/raid1/www/Hosts/bankrupt/TCRLA_Public/060711.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, July 11, 2006, Vol. 7, Issue 136
Headlines
A R G E N T I N A
4 P PRODUCTO: Verification of Creditors' Claims Is Until Oct. 9
FERCARNE SA: Deadline for Verification of Claims Is on Sept. 4
FERRETERIA LA ARGENTINA: Concludes Reorganization Proceeding
LLOVERS SA: Claims Verification Deadline Is Set for Sept. 26
MAGALCUER SA: Trustee Verifies Proofs of Claim Until Oct. 6
MAYAN SA: Last Day for Claims Verification Is Set for Sept. 15
OFELIA SA: Verification of Creditors' Claims Is Until Sept. 4
PHARMACEUTICA SRL: Trustee Will Verify Claims Until Sept. 13
PIZZERIA BABIECA: Seeks Court's Approval to Reorganize Business
RADIATEC SRL: Claims verification Deadline Is on Sept. 8
B A H A M A S
WINN-DIXIE: Prepares Financial Projections Underpinning Plan
WINN-DIXIE: Files Liquidation Analysis Under Best Interests Test
B E R M U D A
ALEA GROUP: Appoints Mark Cloutier as Chief Executive Officer
FOSTER WHEELER: Units Ink Asbestos-Related Insurance Settlement
REFCO INC: Ch. 11 Trustee Says Securities Advisory Panel Formed
REFCO INC: Ch. 11 Trustee Taps Skadden Arps as Special Counsel
REFCO INC: Official Panel Wants 22 Respondents to Produce Docs
B R A Z I L
CAIXA ECONOMICA: Expects Home Loans to Reach Over BRL6 Bil.
PETROLEO BRASILEIRO: Forms Strategic Alliance With Petroecuador
PETROLEO BRASILEIRO: Holds Talks with Russian Oil & Gas Firms
* BRAZIL: Inks Energy Integration Agreement With Uruguay
C A Y M A N I S L A N D S
ACA INC: Final Shareholders Meeting Is Scheduled for Aug. 2
ACA NO.1: Schedules Final Shareholders Meeting on Aug. 2
ALTRIA GROUP: Moody's Reviews Ratings for Possible Upgrade
COMPASS ROYALTY: Liquidator Presents Wind Up Process on Aug. 10
GALAPAGOS INC: Liquidator Presents Wind Up Accounts on Aug. 2
HSJ LIMITED: Shareholders Convene for a Final Meeting on Aug. 10
KPA LTD: Will Hold Final Shareholders Meeting on Aug. 10
MPC COMMODITY: Will Hold Final Shareholders Meeting on Aug. 2
R.L. CAPITAL: Final Shareholders Meeting Is Set for Aug. 10
SANTA ISABEL: Shareholders Convene for Final Meeting on Aug. 10
SCEPTRE INT'L: Last Shareholders Meeting Is Set for Aug. 10
SECOND EMERGING: Last Shareholders Meeting Will be on Aug. 10
START INVESTMENTS: Final Shareholders Meeting Is Set for Aug. 10
UNITED MULTI-SECTOR: Final Shareholders Meeting Is on Aug. 10
C O L O M B I A
BANCO DE BOGOTA: Grupo Aval Can Subscribe to COP240B New Shares
IMPSAT SA: Colombian Unit to Invest CIP1.9 Billion for Expansion
PETROLEO BRASILEIRO: Investing US$150MM to Seek Oil in Colombia
* COLOMBIA: Buys Back US$318 Million of Peso Bonds on July 11
* COLOMBIA: Inaugurates Natural Gas Pipeline with Venezuela
D O M I N I C A N R E P U B L I C
BANCO INTERCONTINENTAL: Former Head Sues Jose Lois Malkun
FALCONBRIDGE LTD: Urges Shareholders to Tender Shares to Inco
E C U A D O R
PETROECUADOR: Forms Strategic Alliance With Petrobras
G U A T E M A L A
* GUATEMALA: Peten Oil Exploration Bidding Awaits Gov't Approval
H O N D U R A S
* HONDURAS: Committee to Present Changes to Mining Reform Bill
J A M A I C A
AIR JAMAICA: Minister to Ask Venezuela More Oil for Airline
MIRANT CORP: US Trustee Wants Ch. 11 Cases of 13 Units Dismissed
M E X I C O
AXTEL SA: Services Contract with Nextel Extended Until Next Year
DANA CORP: Assumes Full Ownership of Mexican Biz for US$19.5MM
GENERAL MOTORS: Fitch Says Ratings Unaffected by Proposed Merger
GRUPPO COVARRA: Court's Injunction Stays Facis S.p.A.'s Lawsuit
GRUPO MEXICO: Will Hold Talks with Union Before Closing Mine
PIER 1 IMPORTS: Incurs US$23 Mil. Net Loss in 1st Fiscal Quarter
VALASSIS COMMS: ADVO Buy May Cue Moody's to Lower Baa3 Ratings
VALASSIS COMMS: S&P Lowers Credit & Sr. Unsecured Ratings to BB
X-RITE INC: Completes US$280 Million Amazys Holding Acquisition
P A N A M A
CHIQUITA BRANDS: Won't Discuss Contract with Coosemupar
COOPERATIVA DE SERVICIOS: Ipaccop Files for Firm's Liquidation
P U E R T O R I C O
FIRST BANCORP: Gets Regulatory Approval on Next Dividend Payment
G+G RETAIL: Max Rave Acquires Remaining Assets for US$300,000
MUSICLAND: Court Okays Stipulation Paying Postpetition Debts
T R I N I D A D & T O B A G O
DIGICEL LTD: Says In Compliance with Tower Building Standards
DIRECTV GROUP: Court Awards Post-Verdict Damages to Finisar
U R U G U A Y
* URUGUAY: Inks Energy Integration Agreement With Brazil
V E N E Z U E L A
PETROLEOS DE VENEZUELA: Funds Construction of US$336MM Pipeline
* VENEZUELA: Inaugurates NatGas Pipeline with Colombia
* VENEZUELA: LatAm Bond Investments Expected to Soar Over Time
- - - - -
=================
A R G E N T I N A
=================
4 P PRODUCTO: Verification of Creditors' Claims Is Until Oct. 9
---------------------------------------------------------------
Alfredo Donatti, the court-appointed trustee for 4 P Producto
Precio Promocion Plaza S.A.'s bankruptcy case will verify
creditors' proofs of claim until Oct. 9, 2006.
Creditors who fail to present proofs of claims won't receive any
post-liquidation distribution that the liquidator will make.
La Nacion relates that Court No. 6 in Buenos Aires declared 4 P
Producto bankrupt at the request of Cooperativa de Credito del
Milenio Limitada, which it owes US$4,800.
Clerk No. 11 assists the court in this case.
The debtor can be reached at:
4 P Producto Precio Promocion Plaza S.A.
Talcahuano 119
Buenos Aires, Argentina
The trustee can be reached at:
Alfredo Donatti
Montevideo 31
Buenos Aires, Argentina
FERCARNE SA: Deadline for Verification of Claims Is on Sept. 4
--------------------------------------------------------------
Court-appointed trustee Maria del Pilar Enriquez will verify
creditors' proofs of claim against bankrupt company Fercarne
S.A. until Sept. 4, 2006.
Creditors who fail to present proofs of their claims won't
receive any post-liquidation distribution.
Ms. Enriquez will present the validated claims in court as
individual reports on Oct. 17, 2006. A general report that
contains an audit of Fercarne's accounting and banking records
will follow on Nov. 28, 2006.
The debtor can be reached at:
Fercarne S.A.
Montevideo 418
Buenos Aires, Argentina
The trustee can be reached at:
Maria del Pilar Enriquez
Adolfo Asina 1495
Buenos Aires, Argentina
FERRETERIA LA ARGENTINA: Concludes Reorganization Proceeding
------------------------------------------------------------
The reorganization of Ferreteria La Argentina S.A. has ended.
Data published by Infobae on its Web site indicated that the
process was concluded after a court in Zarate-Campana, Buenos
Aires, approved the debt agreement signed between the company
and its creditors.
LLOVERS SA: Claims Verification Deadline Is Set for Sept. 26
------------------------------------------------------------
Mauricio Brauer, the court-appointed trustee for Llovers S.A.'s
bankruptcy proceeding, will verify creditors' proofs of claim
until Sept. 26, 2006.
Creditors who fail to submit their proofs of claim won't receive
any post-liquidation distribution.
Court No. 1 in Buenos Aires declared Llovers bankrupt at the
behest of Yara Argentina S.A., which it owes US$31,509.61.
Clerk No. 1 assists the court on the case.
The debtor can be reached at:
Llovers S.A.
Jose A. Terry 390
Buenos Aires, Argentina
The trustee can be reached at:
Mauricio Brauer
Sarmiento 2953
Buenos Aires, Argentina
MAGALCUER SA: Trustee Verifies Proofs of Claim Until Oct. 6
-----------------------------------------------------------
Estudio Guillermo Fernandez y Asociados, the court-appointed
trustee for Magalcuer S.A.'s reorganization proceeding, will
verify creditors' proofs of claim until Oct. 6, 2006.
Court No. 21 in Buenos Aires ordered the trustee to present
individual reports and a general report that contains an audit
of Magalcuer's accounting and banking records after the claims
verification. The report submission dates have not been
disclosed.
On Oct. 1, 2007, the company's creditors will cast their votes
on a settlement plan that Magalcuer will lay on the table.
La Nacion relates that Court No. 21 approved Magalcuer's
petition to reorganize its business after it has defaulted on
its obligations.
Clerk No. 42 assists the court in this case.
The debtor can be reached at:
Magalcuer S.A.
Sanchez 2054
Buenos Aires, Argentina
The trustee can be reached at:
Estudio Guillermo Fernandez y Asociados
Cerrito 520
Buenos Aires, Argentina
MAYAN SA: Last Day for Claims Verification Is Set for Sept. 15
--------------------------------------------------------------
Court-appointed trustee Carlos Alberto Llorca will verify
creditors' proofs of claim against bankrupt company Mayan S.A.
until Sept. 15, 2006.
Creditors who fail to present proofs of their claims won't
receive any post-liquidation distribution.
Mr. Llorca will present the validated claims in court as
individual reports on Oct. 30, 2006. A general report that
contains an audit of Mayan's accounting and banking records will
follow on Dec. 12, 2006.
The trustee can be reached at:
Carlos Alberto Llorca
Carlos Pellegrini 385
Buenos Aires, Argentina
OFELIA SA: Verification of Creditors' Claims Is Until Sept. 4
-------------------------------------------------------------
Eduardo Grunen, the court-appointed trustee for Ofelia S.A.'s
bankruptcy proceeding, will verify creditors' proofs of claim
until Sept. 4, 2006.
La Nacion relates that Court No. 10 in Buenos Aires declared
Ofelia bankrupt at the request of Organizacion de Servicios
Directos Empresarios, which it owes US$8,937.91
Clerk No. 20 assists the court in this case.
The debtor can be reached at:
Ofelia S.A.
San Juan 4050
Buenos Aires, Argentina
The trustee can be reached at:
Eduardo Grunen
Presidente Roque Saenz Pena 1219
Buenos Aires, Argentina
PHARMACEUTICA SRL: Trustee Will Verify Claims Until Sept. 13
------------------------------------------------------------
Elsa Taborcias, the court-appointed trustee for Pharmacuetica
S.R.L.'s bankruptcy case, will verify creditors' proofs of claim
until Sept. 13, 2006.
La Nacion relates that Court No. 18 in Buenos Aires converted
Pharmaceutica's reorganization into a bankruptcy proceeding.
Clerk No. 36 assists the court in this case.
The debtor can be reached at:
Pharmaceutica S.R.L.
Jose Leon Suarez 1052
Buenos Aires, Argentina
The trustee can be reached at:
Elsa Taborcias
Carlos Pellegrini 1063
Buenos Aires, Argentina
PIZZERIA BABIECA: Seeks Court's Approval to Reorganize Business
---------------------------------------------------------------
Pizzeria Babieca S.A., a company operating in Buenos Aires, has
requested for reorganization after failing to pay its
liabilities on June 30, 2006.
The petition, once approved by the court, will allow Pizzeria
Babieca to negotiate a settlement with its creditors in order to
avoid a straight liquidation.
Court No. 2 in Buenos Aires, with assistance from Clerk No. 4,
handles the proceeding.
The debtor can be reached at:
Pizzeria Babieca S.A.
Avenida Rafael Obligado s/n, Esquina La Pampa
Buenos Aires, Argentina
RADIATEC SRL: Claims verification Deadline Is on Sept. 8
--------------------------------------------------------
Noemi Zulema Vivares, the court-appointed trustee for Radiatec
S.R.L.'s bankruptcy case, will verify creditors' proofs of claim
until Sept. 8, 2006.
La Nacion relates that Court No. 5 in Buenos Aires declared
Radiatec bankrupt at the behest of Black & Decker S.A., which it
owes US$6,200.23.
Clerk No. 10 assists the court in this case.
The debtor can be reached at:
Radiatec S.R.L.
Lavalle 1607
Buenos Aires, Argentina
The trustee can be reached at:
Noemi Zulema Vivares
Cordoba 2626
Buenos Aires, Argentina
=============
B A H A M A S
=============
WINN-DIXIE: Prepares Financial Projections Underpinning Plan
------------------------------------------------------------
Winn-Dixie Stores, Inc., and its debtor-affiliates prepared
financial projections for fiscal years 2007 to 2011 in
connection with their Joint Plan of Reorganization.
Pursuant to Section 1129(a)(11), the Court is required to
determine that the confirmation of the Plan is not likely to be
followed by the liquidation or the need for further financial
reorganization of the Debtors.
Based on the Debtors' financial projections, the Reorganized
Debtors should have sufficient cash flow to pay and service
their debt obligations and to fund their operations, according
to H. Jay Skelton, chairman of Winn-Dixie Stores, Inc.'s board
of directors.
