/raid1/www/Hosts/bankrupt/TCRLA_Public/080121.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
Monday, January 21, 2008, Vol. 8, Issue 14
Headlines
A R G E N T I N A
ACXIOM CORP: Board Appoints John Meyer as President & CEO
SUN MICROSYSTEMS: Moody's Says MySQL Buyout Won't Affect Ratings
SUN MICROSYSTEMS: S&P Ratings Unaffected by US$1 Bil. MySQL Deal
TYSON FOODS: Inks Supply & Sponsorship Pact with Six Flags
WR GRACE: Court Commences Asbestos Estimation Trial
B A H A M A S
BANK OF BARODA: To File Unaudited Q3 Results on Jan. 30
HARRAH'S ENTERTAINMENT: S&P Cuts Corporate Credit Rating to B+
METROPOLITAN BANK: Sells Off PHP4.63 Bil. in Bad Loans to Orix
B E R M U D A
ALEA GROUP: Reaches Commutation Terms Agreement
ELAN CORP: US FDA Approves TYSABRI Biologics License Application
FOSTER WHEELER: To Supply Heat Recovery Steam Generator in Spain
MAGNA RE: Proofs of Claim Filing Is Until Tomorrow
B O L I V I A
* BOLIVIA: Comibol To Boost Gold Mining Complexes
B R A Z I L
AES CORP: Brazilian Unit Concludes Substations Automation
ALCATEL-LUCENT: Inks BRL2B Maintenance Pact with Brasil Telecom
BANCO DAYCOVAL: Capital Research Acquires 2.38% Stake in Firm
BANCO ITAU: Subsidiary Inks Exclusive Pact with DAFRA
BENCHMARK ELECTRONICS: Moody's Puts Ba2 Rating on US$100MM Debt
BRASIL TELECOM: Inks BRL2B Maintenance Deal with Alcatel-Lucent
COMPANHIA ENERGETICA: Sao Paulo Selling 33.37% Stake in February
COMPANHIA SIDERURGICA: Takes Away Vale's Right To Buy Excess Ore
DELPHI: ND Acquisition Offers US$44.2 Million for Bearing Biz
DELTA AIR: Commences Merger Negotiations with Northwest & UAL
GERDAU AMERISTEEL: KeyBanc Capital Pares Shares Rating to Buy
IWT TESORO: Withdraws Exclusive Periods Extension Plea
LYONDELL CHEMICAL: S&P Lowers Senior Secured Debt Rating to B
MRS LOGISTICA: Will Invest BRL141 Million in 866 New Railcars
NET SERVICOS: Moody's Assigns Ba2 Rating on US$200-Mln Sr. Notes
SUN MICROSYSTEMS: Caris & Co. Maintains Above Rating on Firm
TELE NORTE: Inks Contracts with Nokia Siemens & Huawei Tech
VALMONT INDUSTRIES: Acquires PennSummit Tubular's Assets
C A Y M A N I S L A N D S
BRIDGE INVESTMENT: Holding Final Shareholders Meeting on Jan. 24
CABLE & WIRELESS: JP Morgan Maintains Neutral Rating on Firm
COUTTS FINANCE: Sets Final Shareholders Meeting for Jan. 24
LINAVEN INVESTMENTS: Sets Final Shareholders Meeting for Jan. 24
MAJESTIC MOUNTAINS: Final Shareholders Meeting Is on Jan. 24
MEMBERSHIP III: To Hold Final Shareholders Meeting on Jan. 24
PYLOS III: Holding Final Shareholders Meeting on Jan. 24
ROOT BROKERS: Sets Final Shareholders Meeting for Jan. 24
SHOWINA INVESTMENT: Final Shareholders Meeting Is on Jan. 24
STAY-CALM LIMITED: Final Shareholders Meeting Is on Jan. 24
ZARANDI LIMITED: Final Shareholders Meeting Is on Jan. 24
C H I L E
GOODYEAR TIRE: Holders Can Convert 4% Sr. Notes Until March 31
C O L O M B I A
US AIRWAYS: Messrs. Ferayorni & Riccoboni Join IT Group
C O S T A R I C A
GRUPO M: Selling Dollar-Denominated Debt to Fund Expansion
D O M I N I C A N R E P U B L I C
AFFILIATED COMPUTER: Tennessee Medicaid Likely to Award New Deal
E C U A D O R
DOLE FOOD: Units Appoint Three New Managers
PETROECUADOR: Budget Decreases 6% to US$4.8 Billion in 2008
* ECUADOR: To Invest US$2 Billion to Increase Oil Production
G U A T E M A L A
BANCO INDUSTRIAL: Banpais Buyout Cues Moody's to Change Outlook
BRITISH AIRWAYS: Pilots May Protest Against OpenSkies' Launching
J A M A I C A
NATIONAL COMMERCIAL: Closing Cash Plus Accounts
NATIONAL COMMERCIAL: Won't Honor World Wise' Managers Cheque
M E X I C O
ADVANCED MICRO: Posts US$1.7 Billion Net Loss in Fourth Quarter
AMERICAN AXLE: UAW Associates Join Buffalo Separation Program
AMERICA AXLE: Continues Driveline Deal for GM's Truck Program
BURGER KING: Brings In Robert Perkins as Vice President
CINRAM INT'L: Subsidiary Welcomes Four New Trustees on Board
CORPORACION INTERAMERICANA: Launches Tender Offer on 8.87% Notes
CORPORACION INTERAMERICANA: Moody's Cuts Corp. Family to Ba3
GENERAL MOTORS: Outlines Turnaround Progress & 2008 Priorities
HARMAN INTERNATIONAL: Promotes Ken Yasuda as Japan Manager
TRIMAS CORP: Operating Unit Bags Hi-Vol's Production Contracts
UNITED RENTALS: Names John Fahey as Vice President-Controller
N I C A R A G U A
* NICARAGUA: In Cooperation Talks with Venezuela
P E R U
QUEBECOR WORLD: Interest Nonpayment Spurs S&P to Give D Ratings
P U E R T O R I C O
AVNET INC: Unit Signs Distribution Deal with Taiyo Yuden
DORAL FINANCIAL: FDIC Lifts Cease & Desist Order with Unit
PEP BOYS: Harry Yanowitz To Resign as Chief Financial Officer
V E N E Z U E L A
CITGO PETROLEUM: Lays Off Over 500 Contract Maintenance Workers
PETROLEOS DE VENEZUELA: Chalmette Maintenance Work Is Until Feb.
PETROLEOS DE VENEZUELA: El Palito's Cat Cracker Shuts Down
PETROLEOS DE VENEZUELA: Investing US$15.6 Billion in 2008
* VENEZUELA: Hugo Chavez Proposes Food Supply Agreement for ALBA
* VENEZUELA: To Evaluate Cooperation with Nicaragua
* BOND PRICING: For the Week January 14 to January 18
- - - - -
=================
A R G E N T I N A
=================
ACXIOM CORP: Board Appoints John Meyer as President & CEO
---------------------------------------------------------
Acxiom(R) Corporation's Board of Directors has named John Meyer
to serve as the company's chief executive officer and president.
Mr. Meyer has been president of the Global Services group of
Alcatel-Lucent since 2003. Prior to joining Lucent, Mr. Meyer
spent almost 20 years in a number of high-profile positions at
EDS that included Chairman of the Europe, Middle East and Africa
Operating Team, President of Diversified Financial Services and
Credit Services Divisions, and CIO for the company's GMAC
business. Mr. Meyer's global, multi-industry experience at EDS
was marked by numerous successes, including doubling revenue in
EMEA from US$3.6 billion to US$7.2 billion in four years.
Before entering the business world, Mr. Meyer served as a flight
commander and was selected as a captain in the U.S. Air Force.
Michael Durham, Acxiom's non-executive chairman, said the board
unanimously selected Meyer because of his demonstrated strong
leadership skills, his broad experience in the information
technology industry and his history of success in building
shareholder value.
"Since October, the board has been focused on the search for a
new leader in its efforts to return Acxiom to sustained
success," Mr. Durham said. "John commanded our attention
because of his strong execution skills, his ability to lead
high-performing teams and his track record in driving
shareholder value. He has demonstrated these skills at both
Alcatel-Lucent and EDS as he ran businesses that are
substantially larger and more complex than Acxiom. As we
learned more about John, we were equally impressed by his focus
on developing internal talent while reaching outside for new
skills. His straightforward style and integrity impressed us as
it has his employees, clients and investors in his previous
roles. John's track record has established him as one of the
most accomplished services leaders in the technology industry."
Mr. Meyer said that "Acxiom's position as the leading provider
of offline and online marketing services is the envy of the
market. Acxiom's proud history of innovation and delivery
excellence has created value for its clients for decades. It is
an honor to join the company and do all I can to build on its
successes. I look forward to working with our associates to
create value for our clients and shareholders."
Mr. Meyer will join Acxiom on Feb. 4. He also will serve as a
member of Acxiom's board of directors. He succeeds Charles
Morgan, a 35-year company veteran who has been Chairman and
Chief Executive Officer since 1975. Mr. Morgan, who announced
his retirement in October, will remain a consultant to the
company through 2010.
"John's go-to-market, operational and technology skills in
leading a large services business are impressive," Mr. Morgan
said. "I leave Acxiom in the capable hands of a leader who has
a strong client focus and will continue to bring out the best in
the teams he leads."
Mr. Meyer will be introduced to the financial analyst community
during the company's third-quarter earnings call at 4:30 p.m.
CST Jan. 23.
Mr. Meyer, his wife Victoria and their three children live in
Dallas, Texas and will be moving to Little Rock, Acxiom's
headquarters, as soon as practical.
Based in Little Rock, Arkansas, Acxiom(R) Corporation (Nasdaq:
ACXM) -- http://www.acxiom.com/-- integrates data, services and
technology to create and deliver customer and information
management solutions for many of the largest, most respected
companies in the world. The core components of Acxiom's
solutions are Customer Data Integration technology, data,
database services, IT outsourcing, consulting and analytics, and
privacy leadership. Founded in 1969, Acxiom has locations
throughout the United States, Europe, Australia and China.
Acxiom has a team of specialists with sales and business
development associates based in the largest Latin American
markets: Brazil, Argentina and Mexico.
* * *
As reported in the Troubled Company Reporter-Latin America on
Dec. 18, 2007, Moody's Investors Service has confirmed Acxiom
Corp.'s Ba2 corporate family rating and assigned a negative
rating outlook, concluding a review for possible downgrade
initiated on May 17, 2007, following the company's announcement
that it had entered into a definitive agreement to be acquired
by Silver Lake and ValueAct Capital for US$3.0 billion.
SUN MICROSYSTEMS: Moody's Says MySQL Buyout Won't Affect Ratings
----------------------------------------------------------------
Moody's has commented that Sun Microsystems, Inc.'s Ba1
corporate family and unsecured debt rating with a stable outlook
would not be affected by the company's recent announcement that
it has entered into a definitive agreement to acquire MySQL AB
for approximately US$1 billion. MySQL is a privately held
developer of high performance open-source database software
experiencing fast growth in the US$15 billion relational
database management systems market. Moody's believes the high
purchase price is mitigated by the strategic nature of the
acquisition and long-term growth opportunities in the relational
database management systems market, which is growing roughly at
14% per annum. Having assembled nearly all of the elements for
its web-based platform strategy, the MySQL acquisition is
consistent with Sun Microsystems' solutions-based operating
model of selling a broader, more integrated comprehensive
offering of storage, servers, software and services based on
open architecture standards. The company expects to: migrate
its customers to MySQL's technology to deepen existing
relationships; provide MySQL with access to its global
infrastructure, channels and OEM partnerships to accelerate the
growth of MySQL's mission critical deployment of applications
for large-scale customers; and further exploit the secular shift
in computing from desktop to web-based platforms through up-sell
and cross-sell opportunities.
Given MySQL's small relative size, Moody's does not expect it to
be a major contributor to the company's operating earnings over
the near term. However, its strong liquidity profile, improved
credit protection measures and enhanced operating profile can
absorb an acquisition of this size.
"This pending transaction reflects the company's historical
penchant to achieve growth through external means, which is
currently factored into the Ba1 CFR. Despite potential revenue
synergies, access to new untapped markets and cross-selling
opportunities, Moody's believes that Sun's acquisition strategy
poses challenges for the company to successfully integrate
technologies and operations as the company seeks to expand its
business model into the software space. Moody's expects the
company will continue to make selective acquisitions to extend
the reach of its products among software developers and
corporate customers, and strengthen its position as a platform
provider for the Web-based economy", stated Moody's Vice
President-Senior Analyst, Gregory Fraser.
Despite market share growth, improvements in profitability and
margins, and higher levels of free cash flow in the company's
recent past, the Ba1 rating reflects the company's aggressive
acquisition strategy to grow beyond its core business. Sun
Microsystems has stated in its public statements that it intends
to be a consolidator in the IT industry. The company has had an
active acquisition program to acquire small, emerging technology
companies whose growth is restrained by resources, distribution
and infrastructure that can benefit from its global sales force
and services organization. The rating is constrained at Ba1,
reflecting the ongoing transition of the company's operating
model away from a direct product sale to a cross-product selling
approach, which blends hardware, software, and services into a
single offering. Though the solutions based sales approach
focuses on the value proposition of the bundled sale rather than
individual pricing of each component, by adapting to a strategy
of selling lower priced servers in order to obtain longer term
service revenue streams, the company is likely to witness
operating margin pressure on the hardware component of the
overall solution sale, while potentially generating future
higher margin revenue streams. Moody's is also concerned about
the sustainability of this operating model given that Sun's
market share continues to be eclipsed by stronger rivals such as
IBM and HP.
Moody's expects that if the acquisition is consummated as
proposed, the company would fund the transaction with
approximately US$800 million in cash and assume US$200 million
in MySQL options. The company expects the transaction to close
in the third or fourth quarter of its fiscal 2008 subject to
regulatory approvals. Moody's also expects that following the
closing of the proposed transaction, Sun will maintain moderate
share purchase activity.
The company's liquidity position is strong, with roughly US$5
billion in cash and marketable securities. Balance sheet debt
totals US$1.27 billion, comprised of a US$550 million note
maturing in August 2009, a US$350 million convertible due 2012,
a US$350 million convertible due 2014 and US$21 million in
interest rate swaps. The company also maintains full access to
US$391 million of uncommitted credit lines. Moody's notes that
further cash usage for material acquisitions or stock purchases
would likely have a negative impact on the company's liquidity
profile and potential credit rating.
The company's revenue and EBITDA for the twelve months ended
Sept. 30, 2007 were US$13.9 billion and US$1.8 billion,
respectively.
Headquartered in Santa Clara, California, Sun Microsystems Inc.
(NASDAQ: SUNW) -- http://www.sun.com/-- provides network
computing infrastructure solutions that include computer
systems, data management, support services and client solutions
and educational services. It sells networking solutions,
including products and services, in most major markets worldwide
through a combination of direct and indirect channels.
Sun Microsystems conducts business in 100 countries around the
globe, including Brazil, Argentina, India, Hungary, United
Kingdom, among others.
SUN MICROSYSTEMS: S&P Ratings Unaffected by US$1 Bil. MySQL Deal
----------------------------------------------------------------
Standard & Poor's Ratings Services's ratings and outlook on Sun
Microsystems Inc. (BB+/Stable/--) are not affected by the
company's recent announcement that it has agreed to acquire
MySQL AB for a total consideration of about US$1 billion
(consisting of US$800 million in cash and US$200 million in
options).
The acquisition supports Sun's strategic intent to expand its
position in the open-source software market; MySQL is an open-
source developer of database software.
S&P expects Sun to maintain a moderately leveraged financial
profile and strong liquidity. As of Sept. 30, 2007, leverage
was less than 2x and cash and investments totaled US$5.2
billion.
Headquartered in Santa Clara, California, Sun Microsystems Inc.
(NASDAQ: SUNW) -- http://www.sun.com/-- provides network
computing infrastructure solutions that include computer
systems, data management, support services and client solutions
and educational services. It sells networking solutions,
including products and services, in most major markets worldwide
through a combination of direct and indirect channels.
Sun Microsystems conducts business in 100 countries around the
globe, including Brazil, Argentina, India, Hungary, United
Kingdom, among others.
TYSON FOODS: Inks Supply & Sponsorship Pact with Six Flags
----------------------------------------------------------
Tyson Foods, Inc., has reached a supply and sponsorship
agreement with Six Flags, Inc.
Under the agreement, Tyson Foods will become a Six Flags
Corporate Alliance partner and Tyson chicken will become the
Official Chicken of Six Flags. In addition, the two companies
will collaborate on a number of marketing and advertising
initiatives.
The agreement makes Tyson Foods, the exclusive chicken supplier
for all United States Six Flags parks and includes exclusive
product placement on menu boards wherever Tyson products are
sold, in-park signage, billboards and additional high-impact
messaging via the Six Flags Media Networks.
"Moms trust Tyson products and they trust Six Flags," said Six
Flags Executive Vice President of Corporate Alliances, Lou
Koskovolis. "Millions of families come to our parks every
summer expecting industry leading attractions and friendly guest
service; now when they dine in our restaurants, they'll
immediately identify the Tyson brand for its own superior
qualities. We're delighted that Tyson recognizes the Six Flags
platform as a unique opportunity to connect with their key
consumers."
"We want to be where families live, work and play," said Tyson
Senior Vice President of Food Service, Randy Smith. "Six Flags
entertains millions of visitors every year and now those
visitors can experience the same Tyson chicken they cook at home
for their families at a Six Flags theme park. We're delighted
to be partnering with a brand that resonates so strongly with
Moms and kids."
About Six Flags Inc.
Six Flags, Inc. is the world's largest regional theme park
company with 21 parks across the U.S., Mexico and Canada. Since
1961, Six Flags has provided world-class thrilling entertainment
for millions of families. Six Flags, Inc. is a publicly traded
corporation (NYSE: SIX) headquartered in New York City.
About Tyson Foods, Inc.
Based in Springdale, Arkansas, Tyson Foods, Inc. (NYSE:TSN)
-- http://www.tysonfoods.com/-- is a processor and marketer of
chicken, beef, and pork. The company produces a wide variety of
protein-based and prepared food products, which are marketed
under the "Powered by Tyson(TM)" strategy.
The company has operations in China, Japan, Singapore, South
Korea, and Taiwan. In Latin America, Tyson Foods has operations
in Argentina.
