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, May 5, 2008, Vol. 11, No. 88 Headlines A U S T R A L I A AMIGO HOLDINGS: Commences Liquidation Proceedings BEMAX RESOURCES: Moody's Affirms Ba3 Rating & Revises Outlook CENTRO NP: Moody's Maintains Review of 'B3' Senior Debt Ratings CHRYSLER LLC: April Sales Drop 23% Due to Slowing SUV Demand KNOWLEDGE DEVELOPMENT: Commences Liquidation Proceedings L.W. WEEKS: Commences Liquidation Proceedings LANE COVE TUNNEL: S&P Cuts Rating on AU$1.14 Bil. Bonds to BB- OPES PRIME: ANZ Wins Case Against Beconwood Securities OPES PRIME: Julian Smith's Travel Ban Extended Until Sept. 26 PENDO (AUSTRALIA): Placed Under Voluntary Liquidation POLYPORE INT'L: Reports US$12.9 Mil. Net Income in First Quarter R & R DRIVESHAFTS: Member and Creditors to Meet on May 6 RELOS TRANSPORT: Supreme Court Enters Wind Up Order SERHAN GROUP: Placed Under Voluntary Liquidation W PINFOLD: Final Members' Meeting Slated for May 9 C H I N A & H O N G K O N G & T A I W A N BUCYRUS INTERNATIONAL: Board Okays Two-For-One Stock Split CHINA SOUTERN: Establishes Domestic Flight Training Base CNH GLOBAL: S&P Upgrades Corporate Credit Rating From 'BB+' COVANTA ENERGY: S&P Alters Outlook to Pos.; Holds 'BB-' Rating FIAT SPA: Signs MoU to Acquire Zastava's Kragujevac Plant NANJING STEEL: 2007 Net Profit Up 164% to CNY1 Billion NANJING STEEL: Increases Steel Plate Price XINING SPECIAL: 2007 Operating Revenue Increases to CNY5.7 Bil. XIN JIANG: Not Paying Dividend for FY2007 I N D I A CONEXANT SYSTEMS: Posts $142MM Net Loss in Qtr. Ended March 28 CONEXANT SYSTEMS: Terminates Daniel Artusi as President and CEO CONEXANT SYSTEMS: D. Scott Mercer Named as New CEO CONEXANT SYSTEMS: Sells Broadband Media Product Line to NXP DUERR AG: Earns EUR4.4 Million for First Quarter Ended March 31 GMAC LLC: JCR Cuts Senior Debts Rating to #B+ from #BB- SUN MICRO: Posts US$34 Million Net Loss in Fiscal 3rd Quarter UTSTARCOM INC: Two Execs Pay $175,000 in Settlement with SEC I N D O N E S I A ALCATEL-LUCENT SA: Posts EUR181 Million Loss for 1st Qtr 2008 ANEKA TAMBANG: 1Q Net Profit Decreases 37% to IDR675 Billion J A P A N ALITALIA SPA: Files Over EUR1-Billion Damages Suit vs SEA SpA DELPHI CORP: Court Approves DIP Facility Extension & Refinancing DELPHI CORP: Court Approves Up to $650MM in GM Credit Extensions FORD MOTOR: April 2008 Sales Drops 12%, Focus Sales Ups 88% JAPAN AIRLINES: Cuts FY2007 Operating Revenue Forecast by 0.4% JAPAN AIR: To Sell 49.4% Stake in Credit-Card Unit to Mitsubishi NOVOLIPETSK STEEL: To Invest US$6.1 Bln to Double Output by 2015 TOKYO ELECTRIC: Posts JPY150.1 Billion Net Loss for FY2007 USINAS SIDERURGICAS: Net Profit Rises to BRL646 Mil. in 1st Qtr. WAVE SYSTEMS: Gets Nasdaq Notice on Listing Non-Compliance K O R E A CLOROX CO: March 31 Balance Sheet Upside-Down by US$472 Million KENERTEC CO: Moves Date for Common Shares Listing to May 28 *Hynix Joins Working Group to Create Mobile Memory Standards M A L A Y S I A ARK RESOURCES: SC Approves Proposed Restructuring Exercise LITYAN HOLDINGS: Wong Weng Foo & Co. Issues Qualified Report LIQUA HEALTH: Unit Commences Legal Action Against Wynsum Healthy THERMADYNE HOLDINGS: To Hold Annual Meeting on Tuesday THERMADYNE HOLDINGS: S&P Lifts Corporate Credit Rating to 'B-' N E W Z E A L A N D ARTISAN DEVELOPMENTS: Commences Liquidation Proceedings BANKS PENINSULA: Faces Shell's Wind-Up Petition BAY LUMBER: Settles With A S L Industries' Wind-Up Petition DW FUNDING: Shareholders Appoint Waller and Agnew as Liquidators EFFECT NZ LIMITED: Creditors Must File Claims by May 16 FORTUNATO LTD.: Commences Liquidation Proceedings FUEL SAVERS: Court Appoints Nellies and William as Liquidators KELOMIKA HOLDINGS: Court to Hear Wind-Up Petition on May 12 LUDLOW INVESTMENTS: Court to Hear Wind-Up Petition Today METE CONSTRUCTION: Court to Hear Wind-Up Petition on May 30 MOOLOOLABA HOLDINGS: Court Appoints Richard Edge as Liquidator MFS FINANCE: Discloses NZ$334.8 Million Shortfall PREMIER HOLDINGS: Court to Hear Wind-Up Petition on June 20 PRIMO BUILDING: Faces DB Plumbing's Wind-Up Petition SHEPHERD FINANCIAL: Shareholders Appoint Liquidators P H I L I P P I N E S MANILA ELECTRIC: GSIS Head Seeks Full Transparency in Power Firm PETRO ENERGY: Assistant Corporate Secretary Leaves Post PRIMANILA PLANS: SEC Probe Uncovers Fraudulent Practices SEAFRONT RESOURCES: Stockholders' Meeting Slated for June 17 WESTMONT INVESTMENT: Court of Appeals Revives Fraud Case S I N G A P O R E CHEMTURA CORP: Posts US$21 Mil. Net Loss in 2008 First Quarter CHEMTURA CORP: Annual Stockholders Meeting Scheduled for May 14 CHEMTURA CORP: Inks Pact with Baerlocher on Heat Stabilizers SCOTTISH RE: S&P Says Ratings Remain on Negative CreditWatch T H A I L A N D GLOBAL TRADER: Creditors Names Grant Thornton as Administrator - - - - - ================= A U S T R A L I A ================= AMIGO HOLDINGS: Commences Liquidation Proceedings ------------------------------------------------- At the general meeting of the members of AMIGO HOLDINGS PTY LTD held April 22, 2008, JOHN WILCOX, the appointed liquidator, presented an account showing the manner in which the winding up has been conducted and the property of the company disposed. The liquidator can be reached at: John Wilcox Hill Rogers Chartered Accountants Level 5, No 1 Chifley Square Sydney, New South Wales 2000 Australia Telephone: (02) 9232-5111 BEMAX RESOURCES: Moody's Affirms Ba3 Rating & Revises Outlook ------------------------------------------------------------- Moody's Investors Service affirmed on May 1, 2008, the Ba3 corporate family and Ba3 senior unsecured ratings of Bemax Resources Limited. The outlook has been changed to negative from stable. "The change in outlook to negative reflects the company's unexpected weakness in production, primarily in Western Australia, and total sales levels relative to forecast - at the time that the rating was first established", says Ian Lewis a Moody's Vice President and Lead Analyst for the company, adding "The combined effects of lower concentrate output together with increased costs associated with higher freight - mainly shipping costs - amid a higher exchange rate environment are challenging the company's Ba3 rating". "Moody's will be closely monitoring Bemax' expansion agenda relative to its initial forecasts and its ability to sustain financial metrics appropriate to its rating level and relative to its peers" says Lewis. Bemax Resources Limited (Bemax) is an Australian-based mineral sands producer, producing zircon and titanium based feedstock products. Bemax intends to expand operations to additional mining sites as well as ramp up operations at its Broken Hill Mineral Separation Plant (MSP) facility to allow for the processing of Rutile and Zircon. CENTRO NP: Moody's Maintains Review of 'B3' Senior Debt Ratings --------------------------------------------------------------- Moody's Investors Service stated that it will maintain the B3 senior unsecured debt ratings under review direction uncertain of Centro NP LLC (formerly New Plan Excel Realty Trust, Inc.) reflecting the company's announcement that its parent, Centro Properties Group, was granted a seven day interim extension until May 7, 2008, on all facilities previously scheduled to expire in order to allow time to finalize discussions with financiers and complete documentation for a longer term extension. The review continues to reflect the financial difficulties and uncertainty regarding the final capital structure and strategic profile of the company in light of Centro NP's and Centro Properties Group's short-term pressure to refinance debt. Moody's will continue to monitor Centro NP's compliance with its bond covenants and the quality and composition of its portfolio as it works though these financings. Upwards rating movement would be contingent upon implementing a viable plan to refinance or restructure Centro Property Group's debt by May 7, 2008, in addition to Centro NP refinancing the bridge facility and line of credit on or before its Sept. 30, 2008 extension date without materially pressuring their leverage, secured debt, the value of their portfolio, and other credit metrics, while complying with bond covenants. A confirmation of the B3 rating would result from Centro NP reaching a financing plan to which the debt holders agree, with a strategic plan in place to restructure Centro Properties Group's debt. A downgrade to the Caa range or lower would most likely reflect Centro NP's continued issues refinancing its line and Centro Properties Group's inability to refinance its debt by the extension dates, noncompliance with bond covenants at the Centro NP level, acceleration of bond payments, a firesale of assets or a bankruptcy filing. These ratings are at B3, with review direction uncertain: -- Centro NP LLC -- Senior unsecured debt at B3; medium-term notes at B3. Centro NP LLC, headquartered in New York City, owns and operates 496 community and neighborhood shopping centers in 39 states. The company had assets of $5.7 billion and equity of $3.2 billion at Dec. 31, 2007. Centro Properties Group, headquartered in Melbourne, Victoria, Australia, is an Australian Listed Property Trust that specializes in the ownership, management and development of retail shopping centers in Australia, New Zealand and the USA with $26.6 billion in assets under management. CHRYSLER LLC: April Sales Drop 23% Due to Slowing SUV Demand ------------------------------------------------------------ Chrysler LLC reported total April 2008 sales of 147,751 units, which is 23% below the same period last year. Overall sales were most affected by slowing truck and SUV demand and a dramatic cut in daily rental-fleet sales. "The overall decrease in April sales, particularly of pickup trucks, demonstrates that the auto industry continues to be under pressure from the national economy," Vice Chairman and President Jim Press said. "Despite the economic challenges, and concern about rising fuel prices, we continue to hear from consumers that there is growing interest in vehicles that meet specific needs, such as the Dodge Journey seven-passenger crossover for families and the Dodge and Jeep fuel-efficient compact vehicles for young professionals. Our plan is to continue to focus on meeting customers' needs, and managing our overall inventory to best weather this slowdown." Chrysler's lineup of compact vehicles continued to connect well with consumers this month. Total compact vehicle sales of the fuel-efficient Dodge Caliber, Jeep Compass and Jeep Patriot, which each achieve 28 miles per gallon or better in highway driving, reached an April record 17,977 units last month, up 16 percent from April 2007. As the spring "top-down" driving season begins, the Chrysler Sebring Convertible finished the month with 2,827 units compared with April 2007 sales of 1,447 units, a 95% sales increase. Also enjoying a positive month was the Dodge Charger with sales of 13,021 units in April, a 29% increase over 2007 April sales. In April, the company launched its largest digital-advertising campaign in Chrysler history for the all-new Dodge Journey, 'If you can dream it, do it.' The Journey, with best-in-class fuel economy (25-mpg hwy, 4-cylinder), delivers a unique combination of versatility and flexibility at less than $20,000. The Journey increased sales to 6,667 units in only its third month on the market. As a result of the success of its "New Day" packages, Chrysler will continue to offer the popular packages in May. The packages have struck a chord with buyers by combining the company's most sought-after features on a wide range of vehicles at reduced prices. The company finished the month with 422,353 units of inventory, or a 74-day supply. As part of a planned reduction in manufacturing and capacity, inventory is down 13% compared with April 2007 when it totaled 482,786 units. Headquartered in Auburn Hills, Michigan, Chrysler LLC -- http://www.chrysler.com/-- a unit of Cerberus Capital Management LP, produces Chrysler, Jeep(R), Dodge and Mopar(R) brand vehicles and products. The company has dealers worldwide, including Canada, Mexico, U.S., Germany, France, U.K., Argentina, Brazil, Venezuela, China, Japan and Australia. * * * As reported in the Troubled Company Reporter on Dec. 10, 2007, Standard & Poor's Ratings Services revised its recovery rating on Chrysler's $2 billion senior secured second-lien term loan due 2014. The issue-level rating on this debt remains unchanged at 'B', and the recovery rating was revised to '3', indicating an expectation for 50% to 70% recovery in the event of a payment default, from '4'. Both the issue-level and recovery ratings on Chrysler's $7 billion first-lien term loan due 2013 remain unchanged. The issue-level rating on this debt is 'BB-' with a recovery rating of '1', indicating an