/raid1/www/Hosts/bankrupt/TCREUR

/raid1/www/Hosts/bankrupt/TCREUR_Public/061122.mbx T R O U B L E D C O M P A N Y R E P O R T E R E U R O P E Wednesday, November 22, 2006, Vol. 7, No. 232 Headlines A U S T R I A ALEKSANDAR KUKIC: Creditors' Meeting Slated for November 27 ERDEXPRESS ERDBEWEGUNG: Creditors' Meeting Slated for Dec. 5 FRACHTEXPRESS TRANSPORT: Creditors' Meeting Slated for Dec. 5 KNAPP LLC: Wels Court Orders Business Shutdown KUECHEN UND BAD: Klagenfurt Court Orders Business Shutdown LIDI LLC: Creditors' Meeting Slated for November 27 STIEFSOHN LLC: St. Poelten Court Shuts Down Business TAXITECH IMPORT: Creditors to Recover 2.6% of Claims WAKOLBINGER & PEINBAUER: Linz Court Orders Business Closure B E L G I U M ARMSTRONG WORLD: 2006 Third Quarter Earnings Down to US$39.2 Mln ARMSTRONG WORLD: 7 Directors Own 8,183 Phantom Stock Units Each GOODYEAR TIRE: S&P Rates US$1 Billion Debentures at 'B-' VOLKSWAGEN AG: Shifting Golf Production From Belgium to Germany F R A N C E LEAR CORP: S&P Assigns B- Ratings on US$300-Mln Senior Notes LUCENT TECH: Reserves US$284 Mln for Winstar Contract Dispute G E R M A N Y ANDREAS PUFAHL: Claims Registration Ends December 1 ATLAS HAUSTECHNIK: Claims Registration Ends December 1 BODEN GESELLSCHAFT: Claims Registration Ends November 29 BROECKER MOEBEL: Claims Registration Ends December 1 DEKO WERBUNG: Creditors' Meeting Slated for November 30 JENOPTIK AG: Fitch Changes Outlook to Positive & Keeps B Ratings LUEFTUNG-KLIMA: Claims Registration Ends December 1 NEQ GMBH: Claims Registration Ends November 30 NIGHTHAWKS PICTURES: Creditors' Meeting Slated for November 30 PABST ELEKTROTECHNIK: Creditors' Meeting Slated for November 30 PORTRAIT CORP: Court Gives Final OK to Berenson's Employment PORTRAIT: Panel Taps Halperin Battaglia as Conflicts Counsel REIMERS IMMOBILIEN: Claims Registration Ends November 30 SEMPER FINANCE: S&P Puts Low-B Ratings to EUR40.1-Million Notes VISTEON CORP: GKN Eyes European & South American Assets VOLKSWAGEN AG: Shifting Golf Production From Belgium to Germany VOLKSWAGEN AG: MAN & Scania's Takeover Battle Continues I R E L A N D ELAN CORP: Increases Senior Notes Offer to US$615 Million I T A L Y LEAR CORP: S&P Assigns B- Ratings on US$300-Mln Senior Notes * Fitch Downgrades Ratings of Italian City of Taranto to CC K A Z A K H S T A N KARATAU LLP: Creditors Must File Claims by Dec. 27 KOMUNSNAB-SERVICE LLP: Court Begins Bankruptcy Proceedings KURLYS AGRO: South Kazakhstan Court Starts Bankruptcy Procedure MONSTA-DETERGENTS LLP: Court Opens Bankruptcy Proceedings NAIZ LLP: Creditors' Claims Due Jan. 2, 2007 ORBITA TELEKOM: Creditors' Claims Due Dec. 27 REMMONTAJSERVICE LLP: Court Commences Bankruptcy Proceedings SAGYM LLP: Claims Filing Period Ends Jan. 2, 2007 SHARUA MK: South Kazakhstan Court Opens Bankruptcy Proceedings TECHSERVICE-L LLP: Proof of Claim Deadline Slated for Dec. 27 K Y R G Y Z S T A N AVTOSERVICE-DALALAT OJSC: Creditors' Claims Due Jan. 5, 2007 MILTON TRADE: Proof of Claim Deadline Slated for Jan. 3, 2007 N E T H E R L A N D S CORUS GROUP: Brazil's Companhia Siderurgica Starts Takeover Bid CORUS GROUP: Proposed Takeover Cues S&P's Developing Watch CORUS GROUP: Tata Steel May Raise Offer to Top CSN's Bid LUCENT TECH: Reserves US$284 Mln for Winstar Contract Dispute LUCENT TECHNOLOGIES: Unveils Several New CDMA2000 Products PHELPS DODGE: Inks US$25.9-Bln Merger Pact with Freeport-McMoRan ROMPETROL GROUP: Fitch Keeps Issuer Default Rating at B- P O L A N D VISTEON CORP: GKN Eyes European & South American Assets P O R T U G A L INTERTAPE POLYMER: S&P Junks Rating on Weak 3rd Qtr. Performance R O M A N I A BANCPOST: Fitch Keeps Individual Rating at D ROMPETROL GROUP: Fitch Keeps Issuer Default Rating at B- UNICREDIT ROMANIA: Fitch Affirms Individual Rating at D R U S S I A AGRO-SNAB OJSC: Ivanovo Bankruptcy Hearing Slated for Feb. 26 AKHIM CJSC: Moscow Court Names I. Gorn as Insolvency Manager ALCEM OJSC: Asset Sale Slated for December 4 ALUMINA CJSC: Court Names A. Pshenkov as Insolvency Manager ARCHITECTURE. BUILDING: Court Names A. Shadrin to Manage Assets BARMA AND POSTNIK: Court Names L. Ponomareva to Manage Assets BARNAULSKIY FACTORY: Court Starts Reorganization Process BUILDER LLC: Court Names I. Madzhuga as Insolvency Manager CENTERTELECOM OAO: One of Russia's Transparent Firm, S&P Says CENTERTELECOM OAO: Fulfills Obligation on Bond Offer CHAISSKIY MACADAM: Court Names L. Bychkova as Insolvency Manager CHERNUSHINSKIY LLC: Court Names B. Novikov as Insolvency Manager COMPUTER SYSTEMS: Court Names V. Babanov as Insolvency Manager DENISOVO LLC: Tyumen Bankruptcy Hearing Slated for Jan. 18 GELENZHIKSKIY CJSC: Court Names V. Zotyev as Insolvency Manager GOLDEN FLEECE: Court Names O. Filippova as Insolvency Manager IMPULSE CJSC: Court Names M. Makhnev as Insolvency Manager LUKOIL OAO: Allocates US$100 Billion to Hike Output Until 2017 LUKOIL OAO: Eyes 20% Stake in Total's Kharyaga Oil Field MEAT PRODUCT: Court Names L. Nechaeva as Insolvency Manager MILK CJSC: Murmansk Court Names P. Tarasov as Insolvency Manager PEREVOLOTSKIY BUTTER: Court Names A. Pakhomov to Manage Assets PORCELAIN OF RUSSIA: Court Names A. Pshenkov to Manage Assets PROGRESS OJSC: Rostov Bankruptcy Hearing Slated for Mar. 19 PROMSVYAZBANK JSCB: Gets US$12-Mln Loan from Nova Ljubljanska ROSNEFT OIL: Earns RUR76.4 Billion Profit for Nine Months 2006 ROSTO CJSC: Rostov Bankruptcy Hearing Slated for Feb. 20 RUSSIAN STYLE: Moscow Court Names I. Gorn as Insolvency Manager SEVERNYJ OJSC: Bankruptcy Hearing Slated for February 20 SISTEMA CAPITAL: S&P Upgrades Long-Term Debt Rating to B+ SISTEMA FINANCE: S&P Raises Long-Term Debt Rating to B+ from B SISTEMA JSFC: S&P Lifts Sistema Capital's Debt Rating to B+ SYZRANSKAYA FURNITURE: Court Names Y. Levin to Manage Assets USOLYE-OIL-SERVICE: Bankruptcy Hearing Slated for Feb. 21 VADSKIY OJSC: Court Names A. Tigulev as Insolvency Manager VERESHAGINSKIY MEAT: Court Starts Bankruptcy Supervision ZAKHAROV CJSC: Court Names Zh. Tachkova as Insolvency Manager S L O V E N I A ABANKA VIPA: Fitch Rates Upcoming Hybrid Issue at BB+ S P A I N CM BANCAJA 1: Fitch Junks EUR16.2-Million Class E Notes S W E D E N ARMSTRONG WORLD: 2006 Third Quarter Earnings Down to US$39.2 Mln ARMSTRONG WORLD: 7 Directors Own 8,183 Phantom Stock Units Each S W I T Z E R L A N D AKKOMA LLC: Aargau Court Begins Bankruptcy Proceedings AR-BAU LLC: Liestal Court Begins Bankruptcy Proceedings ARC LLC: Insufficient Assets Prompt Court to Suspend Bankruptcy BAKO HANDELS: Aargau Court Closes Bankruptcy Proceedings BODECOR LLC: Aargau Court Opens Bankruptcy Proceedings BOMBARDIER INC: Prices New EUR1.9 Billion Senior Notes Issue IPT INFORMATICS: Aargau Court Closes Bankruptcy Process JASARI KUNSTSTOFFE: Liestal Court Begins Bankruptcy Proceedings TPI CONSULTING: Liestal Court Closes Bankruptcy Proceedings T U R K E Y TURKIYE SINAI: Fitch Lifts Int'l. Local Currency IDR at BB U K R A I N E AGAT LLC: Zhitomir Court Starts Bankruptcy Supervision AGROZAGOTPOSTACH LLC: Harkiv Court Starts Bankruptcy Supervision ALFA-PIK LLC: Zaporizhya Court Starts Bankruptcy Supervision BMU HARKIVGAZBUD-1: Harkiv Court Names Yurij Artuh as Liquidator DNIPRO LLC: Dnipropetrovsk Court Starts Bankruptcy Supervision KOMETA PLUS: Zhitomir Court Starts Bankruptcy Supervision MAKS LLC: AR Krym Court Commences Bankruptcy Supervision MRIYA LLC: Dnipropetrovsk Court Starts Bankruptcy Supervision PERESICHANSKIJ OIL: Court Names Shvets Ruslan as Liquidator PMK-41 CJSC: AR Krym Court Names K. Kubalov to Liquidate Assets UKREXIMBANK: Fitch Assigns Final B Rating on US$30-Mln Sub Debt ZDOLBUNIV' BREAD: Court Names Vasil Ribak as Insolvency Manager U N I T E D K I N G D O M ABBAGREEN LIMITED: Claims Filing Period Ends Dec. 12 ARRAN FUNDING: S&P Assigns Low-B Ratings on GBP57.9-Mln Notes BRITISH AIRWAYS: Gives Workers Option to Retire at 60 BRITISH AIRWAYS: American Airlines Sell Iberia Stake for EUR19MM CORUS GROUP: Brazil's Companhia Siderurgica Starts Takeover Bid CORUS GROUP: Proposed Takeover Cues S&P's Developing Watch CORUS GROUP: Tata Steel May Raise Offer to Top CSN's Bid EMI GROUP: Posts GBP30.1 Million Net Loss for First Half 2006 ENRON CORP: Wants US$300,000 Electroimpact Settlement Approved ESSCOM LIMITED: Appoints Richard Jeffrey Rones as Administrator EVERGREEN INT'L: Moody's Assigns Loss-Given-Default Ratings FORD MOTOR: Accelerates Growth Plan in China FORD MOTOR: SEC Wants More Disclosure on Restated Financials HOPPITS LIMITED: Brings In Liquidators from Recovery hjs I H TOWILL: Nominates Ray Purnell as Liquidator IMPACT GLAZING: Creditors' Claims Due Feb. 7, 2007 JAY & DEE: Liquidator Sets Dec. 8 Claims Bar Date KINGSWOOD FITTED: Creditors Confirm Voluntary Liquidation L.B.K. PERSONNEL: Creditors Confirm Liquidators' Appointment LANSDOWNE DISTRIBUTION: Names Steven Law as Administrator LIBRA UPHOLSTERY: Claims Registration Ends Jan. 31, 2007 M & E SERVICES: Appoints Liquidator from Wilkins Kennedy MERIDIAN OFFICE: Taps Liquidators from Rothman Pantall & Co. NAIL BAR: Taps Joint Administrators from Kingston Smith NASDAQ STOCK: London Stock Exchange Rejects EUR2.7 Billion Bid NEW CITY: Names Richard Ian Williamson Liquidator NEW YORK NAIL: Hires Kingston Smith to Administer Assets ODDS BODKINS: Brings In Liquidator from Taylor Rowlands PHELPS DODGE: Inks US$25.9-Bln Merger Pact with Freeport-McMoRan PORTRAIT CORP: Court Gives Final OK to Berenson's Employment PORTRAIT: Panel Taps Halperin Battaglia as Conflicts Counsel RADNOR HOLDINGS: Files Schedules of Assets and Liabilities REBOOT SECURITY: Hires Liquidators from Vantis Business Recovery REFCO INC: Wants to Sell FXA's Customer Lists to Saxo Bank REGISTER TAPE: Appoints I. D. Holland to Liquidate Assets S.D.F. FABRICATIONS: Brings In Vantis as Joint Administrators SANDERSON FOOTWEAR: Taps Gerald Irwin to Administer Assets SCENE LEISURE: Names Liquidators from Vantis Business Recovery SEA CONTAINERS: U.K. Regulator May Issue Financial Directions SERCON CONTROLS: Appoints Wilkinson & Co as Administrator SOFTBAK MOBILE: Trust Debt Assumption Spurs S&P's Watch Negative URBAN SOLUTIONS: Creditors' Meeting Slated for November 24 VISTEON CORP: GKN Eyes European & South American Assets ********* ============= A U S T R I A ============= ALEKSANDAR KUKIC: Creditors' Meeting Slated for November 27 ----------------------------------------------------------- Creditors owed money by LLC Aleksandar Kukic (FN 168510i) are encouraged to attend the creditors' meeting at 9:30 a.m. on Nov. 27 to consider the adoption of the rule by revision and accountability. The creditors' meeting will be held at: The Trade Court of Vienna Room 1705 Vienna, Austria Headquartered in Vienna, Austria, the Debtor declared bankruptcy on Sept. 28 (Bankr. Case No. 3 S 133/06p). Herbert Hochegger serves as the court-appointed property manager of the bankrupt estate. Bernhard Eder represents Dr. Hochegger in the bankruptcy proceedings. The property manager and his representative can be reached at: Dr. Herbert Hochegger c/o Dr. Bernhard Eder Brucknerstrasse 4/5 1040 Vienna, Austria Tel: 505 78 61 Fax: 505 78 61-9 E-mail: office@hoch.co.at ERDEXPRESS ERDBEWEGUNG: Creditors' Meeting Slated for Dec. 5 ------------------------------------------------------------ Creditors owed money by LLC Erdexpress Erdbewegung former LLC Thomas Weilharter Erdbewegung (FN 222655i) are encouraged to attend the creditors' meeting at 11:00 a.m. on Dec. 5 to consider the adoption of the rule by revision and accountability. The creditors' meeting will be held at: The Land Court of Wiener Neustadt Room 15 Wiener Neustadt, Austria Headquartered in Tribuswinkel, Austria, the Debtor declared bankruptcy on Sept. 28 (Bankr. Case No. 11 S 97/06k). Alexander Knotek serves as the court-appointed property manager of the bankrupt estate. The property manager can be reached at: Dr. Alexander Knotek Pergerstrasse 12 2500 Baden, Austria Tel: 02252/43056-0 Fax: 02252/43056-20 E-mail: info@avia-law.com FRACHTEXPRESS TRANSPORT: Creditors' Meeting Slated for Dec. 5 ------------------------------------------------------------- Creditors owed money by LLC Frachtexpress Transport (fka LLC Thomas Weilharter Transport) (FN 238671m) are encouraged to attend the creditors' meeting at 10:30 a.m. on Dec. 5 to consider the adoption of the rule by revision and accountability. The creditors' meeting will be held at: The Land Court of Wiener Neustadt Room 52 Wiener Neustadt, Austria Headquartered in Tribuswinkel, Austria, the Debtor declared bankruptcy on Sept. 28 (Bankr. Case No. 11 S 98/06g). Alexander Knotek serves as the court-appointed property manager of the bankrupt estate. The property manager can be reached at: Dr. Alexander Knotek Pergerstrasse 12 2500 Baden, Austria Tel: 02252/43056-0 Fax: 02252/43056-20 E-mail: info@avia-law-com KNAPP LLC: Wels Court Orders Business Shutdown ---------------------------------------------- The Land Court of Wels entered an order Oct. 9 shutting down the business of LLC Knapp (FN 195756b). Court-appointed property manager Klaus Schiller recommended the business shutdown after determining that the continuing operations would reduce the value of the estate. The property manager can be reached at: Dr. Klaus Schiller Stadtplatz 27 4690 Schwanenstadt, Austria Tel: 07673/6720 Fax: 07673/6720-20 E-mail: office@kanzlei-schiller.at Headquartered in Kohlgrube, Austria, the Debtor declared bankruptcy on Aug. 29 (Bankr. Case No. 20 S 102/06k). KUECHEN UND BAD: Klagenfurt Court Orders Business Shutdown ---------------------------------------------------------- The Land Court of Klagenfurt entered an order Oct. 9 shutting down the business of LLC Kuechen und Bad Einrichtung (FN 233770f). Court-appointed property manager Franz Grauf recommended the business shutdown after determining that the continuing operations would reduce the value of the estate. The property manager and his representative can be reached at: Dr. Franz Grauf Hans-Wiegele-Strasse 3/I 9100 Voelkermarkt, Austria Tel: 04232/25 30 Fax: 04232/25 30-30 E-mail: kanzlei@law-grauf-vigele.at Headquartered in Voelkermarkt, Austria, the Debtor declared bankruptcy on Sept. 26 (Bankr. Case No. 40 S 72/06p). LIDI LLC: Creditors' Meeting Slated for November 27 --------------------------------------------------- Creditors owed money by LLC LIDI (FN 265855p) are encouraged to attend the creditors' meeting at 9:45 a.m. on Nov. 27 to consider the adoption of the rule by revision and accountability. The creditors' meeting will be held at: The Trade Court of Vienna Room 1705 Vienna, Austria Headquartered in Vienna, Austria, the Debtor declared bankruptcy on Sept. 28 (Bankr. Case No. 3 S 134/06k). Martin Honemann serves as the court-appointed property manager of the bankrupt estate. Stefan Langer represents Mag. Honemann in the bankruptcy proceedings. The property manager and his representative can be reached at: Mag. Martin Honemann c/o Dr. Stefan Langer Oelzeltgasse 4 1030 Vienna, Austria Tel: 713 61 92 Fax: 713 61 92-22 E-mail: kanzlei@kosesnik-langer.at STIEFSOHN LLC: St. Poelten Court Shuts Down Business ---------------------------------------------------- The Land Court of St. Poelten entered an order Oct. 9 shutting down the business of LLC Stiefsohn (FN 100122p). Court- appointed property manager Kurt Weinreich recommended the business shutdown after determining that the continuing operations would reduce the value of the estate. The property manager can be reached at: Dr. Kurt Weinreich Josefstr. 13 3100 St. Poelten, Austria Tel: 02742/72222 Fax: 02742/7222210 E-mail: kanzlei@tws-rae.at Headquartered in Gruenau, Austria, the Debtor declared bankruptcy on Oct. 5 (Bankr. Case No. 14 S 160/06d). TAXITECH IMPORT: Creditors to Recover 2.6% of Claims ---------------------------------------------------- The Trade Court of Vienna approved Sept. 26 the final decision on allocation of Susi Pariasek, the court-appointed property manager of LLC TAXITECH Import (FN 210909k). Under the property manager's project by final allocation, creditors will recover 2.6% of their claims. Headquartered in Vienna, Austria, the Debtor declared bankruptcy on Jan. 11 (Bankr. Case No. 28 S 2/06g). The property manager can be reached at: Dr. Susi Pariasek Gonzagagasse 15 1010 Vienna, Austria Tel: 533 28 55 Fax: 533 28 55 28 E-mail: office@anwaltwien.at WAKOLBINGER & PEINBAUER: Linz Court Orders Business Closure ----------------------------------------------------------- The Land Court of Linz entered an order Oct. 9 closing the business of OEG Wakolbinger & Peinbauer (FN 141048z). Court- appointed property manager Georg Buder recommended the business closure after determining that the continuing operations would reduce the value of the estate. The property manager and his representative can be reached at: Dr. Georg Buder c/o Dr. Walther Moerth Bethlehemstrasse 3 4020 Linz, Austria Tel: 0732/771877 Fax: 0732/77187718 E-mail: moerth.buder@utanet.at Headquartered in Leonding, Austria, the Debtor declared bankruptcy on July 20 (Bankr. Case No. 12 S 64/06h). Walter Moerth represents Dr. Buder in the bankruptcy proceedings. ============= B E L G I U M ============= ARMSTRONG WORLD: 2006 Third Quarter Earnings Down to US$39.2 Mln ---------------------------------------------------------------- Armstrong World Industries Inc. reported third quarter 2006 net sales of US$973.6 million, 4% higher than third quarter net sales of US$937 million in 2005, which includes a US$13 million favorable impact from foreign exchange rates. Net earnings for the quarter were reported at US$39.2 million versus US$46.1 million for the comparable quarter in the prior year. Operating income for the quarter increased to US$67.4 million from US$66.5 million in the third quarter of 2005. Adjusted operating income for the quarter of US$82.5 million increased 27% compared with adjusted operating income of US$65.2 million in the prior year quarter. The year-over-year growth in third quarter 2006 adjusted operating income benefited from price increases in excess of manufacturing cost inflation, improved product mix in European businesses, improved direct manufacturing costs in all businesses, and lower manufacturing period expense in our floor businesses. Increased earnings in its WAVE joint venture also contributed to the growth. Notably, the growth was achieved despite significant volume declines in North American resilient business where vinyl declines offset laminate growth. Segment Highlights Resilient Flooring net sales were US$304.8 million in the third quarter of 2006 and US$311.5 million in the same period of 2005. Excluding the favorable impact of foreign exchange rates, net sales decreased 4%. The decline was primarily due to decreased volume for vinyl products in North America. The Company reported operating loss of US$2.9 million in the quarter compared with reported income in the third quarter of 2005 of US$7.7 million. Adjusted operating income of US$4.5 million, compared with US$5.9 million on the same basis in the prior year period. The decline is primarily attributable to lower sales. The benefits of increased manufacturing efficiency were greater than the impact of cost inflation in the period. Wood Flooring net sales of US$217.2 million in the current quarter declined 1% from US$220.2 million in the prior year as weakness in the U.S. housing markets drove volume declines in both engineered and solid wood floors. Reported operating income of US$16.5 million in the quarter was below the US$25.7 million reported in the third quarter of 2005. The reduction in operating income was due to the sales volume decline combined with higher lumber prices and increased promotional spending. Production costs improved during the period. Textiles and Sports Flooring net sales in the third quarter of 2006 increased to US$86.3 million from US$79.7 million. Excluding the effects of favorable foreign exchange rates of US$3.9 million, sales grew 3% primarily on higher volume in carpet tiles and better price realization in broadloom carpet. Reported operating income of US$4.2 million in 2006 increased from US$3.2 million in 2005 on the growth in sales. Building Products net sales of US$304.5 million in the current quarter increased from US$268.2 million in the prior year. Excluding the effects of favorable foreign exchange rates of US$5 million, sales increased by 12% primarily due to price increases made to offset inflationary pressures, and improved product mix in both the U.S. and European markets. Volume increased in North America and the Pacific Rim. Reported operating income increased to US$59.7 million from operating income of US$43.1 million in the third quarter of 2005. The growth was driven by improved price realization, better product mix and increased equity earnings in WAVE. Cabinet net sales in the third quarter of 2006 of US$60.8 million increased 6% from US$57.4 million in 2005 on higher selling prices and improved product mix. Volume decreased slightly. Reported operating income for the third quarter of US$3.8 million improved from the prior year's US$300,000 operating loss, primarily driven by the sales growth, and lower SG&A spending. Year-to-Date Results For the nine-month period ending Sept. 30, 2006, net sales were US$2.795 billion compared with US$2.696 billion reported for the first nine months of 2005. Excluding the US$10.4 million impact from unfavorable foreign exchange rates, net sales increased by 4%. The sales growth was due to improved price and product mix on flat volume, and all segments grew sales except Resilient Flooring. Operating income in the first nine months of 2006 was US$188.1 million compared with operating income of US$110.2 million for the same period in 2005. Adjusted operating income of US$209.9 million increased 59% compared with adjusted operating income of US$131.9 million in the prior year period. The improvement in operating income was primarily due to higher sales, improved manufacturing productivity and reduced SG&A expenses. Outlook For the fourth quarter of 2006, the Company expects commercial markets are expected to remain strong, while the decline in the U.S. housing market will continue to reduce volumes in its residential businesses. On a consolidated basis, improved prices are anticipated to continue to offset cost inflation, and reductions in direct manufacturing costs are expected to be sustained. The Company disclosed that due to fresh start reporting adjustments associated with its Oct. 2, 2006, emergence from Chapter 11, reported fourth quarter operating income will not be comparable to prior periods. A full-text copy of AWI's Third Quarter 2006 Financial Report may be viewed at no charge at http://ResearchArchives.com/t/s?148d Based in Lancaster, Pennsylvania, Armstrong World Industries, Inc. -- http://www.armstrong.com/-- the major operating subsidiary of Armstrong Holdings, Inc., designs, manufactures and sells interior floor coverings and ceiling systems, around the world, including Belgium and Sweden. The company and its affiliates filed for chapter 11 protection on December 6, 2000 (Bankr. Del. Case No. 00-04469). StephenKarotkin, Esq., at Weil, Gotshal & Manges LLP, and Russell C.Silberglied, Esq., at Richards, Layton & Finger, P.A., represent the Debtors in their restructuring efforts. The company and its affiliates tapped the Feinberg Group for analysis, evaluation, and treatment of personal injury asbestos claims. Mark Felger, Esq. and David Carickhoff, Esq., at Cozen and O'Connor, and Robert Drain, Esq., Andrew Rosenberg, Esq., and Alexander Rohan, Esq., at Paul, Weiss, Rifkind, Wharton & Garrison, represent the Official Committee of Unsecured Creditors. The Creditors Committee tapped Houlihan Lokey for financial and investment advice. The Official Committee of Asbestos Personal Injury Claimant hired Ashby & Geddes as counsel. The Bankruptcy Court confirmed AWI's plan on Nov. 18, 2003. The District Court Judge Robreno confirmed AWI's Modified Plan on Aug. 14, 2006. The Clerk entered the formal written confirmation order on Aug. 18, 2006. The company's "Fourth Amended Plan of Reorganization, as Modified," has become effective and AWI has emerged from Chapter 11. * * * As reported in the Troubled Company Reporter on Oct. 9, 2006, Standard & Poor's Ratings Services raised its corporate credit rating on Armstrong World Industries Inc. to 'BB' from 'D', following the Company's emergence from bankruptcy on Oct. 2, 2006. S&P said the outlook is stable. ARMSTRONG WORLD: 7 Directors Own 8,183 Phantom Stock Units Each --------------------------------------------------------------- In separate Form 4 filings with the U.S. Securities and Exchange Commission, seven directors of Armstrong World Industries, Inc., disclosed that each of them directly owns 8,183 units of Phantom Stock pursuant to AWI's 2006 Phantom Stock Unit Plan. The Directors are James J. Gaffney, Robert C. Garland, Judith R. Haberkorn, Russell F. Peppet, Arthur J. Pergament, John Joseph Roberts, and Alexander M. Sanders, Jr. Of the 8,183 Phantom Stock Units, 2,183 units will vest on the earlier date of the award's one-year anniversary or the date of any change in control, while the other 6,000 units will vest in one-thirds on the first, second and third anniversaries of the award or if earlier, upon the date of any change in control. The Phantom Stock Units will expire on the earlier of (i) the six-month anniversary of the director's separation from service for any reason other than removal for cause or (ii) the date of any change in control. Based in Lancaster, Pennsylvania, Armstrong World Industries, Inc. -- http://www.armstrong.com/-- the major operating subsidiary of Armstrong Holdings, Inc., designs, manufactures and sells interior floor coverings and ceiling systems, around the world, including Belgium and Sweden. The company and its affiliates filed for chapter 11 protection on December 6, 2000 (Bankr. Del. Case No. 00-04469). StephenKarotkin, Esq., at Weil, Gotshal & Manges LLP, and Russell C.Silberglied, Esq., at Richards, Layton & Finger, P.A., represent the Debtors in their restructuring efforts. The company and its affiliates tapped the Feinberg Group for analysis, evaluation, and treatment of personal injury asbestos claims. Mark Felger, Esq. and David Carickhoff, Esq., at Cozen and O'Connor, and Robert Drain, Esq., Andrew Rosenberg, Esq., and Alexander Rohan, Esq., at Paul, Weiss, Rifkind, Wharton & Garrison, represent the Official Committee of Unsecured Creditors. The Creditors Committee tapped Houlihan Lokey for financial and investment advice. The Official Committee of Asbestos Personal Injury Claimant hired Ashby & Geddes as counsel. The Bankruptcy Court confirmed AWI's plan on Nov. 18, 2003. The District Court Judge Robreno confirmed AWI's Modified Plan on Aug. 14, 2006. The Clerk entered the formal written confirmation order on Aug. 18, 2006. The company's "Fourth Amended Plan of Reorganization, as Modified," has become effective and AWI has emerged from Chapter 11. * * * As reported in the Troubled Company Reporter on Oct. 9, 2006, Standard & Poor's Ratings Services raised its corporate credit rating on Armstrong World Industries Inc. to 'BB' from 'D', following the Company's emergence from bankruptcy on Oct. 2, 2006. S&P said the outlook is stable. GOODYEAR TIRE: S&P Rates US$1 Billion Debentures at 'B-' -------------------------------------------------------- Standard & Poor's Ratings Services assigned its 'B-' ratings to Goodyear Tire & Rubber Co.'s US$500 million floating rate senior notes due 2009 and its US$500 million fixed rate senior notes due 2011, and placed the ratings on CreditWatch with negative implications. Goodyear's 'B+' corporate credit and other ratings remain on CreditWatch with negative implications where they were placed Oct. 16, 2006, because of the potential for business disruptions and earnings pressures that could result from the ongoing labor dispute at most of the company's North American tire plants. Pro forma for the new debt issues, Goodyear will have total debt of about US$14 billion. Proceeds from the new debt issues will be used: -- to refinance US$515 million of debt due in the next six months; and -- for general corporate purposes. The new capital will raise Goodyear's already high debt levels, but will improve liquidity by increasing the company's current US$2.3 billion cash position, while its U.S. salaried workforce remains on strike. Goodyear is ramping up production at the striking plants using salaried and replacement workers. But the company's accounts receivable and inventory balances may shrink in the coming months, which could force a partial reduction in borrowings outstanding under its fully utilized US$1.5 billion asset-based revolving credit facility. A portion of the debt proceeds could also be used to partially fund a proposed US$660 million VEBA trust to provide retiree health care benefits for its U.S. unionized workforce. VOLKSWAGEN AG: Shifting Golf Production From Belgium to Germany --------------------------------------------------------------- Volkswagen AG plans to halt production of its Golf model at its Belgian plant, which could affect 3,500 jobs in Brussels, Constant Brand reports for The Associated Press. According to the report, Volkswagen will transfer the production of its Golf models to Germany, in an effort to cut output in Western Europe due to decreasing demand. Volkswagen spokeswoman Evelyne Helin told The Associated Press that 1,500 jobs could be saved out of the 5,300 at the assembly plant in Brussels noting that it "is not a firm figure," Ms. Helin disclosed. Ms. Helin said the Brussels factory currently produces 204,000 vehicles per year, 190,000 of which are Golf models. "This is a black day, certainly the worst in my 23 years at Volkswagen," Pascal Van Cauwenberghe, an official of the ACV union, told Bloomberg in a telephone interview. "Volkswagen Brussels is headed for a quiet death." "You have got to add another 3,000 or 4,000 jobs being cut at subcontractors," Van Cauwenberghe told Bloomberg, who estimated they employ some 8,000 people. The cuts are a "total catastrophe" for local workers, he added. "I'm shocked that national reasons lie behind this decision," Prime Minister Guy Verhofstadt was quoted by AP as saying. He encouraged workers to remain calm and await word on what opportunities might still exist in the Volkswagen operation. The European Union said Belgium could apply for EU aid to help retrain workers, AP relates. "We are aware of the challenging effect that any large-scale redundancy with Volkswagen can have for the Brussels region," EU spokeswoman Katharina Von Schnurbein told AP. Volkswagen aims to keep 1,500 workers at the plant, enough to build the Polo car, Harwig von Sass, a Volkswagen spokesman told Bloomberg News. He added that negotiations with the local union are still ongoing and a decision is yet to be concluded. As previously reported in the TCR-Europe, outgoing CEO Bernd Pischetsrieder, who began VW's restructuring efforts, planned to increase pretax profit to EUR5.1 billion in 2008 from EUR1.1 billion in 2004. The company agreed on a 34-hour workweek with unions in September. Mr. Pischetrieder tried to decrease spending on labor and reduce Volkswagen's global workforce by eliminating some 20,000 German jobs. As previously reported, Martin Winterkorn, Volkswagen's incoming chief executive, aimed to beat the carmaker's 2008 profit target as the company introduces new models and cuts costs. Headquartered in Wolfsburg, Germany, the Volkswagen Group -- http://www.volkswagen.de/-- is one of the world's leading automobile manufacturers and the largest carmaker in Europe. With 47 production plants in eleven European countries and a further seven countries in the Americas, Asia and Africa, Volkswagen has more than 343,000 employees producing over 21,500 vehicles or are involved in vehicle-related services on every working day. * * * Volkswagen has been carrying out measures to cut costs and raise profits, which could affect up to 30,000 jobs. The potential job cuts represent about a third of the carmaker's workforce and three times higher than initial estimates made by Chief Executive Bernd Pischetsrieder and Volkswagen brand head, Wolfgang Bernhard. In November last year, Volkswagen maintained its 2005 earnings guidance amid rumors it may lower targets. The company predicts a year-on-year improvement in both operating profit after special items and profit before tax this year. Rumors flew that the company would slash full-year earnings forecast due to higher restructuring costs. The company said the impact of its workforce reduction measures, which will be charged as special items in the fourth quarter, will be lower than last year's. The company also admitted there were no significant improvements in the economic environment in the first nine months of 2005, and the overall situation in the important automotive markets remained difficult. It also expected tougher competition in the Chinese and U.S. markets, and the rise in fuel prices to influence consumer confidence. =========== F R A N C E =========== LEAR CORP: S&P Assigns B- Ratings on US$300-Mln Senior Notes ------------------------------------------------------------ Standard & Poor's Ratings Services assigned its 'B-' ratings to Lear Corp.'s US$300 million senior notes due 2013 and its US$400 million senior notes due 2016. Lear's 'B+' corporate credit and other ratings were affirmed. The outlook is negative. The Southfield, Mich.-based global automotive supplier has total debt of about US$3.7 billion, including the present value of operating leases and underfunded employee benefit liabilities. Proceeds from the new debt issues will be used to refinance US$300 million of debt coming due in 2008, and a portion of Lear's US$600 million of debt due in 2009. "We consider the debt refinancing to be a credit-neutral event. Lear's financing costs will likely increase, as interest rates on the new debt issues are expected to exceed those of the debt being refinanced. But Lear will improve its financial flexibility by extending debt maturities amid continuing uncertainty in the cyclical automotive industry," said Standard & Poor's credit analyst Martin King. Pro forma for the transactions, Lear will have virtually no debt maturities for 2007 and 2008. The ratings reflect Lear's depressed operating performance caused by severe industry pressures, which have caused credit protection measures to weaken dramatically in the past two years. In addition, the company has a weak business profile because of its heavy exposure to automotive customers and product segments that are losing market share. More favorably, Lear has strong market positions, good growth prospects outside of North America, and fair financial flexibility. Lear has reported improved results during the first nine months of 2006, following a very poor performance during 2005 when full-year EBITDA fell by 35%. Core operating earnings, as defined by Lear to exclude restructuring costs and special charges, have increased by 40%, but still remain at relatively low levels. EBIT and margins in Lear's seating unit have improved, but are down in its electronic and electrical unit because of high commodity costs and price reductions. The company's interiors unit continues to generate large losses because of high commodity costs and low volumes. LUCENT TECH: Reserves US$284 Mln for Winstar Contract Dispute ------------------------------------------------------------- In a regulatory filing with the U.S. Securities and Exchange Commission, Lucent Technologies Inc. reported it has set aside a contingency fund totaling US$284 million in connection with its breach of contract litigation against Winstar Communications LLC. David W. Hitchcock, Lucent's corporate controller, said the company recognized the US$284 million as a charge in its 2006 financial statements: * US$278 million charge -- including related interest and other costs of around US$34 million -- in the first quarter of fiscal 2006; and * US$6 million charge for post-judgment interest during the nine months ended June 30, 2006. Cash, totaling US$311 million, was used to collateralize a letter of credit that was issued during the second quarter of fiscal 2006 in connection with the litigation, Mr. Hitchcock adds. Mr. Hitchcock said additional charges for post-judgment interest will be recognized in subsequent periods until the dispute is resolved. Attempt to Settle Dispute In an attempt to settle the dispute between Christine C. Shubert, the Chapter 7 Trustee of Winstar Communications, Inc., et al.; and Lucent Technologies, Inc., District Court Judge Joseph J. Farnan appointed as mediator, Ian Connor Bifferato, Esq., at Bifferato, Gentilotti, Biden & Balick, in Wilmington, Delaware. The Appeal, including briefing, was held in abeyance pending the mediation. Mr. Bifferato met with the parties on May 8, 2006, for a mediation session, but the parties did not settle. As a result, Lucent and Winstar proceeded with the briefing on the Appeal. Parties File Briefs (A) Lucent Lucent Technologies sought authority from the U.S. District Court for the District of Delaware to reverse the Bankruptcy Court's rulings relating to the Trustee's preference claim, subcontract claim, and equitable subordination claim. According to James M. Madron, Esq., at Richards, Layton & Finger, P.A., in Wilmington, Delaware, the decisions of the Bankruptcy Court can only be understood against the backdrop of the rapid rise and fall of the telecommunications sector -- the bursting of the 1990s telecom bubble. Winstar was one of many telecommunications companies founded in 1990 that sought to build a global broadband network to provide high-speed telecommunications services to business customers. Following the passage of the Telecommunications Act of 1996, which deregulated the industry, capital flooded into that sector of the economy, Mr. Madron relates. At that time, many companies racked up huge debts laying redundant fiber-optic cables over the same city-to-city routes on the mistaken -- and, in retrospect, wildly unrealistic -- assumption that demand would keep pace. Because much of the investment was vendor-financed, manufacturersincluding Lucent, Nortel, Motorola, Alcatel and Cisco, lent billions of dollars to the telecom companies that purchased their equipment, Mr. Madron says. But when the demand for telecom services did not match expectations, competition in various markets across the industry and "vicious" price wars ensued, driving down overall industry and individual company revenues. As some telecom companies began to fail and enter bankruptcy, others resorted to fraud and deception to mask those core fundamental problems facing their companies, Mr. Madron says. "Some went so far in their deception to not only mask failure, but to inflate, artificially, revenue growth -- to make it look like the dream was real," he adds. Winstar's bankruptcy case arises from that environment, Mr. Madron tells the District Court. During the heady days of the telecommunications boom, Winstar and Lucent entered into agreements intended to create a mutually beneficial strategic relationship. In the course of that relationship, Lucent and Winstar concededly engaged in some of misconduct, Mr. Madron says. As the telecom sector was collapsing, the parties' relationship deteriorated. When Winstar ultimately filed for bankruptcy, it sued Lucent for, among others, breach of contract. Subsequently, the bankruptcy case was converted to Chapter 7. The Trustee, Ms. Shubert, took over the action, adding a new claim -- that Lucent received an improper preferential