/raid1/www/Hosts/bankrupt/TCREUR

/raid1/www/Hosts/bankrupt/TCREUR_Public/061213.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, December 13, 2006, Vol. 7, No. 247 Headlines A U S T R I A ALLGEMEINE BAUMASCHINEN: Linz Court Orders Branch Closure C.I.D.-TRANSPORT: Claims Registration Period Ends December 22 FAHRTENDIENST KLOUDA: Creditors' Meeting Slated for December 18 PRO.TE.X ENGINEERING: Claims Registration Period Ends Jan. 8 RB - BAU: Claims Registration Period Ends December 23 B E L G I U M COMPAGNIE EUROPEENNE: Proposes Run-Off Scheme to Creditors DOLE FOOD: Posts US$56.1 Million Net Loss in Period Ended Oct. 7 DOLE FOOD: Weak Performance Cues S&P to Cut Credit Rating to B F I N L A N D BENEFON OYJ: Lists New Shares at OMX Helsinki Stock Exchange F R A N C E ALCATEL-LUCENT: U.K. University Deploys VoIP Solutions ALCATEL-LUCENT: Inks Network Solution Deal with Tekomsel ALCATEL-LUCENT: Moody's Lowers Corporate Family Rating at Ba2 COMPAGNIE GENERALE: Shareholders' Meeting Set for Jan. 9, 2007 COMPAGNIE GENERALE: S&P Rates Sr. Secured Facilities at BB- REMY COINTREAU: Analysts See Possible Takeover Bids REMY COINTREAU: Earns EUR75.7 Mln in Period Ended Sept. 30, 2006 TEMBEC INC: DBRS Confirms Sr. Unsec. Debentures' Rating at CCC VALASSIS COMMS: Releases Pretrial Brief on ADVO Litigation G E R M A N Y AUTOHAUS WEDEKIND: Claims Registration Ends December 15 BRAUER GMBH: Claims Registration Ends December 15 BURGDORF TRANSPORTE: Claims Registration Ends December 19 CHARTER KURIER: Claims Registration Ends December 15 DIENSTLEISTUNGS GMBH: Claims Registration Ends December 15 GEBR. HOFFMANN: Claims Registration Ends December 18 HOGAZI GASTRONOMIE: Claims Registration Ends December 16 HSK GMBH: Claims Registration Ends December 18 M.S.P. SPEISENPRODUKTIONS: Creditors' Meeting Slated for Dec. 18 MAXDATA AG: Synergy Woes Cue Board to Drop Yakumo GmbH Takeover MUSIKBOX GASTSTATTEN: Claims Registration Ends December 19 SIKA ANLAGEN: Claims Registration Ends December 18 VOLKSWAGEN AG: Reports 3.09 Million Vehicles Sold in 11 Months H U N G A R Y GRAHAM PACKAGING: Warren Knowlton Replaces Philip Yates as CEO GRAHAM PACKAGING: Sept. 30 Equity Deficit Tops US$526.1 Million I R E L A N D EMI GROUP: Inks Video-on-Demand Deal with Yahoo! Music I T A L Y PARMALAT SPA: U.S. Case Parties Told to Submit Settlement Stance K A Z A K H S T A N A-SERVICE LLP: Creditors Must File Claims by Jan. 17, 2007 ASTANA FINANCE: Fitch Gives Local Currency Default Rating at BB+ ATA-TRANS LLP: Proof of Claim Deadline Slated for Jan. 16, 2007 JAN LTD: Claims Registration Ends Jan. 16, 2007 KARAJAL LLP: Karaganda Court Opens Bankruptcy Proceedings KAZRUDSERVICE LLP: Claims Filing Period Ends Jan. 16, 2007 KRYLO LLP: Claims Registration Ends Jan. 19, 2007 NAN JSC: East Kazakhstan Court Starts Bankruptcy Procedure NURASYL LLP: Claims Filing Period Ends Jan. 16, 2007 ROSTECHNIKA LLP: Creditors' Claims Due Jan. 19, 2007 K Y R G Y Z S T A N OFFICE POLYGRAPHY: Claims Filing Period Ends Jan. 24, 2007 N E T H E R L A N D S ALCATEL-LUCENT: U.K. University Deploys VoIP Solutions ALCATEL-LUCENT: Inks Network Solution Deal with Tekomsel ALCATEL-LUCENT: Moody's Lowers Corporate Family Rating at Ba2 CORUS GROUP: CSN Tops Tata Offer with US$9.6-Billion Bid CORUS GROUP: Agrees to Terms of CSN's GBP4.9-Bln Purchase Deal CORUS GROUP: S&P Holds BB Rating on Developing Watch CORUS GROUP: Confirms Issuance of Ordinary Shares and Bonds N O R W A Y AKER KVAERNER: Inks NOK900-Mln Service Deal with ConocoPhillips FALCONBRIDGE LTD: Xstrata Guarantees Notes and Preferred Shares P O L A N D LUKOIL OAO: Buys ConocoPhillips' Gas Stations in Europe MAXDATA AG: Synergy Woes Cue Board to Drop Yakumo GmbH Takeover P O R T U G A L COMPANHIA SIDERURGICA: Hikes Corus Offer to US$9.6 Billion COMPANHIA SIDERURGICA: Parties Agree on GBP4.9-Bln Corus Deal COMPANHIA SIDERURGICA: Cash Bid Increase Cues S&P's Watch Neg. R U S S I A BANK ROSSIYA: Fitch Rates Issuer Default at B- BUYNAKSKIY ASPHALT-CONCRETE: Court Hearing Slated for Dec. 20 CAUCASUS TRANS-SERVICE: Names A. Dzamykhov as Insolvency Manager COMPAGNIE GENERALE: Shareholders' Meeting Set for Jan. 9, 2007 COMPAGNIE GENERALE: S&P Rates Sr. Secured Facilities at BB- FREGAT CJSC: Bankruptcy Hearing Slated for March 13 HARVEST LLC: Court Names K. Dovbenko as Insolvency Manager KOLOMENSKIY BUILDING: Court Names A. Lantsov to Manage Assets KURKINSKIY BAKERY: Bankruptcy Hearing Slated for March 29 MELIORATION OJSC: Court Names A. Sabirov as Insolvency Manager NORTH-MONIKA LLC: Bankruptcy Hearing Slated for Dec. 20 LUKOIL OAO: Buys ConocoPhillips' Gas Stations in Europe REINFORCED CONCRETE: Names S. Chernobrovenko to Manage Assets RUSSIAN FOOD: Court Names A. Brekhov as Insolvency Manager SLYUDYANSKOYE CJSC: Court Names A. Generalov to Manage Assets SPECIAL PAPERS: Bankruptcy Hearing Slated for March 13 SOSNOVO-BORSKIY ALUMINIUM: Names I. Babenko to Manage Assets TNK-BP HOLDING: Mulls Developing Siberian Gas Field with Gazprom YAKHROMSKIY TEXTILE: Court Names A. Zhukov as Insolvency Manager S P A I N IM CAJA: Moody's Junks EUR10.8-Million Series E Notes INTERPUBLIC GROUP: Moody's Rates New US$250 Million Notes at Ba3 INTERPUBLIC GROUP: S&P's B Rating Remains on Negative Watch S W E D E N DOLE FOOD: Posts US$56.1 Million Net Loss in Period Ended Oct. 7 DOLE FOOD: Weak Performance Cues S&P to Cut Credit Rating to B S W I T Z E R L A N D BAREN IMMOBILIEN: Aargau Court Closes Bankruptcy Proceedings BEST DINE: Zug Court Suspends Bankruptcy Proceedings BOLLIGER BEDACHUNGEN: Court Closes Bankruptcy Proceedings ENERTECH KÄLTETECHNIK: Court Closes Bankruptcy Proceedings EPV COMMERZ: Zug Court Closes Bankruptcy Proceedings FUND MONTESSORI-ADLER: Court Suspends Bankruptcy Proceedings M & S BAUTECHNIK: Aargau Court Starts Bankruptcy Proceedings MONTECRISTO WERBEAGENTUR: Court Suspends Bankruptcy Proceedings ROLF MEYER: Zug Court Closes Bankruptcy Proceedings TECHNO-RESIN: Zug Court Closes Bankruptcy Proceedings T U R K E Y DOGUS HOLDING: Fitch Revises Outlook to Positive on BB- IDRs NOBEL GROUP: Fitch Rates Local & Foreign Currency IDR at B- NOBEL GROUP: Fitch Assigns B-/RR4 Rating on Prospective Bond PETROL OFISI: S&P Keeps B+ Rating on Fine Payment Concerns U K R A I N E TNK-BP HOLDING: Mulls Developing Siberian Gas Field with Gazprom U N I T E D K I N G D O M 21ST CENTURY: Creditors' Claims Due Feb. 28, 2007 AKER KVAERNER: Inks NOK900-Mln Service Deal with ConocoPhillips AMERICAN AXLE: Moody's Holds Corporate Family Rating at Ba3 BAA PLC: OFT Refers Airport Services Supply for Deeper Probe BUILDERS SUPPLY: Appoints Liquidator from David Horner & Co. CORUS GROUP: CSN Tops Tata Offer with US$9.6-Billion Bid CORUS GROUP: Agrees to Terms of CSN's GBP4.9-Bln Purchase Deal CORUS GROUP: S&P Holds BB Rating on Developing Watch CORUS GROUP: Confirms Issuance of Ordinary Shares and Bonds EMI GROUP: Inks Video-on-Demand Deal with Yahoo! Music FALCONBRIDGE LTD: Xstrata Guarantees Notes and Preferred Shares FORD MOTOR: Prices US$4.5 Bil. of Sr. Convertible Notes Due 2036 FORD MOTOR: S&P Holds Junk Rating on Proposed US$4.5-Bln Debt FORUM E.D.M.: Names Eileen T. F. Sale Liquidator GEM SECURITY: Richard Rones Leads Liquidation Procedure GRAHAM PACKAGING: Warren Knowlton Replaces Philip Yates as CEO GRAHAM PACKAGING: Sept. 30 Equity Deficit Tops US$526.1 Million HUXLEY COACHES: Taps Ian C. Brown to Liquidate Assets MIDLAND TOYS: Creditors' Meeting Slated for December 18 PREMIER PERFORMANCE: Brings In Liquidator from Mazars LLP PRISTINE PRINT: Hires Liquidator from Bond Partners LLP R.T.O. CONSTRUCTION: Nominates Alex Kachani as Liquidator RANK GROUP: Peter Johnson Succeeds Alun Cathcart as Chairman REBUILD CENTRE: Appoints Ian Pattinson to Liquidate Assets ROMFORD BATHROOMS: Calls In Liquidator from Carter Clark SAMSONITE CORP: Moody's Junks US$205-Million 8.875% Notes SQUEEZE U.K.: Nominates Lane Bednash to Liquidate Assets STEAMLINE LAUNDRY: Hires Liquidator from Rifsons TIMKEN CO: Sells Latrobe Steel to Watermill, Hicks for US$215MM VEDARIO LIMITED: Creditors' Meeting Slated for December 15 ********* ============= A U S T R I A ============= ALLGEMEINE BAUMASCHINEN: Linz Court Orders Branch Closure --------------------------------------------------------- The Land Court of Linz entered Oct. 23 an order closing the Thondorf, Langenzersdorf and Haid branches of LLC Allgemeine Baumaschinen (FN 178853w). Court-appointed property manager Rudolf Mitterlehner recommended the closure after determining that the continuing operations would reduce the value of the estate. The property manager can be reached at: Dr. Rudolf Mitterlehner Highway 9 4020 Linz, Austria Tel: 77 16 53-0 Fax: 77 16 53-18 E-mail: office@bom.at Headquartered in Haid bei Ansfelden, Austria, the Debtor declared bankruptcy on Oct. 11 (Bankr. Case No. 38 S 48/06x). C.I.D.-TRANSPORT: Claims Registration Period Ends December 22 ------------------------------------------------------------- Creditors owed money by LLC C.I.D.-Transport (FN 122032i) have until Dec. 22 to file written proofs of claims to court- appointed property manager Guenther Grassner at: Dr. Guenther Grassner c/o Dr. Norbert Mooseder Suedtirolerstrasse 4-6 4020 Linz, Austria Tel: 0732/77 08 15 Fax: 0732/77 08 16 Email: lawfirm@gltp.at Creditors and other interested parties are encouraged to attend the creditors' meeting at 2:15 p.m. on Jan. 9 to consider the adoption of the rule by revision and accountability. The meeting of creditors will be held at: The Land Court of Steyr Hall 7 2nd Floor Steyr, Austria Headquartered in Rohr im Kremstal, Austria, the Debtor declared bankruptcy on Oct. 23 (Bankr. Case No. 14 S 55/06w). Norbert Mooseder represents Dr. Grassner in the bankruptcy proceedings. FAHRTENDIENST KLOUDA: Creditors' Meeting Slated for December 18 --------------------------------------------------------------- Creditors owed money by LLC Fahrtendienst Klouda & Pernsteiner (FN 159019b) are encouraged to attend the creditors' meeting at 10:00 a.m. on Dec. 18 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 Oct. 23 (Bankr. Case No. 3 S 143/06h). Johannes Jaksch serves as the court-appointed property manager of the bankrupt estate. Stephan Riel represents Dr. Jaksch in the bankruptcy proceedings. The property manager can be reached at: Dr. Johannes Jaksch c/o Dr. Stephan Riel Landstrasser Hauptstrasse 1/2 1030 Vienna, Austria Tel: 713 44 33 Fax: 713 10 33 E-mail: kanzlei@jsr.at PRO.TE.X ENGINEERING: Claims Registration Period Ends Jan. 8 ------------------------------------------------------------ Creditors owed money by LLC pro.te.X Engineering (FN 152887i) have until Jan. 8, 2007, to file written proofs of claims to court-appointed property manager Herbert Waltl at: Dr. Herbert Waltl Georg-Wagner-Gasse 5 5020 Salzburg, Austria Tel: 0662/829316-0 Fax: 0662/829311-32 Email: kanzlei@waltl-vargha.at Creditors and other interested parties are encouraged to attend the creditors' meeting at 11:00 a.m. on Jan. 19 to consider the adoption of the rule by revision and accountability. The meeting of creditors will be held at: The Land Court of Salzburg Hall 256 2nd Floor Salzburg, Austria Headquartered in Saalfelden am Steinernen Meer, Austria, the Debtor declared bankruptcy on Oct. 23 (Bankr. Case No. 44 S 38/06x). RB - BAU: Claims Registration Period Ends December 23 ----------------------------------------------------- Creditors owed money by LLC RB - Bau- u. Montagebau (FN 106195w) have until Dec. 23 to file written proofs of claims to court- appointed property manager Christian Ebmer at: Mag. Christian Ebmer Schillerstrasse 12 4020 Linz, Austria Tel: 65 69 69 Fax: 65 69 69-60 Email: office@hep.co.at Creditors and other interested parties are encouraged to attend the creditors' meeting at 9:30 a.m. on Jan. 8 to consider the adoption of the rule by revision and accountability. The meeting of creditors will be held at: The Land Court of Linz Room 522 5th Floor Linz, Austria Headquartered in Linz, Austria, the Debtor declared bankruptcy on Oct. 23 (Bankr. Case No. 12 S 90/06g). ============= B E L G I U M ============= COMPAGNIE EUROPEENNE: Proposes Run-Off Scheme to Creditors ---------------------------------------------------------- Compagnie Europeenne d'Assurances Industrielles s.a. is proposing a solvent scheme of arrangement under Section 425 of the Companies Act 1985 to certain of its insurance and reinsurance creditors. The primary objective of the proposed arrangement is to conclude the run-off of the business included within the scope of the arrangement earlier than would be the case if claims were left to mature in the ordinary course of business. The arrangement deals with the company's existing and potential future liabilities under these categories of insurance and reinsurance contract only: -- all policies underwritten on the company's behalf by H. S. Weavers (Underwriting Agencies Limited); and -- all policies underwritten on the company's behalf by UIC Insurance Company Limited, all reinsurance policies underwritten by the company in Brussels, and all direct non-proportional contracts of the insurance that were underwritten by the company in Brussels and placed with the company by the Belgian brokers Henrijean & Cie s.a., Thilly van Eessel s.a. and Charles Brin s.a., all of which now form part of Guy Carpenter & Company, s.a. Business excluded from the scope of the arrangement will continue to be run off in the ordinary course, unaffected by the arrangement. The company will continue to pay claims arising out of Weavers Business and Non-Weavers Business, which have been advised to and agreed by the company as due and payable notwithstanding the arrangement. Under the arrangement, creditors will have a period of 150 days to submit claims. Creditors' claims will be paid in full at the value agreed, or in default of agreement, determined by an independent expert. There will be two independent experts, one based in the United States and dealing with claims arising out of Weavers Business and the other based in the United Kingdom and dealing with claims arising out of Non-Weavers Business. The independent experts will each have expertise in valuing the relevant type of risks. Claims will be discounted for the time value of money although the discount rate to be applied is lower than that which would be applied in a commercial commutation. The company intends to convene two meetings of creditors for the purposes of considering and voting on the arrangement, one meeting for creditors with Notified Outstanding Claims and one meeting for creditors with IBNR Claims. The company's application for leave to convene a meeting of creditors to vote on the arrangement is scheduled to take place on Feb. 20, 2007, at: The Royal Courts of Justice Strand London WCS United Kingdom Creditors who wish to raise any issues at the constitution of the meetings of creditors or otherwise relating to the conduct of those meetings are requested to contact the company as soon as possible so that these issues may be drawn to the attention of the court at the hearing of the application. The company can be reached at: Compagnie Europeenne d'Assurances Industrielles s.a. c/o KMS Insurance Services Limited 2nd Floor America House 2 America Square London EC3N 2LU United Kingdom Tel +44 (0) 207488 5460 E-mail: ceaihelpdesk@kmsim.com ref: Paul Corver Compagnie Europeenne d'Assurances Industrielles s.a. is a private company incorporated with limited liability under the laws of Belgium. DOLE FOOD: Posts US$56.1 Million Net Loss in Period Ended Oct. 7 ---------------------------------------------------------------- Dole Food Company Inc. reported a US$56.1 million net loss on US$1.8 billion of revenues for the third quarter ended Oct. 7, 2006, compared with US$17.6 million of net income on US$1.6 billion of revenues for the third quarter ended Oct. 8, 2005. Revenues increased as a result of higher sales in the company's fresh fruit, fresh vegetables and packaged foods operating segments. The net loss is primarily due to an operating loss of US$22 million in the third quarter of 2006, compared to an operating income of US$26.7 million earned in the prior year, due to lower operating results from the company's fresh-cut flowers, packaged foods and fresh fruit operating segments, and the US$15.7 million increase in interest expenses as a result of additional borrowings and higher effective market-based borrowing rates on the company's debt facilities. At Oct. 7, 2006, the company's balance sheet showed US$4.5 billion in total assets, US$4.1 billion in total liabilities, US$23.6 million in minority interests, and US$378.3 million in total stockholders' equity. In the three quarters ended Oct. 7, 2006, cash flows provided by operating activities were US$85.3 million lower, primarily due to lower earnings and lower payables, due in part to the 2005 accrual of income taxes payable related to the provision on repatriated foreign earnings, as well as the timing of payments, partially offset by lower levels of expenditures for inventory, primarily in the packaged foods business due to lower inventory build, and higher accrued liabilities due in part to the timing of payments. Cash flows used in investing activities decreased US$41.9 million during 2006 primarily due to the first quarter 2005 payment of US$47.1 million to Saba shareholders in connection with the company's purchase of the remaining 40% minority interest. Cash flows provided by financing activities increased US$63.8 million due to higher current year debt borrowings of US$155.3 million, net of repayments and an equity contribution of US$28.4 million made by Dole Holding Company, LLC, the company's immediate parent during 2006. These items were offset by an increase in dividends of US$89.8 million paid to Dole Holding Company, LLC, during 2006 compared to 2005 as well as a distribution of additional paid-in capital to Dole Holding Company, LLC during the third quarter of 2006 of US$31 million. Fresh-cut Flowers Business Restructuring During the third quarter of 2006, the company restructured its fresh-cut flowers division to better focus on high-value products and flower varieties, and position the business unit for future growth. In connection with this restructuring, the fresh-cut flowers division has ceased its farming operations in Ecuador and will close two farms in Colombia and downsize other Colombian farms. During the third quarter ended Oct. 7, 2006, total restructuring and impairment costs incurred amounted to approximately US$5.9 million and US$22.3 million, respectively. The US$5.9 million of restructuring costs relate to approximately 3,500 employees who will be severed by the end of fiscal 2007. As of Oct. 7, 2006, no restructuring costs had been paid. Restructuring of Saba Business During the first quarter of 2006, the commercial relationship substantially ended between the company's wholly owned subsidiary, Saba Trading AB and Saba's largest customer. Saba imports and distributes fruit, vegetables and flowers in Scandinavia. Saba's financial results are included in the fresh fruit reporting segment. The company restructured certain lines of Saba's business and expects to incur approximately US$13 million of total related costs. Total restructuring and fixed asset write-offs incurred as of Oct. 7, 2006, amounted to approximately US$10.1 million, of which US$7.7 million is included in cost of products sold and US$2.4 million in selling, marketing, and general and administrative expenses in the condensed consolidated statements of operations. Total restructuring costs of US$9.6 million include US$7.9 million of employee severance costs, which impacted 245 employees as well as US$1.7 million of contractual lease obligations. Fixed asset write-offs of US$0.5 million were also incurred as a result of the restructuring. Write-off of Crop Related Costs In connection with the company's on-going farm optimization programs in Asia, approximately US$6.7 million of crop related costs were written-off during the third quarter of 2006. The US$6.7 million non-cash charge has been included in cost of products sold in the condensed consolidated statements of operations. Amendment and Restatement of Credit Facilities On April 12, 2006, the company completed an amendment and restatement of its senior secured credit facilities. The company obtained US$975 million of term loan facilities consisting of: * US$225 million related to "Term Loan B;" * US$750 million related to "Term Loan C;" and * US$100 million in a pre-funded letter of credit facility. The proceeds of the term loans were used to repay the outstanding term loans under the company's then existing senior secured credit facilities which consisted of Term Loan A, denominated in Japanese yen, and Term Loan B. In addition, the company paid a dividend of US$160 million during the second quarter of 2006 to its immediate parent, Dole Holding Company, LLC, which proceeds were used to repay its Second Lien Senior Credit Facility. The weighted average variable interest rate at Oct. 7, 2006, for the term loan facilities was 7.5%. In addition, the Company entered into a new asset based revolving credit facility of US$350 million. The facility is secured and is subject to a borrowing base consisting of up to 85% of eligible accounts receivable plus a predetermined percentage of eligible inventory, as defined in the credit facility. As of Oct. 7, 2006, the ABL revolver borrowing base was US$305.6 million and the amount outstanding under the ABL revolver was US$111.2 million. The weighted average variable interest rate at Oct. 7, 2006, for the ABL revolver was 7.7%. Interest Rate Swap Agreement During June 2006, the company entered into an interest rate swap agreement in order to hedge future changes in interest rates. This agreement effectively converted US$320 million of borrowings under Term Loan C, which is variable-rate debt, to a fixed rate basis through June 2011. The interest rate swap fixed the interest rate at 7.2%. The fair value of the interest rate swap was a liability of US$6.2 million at Oct. 7, 2006. Simultaneously, the company executed a cross currency swap to synthetically convert US$320 million of Term Loan C into Japanese yen denominated debt in order to effectively lower the U.S. dollar fixed interest rate of 7.2% to a Japanese yen interest rate of 3.6%. Since the cross currency swap does not qualify for hedge accounting, all gains and losses are recorded through other income (expense), net in the condensed consolidated statements of operations. The fair value of the cross currency swap was an asset of US$19.4 million at Oct. 7, 2006. Business Acquisition On Oct. 3, 2006, Jamaica Producers Group Ltd. accepted the company's offer to purchase from JPG the 65% of JP Fruit Distributors Ltd. that the company does not already own for US$41.9 million in cash. The transaction closed during the fourth quarter of 2006. JP Fruit Distributors Ltd. imports and sells fresh produce in the United Kingdom. The company is considering expressions of interest by potential partners with respect to the ownership and operation of Jamaica Producers Group Ltd. Full-text copies of the company's consolidated financial statements for the third quarter ended Sept. 30, 2006, are available for free at http://researcharchives.com/t/s?168a About Dole Food Co. Based in Westlake Village, California, Dole Food Company, Inc., -- http://www.dole.com/-- is the world's largest producer and marketer of high-quality fresh fruit, fresh vegetables, and fresh-cut flowers based on revenues. Dole markets a growing line of packaged and frozen foods and is a produce industry leader in nutrition education and research. The fresh vegetables segment contains operating segments that produce and market commodity vegetables and ready-to-eat packaged vegetables to wholesale, retail and institutional customers primarily in North America, Europe and Asia. The packaged foods segment contains several operating segments that produce and market packaged foods, including fruit, juices and snack foods. Dole's fresh-cut flowers segment sources, imports and markets fresh-cut flowers, grown mainly in Colombia and Ecuador, primarily to wholesale florists and supermarkets in the United States. In Europe, the company maintains operations in Sweden, France, Spain, Italy, Belgium, Austria and Germany. * * * As reported in the Troubled Company Reporter-Europe on Sept. 28, Moody's Investors Service's confirmed its Ba3 Corporate Family Rating for Dole Food Company Inc. DOLE FOOD: Weak Performance Cues S&P to Cut Credit Rating to B -------------------------------------------------------------- Standard & Poor's Ratings Services lowered its ratings on Westlake Village, Calif.-based Dole Food Co. Inc. and Dole Holding Co. LLC, including its corporate credit rating, to 'B' from 'B+'. The ratings were removed from CreditWatch, where they were placed on Aug. 9, 2006, with negative implications, following materially weaker-than-expected financial performance in the first half of fiscal 2006, which typically represents a substantial portion of cash flow. The outlook is negative. Total debt outstanding at the company was about US$2.3 billion as of Oct. 7, 2006. "The downgrade follows Dole's recent third-quarter earnings release and reflects continued weak operating performance and significantly higher than expected leverage," said Standard & Poor's credit analyst Alison Sullivan. For the 12 months ended Oct. 7, 2006, adjusted EBITDA declined by 39%, compared with the prior-year period, because of higher operating costs. Dole also is faced with ongoing challenging conditions in Europe following the tariff change effective Jan. 1, 2006, that has increased competition, leading to lower pricing and higher net tariff costs. As a result, credit measures have weakened further than anticipated. Lease and pension adjusted total debt to EBITDA increased to about 9.5x for the 12 months ended Oct. 7, 2006, from about 6x at Dec. 31, 2006. Given expected ongoing difficult industry conditions, Standard & Poor's believes Dole will not meet prior expectations of leverage at around 6x and EBITDA interest coverage in the low-2x area for fiscal 2006. The ratings on Dole reflect its highly leveraged financial profile and participation in the competitive and commodity- oriented fresh produce industry, that is subject to seasonality. ============= F I N L A N D ============= BENEFON OYJ: Lists New Shares at OMX Helsinki Stock Exchange ------------------------------------------------------------ Benefon Oyj disclosed of a delay in listing the new investment series shares in OMX Helsinki Stock Exchange. The Company announced on Nov. 27 that the shares subscribed for in the directed share issue would be applied for listing in OMX together with company's existing investment series shares by Dec. 8, 2006, at the latest. Due to technical problems related to registering the shares, the new shares were listed in OMX together with company's existing investment series shares on Dec. 11, 2006. Headquartered in Salo, Finland, Benefon Oyj -- http://www.benefon.com/-- provides mobile telematics solutions saving lives, securing assets and improving field management. The company also operates in the Czech Republic, Russia and the U.K. At Dec. 31, 2005, Benefon Oyj's had EUR4.97 million in total assets and EUR7.30 million in total liabilities, resulting in a EUR2.33 million stockholders' deficit. =========== F R A N C E =========== ALCATEL-LUCENT: U.K. University Deploys VoIP Solutions ------------------------------------------------------ Alcatel-Lucent disclosed that the University of the West of England is currently deploying Alcatel-Lucent's converged communications solutions to improve staff and student collaboration, as well as communication with external organizations. The ongoing project, which is being led by Alcatel-Lucent business partner South West Communications Group, involves migrating UWE to a dual IP/TDM environment, connecting seven different campuses with IP based voice and collaboration. The University also plans to install several departmental contact centres, and to extend the combined Alcatel-Lucent solution to all 4,000 UWE users over the next few years. In order to reduce the cost of circuit rentals, Bristol, U.K.- based UWE has already deployed a VoIP solution with the Alcatel- Lucent OmniPCX Enterprise IP-PBX phone system and supported by Alcatel-Lucent OmniVista network management platform. Users have been equipped with Alcatel-Lucent IP Touch 4018 and Alcatel- Lucent IP Touch 4028 handsets to enable IP call features, while the system supports a number of DECT handset users on a single site. The key driver of the project was a new UWE student village and sports centre, both of which required communications links with other sites and campuses. As it examined ways to reduce the cost of campus-wide communications, the University proposed converged voice and data network migration that would not only provide cost-savings but have the potential to improve internal processes throughout the entire organisation. "The introduction of the new facilities marked the perfect opportunity for us to conduct an overhaul of our existing communications infrastructure, and Alcatel-Lucent and South West Communications stood out as being the best equipped to integrate all of the different sites and environments," said Jonathan Barstow, telecommunications team leader, UWE. "Linking our new buildings using IP telephony has not only reduced call costs and management overheads, it has also improved our communications. The next stage is for us to roll out these benefits across the University's seven campuses and introduce unified communications solutions that will further enhance staff and student collaboration." The University is piloting Alcatel-Lucent's Unified Communications offerings, including Alcatel-Lucent My Messaging and My Teamwork for collaboration, to deliver feature rich voice and video conferencing, document sharing, and intelligent rich presence, which allows the staff to instantly see the availability of colleagues. The University expects to gain overall productivity among staff using real time communications tools, as well as a higher standard of support for students through the integration of advanced voice mail handling capabilities. The University expects to compound these benefits with a lower total cost of ownership, due to reduced administrative and cabling requirements. "By taking the time to evaluate not just costs, but also the way UWE wants to communicate, both internally and externally, we've been able to design and deploy a solution that will have a significant positive impact on how employees and departments interact," said Sarah Flowers, sales director, South West Communications. "Many end-users recognise that there are benefits in collaboration and converged technology, but it is important to show them exactly how the solutions can be tailored to meet their specific needs." "Universities have long faced pressure to adopt the best practices of the business world, but UWE is going one better and looking to deploy a solution that businesses should observe as a best practice example of internal collaboration," said Graeme Allan, for Alcatel-Lucent enterprise activities in U.K. and Ireland. "Alcatel-Lucent continues to make great strides within the education sector, providing organizations of all sizes with campus-wide collaborative technology that has a genuine impact on the way they operate, as well as offering a swift return on investment." About South West Communications Group South West Communications -- http://www.swcomms.co.uk/-- helps businesses to maximize the benefits of voice, data and Internet technologies and are leading the way with convergence solutions throughout the UK. With over 23 years experience of designing, installing and maintaining complex sites, South West Communications prides itself on delivering quality, high performance and well managed applications to a varied platform of businesses. About Alcatel-Lucent Headquartered in Paris, France, Alcatel-Lucent -- http://www.alcatel-lucent.com/-- provides solutions that enable service providers, enterprises and governments worldwide, to deliver voice, data and video communication services to end users. Through its operations in fixed, mobile and converged broadband networking, Internet protocol (IP) technologies, applications, and services, Alcatel-Lucent offers the end-to-end solutions that enable communications services for people at home, at work and on the move. On Nov. 30, 2006, Alcatel and Lucent Technologies Inc. completed their merger transaction, and began operations as a communication solutions provider under the name Alcatel-Lucent on Dec. 1, 2006. * * * As reported in the TCR-Europe on Dec. 12, Fitch Ratings downgraded and removed Alcatel from Rating Watch Negative following the completion of Alcatel SA's merger with Lucent Technologies Inc., at which time Alcatel was renamed Alcatel- Lucent: -- Issuer Default Rating to BB from BBB-; and -- Senior unsecured debt to BB from BBB-. Alcatel's F3 short-term rating has also been withdrawn. The Rating Outlook for Alcatel-Lucent is Stable. Fitch has also withdrawn the following Lucent ratings due to the lack of clarity regarding Alcatel's support and, therefore, expected recovery of these securities in a distressed scenario: -- Issuer Default Rating BB-; -- Senior unsecured debt BB-; -- Convertible subordinated debt B; and -- Convertible trust preferred securities B. Standard & Poor's, on Dec. 6, 2006, said that following news that the merger between French telecoms equipment supplier Alcatel and U.S. peer Lucent Technologies Inc. has received final approval from the U.S. Committee on Foreign Investments, it has lowered its long-term corporate credit and senior unsecured debt ratings on Alcatel -- now named Alcatel-Lucent -- to 'BB-' from 'BB', in line with its preliminary indication in its Nov. 7, 2006, research update. The 'B' short-term corporate credit rating on Alcatel-Lucent was affirmed. S&P said the outlook is positive. ALCATEL-LUCENT: Inks Network Solution Deal with Tekomsel -------------------------------------------------------- Alcatel-Lucent is deploying its intelligent optical networking solution for PT Telekomunikasi Selular, Indonesia's largest mobile operator. Alcatel-Lucent is expanding and upgrading the existing network with its optical cross-connect and multi-service technologies to enhance the current backhaul capacity and aggregation capabilities. The project will lay the foundation for the smooth and cost-effective transformation of PT Telekomunikasi Selular's network to accelerate the rollout of new, IP-based business and entertainment mobile services. With the largest network coverage in the archipelago, PT Telekomunikasi Selular delivers 2G and 3G mobile services to more than 32 million subscribers and provides network coverage to over 90% of Indonesia's population. Alcatel-Lucent's optical transport solution will enable the Indonesian mobile operator to offer innovative mobile data services to its end-users over a converged infrastructure. By delivering enhanced aggregation functionality, the network will enable tremendous flexibility and reliability, as well as investment protection for highly efficient backhaul consolidation. The Alcatel-Lucent solution, based on its 1678 Metro Core Connect and data-aware Optical Multi-Service Node systems, is also integrating Automatic Switched Optical Network and Generalized MPLS technologies. Addressing the critical demand for a highly reliable and automatic multi-service transport network, these technologies empower intelligent optical connectivity by enabling the end-to-end set-up and control of optical connections. The Alcatel-Lucent solution will be managed by its 1350 management suite, a portfolio of applications to manage packet, circuit and