/raid1/www/Hosts/bankrupt/TCRLA_Public/060509.mbx
T R O U B L E D C O M P A N Y R E P O R T E R
L A T I N A M E R I C A
Tuesday, May 9, 2006, Vol. 7, Issue 91
Headlines
A R G E N T I N A
ACIBIS SA: Submission of Proofs of Claim Ends on June 8
AES CORP: Conducts Due Diligence in Hydroelectric Plants Deal
AMILCAR: Sets June 14 as Last Day for Proofs of Claim Filing
LILIANA FLORINDA: Seeks Court Approval for Reorganization
LITRAN SA: Trustee Verifies Proofs of Claim Until May 30
PETROBRAS ENERGIA: Forms Consortium with Argentina & Uruguay
PSIAR SA: Trustee Stops Accepting Proofs of Claim on June 2
REPSOL YPF: Forms Consortium with Argentina & Uruguay Firms
RIGON SRL: Validation of Creditors' Claims Ends on May 31
RODOLFO COLALONGO: Proofs of Claim Filing Ends on May 15
TELECOM ARGENTINA: Will Invest ARS200 Million in Patagonia
T Y M SA: Sets June 28 as Deadline for Proofs of Claim Filing
VARIG: Government Aid Rumors Cause Shares to Rise Sharply
* ARGENTINA: Forms Consortium with Private Companies & Uruguay
* ARGENTINA: Unable to Resolve Pricing During Gas Summit
B A H A M A S
PINNACLE ENTERTAINMENT: Ups Purchase Offer for Aztar to US$2.58B
B E R M U D A
CONOCO IRAN: Sets May 17 as Last Day for Proofs of Claim Filing
OLD BROAD: Creditors Must File Proofs of Claim by May 17
B O L I V I A
REPSOL YPF: Closely Studies Implications of Bolivia's Decree
* BOLIVIA: Nationalization May Bring In US$780M Addt'l Revenues
* BOLIVIA: Petrobras Suspends New Investments in Country
* BOLIVIA: Unable to Reach Specific Agreement in Gas Summit
B R A Z I L
BANCO DO BRASIL: Agrees with Unions on Worker Pension Benefits
BANCO NACIONAL: Approves US$77.7 Million Loan to Naval Sector
COMPANHIA ENERGETICA: Inks Purchase Pact with Schahin Holding
NOSSA CAIXA: Delays Auction to Await Decision on Mapfre Appeal
PETROLEO BRASILEIRO: Puts Off New Investments in Bolivia
RIPASA SA: Suzano Discloses New Schedule for Restructuring
UNIAO DE BANCOS: Refutes Reports to Sell Controlling Stake
* BRAZIL: Unable to Resolve Pricing During Gas Summit
C A Y M A N I S L A N D S
ASTER CITY CABLE EUROPE I: Holds Final General Meeting on May 23
BALANCED HIGH-YIELD: Final Shareholders Meeting Set for May 18
CRONOS EQUIPMENT: Liquidator Stops Accepting Claims by May 18
GDANSK LEASING: Proofs of Claim Filing Deadline Set for May 19
LIBERTY CORNER PATRIOT: Filing of Proofs of Claim Ends on May 19
C H I L E
BANCO BICE: Moody's Affirms C Financial Strength Rating
BANCO DE CREDITO: Moody's Affirms C Financial Strength Rating
FALCONBRIDGE: Reaches Labor Agreement on Lomas Bayas Copper Mine
C U B A
* CUBA: China Offers Aid in Electricity Network Repair & Upgrade
D O M I N I C A N R E P U B L I C
* DOMINICAN REPUBLIC: Fitch Ups LT Foreign Currency Rating to B
E C U A D O R
PETROECUADOR: Analyzes Liquefied Petroleum Gas Storage Proposal
E L S A L V A D O R
* EL SALVADOR: Agrees with Honduras on El Tigre Project Location
H A I T I
* HAITI: Canada Grants US$48 Million Financial Assistance
H O N D U R A S
* HONDURAS: Cites Progress on El Tigre Project with El Salvador
M E X I C O
EMPRESAS ICA: First Quarter Revenues Up 11% to Ps4.6 Billion
MERIDIAN AUTOMOTIVE: Court Disqualifies Milbank as Counsel
MERIDIAN AUTOMOTIVE: Posts US$12.5 Mil. Net Loss in March 2006
P A R A G U A Y
* PARAGUAY: Will Increase Beef Exports to Taiwan
P E R U
* PERU: Will Open Market to US Beef by End of May
P U E R T O R I C O
MUSICLAND HOLDING: Pays Postpetition Debts to Licensing Venture
* PUERTO RICO: Senate Cancels Subsidies to Political Parties
T R I N I D A D & T O B A G O
DIGICEL: Judge Gobin Declares Panel Can't Issue Interim Rates
DIRECTV: Admonished by TATT Director Over Columbus Warning
U R U G U A Y
* URUGUAY: Forms Consortium with Private Companies & Argentina
* URUGUAY: Will Deepen Ties & Discuss Free Trade Pact with US
V E N E Z U E L A
PETROLEOS DE VENEZUELA: Uses SISDEM as Recruitment System
* VENEZUELA: Withdrawing from G-3 Trade Bloc
- - - - -
=================
A R G E N T I N A
=================
ACIBIS SA: Submission of Proofs of Claim Ends on June 8
-------------------------------------------------------
Creditors of Acibis S.A. are required to submit proofs of claim
by June 8, 2006. Infobae relates that the claims will undergo a
verification phase. Creditors whose claims are not validated
will be disqualified from receiving any payment that the company
will make.
Acibis S.A. was declared bankrupt by a Buenos Aires court.
Graciela Estela Cattelan was appointed as trustee.
The trustee can be reached at:
Graciela Estela Cattelan
Calle 11, Numero 716
La Plata
Buenos Aires, Argentina
AES CORP: Conducts Due Diligence in Hydroelectric Plants Deal
-------------------------------------------------------------
AES Corporation carries out due diligence that is expected to
last a month, in connection with its plan to buy controlling
stakes in 270-MW Hinisa and 390-MW Hidisa hydroelectric power
plants that are located in Mendoza, Argentina, a company
spokesman confirmed to Dow Jones Newswires.
The company has already signed a letter of understanding that
gave the company an edge over Grupo Dolphin's bid for the stake.
Grupo Dolphin is an Argentine investment fund group that is
controlled by Electricite de France.
The company official withheld the purchase price, but local
financial newspaper El Cronista reported an estimated price of
US$37 million.
This move by AES is aimed to increase the company's hydropower
resources, as the commodity is progressively becoming scarcer in
Argentina.
AES already operates five hydroelectric plants in the state,
however production is only seasonal due to heavy reliance on
rainy periods. Meanwhile, the Hinisa and Hidisa plants assure a
continuous generation due to constant flows from the rain and
Andean snow melt.
Mendoza Governor Julio Cobos ordered Electricite de France to
sell its stake in the Hinisa and Hidisa plants in connection
with an overall ownership restructuring, in which the government
of Mendoza will correspondingly decrease its stake in the
plants.
According to the Hinisa-Hidisa Web site, Electricite de France
owns a 64.9% stake in the Inversora Nihuiles that controls the
Hinisa plant and 56% stake in Inversora Diamante that controls
the Hidisa plant.
Headquartered in Arlington, Virginia, AES Corporation --
http://www.aes.com/-- is a global power company. The Company
operates in South America, Europe, Africa, Asia and the
Caribbean countries. Generating 44,000 megawatts
of electricity through 124 power facilities, the Company
delivers electricity through 15 distribution companies.
AES's Latin America business group is comprised of generation
plants and electric utilities in Argentina, Brazil, Chile,
Colombia, Dominican Republic, El Salvador, Panama and Venezuela.
Fuels include biomass, diesel, coal, gas and hydro. The group
also pursues business development activities in the region. AES
has been in the region since May 1993, when it acquired the CTSN
power plant in Argentina.
* * *
As reported in the Troubled Company Reporter on March 31, 2006,
Standard & Poor's Ratings Services raised its corporate credit
rating on diversified energy company The AES Corp. to 'BB-' from
'B+'. S&P said the outlook is stable.
As reported in the Troubled Company Reporter on Jan. 11, 2006,
Moody's affirmed the ratings of The AES Corporation, including
its Ba3 Corporate Family Rating and the B1 rating on its senior
unsecured debt. Moody's said the rating outlook remains stable.
AMILCAR: Sets June 14 as Last Day for Proofs of Claim Filing
------------------------------------------------------------
Sara Rey de Lavolpe, court-appointed trustee, has started
verifying claims against Amilcar De Giorgi-Fernando De Giorgi
Sociedad de Hecho.
La Nacion relates that Buenos Aires' Court No. 7 has declared
the company bankrupt.
Clerk No. 14 assists the court in this case.
The trustee can be reached at:
Sara Rey de Lavolpe
Cerrito 1136
Buenos Aires, Argentina
LILIANA FLORINDA: Seeks Court Approval for Reorganization
---------------------------------------------------------
Court No. 26 of Buenos Aires' civil and commercial tribunal is
studying the request for reorganization submitted by local
company Liliana Florinda Taladriz y Ramon Deza Sociedad de
Hecho, says La Nacion.
The report adds that that the Company filed for reorganization
following cessation of debt payments.
The city's Clerk No. 52 assists the court on this case.
The debtor can be reached at:
Liliana Florinda Taladriz y Ramon
Deza Sociedad de Hecho
Franklin D. Roosevelt 2891
Buenos Aires, Argentina
LITRAN SA: Trustee Verifies Proofs of Claim Until May 30
--------------------------------------------------------
Court-appointed trustee Susana Beatriz Minio will verify
creditors' claims against Litran S.A. until May 30, 2006.
Creditors whose claims are not validated will be disqualified
from receiving any payment that the company will make.
A court based in the Neuquen Capital handles the company's
bankruptcy case.
The trustee can be reached at:
Susana Beatriz Minio
Mendoza 69
Nuequen Capital, Argentina
PETROBRAS ENERGIA: Forms Consortium with Argentina & Uruguay
------------------------------------------------------------
Petrobras Energia Participaciones, the Argentine unit of
Petroleo Brasileiro SA, has formed an offshore exploration
consortium with Spanish-Argentine Repsol YPF and with state-run
oil firms from Argentina and Uruguay, Dow Jones Newswires
reports.
Dow Jones relates that a letter of agreement was signed in
January.
According to Dow Jones, the consortium is aimed at the
exploration of the Enarsa 1 and CCM2 blocks about 250 kilometers
east of seaside Mar de Plata, Argentina.
According to a letter Petrobras filed with the Buenos Aires
Sotck Exchange, it was agreed that:
-- Petrobras Energia holds a 25% participation,
-- Repsol holds 35% participation,
-- Argentina's state-run Enarsa holds 35% participation,
and
-- Petrouruguay holds 5% participation.
Dow Jones states that Petrobras Energia, Repsol and Petrouruguay
will front the investment costs. Enarsa, on the other hand,
will pay them back for its part when hydrocarbons are tapped.
The consortium plans to spend about US$20 million in seismic
studies. Drilling, based on the results, could demand further
investments of US$30 million to US$50 million for each well,
according to a statement from Petrobras Energia.
* * *
As reported on Feb. 6, 2006, Standard & Poor's Ratings Services
said that its ratings on Petrobras Energia S.A. (PESA; B/Watch
Neg/--) will not be affected by the company's announced
accounting adjustment that will be reflected in the financial
statements as of Dec. 31, 2005. Net worth will decrease by
approximately US$60 million as a result of a provision of US$140
million against its Venezuelan assets to adjust their expected
recovery value, and the reversal of certain allowances for tax
credits for about US$83 million.
Since the accounting adjustments do not imply cash movements,
they do not have an impact on the ratings on PESA at this point.
Nevertheless, in line with S&P's concerns, the adjustments
reflect lower than previously expected future cash generation
due to changing business conditions in Venezuela. The ratings
will remain on CreditWatch Negative, reflecting the
uncertainties of oil and gas concessions' renegotiation in
Venezuela.
PSIAR SA: Trustee Stops Accepting Proofs of Claim on June 2
-----------------------------------------------------------
Ines Etelvina Clos, the trustee appointed by a Buenos Aires
court for the bankruptcy of Psiar S.A., will no longer entertain
claims submitted after June 2, 2006, Infobae reports. Creditors
whose claims are not validated will be disqualified from
receiving any payment that the company will make.
The debtor can be reached at:
Psiar S.A.
Avenida de Mayo 651
Buenos Aires, Argentina
The trustee can be reached at:
Ines Etelvina Clos
Sarmiento 944
Buenos Aires, Argentina
REPSOL YPF: Forms Consortium with Argentina & Uruguay Firms
-----------------------------------------------------------
Spanish-Argentine Repsol YPF has formed an offshore exploration
consortium with Petrobras Energia Participaciones and with
state-run oil firms from Argentina and Uruguay, Dow Jones
Newswires reports.
Dow Jones relates that a letter of agreement was signed in
January.
According to Dow Jones, the consortium is aimed at the
exploration of the Enarsa 1 and CCM2 blocks about 250 kilometers
east of seaside Mar de Plata, Argentina.
According to a letter Petrobras filed with the Buenos Aires
Sotck Exchange, it was agreed that:
-- Petrobras Energia holds a 25% participation,
-- Repsol holds 35% participation,
-- Argentina's state-run Enarsa holds 35% participation,
and
-- Petrouruguay holds 5% participation.
Dow Jones states that Petrobras Energia, Repsol and Petrouruguay
will front the investment costs. Enarsa, on the other hand,
will pay them back for its part when hydrocarbons are tapped.
The consortium plans to spend about US$20 million in seismic
studies. Drilling, based on the results, could demand further
investments of US$30 million to US$50 million for each well,
according to a statement from Petrobras Energia.
* * *
On June 20, 2005, Moody's Investors Service upgraded the ratings
of Spanish-Argentine oil company Repsol YPF's local subsidiary
YPF S.A. Moody's upgraded YPF's senior unsecured rating to Ba3
from B1 and the unit's domestic currency issuer rating to Baa2
from Baa3.
YPF's foreign currency issuer rating of Caa1 remained unchanged,
as it is constrained by the sovereign ceiling of Argentina.
YPF's Corporate Family Rating (formerly known as the senior
implied rating) is aligned with the foreign currency issuer
rating at Caa1.
RIGON SRL: Validation of Creditors' Claims Ends on May 31
---------------------------------------------------------
The validation of creditors' proofs of claim against Rigon
S.R.L. will end on May 31, 2006, Argentine daily La Nacion
reports.
Buenos Aires' Court No. 7 approved the company's petition for
reorganization filed after the company defaulted on its debt
payments. Adrian Ponce was appointed as trustee.
An informative assembly will be held on March 13, 2007.
Creditors will vote to ratify a completed settlement plan
during the said assembly.
The city's Clerk No. 14 assists the court on the case.
The debtor can be reached at:
Rigon S.R.L.
Avenida Cordoba 417
Buenos Aires, Argentina
The trustee can be reached at:
Adrian Ponce
Bernardo de Irigoyen 330
Buenos Aires, Argentina
RODOLFO COLALONGO: Proofs of Claim Filing Ends on May 15
--------------------------------------------------------
Carlos Walter Maidub -- the trustee appointed by a court based
in Nuequen Capital for the Rodolfo Colalongo S.A. bankruptcy
case -- will stop validating claims from the company's creditors
on May 15, 2006.
The debtor can be reached at:
Rodolfo Colalongo S.A.
Quili Malal s/n San Patricio del Cha¤ar
Nuequen Capital, Argentina
The trustee can be reached at:
Carlos Walter Maidub
Rivadavia 86
Neuquen Capital, Argentina
TELECOM ARGENTINA: Will Invest ARS200 Million in Patagonia
----------------------------------------------------------
Telecom Argentina will invest ARS200 million in the Patagonia
region this year, according to Agencia Nacional de Noticias.
