier III debt at Ba2 Banca Popolare di Lodi Investor Trust III: * non-cumulative guaranteed Trust Preferred Securities at Ba2 Efibanca: * Long-term deposit rating at Baa3 * Short-Term deposit rating at Prime-3 * Financial Strength Rating at D * backed long-term debt at Baa2 * backed subordinated debt at Baa3 Fitch Ratings placed Banco Popolare di Verona's A+ Issuer Default rating and B Individual rating on Rating Watch Negative. Its other ratings are affirmed at Short-term F1 and Support 3. At the same time, the agency placed Banca Popolare Italiana's BBB IDR, F3 Short-term and C Individual ratings on Rating Watch Positive. Its Support rating is affirmed at 3. The rating action follows the announcement by BPI's board of directors that it has accepted a merger offer by BPVN. Fitch will resolve the Rating Watches on completion of the merger, expected for March 2007. ROYAL CARIBBEAN: Names Steve Shaiken VP of Onboard Revenue ---------------------------------------------------------- Royal Caribbean International has named seasoned retail executive Steve Shaiken as vice president of Onboard Revenue. Mr. Shaiken will be responsible for enhancing and promoting Royal Caribbean's onboard revenue products, including casino operations, retail boutiques, art auctions, and the ShipShape Day Spa and salon, in addition to multiple other onboard revenue streams. "We are delighted to have someone of Steve's caliber join the Royal Caribbean executive team," said Michael Bayley, senior vice president of Hotel Operations. "His breadth of retail management experience makes him ideally suited for this vital role." Mr. Shaiken joined the team on December 18. Most recently, Mr. Shaiken served as president of museum retail operations for Smithsonian Business Ventures for the Smithsonian Institution. Before that, Mr. Shaiken spent 17 years in senior leadership positions in retail and merchandising for Fortune 1000 companies such as GE's Universal Parks & Resorts; Starwood Hotels and Resorts Worldwide; and Hilton Hotels Corporation. Based in Miami, Florida, Royal Caribbean Cruises Ltd. -- http://www.royalcaribbean.com/-- operates a cruise line with more than 170 destinations worldwide including Australia, China, Vietnam, and an array of shore excursions and cruise tour options. The company's ships offer itineraries, activities and amenities designed to appeal to every taste, energy level and age group giving guests the opportunity to create their own adventure. The Troubled Company Reporter - Asia Pacific reported that in connection with Moody's Investors Service's implementation of its new Probability-of-Default and Loss-Given-Default rating methodology for the Gaming, Lodging & Leisure sector, the rating agency confirmed its Ba1 Corporate Family Rating for Royal Caribbean Cruises Ltd. Additionally, Moody's revised or held its probability-of-default ratings and assigned loss-given-default ratings on these debentures: Projected Old POD New POD LGD Loss-Given Debt Issue Rating Rating Rating Default ---------- ------- ------- ------ ---------- Unsecured Notes 6.75%-8.75% 2006-2027 Ba1 Ba1 LGD4 55% US$550 Senior Unsecured 7% 2013 Ba1 Ba1 LGD4 55% US$350 Senior Unsecured 7.25% 2016 Ba1 Ba1 LGD4 55% Zero Coupon Convertible Notes Ba1 Ba1 LGD4 55% Senior Unsecured Shelf Ba1 Ba1 LGD4 55% Preferred Shelf Ba3 Ba2 LGD6 97% SAKABUN (H.K.): Appoints Joint Liquidators ------------------------------------------ Chan Cheuk Ying and Lee Cho Yiu Julia were appointed as joint and several liquidators of Sakabun (Hong Kong) Co., Ltd by a special resolution passed on Dec. 8, 2006. The Joint and Several Liquidators can be reached at: Chan Cheuk Ying Lee Cho Yiu Julia Suite 1, 8/F New Henry House 10 Ice House Street, Central Hong Kong SANMINA-SCI: Delays Form 10-K Filing for FY Ended Sept. 30, 2006 ---------------------------------------------------------------- Sanmina-SCI Corp. is filing a notification with the U.S. Securities and Exchange Commission under Rule 12b-25 because it will be unable to file its annual report on Form 10-K for the fiscal year ended Sept. 30, 2006, on a timely basis. The company is completing its preparation of, and its outside independent accounting firm is in the process of auditing the company's Form 10-K. The company intends to file its Form 10-K as soon as practicable, and in any event within the 15-day extension period afforded by SEC Rule 12b-25 under the Securities Exchange Act of 1934, as amended. The company's board of directors formed an independent special committee to review certain matters concerning the company's stock option administration policies and practices dating back to Jan. 1, 1997, and the related accounting implications. Based on the final report and recommendations of the special committee, the company issued a press release on Oct. 12, 2006, stating that a restatement of the company's historical financial results would be necessary in order to record additional stock- based compensation expenses. The company filed on Dec. 13, 2006, its Form 10-Q for the period ended July 1, 2006. The financial statements, and related footnotes and disclosures have been adjusted to reflect the results of the investigation. Headquartered in San Jose, California, Sanmina-SCI Corporation - - http://www.sanmina.com/-- is one of the largest electronics contract manufacturing services companies providing a full spectrum of integrated, value added solutions. The company has locations in Brazil, China, Finland, Malaysia, Mexico and Singapore, among others. On October 23, 2006, the Troubled Company Reporter - Asia Pacific reported that Moody's assigned a Ba2 rating to Sanmina- SCI Corporation's proposed US$600 million unsecured term loan facility due 2008. The proceeds of the proposed US$600 million term loan will be used to finance US$525 million of Sanmina's 3% convertible subordinated notes due 2007. Sanmina's corporate family rating of Ba2 and all of its other outstanding ratings will remain under review for possible downgrade. Likewise, the new Ba2 rating on the proposed term loan facility will also be placed under review for possible downgrade. On October 19, 2006, the TCR-AP reported that Fitch Ratings downgraded Sanmina-SCI Corporation: -- Senior subordinated debt to 'B/RR5' from 'B+/RR4' Fitch also assigned this rating: -- US$600 million term loan expiring January 2008 'BB+/RR1' The ratings on senior secured, senior subordinated and these ratings remained on Rating Watch Negative: -- Issuer Default Rating 'B+' -- First lien senior secured credit facility 'BB+/RR1' SANMINA-SCI CORP: S&P Holds BB- Rating on CreditWatch Negative -------------------------------------------------------------- Standard & Poor's Ratings Services left its 'BB-' corporate credit and other ratings on San Jose, Calif.-based Sanmina-SCI Corp. on CreditWatch with negative implications, where they were placed on Aug. 14, 2006. While Sanmina filed its 10-quarter for the period ending July 1, 2006, by the Dec. 14, 2006, deadline, the company has filed for a 15-day extension to file its 2006 10-K, now due Dec. 29, 2006. "Should the company be unable to file within that deadline, we will review the reaction of the bondholders and creditors under the October 2006 term loan to determine any rating impact," said Standard & Poor's credit analyst Lucy Patricola. The company's securitization programs and lenders under the company's revolving credit have granted waivers to file through Jan. 10, 2007, and possibly longer depending on any extension granted by the bondholders. The rating could be lowered to the 'CCC' category if extensions to file financial statements are not granted by the company's remaining bondholders or lenders, reflecting heightened concerns of debt acceleration. In the process of reviewing stock option grants, the company uncovered several other accounting irregularities. Upon receipt and review of the company's 10-K, Standard & Poor's will evaluate the impact of additional restatements, the company's compliance with Sarbannes-Oxley requirements relating to internal controls, and additional involvement of the SEC or other judicial authorities, and operational performance over the last two quarters to determine the final impact on the rating. Headquartered in San Jose, California, Sanmina-SCI Corporation - - http://www.sanmina.com/-- is one of the largest electronics contract manufacturing services companies providing a full spectrum of integrated, value added solutions. The company has locations in Brazil, China, Finland, Malaysia, Mexico and Singapore, among others. SHAW: China Picks Westinghouse Consortium to Build Nuclear Plant ---------------------------------------------------------------- The Shaw Group Inc. disclosed that the People's Republic of China's State Nuclear Power Technology Company or SNPTC has selected the Westinghouse/Shaw Consortium and Westinghouse's AP1000 passive Generation III technology as the basis for four new nuclear power plants to be constructed in China. The AP1000 Consortium will begin working closely with SNPTC to negotiate final contract details with implementation of the new build program expected to begin in early 2007. J.M. Bernhard, Jr., Chairman, President and Chief Executive Officer of Shaw, said, "We are exceptionally pleased to be a part of the AP1000 Consortium and with our role in supporting China's growing energy needs with the safe, modular and economical AP1000 technology. These first four "next generation" units will provide a sustainable source of critically needed power generation for the citizens and the government of the People's Republic of China and we are delighted to be partnered with Westinghouse Electric Company in these significant projects. This project also represents the beginning of a major construction program for China to add at least 20,000 megawatts of nuclear power over the next 15 years. We look forward to a long and mutually beneficial relationship with our Chinese clients for these and future nuclear units." Richard F. Gill, Chairman of the Executive Committee and Interim President of Shaw's Power Division, added, "It has been a tremendous honor to work with President Chen Zhaobo and SNPTC on this most important initiative. We thank them for the extremely professional and courteous manner in which the negotiations for this selection have been handled. We believe this venture will become a benchmark for future projects and an example of how our countries can successfully work together on very complex industrial projects. Shaw is committed to upholding this spirit of collaboration and innovation as we work together with the People's Republic of China to finalize contract terms on these first four nuclear projects." As part of the AP1000 Consortium, Shaw will provide engineering, procurement, commissioning, and management services for the four Chinese nuclear generation units. The projects are expected to spur significant economic opportunity in China, as well as in the United States with skilled engineering jobs being created in Shaw offices in Massachusetts, New Jersey, North Carolina and Louisiana as a result. Shaw is a pioneer in the nuclear services industry and has a long-standing relationship with its partner, Westinghouse. Shaw and Westinghouse collaborated to build the first commercial nuclear generating plant in the United States at Shippingport, Pennsylvania in the 1950s. Shaw has performed as architect- engineer on 17 domestic nuclear units and is presently completing the construction restart of Tennessee Valley Authority's Browns Ferry Unit #1 in Alabama, the largest nuclear construction project currently underway in the western hemisphere. Shaw is a leader in providing nuclear modifications and maintenance services, with 40% of the nation's market share. The company is certified by ASME to both engineer and fabricate piping systems for nuclear power facilities. Shaw is also a 20% owner of Westinghouse. The selection of Westinghouse and Shaw to supply new nuclear plants in China is the most recent in a series of positive announcements regarding the AP1000 passive Generation III technology and new nuclear construction. The AP1000 technology obtained Design Certification from the United States Nuclear Regulatory Commission and is the current technology selection for at least 12 proposed new units in the United States. Westinghouse and Shaw are working closely to support this proposed growth in the domestic nuclear power sector. Westinghouse Electric Company is the world's pioneering nuclear power company and is a leading supplier of nuclear plant products and technologies to utilities throughout the world. Currently, Westinghouse technology forms the basis for approximately one-half of the world's operating nuclear plants. Headquartered in Baton Rouge, LA, The Shaw Group Inc. -- http://www.shawgrp.com-- is a global provider of services to the environmental, infrastructure and homeland security markets, including consulting, engineering, construction, remediation and facilities management services to governmental and commercial customers. It is also a vertically integrated provider of engineering, procurement, pipe fabrication, construction and maintenance services to the power and process industries. The company segregates its business activities into four operating segments: Environmental & Infrastructure (E&I); Energy & Chemicals (E&C); Maintenance, and Fabrication, Manufacturing & Distribution (F&M). In January 2005, the company sold substantially all of the assets of its Shaw Power Technologies, Inc. and Shaw Power Technologies International, Ltd. units to Siemens Power Transmission and Distribution Inc., a unit of Siemens AG. The company has operations in Chile, China, Malaysia, the United Kingdom and, Venezuela, among others. On December 4, 2006, the Troubled Company Reporter - Asia Pacific reported that Standard & Poor's Ratings Services affirmed its 'BB' corporate credit rating on The Shaw Group Inc. and removed it from CreditWatch, where it was placed with negative implications in Oct. 2006. The outlook is stable. In addition, 'BB' senior secured debt rating was affirmed after the US$100 million increase to the company's revolving credit facility. WELL BOND: Court Appoints Joint Liquidators ------------------------------------------- The High Court of Hong Kong appointed Bruno Arboit and Simon Richard Blade of Baker Tilly Hong Kong Business Recovery Ltd as joint and several liquidators of Well Bond Group Ltd on Dec. 1, 2006. The Joint and Several Liquidators can be reached at: Bruno Arboit Simon Richard Blade 12/F, China Merchants Tower Shun Tak Centre 168-200 Connaught Road, Central Hong Kong YING KONG: Joint Liquidators Cease to Act ----------------------------------------- Wong Man Chung Francis and Leung Lok Ming ceased to act as joint and several liquidators of Ying Kong Industrial Group (Hong Kong) Ltd on Dec. 6, 2006. As reported by the TCR-AP, the members and creditors of the company met on Dec. 6, 2006, and receive the liquidators' account of the company's wind-up proceedings. The former Liquidators can be reached at: Wong Man Chung, Francis Leung Lok Ming 19/F, No. 3 Lockhart Road Wanchai, Hong Kong ========= I N D I A ========= AMERICAN AXLE: Moody's Holds Corporate Family Rating at Ba3 ----------------------------------------------------------- Moody's Investors Service confirmed American Axle & Manufacturing Holdings Inc.'s Corporate Family Rating of Ba3 and affirmed American Axle & Manufacturing, Inc.'s Speculative Grade Liquidity rating of SGL-2. Unsecured debt ratings of Ba3 LGD-4, 57% at both American Axle and Holdings have also been confirmed. The outlook is negative. The actions conclude a ratings review reported on Oct. 5, 2006, after the company's disclosure of a special attrition program and other restructuring actions which will be implemented at the end of the fourth quarter of 2006 and early 2007. Collectively, the programs are anticipated to involve special charges of between US$150-$250. In confirming the ratings, Moody's noted that these programs will involve substantial cash disbursements and cause higher debt levels to persist in the short-term. However, it will have a relatively quick pay-back period through establishing a lower cost structure which is anticipated to improve future performance and cash flows. Metrics more consistent with the Ba3 rating category could develop during 2007 assuming industry conditions stabilize and sufficient consumer demand for vehicles based on the GMT-900 platform develops. The Corporate Family rating of Ba3 reflects weighting placed on scores under the Auto Supplier Methodology for elevated leverage, customer concentration and deterioration in coverage ratios which has occurred over the last year. Scores on those factors are partially mitigated by stronger results from the company's sound capitalization, good liquidity profile, efficient operations, and the long-term nature of its business awards. Moody's would expect free cash flow in 2006 to be close to break-even as the company's investment in organic growth has coincided with sharply lower production at its major customers. The rating also emphasizes potential volatility to the company's cash flows arising from its ongoing customer, geographic and platform concentration. American Axle has a capital intensive business model which creates significant operating leverage as well as ongoing capital expenditure requirements. Those traits tend to compound its exposure to challenges faced by its largest customer, GM. Improved customer, geographic and platform diversification will slowly evolve. Substantial disbursements to facilitate those objectives, the SAP and other restructuring actions will be required. Weak debt service ratios, elevated leverage and constricted free cash flows are anticipated to continue over the near term. However, over the intermediate period, improvements in the company's cost structure and enhanced free cash flow generated from the SAP and other restructuring actions combined with lower capital expenditures in 2007 ought to position key credit metrics within a more acceptable range for Ba3 rated credits. The outlook is negative and reflects the company's continued concentration with GM, whose Corporate Family rating is B3, and issues related to the mix of vehicles it supports. While uncertainty exists on what build rates consumer demand may ultimately support for models based on the GMT-900 platform, the rating agency would expect American Axle to remain profitable during the intermediate term. In the near term, the company's leverage and debt service coverage ratios will remain weak as interest expense will increase as higher debt levels incurred from funding the combination of 2006 capital expenditures and significant SAP disbursements and other restructuring actions will continue. The company remains vulnerable to downside developments at GM and the potential that labor contract issues in late 2007 at the Big 3 OEMs could disrupt build-rate assumptions. The SGL-2 rating represents good liquidity over the coming twelve months. American Axle should generate internal funds to meet basic operating needs during the coming year. However, the cash impact of its SAP and other restructuring programs are likely to cause incremental borrowings towards the end of the fourth quarter and early 2007. While the company maintained only minimal balance sheet cash, it does have access to a US$600 million unsecured revolving credit facility whose commitment extends to April 2010. At the end of the third quarter, the company had approximately US$486 million available under the facility. Ratings confirmed: * American Axle & Manufacturing, Inc. -- Senior Unsecured notes, Ba3, LGD-4, 57% -- Senior Unsecured term loan, Ba3, LGD-4, 57% -- American Axle & Manufacturing Holdings, Inc. -- Corporate Family Rating, Ba3 -- Probability of Default Rating, Ba3 -- Senior Unsecured convertible notes, Ba3, LGD-4, 57% Ratings affirmed: * American Axle & Manufacturing, Inc. -- Speculative Grade Liquidity rating, SGL-2 American Axle & Manufacturing -- http://www.aam.com/-- manufactures, engineers, designs and validates driveline and drive train systems and related components and modules, chassis systems and metal-formed products for light trucks, sport utility vehicles and passenger cars. In addition to locations in the United States, AAM also has offices or facilities in India, Brazil, China, England, Germany, Japan, Mexico, Poland, Scotland and South Korea. BALLY TECH: To File Form 10-Q Quarterly Reports by Dec. 22 ----------------------------------------------------------- Bally Technologies, Inc., anticipates filing with the United States Securities and Exchange Commission its Form 10-Qs for the fiscal quarters ended Sept. 30, 2005, and Dec. 31, 2005, by Dec. 22, 2006. While the company also continues to work diligently to complete its Form 10-Q for the quarter ended March 31, 2006, and its Form 10-K for the fiscal year ended June 30, 2006, the company has requested an amendment to its bank loan agreement to extend the Dec. 31, 2006, deadline for delivery of these two remaining 2006 filings to March 15, 2007. While the company believes it can achieve this filing schedule, there can be no assurance that the schedule will be met, or that the amendment to the bank loan agreement will be successfully obtained. The company will provide an update on the filing status of its 2007 Quarterly Reports on Form 10-Q after the filing of its 2006 10-K. Las Vegas, Nev.-based Bally Technologies, Inc. (NYSE: BYI) -- http://www.BallyTech.com/-- designs, manufactures, operates, and distributes advanced gaming devices, systems, and technology solutions worldwide. Bally Technologies' product line includes reel-spinning slot machines, video slots, wide-area progressives and Class II lottery and central determination games and platforms. Bally Technologies also offers an array of casino management, slot accounting, bonus, cashless, and table management solutions. The company also owns and operates Rainbow Casino in Vicksburg, Miss. The company's South American operations are located in Argentina. The company also has operations in Macau, China and India. * * * As reported in the Troubled Company Reporter on Aug. 16, 2006, Standard & Poor's Ratings Services held its ratings on Bally Technologies Inc., including the 'B' corporate credit rating, on CreditWatch with negative implications. BALLY TECH: Appoints Robert L. Guido to Board of Directors ---------------------------------------------------------- Bally Technologies, Inc., appointed Robert L. Guido to its Board of Directors. Mr. Guido, who has been affirmatively determined by the company's board to be an independent director, will also serve on the company's Audit Committee. Mr. Guido recently retired from Ernst & Young where he was Vice Chair and CEO of E&Y's Assurance and Advisory Practice. In this role, he was responsible for overall business strategy and had significant dealings with both the U.S. Securities and Exchange Commission and the Public company Accounting Oversight Board (PCAOB) on behalf of the firm. During his 38-year career at Ernst & Young, Guido also co-chaired the firm's Global Client Steering Committee and served as a senior advisory or engagement partner to numerous global companies. "Bob will make an immediate contribution to our company," said David Robbins, Chairman of the Board. "His years as a senior executive and partner with Ernst & Young establishing policy and serving large public companies will be invaluable to us. He has significant expertise in various SEC and PCAOB matters, and his appointment is an important next step as we strive to enhance the company's internal control structure and financial reporting." Richard Haddrill, Chief Executive Officer, added, "In addition to Bob's financial expertise, he has significant experience leading various units of Ernst & Young and advising a broad array of companies and businesses. I look forward to his contributions to our overall business direction and execution." Las Vegas, Nev.