expectation for 90% to 100% recovery in the event of a payment default. KNOWLEDGE DEVELOPMENT: Commences Liquidation Proceedings -------------------------------------------------------- At the general meeting of the members and creditors of Knowledge Development Laboratories Pty Ltd held May 1, 2008, Morgan Kelly, the appointed liquidator, presented an account showing the manner in which the winding up has been conducted and the property of the company disposed. The liquidator can be reached at: Morgan Kelly Ferrier Hodgson GPO Box 4114 Sydney, New South Wales 2001 Australia L.W. WEEKS: Commences Liquidation Proceedings --------------------------------------------- At the general meeting of the members of L.W. Weeks Holdings Pty Ltd held April 24, 2008, John Wilcox, the appointed liquidator, presented an account showing the manner in which the winding up has been conducted and the property of the company disposed. The liquidator can be reached at: John Wilcox Hill Rogers Chartered Accountants Level 5, No 1 Chifley Square Sydney, New South Wales 2000 Australia Telephone: (02) 9232-5111 LANE COVE TUNNEL: S&P Cuts Rating on AU$1.14 Bil. Bonds to BB- -------------------------------------------------------------- Standard & Poor's Ratings Services lowered on May 1, 2008, its Standard & Poor's Underlying Rating (SPUR) on the A$1.14 billion senior secured bonds issued by Lane Cove Tunnel Finance Co. Pty. Ltd. (LCTF) to 'BB-', from 'BBB-', and placed the SPUR on CreditWatch with negative implications. This follows our concerns on the continued underperformance of the Lane Cove toll road. The 'AAA/Negative/--' insured rating on LCTF was unchanged, reflecting the fact that bondholders continue to have the benefit of bond insurance provided by MBIA Insurance Corp. (AAA/Negative/--). A SPUR represents our current opinion of the stand-alone creditworthiness of a debt issue. Specifically, the SPUR indicates the capacity and willingness of an issuer to satisfy the obligations of a debt instrument on a timely basis and in accordance with the terms of the debt. A SPUR excludes consideration of any applicable credit support from a third party. Under our criteria, the issue rating on an insured bond issue is the higher of the rating on the bond insurer and the SPUR. "Despite the strong rationale for the Lane Cove Tunnel, traffic numbers continue to fall well short of expectations," Standard & Poor's credit analyst Philip Grundy said. "Liquidity and traffic growth are the key factors to the success of this transaction, and the protracted underperformance of traffic on the road increases the likelihood that liquidity will be exhausted before break-even traffic is achieved. In our view, the acid test for this project and its available liquidity support has begun, given the road is now operating as it was intended to be. Based on our current analysis of the project and using conservative traffic growth forecasts, the project is likely to face liquidity problems by the end of 2009 or early in 2010." The initial poor traffic performance of the road in 2007 had been attributed to the deferral of the Epping Road surface works, which commenced in August 2007 and were completed in March 2008. The traffic profile has shown little improvement since then, although we note that March and April 2008 traffic numbers are likely to be negatively affected by the public and school holidays over the period. A more realistic picture of the road's future traffic profile is expected to be available over the next few months. Standard & Poor's notes that new toll roads are typically characterized by higher traffic growth rates early (ramp-up periods), followed by lower growth rates or a steady state. The ramp-up tends to vary between projects, but can range anywhere from 18 months to five years depending on the characteristics of the road and catchment area. Moreover, liquidity for toll-road projects is typically sufficient for the expected ramp-up period, with some buffer for contingencies. With the ramp-up period for the Lane Cove Tunnel forecast at the low end of industry standards, the project benefited from above-average liquidity. However, all evidence now points to a lower starting point for traffic and slower-than-forecast growth. Consequently, without further support, our concern is that the road's liquidity may run out before break-even traffic is achieved. Mr. Grundy added: "We have some confidence that the road's key stakeholders will try to find solutions to the financial problems facing the project over the next few months. We will closely monitor those developments and the road's traffic performance ahead of an expected resolution of the CreditWatch by the end of July 2008. If traffic continues to underperform and there is no tangible solution offered by stakeholders, we would expect the SPUR to be lowered further." The Lane Cove Tunnel project is a 33-year concession to finance, design, build, operate and maintain the final section of a ring of toll roads which circle Sydney. The project will revert to government ownership at its maturity. OPES PRIME: ANZ Wins Case Against Beconwood Securities ------------------------------------------------------ The Australian Associated Press reported last Friday that the Federal Court of Victoria rejected Beconwood Securities' argument that ANZ should return shares lodged with Opes Prime Group Limited. According to the AAP Justice Ray Finkelstein ruled that Beconwood did not have an "equity of redemption" -- the right to a return of equivalent shares -- or other equitable interests in securities that it had loaned to Opes Prime in return for loans. The Troubled Company Reporter-Asia Pacific reported on April 22, 2008, that according to the AAP, Melbourne businessman Paul Choiselat's Beconwood Securities went to the Federal Court seeking orders that ANZ return equivalent securities to the shares of Beconwood placed with Opes Prime. The report noted that Beconwood pledged AU$7 million worth of shares to Opes Prime in return for a AU$1.3 million loan. The AAP relates that Justice Finkelstein said that under a securities lending agreement, absolute title to shares passed from the lender of the shares to the borrower. Richard Gluyas of The Australian notes that "most margin lenders in Australia allow depositors to retain title over shares deposited, but failed broker Opes had a UK-type model where the lender registered stock in its own name." Mr. Gluyas relates, citing Mallesons Stephen Jaques partner Tony Troiani, the Federal Court decision will have no impact on Opes administrator John Lindholm's decision to recommend a liquidation for Opes or pursuit of commercial settlements with creditors that could lead to a deed of company arrangement. The Australian reports that now that a key preliminary issue has been determined, the Beconwood case can now go to a full trial, which is expected to be in July or August. The AAP report states that Beconwood failed to convince Justice Finkelstein that it was an unsophisticated investor and did not know what it was getting in to when it signed the securities lending agreement. In a separate report, Trevor Chappell of the AAP relates that ANZ welcomed the decision but acknowledged that issue is far from over. ANZ Sells Conquest Mining Stake In another report, Susannah Moran of The Australian writes that ANZ has sold its 5 percent stake in Conquest Mining heightening its dispute with Conquest managing director John Terpu, a former Opes Prime client who previously owned the shares and who has initiated a legal action against Opes and ANZ in the NSW Supreme Court. Ms. Moran relates that Mr. Terpu was initially successful in obtaining an injunction to stop ANZ selling the shares but that injunction was lifted on April 18. Gold Fields disclosed to the Australian Stock Exchange last week that it bought the shares from ANZ at AU$0.35 per share, bringing its total shareholding to 19.06 percent, Ms. Moran states. According to The Australian, Mr. Terpu is pursuing an investigation of the deal. About Opes Prime Opes Prime Group Ltd is an Australian unlisted public company providing a range of financial services and products for high net worth individuals, stockbrokers and financial advisors, asset managers, banks and other firms, both for themselves and their clients. The Group conducts business via a number of operating subsidiaries based in Melbourne, Sydney and Singapore: 1) Opes Prime Stockbroking Limited is a full Market Participant of the Australian Stock Exchange Ltd, and holds an Australian Financial Services Licence (#247408) which enables it to deal and advise in financial services and products to retail and wholesale clients. The company was first registered on 10 March 1999, and started business with its current shareholders in 2005. Opes Prime Stockbroking is a specialist provider of securities lending and equity financing services. In Singapore, the firm operates through Opes Prime Group's wholly owned subsidiary, Opes Prime International Pte Ltd. In Australia, Opes Prime Stockbroking has granted Authorized Representative status to Trader Dealer Pty Ltd, an on-line non-advisory trading execution service for the semi-professional and professional trader. 2) Opes Prime Structured Products Pty Ltd develops, manages and markets specialized leveraged products for the high net worth market, providing outstanding risk protection and return potential. 3) Opes Prime Paradigm Pty Ltd, is a corporate finance and advisory firm specializing in small and mid cap stocks. 4) In Singapore, Opes Prime Asset Management Pte Ltd provides specialist hedge fund incubation, advisory and trade management services, and Five Pillars Associates Pte Ltd provides Islamic finance consultancy. * * * The Troubled Company Reporter Asia-Pacific reported on April 1, 2008 that Opes Prime was placed under receivership after directors became aware of a number of cash and stock movement irregularities in relation to a small number of accounts. Ferrier Hodgson Partners John Lindholm, Peter McCluskey and Adrian Brown have been appointed Administrators by the directors of Opes Prime Group Limited and a number of its subsidiaries and related entities including, Opes Prime Stockbroking Limited. Initial investigations indicate that the solvency of the business was under pressure due to a number of major clients not meeting significant margin calls. The Administrators are currently examining the Group's affairs to quantify the likely liability to OPSL's clients. At the same time, Sal Algeri and Chris Campbell from the Deloitte Corporate Reorganisation Group were appointed by a secured creditor, ANZ Banking Group Ltd., as Receivers and Managers of Opes Prime Group Ltd, Opes Prime Stockbroking Ltd, Leveraged Capital Pty Ltd and Hawkswood Investments Pty Ltd. OPES PRIME: Julian Smith's Travel Ban Extended Until Sept. 26 ------------------------------------------------------------- Richard Gluyas of The Australian reports that OPES Prime Group Ltd. co-founder Julian Smith and the Australian Securities & Investments Commission have agreed to extend his travel ban until September 26. According to The Australian, Mr. Smith's passport will continue to be held at the Federal Court registry in Sydney. The report adds that Mr. Smith promised to give the ASIC seven days' notice of any legal action to vary the terms of the extension order, as well as hand over any evidence he intended to rely on at a hearing on September 26. Mr. Gluyas relates that ASIC investigator Richard Vandeloo considers Mr. Smith to be a flight risk citing that Mr. Smith obtained AU$5.5 million in loans from Leveraged Capital, an Opes company. The Troubled Company Reporter-Asia Pacific reported on April 10, 2008, citing The Sydney Morning Herald, that the ASIC said Opes Director Julian Smith may possibly be involved in covering up massive losses for certain clients just before the firm collapsed. The Herald, the TCR-AP noted, reported that the ASIC made allegations about what it called "double-counting" of shares, a practice it says shielded a handful of Opes' most favored clients from losing millions of dollars against their rapidly deteriorating portfolios. According to the TCR-AP, the ASIC obtained urgent orders from Justice Ray Finkelstein forcing Mr. Smith to hand over his passport until April 11. Mr. Smith had previously booked a 10- day holiday in Fiji with his family and was due to leave April 13. About Opes Prime Opes Prime Group Ltd is an Australian unlisted public company providing a range of financial services and products for high net worth individuals, stockbrokers and financial advisors, asset managers, banks and other firms, both for themselves and their clients. The Group conducts business via a number of operating subsidiaries based in Melbourne, Sydney and Singapore: 1) Opes Prime Stockbroking Limited is a full Market Participant of the Australian Stock Exchange Ltd, and holds an Australian Financial Services Licence (#247408) which enables it to deal and advise in financial services and products to retail and wholesale clients. The company was first registered on 10 March 1999, and started business with its current shareholders in 2005. Opes Prime Stockbroking is a specialist provider of securities lending and equity financing services. In Singapore, the firm operates through Opes Prime Group's wholly owned subsidiary, Opes Prime International Pte Ltd. In Australia, Opes Prime Stockbroking has granted Authorized Representative status to Trader Dealer Pty Ltd, an on-line non-advisory trading execution service for the semi-professional and professional trader. 