* * *
As reported in the Troubled Company Reporter-Latin America on
Aug. 24, 2007, Moody's Investors Service affirmed Tyson Foods
Inc.'s ratings, including its Ba1 corporate family rating and
Ba1 probability of default rating. Moody's said the rating
outlook is negative.
WR GRACE: Court Commences Asbestos Estimation Trial
---------------------------------------------------
Estimation trial on W.R. Grace & Co.'s asbestos-related personal
injury claims started on Jan. 14, 2008. The trial aims to
establish the amount of Grace's current and future PI asbestos
liabilities to allow the company to proceed with the
confirmation of its Plan of Reorganization.
The Jan. 14 Estimation Date was scheduled by Judge Judith
Fitzgerald of the U.S. Bankruptcy Court for the District of
Delaware in late July 2007. Judge Fitzgerald oversees Grace's
bankruptcy case.
All of Grace's personal injury issues are handled by Judge
Ronald Buckwalter of the U.S. District Court for the Eastern
District of Pennsylvania. Grace's PI issues were formerly
handled by District Judge Wolin.
Grace, a specialty chemicals and materials company, and 61 of
its affiliates sought protection under Chapter 11 of the
Bankruptcy Code in early April 2001 to resolve increasing
asbestos-related liabilities. At the Petition Date, Grace
reported total assets of US$2,323,500,000, and debts of
US$2,397,800,000. In comparison, as of November 30, 2007, the
Grace Debtors reported combined assets of US$3,335,000,000, and
combined debts of US$3,712,000,000, resulting in equity of
(US$376,300,000).
Grace's Plan
Grace filed its Plan of Reorganization on November 13, 2004, and
amended it on January 13, 2005. Grace's current draft is
labeled a Proposed First Amended Plan of Reorganization.
Grace's Plan classifies asbestos claims into (i) personal injury
claims that meet specified exposure and medical criteria or
PI-SE Claims; (ii) personal injury claims that do not meet the
exposure and medical criteria necessary to qualify as PI-SE
Claims or PI-AO Claims; and (iii) property damage claims,
including claims related to Grace's former Zonolite attic
insulation product.
Grace's Plan is premised on these principles:
(1) Substantive Consolidation
Grace and its debtor-affiliates will be substantively
consolidated for limited purposes including claims
allowance and treatment and distribution under the Plan.
The deemed substantive consolidation will not affect (i)
the Debtors' legal and organizational structure, (ii) the
encumbrances that are required to be maintained under the
Grace Plan, and (iii) the settlement agreements the
Debtors entered separately with Sealed Air Corporation
and Fresenius Medical Care Holdings, Inc.
(2) Creation of Asbestos Trust and its Funding
A Section 524(g) trust will be created for which all
asbestos-related claims will be channeled and resolved.
The Grace Asbestos Trust will be funded by payments from
Sealed Air pursuant to the settlement agreement, which
payments will consist of:
* US$512,500,000 in cash, plus interest accrued from
Dec. 21, 2005, until the Plan's effective date, at a
rate of 5.5% per annum compounded annually; and
* 18,000,000 shares of Sealed Air common stock, as
adjusted to account for a two-for-one stock split
implemented by Sealed Air in March 2007.
As of Jan. 14 (Eastern Time), Sealed Air stocks are
priced at US$20.77 per share, placing a value of about
373,860,000 on the settlement pact.
The PI-AO Claims would be funded with warrants
exercisable for that number of shares of Grace common
stock, which, when added to the shares issued directly to
the Asbestos Trust on the effective date of the Plan,
would represent 50.1% of Grace's voting securities. If
the common stock issuable on exercise of the warrants is
insufficient to pay all PI-AO Claims, then Grace would
pay any additional liabilities in cash.
PI Claimants would have the option to litigate their
claims against the trust or, if they meet specified
eligibility criteria, accept a settlement amount based on
the severity of their disease. PD Claimants, on the
other hand, would be required to litigate their claims
against the trust.
On confirmation of Grace's Plan, all asbestos-related
claims against Grace's Canadian operating subsidiary,
Grace Canada, Inc., will be transferred to the Asbestos
Trust along with all Asbestos Claims.
As of Jan. 9, 2008, the Court has approved settlement
agreements between Grace and two law firms representing
PD Claimants. PD Claimants represented by the law firm
Dies & Hile, LLP, received a US$60,000,000 settlement
amount, while Claimants represented by the law firm
Motley Rice, LLC, received a US$17,900,000 settlement
amount. Grace is currently litigating the remaining PD
Claims.
(3) US$1,613,000,000 Maximum Value of Asbestos-Related Claims
As a condition to the effectiveness of the Grace Plan,
the Debtors want the Court to establish that their
aggregate Asbestos PI-SE Claims, Asbestos PD Claims, and
Asbestos Trust Expenses is not greater than
US$1,483,000,000, and their Asbestos PI-AO Claims not
greater than US$130,000,000.
(4) Treatment of Non-Asbestos Claims
All allowed administrative or priority claims would be
paid 100% in cash and all general unsecured claims, other
than those covered by the asbestos trust, would be paid
85% in cash and 15% in Grace common stock. Grace
estimates that claims with a recorded value of
US$1,241,000,000, including interest accrued through
Dec. 31, 2006, would be satisfied in the manner
pursuant to Grace's Plan at the effective date of that
Plan.
Grace estimates that their allowed non-asbestos claims
will total:
Administrative Claims US$138,000,000
Priority Tax Claims 232,000,000
Secured Claims 90,000,000
Unsecured Employee-Related Claims 191,000,000
General Unsecured Claims 951,000,000
--------------
US$1,602,000,000
==============
Grace would finance these payments with US$150,000,000 of
cash on hand, US$115,000,000 from the settlement
agreement with Fresenius Medical Care Holdings, Inc.,
US$800,000,000 in new debt, and US$143,000,000 in value
of Grace common stock.
Grace would satisfy other non-asbestos related
liabilities, estimated to be US$508,000,000, primarily
environmental, tax, pension and retirement medical
obligations, as they become due and payable over time.
Proceeds from available product liability insurance would
supplement operating cash flow to service new debt and
liabilities not paid on the effective date of the Plan.
(5) Treatment of Equity Interests
Grace common stock will remain outstanding at the
effective date of the company-proposed Plan, but
interests of existing shareholders would be subject to
dilution by additional shares of common stock issued
under the Plan.
(6) Estimated Value of Reorganized Debtors
In their Joint Plan, the Debtors estimate that their
reorganized value ranges from US$2,200,000,000 to
US$2,600,000,000.
A full-text copy of Grace's Reorganization Plan is available for
free at http://ResearchArchives.com/t/s?2712
A full-text copy of the Disclosure Statement is available for
free at http://ResearchArchives.com/t/s?2713
PI Committee/FCR's Competing Plan
On Nov. 5, 2007, the Official Committee of Asbestos
Personal Injury Claimants and David T. Austern, the
Court-appointed future claims representative, filed a competing
joint plan of reorganization.
Judge Fitzgerald terminated Grace's exclusivity periods in July
2007 noting that despite the company's more than six years under
bankruptcy protection, it still has not negotiated a consensual
resolution of its asbestos liabilities with interested parties.
The Competing Plan conditions its effectivity on the Bankruptcy
Court finding that Grace's pending and future asbestos
liabilities is not less than US$4,000,000,000.
Asbestos PI Claims, under the Competing Plan, will be resolved
in accordance with an Asbestos Trust Agreement and Trust
Distribution Procedures. The Asbestos Trust will be funded by:
* the Sealed Air Payment -- US$512,500,000 cash, plus
interest, and 9,000,000 shares of Sealed Air common stock;
* any proceeds from insurance policies covering Grace's
asbestos liabilities;
* cash, in an amount equal to the Distributable Cash
Percentage multiplied by the Estimated PI Amount, reduced
by the Sealed Air Payment Amount; and
* a number of shares of Grace's common stock.
The Competing Plan provides that certain classes of claims will
be paid in full or reinstated, including:
-- priority claims,
-- secured claims,
-- unsecured pass-through employee-related claims,
-- workers' compensation claims,
-- intercompany claims,
-- Zonolite Attic Insulation claims, and
-- equity interests in the Debtors other than W.R. Grace &
Co, the parent company.
A full-text copy of the PI/FCR Plan is available for free at:
http://ResearchArchives.com/t/s?2504
Asbestos Personal Injury Claims Valuation
Grace -- US$385,000,000 to US$1,314,000,000
Grace will ask the Court to find that the value of its pending
and future PI liabilities ranges from US$385,000,000 to
US$1,314,000,000. Grace has maintained throughout its
bankruptcy case that many PI Claimants have not submitted
evidence showing they have handled any of the company's
asbestos-containing products or evidence showing a link between
asbestos and any medical problems.
Grace's expert, Dr. B. Thomas Florence, who has 30 years of
experience in management consulting and research, estimates
that, as of April 2001, the net present value of the company's
pending and future asbestos PI claims is within a range of
US$385,000,000 to US$1,314,000,000, through 2049, with a median
of US$712,000,000.
To arrive at his estimate, Dr. Florence used:
* 5.36% discount rate,
* 2.5% inflation rate, and
* 1.5% claim value deflation rate.
Dr. Florence also used a set of assumptions based on the premise
that only claimants whose claims meet certain criteria would be
able to sustain their burden of proof that their claims against
the Debtors are valid, and therefore should be valued as part of
the estimation process. The evidentiary criteria used are:
1. a proof of claim;
2. minimum exposure criteria: nature of exposure to Grace
asbestos containing products must be either because
claimant is a worker who personally mixed Grace asbestos-
containing products or because claimant is a worker who
personally installed Grace asbestos-containing product;
3. minimum causation criteria for Lung Cancer claims of (i)
diagnosis of asbestosis based on the B-Reader report of a
reliable B-Reader, and (ii) reproducible ILO score of 1/0
or greater;
4. minimum medical criteria for Other Cancer claims of
diagnosis of laryngeal cancer;
5. minimum medical criteria for all Non-malignant claims of
(i) diagnosis of asbestosis or diffuse pleural thickening
based on the B-Reader report of a reliable B-reader, and
(ii) ILO score of 1/0 or greater for asbestosis;
6. minimum impairment criteria for Severe Asbestosis claims
of (i) diagnosis of asbestosis based on the B-Reader
report of a reliable B-Reader, (ii) ILO score of 2/1 or
greater, (iii) Pulmonary Function Test results of TLC <65%
or complying with American Thoraic Society standards; and
7. minimum impairment criteria for Asbestosis claims of (i)
diagnosis of asbestosis or diffuse pleural thickening
based on the B-Reader report of a reliable B-Reader, (ii)
ILO score of 1/0 or greater, and (iii) PFT results of TLC
<80% or complying with ATS standards.
Throughout Grace's bankruptcy case, the Official Committee of
Unsecured Creditors has been supportive of the Debtors' case
management proposal saying that it is a reasonable means to
determine the "true scope of Grace's liability to asbestos
claimants and then provide for the payment of valid claims on a
basis that preserves Grace's still strong core business
operations."
The Official Committee of Equity Security Holders, who
represents holders of more than 70,000,000 shares of Grace's
common stock, has maintained that Grace is solvent. The Equity
Committee believes that the estimation trial will demonstrate
that, as a matter of logic and epidemiological science, the
number of individuals who could realistically have developed
true asbestos-related disease from Grace products is
diminishingly small.
PI Committee -- US$4,700,000,000 to US$6,200,000,000
The PI Committee's expert, Dr. Mark Peterson, a trial lawyer and
social psychologist, estimates that Grace's pending and future
PI liabilities range from US$4,700,000,000 to US$6,200,000,000.
According to Dr. Peterson, he used standard forecasting methods
regularly accepted by courts, asbestos trusts and businesses for
establishing asbestos liabilities. Grace's asbestos liability
is estimated as the product of (i) the number of claims, (ii)
the fraction of claims that get paid, and (iii) the paid values
of those claims.
Present Value of Grace Liability
for Pending and Future Claims
(in millions)
Other Non-
Period Meso Lung Cancer Malignant Total
------ ---- ---- ------ --------- -----
Pending US$249 US$91 US$12 US$228 US$578
Future US$3,149 US$474 US$71 US$1,364 US$5,106
----- ---- ------ --------- ------
US$3,445 US$565 US$83 US$1,562 US$5,684
----- ---- ------ --------- ------
FCR -- US$7,900,000,000
The FCR's expert, Jennifer L. Biggs, an actuarian, estimates
that Grace's liabilities is US$7,900,000,000, on an undiscounted
basis. She estimates that, when reduced to present value as of
the Petition Date using a 5.2% interest rate, Grace's PI
liabilities is US$3,700,000,000.
Ms. Biggs based her estimate by projecting the quantity and type
of future PI Claims against Grace for up to 54 years after
the Petition Date. The estimate also includes a provision for
the known pending PI Claims filed against the Debtors on or
before the Petition Date. Ms. Biggs calculated the total
liability by multiplying the known pending and projected future
claims filings by the expected average payment amounts that the
Debtors would pay to claimants in each of the years in
projection.
About W.R. Grace
Headquartered in Columbia, Md., W.R. Grace & Co. (NYSE:GRA)
-- http://www.grace.com/-- supplies catalysts and silica
products, especially construction chemicals and building
materials, and container products globally, including Argentina,
Australia and Ireland.
The Company and its debtor-affiliates filed for chapter 11
protection on April 2, 2001 (Bankr. D. Del. Case No. 01-01139).
David M. Bernick, P.C., Esq., at Kirkland & Ellis, LLP, and
Laura Davis Jones, Esq., at Pachulski Stang Ziehl & Jones, LLP,
represent the Debtors in their restructuring efforts. The
Debtors hired Blackstone Group, L.P., for financial advice.
PricewaterhouseCoopers LLP is the Debtors' accountant.
Stroock & Stroock & Lavan, LLP, and Duane Morris, LLP, represent
the Official Committee of Unsecured Creditors. The Creditors
Committee tapped Capstone Corporate Recovery LLC for financial
advice. David T. Austern, the legal representative of future
asbestos personal injury claimants, is represented by Orrick
Herrington & Sutcliffe LLP and Phillips Goldman & Spence, PA.
Elihu Inselbuch, Esq., at Caplin & Drysdale, Chartered, and
Marla R. Eskin, Esq., at Campbell & Levine, LLC, represent the
Official Committee of Asbestos Personal Injury Claimants. The
Asbestos Committee of Property Damage Claimants tapped Scott
Baena, Esq., and Jay M. Sakalo, Esq., at Bilzin Sumberg Baena
Price & Axelrod, LLP, to represent it. Thomas Moers Mayer,
Esq., at Kramer Levin Naftalis & Frankel, LLP, represents the
Official Committee of Equity Security Holders.
The Debtors' filed their Chapter 11 Plan and Disclosure
Statement on Nov. 13, 2004. On Jan. 13, 2005, they filed an
Amended Plan and Disclosure Statement. The hearing to consider
the adequacy of the Debtors' Disclosure Statement began on
Jan. 21, 2005. The Debtors' exclusive period to file a chapter
11 plan expired on July 23, 2007.
Estimation of W.R. Grace's asbestos personal injury liabilities
commenced on January 14, 2008.
At Dec. 31, 2006, the W.R. Grace's balance sheet showed total
assets of US$3,620,400,000 and total debts of US$4,189,100,000.
As of November 30, 2007, W.R. Grace's balance sheet showed total
assets of US$3,335,000,000, and total debts of US$3,712,000,000.
(W.R. Grace Bankruptcy News, Issue No. 147; Bankruptcy
Creditors' Service, Inc., http://bankrupt.com/newsstand/or
215/945-7000).
=============
B A H A M A S
=============
BANK OF BARODA: To File Unaudited Q3 Results on Jan. 30
-------------------------------------------------------
Bank of Baroda's board of directors, on Jan. 30, 2008, will
consider and approve, among others, the bank's unaudited
financial results for the third quarter ended Dec. 31, 2007.
In the same quarter last year, the bank recorded a net profit of
INR3.29 billion on revenues aggregating of INR27.21 billion.
On Jan. 30, the board will also be considering the bank's
results for the nine months ended Dec. 31, 2007, and relevant
segment reporting.
Headquartered in Vadodara, India, Bank of Baroda --
http://www.bankofbaroda.com/-- is a provider of banking
services in India. Bank of Baroda has branches in the Bahamas,
Belgium, the Fiji Islands, Mauritius, Republic of South Africa,
Seychelles, Singapore, Sultanate of Oman, United Arab Emirates,
the United Kingdom, and the United States of America.
* * *
On July 2007, Standard & Poor's assigned its 'BB' issue rating
to Bank of Baroda's US$300 million upper Tier-II subordinated
notes due 2022.
Fitch Ratings, on May 9, 2007, assigned 'BB' ratings to Bank of
Baroda's proposed unsecured subordinated Upper Tier 2 notes
(expected size: US$250 million plus greenshoe option), as well
as the hybrid Tier 1 debt to be issued under its USD1.5 billion
medium-term notes program. Fitch said the outlook on all
ratings is stable.
HARRAH'S ENTERTAINMENT: S&P Cuts Corporate Credit Rating to B+
--------------------------------------------------------------
Standard & Poor's Ratings Services has lowered its ratings on
Las Vegas-based Harrah's Entertainment Inc. and its wholly owned
subsidiary, Harrah's Operating Co. Inc. The corporate credit
rating on each entity was lowered to 'B+' from 'BB'. In
addition, S&P's senior unsecured and subordinated debt ratings
on approximately US$4.6 billion of existing notes, which will be
rolled over as part of the transaction, were both lowered to
'B-', from 'BB' and 'B+', respectively. The ratings were
removed from CreditWatch, where they were placed with negative
implications on Oct. 2, 2006. The rating outlook is stable.
S&P's ratings on the remaining existing debt, which totals
nearly US$7.6 billion, will remain on CreditWatch. These issues
will be refinanced with proceeds from proposed new debt, and the
ratings will be withdrawn upon the close of the transaction.
At the same time, S&P assigned ratings to the operating
company's proposed US$9.25 billion senior secured bank facility,
consisting of a US$2 billion revolving credit facility due 2014
and a US$7.25 billion term loan due 2015. The facility was
rated 'BB' with a recovery rating of '1', indicating the
expectation for very high (90% to 100%) recovery in the event of
a payment default.