-based Bally Technologies, Inc. (NYSE: BYI) -- http://www.BallyTech.com/-- designs, manufactures, operates, and distributes advanced gaming devices, systems, and technology solutions worldwide. Bally Technologies' product line includes reel-spinning slot machines, video slots, wide-area progressives and Class II lottery and central determination games and platforms. Bally Technologies also offers an array of casino management, slot accounting, bonus, cashless, and table management solutions. The company also owns and operates Rainbow Casino in Vicksburg, Miss. The company's South American operations are located in Argentina. The company also has operations in Macau, China and India. * * * As reported in the Troubled Company Reporter on Aug. 16, 2006, Standard & Poor's Ratings Services held its ratings on Bally Technologies Inc., including the 'B' corporate credit rating, on CreditWatch with negative implications. IFCI LTD: ABN Amro London Increases Stake to 5.09% -------------------------------------------------- In a filing with the Bombay Stock Exchange, IFCI Ltd. discloses that ABN Amro Bank NV London Branch acquired 1,701,000 shares of the company. From its 4.82% holding in IFCI, ABN Amro's acquisition through secondary market purchase on Dec. 5, 2006, increased its stake to 5.09%. The Telegraph, citing unnamed sources, said that the investment was purely financial in nature. About IFCI Limited IFCI Limited -- http://www.ifciltd.com/-- is established to cater the long-term finance needs of the industrial sector. The principal activities of IFCI include project finance, financial services, non-project specific assistance and corporate advisory services. Project finance involves providing credit and other facilities to green-field industrial projects (including infrastructure projects), as well as to brown-field projects. Financial services covers a range of activities wherein assistance is provided to existing concerns through various schemes for the acquisition of assets, as part of their expansion, diversification and modernization programs. Non- project specific assistance is provided in the form of corporate/short-term loans, working capital, bills discounting, etc to meet expenditure, which is not specifically related to any particular project. Its investment portfolio includes equity shares, preference shares, security receipts and government securities. * * * Fitch Ratings, on June 29 2006, affirmed IFCI Limited's support rating at '4'. The outlook on the rating is stable. Additionally, on February 15, 2006, Credit Analysis and Research Limited retained a CARE D rating to the long and medium term debt aggregating INR248 crore. Instruments carrying this rating are judged to be of the lowest category. They are either in default or likely to be in default soon. IMAX CORPORATION: Moody's Affirms B3 Corporate Family Rating ------------------------------------------------------------ Moody's Investors Service affirmed the B3 corporate family rating for IMAX Corp., as well as the Caa1 rating on its senior notes. The outlook remains stable. The B3 corporate family rating incorporates the lack of visibility regarding its long term cash flow prospects and high financial risk, offset by adequate liquidity from balance sheet cash and its revolving credit facility, a highly enforceable backlog of signed contracts, and the value of the IMAX brand. Moody's affirmed these ratings: -- B3 Corporate Family Rating; -- B3 Probability of Default Rating; and -- Caa1 Senior Notes rating, LGD 4, 58%. All ratings have a Stable Outlook. The stable outlook assumes that IMAX will maintain liquidity of at least US$30 million through the combination of balance sheet cash and availability under its (unrated) US$40 million revolving credit facility. The stable outlook also anticipates a reversal of the deteriorating free cash flow trend and an improvement in revenue and cash flow from the depressed levels of the September 2006 quarter. IMAX Corporation - http://www.imax.com-- is an entertainment technology company specializing in large-format and three- dimensional (3D) film presentations. The company's principal business is the design, manufacture, sale and lease of projection systems based on technology for large-format, 15- perforation film frame, 70-mm format (15/70-format) theaters, including commercial theaters, museums and science centers, and destination entertainment sites. IMAX has locations in India and Italy, among others. IMAX CORP: Focusing on Worldwide IMAX Network Growth ---------------------------------------------------- IMAX Corp. reported that after an extensive period of review of potential strategic alternatives to enhance shareholder value, it has determined that a sale or merger of the company at this time will not achieve this objective. Accordingly, the Board of Directors and management believe that focusing on the growth of the worldwide IMAX network and strategic business initiatives are the best means at present to grow IMAX's value to shareholders. "While IMAX received interest from multiple parties in our process of exploring a potential sale or merger of the company, none ultimately indicated a willingness to acquire the company at an acceptable valuation," said IMAX Co-Chairmen and Co-Chief Executive Officers Richard L. Gelfond and Bradley J. Wechsler. "As we reported at the end of this year's third quarter, we are confident about our ability to profitably grow the global IMAX network, and to succeed with our new business initiatives designed to expand the IMAX footprint, such as our pursuit of joint venture opportunities around the world and our development of an IMAX digital projector, targeted for introduction in 2008." IMAX Corporation - http://www.imax.com-- is an entertainment technology company specializing in large-format and three- dimensional (3D) film presentations. The company's principal business is the design, manufacture, sale and lease of projection systems based on technology for large-format, 15- perforation film frame, 70-mm format (15/70-format) theaters, including commercial theaters, museums and science centers, and destination entertainment sites. IMAX has locations in India and Italy, among others. INDIAN OIL: Raises US$200 Mil. to Refinance Term Loan Facility -------------------------------------------------------------- Indian Oil Corporation Limited raised a loan of US$200 million (Yen equivalent) for refinancing the existing syndicated term loan facility that was availed of in year 2004-05 to finance capital expenditure. The residual period of the facility is about three years. The loan agreement was signed [on Dec. 18, 2006] at Hong Kong by Mr. S V Narasimhan, Director (Finance), Indian Oil. Indian Oil is availing of the syndicated term loan facility in Japanese Yen for the first time. The facility has been arranged at a highly competitive rate by a syndicate of banks comprising the Bank of Tokyo-Mitsubishi UFJ Ltd., BNP Paribas, Calyon, Citigroup Global Markets Singapore Pte. Ltd., the Hong Kong and Shanghai Banking Corporation Ltd., ING Bank N V, Mizuho Corporate Bank Ltd., Standard Chartered Bank, and Mega International Commercial Bank Co. The deal for the syndication was launched on 10th November 2006 and the road shows were held on 23rd and 24th November 2006 at Taipei and Singapore. The deal closed successfully on 8th December 2006, with participation of 12 banks. Indian Oil plans to utilize the proceeds of the syndication to prepay the leaders of the existing syndicated term loan facility. This refinancing in Yen equivalent is expected to yield substantial savings. Headquartered in New Delhi, Indian Oil Corporation Limited -- http://www.iocl.com/-- is engaged in the sale of petroleum products. Other businesses comprise the sale of imported crude oil, sale of gas, petrochemicals and oil and gas exploration activities jointly undertaken in the form of unincorporated joint ventures. The company's premium fuels include XTRAPREMIUM petrol and XTRAMILE diesel. AutoGas is Indian Oil's auto liquid petroleum gas brand and sells SERVO lubricants in 10 countries. The aviation fuel supply business caters to the aviation fuel requirements of the defense services, national carriers, scheduled private airlines and international airlines. The Digboi Refinery of the Assam Oil Division processes crude oil and its marketing network comprises 366 retail outlets, 399 kerosene/light diesel oil dealerships, and 271 Indane distributors. It owns and operates 18 refineries with a combined refining capacity of 54.20 million tones per annum (1.1 million barrels per day). * * * The Troubled Company Reporter - Asia Pacific reported on April 21, 2006, that Standard & Poor's Ratings Services revised the outlook on Indian Oil to positive from stable. At the same time, S&P affirmed the 'BB+' issuer credit rating on the Company. The outlook revision follows the revision in the outlook on the sovereign credit ratings on India (BB+/Positive/B) on April 19, 2006. Additionally, Moody's Investors Service gave Indian Oil a Ba1 long-term corporate family rating and a Ba2 issuer rating on March 3, 2005. INDIAN OIL: Board to Consider Declaring Interim Dividend -------------------------------------------------------- Indian Oil Corporation Ltd informs the Bombay Stock Exchange that the company's board of directors will consider declaration of interim dividend at a meeting on Dec. 22, 2006. In that regard, Indian Oil fixed Dec. 27, as the Record Date. The Interim Dividend, if declared by the board, would be dispatched to the eligible shareholders by Jan. 8, 2007. Headquartered in New Delhi, Indian Oil Corporation Limited -- http://www.iocl.com/-- is engaged in the sale of petroleum products. Other businesses comprise the sale of imported crude oil, sale of gas, petrochemicals and oil and gas exploration activities jointly undertaken in the form of unincorporated joint ventures. The company's premium fuels include XTRAPREMIUM petrol and XTRAMILE diesel. AutoGas is Indian Oil's auto liquid petroleum gas brand and sells SERVO lubricants in 10 countries. The aviation fuel supply business caters to the aviation fuel requirements of the defense services, national carriers, scheduled private airlines and international airlines. The Digboi Refinery of the Assam Oil Division processes crude oil and its marketing network comprises 366 retail outlets, 399 kerosene/light diesel oil dealerships, and 271 Indane distributors. It owns and operates 18 refineries with a combined refining capacity of 54.20 million tones per annum (1.1 million barrels per day). * * * The Troubled Company Reporter - Asia Pacific reported on April 21, 2006, that Standard & Poor's Ratings Services revised the outlook on Indian Oil to positive from stable. At the same time, S&P affirmed the 'BB+' issuer credit rating on the Company. The outlook revision follows the revision in the outlook on the sovereign credit ratings on India (BB+/Positive/B) on April 19, 2006. Additionally, Moody's Investors Service gave Indian Oil a Ba1 long-term corporate family rating and a Ba2 issuer rating on March 3, 2005. INDIAN OVERSEAS: Signs MOU on Infrastructure Funding with IIFC -------------------------------------------------------------- Indian Overseas Bank signed a memorandum of understanding with India Infrastructure Finance Company to jointly fund infrastructure projects. Under the deal, IOC would identify business opportunities and do project appraisal, while IIFC would bring in the expertise and funding, IOB Chairman T. S. Narayanasami says. The bank would also provide cash management and treasury services to IIFC. The MOU, signed on Dec. 7, is valid for one year and would be renewed next year, myiris.com relates. About Indian Overseas Bank Headquartered in Chennai India, Indian Overseas Bank -- http://www.iob.com/-- provides consumer and commercial banking services. The Company provides various banking services, including saving bank, current accounts, credit facilities and other services. IOB also provides non-residential Indian services, personal banking, foreign exchange reserves collections services, agri business consultancy, credit cards and e-banking services. It also provides automated teller machine services. As of March 31, 2006, IOB had five full- fledged branches overseas: two in Hong Kong, and one each in Singapore, Seoul and Sri Lanka. The Bank also had an extension counter in Sri Lanka and a remittance center in Singapore. Standard & Poor's Ratings Service gave Indian Overseas BB+ ratings to both long-term local and long-term foreign issuer credit, and B ratings for both its short-term foreign and short- term local issuer credit effective on January 16, 2006. INDUSTRIAL DEVELOPMENT: To Receive US$336 Mil. in NPA Recovery -------------------------------------------------------------- Industrial Development Bank of India Ltd. should receive INR1,500 crore (US$336 million) from the recovery of bad loans in the fiscal year to March 2007, The Financial Express relates citing a Reuters report. The money will come from the Stressed Assets Stabilisation Fund, SASF executive trustee Siby Antony explains. SASF, formed in 2004/05, is an independent special purpose vehicle managed by IDBI to resolve problem loans. According to Mr. Antony, of the expected total, SASF had transferred INR6.37 billion of recovered loans to IDBI in November. The expected recoveries for 2006/07, Mr. Antony says, were about one-sixth of the INR90 billion of bad loans SASF took over ahead of the April 2005 merger of IDBI's development finance and banking operations. "Our book value has come down to INR82.29 billion and we may transfer another INR8 billion by March if my anticipated recoveries come," the newspaper quotes Mr. Antony as saying. Industrial Development Bank of India is a scheduled bank incorporated and registered under the Companies Act, 1956, having its registered office at Mumbai, India. IDBI enjoys the status of a public financial institution. IDBI is also categorised under a new sub-group 'Other Public Sector Banks'. The government of India holds 52.68% of the issued capital of IDBI. IDBI was originally established in 1964 as a wholly owned subsidiary of RBI to provide credit and other facilities for the development of industry. In 1976, the ownership of IDBI was transferred from RBI to the Central Government and IDBI was entrusted with the additional responsibility of acting as the principal development financial institution responsible for coordinating the activities of institutions engaged in the financing, promotion or development of industry. IDBI has a long-standing business relationship with more than 3,000 corporate clients and over five million retail investors. Currently, IDBI has a network of 181 branches, four extension counters and 396 ATMs in 103 centres. IDBI provides a wide range of products and services in the financial sector to both retail and corporate clientele. The range of diversified services includes project financing, term lending, working capital facilities, lease finance, venture capital, loan syndication, corporate advisory services and legal and technical advisory services to its corporate clients as well as mortgages and personal loans to its retail clients. As part of IDBI's development activities, the bank has been instrumental in sponsoring and supporting the development of key institutions involved in India's financial sector. In this mode, IDBI has played a key role in the formation of the Securities and Exchange Board of India. IDBI has also sponsored the National Stock Exchange of India Limited, which first introduced electronic trading in securities in India. IDBI maintains an arm's-length business relationship with its subsidiaries and affiliates. More detailed information on IDBI is available on http://www.idbi.com/ * * * The Troubled Company Reporter - Asia Pacific reported on July 28, 2006, that Moody's Investors Service assigned a D- financial strength rating and Ba2/Not-Prime long- and short-term foreign currency deposit ratings to Industrial Development Bank of India Limited. All ratings have stable outlooks. The bank's existing Baa2 foreign currency senior unsecured debt rating was unaffected by this action. Additionally, Standard & Poor's Ratings Services gave IDBI's long-term foreign issuer credit a BB+ rating on April 19, 2006. INDUSTRIAL DEVELOPMENT BANK: Inks MOU with U.S.-Based IFC --------------------------------------------------------- Industrial Development Bank of India Ltd. entered into a non- exclusive Memorandum of Understanding with Washington- headquartered International Finance Corporation to jointly assist domestic companies undertaking Clean Development Mechanism projects which reduce carbon emissions in the environment. The two financial intermediaries will also help companies realize the value of the carbon credits, arising from the implementation of CDM, by selling the credits in the global markets. The MoU was signed by Mr. Pradip Roy, Executive Director, IDBI, and Ms. Anita Marangoly George, Chief Investment Officer, IFC, at IDBI's Corporate Office in the presence of Mr. Jitender Balakrishnan, Deputy Managing Director, IDBI and Mr. Iyad Malas, Director (South Asia), IFC. Domestic companies planning to undertake CDM projects under the Kyoto protocol can now avail of one-stop solutions -- project identification, funding implementation of CDM projects, registration and verification, advisory services for trading certified emission reduction units -- from the IDBI-IFC combine. In October 2006, IDBI had entered into a similar non-exclusive MoU with MITCON, the Technical Consultancy Organisation based in Pune. Speaking on the occasion, Mr. V.P. Shetty, Chairman& Managing Director, IDBI said, "IDBI today offers its customers the entire array of banking services, encompassing corporate, commercial, investment and environmental banking. The IDBI-IFC combine will not only assist Indian companies, both large and small, which want to undertake CDM projects but also help boost their bottomline by selling the resultant CERs forward in the global markets. While the sale of CERs will give companies additional revenue, IDBI stands to gain in the form of additional fee income. Furthermore, IDBI, as the trusted partner in the nation's progress, is, through this initiative, contributing towards furthering "green technology" in the country". Mr. Iyad Malas, IFC's Director for South Asia, added, "The proposed partnership between IFC and IDBI for carbon finance is an important step towards promoting projects that reduce carbon emissions and enable clients to earn carbon credits. IFC has developed innovative products and value-added services that enable emerging market private sector clients to access global buyers of carbon credits. IFC's global expertise in carbon finance and IDBI's deep local knowledge will be key to assisting Indian sponsors participate in this new market. In keeping with its mandate, IFC invests in cleaner technologies and sectors with substantial environmental and social benefits, including participation in the Clean Development Mechanism as defined in Article 12 of the Kyoto Protocol of the UNFCCC." IDBI is currently working on some CDM projects in the textiles, steel, power, paper and sugar sectors. It expects to assist many more companies to implement CDM projects by the end of this financial year. Further, IDBI is seeking to assist SMEs in implementing CDM projects in a big way. The bank plans to pool CERs generated by SMEs and sell them globally in market lots of 50,000 to 100,000 CER units. The move to aggregate CERs is significant as a typical SME in India can generate far lesser CERs annually than the international market lot. Industrial Development Bank of India is a scheduled bank incorporated and registered under the Companies Act, 1956, having its registered office at Mumbai, India. IDBI enjoys the status of a public financial institution. IDBI is also categorised under a new sub-group 'Other Public Sector Banks'. The government of India holds 52.68% of the issued capital of IDBI. IDBI was originally established in 1964 as a wholly owned subsidiary of RBI to provide credit and other facilities for the development of industry. In 1976, the ownership of IDBI was transferred from RBI to the Central Government and IDBI was entrusted with the additional responsibility of acting as the principal development financial institution responsible for coordinating the activities of institutions engaged in the financing, promotion or development of industry. IDBI has a long-standing business relationship with more than 3,000 corporate clients and over five million retail investors. Currently, IDBI has a network of 181 branches, four extension counters and 396 ATMs in 103 centres. IDBI provides a wide range of products and services in the financial sector to both retail and corporate clientele. The range of diversified services includes project financing, term lending, working capital facilities, lease finance, venture capital, loan syndication, corporate advisory services and legal and technical advisory services to its corporate clients as well as mortgages and personal loans to its retail clients. As part of IDBI's development activities, the bank has been instrumental in sponsoring and supporting the development of key institutions involved in India's financial sector. In this mode, IDBI has played a key role in the formation of the Securities and Exchange Board of India. IDBI has also sponsored the National Stock Exchange of India Limited, which first introduced electronic trading in securities in India. IDBI maintains an arm's-length business relationship with its subsidiaries and affiliates. More detailed information on IDBI is available on http://www.idbi.com/ * * * The Troubled Company Reporter - Asia Pacific reported on July 28, 2006, that Moody's Investors Service assigned a D- financial strength rating and Ba2/Not-Prime long- and short-term foreign currency deposit ratings to Industrial Development Bank of India Limited. All ratings have stable outlooks. The bank's existing Baa2 foreign currency senior unsecured debt rating was unaffected by this action. Additionally, Standard & Poor's Ratings Services gave IDBI's long-term foreign issuer credit a BB+ rating on April 19, 2006. INDUSTRIAL DEVELOPMENT: Primary Dealership Unit Now Incorporated ---------------------------------------------------------------- Industrial Development Bank of India Ltd informs the Bombay Stock Exchange that it has obtained a certificate of incorporation from the Registrar of Companies, Mumbai, Maharashtra, regarding the incorporation of IDBI Gilts Ltd., a wholly owned subsidiary. The subsidiary is into primary dealership business. Industrial Development Bank of India is a scheduled bank incorporated and registered under the Companies Act, 1956, having its registered office at Mumbai, India. IDBI enjoys the status of a public financial institution. IDBI is also categorised under a new sub-group 'Other Public Sector Banks'. The government of India holds 52.68% of the issued capital of IDBI. IDBI was originally established in 1964 as a wholly owned subsidiary of RBI to provide credit and other facilities for the development of industry. In 1976, the ownership of IDBI was transferred from RBI to the Central Government and IDBI was entrusted with the additional responsibility of acting as the principal development financial institution responsible for coordinating the activities of institutions engaged in the financing, promotion or development of industry. IDBI has a long-standing business relationship with more than 3,000 corporate clients and over five million retail investors. Currently, IDBI has a network of 181 branches, four extension counters and 396 ATMs in 103 centres. IDBI provides a wide range of products and services in the financial sector to both retail and corporate clientele. The range of diversified services includes project financing, term lending, working capital facilities, lease finance, venture capital, loan syndication, corporate advisory services and legal and technical advisory services to its corporate clients as well as mortgages and personal loans to its retail clients. As part of IDBI's development activities, the bank has been instrumental in sponsoring and supporting the development of key institutions involved in India's financial sector. In this mode, IDBI has played a key role in the formation of the Securities and Exchange Board of India. IDBI has also sponsored the National Stock Exchange of India Limited, which first introduced electronic trading in securities in India. IDBI maintains an arm's-length business relationship with its subsidiaries and affiliates. More detailed information on IDBI is available on http://www.idbi.com/ * * * The Troubled Company Reporter - Asia Pacific reported on