2) Opes Prime Structured Products Pty Ltd develops, manages and markets specialized leveraged products for the high net worth market, providing outstanding risk protection and return potential. 3) Opes Prime Paradigm Pty Ltd, is a corporate finance and advisory firm specializing in small and mid cap stocks. 4) In Singapore, Opes Prime Asset Management Pte Ltd provides specialist hedge fund incubation, advisory and trade management services, and Five Pillars Associates Pte Ltd provides Islamic finance consultancy. * * * The Troubled Company Reporter Asia-Pacific reported on April 1, 2008 that Opes Prime was placed under receivership after directors became aware of a number of cash and stock movement irregularities in relation to a small number of accounts. Ferrier Hodgson Partners John Lindholm, Peter McCluskey and Adrian Brown have been appointed Administrators by the directors of Opes Prime Group Limited and a number of its subsidiaries and related entities including, Opes Prime Stockbroking Limited. Initial investigations indicate that the solvency of the business was under pressure due to a number of major clients not meeting significant margin calls. The Administrators are currently examining the Group's affairs to quantify the likely liability to OPSL's clients. At the same time, Sal Algeri and Chris Campbell from the Deloitte Corporate Reorganisation Group were appointed by a secured creditor, ANZ Banking Group Ltd., as Receivers and Managers of Opes Prime Group Ltd, Opes Prime Stockbroking Ltd, Leveraged Capital Pty Ltd and Hawkswood Investments Pty Ltd. PENDO (AUSTRALIA): Placed Under Voluntary Liquidation ----------------------------------------------------- At a general meeting of Pendo (Australia) Pty Limited's members held March 14, 2008, it was resolved that the company be wound up voluntarily and that Stuart Ariff be appointed to act as liquidator of the company. POLYPORE INT'L: Reports US$12.9 Mil. Net Income in First Quarter ---------------------------------------------------------------- Polypore International Inc. reported its financial results for the first quarter of 2008. For the three months ended March 31, 2007, the company earned of US$12.9 million on net revenues of US$145.3 million compared to net income of US$2.1 million on net revenues of US$129.0 million for the same period in 2007. Commenting on the quarter, Robert B. Toth, President and Chief Executive Officer, said, "We are pleased with the quarter and the solid start to the year. Our global presence, together with the breadth of markets and applications we serve, contributed to our good performance in the current economic environment." Fiscal 2008 Guidance For the year ending Jan. 3, 2009, the company expects to achieve sales of US$580 million to US$605 million. The company estimate total capital expenditures of approximately US$52.0 million in 2008. This remains unchanged from the company's increased guidance issued on March 3, 2008 in conjunction with the acquisition of Microporous. Headquartered in Charlotte, North Carolina, Polypore International Inc., develops, manufactures and markets specialized polymer-based membranes used in separation and filtration processes. The company is managed under two business segments. The energy storage segment, which currently represents approximately two-thirds of total revenues, produces separators for lead-acid and lithium batteries. The separations media segment, which currently represents approximately one- third of total revenues, produces membranes used in various health care and industrial applications. The company has operations in Australia, Germany and Brazil. * * * In July 2007, Standard & Poor's Ratings Services revised its outlook on Charlotte, N.C.-based Polypore International Inc. and its subsidiary Polypore Inc. to positive from stable. At the same time, S&P affirmed its ratings on both companies, including the 'B' corporate credit rating. R & R DRIVESHAFTS: Member and Creditors to Meet on May 6 -------------------------------------------------------- R & R Driveshafts & Steering Pty Limited will hold a joint meeting for its members and creditors on May 6, 2008, at 10:30 a.m., at the offices of GHK Ferrier Green Krejci Silvia, Level 13, 1 Castlereagh Street, in Sydney. At the meeting, the appointed liquidator will present the manner in which the winding up has been conducted and the property of the company disposed. The liquidator is: Martin J. Green GHK Ferrier Green Krejci Silvia Level 13, 1 Castlereagh Street Sydney, New South Wales 2000 Australia RELOS TRANSPORT: Supreme Court Enters Wind Up Order --------------------------------------------------- On March 11, 2008, the Supreme Court of New South Wales entered an order to have Relos Transport Pty Limited's operations wound up. Bradd Morelli was appointed official liquidator. The liquidator can be reached: Bradd Morelli Jirsch Sutherland GPO Box 4256 Sydney, New South Wales 2001 Australia Telephone: (02) 9236 8333 Facsimile: (02) 9236 8334 e-mail: admin@jirschsutherland.com.au SERHAN GROUP: Placed Under Voluntary Liquidation ------------------------------------------------ At a general meeting of Serhan Group Pty Limited's members held March 19, 2008, it was resolved that the company be wound up voluntarily and that Mitchell Warren Ball of Paladin Partners be appointed to act as liquidator of the company. The liquidator can be reached at: Mitchell Ball Paladin Partners Level 3, 120 Sussex Street Sydney, New South Wales 2000 Australia Telephone: (02) 9290-5300 Facsimile: (02) 9290-5399 W PINFOLD: Final Members' Meeting Slated for May 9 -------------------------------------------------- W Pinfold Pty Limited will hold a final meeting of its members on May 9, 2008, at 10:00 a.m., at the offices Alan Ross Taggart, 35 Belford Street, in Broadmeadow, New South Wales. At the meeting, the appointed liquidator will present an account of how the winding up has been conducted. The liquidator is: Alan Ross Taggart 35 Belford Street Newcastle, New South Wales 2292 Australia ================================================== C H I N A & H O N G K O N G & T A I W A N ================================================== BUCYRUS INTERNATIONAL: Board Okays Two-For-One Stock Split ---------------------------------------------------------- Bucyrus International Inc.'s Board of Directors has approved a two-for-one split of Bucyrus' common stock in the form of a 100% stock dividend. The stock split will be effective May 27, 2008 for stockholders of record on May 13, 2008. The Board of Directors also declared a quarterly dividend of US$0.025 per share on Bucyrus common stock. The quarterly dividend is payable on May 27, 2008 to stockholders of record on May 13, 2008. The quarterly dividend will be paid on a post- stock split basis. "Bucyrus has consistently delivered excellent results, both financially and operationally. Today's stock split announcement reflects the Board of Directors' recognition of our strong stock price performance over the past year," said Timothy W. Sullivan, Bucyrus' chief executive officer and president. The two-for-one stock split is Bucyrus' second stock split in the past two years. The previous stock split was a three-for-two split of the common stock effective March 29, 2006. Bucyrus stockholders also approved today an amendment to the Bucyrus Amended and Restated Certificate of Incorporation increasing the number of authorized shares of common stock from 75 million to 200 million. About Bucyrus International Headquartered in South Milwaukee, Wisconsin, Bucyrus International Inc. (Nasdaq: BUCY) -- http://www.bucyrus.com/-- is a global manufacturer of electric mining shovels, walking draglines and rotary blasthole drills and provides aftermarket replacement parts and services for these machines. In 2006, it had sales of USUS$738 million. The company has operations in Brazil, Chile, China, Poland, the United Kingdom, Australia, India, Germany and Peru, among others. * * * Moody's Investor Service placed the company's long-term corporate family rating at 'Ba3' in April 2007. The rating still holds to date with a stable outlook. CHINA SOUTERN: Establishes Domestic Flight Training Base -------------------------------------------------------- China Southern Airlines Co. Limited has set up a flight training base in Nanyang Airport and is mulling to invest CNY510 million to improve facilities at the airport, People Daily Online reports. The report relates that the training base will have specialized training aircraft, airport and management organization. Nanyang Airport is the first wholly-owned airport under the exclusive management of China Southern Airlines. �Located in the hinterland of the Central Plains with pleasant climate, the airport has fine static air conditions, with more than 300 days suitable for flying annually,� the company said, the report notes. According to the reports, the company will gradually dispatch three different models of large aircraft to Nanyang base for the training of all pilots. About China Southern Airlines Headquartered in Guangzhou, China, China Southern Airlines Co. Ltd. -- http://www.cs-air.com-- engages in the operation of airlines, as well as in aircraft maintenance and air catering operations in the People's Republic of China and internationally. It provides commercial airlines, cargo services, logistics operations, air catering, utility service, hotel operation, travel services, aircraft leasing, and Internet services. * * * As reported in the Troubled Company Reporter-Asia Pacific on March 3, 2008, Fitch Ratings affirmed China Southern Airlines Co. Ltd.'s Long-term Foreign Currency and Local Currency Issuer Default Ratings at 'B+'. The Outlook on the ratings is Stable. CNH GLOBAL: S&P Upgrades Corporate Credit Rating From 'BB+' ----------------------------------------------------------- Standard & Poor's Ratings Services raised its corporate credit rating on CNH Global N.V. to 'BBB-' from 'BB+' after taking the same rating action on CNH's parent company, Italy-based auto and truck manufacturer Fiat SpA (BBB-/Stable/A-3). The outlook is stable. Owing to the investment-grade rating, recovery methodology is no longer applicable and Standard & Poor's has thus withdrawn its '4' recovery rating on Case Corp.'s and Case New Holland Inc.'s senior unsecured debt. The corporate credit rating and outlook on publicly traded CNH are the same as those on Fiat because of the close ties between the two. Fiat views CNH as a core business and continues to provide strong liquidity support to CNH by way of intercompany loans and bank loan guarantees. Fiat has a roughly 90% equity ownership stake in CNH. As of March 31, 2008, CNH had $1 billion of cash deposited with Fiat affiliates' cash management pools (repayable to CNH on one day's notice). "Because S&P views CNH as core to the Fiat Group, a positive or negative rating action on Fiat would result in the same action on CNH," said Standard & Poor's credit analyst Dan Picciotto. "If S&P ceases to view CNH as core to the Fiat Group, and if CNH's stand-alone financial profile fails to support the ratings, S&P could take a negative rating action." COVANTA ENERGY: S&P Alters Outlook to Pos.; Holds 'BB-' Rating -------------------------------------------------------------- Standard & Poor's Ratings Services revised its outlook on Covanta Energy Corp. to positive from stable to reflect the company's improving credit metrics, continued focus on its key business, and S&P's expectation that the company will be able to fund costs associated with its growth strategy in a credit neutral manner. At the same time, Standard & Poor's affirmed its ratings on the company, including the 'BB-' corporate credit rating. Covanta had about $2.3 billion total debt as at Dec. 31, 2007, of which $1.3 billion was project debt. The credit rating on Covanta continues to reflect its reliance on residual distributions from project investments and its limited financial flexibility as it pursues its growth strategy given the capital-intensive