payment from Winstar prior to the bankruptcy. The Trustee's case focuses heavily on the allegations of corporate misconduct that she leveled against Lucent, Mr. Madron notes. Neither the preference statute nor state contract law, however, is intended to provide a remedy for claims of improper accounting or other financial irregularities, Mr. Madron argues. Losing sight of that fact, the Bankruptcy Court made the fundamental error of allowing its distaste for Lucent's conduct to override its obligation to follow governing law, Mr. Madron says. In so doing, he continues, the Bankruptcy Court upset previously settled principles that are critical to commercial lending. The Bankruptcy Court's errors will thus have serious adverse consequences, not only for Lucent, but also for any party doing business with companies that may seek bankruptcy protection in Delaware, Mr. Madron asserts. Mr. Madron notes that Lucent was not an "insider" of Winstar. The Bankruptcy Court, among other things, applied the wrong standard in concluding that Lucent was a "person in control" of Winstar, Mr. Madron argues. Winstar's payment in December 2000 to Lucent was not a transfer of the Debtors' property because it came from earmarked funds, from a loan that Winstar contracted with Siemens, Mr. Madron contends. Lucent says it is entitled to a new value defense because it provided Winstar new value in the form of equipment and related services. Moreover, Lucent did not breach any obligation to Winstar's subsidiary, Winstar Wireless, Inc., under a March 1999 subcontract, Mr. Madron argues. Additionally, he says, the Bankruptcy Court erred in equitably subordinating Lucent's claims by relying on the erroneous conclusion that Lucent was an insider of Winstar, and by improperly disregarding the Bankruptcy Code. A full-text copy of Lucent's Opening Brief on the Appeal is available for free at http://ResearchArchives.com/t/s?1566 Because of the complexity of the issues of law involved, Lucent also sought permission from the District Court to conduct an oral argument on the case. (B) Winstar Lucent is changing its strategy and concedes that it engaged in "misconduct" and "suspect" transactions, but does specify the facts underlying that "misconduct" and those "suspect" transactions, Sheldon K. Rennie, Esq., at Fox Rothschild LLP, in Wilmington, Delaware, points out, on behalf of the Chapter 7 Trustee. Mr. Rennie says these facts are at the heart of the Bankruptcy Court's insider determination -- "a series of last minute, massive end of quarter sales and related conduct in which Lucent repeatedly caused Winstar to do Lucent's bidding, including participation in numerous schemes and outright fraud to create hundreds of millions of dollars of fake revenue so that Lucent could appear to be more profitable than it was." What began as a "strategic partnership" to benefit both parties degenerated into a relationship in which the much larger company -- Lucent -- bullied and threatened the smaller company -- Winstar -- into taking actions that were designed to benefit the larger at the expense of the smaller, Mr. Rennie points out. Hence, the Trustee sought authority from the District Court to affirm in all respects the Bankruptcy Court's findings regarding the Preferential Claim. The Bankruptcy Court, according to Mr. Rennie, found that Winstar satisfied both: (i) the statutory definition that Lucent was a "person in control" of Winstar; and (ii) the non-statutory test, by finding that Lucent and Winstar did not deal at arm's length. Regardless of which test is applied, insider status is determined case-by-case, by a "fact-intensive" inquiry into the closeness of the relationship, Mr. Rennie points out. The December 2000 Transfer was not earmarked for Lucent, Mr. Rennie argues. The parties agree that to establish an earmarking defense, there must be: (1) an agreement between the new lender -- Siemens -- and Winstar that the loan funds would be used exclusively to pay a specified antecedent debt; (2) performance of the agreement in accordance with its terms; and (3) no diminution of Winstar's estate as a result of the transaction. Mr. Rennie asserts that Siemens did not require Winstar to use the Siemens funds to pay Lucent. Instead, the Siemens loan was to be used as Winstar's working capital. In addition, Mr. Rennie continues, Lucent waived the earmarking defense by failing to raise it in its answer or in the pre-trial memorandum. According to Mr. Rennie, the Bankruptcy Court properly rejected Lucent's new value defense under Section 547(C)(4) of the Bankruptcy Code because Lucent failed to prove that it provided to Winstar new value for goods and related services after Dec. 7, 2000, and that the new value was unsecured. The Trustee sought permission from the District Court to affirm the Bankruptcy Court's decision equitably subordinating Lucent's claims due Lucent's breach of the Wireless Subcontract. A full-text copy of the Trustee's Brief in Opposition of Lucent's Appeal is available for free at: http://ResearchArchives.com/t/s?1567 Lucent's Reply Neither the bankruptcy preference statute nor the New York contract law provides a remedy for allegations of securities fraud that lie at the heart of the Trustee's story, Mr. Madron reiterates. A creditor is not a "person in control" unless it exercised actual managerial control over the debtors' business affairs, Mr. Madron asserts. The Bankruptcy Court nevertheless erroneously concluded that Lucent "controlled" Winstar even though the two companies were managed by separate and independent directors and officers, Mr. Madron points out. The question on the Appeal focuses on whether the particular laws under which the Trustee has asserted her claims -- the Bankruptcy Code and the New York contract law -- gave it the relief, which the Bankruptcy Court has granted. The Bankruptcy Code and the New York contract law, Mr. Madron insists, cannot provide that relief to the Trustee. The Trustee's efforts to defend the Bankruptcy Court's faulty reasoning fail and her arguments are contradicting, Mr. Madron points out. Moreover, the standard of review for the Appeal does not depend on the subject matter of the claim, but only on the nature of the Bankruptcy Court's conclusions, Mr. Madron says. The Bankruptcy Court's conclusions of law and its application of law to facts must be reviewed de novo regardless of the subject matter, Mr. Madron further asserts. A full-text copy of Lucent's Reply Brief is available for free at: http://ResearchArchives.com/t/s?1568 About Winstar Headquartered in New York, New York, Winstar Communications, Inc., provides broadband services to business customers. The Company and its debtor-affiliates filed for chapter 11 protection on April 18, 2001 (Bankr. D. Del. Case Nos. 01-01430 through 01-01462). The Debtors obtained the Court's approval converting their case to a chapter 7 liquidation proceeding in January 2002. Christine C. Shubert serves as the Debtors' chapter 7 trustee. When the Debtors filed for bankruptcy, they listed US$4,975,437,068 in total assets and US$4,994,467,530 in total debts. About Lucent Technologies Based in Murray Hill, New Jersey, Lucent Technologies Inc. (NYSE: LU) -- http://www.lucent.com/-- designs and delivers the systems, services and software that drive next-generation communications networks. Backed by Bell Labs research and development, Lucent uses its strengths in mobility, optical, software, data and voice networking technologies, as well as services, to create new revenue-generating opportunities for its customers, while enabling them to quickly deploy and better manage their networks. Lucent's customer base includes communications service providers, governments and enterprises worldwide. Lucent also operates in Austria, Belgium, China, Czech republic, Denmark, France, Germany, India, Ireland, Japan, Korean, Brazil, CIS, the Netherlands, Poland, Slovak Republic, Spain, Sweden, Switzerland, Russia, and the United Kingdom. * * * In November 2006, Standard & Poor's Ratings Services said that its 'BB' long-term corporate credit rating on France-based Alcatel and its 'B' long-term corporate credit rating on U.S.- based Lucent Technologies Inc. remain on CreditWatch with negative and positive implications, respectively, where they were placed on March 24 on news of the two telecoms equipment makers' plans to merge. The ratings will remain on CreditWatch until completion of the merger and clarification of the ranking and support mechanisms for the various debt classes within the merged group's capital structure. The ratings on the individual debt issues of each company will be clarified at that time. Standard & Poor's 'B' and 'B-1' short-term corporate ratings on Alcatel and Lucent, respectively, are not on CreditWatch and remain unchanged. In April 2006, Moody's Investors Service placed Lucent's B1 corporate family rating, B1 senior unsecured rating, B3 subordinated rating, and B3 trust preferred rating under review for possible upgrade following the company's announcement of a definitive merger agreement with Alcatel. ============= G E R M A N Y ============= ANDREAS PUFAHL: Claims Registration Ends December 1 --------------------------------------------------- Creditors of Andreas Pufahl Spedition GmbH & Co.KG have until Dec. 1 to register their claims with court-appointed provisional administrator Norbert Kuepper. Creditors and other interested parties are encouraged to attend the meeting at 9:00 a.m. on Dec. 22, at which time the administrator will present his first report on the insolvency proceedings. The meeting of creditors will be held at: The District Court Muenster Meeting Room 101 B 1st Floor Gerichtsstr. 2-6 48149 Muenster, Germany The Court will also verify the claims set out in the administrator's report during this meeting, while creditors may constitute a creditors' committee or opt to appoint a new insolvency manager. The District Court of Muenster opened bankruptcy proceedings against Andreas Pufahl Spedition GmbH & Co.KG on Oct. 1. Consequently, all pending proceedings against the company have been automatically stayed. The Debtor can be contacted at: Andreas Pufahl Spedition GmbH & Co.KG Buschkamp 13-15 48324 Sendenhorst, Germany Attn: Andreas Pufahl, Manager Drosselgasse 8 48324 Sendenhorst, Germany The administrator can be contacted at: Dr. Norbert Kuepper Paderborner Str. 11 33415 Verl, Germany ATLAS HAUSTECHNIK: Claims Registration Ends December 1 ------------------------------------------------------ Creditors of Atlas Haustechnik GmbH have until Dec. 1 to register their claims with court-appointed provisional administrator Andreas Kienast. Creditors and other interested parties are encouraged to attend the meeting at 2:30 p.m. on Dec. 19, at which time the administrator will present his first report on the insolvency proceedings. The meeting of creditors will be held at: The District Court of Stendal Hall 411 Judicial Center "Albrecht der Bar" Scharnhorststrasse 40 39576 Stendal, Germany The Court will also verify the claims set out in the administrator's report during this meeting, while creditors may constitute a creditors' committee or opt to appoint a new insolvency manager. The District Court of Stendal opened bankruptcy proceedings against Atlas Haustechnik GmbH on Oct. 17. Consequently, all pending proceedings against the company have been automatically stayed. The Debtor can be contacted at: Atlas Haustechnik GmbH Attn: S. Kleinau, Manager Herrenkrugstrasse 14 39175 Biederitz, Germany The administrator can be contacted at: Andreas Kienast Lennestrasse 10 D-39112 Magdeburg, Germany Tel: 0391/59733-0 Fax: 0391/5973333 BODEN GESELLSCHAFT: Claims Registration Ends November 29 -------------------------------------------------------- Creditors of Boden Gesellschaft fuer Grundstuecksentwicklung und -verwertung mbH have until Nov. 29 to register their claims with court-appointed provisional administrator Juergen D. Spliedt. Creditors and other interested parties are encouraged to attend the meeting at 9:00 a.m. on Jan. 10, 2007, at which time the administrator will present his first report on the insolvency proceedings. The meeting of creditors will be held at: The District Court of Potsdam Hall 301 3rd Floor Branch Linden Road 6 14467 Potsdam, Germany The Court will also verify the claims set out in the administrator's report during this meeting, while creditors may constitute a creditors' committee or opt to appoint a new insolvency manager. The District Court of Potsdam opened bankruptcy proceedings against Boden Gesellschaft fuer Grundstuecksentwicklung und - verwertung mbH on Oct. 18. Consequently, all pending proceedings against the company have been automatically stayed. The Debtor can be contacted at: Boden Gesellschaft fuer Grundstuecksentwicklung und -verwertung mbH Schlossstrasse 12 14467 Potsdam, Germany Attn: Mario Karras, Manager Schmiedestrasse 1 A 14554 Seddiner, Germany The administrator can be contacted at: Dr. Juergen D. Spliedt Uhlandstrasse 165/166 10719 Berlin, Germany BROECKER MOEBEL: Claims Registration Ends December 1 ---------------------------------------------------- Creditors of Broecker Moebel GmbH have until Dec. 1 to register their claims with court-appointed provisional administrator Norbert Kuepper. Creditors and other interested parties are encouraged to attend the meeting at 9:45 a.m. on Dec. 22, at which time the administrator will present his first report on the insolvency proceedings. The meeting of creditors will be held at: The District Court Muenster Meeting Room 101 B 1st Floor Gerichtsstr. 2-6 48149 Muenster, Germany The Court will also verify the claims set out in the administrator's report during this meeting, while creditors may constitute a creditors' committee or opt to appoint a new insolvency manager. The District Court of Muenster opened bankruptcy proceedings against Broecker Moebel GmbH on Oct. 1. Consequently, all pending proceedings against the company have been automatically stayed. The Debtor can be contacted at: Broecker Moebel GmbH Linzel 15 59302 Oelde-Stromberg, Germany Attn: Heinrich Pospiech, Manager Buschstrasse 8 33449 Langenberg, Germany Heinrich Bonkamp, Manager Koentrup 4 59320 Ennigerloh, Germany The administrator can be contacted at: Dr. Norbert Kuepper Paderborner Str. 11 33415 Verl, Germany DEKO WERBUNG: Creditors' Meeting Slated for November 30 ------------------------------------------------------- The court-appointed provisional administrator for deko werbung marketing GmbH, Frank-Michael Rhode, will present his first report on the Company's insolvency proceedings at a creditors' meeting at 9:30 a.m. on Nov. 30. The meeting of creditors and other interested parties will be held at: The District Court of Bremen Hall 115 Court House (New Building) Ostertorstr. 25-31 28195 Bremen, Germany The Court will also verify the claims set out in the administrator's report at 9:30 a.m. on Feb. 22, 2007, at the same venue. Creditors have until Jan. 9, 2007, to register their claims with the court-appointed provisional administrator. The District Court of Bremen opened bankruptcy proceedings against deko werbung marketing GmbH on Oct. 16. Consequently, all pending proceedings against the company have been automatically stayed. The Debtor can be reached at: deko werbung marketing GmbH Attn: Rolf Herbert Uwe Metlik, Manager Osterfeuerberger Ring 8a 28219 Bremen, Germany The administrator can be reached at: Frank-Michael Rhode Graf-Moltke-Str. 62 28211 Bremen, Germany Tel: 0421/3485212/213 Fax: 0421/341078 Web: http://www.rhode.de/ E-mail: info@rhode.de JENOPTIK AG: Fitch Changes Outlook to Positive & Keeps B Ratings ---------------------------------------------------------------- Fitch Ratings changed German industrial-technology group Jenoptik AG's Outlook to Positive from Stable. At the same time, the agency affirmed the group's Issuer Default rating and Short-term rating at B. Fitch upgraded Jenoptik's senior unsecured rating to B+ from B and its Recovery rating to RR3 from RR4. The Outlook revision reflects Fitch's expectation that Jenoptik will continue to de-leverage its balance sheet and improve its financial profile, with a resulting decrease in interest expenses and an improvement in coverage ratios. Furthermore, Fitch expects that the company will continue to stabilize its margins and grow its photonics business. The upgrade to B+ and RR3 for the senior unsecured notes reflects above-average recovery prospects in the event of financial distress. This is based on a high going-concern value against reduced gross debt since FYE05 and Jenoptik's limited secured debt. The ratings reflect Jenoptik's focus on the higher-margin photonics business after the exit from the Clean Systems division, which changed its business and financial profiles significantly. The ratings are underpinned by Jenoptik's leading market positions in certain segments and fast-growing niche markets in the cyclical and partly fragmented photonics industry. With world-leading proprietary technologies in some of its activities, the company is well positioned to benefit from the growth trends in this industry. While geographical coverage is still concentrated mainly in Europe, especially in Germany, this is partly offset by the company's strong customer diversity and the various end-markets supplied. The ratings are challenged by Jenoptik's weak cash flow generation resulting from still high gross debt and sizeable capital expenditure requirements, its high leverage ratios of 5.8x and 3.6x and overall reduced financial flexibility following the sale of Clean Systems. As of June 30, 2006, Jenoptik had about EUR114 million committed credit lines, of which about EUR29 million were unused. At end- Q3 FY06 Jenoptik had cash and cash equivalents of EUR158.4 million, of which about EUR150 million were paid into a trustee's account to repay a high-yield bond in FY07. At end-nine months FY06 Jenoptik's lease-adjusted total debt amounted to EUR422 million, down from EUR439 million at FYE05. Based on Fitch's preliminary calculations, funds from operations adjusted leverage will slightly exceed 8x at FYE06, before falling to below 4x in FY07 with the high-yield bond repayment. The 4x FFO adjusted leverage factors in the significantly reduced interest expenses with the reduction in gross debt. Total net adjusted debt-to-EBITDAR is currently around 3.6x and would gradually decrease to below 3x in FY07 under this scenario. FFO coverage of net interest expenses of about 4x at FYE06 and the above mentioned ratios are viewed as comfortable for the rating level. Jenoptik is a Germany-based industrial-technology group, which after the sale of its Clean Systems division, now focuses on the remaining photonics division, an electro optic and mechanical systems business. The segment generated revenues of EUR401 million in FY05 and EBITDA of EUR59.4 million. LUEFTUNG-KLIMA: Claims Registration Ends December 1 --------------------------------------------------- Creditors of Lueftung-Klima-Datentechnik LYTHERM GmbH have until Dec. 1 to register their claims with court-appointed provisional administrator Hans-Peter Rechel. Creditors and other interested parties are encouraged to attend the meeting at 3:00 p.m. on Dec. 19, at which time the administrator will present his first report on the insolvency proceedings. The meeting of creditors will be held at: The District Court of Stendal Hall 411 Judicial Center "Albrecht der Bar" Scharnhorststrasse 40 39576 Stendal, Germany The Court will also verify the claims set out in the administrator's report during this meeting, while creditors may constitute a creditors' committee or opt to appoint a new insolvency manager. The District Court of Stendal opened bankruptcy proceedings against Lueftung-Klima-Datentechnik LYTHERM GmbH on Oct. 17. Consequently, all pending proceedings against the company have been automatically stayed. The Debtor can be contacted at: Lueftung-Klima-Datentechnik LYTHERM GmbH Langestr. 16 39596 Eichstedt, Germany Attn: Eberhard Christian Lyttek, Manager Krahenbusch 6 59399 Olfen, Germany The administrator can be contacted at: Hans-Peter Rechel Lehmweg 17 D-20251 Hamburg, Germany Tel: 040/4806390 Fax: 040/48063999 NEQ GMBH: Claims Registration Ends November 30 ---------------------------------------------- Creditors of NEQ GmbH have until Nov. 30 to register their claims with court-appointed provisional administrator Christoph Schulte-Kaubruegger. Creditors and other interested parties are encouraged to attend the meeting at 9:00 a.m. on Jan. 11, 2007, at which time the administrator will present his first report on the insolvency proceedings. The meeting of creditors will be held at: The District Court of Dortmund Hall 3.201 2nd Floor Court Place 1 44135 Dortmund, Germany The Court will also verify the claims set out in the administrator's report during this meeting, while creditors may constitute a creditors' committee or opt to appoint a new insolvency manager. The District Court of Dortmund opened bankruptcy proceedings against NEQ GmbH on Oct. 13. Consequently, all pending proceedings against the company have been automatically stayed. The Debtor can be contacted at: NEQ GmbH Dorotheenstr. 52 59425 Unna, Germany Attn: Waldemar Nemitz, Manager Muehle 20 59427 Unna, Germany The administrator can be contacted at: Dr. Christoph Schulte-Kaubruegger Rheinlanddamm 199 44139 Dortmund, Germany NIGHTHAWKS PICTURES: Creditors' Meeting Slated for November 30 -------------------------------------------------------------- The court-appointed provisional administrator for Nighthawks Pictures GmbH & Co. KG, Rolf Rattunde, will present his first report on the Company's insolvency proceedings at a creditors' meeting at 10:15 a.m. on Nov. 30. The meeting of creditors and other interested parties will be held at: The District Court of Charlottenburg II. Stock Hall 218 District Court Place 1 14057 Berlin, Germany The Court will also verify the claims set out in the administrator's report at 10:05 a.m. on March 8, 2007, at the same venue. Creditors have until Jan. 11, 2007 to register their claims with the court-appointed provisional administrator. The District Court of Charlottenburg opened bankruptcy proceedings against Nighthawks Pictures GmbH & Co. KG on Oct. 18. Consequently, all pending proceedings against the company have been automatically stayed. The Debtor can be reached at: Nighthawks Pictures GmbH & Co. KG Friedrichstrasse 171 10117 Berlin, Germany Attn: Thomas Toth, Manager Planstrasse W Hausnummer 5, 13088 Berlin, Germany The administrator can be reached at: Rolf Rattunde Kurfuerstendamm 212 10719 Berlin, Germany PABST ELEKTROTECHNIK: Creditors' Meeting Slated for November 30 --------------------------------------------------------------- The court-appointed provisional administrator for Pabst Elektrotechnik GmbH, Klaus Thiery, will present his first report on the Company's insolvency proceedings at a creditors' meeting at 11:30 a.m. on Nov. 30. The meeting of creditors and other interested parties will be held at: The District Court of Saarbruecken Meeting Room 13 1st Floor Branch Office Sulzbach Vopeliusstrasse 2 66280 Sulzbach, Germany The Court will also verify the claims set out in the administrator's report at 11:30 a.m. on Jan. 25, 2007, at the same venue. Creditors have until Jan. 3, 2007, to register their claims with the court-appointed provisional administrator. The District Court of Saarbruecken opened bankruptcy proceedings against Pabst Elektrotechnik GmbH on Oct. 18. Consequently, all pending proceedings against the company have been automatically stayed. The Debtor can be reached at: Pabst Elektrotechnik GmbH Attn: Thomas Pabst, Manager Trierer Strasse 37 66636 Tholey, Germany The administrator can be reached at: Klaus Thiery Poststrasse 30 66687 Wadern, Germany PORTRAIT CORP: Court Gives Final OK to Berenson's Employment ------------------------------------------------------------ The Honorable Adlai S. Hardin, Jr., of the U.S. Bankruptcy Court for the Southern District of New York has issued a final order allowing Portrait Corporation of America, Inc., and its debtor- affiliates to employ Berenson & Company, LLC, as their financial advisor and investment banker. Judge Hardin ruled, among other things, that the Debtors' employment of Berenson under the terms of their Amended Engagement Letter and the Indemnification Agreement is necessary and in the best interests of the Debtors' estates. As reported in the Troubled Company Reporter on Sept. 20, 2006, Berenson & Co will: a) review and analyze the Debtors' business operations and financial projections; b) evaluate the Debtors' potential debt capacity in light of their projected cash flows; c) assist in the determination of an appropriate capital structure for the Debtors; d) provide financial advice and assistance to the Debtors in developing and obtaining confirmation of a plan of reorganization; e) advise the Debtors on tactics and strategies for negotiating with various groups of the holders of the Debtors' bank debt or debt securities or other claims against the Debtors; f) advise the Debtors on the timing, nature and terms of any new securities, other consideration or other inducements to be offered to their Creditors in connection with any Restructuring Transaction; g) assess the possibilities of bringing in new lenders and investors to replace, repay or settle with any of the creditors; h) provide expert testimony and related litigation support services customarily provided by financial advisors with respect to any litigation that may arise in connection with any Restructuring Transaction; i) assist in arranging debtor-in-possession financing or a Financing Transaction for the Debtors; j) advise the Debtors with respect to the structure of any "Transaction," participate in any meetings or negotiations relating to a Transaction and advise and attend meetings of the Debtors' Board of Directors and its committees with respect thereto; k) assist the Debtors in preparing any documentation required in connection with the implementation of any Transaction; l) provide testimony in any proceeding before the Bankruptcy Court, as necessary, with respect to matters which Berenson has been engaged to advise the Debtors; and m) provide all other advisory services as customarily in connection with the analysis, negotiation and implementation of a restructuring transaction similar to the Restructuring Transaction and as reasonably requested by the Debtors. The Debtors propose to pay Berenson & Co. a fee of US$125,000 per month plus applicable Sale Transaction, Restructuring Transaction and Financing Transaction fees, if there are any. A copy of the engagement agreement outlining the payment terms for the firm's services is available for free at: http://researcharchives.com/t/s?11e6 As part of the overall compensation payable to Berenson under the terms of the Engagement Letter, the Debtors have agreed to certain indemnification and contribution obligations as described in an Indemnification Agreement. A copy of the Indemnification Agreement is available for free at: http://researcharchives.com/t/s?11e7 The Indemnification Agreement provides that the Debtors will indemnify and hold harmless Berenson and its affiliates from any losses, claims, demands, other than for willful misconduct and gross negligence, which arise out of: * actions taken or omitted to be taken by the Debtors or actions taken or omitted to be taken by an the firm with the Debtors' consent or in conformity with the Debtors' actions or omissions; or * Berenson's activities on the Debtors' behalf under the Engagement Letter. About Portrait Corp Portrait Corporation of America, Inc. -- http://pcaintl.com/-- provides professional portrait photography products and services in North America. The Company operates portrait studios within Wal-Mart stores and Supercenters in the United States, Canada, Mexico, Germany and the United Kingdom. The Company also operates a modular traveling business providing portrait photography services in additional retail locations and to church congregations and other institutions. Portrait Corporation and its debtor-affiliates filed for Chapter 11 protection on Aug. 31, 2006 (Bankr S.D. N.Y. Case No. 06-22541). John H. Bae, Esq., at Cadwalader Wickersham & Taft LLP, represents the Debtors in their restructuring efforts. Berenson & Company LLC serves as the Debtors' Financial Advisor and Investment Banker. Kristopher M. Hansen, Esq., at Stroock & Stroock & Lavan LLP represents the Official Committee of Unsecured Creditors. Peter J. Solomon Company serves as financial advisor for the Committee. At June 30, 2006, the Debtor had total assets of US$153,205,000 and liabilities of US$372,124,000. PORTRAIT: Panel Taps Halperin Battaglia as Conflicts Counsel ------------------------------------------------------------ The Official Committee of Unsecured Creditors of Portrait Corporation of America, Inc., and its debtor-affiliates ask the U.S. Bankruptcy Court for the Southern District of New York for permission to retain Halperin Battaglia Raicht, LLP, as its conflicts counsel under a general retainer, nunc pro tunc, to Oct. 16, 2006. Halperin Battaglia will represent the Committee in the event that its primary counsel, Stroock & Stroock & Lavan LLP, will have potential or actual conflicts of interest on matters arising in the Debtors' bankruptcy cases. The regular hourly rates for Halperin Battaglia's professionals ranged from US$395 to US$175 per hour for attorneys, US$125 per hour for law clerks, and US$100 to US$75 per hour for paraprofessionals. Alan D. Halperin, Esq., a member at Halperin Battaglia, assures the Court that his firm does not hold nor represent any interest adverse to the Debtors' estate and is a "disinterested person" within the meaning of section 101(14) of the Bankruptcy Code. Halperin Battaglia can be reached at: Halperin Battaglia Raicht, LLP Attn: Alan D. Halperin, Esq. 555 Madison Avenue, 9th Floor New York, NY 10022 Phone: (212) 765-9100 About Portrait Corp Portrait Corporation of America, Inc. -- http://pcaintl.com/-- provides professional portrait photography products and services in North America. The Company operates portrait studios within Wal-Mart stores and Supercenters in the United States, Canada, Mexico, Germany and the United Kingdom. The Company also operates a modular traveling business providing portrait photography services in additional retail locations and to church congregations and other institutions. Portrait Corporation and its debtor-affiliates filed for Chapter 11 protection on Aug. 31, 2006 (Bankr S.D. N.Y. Case No. 06-22541). John H. Bae, Esq., at Cadwalader Wickersham & Taft LLP, represents the Debtors in their restructuring efforts. Berenson & Company LLC serves as the Debtors' Financial Advisor and Investment Banker. Kristopher M. Hansen, Esq., at Stroock & Stroock & Lavan LLP represents the Official Committee of Unsecured Creditors. Peter J. Solomon Company serves as financial advisor for the Committee. At June 30, 2006, the Debtor had total assets of US$153,205,000 and liabilities of US$372,124,000. REIMERS IMMOBILIEN: Claims Registration Ends November 30 -------------------------------------------------------- Creditors of Reimers Immobilien GmbH have until Nov. 30 to register their claims with court-appointed provisional administrator Martin Maletzky. Creditors and other interested parties are encouraged to attend the meeting at 11:15 a.m. on Dec. 22, at which time the administrator will present his first report on the insolvency proceedings. The meeting of creditors will be held at: The District Court of Neumuenster Area B.126 Law Courts Boostedter Road 26 Neumuenster, Germany The Court will also verify the claims set out in the administrator's report during this meeting, while creditors may constitute a creditors' committee or opt to appoint a new insolvency manager. The District Court of Neumuenster opened bankruptcy proceedings against Reimers Immobilien GmbH on Oct. 16. Consequently, all pending proceedings against the company have been automatically stayed. The Debtor can be contacted at: Reimers Immobilien GmbH Attn: Beate Reimers, Manager Bimoehler Road 42-44 24576 Bad Bramstedt, Germany The administrator can be contacted at: Dr. Martin Maletzky Hamburger Road 89 a 24558 Henstedt-Ulzburg, Germany SEMPER FINANCE: S&P Puts Low-B Ratings to EUR40.1-Million Notes --------------------------------------------------------------- Standard & Poor's Ratings Services assigned its preliminary credit ratings to the EUR465.6 million floating-rate credit- linked notes to be issued by Semper Finance 2006-1 Ltd., a special purpose entity incorporated in Jersey. This transaction is structured as a synthetic, partially funded CMBS transaction. Its purpose is to transfer the credit risk associated with a pool of 1,773 commercial mortgage loans secured mainly on multifamily real estate located in eastern Germany that has been originated by Eurohypo AG or its predecessors. The reference loan pool amounts to EUR1,850.7 million at cut-off and is secured by first-ranking and subordinated mortgages. In total, there are EUR277.1 million of claims of third parties ranking senior or pari passu to the claims under the reference loan pool. The notes are secured against "lettres de gage publiques" issued by EUROHYPO Europaeische Hypothekenbank S.A., which is based in Luxembourg. Ratings List Semper Finance 2006-1 Ltd. EUR465.6 Million Floating-Rate Credit-Linked Notes Prelim. Prelim. Class rating amount (Mil. EUR) ----- ------ ------ A+ AAA 0.5 A AAA 138 B AA 111.5 C A 92.5 D BBB 83 E BB 32.7 F BB- 7.4 VISTEON CORP: GKN Eyes European & South American Assets ------------------------------------------------------- GKN plc has entered into exclusive discussions with Visteon Corp. to explore the possible acquisition of certain Visteon assets and liabilities in its European and South American businesses. These relate exclusively to Visteon's driveline business, which is conducted at the plants in Duren, Germany, Praszka, Poland, and Swansea, Wales. Driveline assets at Visteon's Arbor plant, Sao Paulo, Brazil are also included. Total revenue of these businesses is around GBP200 million. A further announcement will be made regarding this possible transaction when appropriate. Headquartered in Van Buren Township, Michigan, Visteon Corp. (NYSE: VC) -- http://www.visteon.com/-- is a global automotive supplier that designs, engineers and manufactures innovative climate, interior, electronic and lighting products for vehicle manufacturers, and also provides a range of products and services to aftermarket customers. With corporate offices in Michigan (U.S.); Shanghai, China; and Kerpen, Germany; the company has more than 170 facilities in 24 countries and employs around 50,000 people. At Sept. 30, 2006 the Company's balance sheet showed total assets of US$6.721 billion and total liabilities of US$6.823 billionresulting in a total shareholders' deficit of US$102 miilion. Total shareholders' deficit at Dec. 31, 2005 stood at US$48 million. * * * Standard & Poor's Ratings Services has lowered its long-term corporate credit rating on Visteon Corp. to 'B' from 'B+' and its short-term rating to 'B-3' from 'B-2'. These actions stem from the company's weaker-than-expected earnings and cash flow generation, caused by vehicle production cuts, inefficiencies at several plant locations, sharply lower aftermarket product sales, continued pressure from high raw material costs, and several unusual items that will impact 2006 results. VOLKSWAGEN AG: Shifting Golf Production From Belgium to Germany --------------------------------------------------------------- Volkswagen AG plans to halt production of its Golf model at its Belgian plant, which could affect 3,500 jobs in Brussels, Constant Brand reports for The Associated Press. According to the report, Volkswagen will transfer the production of its Golf models to Germany, in an effort to cut output in Western Europe due to decreasing demand. Volkswagen spokeswoman Evelyne Helin told The Associated Press that 1,500 jobs could be saved out of the 5,300 at the assembly plant in Brussels noting that it "is not a firm figure," Ms. Helin disclosed. Ms. Helin said the Brussels factory currently produces 204,000 vehicles per year, 190,000 of which are Golf models. "This is a black day, certainly the worst in my 23 years at Volkswagen," Pascal Van Cauwenberghe, an official of the ACV union, told Bloomberg in a telephone interview. "Volkswagen Brussels is headed for a quiet death." "You have got to add another 3,000 or 4,000 jobs being cut at subcontractors," Van Cauwenberghe told Bloomberg, who estimated they employ some 8,000 people. The cuts are a "total catastrophe" for local workers, he added. "I'm shocked that national reasons lie behind this decision," Prime Minister Guy Verhofstadt was quoted by AP as saying. He encouraged workers to remain calm and await word on what opportunities might still exist in the Volkswagen operation. The European Union said Belgium could apply for EU aid to help retrain workers, AP relates. "We are aware of the challenging effect that any large-scale redundancy with Volkswagen can have for the Brussels region," EU spokeswoman Katharina Von Schnurbein told AP. Volkswagen aims to keep 1,500 workers at the plant, enough to build the Polo car, Harwig von Sass, a Volkswagen spokesman told Bloomberg News. He added that negotiations with the local union are still ongoing and a decision is yet to be concluded. As previously reported in the TCR-Europe, outgoing CEO Bernd Pischetsrieder, who began VW's restructuring efforts, planned to increase pretax profit to EUR5.1 billion in 2008 from EUR1.1 billion in 2004. The company agreed on a 34-hour workweek with unions in September. Mr. Pischetrieder tried to decrease spending on labor and reduce Volkswagen's global workforce by eliminating some 20,000 German jobs. As previously reported, Martin Winterkorn, Volkswagen's incoming chief executive, aimed to beat the carmaker's 2008 profit target as the company introduces new models and cuts costs. Headquartered in Wolfsburg, Germany, the Volkswagen Group -- http://www.volkswagen.de/-- is one of the world's leading automobile manufacturers and the largest carmaker in Europe. With 47 production plants in eleven European countries and a further seven countries in the Americas, Asia and Africa, Volkswagen has more than 343,000 employees producing over 21,500 vehicles or are involved in vehicle-related services on every working day. * * * Volkswagen has been carrying out measures to cut costs and raise profits, which could affect up to 30,000 jobs. The potential job cuts represent about a third of the carmaker's workforce and three times higher than initial estimates made by Chief Executive Bernd Pischetsrieder and Volkswagen brand head, Wolfgang Bernhard. In November last year, Volkswagen maintained its 2005 earnings guidance amid rumors it may lower targets. The company predicts a year-on-year improvement in both operating profit after special items and profit before tax this year. Rumors flew that the company would slash full-year earnings forecast due to higher restructuring costs. The company said the impact of its workforce reduction measures, which will be charged as special items in the fourth quarter, will be lower than last year's. The company also admitted there were no significant improvements in the economic environment in the first nine months of 2005, and the overall situation in the important automotive markets remained difficult. It also expected tougher