July 28, 2006, that Moody's Investors Service assigned a D- financial strength rating and Ba2/Not-Prime long- and short-term foreign currency deposit ratings to Industrial Development Bank of India Limited. All ratings have stable outlooks. The bank's existing Baa2 foreign currency senior unsecured debt rating was unaffected by this action. Additionally, Standard & Poor's Ratings Services gave IDBI's long-term foreign issuer credit a BB+ rating on April 19, 2006. ITI LTD: Widens Net Loss to INR1.458 Bil. in 2006 3rd Quarter ------------------------------------------------------------- ITI Ltd. posted a net loss of INR1.458 billion for the three months ended Sept. 30, 2006, a 49% increase from the INR981.4- million net loss incurred in the corresponding period last year. Sales dropped by 28% from INR2.986 billion in the third quarter of 2005 to INR2.157 billion in the third quarter of 2006. ITI, however, increased other income in the Sept. 2006 quarter to INR268.9 million from the INR72.8 million earned in the corresponding quarter in 2005. With reduced sales, ITI's expenditures also decreased from INR3.367 billion in the Sept. 2005 quarter to INR3.087 billion in the Sept. 2006 quarter. A full-text copy of ITI's unaudited financial results for the quarter ended Sept. 30, 2006, is available for free at: http://www.itiltd-india.com/iti-english-final.pdf About ITI Ltd. ITI Limited -- http://www.itiltd-india.com/default.htm-- is a telecom company, which manufactures a range of telecom equipment, including switching products; transmission systems, such as satellite communication systems, optical line terminating equipments and digital microwave systems; access products, such as fixed wireless local loop systems and digital local loop carriers; terminal equipment, such as telephones, integrated services digital network products and video conferencing systems; microelectronic products and software; information technology products and telecom products for the defense sector, and other products, including solar power systems and bank mechanizing products. It also provides value- added services, such as shared hub very-small aperture terminal (VSAT) services, and public mobile radio trunked services and turnkey solutions. Its customers include The Department of Telecommunications, defense, railways, oil sector and corporates in India, and certain African and South Asian nations. * * * As reported in the Troubled Company Reporter - Asia Pacific on November 3, 2006, Fitch Ratings assigned final National ratings of 'D(ind)(SO)' to ITI's INR550 million 'J-1' Series long-term bonds. Credit Analysis and Research Limited has revised the rating assigned to the 'M' series long term bond issue of ITI Limited to CARE D (SO) Single D (Structured Obligation) from CARE AAA (SO) with Credit Watch. ================= I N D O N E S I A ================= BANK RAKYAT: Expects Profit To Increase 10% This Year ----------------------------------------------------- PT Bank Rakyat Indonesia expects profit to increase by about 10% in the 2006 fiscal year as it expands loans to small- and medium-sized companies, Bloomberg News reports. According to the report, Bank Rakyat President Director Sofyan Basir said that the bank projects a net income of IDR4.18 trillion this year. The report recounts that Bank Rakyat posted a net profit of IDR3.80 trillion in 2005. As reported in the Troubled Company Reporter - Asia Pacific on Oct. 26, 2006, Bank Rakyat's net profit for the nine-month period ended September 30, 2006, rose 23.56% to IDR3.10 trillion from the IDR2.51 trillion recorded for the same period last year due to higher interest income. Mr. Basir told reporters that the lender's projected net profit for 2006 will be in line with its target. He also said that the bank expects to have outstanding loans of IDR90 trillion by the end of this year, which figure is 19% higher than the IDR75.5-trillion in 2005. Bloomberg notes that demand for loans is rising after the central bank cut its key interest rate, used as a reference for bill sales, seven times since May to 9.75% from a three-year high of 12.75% in December. Bank Indonesia expects the rate for its one-month bills to decline to 8.88% next year and 8.50% in 2008, Governor Burhanuddin Abdullah said, and added that "this should improve demand for loans as "companies are more interested to invest and engage in production next year." Moreover, Mr. Basir said that Bank Rakyat plans to spend about IDR5 trillion on agriculture loans, including for a North Sumatra-based project that will process palm oil into biodiesel and that the plant will have an annual capacity of 70,000 tons of biodiesel, Bloomberg says. Also, according to the report, Mr. Basir hinted that a loan agreement is expected to be reached by March 2007. In addition, the report says that Bank Rakyat also expects to expand its consumer banking business, targeting 400,000 credit card issuances next year from around 45,000 currently. Headquartered in Jakarta, Indonesia, PT Bank Rakyat Indonesia (Persero) Tbk's -- http://www.bri.co.id/-- clients services comprise Savings, Credits and Syariah. In addition, the bank divides its financial and business services into three groups: Business Services, consisting of bank guarantees, bank clearance, automatic teller machines and safe deposit boxes; Financial Services, consisting of bill payments, CEPEBRI, INKASO, deposit acceptance, online transactions and transfers, and Other Services, consisting of tax and fine payments, donations, Western Union and zakat contributions. During the year ended December 31, 2005, the bank had one branch office in Cayman Islands and two representative offices in New York and Hong Kong, respectively. * * * A Troubled Company Reporter - Asia Pacific report on Nov. 2, 2006, stated that Fitch Ratings has affirmed all these ratings of Bank Rakyat Indonesia: * Long-term foreign currency issuer default rating: 'BB-' * Short-term foreign currency rating: 'B' * National Long-term rating: 'AA+(idn)', * Individual: 'C/D' and * Support '4'. The outlook for the ratings is stable. A TCR-AP report on July 6, 2006, indicated that Moody's Investors Service has placed Bank Rakyat Indonesia's D- bank financial strength rating on review for possible upgrade. BRI's other ratings were unaffected: -- Subordinated debt of Ba3; and -- Long-term/short-term deposit ratings of B2/Not Prime. Outlook stable. HANOVER COMPRESSOR: Calls for Redemption of 7-1/4% Securities ------------------------------------------------------------- Hanover Compressor Company said that the call for redemption on January 4, 2007, of US$20,871,000 aggregate principal amount of the Convertible Junior Subordinated Debentures Due 2029. Hanover Compressor Capital Trust owns all of the Debentures and the Trust is required to use the proceeds received from such redemption to redeem US$20,245,000 aggregate liquidation amount of its 7-1/4% Convertible Preferred Securities and US$626,000 aggregate liquidation amount of its 7-1/4% Convertible Common Securities. Hanover Compressor Company owns all of the Common Securities of the Trust. The Preferred Securities to be redeemed will be selected in accordance with the applicable procedures of The Depository Trust Company for partial redemptions. Prior to 5:00 p.m., Eastern Time, on January 3, 2007, holders may convert their Preferred Securities called for redemption on the basis of one Preferred Security per US$50 principal amount of Debentures which will then be immediately converted into shares of Hanover Compressor Company common stock at a price of approximately US$17.875 per share, or 2.7972 shares of Hanover Compressor Company common stock per US$50 principal amount. Cash will be paid in lieu of fractional shares. On December 14, 2006, the closing price of Hanover Compressor Company common stock on the New York Stock Exchange was US$20.42 per share. Alternatively, holders may have their Preferred Securities that have been called for redemption, redeemed on January 4, 2007. Upon redemption, holders will receive US$50 for each of their Preferred Securities, plus accrued and unpaid distributions thereon from December 15, 2006 up to but not including Jan. 4, 2007. Any of the Preferred Securities called for redemption and not converted on or before 5:00 p.m., Eastern Time, on Jan. 3, 2007, will be automatically redeemed on Jan. 4, and no further distributions will accrue. Holders of the Preferred Securities should complete the appropriate instruction form for redemption or conversion, as applicable, pursuant to The Depository Trust Company's book- entry system and follow such other directions as instructed by The Depository Trust Company. Headquartered in Houston, Texas, Hanover Compressor Company -- http://www.hanover-co.com-- rents and repairs compressors and performs natural gas compression services for oil and gas companies. It has a fleet of more than 6,520 mobile compressors ranging from 8 to 4,735 horsepower. The company's subsidiaries also provide service, fabrication, and equipment for oil and natural gas processing and transportation applications. Hanover Compressor is disposing of its non-oilfield power generation facilities and used equipment businesses to focus on core operations. In 2006 the company sold the US amine treating rental assets of Hanover Compression Limited Partnership to oil and gas firm Crosstex Energy for about US$52 million. The company has locations in Indonesia, Japan, Korea, Peru, Taiwan, Trinidad, the United Kingdom, Venezuela and Vietnam, among others. As reported in the Troubled Company Reporter - Asia Pacific on Oct. 29, 2006, Moody's Investors Service, in connection with the implementation of its new Probability-of-Default and Loss-Given- Default rating methodology for the North American Forest Products sector, confirmed its B1 Corporate Family Rating for Hanover Compressor Company. Four layers of bond debt issued by Hanover Compressor and maturing between 2008 and 2014 carry low-B ratings from Moody's Investors Service and Standard & Poor's Rating Services. INTERNATIONAL NICKEL: To Clarify Lower Output ---------------------------------------------- PT International Nickel Indonesia may clarify the extent to which 2006 output may miss a target of 71,000 tons because of a power shortage caused by a lack of rain, Bloomberg News reports. International Nickel is awaiting new assessment from the nation's meteorological agency, Rajeshanagora Sutedja, coordinator for corporate, public and media relations, told Bloomberg. The report notes that the company's new parent, Brazil's Cia. Vale do Rio Doce, first said output at the unit may miss its full-year target on Dec. 14. Nickel futures in London has gained 83% in the past six months on concern that supply is not enough to meet rising demand. Nickel stockpiles have dropped 55% in six months to 6,966 metric tons, Bloomberg relates. The report says that, according to Mr. Sutedja, International Nickel's output will be slightly below target but because it's the end of the year, it will be a slight drop and nickel prices are up again and will compensate. The Troubled Company Reporter - Asia Pacific reported on December 18, 2006, that International Nickel disclosed that lower-than-average rainfall since October and an apparent delay in the arrival of the rainy season (December to March) have resulted in reduced electricity and falling reservoir levels. The TCR-AP noted that unless significant rainfall occurs, International Nickel's hydroelectric power generating capacity will be negatively affected and its nickel-in-matte production will need to be limited. International Nickel is currently producing at a rate of about 1,400-1,500 tonnes of nickel-in- matte per week. Production cuts may result in the company just missing its current production estimate for 2006 of approximately 71,000 tonnes of nickel-in-matte, the TCR-AP added. Headquartered in Jakarta, Indonesia, PT International Nickel Indonesia Tbk -- http://www.pt-inco.co.id/-- is a nickel producer with a production facility and mine are in Sorowako, Sulawesi, where it has a contract agreement until 2025. It produces nickel matte, an intermediate product, from lateritic ores at its integrated mining and processing facilities near Sorowako on the island of Sulawesi. Inco Limited of Canada holds a 60.8% stake of the company and Sumitomo Metal Mining Co Ltd. holds a 20.1% stake. * * * Standard and Poor's gave the company's long-term foreign and local issuer credit both a BB- rating. The company carries Fitch Ratings' BB long-term issuer default and foreign currency long-term debt ratings. MEDCO ENERGI: S&P Affirms 'B+' Corporate Credit Rating ------------------------------------------------------ Standard & Poor's Ratings Services affirmed its 'B+' corporate credit rating on PT Medco Energi Internasional Tbk, an oil & gas exploration and production company in Indonesia. The outlook remains negative. "The rating reflects Medco's short to medium proved reserve life and single block concentration on the Rimau producing block, which carries reserve replacement risks, execution and operation risks, and an aggressive financial risk profile from an aggressive debt-funded capital expenditure program," said Standard & Poor's credit analyst Wee Lee Cheng. "Nevertheless, the rating benefits from company's position as a low-cost producer in Indonesia." "The negative outlook on Medco reflects the company's weaker financial profile due to its increased debt burden to fund its aggressive capital expenditure. Medco will need one to two years to translate these capital expenditures into incremental revenue for the company," said Mr. Cheng. "In addition, the contingent expenses due to the Brantas mud flow problem is still under dispute with the operator, PT Lapindo Brantas, with uncertainty over the final liability cost. This may negatively affect Medco's current rating if its cash outflow on this liability is significantly higher than our current expectation of US$56 million-US$60 million as the total cash outflow cost to the company, based on a total estimated cost of US$180 million for Lapindo Brantas," he said. Medco owns 32% of Lapindo Brantas. Standard & Poor's also notes that the company faces refinancing risk in 2008 when bondholders of its 2010 Eurobond can exercise its put option. Although the company is currently negotiating with banks for a stand-by refinancing facility, this refinancing risk will remain until a firm commitment is in place. Medco's total debt to EBITDA and funds from operations to total debt for 2005 is 1.6x and 32%, respectively, and this is likely to weaken further in the short to medium term as the company embarks on its aggressive capital expenditure program. PERUSAHAAN GAS: S&P Revises Outlook to Positive; Affirms Ratings ---------------------------------------------------------------- Standard & Poor's Ratings Services revised the outlook on Indonesia's PT Perusahaan Gas Negara (Persero) Tbk. to positive from stable. The ratings on the company are affirmed at 'B+'. The outlook revision reflects the expectation that the financial profile of PGN will improve in the near- to medium-term, with distribution and transmission sales revenue increasing as a result of its two new major transmission lines into West Java from South Sumatra. The transmission pipeline SSWJ1 is over 90% complete, while SSWJ2 is expected to be operational by 2007. Consequently, the company's financial profile is also expected to improve with better interest coverage and cash flow credit protection measures. In this regard, the ratings could be raised if the company's key financial metrics improve, in particular its funds from operations to debt exceeds 35% and its debt-to-EBITDA ratio falls below 2.2x. Such improvements would be underpinned by PGN maintaining its dominant position amid industry liberalization, and the company's aggressive capital expenditure program being achieved on time and on budget. It also assumes that the network tariff determination does not hinder the company's cash flow generating abilities. On the other hand, there could be downward pressures on the outlook or rating if there is a significant decline in gas exploration and production activities, which further lower gas supply reliability, reduction in governmental support, decrease in pipeline utilization rates, or if an overly aggressive capital expenditures resulted in a material weakening of financial measures. Triggers for such financial measures would be FFO to debt falling below 25% and debt-to-EBITDA ratio rising above 3x. The affirmation of the ratings on PGN continues to reflect its challenges such as gas supply constraints and the mismatch of tenors of PGN's gas sales contracts with its gas purchase agreements, aggressive capital expenditure program, high concentration on industrial customers, and material country risks and regulatory uncertainties. These challenges are however, offset by the company's dominant position in the gas transmission and distribution business, moderate and improving cash flow measures, and insulation from price risk and minimal volume risk from transmission business. The ratings also acknowledge some inherent support from the government through supportive regulations, although they do not factor in any such potential direct support. Standard & Poor's will reevaluate the credit rating on PGN if the government were to lower its shareholding in the company to below 50%. PGN is an Indonesian government-owned gas utility involved in the transmission, distribution, wholesaling, and retailing of gas. For the first six months of 2006, PGN generated total revenue of IDR3.4 trillion and EBITDA of IDR1.7 trillion. The company had total assets of IDR14 trillion as at June 30, 2006. The government's plan to increase gas usage for power production to 39% in 2010, from 31% currently will increase demand for gas, which could translate into financial support for PGN to expand its pipeline network. Greater certainty in the domestic gas supply should encourage higher investments in gas-fired power plants, which should in turn reduce fuel oil consumption and boost demand for gas. VERITAS DGC: Shareholders to Meet Jan. 9 to Vote on CGG Merger -------------------------------------------------------------- As previously disclosed, Compagnie Generale de Geophysique and Veritas DGC, Inc., will hold separate meetings of their shareholders on January 9, 2007, in connection with the proposed combination between the two companies. Veritas stockholders will vote to approve the merger agreement among Veritas, CGG, and CGG's subsidiaries Volnay Acquisition Co. I and Volnay Acquisition Co. II. CGG shareholders will vote to approve the issuance of CGG ordinary shares underlying the CGG ADSs to be issued pursuant to the merger and certain related matters. Upon approval of the share issuance and related matters by the shareholders of CGG and the merger agreement by the stockholders of Veritas, and satisfaction of other customary conditions, the proposed merger is expected to close on or about January 12, 2007. Veritas shareholders may elect to receive either CGG ADSs, cash or a combination there of in exchange for their shares of Veritas common stock. Election forms for purposes of making this election have been mailed together with the proxy statement/prospectus on or about Dec. 5, 2006. The deadline for making an election with respect to the type of merger consideration to be received is 5:00 p.m., New York City time, on Jan. 10, 2007. Holders of Veritas common stock should carefully complete the election forms and submit them to the exchange agent before the election deadline. Immediately after the effective time of the merger, the combined company will be renamed "Compagnie Generale de Geophysique- Veritas," abbreviated as "CGG Veritas". The trading symbol of the combined company's ADS on the New York Stock Exchange will be "CGV". The CGG Veritas ADSs will have the same CUSIP number as the CGG ADSs. About Veritas Headquartered in Houston, Texas, Veritas DGC, Inc. -- http://www.veritasdgc.com/-- is a leading provider of integrated geophysical information and services to the petroleum industry worldwide. Veritas is listed on New York Stock Exchange under the ticker VTS, and has offices in Malaysia and Indonesia. The Troubled Company Reporter - Asia Pacific reported on Oct. 11, 2006, that in connection with Moody's Investors Service's implementation of its new Probability-of-Default and Loss-Given-Default rating methodology for the oilfield service and refining and marketing sectors, the rating agency confirmed its Ba3 Corporate Family Rating for Veritas DGC. Standard & Poor's Ratings Services gave Veritas a 'BB' corporate credit rating. ========= J A P A N ========= DELPHI CORP: Investor Group Commits Up to US$3.4 Billion -------------------------------------------------------- Delphi Corp. disclosed that it has accepted a proposal for an equity purchase and commitment agreement with affiliates of Appaloosa Management L.P., Cerberus Capital Management, L.P., and Harbinger Capital Partners Master Fund I, Ltd., as well as Merrill Lynch & Co. and UBS Securities LLC to invest up to US$3.4 billion in preferred and common equity in the reorganized Delphi to support the company's transformation plan announced on March 31, 2006 and its plan of reorganization framework agreement also filed Monday. The Plan Framework Support Agreement, signed by Delphi, the Plan Investors and General Motors Corp., outlines the expected treatment of the company's stakeholders in its anticipated plan of reorganization and provides a framework for several other aspects of the company's Chapter 11 reorganization. DIP Loan Separately, Delphi accepted a proposal from JPMorgan Chase Bank, N.A. and a group of lenders to refinance in full the company's existing US$2.0 billion DIP facility and approximately US$2.5 billion prepetition revolver and term loan facilities. In recognition of the favorable environment in the capital markets and to minimize transaction fees payable by Delphi, the company has accepted the lenders' undertaking on a best efforts basis without underwriting by the lenders. The company is filing motions seeking approval of the agreements with the United States Bankruptcy Court of the Southern District of New York and will be filing the relevant agreements this week with the U.S. Securities and Exchange Commission. The Court has scheduled a hearing to consider approval of the plan investment, plan support and DIP refinancing agreements at 10:00 a.m. EST on Jan. 5, 2007. Objections, if any, to the agreements must be filed with the Court by 4:00 p.m. EST on Jan. 2, 2007. "[Mon]day's agreements represent significant milestones in Delphi's reorganization and another major step forward towards emergence from our Chapter 11 reorganization in the U.S.," said Delphi Chairman and CEO Robert S. "Steve" Miller. "Delphi has long emphasized its commitment to pursuing a resolution of the principal issues in our restructuring. The agreements announced today demonstrate real progress toward that objective. The Plan Investors' conditional commitment to invest up to US$3.4 billion in the reorganized company, together with their support of Delphi's transformation plan and our reorganization plan framework, should provide additional confidence to our customers, suppliers, employees and financial stakeholders. Similarly, our new US$4.5 billion DIP financing provides an appropriate foundation from which to negotiate and secure emergence financing. While there is much that remains to be accomplished in our reorganization, Delphi and its stakeholders are together navigating a course that should lead to consensual resolution with our U.S. labor unions and GM while providing an acceptable financial recovery framework for stakeholders." Equity Investment Under the terms of the Equity Purchase and Commitment Agreement, the Plan Investors will commit to purchase US$1.2 billion of convertible preferred stock and approximately US$200 million of common stock in the reorganized company. Additionally, the Plan Investors will commit to purchasing any unsubscribed shares of common stock in connection with an approximately US$2.0 billion rights offering that will be made available to existing common stockholders. The rights offering provides that Delphi will distribute certain rights to its existing shareholders to acquire new common stock subject to the effectiveness of a