Reorganized Debtors
Projected Balance Sheets
2007 through 2009
(In Thousands)
FY 2007 FY 2008 FY 2009
------- ------- -------
Assets
Current Assets:
Cash and cash equivalents US$67,713 US$34,377 US$34,377
Trade and other 97,978 101,984 108,981
receivables, net
Insurance claims receivable 14,631 11,983 11,983
Income tax receivable 45,610 63,438 79,196
Inventories 487,225 511,902 546,261
Prepaid expenses 45,337 47,267 49,953
-------- --------- --------
Total current assets 758,494 770,951 830,751
Non-current assets
PP&E, net 524,169 593,431 657,378
Other assets, net 70,663 65,930 52,008
Reorganization value in
excess of book value 70,563 70,563 70,563
-------- -------- ---------
Total non-current assets 665,395 729,924 779,949
-------- ---------- --------
Total Assets US$1,423,889 US$1,500,875 US$1,610,700
Liabilities & Shareholders' Deficit
Current liabilities:
Current obligations under
capital leases US$3,834 US$3,834 US$3,834
Accounts payable 248,976 277,662 336,338
Reserve for insurance - ST 88,642 88,642 88,642
Accrued wages and salaries 67,385 69,551 72,503
Accrued expenses 102,384 104,231 107,178
---------- ---------- --------
Total current liabilities 511,221 543,920 608,495
Non-current liabilities
Exit facility - 36,731 26,569
Obligations under 3,192 2,192 1,692
capital lease
Reserve for insurance - LT 132,910 128,409 125,155
Other liabilities 33,248 33,240 33,230
---------- ---------- --------
Total non-current liabilities 169,350 200,572 186,646
Total liabilities 680,570 744,492 795,141
Total stockholders' equity 743,319 756,383 815,559
---------- ---------- --------
Total Liabilities and
Stockholders' Equity
(Deficit) US$1,423,889 US$1,500,875 US$1,610,700
Reorganized Debtors
Projected Balance Sheets
2010 through 2011
(In Thousands)
FY 2010 FY 2011
------- -------
Assets
Current Assets:
Cash and cash equivalents US$58,225 US$155,971
Trade and other receivables, net 116,709 123,637
Insurance claims receivable 11,983 11,983
Income tax receivable 95,109 114,089
Inventories 584,995 619,723
Prepaid expenses 52,982 55,697
---------- ----------
Total current assets 920,003 1,081,100
Non-current assets
PP&E, net 689,124 704,560
Other assets, net 35,335 21,201
Reorganization value in
excess of book value 70,563 70,563
---------- ----------
Total non-current assets 795,022 796,324
---------- ----------
Total Assets US$1,715,025 US$1,877,424
========== ==========
Liabilities & Shareholders' Deficit
Current liabilities:
Current obligations under
capital leases US$3,834 US$3,834
Accounts payable 360,188 381,570
Reserve for insurance - ST 88,642 88,642
Accrued wages and salaries 75,678 78,653
Accrued expenses 110,591 113,830
---------- ----------
Total current liabilities 638,933 666,529
Non-current liabilities
Exit facility - -
Obligations under capital lease 1,192 692
Reserve for insurance - LT 122,390 120,509
Other liabilities 33,220 33,209
---------- ----------
Total non-current liabilities 156,803 154,411
Total liabilities 795,735 820,940
Total stockholders' equity 919,289 1,056,484
---------- ----------
Total Liabilities and
Stockholders' Equity (Deficit) US$1,715,025 US$1,877,424
========== ==========
Reorganized Debtors
Projected Statements of Operations
2007 through 2009
(In Thousands)
FY 2007 FY 2008 FY 2009
------- ------- -------
Retail sales US$7,285,045 US$7,664,732 US$8,190,642
Other revenue 44,396 46,710 49,915
Total gross profit 2,036,322 2,150,699 2,307,317
% of retail sales 28.0% 28.1% 28.2%
Selling, general (1,927,587) (1,969,994) (2,035,070)
& administrative ---------- ---------- ----------
EBITDA 108,735 180,705 272,247
Depreciation (113,629) (131,301) (149,565)
Amortization (17,878) (20,473) (21,223)
---------- ---------- ----------
EBIT (22,773) 28,932 101,460
Interest Expenses (6,032) (8,359) (8,270)
Taxes 3,052 (7,509) (34,014)
Bankruptcy related expenses/
Professional fees (27,400) - -
---------- ---------- ---------
Net Income (US$53,152) US$13,064 US$59,176
Reorganized Debtors
Projected Statements of Operations
2010 through 2011
(In Thousands)
FY 2010 FY 2011
------- -------
Retail sales US$8,771,428 US$9,292,134
Other revenue 53,455 56,628
Total gross profit 2,471,833 2,619,307
% of retail sales 28.2% 28.2%
Selling, general & administrative (2,109,813) (2,180,770)
---------- ----------
EBITDA 362,020 438,537
Depreciation (171,369) (197,231)
Amortization (21,473) (20,184)
---------- ----------
EBIT 169,178 221,121
Interest Expenses (5,822) (5,066)
Taxes (59,625) (78,860)
Bankruptcy related expenses/
Professional fees - -
---------- ----------
Net Income US$103,731 US$137,195
========== ==========
Reorganized Debtors
Projected Statements of Cash Flows
2007 through 2009
(In Thousands)
FY 2007 FY 2008 FY 2009
------- ------- -------
Cash flows from operating activities
Net income (loss) (US$53,152) US$13,064 US$59,176
Adjustment to reconcile net
income to net cash provided
by operating activities:
Depreciation and amortization 132,623 153,223 172,238
Changes in assets & liabilities
Accounts receivable 4,763 (4,006) (6,998)
Inventories (2,412) (24,677) (34,358)
Prepaid expenses and others 5,333 2,084 3,212
Accounts payable 61,283 28,686 58,677
Others 25,391 (19,689) (19,021)
---------- ---------- --------
Net cash provided by
operating activities 173,830 148,686 232,924
Cash flows - investing activities:
Acquisition of property, PP&E (149,781) (217,752) (222,263)
Disposition of assets, net 46,277 - -
---------- ---------- --------
Net cash provided by
investing activities (103,505) (217,752) (222,263)
Cash flows - financing activities:
Principal payments of capital
lease obligations (1,250) (1,000) (500)
Proceeds from/
(repayment of) debt (10,371) 36,731 (10,162)
---------- ---------- --------
Net cash used in
financing activities (11,621) 35,731 (10,662)
---------- ---------- --------
Net Increase (decrease) in cash &
cash equivalents 58,704 (33,336) -
Balance sheet excess cash
used at emergence (122,200) - -
Cash & cash equivalents at
beginning of period 131,209 67,713 34,377
---------- ---------- ---------
Cash and cash equivalents at
end of period US$67,713 US$34,377 US$34,377
Reorganized Debtors
Projected Statements of Cash Flows
2010 through 2011
(In Thousands)
FY 2010 FY 2011
------- -------
Cash flows from operating activities
Net income (loss) US$103,731 US$137,195
Adjustment to reconcile net
income to net cash provided
by operating activities:
Depreciation and amortization 194,292 218,865
Changes in assets & liabilities
Accounts receivable (7,728) (6,928)
Inventories (38,735) (34,728)
Prepaid expenses and others 3,560 3,499
Accounts payable 23,849 21,382
Other (18,688) (20,872)
---------- ----------
Net cash provided by
operating activities 260,283 318,413
Cash flows from investing
activities:
Acquisition of property, PP&E (209,365) (220,167)
Disposition of assets, net - -
---------- ----------
Net cash provided by
investing activities (209,365) (220,167)
Cash flows from financing
activities:
Principal payments of capital
lease obligations (500) (500)
Proceeds from/(repayment of) debt (26,569) -
---------- ----------
Net cash used in financing
activities (27,069) (500)
---------- ----------
Net Increase (decrease) in
cash & cash equivalents 23,848 97,746
Balance sheet excess cash
used at emergence - -
Cash & cash equivalents at
beginning of period 34,377 58,225
---------- ----------
Cash and cash equivalents at
end of period US$58,225 US$155,971
========== ==========
Mr. Skelton notes that the Financial Projections are based on
numerous assumptions, including confirmation and consummation of
the Plan in accordance with its terms; realization of the
operating strategy of the Reorganized Debtors; industry
performance; no material adverse changes in applicable
legislation or regulations, or generally accepted accounting
principles; and no material adverse changes in general business
and economic conditions.
Headquartered in Jacksonville, Florida, Winn-Dixie Stores, Inc.
-- http://www.winn-dixie.com/-- is one of the nation's largest
food retailers. The Company operates stores across the
Southeastern United States and in the Bahamas and employs
approximately 90,000 people. The Company, along with 23 of its
U.S. subsidiaries, filed for chapter 11 protection on Feb. 21,
2005 (Bankr. S.D.N.Y. Case No. 05-11063, transferred Apr. 14,
2005, to Bankr. M.D. Fla. Case Nos. 05-03817 through 05-03840).
D.J. Baker, Esq., at Skadden Arps Slate Meagher & Flom LLP, and
Sarah Robinson Borders, Esq., and Brian C. Walsh, Esq., at King
& Spalding LLP, represent the Debtors in their restructuring
efforts. Paul P. Huffard at The Blackstone Group, LP, gives
financial advisory services to the Debtors. Dennis F. Dunne,
Esq., at Milbank, Tweed, Hadley & McCloy, LLP, and John B.
Macdonald, Esq., at Akerman Senterfitt give legal advice to the
Official Committee of Unsecured Creditors. Houlihan Lokey &
Zukin Capital gives financial advisory services to the
Committee. When the Debtors filed for protection from their
creditors, they listed US$2,235,557,000 in total assets and
US$1,870,785,000 in total debts. (Winn-Dixie Bankruptcy News,
Issue No. 43; Bankruptcy Creditors' Service, Inc., 215/945-
7000).
WINN-DIXIE: Files Liquidation Analysis Under Best Interests Test
----------------------------------------------------------------
Winn-Dixie Stores, Inc., and its debtor-affiliates, with the
assistance of their restructuring advisors, XRoads Solutions
Group, LLC, prepared a liquidation analysis to demonstrate that
their Joint Plan of Reorganization satisfies the "best interests
test" under Section 1129(a)(7) of the Bankruptcy Code.
The "best interests test" requires the Court to find either
that:
(i) all members of an impaired class of claims or interests
have accepted the Plan; or
(ii) the Plan will provide a member who has not accepted the
Plan with a recovery value greater than the amount the
member would get if the Debtors were liquidated under
Chapter 7 of the Bankruptcy Code.
H. Jay Skelton, chairman of Winn-Dixie Stores, Inc.'s board of
directors, asserts that holders of prepetition unsecured claims
would recover less in a Chapter 7 liquidation than what they
would receive under the Plan.
According to the Debtors' Liquidation Analysis, in a
hypothetical Chapter 7 liquidation commencing June 30, 2006:
Consolidated Case Deconsolidated Case
----------------- -------------------
(In Thousands) Low High Low High
--- ---- --- ----
Noteholder Recovery US$12,930 US$39,458 US$37,128 US$112,854
Percentage Recovery 4% 13% 12% 36%
Landlord Recovery US$23,761 US$72,510 US$14,423 US$44,150
Percentage Recovery 4% 13% 3% 8%
Vendor/Supplier Recovery US$9,523 US$29,060 US$2,618 US$7,989
Percentage Recovery 4% 13% 1% 3%
Retirement Plan Recovery US$5,388 US$16,443 - -
Percentage Recovery 4% 13% 0% 0%
Other Unsecured Recovery US$3,501 US$10,683 US$935 US$3,162
Percentage Recovery 4% 13% 1% 3%
------- -------- ------- --------
Total US$55,104 US$168,155 US$55,104 US$168,155
Percentage Recovery 4% 13% 4% 13%
Headquartered in Jacksonville, Florida, Winn-Dixie Stores, Inc.
-- http://www.winn-dixie.com/-- is one of the nation's largest
food retailers. The Company operates stores across the
Southeastern United States and in the Bahamas and employs
approximately 90,000 people. The Company, along with 23 of its
U.S. subsidiaries, filed for chapter 11 protection on Feb. 21,
2005 (Bankr. S.D.N.Y. Case No. 05-11063, transferred Apr. 14,
2005, to Bankr. M.D. Fla. Case Nos. 05-03817 through 05-03840).
D.J. Baker, Esq., at Skadden Arps Slate Meagher & Flom LLP, and
Sarah Robinson Borders, Esq., and Brian C. Walsh, Esq., at King
& Spalding LLP, represent the Debtors in their restructuring
efforts. Paul P. Huffard at The Blackstone Group, LP, gives
financial advisory services to the Debtors. Dennis F. Dunne,
Esq., at Milbank, Tweed, Hadley & McCloy, LLP, and John B.
Macdonald, Esq., at Akerman Senterfitt give legal advice to the
Official Committee of Unsecured Creditors. Houlihan Lokey &
Zukin Capital gives financial advisory services to the
Committee. When the Debtors filed for protection from their
creditors, they listed US$2,235,557,000 in total assets and
US$1,870,785,000 in total debts. (Winn-Dixie Bankruptcy News,
Issue No. 43; Bankruptcy Creditors' Service, Inc., 215/945-
7000).
=============
B E R M U D A
=============
ALEA GROUP: Appoints Mark Cloutier as Chief Executive Officer
-------------------------------------------------------------
Alea Group Holdings (Bermuda) Ltd. appointed Mark Cloutier as
Chief Executive Officer of the Group, effective Sept. 1, 2006.
In addition, Mark Cloutier and Kirk Lusk have also been
appointed to the Board of Directors of the Group, effective
Sept. 1, 2006.
Mark Cloutier was President and Chief Executive Officer of
Overseas Partner Re when it was placed into members' voluntary
liquidation following the distribution of capital in excess of
US$1 billion to its shareholders.
These are the directorships held by Mark Cloutier in the last
five years:
-- Overseas Partners Limited,
-- Overseas Partners US Re,
-- Overseas Partners Re,
-- Overseas Partner Capital,
-- Overseas Partners Assurance Limited,
-- Quanta Re Bermuda, and
-- Union Excess Reinsurance Company,
Directorships held by Kirk Lusk in the last five years are:
-- Heritage Insurance Group, Inc.,
-- Heritage Indemnity Company,
-- GE Capital Management Corp.,
-- GE Capital Warranty Corp.,
-- Westwood Indemnity Company,
-- Heritage Mechanical Breakdown Corp.,
-- Westwood Warranty Company,
-- GE Capital Administrative Services, Inc., and
-- Westlake Insurance Company (Bermuda), Ltd.
* * *
On Feb. 1, 2006, A.M. Best Co. downgraded the financial strength
rating to B from B++ and the issuer credit rating to "bb" from
"bbb" of the insurance and reinsurance operating subsidiaries of
Alea Group Holdings (Bermuda) Ltd. (collectively referred to as
Alea Group or Alea).
Subsequently, A.M. Best withdrew all ratings and assigned an
NR-4 (Company Request) to the Alea Group companies.
The downgrade followed significant deterioration in the
company's consolidated risk-adjusted capitalisation as a result
of worse than anticipated performance in 2005 due to run-off
charges, catastrophe losses and further adverse reserve
development. A.M. Best believed that the company is likely to
continue to be affected by high expenses related to the
transition of Alea Group into run off and the continuing
possibility of adverse reserve development.
FOSTER WHEELER: Units Ink Asbestos-Related Insurance Settlement
---------------------------------------------------------------
Foster Wheeler Ltd.'s subsidiaries have reached an agreement to
settle their asbestos-related claims for insurance coverage with
an additional insurer, effective June 30, 2006, in connection
with the coverage litigation with certain insurers. This
settlement generally provides for:
(1) the payment of money to Foster Wheeler in payments over
an up to 25-year period commencing in 2006, in exchange
for the release by Foster Wheeler of past, present and
future asbestos-related claims under such insurer's
policies
(2) agreement by the company to dismiss such insurer from
the coverage litigation and
(3) agreement by the company to indemnify such insurer
from claims asserted under the released claims.
As a result of this insurance settlement and based on foster
Wheeler's previously reported estimated asbestos liability, the
company will increase its reported asbestos-related insurance
assets by approximately US$80 million, and will record a gain of
approximately US$80 million in the second quarter of 2006. In
addition, this settlement will reduce the estimated net amount
to be funded from the Company's cash flow from operations for
the settlement of asbestos-related claims in 2006 to
approximately US$34 million.
Foster Wheeler has been in settlement discussions with its
subsidiaries' insurers, and has also previously entered into
several settlement agreements with insurers.
In Foster Wheeler's unaudited condensed consolidated financial
statements for the three months ended March 31, 2006, the
company said, "The amount and timing of insurance recoveries of
our asbestos-related costs in the United States is uncertain.
The failure to obtain insurance recoveries could cause a
material adverse effect on our financial condition, results of
operations and cash flow."
About Foster Wheeler
Headquartered in Hamilton, Bermuda, Foster Wheeler Ltd.
-- http://www.fwc.com/-- is a global company offering, through
its subsidiaries, a broad range of engineering, procurement,
construction, manufacturing, project development and management,
research and plant operation services. Foster Wheeler serves
the refining, upstream oil and gas, LNG and gas-to-liquids,
petrochemical, chemicals, power, pharmaceuticals, biotechnology
and healthcare industries.
At Dec. 31, 2005, Foster Wheeler's balance sheet showed a
US$341,796,000 equity deficit compared to a US$525,565,000
equity deficit on Dec. 31, 2004.
* * *
As reported in the Troubled Company Reporter on May 25, 2006,
Standard & Poor's Ratings Services raised Foster Wheeler's
corporate credit rating to to B+ from B- and its senior secured
notes rating to B+ from CCC+. At the same time, Standard &
Poor's assigned its 'BB-' bank loan rating and '1' recovery
rating to the company's five-year, US$250 million credit
facility due 2010.
* * *
On May 26, 2006, Moody's Investors Service upgraded Foster
Wheeler's corporate family rating to B1 from B3 and assigned
a Ba3 rating to FWC's US$250 million senior secured bank
revolving credit facility. The rating outlook is changed to
Positive.
REFCO INC: Ch. 11 Trustee Says Securities Advisory Panel Formed
---------------------------------------------------------------
Marc S. Kirschner, the Chapter 11 trustee of the estate of Refco
Capital Markets, Ltd., reports that an RCM Securities Advisory
Committee has been formed pursuant to an order by the United
States Bankruptcy Court for the Southern District of New York
establishing procedures for the sale of a limited amount of
securities.
The members of the RCM Securities Advisory Committee are:
(i) Fintech Advisory Inc.;
(ii) IDC Financial S.A.;
(iii) RB Securities Limited; and
(iv) VR Advisory Services, Ltd.
Judge Robert Drain had previously authorized the RCM Trustee to
sell securities considered "volatile" for as much as
US$150,000,000 of the company's assets to prevent further loss
of value. Judge Drain also permitted the sale of holdings
valued at less than US$200,000 without additional court
approval.
All four members of the RCM Securities Advisory Committee assert
positions as securities customers, Mark W. Deveno, Esq., at
Bingham McCutchen LLP, in New York, relates.
Pursuant to the Sale Order, the RCM Securities Advisory
Committee was anticipated to include four institutions asserting
positions as securities customers and one institution asserting
positions as a foreign exchange customer. Mr. Deveno says the
RCM Trustee has contacted RCM's foreign exchange customers that
were actively involved in the negotiation of the Sale Order, but
none of those foreign exchange customers has been willing to
serve on the Advisory Committee.
The RCM Trustee contemplates allowing foreign exchange customers
to designate one party to receive notices of sales and to be
authorized to object to sales as if a member of the Advisory
Committee, Mr. Deveno adds.
Based in New York, New York, Refco Inc. -- http://www.refco.com/
-- is a diversified financial services organization with
operations in 14 countries and an extensive global institutional
and retail client base. Refco's worldwide subsidiaries are
members of principal U.S. and international exchanges, and are
among the most active members of futures exchanges in Chicago,
New York, London and Singapore. In addition to its futures
brokerage activities, Refco is a major broker of cash market
products, including foreign exchange, foreign exchange options,
government securities, domestic and international equities,
emerging market debt, and OTC financial and commodity products.
Refco is one of the largest global clearing firms for
derivatives.
The Company and 23 of its affiliates filed for chapter 11
protection on Oct. 17, 2005 (Bankr. S.D.N.Y. Case No. 05-60006).
J. Gregory Milmoe, Esq., at Skadden, Arps, Slate, Meagher & Flom
LLP, represent the Debtors in their restructuring efforts. Luc
A. Despins, Esq., at Milbank, Tweed, Hadley & McCloy LLP,
represents the Official Committee of Unsecured Creditors. Refco
reported US$16.5 billion in assets and US$16.8 billion in debts
to the Bankruptcy Court on the first day of its chapter 11
cases.
Refco LLC, an affiliate, filed for chapter 7 protection on
Nov. 25, 2005 (Bankr. S.D.N.Y. Case No. 05-60134). Refco, LLC,
is a regulated commodity futures company that has businesses in
the United States, London, Asia and Canada. Refco, LLC, filed
for bankruptcy protection in order to consummate the sale of
substantially all of its assets to Man Financial Inc., a wholly
owned subsidiary of Man Group plc.
On April 13, 2006, the Court appointed Marc S. Kirschner as
Refco Capital Markets Ltd.'s Chapter 11 trustee. Mr. Kirschner
is represented by Bingham McCutchen LLP. RCM is Refco's
operating subsidiary based in Bermuda.
Three more affiliates of Refco, Westminster-Refco Management
LLC, Refco Managed Futures LLC, and Lind-Waldock Securities LLC,
filed for chapter 11 protection on June 6, 2006 (Bankr. S.D.N.Y.
Case Nos. 06-11260 through 06-11262). (Refco Bankruptcy News,
Issue No. 33; Bankruptcy Creditors' Service, Inc., 215/945-
7000).