nature of its business. Although Covanta generates significant cash flow from its operating subsidiaries, it also has significant ongoing maintenance- capital requirement. Furthermore, the company intends to grow its business through acquisitions, expansion of existing projects, or investments in greenfield energy-from-waste development. Headquartered in Fairfield, New Jersey, Covanta Energy Corporation -- http://www.covantaenergy.com/-- is a publicly traded holding company whose subsidiaries develop, own or operate power generation facilities and water and wastewater facilities in the United States and abroad. Covanta has operations in the Philippines, China, Costa Rica, India, and Bangladesh. FIAT SPA: Signs MoU to Acquire Zastava's Kragujevac Plant --------------------------------------------------------- Fiat S.p.A. and Serbia�s Ministry of Economy and Regional Development has signed a Memorandum of Understanding as the basis for the acquisition by Fiat Group Automobiles of the assets of the Zastava plant at Kragujevac, Serbia. Under the MoU, joint teams are to be set up by FGA and Zastava with the support of the Serbian Ministry of Economy, which will examine the various aspect of the initiative in greater detail. If deemed feasible, the two companies will enter into a definitive agreement in the course of the coming months. "This initiative represents a further step in Fiat Group Automobiles� strategy aimed at supporting its growth and volume aspirations," Sergio Marchionne, Fiat CEO, said. "It follows a number of targeted alliances and partnerships signed with leading carmakers and automotive suppliers over the last four years. Moreover, it demonstrates our confidence and trust in Serbia, its industry, management competence and the skill of its workers, not to forget the Serbian automotive market itself, which we consider an integral extension of our domestic market. "[Fifty-four] years ago, Fiat and Zastava signed an accord for the construction of the factory at Kragujevac where the Fiat Punto is manufactured today," Mr. Marchionne added. "We believe that, together with Zastava, we have played an important role in enhancing the Serbian automotive industry from both the manufacturing as well as the technological point of view. We are proud that many Serbian engineers and technicians have been trained at Fiat in Italy and in Serbia." About Fiat S.p.A. Based in Turin, Italy, Fiat SpA -- http://www.fiatgroup.com/-- designs, manufactures, and sells automobiles, trucks, wheel loaders, excavators, telehandlers, tractors and combine harvesters. Outside Europe, the company has subsidiaries in the United States, Japan, India, China, Mexico, Brazil and Argentina, among others. * * * As of March 13, 2008, Fiat S.p.A. and its subsidiaries carries Ba3 Corporate Family and Senior Unsecured ratings from Moody's Investors Service, which said the outlook is positive. The company carries Standard & Poor's Ratings Services' BB long- term corporate credit rating. The company also carries B short- term rating. S&P said the outlook is stable. NANJING STEEL: 2007 Net Profit Up 164% to CNY1 Billion ------------------------------------------------------ Nanjing Iron & Steel Co reported a 2007 net profit of CNY1 billion, up by 164% year on year, Steel Guru News reports. According to the report, the company's sales revenue increased 38% to CNY22 billion and operating income by 142% to CNY1.4 billion. The company, the report relates, produced 5.4million tonnes of pig iron in 2007 up by 22.2% YoY, 5.1 million tonnes of crude steel up by 26.4% YoY , and 4.2 million tonnes of finished steel up by 21.6% YoY. Its plate output reached 2.7 million tonnes making it the second largest producer in China, Guru News says. Moreover, Guru News notes that Nanjing also exported 535,500 tonnes of steel products last year. Nanjing Steel plans to produce 5.9 million tonnes of pig iron, 5.4million tonnes of crude steel and 4.5 million tonnes of finished steel in 2008, the report adds. About Nanjing Iron & Steel Nanjing, China-based Nanjing Iron & Steel Co.,Ltd. -- http://www.600282.net/-- is primarily engaged in the smelting and processing of ferrous metal and the production and sale of steel products, coke and coke by-products. Its major iron and steel products consist of steel plates, steel bars, steel bands, billets and pig iron. As of May 2, 2008, the company currently holds Xinhua Far East China Ratings' BB+ issuer credit rating. NANJING STEEL: Increases Steel Plate Price ------------------------------------------ Nanjing Iron & Steel Co. Limited increased the price of its steel plate, effective April 1, 2008, Steel Guru News reports. According to the report, the increased in price will be CNY300 per tonnes for ship plate and CNY 600 per tonnes for heavy plate, low alloy plate, boiler plate and vessel plate. The current price for Q235 with thickness from 16mm to 20mm is about CNY 5,780 per tonnes, the report notes. Nanjing, China-based Nanjing Iron & Steel Co.,Ltd. -- http://www.600282.net/-- is primarily engaged in the smelting and processing of ferrous metal and the production and sale of steel products, coke and coke by-products. Its major iron and steel products consist of steel plates, steel bars, steel bands, billets and pig iron. As of May 2, 2008, the company currently holds Xinhua Far East China Ratings' BB+ issuer credit rating. XINING SPECIAL: 2007 Operating Revenue Increases to CNY5.7 Bil. -------------------------------------------------------------- Xining Special Steel Co. Limited recorded an operation revenue of CNY5.7 billion for 2007, up by CNY2.3 billion in 2006, Steel Guru News reports. The report relates that the company's 2007 output and sales volume exceeded 1 million tonnes. According to Guru News, in the company's product cost structure, the main raw materials account for a large proportion. The company combines this situation, as well as the resources advantage in Qinghai province, and put forward mineral resources development strategy, the report notes. Xining Special said that it will increase the development and construction of its iron ore and coal resources. The company's unit, Xigang Mining Development Company, will exploit three iron ore mimes in Qinghai: -- Da Shalong iron ore mine with 32 million tonnes, -- Magnet hill mine with 35 million tonnes, and -- Flood river mine with 12.1 million tonnes. The mines are expected to put into operation in three years and form 700,000 tonnes production capacity. In 2008, Xining Special Steel plans to produce 1.1 million tons iron powder concentrate, up by 78.5% than that of in 2007, with expectation that in three years, it will have 2 million tons iron powder concentrate production capacity, the report adds. About Xining Special Based in Xining, Qinghai Province, Xining Special Steel Co., Ltd. is principally engaged in the smelting and processing of special steel products and offers alloy structural steel, alloy tool steel, carbon structural steel, bearing steel, spring steel, carbon tool steel, stainless steel, high-temperature steel and other steel products. As of May 2, 2008, the company currently holds Xinhua Far East China Ratings's BB issuer credit rating on August 25, 2006. XIN JIANG: Not Paying Dividend for FY2007 ----------------------------------------- Xin Jiang Hops Co. Limited will not pay any dividend to its shareholders for fiscal year 2007, Reuters reports. Based in Urumqi, Xinjiang Uygur Autonomous Region, China, Xin Jiang Hops Co., Ltd. -- http://www.ljjn.com/-- is principally engaged in the production and sale of beers, raw materials for beer, fruit drinks and vegetable drinks, as well as the real estate business. The company primarily offers hops and hop pellets under the brand name of Xinrui, malt, beers under the brand name of Xinjiang, guava drinks and carrot drinks under the brand names of Shennei and Pinjiashi. The Troubled Company Reporter - Asia Pacific reported on February 16, 2007, that the company has a capital deficiency of US$11.26 million, on total assets of US$86.63 million. ========= I N D I A ========= CONEXANT SYSTEMS: Posts $142MM Net Loss in Qtr. Ended March 28 -------------------------------------------------------------- Conexant Systems Inc. disclosed Tuesday results for the second quarter ended March 28, 2008. GAAP operating loss was $125.7 million and GAAP net loss was $142.0 million for the second quarter of fiscal 2008. The GAAP net loss in the quarter included an asset impairment charge of $121.7 million primarily related to the write-down of goodwill associated with the Broadband Media Processing business. GAAP operating loss was $172.7 million and GAAP net loss was $133.4 million for the second quarter of fiscal 2007. The GAAP net loss in the quarter included non-cash goodwill and intangible asset impairment charges related to the company's Embedded Wireless Networking business of $135.0 million and $20.0 million, respectively, and a gain on the sale of the company's investment in Jazz Semiconductor Inc. of $43.5 million. Revenues for the second quarter of fiscal 2008 were $174.0 million, compared to revenues of $200.0 million for the second quarter of fiscal 2007. Core gross margins were 45.0% of revenues, which was unchanged compared to core gross margins of 45.0% of revenues in the second quarter of fiscal 2007. Core operating expenses were $72.3 million, and core operating income was $6.0 million, compared with core operating expenses of $89.9 million, and core operating income of $63,000 in the second quarter of fiscal 2007. Conexant's core net loss was $3.3 million in the second quarter of fiscal 2008, compared to core net loss of $9.9 million in the second quarter of fiscal 2007. On a GAAP basis, gross margins for the second quarter of fiscal 2008 were 45.4% of revenues. GAAP operating expenses were $204.7 million. GAAP gross margins were 45.0% of revenues and GAAP operating expenses were $262.5 million in the second quarter of fiscal 2007. The company ended the quarter with $164.1 million in cash and cash equivalents. Cash declined by approximately $68.0 million, due in large measure to the company's re-purchase of $53.6 million of its floating rate senior notes. Business Perspective "I am pleased to be a part of the Conexant team and enthusiastic about our company's long-term prospects," said Scott Mercer, who joined Conexant as chief executive officer on April 14, 2008. "In the coming weeks and months, I will be focusing on our overall strategy, and on improving our financial performance and position. "For the second fiscal quarter, we exceeded our expectations entering the quarter," Mercer said. "We anticipated revenues in a range between $165.0 million and $170.0 million, and we delivered $174.0 million. Core gross margins came in at the high end of the range we provided, and core operating expenses were significantly lower than we expected, which reflects the team's commitment to reducing costs." Balance Sheet At March 28, 2008, the company's consolidated balance sheet showed $748.6 million in total assets, $746.6 million in total liabilities, and $1.9 million in total stockholders' equity. Business Outlook Conexant expects revenues for the third quarter of fiscal 2008 to be in a range between $167.0 million and $171.0 million, which includes revenues from its Broadband Media Processing product lines. About Conexant Systems Headquartered in Newport Beach, CA, Conexant Systems, Inc. -- http://www.conexant.com/-- is a leading provider of integrated circuits for the communications and broadband digital home markets. The company has operations in India, Taiwan, China, Japan, Korea, Bristol, and Germany. * * * Moody's Investor Service placed Conexant Systems Inc.'s long term corporate family and probability of default ratings at 'Caa1' in October 2006. The ratings still hold to date with a stable outlook. CONEXANT SYSTEMS: Terminates Daniel Artusi as President and CEO --------------------------------------------------------------- Conexant Systems, Inc. said that on April 21, 2008, it executed an agreement, which became effective on April 29, 2008, with Daniel A. Artusi, pursuant to which Mr. Artusi�s service as President and Chief Executive Officer of the company ceased effective as of April 14, 2008 and Mr. Artusi became a non- executive employee of the company, which position he held through April 25, 2008. Pursuant to the Artusi Agreement, the company elected to terminate Mr. Artusi�s employment as President and Chief Executive Officer with the company per section 8(b)(ii) of the original employment agreement between Mr. Artusi and the Company dated June 21, 2007. Mr. Artusi will receive certain compensation and benefits that Mr. Artusi is entitled to receive pursuant to the 2007 Agreement as a result of his termination "without cause" from the company. Pursuant