registration statement to be filed with the SEC, approval of the Bankruptcy Court and satisfaction of other terms and conditions. The rights, which would be transferable by the original eligible holders, would permit holders to purchase their pro rata share of new common stock at a discount to anticipated reorganization business enterprise value. Under the terms of the agreement, the Plan Investors will commit to purchase the number of shares that were offered through the rights offering to eligible holders, but whose rights were not exercised. In the event no other shareholders exercised the rights, the Plan Investors would purchase all of the unsubscribed shares for an amount no greater than approximately US$2.0 billion. Altogether, the Plan Investors could invest up to US$3.4 billion in the reorganized company. The investment agreement is subject to the completion of due diligence to the satisfaction of the Plan Investors in their sole discretion, satisfaction or waiver of numerous other conditions, including Delphi's achievement of consensual agreements with its U.S. labor unions and GM that are acceptable to the Plan Investors in their sole discretion, and the non-exercise by either Delphi or the Plan Investors of certain termination rights, all of which are more fully described in the Equity Purchase and Commitment Agreement. Plan of Reorganization Framework Delphi also filed Monday a Plan Framework Support Agreement between Delphi, GM, and the Plan Investors, which outlines Delphi's proposed framework for a plan of reorganization. While the plan framework is based on extensive discussions and negotiations among Delphi, GM, the Plan Investors and Delphi's statutory committees conducted since August of this year, not every one of the proposed terms and conditions of the plan framework are necessarily acceptable to Delphi's stakeholders, including the company's statutory committees, each of which may determine to oppose one or more elements of the framework. The Plan Framework Support Agreement as well as the economics and structure of the plan framework itself are expressly conditioned on reaching consensual agreements with Delphi's U.S. labor unions and GM. Both Delphi and the Plan Investors are permitted to terminate the Equity Purchase and Commitment Agreement, which terminates the Plan Support Agreement, if consensual agreements are not reached with labor and GM by Jan. 31, 2007. The Plan Framework Support Agreement outlines certain plan terms, including the distributions to be made to creditors and shareholders, the treatment of GM's claim, the resolution of certain pension funding issues, and the corporate governance of the reorganized Debtors. "This plan framework agreement forms a platform for the resolution of our transformation issues and the formulation of a consensual reorganization plan," Mr. Miller said. The Plan Framework Support Agreement outlines these treatment of claims and interests in Delphi's chapter 11 plan of reorganization: * All senior secured debt would be refinanced and paid in full and all allowed administrative and priority claims would be paid in full. * Trade and other unsecured claims and unsecured funded debt claims would be satisfied in full with US$810 million of common stock, 18 million out of a total of 135.3 million shares, in the reorganized Delphi, at a deemed value of US$45 per share, and the balance in cash. The framework requires that the amount of allowed trade and unsecured claims (other than funded debt claims) not exceed US$1.7 billion. * In exchange for GM's financial contribution to Delphi's transformation plan, and in satisfaction of GM's claims against the company, GM will receive 7 million out of a total of 135.3 million shares of common stock in the reorganized Delphi, US$2.63 billion in cash, and an unconditional release of any alleged estate claims against GM. In addition, as with other customers, certain GM claims would flow-through the chapter 11 cases and be satisfied by the reorganized company in the ordinary course of business. The plan framework anticipates that GM's financial contribution to Delphi's transformation plan would include items to be agreed to between Delphi and GM such as triggering of the GM benefit guarantees; assumption by GM of certain postretirement health and life insurance obligations for certain Delphi hourly employees; provision of flowback opportunities at certain GM facilities for certain Delphi employees; GM's payment of certain retirement incentives and buyout costs under current or certain future attrition programs for Delphi employees; GM's payment of mutually negotiated buy-downs; GM's payment of certain labor costs for Delphi employees; a revenue plan governing certain other aspects of the commercial relationship between Delphi and GM; and GM's support of the wind-down of certain Delphi facilities and the sales of certain Delphi business lines and sites. While the actual value of the potential GM contribution cannot be determined until a consensual resolution with GM is completed, Delphi is aware that GM has publicly estimated its potential exposure related to Delphi's chapter 11 filing. * All subordinated debt claims would be allowed and satisfied with US$450 million of common stock (10 million out of a total of 135.3 million shares) in the reorganized Delphi, at a deemed value of US$45 per share and the balance in cash. * Holders of existing equity securities in Delphi would receive US$135 million of common stock (3 million out of a total of 135.3 million shares) in the reorganized Delphi, at a deemed value of US$45 per share, and rights to purchase approximately 57 million shares of common stock in the reorganized Delphi for US$2.0 billion at a deemed exercise price of US$35 per share (subject to the rights offering becoming effective and other conditions). Emergence Corporate Governance Structure The Equity Purchase and Commitment Agreement and the Plan Framework Support Agreement also include certain corporate governance provisions for the reorganized Delphi. Under the terms of the proposed plan the reorganized Delphi would be governed by a 12 member Board of Directors, 10 of whom would be independent directors and two of whom would be a new Executive Chairman and a new Chief Executive Officer and President. Most notably as part of the new corporate governance structure, the current Delphi Board of Directors along with the Plan Investors, have mutually recognized that current Delphi President and Chief Operating Officer, Rodney O'Neal, will be appointed CEO and president of the reorganized Delphi no later than the effective date of the plan of reorganization. Separately, Delphi's Board has decided to make Mr. O'Neal's CEO appointment effective Jan. 1, 2007, to allow for the most optimum transition between Miller and O'Neal before the company emerges from bankruptcy. Concurrent with O'Neal's appointment, Miller will become Delphi's first Executive Chair and will continue to oversee the company's chapter 11 reorganization through emergence. A five member selection committee, consisting of John D. Opie, Delphi Board of Director's lead independent director, a representative of each of Delphi's two statutory committees and a representative of each of Delphi's two lead Plan Investors -- Cerberus and Appaloosa -- will select the company's post- emergence Executive Chair as well as four independent directors (one of whom may be from Delphi's current Board of Directors). The two lead Plan Investors must both concur in the selection of the Executive Chair, but do not vote on the four common independent directors and will each appoint three Board members comprising the remaining six members of the new board of directors. The new board of directors must satisfy all exchange/NASDAQ independence requirements. Executive compensation for the reorganized company must be on market terms, must be reasonably acceptable to the Plan Investors, and the overall executive compensation plan design must be described in the company's disclosure statement and incorporated into the plan of reorganization. Pension Funding The Plan Framework Support Agreement reaffirms Delphi's earlier commitment to preserve its salaried and hourly defined benefit U.S. pension plans and will include an arrangement to fund approximately US$3.5 billion of its pension obligations. The company agreed that as much as US$2 billion of this amount may be satisfied through GM taking an assignment of Delphi's net pension obligations under applicable federal law. GM will receive a note in the amount of such assignment on market terms that will be paid in full within 10 days following the effective date of a plan of reorganization. Through this funding, Delphi will make up required contributions to the plans that were not made in full during the Chapter 11 process. The company has previously said that one of the goals of its transformation plan is the retention of existing U.S. defined benefit pension plans for both its hourly and salaried workforce. In order to retain the programs and related benefits accrued, Delphi will freeze the U.S. pension plans no later than at the time of emergence. "With this funding, Delphi will be able to preserve its pension plans and become fully funded to the extent required by ERISA," said Mr. Miller. "While other major Chapter 11 labor transformation cases have regrettably had to terminate their pension plans as part of their restructuring, Delphi has expended a great deal of effort and energy to save our employees' pensions." Existing Prepetition And Dip Loan Refinancing Given the current favorable conditions in the capital markets, Delphi will be seeking court approval to enter into a US$4.5 billion replacement DIP financing facility on more favorable terms than the combined DIP and prepetition term and revolver loan facilities that are being replaced. Under the terms of the replacement financing facility, Delphi estimates that it will save approximately US$8 million per month in financing costs. These savings result from the interest rate under the replacement financing facility being lower than the accrual rate for the adequate protection payments in respect of the secured prepetition credit facilities, which the company proposes to repay with a portion of the proceeds of the replacement financing facility. The savings generated would preserve additional value of the company's estates and would enhance the ability to implement its transformation plan and emerge from chapter 11 protection. The replacement financing facility will have similar terms as the existing DIP facility, with certain key exceptions, all of which are beneficial for Delphi and its estates. The refinancing of the secured prepetition credit facilities will not impair, in any material respect, the lien priorities of other holders of secured claims relative to such facilities. Details of the replacement financing facility and the existing DIP facility can be found in Delphi's DIP refinancing motion filed with the Court. Consensual Agreement Status While there have been continuing discussions with the company's U.S. labor unions and GM, the parties have not reached comprehensive agreements and there are significant differences of views that need to be reconciled in order to achieve consensual agreements in a timeframe that would permit Delphi to preserve the plan investment and plan framework and support agreements announced today. "While today's agreements are an important step forward in our transformation, we remain keenly focused on reaching a consensual resolution with all of our U.S. unions and GM," Mr. Miller said. "Our fiduciary responsibility as debtors-in- possession is to maximize the value of our estates. Although [Mon]day's court filings represent an encouraging and necessary move closer to emergence, we and our counterparts at the negotiating table must complete our work promptly and on a consensual basis if Delphi is to emerge from chapter 11 during the first half of 2007." Consistent with its prior practice, the company will not comment further regarding the status or substance of its discussions with GM or its unions while discussions are ongoing. About Delphi Corporation Troy, Mich.-based Delphi Corporation -- http://www.delphi.com/- - is the single largest global supplier of vehicle electronics, transportation components, integrated systems and modules, and other electronic technology. The company's technology and products are present in more than 75 million vehicles on the road worldwide. Delphi has regional headquarters in Japan, Brazil and France. Fitch Ratings has assigned a rating of 'BB-' to Delphi Corporation's US$2 billion of debtor-in-possession credit facilities. The DIP facilities will consist of a revolving credit portion and a term loan portion and are to be pari passu with each other in terms of priority of repayment, collateral, and guarantees. The term loan and revolving credit will, therefore, share the same ratings. Standard & Poor's Ratings Services lowered its ratings on Delphi Corp. to 'D' after the company's U.S. operations filed for Chapter 11 bankruptcy protection. The recovery rating on Delphi's senior secured bank facility was withdrawn. Delphi, the largest U.S. manufacturer of automotive components, has total debt of about US$6 billion and total unfunded pension obligations and other postretirement employee benefit liabilities of about US$14.5 billion. The company filed for chapter 11 protection on Oct. 8, 2005 (Bankr. S.D.N.Y. Lead Case No. 05-44481). John Wm. Butler Jr., Esq., John K. Lyons, Esq., and Ron E. Meisler, Esq., at Skadden, Arps, Slate, Meagher & Flom LLP, represent the Debtors in their restructuring efforts. Robert J. Rosenberg, Esq., Mitchell A. Seider, Esq., and Mark A. Broude, Esq., at Latham & Watkins LLP, represents the Official Committee of Unsecured Creditors. As of Aug. 31, 2005, the Debtors' balance sheet showed US$17,098,734,530 in total assets and US$22,166,280,476 in total debts. (Delphi Bankruptcy News, Issue No. 50; Bankruptcy Creditors' Service, Inc., http://bankrupt.com/newsstand/or 215/945-7000). DELPHI CORP: Steering Unit Books US$3.3 Bil. in New Business ---------------------------------------------------------- Delphi Corporation has already booked US$3.3 billion in new steering and halfshaft business to date in 2006, and expects additional new business awards prior to year-end, company officials disclosed. Most of the new business awards are approximately five years in duration. Further details remain confidential at the customers' request. Sixteen global customers are included among the new business awards, with no single customer representing more than 50% of the total business. More than half of the new business is for vehicles produced in Europe, Asia and South America. The products sold include electric and hydraulic power steering systems, steering columns, gears, hoses and halfshafts. "We're showing remarkable strength during a turbulent time for the entire industry," said Bob Remenar, president, Delphi Steering division. "This sales performance shows that we have strong technologies that excite a diversified and global customer base. We have a team that is committed to bringing value to our customers. Our team has built strong sales momentum throughout the year. We expect that momentum to continue for the remainder of the year and into 2007." Beyond the short-term improvement, the news has historical significance: In the 100 years that Delphi has been producing steering components and systems, 2006 will represent the second- strongest bookings year ever. As the division continues to book sales for the remainder of the year, Remenar said he expects that 2006 will reflect more than a 50% gain compared with 2005. Remenar further said that more than 30% of the new business in 2006 is conquest business. "It's really simple," Remenar said. "We expect that as more customers get to know us -- our people, our products, our quality, and our global footprint, with our engineering and manufacturing capabilities -- they will want to do more business with Delphi Steering." Delphi Steering now supports 64 customers worldwide. The division has more than 9,200 employees at 22 manufacturing plants, 11 customer support centers, and five regional engineering centers worldwide. Troy, Mich.-based Delphi Corporation -- http://www.delphi.com/ -- is the single largest global supplier of vehicle electronics, transportation components, integrated systems and modules, and other electronic technology. The company's technology and products are present in more than 75 million vehicles on the road worldwide. Delphi has regional headquarters in Japan, Brazil and France. Fitch Ratings has assigned a rating of 'BB-' to Delphi Corporation's US$2 billion of debtor-in-possession credit facilities. The DIP facilities will consist of a revolving credit portion and a term loan portion and are to be pari passu with each other in terms of priority of repayment, collateral, and guarantees. The term loan and revolving credit will, therefore, share the same ratings. Standard & Poor's Ratings Services lowered its ratings on Delphi Corp. to 'D' after the company's U.S. operations filed for Chapter 11 bankruptcy protection. The recovery rating on Delphi's senior secured bank facility was withdrawn. Delphi, the largest U.S. manufacturer of automotive components, has total debt of about US$6 billion and total unfunded pension obligations and other postretirement employee benefit liabilities of about US$14.5 billion. The company filed for chapter 11 protection on Oct. 8, 2005 (Bankr. S.D.N.Y. Lead Case No. 05-44481). John Wm. Butler Jr., Esq., John K. Lyons, Esq., and Ron E. Meisler, Esq., at Skadden, Arps, Slate, Meagher & Flom LLP, represent the Debtors in their restructuring efforts. Robert J. Rosenberg, Esq., Mitchell A. Seider, Esq., and Mark A. Broude, Esq., at Latham & Watkins LLP, represents the Official Committee of Unsecured Creditors. As of Aug. 31, 2005, the Debtors' balance sheet showed US$17,098,734,530 in total assets and US$22,166,280,476 in total debts. (Delphi Bankruptcy News, Issue No. 50; Bankruptcy Creditors' Service, Inc., http://bankrupt.com/newsstand/or 215/945-7000). SOLO CUP: Elects Four New Members to Board of Directors ------------------------------------------------------- Solo Cup Co. elected four new members to its Board of Directors. The election increases the size of the Solo Cup Board of Directors from seven members to 11. The newly elected Board members are: -- Peter W. Calamari, -- Jack M. Feder, -- Jeffrey W. Long and -- Kevin A. Mundt, all of whom are employees of Vestar Capital Partners, a private equity firm that owns a minority interest in the company. Of the 11 board members, six are appointed by Vestar. In addition, the Board named Mr. Mundt as chairman, replacing long-time chairman Robert L. Hulseman, who will remain on the Board and will also serve as chairman emeritus. John Hulseman will serve as vice chairman Emeritus. "On behalf of Solo's leadership team, I would like to welcome our new Board members. Their considerable experience in enhancing the performance of a variety of companies will be of great value to Solo as we pursue our Performance Improvement Program," said Robert M. Korzenski, the company's chief executive officer. "Robert Hulseman had the vision and the expertise to bring plastics into the world of disposable foodservice products. He was instrumental in creating a number of products that consumers embrace as a regular part of their daily lives," said Dan O'Connell, chief executive officer of Vestar Capital Partners. "We are honored to play a role in helping move this company forward on behalf of the Hulseman family and Solo's employees." Mr. Mundt is a managing director at Vestar Capital Partners, where he also heads Vestar Resources, the firm's portfolio monitoring and advisory group. He has consulted for more than 23 years with major multinational corporations on strategic issues affecting shareholder value growth. Previously, Mr. Mundt was co-founder and director of strategic consultancy Corporate Decisions Inc., which merged with Mercer in 1997. He currently serves as a director of Birds Eye Foods, Sunrise Medical, Duff and Phelps, MediMedia and Fiorucci, SpA. Mr. Mundt began his career at Bain & company. Mr. Long is a managing director in Vestar Resources. He previously spent 12 years at McKinsey and company, Inc., advising industrial clients on enhanced strategy and marketing, supply chain management, manufacturing and capital discipline. Prior to that, he served as a cavalry officer in the U.S. Army for 14 years. Mr. Long is a director on the Boards of ArgoTech and St. John Knits. Mr. Feder is general counsel at Vestar Capital Partners. Before joining Vestar, Mr. Feder was a senior corporate partner in the private equity group of Kirkland & Ellis. Mr. Calamari is a vice president of Vestar Capital Partners. Prior to joining Vestar, he was a member of the Mergers & Acquisitions group at Merrill Lynch. Headquartered in Highland Park, Illinois, Solo Cup Company -- http://www.solocup.com/-- manufactures disposable foodservice products for the consumer and retail, foodservice, packaging, and international markets. Solo Cup has broad expertise in plastic, paper, and foam disposables and creates brand name products under the Solo, Sweetheart, Fonda, and Hoffmaster names. The company was established in 1936 and has presence in Japan, Canada, Mexico, Panama and the United States. The Troubled Company Reporter - Asia Pacific reported on Oct. 27, 2006, that Standard & Poor's Ratings Services lowered all its ratings on Solo Cup Co. by two notches, including its corporate credit rating to 'CCC+', and removed them from CreditWatch where they had been placed with negative implications on Aug. 18, 2006. The outlook is negative. Moody's Investors Service is continuing the review for possible downgrade of Solo Cup Company first initiated on Aug. 16, 2006 and reiterated on Sept. 15, 2006. Although Solo Cup has met its obligation to file financial statements and has completed its previously announced review of accounting issues, Moody's continues to have concerns regarding liquidity and ongoing business strategy. Moody's held B2 ratings on US$150 million senior secured revolving credit facility maturing Feb. 27, 2010, and on US$635 million senior secured term loan B due Feb. 27, 2011; Caa1 rating on US$80 million senior secured second lien term loan due Feb. 27, 2012; Caa2 rating on US$325 million 8.5% subordinated notes due Feb. 15, 2014. SOLO CUP: Launches Performance Improvement Program -------------------------------------------------- Delivering on its promise to investors, Solo Cup Co. has launched its Performance Improvement Program. Having completed a thorough review of its operations, the company has designed a program to reduce costs and help drive profitable growth. The Program targets opportunities for improvement in Supply Chain and Operations, Selling, General & Administrative expenses, and Sales and Marketing. The company today announced that it is implementing its first major initiatives under the plan -- a targeted corporate workforce reduction and the start of manufacturing productivity improvements. "This program is designed to address challenges facing the business directly while allowing us to build on our strengths," said Robert M. Korzenski, the company's chief executive officer. "We are moving aggressively to implement the changes necessary to turn our business around." Initiatives will focus on maximizing cash flow, reducing costs, improving margin, increasing value and building a performance culture, Korzenski added. Savings in SG&A Expenses The company eliminated 92 salaried employee and contractor positions, addressing inefficiencies in all parts of the corporate organization. The workforce reduction is expected to generate approximately US$9 million in annualized cost reductions, which represents an approximate 5% reduction in both salaried headcount and salaried compensation expense. The company will incur a one-time charge of approximately US$1.4 million in severance costs. In addition, Management expects to cancel a number of currently open budgeted positions. Solo's hourly manufacturing employees were not impacted. "This was a difficult action to take, particularly at this time of year," said Mr. Korzenski. "Every affected employee will receive severance to help them through