wavelength services. About PT Telekomunikasi Selular PT Telekomunikasi Selular -- http://www.telkomsel.com/-- is the leading operator of mobile telecommunications industry in Indonesia with a market share of more than 50%. By end of September 2006, Telkomsel has achieved slightly over 32.4 million active subscribers. Telkomsel provides GSM cellular services in Indonesia, through its own nationwide Dual band 900/1800 MHz GSM network, and internationally, through 356 international roaming partners networks in 145 countries (June 2005). About the Company Headquartered in Paris, France, Alcatel-Lucent -- http://www.alcatel-lucent.com/-- provides solutions that enable service providers, enterprises and governments worldwide, to deliver voice, data and video communication services to end users. Through its operations in fixed, mobile and converged broadband networking, Internet protocol (IP) technologies, applications, and services, Alcatel-Lucent offers the end-to-end solutions that enable communications services for people at home, at work and on the move. On Nov. 30, 2006, Alcatel and Lucent Technologies Inc. completed their merger transaction, and began operations as a communication solutions provider under the name Alcatel-Lucent on Dec. 1, 2006. * * * As reported in the TCR-Europe on Dec. 12, Fitch Ratings downgraded and removed Alcatel from Rating Watch Negative following the completion of Alcatel SA's merger with Lucent Technologies Inc., at which time Alcatel was renamed Alcatel- Lucent: -- Issuer Default Rating to BB from BBB-; and -- Senior unsecured debt to BB from BBB-. Alcatel's F3 short-term rating has also been withdrawn. The Rating Outlook for Alcatel-Lucent is Stable. Fitch has also withdrawn the following Lucent ratings due to the lack of clarity regarding Alcatel's support and, therefore, expected recovery of these securities in a distressed scenario: -- Issuer Default Rating BB-; -- Senior unsecured debt BB-; -- Convertible subordinated debt B; and -- Convertible trust preferred securities B. Standard & Poor's, on Dec. 6, 2006, said that following news that the merger between French telecoms equipment supplier Alcatel and U.S. peer Lucent Technologies Inc. has received final approval from the U.S. Committee on Foreign Investments, it has lowered its long-term corporate credit and senior unsecured debt ratings on Alcatel -- now named Alcatel-Lucent -- to 'BB-' from 'BB', in line with its preliminary indication in its Nov. 7, 2006, research update. The 'B' short-term corporate credit rating on Alcatel-Lucent was affirmed. S&P said the outlook is positive. ALCATEL-LUCENT: Moody's Lowers Corporate Family Rating at Ba2 ------------------------------------------------------------- Moody's Investors Service downgraded to Ba2 from Ba1 the Corporate Family Rating of Alcatel S.A., which has completed its merger with Lucent Technologies Inc. and was renamed to Alcatel- Lucent. The ratings for senior debt of Alcatel were equally lowered to Ba2 from Ba1 and its Not-Prime rating for short-term debt was affirmed. At the same time, Moody's raised the ratings for senior debt of Lucent to Ba3 from B1 reflecting both the standalone credit profile of Lucent and, given the strategic importance of Lucent to round-off the group's product range and regional presence, expected financial support from Alcatel-Lucent, although this is not formally committed at this time. The ratings for the other legacy debt of Lucent were raised to B2 from B3 for subordinated debt and trust preferreds, and to P(B3) from P(Caa1) for preferred stock issuable under its shelf registration. Moody's has withdrawn Lucent's Corporate Family Rating of B1, assuming that management of the two entities will be fully integrated over the next several months and all of Lucent's non- US activities merged with their Alcatel counterparts. This should result in a rapid convergence of the credit risks of the affected companies. The outlook for all these ratings is stable. This rating action concludes the rating reviews initiated on April 3, 2006. "The rating downgrade reflects execution challenges related to the integration of two large companies while keeping major customers, market share and key personnel in an increasingly competitive telecommunication equipment market, but also the broad market position of Alcatel-Lucent and the potential for realizing and retaining substantial cost-savings that could drive EBITA-margins into the high single-digits medium-term." Wolfgang Draack, Senior Vice President and lead analyst for Alcatel-Lucent said. "While the outlook for the ratings is stable, we would see potential for a rating upgrade if the company were to keep sales growth above 5% and to reach EBITA- margins during 2007 close to double-digit levels, all while maintaining a strong and liquid capital structure." The Ba2 CFR reflects: (i) Alcatel-Lucent's strong customer relationships and the large installed base supporting its market shares; (ii) the broadest offering of all telecom equipment providers with very advanced technology allowing the company to service its customers for their feature-rich telecommunications and convergence strategies; (iii) the potential for realizing synergy savings targeted at about EUR1.4 billion by management; (iv) the strengthening credit profile of Alcatel on a standalone basis providing the financial basis for the combination; and (v) as a result of the for-share merger, a strong liquidity position with a relatively moderately levered capital structure (Moody's estimates pro-forma net debt/EBITDA for calendar year 2005 at 2.8-times initially after the merger and the Thales transaction, which involves selling Alcatel's transportation, security and space activities to Thales in return for an additional 11.5% stake in the company and about EUR710 million cash) of the combined group. These credit positives, however, are balanced by: (i) the challenges related to the integration of two corporate cultures and various technology platforms; (ii) execution risk for realizing and retaining the bulk of the targeted synergy benefits in an increasing price competitive equipment market; (iii) a relatively weak fiscal 2006 performance of Lucent in its core markets -- although the fourth fiscal quarter showed some improvement; (iv) a complex technology roadmap in 3rd generation (3G) wireless telephony; and (v) modest pro-forma calendar year 2005 profitability (EBITA- margin: 5.7%) and interest coverage (0.6-times) initially after adjusting EBIT for amortization of acquired intangibles particularly and after the Thales transaction. The outlook for Alcatel-Lucent's Ba2 CFR is stable. It anticipates: (i) mid-single digit growth for the company; (ii) measurable progress on the integration and realization of synergy benefits in 2007; (iii) modest improvements in profitability during 2007; but (iv) no further material M&A activity in the integration phase even though opportunities may well present themselves. The last rating action of April 3, 2006, placed the Ba1 senior debt ratings for Alcatel on review for possible downgrade and the B1 unsecured debt ratings of Lucent on review for possible upgrade following the merger announcement. Downgrades: Issuer: Alcatel-Lucent -- Corporate Family Rating, Downgraded to Ba2 from Ba1; -- Senior Unsecured Bank Credit Facility, Downgraded to Ba2 from Ba1; -- Senior Unsecured Conv./Exch. Bond/Debenture, Downgraded to Ba2 from Ba1; -- Senior Unsecured Medium-Term Note Program, Downgraded to Ba2 from Ba1; and -- Senior Unsecured Regular Bond/Debenture, Downgraded to Ba2 from Ba1. Upgrades: Issuer: Lucent Technologies Capital Trust I -- Preferred Stock Preferred Stock, Upgraded to B2 from B3. Issuer: Lucent Technologies, Inc. -- Multiple Seniority Shelf, Upgraded to a range of (P)B3 to (P)Ba3 from a range of (P)Caa1 to (P)B1; -- Subordinate Conv./Exch. Bond/Debenture, Upgraded to B2 from B3; -- Senior Unsecured Conv./Exch. Bond/Debenture, Upgraded to Ba3 from B1; and -- Senior Unsecured Regular Bond/Debenture, Upgraded to Ba3 from B1. Outlook Actions: Issuer: Alcatel-Lucent -- Outlook, Changed To Stable From Rating Under Review. Issuer: Lucent Technologies Capital Trust I -- Outlook, Changed To Stable From Rating Under Review. Issuer: Lucent Technologies, Inc. -- Outlook, Changed To Stable From Rating Under Review. Withdrawals: Issuer: Lucent Technologies, Inc. -- Speculative Grade Liquidity Rating, Withdrawn, previously rated SGL-2; -- Corporate Family Rating, Withdrawn, previously rated B1. Headquartered in Paris, France, Alcatel Lucent is one of the world leaders in providing advanced solutions for telecommunications systems and equipment to service providers, enterprises and governments with 2005 pro-forma sales of EUR18.6 billion after the Thales transaction. Lucent Technologies Inc. is headquartered in Murray Hill, New Jersey with revenues of US$8.8 billion and net income of US$527 million in its fiscal year ending Sept. 30, 2006. COMPAGNIE GENERALE: Shareholders' Meeting Set for Jan. 9, 2007 -------------------------------------------------------------- Compagnie Generale de Geophysique will hold a Combined Ordinary and Extraordinary General Meeting at 3:00 p.m. on Jan. 9, 2007, at: Palais Brongniart Petit Auditorium 75002 Paris France This meeting will resolve in particular the issue of shares to be made in favor of VERITAS DGC Inc. shareholders. In order to participate personally or to be represented at the Meeting: -- holders of registered shares must have the shares registered in their name at least five days prior to the date of the Meeting; -- holders of bearer shares should, at least five days prior to the date of the Meeting, provide evidence that the shares are being held in a blocked account, in the form of a certificate issued by the financial intermediary holding the shares on account. Such certificate should be sent to: BNP Paribas Securities Services GIS Emetteurs Assemblees Immeuble Tolbiac 75450 Paris Cedex 09 France Postal voting or proxy forms and admission cards may be obtained on request from BNP Paribas Securities Services. Shareholders wishing to cast a postal vote may obtain the appropriate form by writing to: Compagnie Generale de Geophysique Corporate Legal Department 1 rue Leon Migaux 91341 Massy Cedex France -- or -- BNP Paribas Securities Services GIS Emetteurs Assemblees Immeuble Tolbiac 75450 Paris Cedex 09 France by registered letter with acknowledgment of receipt, at least six days prior to the date of the Meeting. In the case of holders of bearer shares, postal votes will only be accepted subject to prior receipt of the certificate evidencing the fact that the shares are being held in a blocked account. About Compagnie Generale de Geophysique Headquartered in Massy, France, Compagnie Generale de Geophysique -- http://www.cgg.com/-- provides a wide range of seismic data acquisition, processing and reservoir services to clients in the oil and gas exploration and production business. It is also a global manufacturer of geophysical equipment through its subsidiary Sercel. The company also operates in Angola, Australia, Austria, Brazil, Canada, China, Egypt, United Kingdom, India, Indonesia, Kazakhstan, Libya, Malaysia, Mexico, Morocco, Netherlands, Nigeria, Norway, Oman, Pakistan, Russia, Saudi Arabia, Singapore, South Africa, Switzerland, Thailand, Tunisia, United Arab Emirates, U.S.A., Venezuela and Yemen. * * * As reported in the TCR-Europe on Dec. 11, Moody's Investors Services assigned (P)Ba2 ratings with stable outlook to Compagnie Generale de Geophysique's proposed US$1.1-billion credit facilities comprising of a US$800-million Term Loan due 2014 and two Revolving Credit Facilities of US$100 million and US$200 million, respectively, due 2012. The final confirmation of the ratings is subject to the signing of the credit agreement. Standard & Poor's Ratings Services has placed its 'BB-' long- term corporate credit and senior unsecured debt ratings on France-based Compagnie Generale de Geophysique on CreditWatch with negative implications. The placement follows the announcement by CGG of a friendly US$3.1 billion takeover bid for U.S. competitor Veritas DGC Inc. In addition, Moody's Investors Services assigned a rating of (P)Ba3, stable outlook, to Compagnie Generale de Geophysique's proposed new Senior Notes of US$165 million due May 2015. The final confirmation of the rating is subject to signing of the offering circular. COMPAGNIE GENERALE: S&P Rates Sr. Secured Facilities at BB- ----------------------------------------------------------- Standard & Poor's Ratings Services assigned its 'BB-' long-term debt rating and '2' recovery rating to France-based Compagnie Generale de Geophysique's proposed US$1.1-billion senior secured facilities, of which US$900 million is issued by subsidiary Volnay Acquisition Co. I. The 'BB-' rating is the same as the corporate credit rating on the group. The '2' recovery rating indicates our expectation of substantial (80%-100%) recovery of principal for senior secured lenders in the event of a payment default. Of the new debt, the US$800-million Term Loan B will be used to refinance CGG's existing bridge facility, and US$300 million will fund working capital needs. Furthermore, Standard & Poor's said that its 'BB-' long-term corporate credit and all debt ratings on CGG remain on CreditWatch with negative implications, where they were placed on Sept. 5, 2006, following CGG's US$3.2 billion takeover bid for Veritas DGC Inc. Since the CreditWatch placement, CGG has obtained several regulatory approvals, and the transaction is likely to close early January 2007, once approval for the merger from the shareholders of both companies has been obtained. "We have reviewed the group's medium-term and de-leveraging plans, and expect to affirm the corporate credit rating on CGG at 'BB-' and to equalize the rating on Veritas with that on CGG once the transaction closes," said Standard & Poor's credit analyst Karl Nietvelt. "The outlook on the combined group is likely to be positive." In addition, Standard & Poor's expects to downgrade CGG's unsecured high-yield bonds outstanding by one notch to 'B+', one notch below the corporate credit rating, reflecting their deep subordination to the proposed US$1.1 billion secured facilities. The notching down by just one notch takes into account an expected fairly rapid decrease of the secured debt and the latter's fairly weak security package. REMY COINTREAU: Analysts See Possible Takeover Bids --------------------------------------------------- Analysts have suggested a likely takeover bid for Remy Cointreau S.A., the maker of Remy Martin Cognac and the Cointreau orange liqueur, Simon Clow of The Wall Street Journal relates. According to WSJ, U.S.-based Brown-Forman Corp., owner of Jack Daniels whiskey, and Bermuda-based Bacardi & Co., could possibly bid for the company, as could Constellation Brands Inc. and Diageo plc. Neither Remy nor the two families who hold a controlling stake in the company have shed their plans. The French group's shares spiked to almost 25% in the past five months on talks of a possible approach for Remy, Mr. Clow states. This was fueled by the company's decision to halt a distribution alliance with the Maxxium distribution joint venture effective March 30, 2009, he adds. Headquartered in Cognac, France, Remy Cointreau -- http://www.remycointreau.com/-- offers a range of premium wine and spirit brands, known and recognized throughout the world. These brands include, among others, Remy Martin, Cointreau, Passoa, Metaxa, Mount Gay Rum, Charles Heidsieck and Piper- Heidsieck. * * * Remy Cointreau's senior unsecured debt carries a Ba2 rating from Moody's Investors Service since 2003. Standard & Poor's rated the Company's issuer credit at BB- in 2004. REMY COINTREAU: Earns EUR75.7 Mln in Period Ended Sept. 30, 2006 ---------------------------------------------------------------- Remy Cointreau S.A. disclosed its interim results for the first six months of the 2006/2007 financial year. Remy has recorded 21.9% organic growth in profit from operations to EUR61.9 million, on turnover of EUR354.4 million for the first six-month period. "This excellent growth, achieved for the third consecutive year, is fully in line with the Group's profitable and long-term growth strategy, with its refocused and lasting brand portfolio," the company said. For the period ended Sept. 30, 2006, the company earned EUR75.7 million in net income, compared with a EUR42.9 million net income for the same period in 2005. Cognac Remy Martin continued to develop premium and super premium qualities in order to prioritize profitability. Turnover grew organically by 4.2%, whereas profit from operations of EUR38.7 million represented organic growth of 38.1%. Liqueurs & Spirits The division registered overall organic growth of 2.7% in turnover, while profit from operations grew by 9.1%. Over the first six months of the year, Cointreau in the US with its new "Be Cointreauversial" campaign, and Passoa in Europe, performed particularly well. Champagne An excellent performance by Piper-Heidsieck throughout the first six months of the year enabled the brand to record organic growth of 10.8% in turnover. Profit from operations recorded sharp 48.7% organic growth, due to higher selling prices and increased volumes, as well as an improved product/market mix. Partner Brands Following the cessation of a number of distribution contracts, turnover declined by 17.1% to EUR45.7 million, resulting in an operating loss of EUR1 million, after allocation of distribution and central costs. Consolidated Results Turnover of EUR354.4 million represented overall organic growth of 1.3%. Group brands increased by 4.8%. Profit from operations totaled EUR61.9 million, a 12.8% increase, after including a EUR4.9 million impact due to the unfavorable euro/dollar exchange rate. Organic growth was 21.9%. Profit from operations margin improved by 2 pp compared with the same period of the previous financial year (15.5%). Operating profit increased by 7.3% to EUR58.9 million. This includes a EUR3 million non-recurring expense relating to a demand for business and property tax arrears, recognized under "other operating income and expenses". Financial charges of EUR20 million were a significant EUR11.6 million improvement, due to the substantial effect of debt reduction (from EUR838 million at Sept. 30, 2005 to EUR641 million at Sept. 30, 2006). At Sept. 30, 2006, the net indebtedness to EBITDA ratio was 3.65 (3.93 at Sept. 30, 2005). Net profit from continuing activities totaled EUR34 million, an increase of 86.8% compared with the first six months of 2005. This result includes a lower taxation charge and the reversal of a provision no longer required for tax payable. Net profit from discontinued activities of EUR42.1 million included net capital gains from the disposal of Dutch and Italian liqueurs at the end of March 2006, with a cash effect in April, together with Cognac de Luze and Bols Hungary, which were sold in July 2006. Total net indebtedness fell by 17.4% to EUR637.3 million, a reduction of EUR134.2 million compared with the end of March 2006. This decrease was a result of operations sold and a continued improvement in working capital requirements. Maxxium On Nov. 23, Remy Cointreau announced its decision to terminate the Maxxium Global Distribution Agreement effective March 30, 2009. This strategic decision will enable Remy Cointreau to consider alternative distribution options in priority markets such as Asia. The financial consequences anticipated as a result of terminating the Maxxium distribution agreements are as follows: Payment by Remy Cointreau of compensation estimated at EUR240 million before tax. A provision relating to the compensation will be recognized at March 31, 2007, with effective payment in 2009. After March 30, 2009, the planned exit of Remy Cointreau as a Maxxium shareholder, with disposal on a contractual basis of its stake in Maxxium's equity, after deducting restructuring costs, if applicable. At Sept. 30, 2006, Remy Cointreau's equity share amounted to EUR76.9 million. Outlook Remy Cointreau confirms its target of double-digit organic growth in profit from operations for the 2006/07 financial year ending March 31, 2007. Headquartered in Cognac, France, Remy Cointreau -- http://www.remycointreau.com/-- offers a range of premium wine and spirit brands, known and recognized throughout the world. These brands include, among others, Remy Martin, Cointreau, Passoa, Metaxa, Mount Gay Rum, Charles Heidsieck and Piper- Heidsieck. * * * Remy Cointreau's senior unsecured debt carries a Ba2 rating from Moody's Investors Service since 2003. Standard & Poor's rated the Company's issuer credit at BB- in 2004. TEMBEC INC: DBRS Confirms Sr. Unsec. Debentures' Rating at CCC -------------------------------------------------------------- Dominion Bond Rating Service confirmed the rating of Tembec Inc.'s Senior Unsecured Debentures at CCC. DBRS downgraded the rating of Tembec on Jan. 31, 2006. The rating action reflected the sharper-than-expected decline in Tembec's operating performance and liquidity position, and the risk that the Company would not have the liquidity required to fund its operations substantially beyond the next 12 months. However, the repayment of lumber duties in fiscal first quarter 2007 will provide additional cash of US$242 million ensuring that Tembec's liquidity will be sufficient to meet near-term requirements. The Company's financial risk has been reduced to a level commensurate with the above rating. Despite the much-needed cash infusion, the trend remains Negative, reflecting the high probability that: (1) a deterioration in operating performance could occur in the next year, and (2) continued weak earnings and cash flows may jeopardize the refinancing of a large debt maturity in 2009. Successful supply management strategies have enabled pulp and paper manufacturers to implement cost-push product price increases over the past year. However, industry supply discipline may be increasingly difficult to maintain since most of the high-cost production capacity has been closed. Failure to close a widening demand/supply gap would result in price erosion and declining earnings. Continued weak pulp and paper markets and the possibility that industry production curtailments may not be sufficient to support cost-push price increases elevates the risk that Tembec's operating performance and liquidity could quickly deteriorate. The declining U.S. residential construction industry, continuing lumber trade restrictions, and the potential of a U.S. economic slowdown exacerbates the situation. The Company is highly exposed to weakness in the U.S. dollar relative to the Canadian dollar and the euro, and additional strength in the Canadian dollar will have a significant impact on earnings. Equally important is the significant cost pressures facing Tembec, which are showing no signs of abating. The trend will remain Negative until the Company's financial performance significantly improves and the 2009 debt maturity is successfully refinanced. Headquartered in Canada, Tembec Inc. -- http://www.tembec.com/ -- is an integrated forest products company, with extensive operations in North America and France. With sales of approximately US$3.8 billion and some 10,000 employees, it operates 50 market pulp, paper and wood product manufacturing units, and produces silvichemicals from by-products of its pulping process and specialty chemicals. Tembec markets its products worldwide and has sales offices in Canada, the United States, the United Kingdom, Switzerland, China, Korea, Japan, and Chile. The Company also manages 40 million acres of forest land in accordance with sustainable development principles and has committed to obtaining Forest Stewardship Council (FSC) certification for all forests under its care. VALASSIS COMMS: Releases Pretrial Brief on ADVO Litigation ---------------------------------------------------------- A public version of Valassis Communications Inc.'s reply to ADVO Inc.'s pretrial brief is available for free at: http://researcharchives.com/t/s?16be A copy of the company's pretrial brief is also available at: http://researcharchives.com/t/s?16c1 Valassis filed suit on Aug. 30, 2006, seeking to rescind its US$1.3 billion merger agreement with ADVO based on fraud and material adverse changes. As reported in the Troubled Company Reporter on July 7, Valassis inked a definitive merger agreement with ADVO under which it will acquire all of the outstanding common shares of ADVO stock for US$37 per share in cash in a merger. The fully financed transaction was valued at US$1.3 billion, including US$125 million in existing ADVO debt that Valassis planned to refinance. Valassis subsequently sued ADVO in the Delaware Chancery Court to rescind the merger agreement based on fraud and material adverse changes, alleging that ADVO management materially misrepresented the financial health of the company and failed to reveal internal control deficiencies. About ADVO Based in Windsor, Conn., ADVO, Inc. -- http://www.ADVO.com/-- is a direct mail media company, with annual revenues of US$1.4 billion. Serving 17,000 national, regional and local retailers, the company reaches 114 million households, more than 90% of the nation's homes, with its ShopWise(R) shared mail advertising. ADVO employs 3,700 people at its 23 mail processing facilities, 33 sales offices. About Valassis Headquartered in Livonia, Michigan, Valassis Communications Inc. (NYSE: VCI) -- http://www.valassis.com/-- provides marketing services to consumer-packaged goods manufacturers, retailers, technology companies and other customers with operations in the United States, France, Mexico and Canada. Valassis' products and services portfolio includes: newspaper-delivered promotions and advertisements such as inserts, sampling, polybags and on- page advertisements; direct-to-door advertising and sampling; direct mail; Internet-delivered marketing; loyalty marketing software; coupon and promotion clearing; and promotion planning and analytic services. Valassis has been listed as one of FORTUNE magazine's "Best Companies to Work For" for nine consecutive years. Valassis subsidiaries include Valassis Canada, Promotion Watch, Valassis Relationship Marketing Systems, LLC and NCH Marketing Services, Inc. * * * As reported in the TCR-Europe on Nov. 1, Moody's Investors Service downgraded Valassis Communications, Inc.'s senior unsecured note ratings to Ba1 from Baa3. Moody's also assigned a Ba1 Corporate Family Rating, Ba1 Probability of Default Rating, and LGD4 loss given default assessments to Valassis' debt securities. The ratings remain on review for downgrade. Standard & Poor's Ratings Services lowered on July 9, 2006, its corporate credit and senior unsecured ratings on Valassis Communications Inc. to 'BB' from 'BB+' and left the ratings on CreditWatch with negative implications. ============= G E R M A N Y ============= AUTOHAUS WEDEKIND: Claims Registration Ends December 15 ------------------------------------------------------- Creditors of Autohaus Wedekind GmbH have until Dec. 15 to register their claims with court-appointed provisional administrator Ulrich Hauter. Creditors and other interested parties are encouraged to attend the meeting at 2:10 p.m. on Jan. 15, 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 Muehlhausen Area 35 Untermarkt 17 Muehlhausen, 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 Muehlhausen opened bankruptcy proceedings against Autohaus Wedekind GmbH on Oct. 12. Consequently, all pending proceedings against the company have been automatically stayed. The Debtor can be contacted at: Autohaus Wedekind GmbH Attn: Hartwig Wedekind, Manager Langensalzaer Highway 17 99974 Muehlhausen, Germany The administrator can be contacted at: Ulrich Hauter Untermarkt 12 99974 Muehlhausen, Germany BRAUER GMBH: Claims Registration Ends December 15 ------------------------------------------------- Creditors of Brauer GmbH have until Dec. 15 to register their claims with court-appointed provisional administrator Gerhard Fichter. Creditors and other interested parties are encouraged to attend the meeting at 9:00 a.m. on Jan. 15, 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 Heilbronn Hall 4 Ground Floor Insolvency Court Rollwagstr. 10a 74072 Heilbronn, 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 Heilbronn opened bankruptcy proceedings against Brauer GmbH on Oct. 23. Consequently, all pending proceedings against the company have been automatically stayed. The Debtor can be contacted at: Brauer GmbH Attn: Klaus Brauer, Manager Seeligstrasse 6 74080 Heilbronn, Germany The administrator can be contacted at: Gerhard Fichter Uhlandstrasse 4 74072 Heilbronn, Germany Tel: 07131/888666 Fax: 07131/888667 BURGDORF TRANSPORTE: Claims Registration Ends December 19 --------------------------------------------------------- Creditors of Burgdorf Transporte GmbH & Co. KG have until Dec. 19 to register their claims with court-appointed provisional administrator Hans-Peter Burghardt. Creditors and other interested parties are encouraged to attend the meeting at 11:00 a.m. on Jan. 9, 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 Bielefeld Hall 4065 4 Floor Court Route 6 33602 Bielefeld, 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 Bielefeld opened bankruptcy proceedings against Burgdorf Transporte GmbH & Co. KG on Oct. 23. Consequently, all pending proceedings against the company have been automatically stayed. The Debtor can be contacted at: Burgdorf Transporte GmbH & Co. KG Tonstr. 3a 32549 Bad Oeynhausen, Germany Attn: Dirk Burgdorf, Manager Rudolf-Harbig-Str. 36 32549 Bad Oeynhausen, Germany The administrator can be contacted at: Hans-Peter Burghardt Bunsenstr. 3 32052 Herford, Germany CHARTER KURIER: Claims Registration Ends December 15 ---------------------------------------------------- Creditors of Charter Kurier Neumann + Heuser GbR have until Dec. 15 to register their claims with court-appointed provisional administrator Ulrich Sonntag. Creditors and other interested parties are encouraged to attend the meeting at 10:00 a.m. on Jan. 15, 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 Giessen Room 415 4th Floor Building B Gutfleischstrasse 1 35390 Giessen, 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 Giessen opened bankruptcy proceedings against Charter Kurier Neumann + Heuser GbR on Nov. 10. Consequently, all pending proceedings against the company have been automatically stayed. The Debtor can be contacted at: Charter Kurier Neumann + Heuser GbR Ursulum 7 35396 Giessen, Germany Attn: Frank Heuser, Manager Talstrasse 4 35457 Lollar, Germany Bernd Uwe Neumann, Manager Alte Road 8 35435 Wettenberg, Germany The administrator can be contacted at: Ulrich Sonntag Hanauer Road 25 63674 Altenstadt, Germany Tel: 06047/954760 Fax: 06047/9547620 DIENSTLEISTUNGS GMBH: Claims Registration Ends December 15 ---------------------------------------------------------- Creditors of Dienstleistungs GmbH & Co. KG Sondershausen have until Dec. 15 to register their claims with court-appointed provisional administrator Ulrich Hauter. Creditors and other interested parties are encouraged to attend the meeting at 2:20 p.m. on Jan. 15, 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 Muehlhausen Area 35 Untermarkt 17 Muehlhausen, 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 Muehlhausen opened bankruptcy proceedings against Dienstleistungs GmbH & Co. KG Sondershausen on Oct. 19. Consequently, all pending proceedings against the company have been automatically stayed. The Debtor can be contacted at: Dienstleistungs GmbH & Co. KG Sondershausen Attn: Helmut Gorges, Manager Planplatz 8 99706 Sondershausen, Germany The administrator can be contacted at: Ulrich Hauter Untermarkt 12 99974 Muehlhausen, Germany GEBR. HOFFMANN: Claims Registration Ends December 18 ---------------------------------------------------- Creditors of Gebr. Hoffmann Transporte GmbH have until Dec. 18 to register their claims with court-appointed provisional administrator Karina Schwarz. Creditors and other interested parties are encouraged to attend the meeting at 10:00 a.m. on Jan. 16, 2007, at which time the administrator will present her first report on the insolvency proceedings. The meeting of creditors will be held at: The District Court of Magdeburg Hall E Insolvency Department Liebknechtstrasse 65-91 39110 Magdeburg, 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 Magdeburg opened bankruptcy proceedings against Gebr. Hoffmann Transporte GmbH on Nov. 10. Consequently, all pending proceedings against the company have been automatically stayed. The Debtor can be contacted at: Gebr. Hoffmann Transporte GmbH Halberstadter Str. 5 06484 Quedlinburg, Germany Attn: Helmut Talaga, Manager Alfelder Str. 25A 31139 Hildesheim, Germany The administrator can be contacted at: Karina Schwarz Klausener Str. 24 39112 Magdeburg, Germany Tel: 0391/6286260 Fax: 0391/6286261 Web: http://www.brf-partner.de/ E-mail: magdeburg@brf-partner.de HOGAZI GASTRONOMIE: Claims Registration Ends December 16 -------------------------------------------------------- Creditors of HOGAZI Gastronomie GmbH & Co. KG have until Dec. 16 to register their claims with court-appointed provisional administrator Eckhard Finke. Creditors and other interested parties are encouraged to attend the meeting at 11:00 a.m. on Jan. 15, 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 Bad Kreuznach Hall 309 Ringstrasse 79 55543 Bad Kreuznach, 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 Bad Kreuznach opened bankruptcy proceedings against HOGAZI Gastronomie GmbH & Co. KG on Oct. 31. Consequently, all pending proceedings against the company have been automatically stayed. The Debtor can be contacted at: HOGAZI Gastronomie GmbH & Co. KG Flugplatz Hahn Gebaude 1381 55491 Buechenbeuren, Germany Attn: Winfried Friedrich, Manager Leisniger Str. 6 12627 Berlin, Germany The administrator can be contacted at: Eckhard Finke Mannheimer Road 173 55543 Bad Kreuznach, Germany Tel: 0671/84007-68 Fax: 0671/84007-43 HSK GMBH: Claims Registration Ends December 18 ---------------------------------------------- Creditors of HSK GmbH have until Dec. 18 to register their claims with court-appointed provisional administrator Paul Fink. Creditors and other interested parties are encouraged to attend the meeting at 8:33 a.m. on Jan. 15, 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 Moenchengladbach Meeting Room A 58 Ground Floor Hohenzollernstr. 157 41061 Moenchengladbach, 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 Moenchengladbach opened bankruptcy proceedings against HSK GmbH on Nov. 20. Consequently, all pending proceedings against the company have been automatically stayed. The Debtor can be contacted at: HSK GmbH Volksgartenstrasse 85 41065 Moenchengladbach, Germany Attn: Guido Gillissen, Manager Ratheimer Road 79 41849 Wassenberg, Germany The administrator can be contacted at: Dr. Paul Fink Rheinort 1 40213 Duesseldorf, Germany M.S.P. SPEISENPRODUKTIONS: Creditors' Meeting Slated for Dec. 18 ---------------------------------------------------------------- The court-appointed provisional administrator for M.S.P. Speisenproduktionsgesellschaft mbH, Udo Feser, will present his first report on the Company's insolvency proceedings at a creditors' meeting at 10:50 a.m. on Dec. 18. 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 10:30 a.m. on March 12, 2007, at the same venue. Creditors have until Jan. 18, 2007, to register their claims with the court-appointed provisional administrator. The District Court of Charlottenburg opened bankruptcy proceedings against M.S.P. Speisenproduktionsgesellschaft mbH on Oct. 24. Consequently, all pending proceedings against the company have been automatically stayed. The Debtor can be reached at: M.S.P. Speisenproduktionsgesellschaft mbH Sonnenallee 47 12045 Berlin, Germany The administrator can be reached at: Udo Feser Uhlandstr. 