According to Business News Americas, Telecom Argentina believes
that Patagonia has strong growth potential.
"The investments Telecom Argentina made this year have allowed
us to advance in markets with significant potential for the
firm," Martin Vaca, the telecom's commercial director, told
BNamericas.
Headquartered in Buenos Aires, Telecom Argentina S.A. --
http://www.telecom.com.ar/index-flash.html-- is the fixed-line
operator for local and long-distance services in northern and
southern Argentina. It also provides cellular and PCS phone
services in Argentina, as well as in Paraguay through a 68%
stake in Nocleo. France Telecom formerly controlled the company
through its Nortel Inversora venture with Telecom Italia.
France Telecom sold most of its stake in 2003 to the Werthein
Group, an Argentine agricultural concern owned in part by vice
chairman Gerardo Werthein. Nortel continues to be Telecom
Argentina's largest shareholder with a 55% stake. Nortel is
owned by Sofora, a consortium owned by Telecom Italia (50%), the
Werthein Group (48%), and France Telecom (2%).
* * *
Telecom Argentina's US$64,128,000 and US$54,124,000 notes due
Oct. 15, 2014, carry Standard & Poor's and Fitch's B- ratings.
* * *
As reported in the Troubled Company Reporter on April 27, 2006,
Fitch Ratings made these changes on Telecom Argentina:
Foreign Currency
-- Previous Rating: 'B-'
-- New RR: 'B', Rating Outlook Stable
Local Currency
-- Previous Rating: 'B-'
-- New RR: 'B', Rating Outlook Stable
US$1.5 billion, Senior Unsecured Notes due 2011 and 2014
-- Previous Rating: 'B-'
-- New IDR: 'B/RR4'
* * *
As reported in the Troubled Company Reporter on April 26, 2006,
Standard & Poor's Ratings Services raised its foreign and local
currency corporate credit ratings on several Argentine entities
and removed them from CreditWatch, where they were placed with
positive implications on March 23, 2006. Telecom Argentina
S.A.'s rating was upgraded to B from B-.
The rating actions followed the upgrade on the global foreign
and local currency ratings on the Republic of Argentina to 'B'
from 'B-' and the ratings on Argentina's national scale to
'raAA-' from 'raA'.
T Y M SA: Sets June 28 as Deadline for Proofs of Claim Filing
-------------------------------------------------------------
Susana Roiter, the court-appointed trustee, has started
verifying claims against T y M S.A.
La Nacion relates that Buenos Aires' Court No. 24 declared the
company's bankruptcy in favor of Alfredo Steinhard, whom the
company owes US$67,193.53.
Clerk No. 48 assists the court in this case.
The debtor can be reached at:
T y M S.A.
Mendoza 2123
Buenos Aires, Argentina
The trustee can be reached at:
Susana Roiter
Marcelo T. de Alvear 1430
Buenos Aires, Argentina
VARIG: Government Aid Rumors Cause Shares to Rise Sharply
---------------------------------------------------------
Shares of Brazil's embattled flagship airline Viacao Aerea
Rio-Grandense, or Varig, rose sharply Thursday for a third-
consecutive session amid rumors that the government will seek to
help the company, citing traders quoted in local newspapers.
Bloomberg shows shares closed at BRL4.82 Friday afternoon after
spiking above BRL7.00 on Thursday.
Investors are buying on rumors that the government will offer
heavy support for the company if a viable offer is made for the
company, said a trader quoted by the local Estado newswire.
Brazil's government will not pump public funds into Varig, but
it could finance an eventual purchase of the airline, President
Luiz Inacio Lula da Silva said.
"Varig is a privately owned company and the solution to its
problems must come from the market.... However, we could finance
the rescue of Varig," he said during a public appearance in Sao
Paulo.
Varig has been in trouble for years amid a mounting debt burden,
which has spiraled to more than 8 billion Brazilian reals
(US$3.9 billion). Problems have intensified recently as Varig
lacks cash to pay operating expenses and could be faced to
ground its fleet.
Russian businessman Boris Berezovsky has recently made a bid for
the airline. A company spokesman said Mr. Berezovsky, who
currently lives in self-imposed exile in London, England,
visited the company during the last week of April to discuss the
state of the company and made an offer of unspecified value.
Mr. Berezovsky's bid is one of four for the company. Among the
bids are:
-- a US$400 million offer from VarigLog, the company's former
cargo unit, owned by a group of Brazilian investors and
U.S. investment fund Matlin Patterson,
-- a bid from a group of investors led by Brazilian
consultant Jaime Toscano and another from TGV, which
represents Varig workers,
Meanwhile, Varig's bankruptcy administrators are touting a plan
to spin off the company's domestic operations, which will be
sold to fund the restructuring of international operations and
debt servicing. The plan could involve government financing.
Varig remains the dominant Brazilian carrier on the
international market, but it has fallen behind TAM and Gol on
the domestic market.
Mr. Berezovsky, who made billions in the media, airline and oil
industries, may face problems investing in Varig because of
Brazilian legislation that limits foreign stakes in Brazilian
airline companies to 20%.
Meanwhile, Berezovsky faces an international warrant for his
arrest outside the U.K., where he has been granted asylum, amid
allegations of money laundering and graft.
About VARIG
Headquartered in Rio de Janeiro, Brazil, VARIG S.A. is Brazil's
largest air carrier and the largest air carrier in Latin
America.
VARIG's principal business is the transportation of passengers
and cargo by air on domestic routes within Brazil and on
international routes between Brazil and North and South America,
Europe and Asia. VARIG carries approximately 13 million
passengers annually and employs approximately 11,456 full-time
employees, of which approximately 133 are employed in the United
States.
The Company, along with two affiliates, filed for a judicial
reorganization proceeding under the New Bankruptcy and
Restructuring Law of Brazil on June 17, 2005, due to a
competitive landscape, high fuel costs, cash flow deficit, and
high operating leverage. The Debtors may be the first case
under the new law, which took effect on June 9, 2005. Similar
to a chapter 11 debtor-in-possession under the U.S. Bankruptcy
Code, the Debtors remain in possession and control of their
estate pending the Judicial Reorganization. Sergio Bermudes,
Esq., at Escritorio de Advocacia Sergio Bermudes, represents the
carrier in Brazil.
Each of the Debtors' Boards of Directors authorized Vicente
Cervo as foreign representative. In this capacity, Mr. Cervo
filed a Sec. 304 petition on June 17, 2005 (Bankr. S.D.N.Y. Case
Nos. 05-14400 and 05-14402). Rick B. Antonoff, Esq., at
Pillsbury Winthrop Shaw Pittman LLP represents Mr. Cervo in the
United States. As of March 31, 2005, the Debtors reported
BRL2,979,309,000 in total assets and BRL9,474,930,000 in total
debts.
* ARGENTINA: Forms Consortium with Private Companies & Uruguay
--------------------------------------------------------------
Enarsa, Argentina's state-owned oil firm, formed an offshore
exploration consortium with Spanish-Argentine Repsol YPF,
Petrobras Energia Participaciones and Uruguay, Dow Jones
Newswires reports.
Dow Jones relates that a letter of agreement was signed in
January.
According to Dow Jones, the consortium is aimed at the
exploration of the Enarsa 1 and CCM2 blocks about 250 kilometers
east of seaside Mar de Plata, Argentina.
According to a letter Petrobras filed with the Buenos Aires
Sotck Exchange, it was agreed that:
-- Petrobras Energia holds a 25% participation,
-- Repsol holds a 35% participation,
-- Argentina's state-run Enarsa holds a 35% participation,
and
-- Petrouruguay holds a 5% participation.
Dow Jones states that Petrobras Energia, Repsol and Petrouruguay
will front the investment costs. Enarsa, on the other hand,
will pay them back for its part when hydrocarbons are tapped.
The consortium plans to spend about US$20 million in seismic
studies. Drilling, based on the results, could demand further
investments of US$30 million to US$50 million for each well,
according to a statement from Petrobras Energia.
* * *
Fitch Ratings assigned these ratings on Argentina:
Rating Rating Date
------ -----------
Country Ceiling RD Dec. 14, 2005
Long Term IDR B Dec. 14, 2005
Short Term IDR B- Jun. 3, 2005
Local Currency
Long Term Issuer
Default Rating B Jun. 3, 2005
* ARGENTINA: Unable to Resolve Pricing During Gas Summit
--------------------------------------------------------
During the May 4 summit, the Presidents of Argentina, Brazil and
Venezuela were unable to come up with specific agreements that
will protect their investment interests after the
nationalization of Bolivia's hydrocarbons industry.
The meeting, called by Brazilian President Inacio Lula da Silva
failed to find a regional diplomatic solution to tensions
sparked by Bolivia's decision.
According to Reuters, the four presidents barely agreed that all
negotiations pending in connection with gas supply and prices
will be addressed bilaterally in the future.
Bolivian President Evo Morales has previously said that Brazil
and Argentina needed to understand his petition for them to pay
higher prices for Bolivian gas, El Universal states, citing a
report by the Bolivian Agency of Information.
"Indeed, Brazil and Argentina have to pay a higher price for the
(Bolivian) gas they are purchasing because, under the agreement,
prices should have been reviewed back in 2004. I do regret that
the governments involved did not do so," President Morales told
reporters after a meeting last week with Venezuelan President
Hugo Chavez.
The presidents of Argentina and Brazil want to deepen bilateral
talks that would solve the price disagreement.
"We do respect and praise the sovereign decisions of all
countries, particularly of the Bolivian people, in this case,"
Argentine President Nestor Kirchner was quoted by El Universal
as saying.
Argentina and Brazil, Bolivia's largest oil consumers, were
assured of continued supplies but prices will be discussed
bilaterally.
The four presidents also denied rumors that Bolivia and
Venezuela are cementing an alliance to foster clashes between
Brazil and Argentina, El Universal relates.
According to El Universal, Bolivia will be joining a proposed
gas pipeline that links Venezuela, Brazil and Argentina. A new
meeting will be held in August in Venezuela to address regional
energy integration among the four countries.
* * *
Fitch Ratings assigned these ratings on Argentina:
Rating Rating Date
------ -----------
Country Ceiling RD Dec. 14, 2005
Long Term IDR B Dec. 14, 2005
Short Term IDR B- Jun. 3, 2005
Local Currency
Long Term Issuer
Default Rating B Jun. 3, 2005
=============
B A H A M A S
=============
PINNACLE ENTERTAINMENT: Ups Purchase Offer for Aztar to US$2.58B
----------------------------------------------------------------
Pinnacle Entertainment, Inc.'s (NYSE: PNK) board of directors
unanimously approved an increase in the per-share price under
the Company's merger agreement with Aztar Corporation to US$51
per share in cash and stock, subject to adjustment. The
consideration consists of US$47 per share in cash and US$4 per
share of Pinnacle common stock, subject to a collar
provision. The purchase price for each share of Aztar Series B
preferred stock has been increased to US$497.09 in cash and
US$42.31 in Pinnacle common stock, subject to a collar
provision. The fully financed transaction is valued at US$2.58
billion, including approximately US$1.97 billion in equity on a
fully diluted basis and approximately US$677 million of
indebtedness.
All other aspects of the merger agreement remain unchanged,
except for the termination fee, which has been increased to
US$52.16 million, plus reimbursement of expenses up to
US$25.84 million.
As reported in the Troubled Company Reporter on Mar. 15, 2006,
Pinnacle Entertainment and Aztar Corp.'s Boards of Directors
unanimously approved a definitive merger agreement under which
Pinnacle will acquire all of the outstanding shares of Aztar for
US$38.00 per share in cash. This represents a premium of
approximately 24% over Aztar's closing stock price on Mar. 10,
2006. The fully financed transaction is valued at approximately
US$2.1 billion, including approximately US$1.45 billion of
equity on a fully diluted basis and approximately US$723 million
in indebtedness.
Offer Expires
Pinnacle Entertainment disclosed that at 4 p.m., on May 4, 2006,
it responded to Aztar Corp.'s presentation of a 72-hour notice
of termination provided under the merger agreement between
Pinnacle and Aztar. Under the terms of that agreement, Pinnacle
had until May 4, 2006, to respond to the higher offer provided
by a competing bidder.
Pinnacle said that its offer expired at 11 p.m. on May 4, 2006,
and Aztar did not respond by that time.
About Aztar Corporation
Aztar Corporation (NYSE: AZR) -- http://www.aztarcorp.com/-- is
a publicly traded company that operates Tropicana Casino and
Resort in Atlantic City, New Jersey, Tropicana Resort and Casino
in Las Vegas, Nevada, Ramada Express Hotel and Casino in
Laughlin, Nevada, Casino Aztar in Caruthersville, Missouri, and
Casino Aztar in Evansville, Indiana.
About Pinnacle Entertainment
Headquartered in Las Vegas, Nevada, Pinnacle Entertainment, Inc.
-- http://www.pnkinc.com/-- owns and operates casinos in
Nevada, Louisiana, Indiana and Argentina, owns a hotel in
Missouri, receives lease income from two card club casinos in
the Los Angeles metropolitan area, has been licensed to operate
a small casino in the Bahamas, and owns a casino site and has
significant insurance claims related to a hurricane-damaged
casino previously operated in Biloxi, Mississippi. Pinnacle
opened a major casino resort in Lake Charles, Louisiana in May
2005 and a new replacement casino in Neuquen, Argentina in July
2005.
* * *
As reported in the Troubled Company Reporter on March 20, 2006,
Moody's Investors Service placed the ratings of Pinnacle
Entertainment, Inc. on review for possible upgrade following the
company's announcement that it entered into a definitive merger
agreement under which Pinnacle will acquire all of the
outstanding shares of Aztar Corporation for US$38 per share in
cash, or about US$1.45 billion. Including Aztar's US$723
million of debt, the transaction is valued at almost US$2.2
billion. Pinnacle ratings affected include its B2 corporate
family rating, B1 senior secured bank loan rating, and Caa1
senior subordinated debt rating.
=============
B E R M U D A
=============
CONOCO IRAN: Sets May 17 as Last Day for Proofs of Claim Filing
---------------------------------------------------------------
Creditors of Conoco Iran Limited are given until May 17, 2006,
to prove their claims to Robin J. Mayor, the company's
liquidator, or be excluded from receiving any distribution or
payment that the company will make.
Creditors are required to send by May 17 their full names,
addresses, descriptions, the full particulars of their debts or
claims, and the names and addresses of their lawyers
(if any) to Mr. Mayor.
A final general meeting will be held at the office of the
liquidator on June 8, 2006, at 9:30 a.m., or as soon as
possible thereafter, for the purposes of:
-- receiving an account laid before them showing the manner
in which the winding-up of the company has been conducted
and its property disposed of and of hearing any
explanation that may be given by the Liquidator;
-- by resolution determining the manner in which the books,
accounts and documents of the company and of the
Liquidator will be disposed of; and
-- by resolution dissolving the company.
The company began liquidating assets on April 28, 2006.
The liquidator can be reached at:
Robin J. Mayor
Messrs. Conyers Dill & Pearman
Clarendon House, Church Street
Hamilton, HM DX, Bermuda
OLD BROAD: Creditors Must File Proofs of Claim by May 17
--------------------------------------------------------
Creditors of Old Broad Street Reinsurance Company Limited are
given until May 17, 2006, to prove their claims to Robin J.
Mayor, the company's liquidator, or be excluded from receiving
any distribution or payment that the company will make.
Creditors are required to send by May 17 their full names,
addresses, descriptions, the full particulars of their debts or
claims, and the names and addresses of their lawyers (if any) to
Mr. Mayor.