the transition. I would like to thank them for their dedicated service to the company." Manufacturing Productivity Improvement Solo is also taking steps to increase productivity in its manufacturing facilities. The company is working in the plants on a range of initiatives focused on achieving operational efficiencies. The facilities plan to increase productivity through refining processes, increasing machine utilization and reducing material scrap. Concurrently, Solo has begun related work to improve purchasing and inventory management. The company believes that collectively these actions will contribute to supply chain efficiencies and cost reduction. About Solo Cup Headquartered in Highland Park, Illinois, Solo Cup Company -- http://www.solocup.com/-- manufactures disposable foodservice products for the consumer and retail, foodservice, packaging, and international markets. Solo Cup has broad expertise in plastic, paper, and foam disposables and creates brand name products under the Solo, Sweetheart, Fonda, and Hoffmaster names. The company was established in 1936 and has presence in Japan, Canada, Mexico, Panama and the United States. The Troubled Company Reporter - Asia Pacific reported on Oct. 27, 2006, that Standard & Poor's Ratings Services lowered all its ratings on Solo Cup Co. by two notches, including its corporate credit rating to 'CCC+', and removed them from CreditWatch where they had been placed with negative implications on Aug. 18, 2006. The outlook is negative. Moody's Investors Service is continuing the review for possible downgrade of Solo Cup Company first initiated on Aug. 16, 2006 and reiterated on Sept. 15, 2006. Although Solo Cup has met its obligation to file financial statements and has completed its previously announced review of accounting issues, Moody's continues to have concerns regarding liquidity and ongoing business strategy. Moody's held B2 ratings on US$150 million senior secured revolving credit facility maturing Feb. 27, 2010, and on US$635 million senior secured term loan B due Feb. 27, 2011; Caa1 rating on US$80 million senior secured second lien term loan due Feb. 27, 2012; Caa2 rating on US$325 million 8.5% subordinated notes due Feb. 15, 2014. ========= K O R E A ========= PANTECH CO: Pantech&Curitel's Stock Resumes Trading --------------------------------------------------- Pantech&Curitel Communications Inc.'s stock resumed trading in the Korean Exchange on Dec. 20, Bloomberg News reports. As reported in the Troubled Company Reporter - Asia Pacific yesterday, Korea Exchange suspended the trading of Pantech&Curitel's shares on Dec. 19 after hearing bankruptcy rumors and gave the company until 6:00 p.m. of the same day to clarify the buzz. According to earlier TCR-AP reports, Pantech&Curitel and affiliate Pantech Co. sought creditors' bailout due to increasing debts and mounting losses. On Dec. 15, the creditors rescued the companies by approving a debt-work out program. In a filing to the exchange, Pantech explained that it avoided bankruptcy because it did not have to pay the short-term debt that matured on Dec. 18 after creditors agree to the bailout. The creditors, including the Korea Development Bank, decided to offer a two-month grace period on the company's matured debts, the TCR-AP report said citing The Korea Times as source. In return, creditors ask Pantech's management to accept their proposals for restructuring and take drastic measures to improve profitability Headquartered in Seoul, Korea, Pantech Co., Ltd. -- http://www.pantech.co.kr/manufactures mobile phones. Pantech's products are mainly global system for mobile communication and code division multiple access phones. The company markets its products internationally, and supplies Motorola as an original equipment manufacturer and original design manufacturer. It has seven subsidiaries involved in the information technology and telecommunication sectors. WOORI BANK: To Sell 8.6-Mil. Shares in LG Card for KRW585 Bil. -------------------------------------------------------------- Woori Bank on Dec. 18, 2006, agreed to sell a majority of its shares in LG Card Co. pursuant to a tender offer to be conducted by Shinhan Financial Group, a filing with the United States Securities and Exchange Commission reveals. Woori Bank is a member of the creditors' steering committee of LG Card. According to previous reports by the Troubled Company Reporter - Asia Pacific, LG Card's creditors agreed to sell to Shinhan Financial a majority stake in the credit card company. As reported in the TCR-AP on Dec. 14, Shinhan agreed to pay around US$5.6 billion for a 61% stake in LG Card. Pursuant to the SEC filing, Shinhan will pay KRW585,232,104,510 for Woori Bank's 8,635,563 shares in LG Card. With the sale, the bank's outstanding shares in the credit card company decreased from 10,203,899 shares to 1,568,336 shares. The expected closing date is on March 23, 2007. The reason for disposition, the filing states, is to recover its capital contribution with respect to LG Card. The structure or schedule of the disposition may still be subject to change, the filing notes. About Woori Bank Woori Bank -- http://www.wooribank.com/-- is a government-owned bank headquartered in Seoul, Korea. The bank was established in 2002, and includes the former Hanbit Bank, Sangup Bank and Hanil Bank. It is a part of the Woori Financial Group. It has branches all over the world, including in New York, Los Angeles, Beijing, Tokyo, Hong Kong, Indonesia, Bahrain, Singapore, Moscow, London, and Dhaka. Fitch Ratings gave Woori Bank an individual rating of 'B/C' effective July 20, 2005. Moody's Investors Service gave Woori a 'D+' Bank Financial Strength Rating effective March 14, 2006. * Central Bank Requirement Cues Banks to Cut Forex Deposit Rates ---------------------------------------------------------------- The directive of Korea's central bank to lenders to raise reserves held against foreign currency prompted banks to cut their interest rates on foreign currency deposits. The Bank of Korea's order, which is set to take effect on Dec. 23, is aimed to restrain borrowing, The Korea Herald reports. The central bank requires reserve ratio on short-term foreign currency deposits to be increased to 7% from the current 5%. Lenders will therefore have to set aside US$1.11 billion won out of their foreign currency deposits as reserves, US$260 million more than the current level, The Herald points out. With the tougher reserve requirement, banks slashed their FOREX deposit interest rates: According to the Korean newspaper, Kookmin Bank cut interest rates on short-term dollar deposits by as much as 0.1 percentage points, effective Dec. 20. The revised rates on deposits for terms of less than one week is now 4.07%, down 0.09 percentage points from the previous 4.16%, the newspaper notes. The interest rate applicable for deposits for a period of one week to less than a month is 4.44% from the previous 4.54%. Woori Bank also decided to revise its interest rates on dollar deposits by 0.1 percentage points, the paper adds. Korea Exchange Bank, Hana Bank, Shinhan Bank and the Industrial Bank of Korea are expected to also make the slash. =============== M A L A Y S I A =============== ATMEL CORP: Intends to Sell UK, Germany Wafer Fabrication Plants ---------------------------------------------------------------- Atmel Corp. reported strategic restructuring initiatives designed to enhance profitability, accelerate the company's growth and reduce costs. These initiatives include: -- A focus on the company's high-growth, high-margin proprietary product lines. To better align Atmel's resources with highest-growth opportunities, the company is redeploying resources to accelerate the design and development of products that target expanding markets and is halting development on lesser, unprofitable, non-core products. -- Optimize Atmel's manufacturing operations. Atmel will seek to sell its wafer fabrication facilities in North Tyneside, United Kingdom, and Heilbronn, Germany. These actions are expected to increase manufacturing efficiencies by better utilizing remaining wafer fabrication facilities while reducing future capital expenditure requirements. -- The adoption of a fab-lite strategy. Through better utilization of its remaining wafer fabs and the expansion of its foundry relationships, Atmel will significantly reduce manufacturing costs and continue to design and develop innovative new products utilizing world-class manufacturing facilities. The company anticipates cost savings in the range of US$70 million to US$80 million in 2007 reaching an annual rate of US$80 million to US$95 million by 2008. Included in the cost savings is approximately US$55 million per year resulting from the expected sale of the wafer fabrication facilities. Through a combination of voluntary resignations, attrition and other actions, Atmel expects a reduction in its non- manufacturing workforce of approximately 300 employees, or 10%. The company anticipates headcount to be reduced by approximately 1,000 additional employees upon completion of the sales of the North Tyneside and Heilbronn wafer fabrication facilities. Atmel will continue to meet the production needs of its worldwide customer base during this transition through the use of internal capacity and existing foundry partners. In addition, Atmel anticipates entering into a transition sourcing agreement with the eventual buyers of the wafer fabrication facilities. "These initiatives follow a thorough analysis of the company's operations and strongest opportunities for growth," Atmel president and chief executive officer Steven Laub said. "While this decision was difficult given the company's many dedicated employees, these actions are essential to better position Atmel to compete and drive value for our shareholders. "Focusing on our core business competencies, expanding our foundry relationships, and the adoption of a fab-lite model are the right strategies for Atmel to better serve our customers, reduce manufacturing costs, and enhance shareholder value." As a result of the initiatives, the company estimates it will record one-time restructuring and impairment charges in excess of US$200 million in the fourth quarter of 2006 for fixed asset write-downs, severance, and other expenses associated with the restructuring. A significant portion of these non-recurring charges relate to the non-cash write-down of the North Tyneside manufacturing facility Atmel intends to sell. About Atmel Headquartered in San Jose, Calif., Atmel Corp. (Nasdaq: ATML) -- http://www.atmel.com/-- designs and manufactures microcontrollers, advanced logic, mixed-signal, nonvolatile memory, and radio frequency components. Leveraging one of the industry's broadest intellectual property technology portfolios, Atmel is able to provide the electronics industry with complete system solutions. It is focused on consumer, industrial, security, communications, computing, and automotive markets. The company has manufacturing facilities in USA and Europe with test and assembly facilities in the Philippines and Malaysia. * * * Standard & Poor's Rating Services assigned its single-B long- term foreign issuer and long-term local issuer credit ratings to Atmel Corp. on Oct. 24, 2001, and said the outlook, at that time, was negative. ATMEL CORP: NASDAQ Conditionally Grants Continued Listing --------------------------------------------------------- Atmel Corp. disclosed that the NASDAQ Listing Qualifications Panel has granted the company's request for continued listing on the NASDAQ Stock Market subject to certain conditions. On Feb. 9, 2007, Atmel must file with the Securities and Exchange Commission its Forms 10-Q for its second quarter ended June 30, 2006, and third quarter ended Sept. 30, 2006, as well as any necessary restatements for prior financial periods. The company must also be able to demonstrate compliance with all other requirements for continued listing on the Nasdaq Stock Market. In granting the extension, the Panel has required that through Feb. 9, 2007, Atmel will notify the Panel of the occurrence of any significant events, including any event that may call into question Atmel's historical financial information or affect the company's ability to comply with any NASDAQ listing requirement or satisfy the Feb. 9, 2007, deadline. In addition, any submissions to the Panel, press releases, or public filings prepared by Atmel will be subject to review by the Panel, which may, at its discretion, request additional information before determining that Atmel has complied with the terms of the Panel's decision. The Audit Committee of the company's Board of Directors initiated an independent investigation regarding the timing of past stock option grants and other potentially related issues. The Audit Committee, with the assistance of independent legal and forensic accounting experts, has reached a preliminary determination that, in connection with the requirements of Accounting Principles Board Opinion No. 25, Accounting for Stock Issued to Employees, the actual measurement dates for certain stock options differed from the recorded measurement dates for those stock options. Based on the Audit Committee's preliminary determination, the company expects that the difference in these measurement dates will result in material non-cash, stock-based compensation expenses. The company disclosed the decision of the Audit Committee that prior financial statements should no longer be relied upon. The Audit Committee has not completed its work nor reached final conclusions and is continuing its investigation into the circumstances that gave rise to the differences. The Audit Committee is making every effort to complete its investigation, and the company will make every effort to file its restated financial statements as soon as practicable after the completion of the investigation. There can be no assurance that Atmel will remain listed on the NASDAQ Global Market unless and until the company fully satisfies the terms of the Panel's decision. Headquartered in San Jose, Calif., Atmel Corp. (Nasdaq: ATML) -- http://www.atmel.com/-- designs and manufactures microcontrollers, advanced logic, mixed-signal, nonvolatile memory, and radio frequency components. Leveraging one of the industry's broadest intellectual property technology portfolios, Atmel is able to provide the electronics industry with complete system solutions. It is focused on consumer, industrial, security, communications, computing, and automotive markets. The company has manufacturing facilities in USA and Europe with test and assembly facilities in the Philippines and Malaysia. * * * Standard & Poor's Rating Services assigned its single-B long- term foreign issuer and long-term local issuer credit ratings to Atmel Corp. on Oct. 24, 2001, and said the outlook, at that time, was negative. AVAYA INC: Earns US$48 Million in Fiscal Quarter Ended Sept. 30 --------------------------------------------------------------- Avaya Inc. reported a net income of US$48 million for the fourth fiscal quarter ended Sept. 30, 2006. Avaya's fourth fiscal quarter 2006 revenues increased five percent to US$1.364 billion compared to US$1.296 billion in the same period last year. For the fourth fiscal quarter last year, the company reported a US$660 million net income. Those results included a tax benefit of US$577 million from the reversal of the company's deferred tax valuation allowance, restructuring charges and a charge for in-process research and development. At Sept. 30, 2006 the company reported US$5.2 billion in total assets, US$3.1 billion in total liabilities, and US$2.1 billion in total stockholders' equity. The company reported a US$75 million operating income for the fourth quarter of 2006 and, excluding the restructuring charges, US$137 million. In the year ago quarter, operating income was US$82 million and excluding restructuring charges and a charge for in-process research and development, US$107 million. "We finished fiscal 2006 with a strong quarter," said Lou D'Ambrosio, president and CEO, Avaya. "The transition by enterprises to IP telephony and Intelligent Communications continued to drive growth in product sales and IP line shipments. Also in the quarter, we captured operating leverage from our revenue growth and generated strong cash flow. And we took action to more effectively align our resources to capture market opportunities and to improve our cost structure. "As we move forward in fiscal 2007, we are focused on driving growth and extending our market leadership around Intelligent Communications, tenacious execution and productivity enhancements to deliver sustained value creation," Mr. D'Ambrosio said. During the fourth fiscal quarter of 2006, Avaya incurred restructuring charges of US$62 million pre-tax, primarily related to workforce reductions in the United States and Europe. Avaya also said it expects to incur additional restructuring charges in the range of approximately US$65 million to US$75 million in the first half of fiscal 2007 related to workforce reductions. The savings from the fourth quarter of fiscal 2006 and first half of fiscal 2007 actions will be used to offset increased compensation-related expenses and to enhance and upgrade the company's workforce skills, reinvest in the business to strengthen Avaya's competitiveness and support revenue growth. Once the company has completed these additional restructuring actions, the company believes it should be able to reasonably estimate and make an addition to its reserve for future post employment benefits pursuant to Financial Accounting Standards No. 112, relating to its European operations, of up to approximately US$70 million. For fiscal year 2006, Avaya reported net income of US$201 million compared to net income of US$921 million in fiscal 2005, which result included a tax benefit of US$676 million. The company generated operating cash flow of US$647 million in fiscal 2006 compared to US$334 million in fiscal 2005. Fiscal 2006 revenues were US$5.148 billion compared to fiscal 2005 revenues of US$4.902 billion. Year-over-year revenues increased in both the company's products and services segments, as well as across all geographic regions. Worldwide product sales rose nine percent compared to the same period last year, with IP line shipments increasing in the high 20 percent range. Headquartered in Basking Ridge, N.J., Avaya Inc., (NYSE: AV) -- http://www.avaya.com.-- designs, builds and manages communications networks for more than one million businesses worldwide, including more than 90 percent of the FORTUNE 500(R). Focused on businesses large to small, Avaya is a world leader in secure and reliable Internet Protocol telephony systems and communications software applications and services. Avaya has locations in Malaysia, Argentina and the United Kingdom. * * * Standard & Poor's Ratings Services raised its corporate credit rating on Avaya, Inc., to 'BB' from 'B+'. Moody's Investors Service upgraded the senior implied rating of Avaya, Inc., to Ba3 from B1. Moody's said the ratings outlook is positive. FALCONBRIDGE: Xstrata's Chilean Union Snubs Wage Offer ------------------------------------------------------ A Chilean union at Xstratata plc, the parent firm of Falconbridge Ltd., rejected a wage offer presented by management in a bid to prevent a strike this week. Falconbridge owned Altonorte before the firm was purchased by Xstrata this year. According to Bloomberg News, workers at the Altonorte copper smelter refused a wage increase of 1 percentage point to 4 percentage points above inflation. Altonorte produced 297,567 tons of almost pure copper in 2005, Bloomberg says. Union members make up 70% of the smelter's workforce. About Xstrata Xstrata plc -- http://www.xstrata.com/-- is a major global diversified mining group, listed on the London and Swiss stock exchanges. The Group is and has approximately 24,000 employees worldwide, including contractors. Xstrata does business in six major international commodities markets: copper, coking coal, thermal coal, ferrochrome, vanadium and zinc, with additional exposures to gold, lead and silver. The Group's operations and projects span four continents and nine countries: Australia, South Africa, Spain, Germany, Argentina, Peru, Colombia, the United Kingdom and Canada. Xstrata holds a 97% stake in Falconbridge. About Falconbridge Headquartered in Toronto, Ontario, Falconbridge Limited (TSX:FAL.LV)(NYSE: FAL) -- http://www.falconbridge.com/-- is a leading copper and nickel company with investments in fully integrated zinc and aluminum assets. Its primary focus is the identification and development of world-class copper and nickel orebodies. It employs 14,500 people at its operations and offices in 18 countries, including Malaysia. The company owns nickel mines in Canada and the Dominican Republic and operates a refinery and sulfuric acid plant in Norway. It is also a major producer of copper (38% of sales) through its Kidd mine in Canada and its stake in Chile's Collahuasi mine and Lomas Bayas mine. Its other products include cobalt, platinum group metals, and zinc. * * * Falconbridge's CDN$150-million 5% convertible and callable bonds due April 30, 2007, carry Standard & Poor's BB+ rating. FOAMEX INTERNATIONAL: Wants Plan Solicitation Procedures Amended ---------------------------------------------------------------- Foamex International Inc. and its debtor-affiliates seek to provide supplemental disclosure in their Second Amended Plan of Reorganization and Disclosure Statement with regard to certain Trading Restrictions. To ensure full, fair and adequate disclosure of the possible Trading Restrictions, the Debtors ask the U.S. Bankruptcy Court for the District of Delaware to amend the Disclosure Statement and Solicitation Procedures Order to: (a) authorize the distribution of the Supplemental Solicitation Packages, which includes the First Supplement to the Disclosure Statement, to holders of Interests in Class 9 -- Existing Preferred Stock, and Class 10 -- Existing Common Stock; (b) establish January 11, 2007, as the new deadline by which beneficial holders in Classes 9 and 10 must return the Beneficial Holder Ballot they received; and (c) establish January 18, 2007, as the new Voting Deadline for the Classes 9 and 10, and the new deadline for Classes 9 and 10 to file objections to confirmation of the Second Amended Plan. For them to have sufficient time to complete the solicitation of votes from Classes 9 and 10, the Debtors also ask the Court to adjourn the Confirmation Hearing to a date that is approximately one week after January 18, 2007. Pauline K. Morgan, Esq., at Young Conaway Stargatt & Taylor, LLP, in Wilmington, Delaware, points out that under the Disclosure Statement and Solicitation Procedures Order, holders of Interests in Classes 9 and 10 are afforded approximately five weeks to vote to accept or reject the Second Amended Plan. Interestholders in Classes 9 and 10 will have approximately seven weeks to review and contemplate the Second Amended Plant and approximately four weeks to review the First Supplement Disclosure. The Debtors further propose that all procedures under the Disclosure Statement and Solicitation Procedures Order remain unaffected, provided that any Class 9 or 10 Interestholder who already voted before the transmission of the Supplemental Solicitation Package but who does not submit a subsequent vote before the Class 9 and 10 Voting Deadline should have their original vote counted. Headquartered in Linwood, Pa., Foamex International Inc. -- http://www.foamex.com/-- is the world's leading producer of comfort cushioning for bedding, furniture, carpet cushion and automotive markets. The company also manufactures high- performance polymers for diverse applications in the industrial, aerospace, defense, electronics and computer industries. Foamex has Asian locations in Malaysia, Thailand and China. The Company and eight affiliates filed for chapter 11 protection on Sept. 19, 2005 (Bankr. Del. Case Nos. 05-12685 through 05- 12693). Attorneys at Paul, Weiss, Rifkind, Wharton & Garrison LLP, represent the Debtors in their restructuring efforts. Houlihan, Lokey, Howard and Zukin and O'Melveny & Myers LLP are advising the ad hoc committee of Senior Secured Noteholders. Kenneth A. Rosen, Esq., and Sharon L. Levine, Esq., at Lowenstein Sandler PC and Donald J. Detweiler, Esq., at Saul Ewings, LP, represent