/raid1/www/Hosts/bankrupt/TCRAP_Public/080303.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
Monday, March 3, 2008, Vol. 9, Issue 44
Headlines
A U S T R A L I A
ABC LEARNING: Major Investors Buy Shares to Save Company
ATM MARKETING: Members & Creditors Meeting Set for March 13
AUSTRALIAN ALOE: Members & Creditors to Meet on March 14
CHATSWOOD AUTO: Final Meeting Slated for March 14
CHT PROPERTY: Commences Liquidation Proceedings
CUMBERLAND PAINTING: Members & Creditors Meeting Set for March 5
GRIFFIN COAL: Moody's Assigns Ba3 Corporate Ratings
I.M.S.A PTY: Liquidator to Present Wind-Up Report on March 12
INCUBATOR PTY: Members & Creditors Meeting Set for March 14
KALAMAZOO LOGISTICS: Final Meeting Slated for March 14
MIDWAY STUDIOS: To Declare First Dividend on March 7
NATIONWIDE CLEANING: Court Enters Wind-Up Order
SHOP AMERICA: Placed Under Voluntary Liquidation
ZOO TELECOM: Liquidator to Give Wind-Up Report on March 14
C H I N A , H O N G K O N G & T A I W A N
CHINA EASTERN: Expands Code Sharing with Shanghai Airlines
CHINA EASTERN: Fitch Affirms Issuer Default Ratings at B+
CHINA SOUTHERN: Fitch Affirms B+ Issuer Default Ratings
FIAT SPA: Board Approves Incentive Plan for Key Employees
FIAT SPA: In Talks with BMW on Engine & Gear Box Tie-Up
FIAT SPA: Resumes Production of Multijet Engine in Polish Plant
FUYAO GLASS: Scraps CNY3BB Share Offer Due to Opposition
PETROLEOS DE VENEZUELA: Court May Rule on Asset Freeze Next Week
SHANGHAI PUDONG: 2007 Profit Up 78% to CNY10.76 Billion
I N D I A
ESSAR OIL: Shareholders Approve Plan to Raise US$2 Billion
GENERAL MOTORS: Idles Assembly Plant Due to AAM Workers' Strike
GENERAL MOTOR: Supplier's Workers Strike Won't Affect S&P Rating
GENERAL MOTORS: Fitch Affirms B Issuer Default Rating
HDFC BANK: Reaffirms Swap Ratio; To Issue Shares to Promoters
ICICI BANK: Wholly Owned Subsidiary Enters German Market
QUEBECOR WORLD: To Convert Series 5 Preferred Shares on March 1
QUEBECOR WORLD: Names A. Caille as Restructuring Panel Chairman
TATA STEEL: Three Greenfield Projects Face Delays
I N D O N E S I A
ANIXTER: Pres. & CEO Robert Grubbs to Retire by End of June
BANK INTERNASIONAL: Fitch Affirms BB Issuer Default Ratings
EXCELCOMINDO: Fitch Says Outlook for BB- Rating Is Stable
INDOSAT: Fitch Says Outlook for BB- Rating Is Stable
J A P A N
DELPHI CORP: Shareholder Settlement Hearing Set for April 29
FIDELITY NATIONAL: Earns US$108MM in Quarter ended Dec. 31, 2007
FORD MOTOR: Navistar Re-Files Breach of Contract Suit
IHI CORP: Denies Asahi Report on Hiding Huge Losses
SAPPORO HOLDINGS: Board Rejects Steel Partners Takeover Bid
K O R E A
CLOROX COMPANY: Prices US$500MM Offering of 5% Senior Notes
TEMBEC: Ontario Court Approves Plan of Arrangement under CBCA
M A L A Y S I A
SOLUTIA INC: Gets Exit Financing; Emerges from Ch. 11 Protection
SOLUTIA INC: Court Approves Quinn Emanuel as Conflicts Counsel
N E W Z E A L A N D
ACTION BUSINESS: Subject to CIR's Wind-Up Petition
ANZ TELEPORT: Appoints Whittfield & van Delden as Liquidators
APPLIANCE SERVICING: Creditors' Proofs of Debt Due on March 15
AUCKLAND COATING: Wind-Up Petition Hearing Set for March 6
CONDOR FREIGHT: Wind-Up Petition Hearing Set for April 9
GHH LEASING: Commences Liquidation Proceedings
LES JARDINS: Wind-Up Petition Hearing Set for March 3
ON THE LEVEL: Subject to CIR's Wind-Up Petition
S M SURFBOARDS: Faces CIR's Wind-Up Petition
SHEPPARD SAWMILLS: Wind-Up Petition Hearing Set for March 17
P H I L I P P I N E S
PLDT: Fitch Says Outlook for BB+ Rating Is Stable
RIZAL COMMERCIAL: Asset Management Unit Posts 93% Gain in 2007
S I N G A P O R E
SCOTTISH: A.M. Best Chips Issuer Credit Rating to bb from bbb-
S R I L A N K A
SRI LANKA TELECOM: Fitch Assigns Neg. Outlook on BB- Rating
T H A I L A N D
TOTAL ACCESS: Fitch Puts BB+ Rating on Watch Negative
* Fitch Puts US$97B of CDOs on WatchNeg on Worsening Performance
* Fitch Says Asia Pacific Telecom Sector Can Manage Risks
- - - - -
=================
A U S T R A L I A
=================
ABC LEARNING: Major Investors Buy Shares to Save Company
--------------------------------------------------------
ABC Learning Centres Ltd.'s biggest investors are buying company
shares to offset the free fall of the stocks, various reports
say.
As reported in the Troubled Company Reporter - Asia Pacific, the
company's Sydney trading on Feb. 26 plunged 43% after a slump in
earnings raised concerns it may struggle to repay debts. The
drop to AU$2.14 triggered margin calls on stakes held by some
directors. Consequently, stock trading was halted as the
company entered talks on "indications of interest" for parts of
its business, the report added.
More than 96% of the remaining 21.9 million ABC Learning shares
owned by directors, equivalent to 4.6% of stock outstanding, are
held in margin lending arrangements that may result in forced
sales, the TCR-AP says.
According to Richard Pullin at Reuters, Singapore state
investment firm Temasek Holdings, has increased its stake in the
company by buying nearly 12 million extra shares, paying
between AU$2.14 and AU$4.20 a share. Temasek's purchase
included a parcel of 8 million shares on Tuesday at AU$2.14 a
share.
Myrna Thomas, Temasek managing director for corporate affairs,
said that they remain committed to their investment in the
company, and their investment decisions based on commercial
considerations, The Walls Street Journal relates.
According to the Journal, U.S.-based Lazard Asset Management
also raised its stake to 13.93% from 12.2%. Temasek and Lazard
made their purchases on the open market.
An industry insider told the Journal that a private equity is
behind an approach for ABC's U.S. operations. Goldman Sachs
JBWere and Austock are serving as advisers.
There is speculation that several private-equity firms could be
contenders, including Bain Capital Partners. TPG Inc.,
Macquarie Group Ltd. -- which has child-care interests -- and
Pacific Equity Partners have also been tipped as possible
buyers, the Journal adds.
About A.B.C. Learning
A.B.C. Learning Centres Limited provides childcare services and
education. The company operates in Australia, New Zealand, the
United States and the United Kingdom. The company's
subsidiaries include A.B.C. Developmental Learning Centres Pty
Ltd, A.B.C. Early Childhood Training College Pty Ltd, Premier
Early Learning Centres Pty Ltd, A.B.C. Developmental Learning
Centres (NZ) Ltd., A.B.C. New Ideas Pty. Ltd., A.B.C. Land
Holdings (NZ) Limited and Child Care Centres Australia Ltd.
On September 25, 2006, the company acquired Hutchison Child Care
Services Ltd. On September 7, 2006, it acquired The Children's
Courtyard LLP. On December 18, 2006, it acquired Busy Bees
Group Ltd. On January 26, 2007, it acquired La Petite Holdings
Inc. On February 2, 2007, it acquired Forward Steps Holdings
Ltd. On March 23, 2007, it acquired Children's Gardens LLP. In
September 2007, the company purchased the Nursery division
(Leapfrog Nurseries) from Nord Anglia Education PLC.
As reported by the Troubled Company Reporter - Asia Pacific on
February 29, 2008, the company's Sydney trading last Feb. 26,
plunged 43% after a slump in earnings raised concerns it may
struggle to repay debt. The drop to AU$2.14 triggered margin
calls on stakes held by some directors. Consequently, stock
trading was halted as the company entered talks on "indications
of interest" for parts of its business.
More than 96% of the remaining 21.9 million ABC Learning shares
owned by directors, equivalent to 4.6% of stock outstanding, are
held in margin lending arrangements that may result in forced
sales.
ATM MARKETING: Members & Creditors Meeting Set for March 13
-----------------------------------------------------------
ATM Marketing Pty. Limited will hold a final meeting for its
members and creditors at 11:00 a.m. on March 13, 2008. During
the meeting, the company's liquidator, Robert Elliott at Hall
Chadwick, will provide the attendees with property disposal and
winding-up reports.
The liquidator can be reached at:
Robert Elliott
Hall Chadwick
Level 29, 31 Market Street
Sydney, New South Wales 2000
Australia
About ATM Marketing
ATM Marketing Pty. Limited operates advertising agencies. The
company is located at North Sydney, in New South Wales,
Australia.
AUSTRALIAN ALOE: Members & Creditors to Meet on March 14
--------------------------------------------------------
Australian Aloe Marketing Pty. Ltd. will hold a final meeting
for its members and creditors at 10:00 a.m. on March 14, 2008.
During the meeting, the company's liquidator, P. Ngan at Ngan &
Co., will provide the attendees with property disposal and
winding-up reports.
The liquidator can be reached at:
P. Ngan
c/o Ngan & Co.
49 Market Street, Level 5
Sydney, New South Wales 2000
Australia
About Australian Aloe
Australian Aloe Marketing Pty. Ltd. is located at Milsons Point,
in New South Wales, Australia.
CHATSWOOD AUTO: Final Meeting Slated for March 14
-------------------------------------------------
Chatswood Auto Body Works Pty. Ltd. will hold a final meeting
for its members and creditors at 10:00 a.m. on March 14, 2008.
During the meeting, the company's liquidator, G. G. Woodgate at
Woodgate & Co., will provide the attendees with property
disposal and winding-up reports.
The liquidator can be reached at:
G. G. Woodgate
Woodgate & Co.
25 Bligh Street, Level 14
Sydney, New South Wales
Australia
Telephone:(02) 9233 6088
Facsimile:(02) 9233 1616
About Chatswood Auto
Chatswood Auto Body Works Pty. Ltd. operates top and body repair
and paint shops. The company is located at Chatswood, in New
South Wales, Australia.
CHT PROPERTY: Commences Liquidation Proceedings
-----------------------------------------------
CHT Property Pty. Ltd.'s members agreed on Feb. 2, 2008, to
voluntarily liquidate the company's business. In line with this
goal, the company has appointed Danny Vrkic at Jirsch Sutherland
to facilitate the sale of its assets.
The liquidator can be reached at:
Danny Vrkic
Jirsch Sutherland & Co - Wollongong
PO Box 573
Wollongong, New South Wales 2500
Australia
Telephone:(02) 4225 2545
Facsimile:(02) 4225 2546
e-mail: reception@jswollongong.com.au
About CHT Property
Located at Unanderra, in New South Wales, Australia, CHT
Property Pty. Ltd. is an investor relation company.
CUMBERLAND PAINTING: Members & Creditors Meeting Set for March 5
----------------------------------------------------------------
Cumberland Painting Services Pty. Ltd. will hold a final meeting
for its members and creditors at 11:00 a.m. on March 5, 2008.
During the meeting, the company's liquidator, Michael G. Jones
at Insolvency & Business Recovery, will provide the attendees
with property disposal and winding-up reports.
The liquidator can be reached at:
Michael G. Jones
c/o Jones Partners Insolvency & Business Recovery
189 Kent Street, Level 13
Sydney, New South Wales
Australia
Telephone:(02) 9251 5222
About Cumberland Painting
Cumberland Painting Services Pty Ltd is a distributor of
paintings and paper hangings. The company is located at
Campbelltown, in New South Wales, Australia.
GRIFFIN COAL: Moody's Assigns Ba3 Corporate Ratings
---------------------------------------------------
Moody's Investors Service has cut The Griffin Coal Mining Co.
Pty. Ltd.'s corporate family and senior unsecured ratings to
'Ba3' from 'Ba2', with a stable outlook.
The downgrade reflects lower earnings and profitability in 2007
relative to initial forecasts, and the outlook for lower
production levels, earnings and cash flows, than forecast,
Moody's said.
Moody's noted that Griffin Coal carries extended risk
surrounding the completion and commissioning of its major coal
carbonisation project.
The ratings agency, however, said Griffin Coal has strong
reserves and contracts, and is proceeding on time and within
budget with its Bluewaters I and II projects, which -- when
successfully completed -- will provide strong revenue streams to
replace from 2010 Verve Energy's expiring contract.
Robust cash levels continue and support Griffin Coal's ongoing
liquidity, Moody's reported.
The Griffin Coal Mining Co Pty Ltd --
http://www.griffincoal.com.au/-- operates two open-cut mines in
the Collie Basin in the south-western part of Western Australia.
They produced 3.04 million tonnes of coal during FY2006. Major
customers include Verve Energy's Muja power station -- which is
adjacent to the mines -- and industrial customers mostly within
200 km.
I.M.S.A PTY: Liquidator to Present Wind-Up Report on March 12
-------------------------------------------------------------
I.M.S.A Pty. Limited will hold a final meeting for its members
and creditors at 10:00 a.m. on March 12, 2008. During the
meeting, the company's liquidator, Richard Albarran at Hall
Chadwick, will provide the attendees with property disposal and
winding-up reports.
The liquidator can be reached at:
Richard Albarran
c/o Hall Chadwick
31 Market Street, Level 29
Sydney, New South Wales 2000
Australia
About I.M.S.A Pty.
I.M.S.A Pty. Limited is a distributor of durable goods. The
company is located at Manly, in New South Wales, Australia.
INCUBATOR PTY: Members & Creditors Meeting Set for March 14
-----------------------------------------------------------
Incubator Pty. Limited will hold a final meeting for its members
and creditors at 9:00 a.m. on March 14, 2008. During the
meeting, the company's liquidator, N. C. Malanos, will provide
the attendees with property disposal and winding-up reports.
The liquidator can be reached at:
N. C. Malanos
32 Martin Place, Level 1
Sydney, New South Wales
Australia
About Incubator Pty.
Incubator Pty. Limited is involved with commercial art and
graphic Design. The company is located at Redfern, in New South
Wales, Australia.
KALAMAZOO LOGISTICS: Final Meeting Slated for March 14
------------------------------------------------------
Kalamazoo Logistics Pty. Limited will hold a final meeting for
its members and creditors at 11:00 a.m. on March 14, 2008.
During the meeting, the company's liquidator, Richard Albarran
at Hall Chadwick, will provide the attendees with property
disposal and winding-up reports.
The liquidator can be reached at:
Richard Albarran
Hall Chadwick
Level 29, 31 Market Street
Sydney, New South Wales 2000
Australia
About Kalamazoo Logistics
Kalamazoo Logistics Pty. Limited is a distributor of non-durable
goods. The company is located at Rosebery, in New South Wales,
Australia.
MIDWAY STUDIOS: To Declare First Dividend on March 7
----------------------------------------------------
Midway Studios - Australia Pty Ltd, which is in liquidation,
will declare its first dividend on March 7, 2008.
Creditors are required to file their proofs of debt by
March 6, 2008, to be included in the company's dividend
distribution.
The company's liquidator is:
John Melluish
Ferrier Hodgson
GPO Box 4114
Sydney, New South Wales 2001
Australia
About Midway Studios
Midway Studios - Australia Pty. Ltd. provides computer related
services. The company is located at Adelaide, in South
Australia, Australia.
NATIONWIDE CLEANING: Court Enters Wind-Up Order
-----------------------------------------------
On January 31, 2008, the High Court of Singapore entered an
order to have Nationwide Cleaning Distributors Pty. Limited's
operations wound up. Nicholas Crouch was appointed as
liquidator.
The liquidator can be reached at:
Nicholas Crouch
Crouch Insolvency
31 Market Street, Level 28
Sydney, New South Wales 2000
Australia
Telephone:(02) 8262 9333
Facsimile:(02) 8262 9300
About Nationwide Cleaning
Nationwide Cleaning Distributors Pty Limited is a distributor of
non-durable goods. The company is located at Belmore, in New
South Wales, Australia.
SHOP AMERICA: Placed Under Voluntary Liquidation
------------------------------------------------
Shop America (Australasia) Limited's members agreed on
Jan. 25, 2008, to voluntarily liquidate the company's business.
In line with this goal, the company has appointed John Vouris to
facilitate the sale of its assets.
The liquidator can be reached at:
John Vouris
Lawler Partners Chartered Accountants
1 O'Connell Street, Level 9
Sydney, New South Wales 2000
Australia
About Shop America
Shop America (Australasia) Limited is a theatrical producer.
The company is located at Bellevue Hill, in New South Wales,
Australia.