competition in the Chinese and U.S. markets, and the rise in fuel prices to influence consumer confidence. VOLKSWAGEN AG: MAN & Scania's Takeover Battle Continues ------------------------------------------------------- MAN AG's EUR10.2 billion hostile bid for Scania AB will continue to drag on after Volkswagen AG failed to support a side in the takeover battle for Scania, Jason Singer and Stephen Power write for Wall Street Journal. According to WSJ, Volkswagen's large shareholdings in MAN and Scania gave it the power to influence the outcome, by either siding with MAN or Investor AB, Scania's second largest shareholder. As reported in the TCR-Europe on Nov. 20, Volkswagen's Supervisory Board stated Nov. 17 that it continues to support the merger of MAN and Scania and confirmed its two resolutions adopted on Oct. 15. It continues to seek an amicable solution, but is open to other strategies if necessary. Volkswagen will offer MAN its interest in Scania if MAN holds at least 56.01% of Scania's voting rights and at least 71.31 of its share capital. However, if it is clear that the offer will not be successful, Volkswagen reserves the right to seek any alternative solution. One possibility is a counterbid by Scania for MAN, which could occur if Volkswagen and Sweden's Wallenberg family, through its holding company Investor AB, agreed to act on it. However, people close to the matter told WSJ that the possibility of a counterbid from Scania is unlikely because it's difficult to accomplish a hostile acquisition in Germany than in Sweden. MAN launched its SEK475 formal bid per Scania share in cash and stock on Nov. 16. The offer would run from Nov. 20 to Dec. 11. A combination of MAN and Scania would create Europe's biggest maker of commercial vehicles by market share and the world's third biggest behind Sweden's Volvo AB and Germany's DaimlerChrysler AG. Headquartered in Wolfsburg, Germany, the Volkswagen Group -- http://www.volkswagen.de/-- is one of the world's leading automobile manufacturers and the largest carmaker in Europe. With 47 production plants in eleven European countries and a further seven countries in the Americas, Asia and Africa, Volkswagen has more than 343,000 employees producing over 21,500 vehicles or are involved in vehicle-related services on every working day. * * * Volkswagen has been carrying out measures to cut costs and raise profits, which could affect up to 30,000 jobs. The potential job cuts represent about a third of the carmaker's workforce and three times higher than initial estimates made by Chief Executive Bernd Pischetsrieder and Volkswagen brand head, Wolfgang Bernhard. In November last year, Volkswagen maintained its 2005 earnings guidance amid rumors it may lower targets. The company predicts a year-on-year improvement in both operating profit after special items and profit before tax this year. Rumors flew that the company would slash full-year earnings forecast due to higher restructuring costs. The company said the impact of its workforce reduction measures, which will be charged as special items in the fourth quarter, will be lower than last year's. The company also admitted there were no significant improvements in the economic environment in the first nine months of 2005, and the overall situation in the important automotive markets remained difficult. It also expected tougher competition in the Chinese and U.S. markets, and the rise in fuel prices to influence consumer confidence. ============= I R E L A N D ============= ELAN CORP: Increases Senior Notes Offer to US$615 Million --------------------------------------------------------- Elan Corp. Plc disclosed of the pricing of the offering of US$615 million aggregate principal amount of Senior Notes by its wholly owned subsidiaries, Elan Finance public limited company and Elan Finance Corp. Elan increased the size of the offering from the US$500 million aggregate principal amount previously announced. The Senior Notes consist of US$465 million aggregate principal amount of 8.875% Senior Fixed Rate Notes due 2013 and US$150 million aggregate principal amount of Senior Floating Rate Notes due 2013. The Floating Rate Notes will bear interest at a rate, adjusted quarterly, equal to three-month LIBOR plus 4.125%. Elan and certain of Elan's subsidiaries will guarantee the Senior Notes. The Senior Notes are being offered to investors at a price of 100% of principal amount. The offering is expected to close on November 22, 2006, subject to customary closing conditions. Following the offering, Elan expects to, through its wholly owned subsidiary Elan Capital Corp., Ltd., issue a redemption notice for the outstanding US$254 million aggregate principal amount of 6.5% Convertible Guaranteed Notes due 2008 issued by Elan Capital Corp., Ltd. and guaranteed by Elan. The net proceeds from the offering are expected to be used to repay any Convertible Notes not converted into equity of Elan (at a conversion price of US$7.42 per share) prior to the redemption date and the remaining net proceeds are expected to be used to repay a portion of the outstanding US$613 million aggregate principal amount of 7.25% Guaranteed Senior Notes due 2008 issued by Athena Neurosciences Finance, LLC, a wholly owned subsidiary of Elan, and guaranteed by Elan, in each case, within 90 days of consummation of the offering. About the Company Headquartered in Ireland, Elan Corporation plc (NYSE: ELN) -- http://www.elan.com/-- is a neuroscience-based biotechnology company. Elan shares trade on the New York, London and Dublin Stock Exchanges. * * * As reported in the TCR-Europe on Nov. 13, Standard & Poor's Ratings Services assigned its 'B' rating to Elan Finance plc's proposed offering of US$500 million senior unsecured notes due 2013, to be issued in a combination of fixed and floating-rate notes. Elan Finance plc is a wholly owned subsidiary of Dublin, Ireland-based specialty pharmaceutical company Elan Corp. plc. The notes are guaranteed on a senior unsecured basis by Elan and all of its existing material subsidiaries. Outstanding ratings on Elan (including the 'B' corporate credit rating) and its related entities were affirmed. The ratings outlook is stable. Also, Moody's Investors Service assigned a B3 rating to the proposed new senior unsecured notes of Elan Finance plc reflecting a guarantee from Elan Corporation plc and material subsidiaries. At the same time, Moody's affirmed Elan's existing ratings (B3 Corporate Family Rating) and the stable rating outlook. The rating outlook is stable. Rating assigned: Elan Finance plc * B3 fixed rate senior notes due 2013 (guaranteed by Elan Corporation, plc and subsidiaries) * B3 floating rate senior notes due 2013 (guaranteed by Elan Corporation, plc and subsidiaries) Ratings affirmed: Elan Corporation, plc * B3 corporate family rating Elan Finance plc * B3 fixed rate senior notes of US$850 million due 2011 (guaranteed by Elan Corporation, plc and subsidiaries) * B3 floating rate senior notes of US$300 million due 2011 (guaranteed by Elan Corporation, plc and subsidiaries) Athena Neurosciences Finance, LLC * B3 senior notes of US$613 million due 2008 (guaranteed by Elan Corporation, plc and subsidiaries) Moody's does not rate Elan's US$254 million convertible notes due 2008. ========= I T A L Y ========= LEAR CORP: S&P Assigns B- Ratings on US$300-Mln Senior Notes ------------------------------------------------------------ Standard & Poor's Ratings Services assigned its 'B-' ratings to Lear Corp.'s US$300 million senior notes due 2013 and its US$400 million senior notes due 2016. Lear's 'B+' corporate credit and other ratings were affirmed. The outlook is negative. The Southfield, Mich.-based global automotive supplier has total debt of about US$3.7 billion, including the present value of operating leases and underfunded employee benefit liabilities. Proceeds from the new debt issues will be used to refinance US$300 million of debt coming due in 2008, and a portion of Lear's US$600 million of debt due in 2009. "We consider the debt refinancing to be a credit-neutral event. Lear's financing costs will likely increase, as interest rates on the new debt issues are expected to exceed those of the debt being refinanced. But Lear will improve its financial flexibility by extending debt maturities amid continuing uncertainty in the cyclical automotive industry," said Standard & Poor's credit analyst Martin King. Pro forma for the transactions, Lear will have virtually no debt maturities for 2007 and 2008. The ratings reflect Lear's depressed operating performance caused by severe industry pressures, which have caused credit protection measures to weaken dramatically in the past two years. In addition, the company has a weak business profile because of its heavy exposure to automotive customers and product segments that are losing market share. More favorably, Lear has strong market positions, good growth prospects outside of North America, and fair financial flexibility. Lear has reported improved results during the first nine months of 2006, following a very poor performance during 2005 when full-year EBITDA fell by 35%. Core operating earnings, as defined by Lear to exclude restructuring costs and special charges, have increased by 40%, but still remain at relatively low levels. EBIT and margins in Lear's seating unit have improved, but are down in its electronic and electrical unit because of high commodity costs and price reductions. The company's interiors unit continues to generate large losses because of high commodity costs and low volumes. * Fitch Downgrades Ratings of Italian City of Taranto to CC ----------------------------------------------------------- Fitch Ratings downgraded Taranto's Long-term local and foreign currency ratings to CC from BB+ and its Short-term foreign currency rating to C from B on the prospect of defaulting on its imminent debt repayments. The ratings remain on Rating Watch Negative and may be downgraded further if the likelihood of missing repayment of debt installments increases. The rating actions reflect the potential reversal of the normal waterfall of priorities at Taranto according to which financial debt is usually served before any other liabilities. The municipality is expected to instruct its treasurer bank - Banca Popolare di Puglia e Basilicata - to subordinate the repayment of financial debt to other operating expenses, such as wages. This follows an unconfirmed decision of the treasurer bank's Board Of Directors on Nov. 17 to line up with the also unconfirmed reports of Ministry of the Interior officials' suggestion to use the municipality's liquidity available and subsidies being provided by the Ministry to pay, among others, the salary of Taranto's personnel. This is likely to absorb part of Taranto's liquidity that is earmarked for debt servicing. This action is likely to directly affect the repayment of EUR25 million of advances extended in 2004 to Taranto, which were to have been repaid on a subsequent asset sale that never materialized. The reversal of payment priorities could also negatively affect the repayment of installments of about EUR10 million of long-term loans and bonds falling due between 21/23 November and end-December 2006 out of a total of EUR320 million outstanding. The change in priority payments could expose the treasurer bank to claims from long-term financial lenders of the Municipality for potential credit losses as it infringes a national law requiring a local government's treasurer bank to pay loans and bond installments when they come due. Fitch will continue to monitor the evolution of Taranto's finances and the action of the treasurer bank in respect of both timely repayment of the long-term financial debt and potential losses for bond and loan-holders, in the event of default on loans that are due by end-2006. Taranto declared financial distress in mid-October 2006. The eventual approval of a new 2007 municipal budget authorizing the city to resume normal operations should also imply the resumption of timely debt service for the outstanding long-term bonds and loans, while liabilities predating the declaration of distress and those arising between the distress and resumption of normal operations will be stripped out from the municipality's budget and managed by a separate entity. Liabilities managed under the Commissione di Liquidazione do not bear interest and are eligible for proportional settlement if non-core assets of the municipality and potential capital grants are not enough to cover them. Even if the city does not default on its imminent debt repayments in the coming days, there is still the possibility that Taranto may default on the loan repayments due in December. Fitch expects to conclude its review and resolve the Rating Watch over the next few weeks. The review will focus on the ongoing status of Taranto's finance and confirmation of whether or not the city intends to continue to service loans and bonds despite the instructions to change the prioritization of preferential payments. =================== K A Z A K H S T A N =================== KARATAU LLP: Creditors Must File Claims by Dec. 27 -------------------------------------------------- LLP Building Firm Karatau has declared insolvency. Creditors have until Dec. 27 to submit written proofs of claim to: LLP Building Firm Karatau Jirentaev Str. 5 Almaty District Astana, Kazakhstan KOMUNSNAB-SERVICE LLP: Court Begins Bankruptcy Proceedings ---------------------------------------------------------- The Specialized Inter-Regional Economic Court of Karaganda Region has commenced bankruptcy proceeding against LLP Komunsnab-Service Communal Supply Service (RNN 301200210729). LLP Komunsnab-Service Communal Supply Service is located at: Metallurgov Str. 28-89 Temirtau Karaganda Region Kazakhstan KURLYS AGRO: South Kazakhstan Court Starts Bankruptcy Procedure --------------------------------------------------------------- The Specialized Inter-Regional Economic Court of South Kazakhstan Region commenced bankruptcy proceedings against LLP Kurlys Agro. MONSTA-DETERGENTS LLP: Court Opens Bankruptcy Proceedings --------------------------------------------------------- The Specialized Inter-Regional Economic Court of Karaganda Region commenced bankruptcy proceedings against LLP Monsta- Detergents (RNN 301400001328). LLP Monsta-Detergents is located at: Promzona Str. 1 Temirtau Karaganda Region Kazakhstan NAIZ LLP: Creditors' Claims Due Jan. 2, 2007 -------------------------------------------- The Specialized Inter-Regional Economic Court of Almaty declared LLP Naiz insolvent. Creditors have until Jan. 2, 2007, to submit written proofs of claim to: LLP Naiz Nurmahanov Str. 31 Micro District Taugul-3 Almaty, Kazakhstan Tel: 8 (3272) 56-97-68 ORBITA TELEKOM: Creditors' Claims Due Dec. 27 --------------------------------------------- LLP Orbita Telekom has declared insolvency. Creditors have until Dec. 27 to submit written proofs of claim to: LLP Orbita Telekom Al-Farabi Ave. 93-18 Almaty, Kazakhstan REMMONTAJSERVICE LLP: Court Commences Bankruptcy Proceedings ------------------------------------------------------------ The Specialized Inter-Regional Economic Court of Karaganda Region commenced bankruptcy proceedings against LLP Remmontajservice Repair Montage Service (RNN 301200019455). LLP Remmontajservice Repair Montage Service is located at: Privokzalnaya Str. 2 Temirtau Karaganda Region Kazakhstan SAGYM LLP: Claims Filing Period Ends Jan. 2, 2007 ------------------------------------------------- The Specialized Inter-Regional Economic Court of West Kazakhstan Region commenced bankruptcy proceedings against LLP Sagym on Oct. 24. Creditors have until Jan. 2, 2007, to submit written proofs of to: LLP Sagym Fedorovka Terekty District West Kazakhstan Region Kazakhstan Tel: 8 (232) 2-10-40 SHARUA MK: South Kazakhstan Court Opens Bankruptcy Proceedings -------------------------------------------------------------- The Specialized Inter-Regional Economic Court of South Kazakhstan Region commenced bankruptcy proceedings against LLP Sharua MK. TECHSERVICE-L LLP: Proof of Claim Deadline Slated for Dec. 27 ------------------------------------------------------------- LLP Techservice-l has declared insolvency. Creditors have until Dec. 27 to submit written proofs of claim to: LLP Techservice-l Floor 4 Maresiev Str. 99 Aktobe Aktube Region Kazakhstan =================== K Y R G Y Z S T A N =================== AVTOSERVICE-DALALAT OJSC: Creditors' Claims Due Jan. 5, 2007 ------------------------------------------------------------ OJSC Avtoservice-Dalalat has declared insolvency. Creditors have until Jan 5, 2007, to submit written proofs of claim to: OJSC Avtoservice-Dalalat Panfilov Str. 1 Kant Chui Region Kyrgyzstan Tel: (+996 3132) 2-34-91 MILTON TRADE: Proof of Claim Deadline Slated for Jan. 3, 2007 ------------------------------------------------------------- LLC Milton Trade has declared insolvency. Creditors have until Jan. 3, 2007, to submit written proofs of claim. Inquiries can be addressed to (+996 312) 62-06-05, 97-48-42. ===================== N E T H E R L A N D S ===================== CORUS GROUP: Brazil's Companhia Siderurgica Starts Takeover Bid --------------------------------------------------------------- Companhia Siderurgica Nacional S.A. has approached the Board of Corus Group plc regarding a proposal to acquire the Company at a price of 475 pence per ordinary share in cash. Any potential offer is subject to certain pre-conditions, all of which CSN reserves the right to waive, including: -- completion of confirmatory due diligence satisfactory to CSN; -- finalization of financing arrangements; and -- a recommendation from the Board of Corus. The combination of CSN and Corus would create a top five global steel group with 24 million tons of annual steel production and, by 2010, around 50 million tons of annual iron ore production. CSN intends to finance the Corus acquisition through a combination of existing financial resources and the proceeds of new debt facilities to be underwritten by a bank syndicate comprised of Barclays Bank PLC, Goldman Sachs Credit Partners L.P., and BNP Paribas and/or their designated affiliates. CSN intends to match the terms of the agreement reached with the trustees of Corus' pension funds as described in Corus' scheme document. "A combination of CSN and Corus would create a global powerhouse with market leading positions and exceptional distribution networks across both developed and emerging markets," Benjamin Steinbruch, Chairman and CEO of CSN said. "With its vertically integrated structure and industry leading margins, the enlarged group would become a leader in the global steel industry, fully self-sufficient in iron ore and ideally positioned to take advantage of ongoing consolidation. We have great respect for the accomplishments of the Corus Board and management, including their achievements in the Restoring Success program. With their support, we believe we can swiftly deliver the most attractive proposal to Corus and its shareholders." About Companhia Siderurgica Nacional Headquartered Sao Paolo, Brazil, Companhia Siderurgica Nacional S.A. (NYSE: SID) (BOVESPA: CSNA3) -- http://www.csn.com.br/-- produces, sells, exports and distributes steel products, like hot-dip galvanized sheets, tin mill products and tinplate. The company also runs its own iron ore, manganese, limestone and dolomite mines and has strategic investments in railroad companies and power supply projects. The group also operates in Portugal and the U.S. About Corus Group Corus Group PLC -- http://www.corusgroup.com/-- produces metal from its major operating facilities in the U.K., the Netherlands, Germany, France, Norway, Belgium and Canada. Corus turns over GBP10 billion annually and employs 47,300 in over 40 countries and sales offices and service centers worldwide, including Indonesia and the Philippines. Corus was created through the merger of British Steel plc and Koninklijke Hoogovens N.V. The group suffered six years ago from the crisis in British manufacturing, which prompted it to shake up management, close plants, cut jobs, and sell assets to lower debt. Its debt was thought to stand at GBP1.6 billion in 2002. After posting a net loss of GBP458 million in 2003, it embarked on a restructuring program, signed a new EUR1.2 billion banking facility, and issued GBP307 million worth of shares. It returned to operating profit in the first quarter of 2004. The recent recovery of steel prices and the strength of the euro are expected to help it achieve relatively strong earnings. * * * Moody's Investors Service placed all ratings of Corus Group plc under review with direction uncertain following the recommendation of the board of Corus Group in favor of the proposed acquisition of the entire capital of Corus Group by Tata Steel Limited. If the bondholders exercised the put option or the bonds were tendered for above par as part of a refinancing, Moody's is likely to withdraw the ratings for the bonds. Similarly, a refinancing of the rated bank loans would also result in a likely withdrawal of the ratings for the credit facilities. At that juncture, Moody's remaining rating at Corus Group will be the corporate family rating. Ratings affected: Corus Group plc * Ba2 Corporate Family Rating; * Ba1 Rating on EUR800 million Secured Bank Facilities maturing July 2008; * B1 Rating on EUR800 million Unsecured Notes due 2011; and * B1 Rating on GBP200 million in Unsecured Notes due 2008. Moody's last rating action on Corus was the upgrade to Ba2/Ba1/B1 on May 8. Fitch Ratings changed the Rating Watch on Corus Group PLC's Issuer Default and senior unsecured BB- and Short-term B ratings to Negative from Positive. This follows the recommendation by the CS Board of an offer from India-based Tata Steel Ltd. valued at GBP4.3 billion. The RWN also applies to these debt instruments issued by CS: -- CS EUR800 million 7.5% senior notes; -- CS EUR307 million 3% convertible bonds; and -- Corus Finance Plc GBP200 million 6.75% guaranteed bonds. Fitch will resolve the Rating Watch following publication of CS's 2006 results, further details on the level of synergies and operational benefits that could accrue under the transaction, and the closure of the deal. Standard & Poor's Ratings Services placed its 'BB' long-term corporate credit rating on U.K.-based steel consortium Corus Group PLC on CreditWatch with positive implications following the announcement by Corus concerning a possible recommended offer for the company from Tata Steel Ltd., India's second largest integrated steel company. At the same time, Standard & Poor's placed its 'BB+' senior secured bank loan ratings on Corus and its 'BB-' senior unsecured debt ratings on Corus and related entity Corus Finance PLC on CreditWatch with positive implications. The 'B' short- term corporate credit rating on Corus was also placed on CreditWatch with positive implications. CORUS GROUP: Proposed Takeover Cues S&P's Developing Watch ---------------------------------------------------------- Standard & Poor's Ratings Services kept its 'BB' long-term corporate rating on U.K.-based steelmaker Corus Group PLC on CreditWatch with developing implications, following the announcement by Brazil-based steel maker Companhia Siderurgica Nacional (BB/Watch Neg/--) of a proposed takeover offer worth 475 pence per share. At the same time, the 'BB+' senior secured bank loan ratings and 'BB-' unsecured debt ratings on Corus remain on CreditWatch with developing implications. The 'B' short-term corporate credit rating remains on CreditWatch with positive implications. All ratings were placed on CreditWatch on Oct. 18 following the announcement of an initial bid for the company from India-based steel manufacturer Tata Steel Ltd.. The proposed new offer from CSN is larger than the bid for Corus from Tata Steel, which is worth 455 pence per share. As a result, the new offer has increased uncertainties over the potential outcome for Corus. "We note that integration with low-cost operations of either of the bidders might benefit Corus' weak business profile," said Standard & Poor's credit analyst Tatiana Kordyukova. "Both bidders have referred to nonrecourse debt as a part of the respective financial structures, however, and it is not yet clear how feasibly such debt could be served from the cash flows of Corus and to what extent that could impair Corus' financial position." It is also not certain how both offers could evolve in the future. Upside potential remains if the Tata Steel bid is successful: Because Tata Steel is an entity with higher stand- alone creditworthiness, the combined entity could have a stronger credit quality than Corus on a standalone basis -- provided there is sufficient evidence that Tata Steel will provide financial support to Corus. In resolving the CreditWatch placement, Standard & Poor's will seek further information on the progress of the proposed offers made by both Tata Steel and CSN. In resolving the CreditWatch placement, the rating agency will assess whether Corus' weak business risk profile would be enhanced, and how such a transaction would be financed. Furthermore, it will consider the potentially substantial integration challenges. CORUS GROUP: Tata Steel May Raise Offer to Top CSN's Bid -------------------------------------------------------- Tata Steel Ltd. may raise its offer for Corus Group Plc in order to top the rival bid launched by Brazil's Companhia Siderurgica Nacional SA, Bloomberg says. As previously disclosed, Companhia Siderurgica last week offered GBP4.26-billion to acquire Corus Group, topping a bid by India's Tata Steel. Companhia Siderurgica said that it had approached its board of directors with a proposal to pay 475 pence per share in cash, which is 4.4% higher than Tata Steel's 455 pence offer. The offer was subject to due diligence and Companhia Siderurgica has not yet made a firm bid. Bloomberg relates that Tata Steel and Companhia Siderurgica both want to buy Corus Group to add mills in Europe and boost bargaining power with clients and suppliers. Surging demand has spurred US$78 billion in announced transactions in the industry this year. Bloomberg cites John Thorn, who manages US$250 million in Indian stocks at India Capital Fund Ltd., as saying that Tata Steel will have to raise its offer to stay in the game, adding that although Tata Steel has a first-mover advantage, at the end of the day, money matters. About Corus Group Corus Group PLC -- http://www.corusgroup.com/-- produces metal from its major operating facilities in the U.K., the Netherlands, Germany, France, Norway, Belgium and Canada. Corus turns over GBP10 billion annually and employs 47,300 in over 40 countries and sales offices and service centers worldwide, including Indonesia and the Philippines. Corus was created through the merger of British Steel plc and Koninklijke Hoogovens N.V. The group suffered six years ago from the crisis in British manufacturing, which prompted it to shake up management, close plants, cut jobs, and sell assets to lower debt. Its debt was thought to stand at GBP1.6 billion in 2002. After posting a net loss of GBP458 million in 2003, it embarked on a restructuring program, signed a new EUR1.2 billion banking facility, and issued GBP307 million worth of shares. It returned to operating profit in the first quarter of 2004. The recent recovery of steel prices and the strength of the euro are expected to help it achieve relatively strong earnings. * * * Moody's Investors Service placed all ratings of Corus Group plc under review with direction uncertain following the recommendation of the board of Corus Group in favor of the proposed acquisition of the entire capital of Corus Group by Tata Steel Limited. If the bondholders exercised the put option or the bonds were tendered for above par as part of a refinancing, Moody's is likely to withdraw the ratings for the bonds. Similarly, a refinancing of the rated bank loans would also result in a likely withdrawal of the ratings for the credit facilities. At that juncture, Moody's remaining rating at Corus Group will be the corporate family rating. Ratings affected: Corus Group plc * Ba2 Corporate Family Rating; * Ba1 Rating on EUR800 million Secured Bank Facilities maturing July 2008; * B1 Rating on EUR800 million Unsecured Notes due 2011; and * B1 Rating on GBP200 million in Unsecured Notes due 2008. Moody's last rating action on Corus was the upgrade to Ba2/Ba1/B1 on May 8. Fitch Ratings changed the Rating Watch on Corus Group PLC's Issuer Default and senior unsecured BB- and Short-term B ratings to Negative from Positive. This follows the recommendation by the CS Board of an offer from India-based Tata Steel Ltd. valued at GBP4.3 billion. The RWN also applies to these debt instruments issued by CS: -- CS EUR800 million 7.5% senior notes; -- CS EUR307 million 3% convertible bonds; and -- Corus Finance Plc GBP200 million 6.75% guaranteed bonds. Fitch will resolve the Rating Watch following publication of CS's 2006 results, further details on the level of synergies and operational benefits that could accrue under the transaction, and the closure of the deal. Standard & Poor's Ratings Services placed its 'BB' long-term corporate credit rating on U.K.-based steel consortium Corus Group PLC on CreditWatch with positive implications following the announcement by Corus concerning a possible recommended offer for the company from Tata Steel Ltd., India's second largest integrated steel company. At the same time, Standard & Poor's placed its 'BB+' senior secured bank loan ratings on Corus and its 'BB-' senior unsecured debt ratings on Corus and related entity Corus Finance PLC on CreditWatch with positive implications. The 'B' short- term corporate credit rating on Corus was also placed on CreditWatch with positive implications. LUCENT TECH: Reserves US$284 Mln for Winstar Contract Dispute ------------------------------------------------------------- In a regulatory filing with the U.S. Securities and Exchange Commission, Lucent Technologies Inc. reported it has set aside a contingency fund totaling US$284 million in connection with its breach of contract litigation against Winstar Communications LLC. David W. Hitchcock, Lucent's corporate controller, said the company recognized the US$284 million as a charge in its 2006 financial statements: * US$278 million charge -- including related interest and other costs of around US$34 million -- in the first quarter of fiscal 2006; and * US$6 million charge for post-judgment interest during the nine months ended June 30, 2006. Cash, totaling US$311 million, was used to collateralize a letter of credit that was issued during the second quarter of fiscal 2006 in connection with the litigation, Mr. Hitchcock adds. Mr. Hitchcock said additional charges for post-judgment interest will be recognized in subsequent periods until the dispute is resolved. Attempt to Settle Dispute In an attempt to settle the dispute between Christine C. Shubert, the Chapter 7 Trustee of Winstar Communications, Inc., et al.; and Lucent Technologies, Inc., District Court Judge Joseph J. Farnan appointed as mediator, Ian Connor Bifferato, Esq., at Bifferato, Gentilotti, Biden & Balick, in Wilmington, Delaware. The Appeal, including briefing, was held in abeyance pending the mediation. Mr. Bifferato met with the parties on May 8, 2006, for a mediation session, but the parties did not settle. As a result, Lucent and Winstar proceeded with the briefing on the Appeal. Parties File Briefs (A) Lucent Lucent Technologies sought authority from the U.S. District Court for the District of Delaware to reverse the Bankruptcy Court's rulings relating to the Trustee's preference claim, subcontract claim, and equitable subordination claim. According to James M. Madron, Esq., at Richards, Layton & Finger, P.A., in Wilmington, Delaware, the decisions of the Bankruptcy Court can only be understood against the backdrop of the rapid rise and fall of the telecommunications sector -- the bursting of the 1990s telecom bubble. Winstar was one of many telecommunications companies founded in 1990 that sought to build a global broadband network to provide high-speed telecommunications services to business customers. Following the passage of the Telecommunications Act of 1996, which deregulated the industry, capital flooded into that sector of the economy, Mr. Madron relates. At that time, many companies racked up huge debts laying redundant fiber-optic cables over the same city-to-city routes on the mistaken -- and, in retrospect, wildly unrealistic -- assumption that demand would keep pace. Because much of the investment was vendor-financed, manufacturersincluding Lucent, Nortel, Motorola, Alcatel and Cisco, lent billions of dollars to the telecom companies that purchased their equipment, Mr. Madron says. But when the demand for telecom services did not match expectations, competition in various markets across the industry and "vicious" price wars ensued, driving down overall industry and individual company revenues. As some telecom companies began to fail and enter bankruptcy, others resorted to fraud and deception to mask those core fundamental problems facing their companies, Mr. Madron says. "Some went so far in their deception to not only mask failure, but to inflate, artificially, revenue growth -- to make it look like the dream was real," he adds. Winstar's bankruptcy case arises from that environment, Mr. Madron tells the District Court. During the heady days of the telecommunications boom, Winstar and Lucent entered into agreements intended to create a mutually beneficial strategic relationship. In the course of that relationship, Lucent and Winstar concededly engaged in some of misconduct, Mr. Madron says. As the telecom sector was collapsing, the parties' relationship deteriorated. When Winstar ultimately filed for bankruptcy, it sued Lucent for, among others, breach of contract. Subsequently, the bankruptcy case was converted to Chapter 7. The Trustee, Ms. Shubert, took over the action, adding a new claim -- that Lucent received an improper preferential payment from Winstar prior to the bankruptcy. The Trustee's case focuses heavily on the allegations of corporate misconduct that she leveled against Lucent, Mr. Madron notes. Neither the preference statute nor state contract law, however, is intended to provide a remedy for claims of improper accounting or other financial irregularities, Mr. Madron argues. Losing sight of that fact, the Bankruptcy Court made the fundamental error of allowing its distaste for Lucent's conduct to override its obligation to follow governing law, Mr. Madron says. In so doing, he continues, the Bankruptcy Court upset previously settled principles that are critical to commercial lending. The Bankruptcy Court's errors will thus have serious adverse consequences, not only for Lucent, but also for any party doing business with companies that may seek bankruptcy protection in Delaware, Mr. Madron asserts. Mr. Madron notes that Lucent was not an "insider" of Winstar. The Bankruptcy Court, among other things, applied the wrong standard in concluding that Lucent was a "person in control" of Winstar, Mr. Madron argues. Winstar's payment in December 2000 to Lucent was not a transfer of the Debtors' property because it came from earmarked funds, from a loan that Winstar contracted with Siemens, Mr. Madron contends. Lucent says it is entitled to a new value defense because it provided Winstar new value in the form of equipment and related services. Moreover, Lucent did not breach any obligation to Winstar's subsidiary, Winstar Wireless, Inc., under a March 1999 subcontract, Mr. Madron argues. Additionally, he says, the Bankruptcy Court erred in equitably subordinating Lucent's claims by relying on the erroneous conclusion that Lucent was an insider of Winstar, and by improperly disregarding the Bankruptcy Code. A full-text copy of Lucent's Opening Brief on the Appeal is available for free at http://ResearchArchives.com/t/s?1566 Because of the complexity of the issues of law involved, Lucent also sought permission from the District Court to conduct an oral argument on the case. (B) Winstar Lucent is changing its strategy and concedes that it engaged in "misconduct" and "suspect" transactions, but does specify the facts underlying that "misconduct" and those "suspect" transactions, Sheldon K. Rennie, Esq., at Fox Rothschild LLP, in Wilmington, Delaware, points out, on behalf of the Chapter 7 Trustee. Mr. Rennie says these facts are at the heart of the Bankruptcy Court's insider determination -- "a series of last minute, massive end of quarter sales and related conduct in which Lucent repeatedly caused Winstar to do Lucent's bidding, including participation in numerous schemes and outright fraud to create hundreds of millions of dollars of fake revenue so that Lucent could appear to be more profitable than it was." What began as a "strategic partnership" to benefit both parties degenerated into a relationship in which the much larger company -- Lucent -- bullied and threatened the smaller company -- Winstar -- into taking actions that were designed to benefit the larger at the expense of the smaller, Mr. Rennie points out. Hence, the Trustee sought authority from the District Court to affirm in all respects the Bankruptcy Court's findings regarding the Preferential Claim. The Bankruptcy Court, according to Mr. Rennie, found that Winstar satisfied both: (i) the statutory definition that Lucent was a "person in control" of Winstar; and (ii) the non-statutory test, by finding that Lucent and Winstar did not deal at arm's length. Regardless of which test is applied, insider status is determined case-by-case, by a "fact-intensive" inquiry into the closeness of the relationship, Mr. Rennie points out. The December 2000 Transfer was not earmarked for Lucent, Mr. Rennie argues. The parties agree that to establish an earmarking defense, there must be: (1) an agreement between the new lender -- Siemens -- and Winstar that the loan funds would be used exclusively to pay a specified antecedent debt; (2) performance of the agreement in accordance with its terms; and (3) no diminution of Winstar's estate as a result of the transaction. Mr. Rennie asserts that Siemens did not require Winstar to use the Siemens funds to pay Lucent. Instead, the Siemens loan was to be used as Winstar's working capital. In addition, Mr. Rennie continues, Lucent waived the earmarking defense by failing to raise it in its answer or in the pre-trial memorandum. According to Mr. Rennie, the Bankruptcy Court properly rejected Lucent's new value defense under Section 547(C)(4) of the Bankruptcy Code because Lucent failed to prove that it provided to Winstar new value for goods and related services after Dec. 7, 2000, and that the new value was unsecured. The Trustee sought permission from the District Court to affirm the Bankruptcy Court's decision equitably subordinating Lucent's claims due Lucent's breach of the Wireless Subcontract. A full-text copy of the Trustee's Brief in Opposition of Lucent's Appeal is available for free at: http://ResearchArchives.com/t/s?1567 Lucent's Reply Neither the bankruptcy preference statute nor the New York contract law provides a remedy for allegations of securities fraud that lie at the heart of the Trustee's story, Mr. Madron reiterates. A creditor is not a "person in control" unless it exercised actual managerial control over the debtors' business affairs, Mr. Madron asserts. The Bankruptcy Court nevertheless erroneously concluded that Lucent "controlled" Winstar even though the two companies were managed by separate and independent directors and officers, Mr. Madron points out. The question on the Appeal focuses on whether the particular laws under which the Trustee has asserted her claims -- the Bankruptcy Code and the New York contract law -- gave it the relief, which the Bankruptcy Court has granted. The Bankruptcy Code and the New York contract law, Mr. Madron insists, cannot provide that relief to the Trustee. The Trustee's efforts to defend the Bankruptcy Court's faulty reasoning fail and her arguments are contradicting, Mr. Madron points out. Moreover, the standard of review for the Appeal does not depend on the subject matter of the claim, but only on the nature of the Bankruptcy Court's conclusions, Mr. Madron says. The Bankruptcy Court's conclusions of law and its application of law to facts must be reviewed de novo regardless of the subject matter, Mr. Madron further asserts. A full-text copy of Lucent's Reply Brief is available for free at: http://ResearchArchives.com/t/s?1568 About Winstar Headquartered in New York, New York, Winstar Communications, Inc., provides broadband services to business customers. The Company and its debtor-affiliates filed for chapter 11 protection on April 18, 2001 (Bankr. D. Del. Case Nos. 01-01430 through 01-01462). The Debtors obtained the Court's approval converting their case to a chapter 7 liquidation proceeding in January 2002. Christine C. Shubert serves as the Debtors' chapter 7 trustee. When the Debtors filed for bankruptcy, they listed US$4,975,437,068 in total assets and US$4,994,467,530 in total debts. About Lucent Technologies Based in Murray Hill, New Jersey, Lucent Technologies Inc. (NYSE: LU) -- http://www.lucent.com/-- designs and delivers the systems, services and software that drive next-generation communications networks. Backed by Bell Labs research and development, Lucent uses its strengths in mobility, optical, software, data and voice networking technologies, as well as services, to create new revenue-generating opportunities for its customers, while enabling them to quickly deploy and better manage their networks. Lucent's customer base includes communications service providers, governments and enterprises worldwide. Lucent also operates in Austria, Belgium, China, Czech republic, Denmark, France, Germany, India, Ireland, Japan, Korean, Brazil, CIS, the Netherlands, Poland, Slovak Republic, Spain, Sweden, Switzerland, Russia, and the United Kingdom. * * * In November 2006, Standard & Poor's Ratings Services said that its 'BB' long-term corporate credit rating on France-based Alcatel and its 'B' long-term corporate credit rating on U.S.