the Official Committee of Unsecured Creditors. As of July 3, 2005, the Debtors reported US$620,826,000 in total assets and US$744,757,000 in total debts. (Foamex International Bankruptcy News, Issue No. 35; Bankruptcy Creditors' Service, Inc., http://bankrupt.com/newsstand/or 215/945-7000) Standard & Poor's Ratings Services lowered its senior secured and subordinated debt ratings on Foamex L.P./Foamex Capital Corp. to 'D' from 'C'. The downgrades follow Foamex's announcement that it has filed a voluntary pre-negotiated Chapter 11 bankruptcy plan. The ratings were also removed from CreditWatch with negative implications, where they were placed on July 11, 2005, on concerns that Foamex's leveraged financial profile and liquidity would continue to deteriorate. The corporate credit rating was lowered to 'D' on August 15, 2005, following the company's failure to make a US$51.6 million principal payment on its 13.5% subordinated notes that matured Aug. 15, 2005. FOAMEX INTERNATIONAL: Files Supplements to Second Amended Plan -------------------------------------------------------------- Under their Second Amended Plan, Foamex International Inc. and its debtor-affiliates are authorized to enter into and perform under a commitment letter with certain holders of equity interests in Foamex International and to commence a rights offering. Pauline K. Morgan, Esq., at Young Conaway Stargatt & Taylor, LLP, in Wilmington, Delaware, relates it is possible that the outcome of the Rights Offering will result to a change in control, in which case Foamex International could utilize its net operating losses, which could yield a significant tax benefit to reorganized Foamex International and enhance the Debtors' reorganization value. To preserve the value and protect against a change against a change of control after the Effective Date, the Debtors have determined that it would be advisable to restrict trading of Foamex International's common stock. The Trading Restrictions would be included in the Reorganized Debtors' amended and restated certificate of incorporation. The Trading Restrictions will only be necessary, and thus will only be implemented, under certain limited circumstances related to the Rights Offering. Although the Disclosure Statement contemplates the filing of an amended and restated certificate of incorporation, neither the Disclosure Statement nor the Plan specifically identify the possibility of the Trading Restrictions being included in the restated certificate of incorporation. Thus, the Debtors ask the Court to approve a supplemental disclosure regarding the Trading Restrictions as containing adequate information within the meaning of Section 1125 of the Bankruptcy Code. A full-text copy of the First Supplement to the Disclosure Statement is available for free at: http://researcharchives.com/t/s?171f Headquartered in Linwood, Pa., Foamex International Inc. -- http://www.foamex.com/-- is the world's leading producer of comfort cushioning for bedding, furniture, carpet cushion and automotive markets. The company also manufactures high- performance polymers for diverse applications in the industrial, aerospace, defense, electronics and computer industries. Foamex has Asian locations in Malaysia, Thailand and China. The Company and eight affiliates filed for chapter 11 protection on Sept. 19, 2005 (Bankr. Del. Case Nos. 05-12685 through 05- 12693). Attorneys at Paul, Weiss, Rifkind, Wharton & Garrison LLP, represent the Debtors in their restructuring efforts. Houlihan, Lokey, Howard and Zukin and O'Melveny & Myers LLP are advising the ad hoc committee of Senior Secured Noteholders. Kenneth A. Rosen, Esq., and Sharon L. Levine, Esq., at Lowenstein Sandler PC and Donald J. Detweiler, Esq., at Saul Ewings, LP, represent the Official Committee of Unsecured Creditors. As of July 3, 2005, the Debtors reported US$620,826,000 in total assets and US$744,757,000 in total debts. (Foamex International Bankruptcy News, Issue No. 35; Bankruptcy Creditors' Service, Inc., http://bankrupt.com/newsstand/or 215/945-7000) Standard & Poor's Ratings Services lowered its senior secured and subordinated debt ratings on Foamex L.P./Foamex Capital Corp. to 'D' from 'C'. The downgrades follow Foamex's announcement that it has filed a voluntary pre-negotiated Chapter 11 bankruptcy plan. The ratings were also removed from CreditWatch with negative implications, where they were placed on July 11, 2005, on concerns that Foamex's leveraged financial profile and liquidity would continue to deteriorate. The corporate credit rating was lowered to 'D' on August 15, 2005, following the company's failure to make a US$51.6 million principal payment on its 13.5% subordinated notes that matured Aug. 15, 2005. FOAMEX INT'L: Pa. Revenue Dept. Opposes Amended 2nd Ch. 11 Plan --------------------------------------------------------------- The Commonwealth of Pennsylvania Department of Revenue objects to Foamex International Inc. and its debtor-affiliates' Second Amended Plan of Reorganization to the extent it attempts to release the Debtors' corporate officers from any liability for payment of state trust fund taxes. Attorney General Thomas W. Corbett, Jr., Esq., relates that the Revenue Department has administrative and priority claims against certain Debtors for unpaid corporate taxes: Debtor Type of Claim Amount ------ ------------- ------ Foamex, LP Priority US$37,312 Foamex, LP Gen. Unsecured 500 Foamex International Inc. Administrative 1,985 Foamex International Inc. Priority 1,077 Foamex Capital Corporation Administrative 264 Foamex Capital Corporation Priority 144 FMXI, Inc. Administrative 264 FMXI, Inc. Priority 144 In addition, the Debtors have failed to file corporate tax reports for 2005, 2006, and 2007 through Jan. 16, 2007. Mr. Corbett asserts that without the filing of the tax reports, the Court should not confirm the Debtors' Second Amended Plan. The Revenue Department wants any order confirming the Second Amended Plan to provide that the Plan does not compromise the Department's rights against the Debtors' corporate officers to seek recovery of state trust funds to the extent provided by applicable law. Accordingly, the Revenue Department asks the Court to deny confirmation of the Second Amended Plan. Headquartered in Linwood, Pa., Foamex International Inc. -- http://www.foamex.com/-- is the world's leading producer of comfort cushioning for bedding, furniture, carpet cushion and automotive markets. The company also manufactures high- performance polymers for diverse applications in the industrial, aerospace, defense, electronics and computer industries. Foamex has Asian locations in Malaysia, Thailand and China. The Company and eight affiliates filed for chapter 11 protection on Sept. 19, 2005 (Bankr. Del. Case Nos. 05-12685 through 05- 12693). Attorneys at Paul, Weiss, Rifkind, Wharton & Garrison LLP, represent the Debtors in their restructuring efforts. Houlihan, Lokey, Howard and Zukin and O'Melveny & Myers LLP are advising the ad hoc committee of Senior Secured Noteholders. Kenneth A. Rosen, Esq., and Sharon L. Levine, Esq., at Lowenstein Sandler PC and Donald J. Detweiler, Esq., at Saul Ewings, LP, represent the Official Committee of Unsecured Creditors. As of July 3, 2005, the Debtors reported US$620,826,000 in total assets and US$744,757,000 in total debts. (Foamex International Bankruptcy News, Issue No. 35; Bankruptcy Creditors' Service, Inc., http://bankrupt.com/newsstand/or 215/945-7000) Standard & Poor's Ratings Services lowered its senior secured and subordinated debt ratings on Foamex L.P./Foamex Capital Corp. to 'D' from 'C'. The downgrades follow Foamex's announcement that it has filed a voluntary pre-negotiated Chapter 11 bankruptcy plan. The ratings were also removed from CreditWatch with negative implications, where they were placed on July 11, 2005, on concerns that Foamex's leveraged financial profile and liquidity would continue to deteriorate. The corporate credit rating was lowered to 'D' on August 15, 2005, following the company's failure to make a US$51.6 million principal payment on its 13.5% subordinated notes that matured Aug. 15, 2005. SOLUTIA INC: Wants to Sell Texas Land to Shintech Inc. ------------------------------------------------------ Solutia, Inc. and its debtor-affiliates seek permission from the U.S. Bankruptcy Court for the Southern District of New York to sell 482 acres of undeveloped flat land in Alvin, Texas, to Shintech Incorporated for US$7,109,500 free and clear of liens, claims and encumbrances. Solutia, Inc., owns approximately 3,000 acres of land in Alvin, Texas -- the Chocolate Bayou Property. Solutia operates a chemical manufacturing plant on only 300 of the 3,000 acres. Of the remaining 2,700 acres, 370 acres are leased to a third party, 245 acres are covered by a reservoir and the remaining 2,085 acres are unoccupied and undeveloped flat land. Jonathan S. Henes, Esq., at Kirkland & Ellis LLP, in New York, relates that Solutia does not utilize the Unoccupied Chocolate Bayou Property, other than for underground pipelines, above ground transportation and for certain waste management activities related to the operation of the Chocolate Bayou Plant. On Dec. 6, 2006, Solutia entered into an agreement to sell the approximately 482 acres of undeveloped flat land in the Chocolate Bayou Property to Shintech for US$7,109,500. The Sale Process James T. Strehl, general manager of the Basic Chemicals Group at Solutia, relates that in April 2006, the company was approached by an agent acting on behalf of an anonymous buyer, later revealed to be Shintech. Houston, Texas-based Shintech is the largest producer of the chemical polyvinyl chloride in the United States. Shintech sought to purchase a parcel of the Unoccupied Chocolate Bayou Property to construct a chemical manufacturing plant. Shintech is a subsidiary of the Japanese diversified chemicals company, Shin-Etsu Chemical Co., Ltd. Shintech initially offered to purchase approximately 900 acres of the Unoccupied Chocolate Bayou Property for US$6,200 per acre, for a total purchase price of US$5,580,000. To evaluate the offer, in July 2006, Solutia hired American Appraisal Associates to perform an appraisal of the 900 acres of Unoccupied Chocolate Bayou Property. American Appraisal submitted an appraisal report to Solutia, dated September 1, 2006, which concluded that Shintech's initial offer of US$6,200 per acre exceeded the appraised value of the land. The Appraisal Report assumed it would take Solutia 12 to 24 months to sell the land for the appraised amount. After the Parties executed a letter of intent and Shintech began its due diligence, the Parties engaged in good faith, arm's- length negotiations. These negotiations resulted in the Parties agreeing that Shintech would purchase only 482 acres of the Unoccupied Chocolate Bayou Property for US$14,750 an acre, or a total price of US$7,109,500. The Purchase Price represents an increase of US$8,550 per acre over Shintech's initial offer, Mr. Henes notes. The Purchase Agreement Pursuant to the CB Land Purchase Agreement, Shintech will pay the US$7,109,500 purchase price at closing in cash. Shintech also agreed to allow Solutia to continue to run its underground pipes and above ground transportation over the Sale Property. Other terms of the CB Land Purchase Agreement are: Earnest Money: Shintech paid Solutia a US$25,000 non- Refundable deposit, which will be credited against the Purchase Price. Shintech also deposited US$475,000 with Stewart Title Company, as Escrow Agent. This amount will be credited against the Purchase Price, or in the event the Sale is not consummated, it will be distributed pursuant to the terms of the Escrow Agreement. Title/ Permitted Encumbrances: Solutia presently has and will convey to Shintech good and indefeasible title to the Property on the Closing Date subject only to: (i) general real estate taxes for the current year, (ii) local, state and federal laws, ordinances or governmental regulations, (iii) any title matter approved, or caused, by Shintech, (iv) existing easements and other rights-of- way affecting the Property, and (v) the Ancillary Agreements. Covenants: Solutia agrees to use good faith efforts to obtain approval of the Sale by December 28, 2006. The Parties will use good faith efforts to negotiate the terms of the Ancillary Agreements. Conditions to Closing: The Conditions to Shintech's Obligation to Close are typical for a transaction of this type, including: (i) all of Solutia's representations and warranties will be true and correct, (ii) no encumbrances or title defects other than Permitted Encumbrances, (iii) all of Solutia's covenants performed, (iv) no material adverse change in the condition of the Property, (v) the Parties have agreed upon the terms of the Ancillary Agreements, and (vi) to preserve the December 29, 2006 closing date, an Approval Order obtained by no later than December 28, 2006. The Conditions to Solutia's Obligation to Close are typical for a transaction of this type, including: (i) all of Shintech's representations and warranties will be true and correct, (ii) Shintech will have performed all covenants, (iii) Approval Order will be obtained by March 31, 2007 and (iv) the Parties will have agreed upon the terms of the Ancillary Agreements. Proration of Taxes: General real estate taxes for the current year relating to the Property will be allocated relating to the Property will be between Solutia and Shintech based on the Closing Date. Attorneys' Fees & Legal Expenses: If either party institutes any action or proceeding related to the CB Land Purchase Agreement, the prevailing party is entitled to receive all reasonable attorneys' fees and court costs from the losing party. Right of First Refusal: In the event Shintech acquires the Sale Property, but does not construct a chemical manufacturing facility on it and subsequently decides to sell all or part of the Property, it will provide Solutia the right to meet a bona fide third-party offer for the purchase of the Property. Mr. Strehl relates that, because Shintech wants to promptly begin construction of a chemical plant on the Sale Property, the Parties agreed that time was of the essence and set a Dec. 29, 2006 closing date if the Court approves the Proposed Sale in advance of the closing. If Solutia cannot obtain Court approval by Dec. 28, 2006, Shintech may terminate the CB Agreement by providing written notice to Solutia. If Solutia objects to the notice within five days of receipt and provides evidence that it has made and is continuing to make good faith efforts to obtain Court approval, however, Solutia has until March 31, 2007, to obtain the Approval Order. Sale Free of Liens & Encumbrances Pursuant to Section 363(f) of the Bankruptcy Code, Solutia intends to sell the Property to Shintech free and clear of liens, claims, encumbrances and other interests, other than the customary Permitted Encumbrances set forth in the CB Land Purchase Agreement. Only two parties have asserted liens on the Sale Property- Citicorp USA, Inc., as collateral agent for the Debtors' DIP financing lenders, and Fluor Corporation. Citicorp has consented to the Proposed Sale as a permitted disposition under Solutia's postpetition credit facility. Pursuant to a Transfer Notice dated June 5, 2006, Fluor transferred its claim to Longacre Master Fund, Ltd. Solutia is seeking Longacre's consent to the Proposed Sale. In the event Longacre's Consent is obtained, Section 363(f)(2) will be satisfied, Mr. Henes relates. But if Longacre does not consent, Longacre could be compelled to accept a monetary satisfaction of their liens. Thus, according to Mr. Henes, Section 363(f)(5) is satisfied and any liens asserted against the Sale Property will be adequately protected through attachment to the net proceeds of the Proposed Sale. Private Sale of Property Pursuant to Bankruptcy Rule 6004(f)(1), sales of estate property not in the ordinary course may be by private sale or public auction. Private sales by debtors outside of the ordinary course of business are appropriate where the debtors demonstrate that the sale is permissible pursuant to Section 363. Based on Shintech's specific need for the Sale Property and that the Purchase Price is significantly more than the appraised value of the approximately 482 acres, Solutia has determined that a private sale of the Sale Property to Shintech is in the best interests of its estate and its stakeholders. As a strategic purchaser seeking to build a chemical plant, Shintech has agreed to pay a premium for the Sale Property compared to other potential purchasers. Accordingly, it is unlikely that an auction of the Sale Property would produce a higher offer, and the delay and additional costs to conduct an auction are not necessary, Mr. Henes tells Judge Beatty. About Solutia Inc. Headquartered in St. Louis, Missouri, Solutia, Inc. (OTCBB:SOLUQ) -- http://www.solutia.com/-- with its subsidiaries, make and sell a variety of high-performance chemical-based materials used in a broad range of consumer and industrial applications. Solutia has operations in Malaysia, China, Singapore, Belgium, and Colombia. The company filed for chapter 11 protection on Dec. 17, 2003 (Bankr. S.D.N.Y. Case No. 03-17949). When the Debtors filed for protection from their creditors, they listed US$2,854,000,000 in assets and US$3,223,000,000 in debts. Solutia is represented by Richard M. Cieri, Esq., at Kirkland & Ellis. Daniel H. Golden, Esq., Ira S. Dizengoff, Esq., and Russel J. Reid, Esq., at Akin Gump Strauss Hauer & Feld LLP represent the Official Committee of Unsecured Creditors, and Derron S. Slonecker at Houlihan Lokey Howard & Zukin Capital provides the Creditors' Committee with financial advice. ===================== N E W Z E A L A N D ===================== ARCHILLES PROPERTIES: Court Appoints Joint Liquidators ------------------------------------------------------ On Nov. 30, 2006, the High Court of Auckland appointed Henry David Levin and Barry Jordan as joint and several liquidators of Archilles Properties Ltd. The liquidators fixed Dec. 28, 2006, as the last day for creditors to file their claims and to establish any priority claims they may have. The TCR-AP has reported that on Nov. 30, 2006, the Court heard the liquidation petition against the company. The Commissioner of Inland Revenue filed the petition. The Joint and Several Liquidators can be reached at: Henry David Levin Barry Jordan PPB McCallum Petterson Level Eleven, Forsyth Barr Tower 55-65 Shortland Street, Auckland New Zealand BACCHID BENEVOLENCY: Court to Hear Liquidation Petition ------------------------------------------------------- The High Court of Auckland will hear a liquidation petition against Bacchid Benevolency Ltd on March 15, 2007, at 10:00 a.m. Velocity Distribution Ltd filed the petition on Nov. 22, 2006. The solicitor for the Petitioner can be reached at: Malcolm Whitlock 149 Ti Rakau Drive Pakuranga, Auckland New Zealand About Bacchid Benevolency Bacchid Benevolency Limited is an operational company, which supports the activities of the Auckland University Students Association Inc. Bacchid operates a number of the catering outlets on the Auckland Campus of University of Auckland, at Massey University Campus Albany as well as the iconic bar "Shadows". In 2005, Bacchid took over the operation of StudentCard and purchased "Romfords", the functions venue on Tamaki Drive. BYRNE TRUST: Creditors Must Prove Debts by January 4 ---------------------------------------------------- The shareholders of Byrne Trust (NZ) Ltd appointed Paul Graham Sargison and Gerald Stanley Rea as liquidators on Nov. 30, 2006. Accordingly, Mr. Sargison requires the company's creditors to prove their debts by Jan. 4, 2007, or they will be excluded from sharing in any distribution the company will make. The Liquidators can be reached at: Paul Graham Sargison Gerald Stanley Rea Gerry Rea Associates P.O. Box 3015, Auckland New Zealand Telephone:(09) 377 3099 Facsimile:(09) 377 3098 DEVOX SERVICES: Hearing of Liquidation Petition Set for March 8 --------------------------------------------------------------- Erin Edward Vivian -- trading as Vivian Properties -- filed a petition to liquidate Devox Services Ltd on Nov. 16, 2006. Accordingly, the petition will be heard before the High Court of Auckland on March 8, 2007, at 10:00 a.m. The solicitor for the Petitioner can be reached at: Weston Heys Glaistor Ennor Solicitors First Floor, Norfolk House 18 High Street (P.O. Box 63 or D.X. C.X. 10-236), Auckland New Zealand ELITE HORSE: Court Sets Liquidation Hearing on March 1 ------------------------------------------------------ The High Court of Auckland will hear a liquidation petition against Elite Horse Transport Ltd on March 1, 2007, at 10:00 a.m. Debt Recovery Group NZ Ltd filed the petition with the Court on Nov. 22, 2006. The solicitor for the Petitioner can be reached at: Malcolm Whitlock 149 Ti Rakau Drive Pakuranga, Auckland New Zealand H & P DEVELOPMENTS: Creditors Must Lodge Claims by Feb. 8 --------------------------------------------------------- Craig Alexander Sanson and John Howard Ross Fisk were appointed as joint and several liquidators of H & P Developments Ltd by the High Court on Nov. 29, 2006. In this regard, the company's creditors are required to lodge their claims and establish any priority claims they may have by Feb. 8, 2007. The Joint and Several Liquidators can be reached at: Craig Alexander Sanson John Howard Ross Fisk PricewaterhouseCoopers 113-119 The Terrace (P.O. Box 243) Wellington New Zealand Telephone:(04) 462 7489 Facsimile:(04) 462 7492 LEGACY MOTORS: Petition Hearing Slated for March 8 -------------------------------------------------- On Nov. 14, 2006, Oggi Advertising Ltd filed a liquidation petition against Legacy Motors Ltd before the High Court of Auckland. The petition will be heard on March 8, 2007, at 10:00 a.m. The solicitor for the Petitioner can be reached at: K. A. Muir Morgan Coakle Level Twelve, Gosling Chapman Tower 51-53 Shortland Street, Auckland New Zealand NATURE'S FOREST: Faces Liquidation Proceedings ---------------------------------------------- An application to liquidate Nature's Forest Products Ltd will be heard before the High Court of Auckland on March 8, 2007, at 10:00 a.m. Turners Auctions Ltd filed the petition with the Court on Nov. 22, 2006. The solicitor for the Petitioner can be reached at: Malcolm Whitlock 149 Ti Rakau Drive Pakuranga, Auckland New Zealand OSBORNE HOLDINGS: Creditors to Prove Debts by December 22 --------------------------------------------------------- On Nov. 28, 2006, the shareholders of Osborne Holdings Ltd appointed Boris van Delden and John Trevor Whittfield as the company's joint and several liquidators. Accordingly, the company's creditors are required to prove their debts by Dec. 22, 2006, or they will be excluded from sharing in any distribution the company will make. The TCR-AP has reported that the High Court of Auckland heard a liquidation petition against the company on Nov. 30, 2006. The Commissioner of Inland Revenue filed the petition. The Joint and Several Liquidators can be reached at: Boris van Delden John Trevor Whittfield McDonald Vague P.O. Box 6092 Wellesley Street Post Office, Auckland New Zealand Telephone:(09) 303 0506 Facsimile:(09) 303 0508 Web site: http://www.mvp.co.nz VALLEY ROYAL: Commences Liquidation Proceedings ----------------------------------------------- On Nov. 28, 2006, shareholders of Valley Royal Farm Ltd resolved to liquidate the company's business and appointed Nigel Hicks as liquidator. The Liquidator can be reached at: Nigel Hicks P.O. Box 324 Pukekohe New Zealand Telephone:(09) 238 9219 Facsimile:(09) 238 6826 ===================== P H I L I P P I N E S ===================== METRO PACIFIC: MPIC Opens for Trading at the PSE ------------------------------------------------ On December 15, 2006, shares of Metro Pacific Investments Corporation opened for public trading at the Philippine Stock Exchange under the symbol "MPI". MPIC warrants will be traded under the symbol "MPIW". "[The] listing of MPIC closes a year of recapitalization and reorganization for the Metro Pacific Group, and witnesses the birth of a new company devoted to becoming a significant participant in the Philippine economy," MPIC Chairman Manuel V. Pangilinan said. As reported in the Troubled Company Reporter - Asia Pacific on November 20, 2006, Metro Pacific Corporation