to his employment agreement, Mr. Artusi will receive a lump sum separation payment in full and final settlement of matters relating to his employment with the company of US$2,716,438, which payment will be paid within 30 days of April 25, 2008. In addition, all of Mr. Artusi�s stock options and shares of non-performance based restricted stock will vest and all vested stock options may be exercised for two years from the date of termination, after which time all of his stock options will expire. In addition, Mr. Artusi is restricted from competing with the company or soliciting employees or customers of the Company, which provisions will apply to Mr. Artusi until April 25, 2009. About Conexant Headquartered in Newport Beach, California, Conexant Systems, Inc. (NASDAQ: CNXT) -� http://www.conexant.com/-- has a comprehensive portfolio of innovative semiconductor solutions includes products for Internet connectivity, digital imaging, and media processing applications. Conexant is a fabless semiconductor company that recorded revenues of US$809 million in fiscal year 2007. Outside the United States, the company has subsidiaries in Northern Ireland, China, Barbados, Korea, Mauritius, Hong Kong, France, Germany, the United Kingdom, Iceland, India, Israel, Japan, Netherlands, Singapore and Israel. * * * Conexant currently carries Standard & Poor's Ratings Services� B- rating with a negative outlook. CONEXANT SYSTEMS: D. Scott Mercer Named as New CEO -------------------------------------------------- In a regulatory filing, Conexant Systems, Inc. said that that board member D. Scott Mercer has been named chief executive officer. The company also said that Christian Scherp, senior vice president of Worldwide Sales, has been promoted to president, and that Sailesh Chittipeddi, senior vice president of Global Operations, has been promoted to executive vice president of Global Operations and chief technical officer. Mercer and Scherp replace Daniel Artusi, who had been president and chief executive officer. Artusi will be leaving the company to pursue outside opportunities. �We are fortunate that an executive of Scott�s caliber and experience has chosen to become Conexant�s next chief executive officer,� said Dwight W. Decker, non-executive chairman of Conexant�s board of directors. �Scott has been a Conexant director for the past five years, so he is intimately familiar with the issues facing our company. I am confident that he will provide the strategic leadership Conexant requires to attain the next level of performance.� Mercer, 57, will continue as a company director. �I want to thank Dwight and the Conexant board for giving me the opportunity to lead the company,� Mercer said. �Over the past three quarters, the Conexant team has done a good job of reducing costs and improving financial performance, and we must continue to drive progress in these areas. Our highest priority right now is to determine the best way to deliver increased value to customers and shareholders. I am looking forward to working with Christian, Sailesh, and the rest of the senior team in the coming weeks to evaluate our market and financial positions, and to establish a clear strategic direction for our company. �I would also like to thank Dan for his service, and wish him the best in his future endeavors,� Mercer said. Mercer serves on the boards of Palm, Inc., Polycom, Inc., SMART Modular Technologies, Inc., and Adaptec, Inc., where he is chairman. In 2005, Mercer was named interim chief executive officer at Adaptec. Before that, he spent a total of eight years at Western Digital Corporation in positions that included executive vice president, chief financial and administrative officer, and senior vice president and advisor to the CEO. He also spent a year at TeraLogic, Inc. as chief financial officer, five years at Dell, Inc. in a variety of financial-management positions, and seven years at LSI Logic Corporation, where he was promoted to chief financial officer. After graduating with a bachelor�s degree in Accounting from the California Polytechnic University at Pomona, Mercer spent seven years with Price Waterhouse in San Jose, Calif. In his new position as president, Scherp, 42, will report to Mercer and be responsible for the activities and results of Conexant�s three business units in addition to managing the company�s global sales force. Prior to joining Conexant in June 2005, Scherp spent eight years with Infineon Technologies North America. In his last position at Infineon, he served as vice president and general manager of the company�s Wireless/Wireline Communications Group. He was also vice president of marketing for the Wireline Communications Group, and vice president and general manager of the Communications Group�s wide area networking business. Before Infineon was spun-off from Siemens AG in 1997, Scherp spent six years in a variety of positions in engineering, marketing and business planning at Siemens. He holds a master�s degree in electrical and electronics engineering, and a master�s degree in business administration from the Technical University of Munich, Germany. Chittipeddi, 45, joined Conexant in June 2006 as senior vice president of Global Operations. In his new role, Chittipeddi will report to Mercer and be responsible for Global Operations, Quality, Worldwide Manufacturing Engineering, Design Platform Engineering, and Purchasing. Prior to joining Conexant, Chittipeddi held several senior operations-related positions with Agere Systems, Lucent Technologies, and AT&T Microelectronics. He also served as Lucent�s SEMATECH representative, and was a member of the Technical Staff with AT&T Bell Labs. Chittipeddi holds a master�s degree in business administration from the University of Texas at Austin, a master�s degree and a doctorate in physics from Ohio State University, and a master�s degree in physics from Northern Illinois University. He also holds 59 U.S. patents related to semiconductor process, package, and design, and has authored nearly 40 publications. About Conexant Headquartered in Newport Beach, California, Conexant Systems, Inc. (NASDAQ: CNXT) -� http://www.conexant.com/-- has a comprehensive portfolio of innovative semiconductor solutions includes products for Internet connectivity, digital imaging, and media processing applications. Conexant is a fabless semiconductor company that recorded revenues of US$809 million in fiscal year 2007. Outside the United States, the company has subsidiaries in Northern Ireland, China, Barbados, Korea, Mauritius, Hong Kong, France, Germany, the United Kingdom, Iceland, India, Israel, Japan, Netherlands, Singapore and Israel. * * * Conexant currently carries Standard & Poor's Ratings Services� B- rating with a negative outlook. CONEXANT SYSTEMS: Sells Broadband Media Product Line to NXP ----------------------------------------------------------- Conexant Systems, Inc. signed a definitive agreement to sell its Broadband Media Processing product lines to NXP Semiconductors in a transaction valued at up to US$145 million. Conexant�s Broadband Media Processing business provides solutions for satellite, cable, terrestrial, and IPTV set-top box applications. Under the terms of the agreement, Conexant will receive US$110 million in cash, and up to US$35 million in an �earn-out� fee, contingent upon the achievement of certain milestones over the next two years. The transaction is subject to customary closing conditions and regulatory approvals, and is expected to close within the next 60 days. �Over the years, the Conexant team has successfully developed complex solutions for a variety of set-top box applications,� said Scott Mercer, Conexant�s chief executive officer. �NXP has a long history in consumer electronics, and they possess the scale, skill-sets, and resources required to maintain and expand the positions we established. I am convinced that the combined team will attain an even higher level of success as they continue to deliver innovative, cost-effective set-top box solutions to customers worldwide. �Divesting our Broadband Media Processing product lines also represents a major step in our continuing effort to restructure our company�s business model and cost structure,� Mercer said. �As we get closer to completing the transaction, we plan to provide additional information on the financial performance we expect from our continuing company.� Approximately 700 Conexant employees at locations in the United States, Europe, Israel, Asia-Pacific, and Japan will transfer to NXP and join the company�s Home BusinessUnit when the transaction closes. At that time, Conexant�s ongoing businesses will consist of Imaging and PC Media, and Broadband Access. The total available market addressed by these product lines is greater than US$3 billion today and expected to grow over the next three years. About Conexant Headquartered in Newport Beach, California, Conexant Systems, Inc. (NASDAQ: CNXT) -� http://www.conexant.com/-- has a comprehensive portfolio of innovative semiconductor solutions includes products for Internet connectivity, digital imaging, and media processing applications. Conexant is a fabless semiconductor company that recorded revenues of US$809 million in fiscal year 2007. Outside the United States, the company has subsidiaries in Northern Ireland, China, Barbados, Korea, Mauritius, Hong Kong, France, Germany, the United Kingdom, Iceland, India, Israel, Japan, Netherlands, Singapore and Israel. * * * Conexant currently carries Standard & Poor's Ratings Services� B- rating with a negative outlook. DUERR AG: Earns EUR4.4 Million for First Quarter Ended March 31 --------------------------------------------------------------- The Duerr Group AG posted EUR4.5 million in net profit on EUR356.2 million in net revenues for the first quarter ended March 31, 2008, compared with EUR2.1 million in net losses on EUR304.1 billion in net revenues for the same period in 2007. "We have taken a first important step towards raising the EBIT margin to 5% in 2008 as announced," CEO Ralf Dieter said. "Duerr aims to increase sales revenues by up to 10%." Net financial debt was reduced to EUR57.2 million from EUR60.7 million. Orders on hand were up 20% to EUR1.2 billion. The Group�s gross margin rose by 0.4 percentage points to 17.0%. Besides higher capacity utilization, this also reflects the continuous improvement of internal processes. At 3.5%, the increase in administrative and selling expenses was held well below the growth in sales revenues. Positive Outlook Unchanged For 2008, Duerr expects incoming orders on a level with last year provided the general economic conditions and currency situation do not take a decisive turn for the worse. Sales revenues will probably increase by up to 10%. Duerr forecasts a further strong improvement in earnings, to which a higher gross margin and the earnings improvement targeted in final assembly conveyor systems are expected to contribute. As a result of the tax reform the effective tax rate should not be more than 30% (2007: 39%) which will additionally boost earnings. Duerr aims to hold cash flow at least at the 2007 level. The company therefore expects further improvements in net financial debt and liquidity. About Duerr Headquartered in Stuttgard, Germany, The Duerr Group -- http://www.durr.com/en/-- supplies products, systems, and services for automobile manufacturing. Duerr designs and builds paint shops and final assembly plants. The Duerr Group also operates in Czech Republic, France, U.K., Italy, Netherlands, Poland, Russia, Slovakia, Spain, Turkey, Australia, Brazil, China, India, Japan, Mexico, South Africa, South Korea and the U.S.A. * * * As reported in the TCR-Europe on March 3, 2008, Standard & Poor's Ratings Services revised its outlook to positive from stable on Duerr AG. S&P also affirmed its 'B' long-term corporate credit rating on the group. Duerr AG also carries B2 Corporate Family, B2 Probability of Default and Caa1 Senior Subordinate ratings from Moody's Investor Service. Moody's said the outlook is stable. GMAC LLC: JCR Cuts Senior Debts Rating to #B+ from #BB- -------------------------------------------------------- Japan Credit Rating Agency Ltd. has downgraded GMAC LLC foreign currency long term senior debts rating to #B+ (Negative) from #BB- (Negative). The rating remains under Credit Monitor (Negative). The downgrade reflects Residential Capital, LLC (ResCap), GMAC's mortgage operations' deteriorating earning prospects and difficult funding environment. GMAC's profitability and liquidity will remain under risk due to challenging operating environment surrounding ResCap, in JCR's view. If level of liquidity or equity capital of ResCap will be substantially weakened, GMAC's rating will be further downgraded. According to JCR, ResCap's operation is pressured by