S&P also assigned its 'B-' rating to the operating company's
proposed US$6.775 billion senior unsecured notes offering, which
will consist of US$5.275 billion of cash pay notes due 2016 and
US$1.5 billion of toggle notes due 2018. Although both the
currently existing senior unsecured and subordinated notes
issues are structurally subordinated to the proposed new senior
notes, all debt issues are rated 'B-'. This is because, when
comparing the proposed level of senior secured debt in the
capital structure to Harrah's adjusted tangible assets, the
level exceeds S&P's threshold of 30%, resulting in all other
debt being rated two notches below the corporate credit rating.
The 30% threshold is surpassed whether the calculation is
performed only at Harrah's Operating Co., or on a consolidated
basis.
The corporate credit rating downgrade reflects S&P's expectation
for substantially weaker credit metrics following the completion
of the proposed acquisition of Harrah's by Apollo Management LP
and Texas Pacific Group for approximately US$31.2 billion,
including the assumption of a portion of existing debt, fees,
and expenses. Furthermore, given the importance of capital
spending in the gaming industry, S&P believes that Harrah's
business risk profile is slightly weakened by the limitations on
both free cash flow generation and financial flexibility imposed
by its post-LBO capital structure. Proceeds from the proposed
debt offerings, along with up to US$6.5 billion of CMBS
financing, US$4.6 billion of rollover debt, and US$6.1 billion
of new equity (consisting of US$4.1 billion of common equity and
US$2 billion of PIK preferred equity), will be used to fund the
transaction.
The current 'B+' rating reflects Harrah's high debt leverage and
S&P's expectation that the company will not generate positive
free operating cash flow over the next few years, given a
relatively aggressive pipeline of development activities and
heightened debt service obligations. Still, the company
maintains a strong business profile, with a well-diversified and
good-quality portfolio of assets, a solid brand identity, and an
effective customer loyalty program.
Harrah's Entertainment, Inc., through its wholly-owned
subsidiary, Harrah's Operating Co., Inc., owns or manages
approximately 50 casinos that comprise around 40,000 hotel
rooms, three million square feet of gaming space and two million
square fee of convention center space. HET generated
consolidated revenues of US$10.6 billion for the last twelve
months ended Sept. 30, 2007. Affiliates of Apollo LLC and Texas
Pacific Group (the Sponsors) are expected to close the US$31
billion leverage buy-out of HET within the next month or so.
The transaction will be financed with equity, new bank and bond
issuance, rollover of existing debt and issuance of a CMBS loan.
Headquartered in Las Vegas, Nevada, Harrah's Entertainment Inc.
(NYSE: HET) -- http://www.harrahs.com/-- has grown through
development of new properties, expansions and acquisitions, and
now owns or manages casino resorts on four continents and hosts
over 100 million visitors per year. The company's properties
operate under the Harrah's, Caesars and Horseshoe brand names;
Harrah's also owns the London Clubs International family of
casinos and the World Series of Poker. Harrah's also owns the
London Clubs International family of casinos. In January, it
signed a joint venture agreement with Baha Mar Resorts Ltd. to
operate a resort in Bahamas.
METROPOLITAN BANK: Sells Off PHP4.63 Bil. in Bad Loans to Orix
--------------------------------------------------------------
The Metropolitan Bank & Trust Co. has sold PHP4.63 billion of
non-performing loans to the Japanese financial services group
Orix Corp. through the Special Purpose Vehicle Framework, the
Philippine Daily Inquirer reports.
The bank has now disposed of PHP8.85 billion in bad assets since
last year, the Inquirer says. The Inquirer also adds that the
bank is seen to incur a nonperforming loan ratio of 4.6% versus
7.1% in 2006 with this sale.
The bank's non-performing loan ratio will also go below the
5.26% industry average as recorded by the Bangko Sentral ng
Pilipinas as of October 31 last year, the report says.
Metropolitan Bank and Trust Company --
http://www.metrobank.com.ph/-- is the flagship company of the
Metrobank Group. Metrobank provides a host of deposit, savings,
and loan products as well as electronic banking services like
Internet banking, mobile banking, and phone banking, as well as
its huge ATM network. Metrobank is also the leading provider of
trade finance in the Philippines, and its overseas branch
network has enabled it to service the fund remittances of
Filipino overseas contract workers.
The bank has 583 local branches and 35 international branches
and offices located in Taiwan, China, Japan, Korea, Guam, United
States, Hong Kong, Singapore, Bahamas, and in Europe.
* * *
In November 2006, Moody's Investors Service revised the outlook
of Metropolitan Bank & Trust Co.'s foreign currency long-term
deposit rating of B1 and foreign currency subordinated debt
rating of Ba3 from negative to stable. The outlooks for
Metropolitan Bank's foreign currency Not-Prime short-term
deposit rating and bank financial strength rating of "D" remain
stable.
On Sept. 21, 2006, Fitch Ratings upgraded Metrobank's Individual
rating to 'D' from 'D/E'. All the bank's other ratings were
affirmed: Long-term Issuer Default rating 'BB-' with a stable
Outlook; Short-term rating 'B'; and Support rating '3.
On March 3, 2006, Standard and Poor's Rating Service assigned a
CCC+ rating on Metrobank's US$125-million non-cumulative capital
securities, whereas Moody's Investors Service Rating Agency
issued a B- rating on the same capital instruments.
=============
B E R M U D A
=============
ALEA GROUP: Reaches Commutation Terms Agreement
-----------------------------------------------
Alea Group Holdings (Bermuda) Ltd., has reached agreement to
fully and finally commute all exposure under an excess of
loss reinsurance treaty. Alea Group expects to record an after-
tax loss of approximately US$8.8 million in the fourth quarter
of 2007, pursuant to the commutation terms.
Alea Group Holdings (Bermuda) Ltd. is a global provider of
insurance and reinsurance products and services, Alea Group
faced a tough year in 2005. With catastrophes such as
Hurricanes Katrina and Rita in the US and flooding in Europe
greatly affecting the company, Alea decided to run off its
property/casualty business. It has already sold or runoff some
of its lines, including its European property/casualty treaty
portfolio and Alea Alternative Risk. Headquartered in Bermuda,
the company has additional offices in Australia, Europe, and
North America. Investment firm Kohlberg Kravis Roberts & Co.
holds a nearly 40% stake in the company. Fortress Investment
Group has announced it intends to buy Alea for US$320 million.
* * *
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 capitalization 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.
ELAN CORP: US FDA Approves TYSABRI Biologics License Application
----------------------------------------------------------------
The U.S. Food and Drug Administration has approved the
supplemental Biologics License Application of Elan Corporation
plc and Biogen Idec for TYSABRI(R) (natalizumab).
TYSABRI is approved for inducing and maintaining clinical
response and remission in adult patients with moderately to
severely active Crohn's disease with evidence of inflammation
who have had an inadequate response to, or are unable to
tolerate, conventional CD therapies and inhibitors of TNF-alpha.
TYSABRI will be available for the treatment of CD upon the
completion of key implementation activities related to the
approved risk management plan. The companies anticipate TYSABRI
will be available to Crohn's patients by the end of February
2008.
"The FDA's approval of TYSABRI is an important step forward in
the treatment of Crohn's disease," Dr. Stephen Hanauer,
professor of Medicine & Clinical Pharmacology & chief of the
Section of Gastroenterology at the University of Chicago
Pritzker School of Medicine, said. "A significant number of
patients either fail or cannot tolerate current therapies. The
unique mechanism of action of TYSABRI affords us a new class of
therapy in our fight against this debilitating disease."
The FDA granted approval based on its review of TYSABRI CD
clinical trial data and overall safety data. The approval is
accompanied by robust labeling with safety warnings; and a CD-
specific risk management plan (including the mandatory TOUCH(TM)
Prescribing Program) designed to inform prescribers, patients
and infusion centers about the use of TYSABRI and to minimize
potential risk of progressive multifocal leukoencephalopathy and
other opportunistic infections.
"We are delighted that TYSABRI will be available for Crohn's
patients and their physicians, who continue to need new
therapeutic options with novel mechanisms of action," Gordon
Francis, MD, senior vice president, Global Clinical
Development, Elan, said. "We are committed to providing
therapeutic choice to those patients who can benefit from
TYSABRI, and will continue to work with the FDA and the medical
community to implement the TOUCH(TM) Prescribing Program for
Crohn's patients."
"We are pleased with the FDA's decision to make TYSABRI
available to Crohn's patients suffering from this chronic,
debilitating disease," Evan Beckman, MD, senior vice president,
Immunology Research and Development, Biogen Idec, said.
"Despite the therapeutic advances of the TNF-alpha inhibitors in
CD, there remains a significant unmet need for Crohn's patients
who have inadequate responses to, or are unable to tolerate,
current CD therapies."
TOUCH(TM) Prescribing Program
The TOUCH(TM) (TYSABRI Outreach: Unified Commitment to Health)
Prescribing Program was developed in conjunction with the FDA to
facilitate appropriate use of TYSABRI and to assess, on an
ongoing basis, the incidence and risk factors for PML and other
serious opportunistic infections associated with TYSABRI
treatment. This program represents Elan and Biogen Idec's
commitment to making the unique benefits of TYSABRI available in
a responsible manner. The program already has been implemented
for patients receiving TYSABRI therapy for MS.
About TYSABRI
Data from the ENCORE trial showed that TYSABRI induced response
and remission among patients with moderately to severely active
Crohn's disease, and objective evidence of inflammation, as
measured by elevated C-reactive protein. After 12 weeks of
therapy, 60% of TYSABRI-treated patients attained response,
compared to 44% of placebo treated patients, and 48% of patients
had sustained response at both weeks 8 and 12, compared to 32%
of placebo treated patients (p less than 0.005 for both). Among
the patients who had inadequate response to prior treatment with
inhibitors of TNF-alpha, 38% achieved sustained response at
weeks 8 and 12.
Data from the ENACT-2 showed that an additional year of TYSABRI
therapy sustained response and remission among patients with an
initial response to TYSABRI after 3 months in ENACT-1. Of
patients with response in ENACT-1, sustained response during
ENACT-2 was seen in 61% of patients treated with TYSABRI at
every visit through an additional 6 months of therapy, compared
to 29% for placebo. This treatment difference was also
sustained through 12 months of additional therapy (54% vs. 20%).
Remission was sustained at every visit with an additional 6
months or 12 months of TYSABRI in 45% and 40% of patients,
respectively, compared to 26% and 15% of placebo treated
patients (p less than 0.005 for all comparisons). Among the
patients that had previously failed TNF-inhibitors, response and
remission was sustained at every visit through an additional 6
months of TYSABRI in 52% and 30% of patients, respectively.
Among patients on steroids and in whom a clinical response was
achieved, approximately two-thirds were able to discontinue
steroids within 10 weeks of beginning to taper steroids.
TYSABRI increases the risk of PML, an opportunistic viral
infection of the brain that usually leads to death or severe
disability. Other serious adverse events that have occurred in
TYSABRI-treated patients included hypersensitivity reactions
(e.g., anaphylaxis) and infections. Serious opportunistic and
other atypical infections have been observed in TYSABRI-treated
patients, some of whom were receiving concurrent
immunosuppressants. Herpes infections were slightly more common
in patients treated with TYSABRI. In MS and CD clinical trials,
the incidence and rate of other serious adverse events,
including serious infections, were similar in patients receiving
TYSABRI and those receiving placebo. Common adverse events
reported in TYSABRI-treated MS patients include headache,
fatigue, infusion reactions, urinary tract infections, joint and
limb pain, and rash. Other common adverse events reported in
TYSABRI-treated CD patients include respiratory tract infections
and nausea. Clinically significant liver injury has been
reported in patients treated with TYSABRI in the post-marketing
setting.
TYSABRI has previously been approved for relapsing forms of MS
in the United States and relapsing-remitting MS in the European
Union. According to data that have been published in the New
England Journal of Medicine, after two years, TYSABRI treatment
led to a 68% relative reduction (p less than 0.001) in the
annualized relapse rate compared to placebo and reduced the
relative risk of disability progression by 42-54% (p less than
0.001). In addition to the United States and European Union,
TYSABRI is also approved for MS in Switzerland, Canada,
Australia, New Zealand and Israel. TYSABRI was discovered by
Elan and is co-developed with Biogen Idec.
About the Company
Headquartered in Ireland, Elan Corporation plc (NYSE: ELN)
-- http://www.elan.com/-- is a neuroscience-based biotechnology
company. Elan shares trade on the New York, London and Dublin
Stock Exchanges. The company has locations in Bermuda and
Japan.
* * *
As reported on Oct. 15, 2007, Standard & Poor's Ratings Services
revised its outlook on Elan Corp. PLC to positive from stable
and affirmed the ratings on the company and its subsidiaries,
including the 'B' corporate credit rating.
In April 2007, in connection with the implementation of
its new Probability-of-Default and Loss-Given-Default rating
methodology for the corporate families in the Gaming, Lodging
and Leisure, Manufacturing, and Energy sectors, Moody's
Investors Service confirmed its B3 Corporate Family Rating for
Elan Corporation plc and assigned a B2 probability-of-default
rating to the company.
Debt ratings remain unchanged in conjunction with the
implementation of Moody's Loss Given Default and Probability of
Default rating methodology for existing non-financial
speculative-grade corporate issuers in Europe, Middle East and
Africa.
* Issuer: Elan Finance plc
Projected
Debt LGD Loss-Given
Debt Issue Rating Rating Default
---------- ------- ------- --------
US$300M Senior Unsecured
Regular Bond/Debenture
Due 2011 B3 LGD4 65%
US$300M Senior Unsecured
Regular Bond/Debenture
Due 2011 B3 LGD4 65%
US$150M Senior Unsecured
Regular Bond/Debenture
Due 2013 B3 LGD4 65%
US$850M 7.75% Senior Unsecured
Regular Bond/Debenture
Due 2011 B3 LGD4 65%
US$465M 8.875% Senior Unsecured
Regular Bond/Debenture
Due 2013 B3 LGD4 65
FOSTER WHEELER: To Supply Heat Recovery Steam Generator in Spain
----------------------------------------------------------------
Foster Wheeler Ltd. announced that Foster Wheeler Energia, S.A.,
a Spanish subsidiary of its Global Power Group, has been awarded
a contract for a heat recovery steam generator through SENER,
IngenierIa y Sistemas, S.A. for PETRONOR. The boiler will be
integrated in a cogeneration plant that REPSOL-YPF/PETRONOR is
constructing at the Petronor Refineria de Somorrostro in Bilbao,
Spain. REPSOL-YPF owns 85% of the Petronor Refinery.
Foster Wheeler has received a full notice to proceed on this
contract. The terms of the award were not disclosed, and the
contract will be included in the company's bookings for the
fourth-quarter of 2007.
Foster Wheeler will design, supply and erect the HRSG, and will
also provide start-up supervision for the HRSG, which will be
coupled to a General Electric PG-6581 combustion turbine, with a
total installed capacity of 42 MWe (gross megawatt electric).
The HRSG will produce medium- and low-pressure steam for the
refinery process. Commercial operation of the HRSG is scheduled
for the second quarter of 2009.
About Foster Wheeler
Foster Wheeler Ltd. (Nasdaq: FWLT) -- http://www.fwc.com/--
offers 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. The corporation is based in Hamilton, Bermuda, and
its operational headquarters are in Clinton, New Jersey.
* * *
As reported in the Troubled Company Reporter on Dec. 18, 2006,
Standard & Poor's Ratings Services revised its outlook on Foster
Wheeler Ltd. to positive from stable.
At the same time, Standard & Poor's affirmed its 'B+' corporate
credit rating and other ratings on the company. The company had
about US$217 million of total debt at Sept. 29, 2006.
MAGNA RE: Proofs of Claim Filing Is Until Tomorrow
--------------------------------------------------
Magna Re Ltd.'s creditors are given until Jan. 22, 2008, to
prove their claims to Orlando A. Smith, the company's
liquidator, or be excluded from receiving any distribution or
payment.
In their proofs of claim, creditors must indicate their full
names, addresses, the full particulars of their debts or claims,
and the names and addresses of their lawyers, if any.
Magna Re's shareholder decided on Dec. 14, 2007, to place the
company into voluntary liquidation under Bermuda's Companies Act
1981.
The liquidator can be reached at:
Orlando A. Smith
Milligan-Whyte & Smith
Mintflower Place, 2nd Floor
8 Par-la-Ville Road
Hamilton, Bermuda HM 08
=============
B O L I V I A
=============
* BOLIVIA: Comibol To Boost Gold Mining Complexes
-------------------------------------------------
Bolivian state-owned mining company Comibol will boost gold
mining complexes to take advantage of high gold prices on the
international market, state news agency Agencia Boliviana de
Informacion reports.
Comibol head Hugo Miranda commented to Agencia Boliviana, "Our
[production] costs never rise above US$900/oz so we think that
if prices carry on at this rate, they are going to benefit the
country."
Comibol will buy machinery and equipment, provide economic
support and help with exploration in specific areas to
reactivate units, Mr. Miranda told Business News Americas.
* * *
As reported in the Troubled Company Reporter-Latin America on
Dec. 26, 2007, Standard & Poor's Ratings Services has assigned
B- long-term sovereign local and foreign currency ratings and C
short-term sovereign local and foreign currency ratings on
Bolivia.
===========
B R A Z I L
===========
AES CORP: Brazilian Unit Concludes Substations Automation
---------------------------------------------------------
AES Eletropaulo, The AES Corp.'s Brazilian power distributor,
said in a statement that it has completed the automation at all
of its 141 substations.
AES Eletropaulo told Business News Americas that the automation
process involved linking substations to AES Eletropaulo's
operations center, which is able to turn substations on and off
as required.
Investments for the automation totaled BRL9.45 million,
BNamericas states.
About AES Eletropaulo
AES Eletropaulo is a major Brazilian power distributor in Sao
Paulo. The company's full name is Eletropaulo Metropolitana
Eletricidade de Sao Paulo. Eletropaulo has around five million
customers. Eletropaulo stock is traded on Bovespa, where it is
part of the Ibovespa index. The company is majority owned by
AES Corporation.
About AES Corp.
AES Corp. -- http://www.aes.com/-- is a global power company.
The company operates in South America, Europe, Africa, Asia and
the Caribbean countries. Specifically, it has operations
in India. Generating 44,000 megawatts of electricity through
124 power facilities, the company delivers electricity through
15 distribution companies.