advised the Philippine Stock Exchange approved MPIC's application for, among others: (a) the initial listing by way of introduction of its 1,206,978,766 common shares with a par value of PHP1.00 per share; and (b) a listing price of PHP1.00 per share. Pursuant to and on the basis of the Revised Listing Rules of the PSE, the listing of MPIC will necessarily result in the withdrawal of the listing of MPC. Accordingly, MPC asks the PSE to suspend the trading of its shares starting 9:00 a.m., on November 23, 2005. MPC explains that the suspension will allow the clearing of traded shares in time for the close of the tender offer on November 28, 2006. Since MPC will no longer be listed on the PSE upon the listing of MPIC, MPC's suspension remained in force for the duration. New Holding Company Website Launched MPIC's new corporate website -- http://www.mpic.com.ph-- was also launched on the same day. The new website offers detailed information on MPIC and its investment portfolio, and provides the investing public with a 24-hour resource and tool to reach MPIC officials. About Metro Pacific Metro Pacific Corporation -- http://www.metropacific.com/-- is the flagship publicly listed investment and management company of the First Pacific Group in the Philippines. The Company, which was formerly known as Metro Drug, Inc., has since then evolved from a pharmaceutical and consumer products distribution company into one of the country's leading corporations. Metro Pacific has these significant subsidiaries: * Landco, Inc. * Metro Tagaytay Land Co. Inc. * Negros Navigation Co. Inc. * Lucena Commercial Land Corporation * First Pacific Realty Partners Corporation * Landco Pacific Centers, Inc. As reported in the Troubled Company Reporter - Asia Pacific on June 28, 2006, Marydith C. Miguel, of Sycip Gorres Velayo & Co., raised significant doubts on MPC's ability to continue as a going concern after auditing the Company's annual report for the period ended December 31, 2005. Ms. Miguel noted in the auditors' report that MPC suffered significant losses in prior years leading to its inability to meet its maturing obligations, on principal and interest, to certain third-party lenders and to a related company. Although the Company has generated a PHP194.26-million net income attributable to equity holders for the year ended December 31, 2005, it continues to reflect a deficit of PHP27.5 billion as of December 31, 2005, due to prior year's accumulated losses. In response, the company continues to implement measures geared towards generating liquidity to meet maturing obligations and profitability, including debt rehabilitation activities and a capital restructuring plan. PHILIPPINE LONG DISTANCE: DoCoMo to Increase Shares by 3.2% ----------------------------------------------------------- NTT DoCoMo of Japan plans to increase its stake in Philippine Long Distance Telephone Company by 3.2% to around 9.9%, through the acquisition of approximately six million shares worth PHP13 billion (US$264.4 million) from an affiliate of First Pacific, TeleGeography reports. First Pacific is PLDT's largest shareholder, the report says. DoCoMo expects to finalize the specific terms of the deal after talks with the company. DoCoMo acquired 12,633,486 PLDT shares (approximately 6.7% of total issued and outstanding shares) from NTT Communications Corporation in March 2006, TeleGeography recounts, noting that DoCoMo may consider purchasing additional shares in the future. About PLDT Based in Makati City, Philippines, Philippine Long Distance Telephone Co. -- http://www.pldt.com.ph/-- is the leading national telecommunications service provider in the Philippines. Through three principal business groups -- wireless, fixed line, and information and communications technology -- the company offers a wide range of telecommunications services to over 22 million subscribers in the Philippines across the nation's most extensive fiber optic backbone and fixed line, cellular and satellite networks. * * * Moody's Investors Service placed a Ba1 local currency corporate family rating on PLDT. Moody's also affirmed the company's Ba2 foreign currency senior unsecured ratings, with a negative outlook. Standard & Poor's placed the company's long-term foreign issuer credit rating at BB+. Standard & Poor's also affirmed its 'BB+' foreign currency rating on the company with a stable outlook. * Capital Intelligence Revises RP's Sovereign Rating Outlook ------------------------------------------------------------ Capital Intelligence Ltd has revised the outlook on the Philippines' sovereign credit ratings to stable from negative. At the same time the agency has affirmed the sovereign's long- term foreign currency rating of BB- and its long-term local currency rating of BB, as well as its short-term foreign currency and local currency ratings of B. The change in the outlook is in response to improving fiscal performance and less volatile political conditions. The national government budget deficit has fallen steadily since 2002 and is expected to be below 2% of GDP in 2006 and 2007. Revenue growth has picked up, following the implementation of long-awaited value-added tax reforms and renewed efforts to improve tax collection, and steps have been taken to strengthen expenditure management. Deficit reduction has contributed to a decline in government indebtedness, with the ratio of central government debt to GDP projected to decline to about 57% in 2007 compared to 70% in 2004. Notwithstanding these developments, the debt burden remains high. Interest payments currently absorb more than one-third of budget revenues and the government's gross financing needs exceed 20% of GDP (including short-term debt). Sovereign risks continue to be mitigated, however, by adequate external liquidity. The current account will post its fourth straight surplus in 2006 and should remain in positive territory in 2007. Favorable balance of payments developments have enabled the central bank to accumulate foreign exchange reserves, which now exceed US$19 billion and comfortably exceed government foreign currency debt service payments falling due within the next 12 months, as well as the country's projected gross external financing needs for 2007 (current account position plus short- term external debt plus amortisation on medium- and long-term external debt). * * * "Standard & Poor's Ratings Services assigned its 'BB-' senior unsecured rating to the Republic of Philippines' proposed new bond issue that will mature in 2024, as well as the new debt under the series of 7.75% Global Bonds due in 2031. The government is offering these bonds in exchange for some of its existing debt. At the same time, Standard & Poor's also affirmed its 'BB-' ratings on the bonds that are eligible for exchange." On November 3, 2006, the Troubled Company Reporter - Asia Pacific reported that Moody's Investors Service changed to stable from negative the outlook on the Philippines' key ratings due to the progress made in reining in fiscal deficits in 2006 and an easing in dependence on external financing. The affected ratings include the B1 long-term government foreign- and local-currency ratings, the B1 foreign-currency bank deposit ceiling and Ba3 foreign currency country ceiling, the TCR-AP noted. ================= S I N G A P O R E ================= APOLLO ENTERPRISES: Liquidators to Receive Claims Until Jan. 9 -------------------------------------------------------------- The shareholders of Apollo Enterprises Ltd appointed Colin Brian Wilson as liquidator on Nov. 28, 2006. Accordingly, Liquidator Wilson requires the company's creditors to prove their claims by Jan. 9, 2007, for them to share in the company's distribution. The Liquidator can be reached at: Colin Brian Wilson Prince & Partners P.O. Box 3685, Auckland 1001 New Zealand Telephone:(09) 379 5324 Facsimile:(09) 307 0778 Email: office@prince.co.nz About Apollo Enterprises Headquartered in Singapore -- Apollo Enterprises Limited -- is engaged with hotel operations, property development, and investment holding. The company owns 4 hotels: Novotel Apollo Singapore, Furama Hotel Singapore, Furama Hotel Central, and The Grand Hyatt Taipei. In addition, the Group has a seven-storey commercial building, the Apollo Centre. The Group also operates in Australia. HEXION SPECIALTY: ACC Completes Review of Orica Acquisition ----------------------------------------------------------- Hexion Specialty Chemicals has been notified that the Australian Competition and Consumer Commission or ACCC has completed its review of the company's intent to acquire the resin and adhesives business of Orica Ltd. The ACCC does not propose to intervene in the transaction and has not attached any conditions to its decision. About Hexion Based in Columbus, Ohio, Hexion Specialty Chemicals Inc. -- http://hexionchem.com/-- makes thermosetting resins (or thermosets). Thermosets add a desired quality (heat resistance, gloss, adhesion) to a number of different paints and adhesives. Hexion also makes formaldehyde and other forest product resins, epoxy resins, and raw materials for coatings and inks. The company has 86 manufacturing and distribution facilities in 18 countries. The company has its Asian headquarters in Singapore, with offices in Australia, China, Korea, Malaysia, New Zealand, Taiwan, and Thailand. * * * The Troubled Company Reporter - Asia Pacific reported on Nov. 16, 2006, that Moody's Investors Service assigned B3 ratings to the new guaranteed senior secured second lien notes due 2014 of Hexion Specialty Chemicals Inc. The company expects to issue roughly US$825 million of notes split (55/45) between fixed and floating rate notes. The new notes will be used to refinance roughly US$625 million of existing second lien notes and partially fund a US$500 million dividend to existing shareholders. A US$375 million increase in the company's existing guaranteed senior secured first lien term loan to US$2 billion, rated Ba3, will fund the remainder of the extraordinary dividend. Moody's also affirmed Hexion's other long term debt ratings and its SGL-2 speculative grade liquidity rating. As a result of this refinancing, the LGD assessment rates have changed as shown in the table below. The outlook is stable and the ratings on the existing second lien notes will be withdrawn upon successful completion of the refinancing. New ratings assigned: * Hexion Specialty Chemicals Inc. -- Floating Rate Gtd. Second Lien Sr. Sec Notes due 2014 -- B3, LGD5, 75%; and -- Fixed Rate Gtd Second Lien Sr Sec Notes due 2014, -- B3, LGD5, 75%. Ratings affirmed with revised LGD rates: -- US$225mm Gtd Sr Sec Revolving Credit Facility due 5/2011 -- Ba3, LGD2, 24% from 29%; -- US$50mm Gtd Sr Sec Letter of Credit Facility due 5/2011 -- Ba3, LGD2, 24% from 29%; -- US$1,625mm Gtd Sr Sec Term Loan due 5/2013 -- Ba3, LGD2, 24% from 29%*; -- US$300mm Flt Rate Gtd Second Lien Sr Sec Notes due 7/2010 -- B3, LGD5, 75% from 77%**; -- US$325mm 9.0% Gtd Second Lien Sr Sec Notes due 7/2014 -- B3, LGD5, 75% from 77%**; and -- US$34.0mm Pollution Control Revenue Bonds Series 1992 due 12/2009 -- B3, LGD5, 75% from 77%. Ratings affirmed: * Hexion Specialty Chemicals Inc. -- Corporate Family Rating -- B2; -- Probability of Default Rating -- B2; -- US$114.8mm 9.2% Sr. Unsec Debentures due 3/2021 -- Caa1, LGD6, 94%; -- US$246.8mm 7.875% Sr. Unsec Notes due 2/2023 -- Caa1, LGD6, 94%; and -- US$78.0mm 8.375% S.F. Sr. Unsec Debentures due 4/2016 -- Caa1, LGD6, 94%. Standard & Poor's Ratings Services assigned its 'B+' rating and its recovery rating of '3' to Hexion Specialty's US$1.675 billion senior secured term loan and synthetic letter of credit facilities. The rating on the existing US$225 million revolving credit facility was lowered to 'B+' with a recovery rating of '3', from 'BB-' with a recovery rating of '1', to reflect the similar security package as the new term loan and synthetic letter of credit facility. The ratings on the existing senior second secured notes were raised to 'B', with a recovery rating of '3', from 'B-' with a recovery rating of '5'. The ratings on the senior second secured notes reflect the amount of priority claims of the revolving facility and the first-lien term loan lenders. At the same time, Standard & Poor's affirmed its 'B+' corporate credit rating on Hexion and revised the outlook to stable from negative. MAE ENGINEERING: Changes Location of Share and Warrant Registrar ---------------------------------------------------------------- Mae Engineering Ltd disclosed that the place where the company's Share and Warrant Registrar and Register of Members and Index is kept has been transferred to: 3 Church Street #08-01 Samsung Hub Singapore 049483 About MAE Engineering Headquartered in Singapore, MAE Engineering Limited is engaged in the provision of integrated electrical and mechanical engineering services including designing, planning and procurement. These services are categorized into electrical installations, mechanical installations, electrical power supply installations, instrumentation and building automation as well as maintaining electrical and mechanical systems. The Group also offers consulting and specialist services to oceanariums and aquariums. The Group has disposed off its prawn and fish farming as well as edutainment businesses, after suffering accumulated losses of SGD48 million as of September 30, 2005. The company also suffered a liquidity crunch since September 30, 2005, when its total current liabilities of SGD23,695,000 exceeded its total current assets of SGD5,582,000. As of March 31, 2006, the company's balance sheet showed SGD7,404,000 in total assets and SGD27,257,000 in total liabilities, resulting in a SGD19,853,000 stockholders' equity deficit. LINDETEVES-JACOBERG: Updates on Utilization of Rights Issue ----------------------------------------------------------- Lindeteves-Jacoberg Limited disclosed that pursuant to its undertaking of the Rights Issue completed in Nov. 2006, which was given to the Singapore Exchange Securities Trading Limited, the net proceeds of approximately SGD25.4 million received from the Rights Issue have been utilized in accordance with the Offer Information Statement dated Oct. 6, 2006, through: (i) the capitalization of the Loan Amount of SGD3,706,320 or equivalent to EUR1.9 million, in lieu of payment of cash for subscription of all its Rights Shares entitlements under the Rights Issue; (ii) repayment of bank borrowings of approximately SGD3.3 million; and (iii) the remaining proceeds were used as general working capital. About Lindeteves-Jacoberg Lindeteves-Jacoberg Limited - http://www.linjacob.com/-- was incorporated in Singapore on December 11, 1947 as part of a Dutch international trading group. Its principal activities consist of investment holding, provision of warehousing and rental services and acting as specialist mechanical and electrical contractor for environmental engineering projects. The company is currently working out further debt restructuring plans for its liabilities, in addition to an earlier approved Scheme of Arrangement with its creditors. The TCR-AP reported on Nov. 10, 2006, that the company has total assets of US$225.52 million and US$53.23 million equity deficit as of Nov. 9. PETROLEO BRASILEIRO: Accelerating Ship Construction Tender ---------------------------------------------------------- Guilherme Estrella -- exploration and production director for Petroleo Brasileiro SA, the state oil firm of Brazil -- told Business News Americas that the company will speed up the process to tender construction of two new ships. BNamericas relates that Mr. Estrella said, "Last week, the company board approved the speeding-up of the ship [projects]." According to BNamericas, the acceleration is part of a program to boost natural gas output. Mr. Estrella told BNamericas that Petroleo Brasileiro will tender one ship to transport natural gas, and another to haul natural gas and oil. Meanwhile, Mr. Estrella told BNamericas that Petroleo Brasileiro is negotiating with suppliers to launch a tender to construct the P-55 semi-submersible platform and the P-57 floating production, storage and offloading vessel. Petroleo Brasileiro is appraising is the capacity of Brazilian shipyards to meet demand for its platforms. Published reports say that the two production units will be tendered before the end of 2006. Petroleo Brasileiro told BNamericas that the 180,000-barrel per day P-55 will begin producing oil at the deepwater Roncador field in the Campos basin in 2011. Meanwhile, the P-57 is a 180,000 barrel per day FPSO expected to operate in Campos' deepwater Jubarte field by 2010. The report says that the projects will boost the Plangas program aimed at speeding natural gas production in Brazil's southeastern region by 24 million cubic meters per day by the end of 2008 from 15 million cubic meters per day. BNamericas underscores that the plan includes: -- reducing flaring of gas; -- increasing gas transport capacity; -- increasing output from existing fields; and -- speeding up the development of new fields. About Petroleo Brasileiro Headquartered in Rio de Janeiro, Brazil, Petroleo Brasileiro SA aka Petrobras -- http://www2.petrobras.com.br/-- was founded in 1953. The company explores, produces, refines, transports, markets, distributes oil and natural gas and power to various wholesale customers and retail distributors in Brazil. Petrobras has operations in China, India, Japan, and Singapore. Petroleo Brasileiro SA's long-term corporate family rating is rated Ba3 by Moody's. Fitch Ratings assigned these ratings on Petroleo Brasileiro's senior unsecured notes: Maturity Date Amount Rate Ratings ------------- ------ ---- ------- April 1, 2008 US$400,000,000 9% BB+ July 2, 2013 US$750,000,000 9.125% BB+ Sept. 15, 2014 US$650,000,000 7.75% BB+ Dec. 10, 2018 US$750,000,000 8.375% BB+ Fitch upgraded the foreign currency rating of Petrobras to BB+ from BB, with positive outlook, in conjunction with Fitch's upgrade of the long-term foreign and local currency IDRs of the Federative Republic of Brazil to BB, from BB- on June 29, 2006. PETROLEO BRASILEIRO: Approves Petros Plan Subscription Reopening ---------------------------------------------------------------- Petroleo Brasileiro SA aka Petrobras' board of directors approved the reopening of the subscription process for the new Petros Plan regulation, with an extension term stipulated through Feb. 28, 2007, and with a new minimum adhesion goal set for 2/3 of the Petros Plan participants. The process had been terminated as there was a mandatory condition for massive individual participant adhesion, seeking the near totality of the employees and assisted parties. Adhesion had been about 53% (46% among retirees and pensioners, and 62% of the active employees) in the process held between July and August this year. Headquartered in Rio de Janeiro, Brazil, Petroleo Brasileiro SA aka Petrobras -- http://www2.petrobras.com.br/ingles/index.asp -- was founded in 1953. The company explores, produces, refines, transports, markets, distributes oil and natural gas and power to various wholesale customers and retail distributors in Brazil. Petrobras has operations in China, India, Japan, and Singapore. Petroleo Brasileiro SA's long-term corporate family rating is rated Ba3 by Moody's. Fitch Ratings assigned these ratings on Petroleo Brasileiro's senior unsecured notes: Maturity Date Amount Rate Ratings ------------- ------ ---- ------- April 1, 2008 US$400,000,000 9% BB+ July 2, 2013 US$750,000,000 9.125% BB+ Sept. 15, 2014 US$650,000,000 7.75% BB+ Dec. 10, 2018 US$750,000,000 8.375% BB+ Fitch upgraded the foreign currency rating of Petrobras to BB+ from BB, with positive outlook, in conjunction with Fitch's upgrade of the long-term foreign and local currency IDRs of the Federative Republic of Brazil to BB, from BB- on June 29, 2006. PETROLEO BRASILEIRO: Authorizes Share Repurchase Program -------------------------------------------------------- Petroleo Brasileiro SA aka Petrobras authorized the repurchase of its preferred shares in circulation for future cancellation, using profit reserve resources under these conditions: a) Objective: Reduce excess cash flow and adjust the capital structure, contributing to reducing Petrobras' capital cost; b) Amount: Up to 91,500,000 preferred shares, corresponding to 4.9% of this class of shares currently in circulation, which sums up to 1,850,364,700; c) Price: The acquisition will be made via Stock Exchanges, for share market value on the acquisition dates during the repurchase term; d) Intermediating financial institutions: * Bradesco SA. Corretora de Titulos e Valores Mobiliarios; * Citigroup GMB CCTVM; * Citigroup Global Markets; * Credit Suisse Brasil SA. Corretora de T�tulos e Valores Mobiliarios; * Itau Corretora de Valores; * JP Morgan CCVM SA; * JP Morgan Securities Inc.; * Morgan Stanley Dean Witter CTVM SA; * Morgan Stanley & CO. Incorporated; and * Santander Brasil Corretora de Titulos e Valores Mobiliarios; e) Term: Up to 365 days beginning Dec. 15, 2006. Pursuant to its share repurchase policy, the Board of Directors concluded that the current cash flow situation allows a program for this purpose to be deployed without compromising the company's investment program or substituting for dividend payments, while preserving the operational and financial goals set forth by the Strategic Planning. The Board also believes there are signs share prices are outdated, considering the company's growth and profitability perspectives. In the past three years, there was a marked improvement in Petrobras' financial indicators. The leverage index (net indebtedness/net liabilities) in the Brazilian corporate legislation fell from 53% in December 2002 to 17% in September 2006 (55% to 18% in the American corporate legislation), while the Strategic Planning financial goals point to a 25% baseline for this indicator. This significant improvement in the company's liquidity is also reflected by its risk classification by Moody's. After being reduced to the Ba2 level in August 2002, it was successively increased to Ba1 in September 2004, and Baa2 in October 2005, a classification already considered as investment grade. In October 2006, the company rose US$500 million in funds in the international market, for ten years, offering a yield of 6.185% a year, only 1.55% above the American Government's bonds for similar terms. With these rates in mind, and considering the company's growth perspectives compared with the current market valuing of its shares, and from the viewpoint of the conditions currently in effect and projected for the international oil market, among other alternatives that were analyzed, the Board of Directors considered share repurchase as the most efficacious way to reduce Petrobras' short-term financial cost. Headquartered in Rio de Janeiro, Brazil, Petroleo Brasileiro SA aka Petrobras -- http://www2.petrobras.com.br/ingles/index.asp -- was founded in 1953. The company explores, produces, refines, transports, markets, distributes oil and natural gas and power to various wholesale customers and retail distributors in Brazil. Petrobras has operations in China, India, Japan, and Singapore. Petroleo Brasileiro SA's long-term corporate family rating is rated Ba3 by Moody's. Fitch Ratings assigned these ratings on Petroleo Brasileiro's senior unsecured notes: Maturity Date Amount Rate Ratings ------------- ------ ---- ------- April 1, 2008 US$400,000,000 9% BB+ July 2, 2013 US$750,000,000 9.125% BB+ Sept. 15, 2014 US$650,000,000 7.75% BB+ Dec. 10, 2018 US$750,000,000 8.375% BB+ Fitch upgraded the foreign currency rating of Petrobras to BB+ from BB, with positive outlook, in conjunction with Fitch's upgrade of the long-term foreign and local currency IDRs of the Federative Republic of Brazil to BB, from BB- on June 29, 2006. SEA CONTAINERS: Wants to Employ Appleby Hunter as Special Atty. --------------------------------------------------------------- Sea Containers, Ltd. and its debtor-affiliates ask the Honorable Kevin J. Carey of the United States Bankruptcy Court for the District of Delaware for authority to employ Appleby Hunter Bailhache as their special counsel for Bermuda legal matters, nunc pro tunc to Oct. 15, 2006. Edwin S. Hetherington, vice president, general counsel, and secretary of Sea Containers Ltd., relates that Appleby has served as the Debtors' outside Bermudian counsel on matters including