165/166 10719 Berlin, Germany MAXDATA AG: Synergy Woes Cue Board to Drop Yakumo GmbH Takeover --------------------------------------------------------------- Maxdata AG will not acquire Yakumo GmbH and the brand of the same name, the company's Management Board resolved on Dec. 11, 2006. An extensive review revealed that the acquisition of Yakumo would not lead to the expected synergy effects. In addition, a takeover at the current point in time would result in the tying up of extensive resources. On Oct. 10, 2006, Maxdata announced the planned takeover of Yakumo in an ad-hoc notification, which has been issued in the same manner. Yakumo GmbH -- headquartered in Braunschweig, Germany, and owned by Adam Riesig GmbH -- markets and sells PCs, laptops, TFT monitors and consumer electronic products. Maxdata had initiated a comprehensive restructuring program in March 2006. This foresees, among other things, personnel cuts, which have already been implemented and the further optimisation of sales and purchasing structures. This should result in savings totaling EUR30 million a year -- the full effect of the restructuring program is expected to make itself felt from 2007. About Maxdata AG Headquartered in Marl, Germany, Maxdata AG -- http://www.maxdata.com/-- manufactures of computer hardware and provides built-to-order PC, notebook and server solutions. The Company offers servers, personal computers, laptops and notebooks under the Maxdata brand name, as well as a range of monitors and displays under the Belinea brand. The Company operates in Austria, Switzerland, France, Spain, Poland, Italy, the Netherlands and the United Kingdom. Maxdata AG has been posting net losses since 2003: EUR20.7 million in 2003, EUR1.5 million in 2004 and EUR39.6 million in 2005. For the nine months ended Sept. 30, 2006, Maxdata posted EUR36.4 million in net losses. The company is currently under restructuring, with effects expected to show in 2007. MUSIKBOX GASTSTATTEN: Claims Registration Ends December 19 ---------------------------------------------------------- Creditors of Musikbox Gaststatten GmbH have until Dec. 19 to register their claims with court-appointed provisional administrator Hans-Peter Burghardt. Creditors and other interested parties are encouraged to attend the meeting at 10:00 a.m. on Jan. 9, 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 Bielefeld Hall 4065 4 Floor Court Route 6 33602 Bielefeld, 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 Bielefeld opened bankruptcy proceedings against Musikbox Gaststatten GmbH on Oct. 25. Consequently, all pending proceedings against the company have been automatically stayed. The Debtor can be contacted at: Musikbox Gaststatten GmbH Attn: Heinz Eichler, Manager Friller Str. 26 31675 Bueckeburg, Germany The administrator can be contacted at: Hans-Peter Burghardt Bunsenstr. 3 32052 Herford, Germany SIKA ANLAGEN: Claims Registration Ends December 18 -------------------------------------------------- Creditors of SIKA Anlagen und Verwaltungs GmbH have until Dec. 18 to register their claims with court-appointed provisional administrator Eduard Uebelacker. Creditors and other interested parties are encouraged to attend the meeting at 8:30 a.m. on Jan. 24, 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 Meiningen Hall A 0105 Linden Avenue 15 Meiningen, 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 Meiningen opened bankruptcy proceedings against SIKA Anlagen und Verwaltungs GmbH on Oct. 18. Consequently, all pending proceedings against the company have been automatically stayed. The Debtor can be contacted at: SIKA Anlagen und Verwaltungs GmbH Attn: Dirk Heuser, Manager Kohlersgehau 59 98544 Zella-Mehlis, Germany The administrator can be contacted at: Eduard Uebelacker Schwanthalerstr. 32/IV 80336 Munich, Germany VOLKSWAGEN AG: Reports 3.09 Million Vehicles Sold in 11 Months -------------------------------------------------------------- Volkswagen AG disclosed that Volkswagen brand sold a total of 3.094 million vehicles for 11 months ended November 2006, an increase of 11.4% compared with the same period in 2005. The brand also exceeded last year's total sales of 3.088 million units. Volkswagen recorded 293,000 sales in November. "Customers all over the world are delighted with the attractive and increasingly individual model range presented by the Volkswagen brand. We have never before sold so many vehicles in the first eleven months of a year. That is very satisfactory and confirms our proactive product policy. We will continue with the systematic implementation of this policy to maintain an equally good presence on the world market in future, too," said Dr. Michael Kern, member of the Volkswagen brand board of management responsible for sales and marketing. Volkswagen sold 1.504 million vehicles in Europe from January to November, 7.5 percent more than during the same period last year. In November alone, deliveries to customers rose by 9.7% to 141,700 units. New vehicles registered in Germany totaled 628,035 for the 11 months ended November. "This means we again have a monthly result on our domestic market that is well above average. The Volkswagen brand has expanded its commanding market lead even further. That is not only due to the upcoming rise in value added tax. Our models as well as our packages offering mobility, service, insurance and attractive financing are very popular with customers," Dr. Kern commented. 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. ============= H U N G A R Y ============= GRAHAM PACKAGING: Warren Knowlton Replaces Philip Yates as CEO -------------------------------------------------------------- Graham Packaging Holdings Company disclosed that Warren D. Knowlton has been named as the company's chief executive officer, effective Dec. 4, 2006, replacing Philip R. Yates, who has retired. Mr. Knowlton will also join the company's board of directors. Mr. Knowlton, served as chief executive officer and executive director of Morgan Crucible PLC, from December 2002 to August 2006. Morgan Crucible is a specialty manufacturer of carbon and ceramic products. Prior to joining Morgan Crucible, he was an executive director of a glass-maker Pilkington PLC. With Pilkington, he first served as president of Global Building Products and then as president of Global Automotive. Mr. Knowlton joined Pilkington in 1997. Since 2000, Mr. Knowlton has served as a non-executive director of Smith & Nephew PLC, Filtrona PLC, and Ameriprise Financial. Philip R. Yates, who has been with Graham Packaging for more than 30 years and has served as chief executive officer since 1998, has agreed to continue with the company as chairman of the board. Mr. Yates will continue to be involved in the oversight of the company's operations. Mr. Yates already serves on the Board and the company expects he will be named chairman at the next meeting. Appointment of Mark Burgess as CFO Mark Burgess has been named chief financial officer, succeeding John E. Hamilton, who is leaving after a 22-year career with Graham Packaging to pursue other interests, including his family's business. Mr. Burgess served as president and chief executive officer, as well as chief financial officer, of Anchor Glass Container Corporation, from May 2005 until September 2006, where he led the company through a successful financial restructuring. He previously served as executive vice president and chief financial officer of Clean Harbors Environmental Services, Inc., from May 2003 until May 2005 and prior to that he served as executive vice president and chief financial officer at JL French Automotive Castings, Inc, from November 2000 to May 2003. Chinh Chu, senior managing director of The Blackstone Group, majority owner of Graham Packaging, said, "Warren Knowlton and Mark Burgess are extremely talented and experienced executives, and we are excited to have them join Graham Packaging. We would also like to thank Phil Yates and John Hamilton for their many dedicated years of service to Graham Packaging. We are pleased that Phil will be remaining as the company's chairman." About Graham Packaging Holdings Graham Packaging Holdings Company is a Pennsylvania limited partnership. Graham Packaging Company, L.P., Holdings' wholly owned subsidiary is a worldwide leader in the design, manufacture and sale of customized blow molded plastic containers for the branded food and beverage, household, personal care/specialty and automotive lubricants product categories and, as of the end of September 2006, operated 85 manufacturing facilities throughout North America, Europe and South America. The Company currently operates 88 plants worldwide including France, Hungary, the Netherlands, Poland, Spain, Turkey and the United Kingdom. The Blackstone Group, an investment firm, holds 78.6 percent equity in Graham Packaging Holdings Company. MidOcean Capital Investors, L.P., holds 4.1 percent. A group of management executives holds 2.3 percent. The family of Graham Packaging founder Donald Graham holds 15 percent. * * * Graham Packaging Holdings Company carries Standard & Poor's B rating for both its LT Foreign Issuer Credit and LT Local Issuer Credit. GRAHAM PACKAGING: Sept. 30 Equity Deficit Tops US$526.1 Million --------------------------------------------------------------- Graham Packaging Holdings Company reported a US$15 million net loss on US$643 million of sales for the third quarter ended Sept. 30, 2006, compared with a US$2.2 million net loss on US$615.1 million of sales in the same period in 2005. At Sept. 30, 2006, the company's balance sheet showed US$2.52 billion in total assets and US$3.05 billion in total liabilities, resulting in a US$526.1 million total partners' deficit. The increase in net loss is primarily due to the decrease in gross profits to US$69.1 million in the third quarter of 2006, from US$79.2 million in the third quarter of 2005. Net sales for the three months ended Sept. 30, 2006, increased US$27.9 million to US$643.0 million from US$615.1 million for the three months ended Sept. 30, 2005. The increase in sales was primarily due to an increase in resin pricing and volume, net of changes in mix and price erosion. The decrease in gross profit was primarily due to a reduction to depreciation expense in 2005 related to finalizing the fixed asset valuation for O-I Plastic of US$11.5 million, a net increase in project costs of US$1.6 million and a net decrease in gross profit related to ongoing business of US$3.4 million, partially offset by a decrease in non-recurring charges of US$2.7 million, a favorable impact from changes in foreign currency exchange rates of US$0.5 million and a net decrease in the loss on disposal of fixed assets of US$3.2 million. Interest expense increased US$900,000 to US$48.3 million for the three months ended Sept. 30, 2006, from US$47.4 million for the three months ended Sept. 30, 2005. The increase was primarily related to an increase in interest rates. Income tax provision increased US$2 million to US$6.6 million for the three months ended Sept. 30, 2006, from US$4.6 million for the three months ended Sept. 30, 2005. The increase was primarily related to the establishment of a valuation allowance on a portion of the tax benefit due to taxable losses and tax credits in North America, partially offset by decreased earnings in North America and Europe. Full-text copies of the company's consolidated financial statements for the third quarter ended Sept. 30, 2006, are available for free at: http://researcharchives.com/t/s?1633 About Graham Packaging Holdings Graham Packaging Holdings Company is a Pennsylvania limited partnership. Graham Packaging Company, L.P., Holdings' wholly owned subsidiary is a worldwide leader in the design, manufacture and sale of customized blow molded plastic containers for the branded food and beverage, household, personal care/specialty and automotive lubricants product categories and, as of the end of September 2006, operated 85 manufacturing facilities throughout North America, Europe and South America. The Company currently operates 88 plants worldwide including France, Hungary, the Netherlands, Poland, Spain, Turkey and the United Kingdom. The Blackstone Group, an investment firm, holds 78.6 percent equity in Graham Packaging Holdings Company. MidOcean Capital Investors, L.P., holds 4.1 percent. A group of management executives holds 2.3 percent. The family of Graham Packaging founder Donald Graham holds 15 percent. * * * Graham Packaging Holdings Company carries Standard & Poor's B rating for both its LT Foreign Issuer Credit and LT Local Issuer Credit. ============= I R E L A N D ============= EMI GROUP: Inks Video-on-Demand Deal with Yahoo! Music ------------------------------------------------------ EMI Music, a unit of EMI Group Plc, has signed a pan-European agreement with Yahoo! Music to enable consumers of the online service to watch videos from EMI's digital catalogue. Yahoo! Music will now offer European music fans free access to videos from EMI Music artists including Lily Allen, Corinne Bailey Rae, Coldplay, Gorillaz, Janet Jackson, Norah Jones, KT Tunstall and Robbie Williams, as well as Bebe (Spain), Tiziano Ferro (Italy), LaFee (Germany) and Diam's (France). The Yahoo! Music portal allows consumers to select videos by their favorite artists and stream them free of charge on their PC. The service is supported by targeted advertising. The service also enables music fans to create their own personalized "My Video" list, which tracks recently played videos and lists videos that have been rated by the fan. They can also discover videos by brand new artists through expert recommendations. "As the digital music market grows, we must continue to look for new ways to offer consumers the opportunity to enjoy our artists' content," Jean-Francois Cecillon, chairman and CEO of EMI Music Continental Europe, said. "Thanks to services such as Yahoo! Music, video-on-demand is becoming a valuable new channel that enables us to connect fans with the music they love." "It's important to maximize the value of our artists' music in this rapidly changing market and the recent growth of advertising spending on line is just one of the many ways in which we seek to do this," said Tony Wadsworth, chairman and CEO of EMI Music U.K. and Ireland. "We are extremely excited to add videos from EMI Music to the web's largest collection of music videos," said Shannon Ferguson, Managing Director of Yahoo! Music Europe. "Yahoo! is committed to giving consumers a compelling and comprehensive music experience, and the addition of EMI Music classic and new release videos, from both international and European artists, is critical to providing depth of choice for fans." 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 the TCR-Europe on Nov. 1, 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. S&P said the outlook is negative. Moody's Investors Service also 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. ========= I T A L Y ========= PARMALAT SPA: U.S. Case Parties Told to Submit Settlement Stance ---------------------------------------------------------------- The Honorable Lewis Kaplan Kaplan of the Southern District of New York has ordered Bank of America Corp., Grant Thornton International and Deloitte & Touche to send in writing their position on a possible settlement, The Financial Times says. As reported in the TCR-Europe on Nov. 28, Judge Kaplan adjourned until Dec. 31, 2006, all damages lawsuits by Parmalat S.p.A. against Bank of America, Grant Thornton and Deloitte & Touche. Judge Kaplan directed the parties to explore a possible settlement of the lawsuits filed against the bank and the auditors. The ruling, however, does not include a New Jersey suit filed by Parmalat against Citigroup. Judge Lewis Kaplan also instructed Parmalat to send in writing what the company would accept to settle the case. The judge told all the parties involved to send in their written position to Judge Henry Pitman, who will review the documents on Dec. 18 and gauge whether a global settlement is possible, FT reports. "The time may be ripe to precipitate, if it is conceivable to do, a global settlement or as close to a global settlement as can be achieved," FT quoted Judge Kaplan. "I am directing you all to talk to each other and to see where we can go." As reported in the TCR-Europe on Nov. 27, Credit Suisse Group and Banca Nazionale del Lavoro S.p.A. filed a memorandum of understanding in a Federal District Court in Manhattan to settle for US$25 million each a class action filed by investors of Parmalat S.p.A. Aside from the monetary settlement, the financial institutions agreed to institute changes in their corporate governance that will hopefully prevent future problems. Parmalat is seeking US$10 billion in damages from several financial institutions for their alleged role in the company's EUR14-billion collapse in December 2003. Parmalat filed the lawsuits in Italy and the U.S. People privy with the bank and auditors, however, said a settlement is possible if it includes ending a separate class action in the U.S. Talks between the parties failed months ago since the parties could not meet up their offers. About Parmalat Headquartered in Milan, Italy, Parmalat S.p.A. -- http://www.parmalat.net/-- sells nameplate milk products that can be stored at room temperature for months. It also has 40- some brand product line, which includes yogurt, cheese, butter, cakes and cookies, breads, pizza, snack foods and vegetable sauces, soups and juices. The Company's U.S. operations filed for chapter 11 protection on Feb. 24, 2004 (Bankr. S.D.N.Y. Case No. 04-11139). Gary Holtzer, Esq., and Marcia L. Goldstein, Esq., at Weil Gotshal & Manges LLP, represent the Debtors. When the U.S. Debtors filed for bankruptcy protection, they reported more than US$200 million in assets and debts. The U.S. Debtors emerged from bankruptcy on April 13, 2005. Parmalat S.p.A. and its Italian affiliates filed separate petitions for Extraordinary Administration before the Italian Ministry of Productive Activities and the Civil and Criminal District Court of the City of Parma, Italy on Dec. 24, 2003. Dr. Enrico Bondi was appointed Extraordinary Commissioner in each of the cases. The Parma Court has declared the units insolvent. On June 22, 2004, Dr. Bondi filed a Sec. 304 Petition, Case No. 04-14268, in the United States Bankruptcy Court for the Southern District of New York. =================== K A Z A K H S T A N =================== A-SERVICE LLP: Creditors Must File Claims by Jan. 17, 2007 ---------------------------------------------------------- The Specialized Inter-Regional Economic Court of Akmola Region declared LLP A-Service insolvent on Oct. 18. Creditors have until Jan. 17, 2007, to submit written proofs of claim to: LLP A-Service Room 308 Abai Str. 89 Kokshetau Akmola Region Kazakhstan ASTANA FINANCE: Fitch Gives Local Currency Default Rating at BB+ ---------------------------------------------------------------- Fitch Ratings launched its National ratings scale in Kazakhstan and assigned a National Rating of A+ with a Stable Outlook to JSC Astana Finance. A local currency Issuer Default rating of BB+ with a Stable Outlook was also assigned. The agency's existing ratings for AF are also listed. "Our decision to introduce the National ratings scale in Kazakhstan is driven by the rapid development of the domestic corporate bond market and by the consequent demand for this product from the issuers and investors," Dmitri Surkov, Managing Director and Head of Fitch's CIS office in Moscow disclosed. "Fitch is committed to providing high-quality, independent opinions and credit research to aid investors and issuers in the Kazakhstani capital markets," Mr. Surkov added. National ratings have been successfully used by Fitch since 1997 in the emerging economies with speculative- or low investment- grade international sovereign ratings. Kazakhstan is the 31st country in which the National rating scale has been introduced. National ratings are designed to indicate relative creditworthiness of issuers and issues within one country. By making available a complete range of notches on a separate national scale, they permit better credit differentiation than is possible on the international scale, where ratings tend to bunch below the sovereign ceiling. In addition to the National Rating and local currency IDR assigned, AF's current ratings are: -- Foreign currency IDR: BB+ Outlook Stable; -- Short-term foreign currency: B; -- Individual: D/E; and -- Support: 3. AF's ratings reflect Fitch's opinion that there is a moderate likelihood that support would be made available to it from the municipality of Astana or potentially the Kazakhstani sovereign, should support be required. AF was created in 1997 by the municipality of Astana to facilitate development finance for the rapidly growing new capital of Kazakhstan and for the surrounding Akmola region. It has since diversified geographically and into certain aspects of investment banking. AF is 25.5%-owned by the municipality of Astana. Fitch currently rates 23 issuers in Kazakhstan on the international rating scale and expects to see strong development of its National ratings in Kazakhstan in the next year, including further assignment of such ratings to its internationally rated issuers. ATA-TRANS LLP: Proof of Claim Deadline Slated for Jan. 16, 2007 --------------------------------------------------------------- LLP Ata-Trans has declared insolvency. Creditors have until Jan. 16, 2007, to submit written proofs of claim to: LLP Ata-Trans Panfilov Str. 106-208 Almaty, Kazakhstan JAN LTD: Claims Registration Ends Jan. 16, 2007 ----------------------------------------------- The Specialized Inter-Regional Economic Court of Atyrau Region declared LLP Jan Ltd. insolvent. Creditors have until Jan. 16, 2007, to submit written proofs of claim to: LLP Jan Ltd. Floor 3 Abai Str. 10a Atyrau Atyrau Region Kazakhstan KARAJAL LLP: Karaganda Court Opens Bankruptcy Proceedings --------------------------------------------------------- The Specialized Inter-Regional Economic Court of Karaganda Region commenced bankruptcy proceedings against LLP Karajal (RNN 302800210338). LLP Karajal is located at: Block 12, 4 Karajal Karaganda Region Kazakhstan KAZRUDSERVICE LLP: Claims Filing Period Ends Jan. 16, 2007 ---------------------------------------------------------- LLP Kazrudservice has declared insolvency. Creditors have until Jan. 16, 2007, to submit written proofs of claim to: LLP Kazrudservice Sharipov Str. 90 480012 Almaty, Kazakhstan KRYLO LLP: Claims Registration Ends Jan. 19, 2007 ------------------------------------------------- The Specialized Inter-Regional Economic Court of North Kazakhstan Region declared LLP Krylo insolvent on Nov. 1 without the introduction of the bankruptcy proceedings. Creditors have until Jan. 19, 2007, to submit written proofs of claim to: LLP Krylo Karim Sutushev Str. 58 Petropavlovsk North Kazakhstan Region Kazakhstan Tel: 8 (3152) 46-46-26 Fax: 8 (3152) 46-35-83 NAN JSC: East Kazakhstan Court Starts Bankruptcy Procedure ---------------------------------------------------------- The Specialized Inter-Regional Economic Court of East Kazakhstan Region commenced bankruptcy proceedings against JSC Nan on Nov. 6. NURASYL LLP: Claims Filing Period Ends Jan. 16, 2007 ---------------------------------------------------- The Specialized Inter-Regional Economic Court of Atyrau Region declared LLP Nurasyl insolvent. Creditors have until Jan. 16, 2007, to submit written proofs of claim to: LLP Nurasyl Floor 3 Abai Str. 10a Atyrau Atyrau Region Kazakhstan ROSTECHNIKA LLP: Creditors' Claims Due Jan. 19, 2007 ---------------------------------------------------- The Specialized Inter-Regional Economic Court of North Kazakhstan Region declared LLP Rostechnika insolvent on Nov. 1 without the introduction of the bankruptcy proceedings. Creditors have until Jan. 19, 2007, to submit written proofs of claim to: LLP Rostechnika Karim Sutushev Str. 58 Petropavlovsk North Kazakhstan Region Kazakhstan Tel: 8 (3152) 46-46-26 Fax: 8 (3152) 46-35-83 =================== K Y R G Y Z S T A N =================== OFFICE POLYGRAPHY: Claims Filing Period Ends Jan. 24, 2007 ---------------------------------------------------------- LLC Office Polygraphy has declared insolvency. Creditors have until Jan. 24, 2007, to submit written proofs of claim to: LLC Office Polygraphy Kulatov Str. 1a Bishkek, Kyrgyzstan Tel: (+996 312) 90-60-70 ===================== N E T H E R L A N D S ===================== ALCATEL-LUCENT: U.K. University Deploys VoIP Solutions ------------------------------------------------------ Alcatel-Lucent disclosed that the University of the West of England is currently deploying Alcatel-Lucent's converged communications solutions to improve staff and student collaboration, as well as communication with external organizations. The ongoing project, which is being led by Alcatel-Lucent business partner South West Communications Group, involves migrating UWE to a dual IP/TDM environment, connecting seven different campuses with IP based voice and collaboration. The University also plans to install several departmental contact centres, and to extend the combined Alcatel-Lucent solution to all 4,000 UWE users over the next few years. In order to reduce the cost of circuit rentals, Bristol, U.K.- based UWE has already deployed a VoIP solution with the Alcatel- Lucent OmniPCX Enterprise IP-PBX phone system and supported by Alcatel-Lucent OmniVista network management platform. Users have been equipped with Alcatel-Lucent IP Touch 4018 and Alcatel- Lucent IP Touch 4028 handsets to enable IP call features, while the system supports a number of DECT handset users on a single site. The key driver of the project was a new UWE student village and sports centre, both of which required communications links with other sites and campuses. As it examined ways to reduce the cost of campus-wide communications, the University proposed converged voice and data network migration that would not only provide cost-savings but have the potential to improve internal processes throughout the entire organisation. "The introduction of the new facilities marked the perfect opportunity for us to conduct an overhaul of our existing communications infrastructure, and Alcatel-Lucent and South West Communications stood out as being the best equipped to integrate all of the different sites and environments," said Jonathan Barstow, telecommunications team leader, UWE. "Linking our new buildings using IP telephony has not only reduced call costs and management overheads, it has also improved our communications. The next stage is for us to roll out these benefits across the University's seven campuses and introduce unified communications solutions that will further enhance staff and student collaboration." The University is piloting Alcatel-Lucent's Unified Communications offerings, including Alcatel-Lucent My Messaging and My Teamwork for collaboration, to deliver feature rich voice and video conferencing, document sharing, and intelligent rich presence, which allows the staff to instantly see the availability of colleagues. The University expects to gain overall productivity among staff using real time communications tools, as well as a higher standard of support for students through the integration of advanced voice mail handling capabilities. The University expects to compound these benefits with a lower total cost of ownership, due to reduced administrative and cabling requirements. "By taking the time to evaluate not just costs, but also the way UWE wants to communicate, both internally and externally, we've been able to design and deploy a solution that will have a significant positive impact on how employees and departments interact," said Sarah Flowers, sales director, South West Communications. "Many end-users recognise that there are benefits in collaboration and converged technology, but it is important to show them exactly how the solutions can be tailored to meet their specific needs." "Universities have long faced pressure to adopt the best practices of the business world, but UWE is going one better and looking to deploy a solution that businesses should observe as a best practice example of internal collaboration," said Graeme Allan, for Alcatel-Lucent enterprise activities in U.K. and Ireland. "Alcatel-Lucent continues to make great strides within the education sector, providing organizations of all sizes with campus-wide collaborative technology that has a genuine impact on the way they operate, as well as offering a swift return on investment." About South West Communications Group South West Communications -- http://www.swcomms.co.uk/-- helps businesses to maximize the benefits of voice, data and Internet technologies and are leading the way with convergence solutions throughout the UK. With over 23 years experience of designing, installing and maintaining complex sites, South West Communications prides itself on delivering quality, high performance and well managed applications to a varied platform of businesses. About Alcatel-Lucent Headquartered in Paris, France, Alcatel-Lucent -- http://www.alcatel-lucent.com/-- provides solutions that enable service providers, enterprises and governments worldwide, to deliver voice, data and video communication services to end users. Through its operations in fixed, mobile and converged broadband networking, Internet protocol (IP) technologies, applications, and services, Alcatel-Lucent offers the end-to-end solutions that enable communications services for people at home, at work and on the move. On Nov. 30, 2006, Alcatel and Lucent Technologies Inc. completed their merger transaction, and began operations as a communication solutions provider under the name Alcatel-Lucent on Dec. 1, 2006. * * * As reported in the TCR-Europe on Dec. 12, Fitch Ratings downgraded and removed Alcatel from Rating Watch Negative following the completion of Alcatel SA's merger with Lucent Technologies Inc., at which time Alcatel was renamed Alcatel- Lucent: -- Issuer Default Rating to BB from BBB-; and -- Senior unsecured debt to BB from BBB-. Alcatel's F3 short-term rating has also been withdrawn. The Rating Outlook for Alcatel-Lucent is Stable. Fitch has also withdrawn the following Lucent ratings due to the lack of clarity regarding Alcatel's support and, therefore, expected recovery of these securities in a distressed scenario: -- Issuer Default Rating BB-; -- Senior unsecured debt BB-; -- Convertible subordinated debt B; and -- Convertible trust preferred securities B. Standard & Poor's, on Dec. 6, 2006, said that following news that the merger between French telecoms equipment supplier Alcatel and U.S. peer Lucent Technologies Inc. has received final approval from the U.S. Committee on Foreign Investments, it has lowered its long-term corporate credit and senior unsecured debt ratings on Alcatel -- now named Alcatel-Lucent -- to 'BB-' from 'BB', in line with its preliminary indication in its Nov. 7, 2006, research update. The 'B' short-term corporate credit rating on Alcatel-Lucent was affirmed. S&P said the outlook is positive. ALCATEL-LUCENT: Inks Network Solution Deal with Tekomsel -------------------------------------------------------- Alcatel-Lucent is deploying its intelligent optical networking solution for PT Telekomunikasi Selular, Indonesia's largest mobile operator. Alcatel-Lucent is expanding and upgrading the existing network with its optical cross-connect and multi-service technologies to enhance the current backhaul capacity and aggregation capabilities. The project will lay the foundation for the smooth and cost-effective transformation of PT Telekomunikasi Selular's network to accelerate the rollout of new, IP-based business and entertainment mobile services. With the largest network coverage in the archipelago, PT Telekomunikasi Selular delivers 2G and 3G mobile services to more than 32 million subscribers and provides network coverage to over 90% of Indonesia's population. Alcatel-Lucent's optical transport solution will enable the Indonesian mobile operator to offer innovative mobile data services to its end-users over a converged infrastructure. By delivering enhanced aggregation functionality, the network will enable tremendous flexibility and reliability, as well as investment protection for highly efficient backhaul consolidation. The Alcatel-Lucent solution, based on its 1678 Metro Core Connect and data-aware Optical Multi-Service Node systems, is also integrating Automatic Switched Optical Network and Generalized MPLS technologies. Addressing the critical demand for a highly reliable and automatic multi-service transport network, these technologies empower intelligent optical connectivity by enabling the end-to-end set-up and control of optical connections. The Alcatel-Lucent solution will be managed by its 1350 management suite, a portfolio of applications to manage packet, circuit and wavelength services. About PT Telekomunikasi Selular PT Telekomunikasi Selular -- http://www.telkomsel.com/-- is the leading operator of mobile telecommunications industry in Indonesia with a market share of more than 50%. By end of September 2006, Telkomsel has achieved slightly over 32.4 million active subscribers. Telkomsel provides GSM cellular services in Indonesia, through its own nationwide Dual band 900/1800 MHz GSM network, and internationally, through 356 international roaming partners networks in 145 countries (June 2005). About the Company Headquartered in Paris, France, Alcatel-Lucent -- http://www.alcatel-lucent.com/-- provides solutions that enable service providers, enterprises and governments worldwide, to deliver voice, data and video communication services to end users. Through its operations in fixed, mobile and converged broadband networking, Internet protocol (IP) technologies, applications, and services, Alcatel-Lucent offers the end-to-end solutions that enable communications services for people at home, at work and on the move. On Nov. 30, 2006, Alcatel and Lucent Technologies Inc. completed their merger transaction, and began operations as a communication solutions provider under the name Alcatel-Lucent on Dec. 1, 2006. * * * As reported in the TCR-Europe on Dec. 12, Fitch Ratings downgraded and removed Alcatel from Rating Watch Negative following the completion of Alcatel SA's merger with Lucent Technologies Inc., at which time Alcatel was renamed Alcatel- Lucent: -- Issuer Default Rating to BB from BBB-; and -- Senior unsecured debt to BB from BBB-. Alcatel's F3 short-term rating has also been withdrawn. The Rating Outlook for Alcatel-Lucent is Stable. Fitch has also withdrawn the following Lucent ratings due to the lack of clarity regarding Alcatel's support and, therefore, expected recovery of these securities in a distressed scenario: -- Issuer Default Rating BB-; -- Senior unsecured debt BB-; -- Convertible subordinated debt B; and -- Convertible trust preferred securities B. Standard & Poor's, on Dec. 6, 2006, said that following news that the merger between French telecoms equipment supplier Alcatel and U.S. peer Lucent Technologies Inc. has received final approval from the U.S. Committee on Foreign Investments, it has lowered its long-term corporate credit and senior unsecured debt ratings on Alcatel -- now named Alcatel-Lucent -- to 'BB-' from 'BB', in line with its preliminary indication in its Nov. 7, 2006, research update. The 'B' short-term corporate credit rating on Alcatel-Lucent was affirmed. S&P said the outlook is positive. ALCATEL-LUCENT: Moody's Lowers Corporate Family Rating at Ba2 ------------------------------------------------------------- Moody's