ZOO TELECOM: Liquidator to Give Wind-Up Report on March 14
----------------------------------------------------------
Zoo Telecom Pty. Limited will hold a final meeting for its
members and creditors at 11:00 a.m. on March 14, 2008. During
the meeting, the company's liquidator, Richard Albarran at Hall
Chadwick, will provide the attendees with property disposal and
winding-up reports.
The liquidator can be reached at:
Richard Albarran
Hall Chadwick
Level 29, 31 Market Street
Sydney, New South Wales 2000
Australia
About Zoo Telecom
Zoo Telecom Pty Limited is a distributor of durable goods. The
company is located at Granville, in New South Wales, Australia.
================================================
C H I N A , H O N G K O N G & T A I W A N
================================================
CHINA EASTERN: Expands Code Sharing with Shanghai Airlines
----------------------------------------------------------
China Eastern Airlines Corporation Limited, one of China's three
biggest airways, expands its code sharing agreement with
Shanghai Airlines Co., Ltd.
The cooperation will last for one month beginning March 1, 2008,
and involve 88 flights on some domestic routes. It will be
extended automatically if both sides agreed to the terms in
their agreement.
China Eastern, headquartered in Shanghai, the eastern transport
hub in the country, has initiated code sharing with the smaller
peer since last year. They shared codes for the first time in
16 flights on four return routes between Shanghai and four
cities, including Hohhot, Nanning, Urumqi, and Xuzhou.
The first cooperation, from October 28, 2007, to March 29, 2008,
proved a success, and based on that, both sides decided to
further their cooperation. The upcoming code sharing will cover
five return routes between Shanghai and five cities, like
Harbin, Tianjin, Chengdu, Chongqing, and Shenzhen.
The move will control costs effectively, complete the routine
network, enlarge market share, and overcome market barriers,
said China Eastern.
Both sides will reportedly start code sharing on the return
routes between Shanghai and two more cities, namely Hong Kong
and Macao, in a bid to sharpen their competitive edge in the
overseas market.
Earlier this year, China Eastern signed a cooperative framework
agreement with China Southern Airlines, another Big Three
airway, which, industry analysts believed, will pose pressures,
to some extent, on Air China, also a Big Three airway in China.
The two partners would kick off cross-the-board cooperation in
marketing, airplane procurement, and airport ground services,
told Liu Shaoyong, chairman of Southern Airlines, headquartered
in the southern transport hub Guangzhou.
The cooperation is not exclusive and Southern Airlines is likely
to team up with more partners in the future like Air China,
reports said.
In addition, China Eastern made net profits of CNY1.035 billion
during the first nine months of 2007, showed its financial
report for the third quarter of last year. Its three- quarter
earnings per share stood at CNY 0.2126, and return on equity hit
24.98%.
In the third quarter of last year, China Eastern obtained net
profits of CNY 976 million and basic earnings of CNY 0.2006 per
share with a 23.57% return on equity, according to the report.
Headquartered in Shanghai, China, China Eastern Airlines
Corporation Limited's -- http://www.ce-air.com-- principal
activity is operation of domestic and international commercial
air transportation. The Group also is involved in the common
aircraft industry. Other activities include general aviation,
air catering, advertisement, import and export, equipment
manufacturing, real estate, hotel business, finance and
training. The fleet includes more than 60 large and medium size
airplanes, Airbus and Boeing mostly. Its operation centering
from Shanghai to the whole People's Republic of China and
linking to Asia, Europe, America and Australia.
On April 28, 2006, Fitch Ratings downgraded China Eastern's
foreign currency and local currency issuer default ratings to B+
from BB-. Fitch said the outlook on the IDRs is stable.
Xinhua Far East China Ratings gave the company a BB+ issuer
credit rating.
CHINA EASTERN: Fitch Affirms Issuer Default Ratings at B+
---------------------------------------------------------
Fitch Ratings has affirmed China Eastern Airlines Corporation
Limited's Long-term foreign and local currency Issuer Default
Ratings at 'B+'. The Outlook on the ratings remains Stable.
"After its failed deal with Singapore Airlines, CEA needs to act
quickly to forge strategic ties with a strong partner in order
to help it repair its balance sheet and improve operational
efficiency. Although the business environment remains favourable
with significant growth potential, CEA's low profitability and
high leverage does not leave it much flexibility to finance its
expansion," says Jinqing Li, associate director in Fitch's
corporates team.
The current ratings reflect CEA's low profitability, high
financial leverage, weak cash generation and substantial capital
commitments. CEA's weakness in controlling costs is also one of
the key concerns hindering improvements in its operational
efficiency, which has been made more difficult by the soaring
fuel price. As a result, Fitch does not expect CEA to achieve
meaningful progress on its own repairing its balance sheet,
which stood at 8.6x net adjusted debt to operating EBITDAR as at
H107, especially as it needs to invest in capacity expansion to
cope with the increased demand.
CEA's ratings are further constrained by the intense price
competition in the aviation market notably due to the lack of
product differentiation. Nevertheless, in the medium term,
competitive pressure might be alleviated by the airlines'
capacity expanding more slowly than demand. The ratings also
take into account the company's leading market position in
China's aviation market and its nationwide operations.
Due to the strategic importance of the industry, the ratings of
Chinese airlines benefit from potential direct or indirect
support from government agencies although the exact form this
support would take and whether it would result in the company
servicing its debt, especially capital market borrowings, as
scheduled, has not been tested yet. Currently, the 'Big Three'
-- CEA, Air China Limited and China Southern Airlines, remains
controlled by its holding parent, which is in turn 100% owned by
State-owned Assets Supervision and Administration Commission.
The Stable Outlook reflects Fitch's expectation that CEA's
operating performance will remain weak and its financial
position stretched. Further deterioration in the financial and
operating profile or detrimental changes in the regulatory
environment could, however, result in a negative rating action.
Listed on the stock exchanges of Shanghai, Hong Kong and New
York, CEA is one of China's three largest airlines, with a total
of 398 routes (of which 292 were domestic) at end-H107. It is
59.7%- owned by China Eastern Air Holding Company, which is in
turn 100%-owned by the Chinese government.
CHINA SOUTHERN: Fitch Affirms B+ Issuer Default Ratings
-------------------------------------------------------
Fitch Ratings has today affirmed China Southern Airlines Co.
Ltd.'s Long-term Foreign Currency and Local Currency Issuer
Default Ratings at 'B+'. The Outlook on the ratings remains
Stable.
"CSA's dominant market share in the southern part of China and
nationwide network puts it in a good position to benefit from
long term growth, provided it can improve its poor operational
efficiency, which is currently crippling its results and putting
strain on its balance sheet," says Jinqing Li, Associate
Director in Fitch's corporates team.
CSA's ratings reflect the company's high financial leverage,
substantial capital commitments, its vulnerability to high fuel
prices and the lack of effective cost controls. Substantial
capex for capacity expansion and continuously low profitability
make a meaningful improvement of CSA's financial profile
unlikely. Fitch expects that CSA will seek a strong
international partner (as Air China Limited previously did with
Cathay Pacific Airways Limited) in order to repair its balance
sheet through capital injection and help it improve operational
efficiency.
Due to the strategic importance of the industry, the ratings of
Chinese airlines benefit from potential direct or indirect
support from government agencies although the exact form this
support would take and whether it would result in the company
servicing its debt, especially capital market borrowings, as
scheduled, has yet to be tested. Currently, the 'Big Three' --
China Eastern Airlines, Air China Limited and CSA, remain
controlled by its holding parent, which is in turn 100% owned by
State-owned Assets Supervision and Administration Commission.
Price competition in the Chinese aviation market, partly due to
lack of product differentiation, constrains the company's
ability to improve its operating margins. Although strong, the
level of competition is reduced due to bottlenecks in airport
facilities. Fitch expects the regulatory environment to remain
broadly favourable with some deregulations allowing the company
to use its resources more efficiently while staying short of
full-fledged deregulation, which would result in more severe
competition.
The company is also suffering from rising fuel prices, although
government-regulated fuel surcharges of up to 70% to the end-
customer, could somewhat alleviate the pressure. Nevertheless,
the strong growth prospect of the Chinese aviation market, which
is expected to continue with double-digit growth in the medium
term, is a supportive rating factor.
The Stable Outlook reflects Fitch's expectation that CSA will
maintain its current weak business and financial profile in the
medium term, thwarted by its low operational efficiency, high
financial leverage and weak liquidity position. Further
deterioration in the financial and operating profile or
detrimental changes of the regulatory environment could result
in a negative rating action.
Listed on the stock exchanges of Shanghai, Hong Kong and New
York, CSA is one of China's three-largest airlines, with an
aggregate of 592 routes (of which 478 were domestic) at end-
H107. It is 50.3%-owned by China Southern Airline Holding
Company, which in turn is 100%-owned by the Chinese government.
FIAT SPA: Board Approves Incentive Plan for Key Employees
---------------------------------------------------------
The Board of Directors of Fiat S.p.A. met Tuesday to discuss a
new incentive plan to be authorized by the Stockholders Meeting
of March 31, 2008.
According to a press release, the company says that on the basis
of the recommendation of the Compensation Committee and in view
of current capital market conditions, the Board approved an
Incentive Plan to address attraction and retention of key
employees.
The plan -- which will be submitted, pursuant to Article 114bis
of the Consolidated Financial Act to the next Stockholders'
Meeting -- will be fashioned similarly to the Nov. 3, 2006 stock
option grant in terms of achievement of predetermined
performance criteria, vesting period, and the period available
to exercise (from 2011 through 2014).
The plan, if approved, will give Fiat the flexibility to grant a
maximum aggregate amount of 4 million financial instruments
either in the form of stock options or of Stock Appreciation
Rights (SARs) to be awarded periodically through the end of
2010. SARs, subject to the vesting condition being satisfied,
entitle the beneficiaries to a cash compensation based on the
increase in the company's ordinary stock price.
Each SAR will give right to a compensation (to be settled either
in cash or in ordinary shares) equal the difference between the
company's ordinary stock official price at the exercise date and
the strike price at the granting date. Such SAR strike price
will be equal to the arithmetical average of the official prices
posted on the Italian Stock Exchange in the thirty calendar days
prior to the grant date.
Similarly, under the plan the company will be authorized to
grant up to a maximum of 4 million stock options on a maximum 4
million of underlying ordinary shares (in the event no SARs are
granted) or a number, which together with the number of SARs
issued will not exceed 4 million. Such stock options will be
offered at a strike price equal to the arithmetical average of
the official prices posted on the Italian Stock Exchange in the
thirty calendar days prior to the grant date. The Plan will be
serviced through treasury shares without issuance of new shares.
About Fiat S.p.A.
Headquartered in Turin, Italy, Fiat S.p.A. --
http://www.fiatgroup.com/-- is one of the largest industrial
groups in Italy and the fourth largest European-based automobile
manufacturer, with revenues of EUR33.4 billion in the first nine
months of 2005. Fiat's creditors include Banca Intesa, Banca
Monte dei Paschi di Siena, Banca Nazionale del Lavoro,
Capitalia, Sanpaolo IMI, and UniCredito Italiano.
Fiat operates in Argentina, Australia, Austria, Belgium, Brazil,
Bulgaria, China, Czech Republic, Denmark, France, Germany,
Greece, Hungary, India, Ireland, Italy, Japan, Lituania,
Netherlands, Poland, Portugal, Romania, Russia, Singapore,
Spain, among others.
* * *
As reported on Nov. 6, 2007, Moody's Investors Service changed
the outlook on Fiat S.p.A. and subsidiaries' Ba3 Corporate
Family Rating to positive from stable and affirmed its Ba3 long-
term senior unsecured ratings as well as the short-term
non-Prime rating.
On Oct. 4, 2007, Fitch Ratings affirmed Fiat S.p.A.'s Issuer
Default and senior unsecured ratings at BB- and Short-term
rating at B.
The company carries Standard & Poor's Ratings Services' BB long-
term corporate credit rating. The compay also carries B short-
term rating. S&P said the outlook is stable.
FIAT SPA: In Talks with BMW on Engine & Gear Box Tie-Up
-------------------------------------------------------
Bayerische Motoren Werke AG is in talks with General Motors Corp
and Fiat SpA on a possible tie-up on engines and gear boxes, the
Thomson Financial reports citing a Financial Times Deutschland
pre-release.
According to the report, BMW is also in talks with Daimler AG's
Mercedes-Benz on a possible tie-up for the joint development of
new gear systems and automotive components. The talks however
are tuning out to be difficult than expected, the report adds.
About BMW
Bayerische Motoren Werke AG, better known as BMW --
http://www.bmw.com/-- is one of Europe's top automakers. BMW's
car offerings include sedans, coupes, convertibles, and sport
wagons in the 3 Series, 5 Series, 6 Series, and 7 Series model
groups. Other models include the M3 coupe and convertible; the
X5 sport utilities; and the Z4 roadster. In addition to its BMW
automobiles, the company's operations include motorcycles (K
1200 GT, R 1200 RT, and F 800 S models, among others), the MINI
automotive brand, Rolls-Royce Motor Cars, and software (softlab
GmbH). BMW's motorcycle division also offers a line of
motorcycling apparel such as leather suits, gloves, and boots.
About General Motors
Headquartered in Detroit, Michigan, General Motors Corp. (NYSE:
GM) -- http://www.gm.com/-- was founded in 1908. GM employs
about 266,000 people around the world and manufactures cars and
trucks in 35 countries. In 2007, nearly 9.37 million GM cars
and trucks were sold globally under the following brands: Buick,
Cadillac, Chevrolet, GMC, GM Daewoo, Holden, HUMMER, Opel,
Pontiac, Saab, Saturn, Vauxhall and Wuling. GM's OnStar
subsidiary is the industry leader in vehicle safety, security
and information services.
About Fiat S.p.A.
Headquartered in Turin, Italy, Fiat S.p.A. --
http://www.fiatgroup.com/-- is one of the largest industrial
groups in Italy and the fourth largest European-based automobile
manufacturer, with revenues of EUR33.4 billion in the first nine
months of 2005. Fiat's creditors include Banca Intesa, Banca
Monte dei Paschi di Siena, Banca Nazionale del Lavoro,
Capitalia, Sanpaolo IMI, and UniCredito Italiano.
Fiat operates in Argentina, Australia, Austria, Belgium, Brazil,
Bulgaria, China, Czech Republic, Denmark, France, Germany,
Greece, Hungary, India, Ireland, Italy, Japan, Lituania,
Netherlands, Poland, Portugal, Romania, Russia, Singapore,
Spain, among others.
* * *
As reported on Nov. 6, 2007, Moody's Investors Service changed
the outlook on Fiat S.p.A. and subsidiaries' Ba3 Corporate
Family Rating to positive from stable and affirmed its Ba3 long-
term senior unsecured ratings as well as the short-term
non-Prime rating.
On Oct. 4, 2007, Fitch Ratings affirmed Fiat S.p.A.'s Issuer
Default and senior unsecured ratings at BB- and Short-term
rating at B.
The company carries Standard & Poor's Ratings Services' BB long-
term corporate credit rating. The compay also carries B short-
term rating. S&P said the outlook is stable.
FIAT SPA: Resumes Production of Multijet Engine in Polish Plant
---------------------------------------------------------------
Fiat S.p.A. disclosed in its Web site that anomalies related to
an externally-supplied component of the 1.3 Multijet engine have
been resolved and production of the engines resumed last
Saturday in the Bielsko Biala plant in Poland.
Production of cars that mount this engine was expected to resume
February 26.
The suspension of production activities involved certain
production lines of the Mirafiori, Melfi, Termini Imerese, Tychy
and Bursa plants, where models equipped with 1.3 Multijet
engines are produced. All of these plants resumed normal
activity on February 27.
The company relates that it made every possible effort to speed
up controls and adaptations that became necessary as well as to
reduce delays in delivery to customers to the minimum.
Although Fiat is aware that this suspension of production, which
has now been resolved, will have repercussions on its delivery
volumes for the month of February, it nonetheless decided to
adopt an uncompromising and rigorous approach so as to guarantee
the highest levels of product quality to its customers.
Despite the cost that these measures will have, the Group
confirms its targets for 2008.
Suspension of Production
The company had earlier disclosed that as a result of the
constant quality controls carried out on all the components of
Fiat Group Automobiles cars, a number of anomalies have emerged
with regard to an externally-supplied component for the 1.3
Multijet engine.
In order to verify that this supply of components meets the
quality standards requested by Fiat, the company decided to
suspend production of the engines and cars on which they are
mounted.
About Fiat S.p.A.
Headquartered in Turin, Italy, Fiat S.p.A. --
http://www.fiatgroup.com/-- is one of the largest industrial
groups in Italy and the fourth largest European-based automobile
manufacturer, with revenues of EUR33.4 billion in the first nine
months of 2005. Fiat's creditors include Banca Intesa, Banca
Monte dei Paschi di Siena, Banca Nazionale del Lavoro,
Capitalia, Sanpaolo IMI, and UniCredito Italiano.
Fiat operates in Argentina, Australia, Austria, Belgium, Brazil,
Bulgaria, China, Czech Republic, Denmark, France, Germany,
Greece, Hungary, India, Ireland, Italy, Japan, Lituania,
Netherlands, Poland, Portugal, Romania, Russia, Singapore,
Spain, among others.
* * *
As reported on Nov. 6, 2007, Moody's Investors Service changed
the outlook on Fiat S.p.A. and subsidiaries' Ba3 Corporate
Family Rating to positive from stable and affirmed its Ba3 long-
term senior unsecured ratings as well as the short-term
non-Prime rating.