increasingly harsh mortgage market conditions. In the first quarter of 2008, ResCap reported a substantial net loss, resulting in USD589 million consolidated net loss of GMAC. In an increasingly challenging operating environment, JCR sees a growing possibility that ResCap should continue to record losses in coming quarters. In this case, ResCap could breach its financial covenant which requires it to maintain a minimum tangible net worth of USD5.4 billion. The total net worth of ResCap at the end of March 2008 was USD5.8 billion, compared with USD6.0 billion at the end of 2007. JCR also noted that in recent years, GMAC's auto finance and insurance have been performing relatively well. However, operating environment of auto finance business in North America is becoming weaker on the back of shrinking light-vehicle sales amid weakening economy, and increasingly challenging capital market situation. In addition, GMAC's profitability and liquidity will remain under risk due to challenging operating environment surrounding ResCap. Continuation of Credit Monitor (Negative) reflects possibility of additional downgrades going forward. If level of liquidity or equity capital of ResCap will be substantially weakened, GMAC's rating will be further downgraded, JCR said. About GMAC LLC GMAC LLC -- http://www.gmacfs.com/-- formerly General Motors Acceptance Corporation, is a global, diversified financial services company that operates in approximately 40 countries in automotive finance, real estate finance, insurance and other commercial businesses. GMAC was established in 1919 and employs approximately 26,700 people worldwide. Cerberus Capital Management LP bought 51% GMAC LLC stake from General Motors Corp. on December 2006. In Asia, the company has operations in Australia, China, India, New Zealand and Thailand. * * * As reported in the Troubled Company Reporter on April 25, 2008, Moody's Investors Service downgraded GMAC LLC's senior rating to B2 from B1; the rating remains on review for further possible downgrade. This action follows Moody's rating downgrade of ResCap LLC, GMAC's wholly-owned residential mortgage unit, to Caa1 from B2. SUN MICRO: Posts US$34 Million Net Loss in Fiscal 3rd Quarter ------------------------------------------------------------- Sun Microsystems, Inc. reported results for its fiscal third quarter, which ended March 30, 2008. Revenues for the third quarter of fiscal 2008 were US$3.266 billion, a decrease of 0.5% as compared with US$3.283 billion for the third quarter of fiscal 2007. Total gross margin as a percent of revenues was 44.9, an increase of 0.4 percentage points, as compared with the third quarter of fiscal 2007. Net loss for the third quarter of fiscal 2008 on a GAAP basis was US$34 million, or US$(0.04) per share, as compared with net income of US$67 million, or US$0.07 per share, for the third quarter of fiscal 2007. In the third quarter of fiscal 2008, the company recorded a US$52 million dollar tax provision, as compared to a tax benefit of US$3 million in the third quarter of fiscal 2007. Net loss for the third quarter included charges related to the acquisition of MySQL, which reduced earnings per share by approximately US$0.04. Cash generated from operations for the third quarter of fiscal 2008 was US$329 million, and the cash and marketable debt securities balance at the end of the quarter was US$3.801 billion. During the third quarter, Sun continued to leverage its cash position, spending US$300 million to repurchase 17.5 million shares of its common stock. There is currently US$500 million remaining of the US$3 billion share repurchase program announced in the company's fiscal fourth quarter of 2007. "The U.S. economy presented Sun with significant challenges in the third quarter, masking our progress in developing nations and economies across the world," said Jonathan Schwartz, CEO of Sun Microsystems. "With double digit year-over-year growth in India and Brazil, and triple digit year-over-year billings growth in our energy-efficient, SolarisTM-based Chip Multi- Threading (CMT) systems, Sun made considerable progress during the quarter. We continue to invest in the future created by open alternatives to proprietary technologies, best exemplified by the acquisition of MySQL. The world is moving to open source innovation, and Sun continues to lead that revolution." Third Quarter Highlights Sun reported year-over-year revenue growth in 12 out of its 16 sales geographies during the third quarter, with double-digit revenue growth in key international markets across EMEA, Asia Pacific and the International Americas. From a product perspective, SolarisTM-based Chip Multi-Threading systems billings more than doubled year-over-year, with the company's blade systems also delivering impressive billings growth fueled by Sun's comprehensive portfolio spanning AMD OpteronTM, Intel Xeon(R) and Sun UltraSPARC(R) offerings. Furthering its presence in the open source software marketplace, Sun announced the close of two significant acquisitions: MySQL, the world's most popular open source database provider, and innotek, whose VirtualBoxTM products provide free desktop virtualization. Sun signed a landmark collaboration agreement with The People's Republic of China Ministry of Education to cultivate integrated circuit engineering talent and industry development based upon Sun's OpenSPARCTM open source silicon platform. Sun was awarded significant contracts including funding from the Defense Advanced Research Projects Agency for a five and a half year research project focused on microchip interconnectivity via on-chip optical networks enabled by silicon photonics and proximity communication. About Sun Microsystems Headquartered in Santa Clara, California, Sun Microsystems Inc. (NASDAQ: JAVA) -- http://www.sun.com/-- provides network computing infrastructure solutions that include computer systems, data management, support services and client solutions and educational services. It sells networking solutions, including products and services, in most major markets worldwide through a combination of direct and indirect channels. Sun Microsystems has subsidiaries in, among other, the United Kingdom, Netherlands, Singapore, Taiwan, Mexico, Argentina, Chile, India and Bermuda. * * * Sun Microsystems Inc. carries Moody's "Ba1" probability of default and long-term corporate family ratings with a stable outlook. The ratings were placed on Sept. 22, 2006, and Sept. 22, 2005, respectively. Sun Microsystems also carries Standard & Poor's "BB+" long-term foreign and local issuer credit ratings, which were placed on March 5, 2004, with a stable outlook. UTSTARCOM INC: Two Execs Pay $175,000 in Settlement with SEC ------------------------------------------------------------ Two UTStarcom Inc. officials agreed to pay a collective civil penalty of $175,000 to settle claims with the Securities and Exchange Commission, Christopher Lawton of The Wall Street Journal reports. Hong Liang Lu, UTStarcom's chief executive, agreed to pay $100,000 while Michael Sophie, the company's former chief financial officer, agreed to pay $75,000, in penalties, WSJ notes. According to WSJ, citing SEC filings, the settled action was filed after finding that between 2000 and 2005, UTStarcom improperly reported more than $400 million in sales under applicable accounting principles related to revenue recognition. WSJ notes that SEC further discovered that the company failed to disclose transactions related to a third party, and did not correctly record compensation for employee stock options. Mr. Lu and Mr. Sophie, failed to initiate adequate measures after being notified of the flaw in the company's internal controls early as 2003, WSJ relates. WSJ says quoting Marc Fagel, co-acting regional director of the SEC's San Francisco regional office: "In our view when a company has three restatements in three years having been put on notice for some internal control problems, they need to take it seriously. Much of UTStarcom's troubles came from its operations in China and other parts of Asia and offered a warning to other Bay Area companies to what they are doing offshore." The company did not admit nor deny allegations of wrongdoing, and agreed to settle the charges by consenting to a permanent injunction against any future violations of the reporting, books-and-records and internal control provisions of the federal securities laws. No monetary penalties were assessed against the Company in conjunction with this settlement. The settlement with the SEC does not include the investigation of possible violations of the Foreign Corrupt Practices Act which is ongoing with the Department of Justice. "We are pleased to conclude this investigation with the SEC as we have spent significant time and energy to resolve these historical matters," Fran Barton, chief financial officer of UTStarcom, stated. "With these matters behind us we can now redirect our efforts towards realizing UTStarcom's technological advantages and growth opportunities." About UTStarcom Headquartered in Alameda, California, UTStarcom Inc. (Nasdaq: UTSI) -- http://www.utstar.com/-- provides IP-based, end-to-end networking solutions and international service and support. The company sells its broadband, wireless, and handset solutions to operators in both emerging and established telecommunications markets around the world. UTStarcom enables its customers to rapidly deploy revenue- generating access services using their existing infrastructure, while providing a migration path to cost-efficient, end-to-end IP networks. Founded in 1991, the company has research and design operations in the United States, China, Korea and India. Going Concern Doubt As reported in the Troubled Company Reporter on March 31, 2008, PricewaterhouseCoopers LLP said on Feb. 29, 2008, that UTStarcom Inc. suffered recurring net losses, negative cash flows from operations and has significant debt obligations due on March 1, 2008. These conditions raise substantial doubt about the company's ability to continue as a going concern. ================= I N D O N E S I A ================= ALCATEL-LUCENT SA: Posts EUR181 Million Loss for 1st Qtr 2008 ------------------------------------------------------------- Alcatel-Lucent S.A. posted EUR181 million in net losses on EUR3.86 billion in net revenues for the first quarter ended March 31, 2008, compared with EUR8 million in net losses on EUR3.88 billion in net revenues for the same period in 2007. The company posted EUR95 million in adjusted net losses for first quarter 2008, compared with EUR199 million in adjusted net profit for the same period in 2007. "Considering the impact of the Euro/USD adverse shift, our revenue performance was in line with our expectations, with a year-over-year growth of 6.3%and a sequential decline in the mid point of our typical seasonal pattern of �20% to �25%," Patricia Russo, CEO, said. " "We achieved significant progress in our adjusted gross margin, up 3.8 points quarter-over-quarter to 36.2%, in spite of significantly lower volumes," Ms. Russo continued. "This is attributable in part to one-time gains and a favorable mix, but also reflects an improved ability to retain the benefits of our product costs reduction programs. Additionally, we reduced our operating expenses by 12% year-over-year, excluding the one time capital gain." 2008 Forecast With approximately half of its revenue in US dollar or dollar- linked currencies, Alcatel-Lucent expects its full year 2008 revenue, expressed in current rate, to be down in the low to mid-single digit range. This is due primarily to the significant deterioration in the Euro/US$ exchange rate and, to a much lesser extent, the potential for lower capital spending by a few customers. Against this backdrop, Alcatel-Lucent will continue to execute against its three-year plan, with an aim to improve gross margin, reduce operating expenses and turn around underperforming businesses. * for full year 2008, the company believes it can achieve an adjusted gross margin in the mid thirties and confirms its target to achieve a low to mid single-digit adjusted operating margin in percentage of revenues; and * for the second quarter 2008, Alcatel-Lucent expects revenues to increase in the mid single-digit range sequentially. Balance Sheet and Pension Status The net debt position was EUR30 million as of March 31, 2008, compared with net cash position of EUR271 million as of Dec. 31, 2007. It should be noted that the amount of accounts receivable sold during the quarter was reduced by Euro 217 million sequentially. The funded status of pensions and other post retirement benefits (OPEB) amounted to EUR2.609 billion as of March 31, 2008, down from EUR2.806 billion as of Dec. 31, 2007. As of March 31, 2008, the global asset allocation of the group�s funds