Investors Service downgraded to Ba2 from Ba1 the Corporate Family Rating of Alcatel S.A., which has completed its merger with Lucent Technologies Inc. and was renamed to Alcatel- Lucent. The ratings for senior debt of Alcatel were equally lowered to Ba2 from Ba1 and its Not-Prime rating for short-term debt was affirmed. At the same time, Moody's raised the ratings for senior debt of Lucent to Ba3 from B1 reflecting both the standalone credit profile of Lucent and, given the strategic importance of Lucent to round-off the group's product range and regional presence, expected financial support from Alcatel-Lucent, although this is not formally committed at this time. The ratings for the other legacy debt of Lucent were raised to B2 from B3 for subordinated debt and trust preferreds, and to P(B3) from P(Caa1) for preferred stock issuable under its shelf registration. Moody's has withdrawn Lucent's Corporate Family Rating of B1, assuming that management of the two entities will be fully integrated over the next several months and all of Lucent's non- US activities merged with their Alcatel counterparts. This should result in a rapid convergence of the credit risks of the affected companies. The outlook for all these ratings is stable. This rating action concludes the rating reviews initiated on April 3, 2006. "The rating downgrade reflects execution challenges related to the integration of two large companies while keeping major customers, market share and key personnel in an increasingly competitive telecommunication equipment market, but also the broad market position of Alcatel-Lucent and the potential for realizing and retaining substantial cost-savings that could drive EBITA-margins into the high single-digits medium-term." Wolfgang Draack, Senior Vice President and lead analyst for Alcatel-Lucent said. "While the outlook for the ratings is stable, we would see potential for a rating upgrade if the company were to keep sales growth above 5% and to reach EBITA- margins during 2007 close to double-digit levels, all while maintaining a strong and liquid capital structure." The Ba2 CFR reflects: (i) Alcatel-Lucent's strong customer relationships and the large installed base supporting its market shares; (ii) the broadest offering of all telecom equipment providers with very advanced technology allowing the company to service its customers for their feature-rich telecommunications and convergence strategies; (iii) the potential for realizing synergy savings targeted at about EUR1.4 billion by management; (iv) the strengthening credit profile of Alcatel on a standalone basis providing the financial basis for the combination; and (v) as a result of the for-share merger, a strong liquidity position with a relatively moderately levered capital structure (Moody's estimates pro-forma net debt/EBITDA for calendar year 2005 at 2.8-times initially after the merger and the Thales transaction, which involves selling Alcatel's transportation, security and space activities to Thales in return for an additional 11.5% stake in the company and about EUR710 million cash) of the combined group. These credit positives, however, are balanced by: (i) the challenges related to the integration of two corporate cultures and various technology platforms; (ii) execution risk for realizing and retaining the bulk of the targeted synergy benefits in an increasing price competitive equipment market; (iii) a relatively weak fiscal 2006 performance of Lucent in its core markets -- although the fourth fiscal quarter showed some improvement; (iv) a complex technology roadmap in 3rd generation (3G) wireless telephony; and (v) modest pro-forma calendar year 2005 profitability (EBITA- margin: 5.7%) and interest coverage (0.6-times) initially after adjusting EBIT for amortization of acquired intangibles particularly and after the Thales transaction. The outlook for Alcatel-Lucent's Ba2 CFR is stable. It anticipates: (i) mid-single digit growth for the company; (ii) measurable progress on the integration and realization of synergy benefits in 2007; (iii) modest improvements in profitability during 2007; but (iv) no further material M&A activity in the integration phase even though opportunities may well present themselves. The last rating action of April 3, 2006, placed the Ba1 senior debt ratings for Alcatel on review for possible downgrade and the B1 unsecured debt ratings of Lucent on review for possible upgrade following the merger announcement. Downgrades: Issuer: Alcatel-Lucent -- Corporate Family Rating, Downgraded to Ba2 from Ba1; -- Senior Unsecured Bank Credit Facility, Downgraded to Ba2 from Ba1; -- Senior Unsecured Conv./Exch. Bond/Debenture, Downgraded to Ba2 from Ba1; -- Senior Unsecured Medium-Term Note Program, Downgraded to Ba2 from Ba1; and -- Senior Unsecured Regular Bond/Debenture, Downgraded to Ba2 from Ba1. Upgrades: Issuer: Lucent Technologies Capital Trust I -- Preferred Stock Preferred Stock, Upgraded to B2 from B3. Issuer: Lucent Technologies, Inc. -- Multiple Seniority Shelf, Upgraded to a range of (P)B3 to (P)Ba3 from a range of (P)Caa1 to (P)B1; -- Subordinate Conv./Exch. Bond/Debenture, Upgraded to B2 from B3; -- Senior Unsecured Conv./Exch. Bond/Debenture, Upgraded to Ba3 from B1; and -- Senior Unsecured Regular Bond/Debenture, Upgraded to Ba3 from B1. Outlook Actions: Issuer: Alcatel-Lucent -- Outlook, Changed To Stable From Rating Under Review. Issuer: Lucent Technologies Capital Trust I -- Outlook, Changed To Stable From Rating Under Review. Issuer: Lucent Technologies, Inc. -- Outlook, Changed To Stable From Rating Under Review. Withdrawals: Issuer: Lucent Technologies, Inc. -- Speculative Grade Liquidity Rating, Withdrawn, previously rated SGL-2; -- Corporate Family Rating, Withdrawn, previously rated B1. Headquartered in Paris, France, Alcatel Lucent is one of the world leaders in providing advanced solutions for telecommunications systems and equipment to service providers, enterprises and governments with 2005 pro-forma sales of EUR18.6 billion after the Thales transaction. Lucent Technologies Inc. is headquartered in Murray Hill, New Jersey with revenues of US$8.8 billion and net income of US$527 million in its fiscal year ending Sept. 30, 2006. CORUS GROUP: CSN Tops Tata Offer with US$9.6-Billion Bid -------------------------------------------------------- Brazillian steelmaker Companhia Siderurgica Nacional increased its purchase offer for Corus Group Plc to US$9.6 billion or 515 pence a share, topping Tata Steel Ltd.'s 500 pence per share offer. Companhia Siderurgica's move pushed Corus's stock to rise as high as 529.5 pence, signaling that investors expect another bid, Bloomberg News says. Regardless of who wins the bidding war, a merger would Corus would result to the fifth largest steel firm in the world. Companhia Siderurgica and Corus have held merger talks in 2002 but competition issues and unfavorable conditions in the steel industry hindered negotiations. Companhia Siderurgica proposed purchase of Corus will be funded through a BP4.35 billion of debt underwritten by Barclays Plc, ING Groep NV and Goldman Sachs Group Inc., Bloomberg says, citing Chief Financial Officer Otavio Lazcano. Meanwhile, Companhia Siderurgica promised to pay BP138 million to fund the deficit in the Corus Engineering Steels Pension Scheme, Bloomberg says. Also, the steelmaker will up the contribution rate on the British Steel Pension Scheme to 12% from 10% until March 31, 2009. The company's success in acquiring Corus hinges on the unions support, according to published reports. Shares of Corus rose Monday to 27.25 pence, or 5.5%, to 527.25 pence in London. Companhia Siderurgica's stock dropped 1% to BRL63.9 in Sao Paulo. Tata shares are the worst performers on India's benchmark index in the past three months, according to Bloomberg. The stock slumped 29 rupees, or 6%, to 453.4 rupees in Mumbai on Monday, the sharpest decline since June 26. About Tata Steel Established in 1907, Tata Steel is Asia's first and India's largest private sector steel company. Tata Steel is among the lowest cost producers of steel in the world and one of the few select steel companies in the world that is EVA+ (Economic Value Added). About Companhia Siderurgica Companhia Siderurgica Nacional is one of the lowest-cost steel producers in the world, which is a result of its access to proprietary, high-quality iron ore (at the Casa de Pedra mine); self-sufficiency in energy; streamlined facilities; and logistics advantages. This is in addition to the group's strong market position in the fairly concentrated steel industry in Brazil. About Corus Group Corus Group plc, fka British Steel, was formed when the UK privatized its major steelworks in 1988. It then changed its name to Corus Group after acquiring most of Dutch rival Koninklijke Hoogovens. Corus makes coated and uncoated strip products, sections and plates, wire rod, engineering steels, and semi-finished carbon steel products. It also manufactures primary aluminum products. Customers include companies in the automotive, construction, engineering, and household-product manufacturing industries. Six years ago, the group suffered 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. * * * As reported in the TCR-Europe on Nov. 22, 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. In a TCR-Europe report on Oct. 25, 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. 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. As reported in the TCR-Europe on Oct. 24, 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. CORUS GROUP: Agrees to Terms of CSN's GBP4.9-Bln Purchase Deal -------------------------------------------------------------- The boards of Companhia Siderurgica Nacional and Corus Group plc have agreed on the terms of a recommended pre-conditional cash acquisition by CSN Acquisitions of the entire issued and to be issued share capital of Corus at a price of 515 pence for each Corus Share, valuing Corus at around GBP4.9 billion. CSN believes there is compelling strategic and industrial logic for a combination with Corus as it would: -- create a top five global steel group with around 24 million tons of annual steel production and, by 2010, around 50 million tons of annual iron ore production; -- enable Corus to secure supply of high quality, low cost iron ore from CSN's Casa de Pedra mine, one of the largest captive mines in the world, leading to incremental annual cash-flow in Corus of around US$450 million on a pre-tax basis by 2009; -- in time, provide Corus with access to increasing quantities of low cost semi-finished steel for further processing through its downstream facilities in Europe; -- allow Corus greater access to fast growing markets as well as providing opportunities for cross-selling the enlarged portfolio of products; -- create the potential to capture significant annual synergy benefits of around US$300 million on a pre-tax basis by 2009, through initiatives including global procurement savings, optimization of product flows, integrated commercial policy and the sharing of best practices; and -- give CSN the ability to leverage Corus' exceptional research and development and engineering expertise across the combined group. The price of 515 pence per Corus Share represents: -- a premium of around 42.9% to the average closing mid- market price of 360.5 pence per Corus share for the twelve months to and including Oct. 4, 2006, being the last business day before the announcement by Tata Steel Ltd. that it was evaluating various opportunities, including Corus; -- a premium of around 26.4% to the closing mid-market price of 407.5 pence per Corus Share on Oct. 4, 2006; and -- a premium of around 3% to the revised offer price made by Tata at 500 pence per Corus share. CSN Acquisitions has held constructive and satisfactory discussions with the trustees of Corus' two main U.K. pension schemes and has agreed with committees of the relevant boards of pension trustees an arrangement, which will be recommended to the full boards of the pensions trustees, whereby CSN Acquisitions will: -- fund upfront the IAS 19 deficit on the Corus Engineering Steels Pension Scheme by paying GBP138 million into the scheme; and -- increase the contribution rate on the British Steel Pension Scheme from 10% to 12% until March 31, 2009. The acquisition is subject to the satisfaction or waiver of the Pre-Condition that either: -- Corus Shareholders reject the Tata Scheme; or -- the Tata Scheme is otherwise withdrawn by Corus for lapses. Subject to the satisfaction or waiver of the Pre-Condition, the acquisition will be made by CSN Acquisitions, an indirect wholly owned subsidiary of CSN, and is proposed to be implemented by way of a scheme of arrangement under section 425 of the Companies Act. The scheme will be put to Corus shareholders at the Court Meeting and at the Extraordinary General Meeting, which will be convened in due course. The scheme document will be posted to Corus Shareholders within 28 days of satisfaction or waiver of the Pre-Condition. In addition, a further document setting out further details of the Acquisition and information relating to the CSN Group will be sent to Corus Shareholders as soon as possible. The Loan Note Alternative will be made available to Corus Shareholders. As at the date of this announcement, the CSN Group owns 34,072,613 Corus Shares, representing around 3.8% of Corus' existing issued share capital. The Corus Directors, who have been so advised by Credit Suisse, JPMorgan Cazenove and HSBC, consider the terms of the acquisition to be fair and reasonable, so far as Corus Shareholders are concerned. Accordingly, the Corus Directors intend unanimously to recommend that Corus Shareholders vote in favor of the scheme at the Court Meeting and Extraordinary General Meeting to be convened in relation to the acquisition. In providing their advice, Credit Suisse, JPMorgan Cazenove and HSBC have taken into account the commercial assessments of the Corus Directors. "The strategic impetus for this combination is growth -- growth in Brazil, in Europe and for our combined workforces," Benjamin Steinbruch, Chairman and Chief Executive Officer of CSN, said. Our goal is to unlock the value of our iron ore assets through Corus, transforming them into cost effective, high quality steel products using Corus' advanced engineering capabilities and its excellent European distribution platform. This is a winning combination for all stakeholders." "As I informed shareholders in my letter of Nov. 27, 2006, once the Corus Directors received an approach from CSN, we provided information and made our senior management available to enable CSN to meet its pre-conditions and complete its due diligence. This offer is both higher than the initial proposal by CSN as well as the revised Tata offer of 500 pence per share. It is also consistent with our strategic objective of securing access to raw materials, low cost production and growth markets. The combination of the two businesses will create a strong platform from which to compete and grow in an increasingly global market," Jim Leng, Chairman of Corus, said. Lazard is acting as lead financial adviser, Goldmans Sachs International as financial adviser and joint broker, and UBS as joint broker to CSN and CSN Acquisitions in relation to the acquisition. Credit Suisse is acting as lead financial adviser, JPMorgan Cazenove as joint financial adviser and corporate broker and HSBC as independent financial adviser for the purposes of Rule 3 of the Takeover Code to Corus. 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. Six years ago, the group suffered 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. * * * As reported in the TCR-Europe on Nov. 22, 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. In a TCR-Europe report on Oct. 25, 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. 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. As reported in the TCR-Europe on Oct. 24, 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. CORUS GROUP: S&P Holds BB Rating on Developing Watch ---------------------------------------------------- Standard & Poor's Ratings Services kept its 'BB' long-term corporate credit rating on U.K.-based steelmaker Corus Group PLC on CreditWatch with developing implications, following the start of a bidding war between India-based steel manufacturer Tata Steel Ltd. and Brazil-based steel maker Companhia Siderurgica Nacional. 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, 2006, following the announcement of an initial bid for the company from Tata Steel. On Dec. 10, 2006, Tata Steel revised its offer, increasing its price to 500 pence per share, and subsequently, on Dec. 11, 2006, CSN announced its higher bid of 515 pence per share. Standard & Poor's continues to note that integration with the low-cost operations of either of the bidders might benefit Corus' weak business profile. "Following the revised bids there is still insufficient clarity regarding the financial structure of each transaction and the eventual impact on Corus' credit quality," said Standard & Poor's credit analyst Tatiana Kordyukova. Both bidders have referred to nonrecourse debt as part of the respective financial structures, but it is not yet clear how feasibly such debt could be served from the cash flows of Corus and to what extent this could impair Corus' financial position. Upside potential remains if the Tata Steel bid is successful: As Tata Steel has higher stand-alone creditworthiness, the combined entity could have stronger credit quality than Corus on a stand-alone basis--provided there is sufficient evidence that Tata Steel will provide financial support to Corus. At the same time, as the bid price increases, the possibility of an upgrade of Corus declines. As the price increases the debt burden of the combined entity grows, as does possibly a portion of debt to be served by Corus. This might imply a lower ability of and incentives for the combined entity to support Corus in the future. "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," said Ms. Kordyukova. Standard & Poor's will also need more clarity regarding how such a transaction would be financed, and will need to assess whether Corus' weak business risk profile would be enhanced. Furthermore, the rating agency will consider the potentially substantial integration challenges. CORUS GROUP: Confirms Issuance of Ordinary Shares and Bonds ----------------------------------------------------------- In accordance with Rule 2.10 of the City Code on Takeovers and Mergers, Corus Group plc confirmed that as of Dec. 11, 2006, it had these relevant securities in issue (including any ordinary shares represented by American Depositary Shares but excluding any ordinary shares held in treasury): -- 898,815,415 ordinary shares of 50p each under ISIN code GB00B127GF29. -- 3% guaranteed convertible unsubordinated bonds due 2007 amounting to EUR307,000,000 convertible into 46,870,230 ordinary shares of Corus Group plc. The ISIN code for these securities is XS0140136523. -- 4.625% convertible subordinated bonds due 2007 amounting to NLG345,000,000 convertible into 19,338,687 ordinary shares of Corus Group plc. The ISIN code for these securities is NL0000183184. Each American Depositary Share represents two ordinary shares of the company. 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. Six years ago, the group suffered 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. * * * As reported in the TCR-Europe on Nov. 22, 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. In a TCR-Europe report on Oct. 25, 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. 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. As reported in the TCR-Europe on Oct. 24, 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. =========== N O R W A Y =========== AKER KVAERNER: Inks NOK900-Mln Service Deal with ConocoPhillips --------------------------------------------------------------- ConocoPhillips has awarded Aker Kvaerner ASA a service contract for provision of personnel and equipment for well intervention services on the Norwegian Continental Shelf. The firm contract period is three years with an estimated value of NOK900 million. The contract includes an option to extend another 2 x 2 years. "This is a strategically important contract which ensures Aker Kvaerner Well Service's position as the leading provider of well intervention services on the Norwegian Continental Shelf," said Mads Andersen, Executive Vice President in Aker Kvaerner. The scope of work comprises mechanical wireline services, wireline tractor services and cased and open hole logging services. The work will be undertaken by the Aker Kvaerner subsidiary, Aker Kvaerner Well Service in Stavanger. Data acquisitions services are subcontracted to Baker Atlas. Through this agreement, Aker Kvaerner continues a good cooperation with an important client. "We look forward to jointly developing and implementing new well intervention technologies that will further enhance safety and increase operational efficiency," says Ole Petter Thomesen, President of Aker Kvaerner Well Service. About Aker Kvaerner Headquartered in Lysaker, Norway, Aker Kvaerner ASA -- http://www.akerkvaerner.com/-- through its subsidiaries and affiliates, provides engineering and construction services, technology products and integrated solutions. The Aker Kvaerner group is organized into two principal business streams, namely Oil & Gas and E&C. The group operates in Austria, Azerbaijan, Belgium, Denmark, Finland, France, Germany, Netherlands, Poland, Russia, Spain, Sweden, United Kingdom, Australia, China, India, Indonesia, Japan, Malaysia, Singapore, South Korea, Thailand, Brazil, Chile, Canada and the United States. * * * As reported in the TCR-Europe on April 26, Moody's Investors Service upgraded the of Aker Kvaerner Oil & Gas Group and Aker Kvaerner AS, primarily to reflect the sustainable strong recovery in profitability and cash flow generation of the ring- fenced oil and gas group over the past two years, coupled with the clear reduction in senior debt, repaid from internally generated funds. Ratings affected: Aker Kvaerner Oil & Gas Group AS -- Corporate family rating: upgraded to Ba1 from Ba3 Aker Kvaerner AS -- Rating of the second priority lien notes due 2011: upgraded to Ba1 from Ba3. Moody's said the outlook on all ratings is stable. FALCONBRIDGE LTD: Xstrata Guarantees Notes and Preferred Shares --------------------------------------------------------------- Xstrata plc has fully and unconditionally guaranteed Falconbridge Ltd.'s Notes and its cumulative redeemable preferred shares, Series 2, Series 3 and Series H. Falconbridge will not file interim financial statements for the nine months ended Sept. 30, 2006, as it has obtained an order from Canadian securities regulators permitting Falconbridge to satisfy its continuous disclosure obligations as a reporting issuer by filing Xstrata's U.K. disclosure documents in place of disclosure documents relating solely to Falconbridge. These senior debt of Falconbridge has been guaranteed by Xstrata: * US$250 million principal amount of 6.2% notes due June 15, 2035; * US$250 million principal amount of 5.5% notes due June 15, 2017; * US$350 million principal amount of 6% notes due Oct. 15, 2015; * US$250 million principal amount of 5.375% notes due June 1, 2015; * US$250 million principal amount of 7.35% notes due June 5, 2012; * US$300 million principal amount of 7.25% notes due July 15, 2012; * US$300 million principal amount of 8.375% notes due Feb. 15, 2011; and * CDN$175 million principal amount of 8.5% debentures due Dec. 8, 2008. The guarantee of Falconbridge's Notes was implemented by amending the trust indentures pursuant to which the Notes were issued. Pursuant to the terms of the Note Indentures, as amended by supplemental indentures to implement the guarantees, Xstrata has fully and unconditionally guaranteed the payment, within 15 days of when due, of the principal and interest owing by Falconbridge to the holders of the Notes. Computershare Trust Company of Canada is the trustee for the holders of the Notes under the terms of the Note Indentures. The guarantee of the Preferred Shares is governed by the terms of a guarantee indenture entered into by Xstrata, Falconbridge and Computershare Trust Company of Canada, as guarantee trustee. Pursuant to the terms of the Guarantee Indenture, Xstrata has fully and unconditionally guaranteed in favor of the holders of the Preferred Shares the payment, within 15 days of when due, of all financial liabilities and obligations of Falconbridge to such holders under the terms of the Preferred Shares, whether in respect of: -- any accrued and unpaid dividends on the Preferred Shares, regardless of the ability of Falconbridge to satisfy any financial or legal condition to the declaration or payment of dividends; -- the redemption price and all accrued and unpaid dividends to the date of redemption with respect to the Preferred Shares called for redemption; or -- the liquidation amount payable on the Preferred Shares upon a voluntary or involuntary dissolution, liquidation or winding up of Falconbridge, without regard to the amount of assets of Falconbridge available for distribution. Xstrata's obligation to make a guarantee payment may be satisfied by direct payment of the required amounts by Xstrata to the holders of Preferred Shares entitled to those payments or by causing Falconbridge to pay those amounts to the holders. Structural Subordination Xstrata's guarantees of the Notes and the Preferred Shares constitute unsecured obligations of Xstrata. The terms of the guarantees do not limit the ability of Xstrata to incur additional indebtedness, nor do they limit the ability of Xstrata's subsidiaries or joint ventures to incur additional secured or unsecured indebtedness. Xstrata's obligations under the guarantees will be effectively subordinate to all indebtedness and other liabilities of Xstrata's subsidiaries and joint ventures, except to the extent Xstrata is a creditor of such subsidiaries or joint ventures ranking at least pari passu with such other creditors. The Notes and the Preferred Shares, as guaranteed by Xstrata, have been rated by the following rating agencies as follows: Notes Preferred Shares Rating agency Rating Rating ------------- ------ ---------------- Moody's Investor Service Baa2 not rated Standard & Poor's BBB+ BBB- Dominion Bond Rating Service Limited BBB(high) Pfd-3(high) Holders of the Notes and the Preferred Shares should consult the Rating Agencies with respect to the interpretation of the foregoing ratings and their implications. The credit ratings accorded to the Notes and the Preferred Shares by the Rating Agencies are not recommendations to purchase, hold or sell the Notes or the Preferred Shares inasmuch as such ratings do not comment as to market price or suitability for a particular investor. There is no assurance that the ratings will remain in effect for any period of time or that the ratings will not be revised or withdrawn entirely by one or more of the Rating Agencies at any time in the future if, in the judgment of one or more of the Rating Agencies, circumstances so warrant. Tax Consequences of Guarantee of Preferred Shares The guarantee of the Preferred Shares constitutes a 'guarantee agreement' for purposes of subsection 112(2.2) of the Income Tax Act (Canada). Accordingly, a dividend received on a Preferred Share of a particular series by a holder of Preferred Shares that is a corporation resident in Canada for purposes of the Tax Act generally will not be deductible in computing the taxable income of the corporation unless the Preferred Share is of a class or series of shares of the capital stock of Falconbridge that is listed on a prescribed stock exchange, which includes the Toronto Stock Exchange and the corporation, and persons with which the corporation does not deal at arm's length, or any partnership or, in certain circumstances, trust of which the corporation or any such person is a member or beneficiary, do not, at the time the dividend is received, receive dividends in respect of more than 10% of the issued and outstanding shares to which the guarantee agreement applies. Holders of Falconbridge Preferred Shares to which these provisions may be relevant are urged to consult their own tax advisors. Guarantee of Payment Each guarantee constitutes a guarantee of payment and not of collection. This means that legal proceedings may be brought directly against Xstrata to enforce its obligations under each guarantee without first instituting a legal proceeding against Falconbridge. The guarantees of the Notes will not be discharged except by payment in full of Falconbridge's obligations to the holders of the Notes. The guarantee of the Preferred Shares will not be discharged except by payment of the related guaranteed payments in full to the extent not paid by Falconbridge or upon the cancellation of the Preferred Shares. Amendments and Assignment The guarantees of the Notes may not be amended without the prior approval of the holders of the Notes in accordance with the terms of the Note Indentures, provided that no approval of the holders of the Notes is required for certain changes that do not adversely affect the rights of holders of the Notes. The guarantee of the Preferred Shares may not be amended without the prior approval of the holders representing not less than a majority of the aggregate liquidation amount of the outstanding Preferred Shares, or, in the event that a meeting is held to obtain the consent of the holders of the Preferred Shares, representing not less than a majority of the aggregate liquidation amount of the outstanding Preferred Shares held by holders of the Preferred Shares present at the meeting, provided that no approval of the holders of the Preferred Shares is required for certain changes that do not adversely affect the rights of holders of the Preferred Shares. For purposes of the guarantee, a meeting of the holders of the Preferred Shares requires a quorum consisting of holders of the Preferred Shares holding at least 25% of the aggregate liquidation amount of the outstanding Preferred Shares. The guarantees of the Notes and the Preferred Shares will be binding on the successors and assigns of Xstrata and will enure to the benefit of the holders of the Notes and Preferred Shares then outstanding. Termination The guarantee of the Notes will terminate upon the repayment in full and discharge of all Notes. The guarantee of the Preferred Shares will terminate and be of no further force and effect upon full payment of the applicable redemption price of all Preferred Shares, including any accrued and unpaid dividends at the time of redemption. Governing Law The guarantees of the Notes (other than the CDN$175 million 8.5% debentures due 2008) are governed by and construed in accordance with the laws of the State of New York except with respect to the rights, powers, duties and responsibilities of the Note Trustee under the Note Indentures, which are governed by the laws of the Province of Ontario. The guarantees of the CDN$175 million 8.5% debentures due 2008 and the Preferred Shares are governed by and construed in accordance with the laws of the Province of Ontario. Consent to Jurisdiction and Service Xstrata has appointed CT Corporation System, 111 Eighth Avenue, New York, New York, as its agent for service of process in any suit, action or proceeding arising out of or relating to its guarantee of the Notes (other than the CDN$175 million 8.5% debentures due 2008) and for actions brought under United States federal or state securities laws brought in any federal or state court located in the City of New York and submits to such jurisdiction. Xstrata has appointed Falconbridge as its agent for service of process in any suit, action or proceeding arising out of or relating to its guarantee of the Preferred Shares or the CDN$175 million 8.5% debentures due 2008 and for actions brought under provincial securities laws brought in any court located in the City of Toronto and submits to such jurisdiction. Information Concerning the Trustee Computershare Trust Company of Canada is the Note Trustee under the terms of the Note Indentures and is the guarantee trustee for the holders of the Preferred Shares. The terms of the Guarantee Indenture and the terms of the Note Indentures provide that, except in certain circumstances, no action may be brought against Xstrata to enforce the guarantees except by the Trustee. Changes to Falconbridge Continuous Disclosure Reporting In connection with Xstrata's guarantees of the Notes and the Preferred Shares, the securities commissions of each Canadian province -- other than Prince Edward Island -- and territory have granted Falconbridge an exemption from certain requirements of the securities legislation that will permit Falconbridge to satisfy its continuous disclosure obligations as a reporting issuer by filing Xstrata's U.K. disclosure documents, including Xstrata's annual and interim financial statements, in place of disclosure documents relating solely to Falconbridge. As a result of this relief, in lieu of the quarterly interim financial statements that Falconbridge has historically filed, Falconbridge will file on SEDAR Xstrata's annual and half-yearly financial statements, prepared in accordance with International Financial Reporting Standards. As a result, Falconbridge will not be filing interim financial statements for the nine months ended September 30, 2006. The terms of the exemption require that Falconbridge file on SEDAR copies of all documents filed by Xstrata pursuant to the continuous disclosure requirements of the United Kingdom. Falconbridge will file Xstrata's financial statements on SEDAR at the same time they are filed in the United Kingdom. The continuous disclosure requirements of the United Kingdom require that Xstrata file its financial statements as soon as possible after they have been approved, with annual financial statements filed no later than six months after its Dec. 31 year end and half yearly financial statements filed no later than 90 days after the end of the six month period ending June 30. Xstrata generally publishes its annual financial statements in March and its half yearly financial statements in August. The availability of the exemption is subject to Falconbridge and Xstrata satisfying a number of other conditions that are set forth in the decision of the securities commissions. A copy of the decision is available on the website of the Ontario Securities Commission at http://www.osc.gov.on.ca/ About Xstrata Xstrata plc -- http://www.xstrata.com/-- is a major global diversified mining group, listed on the London and Swiss stock exchanges. The Group is and has approximately 24,000 employees worldwide, including contractors. Xstrata does business in six major international commodities markets: copper, coking coal, thermal coal, ferrochrome, vanadium and zinc, with additional exposures to gold, lead and silver. The Group's operations and projects span four continents and nine countries: Australia, South Africa, Spain, Germany, Argentina, Peru, Colombia, the United Kingdom and Canada. Xstrata holds a 97% stake in Falconbridge. About Falconbridge Headquartered in Toronto, Ontario, Falconbridge Limited (TSX:FAL.LV)(NYSE: FAL) -- http://www.falconbridge.com/-- is a leading copper and nickel company with investments in fully integrated zinc and aluminum assets. Its primary focus is the identification and development of world-class copper and nickel orebodies. It employs 14,500 people at its operations and offices in 18 countries, including Malaysia. The Company owns nickel mines in Canada and the Dominican Republic and operates a refinery and sulfuric acid plant in Norway. It is also a major producer of copper (38% of sales) through its Kidd mine in Canada and its stake in Chile's Collahuasi mine and Lomas Bayas mine. Its other products include cobalt, platinum group metals, and zinc. * * * Falconbridge's CDN$150 million 5% convertible and callable bonds due April 30, 2007, carry Standard & Poor's BB+ rating. =========== P O L A N D =========== LUKOIL OAO: Buys ConocoPhillips' Gas Stations in Europe ------------------------------------------------------- OAO Lukoil has acquired a chain of gasoline stations in Europe from ConocoPhillips, RIA Novosti reports citing Lukoil Vice President Leonid Fedun as saying. The gasoline stations are located in: -- Czech Republic, -- Slovakia, -- Belgium, -- Poland, -- Hungary and -- Finland. Mr. Fedun said the acquisitions would boost Lukoil's annual retail sales jump by 11.4 million metric tons. Lukoil's Vice President, however, refused to divulge the value of the deal. Mr. Fedun said that Lukoil would soon disclose the acquisition of an oil refinery in Eastern Europe, RIA Novosti says. He added that the company considers acquiring a stake in Unipetrol, a Czech petrochemical consortium. ConocoPhillips holds a 19% stake in Lukoil. 