A final general meeting will be held at the office of the
liquidator on June 8, 2006, at 9:30 a.m., or as soon as
possible thereafter, for the purposes of:
-- receiving an account laid before them showing the manner
in which the winding-up of the company has been conducted
and its property disposed of and of hearing any
explanation that may be given by the Liquidator;
-- by resolution determining the manner in which the books,
accounts and documents of the company and of the
Liquidator will be disposed of; and
-- by resolution dissolving the company.
The company began liquidating assets on April 28, 2006.
The liquidator can be reached at:
Robin J. Mayor
Messrs. Conyers Dill & Pearman
Clarendon House, Church Street
Hamilton, HM DX, Bermuda
=============
B O L I V I A
=============
REPSOL YPF: Closely Studies Implications of Bolivia's Decree
------------------------------------------------------------
Repsol YPF is waiting for further details regarding the terms
and conditions of the measures announced by the Bolivian
government, including the opening of a 180-day period for the
renegotiating of contracts held with the oil companies that are
operating in that country.
Following the initial publication of the information with
respect to Decree 28,701 of May 1, 2006, Repsol YPF's legal
department is closely studying all the implications relating to
legal security and guarantees for the investments and the
continuity of the company's activities before making any
decision in this respect.
Repsol YPF will consider all the actions at its disposal to
protect its assets and preserve the employment of all those who
work directly and indirectly in Bolivia.
On a first impression, the company views the decree made public
on May 1 to nationalize hydrocarbons with concern, although in
view of the vagueness of the terms in which it is expressed,
will not make a definite evaluation until its scope and
consequences are fully known.
Repsol YPF Executive Chairman Antonio Brufau said from Argentina
that although he considers the nationalization decree to
"sidestep all industrial logic that ought to govern relations
between a government and companies," he believes that "there is
still time for an agreement to be reached, and I hope that in
these 180 days we will all be capable of applying our talent and
intellect, both one party and the other."
Mr. Brufau added that, "Bolivia should not remain apart from the
international political system," and "in the current situation,
it is imperative to study the Decree in depth, analyzing its
consequences in detail and taking advantage of the 180 days time
limit set by the government to reach agreements of economic
rationale for both parties."
* * *
On June 20, 2005, Moody's Investors Service upgraded the ratings
of Spanish-Argentine oil company Repsol YPF's local subsidiary
YPF S.A. Moody's upgraded YPF's senior unsecured rating to Ba3
from B1 and the unit's domestic currency issuer rating to Baa2
from Baa3.
YPF's foreign currency issuer rating of Caa1 remained unchanged,
as it is constrained by the sovereign ceiling of Argentina.
YPF's Corporate Family Rating (formerly known as the senior
implied rating) is aligned with the foreign currency issuer
rating at Caa1.
* BOLIVIA: Nationalization May Bring In US$780M Addt'l Revenues
---------------------------------------------------------------
President Evo Morales' renationalization decree of Bolivia's
hydrocarbon's sector on May 1 is expected to raise US$780
million in extra revenue per year, Dow Jones Newswires reports.
However, the move will likely spark tensions with major
international oil and gas companies.
"The time has come, the awaited day, a historic day in which
Bolivia retakes absolute control of our natural resources,"
Pres. Morales was quoted by Dow Jones as saying from the San
Alberto petroleum field in southern Bolivia operated by Brazil's
Petroleo Brasileiro S.A. and Spanish-Argentine Repsol-YPF S.A.
"The state recovers the property, the possession and total and
absolute control of these resources," said the decree read by
Pres. Morales, according to the government newswire ABI.
Bolivia owns the second-largest natural gas reserves in Latin
America, after Venezuela. According to the Hydrocarbons
Ministry of Bolivia, the country has reserves of approximately
48.7 trillion cubic feet. However, due to strains with foreign
operators, the development of these reserves has been frozen
over the years. Foreign investments reached US$3.5 billion
since 1996, Dow Jones relates.
The nationalization decree orders the foreign operators to turn
over most of the control in production to Bolivia's state-owned
oil company, Yacimientos Petroliferos Fiscales Bolivianos --
YPFB, and to turn it over for sale and industrialization.
The nationalization also gives YPFB a 505-plusone-share stake in
six key local oil companies that are currently owned either
wholly or partly by local investors or pension funds and by
foreign companies.
State company YPFB had been producing natural gas for the
Bolivia but was stripped off as a producer and reduced to an
administrative capacity after privatization of the gas industry.
However, according to analysts, the state has to provide a huge
amount of cash for YPFB to become a producer again.
Moreover, international oil companies that operate in oil fields
that produce more than 100 million cubic meters a day of natural
gas are compelled to retain only 18% of their production and
turn over the remaining 82% to YPFB. Hence, upon the effective
implementation of the decree, YPFB will set the national and
international price and supply levels of the commodity.
According to ABI, those with less production will maintain the
current terms and enjoy the same regional tax levels.
The foreign oil majors operating in Bolivia include:
-- Brazil's state-run company Petroleo Brasileiro SA;
-- Spanish-Argentine company Repsol YPF;
-- British company BP PLC;
-- British company British Gas Group; and
-- France's Total SA; Exxon Mobil holds a stake in Total's oil
field.
"The companies that have not signed contracts will not be able
to keep operating in the country," Pres. Morales was quoted by
Dow Jones reading from the decree.
This new decree marked the "third and definitive"
nationalization of the Bolivian hydrocarbons industry, according
to Pres. Morales. Past nationalizations of the industry include
the appropriation of the assets of Standard Oil in 1937 and
taking over Gulf Oil in 1969.
Many speculate that Pres. Castro and Pres. Chavez majorly
influenced this decision of Pres. Morales.
"You can call Bolivia Venezuela Part II because it seems like he
(Morales) is going to try to do the same thing that Chavez is
doing," according to Pietro Pitts at LatinPetroleum.com.
This move by Bolivia may spark up tensions with other foreign
companies, especially with Petrobras, since it is the largest
company operating in the state. It has investments of about
US$1.5 billion since 1996. The company owns the two refining
companies in Bolivia, which are among those named in the decree
to be nationalized.
As of March 2006, Petrobras contributed 23% of Bolivia's
international production, which reached an equivalent 59, 175
barrels of oil a day. The company produces oil, natural gas
liquids and natural gas.
The majority of its production is natural gas, which Petrobras
delivers to Brazil through the Bolivia-Brazil pipeline that is a
joint venture with YPFB. Brazil's southeastern and southern
natural gas distributors greatly depend on these shipments from
Bolivia.
"We are evaluating our position with regards to the stand taken
there by President Evo Morales," Dilma Rousseff, Brazil's Chief
of Staff told reporters at an event in New York before the
announcement was made on May 1.
"We recognize the sovereign rights of the Bolivians, and they
must in turn respect Brazil's assets," Mr. Rousseff added. "We
are going to try to reach an agreement."
Dow Jones reports that Petrobras imports more than two-thirds of
Bolivia's current natural gas output of about 35 million cubic
meters per day. The company operates in six out of nine
exploration departments in Bolivia, which are:
-- Tarija,
-- Chuquisaca,
-- Cochabamba,
-- Beni,
-- La Paz, and
-- Santa Cruz de La Sierra.
It also operates two natural gas fields, San Alberto and San
Antonio, in southern Bolivia and also the two refineries of the
state, Gualberto Villaroel in Cochamba and Guillermo Elder Bell
in Santa Cruz, which accounts for a combined average of 40, 000
barrels of processed oil and natural gas liquids per day.
Moreover, the produce supplies all of Bolivia's gasoline, jet
fuel and kerosene, and 70% of diesel demands.
The scope of Petrobras' operation in Bolivia also includes the
control of 90 out of 400 gas stations and manufacturing of
lubricants in Cochamba, distributed under the YPFB brand.
After the declaration of the decree, it is most probable that
all new investments by international companies that operating in
Bolivia will cease.
One of the projects that will be greatly affected by the decree
is the US$1.5 billion petrochemical complex that was negotiated
between Petrobras and YPFB. The project is located on the
border between Bolivia and Brazil.
British BG Group has already acknowledged even before the
announcement was made that there would not be any expansion in
its Bolivian operations in the next two years. The group is one
of the largest holders of reserves in the state.
"BG Group has for some time taken the view that development of
its Bolivian reserves would not take place until the next decade
and has limited its capital expenditure accordingly," BG said on
its Web site.
BG Group was one of the supporters of a liquefied natural gas
project in Bolivia, in which gas from the state would be
transported through a pipeline by the Pacific Coast in Chile to
international markets. However, the plan was not pushed through
due to opposition within Bolivia.
The company has many exploration and production blocks in
Bolivia, which are in different stages of development, including
the La Vertiente processing plant that has a capacity of 160
million cubic meters per day.
The company accounts for 2% of the total production in Bolivia,
or about 2 million cubic meters per day. BG Group gives 1.4
million cubic meters per day of production to YPFB as supply to
Brazil, and sells 0.65 million cubic meters per day directly to
Comgas, the natural gas distributor for Sao Paulo.
Dow Jones reports that in the meantime, the government has
already reserved compensation and pension funds for investors
that had invested in the privatized companies.
The government will take over payments of dividends for those
enjoying the Bonosol pension plan. According to ABI, shares
owned by local pension funds will be handed over to the state
and in return, they will be paid compensation at the same rate
that that the shares were originally bought.
* * *
Fitch Ratings assigned these ratings on Bolivia:
Rating Rating Date
------ -----------
Country Ceiling B- Jun. 17, 2004
Long Term IDR B- Dec. 14, 2005
Local Currency
Long Term Issuer
Default Rating B- Dec. 14, 2005
* BOLIVIA: Petrobras Suspends New Investments in Country
--------------------------------------------------------
Petroleos Brasileiro S.A., Brazil's state-owned oil company told
Dow Jones Newswires that in response to Pres. Evo Morales'
declaration on nationalizing the gas and oil industry in
Bolivia, it is halting new investments in the country and
stopping funds in the expansion of a gas pipeline between the
neighboring countries.
One of the projects that will be greatly affected by Bolivia's
move is the US$1.5 billion petrochemical complex that was
negotiated between Petrobras and Yacimientos Petroliferos
Fiscales Bolivianos, Dow Jones says. The project is located on
the border between Bolivia and Brazil.
Under the nationalization decreed on May 1, foreign operators
are ordered to turn over most of the control in production to
Bolivia's state-owned oil company, YPFB, for sale and
industrialization. International oil companies that operate in
oil fields that produce more than 100 million cubic meters a day
of natural gas are compelled to retain only 18% of their
production and turn over the remaining 82% to YPFB.
Petrobras is the largest company operating in the state. It has
investments of about US$989 million in Bolivia since 1996.
As of March 2006, Dow Jones says that Petrobras contributed 23%
of Bolivia's international production, which reached an
equivalent 59,175 barrels of oil a day. The company produces
oil, natural gas liquids and natural gas.
Dow Jones reports that Petrobras imports more than two-thirds of
Bolivia's current natural gas output of about 35 million cubic
meters per day. The company operates in six out of nine
exploration departments in Bolivia, which are:
-- Tarija,
-- Chuquisaca,
-- Cochabamba,
-- Beni,
-- La Paz, and
-- Santa Cruz de La Sierra.
Dow Jones adds that it also operates two natural gas fields, San
Alberto and San Antonio, in southern Bolivia and also the two
refineries of the state, Gualberto Villaroel in Cochamba and
Guillermo Elder Bell in Santa Cruz, which accounts for a
combined average of 40, 000 barrels of processed oil and natural
gas liquids per day. Moreover, the produce supplies all of
Bolivia's gasoline, jet fuel and kerosene, and 70% of diesel
demands.
The scope of Petrobras' operation in Bolivia also includes the
control of 90 out of 400 gas stations and manufacturing of
lubricants in Cochamba, distributed under the YPFB brand, Dow
Jones says.
Petrobras told Dow Jones that in further response to Pres.
Morales' announcement, the company will right away move to
expand its natural-gas supplies, which includes the possibility
of establishing a regasification plant to treat liquid natural
gas that will be imported from other international suppliers.
Headquartered in Rio de Janeiro, Brazil, Petroleo Brasileiro
S.A. aka Petrobras was founded in 1953. The company explores,
produces, refines, transports, markets, distributes oil and
natural gas and power to various wholesale customers and retail
distributors in the country.
* * *
Petroleo Brasileiro SA's long-term corporate family rating is
rated Ba3 by Moody's and its foreign currency long-term debt is
rated BB by Fitch.
* * *
Fitch assigned these ratings on Petroleo Brasileiro's senior
unsecured notes:
Maturity Date Amount Rate Ratings
------------- ------ ---- -------
April 1, 2008 $400,000,000 9% BB+
July 2, 2013 $750,000,000 9.125% BB+
Sept. 15, 2014 $650,000,000 7.75% BB+
Dec. 10, 2018 $750,000,000 8.375% BB+
* * *
Fitch Ratings assigned these ratings on Bolivia:
Rating Rating Date
------ -----------
Country Ceiling B- Jun. 17, 2004
Long Term IDR B- Dec. 14, 2005
Local Currency
Long Term Issuer
Default Rating B- Dec. 14, 2005
* BOLIVIA: Unable to Reach Specific Agreement in Gas Summit
-----------------------------------------------------------
During the May 4 summit, the Presidents of Argentina, Brazil and
Venezuela were unable to come up with specific agreements that
will protect their investment interests after the
nationalization of Bolivia's hydrocarbons industry.
The meeting, called called by Brazilian President Inacio Lula da
Silva failed to find a regional diplomatic solution to tensions
sparked by Bolivia's decision.
According to Reuters, the four presidents barely agreed that all
negotiations pending in connection with gas supply and prices
will be addressed bilaterally in the future.
Bolivian President Evo Morales has previously said that Brazil
and Argentina needed to understand his petition for them to pay
higher prices for Bolivian gas, El Universal states, citing a
report by the Bolivian Agency of Information.
"Indeed, Brazil and Argentina have to pay a higher price for the
(Bolivian) gas they are purchasing because, under the agreement,
prices should have been reviewed back in 2004. I do regret that
the governments involved did not do so," President Morales told
reporters after a meeting last week with Venezuelan President
Hugo Chavez.
The presidents of Argentina and Brazil want to deepen bilateral
talks that would solve the price disagreement.
"We do respect and praise the sovereign decisions of all
countries, particularly of the Bolivian people, in this case,"
Argentine President Nestor Kirchner was quoted by El Universal
as saying.
Argentina and Brazil, Bolivia's largest oil consumers, were
assured of continued supplies but prices will be discussed
bilaterally.
The four presidents also denied rumors that Bolivia and
Venezuela are cementing an alliance to foster clashes between
Brazil and Argentina, El Universal relates.
According to El Universal, Bolivia will be joining a proposed
gas pipeline that links Venezuela, Brazil and Argentina. A new
meeting will be held in August in Venezuela to address regional
energy integration among the four countries.
* * *
Fitch Ratings assigned these ratings on Bolivia:
Rating Rating Date
------ -----------
Country Ceiling B- Jun. 17, 2004
Long Term IDR B- Dec. 14, 2005
Local Currency
Long Term Issuer
Default Rating B- Dec. 14, 2005
===========
B R A Z I L
===========
BANCO DO BRASIL: Agrees with Unions on Worker Pension Benefits
--------------------------------------------------------------
Brazil's federal bank Banco do Brasil has agreed with the unions
from Sao Paulo, Rio de Janeiro and Brasilia on employee pension
benefits, Jose Ricards Sasseron, a union representative at the
bank's pension fund, told Business News Americas.
The bank will take BRL2 billion from the Previ pension fund's
BRL6 billion surplus from 2001 and put it towards benefit
payments for its workers, Mr. Sasseron informed BNamericas. The
workers will continue to make the same contributions, but will
receive higher benefits.