As reported in the Troubled Company Reporter-Latin America on
Oct. 12, 2007, Moody's Investors Service affirmed The AES
Corporation's Corporate Family Rating at B1 and the senior
unsecured rating assigned to its new senior unsecured notes
offering at B1 following its upsizing to US$2 billion from
US$500 million. LGD assessments are subject to change pending
the final capital structure.
As reported on Oct. 12, 2007, Fitch Ratings assigned a 'BB/RR1'
rating to AES Corporation's US$500 million issue of senior
unsecured notes due 2017. AES' long-term Issuer Default Rating
is rated 'B+' by Fitch. Fitch said the rating outlook is
stable.
ALCATEL-LUCENT: Inks BRL2B Maintenance Pact with Brasil Telecom
---------------------------------------------------------------
Alcatel-Lucent has signed an almost BRL2 billion contract with
Brasil Telecom Participacoes for maintenance of network, Brasil
Telecom said in a statement.
Dow Jones Newswires relates that Alcatel-Lucent won the two-year
contract against Ericsson and Nokia Siemens Networks. The
contract can be extended.
Alcatel-Lucent will be responsible for the administration and
maintenance of Brasil Telecom's fixed-line and wireless
telephony infrastructure and data transmission network. Brasil
Telecom hopes it will lessen costs. The network's maintenance
is one of Brasil Telecom's principle outlays, representing
almost 10% of all expenses in the first nine months of 2007, Dow
Jones states.
About Brasil Telecom
Headquartered in Brasilia, Brazil, Brasil Telecom Participacoes
SA -- http://www.brasiltelecom.com.br-- is a holding company
that conducts substantially all of its operations through its
wholly owned subsidiary, Brasil Telecom SA. The fixed-line
telecommunications services offered to the company's customers
include local services, including all calls that originate and
terminate within a single local area in the region, as well as
installation, monthly subscription, measured services, public
telephones and supplemental local services; intra-regional long-
distance services, which include intrastate and interstate
calls; interregional and international long-distance services;
network services, including interconnection and leasing; data
transmission services; wireless services, and other services.
About Alcatel-Lucent
Alcatel-Lucent maintains operations in 130 countries, including,
Austria, Germany, Hungary, Italy, Netherlands, Ireland, Canada,
United States, Costa Rica, Dominican Republic, El Salvador,
Guatemala, Peru, Venezuela, Indonesia, Australia, Brunei and
Cambodia.
* * *
As reported in the Troubled Company Reporter-Latin America on
Nov. 9, 2007, Moody's Investors Service downgraded to Ba3 from
Ba2 the Corporate Family Rating of Alcatel-Lucent. The ratings
for senior debt of the group were equally lowered to Ba3 from
Ba2 and the trust preferred notes of Lucent Technologies Capital
Trust I have been downgraded to B2 from B1. At the same time,
Moody's affirmed its Not-Prime rating for short-term debt of
Alcatel-Lucent. Moody's said the outlook for the ratings is
stable.
Alcatel-Lucent's Long-Term Corporate Credit rating and Senior
Unsecured Debt carry Standard & Poor's Ratings Services' BB
rating. Its Short-Term Corporate Credit rating stands at B.
BANCO DAYCOVAL: Capital Research Acquires 2.38% Stake in Firm
-------------------------------------------------------------
Banco Daycoval said in a filing with Brazilian securities
regulator Comissao de Valores Mobiliarios that US investment
management company Capital Research and Management Company has
acquired further 2.38% stake in the bank, increasing its control
in the bank to 4.24% from 1.86%.
Business News Americas relates that Capital Research's preferred
shares in Banco Daycoval now has increased to nearly 11.8% from
5.17%.
Banco Daycoval's net profits rose 103% to BRL58.7 million in the
third quarter 2007, compared to the third quarter of 2006,
BNamericas states.
About Capital Research
Capital Research and Management Co. is an institutional
shareholder in several newspaper companies.
About BAnco Daycoval
Headquartered in Sao Paulo, Brazil, Banco Daycoval started its
activities in 1968, with the creation of Daycoval DTVM and Valco
Corretora de Valores. Brothers Ibrahim and Sasson Dayan control
the bank. It is the core business of its shareholders and
specialises in financing small- and medium-sized companies,
backed by receivables. It also operates with consignment
lending for payroll deduction and consumer financing. Since
June 2007, the bank has had 29% of its shares traded at Bovespa
on the New Brazilian Stock Market. These shares enjoy a tag-
along privilege, giving minority shareholders 100% of the value
of the block of controlling shares in the event of the sale of
the institution.
As reported in the Troubled Company Reporter-Latin America on
Nov. 27, 2007, Fitch Ratings assigned Banco Daycoval S.A. these
ratings:
-- Long-term foreign currency Issuer Default Rating 'BB-';
Outlook Stable
-- Long-term local currency IDR 'BB-'; Outlook Stable
-- Short-term foreign currency IDR 'B'
-- Short-term local currency IDR 'B'
-- Individual rating 'C/D'
Banco Daycoval's other ratings are National Long-term rating
'A(bra)' with Positive Outlook, National Short-term rating
'F1(bra)' and Support rating '5'.
BANCO ITAU: Subsidiary Inks Exclusive Pact with DAFRA
-----------------------------------------------------
Banco Itau Holding Financeira S.A., through its subsidiary,
Banco Itau S.A., and Dafra da Amazonia Industria e Comercio de
Motocicletas Ltda., have signed a "Memorandum of Understanding"
establishing the requirements for the constitution of a
partnership, which will offer on an exclusive basis:
a) the financing of promotional campaigns for the acquisition
of DAFRA motorcycles; and
b) a working capital loan to the dealerships for the
distribution of motorcycles.
In addition, DAFRA will recommend ITAU's products and financial,
insurance and private pension services to its dealerships.
ITAU will pay BRL20 million to DAFRA for these exclusive rights
over a period of ten years, this agreement being eligible for
renewal. In line with past practices, the payment shall be
registered as an anticipated expense and recognized in ITAU's
results pro rata over the period of the partnership.
DAFRA is a component of the Itavema Group, which operates in
several sectors. These include plastics, vehicle rentals,
transportation and logistics and vehicle dealerships (made up of
multi-brand name vehicle and motorcycle dealerships, with 64
sales outlets nationwide). DAFRA is to manufacture the
motorcycles in Manaus, state of Amazonas, its focus being on
machines of up to 250 cc.
The partnership between ITAU and DAFRA has the potential to
leverage the sales of motorcycles and related financial products
and services, strengthening the position of ITAU with a stake in
this significant growth market.
About Banco Itau
Banco Itau Holding Financeira SA -- http://www.itau.com.br/--
is a private bank in Brazil. The company has four principal
operations: banking -- including retail banking through its
wholly owned subsidiary, Banco Itau SA(Itau), corporate banking
through its wholly owned subsidiary, Banco Itau BBA SA (Itau
BBA) and consumer credit to non-account hold customers through
Itaucred -- credit cards, asset management and insurance,
private retirement plans and capitalization plans, a type of
savings plan. Itau Holding provides a variety of credit and
non-credit products and services directed towards individuals,
small and middle market companies and large corporations.
* * *
As reported in the Troubled Company Reporter-Latin America on
Feb. 12, 2007, Fitch changed the outlook of these ratings of
Banco Itau Holding Financiera S.A.:
-- Foreign currency IDR at 'BB+'; Outlook to Positive from
Stable;
-- Local currency IDR at 'BBB-'; Outlook to Positive
from Stable; and
-- National Long-term rating at 'AA+(bra)'; Outlook to
Positive from Stable.
BENCHMARK ELECTRONICS: Moody's Puts Ba2 Rating on US$100MM Debt
---------------------------------------------------------------
Moody's Investors Service has assigned a Ba2 (LGD-3, 39%) rating
to Benchmark Electronics, Inc.'s new 5-year US$100 million
senior secured revolving credit facility due 2012 and affirmed
the company's Ba3 corporate family rating. The rating outlook
is stable.
Proceeds from the new credit facility are intended to be used
for working capital needs and general corporate purposes. It
replaces an unrated US$100 million revolver that was set to
expire in January 2008. The new credit facility includes an
accordion feature under which total commitments may be increased
by an additional US$100 million.
The rating for the US$100 million senior secured revolver
reflects the overall probability of default of the company, to
which Moody's assigns a probability of default rating of Ba3.
Under Moody's Loss Given Default methodology, the new senior
secured credit facilities are rated one notch above the Ba3 CFR
given that they receive sufficient support from the company's
senior unsecured non-debt obligations, which provide debt
cushion for any drawings under the secured bank credit facility.
The credit facility is guaranteed by the borrower's domestic
subsidiaries, and is secured by: (1) substantially all assets of
the borrower, subsidiary guarantors and the holding company; (2)
100% of the capital stock of the borrower and domestic
subsidiaries; and (3) 65% of the voting capital stock of foreign
subsidiaries.
The facility contains financial covenants requiring the
maintenance of certain financial ratios (i.e., financial
leverage equal to or less than 2.75 debt to EBITDA, 1.2 minimum
fixed charge coverage and minimum consolidated tangible net
worth).
These new ratings were assigned:
-- Probability of Default Rating -- Ba3
-- US$100 Million Senior Secured Revolving Credit Facility
due 2012 -- Ba2 (LGD-3, 39%)
This rating was affirmed:
-- Corporate Family Rating -- Ba3
Benchmark Electronics' Ba3 CFR reflects the company's minimal
leverage and niche position as a Tier 1 electronics
manufacturing services provider of products in the non-consumer
computing, telecommunications and medical devices markets.
While the company has historically generated operating margins
in the upper range for the industry (4-5% range), the company
experienced margin erosion in the third quarter of 2007 due to a
decrease in activity for its largest customer, slower program
ramps and softer end-market demand. The weakness in the most
recent quarter illustrates the volatility inherent within the
electronics manufacturing services industry, exacerbated by
client concentration and heightened competition from industry
consolidation (i.e., Flextronics' acquisition of Solectron).
Furthermore, Moody's expects the company to continue to face
pricing pressures from OEM customers as well as from Asian
competitors.
Moody's rating outlook is stable, reflecting the expectation
that: (1) revenue levels will bounce back in the near term once
new programs begin to ramp up; (2) bookings levels will remain
healthy, which was the case during the third quarter of 2007
with approximately US$100-US$125 million of new bookings; and
(3) Benchmark Electronics should continue to be free cash flow
positive in 2008. The stable outlook also reflects Moody's view
that it does not expect the company's credit profile to change
significantly over the intermediate term.
The company's revenue and EBITDA for the twelve months ended
Sept. 30, 2007 were US$2.9 billion and US$168 million,
respectively.
Based in Angleton, Texas, Benchmark Electronics Inc. (NYSE: BHE)
-- http://www.bench.com/-- manufactures electronics and
provides services to original equipment manufacturers of
computers and related products for business enterprises, medical
devices, industrial control equipment, testing and
instrumentation products, and telecommunications equipment. The
company's global operations include facilities in The
Netherlands, Romania, Ireland, Brazil, Mexico, Thailand,
Singapore, and China.
BRASIL TELECOM: Inks BRL2B Maintenance Deal with Alcatel-Lucent
---------------------------------------------------------------
Brasil Telecom said in a statement that it has signed an almost
BRL2 billion contract with Alcatel-Lucent for the maintenance of
its network.
Dow Jones Newswires relates that Alcatel-Lucent won the two-year
contract against Ericsson and Nokia Siemens Networks. The
contract can be extended.
Alcatel-Lucent will be responsible for the administration and
maintenance of Brasil Telecom's fixed-line and wireless
telephony infrastructure and data transmission network. Brasil
Telecom hopes it will lessen costs. The network's maintenance
is one of Brasil Telecom's principle outlays, representing
almost 10% of all expenses in the first nine months of 2007, Dow
Jones states.
About Alcatel-Lucent
Alcatel-Lucent maintains operations in 130 countries, including,
Austria, Germany, Hungary, Italy, Netherlands, Ireland, Canada,
United States, Costa Rica, Dominican Republic, El Salvador,
Guatemala, Peru, Venezuela, Indonesia, Australia, Brunei and
Cambodia.
About Brasil Telecom
Headquartered in Brasilia, Brazil, Brasil Telecom Participacoes
SA -- http://www.brasiltelecom.com.br-- is a holding company
that conducts substantially all of its operations through its
wholly owned subsidiary, Brasil Telecom SA. The fixed-line
telecommunications services offered to the company's customers
include local services, including all calls that originate and
terminate within a single local area in the region, as well as
installation, monthly subscription, measured services, public
telephones and supplemental local services; intra-regional long-
distance services, which include intrastate and interstate
calls; interregional and international long-distance services;
network services, including interconnection and leasing; data
transmission services; wireless services, and other services.
* * *
To date, Brasil Telecom carries Moody's Investors Service's Ba1
senior unsecured and credit default swap ratings.
COMPANHIA ENERGETICA: Sao Paulo Selling 33.37% Stake in February
----------------------------------------------------------------
The Sao Paulo state will be selling its 33.37% stake in
Companhia Energetica de Sao Paulo next month, reports say,
citing state deputy finance minister George Tormin.
As reported in the Troubled Company Reporter-Latin America on
Jan. 4, 2008, Companhia Energetica said that the Sao Paulo state
government scheduled a public hearing to provide further
information on the sale of its stake in the firm on Jan. 15.
The Sao Paulo state's privatization board recommended the state
to sell its 33.37% stake in Companhia Energetica by the end of
the first quarter 2008.
Business News Americas relates that the 33.37% stakes represents
109 million shares. A BRL55 price would put Sao Paulo's stake
at BRL6.01 billion.
BNamericas relates that Brazilian brokerage Unibanco Corretora
is positive that the minimum price range for Companhia
Energetica's shares will be up to BRL55.
Unibanco Corretora market analyst Fernando Abdalla said in a
report, "In our view, a market price below BRL45 per share is an
interesting buy opportunity. However, if the stock price
surpasses BRL50s a share, the company's shares do not offer an
attractive upside potential."
Mr. Tormin told BNamericas that the edict for the sale will be
published in two weeks. The minimum price hasn't been
determined yet.
Other state-run power firms in Brazil won't be allowed to
present bids for the stake, BNamericas states.
Headquartered in Sao Paulo, Brazil, Companhia Energetica de Sao
Paulo (BOVESPA: CESP3, CESP5 and CESP6) is the country's third
largest power generator, majority owned by the State of Sao
Paulo. CESP operates 6 hydroelectric plants with total
installed capacity of 7,456 MW and reported net revenues of
BRL1,983 million in the last twelve months through
Sept. 30, 2006.
As reported in the Troubled Company Reporter-Latin America on
Oct. 10, 2007, Standard & Poor's Ratings Services has raised its
ratings on electricity generator Companhia Energetica de Sao
Paulo, including its corporate credit rating to 'B' from 'B-'.
At the same time, S&P raised its Brazil national scale ratings
on CESP to 'brBBB-' from 'brBB'. S&P said the outlook remains
positive on both scales.
COMPANHIA SIDERURGICA: Takes Away Vale's Right To Buy Excess Ore
----------------------------------------------------------------
Companhia Siderurgica Nacional told Reuters that it has removed
iron ore mining and metals group Companhia Vale do Rio Doce's
preference rights to purchase excess ore from its Casa de Pedra
iron ore mine in Minas Gerais.
Companhia Siderurgica said in a statement that it obeyed the
Braziliain antitrust agency Cade's decision over rights to
excess production at Casa de Pedra.
Reuters notes that that Companhia Vale lost all legal challenges
to overturn a regulatory ruling on the issue.
Business News Americas relates that Cade forced Brazilian mining
and metals group Vale in 2005 to give up its right to buy excess
iron ore from Casa de Pedra or divest iron ore miner Ferteco.
The Mining Journal Online explains that Cade found that
Companhia Vale's dominance of the domestic market was
increasing.
BNamericas says that Companhia Vale lost multiple appeals in
2007. It had an injunction canceled that had allowed it to
disregard Cade's decision.
According to Companhia Siderurgica's statement, the firm filed a
statement of compliance with Cade to keep itself from conducting
contractual provisions concerning the rights of first refusal of
Vale related to Casa de Pedra.
The Mining Journal Online states that Cade fined Companhia Vale
BRL33.6 million and ordered the firm to surrender give up ore
rights at Casa de Pedra. Cade also fined Companhia Vale for its
delay in indicating its preferred response to the regulator's
initial 2005 order, which resulted from the firm's acquisition
of five Brazilian mining companies.
Companhia Siderurgica's mining head Juarez Saliba admitted last
year that Companhia Vale's rights to Casa de Pedra has hurt
Companhia Siderurgica's efforts to boost production at the mine
to 40 million tons yearly by 2009 and 60 million tons per year
by 2010, The Mining Journal Online says.
Companhia Vale said in a statement that it would continue
fighting Cade's order in court and knew of no legal authority
that would let it be fined.
About Companhia Vale
Headquartered in Rio de Janeiro, Brazil, Companhia Vale do Rio
Doce -- http://www.cvrd.com.br/-- engages primarily in mining
and logistics businesses. It engages in iron ore mining, pellet
production, manganese ore mining, and ferroalloy production, as
well as in the production of nonferrous minerals, such as
kaolin, potash, copper, and gold.
About Companhia Siderurgica
Headquartered Sao Paolo, Brazil, Companhia Siderurgica Nacional
S.A. -- http://www.csn.com.br/-- produces, sells, exports and
distributes steel products, like hot-dip galvanized sheets, tin
mill products and tinplate. The company also runs its own iron
ore, manganese, limestone and dolomite mines and has strategic
investments in railroad companies and power supply projects.
The group also operates in Brazil, Portugal and the U.S.
As reported in the Troubled Company Reporter-Latin America on
Dec. 27, 2007, Standard & Poor's Ratings Services revised its
outlook on Brazil-based steel maker Companhia Siderurgica
Nacional and related entity National Steel S.A. to positive from
stable. At the same time, Standard & Poor's affirmed its 'BB'
corporate credit rating on CSN and its 'B+' rating on NatSteel.
DELPHI: ND Acquisition Offers US$44.2 Million for Bearing Biz
-------------------------------------------------------------
Delphi Automotive Systems LLC and Delphi Technologies, Inc.,
debtor-subsidiaries of Delphi Corp., intend to sell their global
bearings business to ND Acquisition Corp., or to another party
submitting a higher and better offer for the business.