REFCO INC: Ch. 11 Trustee Taps Skadden Arps as Special Counsel
--------------------------------------------------------------
Marc S. Kirschner, the Chapter 11 trustee of the estate of Refco
Capital Markets, Ltd., asks the U.S. Bankruptcy Court for the
Southern District of New York for authority to employ Skadden,
Arps, Slate, Meagher & Flom LLP, as his special counsel.
Mr. Kirschner says that Skadden Arps provides various legal
services to the Debtors, including Refco Capital Markets, Ltd.
In this regard, Mr. Kirschner, wants Skadden to continue
providing some, but not all, of those services to RCM,
including:
(a) continuing advice with respect to the litigation matters
that were stayed pursuant to the Court's Nov. 28, 2005,
order and the Refco Securities Lawsuit;
(b) claims resolution where the claim has been asserted
against one or more Other Refco Companies as well as RCM
-- other than claims by other Chapter 11 Debtors against
RCM;
(c) matters involving ACM Advanced Currency Markets S.A., and
RCM's ownership interest in ACM;
(d) matters involving consolidated tax returns filed or to be
filed by the Chapter 11 Debtors;
(e) recoveries against third parties arising under "cross
margin" agreements, whether or not involving the Other
Chapter 11 Debtors;
(f) pending litigation between Cargill, Incorporated and the
Chapter 11 Debtors;
(g) in consultation with Bingham McCutchen LLP, the Trustee's
general bankruptcy counsel, the prospective settlement
between the Refco Companies and BAWAG P.S.K. Bank fur
Arbeit und Wirtschaft und Osterreichische Postsparkasse
Aktiengesellschaft and its affiliates;
(h) any matters remaining in the preference action -- or
enforcement of the settlement -- against the SPhinX
Funds;
(i) continuing advice with respect to the pending
investigations by the United States Department of Justice
and the Securities and Exchange Commission; and
(j) motions, applications, answers, orders, reports and
papers necessary to the administration of the RCM estate
other than in connection with matters with respect to
which RCM wishes to take a position different than the
position taken by the Other Chapter 11 Debtors.
Among other things, Skadden will not be rendering services to
RCM with respect to:
(a) whether and on what terms RCM or its creditors
participate in a Chapter 11 plan with the Other Chapter
11 Debtors;
(b) claims between RCM and the Other Chapter 11 Debtors
arising out of intercompany transactions; and
(c) advice with respect to "corporate actions" that may be
necessary or desirable relating to various securities
held by RCM.
With respect to intercreditor and intercompany issues in the
Chapter 11 cases, Skadden will:
-- not, without a waiver from RCM, represent the Other
Chapter 11 Debtors in litigation against RCM;
-- continue to provide information and analysis to the
Chapter 11 Debtors regarding intercompany claims;
-- continue to represent the Other Chapter 11 Debtors in
formulating a plan of reorganization; and
-- continue to investigate intercompany claims as provided
in the Engagement Letter.
Skadden and the Debtors have previously agreed that the firm's
bundled rate structure will apply to these cases. Skadden's
hourly rates under the bundled rate structure range from:
US$585 to US$830 for partners;
US$560 to US$640 for counsel;
US$295 to US$540 for associates; and
US$90 to US$230 for legal assistants and support staff.
Skadden will allocate its fees and disbursements among the
various Chapter 11 Debtors, including RCM, to charge each estate
appropriately for the services provided on behalf of the estate.
Skadden, RCM and the Other Refco Debtors have agreed that:
* 2/3 of the fees and expenses Skadden incurred in
connection with the "stockbroker" litigation culminating
in the order appointing the RCM Trustee will be allocated
to RCM and 1/3 to the Other Refco Debtors; and
* Skadden's other fees incurred appropriately on behalf of
all the Refco Companies will be allocated 40% to RCM and
60% to the Other Refco Debtors.
J. Gregory Milmoe, a member of Skadden, assures the Court that
the firm does not have any connection with the Debtors, their
affiliates, their creditors, any other party-in-interest, their
attorneys and accountants, and the United States Trustee or any
person employed in the Office of the United States Trustee.
Moreover, Skadden is a disinterested person as defined under
Section 101(14) of the Bankruptcy Code and does not represent
any interest that is adverse to the estates of the Chapter 11
Debtors, including RCM.
About Refco Inc.
Based in New York, New York, Refco Inc. -- http://www.refco.com/
-- is a diversified financial services organization with
operations in 14 countries and an extensive global institutional
and retail client base. Refco's worldwide subsidiaries are
members of principal U.S. and international exchanges, and are
among the most active members of futures exchanges in Chicago,
New York, London and Singapore. In addition to its futures
brokerage activities, Refco is a major broker of cash market
products, including foreign exchange, foreign exchange options,
government securities, domestic and international equities,
emerging market debt, and OTC financial and commodity products.
Refco is one of the largest global clearing firms for
derivatives.
The Company and 23 of its affiliates filed for chapter 11
protection on Oct. 17, 2005 (Bankr. S.D.N.Y. Case No. 05-60006).
J. Gregory Milmoe, Esq., at Skadden, Arps, Slate, Meagher & Flom
LLP, represent the Debtors in their restructuring efforts. Luc
A. Despins, Esq., at Milbank, Tweed, Hadley & McCloy LLP,
represents the Official Committee of Unsecured Creditors. Refco
reported US$16.5 billion in assets and US$16.8 billion in debts
to the Bankruptcy Court on the first day of its chapter 11
cases.
Refco LLC, an affiliate, filed for chapter 7 protection on
Nov. 25, 2005 (Bankr. S.D.N.Y. Case No. 05-60134). Refco, LLC,
is a regulated commodity futures company that has businesses in
the United States, London, Asia and Canada. Refco, LLC, filed
for bankruptcy protection in order to consummate the sale of
substantially all of its assets to Man Financial Inc., a wholly
owned subsidiary of Man Group plc.
On April 13, 2006, the Court appointed Marc S. Kirschner as
Refco Capital Markets Ltd.'s chapter 11 trustee. Mr. Kirschner
is represented by Bingham McCutchen LLP. RCM is Refco's
operating subsidiary based in Bermuda.
Three more affiliates of Refco, Westminster-Refco Management
LLC, Refco Managed Futures LLC, and Lind-Waldock Securities LLC,
filed for chapter 11 protection on June 6, 2006 (Bankr. S.D.N.Y.
Case Nos. 06-11260 through 06-11262). (Refco Bankruptcy News,
Issue No. 33; Bankruptcy Creditors' Service, Inc., 215/945-
7000).
REFCO INC: Official Panel Wants 22 Respondents to Produce Docs
--------------------------------------------------------------
The Official Committee of Unsecured Creditors appointed in
Refco, Inc., and its debtor-affiliates cases, asks the U.S.
Bankruptcy Court for the Southern District of New York to compel
22 respondents to produce documents on or before the date that
is 30 days after a corresponding subpoena is served.
The Court had previously authorized the Committee to serve
subpoenas calling for production of documents on 16 individuals
and entities regarding Refco, Inc.'s operations. The Committee
has been pursuing discovery from the subpoena recipients.
Based on the Debtors' public statements, the criminal complaint
for securities fraud filed against Phillip R. Bennett, and the
Committee's preliminary investigation, the Committee has learned
of additional persons and entities who likely have information
relevant to:
(i) the Debtors' property and its location;
(ii) the assets, liabilities and financial condition of the
Debtors;
(iii) matters that may affect the administration of the
Debtors' estates; and
(iv) the identification and prosecution of certain potential
claims against third parties by a representative of the
Debtors' estates.
The 22 Respondents are:
* Arthur Anderson, LLP;
* Delta Flyer Fund, LLC/Eric M. Flanagan;
* Micky Dhillon & the Jasdeep Dhillon Trustee MSD Family
Trust;
* Thomas Dittmer;
* Ernst & Young LLP;
* Stephen Grady;
* Thomas Hackl;
* Ingram Micro Inc.;
* Mark Kavanagh;
* Dennis Klejna;
* Levine Jacobs and Co. LLC;
* Eric Lipoff;
* McDermott Will & Emery;
* Joseph Murphy;
* Frank Mutterer;
* Victor Niederhoffer/Niederhoffer Investments Inc.;
* Sean O'Shea and Edward McElwreath;
* PricewaterhouseCoopers, LLP;
* William M. Sexton;
* Philip Silverman;
* Chris Sugrue; and
* David Weaver.
Specifically, the Committee seeks discovery from the Respondents
with respect to, among other things:
-- a previously undisclosed receivable owed to the Debtors
by Refco Group Holdings, Inc., for approximately
US$430,000,000;
-- the Debtors' accounting and regulatory policies;
-- the financial dealings of the Respondents with the Debtors
and with Mr. Bennett, RGHI, or any of the Recipients of
the Initial Rule 2004 Subpoenas;
-- insider payments received by the Respondents; and
-- any claims arising out of an internal public offering and
a Leveraged Recapitalization.
Scott A. Edelman, Esq., at Milbank, Tweed, Hadley & McCloy LLP,
in New York, tells Judge Drain that the requested documents will
provide the Committee with information to properly discharge its
duties to the unsecured creditors under Section 1103(c) of the
Bankruptcy Code.
Mr. Edelman asserts that the requested discovery is narrowly
tailored to the factual matters raised or implicated by various
issues and events that precipitated the Debtors' Chapter 11
cases. These requests are, however, broad enough to permit the
Committee to perform the investigation it is obligated to
perform.
Mr. Edelman adds that compliance with the Rule 2004 document
requests by the Respondents will not be burdensome and can be
achieved without undue hardship in the time period requested.
A list of the Requested Documents is available at no charge at:
http://ResearchArchives.com/t/s?ce3
The Committee reserves its right to seek to take depositions of
the Respondents at a future date and to serve supplemental and
additional document requests.
Committee and Ingram Stipulate
In a Court-approved stipulation, the Creditors Committee and
Ingram agree that the Committee will limit the scope of its
request for discovery from Ingram to all documents that Ingram
has provided to the Securities and Exchange Commission, any
Committee of Congress, any federal, state or other regulatory
authority or agency, any grand jury, or in any litigation or
arbitration concerning Refco or RGHI, without waiving or
prejudicing the Committee's right to seek the production of any
additional documents from Ingram.
The Committee and Ingram also agree that the production and
disclosure of any documents produced by Ingram will be governed
by the terms of a Protective Order governing the production and
use of confidential material, dated April 26, 2006.
About Refco Inc.
Based in New York, Refco Inc. -- http://www.refco.com/-- is a
diversified financial services organization with operations in
14 countries and an extensive global institutional and retail
client base. Refco's worldwide subsidiaries are members of
principal U.S. and international exchanges, and are among the
most active members of futures exchanges in Chicago, New York,
London and Singapore. In addition to its futures brokerage
activities, Refco is a major broker of cash market products,
including foreign exchange, foreign exchange options, government
securities, domestic and international equities, emerging market
debt, and OTC financial and commodity products. Refco is one of
the largest global clearing firms for derivatives.
The Company and 23 of its affiliates filed for chapter 11
protection on Oct. 17, 2005 (Bankr. S.D.N.Y. Case No. 05-60006).
J. Gregory Milmoe, Esq., at Skadden, Arps, Slate, Meagher & Flom
LLP, represent the Debtors in their restructuring efforts. Luc
A. Despins, Esq., at Milbank, Tweed, Hadley & McCloy LLP,
represents the Official Committee of Unsecured Creditors. Refco
reported US$16.5 billion in assets and US$16.8 billion in debts
to the Bankruptcy Court on the first day of its chapter 11
cases.
Refco LLC, an affiliate, filed for chapter 7 protection on
Nov. 25, 2005 (Bankr. S.D.N.Y. Case No. 05-60134). Refco, LLC,
is a regulated commodity futures company that has businesses in
the United States, London, Asia and Canada. Refco, LLC, filed
for bankruptcy protection in order to consummate the sale of
substantially all of its assets to Man Financial Inc., a wholly
owned subsidiary of Man Group plc.
On April 13, 2006, the Court appointed Marc S. Kirschner as
Refco Capital Markets Ltd.'s Chapter 11 trustee. Mr. Kirschner
is represented by Bingham McCutchen LLP. RCM is Refco's
operating subsidiary based in Bermuda.
Three more affiliates of Refco, Westminster-Refco Management
LLC, Refco Managed Futures LLC, and Lind-Waldock Securities LLC,
filed for chapter 11 protection on June 6, 2006 (Bankr. S.D.N.Y.
Case Nos. 06-11260 through 06-11262). (Refco Bankruptcy News,
Issue No. 33; Bankruptcy Creditors' Service, Inc., 215/945-
7000).
===========
B R A Z I L
===========
CAIXA ECONOMICA: Expects Home Loans to Reach Over BRL6 Bil.
-----------------------------------------------------------
Caixa Economica said in a statement that it projects more than
BRL6 billion in home loans for the first half of 2006, Business
News Americas reports.
The bank has so far granted BRL5.8 billion in home loans for
this year, which is 115% more than what was disbursed in the
same period in 2005, the same report says.
"Of all the home loans granted during the first half of the
year, 69% went to families that earn less than 1,750 reais a
month," CEF president Maria Fernanda Ramos Coelho said in the
statement.
Caixa Economica expects a 14.45% increase in home loans
disbursement, to BRL10.3 billion for the whole year, topping the
BRL9 billion in 2005, BNamericas says.
BNamericas reports that Brazil is also expected to reach a
record of granting BRL18 billion in home loans for 2006.
* * *
On Oct. 19, 2005, Moody's Investors Service upgraded Caixa
Economica Federal's long-term foreign currency deposit rating to
B1 from B2 with a positive 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. The country
ceilings have a positive outlook.
PETROLEO BRASILEIRO: Forms Strategic Alliance With Petroecuador
---------------------------------------------------------------
The director of Petroleo Brasileiro S.A. aka Petrobras'
International Area, Nestor Cervero, and the executive president
of Empresa Petroleos de Ecuador aka Petroecuador, Walter Lopez,
formalized, in Quito, Ecuador, a strategic alliance agreement
between the two companies to carry out economic activities of
mutual interest in:
-- exploration,
-- production,
-- transportation,
-- storage,
-- marketing, and
-- distribution,
The companies will form an executive committee to identify the
need for projects in the areas covered by the agreement and to
arrange for project approval both by the companies and by the
governments of the two countries. The agreement will be in
effect for five years and may be automatically renewed for equal
terms.
Petrobras is assisting Petroecuador in one of Ecuador's projects
that seeks to introduce ethanol in the country's energy matrix,
relying on the Company's 20-year experience in mixing the
product with gasoline as well as on its transportation and
distribution logistics.
Performing in exploration and production since 1985, Petrobras
discovered the Sunka and Wanke fields and currently operates
blocks 18, 31, and the unified Palo Azul field in Ecuador.
By signing the mutual cooperation agreement, Petrobras shows its
interest in continuing investing in Ecuador, where, up to 2005,
it had invested US$461 million in the fields it operates and
where it intends to invest another US$160 million in 2006, and
US$500 million in the next five years.
About Petroecuador
Petroecuador, according to published reports, is faced with
cash-problems. The state-oil firm has no funds for maintenance
has no funds to repair pumps in diesel, gasoline and natural gas
refineries, and has no capacity to pay suppliers and vendors.
The government refused to give the much-needed cash alleging
that Petroecuador has been inefficient and non-transparent in
its accounts.
About Petroleo Brasileiro
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.
* * *
Fitch Ratings assigned these ratings on Petroleo Brasileiro's
senior unsecured notes:
Maturity Date Amount Rate Ratings
------------- ------ ---- -------
April 1, 2008 US$400,000,000 9% BB+
July 2, 2013 US$750,000,000 9.125% BB+
Sept. 15, 2014 US$650,000,000 7.75% BB+
Dec. 10, 2018 US$750,000,000 8.375% BB+
Fitch upgraded the foreign currency rating of Petrobras to BB+
from BB, with positive outlook, in conjunction with Fitch's
upgrade of the long-term foreign and local currency IDRs of the
Federative Republic of Brazil to BB, from BB- on June 29, 2006.
PETROLEO BRASILEIRO: Holds Talks with Russian Oil & Gas Firms
-------------------------------------------------------------
Petroleo Brasileiro SA aka Petrobras sent a mission to Russia
headed by Exploration & Production Director, Guilherme Estrella,
and composed of Exploration & Production, Gas & Energy, Research
& Development Center, Transpetro, and New Business area
managers.
During the meetings held in Moscow with the directors of the
Russian Gazprom, Stroy, Trangas, and Rosneft corporations,
common interests were identified in these areas:
-- gas pipeline design and construction technology,
-- oil and gas exploration and production in onshore and
deepwater basins, and
-- liquefied natural gas, and underground gas storage.
These themes will now be the object of negotiations between
Petrobras and the Russian companies. If successful, they may
give rise to future cooperation and partnership programs.
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.
* * *
Fitch Ratings assigned these ratings on Petroleo Brasileiro's
senior unsecured notes:
Maturity Date Amount Rate Ratings
------------- ------ ---- -------
April 1, 2008 US$400,000,000 9% BB+
July 2, 2013 US$750,000,000 9.125% BB+
Sept. 15, 2014 US$650,000,000 7.75% BB+
Dec. 10, 2018 US$750,000,000 8.375% BB+
Fitch upgraded the foreign currency rating of Petrobras to BB+
from BB, with positive outlook, in conjunction with Fitch's
upgrade of the long-term foreign and local currency IDRs of the
Federative Republic of Brazil to BB, from BB- on June 29, 2006.
* BRAZIL: Inks Energy Integration Agreement With Uruguay
--------------------------------------------------------
The governments of Brazil and Uruguay signed a memorandum of
understanding, through their ministers of Mines and Energy --
Silas Rondeau of Brazil and Jorge Leptra of Uruguay -- on
July 5, 2006, to advance the energy integration process between
the two countries.