BNamericas relates that Banco do Brasil will also be able to
decrease its contributions to the fund.
Banco do Brasil said in a statement that after taxes on the
bank's financial results, the accord will have a positive impact
of BRL880 million.
* * *
As reported on Mar. 3, 2006, Standard & Poor's Ratings Services
raised its foreign currency counterparty credit ratings on Banco
do Brasil S.A. to 'BB' from 'BB-'. The foreign and local
currency ratings of this bank are now equalized at 'BB'. S&P
said the outlook is stable.
BANCO NACIONAL: Approves US$77.7 Million Loan to Naval Sector
-------------------------------------------------------------
The board of Banco Nacional de Desenvolvimento Economico e
Social aka BNDES has approved two financing operations for the
naval construction sector in the total value of US$77.7 million.
One of them, of US$35.9 million, is destined to the shipyard
Aker Promar, located in Niteroi in the State of Rio de Janeiro,
for the construction of a maritime support vessel for offshore.
The other, of US$41.8 million, will enable the company Skannor
Offshore Ltda to acquire a maritime support vessel for anchors
handling, towing and supply, which will also be constructed by
the shipyard Promar.
The operations will be financed with Merchant Navy Fund
resources and will contribute to expand the offshore vessels
fleet with national flag. With that, they will enable to the
country the economy of exchange value, due to the substitution
of services provided by foreign flag vessels.
The projects will enable the shipyard Promar to keep the
production annual volume until the end of 2006, with positive
impact on the job generation and competitiveness of the
Brazilian naval sector. Approximately 300 jobs will be involved
in the vessels construction.
The BNDES financing for the shipyard Aker Promar corresponds to
72% of the investment total value, which is US$49.8 million, for
the construction of a maritime support vessel for type AHTS-
15.000 - UT 722L supply, with hulk number PRO-20, ordered by
Norskan Offshore. The delivery of the vessel, named "Norskan
Fluminense", is programmed for the first semester of 2007.
As to the BNDES financing to Skannor Offshore Ltda,
corresponding to 90% of the investment value, it will enable the
company to acquire the vessel "Skandrio" (hulk number PRO-18) of
support to oil platforms, destined to the anchors handling,
towing and supply. The order shall be delivered in the end of
2006.
Among the main merits of the two projects, the development and
technological capacity of the shipyards national park and the
contribution to the revitalization of the domestic sector of
naval construction stand out.
As the result of the substitution policy of maritime support
foreign vessels adopted by Petrobras, Brazil has stood out as a
constructor complex of that kind of vessel. Currently there are
166 ships providing support services for Petrobras, whose
average age is 16.5 years. The renovation plans of the fleet
aims at increasing the national flag vessels interest until
2008. In 2002, that interest was 33.6%. Last year, that index
increased to 45%.
The shipyard Aker Promar is specialized in the offshore vessels
construction, besides operating in the sectors of naval
conversion, modernization and repairing. As of its creation, in
March 1996, Promar has already signed 21 construction contracts
and has delivered 15 vessels.
Promar is controlled by the Norwegian company Aker Brattvaag AS,
which has 51% of its social capital, being the major part of the
remaining installment, 49%, belonging to PJMR Assessoria
Empresarial, whose partners are four Brazilian entrepreneurs
historically linked to the naval construction sector. Aker
Brattvaag belongs to the group Aker Yards, which operates 13
shipyards throughout the world.
* * *
As reported in the Troubled Company Reporter on March 3, 2006,
Standard & Poor's Ratings Services raised its foreign currency
counterparty credit rating on Banco Nacional de Desenvolvimento
Economico e Social S.A. aka BNDES to 'BB' with a stable outlook
from 'BB-' with a positive outlook. The company's local
currency credit rating was also shifted to 'BB+' with a stable
outlook from 'BB' with a positive outlook.
COMPANHIA ENERGETICA: Inks Purchase Pact with Schahin Holding
-------------------------------------------------------------
Companhia Energetica de Minas Gerais -- Cemig, with advisory
services from Banco Modal S.A., in partnership with MDU Brasil
Ltda. and Brascan Brasil Ltda, has signed Share Purchase and
Sale Agreements with Schahin Holding S.A. relating to
acquisition of Schahin's stockholdings in five companies holding
electricity transmission concessions.
Cemig and MDU are defined as "the Purchasing Group", and Brascan
holds an option to purchase part of the stockholdings acquired.
The purchasers have agreed the value of BRL656 million, on the
basis of September 2005, for Schahin's stock holdings in the
transmission companies. Conclusion of the transaction, to
complete the acquisition of the shares by Cemig and its
partners, is subject to compliance with certain conditions
established in the agreements, including approval by the
Brazilian Electricity Regulator ANEEL, the Brazilian Development
Bank BNDES and other financing bodies of the transfer of the
shares of the above-mentioned companies. The Brazilian
monopolies authority, CADE, will also be notified of the
transaction, in accordance with Law 8884/94.
The acquired companies are located in the North and South of
Brazil. The companies included in the acquisition are:
-- Empresa Paraense de Transmissao de Energia S.A.,
the 324-km, 500kV, Tucurui- Vila do Conde transmission
line; CEMIG stake: 49.5%;
-- Empresa Norte de Transmissao de Energia S.A.,
the 459-km, 500kV, Tucurui - Acailandia transmission line;
CEMIG stake: 37.0%;
-- Empresa Regional de Transmissao de Energia S.A.,
the 155-km, 230kV, Vila do Conde - Santa Maria
transmission line; CEMIG stake: 37.0%;
-- Empresa Amazonense de Transmissao de Energia S.A.,
the 928-km, 500kV, Tucurui - Presidente Dutra transmission
line; CEMIG stake: 49.5%; and
-- ECTE - Empresa Catarinense de Transmissao de Energia S.A.,
the 253-km, 500kV, Blumenau - Campos Novos transmission
line; CEMIG stake: 15.0%.
These percentages correspond to 41.4% of the total of the
assets, and will be reduced by half in the event that Brascan
exercises its option.
Cemig CEO Djalma Bastos de Morais said that the acquisition of
these companies "is one more evidence of the Company's objective
of expanding its increasing its share of the Brazilian
electricity market", and also points out: "We are following the
directives established by our controlling stockholder, the
Brazilian State of Minas Gerais, approved by our Board of
Directors and reflected in our Long-tern Strategic Plan".
The effect of the acquisition is to expand Cemig's participation
in the Brazilian electricity transmission market from 4% to
5.7%; and the list of Brazilian states in which it has a
presence - as well as Minas Gerais - to include:
-- Sao Paulo,
-- Rio de Janeiro,
-- Espirito Santo,
-- Santa Catarina,
-- Rio Grande do Sul,
-- Para, and
-- Maranhao.
Cemig is also present in Chile, where it is building a
transmission line.
Companhia Energetica de Minas Gerais --http://www.cemig.com.br/
-- is one of the largest and most important electric energy
utilities in Brazil due to its strategic location, its technical
expertise and its market. CEMIG's concession area extends
throughout nearly 96.7% of the State of Minas Gerais, Brazil.
CEMIG owns and operates 52 power plants, of which six are in
partnership with private enterprises, relying on a predominantly
hydroelectric energy matrix. Electric energy is produced to
supply more than 17 million people living in the state's 774
municipalities. In addition to those 52 plants, another three
are currently under construction.
CEMIG is also active in several other states, through ventures
for the generation or the commercialization of energy in these
Brazilian states: in Santa Catarina (generation), Rio de Janeiro
(commercialization and generation), Esprito Santo (generation)
and Rio Grande do Sul (commercialization).
* * *
Cemig's BRL312,500,000 12.7% debentures due Nov. 1, 2009, carry
Moody's B1 rating.
NOSSA CAIXA: Delays Auction to Await Decision on Mapfre Appeal
--------------------------------------------------------------
A spokesperson from the Sao Paulo state-run Nossa Caixa told
Business News Americas that the bank has delayed the auction of
the 51% stake in its savings bonds unit until June 7, 2006, as
the insurance regulator Susep has not decided on Mapfre's appeal
to reconsider disqualification.
According to local press, Mapfre has asked the regulator to
reconsider the decision it made on the firm, claiming that a
mix-up with the required paperwork could have led to Susep's
decision.
The spokesperson was quoted by BNamericas saying, "We also have
to see if it's in the bank's interest to hold an auction with
just one company. It's in our interest to have the most
companies possible involved."
As reported in the Troubled Company Reporter on April 24, 2006,
Nossa Caixa earlier moved the auction to May 17 from April 26
as advised by insurance regulator Susep.
BNamericas recalls that Susep had asked Nossa to delay the
auction to allow more time for the finalists -- local units of
Mapfre and Metlife -- to fulfill the minimum capital
requirements as set by Susep. Of the three named finalists,
only Icatu Hartford qualified.
The auction would start with a minimum price of BRL23.9 million,
BNamericas relates. After the auction, an additional offering
of up to 6% with a price per share depending on the size of the
winning bid for the 51% stake will be made to Nossa Caixa
shareholders.
* * *
On Oct. 19, 2005, Moody's Investors Service upgraded Banco Nossa
Caixa S.A.'s long-term foreign currency deposit rating to B1
from B2 with a positive outlook.
At the same time, the ratings agency upgraded Banco Nossa
Caixa's long-term foreign currency debt rating to Ba1 with a
stable outlook.
The action followed Moody's upgrade of Brazil's foreign currency
ceiling for deposits to B1, from B2, and the foreign currency
country ceiling for bonds and notes to Ba3, from B1. Moody's
said the country ceilings have a positive outlook.
PETROLEO BRASILEIRO: Puts Off New Investments in Bolivia
--------------------------------------------------------
Petroleos Brasileiro S.A., Brazil's state-owned oil company
told Dow Jones Newswires that in response to Pres. Evo Morales'
announcement on nationalizing the gas and oil industry in
Bolivia, it is halting new investments in the country and
stopping funds in the expansion of a gas pipeline between the
neighboring countries.
One of the projects that will be greatly affected by Bolivia's
move is the US$1.5 billion petrochemical complex that was
negotiated between Petrobras and Yacimientos Petroliferos
Fiscales Bolivianos -- YPFB, Dow Jones says. The project is
located on the border between Bolivia and Brazil.
Under the nationalization decreed on May 1, foreign operators
are ordered to turn over most of the control in production to
Bolivia's state-owned oil company, YPFB, for sale and
industrialization. International oil companies that operate in
oil fields that produce more than 100 million cubic meters a day
of natural gas are compelled to retain only 18% of their
production and turn over the remaining 82% to YPFB.
Petrobras is the largest company operating in the state. It has
investments of about US$989 million in Bolivia since 1996, the
company told Dow Jones.
As of March 2006, Dow Jones says that Petrobras contributed 23%
of Bolivia's international production, which reached an
equivalent 59,175 barrels of oil a day. The company produces
oil, natural gas liquids and natural gas.
Dow Jones reports that Petrobras imports more than two-thirds of
Bolivia's current natural gas output of about 35 million cubic
meters per day. The company operates in six out of nine
exploration departments in Bolivia, which are:
-- Tarija,
-- Chuquisaca,
-- Cochabamba,
-- Beni,
-- La Paz, and
-- Santa Cruz de La Sierra.
Dow Jones adds that it also operates two natural gas fields, San
Alberto and San Antonio, in southern Bolivia and also the two
refineries of the state, Gualberto Villaroel in Cochamba and
Guillermo Elder Bell in Santa Cruz, which accounts for a
combined average of
40, 000 barrels of processed oil and natural gas liquids per
day. Moreover, the produce supplies all of Bolivia's gasoline,
jet fuel and kerosene, and 70% of diesel demands.
The scope of Petrobras' operation in Bolivia also includes the
control of 90 out of 400 gas stations and manufacturing of
lubricants in Cochamba, distributed under the YPFB brand, Dow
Jones says.
Petrobras told Dow Jones that in further response to Pres.
Morales' announcement, the company will right away move to
expand its natural-gas supplies, which includes the possibility
of establishing a regasification plant to treat liquid natural
gas that will be imported from other international suppliers.
Headquartered in Rio de Janeiro, Brazil, Petroleo Brasileiro
S.A. aka Petrobras was founded in 1953. The company explores,
produces, refines, transports, markets, distributes oil and
natural gas and power to various wholesale customers and retail
distributors in the country.
* * *
Petroleo Brasileiro SA's long-term corporate family rating is
rated Ba3 by Moody's and its foreign currency long-term debt is
rated BB by Fitch.
* * *
Fitch assigned these ratings on Petroleo Brasileiro's senior
unsecured notes:
Maturity Date Amount Rate Ratings
------------- ------ ---- -------
April 1, 2008 $400,000,000 9% BB+
July 2, 2013 $750,000,000 9.125% BB+
Sept. 15, 2014 $650,000,000 7.75% BB+
Dec. 10, 2018 $750,000,000 8.375% BB+
RIPASA SA: Suzano Discloses New Schedule for Restructuring
----------------------------------------------------------
Suzano Papel e Celulose, one of Latin America's integrated
producers of pulp and paper, disclosed in an official
announcement filed at the Brazilian Securities and Exchange
Commission, the new schedule for the Ripasa Restructuring and
other information referring to the procedure for the signature
by the Ripasa shareholders of the Instrument of Consent to the
Agreement Suzano and VCP entered April 26, 2006, with a group of
Ripasa's shareholders.
The salient terms of the Ripasa restructuring are:
1. The exchange ratios informed in the official announcement
filed July 20, 2005, were maintained.
2. A General Shareholders Meeting at Ripar is scheduled for
May 23, 2006.
3. A General Shareholders Meeting at Suzano Papel e Celulose
is scheduled for May 24, 2006.
4. The Ripasa shareholders may excise withdrawal rights for
thirty days after May 24, 2006.
5. Pursuant to the terms of the Material Fact release on
April 26, 2006, the Companies entered into a judicial
agreement with a group of Ripasa preferred shareholders.
6. The conditions of the Agreement having been met and the
Restructuring concluded, VCP and Suzano will pay the said
group of shareholders the sum of BRL1.0538 for each Ripasa
preferred share held.
7. The payment of the Complementary Value will be extended
to Ripasa's remaining minority shareholders who sign the
"Instrument of Consent."
8. Shareholders who sign the Instrument by June 26, 2006,
will receive, on July 4, 2006, the Complementary Value
corresponding to the number of shares held by same on
June 29, 2006.
9. Ripasa shareholders who do not sign the Instrument by
June 26, 2006, may still do so up to May 24, 2009, and the
Complementary Value will be paid later, according to the
details contained in the filed Material Fact.
10. Ripasa shareholders can obtain additional information on
the Agreement and the Instrument by telephone at
0800-169500, between 8:30 and 18:00, Monday through
Friday, between May 8, 2006, and July 8, 2006.
11. Delivery of the Instrument with subsequent partial or
total sale of the shareholding position, will result in
payment of the Complementary Value corresponding to the
number of shares held on June 29, 2006.
12. Ripasa shareholders who do not sign the Instrument will
not receive the Complementary Value.
Ripasa S.A. Celulose e Papel produces, distributes, sells and
exports paper and paper-based products. Products range from
short-fiber pulp and cardboard to printing and writing paper and
other related products.
* * *
On April 24, 2006, Fitch Ratings assigned these ratings to
Ripasa S.A. Celulose e Papel:
Credit Ratings
-- Long Term Issuer Default Rating: BB-, with Positive
Outlook;
-- Local Currency Long Term Issuer Default Rating: BB+,
with Stable Outlook; and
-- National Long Term Rating: A+ (BRA), with Stable
Outlook
UNIAO DE BANCOS: Refutes Reports to Sell Controlling Stake
----------------------------------------------------------
Uniao de Bancos Brasileiros, S.A. -- Unibanco -- Brazil's third
largest bank, denied reports that it plans to sell a controlling
stake in the company, Estado newswire reports.