- based Lucent Technologies Inc. remain on CreditWatch with negative and positive implications, respectively, where they were placed on March 24 on news of the two telecoms equipment makers' plans to merge. The ratings will remain on CreditWatch until completion of the merger and clarification of the ranking and support mechanisms for the various debt classes within the merged group's capital structure. The ratings on the individual debt issues of each company will be clarified at that time. Standard & Poor's 'B' and 'B-1' short-term corporate ratings on Alcatel and Lucent, respectively, are not on CreditWatch and remain unchanged. In April 2006, Moody's Investors Service placed Lucent's B1 corporate family rating, B1 senior unsecured rating, B3 subordinated rating, and B3 trust preferred rating under review for possible upgrade following the company's announcement of a definitive merger agreement with Alcatel. LUCENT TECHNOLOGIES: Unveils Several New CDMA2000 Products ---------------------------------------------------------- Lucent Technologies has unveiled several new CDMA2000 products ideal for wireless service providers that desire to provide high-quality third-generation (3G) mobile voice and high-speed data services in emerging markets. These cost-effective and compact base station and switching platforms also can help reduce operating expenses. Several wireless service providers are already receiving shipments of these products, which include the Lucent Mobility Manager Compact, a switching platform that handles the call processing and mobility management functions in a CDMA network. Lucent also introduced the Packet Switch Compact, a switching platform with a reduced footprint that can grow to increase capacity as needed, and the Lucent CDMA Base Station 4400, which provides operational savings due to its small footprint and efficient power utilization. "Typically, service providers in emerging markets demand cost- competitive, scalable, and reliable products that can provide significant investment protection so that they can easily and cost-effectively upgrade their existing infrastructure as their subscriber base grows and the need to support the latest technological advancements arises," said Mary Chan, vice president of global Mobility research and development, Lucent Technologies. "We're meeting all of these needs with the products we've introduced." "CDMA is a large and sustainable market with growth opportunities in the emerging markets segment," Mike Iandolo, president of Mobility Access Solutions for Lucent Technologies, added. "The products we've introduced will help Lucent better compete for business in this space." Lucent CDMA Base Station 4400 The Lucent CDMA Base Station 4400 is an ultra-compact base station, ideal for small to medium capacity network deployments. Its small footprint saves on real estate and operational support costs. The product supports CDMA2000 1X, CDMA2000 1xEV-DO Revision 0 and CDMA2000 1xEV-DO Revision A technology, as well as IP (Internet Protocol) backhaul capabilities. Built on Lucent's OneBTS base station platform for 3G spread- spectrum technologies, the Base Station 4400 can support 850 MHz spectrum. Currently, the indoor version is generally available. The outdoor version will be available early next year. Lucent Mobility Manager Compact The Mobility Manager Compact supports CDMA2000 1X voice and data services and advanced features such as IP backhaul. It also has an improved design that maximizes call processing power. Lucent Packet Switch Compact The Packet Switch Compact is a scaleable switching solution that enables operators to add capacity as needed, providing significant investment protection. It also supports the evolution to IMS (IP Multimedia Subsystem) via its support for IP applications. When deploying this system in remote or rural areas, the switching and vocoding functions can be moved closer to the base stations while maintaining a central Mobility Manager and home location register. This can help operators reduce backhaul costs. "Emerging markets continue to be a growth opportunity for all wireless technologies," noted Peter Jarich, principal analyst with Current Analysis. "Opex-efficient base stations are a key component of any developing market offer. Flexible switching assets - along with credible professional services capabilities - are equally important." Lucent Services, a leading network solutions integrator, is one of the industry's most experienced network services organizations. Lucent's Professional Services team provides a wide range of wireless capabilities that fully complement Lucent's products introduced including RF planning, network optimization, deployment and integration, maintenance and remote monitoring and control. About Lucent Technologies Headquartered in Murray Hill, New Jersey, Lucent Technologies (NYSE: LU) -- http://www.lucent.com/-- designs and delivers the systems, services and software that drive next-generation communications networks. Backed by Bell Labs research and development, Lucent uses its strengths in mobility, optical, software, data and voice networking technologies, as well as services, to create new revenue-generating opportunities for its customers, while enabling them to quickly deploy and better manage their networks. Lucent's customer base includes communications service providers, governments and enterprises worldwide. Lucent also operates in Austria, Belgium, China, Czech republic, Denmark, France, Germany, India, Ireland, Japan, Korean, Brazil, CIS, the Netherlands, Poland, Slovak Republic, Spain, Sweden, Switzerland, Russia, and the United Kingdom. * * * As reported in the TCR-Europe on Nov. 9, Standard & Poor's Ratings Services said that its 'BB' long-term corporate credit rating on France-based Alcatel and its 'B' long-term corporate credit rating on U.S.-based Lucent Technologies Inc. remain on CreditWatch with negative and positive implications, respectively, where they were placed on March 24 on news of the two telecoms equipment makers' plans to merge. The ratings will remain on CreditWatch until completion of the merger and clarification of the ranking and support mechanisms for the various debt classes within the merged group's capital structure. The ratings on the individual debt issues of each company will be clarified at that time. Standard & Poor's 'B' and 'B-1' short-term corporate ratings on Alcatel and Lucent, respectively, are not on CreditWatch and remain unchanged. According to Troubled Company Reporter on April 7, Moody's Investors Service placed Lucent Technologies, Inc.'s B1 corporate family rating, B1 senior unsecured rating, B3 subordinated rating, and B3 trust preferred rating under review for possible upgrade following the company's announcement of a definitive merger agreement with Alcatel. PHELPS DODGE: Inks US$25.9-Bln Merger Pact with Freeport-McMoRan ---------------------------------------------------------------- Phelps Dodge Corp. and Freeport-McMoRan Copper & Gold Inc. have signed a definitive merger agreement under which FCX will acquire Phelps Dodge for around US$25.9 billion in cash and stock, creating the world's largest publicly traded copper company. The combined company will be a new industry leader with large, long-lived, geographically diverse assets and significant proven and probable reserves of copper, gold, and molybdenum. The company's increased scale of operations, management depth, and strengthened cash flow will provide an improved platform to capitalize on growth opportunities in the global market. The combined company will be the largest North American-based mining company. The company will enjoy an excellent cost position, long reserve life, a diversified geographic footprint, and an attractive growth profile. FCX currently operates the world-class Grasberg mine, located in Papua, Indonesia, which is the world's largest copper and gold mine in terms of reserves. Phelps Dodge has mines in operation or under development in North and South America, and Africa, including the world-class Tenke Fungurume development project in the Democratic Republic of the Congo. The combined company will represent one of the most geographically diversified portfolios of operating, expansion and growth projects in the copper mining industry. James R. Moffett, chairman of the board of FCX, said: "This transaction combines two leading mining companies to form a strong industry leader at a time when we see significant long- term opportunities in our industry. FCX has been built through our exploration and development capabilities, and we will focus on aggressively pursuing opportunities in the extensive Phelps Dodge asset portfolio." Richard C. Adkerson, FCX's president and chief executive officer, said: "This acquisition is financially compelling for FCX shareholders, who will benefit from significant cash flow accretion, lower cost of capital, and improved geographic and asset diversification. The new FCX will continue to invest in future growth opportunities with high rates of return and will aggressively seek to reduce debt incurred in the acquisition using the substantial free cash flow generated from the combined business." Adkerson continued: "Together, FCX and Phelps Dodge will have the size, management depth and financial strength to optimize existing operations and accelerate our growth by aggressively pursuing promising new development projects, exploration and acquisitions. We are enthusiastic about the addition of Phelps Dodge's highly regarded mining team, which will complement our existing organization, and are delighted to welcome Phelps Dodge's talented team to the FCX family." J. Steven Whisler, chairman and chief executive officer of Phelps Dodge, said: "This transaction provides Phelps Dodge shareholders a significant premium for their shares and gives them the opportunity to participate in the upside potential of a geographically diversified industry leader possessing the scale and asset quality to compete on the global stage successfully. I believe our management team, with its industry-recognized reputation for operational excellence and technological innovation, possesses the skills in open pit and underground mining and mineral processing to add value to FCX's operations. We look forward to working with FCX to realize all of the benefits of this combination, and its exciting portfolio of growth and expansion projects, for our shareholders, customers, employees and suppliers." Terms of the Transaction Under the terms of the transaction, FCX will acquire all of the outstanding common shares of Phelps Dodge for a combination of cash and common shares of FCX for a total consideration of US$126.46 per Phelps Dodge share, based on the closing price of FCX stock on Nov. 17, 2006. Each Phelps Dodge shareholder would receive US$88.00 per share in cash plus 0.67 common shares of FCX. This represents a premium of 33% to Phelps Dodge's closing price on Nov. 17, 2006, and 29% to its one-month average price at that date. The cash portion of US$18 billion represents around 70% of the total consideration. In addition, FCX would deliver a total of 137 million shares to Phelps Dodge shareholders, resulting in Phelps Dodge shareholders owning around 38% of the combined company on a fully diluted basis. The boards of directors of FCX and Phelps Dodge have each unanimously approved the terms of the agreement and have recommended that their shareholders approve the transaction. The transaction is subject to the approval of the shareholders of FCX and Phelps Dodge, receipt of regulatory approvals and customary closing conditions. The transaction is expected to close at the end of the first quarter of 2007. FCX has received financing commitments from JPMorgan and Merrill Lynch to fund the cash required to complete the transaction. After giving effect to the transaction, estimated pro forma total debt at Dec. 31, 2006, would be around US$17.6 billion, or around US$15 billion net of cash. Combined Financials and Production For the 12-month period ending Sept. 30, 2006, the companies had combined revenues of US$16.6 billion, EBITDA (operating income before depreciation, depletion and amortization) of US$7.0 billion, and operating cash flows of US$5.5 billion. For the year 2006, the combined company's estimated EBITDA would approximate US$7.9 billion and operating cash flows would approximate US$6.5 billion. On a pro forma basis for 2006, the combined company's production would approximate 3.7 billion pounds of copper (3.1 billion pounds net of minority interests), 1.8 million ounces of gold (1.7 million ounces net of minority interests) and 69 million pounds of molybdenum. Combined proven and probable reserves at Dec. 31, 2005, would approximate 75 billion pounds of copper, 41 million ounces of gold and 1.9 billion pounds of molybdenum, net of minority interests. Benefits Of The Transaction * the combined company is well positioned to benefit from the positive copper market at a time when there is a scarcity of large-scale copper development projects combined with strong global demand for copper. The combined company's copper production growth is expected to be around 25% over the next three years. * the combined company will benefit from long-lived reserves totaling 75 billion pounds of copper, 41 million ounces of gold and 1.9 billion pounds of molybdenum, net of minority interests. * THE combined company is expected to generate strong cash flows, enabling significant debt reduction. For the year 2006, the two companies are expected to generate estimated combined operating cash flows totaling US$6.5 billion. * FCX expects the transaction to be immediately accretive to FCX's earnings and cash flow. * the combined company's project pipeline will support industry-leading growth by delivering nearly 1 billion pounds of additional copper production capacity over the next three years. Projects include Phelps Dodge's recent commissioning of the US$850 million expansion of the Cerro Verde mine in Peru; the development of the new US$550 million Safford mine in Arizona; a potential project to extend the life of El Abra through sulfide leaching; the exciting Tenke Fungurume copper/cobalt project in the Democratic Republic of the Congo, which is expected to begin production by 2009; the expansion of FCX's DOZ underground mine in Indonesia; and other developments of FCX's large-scale, high-grade underground ore bodies in the Grasberg district in Indonesia. * the combined company is expected to generate strong cash flows, enabling significant debt reduction. For the year 2006, the two companies are expected to generate estimated combined operating cash flows totaling US$6.5 billion. * FCX expects the transaction to be immediately accretive to FCX's earnings and cash flow. * the combined company will have significant high potential exploration rights in copper regions around the world, including FCX's existing prospective acreage in Papua, Indonesia, and Phelps Dodge's opportunities at its Tenke concession, the U.S. and South America, as well as Phelps Dodge's portfolio of exciting exploration targets. FCX will continue its longstanding focus on adding value through exploration. * the combination of FCX's and Phelps Dodge's proven management and best practices in open pit and underground mining will facilitate the sharing of expertise to optimize operations across the asset base. Phelps Dodge's unique mining and processing technology provides opportunities to be applied to optimize metal production at Grasberg. Management Team and Board of Directors James R. Moffett, chairman of FCX, will continue as chairman. Richard C. Adkerson, chief executive officer of FCX, will serve as chief executive officer of the combined company. Upon completion of the transaction, J. Steven Whisler, chairman and chief executive officer of Phelps Dodge, is expected to retire after more than 30 years of service to Phelps Dodge. Timothy R. Snider will be chief operating officer of the combined company, Ramiro G. Peru will be chief financial officer and Kathleen L. Quirk will be chief investment officer. Mark J. Johnson will continue as chief operating officer of FCX's Indonesian operations and Michael J. Arnold will continue in his executive management role, including serving as chief financial and administrative officer of FCX's Indonesian operations. At closing, FCX will add to its board of directors three independent members from Phelps Dodge's board, increasing the size of the board to sixteen directors in total. The parent company will retain the Freeport-McMoRan Copper & Gold Inc. name and trade on the New York Stock Exchange under the symbol "FCX." The Phelps Dodge name will continue to be used in its existing operations. The corporate headquarters of the combined company will be located in Phoenix, Arizona, and FCX will maintain its New Orleans, Louisiana, office for accounting and administrative functions for its Indonesian operations. Financial Policy FCX has an established financial policy of maintaining a strong financial position and returning excess cash to shareholders through dividends and share purchases. The continuation of positive copper markets would provide substantial cash flows to enable the combined company to achieve significant near-term debt reductions. In addition, FCX intends to consider opportunities over time to reduce debt further through issuances of equity and equity-linked securities and possibly through asset sales. FCX expects to continue its regular annual common dividend of US$1.25 per share. FCX is committed to its long- standing tradition of maximizing value for shareholders. Advisors and Counsel J.P. Morgan Securities Inc. and Merrill Lynch & Co. are the financial advisors of FCX. Davis Polk & Wardwell and Jones, Walker, Waechter, Poitevent, Carrere & Denegre L.L.P. are the legal counsel of FCX. Citigroup Corporate and Investment Banking and Morgan Stanley & Co. Incorporated are the financial advisors of Phelps Dodge. Debevoise & Plimpton LLP is the legal counsel of Phelps Dodge. About Freeport-McMoRan Copper & Gold Headquartered in New Orleans, Louisiana, Freeport-McMoRan Copper & Gold Inc. (NYSE: FCX) -- http://www.fcx.com/-- explores for, develops, mines, and processes ore containing copper, gold, and silver in Indonesia, and smelts and refines copper concentrates in Spain and Indonesia. About Phelps Dodge Phelps Dodge Corporation (NYSE: PD) http://www.phelpsdodge.com/ -- is one of the world's leading producers of copper and molybdenum and is the largest producer of molybdenum-based chemicals and continuous-cast copper rod. The company employs 15,000 people worldwide. It maintains operations in Mexico, Puerto Rico, Thailand, China, Japan, the Netherlands, and the United Kingdom, among others. * * * In September 2006, Moody's Investors Service confirmed Phelps Dodge's Preferred Stock 2 Shelf at (P)Ba1. ROMPETROL GROUP: Fitch Keeps Issuer Default Rating at B- -------------------------------------------------------- Fitch Ratings affirmed Netherlands-based The Rompetrol Group N.V.'s Issuer Default rating at B-. The Outlook remains Stable. TRG is a privately owned oil refining and marketing company, with most of its assets and operations in Romania. The rating reflects the balance of the favorable location and strong operating results of TRG's key refinery in Romania and the TRG group's aggressive financial profile. It also takes into account the group's increased geographical diversification with the acquisition of Dyneff, a fuel distribution business in France in January 2006, which generated 15% of the group's EBITDA in Q106-Q306. The rating also reflects TRG's high financial leverage, high refinancing risk and aggressive capital expenditure program for 2007-2009. Additionally, TRG operates in a highly cyclical refining segment, which is expected to see deterioration in refining margins in the next three years. The rating also incorporates litigation risk related to a possible trial following the Romanian General Prosecutor's Office investigation on the two owners and managers of TRG. This risk is nevertheless mitigated by improved corporate governance at the TRG group, including a strengthened management team and corporate restructuring in 2006. Due to considerable capital expenditure, devoted primarily to the refining segment, TRG reported negative free cash flow generation in 2004 and 2005, despite an improvement in profitability. Fitch notes that TRG's interest coverage ratio deteriorated to a tight 2.1x in Q106-Q306 from 4x in 2005. This is mostly due to rising interest rates in 2006 and growing debt at the TRG group. Fitch notes that the tight interest coverage is reported at the time of healthy refining margins. This provides limited cushion for the group should cash flow generation at its refining segment deteriorate significantly in the next three years. TRG group's gross debt grew significantly to US$660 million at end-September 2006 from US$381 million at YE05. This was driven by the acquisition of Dyneff, increased working capital needs due to growing crude oil prices and higher business volumes. As a result, TRG's gross debt/EBITDA ratio deteriorated to 3.7x at end-September 2006 from 2.4x at YE05. Gross debt at end- September 2006 consisted mostly of bank loans and convertible bonds. The rating reflects the group's high refinancing risk and its limited back-up liquidity. Most debt is still in the form of short-term bank loans, which are being renewed each year. At end-September, the group had debt of US$370 million due within one year. Against this, available liquidity included cash at TRG of US$51 million and committed unused credit lines of around US$20 million. In addition, the group had uncommitted credit lines of US$162 million. TRG plans to extend its debt maturity profile in 2007, which would be viewed positively by Fitch. =========== P O L A N D =========== VISTEON CORP: GKN Eyes European & South American Assets ------------------------------------------------------- GKN plc has entered into exclusive discussions with Visteon Corp. to explore the possible acquisition of certain Visteon assets and liabilities in its European and South American businesses. These relate exclusively to Visteon's driveline business which is conducted at the plants in Duren, Germany, Praszka, Poland, and Swansea, Wales. Driveline assets at Visteon's Arbor plant, Sao Paulo, Brazil are also included. Total revenue of these businesses is around GBP200 million. A further announcement will be made regarding this possible transaction when appropriate. Headquartered in Van Buren Township, Michigan, Visteon Corp. (NYSE: VC) -- http://www.visteon.com/-- is a global automotive supplier that designs, engineers and manufactures innovative climate, interior, electronic and lighting products for vehicle manufacturers, and also provides a range of products and services to aftermarket customers. With corporate offices in Michigan (U.S.); Shanghai, China; and Kerpen, Germany; the company has more than 170 facilities in 24 countries and employs around 50,000 people. At Sept. 30, 2006 the Company's balance sheet showed total assets of US$6.721 billion and total liabilities of US$6.823 billionresulting in a total shareholders' deficit of US$102 miilion. Total shareholders' deficit at Dec. 31, 2005 stood at US$48 million. * * * Standard & Poor's Ratings Services has lowered its long-term corporate credit rating on Visteon Corp. to 'B' from 'B+' and its short-term rating to 'B-3' from 'B-2'. These actions stem from the company's weaker-than-expected earnings and cash flow generation, caused by vehicle production cuts, inefficiencies at several plant locations, sharply lower aftermarket product sales, continued pressure from high raw material costs, and several unusual items that will impact 2006 results. =============== P O R T U G A L =============== INTERTAPE POLYMER: S&P Junks Rating on Weak 3rd Qtr. Performance ---------------------------------------------------------------- Standard & Poor's Ratings Services lowered its corporate credit and senior secured ratings on Intertape Polymer Group Inc. to 'B-' from 'B+'. In addition, S&P lowered the senior subordinated rating on Intertape to 'CCC' from 'B-'. At the same time, Standard & Poor's said that its ratings on Intertape Polymer remain on CreditWatch with negative implications. The Oct. 4, 2006, CreditWatch placement followed Intertape's announcement that it would initiate a process to explore various strategic and financial alternatives. The placement also anticipated a weakening in the company's third- quarter operations. "The CreditWatch continues to reflect uncertainty in the outcome of the strategic review process, but is also focused on Intertape's weak operating performance and a risk of deterioration in liquidity," said Standard & Poor's credit analyst Paul Kurias. At Sept. 30, 2006, total debt (including present value of operating leases and tax-adjusted postretirement employee benefit liabilities) was US$370 million. The downgrade reflects: -- a meaningful decline in earnings, -- an expectation of continuing difficult market conditions, and -- an increase in leverage, which could contribute to a weakening of liquidity. Intertape's third-quarter EBITDA declined around 40% on a sequential basis. The decline in earnings reflected weaker demand, increased competitive pressures, and volatile input prices. Demand weakened for reasons including softness in some end-markets such as housing. Leverage has increased as a result of the earnings decline. Total debt to EBITDA at Sept. 30, 2006, was at 5.2x, an increase from the 4.6x level of the previous quarter. Standard & Poor's expects weak fourth-quarter earnings to result in a further increase in leverage from Sept. 30 levels. Standard & Poor's is particularly concerned that the increase in leverage is likely to result in very little flexibility under covenants related to the US$75 million revolving credit facility, despite a recent amendment that loosened covenants. Though Intertape has generated positive free cash flow in recent quarters, driven by lower working capital, operating profits are weak and the revolving credit facility is a key source of liquidity. At Sept. 30, availability under the facility constituted about US$25 million of Intertape's US$40 million liquidity, with cash balances accounting for the remaining US$15 million. Any near-term constraints in access to the credit facility, caused by potential covenant breaches, would weaken liquidity considerably and diminish Intertape's ability to meet a relatively large interest payment of around US$5.5 million due on Feb. 1, 2007. The risk of a covenant violation will heighten if earnings do not improve from existing levels through the benefits of Intertape's cost reduction program. Ratings could be lowered in the near-term if earnings decline unexpectedly, liquidity weakens, or leverage increases, or if the review process results in outcomes that could lead to higher debt levels, such as the sale of the company to another highly leveraged company. However, if the strategic review results in actions that improve liquidity and reduce leverage, such as the sale of assets, ratings could be affirmed or raised. Standard & Poor's will continue to monitor the company's strategic and financial review process, and efforts to improve operating performance and free cash flow through cost and working capital reduction measures. The CreditWatch will be resolved after evaluating additional information related to the company's financial performance and ongoing strategic review. ============= R O M A N I A ============= BANCPOST: Fitch Keeps Individual Rating at D -------------------------------------------- Fitch Ratings upgraded Romania-based Bancpost's ratings to Issuer Default A- from BBB+ and to Support 1 from 2. Following the upgrade, the Outlook is now Stable. The other ratings are affirmed at Individual D and Short-term F2. This action follows the upgrade of BP's majority shareholder Greece-based EFG Eurobank Ergasias. The IDR, Short-term and Support ratings of BP reflect the extremely high potential support it can expect to receive from Eurobank EFG. The Individual rating reflects profitability pressures, potential asset quality problems due to rapid loan growth and continued reliance on related-party funding. These are balanced by comfortable liquidity and a growing franchise. The bank has been undergoing a major restructuring following the acquisition of a majority shareholding by Eurobank EFG in 2003, including the implementation of a centralized IT system, network rationalization and the upgrading of risk management procedures. Profitability deteriorated in 2005 mainly due to higher staff costs and narrowing margins mainly from increased competition. In H106 profitability improved mainly with stronger non-interest income, though remains low. Fitch is concerned that rapid loan growth and loans denominated in foreign currency may create potential asset quality problems. This is mitigated to some degree by the risk management procedures put in place following the acquisition by Eurobank EFG. Although customer deposits, dominated by low-cost current accounts, continued to be the main source of funding in 2005, reliance on related-party funding continued. Shareholders continued to inject cash capital in 2005. Further cash capital injections are essential if the bank is to support its planned growth in risk-weighted assets and become more competitive. BP was established in 1991. Eurobank EFG first took a stake in 2000 and its shareholding reached 77.56% in September 2006. BP has 174 units throughout Romania. At end-2005, BP represented 4.46% of system assets and offers full range of banking services to large companies, small and medium-sized enterprises and retail clients. ROMPETROL GROUP: Fitch Keeps Issuer Default Rating at B- -------------------------------------------------------- (11/20/fitch) Fitch Ratings affirmed Netherlands-based The Rompetrol Group N.V.'s Issuer Default rating at B-. The Outlook remains Stable. TRG is a privately owned oil refining and marketing company, with most of its assets and operations in Romania. The rating reflects the balance of the favorable location and strong operating results of TRG's key refinery in Romania and the TRG group's aggressive financial profile. It also takes into account the group's increased geographical diversification with the acquisition of Dyneff, a fuel distribution business in France in January 2006, which generated 15% of the group's EBITDA in Q106-Q306. The rating also reflects TRG's high financial leverage, high refinancing risk and aggressive capital expenditure program for 2007-2009. Additionally, TRG operates in a highly cyclical refining segment, which is expected to see deterioration in refining margins in the next three years. The rating also incorporates litigation risk related to a possible trial following the Romanian General Prosecutor's Office investigation on the two owners and managers of TRG. This risk is nevertheless mitigated by improved corporate governance at the TRG group, including a strengthened management team and corporate restructuring in 2006. Due to considerable capital expenditure, devoted primarily to the refining segment, TRG reported negative free cash flow generation in 2004 and 2005, despite an improvement in profitability. Fitch notes that TRG's interest coverage ratio deteriorated to a tight 2.1x in Q106-Q306 from 4x in 2005. This is mostly due to rising interest rates in 2006 and growing debt at the TRG group. Fitch notes that the tight interest coverage is reported at the time of healthy refining margins. This provides limited cushion for the group should cash flow generation at its refining segment deteriorate significantly in the next three years. TRG group's gross debt grew significantly to US$660 million at end-September 2006 from US$381 million at YE05. This was driven by the acquisition of Dyneff, increased working capital needs due to growing crude oil prices and higher business volumes. As a result, TRG's gross debt/EBITDA ratio deteriorated to 3.7x at end-September 2006 from 2.4x at YE05. Gross debt at end- September 2006 consisted mostly of bank loans and convertible bonds. The rating reflects the group's high refinancing risk and its limited back-up liquidity. Most debt is still in the form of short-term bank loans, which are being renewed each year. At end-September, the group had debt of US$370 million due within one year. Against this, available liquidity included cash at TRG of US$51 million and committed unused credit lines of around US$20 million. In addition, the group had uncommitted credit lines of US$162 million. TRG plans to extend its debt maturity profile in 2007, which would be viewed positively by Fitch. UNICREDIT ROMANIA: Fitch Affirms Individual Rating at D ------------------------------------------------------- Fitch Ratings affirmed UniCredit Romania S.A.'s ratings at Issuer Default A-, Short-term F2, Support 1, and Individual D. The Outlook is Stable. UCR's Issuer Default, Short-term and Support ratings reflect the extremely high potential support available to it from its 99.95% owner, UniCredito Italiano. Its Issuer Default rating is currently constrained by Romania's A- Country Ceiling. The Individual rating reflects the bank's decent asset quality to date and improved risk management structures introduced by UCI, balanced by its modest franchise, low profitability and reliance on shareholder funding. Profitability has remained weak, primarily a result of the bank's still high although improved cost base, relating to the expansion of the network and higher loan loss provisions. Loans grew 48% in 2005 and total loan loss reserves, despite having increased significantly, remained very low as a proportion of gross loans. Fitch has some concerns over the rapid loan growth, which may create asset quality problems. Nevertheless improved risk management structures provide some comfort in this regard. The growth of customer deposits has not kept pace with asset growth, and reliance on related-party funding has increased to comprise 43% of total funding at end-2005, including subordinated facilities. Capitalization has also declined with the growth of the bank, and Fitch considers further capital injections from the shareholders to be necessary to fund future growth. UCR forms part of UCI's strategy to expand into central and eastern Europe. In October 2005, UCI acquired Bayerische Hypo- und Vereinsbank AG. It has been announced that the merger of UCR with Banca Comerciala HVB Tiriac Bank in Romania is expected to complete in mid-2007, which would create the third largest Romanian bank, representing around 9% of total banking assets. =========== R U S S I A =========== AGRO-SNAB OJSC: Ivanovo Bankruptcy Hearing Slated for Feb. 26 ------------------------------------------------------------- The Arbitration Court of Ivanovo Region will convene at 9:30 a.m. on Feb. 26, 2007, to hear the bankruptcy supervision procedure on OJSC Agro-Snab. The case is docketed under Case No. A 17-1846/06-1-B. The Temporary Insolvency Manager is: Z. Barinova Office 52 Teatralnaya Str. 16 Ivanovo Region Russia The Arbitration Court of Ivanovo Region is located at: B. Khmelnitskogo Str. 59B Ivanovo Region Russia The Debtor can be reached at: OJSC Agro-Snab Sadovaya Str. 2 Palekh Ivanovo Region Russia AKHIM CJSC: Moscow Court Names I. Gorn as Insolvency Manager ------------------------------------------------------------ The Arbitration Court of Moscow Region appointed Mr. I. Gorn as Insolvency Manager for CJSC Akhim. He can be reached at: I. Gorn Post User Box 183 127018 Moscow Region Russia The Court commenced bankruptcy proceedings against the company after finding it insolvent. The case is docketed under Case No. A40-47648/06-95-1045B. The Arbitration Court of Moscow is located at: Novaya Basmannaya Str. 10 Moscow Region Russia The Debtor can be reached at: CJSC Akhim Chayanova Str. 8/26 Moscow Region Russia ALCEM OJSC: Asset Sale Slated for December 4 -------------------------------------------- LLC Trust, the bidding organizer for OJSC Alcem, will open a public auction for the company's properties at noon on Dec. 4 at: LLC Trust Komsomolskiy Pr. 79-2 Barnaul Altay Region Russia Interested participants have until 5:00 p.m. on Nov. 30 to deposit an amount equivalent to 10% of the starting price to: OJSC Uralsib Barnaul Settlement Account 40702810934000000803 Correspondent Account 30101810900000000742 TIN 2225061831 KPP 222501001 BIK 040173742 Bidding documents must be submitted to: LLC Trust Komsomolskiy Pr. 79-2 Barnaul Altay Region Russia The Debtor can be reached at: OJSC Alcem Golukha Zarinskiy Region Altay Region Russia ALUMINA CJSC: Court Names A. Pshenkov as Insolvency Manager ----------------------------------------------------------- The Arbitration Court of Kalmykiya Republic appointed