On that same occasion, the state-run oil firms of both countries
-- Petroleo Brasileiro aka Petrobras and Administracion Nacional
de Combustibles, Alcohol y Portland aka Ancap -- commenced
studies aiming at increasing the collaboration between the two
countries in the oil exploration, production, and refining and
in the natural gas areas
Petrobras participates both in natural gas distribution, through
the Conecta and Gaseba distributors, and in oil byproduct
distribution in Uruguay. The company is planning to develop
studies and negotiations with Ancap to increase conversion at
the La Teja refinery in order to process Brazilian heavy oil.
The Uruguayan refinery, the only one in that country, is
currently capable of processing 50,000 barrels of oil a day.
The MOU between Brazil and Uruguay strengthens the link between
them, which was initially established through:
-- the "Landmark Agreement on Regional Energy Complementation
among the States that are Part of the Mercosur and
Associated States," signed in Montevideo on Dec. 9, 2005;
and
-- the "General Energy Interconnection Agreement between
Brazil and Uruguay," signed on March 16, 2006.
The Memorandum signed by the two ministries will give continuity
to the previous understandings reached in the "Landmark
Agreement on Regional Energy Complementation among the States
that are Part of the Mercosur and Associated States," signed in
Montevideo on Dec. 9, 2005, and in the "General Energy
Interconnection Agreement between Brazil and Uruguay," signed on
March 16, 2006.
Under the MOU, both countries committed to finish the
feasibilities studies regarding the transmission line that will
interconnect San Carlos in Uruguay and Candiota in Brazil to
start on its construction. A deployment Commission will be
created after both countries have concluded studies in their
respective systems.
As reported in the Troubled Company Reporter-Latin America on
July 7, 2006, Uruguay and Brazil agreed to construct a US$150
million, 500-KV transmission line that would run 400km between
the two nations, linking San Carlos and Candiota. The
transmission line is expected to increase the power transmission
capacity between the two countries beyond the present 72
megawatts.
The transmission line will be ready 18 months after construction
begins.
The Uruguayan government will invest in the project and operate
it. The government is interested in gaining access to the power
transmission of Brazil to boost local supply.
Minister Silas Rondeau highlighted the importance of the
understandings between Brazil and Uruguay. "Regional
development is determination of President Lula. The agreement
we signed today is yet another step we take towards continuing
the energy integration project in South America. Uruguay has
always been our partner, and we will continue developing the
region together," he said.
An Electric Interconnection Work Group, formed by three members
of each country assigned by the respective Ministers, will
examine the energy integration expansion between Brazil and
Uruguay.
* * *
As reported in the Troubled Company Reporter-Latin America on
May 26, 2006, Fitch Ratings revised the Outlooks on the Oriental
Republic of Uruguay's Sovereign ratings to Positive from Stable.
The long-term foreign currency Issuer Default Rating is affirmed
at 'B+', and the long-term local currency IDR is affirmed at
'BB-'. The Short-term IDR is affirmed at 'B' and the Country
Ceiling is affirmed at 'BB-'.
* * *
Moody's upgraded Uruguay's long-term foreign currency rating to
B1 from B3 under the revised foreign currency ceilings on
May 24, 2006.
* * *
Fitch upgraded these ratings of Brazil on June 29, 2006:
-- Long-term foreign currency IDR: to 'BB' from 'BB-';
-- Long-term local currency IDR: to 'BB' from 'BB-'; and
-- Country ceiling to 'BB' from 'BB-'.
Fitch also affirmed Brazil's short-term rating at 'B'.
Fitch said the Rating Outlook is Stable.
===========================
C A Y M A N I S L A N D S
===========================
ACA INC: Final Shareholders Meeting Is Scheduled for Aug. 2
-----------------------------------------------------------
Aca Inc.'s shareholders will convene for a final meeting on
Aug. 2, 2006, at:
Caledonian House
69 Dr. Roy's Drive, George Town
Grand Cayman, Cayman Islands
Accounts on the company's liquidation process will be presented
during the meeting.
The liquidators can be reached at:
Griffin Management Limited
Attention: Janeen Aljadir
Caledonian Bank & Trust Limited
Caledonian House, 69 Dr. Roy's Drive
P.O. Box 1043, George Town
Grand Cayman, Cayman Islands
Tel: (345) 949-4943
Fax: (345) 814-4859
ACA NO.1: Schedules Final Shareholders Meeting on Aug. 2
--------------------------------------------------------
Aca No.1 Inc.'s shareholders will convene for a final meeting on
Aug. 2, 2006, at:
Caledonian House
69 Dr. Roy's Drive, George Town
Grand Cayman, Cayman Islands
Accounts on the company's liquidation process will be presented
during the meeting.
The liquidators can be reached at:
Griffin Management Limited
Attention: Janeen Aljadir
Caledonian Bank & Trust Limited
Caledonian House, 69 Dr. Roy's Drive
P.O. Box 1043, George Town
Grand Cayman, Cayman Islands
Tel: (345) 949-4943
Fax: (345) 814-4859
ALTRIA GROUP: Moody's Reviews Ratings for Possible Upgrade
----------------------------------------------------------
Moody's Investors Service placed the long-term ratings of Altria
Group, Inc., under review for possible upgrade; and affirmed the
company's short-term commercial paper ratings of Prime-2,
following a recent ruling by the Florida Supreme Court in the
Engle case.
This rating was placed under review for possible upgrade:
-- Long-term unsecured debt rating at Baa2.
This rating is affirmed:
-- Short-term debt rating at Prime-2.
The review is prompted by a recent ruling by the Florida Supreme
Court that upheld the Third District Court of Appeal's reversal
of a final judgment entered in a smokers' class action lawsuit
that sought damages against cigarette companies and industry
organizations for alleged smoking-related injuries.
Specifically, the Florida Supreme Court ruled to decertify the
Engle class and reverse the state court jury's award of US$145
billion in punitive damages. The Court did, however, conclude
that certain issues decided by the Engle trial jury may be
considered as resolved for any potential future cases filed by
former class members which have a one year window in which to
file individual suits for damages. It is Moody's understanding
that Altria may decide to appeal the Court's decision regarding
the "certain issues" that may be considered as resolved. In any
case, Moody's views this decision as a credit positive and
another step toward lessening the overall risk of pending
tobacco litigation even though this decision may result in a
large number of individual suits being filed by former members
of the Engle class. In Moody's opinion, the potential financial
impact of those collective suits would be far less than the
previously awarded US$145 billion in punitive damages.
Moody's notes that the tobacco industry is still involved in one
other major lawsuit for which the outcome is still pending. In
the DOJ case, which was tried under a civil provision of the
RICO statute, the DOJ sought disgorgement of approximately
US$280 billion. In October 2005, the U.S. Supreme Court
declined certiorari review of a decision by D.C. Circuit Court
of Appeals holding that the governments' proposed disgorgement
remedy was not available. The DOJ is currently seeking remedies
of around US$14 billion to be paid out over five-to-ten years
for the entire industry. A ruling by the judge on this case is
still pending. In addition, while Moody's views the May 2006
decision by the Illinois Supreme Court as a further step in
reducing the legal risks faced by the overall tobacco industry,
the plaintiffs in the Price case may still make an appeal to the
U.S. Supreme Court. Even if an appeal is filed, Moody's regards
the prospect of the U.S. Supreme Court agreeing to hear such an
appeal as low.
Moody's review of Altria's long-term debt ratings will focus on
the near term implications of the Florida Supreme Court decision
including the likelihood of possible appeals and future
litigation stemming from the decision, as well as the remaining
litigation risks confronting the company's domestic cigarette
subsidiary. In addition, Moody's will focus on the prospect for
continued growth given declining cigarette per capita
consumption throughout many parts of the world, as well as the
threat of additional anti-smoking laws and regulations, both in
the U.S. and overseas. Finally, Moody's will need to conclude
that the risks stemming from the Price case, additional "lights"
cases or other related litigation remains substantially
diminished, as well as there being some further clarity about
the future composition and credit profile of Altria once
litigation risk has declined sufficiently to allow the company
to contemplate a spin-off of Kraft and/or Philip Morris
International. Moody's ratings will also be sensitive in the
long-run to anticipated debt reduction at PMI (following a US$5
billion debt-financed acquisition last year), pricing
flexibility trends, and the creditor-friendliness of Altria's
potential break-up plans.
Today's rating action does not affect Moody's ratings of tobacco
revenue-backed bonds, which are currently under review direction
uncertain. In its review of the tobacco bonds, Moody's
considers the legal challenges to the ongoing payments under the
Master Settlement Agreement. Such risks include:
-- litigation initiated against the major tobacco companies
party to the MSA and the likelihood that negative
outcomes could result in the failure of one or more of
these companies;
-- litigation threatening the enforceability of the MSA, the
Model Statutes or the complementary legislation; and
-- litigation questioning the diligent enforcement of the
Model Statutes by the states.
Moody's also reviews trends in tobacco consumption and OPM's
market share and anticipated FDA approval of smoking cessation
products. In particular, Moody's believes that Freedom Holdings
v. Spitzer continues to present the most significant legal risk
to tobacco settlement-backed deals because of its ramifications
to the enforceability of the MSA, the New York's Model Statute
and the complementary legislation and, if adversely decided
against the state, its use as precedent in other jurisdictions.
Based in New York, N.Y., Altria is a holding company,
controlling 100% of Philip Morris USA, a domestic tobacco
manufacturer; 100% of Philip Morris International, an
international tobacco manufacturer; 100% of Philip Morris
Capital Corp., a subsidiary engaged in leasing activities; and
87.6% of Kraft Food Inc., a packaged food manufacturer.
COMPASS ROYALTY: Liquidator Presents Wind Up Process on Aug. 10
---------------------------------------------------------------
Compass Royalty I, Ltd.'s liquidators will present a wind up
account during the final shareholders meeting on Aug. 10, 2006,
at:
Maples Finance Limited
Queensgate House, George Town
Grand Cayman, Cayman Islands
The liquidators can be reached at:
Chris Watler
Richard Gordon
Maples Finance Limited
P.O. Box 1093, George Town
Grand Cayman, Cayman Islands
GALAPAGOS INC: Liquidator Presents Wind Up Accounts on Aug. 2
-------------------------------------------------------------
Galapagos Inc.'s liquidator will present a wind up account
during the final shareholders meeting on Aug. 2, 2006, at:
Caledonian House
69 Dr. Roy's Drive, George Town
Grand Cayman, Cayman Islands
The liquidator can be reached at:
Griffin Management Limited
Attn: Janeen Aljadir
Caledonian Bank & Trust Limited
Caledonian House, 69 Dr. Roy's Drive
P.O. Box 1043, George Town
Grand Cayman, Cayman Islands
Tel: (345) 949-4943
Fax: (345) 814-4859
HSJ LIMITED: Shareholders Convene for a Final Meeting on Aug. 10
----------------------------------------------------------------
HSJ Limited's shareholders will convene for a final meeting on
Aug. 10, 2006, at:
Maples Finance Limited
Queensgate House, George Town
Grand Cayman, Cayman Islands
Accounts on the company's liquidation process will be presented
during the meeting.
The liquidators can be reached at:
Helen Allen
Mike Hughes
Maples Finance Limited
P.O. Box 1093, George Town
Grand Cayman, Cayman Islands
KPA LTD: Will Hold Final Shareholders Meeting on Aug. 10
--------------------------------------------------------
KPA Ltd.'s shareholders will convene for a final meeting on
Aug. 10, 2006, at:
Maples Finance Limited
Queensgate House, George Town
Grand Cayman, Cayman Islands
Accounts on the company's liquidation process will be presented
during the meeting.
The liquidators can be reached at:
Guy Major
Mike Hughes
Maples Finance Limited
P.O. Box 1093, George Town
Grand Cayman, Cayman Islands
MPC COMMODITY: Will Hold Final Shareholders Meeting on Aug. 2
-------------------------------------------------------------
MPC Commodity Fund Inc.'s final shareholders meeting will be
at 10:00 a.m. on Aug. 2, 2006, at:
Close Brothers (Cayman) Limited
4th Floor, Harbour Place, George Town
Grand Cayman, Cayman Islands
These agenda will be taken during the meeting:
1) accounting of the liquidation process showing how the
winding up has been conducted during the preceding year,
2) requesting the members' approval of the liquidation fees
incurred to date, approval of the liquidator's estimated
costs to completion, and
3) hearing any explanation that may be given by the
liquidator.
A member entitled to attend and vote at the meeting may appoint
a proxy, who need not be a member, in his stead.
The liquidators can be reached at:
Linburgh Martin
John Sutlic
Attn: Thiry Gordon
Close Brothers (Cayman) Limited
Fourth Floor, Harbour Place
P.O. Box 1034, George Town
Grand Cayman, Cayman Islands
Tel: (345) 949-8455
Fax: (345) 949-8499
R.L. CAPITAL: Final Shareholders Meeting Is Set for Aug. 10
-----------------------------------------------------------
R.L. Capital Limited Company's shareholders will convene for a
final meeting on Aug. 10, 2006, at:
Maples Finance Limited
Queensgate House, George Town
Grand Cayman, Cayman Islands
Accounts on the company's liquidation process will be presented
during the meeting.
The liquidators can be reached at:
Ricahrd Ellison
Richard Gordon
Maples Finance Limited
P.O. Box 1093, George Town
Grand Cayman, Cayman Islands
SANTA ISABEL: Shareholders Convene for Final Meeting on Aug. 10
---------------------------------------------------------------
Santa Isabel Overseas' shareholders will hold their final
meeting on Aug. 10, 2006, at:
Maples Finance Limited
Queensgate House, George Town
Grand Cayman, Cayman Islands
Accounts on the company's liquidation process will be presented
during the meeting.
The liquidators can be reached at:
Jon Roney
Richard Gordon
Maples Finance Limited
P.O. Box 1093, George Town
Grand Cayman, Cayman Islands
SCEPTRE INT'L: Last Shareholders Meeting Is Set for Aug. 10
-----------------------------------------------------------
Sceptre International Limited's shareholders will convene for a
final meeting on Aug. 10, 2006, at:
Maples Finance Limited
Queensgate House, George Town
Grand Cayman, Cayman Islands
Accounts on the company's liquidation process will be presented
during the meeting.
The liquidators can be reached at:
Jon Roney
Richard Gordon
Maples Finance Limited
P.O. Box 1093, George Town
Grand Cayman, Cayman Islands
SECOND EMERGING: Last Shareholders Meeting Will be on Aug. 10
-------------------------------------------------------------
Second Emerging Markets CBO, Limited's shareholders will convene
for a final meeting on Aug. 10, 2006, at:
Maples Finance Limited
Queensgate House, George Town
Grand Cayman, Cayman Islands
Accounts on the company's liquidation process will be presented
during the meeting.
The liquidators can be reached at:
Mike Hughes
Mora Goddard
Maples Finance Limited
P.O. Box 1093, George Town
Grand Cayman, Cayman Islands
START INVESTMENTS: Final Shareholders Meeting Is Set for Aug. 10
----------------------------------------------------------------
Start Investments Limited's shareholders will convene for a
final meeting on Aug. 10, 2006, at:
Maples Finance Limited
Queensgate House, George Town
Grand Cayman, Cayman Islands
Accounts on the company's liquidation process will be presented
during the meeting.
The liquidators can be reached at:
Hugh Thompson
Richard Gordon
Maples Finance Limited
P.O. Box 1093, George Town
Grand Cayman, Cayman Islands
UNITED MULTI-SECTOR: Final Shareholders Meeting Is on Aug. 10
-------------------------------------------------------------
United Multi-Sector CDO I Limited's shareholders will convene
for a final meeting on Aug. 10, 2006, at:
Maples Finance Limited
Queensgate House, George Town
Grand Cayman, Cayman Islands
Accounts on the company's liquidation process will be presented
during the meeting.
The liquidators can be reached at:
Emile Small
Helen Allen
Maples Finance Limited
P.O. Box 1093, George Town
Grand Cayman, Cayman Islands
===============
C O L O M B I A
===============
BANCO DE BOGOTA: Grupo Aval Can Subscribe to COP240B New Shares
---------------------------------------------------------------
Grupo Aval, the controller of Banco de Bogota, told
Superfinanciera -- the financial regulator -- that it could take
up to COP240 billion in Banco de Bogota's new shares, Business
News Americas reports.
As reported in the Troubled Company Reporter-Latin America on
May 30, 2006, Banco de Bogota, said that it would issue about
COP300 billion in new shares.
Grupo Aval told BNamericas it would have to subscribe to COP196
billion in shares, in line with its 65.2% stake in Banco de
Bogota, but the second round of subscriptions among shareholders
would increase the amount to COP240 billion.
BNamericas relates that Banco de Bogota pushed forward a COP90
billion capitalization for Megabanco, which it recently
acquired.
As reported earlier, Banco de Bogota won a 94.99% stake in
Megabanco in an auction held in March with a COP808 billion bid,
increasing its market share to 13.6% from 11.7% of the financial
system's assets.
Grupo Aval plans to merge and capitalize Banco de Bogota and
Megabanco within a year.
* * *
As reported by Troubled Company Reporter on March 13, 2006,
Moody's Investors Service assigned a 'Ba3' long-term foreign
currency deposit rating on Banco de Bogota and changed the
outlook to stable from negative. Moody's also assigned a 'D+'
bank financial strength rating on the company, while the outlook
remained stable.
IMPSAT SA: Colombian Unit to Invest CIP1.9 Billion for Expansion
----------------------------------------------------------------
The Colombian unit of Impsat SA, said in a statement that it
plans to invest COP1.9 billion to expand its fiber optic network
and offer interconnection between the cities of Bogota, Cali and
Medellin.
Business News Americas relates that with the expansion of
Impsat's fiber optic network, the firm will have greater
transmission capacity and will be able to offer more services
related to its "IP anywhere" strategy.
For the expansion, Impsat is implementing technology provided by
Huawei, a Chinese telecoms manufacturer Huawei, BNamericas
reports.
The expansion plan, says BNamericas, will be carried out in
these two stages:
-- the deploying of rings in Bogota, Medellin and Cali, each
with a transmission capacity of over 4.5Gb; and
-- the expansion of services to Neiva, Ibague, Popayan and
Pereira.