Dow Jones Newswires relates that rumors circulated in the market
that U.S.-based Citigroup and U.K.-based HSBC were eyeing to
acquire a controlling stake in Unibanco.
Unibanco was quoted by Estado newswire as saying that neither
negotiations nor initial talks are underway.
* * *
As reported in the Troubled Company Reporter on March 3, 2006,
Standard & Poor's Ratings Services raised its foreign currency
counterparty credit rating on Unibanco -- Uniao de Bancos
Brasileiros, S.A. -- to 'BB/Stable/B' from 'BB-/Positive/B'.
The company's local currency counterparty credit rating
remains at 'BB/Stable/B'.
* BRAZIL: Unable to Resolve Pricing During Gas Summit
-----------------------------------------------------
During the May 4 summit, the Presidents of Argentina, Brazil and
Venezuela were unable to come up with specific agreements that
will protect their investment interests after the
nationalization of Bolivia's hydrocarbons industry.
The meeting, called called by Brazilian President Inacio Lula da
Silva failed to find a regional diplomatic solution to tensions
sparked by Bolivia's decision.
According to Reuters, the four presidents barely agreed that all
negotiations pending in connection with gas supply and prices
will be addressed bilaterally in the future.
Bolivian President Evo Morales has previously said that Brazil
and Argentina needed to understand his petition for them to pay
higher prices for Bolivian gas, El Universal states, citing a
report by the Bolivian Agency of Information.
"Indeed, Brazil and Argentina have to pay a higher price for the
(Bolivian) gas they are purchasing because, under the agreement,
prices should have been reviewed back in 2004. I do regret that
the governments involved did not do so," President Morales told
reporters after a meeting last week with Venezuelan President
Hugo Chavez.
The presidents of Argentina and Brazil want to deepen bilateral
talks that would solve the price disagreement.
"We do respect and praise the sovereign decisions of all
countries, particularly of the Bolivian people, in this case,"
Argentine President Nestor Kirchner was quoted by El Universal
as saying.
Argentina and Brazil, Bolivia's largest oil consumers, were
assured of continued supplies but prices will be discussed
bilaterally.
The four presidents also denied rumors that Bolivia and
Venezuela are cementing an alliance to foster clashes between
Brazil and Argentina, El Universal relates.
According to El Universal, Bolivia will be joining a proposed
gas pipeline that links Venezuela, Brazil and Argentina. A new
meeting will be held in August in Venezuela to address regional
energy integration among the four countries.
* * *
Fitch Ratings assigned these ratings on Brazil:
Rating Rating Date
------ -----------
Country Ceiling BB- Nov. 18, 2004
Long Term IDR BB- Dec. 14, 2005
Short Term IDR B Dec. 14, 2005
Local Currency
Long Term Issuer
Default Rating BB- Dec. 14, 2005
===========================
C A Y M A N I S L A N D S
===========================
ASTER CITY CABLE EUROPE I: Holds Final General Meeting on May 23
----------------------------------------------------------------
Aster City Cable Europe I (Cayman) Limited will hold a final
general meeting on May 23, 2006, at 12:00 p.m. at:
200 Crescent Court, Suite 1600
Dallas, Texas 75201
Accounts on the company's liquidation process will be presented
during the meeting.
As reported in the Troubled Company Reporter on May 3, 2006,
Aster City Cable Europe I started liquidating assets on
Apr. 3, 2006. Creditors of the company are given until
May 19, 2006, to present proofs of claim to William G. Neisel
-- the company's liquidator.
The liquidator can be reached at:
William G. Neisel
c/o Stuarts Walker Hersant, Attorneys-at-law
P.O. Box 2510GT, Cayman Financial Centre
36A Dr. Roy's Drive, George Town
Grand Cayman, Cayman Islands
BALANCED HIGH-YIELD: Final Shareholders Meeting Set for May 18
--------------------------------------------------------------
Shareholders of Balanced High-Yield Fund I Ltd. will convene for
a final general meeting on May 18, 2006, at 10:00 a.m. at the
registered offices of:
BNP Paribas Private Bank & Trust Cayman Limited
3rd Floor Royal Bank House
Shedden Road, George Town
Grand Cayman, Cayman Islands
Accounts on the company's liquidation process will be presented
during the meeting. The shareholders will also authorize the
liquidators to retain the records of the company for a period of
five years, starting from the dissolution of the company.
Destruction of the records may then be allowed after such
period.
Any person who is entitled to attend and vote at this meeting
may appoint a proxy to attend and vote in his stead. A proxy
need not be a member or a creditor.
As reported in the Troubled Company Reporter on May 3, 2006,
Balanced High-Yield Fund I started liquidating assets on April
3, 2006. Creditors are given until May 18, 2006, to submit
claims to the company's appointed liquidator, Piccadilly Cayman
Limited.
The company's liquidator can be reached at:
Piccadilly Cayman Limited
Attention; Ellen J. Christian
BNP Paribas Private Bank & Trust Cayman Limited
3rd Floor Royal Bank House
Shedden Road, George Town
Grand Cayman, Cayman Islands
Tel: (345) 945-9208
Fax: (345) 945-9210
CRONOS EQUIPMENT: Liquidator Stops Accepting Claims by May 18
-------------------------------------------------------------
Creditors of Cronos Equipment funding Limited are required to
submit particulars of their debts or claims by May 18, 2006, to
the company's appointed liquidators - K.D. Blake and S.L.C.
Whicker. Failure to do so will exclude them from receiving the
benefit of any distribution that the company will make.
The company started liquidating assets on March 30, 2006.
The liquidator can be reached at:
K.D. Blake
S.L.C. Whicker
Attention: Eleanore Laureles
P.O. Box 493, George Town
Grand Cayman, Cayman Islands
Tel: (345) 914-4309 or
(345) 949-4800
Fax: (345)949-7164
GDANSK LEASING: Proofs of Claim Filing Deadline Set for May 19
--------------------------------------------------------------
Creditors of Gdansk Leasing, Inc., which is being voluntarily
wound up, are required on or before May 19, 2006, to present
proofs of claim to Piotr Ikanowicz, the company's liquidator.
The company started liquidating assets on March 28, 2006.
Creditors are required to present proofs of claim personally or
through their solicitors at the time and place that the
liquidator will specify. Failure to present claims would mean
exclusion from the benefit of any distribution that the company
will make.
The liquidator can be reached at:
Piotr Ikanowicz
c/o Maples and Calder, Attorneys-at-Law
P.O. Box 309, Ugland House
South Church Street, George Town
Grand Cayman, Cayman Islands
LIBERTY CORNER PATRIOT: Filing of Proofs of Claim Ends on May 19
----------------------------------------------------------------
Creditors of Liberty Corner patriot Offshore are required to
submit particulars of their debts or claims on or before
May 19, 2006, to Miriam Yoshida of Liberty Corner Capital
Strategies, LLC, the company's appointed liquidator. Failure to
do so will exclude them from receiving the benefit of any
distribution that the company will make.
The liquidator can be reached at:
Miriam Yoshida
Attention: Glenn Kennedy
P.O. Box 1234 George Town
Grand Cayman, Cayman Islands
Tel: (345) 949-9876
Fax: (345) 949-1987
=========
C H I L E
=========
BANCO BICE: Moody's Affirms C Financial Strength Rating
------------------------------------------------------
Moody's Investors Service affirmed the C bank financial strength
rating of Banco BICE and changed the outlook to negative from
stable. Banco BICE's Baa1 long term foreign currency deposit
rating remains on review for possible upgrade in line with
Chile's country ceiling.
Moody's indicates that the negative outlook on the BFSR is based
primarily on the gradual decline in Banco BICE's core
profitability indicators as well as its relatively limited
market share and pricing power in a highly competitive banking
market. The Chilean market is increasingly dominated by larger
banks, challenging Banco BICE's niche business, Moody's says.
The outlook change also reflects the bank's comparatively lower
earnings capacity and growth potential as compared to that of
other banks in Chile and in the region that are also rated C by
Moody's for financial strength.
"Banco BICE's weaker margins relative to its Chilean peers are
partly the result of a more conservative lending and growth
strategy, but are also indicative of the bank's weaker fee
generating capacity and operating efficiency," says Moody's
Senior Credit Officer, Jeanne Del Casino. "At the same time,
Banco BICE's relative performance is consistent with a more
liquid balance sheet and conservative approach to credit risk,
which has resulted in consistently superior asset quality and
reserve and capital coverage of problem loans," she adds.
Moody's says that downward pressure on Banco BICE's BFSR could
occur if core profitability indicators continue to lag those of
its relevant peers.
A return to a stable outlook would depend on substantial
improvements in pre-provision profitability as well as the
maintenance of solid asset quality and capitalization, the
agency added.
Banco BICE was Chile's eleventh largest bank as of December 31,
2005 with total assets of US$3.1 billion and equity of US$252
million. The bank and its subsidiaries earned net income of
US$37 million in fiscal year 2005 and US$10.3 million for the
first quarter of 2006.
This rating was affected:
-- C Bank Financial Strength Rating: affirmed with outlook
changed to negative from stable.
BANCO DE CREDITO: Moody's Affirms C Financial Strength Rating
-------------------------------------------------------------
Moody's Investors Service affirmed the C bank financial strength
rating of Banco de Credito e Inversiones and changed the outlook
to positive from stable. Banco de Credito's Baa1 long term
foreign currency deposit rating remains on review for possible
upgrade in line with Chile's country ceiling.
Moody's indicates that the change in the BFSR outlook is based
on Banco de Credito's improving profitability, market share
growth, and the maintenance of solid asset quality in the
context of dynamic loan expansion. "Banco de Credito is in a
position to take advantage of more robust business conditions
and is following close behind its larger private sector peers in
its performance metrics, particularly with regard to its
recurring earning power, fee generation and operating
efficiency," says Moody's Senior Credit Officer, Jeanne Del
Casino.
Upward movement of the BFSR would depend on continued strong
core profitability as a percentage of risk-weighted assets as
well as on maintaining solid asset quality metrics particularly
due to the bank's high growth strategy and increasing
penetration of higher risk consumer and middle market lending
segments. An upgrade would also depend on Banco de Credito's
capacity to generate net interest income and fees to cover
operating expense growth, as well as on the development of the
bank's risk-weighted capitalization to support continued lending
growth, Moody's says.
The agency notes its concerns regarding the potential negative
impact of rising interest rates on Chilean bank margins. Banco
de Credito's solid base of no-cost core deposits and
conservative securities trading positions, together with the
repositioning of its asset mix towards higher yielding credit
segments, should help offset some of the impact of rising
funding costs, the agency added.
Banco de Credito was the fourth largest bank in Chile as of
December 31, 2005 with total assets of US$13.5 billion and
equity of US$978 million. Banco de Credito earned US$205.6
million in fiscal year 2005 and US$49.2 million for the first
quarter of 2006.
This rating was affected:
-- C Bank Financial Strength Rating: affirmed with outlook
changed to positive from stable.
FALCONBRIDGE: Reaches Labor Agreement on Lomas Bayas Copper Mine
----------------------------------------------------------------
Falconbridge Limited (TSX:FAL.LV)(NYSE:FAL) has reached an
agreement with the Sindicato de Empresa Compania Minera Lomas
Bayas for the renewal of the collective agreement at the Lomas
Bayas copper mine located in Chile.
Employees voted in favour of the agreement this morning,
and it will supersede the prior agreement that expired on
Apr. 30, 2006.
"Both parties worked diligently throughout the negotiations, and
we are pleased to have successfully reached an agreement that
balances the needs of the company and employees," said Marcelo
Jo, General Manager of Lomas Bayas.
Under the three-year contract, workers will receive a 10% wage
increase and a bonus tied to copper prices.
Lomas Bayas produced 63,000 metric tons of copper in 2005, or
1.2% of all copper produced in Chile, according to Bloomberg
News.
Headquartered in Toronto, Ontario, Falconbridge Limited
(TSX:FAL.LV)(NYSE: FAL) -- http://www.falconbridge.com/
-- produces nickel products. 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 and Lomas Bayas mines. Its other
products include cobalt, platinum group metals, and zinc.
* * *
Falconbridge's CDN$150 million 5% convertible and callable bonds
due April 30, 2007, carries Standard & Poor's BB+ rating.
=======
C U B A
=======
* CUBA: China Offers Aid in Electricity Network Repair & Upgrade
----------------------------------------------------------------
Cuba has received aid from China with the repair and upgrade of
its electricity network, the Vietnam News Agency reports.
According to VNA, China presented 101 light lorries and
motorcycles to Cuba.
Prensa Latina relates that Cuba will import about 407
specialized vehicles from China in the next two years.
President Fidel Castro was quoted by VNA saying that energy
saving is more important than the search for new energy sources.
VNA states that among electricity saving actions he required
are:
-- distribution of electricity-saving appliances,
-- installation of generators, and
-- power lines rehab.
* * *
Moody's assigned these ratings on Cuba:
-- CC LT Foreign Bank Depst, Caa2
-- CC LT Foreign Curr Debt, Caa1
-- CC ST Foreign Bank Depst, NP
-- CC ST Foreign Curr Debt, NP
-- Issuer Rating, Caa1
===================================
D O M I N I C A N R E P U B L I C
===================================
* DOMINICAN REPUBLIC: Fitch Ups LT Foreign Currency Rating to B
---------------------------------------------------------------
Fitch Ratings has upgraded these debt and issuer Default Ratings
of the Dominican Republic:
-- Long-term foreign currency Issuer Default Rating
to B from B-;
-- Country ceiling upgraded to B+ from B-;
-- Foreign currency bonds due 2006 to B-/RR4 from CCC+/RR4;
-- Foreign currency Brady bonds due 2009 to B/RR4
from B-/RR4;
-- Foreign currency bonds due 2011 to B/RR4 from B-/RR4;
-- Foreign currency bonds due 2013 to B-/RR4 from CCC+/RR4;
-- Foreign currency bonds due 2018 to B/RR4 from B-/RR4; and
-- Foreign currency collateralized Brady bonds due 2024
to B+/RR3 from B/RR3.
Fitch has also affirmed these ratings:
-- Long-term local currency Issuer Default Rating: B; and
-- Short-term Issuer Default Rating: B.
Additionally, Fitch has assigned a debt and Recovery Rating to
this issue:
-- Foreign currency bonds due 2027: B/RR4.
The Rating Outlook for the long-term foreign and local currency
IDRs is Stable.
"The Dominican Republic's rating upgrades are supported by the
country's comparably low external and public debt burdens,
manageable debt service profile, as well as a consolidation of
the economic recovery," said Theresa Paiz-Fredel, Director and
lead analyst for the Dominican Republic for Fitch.
"Nevertheless, in spite of recent improvements, a still fragile
liquidity position constrains the ratings to current levels at
this time."
The Dominican Republic's economic recovery consolidated last
year, in part reflecting prompt actions by the Fernandez
Administration to achieve a substantial fiscal adjustment and
the resulting improved domestic and foreign confidence.
Economic growth was broad based and reached a vigorous 9.3% in
2005, one of the strongest rates of growth in Latin America and
the Caribbean, while inflation continued to decline. A
favorable balance of payments performance, underpinned by
remittances, tourism receipts, as well as reduced debt service
outflows as a result of the debt restructurings, has led to a
steady recuperation of foreign reserves and an improvement in
the country's liquidity position.
Additionally, the authorities achieved a significant fiscal
adjustment in 2005, with the consolidated public sector deficit
declining to 3.3% of GDP in 2005 from 7.7% of GDP in 2004. An
increase in revenue due to the tax reform implemented by the new
government and the economic recovery as well as expenditure
constraint and a reduction in interest rates on the central
bank's debt drove fiscal performance. Scheduled amortizations
for the non-financial public sector are almost entirely with
official creditors this year and appear to be covered by
substantial commitments from multilateral and bilateral
disbursements as well as treasury deposits.