ND Acquisition, a wholly owned subsidiary of private equity
investment firm Resilience Capital Partners LLC, has agreed to
submit a stalking horse bid of US$44,200,000, subject to
adjustments, for the Bearings Business.
The Bearings Business produces both wheel bearings and roller
clutch product lines. It is the leading producer of Gen III
wheel bearings in North America and the primary North American
supplier of those parts to General Motors. The Bearings
Business occupies a 1.3-million square foot plant set on 133
acres in Sandusky, Ohio.
The Debtors have invested more than US$140,000,000 in new
tooling and refurbishment for older equipment and new state-of-
the-art machinery and equipment since 2000. The Bearings
Business employs approximately 1,000 people, including
approximately 775 Hourly Employees. The hourly workforce is
represented by the International Union, United Automobile,
Aerospace and Agricultural Implement Workers of America.
Marketing Efforts for Non-Core Businesses
As previously reported, to achieve the necessary cost savings
and operational effectiveness envisioned in its transformation
plan, Delphi is streamlining its product portfolio to capitalize
on its world-class technology and market strengths and make the
necessary manufacturing realignment consistent with its new
focus. As part of the company's transformation plan, the
company identified the Bearings Business as a non-core business
subject to disposition.
The Debtors believe that as a standalone business, the Bearings
Business could become more profitable and competitive, and thus,
have determined that the value of the Bearings Business would be
maximized through its divestiture, relates John Wm. Butler, Jr.,
Esq., at Skadden, Arps, Slate, Meagher & Flom LLP, in Chicago,
Illinois.
The Debtors, according to Mr. Butler, have actively marketed the
Bearings Business since February 2007. After evaluating
proposals submitted by potential buyers, the Debtors concluded
that ND Acquisition offered the most advantageous terms and the
greatest economic benefit.
Pursuant to a Sale and Purchase Agreement, entered into on
Jan. 15, 2008, the Debtors have agreed to sell the Bearings
Business to ND Acquisition for US$44,200,000, subject to certain
adjustments, and subject to higher or otherwise better offers.
Bidding Procedures
The Debtors will accept and consider competing bids for the
Bearings Business. The proposed Bidding Procedures provide, in
relevant part:
(a) Participation Requirements: To ensure that only bidders
with financial ability and a serious interest in the
purchase of the Acquired Assets participate in the
Bidding Process, the Bidding Procedures provide for
certain requirements for a potential bidder to become a
"Qualified Bidder", including the submission of certain
financial assurances.
(b) Due Diligence: All Qualified Bidders would be afforded an
opportunity to participate in the diligence process.
(c) Bid Deadline: All bids would have to be received not
later than 11:00 a.m. prevailing Eastern time, by
Feb. 11, 2008. The Debtors would provide the UAW with
notice of all Qualified Bidders and their contact
information.
(d) Bid Requirements: All bids would be required to include
certain documents, including a good-faith deposit of
US$750,000.
(e) Qualified Bids: To be deemed a "Qualified Bid," a bid
would be required to be received by the Bid Deadline and,
among other things, (i) be on terms and conditions that
are substantially similar to, and are not materially more
burdensome or conditional to the Debtors than, those
contained in the Agreement, (ii) have a value of the
Purchase Price plus the amount of the US$1,500,000 Break-
Up Fee and the Expense Reimbursement, plus US$500,000 in
the case of an initial Qualified Bid, plus US$250,000 in
the case of any subsequent Qualified Bids over the
immediately preceding highest Qualified Bid.
(f) Conduct Of Auction: If the Debtors receive at least one
Qualified Bid in addition to that of ND Acquisition, they
would conduct an auction of the Acquired Assets at 10:00
a.m. (prevailing Eastern time) on Feb. 13, 2008, or at
a later date.
(g) Selection Of Successful Bid: After the conclusion of the
Auction, the Debtors, in consultation with their
advisors, would review each Qualified Bid and identify
the highest or otherwise best offer for the Acquired
Assets and the bidder making the bid. The Debtors would
sell the Acquired Assets for the highest or otherwise
best bid to the Successful Bidder upon the approval of
the Court after the sale hearing.
(h) Sale Hearing: The Debtors request that the hearing to
consider the sale to ND Acquisition, or the winning
bidder, be scheduled for Feb. 21, 2008, at 10:00 a.m.,
prevailing Eastern time. If the highest bidder fails to
consummate the sale for specified reasons, then the
second highest bid would be deemed to be the successful
bid.
About Delphi Corp.
Headquartered in Troy, Michigan, Delphi Corporation (PINKSHEETS:
DPHIQ) -- http://www.delphi.com/-- is the single supplier of
vehicle electronics, transportation components, integrated
systems and modules, and other electronic technology. The
company's technology and products are present in more than 75
million vehicles on the road worldwide. Delphi has regional
headquarters in Japan, Brazil and France.
The company filed for chapter 11 protection on Oct. 8, 2005
(Bankr. S.D.N.Y. Lead Case No. 05-44481). John Wm. Butler Jr.,
Esq., John K. Lyons, Esq., and Ron E. Meisler, Esq., at Skadden,
Arps, Slate, Meagher & Flom LLP, represent the Debtors in their
restructuring efforts. Robert J. Rosenberg, Esq., Mitchell A.
Seider, Esq., and Mark A. Broude, Esq., at Latham & Watkins LLP,
represents the Official Committee of Unsecured Creditors. As of
March 31, 2007, the Debtors' balance sheet showed
US$11,446,000,000 in total assets and US$23,851,000,000 in total
debts.
The Court approved Delphi's First Amended Joint Disclosure
Statement and related solicitation procedures for the
solicitation of votes on the First Amended Plan on
Dec. 20, 2007. The Court will convene the hearing to consider
confirmation of the Plan on Jan. 17, 2008.
(Delphi Bankruptcy News, Issue No. 107; Bankruptcy Creditors'
Service Inc., http://bankrupt.com/newsstand/or 215/945-7000)
DELTA AIR: Commences Merger Negotiations with Northwest & UAL
-------------------------------------------------------------
Delta Air Lines Inc. obtained approval from its board of
directors on Jan. 11, 2007, to engage in formal merger talks
with both Northwest Airlines Corp. and UAL Corp., The Wall
Street Journal reports.
WSJ says Delta, which is in the early stages of discussions with
both Northwest and UAL, hopes to reach an agreement with one of
them over the next two weeks.
Delta is anticipating a deal announcement as early as mid-
February following Delta's board meeting scheduled early in the
month, says the report.
"A special committee of the board is working with management to
explore strategic options, including potential consolidation
transactions. However, we are not providing updates, while this
process is ongoing," Delta spokeswoman Betsy Talton said.
Northwest and UAL declined to comment.
A UAL-Delta or a Northwest-Delta merger, which would likely be a
stock for stock transaction, would make Delta the largest
airline in the world, according to reports.
Experts in the airline industry, however, believe that a
Northwest-Delta merger is more likely as Delta's Chief Executive
Richard Anderson was previously CEO at Northwest, and is already
well acquainted with Northwest's operations.
Senator Johnny Isakson, a Georgia Republican, said that Mr.
Anderson told him in December that if there's a merger or an
acquisition, Delta would keep its name and Atlanta hub,
Bloomberg News reports.
About Delta Air
Based in Atlanta, Georgia, Delta Air Lines Inc. (NYSE:DAL) --
http://www.delta.com/-- is the world's second-largest airline
in terms of passengers carried and the leading U.S. carrier
across the Atlantic, offering daily flights to 328 destinations
in 56 countries on Delta, Song, Delta Shuttle, the Delta
Connection carriers and its worldwide partners. Delta flies to
Argentina, Australia and the United Kingdom, among others. The
company and 18 affiliates filed for chapter 11 protection on
Sept. 14, 2005 (Bankr. S.D.N.Y. Lead Case No. 05-17923).
Marshall S. Huebner, Esq., at Davis Polk & Wardwell, represents
the Debtors in their restructuring efforts. Timothy R. Coleman
at The Blackstone Group L.P. provides the Debtors with financial
advice. Daniel H. Golden, Esq., and Lisa G. Beckerman, Esq., at
Akin Gump Strauss Hauer & Feld LLP, provide the Official
Committee of Unsecured Creditors with legal advice. John
McKenna, Jr., at Houlihan Lokey Howard & Zukin Capital and James
S. Feltman at Mesirow Financial Consulting, LLC, serve as the
Committee's financial advisors.
The Debtors filed a chapter 11 plan of reorganization and
disclosure statement explaining that plan on Dec. 19, 2007. On
Jan. 19, 2007, they filed revisions to the plan and disclosure
statement, and submitted further revisions to the plan on
Feb. 2, 2007. On Feb. 7, 2007, the Court approved the Debtors'
disclosure statement. In April 25, 2007, the Court confirmed
the Debtors' plan. That plan became effective on
April 30, 2007. The Court entered a final decree closing 17
cases on Sept. 26, 2007.
As of Sept. 30, 2007, the company's balance sheet showed total
assets of US$32.7 billion and total liabilities of US$23
billion, resulting in a US$9.7 billion stockholders' equity. At
Dec. 31, 2006, deficit was US$13.5 billion.
(Delta Air Lines Bankruptcy News; Bankruptcy Creditors' Service,
Inc., http://bankrupt.com/newsstand/or 215/945-7000).
* * *
As reported in yesterday's Troubled Company Reporter, according
to Standard and Poor's, media reports that Delta Air Lines Inc.
(B/Positive/--) entered into merger talks with UAL Corp.
(B/Stable/--) and Northwest Airlines Corp. (B+/Stable/--) has no
effect on its ratings or outlook on Delta, but that confirmed
merger negotiations would result in S&P's placing ratings of
Delta and other airlines involved on CreditWatch, most likely
with developing or negative implications.
GERDAU AMERISTEEL: KeyBanc Capital Pares Shares Rating to Buy
-------------------------------------------------------------
KeyBanc Capital Markets analysts have downgraded Gerdau
Ameristeel Corporation's shares to "buy" from "aggressive buy,"
Newratings.com reports.
Newratings.com relats that the target price for Gerdau
Ameristeel was decreased to US$15 from US$18.
KeyBanc Capital said in a research note that Gerdau Ameristeel
has low exposure to the domestic flat-rolled markets, an area of
upside for the domestic steel industry.
The analysts told Newratings.com that the lack of dividend yield
and share buyback might lessen Gerdau Ameristeel's ability to
underpin its share price if the macro sentiment deteriorates.
The earnings per share estimate for this year was decreased to
US$1.80 from US$1.95, Newratings.com states.
About Gerdau Ameristeel
Headquartered in Tampa, Florida, Gerdau Ameristeel Corporation
(NYSE: GNA; TSX: GNA.TO) -- http://www.ameristeel.com/-- is a
mini-mill steel producer in North America. Through its
vertically integrated network of 17 mini-mills, 17 scrap
recycling facilities and 52 downstream operations, Gerdau
Ameristeel serves customers throughout North America. The
company's products are sold to steel service centers, steel
fabricators, or directly to original equipment manufactures for
use in a variety of industries, including construction, cellular
and electrical transmission, automotive, mining and equipment
manufacturing. Gerdau Ameristeel is a unit of Brazilian firm
Gerdau SA.
* * *
As reported in the Troubled Company Reporter on Nov. 26, 2007,
Moody's Investors Service affirmed Gerdau S.A.'s Ba1 corporate
family rating and stable outlook, following the announcement of
an agreement to acquire the specialty steel operations of Quanex
Corporation, mainly represented by its MacSteel division for
some US$1.46 billion in cash. All other ratings related to the
company were affirmed.
Ratings affirmed are:
Issuer: Gerdau S.A.
-- Ba1 Global Local Currency Corporate Family Rating
-- US$600 million Senior Unsecured Guaranteed Perpetual Notes:
Ba1 Foreign Currency Rating
Issuer: Gerdau Brazil (fictitious entity representing the
Brazilian operations of Gerdau S.A. comprising Gerdau Acominas
S.A., Gerdau Acos Longos S.A., Gerdau Acos Especiais S.A., and
Gerdau Comercial de Acos S.A.).
-- Ba1 Global Local Currency Corporate Family Rating
Issuer: Gerdau Ameristeel Corporation
-- Ba1 Probability of Default Rating
-- Ba1 Corporate Family Rating
-- US$405 million Senior Unsecured Regular Bond: Ba1, LGD4 59%
Issuer: Jacksonville Economic Development Comm.
-- US$23 million Senior Unsecured Revenue Bonds guaranteed by
Gerdau Ameristeel: Ba1, LGD4 59%
Outlook for all ratings: stable
IWT TESORO: Withdraws Exclusive Periods Extension Plea
------------------------------------------------------
IWT Tesoro Corporation and its debtor-affiliates have withdrawn,
without prejudice, their request to further extend their
exclusive periods.
Paper filed with the United States Bankruptcy Court for the
Southern District of New York did not cite any reasons why the
request was withdrawn.
As reported in the Troubled Company Reporter on Jan. 2, 2008,
the Debtors asked the Court to further extend their exclusive
period to file a plan for 120 days, and solicit acceptances of
that plan for 180 days. The Debtors told the Court that they
need sufficient time to formulate a consensual Chapter 11 plan
of reorganization as they continue their negotiations with their
proposed funder, KMA Capital, and the Official Committee of
Unsecured Creditors.
I.W.T. Tesoro Corporation, fka Ponca Acquisition Company, --
http://www.iwttesoro.com/-- is headquartered in New York City.
The company and its subsidiaries distribute building materials,
specifically hard floor and wall coverings. They are
wholesalers and do not sell directly to any end user. Their
products consist of ceramic, porcelain and natural stone floor,
wall and decorative tile. They import a majority of these
products from suppliers and manufacturers in Europe, South
America (Brazil), and the Near and Far East. Their markets
include the United States and Canada. They also offer private
label programs for branded retail sales customers, buying
groups, large homebuilders and home center store chains.
The Debtor and its debtor-affiliates, International Wholesale
Tile, Inc. and American Gres, Inc., filed for Chapter 11
bankruptcy protection on Sept. 6, 2007 (Bankr. S.D. NY Lead Case
No. 07-12841). John K. Sherwood, Esq., at Lowenstein Sandler
P.C., represents the Official Committee of Unsecured Creditors.
As of June 30, 2007, the Debtors had total assets of
US$39,798,579 and total debts of US$47,940,983.
LYONDELL CHEMICAL: S&P Lowers Senior Secured Debt Rating to B
-------------------------------------------------------------
Standard & Poor's Ratings Services has revised its recovery
ratings on the US$100 million notes due 2010 and the US$225
million notes due 2020 issued by Lyondell Chemical Co. to '5'
from '1'. The senior secured debt rating on these instruments
have been lowered to 'B' from 'BB', one notch lower than the
corporate credit rating on the company's parentLyondellBasell
Industries AF S.C.A. (formerly Basell AF S.C.A. B+/Stable/--).
The recovery ratings of '5' indicate S&P's expectation of modest
(10%-30%) recovery in the event of a payment default.
At the same time, the recovery rating on subsidiary Equistar
Chemicals L.P.'s US$150 million senior notes due 2026 has been
revised to '4' from '1' and the senior secured debt rating on
these issues lowered to 'B+' from 'BB', the same level as the
corporate credit rating. The recovery rating of '4' indicates
S&P's expectation of average (30%-50%) recovery in the event of
a payment default.
In addition, the 'B-' senior unsecured debt rating on the
proposed US$2.5 billion senior unsecured notes originally to be
issued by LyondellBasell Finance Co. Ltd. have been withdrawn,
pending finalization of the structure of the debt facilities to
refinance the existing US$8 billion bridge loan.
The recovery rating on the proposed US$5.5 billion second-lien
notes to be issued by LyondellBasell Finance Co. Ltd. has been
revised to '5' from '4' and the issue rating lowered to 'B' from
'B+', one notch lower than the corporate credit rating. The
recovery rating of '5' indicates S&P's expectation of modest
(10%-30%) recovery in the event of a payment default.
The ratings on the new US$12.45 billion senior secured debt
facilities issued by Basell Holdings B.V., Lyondell Chemical
Co., and certain of their subsidiaries, and guaranteed by
LyondellBasell Industries AF S.C.A., and certain of their
subsidiaries, remain unchanged at 'BB', two notches higher than
the corporate credit rating, with a recovery rating of '1'. The
recovery rating of '1' reflects S&P's expectation of very high
(90%-100%) recovery in the event of a payment default.
The ratings on the following instruments remain unchanged at
'B-', two notches lower than the corporate credit rating on the
guarantor, LyondellBasell Industries AF S.C.A.:
-- The US$1.3 billion equivalent bonds due 2015 issued by
LyondellBasell Industries AF S.C.A. and the US$300
million bonds due 2027 issued by Basell Finance Co. B.V.
-- The US$250 million senior unsecured notes due 2026 issued
by related subsidiary Millennium America Inc.
At the same time, the ratings have been withdrawn on all debt
facilities issued by the group that had been refinanced as part
of the recent acquisition and new debt issuance.
The rating actions follow S&P's review of the security
structure, with the benefit of final documentation. The
security package for the legacy Equistar and Lyondell bonds is
considerably weaker than originally envisaged. The security
provided is shared with the senior secured term debt, which
leads to a significant dilution of potential recoveries.
The ratings on these legacy notes factor in material uncertainty
regarding the outcome of a potential insolvency process,
resulting from the intricacies and complexities of the security
structure. The order of distribution of proceeds from different
jurisdictions governing the different collateral pools could
affect recoveries either positively or negatively. S&P's
expectation is that any insolvency filings would take place both
in Europe and the United States at similar times, with the
outcome for the legacy bonds being difficult to predict.
The revision of the recovery rating on the proposed second-lien
notes reflects S&P's expectation that any issuance will for the
time being rank pari passu with the unrefinanced portion of the
second-lien bridge loan. The total amount of pari passu ranking
second-lien debt is expected to total no more than US$8 billion.
In the event that the bridge loan is partially refinanced with
less-well secured or unsecured debt, the ratings on this
instrument would be reviewed.
Recovery expectations for the main senior secured instruments
are underpinned by an extensive security and guarantee package.