Testing of the new services is set for the end of July so that
the services will be launched in the following 45 days,
BNamericas states.
Impsat SA -- http://www.impsat.com-- is a provider of private
telecommunications networks and Internet services in Latin
America. The company owns and operates 15 data centers and
metropolitan area networks in some of the largest cities in
Latin America, providing services to more than 4,200 national
and multinational companies, financial institutions,
governmental agencies, carriers, ISPs and other service
providers throughout the region. Impsat has operations in
Argentina, Colombia, Brazil, Venezuela, Ecuador, Chile, Peru,
the United States and throughout Latin America and the
Caribbean.
Impsat registered an increase in losses from US$14.2 million in
2004 to US$36.2 million in 2005.
PETROLEO BRASILEIRO: Investing US$150MM to Seek Oil in Colombia
---------------------------------------------------------------
A top official in Petroleo Brasileiro SA's Colombian operations
told Dow Dow Jones Newswires that the company will invest US$150
million this year to explore for oil in Colombia.
The amount, says Dow Jones, is four times as much as the amount
Petroleo Brasileiro used in 2005.
Dirceu Abrahao, the chief executive of Petroleo Brasileiro's
Colombian operations, said during a conference in Cartagena that
the company would spend US$35 million in Tayrona Block on the
Caribbean coast.
According to Dow Jones, Petroleo Brasileiro is conducting an oil
exploration in the Tayrona block with Exxon Mobil Corp. and
Ecopetrol SA, Colombia's state-run oil firm.
The three firms could start drilling wells in Tayrona next year,
Dow Jones states, citing Mr. Abrahao.
There are high expectations of discovering oil in Tayrona, the
Mines, Oil and Gas Congress said in a statement.
Petroleo Brasileiro will use the remainder of the US$150 million
in the other blocks where it operates. Among those blocks are:
-- Guando,
-- Villa Rica, and
-- Tierra Negra.
Dow Jones relates that Petroleo Brasileiro has increased the
daily oil output at the Guando block to 35,000 barrels.
"The idea is to maintain the production during the year so that
the company and the country benefit from high oil prices," Mr.
Abrahao told Dow Jones.
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.
* * *
Fitch Ratings assigned these ratings on Petroleo Brasileiro's
senior unsecured notes:
Maturity Date Amount Rate Ratings
------------- ------ ---- -------
April 1, 2008 US$400,000,000 9% BB+
July 2, 2013 US$750,000,000 9.125% BB+
Sept. 15, 2014 US$650,000,000 7.75% BB+
Dec. 10, 2018 US$750,000,000 8.375% BB+
Fitch upgraded the foreign currency rating of Petrobras to BB+
from BB, with positive outlook, in conjunction with Fitch's
upgrade of the long-term foreign and local currency IDRs of the
Federative Republic of Brazil to BB, from BB- on June 29, 2006.
* COLOMBIA: Buys Back US$318 Million of Peso Bonds on July 11
-------------------------------------------------------------
Colombia will repurchase on July 11 up to US$318 million (COP800
billion) of peso-denominated bonds maturing in 2020 that were
sold in the local market, Bloomberg News reports.
The buy back is part of Colombia's previously announced COP2.5
trillion debt repurchase program. Selling bonds in
international markets will finance the repurchase, Finance
Minister Alberto Carrasquilla said in published reports.
* * *
On May 30, 2005, Fitch Ratings affirmed Colombia's ratings as:
-- Long-term foreign currency 'BB';
-- Country ceiling 'BB';
-- Local currency 'BBB-';
-- Short-term 'B'.
Fitch said the Rating Outlook is Stable.
* COLOMBIA: Inaugurates Natural Gas Pipeline with Venezuela
-----------------------------------------------------------
Presidents Alvaro Uribe and Hugo Chavez inaugurated Friday the
construction of a 226-km natural gas pipeline that will run from
Colombian natural gas fields to Maracaibo, Venezuela, Bloomberg
News reports.
President Chavez said that once the project is operational,
Venezuela can substitute natural gas in liue of expensive diesel
fuel, a US$30 million in savings per month.
Despite having the eight-largest gas reserves in the world,
Venezuela needs supply from its neighbor as it has concentrated
more on developing oil reserves, Bloomberg says.
According to Bloomberg, the pipeline's flow would be reversed in
seven years and Venezuela would then export natural gas from
offshore fields it's now developing.
At the initial part of the program, Colombia will send 150
million cubic feet of gas per day.
* * *
Venezuela's foreign currency long-term debt is rated B1 by
Moody's, B+ by Standard & Poor's, and BB- by Fitch.
* * *
On May 30, 2005, Fitch Ratings affirmed Colombia's ratings as:
-- Long-term foreign currency 'BB';
-- Country ceiling 'BB';
-- Local currency 'BBB-';
-- Short-term 'B'.
Fitch said the Rating Outlook is Stable.
===================================
D O M I N I C A N R E P U B L I C
===================================
BANCO INTERCONTINENTAL: Former Head Sues Jose Lois Malkun
---------------------------------------------------------
Ramon Baez Figueroa, the ex-president of Banco Intercontinental
or Baninter filed charges against Jose Lois Malkun, the
Dominican Central Bank's former governor, before Jose Manuel
Hernandez -- the National District prosecutor -- on Friday,
Dominican Today reports.
In his suit, Mr. Figueroa alleged that Mr. Malkun violated the
Monetary and Financial Law 183-02 of the Dominican Republic when
the latter transferred more than DOP40 billion from Baninter
under his safekeeping without complying with the due process,
Dominican Today relates.
The charges involve legal serious consequences with the blatant
violation of the Monetary and Financial Law by Mr. Malkun when
the latter ordered paying all deposits in Baninter and the
Baninter Trust, in excess of the DOP500,000 limit that the law
has established, Mr. Figueroa's lawyers told the Dominican
Today.
Mr. Figueroa told Dominican Today that he decided to press
charges as a citizen and because -- in addition to the quasi-
fiscal deficit of DOP55 billon -- he is being pointed as the one
that caused the Baninter conflict.
Prosecutor Hernandez said after receiving the document from Mr.
Figueroa that as soon as he studies it he will assign a team of
Assistant DAs to conduct the investigation, Dominican Today
states.
Mr. Figueroa said upon leaving the prosecutor's office that
Hipolito Mejia, the former president of the Dominican Republic,
must be included in the process, Dominican Today relates.
Mr. Figueroa alleged that Mr. Mejia was the cause of Baninter's
bankruptcy. He said that there were many media outlets that
interested the former president for his re-election, Dominican
Today says.
Mr. Figueroa is represented by:
-- Marino Vinicio Castillo (Vincho),
-- Juarez Castillo, and
-- Vinicio Castillo.
BanInter collapsed in 2003 as a result of massive fraud
that drained it of about US$657 million in funds. As a
consequence, all of its branches were closed. The bank's
current and savings accounts holders were transferred to the
bank's new owner -- Scotiabank. The bankruptcy of Baninter was
considered the largest in world history, in relation to the
Dominican Republic's Gross Domestic Product. It cost Dominican
taxpayers DOP55 billion and resulted to the country's worst
economic crisis.
FALCONBRIDGE LTD: Urges Shareholders to Tender Shares to Inco
-------------------------------------------------------------
Falconbridge Limited reiterated its recommendation of Inco
Limited's superior offer to acquire Falconbridge and urged
shareholders to tender their shares to the latter's offer. This
is in response to Xstrata's announcement on July 7, that it has
extended its current offer for Falconbridge without increasing
its price.
"Falconbridge's Board of Directors continues to endorse the Inco
offer, which has an implied value of CDN$59.02 per share,
compared to the Xstrata offer of CDN$52.50," said Derek Pannell,
Chief Executive Officer of Falconbridge. "We do not understand
Xstrata's decision to extend its conditional offer without
increasing its dollar value. Our only conclusion is that
Xstrata intends to draw out the process beyond July 28, 2006 and
ultimately attempt to acquire control of Falconbridge through a
creeping takeover. We believe the best option for shareholders
is to tender to the superior offer on the table from Inco, which
has already obtained all necessary regulatory approvals."
Inco Limited's offer for all outstanding Falconbridge shares
will expire at 8:00 p.m., Toronto time on Thursday
July 13, 2006. Assuming full pro-ration, the consideration
payable under their offer is CDN$17.50 plus 0.55676 Inco common
shares for each Falconbridge common share. The implied value of
this offer is CDN$59.02 per Falconbridge share, based on Inco's
closing price on the Toronto Stock Exchange on Friday,
July 7, 2006.
In its Directors' Circular dated June 26, 2006, the Board of
Directors of Falconbridge has recommended that Falconbridge
shareholders tender their shares to the Inco offer. This offer
has received all necessary regulatory approvals and remains
conditional on Falconbridge shareholders tendering a minimum of
66 2/3% of Falconbridge shares to the offer (which condition can
only be waived by extending the offer's expiry date).
"The combination of Falconbridge with Inco will deliver
excellent value to shareholders and result in the creation of an
outstanding base metals company with tremendous potential for
further value creation. Falconbridge shareholders will own
approximately 50% of the Inco/Falconbridge combined company and
will have the opportunity to participate in this potential as
shareholders of the new Inco," Mr. Pannell said. "The
subsequent opportunity presented by the friendly Phelps Dodge
offer will provide a further opportunity to participate as
shareholders in Phelps Dodge Inco, a top tier mining company."
Shareholders are urged to contact their brokers or investment
advisors immediately to begin the tender process to the Inco
offer.
On July 7, Xstrata extended its offer for Falconbridge to July
21, 2006, but did not improve the CDN$52.50 per share offer for
Falconbridge. Although Xstrata's bid is expressed to be for all
Falconbridge shares, Xstrata continues to reserve the right to
take up any number of shares tendered to it. Therefore, under
Falconbridge's shareholders rights plan, the Xstrata bid is not
considered a permitted bid and any shares tendered to this bid
could not be taken up without triggering the dilutive effects of
the rights plan until July 28, 2006.
The bid remains conditional on the approval of Investment Canada
and on the elimination of the Falconbridge shareholders rights
plan, neither of which are expected to occur prior to
July 21, 2006.
"Xstrata's reluctance to accept a negotiated standstill
agreement in the fall of 2005, their attempt to have the Ontario
Securities Commission strike down the shareholders rights plan
on June 27, and their attempt to force an early Annual General
Meeting of Falconbridge shareholders are all consistent with its
intention to creep," Mr. Pannell said. "The two-week extension
announced today without a price improvement is another attempt
to push this process towards the date when the shareholders
rights plan falls away and Xstrata can creep by executing small
market purchases. Falconbridge believes this strategy is a
deliberate attempt to frustrate the competitive auction process
to the detriment of the present superior Inco offer."
Shareholders Rights Plan
The expiry of Falconbridge shareholders rights plan occurs on
July 28, 2006, in accordance with the ruling of the OSC.
Falconbridge's rights plan ensures that any acquisition of
control of the company occurs through a transaction where an
offer is made to all shareholders for all their shares.
Falconbridge's shareholder rights plan will terminate on the
earlier of
(a) Inco acquiring a majority of Falconbridge common shares,
(b) Xstrata acquiring a majority of the outstanding
Falconbridge common shares not currently owned by Xstrata
or a related party or
(c) July 28, 2006.
After July 28, 2006, Xstrata would be permitted to acquire in
the market, at any price, up to 5% of the outstanding
Falconbridge common shares and/or take up a small number of
shares that might be tendered to it in its bid. In either case,
this may well give Xstrata enough shares, together with its
current 20% holding, to frustrate a competing bid including the
current offer from Inco and to end the current competitive
auction process underway for Falconbridge.
"We continue to support a process in which any acquisition of
Falconbridge occurs through a transaction in which all
Falconbridge shareholders are able to participate in any premium
paid for control and we continue to believe that only the Inco
offer currently provides this to shareholders," Mr. Pannell
said.
Board Recommendation
"The recommendation of the board remains that the shareholders
of Falconbridge tender their to the Inco offer which expires on
July 13, 2006. If shareholders wish to speculate that the
conditional offer of Xstrata will represent higher value for
them that is their prerogative, but they should be aware of the
implications of extending the process beyond July 28, 2006 when
Xstrata will be able to acquire further Falconbridge shares
through market purchases, without any obligation to further
extend or enhance its offer to shareholders," Mr. Pannell said.
About Inco
Headquartered in Sudbury, Ontario, Inco Limited (TSX, NYSE:N)
-- http://www.inco.com/-- is the world's #2 producer of nickel,
which is used primarily for manufacturing stainless steel and
batteries. Inco also mines and processes copper, gold, cobalt,
and platinum group metals. It makes nickel battery materials
and nickel foams, flakes, and powders for use in catalysts,
electronics, and paints. Sulphuric acid and liquid sulphur
dioxide are produced as byproducts. The company's primary
mining and processing operations are in Canada, Indonesia, and
the UK.
About Xstrata
Xstrata plc -- http://www.xstrata.com/-- is a major global
diversified mining group, listed on the London and Swiss stock
exchanges. The Group is and has approximately 24,000 employees
worldwide, including contractors.
Xstrata does business in six major international commodities
markets: copper, coking coal, thermal coal, ferrochrome,
vanadium and zinc, with additional exposures to gold, lead and
silver. The Group's operations and projects span four
continents and nine countries: Australia, South Africa, Spain,
Germany, Argentina, Peru, Colombia, the U.K. and Canada.
About Falconbridge
Headquartered in Toronto, Ontario, Falconbridge Limited
(TSX:FAL.LV)(NYSE: FAL) -- http://www.falconbridge.com/-- is a
leading copper and nickel company with investments in fully
integrated zinc and aluminum assets. Its primary focus is the
identification and development of world-class copper and nickel
orebodies. It employs 14,500 people at its operations and
offices in 18 countries. The Company owns nickel mines in
Canada and the Dominican Republic and operates a refinery and
sulfuric acid plant in Norway. It is also a major producer of
copper (38% of sales) through its Kidd mine in Canada and its
stake in Chile's Collahuasi mine and Lomas Bayas mine. Its
other products include cobalt, platinum group metals, and zinc.
* * *
Falconbridge's CDN$150 million 5% convertible and callable bonds
due April 30, 2007, carries Standard & Poor's BB+ rating.
=============
E C U A D O R
=============
PETROECUADOR: Forms Strategic Alliance With Petrobras
-----------------------------------------------------
The director of Petroleo Brasileiro S.A. aka Petrobras'
International Area, Nestor Cervero, and the executive president
of Empresa Petroleos de Ecuador aka Petroecuador, Walter Lopez,
formalized, in Quito, a strategic alliance agreement between the
two companies to carry out economic activities of mutual
interest in:
-- exploration,
-- production,
-- transportation,
-- storage,
-- marketing, and
-- distribution,
The companies will form an executive committee to identify the
need for projects in the areas covered by the agreement and to
arrange for project approval both by the companies and by the
governments of the two countries. The agreement will be in
effect for five years and may be automatically renewed for equal
terms.
Petrobras is assisting Petroecuador in one of Ecuador's projects
that seeks to introduce ethanol in the country's energy matrix,
relying on the Company's 20-year experience in mixing the
product with gasoline as well as on its transportation and
distribution logistics.
Performing in exploration and production since 1985, Petrobras
discovered the Sunka and Wanke fields and currently operates
blocks 18, 31, and the unified Palo Azul field in Ecuador.
By signing the mutual cooperation agreement, Petrobras shows its
interest in continuing investing in Ecuador, where, up to 2005,
it had invested US$461 million in the fields it operates and
where it intends to invest another US$160 million in 2006, and
US$500 million in the next five years.
About Petroleo Brasileiro
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.
* * *
Fitch Ratings assigned these ratings on Petroleo Brasileiro's
senior unsecured notes:
Maturity Date Amount Rate Ratings
------------- ------ ---- -------
April 1, 2008 US$400,000,000 9% BB+
July 2, 2013 US$750,000,000 9.125% BB+
Sept. 15, 2014 US$650,000,000 7.75% BB+
Dec. 10, 2018 US$750,000,000 8.375% BB+
Fitch upgraded the foreign currency rating of Petrobras to BB+
from BB, with positive outlook, in conjunction with Fitch's
upgrade of the long-term foreign and local currency IDRs of the
Federative Republic of Brazil to BB, from BB- on June 29, 2006.
About Petroecuador
Petroecuador, according to published reports, is faced with
cash-problems. The state-oil firm has no funds for maintenance
has no funds to repair pumps in diesel, gasoline and natural gas
refineries, and has no capacity to pay suppliers and vendors.
The government refused to give the much-needed cash alleging
that Petroecuador has been inefficient and non-transparent in
its accounts.
=================
G U A T E M A L A
=================
* GUATEMALA: Peten Oil Exploration Bidding Awaits Gov't Approval
----------------------------------------------------------------
The government of Guatemala has not yet approved the launch of
the bidding process for the exploration of hydrocarbons blocks
in the Peten department, Business News Americas reports, citing
Jorge Silva, the energy and mines ministry's hydrocarbons
director.
BNamericas relates that the offers for the 25-year exploration
and production contracts for the Peten department were expected
in the first quarter of 2006.
Original plans called for putting areas known as A1 and A9 out
to tender, Minister Silva told BNamericas. But the government
has added a third area.
According to BNamericas, A1 covers 102,000 hectares with
reserves expected at 374-765 million barrels, while A9 covers
107,000 hectares with reserves estimated up to 1.07 billion
barrels. Information on the new area was however unavailable.
"There are no specific dates of when bidding will begin, but we
expect it to be this year," Minister Silva told BNamericas.