The country's external and public debt ratios compare favorably
with other speculative grade sovereigns, returning to pre-crisis
levels following the increase in debt in 2003 related to the
bailout of several local banks and currency weakness. The Banco
Central de la Republica Dominicana absorbed most of the increase
in debt since 2002 due to domestic issuance of securities to
address the banking crisis and increased IMF borrowing for
balance of payment support. As a proportion of current external
receipts, the Dominican Republic's net external debt is forecast
to reach 33.9% in 2006, slightly lower than pre-crisis levels,
and significantly below the 49.9% median for sovereigns rated in
the B category.
After peaking at 46.9% in 2003, Fitch expects consolidated
central government debt to reach a projected 26.7% of GDP by the
end of 2006, similar to pre-crisis levels and considerably less
than the median of 47.1% of GDP for similarly rated sovereigns.
As the central bank experienced most of the increase in debt
related to the crisis, consolidated public sector debt is much
higher and is forecast to reach 38.6% of GDP in 2006 from a peak
of 59.8% in 2003, which is still low relative to similarly rated
sovereigns. Continued currency stability and the strong
economic rebound, combined with a reduced government financing
requirement and low net multilateral disbursements, will
contribute to the improvement in debt ratios this year.
In spite of comparably favorable debt ratios, the Dominican
Republic's credit profile has always been constrained by low
liquidity, a situation that can be exacerbated by a loss of
confidence and ensuing capital flight. Although the Dominican
Republic's liquidity position remains tight relative to peers,
the results of the exchange as well as Paris Club and commercial
bank reschedulings combined with a recovery of private capital
inflows, imply a substantial improvement. International reserve
growth and reduced amortizations increased the country's
liquidity ratio to 159% at the beginning of 2006 from 102% in
2004. While this ratio has exceeded 100% for two consecutive
years now, it is still substantially below the B median of 190%.
Furthermore, when adjusting the liquidity ratio to exclude
banks' foreign assets and include banks' resident foreign
currency deposits, the ratio declines significantly to 57%,
highlighting the vulnerabilities associated with high, albeit
declining dollarization.
In addition to the structural performance criteria required by
the IMF program, the implementation of DR-CAFTA would also
bolster the government's efforts to improve the country's
institutional framework in order to avoid the recurrence of the
type of crisis that occurred in 2003 and could be positive for
creditworthiness. Further improvements in liquidity would also
be viewed favorably.
=============
E C U A D O R
=============
PETROECUADOR: Analyzes Liquefied Petroleum Gas Storage Proposal
---------------------------------------------------------------
Petroecuador, the state-run oil firm of Ecuador, will be
evaluating a proposal for a liquefied petroleum gas aka LPG
storage and transport project, Eduardo Naranjo, the company's
institutional relations head told Business News Americas.
Mr. Naranjo informed BNamericas that the proposal came from
local university Escuela Superior Politecnica del Litoral aka
Epsol, Italian consortium Paresa-Bevilacqua and Ecuadorian
business conglomerate Nobis.
Mr. Naranjo was quoted by BNamericas saying that the project
costs US$177 million. It consists of a marine terminal for gas
tankers in Monteverde, Guayas, with a storage capacity of 40,000
tonnes as well as 11 storage spheres with 49,500t capacity.
According to a statement by Petroecuador, the project also
includes a 10-inch diameter pipeline stretching 130km from
Monteverde to Pascuales, where the group would install four
spheres with 10,000t capacity.
A previous report by BNamericas states that the LPG could be
transported from Guayaquil to southern Ecuador.
A 25,000t terminal expansion in 2021 is also being considered to
be included in the project, BNamericas reports.
BNamericas states that Mr. Naranjo said the project will provide
more efficiency and more security in terms of both storage and
long-term supply.
The company said in a statement that Ecuador will consume
891,822t of LPG this year. Demand is growing at 5% every year
and by 2010 demand will reach BRL1.18 million tonnes a year.
Ecuador will need to import 68%.
BNamericas relates that the proposed project will allow the
country to save US$2 billion over the course of the next 30
years, as indicated by calculations based on Friday's US$116/t
LPG price.
Mr. Naranjo revealed to BNamericas that Nobis offered to provide
70% of the funds to be used in the project.
According to BNamericas, Mr. Naranjo said that if the proposal
is accepted by Petroecuador, the contract for the works is
expected to be signed in July and construction could start
immediately.
* * *
The Troubled Company Reporter - Latin America reported on
May 8, 2006, that Petroecuador's employees are threatening to
launch a strike if the government won't provide funding
necessary for the company's operations. Reports said that
Petroecuador has no funds for maintenance and no funds to repair
pumps in diesel, gasoline and natural gas refineries.
Ecuador's Economy Minister Diego Borja demanded more efficiency
from the state oil company as well as transparency in its
accounts.
Petroecuador has asked the government US$279 million to pay
debts to suppliers, outsourcing firms and other creditors
threatening to halt services.
=====================
E L S A L V A D O R
=====================
* EL SALVADOR: Agrees with Honduras on El Tigre Project Location
----------------------------------------------------------------
According to the La Tribuna, progress has been made on talks
between Honduras and El Salvador on the El Tigre hydro-electric
project.
The parties were able to agree on:
-- the project's location at San Antonio in Intibuca,
Honduras, and
-- a study to consider the social and environmental impact of
the project.
The 700 megawatt generator will cover an area of 70 square
kilometres, 50% on Honduran soil. The project is estimated to
cost US$1.5 billion -- half of which will be paid by the
Honduran government.
* * *
Moody's Investor Service assigned these ratings on Honduras:
Rating Rating Date
------ -----------
Senior Unsecured B2 Sept. 29, 1998
Long Term IDR B2 Sept. 29, 1998
* * *
Fitch Ratings assigned these ratings on El Salvador:
Rating Rating Date
------ -----------
Country Ceiling BB+ Jun. 18, 2004
Long Term IDR BB+ Dec. 14, 2005
Short Term IDR B Dec. 14, 2005
Local Currency
Long Term Issuer
Default Rating BB+ Dec. 14, 2005
=========
H A I T I
=========
* HAITI: Canada Grants US$48 Million Financial Assistance
---------------------------------------------------------
The government of Haiti has been granted US$48 million by Canada
to be used for local projects, President-elect Rene Preval told
Prensa Latina.
As reported in the Troubled Company Reporter on May 4, 2006, Mr.
Preval met with Canadian leaders to seek help in the restoration
of his country's security as well as the creation of jobs.
Canada is one of the principal donors to Haiti.
According to the Canadian Press, the federal government of
Canada reiterated its promise to provide US$48 million to
promote good governance and democracy in Haiti.
Mr. Verner said in a statement, "We are determined to help the
Haitian people as they move toward these two objectives."
Prensa Latina relates that Mr. Preval said that with the amount:
-- US$10 million for the Haitian foreign debt,
-- US$5 for democracy plans,
-- US$5 million to the Haitian Parliament, and,
-- US$20 million to some institutions for social projects.
* * *
As reported in the Troubled Company Reporter on April 12, 2006,
president-elect Preval appealed for urgent international help to
spur development in the Western Hemisphere's poorest country and
called on all Haitians to join in a national dialogue to promote
peace, democracy and stability.
"Poverty, widespread unemployment, the state of dilapidation of
basic infrastructures that are necessary for development,
chronic insecurity - these are all the major challenges to be
faced by the next government," President Preval was quoted by
the Associated Press as saying.
President Preval explained that increased international
assistance is "indispensable" to Haiti's economic recovery, to
create conditions for investment and job creation, to improve
social services, and to reform democratic institutions including
parliament, municipalities, the judicial system, and the
national police, the AP relates.
===============
H O N D U R A S
===============
* HONDURAS: Cites Progress on El Tigre Project with El Salvador
---------------------------------------------------------------
According to the La Tribuna, progress has been made on talks
between Honduras and El Salvador on the El Tigre hydro-electric
project.
The parties were able to agree on:
-- the project's location at San Antonio in Intibuca,
Honduras, and
-- a study to consider the social and environmental impact of
the project.
The 700 megawatt generator will cover an area of 70 square
kilometres, 50% on Honduran soil. The project is estimated to
cost US$1.5 billion -- half of which will be paid by the
Honduran government.
* * *
Moody's Investor Service assigned these ratings on Honduras:
Rating Rating Date
------ -----------
Senior Unsecured B2 Sept. 29, 1998
Long Term IDR B2 Sept. 29, 1998
* * *
Fitch Ratings assigned these ratings on El Salvador:
Rating Rating Date
------ -----------
Country Ceiling BB+ Jun. 18, 2004
Long Term IDR BB+ Dec. 14, 2005
Short Term IDR B Dec. 14, 2005
Local Currency
Long Term Issuer
Default Rating BB+ Dec. 14, 2005
===========
M E X I C O
===========
EMPRESAS ICA: First Quarter Revenues Up 11% to Ps4.6 Billion
------------------------------------------------------------
Empresas ICA, S.A. de C.V., an engineering, construction, and
procurement company in Mexico, its unaudited results for the
first quarter of 2006.
As previously announced, ICA is consolidating the income
statement of the North Central Airport Group in the Airports
sub-segment, starting with the first quarter of 2006. The
Airports' balance sheet was consolidated as of December 31,
2005. Airports is a newly created sub-segment in the
Infrastructure segment, which was previously called
Infrastructure Operations.
In addition, effective January 2006, ICA adopted the
proportional consolidation method of accounting for those
subsidiaries and joint ventures where there is shared control.
The accounts are consolidated line-by-line in proportion to
ICA's ownership. The change in accounting method affects the
consolidation of the financial statements of the Spanish
subsidiaries that make up Rodio and the GEOICASA joint venture
with Mexican homebuilder GEO in the Housing
segment. ICA's ownership in each case is 50 percent and there
is shared control.
Prior period statements have not been restated.
ICA noted the following highlights:
-- Total revenues for the first quarter of 2006 were
Ps.4.6 billion, an increase of Ps.465 million, or 11
percent, as compared to Ps. 4.2 billion in the first
quarter of 2005. Airports contributed Ps.380 million, or
8.2 percent, of the total.
-- Operating income for the first quarter of 2006 was Ps.354
million, an increase of Ps.148 million, or 72 percent, as
compared to Ps.206 million in the same period of 2005.
Airports contributed Ps.163 million, or 48 percent of the
total.
-- Net income of majority interest was Ps.131 million in the
first quarter of 2006, an increase of Ps.61 million, or 87
percent, as compared to Ps.70 million in the first quarter
of 2005. This is equivalent to Ps.0.32 per share, or
US$0.36 per ADS. Airports contributed Ps.16 million, or
12.3 percent, of net income of majority interest.
-- New construction contract awards and net contract
additions during the first quarter of 2006 were Ps.3.1
billion. ICA's construction backlog as of March 31, 2006
was Ps.13.06 billion, equivalent to 10 months work based
on first quarter construction revenues.
-- At the end of the first quarter of 2006, ICA's total
assets were Ps.32.2 billion, an increase of 50 percent, as
compared to Ps.21.5 billion in the first quarter of 2005.
Ps.8.2 billion of the increase resulted from the
consolidation of Airports.
-- As of March 31, 2006, cash and cash equivalents were
Ps.6.2 billion, an increase of 97 percent as compared to
Ps.3.1 billion at the end of the first quarter of 2005.
Of the increase of Ps.3.05 billion, Ps.1.8 billion
resulted from the consolidation of Airports.
-- ICA's total debt in the first quarter of 2006 was
Ps.11.04 billion, an increase of Ps.2.9 billion, or 36
percent, as compared to Ps.8.1 billion in the prior year
period. The El Cajon hydroelectric project accounted for
Ps.6.6 billion, or 60 percent, of ICA's total debt, an
increase of Ps.1.1 billion, or 21 percent, as compared to
Ps.5.4 billion in the first quarter of 2005. Airports
accounted for Ps.1.4 million, or 12 percent, of the total.
Empresas ICA -- http://www.ica.com.mx/-- the largest
engineering, construction, and procurement company in Mexico,
was founded in 1947. ICA has completed construction and
engineering projects in 21 countries. ICA's principal business
units include civil construction and industrial construction.
Through its subsidiaries, ICA also develops housing, manages
airports, and operates tunnels, highways, and municipal services
under government concession contracts and/or partial sale of
long-term contract rights.
* * *
Standard & Poor's assigned these ratings to Empresas ICA, with
stable outlook:
-- LT Foreign Issuer Credit B; and
-- LT Local Issuer Credit B.
MERIDIAN AUTOMOTIVE: Court Disqualifies Milbank as Counsel
----------------------------------------------------------
The Hon. Mary F. Walrath of the U.S. Bankruptcy Court for the
District of Delaware has no difficulty concluding that Milbank,
Tweed, Hadley & McCloy LLP's violation of Model Rule 1.9 and
dogged refusal to acknowledge this violation, warrant
disqualification from its further representation of the First
Lien Committee in Meridian Automotive Systems, Inc., and its
debtor-affiliates' bankruptcy cases.
For these reasons, the Court grants Stanfield Capital Partners,
LLC's request to disqualify Milbank from further representation
of the First Lien Committee.
A full-text copy of the Court's 20-page Opinion is available for
free at http://ResearchArchives.com/t/s?89f
According to Judge Walrath, the Model Rules of Professional
Conduct of the American Bar Association govern the practice of
law before the United States Bankruptcy Court for the District
of Delaware. For conduct inconsistent with the Model Rules, an
attorney may be reprimanded or subjected to other disciplinary
action as the circumstances may warrant.
Concurrent Conflict of Interest
Stanfield Capital Partners, LLC, argued that Milbank's
representation of the Informal Committee of First Lien Secured
Lenders is prohibited by Model Rule 1.7(a), which provides that
"a lawyer shall not represent a client if the representation of
. . . [that] client will be directly adverse to another client."
The Court finds that Stanfield terminated the attorney-client
relationship with Milbank before Milbank undertook the First
Lien Committee representation. Consequently, the Court
concludes that Model Rule 1.7 is not implicated.
Duties to Former Clients
Stanfield also argued that Milbank violated a duty owed to
Stanfield as a former client under Model Rule 1.9(a), which
provides that:
"A lawyer who has formerly represented a client in a
matter shall not thereafter represent another person in
the same or a substantially related matter in which
that person's interests are materially adverse to the
interests of the former client unless the former client
gives informed consent, confirmed in writing."
Judge Walrath says that the duty of confidentiality "applies not
only to matters communicated in confidence by the client but
also to all information relating to the representation, whatever
its source," citing Model R. Prof'l Conduct 1.6, cmt. [3].
The Court concludes that even if the Stanfield and First Lien
Committee matters are not "the same," they are "substantially
related" under Model Rule 1.9(a).
Moreover, Judge Walrath notes, to represent the First Lien
Committee, Milbank needed Stanfield's informed consent,
confirmed in writing, as required by Model R. Professional
Conduct 1.9(a).
The Court finds that Stanfield did not consent to Milbank's
representation of the First Lien Committee. Because that
representation was adverse to Stanfield in a matter in which
Milbank had represented Stanfield, the Court concludes that
Milbank violated Model Rule 1.9.
Waiver
Milbank argued that Stanfield waived any right to seek
disqualification by waiting to file its motion eight months
after learning that Milbank refused to withdraw.
The Court notes that Stanfield complained to Milbank of the law
firm's representation of the First Lien Committee. When its
efforts did not result in Milbank withdrawing, Stanfield hired
counsel who made similar efforts to resolve the issue. Only
when those efforts were unsuccessful did Stanfield file its
Disqualification Motion.