On Oct. 4, 2007, Fitch Ratings affirmed Fiat S.p.A.'s Issuer
Default and senior unsecured ratings at BB- and Short-term
rating at B.
The company carries Standard & Poor's Ratings Services' BB long-
term corporate credit rating. The compay also carries B short-
term rating. S&P said the outlook is stable.
FUYAO GLASS: Scraps CNY3BB Share Offer Due to Opposition
--------------------------------------------------------
Fuyao Group Glass Industries Co. scrapped a CNY3 billion share
offer because of opposition among its shareholders, Reuters
reports.
As reported in the Troubled Company Reporter-Asia Pacific on
Feb. 27, 2008, Fuyao Group intends to raise more than
CNY3 billion by selling additional shares to fund expansion.
Fuyao said they plan to sell CNY100 million-denominated A
shares, equal to 10% of its current share capital, the report
noted.
The company, the TCR-AP related, would use about CNY3.1 billion
from the proceeds to expand production capacity and upgrade a
research center. Any proceeds exceeding that amount would be
used for operating capital, while any shortfall would be
supplemented by other fund-raising means.
After further discussion by its board, Fuyao decided not to go
ahead with the plan after some shareholders balked at the plan
due to poor market conditions, Reuters says.
Fuyao told the news agency that it still thinks the plan would
have helped the company's development. It did not say whether
it would now seek other ways of raising money to fund its
expansion, the report adds.
About Fuyao Group
Headquartered in Fuqing, Fujian Province, Fuyao Group Glass
Industries Co., Ltd. -- http://www.fuyaogroup.com/-- is a
manufacturer of automotive and industrial safety glass. The
company provides laminated and tempered glass for automobiles,
encapsulation products, bulletproof glass, laminated and
tempered glass for buildings, furniture and decorative glass
products, front panel glass for electrical appliances and panel
glass for other specialty industrial applications. The Company
has seven production bases in the People's Republic of China and
two wholly owned subsidiaries in the United States. FYG mainly
exports to North America and Asia Pacific.
Xinhua Far East China Ratings gave the company a BB+ issuer
credit rating on June 29, 2005.
PETROLEOS DE VENEZUELA: Court May Rule on Asset Freeze Next Week
----------------------------------------------------------------
John Fordham, Petroleos de Venezuela's legal representative and
head of commercial litigation at law firm Stephenson Harwood,
told Tom Bergin at Reuters that a U.K. court may rule on the
freeze order on the company's assets next week.
As reported in the Troubled Company Reporter-Latin America on
Feb. 26, 2008, Petroleos de Venezuela asked the London High
Court to revoke an injunction freezing the company's US$12-
billion assets. Petroleos de Venezuela is barred from taking or
disposing of up to US$12 billion in petroleum assets worldwide
after courts in Britain and the U.S. ordered freezing of those
assets.
Reuters relates that the asset-freeze order against Petroleos de
Venezuela was made so that Exxon Mobil Corp. would be able to
extract compensation should it win arbitration it has sought
over the fields.
Petroleos de Venezuela has appealed the asset-freeze order. A
hearing was scheduled to start on Thursday, Reuters says, citing
Mr. Fordham.
Reuters notes that Petroleos de Venezuela is arguing that the
U.K. court didn't have the authority to award the injunction
because the case involved U.S. and Venezuelan firms. "The
arbitration would be held in New York, under the auspices of a
unit of the World Bank," Reuters says.
Mr. Fordham told Reuters that a U.K. judge could rule as early
as Friday but was more likely to do so next week. "He has
allocated two and a half days to hear the case, so if it runs
its course, it will be Thursday afternoon, Friday and Monday,"
the lawyer commented to Reuters.
The judge could even delay his ruling for another week, Reuters
says, citing Mr. Fordham. "It is an important case for our
freezing order jurisdiction so he might think he needs to give a
considered judgment," Mr. Fordham told Reuters.
Venezuelan Oil Vice Minister Bernard Mommer told Dow Jones
Newswires that the country will find a way to defeat Exxon Mobil
and that the ongoing dispute is "not a big deal for either
party".
"We will not leave London cowing from a loss, because if Exxon
wins it would set a bad legal precedent," Mr. Mommer told
Venezuelan news daily El Universal.
Mr. Mommer told Dow Jones that Exxon Mobil first rejected an
offer as a minority partner in Venezuelan operations because the
new contracts gave no allowance for arbitration overseas.
"I want to reiterate that the disagreement with Exxon wasn't
economic, it was because Exxon didn't want to accept that there
was no arbitration clause included in the new companies," Mr.
Mommer explained to Dow Jones.
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.
PDVSA is one of the top exporters of oil to the US with proven
reserves of 77.2 billion barrels of oil -- the most outside the
Middle East -- and about 150 trillion cu. ft. of natural gas.
PDVSA's exploration and production take place in Venezuela, but
the company also has refining and marketing operations in the
Caribbean, Europe, and the US.
* * *
To date, Petroleos de Venezuela SA carries Fitch's BB- long term
issuer default rating and local currency long term issuer
default rating. Fitch said the ratings outlook is negative.
SHANGHAI PUDONG: 2007 Profit Up 78% to CNY10.76 Billion
--------------------------------------------------------
Shanghai Pudong Development Bank Co. Ltd.'s profits rose at an
annual rate of 78.21% last year, Xinhua News reports.
In the 2007 financial statement to the Shanghai Stock Exchange,
the report notes, the bank said the profits reached CNY10.76
billion, or CNY1.263 per share.
The company said it would offer a bonus issue of three shares
and CNY1.6 for per ten shares, the report relates.
According to Xinhua News, the bank's turnover jumped 36.70% to
CNY25.88 billion last year, while total assets stood at
CNY914.98 billion by the end of last year, 32.73% higher than a
year ago.
The bank's outstanding local and foreign currency loans
increased 19.55% to CNY550.99 billion by the end of 2007, from
last year. Its outstanding deposits expanded by 27.99% to
CNY763.47 billion, the report says.
The bank's capital adequacy ratio, the report adds, fell to
9.15% at the end of last year from 9.27% one year ago.
About Shanghai Pudong
Headquartered in Shanghai, China, Shanghai Pudong Development
Bank Co., Ltd. -- http://www.spdb.com.cn/-- is a commercial
bank involved in personal banking, corporate banking, and inter-
bank business. The bank also offers Internet banking and
telephone banking.
Fitch Ratings on March 12, 2007, upgraded the Support ratings of
Shanghai Pudong Development Bank to 3 from 4, reflecting the
improved ability of the government to support domestic financial
institutions and the close relationship between the bank and the
central and local governments. At the same time, the agency
affirmed the bank's individual rating at D.
The bank, as of May 4, 2007, also carries Moody's Ba1 rating for
financial strength rating.
=========
I N D I A
=========
ESSAR OIL: Shareholders Approve Plan to Raise US$2 Billion
----------------------------------------------------------
Essar Oil Limited's shareholders approved Feb. 28 the company's
plan to issue US$2 billion.
As reported in the Troubled Company Reporter-Asia Pacific on
Jan. 31, Essar Oil Ltd. wanted to raise up to US$2 billion for
its various developmental business activities. The company
will raise the funds by issuing debt or equity in the domestic
or international markets and/or via qualified institutional
placement.
During the Feb. 28 meeting, shareholders further approved
enhancing the company's
-- borrowing powers from INR25,000 crore to INR30,000 crore
over and above its paid-up capital and its free reserves;
and
-- power to create security on its assets for securing
borrowings from INR25,000 crore to INR30,000 crore.
About Essar Oil
Headquartered in Jamnagar, India, Essar Oil Limited --
http://www.essar.com-- is engaged in the exploration,
production and marketing of oil and gas. The company's
principal activities are to develop, explore, produce, and
refine oil and gas. Vadinar Power Company Limited is a wholly
owned subsidiary of the company.
On August 23, 2005, CRISIL Ratings reaffirmed the outstanding
"D" rating on the INR5.65 billion and INR2 billion Non-
Convertible Debenture programmes of Essar Oil Limited. The
rating indicates that the instruments are in default.
GENERAL MOTORS: Idles Assembly Plant Due to AAM Workers' Strike
---------------------------------------------------------------
American Axle & Manufacturing Inc.'s worker strike has affected
the production of General Motors Corp.'s vehicles equipped with
the former's auto parts sooner that it thought, various sources
report.
GM's production of Chevrolet Silverado and GMC Sierra pickups at
the Pontiac Assembly Center, which has 2,500 hourly and salaried
employees, in Michigan, ceased after the first shift Thursday,
the Associated Press related citing GM spokesman Tom Wickham.
As reported in the Troubled Company Reporter on Feb. 27, 2008,
although the strike of union workers at its supplier American
Axle and Manufacturing Inc. does not affect General Motors
Corp.'s plant production yet, the auto maker says it is
following the protest closely. GM has a large inventory of
pickups and sport utility vehicles, which are equipped with
American Axle's parts. However, if the strike lasts longer than
the supply, GM's assembly lines would suffer.
United Auto Workers union president Ron Gettelfinger and Vice
President James Settles disclosed that members at American Axle
began an unfair labor practices strike at 12:01 a.m. on
Feb. 26, 2008, following expiration of a four-year master labor
agreement. Talks broke off Monday with major issues unresolved.
Headquartered in Detroit, Michigan, General Motors Corp. (NYSE:
GM) -- http://www.gm.com/-- was founded in 1908. GM employs
about 266,000 people around the world and manufactures cars and
trucks in 35 countries. In 2007, nearly 9.37 million GM cars
and trucks were sold globally under the following brands: Buick,
Cadillac, Chevrolet, GMC, GM Daewoo, Holden, HUMMER, Opel,
Pontiac, Saab, Saturn, Vauxhall and Wuling. GM's OnStar
subsidiary is the industry leader in vehicle safety, security
and information services. The company has operations in India
* * *
As reported in the Troubled Company Reporter on Feb. 28, 2008,
Fitch Ratings has affirmed the Issuer Default Rating of General
Motors at 'B', with a rating outlook negative.
As reported in the Troubled Company Reporter on Nov. 9, 2007,
Moody's Investors Service affirmed its rating for General Motors
Corporation (B3 Corporate Family Rating, Ba3 senior secured,
Caa1 senior unsecured and SGL-1 Speculative Grade Liquidity
rating) but changed the outlook to Stable from Positive. In an
environment of weakening prospects for US auto sales GM has
announced that it will take a non-cash charge of $39 billion for
the third quarter of 2007 related to establishing a valuation
allowance against its deferred tax assets in the US, Canada and
Germany.
As reported in the Troubled Company Reporter on Oct. 23, 2007,
Standard & Poor's Ratings Services affirmed its 'B' corporate
credit rating and other ratings on General Motors Corp. and
removed them from CreditWatch with positive implications, where
they were placed Sept. 26, 2007, following agreement on the new
labor contract. S&P said the outlook is stable.
GENERAL MOTOR: Supplier's Workers Strike Won't Affect S&P Rating
----------------------------------------------------------------
Standard & Poor's Ratings Services said that its ratings on
General Motors Corp. (GM; B/Stable/B-3) are not immediately
affected by the United Auto Workers work stoppage at key
supplier American Axle and Manufacturing Holdings Inc.
(BB/Negative/--) that began Feb. 26.
S&P expects American Axle and the UAW to reach an agreement that
will improve American Axle's cost position. However, if the
American Axle work stoppage were to persist beyond a brief
period (likely measured in days, not weeks), it would begin to
affect GM's production schedules and there would be a ripple
effect on many of GM's suppliers as well.
If S&P came to believe that the American Axle work stoppage
would draw out, S&P could place the ratings on GM on CreditWatch
with negative implications, along with the ratings on certain
suppliers that depend heavily on GM production. S&P already
expects GM's first-quarter production to be below year-earlier
levels, which should provide some room for a short work
stoppage.
In addition, S&P estimates that GM has about $27.3 billion in
cash, marketable securities, and readily available assets in its
existing VEBA trust. The company also has access to $7 billion
in committed U.S. credit lines.
Headquartered in Detroit, Michigan, General Motors Corp. (NYSE:
GM) -- http://www.gm.com/-- was founded in 1908. GM employs
about 266,000 people around the world and manufactures cars and
trucks in 35 countries. In 2007, nearly 9.37 million GM cars
and trucks were sold globally under the following brands: Buick,
Cadillac, Chevrolet, GMC, GM Daewoo, Holden, HUMMER, Opel,
Pontiac, Saab, Saturn, Vauxhall and Wuling. GM's OnStar
subsidiary is the industry leader in vehicle safety, security
and information services. The company has operations in India
* * *
As reported in the Troubled Company Reporter on Feb. 28, 2008,
Fitch Ratings has affirmed the Issuer Default Rating of General
Motors at 'B', with a Rating Outlook Negative.
As reported in the Troubled Company Reporter on Nov. 9, 2007,
Moody's Investors Service affirmed its rating for General Motors
Corporation (B3 Corporate Family Rating, Ba3 senior secured,
Caa1 senior unsecured and SGL-1 Speculative Grade Liquidity
rating) but changed the outlook to Stable from Positive. In an
environment of weakening prospects for US auto sales GM has
announced that it will take a non-cash charge of $39 billion for
the third quarter of 2007 related to establishing a valuation
allowance against its deferred tax assets in the US, Canada and
Germany.
As reported in the Troubled Company Reporter on Oct. 23, 2007,
Standard & Poor's Ratings Services affirmed its 'B' corporate
credit rating and other ratings on General Motors Corp. and
removed them from CreditWatch with positive implications, where
they were placed Sept. 26, 2007, following agreement on the new
labor contract. S&P said the outlook is stable.
GENERAL MOTORS: Fitch Affirms B Issuer Default Rating
-----------------------------------------------------
Fitch Ratings has affirmed the Issuer Default Rating of General
Motors at B, with a Rating Outlook Negative. Fitch projects
that despite significant cost reduction programs that have
occurred at GM's North American operations, negative cash flows
at GM are expected to increase in 2008, leading to more
pronounced liquidity drains. Weak economic conditions in the
U.S., continuing restructuring costs, high commodity costs and
supplier issues (including Delphi) will more than offset healthy
results from international operations. In the absence of
improvement in North American economic conditions or access to
additional capital, Fitch projects that GM's liquidity could
drop below US$20 billion within the next year. As a result,
Fitch expects that further restructuring will be required in
addition to the current employee buyout program. The persistent
lack of profitability, even with a lower fixed cost base,
indicates that GM will have to further prune low-margin vehicles
and production capacity. Fitch expects that this will lead to
the closure of at least three more assembly plants over the
intermediate term than has been announced to date.
GM has made very substantial improvement in its North American
cost structure and over the past five years has significantly
mitigated risks and liabilities associated with its pension and
OPEB obligations. The terms of the recent UAW agreement,
including the transfer of healthcare cost inflation from GM to
the UAW trust, will realize meaningful cash savings beginning in
2010. However, this has come at a cost. GM's debt is expected
to total approximately US$45 billion (including US$8.4 billion
issued as part of the UAW VEBA trust agreement that will not
appear on GM's balance sheet until 2010), up more than US$32
billion since yearend 2002, despite a healthy level of asset
sales. This figure may increase as GM seeks additional
financing opportunities to sustain liquidity. Interest expense
will represent an increasing claim on cash flows in 2008 and
2009, while declining income from GM's shrinking cash and
securities portfolio will provide less of an offset. GM's loss
of market share and sale of assets (GMAC, Allison Transmission)
also provide a reduced earnings base with which to meet future
debt obligations. As a result, Fitch does not expect GM to be
in a position to reduce debt obligations over the next three
years. GM retains access to approximately US$7 billion in
committed credit lines in the U.S.
Although GM has a manageable maturity schedule over the next
several years, repayment of maturities from cash holdings would
accelerate the expected decline in liquidity. Given the
existing state of the capital markets, GM may have limited
access to external capital for refinancing purposes. The recent
change to the VEBA funding plan, replacing US$4 billion in cash
with US$4 billion in a two-year note, will provide a helpful,
but temporary boost to liquidity. In the absence of a rebound
in second-half economic conditions or access to additional
capital, Fitch projects that liquidity could drop below US$20
billion within the next year. Upon a rebound in the U.S.
housing market, contribution margins will benefit from improved
volume and margins in the key pickup truck market.
Fitch forecasts that GM's projected cost savings from the 2007
UAW agreement will be insufficient to reverse consolidated
negative cash flows through 2009 without revenue stabilization.
Given weak economic conditions, this is not projected to occur
in 2008. Despite a string of recent successful product
offerings, the decline in the remainder of GM's product
portfolio has prevented consolidated improvement. Over the near
term, GM's North American strategy currently relies on replacing
uncompetitive products with newly competitive products, which
will be a severe challenge as GM struggles to find niches for a
number of overlapping products and brands. Fitch expects that
GM will have to make meaningful reductions in
brand/product/segment offerings over the intermediate term.
Accordingly, Fitch expects that GM could close an additional 3-4
assembly plants.
Shareholder considerations may also encourage a reduction in
exposure to the U.S. market, potentially allowing the company's
stronger, higher growth international operations to represent a
more material component of GM's consolidated valuation.