* * *
Fitch Ratings assigned these ratings on Guatemala:
Rating Rating Date
------ -----------
Country Ceiling BB+ Feb. 22, 2006
Long Term IDR BB+ Feb. 22, 2006
Short Term IDR B Feb. 22, 2006
Local Currency
Long Term Issuer
Default Rating BB+ Feb. 22, 2006
* * *
Fitch also rated Guatemala's senior unsecured bonds:
Maturity Date Amount Rate Ratings
------------- ------ ---- -------
Aug. 3, 2007 US$150,000,000 8.5% BB+
Nov. 8, 2011 US$325,000,000 10.25% BB+
Aug. 1, 2013 US$300,000,000 9.25% BB+
Oct. 6, 2034 US$330,000,000 8.125% BB+
===============
H O N D U R A S
===============
* HONDURAS: Committee to Present Changes to Mining Reform Bill
--------------------------------------------------------------
The congressional mining committee of Honduras will propose
changes to the mining reform bill, Business News Americas
reports. The mining bill is in its third and final debate in
Congress.
Arnoldo Aviles, the chairperson of the mining committee, told
BNamericas, "We became concerned [about the bill] and so will
propose some changes to the mining law in order to suggest that
the state hold shares in mining companies."
BNamericas relates that the committee will propose that the
state hold up to 50% of shares in mining firms in Honduras.
According to BNamericas, Mr. Aviles said that the proposal will
allow the state to be able to hold from 10% to 50% of each
mining project, depending on:
-- project location,
-- the amount of investment,
-- total size of the exploration area, and
-- the type and quantity of mineral.
Mr. Aviles had said earlier that the mining committee would push
to ban future open pit mining licenses, BNamericas states.
Now, the lawmaker aims to allow mining development but assured
that the committee would be stricter.
BNamericas says that other major changes in the reform bill that
could possibly get the Congress' approval include:
-- the increase of the municipal tax on export revenue to
2% from 1%,
-- a 0.5% additional charge on export revenue that would
help fund social development funds for use in
communities around mining projects,
-- the mine operator would have to hold an open
consultation process with the community before moving on
to the development phase, and
-- state participation.
"We'll see if, with this change, we will be able to allow open
pit mining under stricter conditions," Mr. Aviles told
BNamericas.
Mr. Aviles plans to talk with Cardinal Oscar Andres Rodriguez,
who had demanded in February this year the approval of the
mining ban in a sermon and had argued that silence from the
administration could lead to concession approvals without the
proper scrutiny, BNamericas reports.
* * *
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
=============
J A M A I C A
=============
AIR JAMAICA: Minister to Ask Venezuela More Oil for Airline
-----------------------------------------------------------
Phillip Paulwell -- Jamaica's minister of industry, technology,
energy and commerce -- will ask Venezuela for an additional
daily import of 2,500 barrels of crude for Air Jamaica, the
Associated Press reports.
Venezuela currently sends about 21,000 barrels a day of oil to
Jamaica, under the Petrocaribe agreement.
As reported in the Troubled Company Reporter-Latin America on
June 30, 2006, Minister Paulwell had left for Venezuela on
June 27, along with a delegation, to discuss with Rafael
Ramirez, his Venezuelan counterpart, bilateral relations between
Jamaica and Venezuela and a loan agreement under the Petrocaribe
pact.
According to AP, Caribbean nations entered Petrocaribe on
June 29 to counter the rising prices of oil. Under Petrocaribe,
countries pay market price for Venezuelan fuel but are only
required to pay a portion of the cost and fund the rest over 25
years at low interest.
* * *
On May 26, 2006, Moody's Investors Service upgraded Jamaica's
rating under a revised foreign currency ceiling:
-- Long-term foreign currency rating: Ba3 from B1 with
stable outlook.
MIRANT CORP: US Trustee Wants Ch. 11 Cases of 13 Units Dismissed
----------------------------------------------------------------
William T. Neary, the U.S. Trustee for Region 17, asks Judge
Michael D. Lynn of the U.S. Bankruptcy Court for the Northern
District of Texas to dismiss the Chapter 11 cases of 13 debtor
affiliates of Mirant Corporation:
Debtor Case No.
------ --------
Mirant Capital Management, L.L.C. 03-46622
Mirant Central Texas, L.P. 03-46624
Mirant D.C. O&M, L.L.C. 03-46627
Mirant Danville, L.L.C. 03-46628
Mirant Gastonia, L.L.L. 03-46632
Mirant Michigan Investments, Inc. 03-46638
Mirant Mid-Atlantic Services, L.L.C. 03-46639
Mirant New England, Inc. 03-46640
Mirant Parker, L.L.C. 03-46643
Mirant Peaker, L.L.C. 03-46644
Mirant Sugar Creek Holdings, Inc. 03-46651
Mirant Sugar Creek Ventures, Inc. 03-46652
Mirant Texas Investments, Inc. 03-46654
Assistant U.S. Trustee George F. McElreath relates that the 13
Debtors have ceased to exist either by virtue of a motion
approving a merger or dissolution of each of the entities
granted by the Court or by virtue of the terms of the Plan of
Reorganization.
Moreover, pursuant to Section 1930(a)(6) of the Judicial
Procedures Code, the quarterly fees due to the U.S. Trustee will
continue to accrue in each case until it is closed, dismissed or
converted to another chapter.
Mr. McElreath tells the Court that in spite of any merger or
dissolution that may have taken place, each of the 13 cases is
considered an open case for quarterly fee purposes.
Accordingly, as a matter of good housekeeping, it would be in
the best interest of creditors and the Debtors' estates for the
Court to order dismissal of each of the cases, he says.
Headquartered in Atlanta, Georgia, Mirant Corporation --
http://www.mirant.com/-- is a competitive energy company that
produces and sells electricity in North America, the Caribbean,
and the Philippines. Mirant's investments in the Caribbean
include three integrated utilities and assets in Jamaica, Grand
Bahama, Trinidad and Tobago and Curacao. Mirant owns or leases
more than 18,000 megawatts of electric generating capacity
globally. Mirant Corporation filed for chapter 11 protection on
July 14, 2003 (Bankr. N.D. Tex. 03-46590), and emerged under the
terms of a confirmed Second Amended Plan on January 3, 2006.
Thomas E. Lauria, Esq., at White & Case LLP, represented the
Debtors in their successful restructuring. When the Debtors
filed for protection from their creditors, they listed
US$20,574,000,000 in assets and US$11,401,000,000 in debts.
(Mirant Bankruptcy News, Issue No. 100; Bankruptcy Creditors'
Service, Inc., 215/945-7000)
* * *
As reported in the Troubled Company Reporter on Dec. 8, 2005,
Standard & Poor's Ratings Services assigned its 'B+' corporate
credit rating to power generator and developer Mirant Corp. and
said the outlook is stable. That rating reflected the credit
profile of Mirant, based on the structure the company expects to
have on emergence from bankruptcy at or around year-end 2005,
S&P said.
===========
M E X I C O
===========
AXTEL SA: Services Contract with Nextel Extended Until Next Year
----------------------------------------------------------------
Axtel SA de CV said in a statement that its services contract
with Nextel de Mexico has been extended until Dec. 31, 2007.
Business News Americas relates that since 2001, Axtel has been
providing Nextel with these services:
-- local telephony,
-- spectrum utilization,
-- Internet access,
-- long distance,
-- 800 numbers, and
-- private networks.
Axtel currently provides the services for Nextel personnel in 19
cities in Mexico, BNamericas reports.
About Nextel
Nextel the Mexico is part of NII Holdings, Inc., and is the
second postpaid cellular company in Mexico.
About Axtel
Axtel, S.A. de C.V. provides local and long distance
telecommunications services, data transmission and Internet
services in Mexico, to both residential and business customers.
The company has 600,000 installed lines. Axtel posted net
profits of 306 million pesos (US$29 million) for 2005 compared
to a loss of 79.6 million pesos in 2004.
* * *
As reported in the Troubled Company Reporter on June 21, 2006,
Standard & Poor's Ratings Services raised its long-term
corporate credit rating on Monterrey, Mexico-based
telecommunications service provider Axtel S.A. de C.V. to 'BB-'
from 'B+'. The outlook was revised to stable from positive.
The rating on Axtel's US$162 million senior notes due 2013 was
also raised to 'BB-' from 'B+'.
DANA CORP: Assumes Full Ownership of Mexican Biz for US$19.5MM
--------------------------------------------------------------
Dana Corp. and Desc S.A. de C.V. completed the dissolution of
their Mexican joint venture. The closing of this transaction
provides Dana with full ownership of several core operations
based in Mexico, which will operate under Dana Holdings Mexico,
S. de R.L. de C.V., a new Dana subsidiary.
Dana and Desc dissolved their joint venture, Spicer S.A. de
C.V., with Dana assuming 100% ownership of operations that
manufacture and assemble axles, driveshafts, gears, forgings,
and castings in which Dana previously held an indirect 49%
interest. Desc, in turn, assumed full ownership of the
transmission and aftermarket gasket operations in which it
previously held a 51% interest. Along with exchanging its
minority interest in the joint venture, Dana also made cash
payment of US$19.5 million to Desc.
"Taking full ownership of these core operations further
solidifies our competitive profile," said Dana Chairman and CEO
Mike Burns. "In particular, Dana expects to benefit from the
addition of technologically advanced operations supporting our
core axle and driveshaft businesses, as well as the
manufacturing cost efficiencies that come with expanding our
global presence in this key competitive location."
With the completed transaction, Dana has acquired full ownership
of five manufacturing operations, which had combined sales --
both to Dana and to third parties -- of US$296 million in 2005.
The facilities, Autometales, S.A. de C.V.; and Ejes Tractivos,
S.A. de C.V. in Mexico City, and Cardanes, S.A. de C.V.;
Engranes Conicos, S.A. de C.V.; and Forjas Spicer, S.A. de C.V.
in Queretaro, produce light vehicle axle and driveshafts and a
variety of related components.
As part of the transaction, Desc assumed full ownership of
Transmisiones y Equipos Mecanicos, S.A. de C.V. and
Transmisiones TSP, S.A. de C.V. transmissions, located in
Queretaro, Mexico; Transmission Technologies Corporation with
operations in Knoxville, Tennessee; and the T.F. Victor, S.A. de
C.V. aftermarket gasket operation in Mexico City. Dana will
sell aftermarket gaskets in Mexico through T.F. Victor and
original equipment gaskets directly to engine and vehicle
manufacturers.
About Dana Corp.
Headquartered in Toledo, Ohio, Dana Corp. (OTC Bulletin Board:
DCNAQ) -- http://www.dana.com/-- designs and manufactures
products for every major vehicle producer in the world, and
supplies drivetrain, chassis, structural, and engine
technologies to those companies. Dana employs 46,000 people in
28 countries. Dana is focused on being an essential partner to
automotive, commercial, and off-highway vehicle customers, which
collectively produce more than 60 million vehicles annually.
The company and its affiliates filed for chapter 11 protection
on Mar. 3, 2006 (Bankr. S.D.N.Y. Case No. 06-10354). Corinne
Ball, Esq., and Richard H. Engman, Esq., at Jones Day, in
Manhattan and Heather Lennox, Esq., Jeffrey B. Ellman, Esq.,
Carl E. Black, Esq., and Ryan T. Routh, Esq., at Jones Day in
Cleveland, Ohio, represent the Debtors. Henry S. Miller at
Miller Buckfire & Co., LLC, serves as the Debtors' financial
advisor and investment banker. Ted Stenger from AlixPartners
serves as Dana's Chief Restructuring Officer. Thomas Moers
Mayer, Esq., at Kramer Levin Naftalis & Frankel LLP, represents
the Official Committee of Unsecured Creditors. The Debtors'
consolidated balance sheet at March 31, 2006, showed a
US$456,000,000 total shareholder' equity resulting from total
assets of US$7.788 billion and total liabilities of US$7.332
billion. When the Debtors filed for protection from their
creditors, they listed US$7.9 billion in assets and US$6.8
billion in liabilities as of Sept. 30, 2005.
GENERAL MOTORS: Fitch Says Ratings Unaffected by Proposed Merger
----------------------------------------------------------------
The potential alliance between General Motors Corp., Renault and
Nissan, as currently proposed, would not have implications for
the company's credit rating, according to Fitch Ratings.
Although certain benefits could be realized from such an
alliance over the long term, the ratings for General Motors (IDR
rated 'B' and on Rating Watch Negative by Fitch) in the near
term will be driven primarily by the turnaround efforts at its
North American auto operations. The resolution of the Delphi
situation and completion of the sale of a controlling interest
in GMAC are also key factors in the current rating.
General Motors' challenges in North America, on the revenue and
the cost side, remain numerous, and an alliance is unlikely to
have a significant effect on either in the short term. Over the
long-term, the alliance could result in purchasing synergies and
other engineering, design and manufacturing efficiencies.
However, these synergies typically require a timeframe of at
least four years to be realized to a meaningful degree, even if
implemented successfully, as frequently demonstrated through the
industry. The company is already undertaking such an effort on
its own as it moves to a global design process, with the
ultimate benefits yet to be determined.
At General Motors, Ford and DaimlerChrysler, either internally
or through alliances, moving to global platforms has proven to
be a long-term challenge, while transplant manufacturers
continue to realize the benefits of further leveraging existing
platforms. Historically, the industry's track record with
regard to alliances, and General Motors' in particular, has been
notably poor. With the company's purchasing, design,
engineering and manufacturing strategies still evolving, further
alliances could certainly complicate and/or cause revisions to
existing efforts before realizing any ultimate benefits. Should
the alliance progress, there could also be an adverse impact on
the supply base, which is already experiencing substantial
stress.
It is also unlikely that an alliance, or a higher-profile role
by Mr. Ghosn, would have a near term effect on one of General
Motors' primary structural cost issues - the lack of flexibility
incorporated in the company's existing UAW contract. Over the
long-term, any alliance strategy would certainly address the
partners' global manufacturing footprint, including capacity
issues. Given General Motors' high manufacturing cost base in
the U.S., an alliance could be expected to try and steer
production to more cost efficient plants and locations. This is
likely to cause the UAW to weigh in on the alliance, potentially
complicating and alliance agreement and the September 2007
contract talks where the company will already be seeking further
concessions to existing wages, benefits and other structural
terms.
Prior to any alliance agreement, Fitch expects that General
Motors' board and its potential alliance partners would clearly
delineate areas of cooperation and the decision-making process
between the partners. If the major reason Tracinda is
encouraging an alliance is to have Carlos Ghosn take on a
primary role in General Motors' restructuring, this would
certainly be an area of substantive deliberation at its board.
At this stage of General Motor's restructuring efforts, Fitch
expects that this decision would not be taken lightly or
quickly.
On the revenue side, General Motors has benefited from recent
product introductions in the higher-priced SUV segment, but
remains exposed to sliding market share, a continuing industry
decline in the mid-size and full-size SUV market, price
competition and concerns surrounding volumes and pricing in the
important heavy-duty pickup market. On the cost side, the
company has made progress in certain cost areas, including
health care and its employee buyout program, but remains exposed
to operating and financial stresses in its supply base, high
commodity costs and other fixed costs. Despite progress on the
cost side, other cost and revenue pressures make it unlikely
that General Motors will reverse negative operating cash flows
in 2006.
GRUPPO COVARRA: Court's Injunction Stays Facis S.p.A.'s Lawsuit
---------------------------------------------------------------
The Honorable Burton R. Lifland of the U.S. Bankruptcy Court for
the Southern District of New York enjoins creditors of Gruppo
Covarra S.A. de C.V. and its debtor-affiliates from asserting
any action against the Debtors' assets.
Judge Lifland rules that the Fourth District Court in the State
of Morelos, Mexico, will have exclusive jurisdiction to hear and
determine any suit, action, claim or proceeding, and to settle
all disputes which may arise out of the administration of the
Debtors' Mexican insolvency proceeding.
Lic. Miguel Arroyo Ramirez, the liquidator appointed in the
Debtors' Mexican insolvency proceedings sought the injunction to
specifically prohibit Facis S.p.A. from commencing or continuing
any action or proceeding against the Debtors' estates, or
otherwise disrupting the Debtors' insolvency case pending in
Mexico.
Covarra is currently named as a defendant in an action commenced
by Facis S.p.A. in the United States District Court for the
Southern District of New York as well as a respondent in an
International Chamber of Commerce Arbitration proceeding
commenced by Facis in New York. Facis initiated both actions
and wants:
(i) a finding that Covarra breached a license agreement
with Gruppo Finanzario Tessile S.p.A. -- to which Facis
claims to be GFT's successor-in-interest - during the
pendency of Covarra's insolvency proceedings in Mexico;
(ii) a declaration that Facis validly terminated the License
Agreement in 2004 while Covarra's insolvency
proceedings were pending; and
(iii) a finding that the Liquidator's sale of products
containing the licensed trademarks during Covarra's
liquidation constitutes trademark infringement.
Section 304 of the U.S. Bankruptcy Code was specifically
designed to assist foreign representatives in the performance of
its duties. It provides that a U.S. bankruptcy court, upon the
filing of a petition by a foreign representative, may enjoin the
commencement or continuation of any action against the debtor in
a foreign proceeding or its property, and may order the turnover
of the foreign debtor's property to a foreign representative.
About Gruppo Covarra
Headquartered in Morelos, Mexico, Gruppo Covarra S.A. de C.V.
designs, manufactures, sells, distributes, imports and exports
men's clothing. Gruppo Covarra has four subsidiaries, namely,
Fabrica de Casimires Rivetex S.A. de C.V., Confitalia, S.A. de
C.V., Foderami Covarra S.A. de C.V., and Adoc S.A. de C.V.
Rivetex produced fabric, Foderami produced lining material,
Confitalia manufactured the products, and Adoc provided
administrative services. Covarra and its debtor-affiliates
filed a petition for relief under the Mexican Insolvency Act on
Dec. 26, 2001, after an unsuccessful attempt to restructure its
debt obligations. As of Dec. 26, 2001, the Debtors estimated
total assets of more than US$10 million with 1,000 registered
creditors holding US$42 million of claims.
On March 23, 2004, the Federal District Court for the Fourth
District of Morelos, Mexico, converted Covarra's case to a
liquidation proceeding. Following this conversion, the Federal
Insolvency Institute appointed Lic. Miguel Arroyo Ramirez as
Covarra's liquidator, which was later ratified by the Mexican
Federal District Court.