Given Stanfield's continued insistence that there was a
conflict, Milbank could not have believed that Stanfield waived
the Conflict, Judge Walrath says.
Milbank's Appeal
Milbank has taken an appeal to the United States District Court
for the District of Delaware from Judge Walrath's order granting
Stanfield Capital's motion to disqualify Milbank as counsel to
the Committee of First Lien Secured Lenders.
About Meridian
Headquartered in Dearborn, Mich., Meridian Automotive Systems,
Inc. -- http://www.meridianautosystems.com/-- supplies
technologically advanced front and rear end modules, lighting,
exterior composites, console modules, instrument panels and
other interior systems to automobile and truck
manufacturers. Meridian operates 22 plants in the United
States, Canada and Mexico, supplying Original Equipment
Manufacturers and major Tier One parts suppliers. The Company
and its debtor-affiliates filed for chapter 11 protection on
April 26, 2005 (Bankr. D. Del. Case Nos. 05-11168 through
05-11176). James F. Conlan, Esq., Larry J. Nyhan, Esq., Paul S.
Caruso, Esq., and Bojan Guzina, Esq., at Sidley Austin Brown &
Wood LLP, and Robert S. Brady, Esq., Edmon L. Morton, Esq.,
Edward J. Kosmowski, Esq., and Ian S. Fredericks, Esq., at Young
Conaway Stargatt & Taylor, LLP, represent the Debtors in their
restructuring efforts. Eric E. Sagerman, Esq., at Winston &
Strawn LLP represents the Official Committee of Unsecured
Creditors. The Committee also hired Ian Connor Bifferato, Esq.,
at Bifferato, Gentilotti, Biden & Balick, P.A., to prosecute an
adversary proceeding against Meridian's First Lien Lenders and
Second Lien Lenders to invalidate their liens. When the Debtors
filed for protection from their creditors, they listed US$530
million in total assets and approximately US$815 million in
total liabilities. (Meridian Bankruptcy News, Issue No. 26;
Bankruptcy Creditors' Service, Inc., 215/945-7000).
MERIDIAN AUTOMOTIVE: Posts US$12.5 Mil. Net Loss in March 2006
--------------------------------------------------------------
Meridian Automotive Systems - Composites
Operations, Inc. and Subsidiaries
Unaudited Consolidated Balance Sheet
As of March 31, 2006
(In Thousands)
CURRENT ASSETS:
Cash -
Accounts receivable, net $105,135
Intercompany receivable 13,368
Inventories 66,360
Tooling costs in excess of billings and others 29,862
----------
TOTAL CURRENT ASSETS 217,725
----------
Property, plant and equipment, net 227,879
Intangible assets 15,296
Investment in subsidiaries 23,863
Other assets 12,317
----------
TOTAL ASSETS $497,077
CURRENT LIABILITIES NOT SUBJECT TO COMPRISE:
Current portion of long term debt $345,609
Accounts payable 50,089
Accrued expenses 44,988
Tooling billings in excess of costs 2,997
----------
TOTAL CURENT LIABILITIES 443,683
----------
Liabilities subject to comprise 474,443
Non-Current Liabilities Not Subject to Compromise:
Other long-term liabilities 9,099
Accumulated post-retirement benefit obligation 24,487
----------
TOTAL LIABILITIES 951,712
SHAREHOLDERS'
EQUITY (454,635)
----------
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY $497,077
Meridian Automotive Systems - Composite
Operations, Inc. and Subsidiaries
Unaudited Statement of Operations
March 1 to 31, 2006
(In Thousands)
Net sales $72,630
Cost of sales 67,854
----------
Gross profit 4,776
Selling, general and administrative expenses 5,547
Restructuring charges 2,716
----------
Operating income
(loss) (3,487)
Interest expense, net 7,243
Other (expense) income 12
Chapter 11 and related reorganization items 1,802
----------
Loss before provision for income
taxes (12,520)
(Benefit) Provision for income taxes 18
----------
NET
LOSS ($12,538)
Meridian Automotive Systems - Composite
Operations, Inc. and Subsidiaries
Unaudited Statement of Cash Flows
March 1 to 31, 2006
(In Thousands)
OPERATING ACTIVITIES:
Net loss ($12,538)
Adjustments required to reconcile net loss to net
cash provided by (used in) operating activities:
Depreciation, amortization, and impairment 4,561
Change in working capital and other operating
items 14,154
----------
Net cash provided by (used for) operating
activities before reorganization items 6,177
----------
Operating cash flows from reorganization items:
Chapter 11 and related reorganization items 1,802
Payments on Chapter 11 and related reorg items (2,658)
----------
Net cash provided by Chapter 11 and related
reorg items (856)
Net cash provided by (used for) operating
activities 5,321
INVESTING ACTIVITIES:
Additions to property and equipment (4,532)
Proceeds from sale or property and equipment 11
----------
Net cash used for investing activities (4,521)
----------
FINANCING ACTIVITIES:
Proceeds from prepetition borrowings -
Repayments of prepetition borrowings -
Proceeds from DIP credit facility 35,200
Repayments of DIP credit facility (36,000)
Repayments on prepetition long-term debt -
Deferred financing costs capitalized -
----------
Net cash (used for) provided by financing activities ($800)
----------
Net increase (decrease) in cash -
----------
Cash and Cash Equivalents, beginning of period -
Cash and Cash Equivalents, end of period -
Headquartered in Dearborn, Mich., Meridian Automotive Systems,
Inc. -- http://www.meridianautosystems.com/-- supplies
technologically advanced front and rear end modules, lighting,
exterior composites, console modules, instrument panels and
other interior systems to automobile and truck
manufacturers. Meridian operates 22 plants in the United
States, Canada and Mexico, supplying Original Equipment
Manufacturers and major Tier One parts suppliers. The Company
and its debtor-affiliates filed for chapter 11 protection on
April 26, 2005 (Bankr. D. Del. Case Nos. 05-11168 through
05-11176). James F. Conlan, Esq., Larry J. Nyhan, Esq., Paul S.
Caruso, Esq., and Bojan Guzina, Esq., at Sidley Austin Brown &
Wood LLP, and Robert S. Brady, Esq., Edmon L. Morton, Esq.,
Edward J. Kosmowski, Esq., and Ian S. Fredericks, Esq., at Young
Conaway Stargatt & Taylor, LLP, represent the Debtors in their
restructuring efforts. Eric E. Sagerman, Esq., at Winston &
Strawn LLP represents the Official Committee of Unsecured
Creditors. The Committee also hired Ian Connor Bifferato, Esq.,
at Bifferato, Gentilotti, Biden & Balick, P.A., to prosecute an
adversary proceeding against Meridian's First Lien Lenders and
Second Lien Lenders to invalidate their liens. When the Debtors
filed for protection from their creditors, they listed US$530
million in total assets and approximately US$815 million in
total liabilities. (Meridian Bankruptcy News, Issue No. 26;
Bankruptcy Creditors' Service, Inc., 215/945-7000).
===============
P A R A G U A Y
===============
* PARAGUAY: Will Increase Beef Exports to Taiwan
------------------------------------------------
Paraguay's beef exports to Taiwan will increase to 440 from 220
metric tons a year, The China Post reports.
According to The China Post, Taiwan's President Chen Shui-bian
announced at Asuncion on Friday that Taiwan will double its beef
purchases in Paraguay.
The Taiwanese president was quoted by The China Post saying that
this is aimed at enhancing the friendship between the two
countries.
President Shui-bian first disclosed his decision to Paraguay's
President Nicanor Duarte Frutos at a summit meeting that Taiwan
will increase the beef imports from 220 to 440 metric tons a
year, according to Central News Agency.
President Chen told The China Post, "Doubling the (beef) quota
will be a very good start for bilateral ties."
* * *
Moody's assigned these ratings on Paraguay:
-- CC LT Foreign Bank Deposit, Caa2
-- CC LT Foreign Curr Debt, Caa1
-- CC ST Foreign Bank Deposit, NP
-- CC ST Foreign Currency Debt, NP
-- LC Currency Issuer Rating, Caa1
-- FC Curr Issuer Rating, Caa1
-- Local Currency LT Debt, WR
* * *
Standard & Poor's assigned these ratings on Paraguay:
-- Foreign Currency LT Debt B-
-- Local Currency LT Debt B-
-- Foreign Currency ST Debt C
-- Local Currency ST Debt C
=======
P E R U
=======
* PERU: Will Open Market to US Beef by End of May
------------------------------------------------
Peru has agreed with the Office of the US Trade Representative
to fully open its market to US beef by the end of May, Inside US
Trade reports.
The sources revealed to Inside US that Peru welcomed last month
these imports from the US:
-- boneless beef from cattle under 30 months,
-- beef offal and,
-- other meats.
Informed sources told Inside US that actual trade in the items,
which also include the import of chicken, has not yet resumed
but a Peruvian interagency commission is assessing the risk of
additional imports.
Inside US relates that the sources said Peru aims to open its
market completely by May 31, a delay from a commitment made in
the free trade agreement with the US that pledges market access
for US beef by March 1.
Inside US recalls that Peru had blocked imports of US beef when
cases of bovine spongiform encephalopathy were found in the US.
US chicken exports were also blocked after findings of avian
influenza in the US.
Access in Peru's beef market is among the issues that the
country and the US are trying to work out before congressional
consideration of the Free Trade Agreement, according to Inside
US.
* * *
Fitch Ratings assigned these ratings on Peru:
Rating Rating Date
------ -----------
Country Ceiling BB Nov. 18, 2004
Long Term IDR BB Dec. 14, 2005
Short Term IDR B Dec. 14, 2005
Local Currency
Long Term Issuer
Default Rating BB+ Dec. 14, 2005
=====================
P U E R T O R I C O
=====================
MUSICLAND HOLDING: Pays Postpetition Debts to Licensing Venture
---------------------------------------------------------------
The U.S. Bankruptcy Court for the Southern District of New York
directs Musicland Holding Corp. and its debtor-affiliates to pay
certain Postpetition Debts to Licensing Ventures, Inc.
Licensing Ventures had asked the Court to compel the Debtors to:
(a) pay $622,138, under the terms of their unexpired
executory contracts; and
(b) remain current in respect of those payments until the
time the contracts are assumed or rejected.
Pursuant to the Court's order, the Debtors are required to place
in a segregated account $473,645, representing the difference
between the $622,138 demanded by LVI and the $148,492 of the
Debtors' Internet sale proceeds that LVI currently holds.
The Court further rules that LVI will promptly surrender
possession, at the Debtors' direction, of any and all goods,
items and other properties of the Debtors in its control.
Merchant Services Agreement
The Debtors and LVI are parties to a Merchant Services and
Supply Agreement dated February 25, 2004. Under the Supply
Agreement, LVI provides the Debtors with services, relating to
buying and marketing previously-owned music, videos and games
for both retail sales in stores and on Internet Web sites owned
or operated by the Debtors, in exchange for certain monthly fees
and expenses.
The parties also entered into an Intellectual Property License
Agreement dated March 1, 2004, where LVI granted the Debtors:
-- a license to utilize its proprietary inventory shipping
and related software, and
-- an exclusive license to use its Web site, in connection
with the arrangements under the Supply Agreement.
Mr. Abraham Backenroth, Esq., at Backenroth Frankel & Krinsky,
LLP, in New York, notes that the Supply Agreement contains a
strict exclusivity provision, wherein LVI is designated as the
Debtors' exclusive merchant for the Products. In addition, LVI
is not permitted to sell, distribute or otherwise provide
Products and Merchant Services to another party, without the
Debtors' consent.
According to Mr. Backenroth, since the Petition Date, the
Debtors had made no payments to LVI. As of March 1, 2006, the
Debtors' postpetition obligations to LVI amounts to $622,138.
Debtors Object
David A. Agay, Esq., at Kirkland & Ellis LLP, in New York,
contends that to qualify as an administrative expense, a claim
must both arise from a transaction with the debtor-in-
possession, and benefit the debtor-in-possession in the
operation of its business.
Mr. Agay emphasizes that the focus on allowance of a priority is
to prevent unjust enrichment of the estate, not to compensate
the creditor for its loss.
LVI's request is bereft of any justification for entitlement to
payment, thus failing to carry its burden of proving a right to
a priority administrative claim, Mr. Agay argues.
Moreover, the Debtors complain that LVI interfered with their
business both by asserting liens on their goods, which LVI has
since abandoned, and by continuing to deprive them of goods even
after LVI dropped its lien claims.
Mr. Agay points out that LVI asserted in its objection to the
Debtors' Critical Vendor Motion on January 25, 2006, that it
considered the Supply and License Agreements to be "suspended"
due to the Debtors' failure to pay balances. "Thus, if those
contracts were 'suspended' in LVI's view no later than
January 25th, there is no basis for LVI to assert now that it
provided any benefit to the estate after that date."
LVI cannot maintain that the Debtors owe it any intellectual
property license fees or certain merchant service fees when the
Debtors has not asked for, or used, those services, Mr. Agay
contends.
According to Mr. Agay, even if LVI is entitled to some
postpetition payments from the Debtors, LVI is not entitled to
the administrative claim because several of the alleged charges
relate to prepetition services.
Given the parties' conflicting views on the postpetition
payments owed by the Debtors and services performed by LVI, the
Debtors ask the Court to set an evidentiary hearing on LVI's
request.
LVI Responds
Shepard Alster, the secretary and treasurer of Licensing
Ventures, Inc., asserts that LVI was well within its rights to
assert a lien claim for the goods stored in its warehouse.
The Debtors' counsel failed to allege how the mere assertion of
a lien could possibly have interfered with the Debtors' business
in a material way, Mr. Alster argues.
LVI does not know what the Debtors mean by the statement "LVI
refused the Debtors entry to its goods", Mr. Alster notes.
However, if it refers to the fact that LVI refused to allow the
Debtors to empty its warehouse, the Debtors failed to disclose
that both Parties were engaged in negotiations at that time,
pursuant to which the Debtors had agreed to pay LVI for its
services. The Debtors, however, refused to pay as was written
in their contract, Mr. Alster says. Thus, LVI refused to empty
the Warehouse.
The statements of the Debtors' counsels are not supported by
evidence, and are not credible in any event, Mr. Alster
maintains.
Judge Stuart M. Bernstein adjourns the hearing to consider the
remaining issues of LVI's request at a later date, where both
parties will exchange witnesses and exhibit lists.
About Musicland Holding
Headquartered in New York, New York, Musicland Holding Corp., is
a specialty retailer of music, movies and entertainment-related
products. The Debtor and 14 of its affiliates filed for chapter
11 protection on Jan. 12, 2006 (Bankr. S.D.N.Y. Lead Case No.
06-10064). James H.M. Sprayregen, Esq., at Kirkland & Ellis,
represents the Debtors in their restructuring efforts. Mark T.
Power, Esq., at Hahn & Hessen LLP, represents the Official
Committee of Unsecured Creditors. When the Debtors filed for
protection from their creditors, they estimated more than $100
million in assets and debts. (Musicland Bankruptcy News, Issue
No. 10; Bankruptcy Creditors' Service, Inc., 215/945-7000)
* PUERTO RICO: Senate Cancels Subsidies to Political Parties
------------------------------------------------------------
Puerto Rico's Senate voted on Sunday to cease subsidies to
political parties starting 2007 to help solve the country's
financial crisis, the Associated Press reports.
The senators told AP the move will save the state as much as
US$37 million.
AP relates that the country's head -- Gov. Anibal Acevedo Vila
-- and the legislature, which is dominated by the opposition,
continued to search for possible solutions that would help ease
the country from a US$740 million budget shortfall while public
employees and union officials held demonstrations outside the
Capitol and the governor's mansion.
As reported in the Troubled Company Reporter on May 8, 2006,
Puerto Rican senators passed a legislation on Thursday to impose
a 5.9% sales tax and a new levy on large firms to ease the
country of its financial crisis. The House of Representatives
was scheduled to meet later on Thursday to review the plan.