Mr. A. Pshenkov as Insolvency Manager for CJSC Alumina. He can be reached at: A. Pshenkov Lenina Pr. 79-102 400078 Volgograd Region Russia The Court commenced bankruptcy proceedings against the company after finding it insolvent. The case is docketed under Case No. A22-1944/06/15-280. The Debtor can be reached at: CJSC Alumina Urmary Kalmykiya Republic Russia ARCHITECTURE. BUILDING: Court Names A. Shadrin to Manage Assets --------------------------------------------------------------- The Arbitration Court of Udmurtiya Republic appointed Mr. A. Shadrin as Insolvency Manager for CJSC Architecture. Building. Trading. He can be reached at: A. Shadrin Office 66a K. Marksa Str. 246 Izhevsk 426008 Udmurtiya Republic Russia The Court commenced bankruptcy proceedings against the company after finding it insolvent. The case is docketed under Case No. A71-6923/2006-G29. The Arbitration Court of Udmurtiya Republic is located at: Lomonosova Str. 5 Izhevsk 426004 Udmurtiya Republic Russia The Debtor can be reached at: CJSC Architecture. Building. Trading Pesochnaya Str. 11 Izhevsk 426069 Udmurtiya Republic Russia BARMA AND POSTNIK: Court Names L. Ponomareva to Manage Assets ------------------------------------------------------------- The Arbitration Court of Moscow appointed Ms. L. Ponomareva as Insolvency Manager for CJSC Building Company Barma and Postnik (TIN 7705142134). She can be reached at: L. Ponomareva Post User Box 600 603000 Nizhniy Novgorod Region Russia The Court commenced bankruptcy proceedings against the company after finding it insolvent. The case is docketed under Case No. A40-29826/06-86-489B. The Arbitration Court of Moscow is located at: Novaya Basmannaya Str. 10 Moscow Region Russia The Debtor can be reached at: CJSC Building Company Barma and Postnik Building 8 Tverskaya Str. 12/3/2/17 Moscow Russia BARNAULSKIY FACTORY: Court Starts Reorganization Process -------------------------------------------------------- The Arbitration Court of Altay Region commenced external management bankruptcy procedure on OJSC Barnaulskiy Factory of Fuel Apparatus. The case is docketed under Case No. A03-4592/ 06-B. The Temporary Insolvency Manager is: A. Lyutyj Post User Box 103 119415 Moscow Region Russia The Debtor can be reached at: OJSC Barnaulskiy Factory of Fuel Apparatus Kalinina Pr. 28 Barnaul 656037 Altay Region Russia BUILDER LLC: Court Names I. Madzhuga as Insolvency Manager ---------------------------------------------------------- The Arbitration Court of Samara Region appointed Mr. I. Madzhuga as Insolvency Manager for LLC Builder. He can be reached at: I. Madzhuga Office 40 Br. Korostelevykh Str. 268 443001 Samara Region Russia The Court commenced bankruptcy proceedings against the company after finding it insolvent. The case is docketed under Case No. A55-8184/06. The Arbitration Court of Samara Region is located at: Avrory Str. 148 Samara Region Russia The Debtor can be reached at: LLC Builder Khvorostyanka Samara Region Russia CENTERTELECOM OAO: One of Russia's Transparent Firm, S&P Says ------------------------------------------------------------- According to the results of the annual survey of the Russian companies' information transparency conducted by Standard & Poor's, OJSC CenterTelecom was included in the list of leaders and took the 19th place among 70 Russian participants of the survey. The total level of information transparency of CenterTelecom in 2006, according to the assessment of the agency's experts, made 62%. For its survey Standard & Poor's chose Russia's largest public companies, which have the most liquid shares and had passed the listing at the Moscow Interbank Currency Exchange. During the analysis, the level of information transparency of three main public sources were estimated: -- annual reports, -- Web sites, and -- reports filed to the governing bodies. The supplementary element of this year survey became the analysis of the corporate governance structures of the Russian companies. The methodology of the survey is based on 106 criteria arranged into three groups: ownership structure and shareholders rights, financial and operating information, structure and procedure of Board of Directors and management activities. General Director of OJSC CenterTelecom Sergei Pridantsev noted that development of the conversation with financial and investment community is one of the first-priority tasks for OJSC CenterTelecom. "Information transparency is one of the most important elements of the investors confidence forming," Mr. Pridantsev said. "We are trying to correspond to the highest world standards of transparency increasing the level of information transparency and the quality of corporate governance with due consideration of the leading international experts opinion." About CenterTelecom OAO CenterTelecom -- http://www.centertelecom.ru/eng-- provides fixed-line and mobile communications in the Russian Central Federal District. CenterTelecom had a charter capital of RUR6.31 billion (about US$234 million) as of July 1, 2006. The company's shares are listed on the Russian Trading System stock exchange and the Moscow Inter-Bank Currency Exchange, and its Level-1 American Depositary Receipts circulate on the U.S. over-the-counter market and the Berlin and Frankfurt stock exchanges. * * * As reported in the TCR-Europe on Oct. 20, Fitch Ratings changed OAO Centertelecom's Outlook to Positive from Stable. Its ratings are affirmed at Issuer Default B- and Short-term B. CT's National Long-term rating is affirmed at BB+. The Outlook on the National Long-term rating has been changed to Positive from Stable. Fitch has also assigned a BB+ rating to CT's RUB3 billion bond with a maturity in August 2011. Standard & Poor's Ratings Services also raised its long-term corporate credit rating on CenterTelecom to B from B- (with stable outlook) as well as its long-term Russian national scale rating to ruBBB+ from ruBBB-. CENTERTELECOM OAO: Fulfills Obligation on Bond Offer ---------------------------------------------------- OJSC CenterTelecom informs that the holders of interest-bearing non-convertible series 04 bonds have not used their right to present the bonds for redemption under conditions of public irrevocable offer. During the Bonds Presentation Period on the offer, Oct. 19 to Nov. 9, Purchasing Agent OJSC JSCB Rosbank didn't receive any notification about sale of OJSC CenterTelecom bonds under the conditions of public irrevocable offer. Commenting on the results of obligations fulfillment on the offer Alexander Lutsky, Deputy General Director and Financial Director of OJSC CenterTelecom, noted that the absence of the bonds sale bids demonstrated attraction of the issue for the participants of the stock market. "As a result of the OJSC CenterTelecom Management activities credit quality of the Company improved and this positively reflected in upgrade of long-term credit rating of Standard&Poor's up to B (Outlook: Stable) and Fitch Ratings Outlook from Stable to Positive," Mr. Lutsky said. "So, we managed to strengthen the confidence of investors to the Company as a debtor. The absence of the bonds presentation for redemption under conditions of public irrevocable offer will positively influence on the Company's liquidity." In 2001-2006 OJSC CenterTelecom placed five bonded debts to the total amount of RUR11.82 billion, three of which to the total amount of RUR3.2 rubles have already been redeemed. At the moment there are two largest debts of the Company in circulation: -- series 04 bonds with total par value of RUR5.6 billion; and -- series 05 bonds with total par value of RUR3 Besides that, in Q4 2006 US$115 million international loan for four years with the further issue of CLN has been made. About CenterTelecom OAO CenterTelecom -- http://www.centertelecom.ru/eng-- provides fixed-line and mobile communications in the Russian Central Federal District. CenterTelecom had a charter capital of RUR6.31 billion (about US$234 million) as of July 1, 2006. The company's shares are listed on the Russian Trading System stock exchange and the Moscow Inter-Bank Currency Exchange, and its Level-1 American Depositary Receipts circulate on the U.S. over-the-counter market and the Berlin and Frankfurt stock exchanges. * * * As reported in the TCR-Europe on Oct. 20, Fitch Ratings changed OAO Centertelecom's Outlook to Positive from Stable. Its ratings are affirmed at Issuer Default B- and Short-term B. CT's National Long-term rating is affirmed at BB+. The Outlook on the National Long-term rating has been changed to Positive from Stable. Fitch has also assigned a BB+ rating to CT's RUB3 billion bond with a maturity in August 2011. Standard & Poor's Ratings Services also raised its long-term corporate credit rating on CenterTelecom to B from B- (with stable outlook) as well as its long-term Russian national scale rating to ruBBB+ from ruBBB-. CHAISSKIY MACADAM: Court Names L. Bychkova as Insolvency Manager ---------------------------------------------------------------- The Arbitration Court of Penza Region appointed Ms. L. Bychkova as Insolvency Manager for OJSC Chaisskiy Macadam Factory. She can be reached at: L. Bychkova Shmidta Str. 4 440039 Penza Region Russia The Court commenced bankruptcy proceedings against the company after finding it insolvent. The case is docketed under Case No. A49-4227/2006-386b/10. The Arbitration Court of Penza Region is located at: Belinskogo Str. 2 440600 Penza Region Russia The Debtor can be reached at: OJSC Chaisskiy Macadam Factory Pavlovka Nikolskiy Region Penza Region Russia CHERNUSHINSKIY LLC: Court Names B. Novikov as Insolvency Manager ---------------------------------------------------------------- The Arbitration Court of Perm Region appointed Mr. B. Novikov as Insolvency Manager for LLC Meat Combine Chernushinskiy. He can be reached at: B. Novikov Lenina Str. 36 Chernushka 617830 Perm Region Russia The Court commenced bankruptcy proceedings against the company after finding it insolvent. The case is docketed under Case No. A-50-15068/2006-B. The Arbitration Court of Perm Region is located at: Lunacharskogo Str. 3 Perm Region Russia The Debtor can be reached at: LLC Meat Combine Chernushinskiy Bedryazh Chernushinskiy Region 617816 Perm Region Russia COMPUTER SYSTEMS: Court Names V. Babanov as Insolvency Manager -------------------------------------------------------------- The Arbitration Court of Samara Region appointed Mr. V. Babanov as Insolvency Manager for CJSC Computer Systems and Technologies. He can be reached at: V. Babanov Krasnogvardeyskaya Str. 4-59 443112 Samara Region Russia The Court commenced bankruptcy proceedings against the company after finding it insolvent. The case is docketed under Case No. A55-13405/2006. The Arbitration Court of Samara Region is located at: Avrory Str. 148 Samara Region Russia The Debtor can be reached at: CJSC Computer Systems And Technologies Samara Region Russia DENISOVO LLC: Tyumen Bankruptcy Hearing Slated for Jan. 18 ---------------------------------------------------------- The Arbitration Court of Tyumen Region will convene at 9:00 a.m. on Jan. 18, 2007, to hear the bankruptcy supervision procedure on LLC Denisovo. The case is docketed under Case No. A-70-7595/ 3-2006. The Temporary Insolvency Manager is: D. Zaynullina Office 703 Khokhryakova Str. 47 625000 Tyumen Region Russia The Arbitration Court of Tyumen Region is located at: Khokhryakova Str. 77 627000 Tyumen Region Russia The Debtor can be reached at: LLC Denisovo Novoselov Str. 1 Denisovo Isetskiy Region 626395 Tyumen Region Russia GELENZHIKSKIY CJSC: Court Names V. Zotyev as Insolvency Manager --------------------------------------------------------------- The Arbitration Court of Krasnodar Region appointed Mr. V. Zotyev as Insolvency Manager for CJSC Gelenzhikskiy House- Building Combine (TIN 2304039035). He can be reached at: V. Zotyev Nakhichevanskiy Per. 64 344010 Rostov-na-Donu Russia The Court commenced bankruptcy proceedings against the company after finding it insolvent. The case is docketed under Case No. A-32-16467/06-27/973-B. The Arbitration Court of Krasnodar Region is located at: Krasnaya Str. 6 Krasnodar Region Russia The Debtor can be reached at: CJSC Gelenzhikskiy House-Building Combine Lunacharskogo Str. 169 Gelendzhik Krasnodar Region Russia GOLDEN FLEECE: Court Names O. Filippova as Insolvency Manager ------------------------------------------------------------- The Arbitration Court of Amur Region appointed Ms. O. Filippova as Insolvency Manager for CJSC Golden Fleece (TIN 2801071350). She can be reached at: O. Filippova Pervomayskaya Str. 1 Blagoveshensk 675000 Amur Region Russia The Court commenced bankruptcy proceedings against the company after finding it insolvent. The case is docketed under Case No. A04-1327/06-10/102 B. The Debtor can be reached at: CJSC Golden Fleece Office 217 Shevchenko Str. 6 Blagoveshensk 675000 Amur Region Russia IMPULSE CJSC: Court Names M. Makhnev as Insolvency Manager ---------------------------------------------------------- The Arbitration Court of Krasnodar Region appointed Mr. M. Makhnev as Insolvency Manager for CJSC Impulse (TIN 2321003198). He can be reached at: M. Makhnev Rostov-na-Donu 344010 Krasnodar Region Russia The Court commenced bankruptcy proceedings against the company after finding it insolvent. The case is docketed under Case No. A32-15433/2006-46/1425-B. The Arbitration Court of Krasnodar Region is located at: Krasnaya Str. 6 Krasnodar Region Russia The Debtor can be reached at: CJSC Impulse Tikhoretsk Krasnodar Region Russia LUKOIL OAO: Allocates US$100 Billion to Hike Output Until 2017 --------------------------------------------------------------- OAO Lukoil will pour in around US$100 billion to increase its oil and gas production for the next 10 years, RIA Novosti cites Lukoil Chief Executive Vagit Alekperov. According to Mr. Alekperov, Lukoil plans to hike: -- annual liquid hydrocarbon output to 50 million tons; and -- annual natural gas production to 50 billion cubic meters. "These are very high figures, and we are confident in achieving them, based on our physical reserve base," Mr. Alekperov told RIA Novosti. Mr. Alekperov added Lukoil currently has 30 billion tons in oil reserves. He revealed that with the investment scheme, the company could develop and fortify its world market position, and at the same time transform into a diversified energy company. As reported in the TCR-Europe on Nov. 21, Lukoil will invest around US$27 billion until 2017 to expand its overseas production and fund projects and acquisitions, says RIA Novosti citing Andrei Kuzyaev, President of Lukoil Overseas Holding Ltd. "In the long-term, in line with our development strategy, we plan to produce at least 40 million tons of hydrocarbons by 2017 outside Russia, and to invest about US$27 billion not only in current projects, but also in new acquisitions," Mr. Kuzyaev said. About Lukoil Headquartered in Moscow, Russia, OAO Lukoil (LSE: LKOD; MICEX, RTS: LKOH) -- http://www.lukoil.com/-- explores and produces oil & gas, petroleum products and petrochemicals, and markets the outputs. Most of the Company's exploration and production activity is located in Russia, and its main resource base is in Western Siberia. * * * As reported in the TCR-Europe on July 12, Standard & Poor's Ratings Services raised its long-term corporate credit rating on Lukoil OAO to 'BB+' from 'BB'. S&P said the outlook is positive. LUKOIL OAO: Eyes 20% Stake in Total's Kharyaga Oil Field -------------------------------------------------------- OAO Lukoil welcomed a possible 20% stake in Kharyaga oil field project provided that the decision-making process be changed, RIA Novosti cites Lukoil Board of Directors member Ravil Maganov. Lukoil is currently holding talks with Total S.A. to acquire a stake in Kharyaga oil field project. "A 20% stake will suit us, if changes are made to the work procedure of the board of directors," Mr. Maganov told RIA Novsoti. Total, which has been developing the Kharyaga deposit since January 1999, holds a 50% stake in the project, along with Norsk Hydro ASA (40%) and Russia's Nenets Oil Co. (10%). About Lukoil Headquartered in Moscow, Russia, OAO Lukoil (LSE: LKOD; MICEX, RTS: LKOH) -- http://www.lukoil.com/-- explores and produces oil & gas, petroleum products and petrochemicals, and markets the outputs. Most of the Company's exploration and production activity is located in Russia, and its main resource base is in Western Siberia. * * * As reported in the TCR-Europe on July 12, Standard & Poor's Ratings Services raised its long-term corporate credit rating on Lukoil OAO to 'BB+' from 'BB'. S&P said the outlook is positive. MEAT PRODUCT: Court Names L. Nechaeva as Insolvency Manager ----------------------------------------------------------- The Arbitration Court of Kirov Region appointed Ms. L. Nechaeva as Insolvency Manager for LLC Meat Product. She can be reached at: L. Nechaeva Bolshevikov Str. 89a-21 610002 Kirov Region Russia The Court commenced bankruptcy proceedings against the company after finding it insolvent. The case is docketed under Case No. A28-416/06-290/20. The Arbitration Court of Kirov Region is located at: K-Libknekhta Str. 102 610017 Kirov Region Russia The Debtor can be reached at: L. Nechaeva Bolshevikov Str. 89a-21 610002 Kirov Region Russia MILK CJSC: Murmansk Court Names P. Tarasov as Insolvency Manager ---------------------------------------------------------------- The Arbitration Court of Murmansk Region appointed Mr. P. Tarasov as Insolvency Manager for CJSC Milk. He can be reached at: P. Tarasov Post User Box 19 OPS-100 170100 Tver Region Russia The Court commenced bankruptcy proceedings against the company after finding it insolvent. The case is docketed under Case No. A56-17211/2006. The Arbitration Court of Murmansk Region is located at: Knipovicha Str. 20 Murmansk Region Russia The Debtor can be reached at: CJSC Milk Pervomayskaya Str. 57 Kandalaksha 184040 Murmansk Region Russia PEREVOLOTSKIY BUTTER: Court Names A. Pakhomov to Manage Assets -------------------------------------------------------------- The Arbitration Court of Orenburg Region appointed Mr. A. Pakhomov as Insolvency Manager for OJSC Perevolotskiy Butter Factory. He can be reached at: A. Pakhomov Ilyinka Str. 5/2 Moscow Region Russia The Court commenced bankruptcy proceedings against the company after finding it insolvent. The case is docketed under Case No. A47-9669/05-14GK. The Arbitration Court of Orenburg Region is located at: 9th January Str. 64 460046 Orenburg Region Russia The Debtor can be reached at: A. Pakhomov Ilyinka Str. 5/2 Moscow Region Russia PORCELAIN OF RUSSIA: Court Names A. Pshenkov to Manage Assets ------------------------------------------------------------- The Arbitration Court of Kalmykiya Republic appointed Mr. A. Pshenkov as Insolvency Manager for CJSC Porcelain of Russia. He can be reached at: A. Pshenkov Lenina Pr. 79-102 400078 Volgograd Region Russia The Court commenced bankruptcy proceedings against the company after finding it insolvent. The case is docketed under Case No. A22-1374/06/1-191. The Debtor can be reached at: CJSC Porcelain of Russia Elista Kalmykiya Republic Russia PROGRESS OJSC: Rostov Bankruptcy Hearing Slated for Mar. 19 ----------------------------------------------------------- The Arbitration Court of Rostov Region will convene at 11:15 a.m. on Mar. 19, 2007, to hear the bankruptcy supervision procedure on OJSC Progress. The case is docketed under Case No. A53-11301/2006-S2-7. The Temporary Insolvency Manager is: V. Shvayko Bujnakskaya Str. 2/56 344037 Rostov-na-Donu Russia The Arbitration Court of Rostov Region is located at: Stanislavskogo Str. 8a 344008 Rostov-na-Donu Russia The Debtor can be reached at: OJSC Progress Lenina Str. 20 Progress Volgodonskiy Region Rostov Region Russia PROMSVYAZBANK JSCB: Gets US$12-Mln Loan from Nova Ljubljanska ------------------------------------------------------------- JSCB Promsvyazbank signed a loan agreement with Slovenian bank Nova Ljubljanska Banka d.d. According to the agreement, NLB will provide Promsvyazbank with US$12-million loan for a period of five years. The raised funds will be allocated to finance Promsvyazbank's corporate clients. Promsvyazbank and NLB have had long-term cooperation in promoting and developing business and trade links between Russian and Slovenian companies. Headquartered in Moscow, JSCB Promsvyazbank -- http://www.psbank.ru/eng/-- engages in lending business, project finance, leasing regional projects expanding its presence in the financial markets. Alexey and Dmitry Annaniev are the major shareholders in the Bank. Nova Ljubljanska Banka (Slovenia) holds 3.65% while Rostelecom owns 0.27%. * * * As reported in the TCR-Europe on Oct. 5, Fitch Ratings upgraded Russia-based JSC Promsvyazbank's Issuer Default rating to B+ from B. The other ratings are affirmed at Short-term B, Individual D and Support 5; Stable Outlook. Fitch has also assigned an expected Long-term rating of B+ to PSB's upcoming senior unsecured eurobond and an expected Long-term rating of B- to its upcoming subordinated debt issue. Moody's Investors Service assigned a Ba3 foreign currency debt rating to the Loan Participation Notes to be issued on a limited recourse basis by PSB Finance S.A. for the sole purpose of funding a loan to Promsvyazbank. The outlook for the rating is stable. Moody's Ba3 debt rating is based on the fundamental credit quality of Promsvyazbank. The holders of the notes will be relying for repayment solely and exclusively on the ability of Promsvyazbank to make payments under the loan agreement. ROSNEFT OIL: Earns RUR76.4 Billion Profit for Nine Months 2006 -------------------------------------------------------------- OAO Rosneft Oil Co. released its financial results for the nine months ended Sept. 30, 2006, and prepared according to Russian Accounting Standards. For the January-September 2006 period, Rosneft posted a 43.2% year-on-year hike in net profit to RUR76.4 billion against a 27.7% year-on-year increase in revenues to RUR458.6 billion. Rosneft, RIA Novosti says, also increased its gross profit by 10.4% year-on-year to RUR143.7 billion. The company's authorized capital following the consolidation of its 12 subsidiaries reached RUR106 million. The Russian government owns a 75.16% stake in the company. About Rosneft Headquartered in Moscow, Russia, OAO Rosneft Oil Co. -- http://ns.roilcom.ru/english/-- produces and markets petroleum products. The Company explores for, extracts, refines and markets oil and natural gas. Rosneft produces oil in Western Siberia, Sakhalin, the North Caucasus and the Arctic regions of Russia. * * * Standard & Poor's assigned B+ ratings to Rosneft's long-term and local foreign issuer credit, while Fitch assigned BB+ ratings to the Company's foreign currency and local currency long-term debt in 2005. ROSTO CJSC: Rostov Bankruptcy Hearing Slated for Feb. 20 -------------------------------------------------------- The Arbitration Court of Rostov Region will convene at 3:00 p.m. on Feb. 20, 2007, to hear the bankruptcy supervision procedure on CJSC Shakhtinskiy Air-Repair Factory Rosto. The case is docketed under Case No. A53-11299/06-S2-8. The Temporary Insolvency Manager is: E. Shakulov Bujnakskaya Str. 2/56 344037 Rostov-na-Donu Russia The Arbitration Court of Rostov Region is located at: Stanislavskogo Str. 8a 344008 Rostov-na-Donu Russia The Debtor can be reached at: CJSC Shakhtinskiy Air-Repair Factory Rosto Shakhty Rostov Region Russia RUSSIAN STYLE: Moscow Court Names I. Gorn as Insolvency Manager --------------------------------------------------------------- The Arbitration Court of Moscow appointed Mr. I. Gorn as Insolvency Manager for OJSC Insurance Company Russian Style. He can be reached at: I. Gorn Post User Box 183 127018 Moscow Region Russia The Court commenced bankruptcy proceedings against the company after finding it insolvent. The case is docketed under Case No. A40-46377/06-95-1028B. The Arbitration Court of Moscow is located at: Novaya Basmannaya Str. 10 Moscow Region Russia The Debtor can be reached at: OJSC Insurance Company Russian Style Osipenko Str. 69/44 Moscow Region Russia SEVERNYJ OJSC: Bankruptcy Hearing Slated for February 20 -------------------------------------------------------- The Arbitration Court of St. Petersburg and Leningrad Region will convene on Feb. 20, 2007, to hear the bankruptcy supervision procedure on OJSC Wood Working Combine Severnyj (TIN 2463046430, OGRN 1022402148669). The case is docketed under Case No. A56-13943/2006. The Temporary Insolvency Manager is: V. Dobryshkin Post User Box 21900 660060 Krasnoyarsk Russia The Arbitration Court of St. Petersburg and the Leningrad Region is located at: Hall 113 Suvorovskiy Pr. 50/52 St. Petersburg Russia The Debtor can be reached at: OJSC Wood Working Combine Severnyj Molodyezhnaya Str. 66A Sosnovyj Bor 188544 Leningrad Region Russia SISTEMA CAPITAL: S&P Upgrades Long-Term Debt Rating to B+ --------------------------------------------------------- Standard & Poor's Ratings Services raised its long-term debt rating to 'B+' from 'B' on the senior unsecured debt issued by Sistema Capital S.A. and OJSC Sistema Finance Investments, and on the senior secured debt issued by Sistema Finance S.A. All three companies are financing vehicles for Russian Telecommunications and industrials holding group Sistema (JSFC) (BB-/Stable/--), which guarantees the debt. The revision follows S&P's review of the structural subordination of Sistema's debt with respect to that of its key operating subsidiary, Mobile TeleSystems (OJSC). The one-notch upgrade reflects the improvement in recent quarters in the position of Sistema's creditors with respect to that of MTS' creditors. "The better recovery prospects for Sistema's debt are supported by the company's progress in streamlining its corporate structure; continuing growth of its key subsidiaries with operations in fixed-line telecommunications, technology, financial services, and real estate; and increasing capitalization," said Standard & Poor's credit analyst Lorenzo Sliusarev. "Furthermore, Sistema's moderate parent-company debt bodes well for its creditors' position." Consequently, we expect the company to maintain a moderate debt burden contained at a maximum 20%-25% of its total market capitalization. "Nevertheless, the remaining one-notch differential between Sistema's and MTS' debt ratings reflects our view that the prospective recovery of funds in a potential default by either company would likely be more favorable for MTS' creditors than for those of Sistema," added Mr. Sliusarev. Ratings List To From -- ---- Sistema (JSFC) Corporate credit rating BB-/Stable/-- BB-/Stable/-- Sistema Finance S.A. Senior secured* B+ B Sistema Capital S.A. OJSC Sistema Finance Investments Senior unsecured debt* B+ B *Guaranteed by Sistema (JSFC) SISTEMA FINANCE: S&P Raises Long-Term Debt Rating to B+ from B -------------------------------------------------------------- Standard & Poor's Ratings Services raised its long-term debt rating to 'B+' from 'B' on the senior unsecured debt issued by Sistema Capital S.A. and OJSC Sistema Finance Investments, and on the senior secured debt issued by Sistema Finance S.A. All three companies are financing vehicles for Russian Telecommunications and industrials holding group Sistema (JSFC) (BB-/Stable/--), which guarantees the debt. The revision follows our review of the structural subordination of Sistema's debt with respect to that of its key operating subsidiary, Mobile TeleSystems (OJSC). The one-notch upgrade reflects the improvement in recent quarters in the position of Sistema's creditors with respect to that of MTS' creditors. "The better recovery prospects for Sistema's debt are supported by the company's progress in streamlining its corporate structure; continuing growth of its key subsidiaries with operations in fixed-line telecommunications, technology, financial services, and real estate; and increasing capitalization," said Standard & Poor's credit analyst Lorenzo Sliusarev. "Furthermore, Sistema's moderate parent-company debt bodes well for its creditors' position." Consequently, we expect the company to maintain a moderate debt burden contained at a maximum 20%-25% of its total market capitalization. "Nevertheless, the remaining one-notch differential between Sistema's and MTS' debt ratings reflects our view that the prospective recovery of funds in a potential default by either company would likely be more favorable for MTS' creditors than for those of Sistema," added Mr. Sliusarev. Ratings List To From -- ---- Sistema (JSFC) Corporate credit rating BB-/Stable/-- BB-/Stable/-- Sistema Finance S.A. Senior secured* B+ B Sistema Capital S.A. OJSC Sistema Finance Investments Senior unsecured debt* B+ B *Guaranteed by Sistema (JSFC) SISTEMA JSFC: S&P Lifts Sistema Capital's Debt Rating to B+ ----------------------------------------------------------- Standard & Poor's Ratings Services raised its long-term debt rating to 'B+' from 'B' on the senior unsecured debt issued by Sistema Capital S.A. and OJSC Sistema Finance Investments, and on the senior secured debt issued by Sistema Finance S.A. All three companies are financing vehicles for Russian Telecommunications and industrials holding group Sistema (JSFC) (BB-/Stable/--), which guarantees the debt. The revision follows our review of the structural subordination of Sistema's debt with respect to that of its key operating subsidiary, Mobile TeleSystems (OJSC). The one-notch upgrade reflects the improvement in recent quarters in the position of Sistema's creditors with respect to that of MTS' creditors. "The better recovery prospects for Sistema's debt are supported by the company's progress in streamlining its corporate structure; continuing growth of its key subsidiaries with operations in fixed-line telecommunications, technology, financial services, and real estate; and increasing capitalization," said Standard & Poor's credit analyst Lorenzo Sliusarev. "Furthermore, Sistema's moderate parent-company debt bodes well for its creditors' position." Consequently, we expect the company to maintain a moderate debt burden contained at a maximum 20%-25% of its total market capitalization. "Nevertheless, the remaining one-notch differential between Sistema's and MTS' debt ratings reflects our view that the prospective recovery of funds in a potential default by either company would likely be more favorable for MTS' creditors than for those of Sistema," added Mr. Sliusarev. Ratings List To From -- ---- Sistema (JSFC) Corporate credit rating BB-/Stable/-- BB-/Stable/-- Sistema Finance S.A. Senior secured* B+ B Sistema Capital S.A. OJSC Sistema Finance Investments Senior unsecured debt* B+ B *Guaranteed by Sistema (JSFC) SYZRANSKAYA FURNITURE: Court Names Y. Levin to Manage Assets ------------------------------------------------------------ The Arbitration Court of Samara Region appointed Mr. Y. Levin as Insolvency Manager for CJSC Syzranskaya Furniture Factory. He can be reached at: Y. Levin Post User Box 41 Syzran 446001 Samara Region Russia The Court commenced bankruptcy proceedings against the company after finding it insolvent. The case is docketed under Case No. A55-36637/2005-13. The Arbitration Court of Samara Region is located at: Avrory Str. 148 Samara Region Russia The Debtor can be reached at: CJSC Syzranskaya Furniture Factory Khvalynskaya Str. 83 Syzran 446012 Samara Region Russia USOLYE-OIL-SERVICE: Bankruptcy Hearing Slated for Feb. 21 --------------------------------------------------------- The Arbitration Court of Irkutsk Region will convene at 10:00 a.m. on Feb. 21, 2007, to hear the bankruptcy supervision procedure on CJSC Usolye-Oil-Service. The case is docketed under Case No. A19-16515/06-49. The Temporary Insolvency Manager is: V. Mamonov Post User Box 150 664011 Irkutsk-11 Russia The Arbitration Court of Irkutsk Region is located at: Room 303 Gagarina Avenue 70 664025 Irkutsk Region Russia The Debtor can be reached at: CJSC Usolye-Oil-Service Komsomolskiy Pr. 134 Usolye-Sibirskoye Irkutsk region Russia VADSKIY OJSC: Court Names A. Tigulev as Insolvency Manager ---------------------------------------------------------- The Arbitration Court of Nizhniy Novgorod Region appointed Mr. A. Tigulev as Insolvency Manager for OJSC Agricultural Complex Vadskiy (TIN 5206002410). He can be reached at: A. Tigulev Beketova Str. 38a 603146 Nizhniy Novgorod Region Russia The Court commenced bankruptcy proceedings against the company after finding it insolvent. The case is docketed under Case No. A43-4371/2006 33-31. The Arbitration Court of Nizhniy Novgorod Region is located at: Kremlin 9 603082 Nizhniy Novgorod Region Russia The Debtor can be reached at: OJSC Agricultural Complex Vadskiy Privokzalnaya Str. 1a Vad Nizhniy Novgorod Region Russia VERESHAGINSKIY MEAT: Court Starts Bankruptcy Supervision -------------------------------------------------------- The Arbitration Court of Perm Region commenced bankruptcy supervision procedure on OJSC Vereshaginskiy Meat Combine. The case is docketed under Case No. A-50-15391/2006-B. The Temporary Insolvency Manager is: OJSC Vereshaginskiy Meat Combine Sadovaya Str. 2 Vereshagino 617120 Perm Region Russia The Arbitration Court of Perm Region is located at: Lunacharskogo Str. 3 Perm Region Russia The Debtor can be reached at: OJSC Vereshaginskiy Meat Combine Sadovaya Str. 2 Vereshagino 617120 Perm Region Russia ZAKHAROV CJSC: Court Names Zh. Tachkova as Insolvency Manager ------------------------------------------------------------- The Arbitration Court of Nizhniy Novgorod Region appointed Ms. Zh. Tachkova as Insolvency Manager for CJSC Furniture Factory of Zakharov. She can be reached at: Zh. Tachkova Shmidta Str. 4 440039 Penza Region Russia The Court commenced bankruptcy proceedings against the company after finding it insolvent. The case is docketed under Case No. A43-92712006-27-429. The Arbitration Court of Nizhniy Novgorod Region is located at: Kremlin 9 603082 Nizhniy Novgorod Region Russia The Debtor can be reached at: CJSC Furniture Factory of Zakharov Gagarina Pr. 110 Nizhniy Novgorod Region Russia =============== S L O V E N I A =============== ABANKA VIPA: Fitch Rates Upcoming Hybrid Issue at BB+ ----------------------------------------------------- Fitch Ratings assigned Abanka Vipa d.d.'s upcoming hybrid issue an expected Long-term BB+ rating. The final rating will be contingent on final documentation conforming to information already received. Abanka is rated Issuer Default BBB with Negative Outlook, Short- term F3, Individual C, and Support 3. The rating of the hybrid issue reflects Fitch's standard methodology of two notches for entities rated in the BBB range. The notes will qualify as Tier 1 capital under Slovene regulations. Interest payments can be deferred in the event of there being no distributable reserves, or if no payment was declared or made for securities ranking equally or junior to these notes. Interest is non-cumulative. The notes are perpetual, but there is a step-up clause after 10 years at which date the securities are callable by Abanka. ========= S P A I N ========= CM BANCAJA 1: Fitch Junks EUR16.2-Million Class E Notes ------------------------------------------------------- Fitch Ratings affirmed all Classes of CM Bancaja 1, Fondo de Titulizacion de Activos' notes due December 2036: -- EUR349,878,027 Class A (ISIN ES037934006) affirmed at AAA; -- EUR25,300,000 Class B (ISIN ES0379349014) affirmed at A; -- EUR16,200,000 Class C (ISIN ES0379349022) affirmed at BBB; -- EUR15,200,000 Class D (ISIN ES0379349030) affirmed at BB; -- EUR16,200,000 Class E (ISIN ES0379349048) affirmed at CC. The rating actions reflect the deal's stable performance. No losses or defaults have been registered to date. The 90days+ and 180d+ delinquency rates currently stand at 0.26% of the outstanding pool. This is well below Fitch's base case for default, set at close. The current weighted average life, as calculated by Fitch, is 2.24 years. The collateral pool initially consisted of 158 loans, which has now reduced to 129 due to amortizations. Meanwhile Class A has amortized to 72.39% of its initial balance as of the October 2006 trustee report. The largest 10 obligors currently make up 38.74% of the outstanding portfolio balance compared to 34.73% at closing. The increase in credit enhancement resulting from deleveraging has offset the additional concentration risk. The collateral pool is significantly more concentrated than comparable SME collateralized loan obligations in Spain, which is reflected in the higher base default rate set at closing. The uncollateralized Class E notes were issued to finance the creation of the reserve fund and were subscribed by Bancaja at closing. The reserve fund is currently fully funded, but can amortize according to certain rules during the transaction's life subject to an absolute minimum level of 1% of the performing collateral pool. This transaction is a cash flow securitization of an initially EUR540 million static pool of secured loans granted by Caja de Ahorros de Valencia Castellon y Alicante to Spanish SMEs and bigger companies. The collateral is fully secured on first- ranking mortgages. The issuer is legally represented and managed by Titulizacion de Activos SGFT, SA, a special-purpose management company with limited liability incorporated under the laws of Spain. =========== S W E D E N =========== ARMSTRONG WORLD: 2006 Third Quarter Earnings Down to US$39.2 Mln ---------------------------------------------------------------- Armstrong World Industries Inc. reported third quarter 2006 net sales of US$973.6 million, 4% higher than third quarter net sales of US$937 million in 2005, which includes a US$13 million favorable impact from foreign exchange rates. Net earnings for the quarter were reported at US$39.2 million versus US$46.1 million for the comparable quarter in the prior year. Operating income for the quarter increased to US$67.4 million from US$66.5 million in the third quarter of 2005. Adjusted operating income for the quarter of US$82.5 million increased 27% compared with adjusted operating income of US$65.2 million in the prior year quarter. The year-over-year growth in third quarter 2006 adjusted operating income benefited from price increases in excess of manufacturing cost inflation, improved product mix in European businesses, improved direct manufacturing costs in all businesses, and lower manufacturing period expense in our floor businesses. Increased earnings in its WAVE joint venture also contributed to the growth. Notably, the growth was achieved despite significant volume declines in North American resilient business where vinyl declines offset laminate growth. Segment Highlights Resilient Flooring net sales were US$304.8 million in the third quarter of 2006 and US$311.5 million in the same period of 2005. Excluding the favorable impact of foreign exchange rates, net sales decreased 4%. The decline was primarily due to decreased volume for vinyl products in North America. The Company reported operating loss of US$2.9 million in the quarter compared with reported income in the third quarter of 2005 of US$7.7 million. Adjusted operating income of US$4.5 million, compared with US$5.9 million on the same basis in the prior year period. The decline is primarily attributable to lower sales. The benefits of increased manufacturing efficiency were greater than the impact of cost inflation in the period. Wood Flooring net sales of US$217.2 million in the current quarter declined 1% from US$220.2 million in the prior year as weakness in the U.S. housing