Mr. Ramirez, in his capacity as the Debtors' liquidator, filed a
Sec. 304 petition on May 27, 2005 (Bankr. S.D.N.Y. Case No.
05-13925). Lynn P. Harrison, III, Esq., at Curtis, Mallet-
Prevost, Colt & Mosle, LLP, represents Mr. Ramirez. As of the
Sec. 304 petition date, the Debtors estimated between US$10
million to US$50 million in total assets and debts.
GRUPO MEXICO: Will Hold Talks with Union Before Closing Mine
------------------------------------------------------------
Grupo Mexico decided to delay the planned closure of its La
Caridad copper mine for two weeks to give negotiations with the
union a try.
As previously reported, Juan Rebolledo, Grupo Mexico's head of
international affairs, had said, "It is sad, but the decision to
close the La Caridad mine has been taken and stands. We really
don't have an alternative because we don't see any indications
from the (striking miners) to try to resolve this."
Grupo Mexico and the Mexican government have been in conflict
with the union. La Caridad mine workers had walked off their
jobs on March 24, 2006, in support of Napoleon Gomez Urrutia,
whose leadership in the union was snubbed by both the government
and Grupo Mexico due to allegations of embezzling about US$55
million in funds paid into a trust by Grupo Mexico in relation
to the 1990 privatization of La Caridad and Cananea. Eduardo
Bours Castelo -- the governor of Sonora, where the La Caridad
mine is situated -- had tried to intervene to stop the shutting
down of the mine.
According to Mr. Rebolledo, Grupo Mexico's production has
declined since the strikes started, with production losses
rising at about US$2 million daily. Production losses of copper
concentrates reached 35,000 metric tons, while those of copper
cathodes amounted to 6,000 tons. Total losses incurred are
estimated at US$150 million.
However, Mr. Rebolledo did say that the closure is not yet
authorized and that Grupo Mexico is waiting for the arbitration
board's approval, which is expected this week.
Mr. Rebolledo added that if the board would go for liquidation,
About 3,000 workers would be sacked, including the 1,200
unionized miners at La Caridad.
Still there is no assurance the strikers at the mine entrance
would abandon the site after being laid off, and Grupo Mexico
could not tell when it would be able to regain access to the La
Caridad mine. The Mexican police -- having killed two union
members in April in an attempt to break through a picket line at
the Sicartsa steel mill -- were hesitant to make efforts in
warding off protesters armed with knives and clubs.
Grupo Mexico said it would seek to restart operations at the La
Caridad mine quickly, using the services of nonunion and
contract workers.
Copper production at the mine has been suspended. However, the
production from the smelter and refinery could resume if the
strikes are resolved, Mr. Rebolledo said, hoping that talks
between Grupo Mexico and the union would show signs of progress
so that mining operations could be restarted soon.
Although Grupo Mexico did not proceed with plans to close the La
Caridad mine, the government is expected to force the closure in
the coming weeks due to strikes held by union members at the
mine.
Grupo Mexico SA de C.V. -- http://www.grupomexico.com/--
through its ownership of Asarco and the Southern Peru Copper
Company, Grupo Mexico is the world's third largest copper
producer, fourth largest silver producer and fifth largest
producer of zinc and molybdenum.
* * *
Fitch Ratings assigned these ratings to Grupo Mexico SA de C.V.:
-- foreign currency long-term debt, BB; and
-- local currency long-term debt, BB.
PIER 1 IMPORTS: Incurs US$23 Mil. Net Loss in 1st Fiscal Quarter
----------------------------------------------------------------
Pier 1 Imports, Inc., incurred US$23.17 million net loss on
US$376.09 million of net sales for the quarter ended
May 27, 2006, the company disclosed in a Form 10-Q filing with
the US Securities and Exchange Commission.
Sales declines during the first quarter of fiscal 2007 were the
result of decreased customer traffic and competitive pressures
in the home furnishings sector. Conversion rates during the
quarter were down compared to the previous fiscal year, while
average ticket amounts increased. During the first quarter of
fiscal 2007, the Company opened 14 and closed or relocated nine
Pier 1 stores in the United States and Canada and opened two
"store within a store" locations in Mexico.
As of May 27, 2006, the Company's balance sheet reported
US$1.12 billion in assets and US$558.75 million in equity.
Liquidity and Capital Resources
The Company ended the first quarter of fiscal 2007 with
US$235.2 million in cash and temporary investments compared to
US$105.7 million a year ago. Operating activities in the first
quarter of fiscal 2007 used US$22.2 million of cash, primarily
as a result of the Company's net loss. Inventory levels at the
end of the first quarter of fiscal 2007 were US$357.3 million,
down US$51.1 million or 12.5%, from inventory levels at the end
of last year's first quarter. At the end of the first quarter
of fiscal 2007, retail square footage increased 2.6% compared to
the same period last year, and inventory per retail square foot
was US$37, a decrease from US$44 per retail square foot in the
prior year. While inventory levels at the distribution centers
remained relatively flat with last year, store-level inventories
have declined significantly as a result of the Company's efforts
to create a cleaner and less cluttered shopping environment in
the stores.
In addition, Pier 1 recently implemented a new rapid
replenishment process in its stores where more merchandise is
now held at the distribution centers rather than in stores and
is restocked quickly as merchandise sells. This new process has
removed at least a week from the restocking time in stores and
helped to maintain the clean, contemporary look of the stores.
During the first three months of fiscal 2007, investing
activities provided US$11 million compared to US$3.6 million
during the same period last year. Proceeds from the sale of The
Pier provided US$15 million, partially offset by US$3.4 million
in cash held by The Pier on the date of the sale. Collections
of principal on beneficial interest in securitized receivables
provided US$11 million compared to US$17.6 million for the first
quarter of fiscal 2006. Capital expenditures were US$11.6
million in fiscal 2007 compared to US$14 million in fiscal 2006,
consisting primarily of US$4.2 million for fixtures, equipment,
and leasehold improvements for new and existing stores, US$5
million for information systems' enhancements and US$2.4 million
related to the Company's distribution centers. Capital
expenditures for fiscal 2007 are expected to be US$38 million to
$40 million. The Company has revised its previous store opening
and closing projections and now plans to open approximately 35
new Pier 1 stores in the United States and Canada during fiscal
2007 and plans to close or relocate 45 to 50 Pier 1 stores and
five Pier 1 Kids stores over the same period. In addition, the
Company expects to open approximately seven "store within a
store" locations in Mexico and Puerto Rico. In March 2006, the
Company began operating its new distribution center in Tacoma,
Washington, which is leased under an operating lease.
Financing activities for the first three months of fiscal 2007
used a net US$6.9 million of the Company's cash. Dividend
payments totaled US$8.7 million for the first quarter of fiscal
2007, and other financing activities, primarily the exercise of
stock options, provided net cash of US$1.8 million. At the end
of the first quarter, the Company's minimum operating lease
commitments remaining for fiscal 2007 were US$177.7 million.
The present value of total existing minimum operating lease
commitments discounted at 10% was US$934.7 million at the fiscal
2007 first quarter-end.
Working capital requirements are expected to be funded from cash
generated from the operations of Pier 1, from funds received in
the prior year related to the issuance of convertible debt and
from borrowings against lines of credit. The Company's bank
facilities include a US$325 million credit facility, which is
secured by the Company's eligible merchandise inventory and
third-party credit card receivables. This facility expires in
November 2010. As of May 27, 2006, the Company had no
outstanding cash borrowings and approximately US$115.7 million
in letters of credit utilized against the new secured credit
facility, and the borrowing base was US$222.1 million, of which
US$106.4 million was available for cash borrowings.
A full-text copy of the Quarterly Report is available for free
at http://ResearchArchives.com/t/s?d7e
Pier 1 Imports, Inc. (NYSE:PIR) -- http://www.pier1.com/-- is
a specialty retailer of imported decorative home furnishings and
gifts with Pier 1 Imports(R) stores in 49 states, Puerto Rico,
Canada, and Mexico and Pier 1 kids(R) stores in the United
States.
* * *
As reported in the Troubled Company Reporter on May 8, 2006,
Standard & Poor's Ratings Services' 'B' corporate credit and
'B-' unsecured debt ratings on Fort Worth, Texas-based Pier 1
Imports Inc. remained on CreditWatch with negative implications.
VALASSIS COMMS: ADVO Buy May Cue Moody's to Lower Baa3 Ratings
--------------------------------------------------------------
Moody's Investors Service placed Valassis Communications, Inc.'s
Baa3 senior unsecured ratings on review for possible downgrade
following the company's announcement that it has entered into a
definitive agreement to acquire ADVO, Inc. for a cash purchase
price of approximately US$1.3 billion, including assumed debt.
These ratings are on review for possible downgrade:
-- Senior Unsecured Conv./Exch. Bond/Debenture, Placed on
Review for Possible Downgrade, currently Baa3; and
-- Senior Unsecured Regular Bond/Debenture, Placed on Review
for Possible Downgrade, currently Baa3.
The ratings outlook is changed to rating under review from
negative.
The review is prompted by the significant increase in leverage
that will occur as a result of the acquisition. Moody's
believes there is a potential for a multi-notch downgrade. In
its review, Moody's will focus on:
-- the post-transaction capital structure,
-- the company's plans to reduce the debt incurred as a
result of the acquisition,
-- the combined company's growth prospects and operating
margins,
-- the benefits from the improved scale revenue diversity,
and
-- Valassis' strategies to integrate ADVO to achieve
projected cost and capital savings.
Moody's will also evaluate the priority of claim of the post-
acquisition capital structure. Moody's notes that the existing
bonds are not guaranteed by operating subsidiaries but contain a
negative pledge that would likely be triggered if a substantial
amount of new secured debt is utilized to fund the cash purchase
price.
Valassis Communications, Inc. headquartered in Livonia,
Michigan, offers a wide range of promotional and advertising
products including newspaper advertising and inserts, sampling,
direct mail, targeted marketing, coupon clearing and consulting
and analytic services.
VALASSIS COMMS: S&P Lowers Credit & Sr. Unsecured Ratings to BB
---------------------------------------------------------------
Standard & Poor's Ratings Services lowered its corporate credit
and senior unsecured ratings on Valassis Communications Inc. to
'BB' from 'BB+' and left the ratings on CreditWatch with
negative implications.
The downgrade reflects a meaningfully more aggressive expected
long-term financial policy at Valassis following the company's
announcement it has entered into a definitive agreement to
acquire the common stock of ADVO Inc. for US$37 per share, or
US$1.2 billion, plus the assumption of US$125 million in debt.
"The downgrade and continued CreditWatch listing reflect our
view that 'BB' is the highest rating warranted following today's
announcement, but that ratings could still be lowered further as
we evaluate the transaction," said Standard & Poor's credit
analyst Emile Courtney.
The CreditWatch listing also reflects the announced acquisition,
which would be debt financed, and the expectation for a
heightened financial risk profile at Valassis. Given the size
of the acquisition and the recent lowered earnings guidance at
Valassis, the outcome of our review could range from a one-notch
to a multiple-notch downgrade.
In resolving the CreditWatch, Standard & Poor's will review
expectations for operating performance at the combined company
in light of the current competitive environment, as well as
Valassis' financial risk profile.
X-RITE INC: Completes US$280 Million Amazys Holding Acquisition
-------------------------------------------------------------
X-Rite, Incorporated, completed its acquisition of Amazys
Holding AG for a purchase price of CHF77 per share plus 2.11
shares of X-Rite, Incorporated stock for each Amazys share. The
total purchase price on the settlement date of July 5, 2006 was
US$280 million. The acquisition was financed through a
combination of cash, debt and X-Rite stock. Amazys develops,
markets and supports hardware, software and services to measure
and communicate color under the GretagMacbeth brand. The
combined company will be called X-Rite, Incorporated.
The major benefits of the acquisition are expected to include:
* creating a global market leader in the color industry;
* accelerating technology innovation;
* building the strongest talent pool in the industry; and
* generating significant synergy potential
The combined company expects to achieve approximately US$25
million of annual operating expense savings in connection with
the transaction in year three. The company expects to incur
cash restructuring costs totaling US$20 million during the first
three years. The transaction is expected to be accretive to X-
Rite's cash EPS during year two of the combined operations.
"Our new company combines top notch talent, technology and
products in the color industry," said Michael C. Ferrara, X-Rite
CEO. "We expect our expertise, talent and technology to help us
expand the global color market through innovation."
Organization of the Combined Entity
A strong team of X-Rite and GretagMacbeth executives lead the
combined organization. Michael C. Ferrara is the CEO, Thomas J.
Vacchiano, Jr. is the President and COO, Mary E. Chowning is the
CFO, and Dr. Francis Lamy is the CTO. The X-Rite Board of
Directors is now comprised of nine members, including six
current directors of X-Rite and three former directors of Amazys
Holding AG.
"I am confident that the new X-Rite Board of Directors and
senior management team under the leadership of Michael C.
Ferrara, CEO, will ensure that X-Rite excels in every aspect of
the business," John Utley, X-Rite Chairman, said. "The combined
company is poised to lead the future of the color industry and
maximize shareholder value."
The global headquarters for the combined entity is in
Grandville, Michigan, with European headquarters in Regensdorf,
Switzerland, and Asia Pacific headquarters in Hong Kong. X-Rite
will be represented by the new logo, incorporating the core
colors of both companies, and symbolizing how our shared values
and goals will drive this new company.
Financing and Listing on the SWX Exchange
The cash portion of the transaction was financed through a
combination of cash on hand and new borrowings. Goldman Sachs
provided a total debt package of US$220 million to fund the
transaction and post-closing working capital needs. Concurrent
with the settlement X-Rite has established a secondary listing
on the SWX Swiss Exchange.
"We are excited about the potential financial benefits this
acquisition brings to X-Rite shareholders," Mary E. Chowning,
X-Rite Chief Financial Officer, said. "The synergies expected
from this acquisition will reduce costs, enhance our margins,
and ultimately increasing our shareholder value."
Advisors
X-Rite was advised exclusively by Headwaters MB for investment
banking and financial advisory services, including securing debt
financing which has been committed by Goldman Sachs. X-Rite's
other advisors include McDermott Will & Emery LLP and Wenger
Plattner for legal advice. Amazys Holding AG was advised by
Credit Suisse for investment banking and financial advice, and
by Lenz & Staehelin for legal advice.
About X-Rite
Headquartered in Grandville, Michigan, X-Rite Incorporated
(Nasdaq: XRIT) -- http://www.xrite.com/-- is a global leader
offering color measurement technology solutions comprised of
hardware, software and services for the verification and
communication of color data. The Company serves a broad range
of industries, including graphic arts, digital imaging,
industrial and retail color matching, and medical, among other
industries. X-Rite is global, with 21 offices throughout
Europe, Asia, and the Americas, serving customers in 100
countries.
* * *
As reported in the Troubled Company Reporter on May 29, 2006,
Standard & Poor's Rating Services assigned its 'B+' corporate
credit rating to Grandville, Michigan-based X-Rite Inc. The
outlook is stable.
At the same time, Standard & Poor's assigned a 'B+' rating and a
recovery rating of '2' to the company's proposed first-lien
loan, which amounts to US$160 million (a term loan of US$120
million and an undrawn revolving credit facility of US$40
million).
As reported in the Troubled Company Reporter on May 23, 2006,
Moody's Investors Service assigned a first-time corporate family
rating of B1 to X-Rite, Inc., B1 to X-Rite's proposed senior
secured first priority term loan and revolver and B3 to the
proposed senior secured second priority term loan.
Moody's said the ratings outlook is stable.
===========
P A N A M A
===========
CHIQUITA BRANDS: Won't Discuss Contract with Coosemupar
-------------------------------------------------------
Chiquita Brands International Inc. will not discuss any contract
conditions with Cooperativa de Servicios Multiples de Puerto
Armuelles RL aka Coosemupar, Fresh Plaza reports.
Instead, Chiquita Brands will hold negotiations with the
Autonomous Panamanian Cooperative Institute or Ipacoop, a
governmental agency for established for the supervision of loans
and credit cooperatives that is intervening and filing for the
liquidation of Coosemupar, Fresh Plaza relates.
According to Fresh Plaza, Chiquita Brands maintained its
proposition to organize the funding of US$8 million for the
rehabilitation of Coosemupar. Chiquita Brands said that it is a
must that productivity as well as the employment funds in Panama
be improved.
Meanwhile, the Sitrachilco union held demonstrations when the
government could not report any changes in the sales contract
with Chiquita Brands that the Coosemupar workers had demanded,
Fresh Plaza states. The gates of the plantations were closed
and the harvesting of bananas was stopped, freezing supply to
Chiquita.
About Coosemupar
Moltiple Services Cooperative (Coosemupar) produces half the
bananas exported from Panama on 3,000 hectares of land. It is
formally owned by the workers. This cooperative is led by
members of the Armuelles banana workers union, Sindicato
Industrial de Trabajadores de la Chiriqui Land Co y Empresas
Afines or Sitrachilco.
About Chiquita Brands
Chiquita Brands International is a Cincinnati, Ohio-based
producer and distributor of bananas and other produce, under a
variety of subsidiary brand names, collectively known as
Chiquita. Chiquita is the successor to the United Fruit Company
and is the leading distributor of bananas in the United States.
The company also owns a German produce distribution company,
Atlanta AG, which it acquired in 2003. It markets, produces and
distributes fresh fruits, processed fruits and vegetable
products.
On June 15, 2006, Standard & Poor's Ratings Services affirmed
its ratings on Cincinnati, Ohio-based Chiquita Brands
International Inc., including the 'B+' corporate credit rating.
S&P said the rating outlook is negative.
COOPERATIVA DE SERVICIOS: Ipaccop Files for Firm's Liquidation
--------------------------------------------------------------
The Autonomous Panamanian Cooperative Institute or Ipacoop, a
governmental agency for established for the supervision of loans
and credit cooperatives, has filed for the liquidation of
Cooperativa de Servicios Multiples de Puerto Armuelles RL aka
Coosemupar, Fresh Plaza reports, citing Reynaldo Rivera,
Panama's minister of labor.