The group benefits from an extensive and good quality asset
base, as well as a leading market position as the No. 3 producer
of chemical products worldwide, which support going-concern
valuation and a distressed enterprise value of about US$18.5
billion. After distribution through a particularly complex
waterfall, senior secured lenders are expected to achieve very
high recoveries, with more varied recovery prospects for the
less-well secured or more junior debt instruments.
The 'B-' ratings on the various unsecured debt instruments are
two notches lower than the corporate credit rating of
LyondellBasell Industries AF S.C.A. and reflect the overall
level of subordination to prior-ranking secured or guaranteed
debt. The instruments nevertheless benefit from different
guarantee packages and therefore rank differently between each
other.
Ratings Lowered:
To From
Lyondell Chemical Co.: ----------
-- Senior secured debt (US$225-mil. due 2020) B BB
-- (Recovery rating) 5 1
-- Senior secured debt (US$100-mil. due 2010) B BB
-- (Recovery rating) 5 1
Equistar Chemicals L.P.:
-- Senior secured debt B+ BB
-- (Recovery rating) 4 1
LyondellBasell Finance Co. Ltd.:
-- Proposed US$5.5 billion second lien notes B B+
-- (Recovery rating) 5 4
Rating Withdrawn:
LyondellBasell Finance Co. Ltd.:
-- Proposed senior unsecured debt NR B-
Headquartered in Houston, Texas, Lyondell Chemical Company
(NYSE:LYO) -- http://www.lyondell.com/-- is North America's
third-largest independent, publicly traded chemical company.
Lyondell manufactures chemicals and plastics, a refiner of
heavy, high-sulfur crude oil and a significant producer of fuel
products. Key products include ethylene, polyethylene, styrene,
propylene, propylene oxide, gasoline, ultra low-sulfur diesel,
MTBE and ETBE.
The company also has locations in Austria, France, Italy, The
Netherlands, Belgium, Germany, Spain, United Kingdom, Brazil,
China, Japan, Taiwan, India and Singapore.
MRS LOGISTICA: Will Invest BRL141 Million in 866 New Railcars
-------------------------------------------------------------
MRS Logistica said in a statement that it will invest some
BRL141 million in 866 new railcars.
Business News Americas relates that MRS Logistica will also have
15 new locomotives from the producer G, an investment of US$35
million made in 2007. MRS Logistica will get another 75
locomotives by the end of 2008.
MRS Logsitica said in a filing with Brazilian securities
regulator Comissao de Valores Mobiliarios that Finame credit
line will finance the railcars.
"From January 2000 to January 2008, we will purchase 3,416
railcars. By July 2008, another 1,402 units should arrive," MRS
Logistica head Julio Fontana Neto commented to BNamericas.
The MRS consortium is a railway freight transport company
established in 1996 to operate approximately 1,700 kilometers of
track in the states of Minas Gerais, Rio de Janeiro e Sao Paulo.
MRS's rail network is also linked to the Central Atlantic,
Vitoria-Minas and Sao Paulo Railroads, offering intramodal
transportation options to the other parts of the country. The
company mainly transports cargo for its principle shareholders.
* * *
As reported in the Troubled Company Reporter-Latin America on
May 24, 2007, Standard & Poor's Ratings Services affirmed its
'BB' long-term corporate credit rating on Brazil-based railroad
company MRS Logistica S.A. S&P revised the outlook to positive
from stable.
NET SERVICOS: Moody's Assigns Ba2 Rating on US$200-Mln Sr. Notes
----------------------------------------------------------------
Moody's Investors Service has assigned a Ba2 foreign currency
rating to the proposed up to US$200 million guaranteed long term
senior unsecured notes to be issued by Net Servicos de
Comunicacao S.A. The rating outlook is stable.
The Ba2 rating of the notes reflects Net Servicos' position as
the leading pay TV company in Brazil with a 46% market share and
its strong growth in broadband and cable telephony services.
The rating is also supported by the strategic nature of the
company for Telmex (A2/sta), which is a major shareholder; as
well as the company's relatively low leverage, improving
interest coverage and solid liquidity position. At the same
time, the Ba2 rating continues to be primarily constrained by
two main factors: 1) competition, and 2) the cyclical nature of
the cable TV business in Brazil, making the industry more
vulnerable to economic downturns than is the case in more
developed markets, where pay TV is already seen as an essential
service.
Moody's Ba2 foreign-currency rating for the proposed notes is at
the same level as its Ba2 corporate family rating based on the
company's low level of secured debt on a consolidated basis
(approximately 5%) and also because the notes will be
unconditionally guaranteed by all of the company's wholly-
subsidiaries, representing essentially all of the company's cash
flow. Net intends to use most of the net proceeds of the note
issuance to fund the acquisition of BIGTV, with the balance
utilized to fund capital expenditures and for general corporate
purposes. Moody's has reviewed preliminary draft legal
documentation for the transaction and the rating for the notes
assumes that there will be no material deviation from the drafts
reviewed and that all legal agreements are legally valid,
binding and enforceable.
Moody's affirmed the company's rating on Dec. 28, 2007,
following its announced agreement to acquire 100% of the capital
of BIGTV based. The transaction is subject to regulatory
(ANATEL) and anti-trust commission (CADE) rulings, which should
take place within the next six months.
The stable outlook assumes that Net Servicos can at least
maintain its market share and experience mid single digit growth
in its pay-TV subscriber base and double digit growth in its
broadband subscriber base over the next few years, due to its
low penetration relative to its existing level of homes passed,
combined with its triple-play offering and continued marketing
efforts. The stable outlook also assumes that the company will
manage its future acquisition and overall growth strategy
maintaining a comfortable liquidity position and financial
leverage below 2.5 times on a total debt to EBITDA basis.
Rating assigned:
-- Up to US$200 million long term guaranteed senior unsecured
notes: Ba2
Ratings affirmed:
-- Local currency corporate family rating: Ba2
-- Brazilian national scale corporate family rating: Aa3.br
Headquartered in Sao Paulo, Brazil, Net Servicos de Comunicacao
SA -- http://Nettv.globo.com/NETServ/br/home/indexNet.jsp?id=1
-- is the largest cable company in Latin America with
approximately 2.4 million Pay TV subscribers as of Sept. 30,
2007. The company also offers bidirectional broadband Internet
access through its Virtua franchise and voice services through
Net Fone via Embratel. The acquisition of BIGTV will add 107
thousand and 56 thousand pay-TV and broadband subscribers,
respectively, to Net's subscriber base.
SUN MICROSYSTEMS: Caris & Co. Maintains Above Rating on Firm
------------------------------------------------------------
Caris & Company analyst Shebly Seyrafi has kept his "above
average" rating on Sun Microsystems Inc.'s shares,
Newratings.com reports.
Newratings.com relates that the target price for Sun
Microsystems was decreased to US$20.00 from US$25.20.
Mr. Seyrafi said in a research note that Sun Microsystems issued
a positive pre-announcement for the second quarter of the fiscal
year 2008, with revenues of almost US$3.6 billion and GAAP
earnings per share of up to US$0.32, which is above the
consensus.
Mr. Seyrafi told Newratings.com that sales of Sun Microsystems'
Intel/Galaxy products are not meeting expectations. Sun
Microsystems would face a challenging macro environment.
The earnings per share estimates for the fiscal years 2008 and
2009 were decreased to US$1.28 from US$1.37 and to US$1.51 from
US$1.68, respectively, Newratings.com states.
Headquartered in Santa Clara, California, Sun Microsystems Inc.
(NASDAQ: SUNW) -- http://www.sun.com/-- provides network
computing infrastructure solutions that include computer
systems, data management, support services and client solutions
and educational services. It sells networking solutions,
including products and services, in most major markets worldwide
through a combination of direct and indirect channels.
Sun Microsystems conducts business in 100 countries around the
globe, including Brazil, Argentina, India, Hungary, United
Kingdom, Singapore, among others.
* * *
Sun Microsystems Inc. carries Moody's "Ba1" probability of
default and long-term corporate family ratings with a stable
outlook. The ratings were placed on Sept. 22, 2006, and
Sept. 22, 2005, respectively.
Sun Microsystems also carries Standard & Poor's "BB+" long-term
foreign and local issuer credit ratings, which were placed on
March 5, 2004, with a stable outlook.
TELE NORTE: Inks Contracts with Nokia Siemens & Huawei Tech
-----------------------------------------------------------
A Tele Norte Leste Participacoes spokesperson told Dow Jones
Newswires that it has signed contracts with Nokia Siemens
Networks and Huawei Technology to deploy third generation
wireless infrastructure across Brazil.
Brazilian news daily Valor Economico relates that the contracts
cover 18 states and total BRL1 billion.
According to Dow Jones, Tele Norte will deploy 3G services in 53
municipal areas over next year. It will also set up a wireless
and 3G network in Sao Paulo. Tele Norte won band frequencies
that will let it operate in Sao Paulo.
Valor Economico notes that Tele Norte, Nokia Siemens, and Huawei
already agreed funding for the construction of the networks.
Nokia Siemens will supply the "nucleus" of the network and half
of the needed equipment. Meanwhile, Huawei Technology will
handle the remainder, Dow Jones states.
About Nokia Siemens
Nokia Siemens Networks wants to prove that titans don't have to
clash. The 50-50 joint venture combines the telecom carrier
operations of diversified manufacturer Siemens with the network
business of communications giant Nokia. With a product
portfolio spanning both wireless and wireline network equipment,
the company encompasses six business units: broadband access,
Internet protocol transport, operation support systems, radio
access, service core and applications, and services.
About Huawei
Huawei provides next generation telecommunications networks.
The company is committed to providing innovative and customized
products, services and solutions to create long-term value and
potential growth for its customers.
About Telemar Norte
Headquartered in Rio de Janeiro, Brazil, Tele Norte Leste
Participacoes SA -- http://www.telemar.com.br-- is a provider
of fixed-line telecommunications services in South America. The
company markets its services under its Telemar brand name. Tele
Norte's subsidiaries include Telemar Norte Leste SA; TNL PCS SA;
Telemar Internet Ltda.; and Companhia AIX Participacoes SA.
As reported on April 27, 2007, Standard & Poor's placed on
CreditWatch with negative implications the 'BB+' corporate
credit rating on Tele Norte Leste Participacoes S.A. The
creditwatch resulted from TmarPart's decision to buy out its
holding company's preferred shares.
VALMONT INDUSTRIES: Acquires PennSummit Tubular's Assets
--------------------------------------------------------
Valmont Industries, Inc., has acquired the assets of PennSummit
Tubular, LLC, a manufacturer of steel poles primarily for the
utility industry. PennSummit, which is headquartered in
Hazelton, Pennsylvania, had fiscal year 2007 revenues of
approximately US$50 million.
"PennSummit is a very strategic acquisition as it broadens
Valmont's customer base in the utility industry and strengthens
our leadership position," said Valmont's Chairperson and Chief
Executive Officer, Mogens C. Bay. "As the utility industry
continues to invest in the transmission and distribution grid
and improve the reliability of electric power delivery,
Valmont's investment is especially timely."
Valmont's President of the Utility Structures Division, Earl
Foust added, "PennSummit further enhances our geographic
footprint with two locations in Pennsylvania. This allows us to
better serve our utility customers in the Northeast, where
previously we did not have any manufacturing facilities. We
have known and respected the PennSummit organization for many
years, and will benefit from the capabilities of their seasoned
management team. PennSummit Tubular will carry the name Valmont-
PennSummit and operate as part of Valmont-Newmark, the Utility
Division of Valmont Industries, Inc. Valmont-PennSummit will
continue to be led by Raj Pawar, and we are delighted that Raj
and his team have decided to join forces with Valmont."
PennSummit Tubular President, Raj Pawar added, "We are very
excited to join the Valmont team, Valmont's commitment to
engineering, quality, service and product development
complements the PennSummit culture."
About Valmont
Headquartered in Valley, Nebraska, Valmont Industries Inc.
-- http://www.valmont.com/-- is engaged in the manufacture of
fabricated metal products, metal and concrete pole and tower
structures. The company also operates in Brazil.
* * *
As reported in the Troubled Company Reporter-Latin America on
Jan. 17, 2008, Standard & Poor's Ratings Services has raised its
ratings on metal products fabricator Valmont Industries Inc. and
removed them from CreditWatch, where they were placed with
positive implications on Nov. 20, 2007. The corporate credit
rating was raised to 'BB+' from 'BB'. S&P said the outlook is
stable.
===========================
C A Y M A N I S L A N D S
===========================
BRIDGE INVESTMENT: Holding Final Shareholders Meeting on Jan. 24
----------------------------------------------------------------
Bridge Investment Holding Limited will hold its final
shareholders meeting on Jan. 24, 2008, at 10:00 a.m. at:
Deloitte
Fourth Floor, Citrus Grove
P.O. Box 1787, George Town
Grand Cayman, Cayman Islands
These agendas will be taken during the meeting:
1) accounting of the winding-up process; and
2) authorizing the liquidator to retain the records of
the company for a period of five years from the
dissolution of the company after which they may be
destroyed.
Bridge Investment's shareholders agreed on Dec. 11, 2007, to
place the company into voluntary liquidation under The Companies
Law (2004 Revision) of the Cayman Islands.
The liquidator can be reached at:
Stuart Sybersma
Attention: Mervin Solas
Deloitte
P.O. Box 1787, George Town
Grand Cayman, Cayman Islands
Telephone: (345) 949-7500
Fax: (345) 949-8258
CABLE & WIRELESS: JP Morgan Maintains Neutral Rating on Firm
------------------------------------------------------------
JP Morgan analysts have kept their "neutral" rating on Cable &
Wireless Plc's shares, Newratings.com reports.
The analysts said in a research note that Cable & Wireless is a
leading mobile and fixed line telephony firm in Panama. About
23% of its EBITDA in the first half of 2008 come from the
Panamanian telephony division.
However, the entry of newer players in Panama's mobile segment
could restrict Cable & Wireless' margins at this division,
Newratings.com says, citing the analysts.
The Panama National Authority of Public Services finalized the
list of mobile bidders for another mobile license. The final
contracts would be signed by April 14, Newratings.com states.
Headquartered in London, Cable & Wireless Plc --
http://www.cw.com/new/-- provides voice, data and IP (Internet
Protocol) services to business and residential customers, as
well as services to other telecoms carriers, mobile operators
and providers of content, applications and Internet services.
The company has operations are in the United Kingdom, India,
China, the Cayman Islands and the Middle East.
* * *
In April 2007, in connection with the implementation of its new
Probability-of-Default and Loss-Given-Default rating methodology
for the corporate families in the Telecommunications, Media and
technology sector, Moody's Investors Service confirmed its Ba3
Corporate Family Rating for Cable & Wireless Plc.
Moody's also assigned a Ba3 Probability-of-Default rating to the
company.
* Issuer: Cable & Wireless Plc
Projected
Debt LGD Loss-Given
Debt Issue Rating Rating Default
---------- ------- ------- --------
4% Senior Unsecured
Conv./Exch.
Bond/Debenture
Due 2010 B1 LGD4 60%
GBP200 million
8.75% Senior
Unsecured Regular
Bond/Debenture
Due 2012 B1 LGD4 60%
COUTTS FINANCE: Sets Final Shareholders Meeting for Jan. 24
-----------------------------------------------------------
Coutts Finance Company (Cayman) Limited will hold its final
shareholders meeting on Jan. 24 at:
Coutts House, 1446 West Bay Road
P.O. Box 707, Grand Cayman KY1-1107
Cayman Islands
These agendas will be taken during the meeting:
1) accounting of the winding-up process; and
2) authorizing the liquidator to retain the records of
the company for a period of five years from the
dissolution of the company after which they may be
destroyed.
Coutts Finance's shareholders agreed on Dec. 11, 2007, to place
the company into voluntary liquidation under The Companies Law
(2004 Revision) of the Cayman Islands.
The liquidator can be reached at:
Royhaven Secretaries Limited
Attention: Judith Chatoo
P.O. Box 707, Grand Cayman KY1-1107
Cayman Islands
Telephone: 945-4777
Fax: 945-4799
LINAVEN INVESTMENTS: Sets Final Shareholders Meeting for Jan. 24
----------------------------------------------------------------
Linaven Investments Limited will hold its final shareholders
meeting on Jan. 24, 2008, at the office of the company.
These agendas will be taken during the meeting:
1) accounting of the winding-up process; and
2) authorizing the liquidator to retain the records of
the company for a period of five years from the
dissolution of the company after which they may be
destroyed.
Linaven Investments' shareholders agreed on Dec. 11, 2007, to
place the company into voluntary liquidation under The Companies
Law (2004 Revision) of the Cayman Islands.
The liquidator can be reached at:
Royhaven Secretaries Limited
Attention: Fiona Graham
P.O. Box 707, Grand Cayman KY1-1107
Cayman Islands
Telephone: 945-4777
Fax: 945-4799
MAJESTIC MOUNTAINS: Final Shareholders Meeting Is on Jan. 24
------------------------------------------------------------
Majestic Mountains Limited will hold its final shareholders
meeting on Jan. 24 at:
Cititrust (Cayman) Limited
CIBC Financial Center, George Town
Grand Cayman, Cayman Islands
These agendas will be taken during the meeting:
1) accounting of the winding-up process; and
2) giving explanation thereof.
Majestic Mountains' shareholders agreed on Dec. 13, 2007, to
place the company into voluntary liquidation under The Companies
Law (2004 Revision) of the Cayman Islands.
The liquidator can be reached at:
Buchanan Limited
P.O. Box 1170, Grand Cayman KY1-1102
Cayman Islands
MEMBERSHIP III: To Hold Final Shareholders Meeting on Jan. 24
-------------------------------------------------------------
Membership III Corporation will hold its final shareholders
meeting on Jan. 24 at 10:00 a.m. at:
BNP Paribas Bank & Trust Cayman Limited
3rd Floor Royal Bank House, Shedden Road
George Town, Grand Cayman
Cayman Islands
These agendas will be taken during the meeting:
1) accounting of the winding-up process; and
2) authorizing the liquidator to retain the records of
the company for a period of five years from the
dissolution of the company after which they may be
destroyed.
Membership III's shareholders agreed on Dec. 12, 2007, to place
the company into voluntary liquidation under The Companies Law
(2004 Revision) of the Cayman Islands.