corporate and securities law and general litigation since 1974. Mr. Hetherington tells Judge Carey that that the firm's professionals have become very familiar with the Debtors and their business affairs, and have gained extensive experience in most aspects of the Debtors' general legal work and needs. Specifically, Appleby will: -- continue to advise and represent SCL in accordance to its prior representation; and -- advise and represent the Debtors with respect to SCL's Bermuda insolvency proceeding and other matters that may arise in the Debtors' Chapter 11 cases or the Bermuda proceeding in the ordinary course of operations. Appleby will be paid for its services based on the firm's customary hourly rates: Professionals Hourly Rate ------------- ----------- Partners US$400 - US$625 Associates US$200 - US$590 Paraprofessionals US$125 - US$260 The firm will also be reimbursed for necessary out-of-pocket expenses. Mr. Hetherington relates that Appleby has received a replenishing prepetition retainer with a remaining balance of US$183,856 for providing the Debtors with representation on Bermuda legal matters prior to the Petition Date. In addition to the retainer, Appleby has also received US$205,941 from the Debtors on account of services rendered regarding the Bermuda legal matters. Jennifer Yolande Fraser, Esq., a partner at Appleby, assures the Court that her firm does not hold any interest adverse to Debtors or their estates with respect to the matters on which it is to be employed. Ms. Fraser can be contacted at: Jennifer Y. Fraser, Esq. Appleby Hunter Bailhache Canon's Court, 22 Victoria Street P.O. Box HM 1179 Hamilton HM EX, Bermuda Telephone: (441) 295-2244 Facsimile: (441) 292-8666 Web site: http://www.applebyglobal.com About Sea Containers Headquartered in Hamilton, Bermuda, Sea Containers Ltd. -- http://www.seacontainers.com/-- provides passenger and freight transport and marine container leasing. Registered in Bermuda, the company has regional operating offices in London, Genoa, New York, Rio de Janeiro, Sydney, and Singapore. The company is owned almost entirely by United States shareholders and its primary listing is on the New York Stock Exchange (SCRA and SCRB) since 1974. On Oct. 3, the company's common shares and senior notes were suspended from trading on the NYSE and NYSE Arca after the company's failure to file its 2005 annual report on Form 10-K and its quarterly reports on Form 10-Q during 2006 with the U.S. Securities and Exchange Commission. Through its GNER subsidiary, Sea Containers Passenger Transport operates Britain's fastest railway, the Great North Eastern Railway, linking England and Scotland. It also conducts ferry operations, serving Finland and Estonia as well as a commuter service between New York and New Jersey in the U.S. Sea Containers Ltd. and two subsidiaries filed for chapter 11 protection on Oct. 15, 2006 (Bankr. D. Del. Case No. 06-11156). Robert S. Brady, Esq., at Young, Conaway, Stargatt & Taylor represents the Debtors in their restructuring efforts. When the Debtors filed for protection from their creditors, they reported US$1.7 billion in total assets and US$1.6 billion in total debts. (Sea Containers Bankruptcy News, Issue No. 6; Bankruptcy Creditors' Service, Inc., http://bankrupt.com/newsstand/or 215/945-7000) =============== T H A I L A N D =============== BLOCKBUSTER INC: Improved Cash Flow Cues S&P's Stable Outlook ------------------------------------------------------------- Standard & Poor's Ratings Services revised its outlook on video rental retailer Blockbuster Inc. to stable from negative. The ratings on the Dallas-based company, including the 'B-' corporate credit rating, were affirmed. "The outlook revision is based on the company's strengthened cash flow protection measures as a result of its cost reduction efforts and lower advertising and promotional expenses," said Standard & Poor's credit analyst Diane Shand. Total debt to EBITDA declined to 5.6x in 12 months ended Sept. 30, 2006, from 8.9x, a year earlier, and EBITDA coverage of interest increased to 1.9x from 1.4x. Although cash flow protection measures are still weak, Standard & Poor's expects further improvement in the near term due to slightly better operating results and a reduction of debt by US$150 million. The company's operating margin increased to 16.7% in the first nine months of 2006, from 11.7% a year earlier. The ratings on Blockbuster reflect the risks of operating in a mature and declining video rental industry, the company's dependence on decisions made by movie studios, its thin cash flow protection measures, high leverage, and the technology risks associated with delivery of video movies to the home. Industry fundamentals for the video rental market, on which Blockbuster's profitability is heavily dependent, are weak. The company generated 71% of total sales from its movie rental business in 2005, and its domestic rental same-store sales have been weak since 2001. The company was particularly hard hit in 2005 when the rental market dropped at a double-digit rate, after steadily declining at a low-single-digit rate in the prior three years. The contraction in the rental market is attributable to the elimination of exclusive movie release rental time windows as a result of the format change to DVD from VHS, and to studios' pricing DVDs to stimulate retail sales. In response to weak rental industry dynamics, Blockbuster eliminated late fees to increase customer traffic. This move affected revenues by US$532 million and operating income by an estimated US$250 million-US$300 million in 2005. In addition, the company is attempting to transform into a home entertainment store and has launched a national online and in-store rental subscription program. Standard & Poor's has concerns over whether these initiatives will revive the company's flagging rental business. Blockbuster Inc. (NYSE: BBI, BBI.B) -- http://www.blockbuster.com/-- provides in-home movie and game entertainment, with more than 9,000 stores throughout the Americas, Europe, Asia and Australia. The company also operates in Thailand, Taiwan and New Zealand. DAIMLERCHRYSLER: U.S. Unit Ceases Production on Various Plants -------------------------------------------------------------- The Chrysler Group, the U.S.-based unit of DaimlerChrysler AG, will halt production for more than a month on some of its U.S. plants starting Dec. 22, 2006, to cut piled-up inventory, Jeff Bennett and Alan Ohnsman at Bloomberg News report. According to Bloomberg, Chrysler will stop vehicle production in its Dodge truck plants in St. Louis, Michigan, Newark, and Delaware, minivan plants in Windsor, Ontario, and a jeep plant in Detroit. The company, which depends on light trucks for most of its sales, has cut back its inventory in spite of its U.S. sales plummeting 7.7% during November. The company is trying to shed off units that were not ordered by customers, Bloomberg says. Bloomberg relates that Autodata Corp. stated that light truck sales dropped 5.6%. Large pickup truck sales also dropped 9.1% from last year. In addition, gasoline prices that stayed up for US$3 a barrel for most of the year contributed to declining sales. Bloomberg adds that in the second quarter of 2006, Chrysler had planned to cut North American production by 16%. Inventory Plans Automotive News, a Detroit trade publication, has reportedly said that Chrysler had an 81-day supply of light trucks, instead of the standard 60 days. Joe Eberhardt told Bloomberg in an interview that the company's inventory of unsold vehicles was in the low "500,000s". Chrysler will have some plants that will suspend its operations longer than the planned duration, while other Chrysler facilities will be operating longer than usual due to the demand for certain vehicles, Frank Klegon, Chrysler product development head, informed Bloomberg. About DaimlerChrysler Headquartered in Stuttgart, Germany, DaimlerChrysler AG -- http://www.daimlerchrysler.com/-- engages in the development, manufacture, distribution, and sale of various automotive products, primarily passenger cars, light trucks, and commercial vehicles worldwide. It primarily operates in four segments: Mercedes Car Group, Chrysler Group, Commercial Vehicles and Financial Services. The Chrysler Group segment offers cars and minivans, pick-up trucks, sport utility vehicles, and vans under the Chrysler, Jeep and Dodge brand names. It also sells parts and accessories under the MOPAR brand. DaimlerChrysler has operations in Australia, China, Indonesia, Japan, Korea, Malaysia and Thailand. DaimlerChrysler lowered its operating profit forecast for full- year 2006 to be in the magnitude of EUR5 billion (US$6.4 billion) based on an expected full-year operating loss of approximately EUR1 billion (US$1.2 billion) for its Chrysler Group. The Chrysler Group is facing a difficult market environment in the United States with excess inventory, non-competitive legacy costs for employees and retirees, continuing high fuel prices and a stronger shift in demand toward smaller vehicles. At the same time, key competitors have further increased margin and volume pressures - particularly on light trucks - by making significant price concessions. In addition, increased interest rates caused higher sales & marketing expenses. Chrysler Group will take additional production cuts in the third and fourth quarters to reduce dealer inventories and make way for its current product offensive. DAIMLERCHRYSLER: Unit Ordered to Pay US$350MM in U.S. Fraud Case ---------------------------------------------------------------- The Multnomah County Circuit Court has ordered DaimlerChrysler North American Holding Corp. and its heavy truck subsidiary, Freightliner LLC, to pay US$350 million in damages in connection with a multinational fraud case, CNNMoney reports. The Court found DaimlerChrysler liable for US$280 million of the punitive damages, with the remaining US$70 million asserted against Freightliner, reports say. The Oregon Court found that Freightliner transferred assets between its divisions in an effort to avoid a legal judgment. The U.S. Court's ruling follows a British Court order handed down last year compelling Freightliner to pay approximately US$489 million to German truck maker MAN AG, CNNMoney adds. DaimlerChrysler intends to appeal the jury ruling. A company spokeswoman has reiterated that Freightliner had never sought to hide assets from MAN. About DaimlerChrysler Headquartered in Stuttgart, Germany, DaimlerChrysler AG -- http://www.daimlerchrysler.com/-- engages in the development, manufacture, distribution, and sale of various automotive products, primarily passenger cars, light trucks, and commercial vehicles worldwide. It primarily operates in four segments: Mercedes Car Group, Chrysler Group, Commercial Vehicles, and Financial Services. The Chrysler Group segment offers cars and minivans, pick-up trucks, sport utility vehicles, and vans under the Chrysler, Jeep, and Dodge brand names. It also sells parts and accessories under the MOPAR brand. DaimlerChrysler has operations in Australia, China, Indonesia, Japan, Korea, Malaysia and Thailand. DaimlerChrysler lowered its operating profit forecast for full- year 2006 to be in the magnitude of EUR5 billion (US$6.4 billion) based on an expected full-year operating loss of approximately EUR1 billion (US$1.2 billion) for its Chrysler Group. The Chrysler Group is facing a difficult market environment in the United States with excess inventory, non-competitive legacy costs for employees and retirees, continuing high fuel prices and a stronger shift in demand toward smaller vehicles. At the same time, key competitors have further increased margin and volume pressures - particularly on light trucks - by making significant price concessions. In addition, increased interest rates caused higher sales & marketing expenses. Chrysler Group will take additional production cuts in the third and fourth quarters to reduce dealer inventories and make way for its current product offensive. FEDERAL-MOGUL: Court OKs Inter-company Equity Interest Transfers ---------------------------------------------------------------- Federal-Mogul Corporation and its debtor-affiliates were granted approval by the U.S. Bankruptcy Court for the District of Delaware for the inter-company transfers of equity interests in Federal-Mogul Holding Deutschland GmbH and certain Mexican subsidiaries to Cooperatief Federal-Mogul Dutch Investments U.A., a non-Debtor subsidiary. The equity interests are currently held either directly by Debtors Federal-Mogul Corporation, FM International LLC, and Federal-Mogul Ignition Company, or indirectly through their non- debtor affiliates. The proposed Transfers are part of an international restructuring that the Debtors intend to consummate before year- end to maximize the tax-efficiency of their corporate structure going forward. The restructuring will ultimately result in many of the Debtors' foreign subsidiaries being owned through the F-M Dutch HoldCo structure. F-M Dutch HoldCo, which was formed in connection with the Court-authorized French and Italian Recap, is a Dutch holding company with no current material liabilities and whose only significant assets are its indirect equity holdings in Federal-Mogul Holding Italy S.r.L. The Transfers will result in an estimated annual tax savings aggregating US$28,000,000, and will preserve a larger portion of post-tax funds that are repatriated through the F-M Dutch HoldCo structure. German Transfers F-M Germany is currently a wholly owned subsidiary of Federal- Mogul Corp., and is the parent of a number or subsidiaries that constitute about 60% of the Debtors' operations in Europe. The Debtors proposed to transfer ownership of F-M Germany from Federal-Mogul Corp., resulting in F-M Dutch HoldCo directly holding a 90% equity interest in F-M Germany with the remaining 10% held indirectly through a newly formed German partnership. The German Transfer allows the Debtors to effectuate their international restructuring and move funds up the corporate ownership chain to their United States parent companies. The German Transfer must be completed by the end of 2006 to allow the Debtors to take advantage of a number of beneficial tax attributes that are anticipated to result in an aggregate tax savings of approximately US$26,000,000. Mexican Transfers The Debtors' Mexican operations consist of 10 directly and indirectly held subsidiaries. None of the Mexican subsidiaries are Debtors in the Chapter 11 proceedings. Servicio de Componente Automotrices, S.A. de C.V., is the principal holding company for the Mexican businesses. The current shareholders of SEDECA are: (1) Debtor F-M International with a current interest of 25.52% interest in SEDECA; (2) Debtor F-M Ignition with a 70.74% interest in SEDECA; and (3) non-Debtor Federal-Mogul Canada Ltd., which is wholly owned by Federal-Mogul Corp., with a 3.74% interest in SEDECA. SEDECA directly or indirectly holds 100% of all of the SEDECA Subsidiaries except: * Servicios Administrativos Industriales, S.A. de C.V.; * Camshafts Castings de Mexico S. de R.L.; and * Federal-Mogul S.A. de C.V. The Debtors proposed to transfer the equity interests of SEDECA and SAISA to F-M Dutch HoldCo, which will permit the Debtors to avail themselves of certain tax advantages under Dutch and Mexican law. As part of the Mexican Transfer, the shareholders of the Mexican Subsidiaries will indirectly contribute their ownership interests in the Mexican Subsidiaries to F-M Dutch HoldCo in exchange for equity interests in F-M Dutch HoldCo. The Mexican Transfer is part of the Debtors' overall tax planning efforts to reduce the tax liability related to their Mexican operations. The Debtors estimate that the Mexican Transfers will result in an ownership structure that will confer a net US$2,000,000 annual savings in taxes. Scotta E. McFarland, Esq., at Pachulski Stang Ziehl Young Jones & Weintraub LLP, in Wilmington, Delaware, explained that by easing the movement of funds in a more tax-efficient structure, the Transfers will ultimately enable the Debtors to deploy their cash in the most efficient manner including paying down certain of their existing inter-company indebtedness, while simultaneously reducing the amount of cash the Debtors will be required to draw down for working capital purposes under the proposed exit financing facility. In addition, the Transfers will serve to help preserve any of the Debtors' existing NOLs. Following the Transfers, the Debtor Shareholders that currently hold direct equity interests in the Restructuring Entities, will own equivalent ownership interests in F-M Dutch HoldCo, which will own the Restructuring Entities. Thus, the Transfers, which will not involve the actual movement of any of the Debtors' cash, will have an economically neutral impact on the Debtors' overall equity structure. F-M Dutch HoldCo and its subsidiary holding companies will remain holding companies with: (i) no third-party liabilities; (ii) certain permitted inter-company loans; and (iii) equity interests in the various Federal-Mogul foreign subsidiaries as their only significant assets. Accordingly, the Transfers should have a minimal impact on the Debtors' rights to their ultimate equity interests in the Restructuring Entities and, correspondingly, will not adversely impact the Debtors' creditors, Ms. McFarland tells the Court. Headquartered in Southfield, Michigan, Federal-Mogul Corporation -- http://www.federal-mogul.com/-- is one of the world's largest automotive parts companies with worldwide revenue of some US$6 billion. In the Asian Pacific region, the company has operations in Malaysia, Australia, China, India, Japan, Korea, and Thailand. The company filed for chapter 11 protection on Oct. 1, 2001 (Bankr. Del. Case No. 01-10582). Lawrence J. Nyhan Esq., James F. Conlan Esq., and Kevin T. Lantry Esq., at Sidley Austin Brown & Wood, and Laura Davis Jones Esq., at Pachulski, Stang, Ziehl, Young, Jones & Weintraub, P.C., represent the Debtors in their restructuring efforts. When the Debtors filed for protection from their creditors, they listed US$10.15 billion in assets and US$8.86 billion in liabilities. Federal-Mogul Corp.'s U.K. affiliate, Turner & Newall, is based at Dudley Hill, Bradford. Peter D. Wolfson, Esq., at Sonnenschein Nath & Rosenthal; and Charlene D. Davis, Esq., Ashley B. Stitzer, Esq., and Eric M. Sutty, Esq., at The Bayard Firm represent the Official Committee of Unsecured Creditors. OMNOVA SOLUTIONS: Fitch Affirms Issuer Default Ratings at B+ ------------------------------------------------------------ Fitch Ratings affirmed the credit ratings for OMNOVA Solutions Inc.: -- Issuer Default rating at B+; -- Senior secured credit facility at BB+/RR1; and -- Senior secured notes at B+/RR4. The Rating Outlook is Stable. These rating actions affect US$165 million in public securities and the company's US$72 million senior secured credit facility. OMNOVA's credit ratings are supported by its small company size, relatively high debt level, and weak, though improving, operating performance. The company's size has declined and its product portfolio has become more limited upon the divestiture of its roofing business in late September 2006 for approximately US$40 million cash. The opportunistic sale monetized a small contributor to sales and operating income while removing warranty liabilities from the balance sheet. However, Fitch notes that resulting lower revenue and earnings levels make OMNOVA more susceptible to default risk when business conditions weaken. Total debt-to-operating EBITDA remains high at 3.6 times with US$165 million 11.25% notes representing the majority of the outstanding debt. These notes may be refinanced in 2007 after its call date at June 1 as the company tries to reduce future interest expense. The remaining portfolio has shown mixed results in 2006 so far. The Decorative Products segment began to contribute profit, although at very low levels, while the Performance Chemicals segment exhibited weaker margin and lower profit on lower volumes. Despite weaker profitability, Performance Chemicals continues to be the company's largest contributor to earnings. That OMNOVA's stronger segment is presenting some weakness is a near-term concern. The Stable Rating Outlook reflects Fitch's view that operating performance and credit measures are expected to change modestly from current levels near term. Fitch expects Performance Chemicals to stabilize or possibly weaken if carpet demand remains weak and raw material prices soften with energy prices near term. Fitch also expects Decorative Products to weaken slightly if office vacancy rates increase in 2007 and a weaker U.S. economy stems refurbishment activity, resulting in slower wallcovering and laminate demand. OMNOVA Solutions Inc. is a specialty chemical producer based in Fairlawn, OH. The company has leading positions in styrene- butadiene latex production, vinyl wallcovering, coated fabrics and decorative laminates. For the last 12 months ended Aug. 31, 2006, the company had operating EBITDA of US$50.1 million on sales of US$812.2 million unadjusted for the recent divestiture. OMNOVA Solutions Inc. - http://www.omnova.com-- is a producer of emulsion polymers and specialty chemicals, decorative and functional surfaces and single-ply roofing systems for a variety of commercial, industrial and residential end uses. OMNOVA operates in three business segments: Performance Chemicals, Decorative Products and Building Products. During the fiscal year ended November 30, 2005 (fiscal 2005), revenue from Performance Chemicals segment, Decorative Products segment and Building Products segment represented approximately 55.9%, 29.9% and 14.2%, respectively. The company has over 1,800 customers that rely on over 1,000 OMNOVA products. OMNOVA utilizes 15 manufacturing, development and design facilities in North America, Europe and Asia to service its broad customer base The company has operations in China and Thailand. ********* Tuesday's edition of the TCR-AP delivers a list of indicative prices for bond issues that reportedly trade well below par. Prices are obtained by TCR-AP editors from a variety of outside sources during the prior week we think are reliable. Those sources may not, however, be complete or accurate. The Tuesday Bond Pricing table is compiled on the Friday prior to publication. Prices reported are not intended to reflect actual trades. Prices for actual trades are probably different. Our objective is to share information, not make markets in publicly traded securities. Nothing in the TCR-AP constitutes an offer or solicitation to buy or sell any security of any kind. It is likely that some entity affiliated with a TCR-AP editor holds some position in the issuers' public debt and equity securities about which we report. A list of Meetings, Conferences and Seminars appears in each Wednesday's edition of the TCR-AP. Submissions about insolvency- related conferences are encouraged. Send announcements to conferences@bankrupt.com Friday's edition of the TCR-AP features a list of companies with insolvent balance sheets obtained by our editors based on the latest balance sheets publicly available a day prior to publication. At first glance, this list may look like the definitive compilation of stocks that are ideal to sell short. Don't be fooled. Assets, for example, reported at historical cost net of depreciation may understate the true value of a firm's assets. A company may establish reserves on its balance sheet for liabilities that may never materialize. The prices at which equity securities trade in public market are determined by more than a balance sheet solvency test. ********* 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 - Asia Pacific is a daily newsletter co-published by Bankruptcy Creditors' Service, Inc., Fairless Hills, Pennsylvania, USA, and Beard Group, Inc., Frederick, Maryland, USA. Nolie Christy Alaba, Rousel Elaine Tumanda, Valerie Udtuhan, Francis James Chicano, Catherine Gutib, Tara Eliza Tecarro, Freya Natasha Fernandez, and Peter A. Chapman, Editors. Copyright 2006. All rights reserved. ISSN: 1520-9482. 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. TCR-AP subscription rate is $575 for 6 months 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 $25 each. For subscription information, contact Christopher Beard at 240/629-3300. *** End of Transmission ***