Commodity prices will continue to hurt GM's margins, although
the rate of increase is likely to slow in comparison to 2007,
allowing more of the company's manufacturing efficiencies to
benefit margin performance. However, GM is likely to face
escalating costs and required financial support for second and
third-tier suppliers that will continue to face bankruptcy (and
potential liquidation) from lower Detroit Three production and
lack of access to capital.
GM's international operations have transitioned into a material
positive factor for the ratings. The company's growth in China,
Latin America and a number of developing markets provide an
increasing offset to the company's North American operations,
but also are now producing free cash flow that can be applied to
consolidated debt or restructuring obligations. However, the
4th quarter loss in GM's European operations and the
extraordinary profitability that the industry has enjoyed in
Latin America question the sustainability of 2007 results into
2008.
These events could result in a downgrade of GM:
-- Consolidated cash drains in excess of US$8 billion, which
results in liquidity dropping below US$20 billion;
-- Lack of progress in reducing fixed costs, combined with a
reduction in international profitability;
-- Double-digit production cuts in North America throughout
2008 resulting from a more severe decline in economic
conditions or a deterioration in GM's product
competitiveness.
Attempts to resolve the Delphi situation have become
increasingly extended and expensive to GM. GM took an
additional US$1.5 billion in reserves in 2007, and will continue
to incur expenses over the medium term. With Delphi currently
unable to raise the financing required to exit bankruptcy, the
situation remains highly uncertain. An extended stay in
bankruptcy and increasing costs accruing to GM could result in
the event that the agreement with Apaloosa is unable to be
closed. Although resolution of GM's price penalty to Delphi
represents an opportunity for further cost reductions over the
intermediate term, Delphi will remain a meaningful competitive
disadvantage.
Deteriorating performance at GMAC has materially reduced
estimated recovery valuations from this asset. Fitch does not
expect that GM will provide additional capital to support GMAC's
ResCap operations, given GM's liquidity position and its primary
focus on GMAC's auto finance operations. Any additional capital
contributed to GMAC by GM would be viewed as a negative. Fitch
remains concerned about asset quality deterioration, funding
costs and ABS market conditions at GMAC and the industry in
2008.
Recovery ratings remain in the same category, although projected
recovery valuations have moved modestly lower. Negative
movements include a significant deterioration in the asset value
of GM's 49% stake in GMAC, and higher debt levels, which are
offset by increased valuations for the company's international
holdings in Latin America and Asia (primarily China).
Fitch has affirmed these ratings:
General Motors
-- IDR at 'B';
-- Senior unsecured debt at 'B-/RR5'
-- Senior Secured at 'BB/RR1'.
General Motors of Canada
-- IDR at 'B';
-- Senior unsecured at 'B-/RR5'.
HDFC BANK: Reaffirms Swap Ratio; To Issue Shares to Promoters
-------------------------------------------------------------
The board of directors of both HDFC Bank Ltd. and Centurion Bank
of Punjab Ltd. have reaffirmed the 1:29 share swap ratio after
considering due diligence findings, according to disclosures
filed with the Bombay Stock Exchange.
As previously reported in the Troubled Company Reporter-Asia
Pacific, both of the banks' boards gave their in-principle
approval for the merger between them, subject to satisfactory
due diligence. A joint valuation report submitted by Ernst &
Young Pvt. Ltd. and M/s. Dalal & Shah, Chartered Accountants
came up with the 1:29 share swap ratio -- one equity share of
INR10 each of HDFC Bank for every 29 shares of INR1 each held in
Centurion Bank of Punjab.
The boards also approved the draft Scheme of Amalgamation and
the Merger Agreement.
To maintain promoter's shareholding percentage in HDFC Bank, the
bank's board has proposed to issue, on preferential basis,
2,62,00,220 equity shares and/or other instruments (e.g.,
warrants convertible into equity shares) at INR1,530.13 to:
-- Housing Development Finance Corporation Ltd.,
-- HDFC Investments Ltd and/or HDFC Holdings Ltd., and/or
-- Home Loan Services India Private Ltd.;
on preferential basis pursuant to the SEBI (Disclosure and
Investor Protection) Guidelines, 2000, subject to the approvals
of the shareholders, Reserve Bank of India and other regulatory
authorities.
HDFC Bank's board has also approved the increase in the bank's
authorized capital from INR450 crore to INR550 crore, subject to
shareholders' approval.
HDFC Bank will hold an Extraordinary General Meeting for its
members on March 27, 2008, to consider the board's proposal.
Headquartered in Mumbai, India, HDFC Bank Limited --
http://www.hdfcbank.com/-- is a private sector bank that offers
a range of commercial and transactional banking services and
treasury products to wholesale and retail customers. The bank
operates in three segments: retail banking, wholesale banking
and treasury services. The retail banking segment serves retail
customers through a branch network and other delivery channels.
The wholesale banking segment provides loans and transaction
services to corporate and institutional customers. The treasury
services segment undertakes trading operations on the
proprietary account, foreign exchange operations and derivatives
trading.
As reported in the Troubled Company Reporter-Asia Pacific on
Feb. 22, 2008, Standard & Poor's Ratings Services assigned these
ratings to HDFC Bank's proposed debt issues under the
US$1-billion medium-term notes program:
-- 'BB+' rating to the lower Tier II subordinated notes to be
issued; and
-- 'BB' rating to the upper Tier II subordinated and hybrid
Tier I notes to be issued.
ICICI BANK: Wholly Owned Subsidiary Enters German Market
--------------------------------------------------------
ICICI Bank UK PLC, a wholly owned subsidiary of ICICI Bank
Limited is entering the German market, with its Frankfurt branch
being launched today at Mainzer Landstrasse 69-71, Frankfurt am
Main. The branch is a member of the Association of German
Banks.
This offering leverages ICICI Bank's technological capabilities
and cost efficiencies to create a superior value proposition and
serve customers through the Internet -- http://www.icicibank.de
-- and telephone banking. It will also focus on serving
corporate businesses with significant Germany-India linkages.
Coinciding with the inauguration, ICICI Bank UK PLC has launched
a call money account product "HiZins" with an interest rate of
4.75%. This would be a no frills savings account with
withdrawals available on a daily basis, and no restrictions on
the amount that can be deposited. The customers will be served
through a call center that will be located in Germany.
K. V. Kamath, Managing Director & CEO, ICICI Bank Limited said:
"Germany is the biggest economy in Europe and marks a critical
step in ICICI Bank's international expansion strategy. We are
naturally positioned to service the trade and business needs of
companies with linkages between Germany and India. We are
delighted to be here and look forward to growing our business in
this market".
Sonjoy Chatterjee, Executive Director, responsible for Corporate
& International banking, at ICICI Bank Limited said: "After the
success of our consumer business in the UK, we are entering the
German market with what we believe is a compelling customer
savings product. We will leverage our corporate advisory and
financing capabilities to facilitate Indian investment into
Germany and vice versa."
Headquartered in Mumbai, India, ICICI Bank Limited --
http://www.icicibank.com/-- is a financial services group
providing a variety of banking and financial services, including
project and corporate finance, working capital finance, venture
capital finance, investment banking, treasury products and
services, retail banking, broking and insurance. It also has
interests in the software development, software services and
business process outsourcing businesses. The Company's
operations have been classified into three segments: Commercial
Banking, Investment Banking and Others. It has subsidiaries in
the United Kingdom, Canada and Russia, branches in Singapore and
Bahrain, and representative offices in the United States, China,
United Arab Emirates, Bangladesh and South Africa.
* * *
On Aug. 15, 2006, Standard & Poor's assigned its 'BB-' rating to
the hybrid Tier-1 securities to be issued by ICICI Bank Ltd. On
Oct. 16, S&P assigned its 'BB+' issue rating to its senior
unsecured, five-year, fixed-rate U.S. dollar notes.
QUEBECOR WORLD: To Convert Series 5 Preferred Shares on March 1
---------------------------------------------------------------
Quebecor World Inc. determined the final conversion rate
applicable to the 3,975,663 Series 5 Cumulative Redeemable First
Preferred Shares (TSX: IQW.PR.C) that will be converted into
Subordinate Voting Shares effective as of March 1, 2008.
Taking into account all accrued and unpaid dividends on the
Series 5 Preferred Shares up to and including March 1, 2008,
Quebecor World has determined that, in accordance with the
provisions governing the Series 5 Preferred Shares, each Series
5 Preferred Share will be converted on March 1, 2008 into
12.93125 Subordinate Voting Shares.
Registered holders of Series 5 Preferred Shares who submitted
notices of conversion on or prior to Dec. 27, 2007, will receive
in the coming days from Quebecor World's transfer agent and
registrar, Computershare Investor Services Inc., certificates
representing their Subordinate Voting Shares resulting from the
conversion.
Approximately 51,400,000 new Subordinate Voting Shares will thus
be issued by Quebecor World to holders of Series 5 Preferred
Shares on March 1, 2008. Quebecor World will apply to list the
51,400,000 Subordinate Voting Shares on The Toronto Stock
Exchange(TSX), although there can be no assurance that the TSX
will accept the listing of [the] shares.
About Quebecor World
Based in Montreal, Quebec, Quebecor World Inc. (TSX: IQW) (NYSE:
IQW), -- http://www.quebecorworldinc.com/-- provides market
solutions, including marketing and advertising activities, well
as print solutions to retailers, branded goods companies,
catalogers and to publishers of magazines, books and other
printed media. It has 127 printing and related facilities
located in North America, Europe, Latin America and Asia. In
the United States, it has 82 facilities in 30 states, and is
engaged in the printing of books, magazines, directories, retail
inserts, catalogs and direct mail. In Canada it has 17
facilities in five provinces, through which it offers a mix of
printed products and related value-added services to the
Canadian market and internationally.
The company is an independent commercial printer in Europe with
19 facilities, operating in Austria, Belgium, Finland, France,
Spain, Sweden, Switzerland and the United Kingdom. In March
2007, it sold its facility in Lille, France. Quebecor World
(USA) Inc. is its wholly owned subsidiary.
Quebecor World and 53 of its subsidiaries, including those in
Canada, filed a petition under the Companies' Creditors
Arrangement Act before the Superior Court of Quebec, Commercial
Division, in Montreal, Canada, on Jan. 20, 2008. The Honorable
Justice Robert Mongeon oversees the CCAA case. Francois-David
Pare, Esq., at Ogilvy Renault, LLP, represents the Company in
the CCAA case. They obtained creditor protection until
Feb. 20, 2008. Ernst & Young Inc. was appointed as Monitor.
On Jan. 21, 2008, Quebecor World (USA) Inc., its U.S.
subsidiary, along with other U.S. affiliates, filed for chapter
11 bankruptcy on Jan. 21, 2008 (Bankr. S.D.N.Y Lead Case No.
08-10152). Anthony D. Boccanfuso, Esq., at Arnold & Porter LLP
represents the Debtors in their restructuring efforts.
Based in Corby, Northamptonshire, Quebecor World PLC --
http://www.quebecorworldplc.com/-- is the U.K. subsidiary of
Quebecor World Inc. that specializes in web offset magazines,
catalogues and specialty print products for marketing and
advertising campaigns. The company employs around 290 people.
Quebecor PLC was placed into administration with Ian Best and
David Duggins of Ernst & Young LLP appointed as joint
administrators effective Jan. 28, 2008.
As of Sept. 30, 2007, Quebecor World's unaudited consolidated
balance sheet showed total assets of US$5,554,900,000, total
liabilities of US$3,964,800,000, preferred shares of
US$175,900,000, and total shareholders' equity of
US$1,414,200,000. The company has until May 20, 2008, to file a
plan of reorganization in the Chapter 11 case. The Debtors'
CCAA stay expires on Feb. 20, 2008. (Quebecor World Bankruptcy
News, Issue No. 5; Bankruptcy Creditors' Service, Inc.,
http://bankrupt.com/newsstand/or 215/945-7000)
* * *
As reported on Feb. 13, 2008 Moody's Investors Service assigned
a Ba2 rating to the US$400 million super priority senior secured
revolving term loan facility of Quebecor World Inc. as a Debtor-
in-Possession. The related US$600 million super priority senior
secured term loan was rated Ba3 (together, the DIP facilities).
The RTL's better asset value coverage relative to the TL
accounts for the ratings' differential.
QUEBECOR WORLD: Names A. Caille as Restructuring Panel Chairman
---------------------------------------------------------------
Quebecor World Inc. provides an update on its restructuring
under the Canadian Companies' Creditors Arrangement Act (CCAA)
and under Chapter 11 of the U.S. Bankruptcy Code:
The Board of Directors of Quebecor World Inc. has created a
restructuring committee of the board as referenced in the most
recent Monitor's report. The Committee is chaired by Andre
Caille.
The Committee will facilitate and supervise the work of
management of the Corporation and its advisors in developing
[the] plan or plans as may be necessary or desirable to effect:
(i) a restructuring of the Corporation's financial affairs
including, without limitation, the liabilities and
obligations to [the] creditors of the Corporation and
its subsidiaries as the Committee may deem necessary or
appropriate, and
(ii) a recapitalization of the Corporation and its
subsidiaries and to report thereon, from time-to-time,
with its recommendations to the Board of Directors of
the Corporation.
In addition, Quebecor World appointed Jacques Mallette,
President and Chief Executive Officer of Quebecor World, to the
Board of Directors and will serve on the Committee. Other
members include Jean LaCouture, Michele Desjardins, and Jean
Neveu.
About Quebecor World
Based in Montreal, Quebec, Quebecor World Inc. (TSX: IQW) (NYSE:
IQW), -- http://www.quebecorworldinc.com/-- provides market
solutions, including marketing and advertising activities, well
as print solutions to retailers, branded goods companies,
catalogers and to publishers of magazines, books and other
printed media. It has 127 printing and related facilities
located in North America, Europe, Latin America and Asia. In
the United States, it has 82 facilities in 30 states, and is
engaged in the printing of books, magazines, directories, retail
inserts, catalogs and direct mail. In Canada it has 17
facilities in five provinces, through which it offers a mix of
printed products and related value-added services to the
Canadian market and internationally.
The company is an independent commercial printer in Europe with
19 facilities, operating in Austria, Belgium, Finland, France,
Spain, Sweden, Switzerland and the United Kingdom. In March
2007, it sold its facility in Lille, France. Quebecor World
(USA) Inc. is its wholly owned subsidiary.
Quebecor World and 53 of its subsidiaries, including those in
Canada, filed a petition under the Companies' Creditors
Arrangement Act before the Superior Court of Quebec, Commercial
Division, in Montreal, Canada, on Jan. 20, 2008. The Honorable
Justice Robert Mongeon oversees the CCAA case. Francois-David
Pare, Esq., at Ogilvy Renault, LLP, represents the Company in
the CCAA case. They obtained creditor protection until
Feb. 20, 2008. Ernst & Young Inc. was appointed as Monitor.
On Jan. 21, 2008, Quebecor World (USA) Inc., its U.S.
subsidiary, along with other U.S. affiliates, filed for chapter
11 bankruptcy on Jan. 21, 2008 (Bankr. S.D.N.Y Lead Case No.
08-10152). Anthony D. Boccanfuso, Esq., at Arnold & Porter LLP
represents the Debtors in their restructuring efforts.
Based in Corby, Northamptonshire, Quebecor World PLC --
http://www.quebecorworldplc.com/-- is the U.K. subsidiary of
Quebecor World Inc. that specializes in web offset magazines,
catalogues and specialty print products for marketing and
advertising campaigns. The company employs around 290 people.
Quebecor PLC was placed into administration with Ian Best and
David Duggins of Ernst & Young LLP appointed as joint
administrators effective Jan. 28, 2008.
As of Sept. 30, 2007, Quebecor World's unaudited consolidated
balance sheet showed total assets of US$5,554,900,000, total
liabilities of US$3,964,800,000, preferred shares of
US$175,900,000, and total shareholders' equity of
US$1,414,200,000. The company has until May 20, 2008, to file a
plan of reorganization in the Chapter 11 case. The Debtors'
CCAA stay expires on Feb. 20, 2008. (Quebecor World Bankruptcy
News, Issue No. 5; Bankruptcy Creditors' Service, Inc.,
http://bankrupt.com/newsstand/or 215/945-7000)
* * *
As reported in the Troubled Company Reporter-Europe on Feb. 13,
2008 Moody's Investors Service assigned a Ba2 rating to the
US$400 million super priority senior secured revolving term loan
facility of Quebecor World Inc. as a Debtor-in-Possession. The
related US$600 million super priority senior secured term loan
was rated Ba3 (together, the DIP facilities). The RTL's better
asset value coverage relative to the TL accounts for the
ratings' differential.
TATA STEEL: Three Greenfield Projects Face Delays
-------------------------------------------------
Tata Steel Ltd.'s three greenfield projects have been delayed by
about 12 to 16 months because of land acquisition and
resettlement issues, Ishita Ayan Dutt at the Business Standard
says, citing Tata Steel executives as source.
Tata Steel intends to build three plants in Jharkhand, Orissa,
and Chhattisgarh, which capacity is estimated to aggregate
23-million tonnes. According to the BS report, the company
plans dole out about INR90,000 crore in the three projects.
According to the report, construction of the Jharkhand plant has
not started yet with about 400 families still to be re-settled.
The company has yet to get recommendation for iron ore mines for
its Orissa project. The Chhattisgarh project, first phase of
which is planned to be commissioned by 2011 and the second phase
by 2015, is also facing litigation over mines, BS adds.