The Troubled Company Reporter also reported on May 2, 2006, that
the House of Representatives approved in April Gov. Vila's
US$638 million loan proposal. The loan was said to be paid off
by a 7% sales tax, as Puerto Rico currently has no sales tax.
The House, however, said it would support only a 4% sales tax
and refused to consider the governor's plan. Gov. Vila
eventually told AP he would agree on a 5.9% sales tax, which was
offered under one Senate proposal.
AP reports that the Senate measure also included a new tax on
firms earning more than US$10 million. Gov. Acevedo, who
previously said he would oppose that additional tax, agreed to
support it as public protests went on.
As reported in the Troubled Company Reporter on May 2, 2006,
almost 100,000 Puerto Ricans of the 200,000 employed by the
government were laid off as salaries constitute about 80% of the
government's operational costs. All 1,600 public schools were
closed Monday, along with 43 government agencies.
AP states that many basic functions of the government were not
available but Gov. Vila said essential services, such as police
and hospitals, would continue during the shutdown. Municipal
governments that provide services like garbage collection
continued operations.
The governor had explained to AP that the shutdown was necessary
as the island no longer has enough money in its budget to get
through the fiscal year ending June 30.
AP reports that Gov. Vila and the legislature controlled by the
members of the New Progressive Party have been arguing on a
spending plan since 2004. The two sides never agreed on the
2005 or the 2006 budgets. The government is currently using the
2004 budget to operate as the country's debts grow.
Standard & Poor's and Moody's Investors Service placed Puerto
Rico's economic outlook at negative. The rating agencies have
also put Puerto Rico on a special watch status, with the
possibility of downgrading the government's credit rating.
=================================
T R I N I D A D & T O B A G O
=================================
DIGICEL: Judge Gobin Declares Panel Can't Issue Interim Rates
-------------------------------------------------------------
Justice Carol Gobin of the High Court of Trinidad and Tobago
ruled that a panel established by the Telecommunications
Authority of Trinidad and Tobago has no authority to issue
interim interconnection rates between Digicel Limited and the
Telecommunication Services of Trinidad and Tobago -- TSTT.
The panel was supposed to issue interim interconnection rates on
April 18 but was stalled by a stay from the High Court at the
behest of TSTT.
Lisa Agard, TSTT's vice president of Legal, Regulatory and
Carrier Services, was quoted by the Trinidad Express as saying
that both companies will keep the revenue generated each time an
interconnection takes place until there is a final decision on
the impasse between the two companies.
The sender-keeps-all arrangement was put in place on March 31 by
the panel pending a final resolution on the rates conflict.
An arbitration process will begin on May 22.
TSTT asked the Court to prevent the panel from issuing interim
rates based on the nation's existing Telecommunications Act.
Digicel said it wanted the interim rates adjusted in order to
get more competitive with TSTT. The current sender-keeps-all
rates arrangement is not favorable to the new telecom operator,
the Express states.
Under the existing interconnection arrangement, TSTT retains the
cost of interconnecting a call made from a TSTT phone to a
Digicel phone, and the same applies to Digicel. Digicel has
argued that since TSTT has more users, more calls are sent to
(or terminate on) Digicel's network than vice versa, the Express
explains.
The three member arbitration panel comprises Dr. Ronald
Ramkissoon and Dr. Shahid Hussain of the Telecommunications
Authority, and is chaired by UK-based attorney Rory Mac Millan.
TSTT is represented by:
Martin Daly S.C.
115a Abercromby Street
Port of Spain, Trinidad
Tel: 00 1 868 623 1371
Fax: 00 1 868 627 5006
Digicel is represented by:
Christopher Hamel-Smith, Esq.
Hamel-Smith & Company
P.O. Box 219
19 Saint Vincent Street
Port of Spain, Trinidad and Tobago
The arbitration panel is represented by:
Deborah Peake SC
-- and --
Rikki Harnanan
Digicel Limited is a wireless services provider in the Caribbean
region founded in 2000, and controlled by Denis O'Brien. The
company started operations in Jamaica in April 2001 and now
offers GSM mobile services in 13 countries of the Caribbean
including Jamaica, St. Lucia, St. Vincent, Aruba, Grenada,
Barbados, Cayman, and Curacao among others. Digicel finished
FY2005 with 1.722 million total subscribers -- 97% pre-paid --
estimated market share of 67% and revenues and EBITDA of US$478
million and US$155 million, respectively.
* * *
On Mar. 10, 2006, Fitch affirmed the 'B' rating of Digicel
Limited, senior unsecured debt, including the US$300 million
senior notes due 2012, following the announcement that it is in
the process of acquiring Bouygues Telecom Caraibe. Fitch said
the Outlook for the Ratings is Stable.
DIRECTV: Admonished by TATT Director Over Columbus Warning
----------------------------------------------------------
Dr. John Prince told the Trinidad & Tobago Express that DirecTV
doesn't have the legal authority to prohibit Columbus
Communications from airing HBO and Cinemax channels.
Dr. Prince is the director of the Telecommunications Authority
of Trinidad and Tobago. Dr. Prince also monitors the nation's
cable TV industry.
DirecTV reportedly issued a stern warning to Columbus over the
airing of HBO and Cinemax saying that contracts are inconclusive
at this time, the Express says.
Dr. Prince said:
"I don't know that Columbus is pirating anything. I certainly do
not have that information nor evidence that Columbus is
pirating."
"DirecTV and its North American affiliates had discussions with
us some time ago. There's an HBO US and an HBO Latin America
apparently HBO Latin America gets their package from HBO US to
air it later."
"Columbus gets US HBO and is able to show it at the same time
which is what DirecTV has an affront to."
Meanwhile, Columbus' director Rhea Yaw Ching clarified to the
Express that her company is negotiating channel contracts.
Ms. Yaw Ching said:
"Right now there are hot discussions to hammer out agreements.
The discussions are between the Government sub-committee, TATT,
programmers including HBO, us and DirecTV."
"We're trying to leverage the size of the English speaking
Caribbean to make this a win-win situation for all and we're
getting massive support from other programmers on the ground, to
be able to find creative programming solutions."
"We have more than 100,000 customers who want an English HBO
version."
About DIRECTV
The DIRECTV Group, Inc., formerly Hughes Electronics
Corporation, headquartered in El Segundo, California, is a
world-leading provider of multi-channel television
entertainment, and broadband satellite networks and services.
The DIRECTV Group, Inc. with sales in 2004 of approximately
US$11.4 billion is 34% owned by Fox Entertainment Group, Inc.,
which is owned by News Corporation. DIRECTV is currently
available in Latin American countries: Argentina, Brazil, Chile,
Colombia, Costa Rica, Ecuador, El Salvador, Guatemala, Honduras,
Mexico, Nicaragua, Panama, Puerto Rico, Trinidad & Tobago,
Uruguay, Venezuela and several Caribbean island nations.
* * *
Standard & Poor's Rating Services placed a BB credit rating on
DIRECTV Group'S long-term foreign and local currency ratings
effective Aug. 9, 2004. S&P said the outlook is stable.
=============
U R U G U A Y
=============
* URUGUAY: Forms Consortium with Private Companies & Argentina
--------------------------------------------------------------
Petrouruguay, Uruguay's state-owned firm, formed an offshore
exploration consortium with Argentine state-run Enarsa, Repsol
YPF and Petrobras Energia Participaciones, Dow Jones Newswires
reports.
Dow Jones relates that a letter of agreement was signed in
January.
According to Dow Jones, the consortium is aimed at the
exploration of the Enarsa 1 and CCM2 blocks about 250 kilometers
east of seaside Mar de Plata, Argentina.
According to a letter Petrobras filed with the Buenos Aires
Stock Exchange, it was agreed that:
-- Petrobras Energia holds a 25% participation,
-- Repsol holds a 35%,
-- Argentina's state-run Enarsa holds a 35% participation,
and
-- Petrouruguay holds a 5% participation.
Dow Jones states that Petrobras Energia, Repsol and Petrouruguay
will front the investment costs. Enarsa, on the other hand,
will pay them back for its part when hydrocarbons are tapped.
The consortium plans to spend about US$20 million in seismic
studies. Drilling, based on the results, could demand further
investments of US$30 million to US$50 million for each well,
according to a statement from Petrobras Energia.
* * *
Fitch Ratings assigned these ratings on Uruguay:
Rating Rating Date
------ -----------
Country Ceiling BB- Mar. 7, 2005
Long Term IDR B+ Dec. 14, 2005
Short Term IDR B Dec. 14, 2005
Local Currency
Long Term Issuer
Default Rating BB- Mar. 7, 2005
* URUGUAY: Will Deepen Ties & Discuss Free Trade Pact with US
-------------------------------------------------------------
Uruguay's President Tabare Vazquez met with US President Bush on
Thursday and agreed to deepen ties between countries. The two
presidents also discussed a possible free-trade pact, the Miami
Herald reports.
President Vazquez told the Herald, "We have now also agreed to
work to expand, intensify, and strengthen our trade relations."
As reported in the Troubled Company Reporter on April 27, 2006,
President Vazquez would seek equity in trade relations with
Mexico and the United States. The Uruguayan president left the
country to meet with his Mexican and US counterparts,
accompanied by Foreign Minister Reinaldo Gargano and Industry
and Energy Minister Jorge Lepra.
President Vazquez was quoted by Miami Herald saying that Uruguay
and US will set up a joint technical commission to discuss trade
issues, which could lead to formal trade talks later this year.
According to Miami Herald, President Vazquez said the joint
commission would start in a few months in Montevideo.
President Bush said they discussed on the extension of the two
countries' commercial relations as well as renewable energy.
The Troubled Company Reporter stated that the Uruguayan leader
had said he would not sign a free trade agreement with the US
and that it is not even on the government's agenda.
* * *
Fitch Ratings assigned these ratings on Uruguay:
Rating Rating Date
------ -----------
Country Ceiling BB- Mar. 7, 2005
Long Term IDR B+ Dec. 14, 2005
Short Term IDR B Dec. 14, 2005
Local Currency
Long Term Issuer
Default Rating BB- Mar. 7, 2005
=================
V E N E Z U E L A
=================
PETROLEOS DE VENEZUELA: Uses SISDEM as Recruitment System
---------------------------------------------------------
The Job Democratization System or SISDEM has met the demand of
professional, technical staff, and workers in general, required
for different temporary job positions within the Venezuelan oil
industry, specifically in Western, Eastern and South-Centered
Venezuela. Through this system, Petroleos de Venezuela S.A. --
PDVSA -- shows its intention of guaranteeing a fair distribution
of employment nationwide.
Nowadays, SISDEM has registered a total of 24,634 people
recruited all over the country by means of a transparent process
aimed at assigning temporary job positions within the oil
industry. A record figure of 57,132 people registered at SISDEM
has been achieved since its creation. Then on, SISDEM turns to
be one of the main databases in terms of possible candidates for
job positions nationwide, and it has amounted to 445,083 people
recruited. The Labor Relations Corporate Management -part of
PDVSA's Human Resources Executive Department- informed that in
Western Venezuela 5,878 workers have been chosen to work for the
oil industry. Just within the Paraguana Refining Center, the
figure has reached 7,068 people compared to the number of
recruited people registered in Eastern Venezuela which amounts
to 7,861. In South-Centered Venezuela, 3,827 workers have been
chosen to be part of SISDEM. In general terms, 24,634 workers
around the country who render services in 3,109 works, have been
contracted.
State enterprises such as Corporacion Venezolana de Guayana or
CVG and other companies from the private sector, have shown
their interest in using this big database for their
corresponding staff recruitment process for temporary or
permanent job positions. In fact, PEQUIVEN, whose employees are
working on negotiations regarding their collective bargaining
agreement, intends to use this platform system to assign
temporary jobs.
Among benefits offered by SISDEM it must be mentioned the
artisanal certification process currently carried out by PDVSA's
Human Resources Executive Department which is based on
information provided by SISDEM, a program that validates
abilities showed by workers who are not yet identified. When it
comes to people suffering from an illness, which have been
considered unable to perform oil-related activities, PDVSA's
Health and Social Development Department meet their needs. It is
responsible for rendering medical assistance required, even in
case of surgeries or corresponding treatments. Likewise, people
who have never worked for the hydrocarbon sector in Venezuela
but are registered at SISDEM, are guided to other economical or
educational activities, such as Social Missions, or they are
persuaded to create cooperative groups or Social Production
Companies.
The new PDVSA confirms its commitment to select and assign job
positions on a fair and transparent basis by means of SISDEM; a
mechanism that plays a key role for PDVSA's contracting units,
since it allows active and direct participation of oil-related
communities and unions.
Petroleos de Venezuela SA aka PDVSA is Venezuela's state oil
company in charge of the development of the petroleum,
petrochemical and coal industry, as well as planning,
coordinating, supervising and controlling the operational
activities of its divisions, both in Venezuela and abroad.
* * *
On Jan. 23, 2006, Fitch Ratings upgraded the local and foreign
currency ratings of Petroleos de Venezuela S.A. aka PDVSA to
'BB-' from 'B+'. The rating of PDVSA's export receivable
future flow securitization, PDVSA Finance Ltd, was also upgraded
to 'BB+' from 'BB'. In addition, Fitch has assigned PDVSA a
'AAA(ven)' national scale rating. The Rating Outlook is
Stable. Both rating actions follow Fitch's November 2005
upgrade of Venezuela's sovereign rating.
* VENEZUELA: Withdrawing from G-3 Trade Bloc
--------------------------------------------
During his weekly television show, Venezuelan President Hugo
Chavez announced his plan to withdraw from the Group of Three
trade bloc, Bloomberg News reports.
The G-3 was formed with Mexico and Colombia in 1995.
"We have to free ourselves of these old mechanisms that
undermine South American Integration," President Chavez was
quoted by Bloomberg as saying.
Venezuela has already withdrawn from the Andean Community of
Nations after Colombia and Peru signed free trade accords with
the United States. President Chavez claimed that the trade
pacts with the US are unfair to local manufacturers.
The Andean Community of Nations is made up of Bolivia, Colombia,
Ecuador and Peru.
After its withdrawal from the Andean Bloc, Venezuela chose to
join the Mercosur trade bloc as a special member with no voting
power. Mercosur is comprised of Argentina, Brazil, Paraguay and
Uruguay.
Venezuela's foreign currency long-term debt is rated B2 by
Moody's, B+ by Standard & Poor's, and BB- by Fitch.
* * *
On Nov. 29, 2005, Fitch Ratings assigned expected 'BB-' ratings
to the pending issues of Venezuelan government bonds maturing
Feb. 26, 2016, and Dec. 9, 2020. The 2016 bond has a 5.75%
fixed coupon and the 2020 bond has a 6% fixed coupon. The bonds
are being marketed in Venezuela to be purchased in local
currency at the official exchange rate but under New York law,
with all coupon and principal payments in U.S. dollars.
Venezuela's sovereign ratings are supported by superior
international liquidity and low external financing
requirements relative to similarly rated sovereigns. The
ratings are constrained by vulnerability to external shocks
because of oil dependency; diminished capacity of the private
sector to absorb shocks because of heavy government
intervention in the productive sector; recent spending
increases that reduce fiscal flexibility; and concerns about
the rule of law and potential political instability. Fitch said
the Rating Outlook is Stable.
***********
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 - Latin America is a daily newsletter
co-published by Bankruptcy Creditors' Service, Inc., Fairless
Hills, Pennsylvania, USA, and Beard Group, Inc., Frederick,
Maryland USA. Marjorie C. Sabijon, Sheryl Joy P. Olano, and
Stella Mae Hechanova, Editors.
Copyright 2006. All rights reserved. ISSN 1529-2746.
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