was 20% in equity securities, 60% in bonds and 20%in alternatives (i.e., real estate, private equity and hedge funds), unchanged from year-end 2007. About Alcatel-Lucent Headquartered in Paris, France, Alcatel-Lucent S.A. -- http://www.alcatel-lucent.com/-- provides solutions that enable service providers, enterprises and governments worldwide to deliver voice, data and video communication services to end users. Alcatel-Lucent maintains operations in 130 countries, including, Austria, Germany, Hungary, Italy, Netherlands, Ireland, Canada, United States, Costa Rica, Dominican Republic, El Salvador, Guatemala, Peru, Venezuela, Indonesia, Australia, Brunei and Cambodia. * * * As reported in the TCR-Europe on April 4, 2008, Moody's Investors Service affirmed the ratings for Alcatel-Lucent, which include a Ba3 corporate family rating for Alcatel-Lucent and a Not-Prime for its short term debt, as well as Ba3 ratings for senior and B2 ratings for subordinated debt that was issued originally by the predecessor companies Alcatel S.A. and Lucent Technologies, Inc. Moody's said the outlook for the ratings is Negative. Alcatel-Lucent's Long-Term Corporate Credit rating and Senior Unsecured Debt carry Standard & Poor's Ratings Services' BB rating. Its Short-Term Corporate Credit rating stands at B. ANEKA TAMBANG: 1Q Net Profit Decreases 37% to IDR675 Billion ------------------------------------------------------------ PT Aneka Tambang Tbk or Antam said its unaudited consolidated net profit decreased 37% to IDR675 billion, and Earnings per Share (EPS) of IDR70.81 for the first quarter of 2008, from the IDR1,073 billion and EPS of IDR112.52 of the same quarter of 2007. The decrease is mostly due to lower achieved selling prices of ferronickel and lower ferronickel sales volumes, with no increase of nickel ore sales volumes or prices, in combination with a 20% increase to Antam's cost of sales due to higher fuel and ore feed prices. The decrease occurred despite slighter higher ferronickel production volume, signaling a good performance from FeNi III, increased gold and silver sales volumes and higher gold and silver achieved selling prices. As such Antam's net margin contracted to 32% from 45%. Antam's President Director, Mr. Dedi Aditya Sumanagara said: "While our net income has decreased in the first quarter of 2008, this was not unexpected. We are pleased FeNi III appears to have stabilized and ferronickel production increased slightly. As well, we were able to maintain our nickel ore prices despite softening spot prices for nickel throughout the quarter. Our gold division performed well in terms of revenue growth and prices of gold increased significantly. We are still optimistic we will achieve our volume targets for this year. We are also now focused on our next significant growth investment." * Net Sales Antam's consolidated first quarter sales revenues dropped 12% to IDR2,092 billion from IDR2,386 billion, due to lower ferronickel sales volume as well as lower nickel prices. Nickel, including exports of ferronickel and nickel ore, remains Antam's biggest sales revenue component, accounting for 72% followed by gold segment which accounted for 27%. The contribution of gold segment increased from a 7% share of sales revenue in the first quarter of 2007, due to stronger sales from trading activities conducted by Antam's Logam Mulia unit. However, while these trading activities boosted revenues, the small operating margins did not generate a similar boost to operating income. Antam remains an export oriented mining and metals company. In the first quarter of 2008, exports contributed 92% of Antam's total net sales. All of Antam's nickel products are sold abroad while exports accounted for 73% of the sales from Antam gold segment. * Ferronickel In the first quarter of 2008, sales volumes dropped 62% from 3,345 tonnes to 1,267 tonnes of contained nickel in ferronickel and generated IDR325 billion, a 69% decline from the IDR1,063 billion generated in the first quarter of 2007. The decrease of sales volumes in the first quarter of 2008 was due to ferronickel shipments still in transit to Europe and so were still accounted for as inventories. Total shipments of nickel contained in ferronickel during the March quarter amounted to 5,975 tonnes. However, of that amount 4,708 tonnes departed at the end of March and is expected to arrive in April. Antam matches its ferronickel shipments with each customer's request. During the March quarter, Antam delivered 1,159 tonnes to a customer in Korea and 108 tonnes to a customer in Japan. Lower sales volumes coupled with a 20% lower average achieved selling price of US$12.69 per pound resulted in a 69% decrease of revenues to IDR325 billion. Although only reaching 7% of the target, Antam remains hopeful to meet its 2008 ferronickel sales target of 17,000 tonnes. Not related to lower sales volumes during the March quarter, ferronickel production was relatively similar to the first quarter of 2007, as Antam produced 4,362 tonnes of contained nickel in ferronickel compared to 4,352 tonnes. With this result, Antam reached 26% of the 2008 17,000 tonnes target. The operation of FeNi III and FeNi II smelters was stable, while production from the FeNi I smelter was reduced due to a routine maintenance overhaul. FeNi I, FeNi II and FeNi III produced 752 tonnes, 1,758 tonnes and 1,851 tonnes, respectively. This compares to the same quarter of 2007 when FeNi I, FeNi II and FeNi III produced 1,089 tonnes, 1,565 tonnes and 1,697 tonnes respectively. The production of FeNi II was above capacity due to higher ore grades and the maximization of the concentrates from the slag treatment plant at the kiln. To produce 4,362 tonnes Antam used 18,094 wmt from its own mines at Pomalaa and Halmahera Island and 276,463 wmt from PT Inco's East Pomalaa deposit. Antam has an agreement to source +/- 1 million wmt of ore feed from PT Inco. Antam currently is in talks with PT Inco to extend the agreement. As part of the routine maintenance of its ferronickel smelters, Antam switched off the FeNi I smelter on February 19th. Antam usually overhauls its smelters every 8-10 years. Antam expects the overhaul to be complete in the middle of the second quarter of 2008. Despite the overhaul of FeNi I smelter, Antam expects to achieve its 2008 ferronickel production target of 17,000 tonnes. Antam last completed a routine overhaul of FeNi I smelter at the beginning of 1999. In 2005, Antam completed an overhaul of FeNi II smelter, which included the installation of a new copper cooling system. However, the overhaul of FeNi I will not include the installation of a similar system. After having recently been repaired following a leak that occurred in July of 2007, the operation of FeNi III was stable and Antam successfully increased the load of the smelter above 25 megawatts at the end of February. Despite the current load of 30-32 MW, Antam could need to lower the power load of the FeNi III smelter to maintain the stability of the plant. FeNi III has a greater capacity than FeNi II, yet only just outpaced FeNi II due to the low power load and due to the above average output from FeNi II. * Nickel Ore Beginning in 2008, with regards to the marketing of its ore products, and not the estimation of reserves and resources, Antam began to implement a new classification of its nickel ore. Previously, nickel ore known as low grade saprolite ore (LGSO), with a nickel grade between 1.5% and 2%, was included in the classification of saprolite. It is now included in the classification of low grade ore, which also includes limonite ore with grades below 1.5%. Ore grading above 2% is simply classified as high grade ore. The new classification has changed Antam's annual export targets for 2008. Rather than 5.8 million wmt of saprolite, Antam is now targeting 3.2 million wmt of high grade ore and 2.6 million wmt of low grade ore, or more specifically 2.4 million wmt of LGSO and 0.2 million wmt of limonite. Antam's production target for high grade of 3.65 million wmt is the same as the export target plus and additional 450,000 wmt for ore feed. Antam's production target for low grade is the same as the sales target. As the reclassification of Antam's ore was only applied to Antam's 2008 ore output, the only figures that represent an accurate reflection of the company's performance are the production and sales volumes, price and revenues of total combined high grade and low grade nickel ore. In the first quarter of 2008, Antam's total ore production volume increased 33% to 2,313,299 wmt, while Antam's total ore sales volume held steady at 2,005,706 wmt. The combined average achieved selling price of all of Antam's nickel ore, which is sold free on board (FOB) amounted to US$63.26 per wmt, slightly higher than the US$62.76 per wmt of the same period last year. Combined nickel ore revenue increased 6% to IDR1,173 billion from IDR1,102 billion. Antam's nickel ore is sold to Japan, Eastern Europe and China, with the high grade generally going to Japan and Eastern Europe and low grade to China. During the first quarter of 2008, 73% of Antam's high grade was sold to Japan with the rest sold to Europe. Antam's ore prices are determined according to the spot price on the London Metal Exchange, as well as the grade, moisture content and specified recovery rate. Due largely to the ore reclassification for 2008 (2007 was not reclassified), whereas Antam had no production of low grade in the first quarter of 2007, production of low grade ore amounted to 1,354,770 wmt, including 1,211,895 wmt of LGSO and 142,875 wmt of limonite. For the same reason, production of high grade nickel ore decreased 45% to 958,529 wmt during the first quarter. Antam thus achieved 52% of the low grade production target for 2008 (50% of the LGSO target and 71% of the limonite target) and 26% of the high grade production target. Combined high grade nickel ore sales amounted to 975,693 wmt, a 51% decrease compared to the first quarter of 2007, due to the reclassification of ore in 2008. For the same reason, consolidated high grade sales revenue decreased 40% to IDR720 billion. Meanwhile, whereas there were no sales in 2007, low grade nickel ore sales of 1,030,013 wmt, including 926,476 wmt of LGSO and 103,537 wmt of limontite, brought in sales revenues of IDR453 billion. Antam achieved 29% of its high grade sales volume target and 40% of its low grade target (39% of the LGSO target and 52% of the limonite target). * Gold and Silver Antam's gold production increased 21% to 935 kg, or 31% of the 2008 target of 2,980 kg. The stronger production was due to higher gold ore production as well as higher gold grades. Gold ore production increased to 105,952 wmt from 99,428 wmt in the first quarter of 2007 while the average gold grade was 10.80 grams per ton (gpt) during the first quarter of 2008 or 15% higher than the 9.38 gpt achieved during the first quarter of 2007. Gold sales increased by 112% in the first quarter of 2008 to 1,580 kg, or 26% of the 2008 target of 6,000 kg, as Logam Mulia continued its extensive gold trading that began at the beginning of last year. Antam's trading activities mostly consist of buying scrap gold and reprocessing it into pure gold bars for sale. Exports accounted for 75% of gold sales in the March quarter. Logam Mulia's .9999 fine gold products are internationally accredited. Strong sales volumes coupled with a 38% increase in the average achieved selling price of gold of US$901.57 per troy ounce, increased gold revenues by 269% to IDR528 billion compared to IDR143 billion in the first quarter of 2007. However, Antam's materials costs also increased significantly related to the higher cost of using gold scrap to produce gold bars. In the first quarter of 2008, Logam Mulia bought 1,109kg of gold compared to 56kg of gold in the same quarter of 2007. Antam made smaller margins on its trading activities than selling gold refined from bullion produced by the Pongkor gold mine. Sales of silver increased 40% to 7,289 kg supported by the 23% increase in silver production to 7,633 kg. Inline with higher silver sales volume as well as a 33% increase in the average achieved selling price of silver to US$17.81 per troy ounce, revenue from silver amounted to IDR30 billion, a 49% increase compared to the first quarter of 2007. Exports accounted for 69% of total silver sales. Domestic silver sales increased 46% to IDR12 billion while exports increased 124% to IDR26 billion. Revenue from the precious metals refinery services decreased 15% to IDR6 billion. Antam's gold segment, including gold, silver and refinery services, generated IDR575 billion, an increase of 243% from the IDR167 billion in the first quarter of 2007. * Bauxite Despite a 24% higher average achieved bauxite price of US$20.41 per wmt, revenue from bauxite