Headquartered in Mumbai, India, Tata Steel Limited --
http://www.tatasteel.com/-- manufactures steel, and ferro
alloys and minerals. Tata Steel's products are targeted at the
auto sector and construction industry. With wire manufacturing
facilities in India, Sri Lanka and Thailand, the company plans
to emerge as a major global player in the wire business.
As reported in the Troubled Company Reporter-Asia Pacific,
Standard & Poor's Ratings Services, on July 10, 2007, lowered
its corporate credit rating on Tata Steel to 'BB' from 'BBB.'
The outlook is positive. The rating is removed from
CreditWatch, where it was placed on Oct. 18, 2006, with negative
implications after its announcement on acquiring Corus
Group PLC (Corus, BB-/Stable/--).
Moody's Investors Service, on Sept. 18, 2007, affirmed the Ba1
corporate family rating of Tata Steel Ltd., and changed the
outlook to negative from stable.
=================
I N D O N E S I A
=================
ANIXTER: Pres. & CEO Robert Grubbs to Retire by End of June
-----------------------------------------------------------
Anixter International Inc.'s President and Chief Executive
Officer Robert W. Grubbs will retire at the end of June 2008,
following a 30-year career with the company. Mr. Grubbs, who
has held those posts since 1998, will continue to serve on the
company's Board of Directors.
Effective July 1, 2008, Robert J. Eck will become President and
Chief Executive Officer. Mr. Eck has served as the company's
Executive Vice President and Chief Operating Officer since
September 2007. During the last 17 years, Mr. Eck has served in
a variety of senior management positions with Anixter Inc., the
company's operating subsidiary, most recently as Executive Vice
President -- Enterprise Cabling and Security Solutions
(2004-2007) and Senior Vice President -- Physical Security
Products and Integrated Supply (2003).
Commenting on the transition, Sam Zell, Chairman of the Board,
said, "During Bob Grubbs' tenure the company has seen tremendous
growth in sales, profitability and shareholder returns. Under
his leadership, the company has successfully evolved into one of
the world's truly global distribution businesses. We are
especially pleased that Bob will continue to serve on our Board
of Directors, allowing Anixter to continue benefiting from his
many years of company and industry experience."
In discussing his upcoming retirement, Mr. Grubbs said, "During
my 30 years at Anixter the company has gone through an
incredible amount of change and I have a real sense of pride in
what the company's leadership team has accomplished during my
tenure as CEO. The company is well positioned for the future
and I look forward to continuing to contribute to the future
success of the company as a member of the Board of Directors."
Mr. Zell continued, "The company has worked hard over the years
to successfully develop future leaders who could continue to
drive the ongoing growth and success of our business. Bob Eck
brings many years of increasing responsibilities and successful
leadership to his new role at Anixter. The Board of Directors
has confidence that, under Bob Eck's leadership, the company can
continue its consistent track record of driving strong growth
and shareholder returns."
"I am honored to have the opportunity to lead the company and
further build on its past successes," commented Eck. "Our
priorities as a company will continue to center around building
on our strategic initiatives of growing our customer base,
expanding our product and service offerings and enlarging the
geographic presence of our electrical wire & cable and OEM
supply businesses. I am very excited about the future and the
opportunities that lie ahead for Anixter."
About Anixter
Anixter International Inc. -- http://www.anixter.com/-- is the
world's largest distributor of communication products and
electrical and electronic wire and cable, and a leading
distributor of fasteners and other small parts ("C" class
inventory components) to original equipment manufacturers.
The company has nearly US$725 million in inventory of more than
325,000 products, logistics network of 197 warehouses with more
than 5.0 million square feet of space, and has presence in 220
cities in 45 countries, including Indonesia, Australia, China,
France, Hong Kong, India, Malaysia, New Zealand, the
Philippines, Singapore, Spain, Taiwan, Thailand, and the United
Kingdom.
* * *
As reported in the Troubled Company Reporter-Latin America on
Nov. 2, 2007, Fitch Ratings has affirmed these ratings for
Anixter International Inc. and its wholly owned operating
subsidiary, Anixter Inc.:
Anixter International Inc.
-- Issuer Default Rating 'BB+';
-- Senior unsecured debt 'BB-'.
Anixter Inc.
-- Issuer Default Rating 'BB+';
-- Senior unsecured notes 'BB+';
-- Senior unsecured bank credit facility at 'BB+'.
BANK INTERNASIONAL: Fitch Affirms BB Issuer Default Ratings
-----------------------------------------------------------
Fitch Ratings has affirmed PT Bank Internasional Indonesia Tbk's
(BII) long-term foreign currency Issuer Default Rating at 'BB',
following Fullerton Financial Holdings' announcement of its
intentions to pursue the sale of its interest in BII. FFH is a
wholly owned subsidiary of Temasek Holdings.
"BII's Long-term foreign currency IDR is mainly driven by its
standalone financial profile as reflected in its Individual
rating of 'C/D'," said Tan Lai Peng, director of Fitch's
financial institutions group. "This in turn reflects BII's
satisfactory balance sheet position with a lower profitability
in 2007, underlining efforts by the bank to clean up its
motorcycle financing and credit card businesses."
The bank achieved a broad-based reduction in NPLs (3.1%) and
raised provision cover (76.5%) in 2007, with total capital
adequacy ratio reduced but still healthy at 20.2% at the end of
2007. Prospects for the bank in 2008 should remain stable given
the generally benign operating conditions in Indonesia.
Meanwhile, the bank is also expected to be better equipped to
deal with potential challenges based on the improvements made to
risk management last year.
However, the agency will continue to monitor the progress of the
divestment by Temasek for its implications on the Support rating
of BII, currently at '3'. While this will create some
uncertainty for the bank, the agency believes this is already
factored into the current support rating which reflects only a
moderate probability of support (from its institutional
shareholders). Beyond this, the agency also believes that there
is a likelihood of state support for the bank as BII is the
sixth largest bank in Indonesia by assets. Nonetheless,
subsequent ownership changes will be re-assessed by the agency
for its impact on institutional support.
The divestment of the stake by Temasek is to comply with the
Single Presence Policy, which restricts a single owner from
holding a controlling stake in more than one domestic bank in
Indonesia. The deadline for compliance is at end-December 2010.
Established in 1959, BII is 55.85% owned by Sorak Financial
Holdings, which is 75:25 owned by FFH and Kookmin Bank (rated
'A+').
EXCELCOMINDO: Fitch Says Outlook for BB- Rating Is Stable
---------------------------------------------------------
Fitch Ratings has assigned a stable outlook on PT Excelcomindo
Pratama's BB- rating. EBITDA margins are likely to be stable
overall.
Fitch Ratings has said that its overall outlook for the Asia
Pacific telecommunication sector in 2008 is stable, with 24 out
of its total 28 rated telecommunications issuers bearing a
Stable Outlook. Highlighting its newly published "Asia-Pacific
Telecoms Credit Outlook 2008" 20 page report, the agency
outlines its expectations on how key financial metrics will
move for 26 operators across Asia-Pacific in 2008, concluding
that while revenue growth is likely to slow, cash flow from
operations and free cash flow after dividends are likely to
rise on aggregate. Nevertheless the agency cautioned that it
expects FCF to actually fall for half of its rated operators
across Asia Pacific.
"While 24 out of our 28 rated telecom issuers have a Stable
Outlook, and average leverage levels are expected to remain
flat at 1.2x, this is not to say that the sector will be quiet,
but rather reflects our view that the operators are relatively
well-positioned to manage the risks," says Matt Jamieson,
senior director and head of Fitch's Asia-Pacific
telecommunications, media and technology team. Fitch believes
the overall themes for 2008 will be competition, regulation,
M&A and new technologies.
Mr. Jamieson emphasised that "a key aspect of our report is the
upfront inclusion of summary tables detailing Fitch's view of
how revenue growth, EBITDA margins, leverage, CFO, capex,
dividends and FCF are likely to trend in 2008," for the 26
operators across Asia-Pacific where Fitch's financial forecasts
are current. "So rather than merely reviewing 2007's financial
performance, we are also providing a greater degree of clarity
on our financial forecasts for 2008 which form an important
part of our rating process," he added.
Specifically, Fitch expects average revenue growth to slow to
5.2% in 2008 from 9.4% in 2007, largely associated with
declines in fixed and mobile average revenue per user as
competitive and regulatory factors force tariffs downwards.
Nevertheless, Fitch expects a number of operators in the
emerging markets to record strong revenue growth in 2008.
INDOSAT: Fitch Says Outlook for BB- Rating Is Stable
----------------------------------------------------
Fitch Ratings has assigned a stable outlook on PT Indosat Tbk's
BB- rating. EBITDA margins are likely to be stable overall.
Fitch Ratings has said that its overall outlook for the Asia
Pacific telecommunication sector in 2008 is stable, with 24 out
of its total 28 rated telecommunications issuers bearing a
Stable Outlook. Highlighting its newly published "Asia-Pacific
Telecoms Credit Outlook 2008" 20 page report, the agency
outlines its expectations on how key financial metrics will
move for 26 operators across Asia-Pacific in 2008, concluding
that while revenue growth is likely to slow, cash flow from
operations and free cash flow after dividends are likely to
rise on aggregate. Nevertheless the agency cautioned that it
expects FCF to actually fall for half of its rated operators
across Asia Pacific.
"While 24 out of our 28 rated telecom issuers have a Stable
Outlook, and average leverage levels are expected to remain
flat at 1.2x, this is not to say that the sector will be quiet,
but rather reflects our view that the operators are relatively
well-positioned to manage the risks," says Matt Jamieson,
senior director and head of Fitch's Asia-Pacific
telecommunications, media and technology team. Fitch believes
the overall themes for 2008 will be competition, regulation,
M&A and new technologies.
Mr. Jamieson emphasised that "a key aspect of our report is the
upfront inclusion of summary tables detailing Fitch's view of
how revenue growth, EBITDA margins, leverage, CFO, capex,
dividends and FCF are likely to trend in 2008," for the 26
operators across Asia-Pacific where Fitch's financial forecasts
are current. "So rather than merely reviewing 2007's financial
performance, we are also providing a greater degree of clarity
on our financial forecasts for 2008 which form an important
part of our rating process," he added.
Specifically, Fitch expects average revenue growth to slow to
5.2% in 2008 from 9.4% in 2007, largely associated with
declines in fixed and mobile average revenue per user as
competitive and regulatory factors force tariffs downwards.
Nevertheless, Fitch expects a number of operators in the
emerging markets to record strong revenue growth in 2008.
=========
J A P A N
=========
DELPHI CORP: Shareholder Settlement Hearing Set for April 29
------------------------------------------------------------
The Hon. Gerald E. Rosen of the U.S. District Court for the
Eastern District of Michigan, Southern Division, will convene a
hearing on April 29, 2008, to decide, among other things, final
Court approval of a settlement providing for a recovery of
US$38,250,000 to be paid by Deloitte & Touche LLP, Delphi
Corp.'s outside auditor; and on the dismissal of claims against
Deloitte & Touche.
District Court Certifies Class
The Court has preliminarily certified a class consisting of all
persons and entities who purchased or acquired publicly traded
securities issued by Delphi Trust I and Delphi Trust II between
March 7, 2000, and March 3, 2005, inclusive, and who suffered
damages thereby, including all entities who acquired shares of
Delphi common and preferred stock in the secondary market and
debt securities in Delphi. The case is in In re Delphi
Securities, Derivative and ERISA Litigation, MDL No. 1725, Case
No. 05-md- 1725.
The District Court also preliminarily approved the Deloitte &
Touche Settlement providing for a recovery ofUS$38,250,000 to be
paid by Deloitte & Touche LLP, Delphi Corp.'s outside auditor
during the Class Period. The Class will receive an interest on
the Deloitte & Touche Settlement Amount.
Copies of the full printed Deloitte & Touche Notice and the
Proof of Claim and Release form may be obtained at
http://www.delphiclasssettlement.comor by contacting:
In re Delphi Corporation Securities Litigation Settlement
c/o The Garden City Group, Inc.
Claims Administrator
P.O. Box 9185
Dublin, OH 43017-4185
Inquiries may be made to the four co-lead counsel for the Lead
Plaintiffs in the Securities Litigation:
* Bradley E. Beckworth, Esq.
Nix, Patterson & Roach, L.L.P.
205 Linda Drive
Daingerfield, Texas 75638
* Sean Handler, Esq.
Schiffrin Barroway Topaz & Kessler, LLP
280 King of Prussia Road
Radnor, PA 19087
* Jeffrey N. Leibell, Esq.
Bernsten Litowitz Berger & Grossmann, LLP
1285 Avenue of the Americas
New York 10019
* Stuart Grant, Esq.
Grant & Eisenhofer P.A.
Chase Manhattan Centre
Suite 2100
1201 N. Market St.
Wilmington, DE 19801
Further information may also be obtained by writing to the
Claims Administrator or calling 1-800-918-0998 toll-free.
The Securities Litigation has been resolved with respect to the
Debtors pursuant to the Court-approved Multidistrict Litigation
Settlements between the Debtors and the Lead Plaintiffs. Under
the terms of the MDL Settlements, the Debtors granted the Lead
Plaintiffs claims that will be satisfied through Delphi's
confirmed Plan of Reorganization.
To participate in the Deloitte & Touche Settlement, parties-in-
interest must have submitted a valid proof of claim in
connection with the MDL Settlements or submit a valid proof of
claim to the Claims Administrator postmarked not later than
May 30, 2008. The deadline for filing objection and the receipt
of requests for exclusions is April 15, 2008.
Headquartered in Troy, Michigan, Delphi Corporation (PINKSHEETS:
DPHIQ) -- http://www.delphi.com/-- is the single 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.
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
March 31, 2007, the Debtors' balance sheet showed
US$11,446,000,000 in total assets and US$23,851,000,000 in total
debts.
The Court approved Delphi's First Amended Joint Disclosure
Statement and related solicitation procedures for the
solicitation of votes on the First Amended Plan on
Dec. 20, 2007. The Court confirmed the Debtors' First Amended
Plan on Jan. 25, 2008.
(Delphi Bankruptcy News; Bankruptcy Creditors' Service Inc.,
http://bankrupt.com/newsstand/or 215/945-7000)
* * *
As reported in the Troubled Company Reporter on Jan. 16, 2008,
Moody's Investors Service assigned ratings to Delphi Corporation
for the company's financing for emergence from Chapter 11
bankruptcy protection: Corporate Family Rating of (P)B2;
US$3.7 billion of first lien term loans, (P)Ba3; and US$0.825
billion of 2nd lien term debt, (P)B3. In addition, a
Speculative Grade Liquidity rating of SGL-2 representing good
liquidity was assigned. Moody's said the outlook is stable.
As reported in the Troubled Company Reporter on Jan. 11, 2008,
Standard & Poor's Ratings Services expects to assign its 'B'
corporate credit rating to Troy, Michigan-based automotive
supplier Delphi Corp. upon the company's emergence from Chapter
11 bankruptcy protection, which may occur by the end of the
first quarter of 2008. S&P expects the outlook to be negative.
In addition, Standard & Poor's expects to assign these
issue-level ratings: a 'B+' issue rating (one notch above the
corporate credit rating), and '2' recovery rating to the
company's proposed US$3.7 billion senior secured first-lien term
loan; and a 'B-' issue rating (one notch below the corporate
creditrating), and '5' recovery rating to the company's proposed
US$825 million senior secured second-lien term loan.
FIDELITY NATIONAL: Earns US$108MM in Quarter ended Dec. 31, 2007
----------------------------------------------------------------
Fidelity National Information Services Inc. disclosed financial
results for the quarter and year ended Dec. 31, 2007.
Fourth quarter 2007 net earnings totaled US$108.4 million
compared to net earnings of US$75.12 million for the same period
in the previous year. FIS' fourth quarter 2007 results include
approximately US$140 million in revenue from eFunds. Excluding
eFunds, the company reported fourth quarter revenue growth of
7.4%.
For the full year 2007, net earnings totaled US$561.2 million
compared to net earnings o fUS$259.09 million in 2006. These
results include revenue of approximately US$167 million
attributable to eFunds, which was acquired by FIS in September
2007. Excluding eFunds, full year revenue increased 11.0% to
$4.6 billion, compared to pro forma revenue of US$4.1 billion in
2006. The increase was driven by 10.5% growth in Transaction
Processing Services and 11.2% growth in Lender Processing
Services.
"It was a good quarter and great year for FIS," William P.
Foley, II, executive chairman of FIS, stated. "Double digit
revenue growth in Transaction Processing Services and Lender
Processing Services enabled us to achieve excellent financial
performance in 2007, despite a highly challenging economic
environment. We expect to make significant progress with the
eFunds integration, and are on track to complete the spin-off of
our Lender Processing business by mid 2008."
About Fidelity National
Based in Jacksonville, Florida, Fidelity National Information
Services, Inc. -- http://www.fidelityinfoservices.com/--
provides core processing for financial institutions; card issuer
and transaction processing services; mortgage loan processing
and mortgage related information products; and outsourcing
services to financial institutions, retailers, mortgage lenders
and real estate professionals. FIS has processing and
technology relationships with 35 of the top 50 global banks,
including nine of the top ten. Nearly 50% of all US residential
mortgages are processed using FIS software. FIS maintains a
strong global presence, serving over 7,800 financial
institutions in more than 60 countries worldwide, including
Brazil and Japan.