The liquidator can be reached at:
Piccadilly Cayman Limited
Attention: Ellen J. Christian
c/o BNP Paribas Bank & Trust Cayman Limited
3rd Floor Royal Bank House, Shedden Road
George Town, Grand Cayman
Cayman Islands
Telephone: 345 945 9208
Fax: 345 945 9210
PYLOS III: Holding Final Shareholders Meeting on Jan. 24
--------------------------------------------------------
Pylos III Limited will hold its final shareholders meeting on
Jan. 24 at 10:00 a.m. at:
BNP Paribas Bank & Trust Cayman Limited
3rd Floor Royal Bank House, Shedden Road
George Town, Grand Cayman
Cayman Islands
These agendas will be taken during the meeting:
1) accounting of the winding-up process; and
2) authorizing the liquidator to retain the records of
the company for a period of five years from the
dissolution of the company after which they may be
destroyed.
Pylos III's shareholders agreed on Dec. 12, 2007, to place the
company into voluntary liquidation under The Companies Law (2004
Revision) of the Cayman Islands.
The liquidator can be reached at:
Piccadilly Cayman Limited
Attention: Ellen J. Christian
c/o BNP Paribas Bank & Trust Cayman Limited
3rd Floor Royal Bank House, Shedden Road
George Town, Grand Cayman
Cayman Islands
Telephone: 345 945 9208
Fax: 345 945 9210
ROOT BROKERS: Sets Final Shareholders Meeting for Jan. 24
---------------------------------------------------------
Root Brokers Limited will hold its final shareholders meeting on
Jan. 24 at:
Cititrust (Cayman) Limited
CIBC Financial Center, George Town
Grand Cayman, Cayman Islands
These agendas will be taken during the meeting:
1) accounting of the winding-up process; and
2) giving explanation thereof.
Root Brokers' shareholders agreed on Dec. 13, 2007, to place the
company into voluntary liquidation under The Companies Law (2004
Revision) of the Cayman Islands.
The liquidator can be reached at:
Buchanan Limited
P.O. Box 1170, Grand Cayman KY1-1102
Cayman Islands
SHOWINA INVESTMENT: Final Shareholders Meeting Is on Jan. 24
------------------------------------------------------------
Showina Investment Limited will hold its final shareholders
meeting on Jan. 24 at:
Cititrust (Cayman) Limited
CIBC Financial Center, George Town
Grand Cayman, Cayman Islands
These agendas will be taken during the meeting:
1) accounting of the winding-up process; and
2) giving explanation thereof.
Showina Investment's shareholders agreed on Dec. 13, 2007, to
place the company into voluntary liquidation under The Companies
Law (2004 Revision) of the Cayman Islands.
The liquidator can be reached at:
Buchanan Limited
P.O. Box 1170, Grand Cayman KY1-1102
Cayman Islands
STAY-CALM LIMITED: Final Shareholders Meeting Is on Jan. 24
---------------------------------------------------------
Stay-Calm Limited will hold its final shareholders meeting on
Jan. 24 at:
Cititrust (Cayman) Limited
CIBC Financial Center, George Town
Grand Cayman, Cayman Islands
These agendas will be taken during the meeting:
1) accounting of the winding-up process; and
2) giving explanation thereof.
Stay-Calm's shareholders agreed on Dec. 13, 2007, to place the
company into voluntary liquidation under The Companies Law (2004
Revision) of the Cayman Islands.
The liquidator can be reached at:
Buchanan Limited
P.O. Box 1170, Grand Cayman KY1-1102
Cayman Islands
ZARANDI LIMITED: Final Shareholders Meeting Is on Jan. 24
---------------------------------------------------------
Zarandi Limited will hold its final shareholders meeting on
Jan. 24 at:
Cititrust (Cayman) Limited
CIBC Financial Center, George Town
Grand Cayman, Cayman Islands
These agendas will be taken during the meeting:
1) accounting of the winding-up process; and
2) giving explanation thereof.
Zarandi Limited's shareholders agreed on Dec. 13, 2007, to place
the company into voluntary liquidation under The Companies Law
(2004 Revision) of the Cayman Islands.
The liquidator can be reached at:
Buchanan Limited
P.O. Box 1170, Grand Cayman KY1-1102
Cayman Islands
=========
C H I L E
=========
GOODYEAR TIRE: Holders Can Convert 4% Sr. Notes Until March 31
--------------------------------------------------------------
The Goodyear Tire & Rubber Company has announced that its 4.00%
Convertible Senior Notes due June 15, 2034 are now convertible
at the option of the holders and will remain convertible through
March 31, 2008, the last business day of the current fiscal
quarter.
The notes became convertible because the last reported sale
price of the company's common stock for at least 20 trading days
during the 30 consecutive trading-day period ending on
Jan. 16, 2008, the 11th trading day of the current fiscal
quarter, was greater than 120 percent of the conversion price in
effect on such day. The notes have been convertible in previous
fiscal quarters.
The company will deliver shares of its common stock or pay cash
upon conversion of any notes surrendered on or prior to
March 31, 2008. If shares are delivered, cash will be paid in
lieu of fractional shares only. Issued in July 2004, the notes
are currently convertible at a rate of 83.0703 shares of common
stock per US$1,000 principal amount of notes, which is equal to
a conversion price of US$12.04 per share.
During the fourth quarter of 2007, the company completed an
exchange offer for outstanding notes for a cash payment and
shares of common stock. As a result, less than US$4 million in
aggregate principal amount of notes remain outstanding. If all
outstanding notes are surrendered for conversion, the aggregate
number of shares of common stock issued would be approximately
0.3 million.
The notes could be convertible after March 31, 2008, if the sale
price condition described above is met in any future fiscal
quarter or if any of the other conditions to conversion set
forth in the indenture governing the notes are met.
About Goodyear Tire
Headquartered in Akron, Ohio, The Goodyear Tire & Rubber Company
(NYSE: GT) -- http://www.goodyear.com/-- is the world's largest
tire company. The company manufactures tires, engineered rubber
products and chemicals in more than 90 facilities in 28
countries. Goodyear's operations are located in Argentina,
Austria, Chile, Colombia, France, Italy, Guatemala, Jamaica,
Peru, Russia, among others. Goodyear employs more than 80,000
people worldwide.
* * *
In June 2007, Standard & Poor's Ratings Services raised its
ratings on Goodyear Tire & Rubber Co., including its corporate
credit rating to 'BB-' from 'B+'. These ratings still apply as
of Dec. 4, 2007.
===============
C O L O M B I A
===============
US AIRWAYS: Messrs. Ferayorni & Riccoboni Join IT Group
-------------------------------------------------------
US Airways announced two new executive appointments in its
Information Technologies group. Approved earlier by the
airline's board of directors, Alan Ferayorni has been named vice
president, IT infrastructure and Kevin Riccoboni has been named
vice president, technology delivery for airline operations.
Both executives will report directly to Senior Vice President
and Chief Information Officer Joe Beery.
"We couldn't be more pleased to have Al and Kevin join our
team," said Mr. Beery. "The technology support needs of an
airline our size are vast and the complexity of our systems
cannot be overstated. Both Al and Kevin bring the necessary
breadth and depth to help lead the IT team as we support our
current technology and explore future applications that support
our key company objectives surrounding improved reliability and
convenience."
Background on Alan Ferayorni
Mr. Ferayorni will oversee IT infrastructure, which includes
approximately 18,000 personal computers and the airline's self
service check-in kiosks. He will also oversee the airline's
mainframe server environment and all data center operation and
support functions.
"Information technology systems touch every area of our business
and are critical to the reliable operation of our airline and
the convenience of our customers," Mr. Beery said. "Alan has
extensive experience tying technology to the business needs of
large organizations, and we are delighted to welcome him to US
Airways."
Mr. Ferayorni has 35 years of IT experience and joins US Airways
from Motorola where he was senior director, information
technology (corporate group). He holds a Master of Business
Administration from Arizona State University and a Bachelor of
Science in Mathematics from St. John's University in New York
City.
Background On Kevin Riccoboni
Mr. Riccoboni's position consolidates US Airways' software
development, and support for all of the operations systems,
under one individual.
"Kevin has done an outstanding job overseeing operationally
critical and complicated assignments, most recently coordinating
all of our systems integration work over the past two years as
we moved to a single operating certificate," Mr. Beery said.
"In his new role, Kevin will lead initiatives to develop and
deploy new technology to our operational group, which includes
crew resources, airport automation, technical operations and
reservations."
Mr. Riccoboni joined the airline in 2001 as director, business
technology delivery, supporting the technical operations and
safety organizations. In June 2004, he was promoted to managing
director, business technology delivery, supporting US Airways
technical operations, safety, flight operations, in-flight and
crew resources organizations.
Mr. Riccoboni spent 18 years at Motorola serving in various
managerial positions within manufacturing and information
systems in that company's semiconductor sector. He holds a
Bachelor of Science degree in Information Systems from Western
International University in Phoenix.
About US Airways
Based in Tempe, Arizona, US Airways Group Inc.'s (NYSE: LCC) -
http://www.usairways.com/-- primary business activity is the
ownership of the common stock of US Airways, Inc., Allegheny
Airlines, Inc., Piedmont Airlines, Inc., PSA Airlines, Inc.,
MidAtlantic Airways, Inc., US Airways Leasing and Sales, Inc.,
Material Services Company, Inc., and Airways Assurance Limited,
LLC.
US Airways has operations in Japan, Australia, China, Costa
Rica, Philippines, and Spain, among others.
Under a Chapter 11 plan declared effective on March 31, 2003,
USAir emerged from bankruptcy with the Retirement Systems of
Alabama taking a 40% equity stake in the deleveraged carrier in
exchange for US$240 million infusion of new capital.
US Airways and its subsidiaries filed another chapter 11
petition on Sept. 12, 2004 (Bankr. E.D. Va. Case No. 04-13820).
Brian P. Leitch, Esq., Daniel M. Lewis, Esq., and Michael J.
Canning, Esq., at Arnold & Porter LLP, and Lawrence E. Rifken,
Esq., and Douglas M. Foley, Esq., at McGuireWoods LLP, represent
the Debtors in their restructuring efforts. In the Company's
second bankruptcy filing, it lists US$8,805,972,000 in total
assets and US$8,702,437,000 in total debts.
The Debtors' Chapter 11 plan for its second bankruptcy filing
became effective on Sept. 27, 2005. The Debtors completed their
merger with America West on the same date.
* * *
US Airways Group Inc.'s US$1.6 billion secured credit facility
due 2014, currently being syndicated, carries Standard & Poor's
Ratings Services 'B' rating. That rating was assigned in March
2007.
===================
C O S T A R I C A
===================
GRUPO M: Selling Dollar-Denominated Debt to Fund Expansion
----------------------------------------------------------
Grupo M Holding SA is planning to sell dollar-denominated debt
to fund expansion and repay debt, Guillermo Parra-Bernal at
Bloomberg News reports, citing a person familiar with the
matter.
According to the unidentified person, the company will offer
senior, unsecured notes that mature in 2018, saying Grupo M
might choose to pay off the securities after 2013.
Bloomberg relates that Merrill Lynch & Co. will be involved with
the sale. U.S., European and Asian investors have been offered
from the notes, which started Jan. 16 through Jan. 23. The same
person told Bloomberg that Moody's Investors Service is expected
to affirm the securities a Ba3 rating, three levels below
investment grade, and Standard & Poor's might rank them an
equivalent BB-.
Proceeds from its first dollar bond sale will be used to repay
US$30 million of senior secured interim notes issued in November
and other obligations, sources said. In addition, the remaining
proceeds will be used for capital expenditures and general
corporate purposes, Bloomberg states.
Report shows that the offering has been initiated in November
but was suspended due to several biggest banks' comments about
growing losses related to the U.S. mortgage debt market, pared
purchases and sales of bonds and stocks and restricted lending.
Based in Alajuela, Costa Rica, Grupo M Holding S.A., a
privately-owned holding company, through its subsidiaries, is
the leading retailer of consumer electronics, home furniture,
home appliances, and telephone and computer equipment in Central
America. The company largely caters to low and medium income
customers to which it offers installment financing plans as an
integral part of its business. For the 12 months ended
Sept. 30, 2007, sales and reported EBITDA reached about US$361
million and US$64 million, respectively. The company has
operations in Nicaragua, Honduras, Guatemala and El Salvador.
* * *
As reported in the Troubled Company Reporter-Latin America on
Nov. 9, 2007, Moody's Investors Service has assigned a Ba3
global foreign currency rating to Grupo M Holding S.A.'s
proposed US$150 million senior unsecured notes due 2017.
Moody's has also assigned a Ba3 corporate family rating to the
company. This is the first time Moody's has assigned ratings to
Grupo M. Moody's said the rating outlook is stable.
===================================
D O M I N I C A N R E P U B L I C
===================================
AFFILIATED COMPUTER: Tennessee Medicaid Likely to Award New Deal
----------------------------------------------------------------
Affiliated Computer Services, Inc., has announced the Tennessee
Bureau of TennCare's intent to award a new contract for the
TennCare Management Information System. The proposed contract
has a length of five years and an evaluated total value of
US$156 million, and must be negotiated and executed prior to
Affiliated Computer commencing operations.
The proposed contract calls for Affiliated Computer to assume
responsibility for the current TennCare Management Information
System used by the state for the management of its Medicaid
program. In addition to the takeover, the company will be
responsible for data management, as well as ongoing systems
modifications and day-to-day operations. The company currently
supports Medicaid programs in 13 states and the District of
Columbia, in addition to the proposed contract with Tennessee.
Affiliated Computer will also assess current TennCare business
processes and collaboratively work with TennCare in making
business process improvement recommendations. Additionally, it
will be performing multiple enhancement projects, including the
development of an enterprise Project Management Office and
several other projects that will enable TennCare to leverage
technology in the most effective manner.
"Tennessee has been a leader in Medicaid Managed Care and is
looking to ACS' expertise and innovation to continue to advance
their program and keep TennCare as one of the premier Medicaid
programs in the country," said ACS senior vice president and
managing director, Government Healthcare Solutions, Christopher
T. Deelsnyder. "In taking over the system, we are committed to
our client's success and to building the enhancements that will
benefit all Tennesseans enrolled in the TennCare program."
TennCare is Tennessee's managed care Medicaid program, serving
1.2 million Tennesseans through a network of contracted, managed
care companies. The core of its population consists of
Medicaid-eligible people, most of whom are low-income children
and families, pregnant women, disabled people, women needing
treatment for breast or cervical cancer, or persons requiring
care in a nursing facility.
"Using Tennessee's competitive bid process to help ensure
TennCare vendors bring added-value at competitive prices to our
state is a cornerstone of our program's operational success,"
said Bureau of TennCare deputy commissioner, Darin Gordon.
"TennCare looks forward to working with ACS as they assume their
contracted responsibilities for an integral part of our day-to-
day operations."
Affiliated Computer is partnering with Zycron, a Nashville-based
minority-owned information technology staffing and outsourcing
company. "Zycron is excited to partner with ACS in supporting
the state in meeting TennCare objectives," said Zycron Chief
Executive Officer, Darrell Freeman. "Zycron's strong presence
in the IT industry coupled with ACS' international profile is
the ideal solution for the state of Tennessee."
About Affiliated Computer Services
Headquartered in Dallas, Affiliated Computer Services Inc.
(NYSE: ACS) -- http://www.acs-inc.com/-- provides business
process outsourcing and information technology solutions to
world-class commercial and government clients. The company has
more than 58,000 employees supporting client operations in
nearly 100 countries. The company has global operations in
Brazil, China, Dominican Republic, India, Guatemala, Ireland,
Philippines, Poland, and Singapore.
* * *
As reported in the Troubled Company Reporter-Latin America on
Jan. 8, 2008, Standard & Poor's Ratings Services affirmed its
'BB' corporate credit rating on Dallas, Texas-based Affiliated
Computer Services Inc., and removed it from CreditWatch, where
it had been placed with negative implications on March 20, 2007.
S&P said the outlook is negative.
=============
E C U A D O R
=============
DOLE FOOD: Units Appoint Three New Managers
-------------------------------------------
The Dole Food Co.'s units have appointed three new managers,
Fresh Plaza reports.
According to Fresh Plaza, Dole Fresh Fruit named Yvonne
Rentmeester as marketing services manager and appointed Odalis
Hawit-Rivera as brand manager. Meanwhile, Dole Fresh Vegetables
named Keith Kelley as marketing manager for new products.
Fresh Plaza relates that Ms. Rentmeester will manage the
technical services department, as well as banana ripening and
product handling from warehouse all the way through the retail
store. She will be responsible for Dole Fresh's marketing
representatives and the merchandising program.
Dole Fresh's marketing director David Bright commented to Fresh
Plaza, "This move integrates the activities of the technical
sand merchandising departments. Yvonne's experience, management
style, and attention to detail will greatly leverage the
resources of two departments into a strong program that
troubleshoots potential problems, identifies opportunities and
communicates Dole Fresh messages down to the retail store
level."
Fresh Plaza notes that Ms. Rentmeester started at Dole Fresh
Fruit as a technical service representative in November 1997.
She has managed the department since January 2000.
Ms. Hawit-Rivera will leverage market research and head Dole's
marketing to deliver value for clients and drive long-term sales
through message positioning, new product development, Fresh
Plaza says. Ms. Hawit-Rivera had held various positions at
Pharmavite, LLC, most recently as associate brand manager before
joining Dole Fresh.
"Odalis brings extensive experience in trade and consumer
marketing to Dole. She has the strong background in the
development and commercialization of new products that we have
been seeking," Mr. Bright commented to Fresh Plaza.
Meanwhile, Mr. Kelley's responsibilities Dole Fresh Vegetables
will be specifically concentrated on the firm's cross-functional
resources against top priority new product segments, Fresh Plaza
reports. He will co-manage the innovation process to drive
long-term sales and profit growth for Dole Fresh Value-Added
Business. Mr. Kelley has extensive packaged consumer goods
experience in the areas of:
-- brand outreach,
-- product development,
-- strategic planning,
-- sales support, and
-- forecasting analysis, for products including
Columbia Crest Winery and Eight O'Clock Coffee.
"Keith brings direct, hands-on experience in areas relevant to
Dole Fresh Vegetable's business -- market segmentation,
merchandising and sales modeling. He has a successful track
record in building brands and delivering results across multiple
consumer categories, Dole Fresh Vegetables marketing director
Michelle Gonsalves told Fresh Plaza.