fell 70% to IDR14 billion. This was due to lower demand for Antam's low quality high silica bauxite ore still remaining at the nearly depleted Kijang bauxite mine. As such, bauxite sales volume decreased 76% to 73,866 wmt, or 5% of the 1.5 million wmt 2008 target. In line with lower demand, Antam's bauxite production decreased 59% to 181,141 wmt or 12% of of the 2008 production target of 1.5 million wmt. * Cost of Sales and Production Costs Despite a decrease in Antam's revenue, Antam's cost of sales increased 20% to IDR1,061 billion mainly due to significant increases in materials costs, ore mining fees, fuel, depreciation and labour costs. These top five largest components of Antam's cost of sales represented 86% of Antam's total production costs. * Materials Used Materials costs, the largest component of Antam's cost of production, increased 185% to IDR570 billion representing 36% of Antam's total cost of production. The main cause of the increase was a substantial increase in materials costs for Antam's Logam Mulia precious metal refining business which increased 2,479% to IDR307 billion and accounted for 54% of Antam's overall material costs. This is due to Logam Mulia's increased gold and silver trading activities. In view of the strong demand for refined precious metals, Logam Mulia has been active in purchasing gold and silver scraps from retailers and jewelers and then remelting and refining them to produce refined gold bars. Logam Mulia purchased 1,109 kg of gold in the first quarter of 2008, up 1,880% from the 56 kg purchased in the first quater of 2007. Gold and silver inventories also increased 150% to IDR238 billion. Another substantial component of Antam's materials costs was the purchase of nickel ore feedstock for ferronickel production, which increased 45% to IDR200 billion, representing 35% of Antam's overall material costs. Ore was more expensive as Antam purchased higher grades than in the first quarter of 2007. In the first quarter of 2008, Antam used 294,557 wmt of high grade ore to produce 4,362 tonnes of nickel in ferronickel, resulting in a lower than normal ratio of 67.5 tonnes of ore for each tonne of contained nickel. About 94% of Antam's nickel feedstock was sourced from PT Inco's East Pomalaa deposit. By buying ore from PT Inco, Antam preserves its own high grade ore reserves for later development, lowers the cost of ore mining fees and frees up ore extraction capacity in order to increase production of lower quality ore, which Antam does not use for its own ferronickel production, for export to China. In the first quarter of 2008, Antam did not undertake toll smelting activities for its ferronickel production. Other important materials are consumables such as coal and anthracite which are used as reductors in the furnace. Although coal consumption decreased 5% to 25,694 tonnes its price increased 59% to IDR830,000 per tonne which resulted in 20% increase in total coal cost to IDR17 billion. Anthracite consumption increased 31% to 3,191 tonnes while its price remained flat at IDR1.26 million per tonne, which resulted in 31% increase in total cost to IDR4 billion. * Ore Mining Fees Antam outsources most of its mining activities to third party mining contractors inline with Antam's plan to move downstream, as well as to lower overhead costs, labour costs and pension obligations. While both largely performed by mining contractors, Antam classifies the cost of mining of ore for exports as ore mining fees while the cost of mining the ore for feedstock as materials used. Ore mining fees increased 84% to IDR349 billion in the first quarter of 2008 mainly due to a 33% increase of nickel ore production and 6% increase of nickel ore sales volumes as well as higher operating cost, such as fuel, which are passed on to Antam by the mining contractors. Ore mining fees was the second largest component, or 22%, of Antam's production cost. Nickel ore mining fees, which amounted to IDR338 billion, was the largest component of Antam's ore mining fees and accounted for about 97% of the total. Bauxite mining fees stood at IDR10 billion or 3% of Antam's mining fees while gold mining fees amounted to IDR1 billion or 0.3% of overall ore mining fees. * Fuel Fuel costs, the third largest component, representing 13% of Antam's cost of production, increased 60% to IDR208 billion. This is mainly due to higher international oil prices. The marine fuel oil (MFO) price increased by 77% to IDR4,708 per litre while industrial diesel oil (IDO) price increased by 40% to IDR6,625 per litre. About 98% of Antam's fuel cost is attributed to Antam's energy intensive ferronickel facilities at Pomalaa. In first quarter of 2008, Antam used around 37.4 million litres of fuels, of which 91% was the less expensive MFO and 9% was the more expensive IDO. However, although cheaper compared to IDO, MFO is still too expensive and Antam's ferronickel cash cost is still above the industry average. Antam plans to lower its fuel cost further by converting to less expensive fuels such as natural gas, hydropower or coal. * Depreciation Depreciation was the fourth largest component, representing 8% of total production costs. Depreciation increased 37% to IDR128 billion mainly due to the depreciation of FeNi III, which began commerical operations in early 2007. About 80% of Antam's depreciation is attributed to depreciation at Antam's ferronickel facilities in Pomalaa. Depreciation at Antam'gold facilities in Pongkor contributed 19.5% of total depreciation cost. * Labour Cost Labour cost, which include salaries, wages, bonus and employee benefits, was the fifth largest component of production costs and increased 18% to IDR122 billion representing 8% of total production costs. Among the largest components of labour costs were the IDR24 billion for bonuses, IDR15 billion for pension health, IDR12 billion for business unit (remote-site) allowances. Antam's Pomalaa nickel business unit accounted for 63% or the largest portion of the total labour cost. Pongkor and Kijang accounted for 22% and 8% respectively. * Transportation Cost While not included as the five largest production costs, transportation cost, which includes costs associated with the shipment of ore, machinery mobilisation, and loading and unloading logistics, is an important component of production costs. Despite higher fuel prices in the first quarter of 2008 and a slight increase in ore export volumes, transportation costs decreased 38% to IDR21 billion. The decrease is mainly due to lower loading logistics activities. In the first quarter of 2007 ore loading amounted to IDR18 billion and accounted for 53% of transportation cost. Meanwhile in the first quarter of 2008 ore loading amounted to only IDR6 billion and accounted for only 28% of transportation cost. * Gross Profit Antam's gross profit decreased 31% to IDR1,031 billion due to lower revenues and higher cost of sales. As a result, Antam's gross profit margin decreased 22% to 49% in the first quarter of 2008 from 63% in the first quarter of 2007. * Operating Expenses and Operating Profit Antam's operating expense increased 23% to IDR94 billion mainly due to a 39% increase in general and administrative expenses to IDR74 billion. The largest component of general and administrative expenses was salaries and other employee benefits, which increased by 52% to IDR36 billion and accounted for about 49% of the total general and administrative expenses. Other expenses, the second largest component of general and administrative expenses, increased 63% to IDR16 billion in the first quarter of 2008. Exploration expenses and the Tokyo office's selling and marketing activities, the other important components of general and administrative expenses, decreased 10% to IDR19 billion and 44% to IDR1.6 billion respectively. Antam's operating profit decreased by 34% to IDR937 billion, which resulted in a decrease of operating margin to 45% in the first quarter of 2008 from 60% in 2007. * Other Income and Net Income In the first quarter of 2008 Antam booked other income of IDR10 billion, a 91% decrease from IDR108 billion in the first quarter of 2007. This was mainly due to the foreign exchange losses of IDR108 billion in the first quarter of 2008 due to the weakening of the US dollar as opposed to IDR17 billion of foreign exchange gain in the first quarter of 2007. Antam also booked less one- off types of income, totalling IDR84 billion compared to IDR98 billion in the first quarter of 2007. The 249% increase of interest income to IDR49 billion, due to higher interest rates, and in particular for Antam's IDR3,646 billion of US dollar time deposits and the 34% decrease of interest expense to IDR15 billion due to lower investment loans, could not offset the decrease in other income. Antam's profit before income tax decreased 38% to IDR947 billion and after the deduction of 30% corporate income tax, Antam's net income decreased 37% to IDR675 billion. As a result, Antam's net margin decreased 29% to 32% in the first quarter of 2008 from 45% in the first quarter of 2007. * Cash Cost and Cost Reduction Program Similar to other mining and metal companies, Antam experienced increases in the cash costs of its products due to among other things higher materials, labour and fuel costs. the provisional ferronickel cash cost increased 37% to US$6.17 per pound mainly due to higher fuel and ore feed prices while the provisional gold cash cost increased 6% to US$283.09 per troy ounce largely due to higher fuel prices. Antam has taken various measures to lower its costs such as using less expensive but higher quality parts, machinery and equipment and continuously conducting employee training and workforce size reduction to improve efficiency and productivity. Antam has also entered into a Power Purchase Agreement with a hydropower producer for the supply of 15 megawatts of electricity (about 15% of its energy requirements) at a competitive price of US$0.0565 per kilowatt hour that will commence in 2009. The next major and most important costs reduction exercise, however, will come when Antam converts its main energy source from the more expensive diesel fuel to cheaper alternative sources of energy such as coal, hydropower or gas. Currently, coal is considered as the 'front runner' and the most feasible source of cheaper energy for Antam's ferronickel smelters. A study on a process called Smart Predictive Line Controller, which would make the use of coal suitable for the high energy needs of Antam's ferronickel, is currently underway. Balance Sheet Antam's financial structure improved as Antam's cash and cash equivalents more than doubled while total debt and post- retirement obligations decreased, although accounts payable increased slightly. Lower debt in combination with a significant increase of total stockholders' equity reduced Antam's long term debt to equity (end of period) to 7%. Antam's balance sheet is ready to leverage and make growth investments. * Total Assets Antam's total assets increased IDR3,826 billion, or 47%, to IDR12,004 billion. The main reason for the increase is the 124% increase of cash and cash equivalents. Total assets also increased due to an 870% increase of investments in shares of stock and despite a 10% decrease of property, plant and equipment. * Current Assets Antam's current assets increased 80% to IDR7,593 billion due to increased cash. Cash and cash equivalents increased to IDR4,568 billion due to increased production and higher prices in 2007. Compared to the end of 2007 Antam's cash position decreased 4%, due to a large income tax payment, long term investments and the effect of foreign exchange rate fluctuations. Antam's cash was 80% held in US dollar time deposits and 18% held in US dollar bank accounts, in fourteen domestic and international banks. The range of annual interest rates on Rupiah time deposits increased to 7.25% - 9.25%, while for US dollar time deposits the range increased to 4.00% - 5.50%. Antam's third party trade receivables net of the IDR1.3 billion allowance for doubtful accounts held steady at IDR831 billion. Of these, 36% were current and 37% were 31 - 90 days overdue. The largest four receivables made up 69% of the account and were owed by Antam's agent for ferronickel sales in Europe, Avarus AG, followed by Raznoimport Nickel (UK) Ltd, Zhejiang Grand IMP and Mitsui & Co. Ltd. Antam's net inventories increased 76% to IDR1,845 billion, mostly due to the IDR700 billion of ferronickel shipments in transit to customers. Antam did not have inventories in transit at the end of the first quarter of 2007. Inventories also increased due to the 153% increase of gold and silver inventories to IDR238 billion, associated with the gold trading activities conducted by Logam Mulia, Antam's precious metals refinery. Nickel ore inventories increased 111