* * *
As reported in the Troubled Company Reporter on Oct. 30, 2007,
following Fidelity National Information Systems Inc.'s
announcement of a plan to split the company into two segments,
Fitch Ratings will reevaluate Fidelity's Issuer Default Rating
and debt ratings once further clarity is available on the final
capital structure and operating profile of each entity.
Fitch currently rates Fidelity as: IDR 'BB';US$900 million
secured revolving credit facility 'BB+';US$2.1 billion secured
term loan A 'BB+';US$1.6 billion secured term loan B 'BB+'; and
4.75% senior notes 'BB+'. Fitch said the rating outlook is
stable.
FORD MOTOR: Navistar Re-Files Breach of Contract Suit
-----------------------------------------------------
Navistar International Corp. has re-filed a lawsuit against Ford
Motor Co. for violating a diesel engine contract in which Ford
promised that Navistar would be Ford's primary manufacturer and
supplier of V-6 and V-8 diesel engines in North America,
including diesel engines for Ford's F-150 pickup trucks.
The suit, filed in the Circuit Court of Cook County, Ill., seeks
"at least hundreds of millions of dollars."
Navistar originally sued Ford alleging breach of the contract in
June 2007. Cook County Circuit Court Judge Dennis Burke
dismissed that suit to allow for mediation of the dispute by a
third-party. Navistar and Ford were unable to resolve the
dispute through mediation, so Navistar now has re-filed the
lawsuit.
According to the lawsuit, Ford will introduce a 4.4-liter diesel
engine for production in North America by late 2009 or 2010 or
possibly earlier. Ford intends to produce the engine itself for
use in the F-150, and possibly other vehicles. The lawsuit
states that Ford cannot manufacture the engine without violating
its contract with Navistar. Reportedly, Ford will produce the
engines at a Ford facility in Chihuahua, Mexico.
The lawsuit states that Navistar spent millions of dollars and
devoted years of its employees' time to develop a next
generation diesel engine named "Lion" for use in F-150 pickup
trucks and other vehicles in which Ford had not previously
offered diesel engines. Ford agreed that Navistar, which has
been the exclusive diesel engine supplier for Ford's heavy-duty
pickup trucks since 1979, would be the manufacturer and supplier
of the new engines for the North American vehicle market.
The lawsuit, filed Feb. 26, 2008, is separate from previously
reported litigation between the two companies. In 2007, Ford
filed a lawsuit against Navistar involving engine pricing and
warranty claims on Power Stroke diesel engines. Navistar
counter-sued, stating that pricing was consistent with
contractual agreements, that the warranty claims were entirely
without merit and that Ford has stopped honoring the terms of an
agreement under which the engines were built. Navistar amended
its counter-suit in May 2007 and asked for in excess of
US$2 billion in damages.
About Navistar International
Based in Warrenville, Illinois, Navistar International Corp.
(NYSE:NAV) -- http://www.nav-international.com/-- is the parent
company of Navistar Financial Corp. and International Truck and
Engine Corp. The company produces International brand
commercial trucks, mid-range diesel engines and IC brand school
buses, Workhorse brand chassis for motor homes and step vans,
and is a private label designer and manufacturer of diesel
engines for the pickup truck, van and SUV market. The company
also provides truck and diesel engine parts and service sold
under the International brand. A wholly owned subsidiary offers
financing services. The company has operations in Brazil,
Iceland and India.
About Ford Motor
Headquartered in Dearborn, Michigan, Ford Motor Co. (NYSE: F)
-- http://www.ford.com/-- manufactures or distributes
automobiles in 200 markets across six continents. With about
260,000 employees and about 100 plants worldwide, the company's
core and affiliated automotive brands include Ford, Jaguar, Land
Rover, Lincoln, Mercury, Volvo, Aston Martin, and Mazda. The
company provides financial services through Ford Motor Credit
Company.
The company has operations in Japan in the Asia Pacific region.
In Europe, the company maintains a presence in Sweden, and the
United Kingdom. The company also distributes its brands in
various Latin American regions, including Argentina and Brazil.
* * *
As reported on Nov. 20, 2007, Moody's Investors Service affirmed
the long-term ratings of Ford Motor Company (B3 Corporate Family
Rating, Ba3 senior secured, Caa1 senior unsecured, and B3
probability of default), but changed the rating outlook to
Stable from Negative and raised the company's Speculative Grade
Liquidity rating to SGL-1 from SGL-3. Moody's also affirmed
Ford Motor Credit Company's B1 senior unsecured rating, and
changed the outlook to Stable from Negative. These rating
actions follow Ford's announcement of the details of the newly
ratified four-year labor agreement with the UAW.
IHI CORP: Denies Asahi Report on Hiding Huge Losses
---------------------------------------------------
IHI Corp. rejected a report published in the Asahi Shimbun that
its top executives knew and hidden huge operating losses for
fiscal year 2006.
The Asahi Shimbun report implied that IHI management hid the
losses in order to overvalue shares it sold to the public in
January and June last year.
"We are denying the report," a company spokesman told Reuters,
adding that the company would issue an official statement
shortly. T he spokesman declined to be identified.
Asahi Shimbun reported that the company's declaration that it
became aware of the losses only in July 2007 contradicts
documents that prove management knew about the losses in April.
The same paper relates that IHI reported operating profit of
JPY24.6 billion for fiscal year 2006. The company's earnings
release, however, did not include a combined JPY7 billion loss
from its boiler projects in Kanagawa and Ehime prefectures.
After the company concluded its internal investigation, it
revised its 2006 report with a consolidated operating loss of
JPY5.6 billion after booking an additional loss of JPY30
billion.
The Tokyo Stock Exchange did not delist IHI stock but required
the company to submit an annual report detailing its management
system. Bloomberg News says that if IHI fails to improve within
three years, its shares will be delisted from the local stock
market.
Based in Tokyo, Japan, IHI Corporation, -- http://www.ihi.co.jp
-- formerly Ishikawajima-Harima Heavy Industries Co., Ltd., is a
Japan-based company engaged in six business segments. The
Logistics and Steel segment offers concrete products, automated
storages, loaders and others. The Machinery segment offers
plastic processing machines, industrial boilers, pumps and
others. The Energy Plant segment develops waste incineration
facilities, nuclear power plants, thermal power plants and
process plants, water treatment plants, renewable power plants
and other facilities. The Aerospace segment produces aircraft
engine parts and provides aircraft maintenance services. The
Ship and Offshore segment builds container ships, bulk carriers,
tankers and other ships, as well as develops marine equipment
and machinery and provides design and engineering services. The
Others segment provides real estate, financial and insurance
services.
The Troubled Company Reporter-Asia Pacific reported on
Feb 14, 2008, that Standard & Poor's Ratings Services revised
its outlook on the long-term corporate credit rating on IHI
Corp. to negative from stable, reflecting growing expectations
that the company's steady earnings recovery would be delayed,
following the Tokyo Stock Exchange's announcement that it will
place the company's stock on "alert status." The outlook change
also reflects concerns that the company's financial flexibility
will be constrained to some extent by this action. At the same
time, Standard & Poor's affirmed its 'BB+' long-term corporate
credit and 'BBB-' long-term senior unsecured issue ratings on
the company.
SAPPORO HOLDINGS: Board Rejects Steel Partners Takeover Bid
-----------------------------------------------------------
Sapporo Holdings Ltd.'s board of directors told shareholders to
reject a takeover proposal from Steel Partners Japan Strategic
Fund (Offshore), L.P., the local unit of the U.S. hedge fund
Steel Partners Japan, the Asahi Shimbun reports.
As previously reported, a panel established to study the
proposal rejected the deal on grounds that the deal is
detrimental to stakeholders' interests. The panel added that
Sapporo failed to properly outline its turnaround plans for the
brewery. The refusal prompted the U.S. hedge fund to issue a
response saying that the panel's fears are "not supported by
facts."
According to the same paper, Sapporo President Takao Murakami
said that Steel Partners would likely seek only short-term
profits and a takeover could damage the beverage maker's
corporate value.
Steel Partners has offered JPY825 a share for about 66.6% stake
in the brewery.
About Steel Partners Japan Strategic Fund
Steel Partners Japan Strategic Fund (Offshore), L.P., is a
Cayman Islands-registered fund management subsidiary of Warren
Lichtenstein's Steel Partners and the biggest shareholder (18.6%
as of Feb. 2007) of Sapporo Holdings. It submitted a proposal
to Sapporo seeking approval to raise its stake to 66.6%.
About Sapporo Holdings
Sapporo Holdings Limited -- http://www.sapporoholdings.jp/
-- formerly known as Sapporo Breweries, brews beer and operates
more than 200 beer halls and restaurants. Sapporo is one of
Japan's oldest brewers, and is Japan's third largest brewing
company, with brews ranging from its flagship Black Label to the
pricier Yebisu. Sapporo also makes the low-malt happoshu brew.
The company sells Guinness beer in Japan through its Sapporo
Guinness Company and owns a beverage company that makes canned
coffee, bottled water, and soft drinks.
* * *
As of May 16, 2007, the company carries Standard & Poor's Rating
Service's 'BB' Long-Term Foreign Issuer Credit and Long-Term
Local Issuer Credit Ratings that were issued on Feb. 6, 2006;
and Fitch Ratings' 'B' Short-term Foreign and Local Currency
Issuer Default Ratings that were issued on March 14, 2006.
=========
K O R E A
=========
CLOROX COMPANY: Prices US$500MM Offering of 5% Senior Notes
-----------------------------------------------------------
The Clorox Company has priced the offering ofUS$500 million
aggregate principal amount of its 5% senior notes due 2013 in an
underwritten registered public offering.
The offering was made pursuant to an effective shelf
registration statement Clorox filed with the Securities and
Exchange Commission on Oct. 3, 2007. The offering is expected
to close on March 3, 2008, subject to customary closing
conditions. Clorox intends to use the net proceeds from the
offering to retire commercial paper.
Citigroup Global Markets Inc., J.P. Morgan Securities Inc. and
Wachovia Capital Markets LLC acted as joint lead book-running
managers.
Copies of preliminary prospectus supplement and an accompanying
prospectus are available by contacting:
a) Citigroup Global Markets Inc.
388 Greenwich St.
New York, NY 10013
Tel (877) 858-5407
b) J.P Morgan Securities Inc.
270 Park Ave.
New York, NY 10017
Tel (212) 834-4533
c) Wachovia Capital Markets LLC
301 South College St.
Charlotte, NC 28202
Tel (800) 326-5897
About The Clorox Company
Headquartered in Oakland, California, The Clorox Company (NYSE:
CLX) -- http://www.thecloroxcompany.com/-- manufactures and
markets household cleaning products with fiscal year 2007
revenues of US$4.8 billion. Clorox markets some of consumers'
most trusted and recognized brand names, including its namesake
bleach and cleaning products, Green Works(TM) natural cleaners,
Armor All(R) and STP(R) auto-care products, Fresh Step(R) and
Scoop Away(R) cat litter, Kingsford(R) charcoal, Hidden
Valley(R) and K C Masterpiece(R) dressings and sauces, Brita(R)
water-filtration systems, Glad(R) bags, wraps and containers,
and Burt's Bees(R) natural personal care products.
Clorox has manufacturing facilities in China, Costa Rica,
Dominican Republic, Malaysia, Panama, Peru, United Kingdom,
Korea among others.
At Dec. 31, 2007, Clorox's balance sheet showed total assets of
US$4.85 billion and total liabilities ofUS$5.4 billion,
resulting to a stockholders' deficit ofUS$0.55 billion.
TEMBEC: Ontario Court Approves Plan of Arrangement under CBCA
-------------------------------------------------------------
Tembec Inc. disclosed that the plan of arrangement under the
Canada Business Corporations Act, relating to the
recapitalization transaction, has been approved and sanctioned
by the Ontario Superior Court of Justice.
The Court determined that the Plan of Arrangement met all
statutory requirements, that it was brought in good faith and
that it was fair and reasonable in the circumstances.
Accordingly, the Court issued a final order approving the Plan
of Arrangement.
"This is excellent news for the company and its stakeholders,"
James Lopez, president and CEO of Tembec, said. "Court approval
of the Plan of Arrangement is the final step in advance of
closing the transaction. With a secure financial footing and
solid stakeholder support, the company that will emerge from
this transaction will be very well positioned to pursue its
business strategy. The immediate focus will be on improving the
operating and financial performance of the company with the
short-term goal of restoring free cash flow."
Resolutions relating to the Recapitalization were approved by in
excess of 95% of shareholders of Tembec and by in excess of 98%
of noteholders of Tembec Industries Inc. at meetings held on
Feb. 22, 2008. Court approval of the Plan of Arrangement was
the final outstanding approval requirement prior to
implementation of the Recapitalization. The closing and
implementation of the Recapitalization is expected to occur
today, Feb. 29, 2008.
The company also disclosed that these individuals will serve on
the board of directors of the new Tembec Inc. effective as at
the time of closing, on Feb 29:
-- Norman Betts, Storytown, New Brunswick
-- James Brumm, New York, New York
-- Jim Chapman, Greenwich, Connecticut
-- Jim Continenza, Lakeville, Minnesota
-- Jim Lopez, North Bay, Ontario
-- Luc Rossignol, T‚miscaming, Qu‚bec
-- Fran Scirrico, Cold Spring Harbor, New York
-- David Steuart, Burlington, Ontario
-- Lorie Waisberg, Toronto, Ontario
"I am pleased to have this accomplished group of individuals
join our board," Mr. Lopez concluded. "The unique mix of skills
and experience they bring will be very helpful in providing the
guidance necessary as the company charts its course forward
following this very important transaction."
About Tembec
Headquartered in Montreal Quebec, Tembec Inc. (TSC:TBC) --
http://www.tembec.com -- operates an integrated forest products
business. The company's operations consist of four business
segments: forest products, pulp, paper and chemicals. The
forest products segment consists primarily of forest and
sawmills operations, which produce lumber and building
materials. The pulp segment includes the manufacturing and
marketing activities of a number of different types of pulps.
The paper segment consists primarily of production and sales of
newsprint and bleached board. The chemicals segment consists
primarily of the transformation and sale of resins and pulp by-
products. As of Sept. 29, 2007, Tembec operated manufacturing
facilities in New Brunswick, Quebec, Ontario, Manitoba, Alberta,
British Columbia, the states of Louisiana and Ohio, as well as
in Southern France and Korea.
* * *
Standard & Poor's placed Tembec Inc.'s long-term foreign and
local issuer credit ratings at 'CC' in Dec. 20, 2007.
===============
M A L A Y S I A
===============
SOLUTIA INC: Gets Exit Financing; Emerges from Ch. 11 Protection
----------------------------------------------------------------
Solutia Inc. and its debtor-affiliates have emerged from Chapter
11 reorganization, pursuant to an agreement with their lenders
who will provide exit financing to the Debtors.
As reported in the Troubled Company Reporter on Feb. 26, 2008,
the Debtors reached an agreement with Citigroup Global Markets
Inc., Goldman Sachs Credit Partners L.P., and Deutsche Bank
Securities Inc. to fund Solutia's exit financing package and
scheduled a closing date on Feb. 28, 2008.
"Solutia has emerged as a well-positioned specialty chemicals
and performance materials company with market-leading global
positions and a diverse portfolio of high potential businesses,"
said Jeffry N. Quinn, chairman, president and chief executive
officer. "We believe we are a stronger, healthier and more
competitive company than at any point in our history. Over the
past four years, we have transformed our portfolio through
strategic acquisitions, internal investments, asset
dispositions, and the re-deployment of significant nylon assets
to higher-value uses."
During its time in Chapter 11, Solutia has diversified from both
an end-market and a geographic perspective. In 2007, the
company's net sales from outside the United States were 55% of
the total revenue, compared to 39% in 2003. The increase has
been driven primarily by Solutia's Asian growth strategy, as
well as significant growth in Europe.
"During this period, we have made great strides in improving our
financial position by reducing legacy liabilities, enhancing and
focusing the business portfolio and delivering strong revenue
and operating earnings growth and momentum," said James M.
Sullivan, senior vice president and chief financial officer.
"With a strong balance sheet and more than 50% of our portfolio
growing at greater than two times global GDP, we believe we are
positioned to deliver increased shareholder value."
The U.S. Bankruptcy Court for the Southern District of New York
confirmed Solutia's plan of reorganization and approved the
company's exit from bankruptcy subject to certain conditions
including the funding of an exit financing facility on
Nov. 29, 2007. This exit financing is being used to pay certain
creditors, and for ongoing operations.
The new common stock of reorganized Solutia is scheduled to
begin trading on the New York Stock Exchange under the ticker
symbol SOA on Monday, March 3, 2008. Currently the stock symbol
also includes the "WI" notation.
The "old" Solutia stock, which was trading over-the-counter
under the SOLUQ ticker symbol, together with warrants or options
to purchase old common stock, were cancelled as of today.
About Solutia Inc.
Based in St. Louis, Missouri, Solutia Inc.
(OTCBB:SOLUQ)(NYSE:SOA- WI) -- http://www.solutia.com/-- and
its subsidiaries, engage in the manufacture and sale of
chemical-based materials, which are used in consumer and
industrial applications worldwide.
The company and 15 debtor-affiliates filed for chapter 11
protection on Dec. 17, 2003 (Bankr. S.D.N.Y. Lead 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., Jonathan S.