markets drove volume declines in both engineered and solid wood floors. Reported operating income of US$16.5 million in the quarter was below the US$25.7 million reported in the third quarter of 2005. The reduction in operating income was due to the sales volume decline combined with higher lumber prices and increased promotional spending. Production costs improved during the period. Textiles and Sports Flooring net sales in the third quarter of 2006 increased to US$86.3 million from US$79.7 million. Excluding the effects of favorable foreign exchange rates of US$3.9 million, sales grew 3% primarily on higher volume in carpet tiles and better price realization in broadloom carpet. Reported operating income of US$4.2 million in 2006 increased from US$3.2 million in 2005 on the growth in sales. Building Products net sales of US$304.5 million in the current quarter increased from US$268.2 million in the prior year. Excluding the effects of favorable foreign exchange rates of US$5 million, sales increased by 12% primarily due to price increases made to offset inflationary pressures, and improved product mix in both the U.S. and European markets. Volume increased in North America and the Pacific Rim. Reported operating income increased to US$59.7 million from operating income of US$43.1 million in the third quarter of 2005. The growth was driven by improved price realization, better product mix and increased equity earnings in WAVE. Cabinet net sales in the third quarter of 2006 of US$60.8 million increased 6% from US$57.4 million in 2005 on higher selling prices and improved product mix. Volume decreased slightly. Reported operating income for the third quarter of US$3.8 million improved from the prior year's US$300,000 operating loss, primarily driven by the sales growth, and lower SG&A spending. Year-to-Date Results For the nine-month period ending Sept. 30, 2006, net sales were US$2.795 billion compared with US$2.696 billion reported for the first nine months of 2005. Excluding the US$10.4 million impact from unfavorable foreign exchange rates, net sales increased by 4%. The sales growth was due to improved price and product mix on flat volume, and all segments grew sales except Resilient Flooring. Operating income in the first nine months of 2006 was US$188.1 million compared with operating income of US$110.2 million for the same period in 2005. Adjusted operating income of US$209.9 million increased 59% compared with adjusted operating income of US$131.9 million in the prior year period. The improvement in operating income was primarily due to higher sales, improved manufacturing productivity and reduced SG&A expenses. Outlook For the fourth quarter of 2006, the Company expects commercial markets are expected to remain strong, while the decline in the U.S. housing market will continue to reduce volumes in its residential businesses. On a consolidated basis, improved prices are anticipated to continue to offset cost inflation, and reductions in direct manufacturing costs are expected to be sustained. The Company disclosed that due to fresh start reporting adjustments associated with its Oct. 2, 2006, emergence from Chapter 11, reported fourth quarter operating income will not be comparable to prior periods. A full-text copy of AWI's Third Quarter 2006 Results may be viewed at no charge at http://ResearchArchives.com/t/s?148d Based in Lancaster, Pennsylvania, Armstrong World Industries, Inc. -- http://www.armstrong.com/-- the major operating subsidiary of Armstrong Holdings, Inc., designs, manufactures and sells interior floor coverings and ceiling systems, around the world, including Belgium and Sweden. The company and its affiliates filed for chapter 11 protection on December 6, 2000 (Bankr. Del. Case No. 00-04469). StephenKarotkin, Esq., at Weil, Gotshal & Manges LLP, and Russell C.Silberglied, Esq., at Richards, Layton & Finger, P.A., represent the Debtors in their restructuring efforts. The company and its affiliates tapped the Feinberg Group for analysis, evaluation, and treatment of personal injury asbestos claims. Mark Felger, Esq. and David Carickhoff, Esq., at Cozen and O'Connor, and Robert Drain, Esq., Andrew Rosenberg, Esq., and Alexander Rohan, Esq., at Paul, Weiss, Rifkind, Wharton & Garrison, represent the Official Committee of Unsecured Creditors. The Creditors Committee tapped Houlihan Lokey for financial and investment advice. The Official Committee of Asbestos Personal Injury Claimant hired Ashby & Geddes as counsel. The Bankruptcy Court confirmed AWI's plan on Nov. 18, 2003. The District Court Judge Robreno confirmed AWI's Modified Plan on Aug. 14, 2006. The Clerk entered the formal written confirmation order on Aug. 18, 2006. The company's "Fourth Amended Plan of Reorganization, as Modified," has become effective and AWI has emerged from Chapter 11. * * * As reported in the Troubled Company Reporter on Oct. 9, 2006, Standard & Poor's Ratings Services raised its corporate credit rating on Armstrong World Industries Inc. to 'BB' from 'D', following the Company's emergence from bankruptcy on Oct. 2, 2006. S&P said the outlook is stable. ARMSTRONG WORLD: 7 Directors Own 8,183 Phantom Stock Units Each --------------------------------------------------------------- In separate Form 4 filings with the U.S. Securities and Exchange Commission, seven directors of Armstrong World Industries, Inc., disclosed that each of them directly owns 8,183 units of Phantom Stock pursuant to AWI's 2006 Phantom Stock Unit Plan. The Directors are James J. Gaffney, Robert C. Garland, Judith R. Haberkorn, Russell F. Peppet, Arthur J. Pergament, John Joseph Roberts, and Alexander M. Sanders, Jr. Of the 8,183 Phantom Stock Units, 2,183 units will vest on the earlier date of the award's one-year anniversary or the date of any change in control, while the other 6,000 units will vest in one-thirds on the first, second and third anniversaries of the award or if earlier, upon the date of any change in control. The Phantom Stock Units will expire on the earlier of (i) the six-month anniversary of the director's separation from service for any reason other than removal for cause or (ii) the date of any change in control. Based in Lancaster, Pennsylvania, Armstrong World Industries, Inc. -- http://www.armstrong.com/-- the major operating subsidiary of Armstrong Holdings, Inc., designs, manufactures and sells interior floor coverings and ceiling systems, around the world, including Belgium and Sweden. The company and its affiliates filed for chapter 11 protection on December 6, 2000 (Bankr. Del. Case No. 00-04469). StephenKarotkin, Esq., at Weil, Gotshal & Manges LLP, and Russell C.Silberglied, Esq., at Richards, Layton & Finger, P.A., represent the Debtors in their restructuring efforts. The company and its affiliates tapped the Feinberg Group for analysis, evaluation, and treatment of personal injury asbestos claims. Mark Felger, Esq. and David Carickhoff, Esq., at Cozen and O'Connor, and Robert Drain, Esq., Andrew Rosenberg, Esq., and Alexander Rohan, Esq., at Paul, Weiss, Rifkind, Wharton & Garrison, represent the Official Committee of Unsecured Creditors. The Creditors Committee tapped Houlihan Lokey for financial and investment advice. The Official Committee of Asbestos Personal Injury Claimant hired Ashby & Geddes as counsel. The Bankruptcy Court confirmed AWI's plan on Nov. 18, 2003. The District Court Judge Robreno confirmed AWI's Modified Plan on Aug. 14, 2006. The Clerk entered the formal written confirmation order on Aug. 18, 2006. The company's "Fourth Amended Plan of Reorganization, as Modified," has become effective and AWI has emerged from Chapter 11. * * * As reported in the Troubled Company Reporter on Oct. 9, 2006, Standard & Poor's Ratings Services raised its corporate credit rating on Armstrong World Industries Inc. to 'BB' from 'D', following the Company's emergence from bankruptcy on Oct. 2, 2006. S&P said the outlook is stable. ===================== S W I T Z E R L A N D ===================== AKKOMA LLC: Aargau Court Begins Bankruptcy Proceedings ------------------------------------------------------ The Bankruptcy Court of Aargau in Brugg commenced bankruptcy proceedings against LLC Akkoma on Sept. 18, 2006. Headquartered in Mohlin, Switzerland, the Debtor constructs walls in high-rise buildings. AR-BAU LLC: Liestal Court Begins Bankruptcy Proceedings ------------------------------------------------------- The Bankruptcy Court for the District of Liestal commenced bankruptcy proceedings against LLC AR-Bau on Sept. 27, 2006. The Debtor can be contacted at: LLC AR-Bau Rheinstrasse 79 4402 Frenkendorf Liestal Switzerland ARC LLC: Insufficient Assets Prompt Court to Suspend Bankruptcy --------------------------------------------------------------- The Bankruptcy Court for the District of Aarau suspended the bankruptcy proceedings of LLC ARC because the company's assets are insufficient to pay creditors' claims. The owner of the building where the company is headquartered must estimate the detained property according to the Bankruptcy Code of Switzerland. Only creditors holding pledges against the Debtor are required to submit their written proofs of claim by Nov. 27 to: The Bankruptcy Service of Aargau in Oberentfelden 5036 Oberentfelden Aarau, Aargau Switzerland The Debtor can be reached at: LLC ARC Rohrerstrasse 89 5000 Aarau Aargau Switzerland BAKO HANDELS: Aargau Court Closes Bankruptcy Proceedings -------------------------------------------------------- The Bankruptcy Court of Aargau in Oberentfelden closed the bankruptcy proceedings of JSC Bako Handels on Oct. 17. The Company can be contacted at: JSC Bako Handels Dahlienweg 4 5018 Erlinsbach Aargau Switzerland BODECOR LLC: Aargau Court Opens Bankruptcy Proceedings ------------------------------------------------------ The Bankruptcy Court of Aargau in Brugg commenced bankruptcy proceedings against LLC Bodecor on Oct. 16. Headquartered in Klingnau, Aargau, Switzerland, LLC Bodecor is engaged in interior finishing and consultation. BOMBARDIER INC: Prices New EUR1.9 Billion Senior Notes Issue ------------------------------------------------------------ Bombardier Inc. priced a new EUR1.9 billion issue of Senior Notes. The offering, made principally in Europe and the United States, will consist of a EUR800 million aggregate principal amount of floating rate senior notes due 2013 based on EUROLIBOR +3.125%, a US$385 million (EUR300 million) aggregate principal amount of 8% Senior Notes due 2014 and a EUR800 million aggregate principal amount of 7.25% Senior Notes due 2016. This offering of Senior Notes is part of a refinancing plan to provide Bombardier with increased financial and operating flexibility. The refinancing plan also contemplates the entering into a new EUR4.3 billion-syndicated letter of credit facility, within a few weeks, to replace existing facilities prior to their maturity. The net proceeds of the offering of the Senior Notes will be used to repurchase all of the outstanding EUR500 million 6.125% Notes due 2007 issued in Europe by Bombardier Capital Funding LP and a principal amount to be determined of the EUR500 million 5.75% Notes due 2008 issued in Europe by Bombardier Inc., which will have been duly tendered pursuant to tender offers launched on Oct. 23, 2006. Each tender offer is made upon the terms and subject to the conditions (including the jurisdictional limitations) set out in the Invitation Memorandum dated Oct. 23, 2006 relating thereto. The proceeds of the offering will also be used to retire all of the outstanding US$220 million 7.09% Notes due 2007 issued by Bombardier Capital Inc. and to support the new syndicated letter of credit facility. "The purpose of our refinancing initiative is to take advantage of current favourable conditions in the debt capital markets and to extend Bombardier's debt maturity profile," said Francois Lemarchand, Senior Vice President and Treasurer, Bombardier Inc. "This transaction, one of the largest euro denominated corporate issue ever, was significantly oversubscribed which reflects the confidence of the European and U.S. capital markets in the Corporation's ability to execute its business plan." About Bombardier Headquartered in Valcourt, Quebec, Bombardier Inc. (TSX: BBD) -- http://www.bombardier.com/-- manufactures transportation solutions, from regional aircraft and business jets to rail transportation equipment. In Europe, it maintains operations in Northern Ireland, United Kingdom, Germany, Switzerland, Sweden, and Austria. Its revenues for the fiscal year ended Jan. 31, 2006 were US$14.7 billion and its shares are traded in the Toronto Stock Exchange. * * * As reported in the Troubled Company Reporter on Nov. 1, 2006, Dominion Bond Rating Service confirmed the ratings of Bombardier Inc. and Bombardier Capital Ltd. The Senior Unsecured Debentures of both Bombardier Inc. and Bombardier Capital Ltd. are confirmed at BB, and Preferred Shares of Bombardier Inc. at Pfd-4. All trends are Negative. In a TCR-Europe report on Nov. 1, Fitch Ratings has downgraded the debt and Issuer Default Ratings for both Bombardier Inc. The Company's issuer default rating was downgraded from BB to BB-. Other rating actions include, Senior unsecured debt revised to 'BB-' from 'BB'; Credit facilities revised to 'BB-' from 'BB' and Preferred stock revised to 'B' from 'B+'. The Rating Outlook is Stable. At the same time, Standard & Poor's Ratings Services affirmed its 'BB' long-term corporate credit rating on Bombardier. At the same time, Standard & Poor's assigned its 'BB' issue rating to Bombardier's proposed issuance of up to EUR1.8 billion seven- to-ten-year multi-tranche senior unsecured notes. Moody's Investors Service also assigned its Ba2 rating to Bombardier Incorporated's proposed EUR1.8 billion in new senior unsecured notes and affirms all current ratings. IPT INFORMATICS: Aargau Court Closes Bankruptcy Process ------------------------------------------------------- The Bankruptcy Court of Aargau in Brugg closed the bankruptcy proceedings of JSC IPT Informatics Project Team on Oct. 19. The Company can be contacted at: JSC IPT Informatics Project Team Liebrutistrasse 20 4303 Kaiseraugst Aargau Switzerland JASARI KUNSTSTOFFE: Liestal Court Begins Bankruptcy Proceedings --------------------------------------------------------------- The Bankruptcy Court for the District of Liestal commenced bankruptcy proceedings against LLC Jasari Kunststoffe on Sept. 28, 2006. The Debtor can be contacted at: LLC Jasari Kunststoffe Netzibodenstrasse 34 4133 Pratteln Basel-Country Switzerland TPI CONSULTING: Liestal Court Closes Bankruptcy Proceedings ----------------------------------------------------------- The Bankruptcy Court of Liestal closed the bankruptcy proceedings of LLC TPI Consulting on Oct. 16. The Company can be reached at: LLC TPI Consulting Ermitagestrasse 17 4144 Arlesheim Basel-Country Switzerland =========== T U R K E Y =========== TURKIYE SINAI: Fitch Lifts Int'l. Local Currency IDR at BB ---------------------------------------------------------- Fitch Ratings upgraded Turkey-based Turkiye Sinai Kalkinma Bankasi A.S. International local currency Issuer Default rating to BB from BB- and National Long-term rating to A+ from A. The bank's other ratings are affirmed at foreign currency IDR BB-, Short-term foreign and local currency at B, Individual C/D, and Support 3. The Outlooks on the foreign and local currency IDRs remain Positive and the Outlook on the National rating remains Stable. The upgrade in TSKB's local currency IDR and National rating reflects the increased support by and its strategic importance to its parent, Turkiye Is Bankasi A.S. TSKB is 50.1%-owned by Isbank Group and it is the largest development and investment bank in Turkey. The ratings of TSKB are underpinned by its improved asset quality, good profitability, strong capitalization and niche position as the largest development and investment bank in Turkey. These are balanced by limited earnings diversification and the vulnerability of the business to a volatile operating environment. TSKB mainly extends medium- and long-term loans, funded by facilities obtained from diversified international and domestic sources. The majority of its overseas funding is guaranteed by the Turkish Treasury. TSKB's core business lines are development and investment banking. ============= U K R A I N E ============= AGAT LLC: Zhitomir Court Starts Bankruptcy Supervision ------------------------------------------------------ The Economic Court of Zhitomir Region commenced bankruptcy supervision procedure on LLC Agat (code EDRPOU 31563342). The case is docketed under Case No. 3/148-b. The Temporary Insolvency Manager is: Volodimir Kravtsov Polyova Square 10/7 10009 Zhitomir Region Ukraine The Economic Court of Zhitomir Region is located at: Berdichivska Str. 25 Mala 10014 Zhitomir Region Ukraine The Debtor can be reached at: LLC Agat Radyanska Str. 6-A Malin 11601 Zhitomir Region Ukraine AGROZAGOTPOSTACH LLC: Harkiv Court Starts Bankruptcy Supervision ---------------------------------------------------------------- The Economic Court of Harkiv Region commenced bankruptcy supervision procedure on LLC Agrozagotpostach (code EDRPOU 30759742) on Oct. 5. The case is docketed under Case No. B-50/ 143/06. The Temporary Insolvency Manager is: V. Kalashnikov Druzhbi Narodiv Str. 233/82 Harkiv Region Ukraine The Economic Court of Harkiv Region is located at: Derzhprom 8th Entrance Svobodi Square 5 61022 Harkiv Region Ukraine The Debtor can be reached at: LLC Agrozagotpostach Anri Barbus Str. 3-A 61022 Harkiv Region Ukraine ALFA-PIK LLC: Zaporizhya Court Starts Bankruptcy Supervision ------------------------------------------------------------ The Economic Court of Zaporizhya Region commenced bankruptcy supervision procedure on LLC Alfa-Pik (code EDRPOU 13632026) on Sept. 25. The case is docketed under Case No. 25/128/06. The Temporary Insolvency Manager is: M. Vereshak Kostyantin Velikij Str. 16/16 69002 Zaporizhya Region Ukraine The Debtor can be reached at: LLC Alfa-Pik a/b 5191 Geroiv Stalingradu Str. 48/220 69002 Zaporizhya Region Ukraine BMU HARKIVGAZBUD-1: Harkiv Court Names Yurij Artuh as Liquidator ---------------------------------------------------------------- The Economic Court of Harkiv Region appointed Yurij Artuh as Liquidator/Insolvency Manager for LLC BMU Harkivgazbud-1 (code EDRPOU 31150692). The Court commenced bankruptcy proceedings against the company after finding it insolvent on Oct. 2. The case is docketed under Case No. B-39/67-06. The Economic Court of Harkiv Region is located at: Derzhprom 8th Entrance Svobodi Square 5 61022 Harkiv Region Ukraine The Debtor can be reached at: LLC BMU Harkivgazbud-1 Ohtirska Str. 15 Harkiv Region Ukraine DNIPRO LLC: Dnipropetrovsk Court Starts Bankruptcy Supervision -------------------------------------------------------------- The Economic Court of Dnipropetrovsk Region commenced bankruptcy supervision procedure on Agricultural LLC Dnipro (code EDRPOU 30927468) on Oct. 2. The case is docketed under Case No. B 15/ 124-06. The Temporary Insolvency Manager is: Oleksandr Osadchij Chernishevskij Str. 15 49005 Dnipropetrovsk Region Ukraine The Economic Court of Dnipropetrovsk Region is located at: Kujbishev Str. 1a 49600 Dnipropetrovsk Region Ukraine The Debtor can be reached at: Agricultural LLC Dnipro Ukrainka Mezhivskij District 52905 Dnipropetrovsk Region Ukraine KOMETA PLUS: Zhitomir Court Starts Bankruptcy Supervision --------------------------------------------------------- The Economic Court of Zhitomir Region commenced bankruptcy supervision procedure on LLC Kometa Plus (code EDRPOU 38205617) on Oct. 5. The case is docketed under Case No. 7/167-V. The Temporary Insolvency Manager is: Leonid Shishkin Chernyahivskij Str. 20-A/19 10014 Zhitomir Region Ukraine The Economic Court of Zhitomir Region is located at: Berdichivska Str. 25 Mala 10014 Zhitomir Region Ukraine The Debtor can be reached at: LLC Kometa Plus Meblevij Lane 3-a 10001 Zhitomir Region Ukraine MAKS LLC: AR Krym Court Commences Bankruptcy Supervision -------------------------------------------------------- The Economic Court of AR Krym Region commenced bankruptcy supervision procedure on LLC Maks (code EDRPOU 19012655). The case is docketed under Case No. 2-4/12981-2006. The Temporary Insolvency Manager is: Oleksandr Borisenko Kujbishev Str. 15/165 Simferopol 95000 AR Krym Region Ukraine The Economic Court of AR Krym Region is located at: Karl Marks Str. 18 Simferopol 95000 AR Krym Region Ukraine The Debtor can be reached at: LLC Maks Aromatnij Lane 16 Viline Bahchisaray District 98433 AR Krym Region Ukraine MRIYA LLC: Dnipropetrovsk Court Starts Bankruptcy Supervision ------------------------------------------------------------- The Economic Court of Dnipropetrovsk Region commenced bankruptcy supervision procedure on LLC Mriya (code EDRPOU 20259094) on Oct. 11. The case is docketed under Case No. B29/219/06. The Temporary Insolvency Manager is: Romanov Kostyantin a/b 3740 49064 Dnipropetrovsk Region Ukraine The Economic Court of Dnipropetrovsk Region is located at: Kujbishev Str. 1a 49600 Dnipropetrovsk Region Ukraine The Debtor can be reached at: LLC Mriya Peremogi Avenue 41/95 Dniprodzerzhinsk Dnipropetrovsk Region Ukraine PERESICHANSKIJ OIL: Court Names Shvets Ruslan as Liquidator ----------------------------------------------------------- The Economic Court of Harkiv Region appointed Shvets Ruslan as Liquidator/Insolvency Manager for LLC Peresichanskij Oil Extracting Plant (code EDRPOU 33120633). The Court commenced bankruptcy proceedings against the company after finding it insolvent on Oct. 9. The case is docketed under Case No. B-39/120-06. The Economic Court of Harkiv Region is located at: Derzhprom 8th Entrance Svobodi Square 5 61022 Harkiv Region Ukraine The Debtor can be reached at: LLC Peresichanskij Oil Extracting Plant Krinichnij Lane 5 Harkiv Region Ukraine PMK-41 CJSC: AR Krym Court Names K. Kubalov to Liquidate Assets --------------------------------------------------------------- The Economic Court of AR Krym Region appointed Mr. K. Kubalov as Liquidator/Insolvency Manager for CJSC PMK-41 (code EDRPOU 01271528). The Court commenced bankruptcy proceedings against the company after finding it insolvent on Aug. 29. The case is docketed under Case No. 2-11/2731-2006. The Economic Court of AR Krym Region is located at: Karl Marks Str. 18 Simferopol 95000 AR Krym Region Ukraine The Debtor can be reached at: CJSC PMK-41 Shkilna Str. 55a Armyansk 96012 AR Krym Region Ukraine UKREXIMBANK: Fitch Assigns Final B Rating on US$30-Mln Sub Debt --------------------------------------------------------------- Fitch Ratings assigned Credit Suisse International's US$30 million 8.4% issue of limited recourse loan participation notes due February 2016 with interest rate step-up in February 2011 a final Long-term B rating. The notes are to be used solely for financing a subordinated loan to The State Export-Import Bank of Ukraine (Ukreximbank). CSI will only pay noteholders amounts, if any, received from Ukreximbank under the loan agreement. The new notes will be consolidated and form a single series with CSI's US$95 million issue of 8.4% notes, due February 2016 with interest rate step-up in February 2011. Ukrexim was founded in 1992 and was within the top five Ukrainian banks by assets at end-Q306. The bank's principal franchise lies in serving corporate customers and their workforce. The bank has a significant national presence through 96 points-of-sale, which compliment its continuous diversification efforts. Besides its commercial banking activities, Ukreximbank is the only Ukrainian bank that acts as a sole financial agent for international loans that are originated, borrowed or guaranteed by the state. ZDOLBUNIV' BREAD: Court Names Vasil Ribak as Insolvency Manager --------------------------------------------------------------- The Economic Court of Rivne Region appointed Vasil Ribak as Liquidator/Insolvency Manager for OJSC Zdolbuniv' Bread Plant (code EDRPOU 00379459). The Court commenced bankruptcy proceedings against the company after finding it insolvent on Sept. 11. The case is docketed under Case No. 1 b/1-B-01. The Economic Court of Rivne Region is located at: Yavornitski Str. 59 33001 Rivne Region Ukraine The Debtor can be reached at: OJSC Zdolbuniv' Bread Plant Shepkin Str. 13 35700 Rivne Region Ukraine 35700 Rivne Region Ukraine =========================== U N I T E D K I N G D O M =========================== ABBAGREEN LIMITED: Claims Filing Period Ends Dec. 12 ---------------------------------------------------- Creditors of Abbagreen Limited have until Dec. 12 to send their names and addresses and the particulars of their debts or claim, and or any security held by them, and the names and addresses of their Solicitors (if any), to Joint Liquidator Andrew John Turner at: Andrew John Turner Lovewell Blake 89 Bridge Road Oulton Broad Lowestoft Suffolk NR32 3LN United Kingdom The company can be reached at: Abbagreen Limited 1 Peppers Hall Cottage Cross Green Cockfield Bury St. Edmunds Suffolk IP300LG United Kingdom Tel: 01284 827 133 Fax: 01284 827 144 ARRAN FUNDING: S&P Assigns Low-B Ratings on GBP57.9-Mln Notes ------------------------------------------------------------- Standard & Poor's Ratings Services assigned its preliminary credit ratings to the GBP57.9 million (equivalent) asset-backed floating-rate notes series 2006-A to be issued Arran Funding Ltd., a special purpose entity. The issuer will issue to the noteholders the series 2006-A notes, which will be subordinated to the two existing Arran series, 2005-A and 2005-B. The cash flow mechanics will ensure that the series 2006-A notes will provide credit enhancement to all outstanding Arran Funding series, but not to any future series. Series 2006-A will equal 2% of the outstanding series. An excess spread capture mechanism already exists for the protection of the 'BBB' rated notes issued by existing series. Credit enhancement will be provided to the series 2006-A notes through a second, separate excess spread capture mechanism. This will be The Royal Bank of Scotland PLC's (RBS) fourth public securitization of U.K.-originated credit card receivables, and the second under its MTN program set up in December 2005. This program enables RBS to issue multiple series of notes without needing a new special purpose entity, thereby reducing the time and cost of subsequent issuances. The Arran Funding program is a US$7.5 billion facility, and this issuance will consist of one series, series 2006-A, with tranching as shown in the presale report. Each series is segregated from every other series. The collateral backing the notes consists of U.K. Visa and MasterCard receivables originated by RBS and National Westminster Bank PLC. Ratings List Arran Funding Ltd. GBP57.9 Million (Equivalent) Asset-Backed Floating-Rate Notes Series 2006-A Prelim. Prelim. amount (Mil. GBP Class rating equiv.)(1) ----- ------ ------ A2 BB TBD A3 BB TBD (1) At closing, the GBP57.9 million (equivalent) issuance amount will be split between the class A2 and A3 notes. TBD-To be determined. BRITISH AIRWAYS: Gives Workers Option to Retire at 60 ----------------------------------------------------- British Airways Plc met its trade unions Thursday to continue consultation over tackling the GBP2.1 billion deficit in its New Airways Pension Scheme. The meeting follows an agreement in principle between the airline and the NAPS trustees on a funding plan to pay off the deficit, subject to staff accepting benefit changes. A major issue for the staff and unions is the raising of the normal retirement age to 65 from 55 for aircrew and 60 for ground staff. The airline has now included the option of a normal retirement age of 60 in return for increased contribution rates: * For ground staff: an increase from 5.25 percent to 10 percent; and * For air crew: 6.5 percent to 11.25 percent increase for the first five years. After five years, rates will be harmonized at 10 percent for all. BA will raise its annual contributions from GBP235 million to GBP272 million. "We recognize that normal retirement age was a sticking point and we have put forward an option that allows staff to retire at 60," British Airways chief financial officer Keith Williams said. "Staff can still choose not to pay any extra but it will mean working longer to get the same pension." Funding Plan Agreement As reported in the TCR-Europe on Nov. 20, British Airways and the NAPS trustees have agreed in principle a ten-year funding plan to tackle its GBP2.1 billion deficit. The airline will increase its one-off cash injection from GBP500 to GBP800 million and offer to pay up to GBP50 million a year for the next three years subject to the airline's year end cash balances remaining above GBP1.8 billion and on staff accepting future benefit changes. The agreed funding plan between the company and trustees assumes an increase in British Airways' annual contributions to over GBP250 million and close to the value of the proposed members benefit reductions. The benefit reductions include raising the normal retirement age to 65, a lower accrual rate, inflation capped pensionable pay increases, capped pension increases on retirement and sharing life expectancy. NAPS will remain a final salary scheme. About the Company Headquartered in West Drayton, United Kingdom, British Airways Plc -- http://www.ba.com/-- operates of international and domestic scheduled and charter air services for the carriage of passengers, freight and mail, and provides of ancillary services. The British Airways group consists of British Airways Plc and a number of subsidiary companies including in particular British Airways Holidays Limited and British Airways Travel Shops Limited. * * * British Airways' 7-1/4% senior unsubordinated notes due 2016 and 10-7/8% notes due 2008 carry Moody's Investors Service's Ba2 ratings and Standard & Poor's BB- ratings. BRITISH AIRWAYS: American Airlines Sell Iberia Stake for EUR19MM ---------------------------------------------------------------- British Airways Plc purchased American Airline's remaining stake in Iberia, which amounts to around one percent of Iberia's issued share capital for around EUR19 million (or GBP13 million). This now takes BA's total share holding from some nine to ten percent. The company said the transaction is intended to preserve British Airways' two seats on the Iberia board. About the Company Headquartered in West Drayton, United Kingdom, British Airways Plc -- http://www.ba.com/-- operates of international and domestic scheduled and charter air services for the carriage of passengers, freight and mail, and provides of ancillary services. The British Airways group consists of British Airways Plc and a number of subsidiary companies including in particular British Airways Holidays Limited and British Airways Travel Shops Limited. * * * British Airways' 7-1/4% senior unsubordinated notes due 2016 and 10-7/8% notes due 2008 carry Moody's Investors Service's Ba2 ratings and Standard & Poor's BB- ratings. CORUS GROUP: Brazil's Companhia Siderurgica Starts Takeover Bid --------------------------------------------------------------- Companhia Siderurgica Nacional S.A. has approached the Board of Corus Group plc regarding a proposal to acquire the Company at a price of 475 pence per ordinary share in cash. Any potential offer is subject to certain pre-conditions, all of which CSN reserves the right to waive, including: -- completion of confirmatory due diligence satisfactory to CSN; -- finalization of financing arrangements; and -- a recommendation from the Board of Corus. The combination of CSN and Corus would create a top five global steel group with 24 million tons of annual steel production and, by 2010, around 50 million tons of annual iron ore production. CSN intends to finance the Corus acquisition through a combination of existing financial resources and the proceeds of new debt facilities to be underwritten by a bank syndicate comprised of Barclays Bank PLC, Goldman Sachs Credit Partners L.P., and BNP Paribas and/or their designated affiliates. CSN intends to match the terms of the agreement reached with the trustees of Corus' pension funds as described in Corus' scheme document. "A combination of CSN and Corus would create a global powerhouse with market leading positions and exceptional distribution networks across both developed and emerging markets," Benjamin Steinbruch, Chairman and CEO of CSN said. "With its vertically integrated structure and industry leading margins, the enlarged group would become a leader in the global steel industry, fully self-sufficient in iron ore and ideally positioned to take advantage of ongoing consolidation. We have great respect for the accomplishments of the Corus Board and management, including their achievements in the Restoring Success program. With their support, we believe we can swiftly deliver the most attractive proposal to Corus and its shareholders." About Companhia Siderurgica Nacional Headquartered Sao Paolo, Brazil, Companhia Siderurgica Nacional S.A. (NYSE: SID) (BOVESPA: CSNA3) -- http://www.csn.com.br/-- produces, sells, exports and distributes steel products, like hot-dip galvanized sheets, tin mill products and tinplate. The company also runs its own iron ore, manganese, limestone and dolomite mines and has strategic investments in railroad companies and power supply projects. The group also operates in Portugal and the U.S. About Corus Group Corus Group PLC -- http://www.corusgroup.com/-- produces metal from its major operating facilities in the U.K., the Netherlands, Germany, France, Norway, Belgium and Canada. Corus turns over GBP10 billion annually and employs 47,300 in over 40 countries and sales offices and service centers worldwide, including Indonesia and the Philippines. Corus was created through the merger of British Steel plc and Koninklijke Hoogovens N.V. The group suffered six years ago from the crisis in British manufacturing, which prompted it to shake up management, close plants, cut jobs, and sell assets to lower debt. Its debt was thought to stand at GBP1.6 billion in 2002. After posting a net loss of GBP458 million in 2003, it embarked on a restructuring program, signed a new EUR1.2 billion banking facility, and issued GBP307 million worth of shares. It returned to operating profit in the first quarter of 2004. The recent recovery of steel prices and the strength of the euro are expected to help it achieve relatively strong earnings. * * * Moody's Investors Service placed all ratings of Corus Group plc under review with direction uncertain following the recommendation of the board of Corus Group in favor of the proposed acquisition of the entire capital of Corus Group by Tata Steel Limited. If the bondholders exercised the put option or the bonds were tendered for above par as part of a refinancing, Moody's is likely to withdraw the ratings for the bonds. Similarly, a refinancing of the rated bank loans would also result in a likely withdrawal of the ratings for the credit facilities. At that juncture, Moody's remaining rating at Corus Group will be the corporate family rating. Ratings affected: Corus Group plc * Ba2 Corporate Family Rating; * Ba1 Rating on EUR800 million Secured Bank Facilities maturing July 2008; * B1 Rating on EUR800 million Unsecured Notes due 2011; and * B1 Rating on GBP200 million in Unsecured Notes due 2008. Moody's last rating action on Corus was the upgrade to Ba2/Ba1/B1 on May 8. Fitch Ratings changed the Rating Watch on Corus Group PLC's Issuer Default and senior unsecured BB- and Short-term B ratings to Negative from Positive. This follows the recommendation by the CS Board of an offer from India-based Tata Steel Ltd. valued at GBP4.3 billion. The RWN also applies to these debt instruments issued by CS: -- CS EUR800 million 7.5% senior notes; -- CS EUR307 million 3% convertible bonds; and -- Corus Finance Plc GBP200 million 6.75% guaranteed bonds. Fitch will resolve the Rating Watch following publication of CS's 2006 results, further details on the level of synergies and operational benefits that could accrue under the transaction, and the closure of the deal. Standard & Poor's Ratings Services placed its 'BB' long-term corporate credit rating on U.K.-based steel consortium Corus Group PLC on CreditWatch with positive implications following the announcement by Corus concerning a possible recommended offer for the company from Tata Steel Ltd., India's second largest integrated steel company. At the same time, Standard & Poor's placed its 'BB+' senior secured bank loan ratings on Corus and its 'BB-' senior unsecured debt ratings on Corus and related entity Corus Finance PLC on CreditWatch with positive implications. The 'B' short- term corporate credit rating on Corus was also placed on CreditWatch with positive implications. CORUS GROUP: Proposed Takeover Cues S&P's Developing Watch ---------------------------------------------------------- Standard & Poor's Ratings Services kept its 'BB' long-term corporate rating on U.K.