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. MAXDATA AG: Synergy Woes Cue Board to Drop Yakumo GmbH Takeover --------------------------------------------------------------- Maxdata AG will not acquire Yakumo GmbH and the brand of the same name, the company's Management Board resolved on Dec. 11, 2006. An extensive review revealed that the acquisition of Yakumo would not lead to the expected synergy effects. In addition, a takeover at the current point in time would result in the tying up of extensive resources. On Oct. 10, 2006, Maxdata announced the planned takeover of Yakumo in an ad-hoc notification, which has been issued in the same manner. Yakumo GmbH -- headquartered in Braunschweig, Germany, and owned by Adam Riesig GmbH -- markets and sells PCs, laptops, TFT monitors and consumer electronic products. Maxdata had initiated a comprehensive restructuring program in March 2006. This foresees, among other things, personnel cuts, which have already been implemented and the further optimisation of sales and purchasing structures. This should result in savings totaling EUR30 million a year -- the full effect of the restructuring program is expected to make itself felt from 2007. About Maxdata AG Headquartered in Marl, Germany, Maxdata AG -- http://www.maxdata.com/-- manufactures of computer hardware and provides built-to-order PC, notebook and server solutions. The Company offers servers, personal computers, laptops and notebooks under the Maxdata brand name, as well as a range of monitors and displays under the Belinea brand. The Company operates in Austria, Switzerland, France, Spain, Poland, Italy, the Netherlands and the United Kingdom. Maxdata AG has been posting net losses since 2003: EUR20.7 million in 2003, EUR1.5 million in 2004 and EUR39.6 million in 2005. For the nine months ended Sept. 30, 2006, Maxdata posted EUR36.4 million in net losses. The company is currently under restructuring, with effects expected to show in 2007. =============== P O R T U G A L =============== COMPANHIA SIDERURGICA: Hikes Corus Offer to US$9.6 Billion ---------------------------------------------------------- Brazillian steelmaker Companhia Siderurgica Nacional increased its purchase offer for Corus Group Plc to US$9.6 billion or 515 pence a share, topping Tata Steel Ltd.'s 500 pence per share offer. Companhia Siderurgica's move pushed Corus's stock to rise as high as 529.5 pence, signaling that investors expect another bid, Bloomberg News says. Regardless of who wins the bidding war, a merger would Corus would result to the fifth largest steel firm in the world. Companhia Siderurgica and Corus have held merger talks in 2002 but competition issues and unfavorable conditions in the steel industry hindered negotiations. Companhia Siderurgica proposed purchase of Corus will be funded through a BP4.35 billion of debt underwritten by Barclays Plc, ING Groep NV and Goldman Sachs Group Inc., Bloomberg says, citing Chief Financial Officer Otavio Lazcano. Meanwhile, Companhia Siderurgica promised to pay BP138 million to fund the deficit in the Corus Engineering Steels Pension Scheme, Bloomberg says. Also, the steelmaker will up the contribution rate on the British Steel Pension Scheme to 12% from 10% until March 31, 2009. The company's success in acquiring Corus hinges on the unions support, according to published reports. Shares of Corus rose Monday to 27.25 pence, or 5.5%, to 527.25 pence in London. Companhia Siderurgica's stock dropped 1% to BRL63.9 in Sao Paulo. Tata shares are the worst performers on India's benchmark index in the past three months, according to Bloomberg. The stock slumped 29 rupees, or 6%, to 453.4 rupees in Mumbai on Monday, the sharpest decline since June 26. About Tata Steel Established in 1907, Tata Steel is Asia's first and India's largest private sector steel company. Tata Steel is among the lowest cost producers of steel in the world and one of the few select steel companies in the world that is EVA+ (Economic Value Added). About Corus Group Corus Group plc, fka British Steel, was formed when the UK privatized its major steelworks in 1988. It then changed its name to Corus Group after acquiring most of Dutch rival Koninklijke Hoogovens. Corus makes coated and uncoated strip products, sections and plates, wire rod, engineering steels, and semi-finished carbon steel products. It also manufactures primary aluminum products. Customers include companies in the automotive, construction, engineering, and household-product manufacturing industries. Six years ago, the group suffered 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. About Companhia Siderurgica Nacional Headquartered Sao Paolo, Brazil, Companhia Siderurgica Nacional S.A. -- 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. * * * Standard & Poor's Ratings Services affirmed on Aug. 4, 2006, its 'BB' long-term corporate credit rating on Brazil-based steel maker Companhia Siderurgica Nacional aka CSN after the announcement of its association with U.S.-based steel maker Wheeling-Pittsburgh Corp. in the U.S. The outlook is stable. Fitch Ratings viewed the proposed merger of Companhia Siderurgica Nacional's or CSN North American operations with those of Wheeling-Pittsburgh Corporation or WPSC to be neutral to CSN's credit quality. Fitch's ratings of CSN include: -- Foreign currency Issuer Default Rating: 'BB+'; -- Local currency IDR: 'BBB-'; -- National scale rating: 'AA (bra)'; -- Senior unsecured notes 'BB+'; and -- Brazilian Real denominated debentures: 'AA (bra)'. COMPANHIA SIDERURGICA: Parties Agree on GBP4.9-Bln Corus Deal ------------------------------------------------------------- The boards of Companhia Siderurgica Nacional and Corus Group plc have agreed on the terms of a recommended pre-conditional cash acquisition by CSN Acquisitions of the entire issued and to be issued share capital of Corus at a price of 515 pence for each Corus Share, valuing Corus at around GBP4.9 billion. CSN believes there is compelling strategic and industrial logic for a combination with Corus as it would: -- create a top five global steel group with around 24 million tons of annual steel production and, by 2010, around 50 million tons of annual iron ore production; -- enable Corus to secure supply of high quality, low cost iron ore from CSN's Casa de Pedra mine, one of the largest captive mines in the world, leading to incremental annual cash-flow in Corus of around US$450 million on a pre-tax basis by 2009; -- in time, provide Corus with access to increasing quantities of low cost semi-finished steel for further processing through its downstream facilities in Europe; -- allow Corus greater access to fast growing markets as well as providing opportunities for cross-selling the enlarged portfolio of products; -- create the potential to capture significant annual synergy benefits of around US$300 million on a pre-tax basis by 2009, through initiatives including global procurement savings, optimization of product flows, integrated commercial policy and the sharing of best practices; and -- give CSN the ability to leverage Corus' exceptional research and development and engineering expertise across the combined group. The price of 515 pence per Corus Share represents: -- a premium of around 42.9% to the average closing mid- market price of 360.5 pence per Corus share for the twelve months to and including Oct. 4, 2006, being the last business day before the announcement by Tata Steel Ltd. that it was evaluating various opportunities, including Corus; -- a premium of around 26.4% to the closing mid-market price of 407.5 pence per Corus Share on Oct. 4, 2006; and -- a premium of around 3% to the revised offer price made by Tata at 500 pence per Corus share. CSN Acquisitions has held constructive and satisfactory discussions with the trustees of Corus' two main U.K. pension schemes and has agreed with committees of the relevant boards of pension trustees an arrangement, which will be recommended to the full boards of the pensions trustees, whereby CSN Acquisitions will: -- fund upfront the IAS 19 deficit on the Corus Engineering Steels Pension Scheme by paying GBP138 million into the scheme; and -- increase the contribution rate on the British Steel Pension Scheme from 10% to 12% until March 31, 2009. The acquisition is subject to the satisfaction or waiver of the Pre-Condition that either: -- Corus Shareholders reject the Tata Scheme; or -- the Tata Scheme is otherwise withdrawn by Corus for lapses. Subject to the satisfaction or waiver of the Pre-Condition, the acquisition will be made by CSN Acquisitions, an indirect wholly owned subsidiary of CSN, and is proposed to be implemented by way of a scheme of arrangement under section 425 of the Companies Act. The scheme will be put to Corus shareholders at the Court Meeting and at the Extraordinary General Meeting, which will be convened in due course. The scheme document will be posted to Corus Shareholders within 28 days of satisfaction or waiver of the Pre-Condition. In addition, a further document setting out further details of the Acquisition and information relating to the CSN Group will be sent to Corus Shareholders as soon as possible. The Loan Note Alternative will be made available to Corus Shareholders. As at the date of this announcement, the CSN Group owns 34,072,613 Corus Shares, representing around 3.8% of Corus' existing issued share capital. The Corus Directors, who have been so advised by Credit Suisse, JPMorgan Cazenove and HSBC, consider the terms of the acquisition to be fair and reasonable, so far as Corus Shareholders are concerned. Accordingly, the Corus Directors intend unanimously to recommend that Corus Shareholders vote in favor of the scheme at the Court Meeting and Extraordinary General Meeting to be convened in relation to the acquisition. In providing their advice, Credit Suisse, JPMorgan Cazenove and HSBC have taken into account the commercial assessments of the Corus Directors. "The strategic impetus for this combination is growth -- growth in Brazil, in Europe and for our combined workforces," Benjamin Steinbruch, Chairman and Chief Executive Officer of CSN, said. Our goal is to unlock the value of our iron ore assets through Corus, transforming them into cost effective, high quality steel products using Corus' advanced engineering capabilities and its excellent European distribution platform. This is a winning combination for all stakeholders." "As I informed shareholders in my letter of Nov. 27, 2006, once the Corus Directors received an approach from CSN, we provided information and made our senior management available to enable CSN to meet its pre-conditions and complete its due diligence. This offer is both higher than the initial proposal by CSN as well as the revised Tata offer of 500 pence per share. It is also consistent with our strategic objective of securing access to raw materials, low cost production and growth markets. The combination of the two businesses will create a strong platform from which to compete and grow in an increasingly global market," Jim Leng, Chairman of Corus, said. Lazard is acting as lead financial adviser, Goldmans Sachs International as financial adviser and joint broker, and UBS as joint broker to CSN and CSN Acquisitions in relation to the acquisition. Credit Suisse is acting as lead financial adviser, JPMorgan Cazenove as joint financial adviser and corporate broker and HSBC as independent financial adviser for the purposes of Rule 3 of the Takeover Code to Corus. 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. Six years ago, the group suffered 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. About Companhia Siderurgica Nacional Headquartered Sao Paolo, Brazil, Companhia Siderurgica Nacional S.A. -- 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. * * * Standard & Poor's Ratings Services affirmed on Aug. 4, 2006, its 'BB' long-term corporate credit rating on Brazil-based steel maker Companhia Siderurgica Nacional aka CSN after the announcement of its association with U.S.-based steel maker Wheeling-Pittsburgh Corp. in the U.S. The outlook is stable. Fitch Ratings viewed the proposed merger of Companhia Siderurgica Nacional's or CSN North American operations with those of Wheeling-Pittsburgh Corporation or WPSC to be neutral to CSN's credit quality. Fitch's ratings of CSN include: -- Foreign currency Issuer Default Rating: 'BB+'; -- Local currency IDR: 'BBB-'; -- National scale rating: 'AA (bra)'; -- Senior unsecured notes 'BB+'; and -- Brazilian Real denominated debentures: 'AA (bra)'. COMPANHIA SIDERURGICA: Cash Bid Increase Cues S&P's Watch Neg. ------------------------------------------------------------- Standard & Poor's Ratings Services said its 'BB' long-term corporate credit ratings on Brazil-based steel maker Companhia Siderurgica Nacional remain on CreditWatch with negative implications (where they were placed on Nov. 17, 2006) following the announcement of an increase in its conditional all-cash bid for Corus Group PLC to 515 pence per share, up from its initial offer of 475 per share. CSN's counterbid follows Tata Steel Ltd.'s proposal to raise its offer for Corus to 500 pence per share, which was announced on Dec. 10, 2006. S&P understand that, apart from the change in the proposed acquisition price, the characteristics of the transaction remain unchanged, such as the conditional aspects of the proposal, including completion of confirmatory due diligence satisfactory to CSN, finalization of financing arrangements, and a recommendation from Corus's board. S&P also understand the financial package negotiated by CSN with its partner banks to fund the acquisition already incorporates a potential change in the final acquisition price, and that it still includes debt instruments primarily nonrecourse to the company's assets in Brazil. S&P emphasize the concerns about the impact of the proposed transaction on CSN's financial profile, as CSN has indicated its intention to use part of its cash holdings (which totaled US$1.4 billion as of Sept. 30, 2006) for the transaction and that it does not envision an equity issuance to finance the acquisition. While it is unclear whether Tata Steel would revise its offer and, in that case, whether CSN would consider another counterbid, the eventual acquisition price and cash outflow from CSN in its offer for Corus could have an adverse impact on its consolidated financial profile. The resolution of the CreditWatch continues to be subject to the developments of the transaction, including progress of offers made by both CSN and Tata, and further clarity on the resulting financial profile for the consolidated new entity. =========== R U S S I A =========== BANK ROSSIYA: Fitch Rates Issuer Default at B- ---------------------------------------------- Fitch Ratings assigned Russia-based Bank Rossiya ratings of Issuer Default B-, Short-term B, Support 5, Individual D/E, and National Long-term BB-. A Stable Outlook has been assigned to both Issuer Default and National Long-term ratings. The ratings reflect BR's rapid loan portfolio growth, which has the potential for increased loan losses, high concentrations in both assets and liabilities, and moderate capitalization, undermined by significant equity investments made through the bank's subsidiary, and underdeveloped corporate governance. The ratings also acknowledge the bank's reasonable earnings generation to date, its growing customer base -- the sustainability of which, however, is of concern -- its currently low loan impairment and limited market risk. In late 2004/early 2005, BR acquired a 51% stake in Sogaz, one of the country's largest insurance groups. Although Fitch Ratings acknowledge the latter's strong franchise and sound capital generation, the support of Sogaz's credit profile for the bank's ratings is at present limited due to lack of operational integration between group entities and the leveraged acquisition structure, the latter likely to constrain the up- streaming of dividends to the bank in the medium-term. However, potential support for BR could still be forthcoming from Sogaz in the form of liquidity injections. The successful integration of Sogaz and the repayment of debt used to finance the acquisition, as well as the bank's further business expansion, accompanied by lower concentration trends on both sides of the balance sheet, improved risk management, better corporate governance and stronger capitalization may cause upward pressure on the ratings. Downward pressure might arise mainly from a deterioration of asset quality following the above noted rapid loan growth, a decrease of capitalization levels or potential liquidity shortfalls, the latter as a result, for example, of key customer losses. Further acquisitions by BR or its subsidiaries -- particularly should they be debt financed and therefore increase leverage -- could also have a negative impact. BR is a medium-sized corporate-focused bank with operations in northwestern Russia and the Moscow region. The bank has interests in a number of non-banking entities, including the above noted stake in Sogaz. BR is majority owned by local businessmen, of whom Mr. Yuri Kovalchuk has the largest stake at 30%. BUYNAKSKIY ASPHALT-CONCRETE: Court Hearing Slated for Dec. 20 ------------------------------------------------------------- The Arbitration Court of Dagestan Republic will convene at 4:00 p.m. on Dec. 20 to hear the bankruptcy supervision procedure on Municipal Unitary Enterprise Buynakskiy Asphalt- Concrete Factory (TIN 0543014038, OGRN 1020502055078). The case is docketed under Case No. A15-1144/2006. The Temporary Insolvency Manager is: M. Datsiev Apartment 34 I. Kazaka Str. 5a Makhachkala 367003 Dagestan Republic Russia The Debtor can be reached at: Municipal Unitary Enterprise Buynakskiy Asphalt- Concrete Factory Stepnoj Buynaksk 368220 Dagestan Republic Russia CAUCASUS TRANS-SERVICE: Names A. Dzamykhov as Insolvency Manager ---------------------------------------------------------------- The Arbitration Court of Krasnodar Region appointed Mr. A. Dzamykhov as Insolvency Manager for CJSC Company Caucasus Trans- Service. He can be reached at: A. Dzamykhov Internatsionalnaya Str. 48 Cherkessk Karachaevo Cherkessiya Republic Russia The Court commenced bankruptcy proceedings against the company after finding it insolvent. The case is docketed under Case No. A-32-15364/2006-27/986-B. The Arbitration Court of Krasnodar Region is located at: Krasnaya Str. 6 Krasnodar Region Russia The Debtor can be reached at: CJSC Company Caucasus Trans-Service Privokzlnaya Str. 41 Belaya Glina Beloglinskiy Region Krasnodar Region Russia COMPAGNIE GENERALE: Shareholders' Meeting Set for Jan. 9, 2007 -------------------------------------------------------------- Compagnie Generale de Geophysique will hold a Combined Ordinary and Extraordinary General Meeting at 3:00 p.m. on Jan. 9, 2007, at: Palais Brongniart Petit Auditorium 75002 Paris France This meeting will resolve in particular the issue of shares to be made in favor of VERITAS DGC Inc. shareholders. In order to participate personally or to be represented at the Meeting: -- holders of registered shares must have the shares registered in their name at least five days prior to the date of the Meeting; -- holders of bearer shares should, at least five days prior to the date of the Meeting, provide evidence that the shares are being held in a blocked account, in the form of a certificate issued by the financial intermediary holding the shares on account. Such certificate should be sent to: BNP Paribas Securities Services GIS Emetteurs Assemblees Immeuble Tolbiac 75450 Paris Cedex 09 France Postal voting or proxy forms and admission cards may be obtained on request from BNP Paribas Securities Services. Shareholders wishing to cast a postal vote may obtain the appropriate form by writing to: Compagnie Generale de Geophysique Corporate Legal Department 1 rue Leon Migaux 91341 Massy Cedex France -- or -- BNP Paribas Securities Services GIS Emetteurs Assemblees Immeuble Tolbiac 75450 Paris Cedex 09 France by registered letter with acknowledgment of receipt, at least six days prior to the date of the Meeting. In the case of holders of bearer shares, postal votes will only be accepted subject to prior receipt of the certificate evidencing the fact that the shares are being held in a blocked account. About Compagnie Generale de Geophysique Headquartered in Massy, France, Compagnie Generale de Geophysique -- http://www.cgg.com/-- provides a wide range of seismic data acquisition, processing and reservoir services to clients in the oil and gas exploration and production business. It is also a global manufacturer of geophysical equipment through its subsidiary Sercel. The company also operates in Angola, Australia, Austria, Brazil, Canada, China, Egypt, United Kingdom, India, Indonesia, Kazakhstan, Libya, Malaysia, Mexico, Morocco, Netherlands, Nigeria, Norway, Oman, Pakistan, Russia, Saudi Arabia, Singapore, South Africa, Switzerland, Thailand, Tunisia, United Arab Emirates, U.S.A., Venezuela and Yemen. * * * As reported in the TCR-Europe on Dec. 11, Moody's Investors Services assigned (P)Ba2 ratings with stable outlook to Compagnie Generale de Geophysique's proposed US$1.1-billion credit facilities comprising of a US$800-million Term Loan due 2014 and two Revolving Credit Facilities of US$100 million and US$200 million, respectively, due 2012. The final confirmation of the ratings is subject to the signing of the credit agreement. Standard & Poor's Ratings Services has placed its 'BB-' long- term corporate credit and senior unsecured debt ratings on France-based Compagnie Generale de Geophysique on CreditWatch with negative implications. The placement follows the announcement by CGG of a friendly US$3.1 billion takeover bid for U.S. competitor Veritas DGC Inc. In addition, Moody's Investors Services assigned a rating of (P)Ba3, stable outlook, to Compagnie Generale de Geophysique's proposed new Senior Notes of US$165 million due May 2015. The final confirmation of the rating is subject to signing of the offering circular. COMPAGNIE GENERALE: S&P Rates Sr. Secured Facilities at BB- ----------------------------------------------------------- Standard & Poor's Ratings Services assigned its 'BB-' long-term debt rating and '2' recovery rating to France-based Compagnie Generale de Geophysique's proposed US$1.1-billion senior secured facilities, of which US$900 million is issued by subsidiary Volnay Acquisition Co. I. The 'BB-' rating is the same as the corporate credit rating on the group. The '2' recovery rating indicates our expectation of substantial (80%-100%) recovery of principal for senior secured lenders in the event of a payment default. Of the new debt, the US$800-million Term Loan B will be used to refinance CGG's existing bridge facility, and US$300 million will fund working capital needs. Furthermore, Standard & Poor's said that its 'BB-' long-term corporate credit and all debt ratings on CGG remain on CreditWatch with negative implications, where they were placed on Sept. 5, 2006, following CGG's US$3.2 billion takeover bid for Veritas DGC Inc. Since the CreditWatch placement, CGG has obtained several regulatory approvals, and the transaction is likely to close early January 2007, once approval for the merger from the shareholders of both companies has been obtained. "We have reviewed the group's medium-term and de-leveraging plans, and expect to affirm the corporate credit rating on CGG at 'BB-' and to equalize the rating on Veritas with that on CGG once the transaction closes," said Standard & Poor's credit analyst Karl Nietvelt. "The outlook on the combined group is likely to be positive." In addition, Standard & Poor's expects to downgrade CGG's unsecured high-yield bonds outstanding by one notch to 'B+', one notch below the corporate credit rating, reflecting their deep subordination to the proposed US$1.1 billion secured facilities. The notching down by just one notch takes into account an expected fairly rapid decrease of the secured debt and the latter's fairly weak security package. FREGAT CJSC: Bankruptcy Hearing Slated for March 13 --------------------------------------------------- The Arbitration Court of St. Petersburg and Leningrad Region will convene at 2:35 p.m. on March 13, 2007, to hear the bankruptcy supervision procedure on CJSC Trading Company Fregat. The case is docketed under Case No. A56-31813/2006. The Temporary Insolvency Manager is: M. Brylev Post User Box 119 191123 St. Petersburg Region 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: CJSC Trading Company Fregat Building 1 Shlisselburgskiy Pr. 17 193177 St. Petersburg Region Russia HARVEST LLC: Court Names K. Dovbenko as Insolvency Manager ---------------------------------------------------------- The Arbitration Court of Krasnodar Region appointed Mr. K. Dovbenko as Insolvency Manager for LLC Harvest. He can be reached at: K. Dovbenko Osipenko Str. 10 355004 Stavropol Region Russia The Court commenced bankruptcy proceedings against the company after finding it insolvent. The case is docketed under Case No. A-32-45729/2005-37/571-B. The Arbitration Court of Krasnodar Region is located at: Krasnaya Str. 6 Krasnodar Region Russia The Debtor can be reached at: LLC Harvest Kalininskaya St. Krasnodar Region Russia KOLOMENSKIY BUILDING: Court Names A. Lantsov to Manage Assets ------------------------------------------------------------- The Arbitration Court of Moscow Region appointed Mr. A. Lantsov as Insolvency Manager for CJSC Kolomenskiy Building Combine. He can be reached at: A. Lantsov Post User Box 58 121614 Moscow Region Russia The Court commenced bankruptcy proceedings against the company after finding it insolvent. The case is docketed under Case No. A41-K2-15895/06. The Arbitration Court of Moscow is located at: Novaya Basmannaya Str. 10 Moscow Region Russia The Debtor can be reached at: CJSC Kolomenskiy Building Combine Derskiy Proezd 6 Kolomenskoye 140400 Moscow Region Russia KURKINSKIY BAKERY: Bankruptcy Hearing Slated for March 29 --------------------------------------------------------- The Arbitration Court of Tula Region will convene at 11:00 a.m. on March 29, 2007, to hear the bankruptcy supervision procedure on CJSC Kurkinskiy Bakery. The case is docketed under Case No. A68-594/B-06. The Temporary Insolvency Manager is: T. Shakhmina Post User Box 1164 Rostov-na-Donu 344091 Rostov Region Russia The Arbitration Court of Tula Region is located at: Hall 35 Sovetskaya Str. 112 Tula Region Russia The Debtor can be reached at: CJSC Kurkinskiy Bakery Lenina Str. 5a Kurkino Kurkinskiy Region 301940 Tula Region Russia MELIORATION OJSC: Court Names A. Sabirov as Insolvency Manager -------------------------------------------------------------- The Arbitration Court of Tatarstan Republic appointed Mr. A. Sabirov as Insolvency Manager for OJSC Muslyumovskoye Enterprise Melioration. He can be reached at: A. Sabirov Post User Box 236 Kazan 420012 Tatarstan Republic Russia The Court commenced bankruptcy proceedings against the company after finding it insolvent. The case is docketed under Case No. A65-12866/2006-SG4-21. The Arbitration Court of Tatarstan Republic is located at: Room 12 Floor 2 Entrance 2 Building 1 Kremlin Kazan Tatarstan Republic Russia The Debtor can be reached at: OJSC Muslyumovskoye Enterprise Melioration Urozhaynaya Str. 1 Muslimovo Muslimovskiy Region 423970 Tatarstan Republic Russia NORTH-MONIKA LLC: Bankruptcy Hearing Slated for Dec. 20 ------------------------------------------------------- The Arbitration Court of St. Petersburg and Leningrad Region Will convene on Dec. 20 to hear the bankruptcy supervision procedure on LLC North-Monika (TIN 7825373285). The case is docketed under Case No. A56-28540/2006. The Temporary Insolvency Manager is: G. Grishenkov Apartment 9 Sveaborgskaya Str. 15 196105 St. Petersburg Region 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: LLC North-Monika Premise 16N Ligovskiy Pr. 29 St. Petersburg Region Russia LUKOIL OAO: Buys ConocoPhillips' Gas Stations in Europe ------------------------------------------------------- OAO Lukoil has acquired a chain of gasoline stations in Europe from ConocoPhillips, RIA Novosti reports citing Lukoil Vice President Leonid Fedun as saying. The gasoline stations are located in: -- Czech Republic, -- Slovakia, -- Belgium, -- Poland, -- Hungary and -- Finland. Mr. Fedun said the acquisitions would boost Lukoil's annual retail sales jump by 11.4 million metric tons. Lukoil's Vice President, however, refused to divulge the value of the deal. Mr. Fedun said that Lukoil would soon disclose the acquisition of an oil refinery in Eastern Europe, RIA Novosti says. He added that the company considers acquiring a stake in Unipetrol, a Czech petrochemical consortium. ConocoPhillips holds a 19% stake in Lukoil. 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. REINFORCED CONCRETE: Names S. Chernobrovenko to Manage Assets ------------------------------------------------------------- The Arbitration Court of Bryansk Region appointed Mr. S. Chernobrovenko as Insolvency Manager for LLC Factory of Reinforced Concrete Constructions (TIN 3255045170). He can be reached at: S. Chernobrovenko Office 14 Zelenaya Str. 2v Dubovoye Belgorod Region Russia The Court commenced bankruptcy proceedings against the company after finding it insolvent. The case is docketed under Case No. A09-2944/06-26. The Arbitration Court of Bryansk Region is located at: Room 602 Trudovoy Per. 5 Bryansk Region Russia The Debtor can be reached at: LLC Factory of Reinforced Concrete Constructions Bryansk Region Russia RUSSIAN FOOD: Court Names A. Brekhov as Insolvency Manager ---------------------------------------------------------- The Arbitration Court of St. Petersburg and Leningrad Region appointed Mr. A. Brekhov as Insolvency Manager for OJSC Russian Food. He can be reached at: A. Brekhov Post User Box 84 Kazanskaya Str. 9 191186 St. Petersburg Region Russia The Court commenced bankruptcy proceedings against the company after finding it insolvent. The case is docketed under Case No. A56-11399/2006. 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: A. Brekhov Post User Box 84 Kazanskaya Str. 9 191186 St. Petersburg Region Russia SLYUDYANSKOYE CJSC: Court Names A. Generalov to Manage Assets ------------------------------------------------------------- The Arbitration Court of Altay Region appointed Mr. A. Generalov as Insolvency Manager for CJSC Slyudyanskoye. He can be reached at: A. Generalov Post User Box 3923 Barnaul 656015 Altay Region Russia The Court commenced bankruptcy proceedings against the company after finding it insolvent. The case is docketed under Case No. A03-12067/06-B. The Debtor can be reached at: CJSC Slyudyanskoye Slyudyanka Ust'-Kalmanskiy Region Altay Region Russia SPECIAL PAPERS: Bankruptcy Hearing Slated for March 13 ------------------------------------------------------ The Arbitration Court of St. Petersburg and Leningrad Region commenced bankruptcy supervision procedure on Cjsc Factory of Special Papers and Tapes. The case is docketed under Case No. A56-32196/2006. The Temporary Insolvency Manager is: A. Pankov Post User Box 7 198334 St. Petersburg Region 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: CJSC Factory of Special Papers and Tapes Malookhtinskiy Pr. 8 195112 St. Petersburg Region Russia SOSNOVO-BORSKIY ALUMINIUM: Names I. Babenko to Manage Assets ------------------------------------------------------------ The Arbitration Court of St. Petersburg and Leningrad Region appointed Mr. I. Babenko as Insolvency Manager for CJSC Sosnovo- Borskiy Aluminium Factory. He can be reached at: I. Babenko Post User Box 6 194214 St. Petersburg Region Russia The Court commenced bankruptcy proceedings against the company after finding it insolvent. The case is docketed under Case No. A56-24869/06. 