Henes, Esq., and Michael A. Cohen, Esq., at Kirkland & Ellis
LLP, in New York, as lead bankruptcy counsel, and David A.
Warfield, Esq., and Laura Toledo, Esq., at Blackwell Sanders
LLP, in St. Louis Missouri, as special counsel. Trumbull Group
LLC is the Debtor's claims and noticing agent. 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. The Official Committee of
Retirees of Solutia, Inc., et al., is represented by Daniel D.
Doyle, Esq., Nicholas A. Franke, Esq., and David M. Brown, Esq.,
at Spencer Fane Britt & Browne, LLP, in St. Louis, Missouri, and
Frank M. Young, Esq., Thomas E. Reynolds, Esq., R. Scott
Williams, Esq., at Haskell Slaughter Young & Rediker, LLC, in
Birmingham, Alabama.
On Feb. 14, 2006, the Debtors filed their Reorganization Plan &
Disclosure Statement. On May 15, 2007, they filed an Amended
Reorganization Plan and on July 9, 2007, filed a 2nd Amended
Reorganization Plan. The Bankruptcy Court approved the Debtors'
amended Disclosure Statement on Oct. 19, 2007. On
Oct. 22, 2007, the Debtor re-filed a Consensual Plan &
Disclosure Statement and on Nov. 29, 2007, the Court confirmed
the Debtors' Consensual Plan. (Solutia Bankruptcy News, Issue
No. 119; Bankruptcy Creditors' Service, Inc.,
http://bankrupt.com/newsstand/or 215/945-7000).
* * *
As reported in the Troubled Company Reporter on Dec. 10, 2007,
Standard & Poor's Ratings Services assigned its 'B+' loan rating
to Solutia Inc.'s (D/--/--) proposedUS$1.2 billion senior
secured term loan and a '3' recovery rating, indicating the
likelihood of a meaningful (50%-70%) recovery of principal in
the event of a payment default. The ratings are based on
preliminary terms and conditions. S&P also assigned its 'B-'
rating to the company's proposed US$400 million unsecured notes.
Standard & Poor's expects to assign its 'B+' corporate credit
rating to Solutia if the company and its subsidiaries emerge
from Chapter 11 bankruptcy proceedings in early 2008 as planned.
S&P expects the outlook to be stable.
SOLUTIA INC: Court Approves Quinn Emanuel as Conflicts Counsel
--------------------------------------------------------------
Solutia Inc. and its Debtor-affiliates obtained approval from
the U.S. Bankruptcy Court for the Southern District of New
York's to employ Quinn Emanuel Urquhart Oliver & Hedges LLP, as
their special litigation and conflicts counsel for matters
arising in or related to the Debtors' Chapter 11 cases, nunc pro
tunc to Jan. 22, 2008.
The Troubled Company Reporter said on Feb. 6, 2008, that
according to Rosemary L. Klein, general counsel of Solutia and
an authorized officer of each of the other Debtors, because of
Quinn Emanuel's experience in matters concerning complex
bankruptcy and commercial litigation, the firm is well-suited to
deal effectively with many of the potential legal issues that
may arise in the Debtors' Chapter 11 cases.
As special counsel, Quinn Emanuel will:
(a) advise the Debtors regarding their ability to initiate
actions to protect their rights under certain
Oct. 25, 2007 Commitment Letter -- with respect to
Solutia's exit financing -- and related documents and
enforce the Commitment Parties' legally binding
commitments for the benefit of their estates;
(b) advise the Debtors regarding their ability to initiate
actions to protect their rights as against the Debtors'
postpetition lenders; and
(c) commence and conduct any and all litigation necessary or
appropriate to assert rights held by the Debtors, protect
assets of the Debtors' Chapter 11 estates or otherwise
further the goal of completing the Debtors' successful
reorganization.
The Debtors will pay Quinn Emanuel in accordance with its
standard hourly rates and reimburse the firm of actual and
necessary expenses. The firm informs the Court that its rates
are subject to period adjustment to reflect economic and other
conditions. The firm's current hourly rates are:
Partners US$660 - $950
Other Attorneys $380 - $950
Legal Assistants $250 - $280
Quinn Emanuel has not, does not, and will not represent any
entities or any of their respective affiliates or subsidiaries,
in matters related to the Debtors, their Chapter 11 cases, or
other matters directly adverse to the Debtors during the
pendency of their cases, Susheel Kirpalani, Esq., a member of
Quinn Emanuel, assures the Court.
Mr. Kirpalani asserts that the firm is a disinterested person,
as the term is defined by Section 101(14) of the Bankruptcy
Code.
About Solutia Inc.
Based in St. Louis, Missouri, Solutia Inc.
(OTCBB:SOLUQ)(NYSE:SOA- WI) -- http://www.solutia.com/-- and
its subsidiaries, engage in the manufacture and sale of
chemical-based materials, which are used in consumer and
industrial applications worldwide.
The company and 15 debtor-affiliates filed for chapter 11
protection on Dec. 17, 2003 (Bankr. S.D.N.Y. Lead 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., Jonathan S.
Henes, Esq., and Michael A. Cohen, Esq., at Kirkland & Ellis
LLP, in New York, as lead bankruptcy counsel, and David A.
Warfield, Esq., and Laura Toledo, Esq., at Blackwell Sanders
LLP, in St. Louis Missouri, as special counsel. Trumbull Group
LLC is the Debtor's claims and noticing agent. 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. The Official Committee of
Retirees of Solutia, Inc., et al., is represented by Daniel D.
Doyle, Esq., Nicholas A. Franke, Esq., and David M. Brown, Esq.,
at Spencer Fane Britt & Browne, LLP, in St. Louis, Missouri, and
Frank M. Young, Esq., Thomas E. Reynolds, Esq., R. Scott
Williams, Esq., at Haskell Slaughter Young & Rediker, LLC, in
Birmingham, Alabama.
On Feb. 14, 2006, the Debtors filed their Reorganization Plan &
Disclosure Statement. On May 15, 2007, they filed an Amended
Reorganization Plan and on July 9, 2007, filed a 2nd Amended
Reorganization Plan. The Bankruptcy Court approved the Debtors'
amended Disclosure Statement on Oct. 19, 2007. On
Oct. 22, 2007, the Debtor re-filed a Consensual Plan &
Disclosure Statement and on Nov. 29, 2007, the Court confirmed
the Debtors' Consensual Plan. (Solutia Bankruptcy News, Issue
No. 119; Bankruptcy Creditors' Service, Inc.,
http://bankrupt.com/newsstand/or 215/945-7000).
* * *
As reported in the Troubled Company Reporter on Dec. 10, 2007,
Standard & Poor's Ratings Services assigned its 'B+' loan rating
to Solutia Inc.'s (D/--/--) proposedUS$1.2 billion senior
secured term loan and a '3' recovery rating, indicating the
likelihood of a meaningful (50%-70%) recovery of principal in
the event of a payment default. The ratings are based on
preliminary terms and conditions. S&P also assigned its 'B-'
rating to the company's proposedUS$400 million unsecured notes.
Standard & Poor's expects to assign its 'B+' corporate credit
rating to Solutia if the company and its subsidiaries emerge
from Chapter 11 bankruptcy proceedings in early 2008 as planned.
S&P expects the outlook to be stable.
====================
N E W Z E A L A N D
====================
ACTION BUSINESS: Subject to CIR's Wind-Up Petition
--------------------------------------------------
A petition to have Action Business Solutions Ltd.'s operations
wound up was filed by the Commissioner of Inland Revenue on
October 29, 2007.
The High Court of Auckland will hear the petition on
March 6, 2008, at 10:45 a.m.
The CIR's solicitor is:
Simon John Eisdell Moore
c/o Meredith Connell
Forsyth Barr Tower, Level 17
55-65 Shortland Street
PO Box 2213, Auckland
New Zealand
Telephone:(09) 336 7556)
ANZ TELEPORT: Appoints Whittfield & van Delden as Liquidators
-------------------------------------------------------------
On February 12, 2008, the shareholders of ANZ Teleport &
Broadcast Ltd. appointed John Trevor Whittfield and Boris van
Delden as the company's liquidators.
Messrs. Whittfield and van Delden are accepting creditors'
proofs of debt until March 18, 2008.
The liquidators can be reached at:
John Trevor Whittfield
Boris van Delden
c/o McDonald Vague
PO Box 6092, Auckland
New Zealand
Telephone:(09) 303 0506
Facsimile:(09) 303 0508
Web site: http://www.mvp.co.nz
APPLIANCE SERVICING: Creditors' Proofs of Debt Due on March 15
--------------------------------------------------------------
The creditors of Appliance Servicing (2004) Ltd. are required to
file their proofs of debt by March 15, 2008, to be included in
the company's dividend distribution.
The company's liquidatro is:
John Francis Managh
50 Tennyson Street
PO Box 1022, Napier
New Zealand
Telephone/Facsimile:(06) 835 6280
AUCKLAND COATING: Wind-Up Petition Hearing Set for March 6
----------------------------------------------------------
The High Court of Auckland will hear on March 6, 2008, at
10:00 a.m., a petition to have Auckland Coating Systems Ltd.'s
operations wound up.
The Commissioner of Inland Revenue filed the petition on
Oct. 24, 2007.
The CIR's solicitor is:
Simon John Eisdell Moore
c/o Meredith Connel
Forsyth Barr Tower, Level 17
55-65 Shortland Street
PO Box 2213, Auckland
New Zealand
Telephone:(09) 336 7556)
CONDOR FREIGHT: Wind-Up Petition Hearing Set for April 9
--------------------------------------------------------
The High Court of Auckland will hear on April 9, 2008, at 10:00
a.m., a petition to have Condor Freight Ltd.'s operations wound
up.
The petition was filed by Accident Compensation Corporation on
November 16, 2007.
Accident Compensation's solicitor is:
Dianne S. Lester
c/o Maude & Miller
McDonald's Building, 2nd Floor
PO Box 50555, Porirua City
New Zealand
GHH LEASING: Commences Liquidation Proceedings
----------------------------------------------
GHH Leasing Ltd.'s shareholders agreed on January 21, 2008, to
voluntarily liquidate the company's business. In line with this
goal, the company has appointed Grant Mackintosh to facilitate
the sale of its assets.
Creditors are required to file their proofs of debt by
March 14, 2008, to be included in the company's dividend
distribution.
The liquidator can be reached at:
Grant Mackintosh
PO Box 794, Hamilton
New Zealand
Telephone:(07) 839 5725
Facsimile:(07) 838 2881
LES JARDINS: Wind-Up Petition Hearing Set for March 3
-----------------------------------------------------
A petition to have Les Jardins Du Pays Ltd.'s operations wound
up will be heard before the High Court of Wellington on
March 3, 2008, at 10:00 a.m.
The Commissioner of Inland Revenue filed the petition on
Jan. 16, 2008.
The CIR's solicitor is:
Fiona Melanie Vining
c/o Inland Revenue Department
Legal and Technical Services
7-27 Waterloo Quay
PO Box 1462, Wellington
New Zealand
Telephone:(04) 890 1043
Facsimile:(04) 890 0009
ON THE LEVEL: Subject to CIR's Wind-Up Petition
-----------------------------------------------
On November 23, 2007, the Commissioner of Inland Revenue filed a
petition to have On the Level Builders (06) Ltd.'s operations
wound up.
The petition will be heard before the High Court of Wellington
on March 3, 2008.
The CIR's solicitor is:
Julie Newton
c/o Inland Revenue Department
Legal and Technical Services
First Floor Reception
224 Cashel Street
PO Box 1782, Christchurch 8140
New Zealand
Telephone:(03) 968 0807
Facsimile:(03) 977 9853
S M SURFBOARDS: Faces CIR's Wind-Up Petition
--------------------------------------------
On October 24, 2007, the Commissioner of Inland Revenue filed a
petition to have S M Surfboards Ltd.'s operations wound up.
The petition will be heard before the High Court of Auckland on
March 6, 2008, at 10:45 a.m.
The CIR's solicitor is:
Simon John Eisdell Moore
c/o Meredith Connell
Forsyth Barr Tower, Level 17
55-65 Shortland Street
PO Box 2213, Auckland
New Zealand
Telephone:(09) 336 7556)
SHEPPARD SAWMILLS: Wind-Up Petition Hearing Set for March 17
------------------------------------------------------------
A petition to have Sheppard Sawmills Ltd.'s operations wound up
will be heard before the High Court of Whangarei on
March 17, 2008, at 10:00 a.m.
Accident Compensation Corporation filed the petition on
Jan. 23, 2008.
Accident Compensation's solicitor is:
Dianne S. Lester
Maude & Miller
McDonald's Building, 2nd Floor
PO Box 50555, Porirua City
New Zealand
=====================
P H I L I P P I N E S
=====================
PLDT: Fitch Says Outlook for BB+ Rating Is Stable
-------------------------------------------------
Fitch Ratings has assigned a stable outlook on Philippine Long
Distance Telephone Company's BB- rating.
Fitch Ratings has said that its overall outlook for the Asia
Pacific telecommunication sector in 2008 is stable, with 24 out
of its total 28 rated telecommunications issuers bearing a
Stable Outlook. Highlighting its newly published "Asia-Pacific
Telecoms Credit Outlook 2008" 20 page report, the agency
outlines its expectations on how key financial metrics will
move for 26 operators across Asia-Pacific in 2008, concluding
that while revenue growth is likely to slow, cash flow from
operations and free cash flow after dividends are likely to
rise on aggregate. Nevertheless the agency cautioned that it
expects FCF to actually fall for half of its rated operators
across Asia Pacific.
"While 24 out of our 28 rated telecom issuers have a Stable
Outlook, and average leverage levels are expected to remain
flat at 1.2x, this is not to say that the sector will be quiet,
but rather reflects our view that the operators are relatively
well-positioned to manage the risks," says Matt Jamieson,
senior director and head of Fitch's Asia-Pacific
telecommunications, media and technology team. Fitch believes
the overall themes for 2008 will be competition, regulation,
M&A and new technologies.
Mr. Jamieson emphasised that "a key aspect of our report is the
upfront inclusion of summary tables detailing Fitch's view of
how revenue growth, EBITDA margins, leverage, CFO, capex,
dividends and FCF are likely to trend in 2008," for the 26
operators across Asia-Pacific where Fitch's financial forecasts
are current. "So rather than merely reviewing 2007's financial
performance, we are also providing a greater degree of clarity
on our financial forecasts for 2008 which form an important
part of our rating process," he added.
Specifically, Fitch expects average revenue growth to slow to
5.2% in 2008 from 9.4% in 2007, largely associated with
declines in fixed and mobile average revenue per user as
competitive and regulatory factors force tariffs downwards.
Nevertheless, Fitch expects a number of operators in the
emerging markets to record strong revenue growth in 2008.
RIZAL COMMERCIAL: Asset Management Unit Posts 93% Gain in 2007
--------------------------------------------------------------
The wealth management arm of Rizal Commercial Banking
Corporation had reported a 93% increase in assets it is managing
in 2007 at PHP20.6 billion compared to the PHP10.7 billion
figure it posted in end-2006.
RCBC Wealth Management Senior Vice President Manuel G. Ahyong
Jr. said the portfolio gain can be attributed to the significant
increase in its client base, which expanded by 117% in the past
year. "We also consider our structural expansion as another
growth driver for the bank's private banking unit as we hired
more relationship managers in 2007 to personally attend to the
various needs of our clients," Ahyong revealed.
In the past year, RCBC Wealth Management also capitalized on the
mother bank's wide branch network by tapping the potentials of
existing high net-worth clients to pour in their funds in
various wealth management investment options.
RCBC President and CEO Lorenzo V. Tan expressed full confidence
in the unit's future outlook, based on its sterling 12-month
showing. "With last year's aggressive performance, I'd like to
think that our goal of turning our wealth management business
into a P50 billion asset business in 5 years is very
much attainable. That is, in fact, still a small portion of the
Filipino funds currently management by offshore banks," said Mr.
Tan.
For 2008, the RCBC wealth management unit is targeting a 50%
growth in its Assets Under Management. To achieve this, it
intends to beef up its branches in Metro Manila by doubling its
existing force of wealth relationship managers. Just like last
year where RCBC wealth management solidified its presence in its
Makati and Binondo offices, this year, it will be establishing
wealth management desks in some RCBC branches that particularly
cater to the Filipino-Chinese market. These will be in
Greenhills/New Manila, Calooocan/Valenzuela and Quezon Avenue.
Ahyong also said that plans to develop new offices in provincial
sites such as Cebu, Davao and Iloilo are already under way.
In fact, its Cebu unit, which will be located inside the new
RCBC building being constructed in the Cebu Business Park, will
start operations around 2nd quarter of 2008.
"While we know that Metro Manila is still the heart of business
in the country, we also recognize the immense business potential
awaiting us in the country's other high growth areas where many
of our high networth Filipinos are," he said.
RCBC Wealth Management was established in the late 1980s as a
small unit servicing the bank's biggest clients that has now
become one of the most successful subsidiaries in the bank's
conglomerate. RCBC is the country's fourth largest private
universal bank in terms of capital base with 303 branches
nationwide. In the last 12 months, RCBC opened 11 new
domestic branches and 4 new branches in North America. It is a
strong player in the remittance business with a wide presence
overseas through remittance subsidiaries and tie-ups in North
America, Europe and Hongkong. RCBC is a member of the multi-
industry conglomerate Yuchengco Group of Companies.