-based steelmaker Corus Group PLC on CreditWatch with developing implications, following the announcement by Brazil-based steel maker Companhia Siderurgica Nacional (BB/Watch Neg/--) of a proposed takeover offer worth 475 pence per share. At the same time, the 'BB+' senior secured bank loan ratings and 'BB-' unsecured debt ratings on Corus remain on CreditWatch with developing implications. The 'B' short-term corporate credit rating remains on CreditWatch with positive implications. All ratings were placed on CreditWatch on Oct. 18 following the announcement of an initial bid for the company from India-based steel manufacturer Tata Steel Ltd.. The proposed new offer from CSN is larger than the bid for Corus from Tata Steel, which is worth 455 pence per share. As a result, the new offer has increased uncertainties over the potential outcome for Corus. "We note that integration with low-cost operations of either of the bidders might benefit Corus' weak business profile," said Standard & Poor's credit analyst Tatiana Kordyukova. "Both bidders have referred to nonrecourse debt as a part of the respective financial structures, however, and it is not yet clear how feasibly such debt could be served from the cash flows of Corus and to what extent that could impair Corus' financial position." It is also not certain how both offers could evolve in the future. Upside potential remains if the Tata Steel bid is successful: Because Tata Steel is an entity with higher stand- alone creditworthiness, the combined entity could have a stronger credit quality than Corus on a standalone basis -- provided there is sufficient evidence that Tata Steel will provide financial support to Corus. In resolving the CreditWatch placement, Standard & Poor's will seek further information on the progress of the proposed offers made by both Tata Steel and CSN. In resolving the CreditWatch placement, the rating agency will assess whether Corus' weak business risk profile would be enhanced, and how such a transaction would be financed. Furthermore, it will consider the potentially substantial integration challenges. CORUS GROUP: Tata Steel May Raise Offer to Top CSN's Bid -------------------------------------------------------- Tata Steel Ltd. may raise its offer for Corus Group Plc in order to top the rival bid launched by Brazil's Companhia Siderurgica Nacional SA, Bloomberg says. As previously disclosed, Companhia Siderurgica last week offered GBP4.26-billion to acquire Corus Group, topping a bid by India's Tata Steel. Companhia Siderurgica said that it had approached its board of directors with a proposal to pay 475 pence per share in cash, which is 4.4% higher than Tata Steel's 455 pence offer. The offer was subject to due diligence and Companhia Siderurgica has not yet made a firm bid. Bloomberg relates that Tata Steel and Companhia Siderurgica both want to buy Corus Group to add mills in Europe and boost bargaining power with clients and suppliers. Surging demand has spurred US$78 billion in announced transactions in the industry this year. Bloomberg cites John Thorn, who manages US$250 million in Indian stocks at India Capital Fund Ltd., as saying that Tata Steel will have to raise its offer to stay in the game, adding that although Tata Steel has a first-mover advantage, at the end of the day, money matters. About Corus Group Corus Group PLC -- http://www.corusgroup.com/-- produces metal from its major operating facilities in the U.K., the Netherlands, Germany, France, Norway, Belgium and Canada. Corus turns over GBP10 billion annually and employs 47,300 in over 40 countries and sales offices and service centers worldwide, including Indonesia and the Philippines. Corus was created through the merger of British Steel plc and Koninklijke Hoogovens N.V. The group suffered six years ago from the crisis in British manufacturing, which prompted it to shake up management, close plants, cut jobs, and sell assets to lower debt. Its debt was thought to stand at GBP1.6 billion in 2002. After posting a net loss of GBP458 million in 2003, it embarked on a restructuring program, signed a new EUR1.2 billion banking facility, and issued GBP307 million worth of shares. It returned to operating profit in the first quarter of 2004. The recent recovery of steel prices and the strength of the euro are expected to help it achieve relatively strong earnings. * * * Moody's Investors Service placed all ratings of Corus Group plc under review with direction uncertain following the recommendation of the board of Corus Group in favor of the proposed acquisition of the entire capital of Corus Group by Tata Steel Limited. If the bondholders exercised the put option or the bonds were tendered for above par as part of a refinancing, Moody's is likely to withdraw the ratings for the bonds. Similarly, a refinancing of the rated bank loans would also result in a likely withdrawal of the ratings for the credit facilities. At that juncture, Moody's remaining rating at Corus Group will be the corporate family rating. Ratings affected: Corus Group plc * Ba2 Corporate Family Rating; * Ba1 Rating on EUR800 million Secured Bank Facilities maturing July 2008; * B1 Rating on EUR800 million Unsecured Notes due 2011; and * B1 Rating on GBP200 million in Unsecured Notes due 2008. Moody's last rating action on Corus was the upgrade to Ba2/Ba1/B1 on May 8. Fitch Ratings changed the Rating Watch on Corus Group PLC's Issuer Default and senior unsecured BB- and Short-term B ratings to Negative from Positive. This follows the recommendation by the CS Board of an offer from India-based Tata Steel Ltd. valued at GBP4.3 billion. The RWN also applies to these debt instruments issued by CS: -- CS EUR800 million 7.5% senior notes; -- CS EUR307 million 3% convertible bonds; and -- Corus Finance Plc GBP200 million 6.75% guaranteed bonds. Fitch will resolve the Rating Watch following publication of CS's 2006 results, further details on the level of synergies and operational benefits that could accrue under the transaction, and the closure of the deal. Standard & Poor's Ratings Services placed its 'BB' long-term corporate credit rating on U.K.-based steel consortium Corus Group PLC on CreditWatch with positive implications following the announcement by Corus concerning a possible recommended offer for the company from Tata Steel Ltd., India's second largest integrated steel company. At the same time, Standard & Poor's placed its 'BB+' senior secured bank loan ratings on Corus and its 'BB-' senior unsecured debt ratings on Corus and related entity Corus Finance PLC on CreditWatch with positive implications. The 'B' short- term corporate credit rating on Corus was also placed on CreditWatch with positive implications. EMI GROUP: Posts GBP30.1 Million Net Loss for First Half 2006 ------------------------------------------------------------- EMI Group Plc released its financial results for the six months ended Sept. 30, 2006. EMI posted GBP30.1 million in net loss against GBP867.9 million in revenues for the first half of 2006, compared with GBP37.8 million in net profit against GBP924.6 million in revenues for the same period in 2006. In the first half, EMI Group delivered rapid digital growth, continued creative success across both divisions and made good progress on its restructuring initiatives. The lower first-half revenues at EMI Music, and the GBP9 million one-off cost of the fraud discovered in October at our recorded music business in Brazil, are the key reasons for the reported decline in Group profit from operations from GBP86.7 million to GBP62.7 million. The Board has declared an unchanged interim dividend of 2.0p per share. "The results for the first half of the financial year largely reflect the phasing of EMI Music's planned release schedule which, as previously indicated, has a greater weighting to the second half of the financial year than in prior years," Eric Nicoli, Group Chairman, said. "EMI Music Publishing once again delivered a strong performance." Outlook The company discloses an outstanding collection of releases due in the second half of the financial year from both divisions. From EMI Music, the company has albums from Robbie Williams, Norah Jones, Keith Urban, Joss Stone, Dierks Bentley, RBD, Relient K, All Saints, Vasco Rossi, Simon Webbe, Depeche Mode, The Magic Numbers, The Thrills and Moby. It also has an exciting new release from The Beatles, where the legendary producer Sir George Martin, and his son Giles, have been working with the entire archive of Beatles recordings to create the LOVE album. Key second-half releases for EMI Music Publishing include albums from Natasha Bedingfield, Kelly Clarkson, Daddy Yankee, Diddy, Snoop Dogg, Good Charlotte, Il Divo, Jay-Z, Norah Jones, My Chemical Romance, Scissor Sisters, Sting, Kanye West and Amy Winehouse. The strength of this line up, together with continued strong growth in digital revenues and on-going cost discipline, give the Board confidence that the Group is on track to deliver results in line with its expectations for the full year, after taking into account the impact of the fraud in Brazil. About EMI Headquartered in London, United Kingdom, EMI Group PLC -- http://www.emigroup.com/-- is the world's largest independent music company, operating directly in 50 countries, including Brazil, and with licensees in a further 20. The group employs over 6,600 people. Revenues in 2005 were near EUR2 billion and operating profit generated was over EUR225 million. At March 31, 2006, EMI Group's consolidated balance sheet revealed GBP1.817 billion in total assets, GBP2.544 billion in total liabilities and GBP726.6 million in shareholders' deficit. * * * As reported in Troubled Company Reporter - Latin America on Nov. 8, Standard & Poor's Rating Services lowered to 'BB' from 'BB+' its long-term corporate and senior unsecured ratings on U.K.-based music producer and distributor EMI Group PLC, following an annual review. The outlook is negative. Moody's Investors Service laso downgraded EMI Group plc's senior debt and guaranteed debt ratings to Ba2 from Ba1. At the same time Moody's assigned a Ba2 Corporate Family Rating to EMI. The downgrade is based on Moody's expectation that EMI's debt protection measurements will not improve near-term to a level commensurate with the Ba1 rating category. Moody's said the rating outlook is now stable. ENRON CORP: Wants US$300,000 Electroimpact Settlement Approved -------------------------------------------------------------- Pursuant to Rule 9019(a) of the Federal Rules of Bankruptcy Procedure, Enron Corp. and its debtor-affiliates ask the Honorable Arthur Gonzalez of the U.S. Bankruptcy Court for the Southern District of New York to approve its settlement agreement with Electroimpact, Inc. Prior to Dec. 2, 2001, Enron issued unsecured commercial paper to various entities. The commercial paper had maturities of up to 270 days. In a series of transfers starting on Oct. 26, 2001, and concluding on Nov. 6, 2001, Enron transferred over US$1,000,000,000 to various entities for the purpose of prepaying or redeeming, prior to its stated maturity date, commercial paper that Enron had previously issued. By complaint dated Nov. 6, 2003, and later amended, styled Enron Corp. v. J.P. Morgan Securities Inc., et al., Adversary Proceeding No. 03-92677, Enron commenced litigation against Electroimpact and other defendants, asserting claims for the avoidance and recovery of preferential or fraudulent transfers in connection with the Early Redemption Transfers, and disallowance of defendants' claims against Enron. Enron sought to recover from Electroimpact US$747,525 in connection with one of the commercial paper debt prepayments identified in the Complaint. On Feb. 19, 2004, Electroimpact moved to dismiss the Complaint in the Adversary Proceeding. Enron opposed the motion to dismiss. The motion to dismiss was subsequently denied by the Bankruptcy Court. On Aug. 1, 2005, Electroimpact filed an answer in the Adversary Proceeding denying the material allegations of the Complaint and asserting various affirmative defenses thereto. Following discussions between Enron and Electroimpact, the parties have negotiated the Settlement Agreement under which, subject to approval by the Court, Electroimpact will pay Enron US$300,000, and Electroimpact will forfeit, waive and release any claim pursuant to Section 502(h) of the Bankruptcy Code against Enron based upon the Settlement Payment. The Settlement Agreement also contemplates that Enron will execute a stipulation and order dismissing claims against Electroimpact in the Commercial Paper Action which, once filed with the Bankruptcy Court, will effectively serve to dismiss with prejudice the claims against Electroimpact in the Adversary Proceeding. About Enron Corp. Headquartered in Houston, Texas, Enron Corporation filed for chapter 11 protection on December 2, 2001 (Bankr. S.D.N.Y. Case No. 01-16033) following controversy over accounting procedures, which caused Enron's stock price and credit rating to drop sharply. Judge Gonzalez confirmed the Company's Modified Fifth Amended Plan on July 15, 2004, and numerous appeals followed. The Debtors' confirmed chapter 11 Plan took effect on Nov. 17, 2004. Albert Togut, Esq., at Togut Segal & Segal LLP, Brian S. Rosen, Esq., Martin Soslan, Esq., Melanie Gray, Esq., Michael P. Kessler, Esq., Sylvia Ann Mayer, Esq., at Weil, Gotshal & Manges LLP, Frederick W.H. Carter, Esq., Michael Schatzow, Esq., Robert L. Wilkins, Esq., at Venable, Baetjer and Howard, LLP, and Mark C. Ellenberg, Esq., at Cadwalader, Wickersham & Taft, LLP represent the Debtor. Jeffrey K. Milton, Esq., Luc A. Despins, Esq., Matthew Scott Barr, Esq., and Paul D. Malek, Esq., at Milbank, Tweed, Hadley & McCloy LLP represents the Official Committee of Unsecured Creditors. (Enron Bankruptcy News, Issue No. 182; Bankruptcy Creditors' Service, Inc., http://bankrupt.com/newsstand/or 215/945-7000) ESSCOM LIMITED: Appoints Richard Jeffrey Rones as Administrator --------------------------------------------------------------- Richard Jeffrey Rones of ThorntonRones LLP was appointed administrator of Esscom Ltd. (Company Number 5018596) on Oct. 30. The administrator can be reached at: Richard Jeffrey Rones ThorntonRones LLP 1st Floor 167 High Road Loughton Essex IG10 4LF United Kingdom Tel: 020 841 9333 Fax: 020 8418 9444 E-mail: info@thorntonrones.co.uk Headquartered in Bicester, England, Esscom Ltd. sells, installs and maintains computer network systems. EVERGREEN INT'L: Moody's Assigns Loss-Given-Default Ratings ----------------------------------------------------------- In connection with Moody's Investors Service's implementation of its Probability-of-Default and Loss-Given-Default rating methodology for the Transportation sector, the rating agency confirmed its B2 Corporate Family Rating for Evergreen International Aviation Inc. Additionally, Moody's confirmed its probability-of-default ratings and assigned loss-given-default ratings on these bond debt obligations: Projected Old POD New POD LGD Loss-Given Debt Issue Rating Rating Rating Default ---------- ------- ------- ------ ---------- Guaranteed Senior Secured 1st Lien Term Loan, Due Aug. 10, 2011 B1 B1 LGD3 33% Guaranteed Senior Secured 1st Lien Revolver Due Aug. 10, 2011 B1 B1 LGD3 33% Guaranteed Senior Secured 2nd Lien Term Loan Due Feb. 10, 2013 Caa1 Caa1 LGD5 79% Moody's explains that current long-term credit ratings are opinions about expected credit loss which incorporate both the likelihood of default and the expected loss in the event of default. The LGD rating methodology will disaggregate these two key assessments in long-term ratings. The LGD rating methodology will also enhance the consistency in Moody's notching practices across industries and will improve the transparency and accuracy of Moody's ratings as Moody's research has shown that credit losses on bank loans have tended to be lower than those for similarly rated bonds. Probability-of-default ratings are assigned only to issuers, not specific debt instruments, and use the standard Moody's alpha- numeric scale. They express Moody's opinion of the likelihood that any entity within a corporate family will default on any of its debt obligations. Loss-given-default assessments are assigned to individual rated debt issues -- loans, bonds, and preferred stock. Moody's opinion of expected loss are expressed as a percent of principal and accrued interest at the resolution of the default, with assessments ranging from LGD1 (loss anticipated to be 0% to 9%) to LGD6 (loss anticipated to be 90% to 100%). Based in McMinnville, Oregon, Evergreen International Aviation, Inc. -- http://www.evergreenaviation.com/-- is a privately held global aviation services company that is active through several subsidiary companies. FORD MOTOR: Accelerates Growth Plan in China -------------------------------------------- Ford Motor Company continues its accelerated growth plan for China and is on track to deliver its year to date with growth expected to exceed 100.8% (year on year) in 2006. Headlining Ford's product line-up at Auto China 2006 is the all- new Ford S-MAX, which was named Car of the Year in Europe last week, and is the first Ford vehicle to introduce "kinetic design" to China's motoring enthusiasts. At Ford, kinetic design stands for "energy in motion." Ford S- MAX is one of the new vehicles to hit China's roads and highways. Ford Focus was also at the show. Ford recently added a 5-door version to Ford Focus to keep ahead of consumer demand. In addition to a product showing at Auto China 2006, Ford Motor also announced a major new investment -- the opening of the Ford Research and Engineering Center -- to be located in Nanjing, China. It will support Ford Motor Company's product development for worldwide operations while also making a major contribution to the future of China's auto market. "The Ford Research and Engineering Center represents another major milestone for Ford as it strengthens its manufacturing blueprint in China. It will offer a winning combination that leverages Ford's global expertise in research and engineering in addition to building China's leading local talent. It will also work with Technical Development Centers at Ford Motor's joint ventures in China to support product development and procurement, " Ford Motor (China) Ltd. chairman and chief executive officer Mei Wei Cheng said. Earlier last week, Ford S-MAX, was voted Car of the Year by 58 of Europe's leading motoring journalists across 22 European countries. Ford S-MAX knocked out 41 contenders to win this prized European automotive crown. Ford now has two cars in its China product lineup that have won this prestigious award, the other being the Ford Focus. With its "kinetic design" Ford S-MAX, it is expected to be a favorite in China as it has in Europe. It aims to set new standards in driver comfort and style with its innovative driver focused technologies and inventive approach to seating, storage and flexibility of space. Ford enthusiasts will not have to wait long for S-MAX. Speaking at Auto China 2006, Mei Wei Cheng confirmed that S-MAX will be produced by Changan Ford and will be ready to roll off production lines in early 2007. Joining S-MAX and Focus on stage is the Ford iosis Concept Car which gives Ford's customers a strong sense of the future design direction the brand is taking. The man behind the iosis Concept is Martin Smith, Executive Design Director for Ford of Europe, was also awarded "Outstanding Achievement Award" by Autocar in London last week. Speaking at Auto China 2006, Mr. Smith stated, "What iosis does, is bring to life our new "kinetic design" language in a compelling way. To us, "kinetic design" is about expressing the energy in motion and power of our vehicles, seamlessly integrating strong visual cues with dynamic driving performance. It shows our customers the future design direction of Ford's product line. A consistent and dynamic energy that will be embedded into our product DNA." He continued, "You only have to look at Ford S-MAX. Its bold "kinetic design" offers function, space, and flexibility alongside head turning "wow factor" and dynamic drivability. This winning formula is what's made Ford S-MAX such a success in Europe." Other products taking center stage for Ford will include Ford's Reflex concept, which features a Diesel Hybrid Powertrain, the legendary Ford Mustang Shelby GT500 and the all-new Focus ST. A range of other locally produced blue oval favorites will also be on display. "We are using Auto China 2006 to showcase the strength of our product range, reinforcing the depth and diversity of the Ford Motor Company product family. Our portfolio has something to appeal to everyone, from dependable and affordable transportation through to luxurious premium brands. In the future, Chinese customers can continue to expect more exciting, locally made Ford vehicles that consistently deliver cutting- edge design and world leading technology," Mei Wei Cheng said. The full Ford Focus family will be on display at the show. Ranging from locally produced Focus 4-door and Focus 5-door through to the Focus China Circuit Championship (CCC) racing car and the visually stunning Focus ST. This convertible Focus has been a global success and is now making its first appearance in China at this years show. Ford Focus boosted the sales at Changan Ford Mazda Automobile in the first ten months of 2006 with retail sales totaling 56,151 units, representing more than 50% of total Ford product sales. With strong sales momentum, Changan Ford Mazda Automobile is now one of the fastest growing auto makers in China. In 2007, total annual production capacity will exceed 410,000 units at Chongqing and Nanjing plants (combined). Ford also continues to expand its distribution network and will have 200 appointed dealers by the end of 2006. "It is no secret that the China market is critical to our plans for building a stronger Ford Motor Company globally," Mei Wei Cheng said. "With sales volumes continuing to fuel growth, we are looking ahead and taking the required steps now to ensure our China operation is able to continue to meet the seemingly insatiable appetite for our products. In doing so, the China market will play an even greater role in the future growth and success of Ford Motor Company's global operations." For the year 2006, Ford Motor Company's China Sourcing Office is on track to source some US$2.6 billion worth of auto parts and systems, supporting Ford Motor Company's global manufacturing operations and after sales customer services. The company is also actively expanding its auto financing business in the China market. Ford Automotive Finance has extended its auto financing services to more than 70 Chinese cities nationwide in just 18 months after starting operation, servicing Changan Ford Mazda Automobile and Jiangling Motor Company simultaneously. As one of the largest exhibitors with 5,000 square meters of exhibition space, Ford Motor Company, comprising of six affiliated brands (Ford, Lincoln, Volvo, Land Rover, Jaguar and Mazda) will demonstrate its enterprise muscle, displaying a full fleet of show vehicles. Executives from Ford Motor Company, John Parker, group vice president of Ford Motor Company, Asia Pacific and Africa; Mei Wei Cheng, chairman and chief executive officer of Ford Motor China; and Martin Smith, executive design director from Ford of Europe, attended the Ford press conference and show preview for media at Auto China 2006 in Beijing. About Ford Motor Headquartered in Dearborn, Michigan, Ford Motor Company (NYSE: F) -- http://www.ford.com/-- manufactures and distributes automobiles in 200 markets across six continents. With more than 324,000 employees worldwide, the company's core and affiliated automotive brands include Aston Martin, Ford, Jaguar, Land Rover, Lincoln, Mazda, Mercury and Volvo. Its automotive-related services include Ford Motor Credit Company and The Hertz Corporation. * * * In a TCR-Europe report on Nov. 17, Dominion Bond Rating Service believes that the restatements have no material impact on the Company's financial position and do not warrant any rating actions. The restatements do not affect the availability of the Company's committed credit facilities. More importantly, the Company has taken action to remediate the material weaknesses in its accounting for certain derivative transactions under the Statement of Financial Accounting Standards 133. As reported in the Troubled Company Reporter-Europe on Oct. 25, Moody's Investors Service disclosed that Ford's very weak third quarter performance, with automotive operations generating a pre-tax loss of US$1.8 billion and a negative operating cash flow of US$3 billion, was consistent with the expectations which led to the September 19 downgrade of the company's long-term rating to B3. Standard & Poor's Ratings Services has placed its 'B' senior unsecured debt issue ratings on Ford Motor Co. on CreditWatch with negative implications. At the same time, S&P affirmed all other ratings on Ford, Ford Motor Credit Co., and related entities, except the rating on Ford Motor Co. Capital Trust II 6.5% cumulative convertible trust preferred securities, which was lowered to 'CCC-' from 'CCC.' Fitch Ratings has also placed Ford Motor Company's 'B+/RR3' senior unsecured debt on Rating Watch Negative reflecting Ford's intent to raise secured financing that would impair the position of unsecured debtholders. Under Fitch's recovery rating scenario it was estimated that unsecured holders would recover around 68% in a bankruptcy scenario, equating to a Recovery Rating of 'RR3' (50-70% recovery). FORD MOTOR: SEC Wants More Disclosure on Restated Financials ------------------------------------------------------------ The U.S. Securities and Exchange Commission wants Ford Motor Co. to disclose additional information in its Current Reports on Form 8-K dated Oct. 20, 2006, the Annual Reports on Form 10-K/A for the year ended Dec. 31, 2005, and the Quarterly Reports on Form 10-Q for the period ended Sept. 30, 2006, filed by Ford and Ford Motor Credit Company relating to their recent restatement of financial results. Ford said it is voluntarily cooperating with SEC's informal inquiries. As reported in the Troubled Company Reporter-Europe on Nov. 15, Ford restated its previously reported financial results from 2001 through 2005 to correct accounting for certain derivative transactions under Paragraph 68 of the Statement of Financial Accounting Standards 133, Accounting for Derivative Instruments and Hedging Activities. As part of the restatement, the company also reversed certain immaterial accounting adjustments and recorded them in the proper period. Headquartered in Dearborn, Michigan, Ford Motor Company (NYSE: F) -- http://www.ford.com/-- manufactures and distributes automobiles in 200 markets across six continents. With more than 324,000 employees worldwide, the company's core and affiliated automotive brands include Aston Martin, Ford, Jaguar, Land Rover, Lincoln, Mazda, Mercury and Volvo. Its automotive-related services include Ford Motor Credit Company and The Hertz Corporation. * * * In a TCR-Europe report on Nov. 17, Dominion Bond Rating Service believes that the restatements have no material impact on the Company's financial position and do not warrant any rating actions. The restatements do not affect the availability of the Company's committed credit facilities. More importantly, the Company has taken action to remediate the material weaknesses in its accounting for certain derivative transactions under the Statement of Financial Accounting Standards 133. As reported in the Troubled Company Reporter-Europe on Oct. 25, Moody's Investors Service disclosed that Ford's very weak third quarter performance, with automotive operations generating a pre-tax loss of US$1.8 billion and a negative operating cash flow of US$3 billion, was consistent with the expectations which led to the September 19 downgrade of the company's long-term rating to B3. Standard & Poor's Ratings Services has placed its 'B' senior unsecured debt issue ratings on Ford Motor Co. on CreditWatch with negative implications. At the same time, S&P affirmed all other ratings on Ford, Ford Motor Credit Co., and related entities, except the rating on Ford Motor Co. Capital Trust II 6.5% cumulative convertible trust preferred securities, which was lowered to 'CCC-' from 'CCC.' Fitch Ratings has also placed Ford Motor Company's 'B+/RR3' senior unsecured debt on Rating Watch Negative reflecting Ford's intent to raise secured financing that would impair the position of unsecured debtholders. Under Fitch's recovery rating scenario it was estimated that unsecured holders would recover around 68% in a bankruptcy scenario, equating to a Recovery Rating of 'RR3' (50-70% recovery). HOPPITS LIMITED: Brings In Liquidators from Recovery hjs -------------------------------------------------------- Gordon Johnston & Shane Biddlecombe of Recovery hjs were appointed Liquidators of Hoppits Limited on Nov. 7 for the creditors' voluntary winding-up procedure. The company can be reached at: Hoppits Limited Warren House Bell Lane Nutley Uckfield East Sussex TN223PD United Kingdom Tel: 01892 665 025 I H TOWILL: Nominates Ray Purnell as Liquidator ----------------------------------------------- Ray Purnell of Purnells was nominated Liquidator of I H Towill Electrical Limited on Oct. 27 for the creditors' voluntary winding-up procedure. The company can be reached at: I H Towill Electrical Limited Station Yard Berrycoombe Road Bodmin Cornwall PL312NR United Kingdom Tel: 01208 751 51 IMPACT GLAZING: Creditors' Claims Due Feb. 7, 2007 -------------------------------------------------- Creditors of Impact Glazing Limited have until Feb. 7, 2007, to send in their full names, their addresses and descriptions, full particulars of their debts or claims, and the names and addresses of their Solicitors (if any), to appointed Liquidator M. H. Abdulali at: Moore Stephens 6 Ridge House Ridgehouse Drive Festival Park Stoke on Trent Staffordshire ST1 5TL United Kingdom Moore Stephens -- http://www.moorestephens.co.uk/-- offers audit, business support, corporate finance, corporate recovery, dispute analysis, financial services, insurance broking, IT consultancy, pensions audit, risk advisory services, tax and trusts & estates services. Its U.K. network comprises over 1,400 partners and staff. JAY & DEE: Liquidator Sets Dec. 8 Claims Bar Date ------------------------------------------------- Creditors of Jay & Dee Limited have until Dec. 8 to send in their full names and addresses and particulars of their debt or claims to appointed Liquidator Wilfred Vaughan Jones at: BN Jackson Norton 4th Floor Dominions House North Dominions Arcade Queen Street Cardiff CF10 2AR United Kingdom Headquartered in Swansea, Wales, Jay & Dee Limited -- http://www.jayanddee.co.uk/-- supplies a comprehensive range of graphic sign solutions. The company's services include: banners, posters, popups, rollups and vehicle wrapping. KINGSWOOD FITTED: Creditors Confirm Voluntary Liquidation --------------------------------------------------------- Creditors of Kingswood Fitted Furniture Limited confirmed Nov. 9 the resolutions for voluntary liquidation and the appointment of John Russell and Andrew Philip Wood of The P&A Partnership as Liquidators. The company can be reached at: Kingswood Fitted Furniture Limited King Mills King Street Drighlington Bradford West Yorkshire BD111EJ United Kingdom Tel: 0113 285 2134 Fax: 0113 285 2037 L.B.K. PERSONNEL: Creditors Confirm Liquidators' Appointment ------------------------------------------------------------ Creditors of L.B.K. Personnel Solutions Limited confirmed Nov. 9 the resolutions for voluntary liquidation and the appointment of John Russell and Andrew Philip Wood of The P&A Partnership as Liquidators. The company can be reached at: L.B.K. Personnel Solutions Limited Unit 1 Lloyd Street Parkgate Rotherham South Yorkshire S62 6JG United Kingdom Tel: 01709 515 532 Fax: 01709 515 533 LANSDOWNE DISTRIBUTION: Names Steven Law as Administrator --------------------------------------------------------- Steven Law of Ensors was named administrator of Landsdowne Distribution Ltd. (Company Number 04179097) and Lansdowne Warehousing Ltd. (Company Number 05814441) on Nov. 8. Ensors -- http://www.ensors.co.uk/-- is the leading independent firm of chartered accountants in East Anglia, United Kingdom. It has branches in Bury St. Edmunds, Haverhill, Ipswich and Saxmundham. Lansdowne Distribution Ltd. and Landsdowne Warehousing Ltd. can be reached at: Parker Avenue Felixstowe Suffolk IP11 4HF United Kingdom Tel: 01394 600 470 LIBRA UPHOLSTERY: Claims Registration Ends Jan. 31, 2007 -------------------------------------------------------- Creditors of Libra Upholstery Ltd. have until Jan. 31, 2007, to send in their full particulars of their debts or claims to appointed Liquidator Mark Jonathan Botwood at: Muras Baker Jones Regent House Bath Avenue Wolverhampton WV1 4EG United Kingdom The company can be reached at: Libra Upholstery Ltd. Unit 3 Broadcott Industrial Estate Station Road Cradley Heath West Midlands B64 6NT United Kingdom Tel: 0121 559 3258 Fax: 0121 561 2651 M & E SERVICES: Appoints Liquidator from Wilkins Kennedy -------------------------------------------------------- Keith Aleric Stevens of Wilkins Kennedy was appointed Liquidator of M & E Services Europe Limited on Nov. 9 for the creditors' voluntary winding-up procedure. The petition costs of BSS Group plc amounting to GBP1,200 are paid as a liquidation expense. The company can be reached at: M & E Services Europe Limited High Street Bramley Guildford Surrey GU5 0HS United Kingdom Tel: 01483 898 899 Fax: 01483 894 420 MERIDIAN OFFICE: Taps Liquidators from Rothman Pantall & Co. ------------------------------------------------------------ Robert Derek Smailes and Stephen Blandford Ryman of Rothman Pantall & Co. were appointed Joint Liquidators of Meridian Office Interiors Limited on Nov. 3 for the creditors' voluntary winding-up procedure. The company can be reached at: Meridian Office Interiors Limited 3 Meadow View Calne Wiltshire SN110ST United Kingdom Tel: 01249 820 050 NAIL BAR: Taps Joint Administrators from Kingston Smith ------------------------------------------------------- Ian Robert and Nicholas John Miller of Kingston Smith & Partners LLP were appointed joint administrators of The Nail Bar Ltd. (Company Number 03638215) on Nov. 9. Kingston Smith -- http://www.kingstonsmith.co.uk/-- advises owner-managers seeking solutions to business problems. The company has over 400 people, including 45 partners, based in six offices in London and the South East, and was founding member of KS International, a network of over 100 offices in 49 countries around the world. It was originally formed in 1923. The Nail Bar Ltd. can be reached at: 10 Shepherd Road Luton Bedfordshire LU4 0SP United Kingdom Tel: 01582 604432 NASDAQ STOCK: London Stock Exchange Rejects EUR2.7 Billion Bid -------------------------------------------------------------- Nightingale Acquisition Limited, a wholly owned subsidiary of The Nasdaq Stock Market Inc. offered EUR2.7 billion ($5.12 billion) bid to acquire the entire issued and to be issued ordinary and B shares of London Stock Exchange Group plc. LSE rejected Monday Nasdaq's offer. Cheyne Capital Management, a hedge fund company, told Nasdaq that it owns over 1 million shares it had bought for 1,274.5 pence a piece; higher than Nasdaq's GBP12.43 per share bid, James Moore of The Independent reports. Mr. Moore further reports that hedge funds are believed to hold approximately 30% of LSE's shares. Nasdaq reported third quarter 2006 net income of $30.2 million, an increase of 69.7% from $17.8 million in the third quarter of 2005, and 81.9% from $16.6 million in the second quarter of 2006. Alan Paul, Esq., and Ian Lopez, Esq., at Allen & Overy; and Michael Hatchard, Esq., and Eric Friedman, Esq., at Skadden Arps Slate Meagher & Flom give legal advice to Nasdaq. Freshfields Bruckhaus Deringer is the legal counsel of LSE. The Nasdaq Stock Market Inc. -- http://www.nasdaq.com/-- is the largest electronic equity securities market in the United States with approximately 3,200 companies. * * * Standard & Poor's Ratings Services lowered in May 2006 its long-term counterparty credit rating and bank loan rating on The Nasdaq Stock Market Inc. to 'BB+' from 'BBB-'. The company was removed from CreditWatch Negative, where it was placed on April 11, 2006. S&P said the outlook is developing. Moody's Investors Service assigned in April 2006 ratings to three new bank facilities of The Nasdaq Stock Market Inc.: a $750 million Senior Secured Term Loan B, a $1,100 million Secured Term Loan C, and a $75 million Senior Secured Revolving Credit Facility. Moody's said each facility is rated Ba3 with a negative outlook. NEW CITY: Names Richard Ian Williamson Liquidator ------------------------------------------------- Richard Ian Williamson of Campbell Crossley and Davis was appointed Liquidator of New City Construction Limited on Nov. 8 for the creditors' voluntary winding-up procedure. Headquartered in Preston, England, New City Construction Limited -- http://www.newcityconstruction.net/-- offers all clients a complete package of civil engineering, builders work, interior fit out, demolition, maintenance, land and building surveying, utilities, and design and build services. NEW YORK NAIL: Hires Kingston Smith to Administer Assets -------------------------------------------------------- Ian Robert and Nicholas John Miller of Kingston Smith & Partners LLP were appointed joint administrators of The New York Nail Company Ltd. (Company Number 03782399) on Nov. 9. Kingston Smith -- http://www.kingstonsmith.co.uk/-- advises owner-managers seeking solutions to business problems. The company has over 400 people, including 45 partners, based in six offices in London and the South East, and was founding member of KS International, a network of over 100 offices in 49 countries around the world. It was originally formed in 1923. The New York Nail Company Ltd. can be reached at: 118 Westbourne Grove City of Westminster London W11 2RR United Kingdom Tel: 020 7229 4321 ODDS BODKINS: Brings In Liquidator from Taylor Rowlands ------------------------------------------------------- J. Harvey Madden of Taylor Rowlands was appointed Liquidator of Odds Bodkins Limited (formerly Harrowell Shaftoe (No. 96) Limited) on Nov. 8 for the creditors' voluntary winding-up proceeding. The company can be reached at: Odds Bodkins Limited Bootham York North Yorkshire YO307BL United Kingdom Tel: 01904 679 322 Fax: 01904 679 322 PHELPS DODGE: Inks US$25.9-Bln Merger Pact with Freeport-McMoRan ---------------------------------------------------------------- Phelps Dodge Corp. and Freeport-McMoRan Copper & Gold Inc. have signed a definitive merger agreement under which FCX will acquire Phelps Dodge for around US$25.9 billion in cash and stock, creating the world's largest publicly traded copper company. The combined company will be a new industry leader with large, long-lived, geographically diverse assets and significant proven and probable reserves of copper, gold, and molybdenum. The company's increased scale of operations, management depth, and strengthened cash flow will provide an improved platform to capitalize on growth opportunities in the global market. The combined company will be the largest North American-based mining company. The company will enjoy an excellent cost position, long reserve life, a diversified geographic footprint, and an attractive growth profile. FCX currently operates the world-class Grasberg mine, located in Papua, Indonesia, which is the world's largest copper and gold mine in terms of reserves. Phelps Dodge has mines in operation or under development in North and South America, and Africa, including the world-class Tenke Fungurume development project in the Democratic Republic of the Congo. The combined company will represent one of the most geographically diversified portfolios of operating, expansion and growth projects in the copper mining industry. James R. Moffett, chairman of the board of FCX, said: "This transaction combines two leading mining companies to form a strong industry leader at a time when we see significant long- term opportunities in our industry. FCX has been built through our exploration and development capabilities, and we will focus on aggressively pursuing opportunities in the extensive Phelps Dodge asset portfolio." Richard C. Adkerson, FCX's president and chief executive officer, said: "This acquisition is financially compelling for FCX shareholders, who will benefit from significant cash flow accretion, lower cost of capital, and improved geographic and asset diversification. The new FCX will continue to invest in future growth opportunities with high rates of return and will aggressively seek to reduce debt incurred in the acquisition using the substantial free cash flow generated from the combined business." Adkerson continued: "Together, FCX and Phelps Dodge will have the size, management depth and financial strength to optimize existing operations and accelerate our growth by aggressively pursuing promising new development projects, exploration and acquisitions. We are enthusiastic about the addition of Phelps Dodge's highly regarded mining team, which will complement our existing organization, and are delighted to welcome Phelps Dodge's talented team to the FCX family." J. Steven Whisler, chairman and chief executive officer of Phelps Dodge, said: "This transaction provides Phelps Dodge shareholders a significant premium for their shares and gives them the opportunity to participate in the upside potential of a geographically diversified industry leader possessing the scale and asset quality to compete on the global stage successfully. I believe our management team, with its industry-recognized reputation for operational excellence and technological innovation, possesses the skills in open pit and underground mining and mineral processing to add value to FCX's operations. We look forward to