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: CJSC Sosnovo-Borskiy Aluminium Factory Post User Box 28/6 188540 Leningrad Region Russia TNK-BP HOLDING: Mulls Developing Siberian Gas Field with Gazprom ---------------------------------------------------------------- TNK-BP Holding OAO and OAO Gazprom are nearing a deal to jointly develop Russia's East Siberian natural gas field, Bloomberg News says. Alexei Miller, Gazprom's Chief Executive Officer, and Viktor Vekselberg, TNK-BP's director and shareholder, discussed twice last week over possible gas project cooperation in East Siberia, particularly TNK-BP's Kovytka field, TNK-BP spokeswoman Maria Dracheva said. The companies are mulling to build a gas and chemicals complex at the area, Gazprom said in a statement. TNK-BP, through its Rusia Petroleum unit, holds the license to the US$18-billion Kovytka field. Chinese Demand TNK-BP has petitioned to construct a pipeline and export gas directly from the Kovykta field to China or Korea, but met resistance from Gazprom, which controls the adjacent South Kovytka gas field. With the pressing demand from Chinese gas markets, Gazprom wants to develop and fully tap the Kovytka field by 2011. Nadia Kazakova, an analyst at MDM Bank, said a deal between Gazprom and TNK-BP needs to happen soon due to Chinese export obligations, adding that the Kovytka field needs around three- four years to reach output capacity. The field holds two trillion cubic meters of gas, enough to power Asia for about six years, Bloomberg News relays. Ms. Kazakova suggested that the companies have reached a casual agreement and are now discussing the investment, market strategy and stakes in the planned joint venture. Ms. Kazakova told Bloomberg that she expects Gazprom to push for a controlling stake. According to Bloomberg, production at Kovytka field currently stands at a minimal level, with gas sold exclusively in the domestic market. About Gazprom Headquartered in Moscow, Russia, OAO Gazprom (RTS: GAZP; MICEX: GAZP; LSE: OGZD) -- http://www.gazprom.ru/eng-- produces 94% of the country's natural gas, controls 25% of the world's reserves, and is also the world's largest gas producer. It focuses on gas exploration, processing, transport, and marketing. About TNK-BP Headquartered Moscow, Russia, TNK-BP Holding OAO -- http://www.tnk-bp.com/-- operates six refineries in Russia and Ukraine, and markets products through 2,100 retail service stations operating under TNK and BP brand. TNK owns 56.5% of TNK-BP Holding, and Onako and Sidanco hold 6.8% and 30.9%, respectively. The other 5.8% belongs to TNK-BP shareholders. TNK-BP holds a strategic position as the second largest liquids producer in the Russian intergraded operating environment, accounting for approximately 18% of Russia's total crude oil production. * * * Standard & Poor's assigned BB+/Stable foreign currency local currency ratings to TNK-BP on June 30, 2006. Moody's assigned Ba2/Positive foreign currency rating to the company on Jan. 24, 2006. Fitch assigned BB+/Positive foreign currency rating to TNK-BP on Feb. 13, 2006, and BB+/Positive local currency rating on Aug. 24, 2005. YAKHROMSKIY TEXTILE: Court Names A. Zhukov as Insolvency Manager ---------------------------------------------------------------- The Arbitration Court of Moscow Region appointed Mr. A. Zhukov as Insolvency Manager for CJSC Yakhromskiy Textile. He can be reached at: A. Zhukov Post User Box 12 109443 Moscow Region Russia Tel: 749-04-16 The Court commenced bankruptcy proceedings against the company after finding it insolvent. The case is docketed under Case No. A41-K2-18997/02. The Arbitration Court of Moscow is located at: Novaya Basmannaya Str. 10 Moscow Region Russia The Debtor can be reached at: A. Zhukov Post User Box 12 109443 Moscow Region Russia Tel: 749-04-16 ========= S P A I N ========= IM CAJA: Moody's Junks EUR10.8-Million Series E Notes ----------------------------------------------------- Moody's Investors Service assigned these definitive ratings to the debt to be issued by Im Caja Laboral 1 Fondo De Titulizacion De Activos: -- EUR856.3-million Series A notes: Aaa; -- EUR10.8-million Series B notes: Aa2; -- EUR14.9-million Series C notes: A1; -- EUR18-million Series D notes: Baa3; and -- EUR10.8-million Series E notes: Ca. This is the first transaction where Caja Laboral comes to market on its own. It had previously participated in TDA 9 FTH. The transaction consists of prime mortgage loans originated under Caja Laboral's regular business practices. The transaction will be structured with five different tranches. As in other deals, the SPV will use the proceeds from the issuance of the notes to purchase the mortgage loans portfolio. The total initial purchase price of the mortgage loans will be equal to the proceeds received from the issue of the rated Class A, Class B Class C, and class D notes. With the benefits from the Equity tranche the Fondo will finance the reserve fund. Strong features include: (1) good collateral in terms of LTV (CLTV = 63.23%); (2) a reserve fund to cover potential shortfalls in interest or principal; (3) a 12-month artificial write-off mechanism; (4) the fact that all the loans are secured by a first-lien mortgage guarantee and (5) a very strong seasoning. It is worth pointing out that the reserve fund will be fully funded with the benefits from the issuance of Series E Notes. Weaker features include: (1) geographical concentration in the regions of Vasque Country and Navarra; (2) pro rata amortisation of the notes; and (3) the negative impact of the interest deferral trigger on the subordinated series. These increased risks were reflected in the credit enhancement calculation. Moody's based its ratings primarily on: (i) an evaluation of the underlying portfolio of loans; ii) historical performance information; (iii) the swap agreement hedging the interest rate risk; (iv) the credit enhancement provided through the GIC account, the pool spread, the reserve fund and the subordination of the notes; and (v) the legal and structural integrity of the transaction. The ratings address the expected loss posed to investors by the legal final maturity (October 2049). In Moody's opinion, the structure allows for timely payment of interest and ultimate payment of principal on Series A, B, C and D at par on or before the rated legal final maturity date, and for ultimate payment of interest and principal at par on or before the rated legal final maturity date on Series E. INTERPUBLIC GROUP: Moody's Rates New US$250 Million Notes at Ba3 ---------------------------------------------------------------- Moody's Investors Service assigned a Ba3 senior unsecured debt rating to Interpublic Group of Companies Inc.'s new US$250 million floating rate notes due 2010. The Ba3 rating reflects a loss given default of about 66% given the company's all-bond debt capital structure. The rating outlook is negative. The new notes are being offered in exchange for IPG's US$250 million of floating rate notes due 2008. The Ba3 rating reflects the senior priority of the new notes, pari passu with all of IPG's other senior unsecured debt. The exchange period expires Dec. 21, 2006 with early participators receiving a payment of US$41.25 in cash per US$1,000 principal amount of old notes exchanged. The early participation payment ended Dec. 7, 2006, with all US$250 million exchanged. As compared to the exchanged floating rate notes, all terms are substantially identical except the new notes bear a lower interest rate at LIBOR plus 200 versus LIBOR plus 325. "The exchange is another significant step in reducing the 2008 maturities and provides IPG with added liquidity headroom to get its house in order, since it is still in the midst of a significant turnaround and internal control weakness remediation program", said Moody's Senior Vice President Neil Begley. Moody's also notes that the company is showing signs of turnaround traction despite the recent Draft/FCB surprising loss of Wal-Mart's marketing account, and stated that the company will need to maintain its momentum around its other recent notable client wins and the operating performance improvement of the third quarter in order to remove the negative outlook and be comfortable within the Ba3 rating category. The Interpublic Group of Companies, Inc., with headquarters in New York, is one of the world's largest advertising, marketing and corporate communications holding companies. The company has operations worldwide, including in Argentina, Australia, Chile, China, India, Indonesia, Ireland, Japan, Malaysia, Panama, Spain, Thailand, the United States and Venezuela, among others. INTERPUBLIC GROUP: S&P's B Rating Remains on Negative Watch ----------------------------------------------------------- Standard & Poor's Ratings Services reported that its ratings on The Interpublic Group of Cos. Inc., including the corporate credit rating of 'B', remain on CreditWatch with negative implications, where they were placed on March 22, 2006. The CreditWatch update came after the news that Wal-Mart Stores Inc. has decided to place under review its business with one of Interpublic's advertising agencies, although other Interpublic units may pitch for the business. The New York-based global advertising agency holding company had approximately US$2.2 billion in debt outstanding at Sept. 30, 2006. "Standard & Poor's remains concerned about the resolution of Interpublic's financial and reporting issues resulting from material weaknesses in internal controls, the negative trends in auto advertising, and the overall earnings outlook, especially in light our lower GDP growth forecast for 2007," said Standard & Poor's credit analyst Deborah Kinzer. In resolving our CreditWatch listing, Standard & Poor's will evaluate the sustainability of recent trends in the company's organic revenues, margin, and cash flow, and monitor its progress in resolving control deficiencies. Standard & Poor's will also address issues relating to client retention, including implications, if any, of the Wal-Mart review. =========== S W E D E N =========== DOLE FOOD: Posts US$56.1 Million Net Loss in Period Ended Oct. 7 ---------------------------------------------------------------- Dole Food Company Inc. reported a US$56.1 million net loss on US$1.8 billion of revenues for the third quarter ended Oct. 7, 2006, compared with US$17.6 million of net income on US$1.6 billion of revenues for the third quarter ended Oct. 8, 2005. Revenues increased as a result of higher sales in the company's fresh fruit, fresh vegetables and packaged foods operating segments. The net loss is primarily due to an operating loss of US$22 million in the third quarter of 2006, compared to an operating income of US$26.7 million earned in the prior year, due to lower operating results from the company's fresh-cut flowers, packaged foods and fresh fruit operating segments, and the US$15.7 million increase in interest expenses as a result of additional borrowings and higher effective market-based borrowing rates on the company's debt facilities. At Oct. 7, 2006, the company's balance sheet showed US$4.5 billion in total assets, US$4.1 billion in total liabilities, US$23.6 million in minority interests, and US$378.3 million in total stockholders' equity. In the three quarters ended Oct. 7, 2006, cash flows provided by operating activities were US$85.3 million lower, primarily due to lower earnings and lower payables, due in part to the 2005 accrual of income taxes payable related to the provision on repatriated foreign earnings, as well as the timing of payments, partially offset by lower levels of expenditures for inventory, primarily in the packaged foods business due to lower inventory build, and higher accrued liabilities due in part to the timing of payments. Cash flows used in investing activities decreased US$41.9 million during 2006 primarily due to the first quarter 2005 payment of US$47.1 million to Saba shareholders in connection with the company's purchase of the remaining 40% minority interest. Cash flows provided by financing activities increased US$63.8 million due to higher current year debt borrowings of US$155.3 million, net of repayments and an equity contribution of US$28.4 million made by Dole Holding Company, LLC, the company's immediate parent during 2006. These items were offset by an increase in dividends of US$89.8 million paid to Dole Holding Company, LLC, during 2006 compared to 2005 as well as a distribution of additional paid-in capital to Dole Holding Company, LLC during the third quarter of 2006 of US$31 million. Fresh-cut Flowers Business Restructuring During the third quarter of 2006, the company restructured its fresh-cut flowers division to better focus on high-value products and flower varieties, and position the business unit for future growth. In connection with this restructuring, the fresh-cut flowers division has ceased its farming operations in Ecuador and will close two farms in Colombia and downsize other Colombian farms. During the third quarter ended Oct. 7, 2006, total restructuring and impairment costs incurred amounted to around US$5.9 million and US$22.3 million, respectively. The US$5.9 million of restructuring costs relate to approximately 3,500 employees who will be severed by the end of fiscal 2007. As of Oct. 7, 2006, no restructuring costs had been paid. Restructuring of Saba Business During the first quarter of 2006, the commercial relationship substantially ended between the company's wholly owned subsidiary, Saba Trading AB and Saba's largest customer. Saba imports and distributes fruit, vegetables and flowers in Scandinavia. Saba's financial results are included in the fresh fruit reporting segment. The company restructured certain lines of Saba's business and expects to incur approximately US$13 million of total related costs. Total restructuring and fixed asset write-offs incurred as of Oct. 7, 2006, amounted to approximately US$10.1 million, of which US$7.7 million is included in cost of products sold and US$2.4 million in selling, marketing, and general and administrative expenses in the condensed consolidated statements of operations. Total restructuring costs of US$9.6 million include US$7.9 million of employee severance costs, which impacted 245 employees as well as US$1.7 million of contractual lease obligations. Fixed asset write-offs of US$0.5 million were also incurred as a result of the restructuring. Write-off of Crop Related Costs In connection with the company's on-going farm optimization programs in Asia, approximately US$6.7 million of crop related costs were written-off during the third quarter of 2006. The US$6.7 million non-cash charge has been included in cost of products sold in the condensed consolidated statements of operations. Amendment and Restatement of Credit Facilities On April 12, 2006, the company completed an amendment and restatement of its senior secured credit facilities. The company obtained US$975 million of term loan facilities consisting of: * US$225 million related to "Term Loan B;" * US$750 million related to "Term Loan C;" and * US$100 million in a pre-funded letter of credit facility. The proceeds of the term loans were used to repay the outstanding term loans under the company's then existing senior secured credit facilities which consisted of Term Loan A, denominated in Japanese yen, and Term Loan B. In addition, the company paid a dividend of US$160 million during the second quarter of 2006 to its immediate parent, Dole Holding Company, LLC, which proceeds were used to repay its Second Lien Senior Credit Facility. The weighted average variable interest rate at Oct. 7, 2006, for the term loan facilities was 7.5%. In addition, the Company entered into a new asset based revolving credit facility of US$350 million. The facility is secured and is subject to a borrowing base consisting of up to 85% of eligible accounts receivable plus a predetermined percentage of eligible inventory, as defined in the credit facility. As of Oct. 7, 2006, the ABL revolver borrowing base was US$305.6 million and the amount outstanding under the ABL revolver was US$111.2 million. The weighted average variable interest rate at Oct. 7, 2006, for the ABL revolver was 7.7%. Interest Rate Swap Agreement During June 2006, the company entered into an interest rate swap agreement in order to hedge future changes in interest rates. This agreement effectively converted US$320 million of borrowings under Term Loan C, which is variable-rate debt, to a fixed rate basis through June 2011. The interest rate swap fixed the interest rate at 7.2%. The fair value of the interest rate swap was a liability of US$6.2 million at Oct. 7, 2006. Simultaneously, the company executed a cross currency swap to synthetically convert US$320 million of Term Loan C into Japanese yen denominated debt in order to effectively lower the U.S. dollar fixed interest rate of 7.2% to a Japanese yen interest rate of 3.6%. Since the cross currency swap does not qualify for hedge accounting, all gains and losses are recorded through other income (expense), net in the condensed consolidated statements of operations. The fair value of the cross currency swap was an asset of US$19.4 million at Oct. 7, 2006. Business Acquisition On Oct. 3, 2006, Jamaica Producers Group Ltd. accepted the company's offer to purchase from JPG the 65% of JP Fruit Distributors Ltd. that the company does not already own for US$41.9 million in cash. The transaction closed during the fourth quarter of 2006. JP Fruit Distributors Ltd. imports and sells fresh produce in the United Kingdom. The company is considering expressions of interest by potential partners with respect to the ownership and operation of Jamaica Producers Group Ltd. Full-text copies of the company's consolidated financial statements for the third quarter ended Sept. 30, 2006, are available for free at http://researcharchives.com/t/s?168a About Dole Food Co. Based in Westlake Village, California, Dole Food Company, Inc., -- http://www.dole.com/-- is the world's largest producer and marketer of high-quality fresh fruit, fresh vegetables, and fresh-cut flowers based on revenues. Dole markets a growing line of packaged and frozen foods and is a produce industry leader in nutrition education and research. The fresh vegetables segment contains operating segments that produce and market commodity vegetables and ready-to-eat packaged vegetables to wholesale, retail and institutional customers primarily in North America, Europe and Asia. The packaged foods segment contains several operating segments that produce and market packaged foods, including fruit, juices and snack foods. Dole's fresh-cut flowers segment sources, imports and markets fresh-cut flowers, grown mainly in Colombia and Ecuador, primarily to wholesale florists and supermarkets in the United States. In Europe, the company maintains operations in Sweden, France, Spain, Italy, Belgium, Austria and Germany. * * * As reported in the Troubled Company Reporter-Europe on Sept. 28, Moody's Investors Service's confirmed its Ba3 Corporate Family Rating for Dole Food Company Inc. DOLE FOOD: Weak Performance Cues S&P to Cut Credit Rating to B -------------------------------------------------------------- Standard & Poor's Ratings Services lowered its ratings on Westlake Village, Calif.-based Dole Food Co. Inc. and Dole Holding Co. LLC, including its corporate credit rating, to 'B' from 'B+'. The ratings were removed from CreditWatch, where they were placed on Aug. 9, 2006, with negative implications, following materially weaker-than-expected financial performance in the first half of fiscal 2006, which typically represents a substantial portion of cash flow. The outlook is negative. Total debt outstanding at the company was about US$2.3 billion as of Oct. 7, 2006. "The downgrade follows Dole's recent third-quarter earnings release and reflects continued weak operating performance and significantly higher than expected leverage," said Standard & Poor's credit analyst Alison Sullivan. For the 12 months ended Oct. 7, 2006, adjusted EBITDA declined by 39%, compared with the prior-year period, because of higher operating costs. Dole also is faced with ongoing challenging conditions in Europe following the tariff change effective Jan. 1, 2006, that has increased competition, leading to lower pricing and higher net tariff costs. As a result, credit measures have weakened further than anticipated. Lease and pension adjusted total debt to EBITDA increased to about 9.5x for the 12 months ended Oct. 7, 2006, from about 6x at Dec. 31, 2006. Given expected ongoing difficult industry conditions, Standard & Poor's believes Dole will not meet prior expectations of leverage at around 6x and EBITDA interest coverage in the low-2x area for fiscal 2006. The ratings on Dole reflect its highly leveraged financial profile and participation in the competitive and commodity- oriented fresh produce industry, that is subject to seasonality. ===================== S W I T Z E R L A N D ===================== BAREN IMMOBILIEN: Aargau Court Closes Bankruptcy Proceedings ------------------------------------------------------------ The Bankruptcy Court of Aargau entered Nov. 3 an order closing the bankruptcy proceedings of JSC Baren Immobilien. The Debtor can be reached at: JSC Baren Immobilien Landhausweg 6 5742 Kolliken Aargau Switzerland The Bankruptcy Service of Aargau can be reached at: Bankruptcy Service of Aargau Administrative Department of Oberentfelden 5036 Oberentfelden Aargau Switzerland BEST DINE: Zug Court Suspends Bankruptcy Proceedings ---------------------------------------------------- The Bankruptcy Court of Zug suspended the bankruptcy proceedings of LLC Best Dine on Oct. 26, pursuant to Article 230 of the Swiss Bankruptcy Code. The right for the additional deposit is retained. The bankruptcy proceedings will be declared closed once creditors fail to submit their claims and pay a CHF5,000 deposit. The Debtor, declared bankrupt on Sept. 5, can be reached at: LLC Best Dine Im Rank 140 6300 Zug Switzerland The Bankruptcy Service of Zug can be reached at: Bankruptcy Service of Zug 6300 Zug Switzerland BOLLIGER BEDACHUNGEN: Court Closes Bankruptcy Proceedings --------------------------------------------------------- The Bankruptcy Court of Aargau entered Nov. 1 an order closing the bankruptcy proceedings of LLC Bolliger Bedachungen. The Debtor can be reached at: LLC Bolliger Bedachungen Ruederstrasse 39 5040 Schöftland Aargau Switzerland The Bankruptcy Service of Aargau can be reached at: Bankruptcy Service of Aargau Administrative Department of Oberentfelden 5036 Oberentfelden Aargau Switzerland ENERTECH KÄLTETECHNIK: Court Closes Bankruptcy Proceedings ---------------------------------------------------------- The Bankruptcy Court of Aargau entered Oct 31 an order closing the bankruptcy proceedings of JSC Enertech Kältetechnik. The Debtor can be reached at: JSC Enertech Kaltetechnik Scheidweg 13 5452 Oberrohrdorf Aargau Switzerland The Bankruptcy Service of Aargau can be reached at: Bankruptcy Service of Aargau Administrative Department of Baden 5402 Baden Aargau Switzerland EPV COMMERZ: Zug Court Closes Bankruptcy Proceedings ---------------------------------------------------- The Bankruptcy Court of Zug entered Oct. 25 an order closing the bankruptcy proceedings of JSC Epv Commerz. The Debtor can be reached at: JSC Epv Commerz 6340 Baar Zug Switzerland The Bankruptcy Service of Zug can be reached at: Bankruptcy Service of Zug 6300 Zug Switzerland FUND MONTESSORI-ADLER: Court Suspends Bankruptcy Proceedings ------------------------------------------------------------ The Bankruptcy Court of Hottingen-Zurich suspended the bankruptcy proceedings of Fund Montessori-Adler Stiftung on Oct. 27, pursuant to Article 230 of the Swiss Bankruptcy Code. The bankruptcy proceedings will be declared closed once creditors fail to submit their claims and pay a CHF4,000 deposit. The right for the additional deposit is retained. The Debtor, declared bankrupt on Oct 5, can be reached at: Fund Montessori-Adler Stiftung Carmenstrasse 57 8032 Zurich Switzerland The Bankruptcy Service of Hottingen-Zurich can be reached at: Bankruptcy Service of Hottingen-Zurich 8032 Zurich Switzerland M & S BAUTECHNIK: Aargau Court Starts Bankruptcy Proceedings ------------------------------------------------------------ The Bankruptcy Court of Aargau commenced bankruptcy proceedings against JSC M & S Bautechnik on Nov. 2. The Debtor can be reached at: JSC M & S Bautechnik Schwarzackerstrasse 60 4303 Kaiseraugst Aargau Switzerland The Bankruptcy Service of Aargau can be reached at: Bankruptcy Service of Aargau Administrative Department of Brugg 5201 Brugg Aargau Switzerland MONTECRISTO WERBEAGENTUR: Court Suspends Bankruptcy Proceedings --------------------------------------------------------------- The Bankruptcy Court of Unterstrass-Zürich suspended the bankruptcy proceedings of JSC montecristo werbeagentur on Oct. 23, pursuant to Article 230 of the Swiss Bankruptcy Code. The bankruptcy proceedings will be declared closed once creditors fail to submit their claims and pay a CHF4,500 deposit. The right for the additional deposit is retained. The Debtor, declared bankrupt on Sept. 13, can be reached at: JSC montecristo werbeagentur Rötelstrasse 10 8006 Zürich Switzerland The Bankruptcy Service of Unterstrass-Zürich can be reached at: Bankruptcy Service of Unterstrass-Zürich 8042 Zürich Switzerland ROLF MEYER: Zug Court Closes Bankruptcy Proceedings --------------------------------------------------- The Bankruptcy Court of Zug entered Oct. 24 an order closing the bankruptcy proceedings of JSC Rolf Meyer Architekturburo. The Debtor can be reached at: JSC Rolf Meyer Architekturburo Seeblick 1 6330 Cham Zug Switzerland The Bankruptcy Service of Zug can be reached at: Bankruptcy Service of Zug 6300 Zug Switzerland TECHNO-RESIN: Zug Court Closes Bankruptcy Proceedings ----------------------------------------------------- The Bankruptcy Court of Zug entered Oct. 24 an order closing the bankruptcy proceedings of JSC Techno-Resin. The Debtor can be reached at: JSC Techno-Resin Sihlbruggstrasse 6340 Baar Zug Switzerland The Bankruptcy Service of Zug can be reached at: Bankruptcy Service of Zug 6300 Zug Switzerland =========== T U R K E Y =========== DOGUS HOLDING: Fitch Revises Outlook to Positive on BB- IDRs ------------------------------------------------------------ Fitch Ratings revised the Outlook to Positive from Stable for Turkey-based Dogus Holding A.S.'s for local and foreign currency Issuer Default ratings. The IDRs are affirmed at BB-. The Outlook revision is based on Fitch's assessment of Dogus's plans to invest its increased liquidity in projects yielding potentially higher returns and cash flows than the current levels of interest income on the liquidity held by the holding company. On a consolidated level, excluding financial services subsidiaries, Dogus Holding had just over US$800 million net cash at end FY05 compared to just under US$900 million net debt at end FY04. Fitch expects Dogus to have around US$600 million net cash at end FY06, again excluding financial services from the consolidated holding results. Dogus Holding, on a stand- alone basis, had slightly over US$400 milllion gross debt at end FY05, expected to reach c.US$100 million by end FY06. Fitch notes the improvements in the business and financial profiles of the operating subsidiaries of Dogus during FY05 and so far in FY06, especially in Turkiye Garanti Bankasi A.S., with respect to their potential dividend contributions to Dogus cash flows in the future. While Garanti Bank has materially improved its intrinsic financial strength during 2005, Dogus' stake has been reduced to 31.67% at 31.12.2005, limiting its share of the potential dividend flows from the bank as well as the net asset value contribution to the holding company's consolidated asset base. Fitch acknowledges that the forecast FYE06 c.US$600 million net cash position provides financial flexibility to Dogus, the future strategy of which focuses on expanding Garanti Bank jointly with General Electric Consumer Finance, as well as possible new investments in Turkey, including automotive, construction, tourism, media and real estate. Such investments are likely to be financed from existing resources and are not expected to result in substantial re-leveraging. The holding company's future cash flows remain dependent on the returns realized on the cash position, rental income from its real estate portfolio as well as the operating profitability of its subsidiaries and potential future investments. While assigning a Positive Outlook, Fitch will continue to scrutinize the sustainability of the operating improvements at Dogus's subsidiaries, the use of the net liquidity held at the holding level and net leverage level of Dogus. NOBEL GROUP: Fitch Rates Local & Foreign Currency IDR at B- ----------------------------------------------------------- Fitch Ratings assigned Turkey-based generic drug manufacturer Nobel Group, local and foreign currency Issuer Default ratings of B-, both with Stable Outlooks. Separately, Fitch assigned Nobel Group's senior notes an expected rating of B- and an expected Recovery Rating of RR4. The ratings reflect Nobel Group's positioning as a small-sized vertically integrated player in the Turkish generic drugs industry, which shows strong underlying fundamentals. The ratings are supported by the company's good brands and marketing capabilities as well as its full pipeline and good product portfolio, including the anti-rheumatic, muscle relaxant Etol Fort, the best-selling prescription drug in Turkey in 2005. Negative rating factors are single-family ownership, the company's over-reliance on the Turkish healthcare system, product concentration, which although not unusually high for the industry, makes Nobel Group somewhat reliant on single drugs. Furthermore, its financial constraints limit its flexibility to participate in future consolidation. These factors contributed to a 12.1% EBITDA margin in FY05, which is below that of larger international players in the generic drugs industry. Due to large cash outflows for working capital and capital expenditure over the past three years, Nobel Group's free cash flow was negative. Capital spending in FY05, FY04 and FY03 stood at a high 15%, 12% and 8% of sales, respectively and was used for investments in buildings and new equipment which should be completed by FY07. Cash outflow for working capital was at an enormous 43% and 52% of sales in FY03 and FY04, respectively before falling in FY05 to 42%. Fitch expects Nobel Group's free cash flow to continue to be tight, even though capital expenditure as a percentage of sales is projected to be reduced significantly over the next three years. At FYE05 the company's net debt/EBITDA coverage was 3.5x and it is expected to increase to above 4x at FYE06. The group's EBITDA net interest cover was 2.7x and is expected to decrease slightly by FYE06. Nobel Group is exposed to the risks of a sudden devaluation of the Turkish lira against the USD and the EUR. This is because almost all of the group's operations are domestic while its debt is foreign-currency denominated. Furthermore, there is no hedging in place and only a limited natural hedge. NOBEL GROUP: Fitch Assigns B-/RR4 Rating on Prospective Bond ------------------------------------------------------------ Fitch Ratings assigned Turkey-based pharmaceutical company Nobel Group's prospective issue of USD senior notes due 2011 an expected B- rating and an expected Recovery Rating of RR4. The expected rating of the notes is in line with Nobel Group's foreign currency and local currency Issuer Default B- ratings. The final ratings are contingent upon receipt of final documents conforming to information already received, as well as the receipt of satisfactory legal opinions, including in particular, the enforceability of the guarantees referred to below. The three entities constituting the Nobel Group will guarantee the obligations of Terramar Financing S.A. in relation to the notes on an unconditional, irrevocable, joint and several basis. The guarantors account for 100% of group assets as of Dec. 31, 2005. Based on the market dynamics and the business characteristics, Fitch assumes a distressed EV/EBITDA multiple of 7x. This reflects the good fundamentals supporting Nobel Group's business, as the generic market in Turkey is expected to continue its strong growth. This is offset by Nobel Group's poor geographical diversification, small size, and exposure to pharmaceutical sector risks; namely failure of reimbursement of existing drugs, pipeline failures and normal business plan execution risks. Although Fitch expects under these assumptions outstanding recoveries for secured bank lenders and bondholders, the maximum recovery rating applicable to the senior secured debt is capped at RR4 in light of the Turkish jurisdiction. As a result, Fitch has assigned an expected RR4 to the senior secured facilities, which translates into an expected B- instrument rating. The terms and conditions of the notes include European high yield-style covenants such as a limitation on additional debt based on minimum EBITDA interest cover of 2.5x for the group. There are also certain restrictions on dividend payments and asset sales by the guarantors. In the event of a change of control relating to Nobel Group, note holders have the right to put the notes at 101%. There is also a cross default clause in the documentation and covenants relating to transactions with affiliates, mergers and disposals. PETROL OFISI: S&P Keeps B+ Rating on Fine Payment Concerns ---------------------------------------------------------- Standard & Poor's Ratings Services kept its 'B+' long-term corporate credit rating on Turkey-based petroleum products distributor Petrol Ofisi A.S. on CreditWatch with negative implications, where it was placed on Sept. 1, 2006. The rating was placed on CreditWatch following the Turkish energy market regulator's decision to fine the company new Turkish lira TRY599.4 million (US$418.7 million; including fines levied against POAS' subsidiary ERK Petrol A.S.) for allegedly supplying petroleum products to unlicensed gas stations. The CreditWatch update reflects that POAS is required to pay the fine now. POAS, together with the other Turkish petroleum product retail companies (aggregate fines for the sector total TRY1.7 billion), is in the process of appealing the decision. Instead of a lump sum payment, the company has agreed to an 18-month installment plan commencing December 2006. In the interim, until the appeal process (which could take two-three years) is resolved, POAS has filed for a stay of execution with respect to the monthly payments. "Failure to obtain a stay of execution may result in POAS paying the full fine over the next 18 months before an outcome is reached regarding the appeal," said Standard & Poor's credit analyst Sophia Dedemadis. "Standard & Poor's expects to resolve the CreditWatch listing once the outcome with respect to the stay of execution is clear," Ms. Dedemadis added. POAS' fine is large compared with its total debt, which stood at TRY1.95 billion at Sept. 30, 2006, including large working capital financings under TRY995 million of LOCs. Full payment of the fine and a resulting increase in debt could result in the rating being lowered by one notch. If the parties agree a lower settlement, if part of the fine is paid with free cash flows and/or a reduction in dividends, and if liquidity is not affected, the financial profile could remain in line with the rating, and the rating would therefore remain unchanged. Standard & Poor's requires funds from operations to adjusted debt of about 30% for the rating. Before resolving the CreditWatch, Standard & Poor's will also need to be satisfied that POAS' future cash flow generation will not be negatively affected. ============= U K R A I N E ============= TNK-BP HOLDING: Mulls Developing Siberian Gas Field with Gazprom ---------------------------------------------------------------- TNK-BP Holding OAO and OAO Gazprom are nearing a deal to jointly develop Russia's East Siberian natural gas field, Bloomberg News says. Alexei Miller, Gazprom's Chief Executive Officer, and Viktor Vekselberg, TNK-BP's director and shareholder, discussed twice last week over possible gas project cooperation in East Siberia, particularly TNK-BP's Kovytka field, TNK-BP spokeswoman Maria Dracheva said. The companies are mulling to build a gas and chemicals complex at the area, Gazprom said in a statement. TNK-BP, through its Rusia Petroleum unit, holds the license to the US$18-billion Kovytka field. Chinese Demand TNK-BP has petitioned to construct a pipeline and export gas directly from the Kovykta field to China or Korea, but met resistance from Gazprom, which controls the adjacent South Kovytka gas field. With the pressing demand from Chinese gas markets, Gazprom wants to develop and fully tap the Kovytka field by 2011. Nadia Kazakova, an analyst at MDM Bank, said a deal between Gazprom and TNK-BP needs to happen soon due to Chinese export obligations, adding that the Kovytka field needs around three- four years to reach output capacity. The field holds two trillion cubic meters of gas, enough to power Asia for about six years, Bloomberg News relays. Ms. Kazakova suggested that the companies have reached a casual agreement and are now discussing the investment, market strategy and stakes in the planned joint venture. Ms. Kazakova told Bloomberg that she expects Gazprom to push for a controlling stake. According to Bloomberg, production at Kovytka field currently stands at a minimal level, with gas sold exclusively in the domestic market. About Gazprom Headquartered in Moscow, Russia, OAO Gazprom (RTS: GAZP; MICEX: GAZP; LSE: OGZD) -- http://www.gazprom.ru/eng-- produces 94% of the country's natural gas, controls 25% of the world's reserves, and is also the world's largest gas producer. It focuses on gas exploration, processing, transport, and marketing. About TNK-BP Headquartered Moscow, Russia, TNK-BP Holding OAO -- http://www.tnk-bp.com/-- operates six refineries in Russia and Ukraine, and markets products through 2,100 retail service stations operating under TNK and BP brand. TNK owns 56.5% of TNK-BP Holding, and Onako and Sidanco hold 6.8% and 30.9%, respectively. The other 5.8% belongs to TNK-BP shareholders. TNK-BP holds a strategic position as the second largest liquids producer in the Russian intergraded operating environment, accounting for approximately 18% of Russia's total crude oil production. * * * Standard & Poor's assigned BB+/Stable foreign currency local currency ratings to TNK-BP on June 30, 2006. Moody's assigned Ba2/Positive foreign currency rating to the company on Jan. 24, 2006. Fitch assigned BB+/Positive foreign currency rating to TNK-BP on Feb. 13, 2006, and BB+/Positive local currency rating on Aug. 24, 2005. =========================== U N I T E D K I N G D O M =========================== 21ST CENTURY: Creditors' Claims Due Feb. 28, 2007 ------------------------------------------------- Creditors of 21st Century Computers Limited have until Feb. 28, 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 Gerald Frederick Davis at: Heathcote & Coleman LLP Heathcote House 136 Hagley Road Edgbaston Birmingham B16 9PN United Kingdom The company can be reached at: 21st Century Computers Limited Office 1 Shenstone Court Forge Lane Halesowen West Midlands B62 8EA United Kingdom Tel: 0121 585 8559 AKER KVAERNER: Inks NOK900-Mln Service Deal with ConocoPhillips --------------------------------------------------------------- ConocoPhillips has awarded Aker Kvaerner ASA a service contract for provision of personnel and equipment for well intervention services on the Norwegian Continental Shelf. The firm contract period is three years with an estimated value of NOK900 million. The contract includes an option to extend another 2 x 2 years. "This is a strategically important contract which ensures Aker Kvaerner Well Service's position as the leading provider of well intervention services on the Norwegian Continental Shelf," said Mads Andersen, Executive Vice President in Aker Kvaerner. The scope of work comprises mechanical wireline services, wireline tractor services and cased and open hole logging services. The work will be undertaken by the Aker Kvaerner subsidiary, Aker Kvaerner Well Service in Stavanger. Data acquisitions services are subcontracted to Baker Atlas. Through this agreement, Aker Kvaerner continues a good cooperation with an important client. "We look forward to jointly developing and implementing new well intervention technologies that will further enhance safety and increase operational efficiency," says Ole Petter Thomesen, President of Aker Kvaerner Well Service. About Aker Kvaerner Headquartered in Lysaker, Norway, Aker Kvaerner ASA -- http://www.akerkvaerner.com/-- through its subsidiaries and affiliates, provides engineering and construction services, technology products and integrated solutions. The Aker Kvaerner group is organized into two principal business streams, namely Oil & Gas and E&C. The group operates in Austria, Azerbaijan, Belgium, Denmark, Finland, France, Germany, Netherlands, Poland, Russia, Spain, Sweden, United Kingdom, Australia, China, India, Indonesia, Japan, Malaysia, Singapore, South Korea, Thailand, Brazil, Chile, Canada and the United States. * * * As reported in the TCR-Europe on April 26, Moody's Investors Service upgraded the of Aker Kvaerner Oil & Gas Group and Aker Kvaerner AS, primarily to reflect the sustainable strong recovery in profitability and cash flow generation of the ring- fenced oil and gas group over the past two years, coupled with the clear reduction in senior debt, repaid from internally generated funds. Ratings affected: Aker Kvaerner Oil & Gas Group AS -- Corporate family rating: upgraded to Ba1 from Ba3 Aker Kvaerner AS -- Rating of the second priority lien notes due 2011: upgraded to Ba1 from Ba3. Moody's said the outlook on all ratings is stable. AMERICAN AXLE: Moody's Holds Corporate Family Rating at Ba3 ----------------------------------------------------------- Moody's Investors Service confirmed American Axle & Manufacturing Holdings Inc.'s Corporate Family Rating of Ba3 and affirmed American Axle & Manufacturing, Inc.'s Speculative Grade Liquidity rating of SGL-2. Unsecured debt ratings of Ba3 LGD-4, 57% at both American Axle and Holdings have also been confirmed. The outlook is negative. The actions conclude a ratings review reported on Oct. 5, 2006, after the company's disclosure of a special attrition program and other restructuring actions which will be implemented at the end of the fourth quarter of 2006 and early 2007. Collectively, the programs are anticipated to involve special charges of between US$150-$250. In confirming the ratings, Moody's noted that these programs will involve substantial cash disbursements and cause higher debt levels to persist in the short-term. However, it will have a relatively quick pay-back period through establishing a lower cost structure which is anticipated to improve future performance and cash flows. Metrics more consistent with the Ba3 rating category could develop during 2007 assuming industry conditions stabilize and sufficient consumer demand for vehicles based on the GMT-900 platform develops. The Corporate Family rating of Ba3 reflects weighting placed on scores under the Auto Supplier Methodology for elevated leverage, customer concentration and deterioration in coverage ratios which has occurred over the last year. Scores on those factors are partially mitigated by stronger results from the company's sound capitalization, good liquidity profile, efficient operations, and the long-term nature of its business awards. Moody's would expect free cash flow in 2006 to be close to break-even as the company's investment in organic growth has coincided with sharply lower production at its major customers. The rating also emphasizes potential volatility to the company's cash flows arising from its ongoing customer, geographic and platform concentration. American Axle has a capital intensive business model which creates significant operating leverage as well as ongoing capital expenditure requirements. Those traits tend to compound its exposure to challenges faced by its largest customer, GM. Improved customer, geographic and platform diversification will slowly evolve. Substantial disbursements to facilitate those objectives, the SAP and other restructuring actions will be required. Weak debt service ratios, elevated leverage and constricted free cash flows are anticipated to continue over the near term. However, over the intermediate period, improvements in the company's cost structure and enhanced free cash flow generated from the SAP and other restructuring actions combined with lower capital expenditures in 2007 ought to position key credit metrics within a more acceptable range for Ba3 rated credits. The outlook is negative and reflects the company's continued concentration with GM, whose Corporate Family rating is B3, and issues related to the mix of vehicles it supports. While uncertainty exists on what build rates consumer demand may ultimately support for models based on the GMT-900 platform, the rating agency would expect American Axle to remain profitable during the intermediate term. In the near term, the company's leverage and debt service coverage ratios will remain weak as interest expense will increase as higher debt levels incurred from funding the combination of 2006 capital expenditures and significant SAP disbursements and other restructuring actions will continue. The company remains vulnerable to downside developments at GM and the potential that labor contract issues in late 2007 at the Big 3 OEMs could disrupt build-rate assumptions. The SGL-2 rating represents good liquidity over the coming twelve months. American Axle should generate internal funds to meet basic operating needs during the coming year. However, the cash impact of its SAP and other restructuring programs are likely to cause incremental borrowings towards the end of the fourth quarter and early 2007. While the company maintained only minimal balance sheet cash, it does have access to a US$600 million unsecured revolving credit facility whose commitment extends to April 2010. At the end of the third quarter, the company had approximately US$486 million available under the facility. Ratings confirmed: * American Axle & Manufacturing, Inc. -- Senior Unsecured notes, Ba3, LGD-4, 57% -- Senior Unsecured term loan, Ba3, LGD-4, 57% -- American Axle & Manufacturing Holdings, Inc. -- Corporate Family Rating, Ba3 -- Probability of Default Rating, Ba3 -- Senior Unsecured convertible notes, Ba3, LGD-4, 57% Ratings affirmed: * American Axle & Manufacturing, Inc. -- Speculative Grade Liquidity rating, SGL-2 American Axle & Manufacturing, headquartered in Detroit, Michigan, is engaged in the manufacture, design, engineering and validation of driveline systems and related components and modules, chassis systems, and metal formed products for light truck, SUVs and passenger cars. The company has manufacturing locations in the U.S.A., Mexico, the United Kingdom and Brazil. The company reported revenues of US$3.4 billion in 2005 and has approximately 10,900 employees. BAA PLC: OFT Refers Airport Services Supply for Deeper Probe ------------------------------------------------------------ The U.K. Office of Fair Trading has signaled its intention to refer the supply of airport services by BAA plc to the Competition Commission for more detailed investigation. It has also made a recommendation that the airports regulator advise the government on the case for the de-regulation of Manchester airport. BAA owns Heathrow, Gatwick, Stansted and Southampton in South East England, and Edinburgh, Glasgow and Aberdeen in Scotland. These airports have an annual turnover of GBP2 billion and handle over 60% of all air passengers in the U.K. The OFT market study has found: -- in the South East, BAA's airports handle 90% of passenger trips, and these airports could under separate ownership compete to attract air passengers; -- evidence of poor customer satisfaction; -- significant investment at airports in the South East of England is planned. Without competition -- investment could be inefficient -- costly for air passengers and for the U.K.; -- BAA's Scottish airports which carry over 80% of Scottish air passengers, are not price regulated, and charges to airlines are higher than Gatwick and Stansted; -- Glasgow, which faces some competition from Prestwick, has had the largest price decreases of BAA's airports in Scotland; and -- the study also found further evidence that competition between independently owned airports -- such as Liverpool and Manchester -- leads to improved value for air travelers. The conclusion on referring BAA to the CC is provisional -- the OFT now invites comments before reaching a final conclusion. John Fingleton, OFT Chief Executive, said: "We believe that the current market structure does not deliver best value for air travelers in the U.K., and that greater competition within the industry could bring significant benefits for passengers. There is evidence of poor quality and high charges -- BAA's investment plans, which are of great importance to the U.K., have raised significant concerns among its customers. These are signs of a market not working well for consumers and we believe that a full inquiry into BAA's structure is justified." The consultation will last for eight weeks and will end on Feb. 8, 2007. As reported in the TCR-Europe on Sept. 6, BAA dismissed calls for the break-up of its U.K. airports, arguing that a more fragmented ownership structure would undermine vitally needed investment in airport capacity. In a submission to the OFT study on the U.K. airports market, BAA urged the OFT to focus upon the true interests of consumers. About BAA Plc Headquartered in London, United Kingdom, BAA plc -- http://www.baa.com/-- owns and operates seven airports in the United Kingdom, including Healthrow, the world's busiest international airport, and Budapest Airport, serving 700 destination by around 300 airlines. Its U.K. airports handled over 117 million international passenger during the 12 months up to October 2005. International passengers make up 81% of its total U.K. airport traffic. BAA had total assets of GBP15.2 billion and pre-tax profits of GBP757 million for the year ended March 31, 2006. * * * As reported in TCR-Europe on June 9, Moody's Investors Service downgraded to Ba1 from Baa3 the issuer rating of BAA Plc as well as the ratings for: -- GBP425 million convertible bonds due August 2009; -- GBP424 million convertible bonds due April 2008; and -- GBP200 million 7.875% bonds due February 2007. BAA's short-term rating was also downgraded to Not Prime from Prime-3. All other long-term debt ratings remain at Baa2. All long-term ratings remain on review for further downgrade. BUILDERS SUPPLY: Appoints Liquidator from David Horner & Co. ------------------------------------------------------------ David Anthony Horner of David Horner & Co. was appointed Liquidator of Builders Supply (Castleford) Ltd. (formerly Practical Building Products Limited) on for the creditors' voluntary winding-up procedure. The company can be reached at: Builders Supply (Castleford) Ltd. Oxford Street Castleford West Yorkshire WF105DF United Kingdom Tel: 01977 552 440 Fax: 01977 603 107 CORUS GROUP: CSN Tops Tata Offer with US$9.6-Billion Bid -------------------------------------------------------- Brazillian steelmaker Companhia Siderurgica Nacional increased its purchase offer for Corus Group Plc to US$9.6 billion or 515 pence a share, topping Tata Steel Ltd.'s 500 pence per share offer. Companhia Siderurgica's move pushed Corus's stock to rise as high as 529.5 pence, signaling that investors expect another bid, Bloomberg News says. Regardless of who wins the bidding war, a merger would Corus would result to the fifth largest steel firm in the world. Companhia Siderurgica and Corus have held merger talks in 2002 but competition issues and unfavorable conditions in the steel industry hindered negotiations. Companhia Siderurgica proposed purchase of Corus will be funded through a BP4.35 billion of debt underwritten by Barclays Plc, ING Groep NV and Goldman Sachs Group Inc., Bloomberg says, citing Chief Financial Officer Otavio Lazcano. Meanwhile, Companhia Siderurgica promised to pay BP138 million to fund the deficit in the Corus Engineering Steels Pension Scheme, Bloomberg says. Also, the steelmaker will up the contribution rate on the British Steel Pension Scheme to 12% from 10% until March 31, 2009. The company's success in acquiring Corus hinges on the unions support, according to published reports. Shares of Corus rose Monday to 27.25 pence, or 5.5%, to 527.25 pence in London. Companhia Siderurgica's stock dropped 1% to BRL63.9 in Sao Paulo. Tata shares are the worst performers on India's benchmark index in the past three months, according to Bloomberg. The stock slumped 29 rupees, or 6%, to 453.4 rupees in Mumbai on Monday, the sharpest decline since June 26. About Tata Steel Established in 1907, Tata Steel is Asia's first and India's largest private sector steel company. Tata Steel is among the lowest cost producers of steel in the world and one of the few select steel companies in the world that is EVA+ (Economic Value Added). About Companhia Siderurgica Companhia Siderurgica Nacional is one of the lowest-cost steel producers in the world, which is a result of its access to proprietary, high-quality iron ore (at the Casa de Pedra mine); self-sufficiency in energy; streamlined facilities; and logistics advantages. This is in addition to the group's strong market position in the fairly concentrated steel industry in Brazil. About Corus Group Corus Group plc, fka British Steel, was formed when the UK privatized its major steelworks in 1988. It then changed its name to Corus Group after acquiring most of Dutch rival Koninklijke Hoogovens. Corus makes coated and uncoated strip products, sections and plates, wire rod, engineering steels, and semi-finished carbon steel products. It also manufactures primary aluminum products. Customers include companies in the automotive, construction, engineering, and household-product manufacturing industries. Six years ago, the group suffered 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. * * * As reported in the TCR-Europe on Nov. 22, 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. In a TCR-Europe report on Oct. 25, 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. 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. As reported in the TCR-Europe on Oct. 24, 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. CORUS GROUP: Agrees to Terms of CSN's GBP4.9-Bln Purchase Deal -------------------------------------------------------------- The boards of Companhia Siderurgica Nacional and Corus Group plc have agreed on the terms of a recommended pre-conditional cash acquisition by CSN Acquisitions of the entire issued and to be issued share capital of Corus at a price of 515 pence for each Corus Share, valuing Corus at around GBP4.9 billion. CSN believes there is compelling strategic and industrial logic for a combination with Corus as it would: -- create a top five global steel group with around 24 million tons of annual steel production and, by 2010, around 50 million tons of annual iron ore production; -- enable Corus to secure supply of high quality, low cost iron ore from CSN's Casa de Pedra mine, one of the largest captive mines in the world, leading to incremental annual cash-flow in Corus of around US$450 million on a pre-tax basis by 2009; -- in time, provide Corus with access to increasing quantities of low cost semi-finished steel for further processing through its downstream facilities in Europe; -- allow Corus greater access to fast growing markets as well as providing opportunities for cross-selling the enlarged portfolio of products; -- create the potential to capture significant annual synergy benefits of around US$300 million on a pre-tax basis by 2009, through initiatives including global procurement savings, optimization of product flows, integrated commercial policy and the sharing of best practices; and -- give CSN the ability to leverage Corus' exceptional research and development and engineering expertise across the combined group. The price of 515 pence per Corus Share represents: -- a premium of around 42.9% to the average closing mid- market price of 360.5 pence per Corus share for the twelve months to and including Oct. 4, 2006, being the last business day before the announcement by Tata Steel Ltd. that it was evaluating various opportunities, including Corus; -- a premium of around 26.4% to the closing mid-market price of 407.5 pence per Corus Share on Oct. 4, 2006; and -- a premium of around 3% to the revised offer price made by Tata at 500 pence per Corus share. CSN Acquisitions has held constructive and satisfactory discussions with the trustees of Corus' two main U.K. pension schemes and has agreed with committees of the relevant boards of pension trustees an arrangement, which will be recommended to the full boards of the pensions trustees, whereby CSN Acquisitions will: -- fund upfront the IAS 19 deficit on the Corus Engineering Steels Pension Scheme by paying GBP138 million into the scheme; and -- increase the contribution rate on the British Steel Pension Scheme from 10% to 12% until March 31, 2009. The acquisition is subject to the satisfaction or waiver of the Pre-Condition that either: -- Corus Shareholders reject the Tata Scheme; or -- the Tata Scheme is otherwise withdrawn by Corus for lapses. Subject to the satisfaction or waiver of the Pre-Condition, the acquisition will be made by CSN Acquisitions, an indirect wholly owned subsidiary of CSN, and is proposed to be implemented by way of a scheme of arrangement under section 425 of the Companies Act. The scheme will be put to Corus shareholders at the Court Meeting and at the Extraordinary General Meeting, which will be convened in due course. The scheme document will be posted to Corus Shareholders within 28 days of satisfaction or waiver of the Pre-Condition. In addition, a further document setting out further details of the Acquisition and information relating to the CSN Group will be sent to Corus Shareholders as soon as possible. The Loan Note Alternative will be made available to Corus Shareholders. As at the date of this announcement, the CSN Group owns 34,072,613 Corus Shares, representing around 3.8% of Corus' existing issued share capital. The Corus Directors, who have been so advised by Credit Suisse, JPMorgan Cazenove and HSBC, consider the terms of the acquisition to be fair and reasonable, so far as Corus Shareholders are concerned. Accordingly, the Corus Directors intend unanimously to recommend that Corus Shareholders vote in favor of the scheme at the Court Meeting and Extraordinary General Meeting to be convened in relation to the acquisition. In providing their advice, Credit Suisse, JPMorgan Cazenove and HSBC have taken into account the commercial assessments of the Corus Directors. "The strategic impetus for this combination is growth -- growth in Brazil, in Europe and for our combined workforces," Benjamin Steinbruch, Chairman and Chief Executive Officer of CSN, said. Our goal is to unlock the value of our iron ore assets through Corus, transforming them into cost effective, high quality steel products using Corus' advanced engineering capabilities and its excellent European distribution platform. This is a winning combination for all stakeholders." "As I informed shareholders in my letter of Nov. 27, 2006, once the Corus Directors received an approach from CSN, we provided information and made our senior management available to enable CSN to meet its pre-conditions and complete its due diligence. This offer is both higher than the initial proposal by CSN as well as the revised Tata offer of 500 pence per share. It is also consistent with our strategic objective of securing access to raw materials, low cost production and growth markets. The combination of the two businesses will create a strong platform from which to compete and grow in an increasingly global market," Jim Leng, Chairman of Corus, said. Lazard is acting as lead financial adviser, Goldmans Sachs International as financial adviser and joint broker, and UBS as joint broker to CSN and CSN Acquisitions in relation to the acquisition. Credit Suisse is acting as lead financial adviser, JPMorgan Cazenove as joint financial adviser and corporate broker and HSBC as independent financial adviser for the purposes of Rule 3 of the Takeover Code to Corus. 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. Six years ago, the group suffered 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. * * * As reported in the TCR-Europe on Nov. 22, 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. In a TCR-Europe report on Oct. 25, 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. 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. As reported in the TCR-Europe on Oct. 24, 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. CORUS GROUP: S&P Holds BB Rating on Developing Watch ---------------------------------------------------- Standard & Poor's Ratings Services kept its 'BB' long-term corporate credit rating on U.K.-based steelmaker Corus Group PLC on CreditWatch with developing implications, following the start of a bidding war between India-based steel manufacturer Tata Steel Ltd. and Brazil-based steel maker Companhia Siderurgica Nacional. 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, 2006, following the announcement of an initial bid for the company from Tata Steel. On Dec. 10, 2006, Tata Steel revised its offer, increasing its price to 500 pence per share, and subsequently, on Dec. 11, 2006, CSN announced its higher bid of 515 pence per share. Standard & Poor's continues to note that integration with the low-cost operations of either of the bidders might benefit Corus' weak business profile. "Following the revised bids there is still insufficient clarity regarding the financial structure of each transaction and the eventual impact on Corus' credit quality," said Standard & Poor's credit analyst Tatiana Kordyukova. Both bidders have referred to nonrecourse debt as part of the respective financial structures, but it is not yet clear how feasibly such debt could be served from the cash flows of Corus and to what extent this could impair Corus' financial position. Upside potential remains if the Tata Steel bid is successful: As Tata Steel has higher stand-alone creditworthiness, the combined entity could have stronger credit quality than Corus on a stand-alone basis--provided there is sufficient evidence that Tata Steel will provide financial support to Corus. At the same time, as the bid price increases, the possibility of an upgrade of Corus declines. As the price increases the debt burden of the combined entity grows, as does possibly a portion of debt to be served by Corus. This might imply a lower ability of and incentives for the combined entity to support Corus in the future. "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," said Ms. Kordyukova. Standard & Poor's will also need more clarity regarding how such a transaction would be financed, and will need to assess whether Corus' weak business risk profile would be enhanced. Furthermore, the rating agency will consider the potentially substantial integration challenges. CORUS GROUP: Confirms Issuance of Ordinary Shares and Bonds ----------------------------------------------------------- In accordance with Rule 2.10 of the City Code on Takeovers and Mergers, Corus Group plc confirmed that as of Dec. 11, 2006, it had these relevant securities in issue (including any ordinary shares represented by American Depositary Shares but excluding any ordinary shares held in treasury): -- 898,815,415 ordinary shares of 50p each under ISIN code GB00B127GF29. -- 3% guaranteed convertible unsubordinated bonds due 2007 amounting to EUR307,000,000 convertible into 46,870,230 ordinary shares of Corus Group plc. The ISIN code for these securities is XS0140136523. -- 4.625% convertible subordinated bonds due 2007 amounting to NLG345,000,000 convertible into 19,338,687 ordinary shares of Corus Group plc. The ISIN code for these securities is NL0000183184. Each American Depositary Share represents two ordinary shares of the company. 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. Six years ago, the group suffered 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. * * * As reported in the TCR-Europe on Nov. 22, 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. In a TCR-Europe report on Oct. 25, 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. 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. As reported in the TCR-Europe on Oct. 24, 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. EMI GROUP: Inks Video-on-Demand Deal with Yahoo! Music ------------------------------------------------------ EMI Music, a unit of EMI Group Plc, has signed a pan-European agreement with Yahoo! Music to enable consumers of the online service to watch videos from EMI's digital catalogue. Yahoo! Music will now offer European music fans free access to videos from EMI Music artists including Lily Allen, Corinne Bailey Rae, Coldplay, Gorillaz, Janet Jackson, Norah Jones, KT Tunstall and Robbie Williams, as well as Bebe (Spain), Tiziano Ferro (Italy), LaFee (Germany) and Diam's (France). The Yahoo! Music portal allows consumers to select videos by their favorite artists and stream them free of charge on their PC. The service is supported by targeted advertising. The service also enables music fans to create their own personalized "My Video" list, which tracks recently played videos and lists videos that have been rated by the fan. They can also discover videos by brand new artists through expert recommendations. "As the digital music market grows, we must continue to look for new ways to offer consumers the opportunity to enjoy our artists' content," Jean-Francois Cecillon, chairman and CEO of EMI Music Continental Europe, said. "Thanks to services such as Yahoo! Music, video-on-demand is becoming a valuable new channel that enables us to connect fans with the music they love." "It's important to maximize the value of our artists' music in this rapidly changing market and the recent growth of advertising spending on line is just one of the many ways in which we seek to do this," said Tony Wadsworth, chairman and CEO of EMI Music U.K. and Ireland. "We are extremely excited to add videos from EMI Music to the web's largest collection of music videos," said Shannon Ferguson, Managing Director of Yahoo! Music Europe. "Yahoo! is committed to giving consumers a compelling and comprehensive music experience, and the addition of EMI Music classic and new release videos, from both international and European artists, is critical to providing depth of choice for fans." 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 the TCR-Europe on Nov. 1, 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. S&P said the outlook is negative. Moody's Investors Service also 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. FALCONBRIDGE LTD: Xstrata Guarantees Notes and Preferred Shares --------------------------------------------------------------- Xstrata plc has fully and unconditionally guaranteed Falconbridge Ltd.'s Notes and its cumulative redeemable preferred shares, Series 2, Series 3 and Series H. Falconbridge will not file interim financial statements for the nine months ended Sept. 30, 2006, as it has obtained an order from Canadian securities regulators permitting Falconbridge to satisfy its continuous disclosure obligations as a reporting issuer by filing Xstrata's U.K. disclosure documents in place of disclosure documents relating solely to Falconbridge. These senior debt of Falconbridge has been guaranteed by Xstrata: * US$250 million principal amount of 6.2% notes due June 15, 2035; * US$250 million principal amount of 5.5% notes due June 15, 2017; * US$350 million principal amount of 6% notes due Oct. 15, 2015; * US$250 million principal amount of 5.375% notes due June 1, 2015; * US$250 million principal amount of 7.35% notes due June 5, 2012; * US$300 million principal amount of 7.25% notes due July 15, 2012; * US$300 million principal amount of 8.375% notes due Feb. 15, 2011; and * CDN$175 million principal amount of 8.5% debentures due Dec. 8, 2008. The guarantee of Falconbridge's Notes was implemented by amending the trust indentures pursuant to which the Notes were issued. Pursuant to the terms of the Note Indentures, as amended by supplemental indentures to implement the guarantees, Xstrata has fully and unconditionally guaranteed the payment, within 15 days of when due, of the principal and interest owing by Falconbridge to the holders of the Notes. Computershare Trust Company of Canada is the trustee for the holders of the Notes under the terms of the Note Indentures. The guarantee of the Preferred Shares is governed by the terms of a guarantee indenture entered into by Xstrata, Falconbridge and Computershare Trust Company of Canada, as guarantee trustee. Pursuant to the terms of the Guarantee Indenture, Xstrata has fully and unconditionally guaranteed in favor of the holders of the Preferred Shares the payment, within 15 days of when due, of all financial liabilities and obligations of Falconbridge to such holders under the terms of the Preferred Shares, whether in respect of: -- any accrued and unpaid dividends on the Preferred Shares, regardless of the ability of Falconbridge to satisfy any financial or legal condition to the declaration or payment of dividends; -- the redemption price and all accrued and unpaid dividends to the date of redemption with respect to the Preferred Shares called for redemption; or -- the liquidation amount payable on the Preferred Shares upon a voluntary or involuntary dissolution, liquidation or winding up of Falconbridge, without regard to the amount of assets of Falconbridge available for distribution. Xstrata's obligation to make a guarantee payment may be satisfied by direct payment of the required amounts by Xstrata to the holders of Preferred Shares entitled to those payments or by causing Falconbridge to pay those amounts to the holders. Structural Subordination Xstrata's guarantees of the Notes and the Preferred Shares constitute unsecured obligations of Xstrata. The terms of the guarantees do not limit the ability of Xstrata to incur additional indebtedness, nor do they limit the ability of Xstrata's subsidiaries or joint ventures to incur additional secured or unsecured indebtedness. Xstrata's obligations under the guarantees will be effectively subordinate to all indebtedness and other liabilities of Xstrata's subsidiaries and joint ventures, except to the extent Xstrata is a creditor of such subsidiaries or joint ventures ranking at least pari passu with such other creditors. The Notes and the Preferred Shares, as guaranteed by Xstrata, have been rated by the following rating agencies as follows: Notes Preferred Shares Rating agency Rating Rating ------------- ------ ---------------- Moody's Investor Service Baa2 not rated Standard & Poor's BBB+ BBB- Dominion Bond Rating Service Limited BBB(high) Pfd-3(high) Holders of the Notes and the Preferred Shares should consult the Rating Agencies with respect to the interpretation of the foregoing ratings and their implications. The credit ratings accorded to the Notes and the Preferred Shares by the Rating Agencies are not recommendations to purchase, hold or sell the Notes or the Preferred Shares inasmuch as such ratings do not comment as to market price or suitability for a particular investor. There is no assurance that the ratings will remain in effect for any period of time or that the ratings will not be revised or withdrawn entirely by one or more of the Rating Agencies at any time in the future if, in the judgment of one or more of the Rating Agencies, circumstances so warrant. Tax Consequences of Guarantee of Preferred Shares The guarantee of the Preferred Shares constitutes a 'guarantee agreement' for purposes of subsection 112(2.2) of the Income Tax Act (Canada). Accordingly, a dividend received on a Preferred Share of a particular series by a holder of Preferred Shares that is a corporation resident in Canada for purposes of the Tax Act generally will not be deductible in computing the taxable income of the corporation unless the Preferred Share is of a class or series of shares of the capital stock of Falconbridge that is listed on a prescribed stock exchange, which includes the Toronto Stock Exchange and the corporation, and persons with which the corporation does not deal at arm's length, or any partnership or, in certain circumstances, trust of which the corporation or any such person is a member or beneficiary, do not, at the time the dividend is received, receive dividends in respect of more than 10% of the issued and outstanding shares to which the guarantee agreement applies. Holders of Falconbridge Preferred Shares to which these provisions may be relevant are urged to consult their own tax advisors. Guarantee of Payment Each guarantee constitutes a guarantee of payment and not of collection. This means that legal proceedings may be brought directly against Xstrata to enforce its obligations under each guarantee without first instituting a legal proceeding against Falconbridge. The guarantees of the Notes will not be discharged except by payment in full of Falconbridge's obligations to the holders of the Notes. The guarantee of the Preferred Shares will not be discharged except by payment of the related guaranteed payments in full to the extent not paid by Falconbridge or upon the cancellation of the Preferred Shares. Amendments and Assignment The guarantees of the Notes may not be amended without the prior approval of the holders of the Notes in accordance with the terms of the Note Indentures, provided that no approval of the holders of the Notes is required for certain changes that do not adversely affect the rights of holders of the Notes. The guarantee of the Preferred Shares may not be amended without the prior approval