* * *
The Troubled Company Reporter-Asia Pacific on Feb. 8, 2008,
reported that Fitch Ratings assigned a Long-term rating of 'B+'
to Rizal Commercial Banking Corp's proposed issue of Philippine
peso denominated subordinated notes due 2018, callable with
step-up in 2013 of up to PHP7 billion.
In Feb 4, 2008 report, TCR-AP said that Moody's Investors
Service changed the outlook on RCBC's foreign currency hybrid
tier 1 debt rating of B3 to positive from stable. The rating
action does not affect the bank's B1 foreign currency long-term
deposit ratings and foreign currency senior unsecured debt
rating of Ba3, which maintain their positive outlook.
The TCR-AP also reported on Oct. 24, 2006, that Standard &
Poor's Ratings Services assigned its 'CCC' rating to RCBC's
(B/Stable/B) US$100 million non-cumulative step-up callable
perpetual capital securities.
=================
S I N G A P O R E
=================
SCOTTISH: A.M. Best Chips Issuer Credit Rating to bb from bbb-
--------------------------------------------------------------
A.M. Best Co. has downgraded the financial strength rating to
B from B+ and the issuer credit ratings to "bb" from
"bbb-" of the primary operating insurance subsidiaries of
Scottish Re Group Limited. A.M. Best also has downgraded the
ICR to "b-"from "bb-" and the various debt ratings of Scottish
Re. The outlook for all ratings is negative.
These rating actions are based on A.M. Best's opinion that
continuing market deterioration in the subprime mortgage loan
market will result in additional delinquencies and losses and
that the uncertainty surrounding the ultimate impact of
investment write-downs on Scottish Re, its subsidiaries and
special purpose vehicles such as Ballantyne Re are not
appropriate for "Secure" FSRs. The rating downgrades also
reflect A.M. Best's concerns with the ongoing pricing,
volatility, valuation and default risk in the mortgage-backed
securities market, which could result in substantial negative
impact on the company's consolidated balance
sheet.
A.M. Best notes that Scottish Re remains heavily dependent upon
offshore securitizations for its XXX reserves. While a majority
of Scottish Re's XXX reinsurance structures are bankruptcy
remote, an additional rating concern is the deterioration in the
market value of the underlying collateral, which reduces the
amount available to fund future reserve increases. Large write-
downs on subprime loans held in the SPV's investment portfolio
could potentially deplete the capital held within those
structures. If any deficiency were to develop, Scottish Re's
operating subsidiaries may be required to pledge additional
assets to secure reserve credit outside of the securitization
structure.
Given the increased risk commonly associated with lower rated
companies, A.M. Best has widened the notching for its debt
ratings and downgraded the senior debt.
The FSR has been downgraded to B from B+ and the ICRs to "bb"
from "bbb-" for these subsidiaries of Scottish Re Group Limited:
-- Scottish Annuity & Life Insurance Company (Cayman) Ltd.
-- Scottish Re (U.S.), Inc.
-- Scottish Re Life Corporation
-- Scottish Re Limited
-- Orkney Re, Inc.
The ICR has been downgraded to "b-" from "bb-" for Scottish Re
Group Limited.
These debt ratings have been downgraded:
Scottish Re Group Limited
-- to "ccc" from "b" on US$125 million non-cumulative preferred
shares
Stingray Pass-thru Trust
-- to "bb" from "bbb-"on US$325 million 5.902% senior secured
pass-thru certificates, due 2012
These indicative ratings for debt securities have been
downgraded:
Scottish Re Group Limited
-- to "b-" from "bb-"on senior unsecured debt
-- to "ccc+" from "b+" on subordinated debt
-- to "ccc" from "b" on preferred stock
Scottish Holdings Statutory Trust II and III
-- to "ccc+" from "b+" on preferred securities
================
S R I L A N K A
================
SRI LANKA TELECOM: Fitch Assigns Neg. Outlook on BB- Rating
-----------------------------------------------------------
Fitch Ratings has said that its overall outlook for the Asia
Pacific telecommunication sector in 2008 is stable, with 24 out
of its total 28 rated telecommunications issuers bearing a
Stable Outlook. Highlighting its newly published "Asia-Pacific
Telecoms Credit Outlook 2008" 20 page report, the agency
outlines its expectations on how key financial metrics will
move for 26 operators across Asia-Pacific in 2008, concluding
that while revenue growth is likely to slow, cash flow from
operations and free cash flow after dividends are likely to
rise on aggregate. Nevertheless the agency cautioned that it
expects FCF to actually fall for half of its rated operators
across Asia Pacific.
"While 24 out of our 28 rated telecom issuers have a Stable
Outlook, and average leverage levels are expected to remain
flat at 1.2x, this is not to say that the sector will be quiet,
but rather reflects our view that the operators are relatively
well-positioned to manage the risks," says Matt Jamieson,
senior director and head of Fitch's Asia-Pacific
telecommunications, media and technology team. Fitch believes
the overall themes for 2008 will be competition, regulation,
M&A and new technologies.
Mr. Jamieson emphasized that "a key aspect of our report is the
upfront inclusion of summary tables detailing Fitch's view of
how revenue growth, EBITDA margins, leverage, CFO, capex,
dividends and FCF are likely to trend in 2008," for the 26
operators across Asia-Pacific where Fitch's financial forecasts
are current. "So rather than merely reviewing 2007's financial
performance, we are also providing a greater degree of clarity
on our financial forecasts for 2008 which form an important
part of our rating process," he added.
Specifically, Fitch expects average revenue growth to slow to
5.2% in 2008 from 9.4% in 2007, largely associated with
declines in fixed and mobile average revenue per user as
competitive and regulatory factors force tariffs downwards.
Nevertheless, Fitch expects a number of operators in the
emerging markets to record strong revenue growth in 2008.
In Sri Lanka, the agency is concerned about the weakened
macroeconomic environment and security situation, and
accordingly, Sri Lanka Telecom (BB-) is assigned a negative
outlook.
===============
T H A I L A N D
===============
TOTAL ACCESS: Fitch Puts BB+ Rating on Watch Negative
-----------------------------------------------------
Total Access Communication Public Company Limited (rated 'BB+')
in Thailand is on Rating Watch Negative, as Fitch awaits a
newly elected government in 2008 to clarify policy, regulatory
and legal risks which increased in 2007.
Fitch Ratings has said that its overall outlook for the Asia
Pacific telecommunication sector in 2008 is stable, with 24 out
of its total 28 rated telecommunications issuers bearing a
Stable Outlook. Highlighting its newly published "Asia-Pacific
Telecoms Credit Outlook 2008" 20 page report, the agency
outlines its expectations on how key financial metrics will
move for 26 operators across Asia-Pacific in 2008, concluding
that while revenue growth is likely to slow, cash flow from
operations and free cash flow after dividends are likely to
rise on aggregate. Nevertheless the agency cautioned that it
expects FCF to actually fall for half of its rated operators
across Asia Pacific.
"While 24 out of our 28 rated telecom issuers have a Stable
Outlook, and average leverage levels are expected to remain
flat at 1.2x, this is not to say that the sector will be quiet,
but rather reflects our view that the operators are relatively
well-positioned to manage the risks," says Matt Jamieson,
senior director and head of Fitch's Asia-Pacific
telecommunications, media and technology team. Fitch believes
the overall themes for 2008 will be competition, regulation,
M&A and new technologies.
Mr. Jamieson emphasised that "a key aspect of our report is the
upfront inclusion of summary tables detailing Fitch's view of
how revenue growth, EBITDA margins, leverage, CFO, capex,
dividends and FCF are likely to trend in 2008," for the 26
operators across Asia-Pacific where Fitch's financial forecasts
are current. "So rather than merely reviewing 2007's financial
performance, we are also providing a greater degree of clarity
on our financial forecasts for 2008 which form an important
part of our rating process," he added.
Specifically, Fitch expects average revenue growth to slow to
5.2% in 2008 from 9.4% in 2007, largely associated with
declines in fixed and mobile average revenue per user as
competitive and regulatory factors force tariffs downwards.
Nevertheless, Fitch expects a number of operators in the
emerging markets to record strong revenue growth in 2008.
* Fitch Puts US$97B of CDOs on WatchNeg on Worsening Performance
----------------------------------------------------------------
Following continued deterioration in the subprime and Alt-A RMBS
markets, Fitch Ratings initiated a global review of 430
structured finance collateralized debt obligations (SF CDOs)
with exposure to residential mortgage-backed securities (RMBS).
Fitch has placed US$97 billion of rated notes, comprised of 902
tranches, across 197 transactions on Rating Watch Negative.
This action reflects the continued credit deterioration in U.S.
subprime mortgage as recently revealed in heightened loss
expectations and resultant rating actions. The combination of
declining home prices and high-risk mortgages are principal
drivers of increased loss expectations for subprime RMBS. In
light of this on-going deterioration, Fitch's RMBS group
announced increased loss expectations of 21% and 26% of initial
securitized balances for subprime RMBS from the 2006 and 2007
vintage, respectively. Accordingly, Fitch placed US$139 billion
of 2006 and 2007 subprime RMBS on Rating Watch Negative.
As of Feb. 25, 2008, Fitch completed rating actions on
approximately 80% of these tranches with 1,913 RMBS bonds being
downgraded an average of 8.6 notches, 366 RMBS bonds affirmed
and 91 RMBS bonds remained on Rating Watch Negative. A detailed
list of the RMBS rating action summary is available on the Fitch
Ratings web site at http://www.fitchratings.com/
In placing SF CDO transactions on Rating Watch Negative, Fitch
primarily considered exposure to subprime RMBS and other SF CDOs
with underlying exposure to subprime RMBS. Fitch notes that
credit deterioration of the underlying subprime RMBS securities
may be amplified at the SF CDO-level due to the use of leverage
as well as structural features, such as overcollateralization
haircuts and OC-based event of default, which may adversely
impact certain rated notes and CDOs containing these notes.
Further, Fitch's higher loss forecasts are expected to result in
widespread and significant downgrades among the subprime RMBS
bonds still on Rating Watch Negative, and may affect all levels
of the subprime RMBS capital structure. This was taken into
consideration in identifying Rating Watch Negative candidates,
especially with respect to high grade SF CDOs (i.e. underlying
collateral originally rated AAA, AA or A), which tend to be
thinly capitalized. Other factors considered in the Rating Watch
Negative process included the worse-than-expected and still
rising level of negative credit migration of Alternative-A (Alt-
A) mortgage loans. In fact, a significant number of Alt-A
transaction has been downgraded, placed on Rating Watch Negative
or 'Under Analysis' by either Fitch or the other rating
agencies.
In total, this rating action affects 140 cash/hybrid
transactions and 57 synthetic transactions. The bulk of these
transactions was originated in 2007 (23 transactions), 2006 (48
transactions) and 2005 (49 transactions). The remaining
transactions were originated in 2004 (36 transactions), 2003 (25
transactions), 2002 (14 transactions) and 2001 (2 transactions).
Further analysis shows that $42.8 billion of rated notes on
Rating Watch Negative are from U.S. mezzanine transactions and
CDO-squared transactions backed by mezzanine SF CDO tranches.
US$37 billion of the rated notes placed on Rating Watch Negative
are from U.S. high-grade transactions and CDO-squared
transactions containing high grade SF CDO tranches. Tranches of
European SF CDOs placed on Rating Watch Negative total US$16.2
billion. Finally, US$1 billion of rated notes on Rating Watch
Negative are from one Asian SF CDO.
Of the US$97 billion of rated securities or 902 tranches placed
on Rating Watch Negative, US$67 billion of rated notes or 652
tranches were previously downgraded in November 2007 when Fitch
undertook a global review of the SF CDOs it rates. As such,
these notes are expected to experience relatively moderate
downgrades. That said, high grade subprime RMBS, high grade
prime/Alt-A, as well as high grade and mezzanine CDO-squared
transactions are expected to suffer comparatively more severe
rating downgrades. Still, the characteristics of the exposure
(size, vintage, seniority, borrower quality, country of
origination) as well as the structural features of the specific
SF CDO will ultimately determine the magnitude of rating
downgrades.
Looking ahead, the resolution of this Rating Watch Negative
action will reflect the rating actions taken on the underlying
RMBS assets. Additionally, Fitch is reviewing its SF CDO
approach and will comment separately on any changes and
potential rating impact at a later date.
* Fitch Says Asia Pacific Telecom Sector Can Manage Risks
---------------------------------------------------------
Fitch Ratings has said that its overall outlook for the Asia
Pacific telecommunication sector in 2008 is stable, with 24 out
of its total 28 rated telecommunications issuers bearing a
Stable Outlook. Highlighting its newly published "Asia-Pacific
Telecoms Credit Outlook 2008" 20 page report, the agency
outlines its expectations on how key financial metrics will
move for 26 operators across Asia-Pacific in 2008, concluding
that while revenue growth is likely to slow, cash flow from
operations and free cash flow after dividends are likely to
rise on aggregate. Nevertheless the agency cautioned that it
expects FCF to actually fall for half of its rated operators
across Asia Pacific.
"While 24 out of our 28 rated telecom issuers have a Stable
Outlook, and average leverage levels are expected to remain
flat at 1.2x, this is not to say that the sector will be quiet,
but rather reflects our view that the operators are relatively
well-positioned to manage the risks," says Matt Jamieson,
senior director and head of Fitch's Asia-Pacific
telecommunications, media and technology team. Fitch believes
the overall themes for 2008 will be competition, regulation,
M&A and new technologies.
Notable exceptions to the Stable Outlook include Korea-based
hanarotelecom Inc., an entity Fitch recently upgraded to 'BBB+'
from 'BB' following SK Telecom Co., Ltd (SKT, 'A'/Stable)'s
acquisition of a controlling stake, for which it was assigned a
Positive Outlook in view of the potential for an even closer
level of integration between the two entities. In addition,
Advanced Info Service Public Company Limited (rated 'BBB+') and
Total Access Communication Public Company Limited (rated 'BB+')
in Thailand are both on Rating Watch Negative, as Fitch awaits
a newly elected government in 2008 to clarify policy,
regulatory and legal risks which increased in 2007. In Sri
Lanka, the agency is concerned about the weakened macroeconomic
environment and security situation, and accordingly, Sri Lanka
Telecom (SLT, 'BB-') is assigned a Negative Outlook.
Mr. Jamieson emphasised that "a key aspect of our report is the
upfront inclusion of summary tables detailing Fitch's view of
how revenue growth, EBITDA margins, leverage, CFO, capex,
dividends and FCF are likely to trend in 2008," for the 26
operators across Asia-Pacific where Fitch's financial forecasts
are current. "So rather than merely reviewing 2007's financial
performance, we are also providing a greater degree of clarity
on our financial forecasts for 2008 which form an important
part of our rating process," he added.
Specifically, Fitch expects average revenue growth to slow to
5.2% in 2008 from 9.4% in 2007, largely associated with
declines in fixed and mobile average revenue per user as
competitive and regulatory factors force tariffs downwards.
Nevertheless, Fitch expects a number of operators in the
emerging markets to record strong revenue growth in 2008,
including China Mobile Limited ('A+'/Stable), PT Excelcomindo
Pratama (Excelcom, 'BB-'/Stable) and PT Indosat Tbk (Indosat,
'BB-'/Stable). EBITDA margins are likely to be stable overall,
but Fitch expects downward pressure for the Indonesian
operators, Telecom Corporation of New Zealand Ltd (TCNZ,
'A'/Stable), KT Corporation (KT, 'A'/Stable), SKT and SLT.
Fitch also expects positive FCF growth exceeding 10% in 2008 to
be recorded by China Mobile and China Netcom Group Corporation
('BBB+'/Stable). Other operators expected to record strong
positive FCF for 2008 in absolute terms include China Telecom
Corporation Limited ('A-'/Stable), Singapore Telecommunications
Ltd. ('A'/Stable), Philippine Long Distance Telephone Company
('BB+'/Stable), NTT Corporation ('AA-'/Stable), KT, SKT, and
Chunghwa Telecom Co., Ltd ('AA'/Stable). On the other hand,
Fitch expects negative FCF (after dividends) in absolute terms
to be registered by Telstra Corporation Limited ('A'/Stable)
and TCNZ; Fitch's four rated telecommunications operators in
Indonesia; and Telekom Malaysia Berhad (TM, 'A-'/Stable).
In conjunction with the report, Fitch Ratings will be hosting a
teleconference on March 4, 2008, at 10:00 a.m. in Hong
Kong/Singapore, 11:00 a.m. in Tokyo/Seoul and 1:00 p.m. in
Sydney to discuss the 2008 outlook for the Asia-Pacific
telecommunications sector. To register for the event, please
contact Valerie Tan at +65 6796 7209/
valerie.tan@fitchratings.com.
*********
S U B S C R I P T I O N I N F O R M A T I O N
Troubled Company Reporter-Asia Pacific is a daily newsletter co-
published by Bankruptcy Creditors' Service, Inc., Fairless
Hills, Pennsylvania, USA, and Beard Group, Inc., Frederick,
Maryland, USA. Azela Jane Taladua, Rousel Elaine Tumanda,
Valerie Udtuhan, Patrick Abing, Tara Eliza Tecarro, Marjorie C.
Sabijon, Editors.
Copyright 2008. 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 US$625 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 US$25 each. For subscription information, contact
Christopher Beard at 240/629-3300.
*** End of Transmission ***