working with FCX to realize all of the benefits of this combination, and its exciting portfolio of growth and expansion projects, for our shareholders, customers, employees and suppliers." Terms of the Transaction Under the terms of the transaction, FCX will acquire all of the outstanding common shares of Phelps Dodge for a combination of cash and common shares of FCX for a total consideration of US$126.46 per Phelps Dodge share, based on the closing price of FCX stock on Nov. 17, 2006. Each Phelps Dodge shareholder would receive US$88.00 per share in cash plus 0.67 common shares of FCX. This represents a premium of 33% to Phelps Dodge's closing price on Nov. 17, 2006, and 29% to its one-month average price at that date. The cash portion of US$18 billion represents around 70% of the total consideration. In addition, FCX would deliver a total of 137 million shares to Phelps Dodge shareholders, resulting in Phelps Dodge shareholders owning around 38% of the combined company on a fully diluted basis. The boards of directors of FCX and Phelps Dodge have each unanimously approved the terms of the agreement and have recommended that their shareholders approve the transaction. The transaction is subject to the approval of the shareholders of FCX and Phelps Dodge, receipt of regulatory approvals and customary closing conditions. The transaction is expected to close at the end of the first quarter of 2007. FCX has received financing commitments from JPMorgan and Merrill Lynch to fund the cash required to complete the transaction. After giving effect to the transaction, estimated pro forma total debt at Dec. 31, 2006, would be around US$17.6 billion, or around US$15 billion net of cash. Combined Financials and Production For the 12-month period ending Sept. 30, 2006, the companies had combined revenues of US$16.6 billion, EBITDA (operating income before depreciation, depletion and amortization) of US$7.0 billion, and operating cash flows of US$5.5 billion. For the year 2006, the combined company's estimated EBITDA would approximate US$7.9 billion and operating cash flows would approximate US$6.5 billion. On a pro forma basis for 2006, the combined company's production would approximate 3.7 billion pounds of copper (3.1 billion pounds net of minority interests), 1.8 million ounces of gold (1.7 million ounces net of minority interests) and 69 million pounds of molybdenum. Combined proven and probable reserves at Dec. 31, 2005, would approximate 75 billion pounds of copper, 41 million ounces of gold and 1.9 billion pounds of molybdenum, net of minority interests. Benefits Of The Transaction * the combined company is well positioned to benefit from the positive copper market at a time when there is a scarcity of large-scale copper development projects combined with strong global demand for copper. The combined company's copper production growth is expected to be around 25% over the next three years. * the combined company will benefit from long-lived reserves totaling 75 billion pounds of copper, 41 million ounces of gold and 1.9 billion pounds of molybdenum, net of minority interests. * the combined company is expected to generate strong cash flows, enabling significant debt reduction. For the year 2006, the two companies are expected to generate estimated combined operating cash flows totaling US$6.5 billion. * FCX expects the transaction to be immediately accretive to FCX's earnings and cash flow. * the combined company's project pipeline will support industry-leading growth by delivering nearly 1 billion pounds of additional copper production capacity over the next three years. Projects include Phelps Dodge's recent commissioning of the US$850 million expansion of the Cerro Verde mine in Peru; the development of the new US$550 million Safford mine in Arizona; a potential project to extend the life of El Abra through sulfide leaching; the exciting Tenke Fungurume copper/cobalt project in the Democratic Republic of the Congo, which is expected to begin production by 2009; the expansion of FCX's DOZ underground mine in Indonesia; and other developments of FCX's large-scale, high-grade underground ore bodies in the Grasberg district in Indonesia. * the combined company is expected to generate strong cash flows, enabling significant debt reduction. For the year 2006, the two companies are expected to generate estimated combined operating cash flows totaling US$6.5 billion. * FCX expects the transaction to be immediately accretive to FCX's earnings and cash flow. * the combined company will have significant high potential exploration rights in copper regions around the world, including FCX's existing prospective acreage in Papua, Indonesia, and Phelps Dodge's opportunities at its Tenke concession, the U.S. and South America, as well as Phelps Dodge's portfolio of exciting exploration targets. FCX will continue its longstanding focus on adding value through exploration. * the combination of FCX's and Phelps Dodge's proven management and best practices in open pit and underground mining will facilitate the sharing of expertise to optimize operations across the asset base. Phelps Dodge's unique mining and processing technology provides opportunities to be applied to optimize metal production at Grasberg. Management Team and Board of Directors James R. Moffett, chairman of FCX, will continue as chairman. Richard C. Adkerson, chief executive officer of FCX, will serve as chief executive officer of the combined company. Upon completion of the transaction, J. Steven Whisler, chairman and chief executive officer of Phelps Dodge, is expected to retire after more than 30 years of service to Phelps Dodge. Timothy R. Snider will be chief operating officer of the combined company, Ramiro G. Peru will be chief financial officer and Kathleen L. Quirk will be chief investment officer. Mark J. Johnson will continue as chief operating officer of FCX's Indonesian operations and Michael J. Arnold will continue in his executive management role, including serving as chief financial and administrative officer of FCX's Indonesian operations. At closing, FCX will add to its board of directors three independent members from Phelps Dodge's board, increasing the size of the board to sixteen directors in total. The parent company will retain the Freeport-McMoRan Copper & Gold Inc. name and trade on the New York Stock Exchange under the symbol "FCX." The Phelps Dodge name will continue to be used in its existing operations. The corporate headquarters of the combined company will be located in Phoenix, Arizona, and FCX will maintain its New Orleans, Louisiana, office for accounting and administrative functions for its Indonesian operations. Financial Policy FCX has an established financial policy of maintaining a strong financial position and returning excess cash to shareholders through dividends and share purchases. The continuation of positive copper markets would provide substantial cash flows to enable the combined company to achieve significant near-term debt reductions. In addition, FCX intends to consider opportunities over time to reduce debt further through issuances of equity and equity-linked securities and possibly through asset sales. FCX expects to continue its regular annual common dividend of US$1.25 per share. FCX is committed to its long- standing tradition of maximizing value for shareholders. Advisors and Counsel J.P. Morgan Securities Inc. and Merrill Lynch & Co. are the financial advisors of FCX. Davis Polk & Wardwell and Jones, Walker, Waechter, Poitevent, Carrere & Denegre L.L.P. are the legal counsel of FCX. Citigroup Corporate and Investment Banking and Morgan Stanley & Co. Incorporated are the financial advisors of Phelps Dodge. Debevoise & Plimpton LLP is the legal counsel of Phelps Dodge. About Freeport-McMoRan Copper & Gold Headquartered in New Orleans, Louisiana, Freeport-McMoRan Copper & Gold Inc. (NYSE: FCX) -- http://www.fcx.com/-- explores for, develops, mines, and processes ore containing copper, gold, and silver in Indonesia, and smelts and refines copper concentrates in Spain and Indonesia. About Phelps Dodge Phelps Dodge Corporation (NYSE: PD) http://www.phelpsdodge.com/ -- is one of the world's leading producers of copper and molybdenum and is the largest producer of molybdenum-based chemicals and continuous-cast copper rod. The company employs 15,000 people worldwide. It maintains operations in Mexico, Puerto Rico, Thailand, China, Japan, the Netherlands, and the United Kingdom, among others. * * * In September 2006, Moody's Investors Service confirmed Phelps Dodge's Preferred Stock 2 Shelf at (P)Ba1. PORTRAIT CORP: Court Gives Final OK to Berenson's Employment ------------------------------------------------------------ The Honorable Adlai S. Hardin, Jr., of the U.S. Bankruptcy Court for the Southern District of New York has issued a final order allowing Portrait Corporation of America, Inc., and its debtor- affiliates to employ Berenson & Company, LLC, as their financial advisor and investment banker. Judge Hardin ruled, among other things, that the Debtors' employment of Berenson under the terms of their Amended Engagement Letter and the Indemnification Agreement is necessary and in the best interests of the Debtors' estates. As reported in the Troubled Company Reporter on Sept. 20, 2006, Berenson & Co will: a) review and analyze the Debtors' business operations and financial projections; b) evaluate the Debtors' potential debt capacity in light of their projected cash flows; c) assist in the determination of an appropriate capital structure for the Debtors; d) provide financial advice and assistance to the Debtors in developing and obtaining confirmation of a plan of reorganization; e) advise the Debtors on tactics and strategies for negotiating with various groups of the holders of the Debtors' bank debt or debt securities or other claims against the Debtors; f) advise the Debtors on the timing, nature and terms of any new securities, other consideration or other inducements to be offered to their Creditors in connection with any Restructuring Transaction; g) assess the possibilities of bringing in new lenders and investors to replace, repay or settle with any of the creditors; h) provide expert testimony and related litigation support services customarily provided by financial advisors with respect to any litigation that may arise in connection with any Restructuring Transaction; i) assist in arranging debtor-in-possession financing or a Financing Transaction for the Debtors; j) advise the Debtors with respect to the structure of any "Transaction," participate in any meetings or negotiations relating to a Transaction and advise and attend meetings of the Debtors' Board of Directors and its committees with respect thereto; k) assist the Debtors in preparing any documentation required in connection with the implementation of any Transaction; l) provide testimony in any proceeding before the Bankruptcy Court, as necessary, with respect to matters which Berenson has been engaged to advise the Debtors; and m) provide all other advisory services as customarily in connection with the analysis, negotiation and implementation of a restructuring transaction similar to the Restructuring Transaction and as reasonably requested by the Debtors. The Debtors propose to pay Berenson & Co. a fee of US$125,000 per month plus applicable Sale Transaction, Restructuring Transaction and Financing Transaction fees, if there are any. A copy of the engagement agreement outlining the payment terms for the firm's services is available for free at: http://researcharchives.com/t/s?11e6 As part of the overall compensation payable to Berenson under the terms of the Engagement Letter, the Debtors have agreed to certain indemnification and contribution obligations as described in an Indemnification Agreement. A copy of the Indemnification Agreement is available for free at: http://researcharchives.com/t/s?11e7 The Indemnification Agreement provides that the Debtors will indemnify and hold harmless Berenson and its affiliates from any losses, claims, demands, other than for willful misconduct and gross negligence, which arise out of: * actions taken or omitted to be taken by the Debtors or actions taken or omitted to be taken by an the firm with the Debtors' consent or in conformity with the Debtors' actions or omissions; or * Berenson's activities on the Debtors' behalf under the Engagement Letter. About Portrait Corp Portrait Corporation of America, Inc. -- http://pcaintl.com/-- provides professional portrait photography products and services in North America. The Company operates portrait studios within Wal-Mart stores and Supercenters in the United States, Canada, Mexico, Germany and the United Kingdom. The Company also operates a modular traveling business providing portrait photography services in additional retail locations and to church congregations and other institutions. Portrait Corporation and its debtor-affiliates filed for Chapter 11 protection on Aug. 31, 2006 (Bankr S.D. N.Y. Case No. 06-22541). John H. Bae, Esq., at Cadwalader Wickersham & Taft LLP, represents the Debtors in their restructuring efforts. Berenson & Company LLC serves as the Debtors' Financial Advisor and Investment Banker. Kristopher M. Hansen, Esq., at Stroock & Stroock & Lavan LLP represents the Official Committee of Unsecured Creditors. Peter J. Solomon Company serves as financial advisor for the Committee. At June 30, 2006, the Debtor had total assets of US$153,205,000 and liabilities of US$372,124,000. PORTRAIT: Panel Taps Halperin Battaglia as Conflicts Counsel ------------------------------------------------------------ The Official Committee of Unsecured Creditors of Portrait Corporation of America, Inc., and its debtor-affiliates ask the U.S. Bankruptcy Court for the Southern District of New York for permission to retain Halperin Battaglia Raicht, LLP, as its conflicts counsel under a general retainer, nunc pro tunc, to Oct. 16, 2006. Halperin Battaglia will represent the Committee in the event that its primary counsel, Stroock & Stroock & Lavan LLP, will have potential or actual conflicts of interest on matters arising in the Debtors' bankruptcy cases. The regular hourly rates for Halperin Battaglia's professionals ranged from US$395 to US$175 per hour for attorneys, US$125 per hour for law clerks, and US$100 to US$75 per hour for paraprofessionals. Alan D. Halperin, Esq., a member at Halperin Battaglia, assures the Court that his firm does not hold nor represent any interest adverse to the Debtors' estate and is a "disinterested person" within the meaning of section 101(14) of the Bankruptcy Code. Halperin Battaglia can be reached at: Halperin Battaglia Raicht, LLP Attn: Alan D. Halperin, Esq. 555 Madison Avenue, 9th Floor New York, NY 10022 Phone: (212) 765-9100 About Portrait Corp Portrait Corporation of America, Inc. -- http://pcaintl.com/-- provides professional portrait photography products and services in North America. The Company operates portrait studios within Wal-Mart stores and Supercenters in the United States, Canada, Mexico, Germany and the United Kingdom. The Company also operates a modular traveling business providing portrait photography services in additional retail locations and to church congregations and other institutions. Portrait Corporation and its debtor-affiliates filed for Chapter 11 protection on Aug. 31, 2006 (Bankr S.D. N.Y. Case No. 06-22541). John H. Bae, Esq., at Cadwalader Wickersham & Taft LLP, represents the Debtors in their restructuring efforts. Berenson & Company LLC serves as the Debtors' Financial Advisor and Investment Banker. Kristopher M. Hansen, Esq., at Stroock & Stroock & Lavan LLP represents the Official Committee of Unsecured Creditors. Peter J. Solomon Company serves as financial advisor for the Committee. At June 30, 2006, the Debtor had total assets of US$153,205,000 and liabilities of US$372,124,000. RADNOR HOLDINGS: Files Schedules of Assets and Liabilities ---------------------------------------------------------- Radnor Holdings Corporation and its debtor-affiliates delivered to the U.S. Bankruptcy Court for the District of Delaware their schedules of assets and liabilities, disclosing: Name of Schedule Assets Liabilities ---------------- ------ ----------- A. Real Property Unknown B. Personal Property Unknown C. Property Claimed as Exempt D. Creditors Holding Secured Claims US$217,402,699 E. Creditors Holding Unsecured Priority Claims F. Creditors Holding Unsecured Nonpriority Claims US$205,638,958 ------- ------------ Total Unknown US$423,041,657 Although the Debtors have values recorded for assets owned on their books, they believe that those book values would not accurately reflect the market value of those properties. So, the Debtors listed the value as unknown. A full-text copy of the Debtors' Schedules Assets and Liabilities is available for free at http://ResearchArchives.com/t/s?1564 Headquartered in Radnor, Pennsylvania, Radnor Holdings Corporation -- http://www.radnorholdings.com/ -- manufactures and distributes a broad line of disposable food service products in the United States, and specialty chemicals worldwide. The Debtor and its affiliates filed for chapter 11 protection on Aug. 21, 2006 (Bankr. D. Del. Case No. 06-10894). Gregg M. Galardi, Esq., and Mark L. Desgrosseilliers, Esq., at Skadden, Arps, Slate, Meagher, represent the Debtors. Donald J. Detweiler, Esq., and Victoria Watson Counihan, Esq., at Greenberg Traurig, LLP, serves the Official Committee of Unsecured Creditors. When the Debtors filed for protection from their creditors, they listed total assets of US$361,454,000 and total debts of US$325,300,000. REBOOT SECURITY: Hires Liquidators from Vantis Business Recovery ---------------------------------------------------------------- G. Mummery and P. Atkinson of Vantis Business Recovery were appointed Joint Liquidators of Reboot Security Limited on Nov. 7 for the creditors' voluntary winding-up proceeding. Headquartered in Ashford, England, Reboot Security Limited -- http://www.rebootsecurity.co.uk/-- provides security services including door supervisors, special events security, holiday park security and VIP protection. REFCO INC: Wants to Sell FXA's Customer Lists to Saxo Bank ---------------------------------------------------------- Refco Inc. and its debtor-affiliates had previously sought, in June 2006, the U.S. Bankruptcy Court for the Southern District of New York's permission for Refco F/X Associates, LLC, to sell its customer lists to GAIN Capital Group, subject to higher and better offers. Notwithstanding their efforts, the Debtors and GAIN decided not to pursue further discussions because they could not agree on workable terms for a definitive purchase agreement. The Debtors withdrew their request in July 2006, and the Court subsequently approved a mutual settlement agreement and release between FXA and GAIN terminating a proposed sale term sheet and all of their obligations. Richard Levin, Esq., at Skadden, Arps, Slate, Meagher & Flom LLP, in New York, relates that while FXA and GAIN were attempting to negotiate a definitive purchase agreement, Saxo Bank A/S, who had previously expressed an interest in the FXA Customer Lists, re-emerged as a potential transaction partner. As the GAIN transaction was collapsing, FXA and Saxo Bank commenced negotiations for a sale of the Customer Lists. Acknowledging that the transaction was only feasible if the structure was simplified, the Debtors and Saxo Bank entered into an asset purchase agreement. The Debtors ask the Court to authorize FXA to sell its Customer List and Marketing List to Saxo Bank, free and clear of all liens, claims and encumbrances within the meaning of Section 363 of the Bankruptcy Code, subject to higher and better offers. Mr. Levin tells Judge Drain that the Customer List and Marketing List are "deteriorating assets," given that the one-year anniversary of commencement of the Debtors' Petition Date has recently passed. He adds that FXA ceased opening new accounts or accepting customer deposits on the Petition Date, and all trading activity by FXA customers was frozen by July 2006. "[T]he Customer List and Marketing List are quickly approaching the point at which customer information will be stale and of little value to potential purchasers," Mr. Levin says. Purchase Agreement The Debtors believe that their Purchase Agreement with Saxo Bank represents a last chance to salvage value for the benefit of FXA's estate. The principal terms of the Purchase Agreement are: (1) FXA will sell the Customer and Marketing Lists to Saxo for an initial fixed amount of US$500,000. (2) for each individual that opens an online FX trading account with Saxo or one of its affiliates by the second anniversary of a closing date, FXA will pay a US$100 activation fee for each additional New Customer Account, except for the first 5,000 New Customer Accounts, for which Saxo will pay no Activation Fee. (3) for each New Customer Account, Saxo will pay FXA an annual maintenance fee of 1% of average balance of the New Customer Account on the first anniversary of the Closing Date, and an additional annual maintenance fee of 1% of the Average Balance on the second anniversary of the Closing Date. (4) Saxo will adopt FXA's privacy policy or demonstrate to the Court that the policy is consistent with the policy as required by Section 363(b)(1)(A). (5) the order approving the sale to Saxo or another winning bidder will provide that Forex Capital Markets, Ltd., will not interfere with the Sale consummation, and will be prohibited from soliciting the Debtors' customers in violation of FXCM's Facilities Management Agreement with Refco Group Ltd., LLC. (6) in the event that (i) FXA consummates a sale of the Purchased Assets to a party other than Saxo or any of its affiliate within one year after entry into the Purchase Agreement, and (ii) Saxo is not in default of its obligations, Saxo will be entitled to a US$15,000 break- up fee and expense reimbursement. Bidding Procedures To properly value certain bids, the Debtors require any person who desires to make a competing proposal to satisfy all requirements with respect to proponent, form, and terms of a competing proposal. The consideration to the Debtors' estates under any Proposal must be at least US$555,000. A Qualified Competing Proposal will be considered only if it exceeds Saxo's bid by a minimum of: * the amount that would be owed if the Debtors were required to pay the Break-Up Fee and the Expense Reimbursement; and * consideration in an amount not less that US$25,000. If any consideration to be provided is not cash, the Proposal must include the Qualified Competing Bidders' valuation of that consideration. Irrevocable Qualified Competing Proposals containing all material terms of the proposed were due on Nov. 7, 2006. About Refco Inc. Based in New York, Refco Inc. -- http://www.refco.com/-- is a diversified financial services organization with operations in 14 countries and an extensive global institutional and retail client base. Refco's worldwide subsidiaries are members of principal U.S. and international exchanges, and are among the most active members of futures exchanges in Chicago, New York, London and Singapore. In addition to its futures brokerage activities, Refco is a major broker of cash market products, including foreign exchange, foreign exchange options, government securities, domestic and international equities, emerging market debt, and OTC financial and commodity products. Refco is one of the largest global clearing firms for derivatives. The Company and 23 of its affiliates filed for chapter 11 protection on Oct. 17, 2005 (Bankr. S.D.N.Y. Case No. 05-60006). J. Gregory Milmoe, Esq., at Skadden, Arps, Slate, Meagher & Flom LLP, represent the Debtors in their restructuring efforts. Luc A. Despins, Esq., at Milbank, Tweed, Hadley & McCloy LLP, represents the Official Committee of Unsecured Creditors. Refco reported US$16.5 billion in assets and US$16.8 billion in debts to the Bankruptcy Court on the first day of its chapter 11 cases. On Oct. 6, 2006, the Debtors filed their Amended Plan and Disclosure Statement. On Oct. 16, 2006, the gave its tentative approval on the Disclosure Statement and on Oct. 20, 2006, the Court Clerk entered the written disclosure statement order. The hearing to consider confirmation of Refco, Inc., and its debtor-affiliates' plan is set for Dec. 15, 2006. Objections to the plan, if any, must be in by Dec. 1, 2006. Refco LLC, an affiliate, filed for chapter 7 protection on Nov. 25, 2005 (Bankr. S.D.N.Y. Case No. 05-60134). Refco, LLC, is a regulated commodity futures company that has businesses in the United States, London, Asia and Canada. Refco, LLC, filed for bankruptcy protection in order to consummate the sale of substantially all of its assets to Man Financial Inc., a wholly owned subsidiary of Man Group plc. Albert Togut, the chapter 7 trustee, is represented by Togut, Segal & Segal LLP. On April 13, 2006, the Court appointed Marc S. Kirschner as Refco Capital Markets Ltd.'s chapter 11 trustee. Mr. Kirschner is represented by Bingham McCutchen LLP. RCM is Refco's operating subsidiary based in Bermuda. Three more affiliates of Refco, Westminster-Refco Management LLC, Refco Managed Futures LLC, and Lind-Waldock Securities LLC, filed for chapter 11 protection on June 6, 2006 (Bankr. S.D.N.Y. Case Nos. 06-11260 through 06-11262). Refco Commodity Management, Inc., formerly known as CIS Investments, Inc., a debtor-affiliate of Refco Inc., filed for chapter 11 protection on Oct. 16, 2006 (Bankr. S.D.N.Y. Case No. 06-12436). RCMI's exclusive period to file a chapter 11 plan expires on Feb. 13, 2007. (Refco Bankruptcy News, Issue No. 48; Bankruptcy Creditors' Service, Inc., http://bankrupt.com/newsstand/or 215/945-7000) REGISTER TAPE: Appoints I. D. Holland to Liquidate Assets --------------------------------------------------------- I. D. Holland was appointed Liquidator of Register Tape International Limited on Nov. 7 for the creditors' voluntary winding-up proceeding. The company can be reached at: Register Tape International Limited Highgate Studios 53 79 Highgate Road Camden London NW5 1TL United Kingdom Tel: 020 7284 2150 Fax: 020 7284 2160 S.D.F. FABRICATIONS: Brings In Vantis as Joint Administrators ------------------------------------------------------------- G. Mummery and G. Rowley of Vantis Business Recovery Services were appointed joint administrators of S.D.F. Fabrications Ltd. (Company Number 3180793) on Nov. 3. Headquartered in United Kingdom, Vantis Plc (fka Vantis Numerica) -- http://www.vantisplc.com/-- provides accounting, business and tax advisory services in the United Kingdom. S.D.F. Fabrications Ltd. can be reached at: 5 Sandwich Industrial Estate Sandwich Kent CT13 9LY United Kingdom Tel: 01304 621 063 Fax: 01304 620 896 SANDERSON FOOTWEAR: Taps Gerald Irwin to Administer Assets ---------------------------------------------------------- Gerald Irwin of Irwin & Company was appointed administrator of Sanderson Footwear Ltd. (Company Number 2916162) on Nov. 3. The administrator can be reached at: Gerald Irwin Irwin & Company Station House Midland Drive Sutton Coldfield Birmingham West Midlands B72 1TU United Kingdom Tel: 08700 111812 Fax: 08700 111813 E-mail: mail@irwinuk.net Headquartered in Birmingham, England, Sanderson Footwear Ltd. retails shoes and accessories. SCENE LEISURE: Names Liquidators from Vantis Business Recovery -------------------------------------------------------------- G. Mummery and P. Atkinson of Vantis Business Recovery Services were appointed Joint Liquidators of Scene Leisure Limited on Nov. 7 for the creditors' voluntary winding-up proceeding. Headquartered in United Kingdom, Vantis Plc (fka Vantis Numerica) -- http://www.vantisplc.com/-- provides accounting, business and tax advisory services in the United Kingdom. SEA CONTAINERS: U.K. Regulator May Issue Financial Directions ------------------------------------------------------------- The United Kingdom Government Pensions Regulator has warned Sea Containers Ltd. and its debtor-affiliates that it is considering the exercise of its power to issue financial support directions to the Company, Ian C. Durant, vice president for finance and chief financial officer of Sea Containers, Ltd., disclosed of in a regulatory filing with the U.S. Securities and Exchange Commission dated Oct. 30, 2006. Mr. Durant said the FSDs will be under relevant U.K. pensions legislation, in respect of the Sea Containers 1983 Pension Scheme and the Sea Containers 1990 Pension Scheme, which are multi-employer defined benefit pension plans of Sea Containers Services Ltd. According to Mr. Durant, if FSDs are issued, SCL may be liable to make a financial contribution to the Schemes that may be greater than the sum payable by SCL under the terms of a 1989 support agreement with Sea Containers Services. Pursuant to the Support Agreement, Sea Containers Services provides administrative services to SCL and other subsidiaries, and is indemnified by SCL for the cost of its services. Mr. Durant said the trustees of the Schemes or their actuary advised SCL that their current estimates of the cost of winding up the Schemes, including the cost of purchasing annuities to pay projected benefit obligations to Scheme participants, would be US$201,000,000 for the 1983 Scheme and US$51,000,000 for the 1990 Scheme. Because the Schemes are multi-employer plans, the liabilities under them are shared among the participating companies, Mr. Durant added. SCL Disputes Warning Tom Burroughes of Reuters reports that SCL believes there was no need for the U.K. Regulator's warning as the Company is currently in talks with the U.K. Pension Funds. "They (pension fund members) will be ranked on an equal footing with bondholders and other creditors. We are keen to let these discussions play out," an Sea Containers spokeswoman told Reuters. About Sea Containers Headquartered in Hamilton, Bermuda, Sea Containers Ltd. -- http://www.seacontainers.com/-- provides passenger and freight transport and marine container leasing. Registered in Bermuda, the company has regional operating offices in London, Genoa, New York, Rio de Janeiro, Sydney, and Singapore. The company is owned almost entirely by United States shareholders and its primary listing is on the New York Stock Exchange (SCRA and SCRB) since 1974. On Oct. 3, the company's common shares and senior notes were suspended from trading on the NYSE and NYSE Arca after the company's failure to file its 2005 annual report on Form 10-K and its quarterly reports on Form 10-Q during 2006 with the U.S. Securities and Exchange Commission. Through its GNER subsidiary, Sea Containers Passenger Transport operates Britain's fastest railway, the Great North Eastern Railway, linking England and Scotland. It also conducts ferry operations, serving Finland and Estonia as well as a commuter service between New York and New Jersey in the U.S. Sea Containers Ltd. and two subsidiaries filed for chapter 11 protection on Oct. 15, 2006 (Bankr. D. Del. Case No. 06-11156). Robert S. Brady, Esq., at Young, Conaway, Stargatt & Taylor represents the Debtors in their restructuring efforts. When the Debtors filed for protection from their creditors, they reported US$1.7 billion in total assets and US$1.6 billion in total debts. (Sea Containers Bankruptcy News, Issue No. 5; Bankruptcy Creditors' Service, Inc., http://bankrupt.com/newsstand/or 215/945-7000). SERCON CONTROLS: Appoints Wilkinson & Co as Administrator --------------------------------------------------------- Andrew Hartley Wilkinson of Wilkinson & Co. was appointed administrator of Sercon Controls Ltd. (Company Number 2545974) on Nov. 6. The administrator can be reached at: Andrew Hartley Wilkinson Wilkinson & Co. 68 Thorpe Lane Almondbury Huddersfield West Yorkshire HD5 8UF United Kingdom Tel: 01484 349468 E-mail: ahw@ahwilk.demon.co.uk Headquartered in Huddersfield, England, Sercon Controls Ltd. designs and constructs electrical panels. SOFTBAK MOBILE: Trust Debt Assumption Spurs S&P's Watch Negative ---------------------------------------------------------------- Standard & Poor's Ratings Services moved its 'BB+' rating on Softbank Mobile Corp.'s senior unsecured bonds to CreditWatch with positive implications from CreditWatch negative. The action followed Softbank Corp.'s announcement on Nov. 17, that trust debt assumption of Softbank Mobile's straight bonds totaling JPY100 billion will be implemented as part of the securitization of its mobile telecommunications business. The 'BB+' corporate credit rating remains on CreditWatch with negative implications. The ratings on Softbank Mobile have been on CreditWatch since Mar. 20, 2006, after being lowered to 'BB+' from 'A+' following Vodafone Group PLC's agreement to sell its Japanese subsidiary to Softbank. In the trust debt assumption, Softbank Mobile is to entrust a set amount of the issued bonds as well as certain assets to a trust bank for the repayment of the principal and interest on its bonds. The CreditWatch listing of the debt rating on Softbank Mobile's issuances was moved to positive as Standard & Poor's believes the creditworthiness of these debts will be raised by the trust debt assumption, as this measure is being implemented as one element of the company's overall business securitization, and a specified level of assets are being entrusted as repayment resources. Standard & Poor's assigned its preliminary rating on the business securitization of Softbank Mobile's mobile telecommunications business on Sept. 29. This preliminary rating was assigned based on preliminary terms and conditions, and is to be finalized once Standard & Poor's confirms the final details of the business securitization. The corporate credit rating on Softbank Mobile remains on CreditWatch with negative implications. However, Standard & Poor's may withdraw the corporate credit rating at its discretion following implementation of the business securitization plan. Business securitization is a financing scheme in which an issuer securitizes cash flows from a specific business, thereby enhancing the probability of debt servicing. In such transactions, cash flows generated from the securitized business are generally used to redeem the debts in the securitization. Upon implementing the business securitization scheme, almost all assets held by Softbank Mobile will be pledged as collateral for the purpose of the transaction. The relative seniority of any debt outstanding that is not included in the securitization at the time of closing may decrease dramatically following the securitization. However, as nearly all of the company's debt currently falls within the bounds of the securitization, the corporate credit rating on Softbank Mobile will be less relevant for the duration of the business securitization. URBAN SOLUTIONS: Creditors' Meeting Slated for November 24 ---------------------------------------------------------- Creditors of Urban Solutions (Midlands) Limited (Company Number 05482428) will meet at 10:00 a.m. on Nov. 24 at: Irwin & Company Station House Midland Drive Sutton Coldfield Birmingham West Midlands B72 1TU United Kingdom Creditors who want to be represented at the meeting may appoint proxies. Proxy forms must be submitted together with written debt claims at noon on Nov. 23 at: G. Irwin Administrator Irwin & Company Station House Midland Drive Sutton Coldfield Birmingham West Midlands B72 1TU United Kingdom Tel: 08700 111812 Fax: 08700 111813 E-mail: mail@irwinuk.net VISTEON CORP: GKN Eyes European & South American Assets ------------------------------------------------------- GKN plc has entered into exclusive discussions with Visteon Corp. to explore the possible acquisition of certain Visteon assets and liabilities in its European and South American businesses. These relate exclusively to Visteon's driveline business, which is conducted at the plants in Duren, Germany, Praszka, Poland, and Swansea, Wales. Driveline assets at Visteon's Arbor plant, Sao Paulo, Brazil are also included. Total revenue of these businesses is around GBP200 million. A further announcement will be made regarding this possible transaction when appropriate. Headquartered in Van Buren Township, Michigan, Visteon Corp. (NYSE: VC) -- http://www.visteon.com/-- is a global automotive supplier that designs, engineers and manufactures innovative climate, interior, electronic and lighting products for vehicle manufacturers, and also provides a range of products and services to aftermarket customers. With corporate offices in Michigan (U.S.); Shanghai, China; and Kerpen, Germany; the company has more than 170 facilities in 24 countries and employs around 50,000 people. At Sept. 30, 2006 the Company's balance sheet showed total assets of US$6.721 billion and total liabilities of US$6.823 billionresulting in a total shareholders' deficit of US$102 miilion. Total shareholders' deficit at Dec. 31, 2005 stood at US$48 million. * * * Standard & Poor's Ratings Services has lowered its long-term corporate credit rating on Visteon Corp. to 'B' from 'B+' and its short-term rating to 'B-3' from 'B-2'. These actions stem from the company's weaker-than-expected earnings and cash flow generation, caused by vehicle production cuts, inefficiencies at several plant locations, sharply lower aftermarket product sales, continued pressure from high raw material costs, and several unusual items that will impact 2006 results. ********* Each Tuesday edition of the TCR contains a list of companies with insolvent balance sheets whose shares trade higher than US$3 per share in public markets. At first glance, this list may look like the definitive compilation of stocks that are ideal to sell short. Don't be fooled. Assets, for example, reported at historical cost net of depreciation may understate the true value of a firm's assets. A company may establish reserves on its balance sheet for liabilities that may never materialize. The prices at which equity securities trade in public market are determined by more than a balance sheet solvency test. A list of Meetings, Conferences and Seminars appears in each Thursday's edition of the TCR. Submissions about insolvency- related conferences are encouraged. Send announcements to conferences@bankrupt.com/ Each Friday's edition of the TCR includes a review about a book of interest to troubled company professionals. All titles are available at your local bookstore or through Amazon.com. Go to http://www.bankrupt.com/books/to order any title today. ********* S U B S C R I P T I O N I N F O R M A T I O N Troubled Company Reporter -- Europe is a daily newsletter co- published by Bankruptcy Creditors' Service, Inc., Fairless Hills, Pennsylvania, USA, and Beard Group, Inc., Frederick, Maryland USA. Jazel Laureno, Julybien Atadero, Carmel Zamesa Paderog, Joy Agravante, and Zora Jayda Zerrudo Sala, Editors. Copyright 2006. All rights reserved. ISSN 1529-2754. This material is copyrighted and any commercial use, resale or publication in any form (including e-mail forwarding, electronic re-mailing and photocopying) is strictly prohibited without prior written permission of the publishers. Information contained herein is obtained from sources believed to be reliable, but is not guaranteed. The TCR Europe subscription rate is US$575 per half-year, delivered via e-mail. Additional e-mail subscriptions for members of the same firm for the term of the initial subscription or balance thereof are US$25 each. For subscription information, contact Christopher Beard at 240/629-3300. * * * End of Transmission * * *