of the holders representing not less than a majority of the aggregate liquidation amount of the outstanding Preferred Shares, or, in the event that a meeting is held to obtain the consent of the holders of the Preferred Shares, representing not less than a majority of the aggregate liquidation amount of the outstanding Preferred Shares held by holders of the Preferred Shares present at the meeting, provided that no approval of the holders of the Preferred Shares is required for certain changes that do not adversely affect the rights of holders of the Preferred Shares. For purposes of the guarantee, a meeting of the holders of the Preferred Shares requires a quorum consisting of holders of the Preferred Shares holding at least 25% of the aggregate liquidation amount of the outstanding Preferred Shares. The guarantees of the Notes and the Preferred Shares will be binding on the successors and assigns of Xstrata and will enure to the benefit of the holders of the Notes and Preferred Shares then outstanding. Termination The guarantee of the Notes will terminate upon the repayment in full and discharge of all Notes. The guarantee of the Preferred Shares will terminate and be of no further force and effect upon full payment of the applicable redemption price of all Preferred Shares, including any accrued and unpaid dividends at the time of redemption. Governing Law The guarantees of the Notes (other than the CDN$175 million 8.5% debentures due 2008) are governed by and construed in accordance with the laws of the State of New York except with respect to the rights, powers, duties and responsibilities of the Note Trustee under the Note Indentures, which are governed by the laws of the Province of Ontario. The guarantees of the CDN$175 million 8.5% debentures due 2008 and the Preferred Shares are governed by and construed in accordance with the laws of the Province of Ontario. Consent to Jurisdiction and Service Xstrata has appointed CT Corporation System, 111 Eighth Avenue, New York, New York, as its agent for service of process in any suit, action or proceeding arising out of or relating to its guarantee of the Notes (other than the CDN$175 million 8.5% debentures due 2008) and for actions brought under United States federal or state securities laws brought in any federal or state court located in the City of New York and submits to such jurisdiction. Xstrata has appointed Falconbridge as its agent for service of process in any suit, action or proceeding arising out of or relating to its guarantee of the Preferred Shares or the CDN$175 million 8.5% debentures due 2008 and for actions brought under provincial securities laws brought in any court located in the City of Toronto and submits to such jurisdiction. Information Concerning the Trustee Computershare Trust Company of Canada is the Note Trustee under the terms of the Note Indentures and is the guarantee trustee for the holders of the Preferred Shares. The terms of the Guarantee Indenture and the terms of the Note Indentures provide that, except in certain circumstances, no action may be brought against Xstrata to enforce the guarantees except by the Trustee. Changes to Falconbridge Continuous Disclosure Reporting In connection with Xstrata's guarantees of the Notes and the Preferred Shares, the securities commissions of each Canadian province -- other than Prince Edward Island -- and territory have granted Falconbridge an exemption from certain requirements of the securities legislation that will permit Falconbridge to satisfy its continuous disclosure obligations as a reporting issuer by filing Xstrata's U.K. disclosure documents, including Xstrata's annual and interim financial statements, in place of disclosure documents relating solely to Falconbridge. As a result of this relief, in lieu of the quarterly interim financial statements that Falconbridge has historically filed, Falconbridge will file on SEDAR Xstrata's annual and half-yearly financial statements, prepared in accordance with International Financial Reporting Standards. As a result, Falconbridge will not be filing interim financial statements for the nine months ended September 30, 2006. The terms of the exemption require that Falconbridge file on SEDAR copies of all documents filed by Xstrata pursuant to the continuous disclosure requirements of the United Kingdom. Falconbridge will file Xstrata's financial statements on SEDAR at the same time they are filed in the United Kingdom. The continuous disclosure requirements of the United Kingdom require that Xstrata file its financial statements as soon as possible after they have been approved, with annual financial statements filed no later than six months after its Dec. 31 year end and half yearly financial statements filed no later than 90 days after the end of the six month period ending June 30. Xstrata generally publishes its annual financial statements in March and its half yearly financial statements in August. The availability of the exemption is subject to Falconbridge and Xstrata satisfying a number of other conditions that are set forth in the decision of the securities commissions. A copy of the decision is available on the website of the Ontario Securities Commission at http://www.osc.gov.on.ca/ About Xstrata Xstrata plc -- http://www.xstrata.com/-- is a major global diversified mining group, listed on the London and Swiss stock exchanges. The Group is and has approximately 24,000 employees worldwide, including contractors. Xstrata does business in six major international commodities markets: copper, coking coal, thermal coal, ferrochrome, vanadium and zinc, with additional exposures to gold, lead and silver. The Group's operations and projects span four continents and nine countries: Australia, South Africa, Spain, Germany, Argentina, Peru, Colombia, the United Kingdom and Canada. Xstrata holds a 97% stake in Falconbridge. About Falconbridge Headquartered in Toronto, Ontario, Falconbridge Limited (TSX:FAL.LV)(NYSE: FAL) -- http://www.falconbridge.com/-- is a leading copper and nickel company with investments in fully integrated zinc and aluminum assets. Its primary focus is the identification and development of world-class copper and nickel orebodies. It employs 14,500 people at its operations and offices in 18 countries, including Malaysia. The Company owns nickel mines in Canada and the Dominican Republic and operates a refinery and sulfuric acid plant in Norway. It is also a major producer of copper (38% of sales) through its Kidd mine in Canada and its stake in Chile's Collahuasi mine and Lomas Bayas mine. Its other products include cobalt, platinum group metals, and zinc. * * * Falconbridge's CDN$150 million 5% convertible and callable bonds due April 30, 2007, carry Standard & Poor's BB+ rating. FORD MOTOR: Prices US$4.5 Bil. of Sr. Convertible Notes Due 2036 ---------------------------------------------------------------- Ford Motor Co. priced US$4.5 billion principal amount of unsecured Senior Convertible Notes due 2036 (increased from US$3 billion). Ford expects to close the sale of the notes on Dec. 15, 2006, subject to the satisfaction of customary closing conditions. The notes will pay interest semiannually at a rate of 4.25% per annum. The notes will be convertible into shares of Ford's common stock, based on a conversion rate (subject to adjustment) of 108.6957 shares per US$1,000 principal amount of notes (which is equal to a conversion price of US$9.20 per share, representing a 25% conversion premium based on the closing price of US$7.36 per share on Dec. 6, 2006). Ford expects to use the net proceeds from the offering for general corporate purposes. In addition, Ford has granted the underwriters an over-allotment option to purchase up to US$450 million principal amount of additional notes. The joint-book running managers for this offering are: -- Citigroup Corporate and Investment Banking, -- Goldman, Sachs & Co., -- J.P. Morgan Securities Inc., -- Deutsche Bank Securities Inc., -- Lehman Brothers Inc., -- Merrill Lynch, -- Pierce, Fenner & Smith Incorporated and -- Morgan Stanley & Co. Incorporated. The joint- lead manager for this offering is BNP Paribas Securities Corp. A copy of the prospectus and prospectus supplement can be obtained from: Citigroup Corporate and Investment Banking Brooklyn Army Terminal, 140 58th Street, 8th Floor Brooklyn, NY 11220 Tel: 718-765-6732 or Fax: 718-765-6734 Goldman, Sachs & Co. Attn: Prospectus Dept., 85 Broad St. New York, NY 10004 Fax: 212-902-9316 E-mail: prospectus-ny@ny.email.gs.com J.P. Morgan Securities Inc. National Statements Processing 4 Chase Metrotech Center, CS Level Brooklyn, NY 11245 Tel: 718-242-8002 Fax: 718-242-1350 Headquartered in Dearborn, Michigan, Ford Motor Company (NYSE: F) -- http://www.ford.com/-- manufactures and distributes automobiles in 200 markets across six continents including Brazil and Mexico in Latin America. 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 Corp. FORD MOTOR: S&P Holds Junk Rating on Proposed US$4.5-Bln Debt ------------------------------------------------------------- Standard & Poor's Ratings Services affirmed its 'B' bank loan and '2' recovery ratings on Ford Motor Co. after the company increased the size of its proposed senior secured credit facilities to between US$17.5 billion and US$18.5 billion, up from US$15 billion. The 'B' bank loan rating and '2' recovery rating indicate the expectation of substantial recovery of principal in the event of a payment default. In addition, Standard & Poor's affirmed its 'CCC+' issue rating on Ford's proposed US$4.5 billion senior unsecured convertible debt issue, which Ford increased from the earlier US$3 billion. The size of this issue may increase to US$4.95 billion if underwriters exercise their option to purchase an additional US$450 million of notes. The secured credit facilities consist of a revolving credit facility, which Standard & Poor's believes will not exceed US$11.5 billion, up from the original US$8 billion, and a US$7 billion term loan B. The size of the term loan B, as well as a US$1.5 billion permitted basket of non-loan exposure, remains unchanged. Although the substantial increase in the size of the revolving credit facility does not change our '2' recovery rating, estimated recoveries according to Standard & Poor's default and emergence scenario are now at the lower end of the '2' range. Standard & Poor's also notes that the increased revolving credit facility reduces the cushion Ford has above a 1x borrowing-base coverage test, one of the primary loan covenants afforded to secured lenders. Pro forma for the proposed transactions, Ford would have availability to fully draw the revolving credit facility with borrowing-base coverage of about 1.15x, down from 1.4x earlier. Because Ford must maintain coverage of at least 1x under this test, a significant future decline in collateral book values or eligibility may reduce availability under the revolving credit facility. In addition to increasing the size of the financing package, Ford also amended the terms under which it may borrow an additional US$2 billion of first-lien debt at a later date. To access this additional US$2 billion of borrowings, Ford must add its minority investment in Mazda Motor Corp. as collateral for all senior secured facilities or reduce the amount of availability under the revolving credit facility by a like amount. Ratings List: * Ford Motor Co. -- Corporate credit rating at B/Negative/B-3; -- Senior secured credit facilities at B; and -- US$4.5 billion senior unsecured debt at CCC+ FORUM E.D.M.: Names Eileen T. F. Sale Liquidator ------------------------------------------------ Eileen T. F. Sale of Sale Smith & Co. Limited was appointed Liquidator of Forum E.D.M. Limited on Nov. 24 for the creditors' voluntary winding-up procedure. The company can be reached at: Forum E.D.M. Limited 33 Lionel Street Birmingham West Midlands B3 1AP United Kingdom Tel: 0121 333 7210 GEM SECURITY: Richard Rones Leads Liquidation Procedure ------------------------------------------------------- Richard Rones of ThorntonRones LLP was appointed Liquidator of Gem Security Group Limited on Nov. 30 for the creditors' voluntary winding-up procedure. The company can be reached at: Gem Security Group Limited 215 London Road Greenhithe Kent DA9 9DQ United Kingdom Tel: 01322222699 Fax: 01322222692 GRAHAM PACKAGING: Warren Knowlton Replaces Philip Yates as CEO -------------------------------------------------------------- Graham Packaging Holdings Company disclosed that Warren D. Knowlton has been named as the company's chief executive officer, effective Dec. 4, 2006, replacing Philip R. Yates, who has retired. Mr. Knowlton will also join the company's board of directors. Mr. Knowlton, served as chief executive officer and executive director of Morgan Crucible PLC, from December 2002 to August 2006. Morgan Crucible is a specialty manufacturer of carbon and ceramic products. Prior to joining Morgan Crucible, he was an executive director of a glass-maker Pilkington PLC. With Pilkington, he first served as president of Global Building Products and then as president of Global Automotive. Mr. Knowlton joined Pilkington in 1997. Since 2000, Mr. Knowlton has served as a non-executive director of Smith & Nephew PLC, Filtrona PLC, and Ameriprise Financial. Philip R. Yates, who has been with Graham Packaging for more than 30 years and has served as chief executive officer since 1998, has agreed to continue with the company as chairman of the board. Mr. Yates will continue to be involved in the oversight of the company's operations. Mr. Yates already serves on the Board and the company expects he will be named chairman at the next meeting. Appointment of Mark Burgess as CFO Mark Burgess has been named chief financial officer, succeeding John E. Hamilton, who is leaving after a 22-year career with Graham Packaging to pursue other interests, including his family's business. Mr. Burgess served as president and chief executive officer, as well as chief financial officer, of Anchor Glass Container Corporation, from May 2005 until September 2006, where he led the company through a successful financial restructuring. He previously served as executive vice president and chief financial officer of Clean Harbors Environmental Services, Inc., from May 2003 until May 2005 and prior to that he served as executive vice president and chief financial officer at JL French Automotive Castings, Inc, from November 2000 to May 2003. Chinh Chu, senior managing director of The Blackstone Group, majority owner of Graham Packaging, said, "Warren Knowlton and Mark Burgess are extremely talented and experienced executives, and we are excited to have them join Graham Packaging. We would also like to thank Phil Yates and John Hamilton for their many dedicated years of service to Graham Packaging. We are pleased that Phil will be remaining as the company's chairman." About Graham Packaging Holdings Graham Packaging Holdings Company is a Pennsylvania limited partnership. Graham Packaging Company, L.P., Holdings' wholly owned subsidiary is a worldwide leader in the design, manufacture and sale of customized blow molded plastic containers for the branded food and beverage, household, personal care/specialty and automotive lubricants product categories and, as of the end of September 2006, operated 85 manufacturing facilities throughout North America, Europe and South America. The Company currently operates 88 plants worldwide including France, Hungary, the Netherlands, Poland, Spain, Turkey and the United Kingdom. The Blackstone Group, an investment firm, holds 78.6 percent equity in Graham Packaging Holdings Company. MidOcean Capital Investors, L.P., holds 4.1 percent. A group of management executives holds 2.3 percent. The family of Graham Packaging founder Donald Graham holds 15 percent. * * * Graham Packaging Holdings Company carries Standard & Poor's B rating for both its LT Foreign Issuer Credit and LT Local Issuer Credit. GRAHAM PACKAGING: Sept. 30 Equity Deficit Tops US$526.1 Million --------------------------------------------------------------- Graham Packaging Holdings Company reported a US$15 million net loss on US$643 million of sales for the third quarter ended Sept. 30, 2006, compared with a US$2.2 million net loss on US$615.1 million of sales in the same period in 2005. At Sept. 30, 2006, the company's balance sheet showed US$2.52 billion in total assets and US$3.05 billion in total liabilities, resulting in a US$526.1 million total partners' deficit. The increase in net loss is primarily due to the decrease in gross profits to US$69.1 million in the third quarter of 2006, from US$79.2 million in the third quarter of 2005. Net sales for the three months ended Sept. 30, 2006, increased US$27.9 million to US$643.0 million from US$615.1 million for the three months ended Sept. 30, 2005. The increase in sales was primarily due to an increase in resin pricing and volume, net of changes in mix and price erosion. The decrease in gross profit was primarily due to a reduction to depreciation expense in 2005 related to finalizing the fixed asset valuation for O-I Plastic of US$11.5 million, a net increase in project costs of US$1.6 million and a net decrease in gross profit related to ongoing business of US$3.4 million, partially offset by a decrease in non-recurring charges of US$2.7 million, a favorable impact from changes in foreign currency exchange rates of US$0.5 million and a net decrease in the loss on disposal of fixed assets of US$3.2 million. Interest expense increased US$900,000 to US$48.3 million for the three months ended Sept. 30, 2006, from US$47.4 million for the three months ended Sept. 30, 2005. The increase was primarily related to an increase in interest rates. Income tax provision increased US$2 million to US$6.6 million for the three months ended Sept. 30, 2006, from US$4.6 million for the three months ended Sept. 30, 2005. The increase was primarily related to the establishment of a valuation allowance on a portion of the tax benefit due to taxable losses and tax credits in North America, partially offset by decreased earnings in North America and Europe. Full-text copies of the company's consolidated financial statements for the third quarter ended Sept. 30, 2006, are available for free at: http://researcharchives.com/t/s?1633 About Graham Packaging Holdings Graham Packaging Holdings Company is a Pennsylvania limited partnership. Graham Packaging Company, L.P., Holdings' wholly owned subsidiary is a worldwide leader in the design, manufacture and sale of customized blow molded plastic containers for the branded food and beverage, household, personal care/specialty and automotive lubricants product categories and, as of the end of September 2006, operated 85 manufacturing facilities throughout North America, Europe and South America. The Company currently operates 88 plants worldwide including France, Hungary, the Netherlands, Poland, Spain, Turkey and the United Kingdom. The Blackstone Group, an investment firm, holds 78.6 percent equity in Graham Packaging Holdings Company. MidOcean Capital Investors, L.P., holds 4.1 percent. A group of management executives holds 2.3 percent. The family of Graham Packaging founder Donald Graham holds 15 percent. * * * Graham Packaging Holdings Company carries Standard & Poor's B rating for both its LT Foreign Issuer Credit and LT Local Issuer Credit. HUXLEY COACHES: Taps Ian C. Brown to Liquidate Assets ----------------------------------------------------- Ian C. Brown of Parkin S Booth & Co. was appointed Liquidator of Huxley Coaches Limited on Nov. 30 for the creditors' voluntary winding-up proceeding. Headquartered in Malpas, England, Huxley Coaches Limited -- http://www.huxleycoachholidays.co.uk/-- operates a fleet of executive coaches for holidays in Britain and Europe, excursions and special offers. MIDLAND TOYS: Creditors' Meeting Slated for December 18 ------------------------------------------------------- Creditors of Midland Toys Ltd. (Company Number 03280332)(t/a Carols Superstore, Carols Megastore, Seasons & Pound Plaza) will meet at 10:00 a.m. on Dec. 18 at: Oak Farm Hotel Watling Street Cannock WS11 1SF 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 Dec. 15 at: Mark Hopkins and Robert Jonathan Hunt Joint Administrative Receivers PricewaterhouseCoopers LLP Cornwall Court 19 Cornwall Street Birmingham B3 2DT United Kingdom Tel: [44] (121) 200 3000 Fax: [44] (121) 200 2464 PricewaterhouseCoopers LLP -- http://www.pwcglobal.com/-- provides auditing services, accounting advice, tax compliance and consulting, financial consulting and advisory services to clients in a variety of industries. PREMIER PERFORMANCE: Brings In Liquidator from Mazars LLP --------------------------------------------------------- Philip Michael Lyon of Mazars LLP was appointed Liquidator of Premier Performance Limited on Nov. 29 for the creditors' voluntary winding-up proceeding. Premier Performance Limited Downing Street Sutton-In-Ashfield Nottinghamshire NG174EF United Kingdom Tel: 01623 553 357 Fax: 01623 555 792 Web: http://www.prem-performance.co.uk/ PRISTINE PRINT: Hires Liquidator from Bond Partners LLP ------------------------------------------------------- T. Papanicola of Bond Partners LLP was appointed Liquidator of Pristine Print Limited on Nov. 29 for the creditors' voluntary winding-up proceeding. The company can be reached at: Pristine Print Limited 241a Selbourne Road Luton Bedfordshire LU4 8NP United Kingdom Tel: 01582 583 377 Fax: 01582 583 366 R.T.O. CONSTRUCTION: Nominates Alex Kachani as Liquidator --------------------------------------------------------- Alex Kachani of Crawfords was nominated Liquidator of R.T.O. Construction Limited on Nov. 22 for the creditors' voluntary winding-up procedure. The company can be reached at: R.T.O. Construction Limited 13 Fladgate Road Waltham Forest London E11 1LX United Kingdom Tel: 020 8553 3028 RANK GROUP: Peter Johnson Succeeds Alun Cathcart as Chairman ------------------------------------------------------------ The Rank Group Plc appointed Peter Johnson as Chairman, to succeed Alun Cathcart who retires from the Board at the end of February 2007. Mr. Johnson is currently the chairman of Inchcape Plc and a non- executive director of Bunzl Plc. He will join the Board of Rank as Deputy Chairman from Jan. 1, 2007 and will become Chairman on March 1, 2007. Mr. Cathcart has been Chairman of the Group for almost six years. Under his chairmanship, Rank has transformed itself from a broad-based conglomerate into a focused gaming and leisure business. Ian Burke, Chief Executive of Rank said, "On behalf of the Board I wish to thank Alun for the leading role that he has played in re-shaping The Rank Group. Under his guidance the Group has sold a number of non-core businesses and established a leading position in the U.K. gaming sector." "Rank is entering a new phase in its development, adapting to the range of social, regulatory and legislative influences that are changing the U.K. gaming market. Peter Johnson's depth of retail experience and his proven qualities of leadership are of great importance to the Group as we seek to grasp the opportunities and to overcome the challenges presented by our changing business environment," Mr. Burke added. About Rank Group Headquartered in London, United Kingdom, Rank Group PLC -- http://www.rank.com/-- is an international leisure and entertainment company. The Group provides services to the film industry, including film processing, video duplication and cinema exhibition. The Group's leisure and entertainment activities entail gambling services, encompassing Mecca Bingo Clubs and Grosvenor Casinos, and owned and franchises Hard Rock cafes. * * * As reported in the TCR-Europe on Dec. 11, Fitch Ratings downgraded Rank Group Plc's Issuer Default and Senior Unsecured Ratings to B+ from BB-. Fitch assigned a RR4 Recovery rating to Rank's outstanding bonds. The Short-term rating is affirmed at B and the Outlook remains Negative. On March 6, Moody's Investors Service assigned a Ba2 corporate family rating to The Rank Group Plc and concurrently downgraded the senior unsecured long-term debt ratings of Rank Group Finance Plc (guaranteed by The Rank Group Plc) to Ba2 from Baa3). At the same time, Fitch Ratings downgraded The Rank Group PLC's Long-term Issuer Default rating and Senior Unsecured ratings to BB- from BB+ and removed them from Rating Watch Negative. A Negative Outlook is assigned. The Short-term rating is affirmed at B. The downgrade follows the disposal of its film processing business, Deluxe Film, and confirmation of a return of capital to shareholders announced in conjunction with its 2005 preliminary results. In addition, Standard & Poor's Ratings Services lowered its long- and short-term corporate credit ratings on U.K.-based diversified leisure and entertainment company The Rank Group PLC to 'BB-/B' from 'BBB-/A-3'. REBUILD CENTRE: Appoints Ian Pattinson to Liquidate Assets ---------------------------------------------------------- Ian Pattinson was appointed Liquidator of The Rebuild Centre Limited on Nov. 28 for the creditors' voluntary winding-up procedure. The company can be reached at: The Rebuild Centre Limited 3, Hilary Bevins Close Higham-on-the-Hill Nuneaton Warwickshire CV13 6AQ United Kingdom Tel: 07860 673975 ROMFORD BATHROOMS: Calls In Liquidator from Carter Clark -------------------------------------------------------- A. J. Clark of Carter Clark was appointed Liquidator of Romford Bathrooms Direct Limited on Nov. 28 for the creditors' voluntary winding-up procedure. Headquartered in Romford, England, Romford Bathrooms Direct Limited -- http://www.romfordbathroomsdirect.co.uk/-- offers bathroom planning, design and installation services. The company operates throughout Essex and Romford. SAMSONITE CORP: Moody's Junks US$205-Million 8.875% Notes --------------------------------------------------------- Moody's Investors Service confirmed the B1 corporate family rating for Samsonite Corp. Moody's also assigned Ba3 ratings to the proposed US$80-million senior secured revolving credit facility and US$450-million term loan B. Proceeds from the new facilities, along with a portion out outstanding cash balances, will be used to fund a special dividend and debt repurchase, and pay associated fees and premiums. The outlook is positive. This concludes the review for possible upgrade that commenced on Sept. 13, 2006. The confirmation reflects Moody's concern that the proposed US$175-million special dividend, which was announced as part of a series of transactions in November 2006, will significantly increase leverage and weaken credit metrics to a level that is inconsistent with an upgrade at this time. Moody's estimates that pro forma leverage (debt-to-EBITDA) would exceed 6 times upon completion of the transaction, up from 4.1 times for the LTM period ending July 30, 2006. The positive rating outlook reflects Moody's expectation that the company will continue its profitable growth, both organically and through further investment, while improving free cash flow generation and rapidly reducing leverage. A ratings upgrade would likely occur if leverage approaches 4.5 times while maintaining positive free cash flow and EBITA margins of over 10% by the end of FYE January 2008. On Nov. 21, 2006, Samsonite announced a series of transactions including: 1) an offer to purchase for cash any and all of its outstanding 8-7/8% Senior Subordinated Notes due 2011 and Floating Rate Senior Notes due 2010; 2) the conversion of at least 90% of the Company's outstanding shares of convertible preferred stock into shares of its common stock; 3) the entering into a new credit facility consisting of an approximately US$450-Mln term loan facility and an approximately US$80-Mln revolving credit facility; and 4) the distribution of US$175-Mln in cash in the form of a special dividend to the company's stockholders. Ratings assigned and confirmed: Samsonite Corp. -- US$80-Mln senior secured revolving credit facility at Ba3 (LGD2, 25%); -- US$450-Mln senior secured term loan at Ba3 (LGD2, 25%); and -- Corporate Family Rating at B1. Ratings downgraded: Samsonite Corp. -- EUR100-Mln senior unsecured notes to B1 from Ba3; and -- US$205-Mln 8.875% subordinated to Caa1 from B3. The ratings on both instruments will be withdrawn upon completion of the transaction. Samsonite's ratings are supported by the global strength of its brands, strong global market share, good geographic and distribution diversity, and solid cash flow generation and liquidity. However, the ratings are currently constrained by high pro forma leverage (debt to EBITDA) and weak pro forma credit metrics as a result of the proposed special dividend, its small size relative to other global consumer products companies, and limited product diversification. The new revolver and term loan are secured by substantially all assets of Samsonite Corp. and all wholly owned domestic direct and indirect subsidiaries. The obligations of Samsonite Europe N.V. will be secured by a first priority lien on those same assets and by a first priority pledge of a portion of the equity of SC International Holdings C.V. and all of the equity of SC Denmark ApS and Samsonite Europe N.V. However, a portion of the Samsonite's assets are pledged as security to the Pension benefit Guaranty Corporation under a 2003 agreement. Both the revolver and term loan are guaranteed by the U.S. subsidiaries, while borrowings from Samsonite Europe N.V. also benefit from additional guarantees by Samsonite Corp., SC International Holdings C.V. and SC Denmark ApS. A mechanism in the credit facilities will provide for pari passu sharing of collateral between the lenders to Samsonite Corp. and Samsonite Europe N.V. The facilities will include one financial covenant limiting the level of total debt to EBITDA at levels to be determined. Samsonite is a leading manufacturer, marketer and distributor of luggage and travel-related products. The company's owned and licensed brands, which include Samsonite, American Tourister, Sammies, Lacoste and Timberland, are sold globally through external retailers and 284 company-owned stores. Net sales for the 12-month period ended July 30, 2006, were US$996 million. Executive offices are located in London, United Kingdom. SQUEEZE U.K.: Nominates Lane Bednash to Liquidate Assets -------------------------------------------------------- Lane Bednash of David Rubin & Partners was nominated Liquidator of Squeeze U.K. Limited on Nov. 29 for the creditors' voluntary winding-up proceeding. The company can be reached at: Squeeze U.K. Limited Unit 9 Latimer Road London W10 6RA United Kingdom Tel: 020 8969 6606 STEAMLINE LAUNDRY: Hires Liquidator from Rifsons ------------------------------------------------ Arif Anwar of Rifsons was appointed Liquidator of Steamline Laundry Limited on Nov. 30 for the creditors' voluntary winding-up proceeding. The company can be reached at: Steamline Laundry Limited 40 Waterloo Road Brent London NW2 7UH United Kingdom Tel: 020 8452 4546 TIMKEN CO: Sells Latrobe Steel to Watermill, Hicks for US$215MM --------------------------------------------------------------- The Timken Company completed the sale of its subsidiary, Latrobe Steel, to a group of investors led by the Watermill Group, Hicks Holdings and Sankaty Advisors, for approximately US$215 million in cash. The proceeds provide resources for general corporate purposes, including strategic growth initiatives and pension funding. "We are taking actions across our portfolio to increase the ability to generate consistent profitable growth," James W. Griffith, president and chief executive officer, said. "We believe the divestment of Latrobe Steel will create new opportunities for us to invest in key industrial markets that have the potential to generate greater value for our shareholders over time." Steven E. Karol, founder and managing partner of the Watermill Group said, "Watermill has a long history of buying and helping businesses improve. Latrobe Steel is attractive to us due to its position in growing and profitable markets and a strong management team. Latrobe has manufacturing and distribution facilities that are up-to-date, well-maintained and which will support the company's continued growth. We look forward to partnering with Hicks, Sankaty and local management in this endeavor." "As with our recent sale of the precision steel components business in Europe and our intention to exit the tubing business in the United Kingdom, the sale of Latrobe Steel reinforces our focus on the alloy steel business," Salvatore J. Miraglia, Jr., president of Timken's Steel Group, said. "We invested in our alloy steelmaking capabilities during 2006, adding a new induction heat-treat line and expanding large bar capacity, and will continue to look for opportunities to strengthen our portfolio in this core area going forward." About Latrobe Steel Headquartered in Latrobe, Pa., Latrobe Steel through its two primary business units, Latrobe Steel Manufacturing and Latrobe Steel Distribution, produces and distributes more than 300 grades of specialty steels for use in aerospace applications, high performance cutting tools, aluminum casting dies, extrusion and thread roll dies and other demanding applications. Latrobe Steel has more than 800 associates across the United States, including approximately 530 in Latrobe, Pa. About The Watermill Group The Watermill Group -- http://www.watermill.com-- is a private strategic investment firm that focuses on acquiring middle- market companies in which it can add value through strategic and operational guidance as well as investment capital. About Hicks Holdings LLC Dallas, Tex.-based Hicks Holdings LLC is a private investment firm that makes corporate acquisitions as well as owns and manages assets in sports and real estate. The firm's strategy is based on the "buy build" concept pioneered by Tom Hicks in the mid-1980s. Examples of the buy build strategy include Dr Pepper/7-Up, International Home Foods and Chancellor/Clear Channel. About Sankaty Advisors Sankaty Advisors, LLC, the credit affiliate of Bain Capital, LLC, is a private manager of high yield debt obligations. With approximately US$13 billion in assets, Sankaty invests in a variety of securities, including leveraged loans, high-yield bonds, stressed debt, distressed debt, mezzanine debt, structured products and equity investments. About The Timken Company Headquartered in Canton, Ohio, The Timken Company (NYSE: TKR) -- http://www.timken.com/-- manufactures highly engineered bearings and alloy steels. It also provides related components and services such as bearing refurbishment for the aerospace, medical, industrial, and railroad industries. The Company has operations in 27 countries and employs 27,000 employees. * * * As reported in the Troubled Company Reporter on Oct. 30, 2006, Moody's Investors Service confirmed The Timken Company's Ba1 Corporate Family Rating and the Ba1 rating on the company's US$300 Million Unsecured Medium Term Notes Series A due 2028 in connection with the rating agency's implementation of its new Probability-of-Default and Loss-Given-Default rating methodology. VEDARIO LIMITED: Creditors' Meeting Slated for December 15 ---------------------------------------------------------- Creditors of Vedario Ltd. (t/a Don Antonio) (Company Number 01442809) will meet at 11:00 a.m. on Dec. 15 at: Cresswall Associates Limited Maple View White Moss Business Park Skelmersdale Lancashire WN8 9TG 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 Dec. 14 at: D. P. Hennessy Joint Administrator Cresswall Associates Ltd. West Lancashire Investment Centre Maple View Whitemoss Business Park Skelmersdale Lancashire WN8 9TG United Kingdom Tel: 01695 712683 ********* 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 * * *