Minister Rivera told Fresh Plaza that Ipacoop is intervening and
has sought for the bankruptcy of Coosemupar because of the
latter's financial situation and the lack of new sales
conditions with Chiquita Brands International Inc.
Minister Rivera is having a last meeting, which is deemed as
just for formality, with the leaders of the Sitrachilco union to
look for possibilities to avert Coosemupar's bankruptcy, Fresh
Plaza relates.
According to Fresh Plaza, the minister has asked the workers to
resume work.
Chiquita Brands will hold talks with Ipacoop and will not
discuss any contract conditions with Coosemupar, Fresh Plaza
states.
About Coosemupar
Moltiple Services Cooperative (Coosemupar) produces half the
bananas exported from Panama on 3,000 hectares of land. It is
formally owned by the workers. This cooperative is led by
members of the Armuelles banana workers union, Sindicato
Industrial de Trabajadores de la Chiriqui Land Co y Empresas
Afines or Sitrachilco.
About Chiquita Brands
Chiquita Brands International is a Cincinnati, Ohio-based
producer and distributor of bananas and other produce, under a
variety of subsidiary brand names, collectively known as
Chiquita. Chiquita is the successor to the United Fruit Company
and is the leading distributor of bananas in the United States.
The company also owns a German produce distribution company,
Atlanta AG, which it acquired in 2003. It markets, produces and
distributes fresh fruits, processed fruits and vegetable
products.
=====================
P U E R T O R I C O
=====================
FIRST BANCORP: Gets Regulatory Approval on Next Dividend Payment
----------------------------------------------------------------
First BanCorp declared the next payment of dividends on First
BanCorp's Series A through E Preferred shares upon receiving
regulatory approval.
The estimated corresponding amounts, record dates and payment
dates for the Series A through E Preferred Shares are:
Series US$Per/share Record Date Payment Date
A 0.1484375 July 29, 2006 July 31, 2006
B 0.17395833 July 15, 2006 July 31, 2006
C 0.1541666 July 15, 2006 July 31, 2006
D 0.15104166 July 15, 2006 July 31, 2006
E 0.14583333 July 15, 2006 July 31, 2006
The regulatory approvals were obtained as a part of First
BanCorp's previously announced agreement with:
-- the Board of Governors of the Federal Reserve System,
-- the Federal Deposit Insurance Corp. and
-- the Office of the Commissioner of Financial Institutions
of the Commonwealth of Puerto Rico.
About First BanCorp
First BanCorp is the parent corporation of FirstBank Puerto
Rico, a state chartered commercial bank with operations in
Puerto Rico and the Virgin Islands and in the state of Florida;
of FirstBank Insurance Agency; and of Ponce General Corporation.
First BanCorp, FirstBank Puerto Rico and UniBank, the thrift
subsidiary of Ponce General, all operate within U.S. banking
laws and regulations. The Corporation operates a total of 140
financial services facilities throughout Puerto Rico, the U.S.
and British Virgin Islands, and Florida (USA). Among the
subsidiaries of FirstBank Puerto Rico are Money Express, a
finance company; First Leasing and Car Rental, a car and truck
rental leasing company; and FirstMortgage, a mortgage banking
company. In the U.S. and British Virgin Islands, FirstBank
operates FirstBank Insurance VI, an insurance agency; First
Trade, Inc., a foreign corporation management company; and First
Express, a small loan company. First BanCorp's common and
preferred shares trade on the New York Stock Exchange, under the
symbols FBP, FBPPrA, FBPPrB, FBPPrC, FBPPrD and FBPPrE.
* * *
As reported in the Troubled Company Reporter on March 21, 2006,
Fitch Ratings assigned the following ratings on First BanCorp
and FirstBank Puerto Rico:
First BanCorp
-- Long-term IDR at 'BB';
-- Short-term at 'B';
-- Individual at 'C/D';
-- Support '5'.
FirstBank Puerto Rico
-- Long-term IDR at 'BB';
-- Long-term deposit obligations at 'BB+';
-- Short-term deposit obligations at 'B';
-- Short-term at 'B';
-- Individual at 'C/D';
-- Support at '5'.
G+G RETAIL: Max Rave Acquires Remaining Assets for US$300,000
-------------------------------------------------------------
The U.S. Bankruptcy Court for the Southern District of New York
allowed G+G Retail Inc. to sell certain personal property to Max
Rave, LLC, for US$300,000.
Early this year, Max Rave, and Guggenheim Corporate Funding LLC,
won the auction of substantially all of the Debtor's assets for
US$35 million. GCF provided equity and loan commitments to Max
Rave to:
* fund the purchase of the company,
* provide fresh inventory for stores, and
* provide operating working capital for operations.
The assets sold at the auction did not include the inventory of
network servers and related equipment and certain computer
software and software licenses that Max Rave wants to own.
Other key terms of the asset purchase agreement on the personal
property include:
(a) the release and discharge of the Debtors from any further
obligation to provide computer or information technology
services to Max Rave under that Feb. 17, 2006, Transition
Services Agreement;
(b) reasonable access for the Debtor to records, information
and certain personnel until the closing of the Debtor's
bankruptcy sale; and
(c) the Debtor to have the right to occupy and use certain
areas at Max Rave's facility located at 8501 West Side,
North Bergen, New Jersey.
Headquartered in New York, New York, G+G Retail Inc. retails
ladies wear and operates 566 stores in the United States and
Puerto Rico under the names Rave, Rave Girl and G+G. The Debtor
filed for Chapter 11 protection on Jan. 25, 2006 (Bankr.
S.D.N.Y. Case No. 06-10152). William P. Weintraub, Esq., Laura
Davis Jones, Esq., David M. Bertenthal, Esq., and Curtis A.
Hehn, Esq., at Pachulski, Stang, Ziehl, Young & Jones P.C.
represent the Debtor in its restructuring efforts. Scott L.
Hazan, Esq.. at Otterbourg, Steindler, Houston & Rosen, P.C.,
represents the Official Committee of Unsecured Creditors. When
the Debtor filed for protection from its creditors, it estimated
assets of more than US$100 million and debts between US$10
million to US$50 million.
MUSICLAND: Court Okays Stipulation Paying Postpetition Debts
------------------------------------------------------------
The U.S. Bankruptcy Court for the Southern District of New York
approved Musicland Holding Corp. and its debtor-affiliates'
Stipulation with Licensing Ventures, Inc.
As reported in the Troubled Company Reporter on Jun 7, 2006, the
Debtors and LVI stipulate that:
(1) in full and final settlement of LVI's Motion to Compel
the Debtors to pay postpetition expenses, and of all
claims asserted by LVI, the Debtors will pay LVI
US$239,492, representing the difference between:
* US$387,500, which as agreed on by the Parties will
constitute LVI's allowed administrative claim; and
* US$148,007, which LVI owes and is obligated to turn
over to the Debtors, but which the Debtors will allow
LVI to retain under the settlement.
(2) the Debtors will make the Settlement Payment to LVI
without delay;
(3) the Debtors will no longer be obligated to hold
US$622,138 in Internet sale proceeds in a separate
account;
(4) LVI's Motion to Compel will be withdrawn, without
prejudice;
(5) the Supply Agreement and the License Agreement will be
deemed rejected as of March 22, 2006; and
(6) LVI and the Debtors mutually release and waive any and
all claims asserted against each other.
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 US$100
million in assets and debts. (Musicland Bankruptcy News, Issue
No. 13; Bankruptcy Creditors' Service, Inc., 215/945-7000)
=================================
T R I N I D A D & T O B A G O
=================================
DIGICEL LTD: Says In Compliance with Tower Building Standards
-------------------------------------------------------------
In response to the emphasis given by the Town and Country
Planning Division of Trinidad and Tobado to the construction of
cell towers in the island, Digicel Ltd. gave its assurance in a
statement that "it has brought high-quality, reliable service to
districts and communities that have previously been deprived of
it."
The statement added that "all Digicel technology, from site
masts to handsets are provided with the best interest of human
and natural environments in mind."
The Trinidad and Tobago Express recalled Digicel's earlier
statement saying that since 2004, it had made every effort to
comply with the building standards set out by the Town and
Country Planning with respect to the construction of cell
towers.
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 GROUP: Court Awards Post-Verdict Damages to Finisar
-----------------------------------------------------------
Finisar Corp. has been awarded additional post-verdict damages
by a US federal district court against DIRECTV Group Inc. in a
patent infringement case.
On June 23, 2006, a Beaumont, Texas, jury rendered a decision
that found DIRECTV and its affiliated companies were directly,
literally and willfully infringing upon Finisar's information
transmission patent and awarded a US$78.9 million verdict in
back damages to Finisar. On July 6, 2006, the court determined
that, due to DIRECTV's willful infringement, those damages would
be enhanced by an additional US$25 million. Further, the court
awarded Finisar prejudgment interest on the jury's verdict in
the amount of 6% compounded annually from April 4, 1999 (which
currently totals about US$12 million) and, although denying an
injunction, the court ordered DIRECTV to pay a compulsory
ongoing license fee to Finisar at the rate of US$1.60 per set-
top box through the duration of the patent which expires in
April 2012. In court testimony, DIRECTV's damages expert
estimated its 2006 sales of new set-top boxes at 15 million
units.
At issue in the case was Finisar's U.S. Patent No. 5,404,505
(the '505 patent). The methods found within the '505 patent
were invented by Finisar's co-founder, Dr. Frank Levinson, who
filed a patent application in 1991. The patent addresses unique
ways to transmit and broadcast digital information to a wide
base of subscribers.
The case, Finisar Corporation v. DIRECTV, et al, Docket No.
1:05-cv-264, was filed in the United States District Court for
the Eastern District of Texas, Beaumont Division. Judge Ron
Clark presided over the trial.
About Finisar
Headquartered in Sunnyvale, Calif., Finisar Corp. --
http://www.finisar.com/-- is a technology leader for fiber
optic components and subsystems and network test and monitoring
systems. These products enable high-speed data communications
for networking and storage applications over Gigabit Ethernet
Local Area Networks (LANs), Fibre Channel Storage Area Networks
(SANs), and Metropolitan Area Networks (MANs) using Fibre
Channel, IP, SAS, SATA and SONET/SDH protocols.
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: Inks Energy Integration Agreement With Brazil
--------------------------------------------------------
The governments of Brazil and Uruguay signed a memorandum of
understanding, through their ministers of Mines and Energy --
Silas Rondeau of Brazil and Jorge Leptra of Uruguay -- on
July 5, 2006, to advance the energy integration process between
the two countries.
On that same occasion, the state-run oil firms of both countries
-- Petroleo Brasileiro aka Petrobras and Administracion Nacional
de Combustibles, Alcohol y Portland aka Ancap -- commenced
studies aiming at increasing the collaboration between the two
countries in the oil exploration, production, and refining and
in the natural gas areas
Petrobras participates both in natural gas distribution, through
the Conecta and Gaseba distributors, and in oil byproduct
distribution in Uruguay. The company is planning to develop
studies and negotiations with Ancap to increase conversion at
the La Teja refinery in order to process Brazilian heavy oil.
The Uruguayan refinery, the only one in that country, is
currently capable of processing 50,000 barrels of oil a day.
The MOU between Brazil and Uruguay strengthens the link between
them, which was initially established through:
-- the "Landmark Agreement on Regional Energy Complementation
among the States that are Part of the Mercosur and
Associated States," signed in Montevideo on Dec. 9, 2005;
and
-- the "General Energy Interconnection Agreement between
Brazil and Uruguay," signed on March 16, 2006.
The Memorandum signed by the two ministries will give continuity
to the previous understandings reached in the "Landmark
Agreement on Regional Energy Complementation among the States
that are Part of the Mercosur and Associated States," signed in
Montevideo on Dec. 9, 2005, and in the "General Energy
Interconnection Agreement between Brazil and Uruguay," signed on
March 16, 2006.
Under the MOU, both countries committed to finish the
feasibilities studies regarding the transmission line that will
interconnect San Carlos in Uruguay and Candiota in Brazil to
start on its construction. A deployment Commission will be
created after both countries have concluded studies in their
respective systems.
As reported in the Troubled Company Reporter-Latin America on
July 7, 2006, Uruguay and Brazil agreed to construct a US$150
million, 500-KV transmission line that would run 400km between
the two nations, linking San Carlos and Candiota. The
transmission line is expected to increase the power transmission
capacity between the two countries beyond the present 72
megawatts.
The transmission line will be ready 18 months after construction
begins.
The Uruguayan government will invest in the project and operate
it. The government is interested in gaining access to the power
transmission of Brazil to boost local supply.
Minister Silas Rondeau highlighted the importance of the
understandings between Brazil and Uruguay. "Regional
development is determination of President Lula. The agreement
we signed today is yet another step we take towards continuing
the energy integration project in South America. Uruguay has
always been our partner, and we will continue developing the
region together," he said.
An Electric Interconnection Work Group, formed by three members
of each country assigned by the respective Ministers, will
examine the energy integration expansion between Brazil and
Uruguay.
* * *
As reported in the Troubled Company Reporter-Latin America on
May 26, 2006, Fitch Ratings revised the Outlooks on the Oriental
Republic of Uruguay's Sovereign ratings to Positive from Stable.
The long-term foreign currency Issuer Default Rating is affirmed
at 'B+', and the long-term local currency IDR is affirmed at
'BB-'. The Short-term IDR is affirmed at 'B' and the Country
Ceiling is affirmed at 'BB-'.
* * *
Moody's upgraded Uruguay's long-term foreign currency rating to
B1 from B3 under the revised foreign currency ceilings on
May 24, 2006.
* * *
Fitch upgraded these ratings of Brazil on June 29, 2006:
-- Long-term foreign currency IDR: to 'BB' from 'BB-';
-- Long-term local currency IDR: to 'BB' from 'BB-'; and
-- Country ceiling to 'BB' from 'BB-'.
Fitch also affirmed Brazil's short-term rating at 'B'.
Fitch said the Rating Outlook is Stable.
=================
V E N E Z U E L A
=================
PETROLEOS DE VENEZUELA: Funds Construction of US$336MM Pipeline
---------------------------------------------------------------
Petroleos de Venezuela SA will cover the US$336 million cost of
constructing a 226-km natural gas pipeline that will connect
Colombian gas fields to Maracaibo, Venezuela.
Presidents Alvaro Uribe and Hugo Chavez inaugurated Friday the
construction of the pipeline, Bloomberg News reports.
President Chavez said that once the project is operational,
Venezuela can substitute natural gas in liue of expensive diesel
fuel, a US$30 million in savings per month.
Despite having the eight-largest gas reserves in the world,
Venezuela needs supply from its neighbor as it has concentrated
more on developing oil reserves, Bloomberg says.
According to Bloomberg, the pipeline's flow would be reversed in
seven years and Venezuela would then export natural gas from
offshore fields it's now developing.
At the initial part of the program, Colombia will send 150
million cubic feet of gas per day.
Petroleos de Venezuela SA 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, 2005, 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. Fitch said the Rating Outlook
is Stable. Both rating actions followed Fitch's November 2005
upgrade of Venezuela's sovereign rating.
* VENEZUELA: Inaugurates NatGas Pipeline with Colombia
------------------------------------------------------
Presidents Hugo Chavez and Alvaro Uribe inaugurated Friday the
construction of a 226-km natural gas pipeline that will run from
Colombian natural gas fields to Maracaibo, Venezuela, Bloomberg
News reports.
President Chavez said that once the project is operational,
Venezuela could substitute natural gas in liue of expensive
diesel fuel, a US$30 million in savings per month.
Despite having the eight-largest gas reserves in the world,
Venezuela needs supply from its neighbor as it has concentrated
more on developing oil reserves, Bloomberg says.
According to Bloomberg, the pipeline's flow would be reversed in
seven years and Venezuela would then export natural gas from
offshore fields it's now developing.
At the initial part of the program, Colombia will send 150
million cubic feet of gas per day.
* * *
Venezuela's foreign currency long-term debt is rated B1 by
Moody's, B+ by Standard & Poor's, and BB- by Fitch.
* * *
On May 30, 2005, Fitch Ratings affirmed Colombia's ratings as:
-- Long-term foreign currency 'BB';
-- Country ceiling 'BB';
-- Local currency 'BBB-';
-- Short-term 'B'.
Fitch said the Rating Outlook is Stable.
* VENEZUELA: LatAm Bond Investments Expected to Soar Over Time
--------------------------------------------------------------
The Venezuelan government's investments in debt issued by its
South American neighbors will increase to US$2.925 billion once
it takes Paraguay's offer to purchase its Itaipu hydroelectric
power debt certificates, El Universal says.
Venezuela started purchasing Argentine debt bonds last year.
The action came in response to Argentina's situation in 2005
where it was faced with maturing bonds amounting to US$3.87
billion, El Universal relates. Overall, Venezuela has bought
Argentine debt certificates totaling US$2.8 billion, and sold
US$2.4 billion of it to local financial institutions with
profits exceeding US$200 million.
Itaipu Bonds
Last week, President Chavez said Venezuela will buy debt bonds
from Itaipu for US$100 million. The proposed sale met
resistance from Brazil which co-finances Itaipu. Itaipu debt
with the Brazilian government amounts to US$19 billion.
Bi-National Debt
Venezuela and Argentina disclosed last week a plan to issue bi-
national debt certificates up to US$2 billion. The proposed
debts would be partly sold in the Venezuelan domestic market,
which means they could be dollar-denominated but payable in
bolivars. The transaction is expected to be completed in 60-90
days, El Universal relates.
Other Investments
In the second half of 2005, Venezuela purchased US$300 million
out of a US$750-million debt issued by Ecuador in international
markets. The purchase occurred after Ecuador's debt default.
Additionally, Bolivia and Costa Rica are also selling some of
their debt bonds to Venezuela.
* * *
Venezuela's foreign currency long-term debt is rated B1 by
Moody's, B+ by Standard & Poor's, and BB- by Fitch.
***********
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
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Copyright 2006. All rights reserved. ISSN 1529-2746.
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