Headquartered in Westlake Village, California, Dole Food
Company, Inc. -- http://www.dole.com/-- is a producer and
marketer of fresh fruit, fresh vegetables and fresh-cut flowers,
and markets a line of packaged foods. The company has four
primary operating segments. The fresh fruit segment produces
and markets fresh fruit to wholesale, retail and institutional
customers worldwide. The fresh vegetables segment contains
operating segments that produce and market commodity vegetables
and ready-to-eat packaged vegetables to wholesale, retail and
institutional customers primarily in North America, Europe and
Asia. The packaged foods segment contains several operating
segments that produce and market packaged foods, including
fruit, juices and snack foods. Dole's fresh-cut! flowers
segment sources, imports and markets fresh-cut flowers, grown
mainly in Colombia and Ecuador, primarily to wholesale florists
and supermarkets in the U.S.
PETROECUADOR: Budget Decreases 6% to US$4.8 Billion in 2008
-----------------------------------------------------------
Ecuadorian state-run oil firm Petroecuador's budget for 2008
decreased 6% to US$4.8 billion, from US$1.5 billion last year,
the oil ministry said in a statement.
According to Reuters, the government transferred some of the
costs of fuel imports from Petroecuador into the national
budget.
Reuters relates that Petroecuador's investment budget increased
to US$1.73 billion to boost its production to 200,000 barrels
per day this year from 170,000 barrels per day in 2007.
Energy minister Galo Chiriboga told the Associated Press that
some US$2 billion will be invested in the oil industry to boost
output by 11%.
About US$1.7 billion will be used to increase production at
Petroecuador and another US$300 million will be used for the
Esmeraldas refinery revamp, Ecuador Inmediato radio says, citing
Minister Chiriboga.
Meanwhile, Petroecuador said in a statement that its board has
authorized a US$5.15 billion investment and operating budget for
this year.
Business News Americas relates that major projects this year
will include:
-- developing the 300,000-barrel-per-day Manabi
refinery,
-- developing the Panacocha oilfield, and
-- upgrading plants.
Petroecuador wants to produce about 107,000 barrels a day in the
former Occidental Petroleum Company fields, including block 15,
this year. Budget for those fields will total US$713 million:
US$276 million will be used for operative and administrative
expenses and US$437 million for investment, Dow Jones Newswires
states. Block 15 has a separate budget than the one set out for
Petroecuador.
In previous years, Petroecuador, according to published reports,
was 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 inefficiency and non-transparency in
Petroecuador's dealings. In 2008, a new management team was
appointed to turn around the company's operations.
* ECUADOR: To Invest US$2 Billion to Increase Oil Production
------------------------------------------------------------
Ecuador, in an attempt to boost oil production by 11%, is
investing US$2 billion in 2007, the Associated Press reports,
citing Energy Minister Galo Chiriboga.
Mr. Chiriboga told Ecuador Inmediato radio that the US$1.7
billion investment will help production to increase at
Petroecuador while US300 million will be used for Esmeraldas
refinery restoration.
According to the report, Ecuador ranked as South America's
fifth-largest oil producer with an average of 510,000 barrels of
crude per day.
AP relates that President Rafael Correa critized the
government's 9.8% drop in oil production was the result of 2.67%
economic growth -- one of the lowest rates in the region.
In November 2007, Mr. Correa became the new head of Petroecuador
and inked a decree that nearly doubled the state's share of oil
profits -- earnings on oil sold above prices fixed in company
contracts, AP states.
Financial analysts was skeptical that can raise productivity and
growth following Mr. Correa's repeated hopes to increase state
control of the economy, AP adds.
* * *
As reported in the Troubled Company Reporter-Latin America on
Dec. 26, 2007, Standard & Poor's Ratings Services has assigned
B- long-term sovereign local and foreign currency ratings and C
short-term sovereign local and foreign currency ratings on
Ecuador.
As reported in the Troubled Company Reporter-Latin America on
Nov. 1, 2007, Fitch Ratings affirmed and removed from Rating
Watch Negative the long-term foreign currency Issuer Default
Rating of Ecuador at 'CCC', the country ceiling at 'B-' and the
short-term IDR at 'C'. Fitch said the rating outlook is stable.
In addition, these bond ratings were affirmed:
-- Uncollateralized foreign currency bonds at 'CCC/RR4';
-- Collateralized foreign currency Par and Discount Brady
bonds at 'CCC+/RR3'.
=================
G U A T E M A L A
=================
BANCO INDUSTRIAL: Banpais Buyout Cues Moody's to Change Outlook
---------------------------------------------------------------
Moody's Investors Service has affirmed the ratings of Banco
Industrial S.A. following the acquisition of Banpais, Honduras'
fifth largest bank, by Bicapital, its parent holding company.
The outlook for the bank financial strength rating was changed
to negative.
At the same time, the agency affirmed the stable outlook for the
bank's Baa3 and Prime-3 long and short-term global local
currency deposit ratings, which include systemic support
considerations for its local currency obligations. The positive
outlook for the Ba3 and Not Prime long and short term foreign
currency deposit ratings was also affirmed, as they remain
constrained by the country ceiling for deposits, which also have
a positive outlook.
On Dec. 19, 2007, Banco Industrial acquired a 90% stake and
controlling interest in Grupo Financiero Banpais, through
Bicapital, the group's Panama-based parent holding company, and
88% owner of Banco Industrial. The Honduran group's main assets
are Banco del Pais, a universal bank, and insurance company
Seguros del Pais. Moody's does not currently rate Banpais.
The rating agency noted that the Banpais acquisition is Banco
Industrial's fourth in the past two years and is a sizable one,
as it is equal to about 18% of the acquiring group's assets.
The Banpais transaction is the group's first major cross border
acquisition and, as such, it may expose the group to increasing
credit and market risk within a less creditworthy and more
highly dollarized country. Moreover, Moody's said, the
acquisition challenges management's cross border expertise.
Moody's noted at the same time that Industrial's financial
performance benefits from its position as the dominant
Guatemalan banking group in terms of loan and deposit market
shares, a growing and increasingly core deposit base, and strong
distribution capabilities. However, the bank is facing intense
competition from a host of international banks that have entered
the region aggressively in recent years. The transaction is
designed as a defensive move to counteract that encroachment as
well as to provide diversification and earnings enhancement
opportunities for the group, said Moody's.
The negative outlook for financial strength however reflects the
aggressive nature of the financing package for the transaction
as well as the group's acquisitive strategy. Though financed
through the holding, the double leverage used to acquire the
Honduran entity raises the question of a potential financial
drain on Banco Industrial's earnings and capital as the main
profit and cash flow generator of the group.
The agency noted that the ratings affirmation is predicated on
the expectation that the double leverage at the holding company
will be eliminated within the next six months through the
group's planned IPO or by other means. It also assumes that the
bank's tier one adjusted capital ratio will be maintained at
historical levels aided by its enhanced profit potential,
shareholder infusions, and a limited upstreaming of dividends to
the holding.
Should the group's double leverage not be eliminated on
schedule, however, a negative rating action is likely, said the
agency.
These ratings were affirmed for Banco Industrial S.A.:
-- Bank Financial Strength Rating: D, outlook changed to
negative from stable
-- Long Term Global Local Currency Deposits: Baa3, with
stable outlook
-- Short Term Global Local Currency Deposits: Prime-3
-- Long Term Foreign Currency Deposits: Ba3, with positive
outlook
-- Short Term Foreign Currency Deposits: Not Prime
Banco Industrial SA is the largest bank in Guatemala. As of
June 30, 2007, it has consolidated assets of approximately
US$4.5 billion and equity of US$373.3 million. As of
Sept. 30, 2007, Banpais had US$925 million in assets, US$600
million in deposits, and earnings of approximately US$22
million.
BRITISH AIRWAYS: Pilots May Protest Against OpenSkies' Launching
----------------------------------------------------------------
British Airways' pilots may hold protest against the airline's
launching of transatlantic unit OpenSkies, Travel Weekly
reports.
As reported in the Troubled Company Reporter-Latin America on
Jan. 14, 2008, British Airways will be launching its new US-EU
subsidiary airline "OpenSkies" with daily flights from New York
to Brussels and Paris in June 2008 with one Boeing 757 aircraft
that will operate from New York to either Brussels or Paris
Charles de Gaulle airports. A second aircraft will be added to
the fleet later this year to fly to the other EU destination.
The plan is to operate six 757s by the end of 2009, all of which
will be sourced from the current British Airways' fleet. The
aircraft will carry up to 82 passengers on Boeing 757 aircraft
with three onboard cabins: business, premium economy and
economy.
Sources told Travel Weekly that a strike ballot would be
possible without substantial concessions from British Airways.
British Airways met with pilots' union Balpa earlier last week
to determine whether OpenSkies has a difficult or successful
launch, with the two parties entering negotiations, Travel
Weekly notes. British Airways pilots will meet to discuss the
result of the meeting.
British Airways chief executive Willie Walsh told Travel Weekly
that the airline already operates a subsidiary operation with
CityFlyer, which offers regional services from London City.
According to him, OpenSkies will be similar to CityFlyer.
British Airways has pilots flying out of London City on
different terms and conditions to British Airways Mainline
pilots.
British Airways told Travel Weekly that it is recruiting pilots
for OpenSkies.
Meanwhile, a Balpa spokesperson commented to Travel Weekly, "BA
[British Airways] wants a separate workforce for OpenSkies and
we want to retain one pilot force to protect the professional
standards and reputation of BA."
Balpa explained to Travel Weekly that British Airways' CityFlyer
is a small operation with different aircraft from the rest of
the fleet. OpenSkies will use the same aircraft as British
Airways Mainline and fly similar routes across the Atlantic.
A source told David Kaminski-Morrow at Flight International that
pilots believe British Airways could split the crew corps to
form a separate organization.
Flight International relates that the pilots will demand for a
single pilot corps from which to draw crews for OpenSkies.
Balpa will seek assurances from British Airways after disclosing
details of the new carrier, five days ahead of scheduled
negotiations with the union.
According to Flight International, British Airways will still
determine what proportion of OpenSkies' pilots will be sourced
from mainline crews.
Pilots are worried that OpenSkies might have less-experienced
crews running its services and that its pay scales could even
drag down those at British Airways mainline, Flight
International states.
Mr. Walsh denied to Travel Weekly any dispute between British
Airways and its pilots. He admitted that he wants OpenSkies
pilots to be employed on different contracts and at different
pay rates from British Airways' current 3,000 pilots.
Headquartered in West Drayton, United Kingdom, British Airways
plc -- http://www.ba.com/-- operates of international and
domestic scheduled and charter air services for the carriage of
passengers, freight and mail, and provides of ancillary
services. The British Airways group consists of British Airways
plc and a number of subsidiary companies including in particular
British Airways Holidays Ltd. and British Airways Travel
Shops Ltd. BA has offices in India and Guatemala.
* * *
As of Jan. 2, 2008, British Airways plc carries a senior
unsecured debt rating of Ba1 from Moody's Investors' Service
with a stable outlook.
=============
J A M A I C A
=============
NATIONAL COMMERCIAL: Closing Cash Plus Accounts
-----------------------------------------------
The National Commercial Bank will be closing several alternative
investment agency Cash Plus Limited accounts, Radio Jamaica
reports.
As reported in the Troubled Company Reporter-Latin America on
Dec. 10, 2007, the attorneys for Cash Plus sought another
injunction against the National Commercial Bank before the
Jamaican court. The National Commercial's management allegedly
implemented precautionary measures to protect its workers from
angry supporters of alternative investment schemes. The
management instructed the workers not to wear their uniforms to
work. The instruction was reportedly issued on Wednesday when
persons accusing the National Commercial of taking part of a
plot to destroy alternative investment schemes threatened the
bank. Justice Marva McIntosh granted CASH Plus Limited a nine-
day injunction, blocking the National Commercial from closing
the 16 accounts held with the bank. The injunction effectively
prevented the National Commercial from closing Cash Plus'
accounts at its Duke Street and Barry Street unit in Kingston by
Dec. 4. Some of Cash Plus' account with the National Commercial
include:
-- remittance account,
-- foreign currency account,
-- Cash Mart Ltd,
-- Cash Plus Foods Ltd,
-- Atlantic Gas Distributors Ltd,
-- ExMil Security Company Ltd operating and general
accounts, and
-- the Drax Hall Ltd development local and foreign
currency accounts.
According to Radio Jamaica, the attorneys for the National
Commercial were successful in the legal battle to close the
accounts.
The Court of Appeal partially let the National Commercial's
appeal against an order of the Supreme Court, Radio Jamaica
says, citing the bank's general council and special projects
general manager Dave Garcia. The order had required the
National Commercial to keep open several Cash Plus accounts.
The National Commercial will be back in court to argue for the
closure of the remaining nine accounts, Radio Jamaica states.
* * *
As reported in the Troubled Company Reporter-Latin America on
Dec. 18, 2006, Standard & Poor's Rating Services affirmed its
'B/B' counterparty credit and CD ratings on National Commercial
Bank Jamaica Ltd. S&P said the outlook is stable.
* * *
As reported in the Troubled Company Reporter-Latin America on
May 2, 2007, Fitch Ratings affirmed these ratings on Jamaica-
based National Commercial Bank Jamaica Limited:
-- long-term foreign and local currency Issuer Default
Ratings (IDR) at 'B+';
-- short-term foreign and local currency rating at
'B';
-- individual at 'D';
-- support at 4.
The rating outlook on the bank's ratings is stable, in line with
Fitch's view of the sovereign's creditworthiness.
NATIONAL COMMERCIAL: Won't Honor World Wise' Managers Cheque
------------------------------------------------------------
The National Commercial Bank said in a press statement that it
won't honor a manager's cheque sent to its offices by World Wise
Limited to comply with legislation stipulated under the Banking
Act.
Radio Jamaica relates that World Wise published an advertisement
explaining to customers that a manager's cheque delivered to the
National Commercial with instructions to credit its clients who
bank there was sent back to the company. The problems with the
National Commercial caused a rush on its offices as persons
misunderstood why they could not access their returns.
The National Commercial told Radio Jamaica that its actions were
due to recent steps made by the Financial Services Commission to
order one unregulated investment scheme to cease its operations.
The bank became more worried about conducting transactions for
World Wise when the firm was featured on a list of investment
schemes the Financial Services had concerns with. Transactions
with World Wise will place the bank in regulatory risk if it is
found to facilitate the activities of an unregulated entity.
* * *
As reported in the Troubled Company Reporter-Latin America on
May 2, 2007, Fitch Ratings affirmed these ratings on Jamaica-
based National Commercial Bank Jamaica Limited:
-- long-term foreign and local currency Issuer Default
Ratings (IDR) at 'B+';
-- short-term foreign and local currency rating at
'B';
-- individual at 'D';
-- support at 4.
The rating outlook on the bank's ratings is stable, in line with
Fitch's view of the sovereign's creditworthiness.
===========
M E X I C O
===========
ADVANCED MICRO: Posts US$1.7 Billion Net Loss in Fourth Quarter
---------------------------------------------------------------
Advanced Micro Devices Inc. reported fourth quarter 2007 revenue
of US$1.770 billion, an 8 percent increase compared to the third
quarter of 2007 and flat compared to the fourth quarter of 2006.
In the fourth quarter of 2007, Advanced Micro reported a net
loss of US$1.772 billion, or US$3.06 per share, and an operating
loss of US$1.678 billion. Fourth quarter net loss included
charges of US$1.675 billion, or US$2.89 per share, of which
US$1.669 billion were operating charges. The non-cash portion
of the fourth quarter charges was US$1.606 billion.
In the third quarter of 2007, Advanced Micro reported revenue of
US$1.632 billion, a net loss of US$396 million, and an operating
loss of US$226 million. In the fourth quarter of 2006, Advanced
Micro reported revenue of US$1.773 billion, a net loss US$576
million, and an operating loss of US$529 million.
For the year ended Dec. 29, 2007, Advanced Micro achieved
revenue of US$6.013 billion, a 6 percent increase from 2006. The
fiscal 2007 net loss was US$3.379 billion. Included in the 2007
net loss were non-cash charges of US$2.007 billion. Advanced
Micro reported revenue of US$5.649 billion and a net loss of
US$166 million for fiscal 2006.
"We were close to break-even operationally for the quarter,
reducing our fourth quarter non-GAAP operating loss to US$9
million. We improved gross margin by three points sequentially,
driven by increased shipments of new products, higher average
selling prices and cost containment actions," said Robert J.
Rivet, Advanced Micro's Chief Financial Officer. "We shipped a
record number of microprocessor units in the quarter, including
nearly four hundred thousand quad-core processors."
Fourth quarter 2007 gross margin was 44 percent, compared to 41
percent in the third quarter of 2007 and 36 percent in the
fourth quarter of 2006.
Computing Solutions
Fourth quarter Computing Solutions segment revenue was US$1.402
billion, a 9 percent sequential increase. Server, mobile and
desktop processor revenue each increased quarter-over-quarter,
driving an 11 percent sequential increase in microprocessor
revenue. Record desktop and mobile processor unit shipments
drove a 7 percent sequential increase in overall microprocessor
unit shipments, resulting in record microprocessor unit
shipments. Server processor unit shipments increased 22 percent
sequentially, driven by a significant increase in quad-core AMD
Opteron(TM) processor shipments.
Graphics
Graphics segment revenue was US$259 million, a three percent
sequential increase. The growth was due to demand for AMD's new
ATI Radeon HD(TM) 3800 series and continued adoption of the ATI
Radeon HD 2000 series of graphics processors.
Consumer Electronics
Fourth quarter Consumer Electronics segment revenue was US$109
million, a 12 percent increase compared with US$97 million in
the third quarter of 2007. The increase was driven largely by
increased game console royalties and sales of products for the
handheld market.
Current Outlook
Advanced Micro's outlook statements are based on current
expectations.
In the seasonally down first quarter, Advanced Micro expects
revenue to decrease in line with seasonality.
Additional Quarterly Highlights:
* The Quad-Core AMD Opteron processor was named Chip of the
Year by CRN. The publication called the processor a "game
changer" because of its blend of "blazing" speed and
energy efficiency.
* Advanced Micro launched its new desktop platform,
"Spider," empowering enthusiasts with the ultimate
computing experience. Spider combines AMD Phenom(TM)
quad-core processors, ATI Radeon HD 3800 series graphics
processors and the AMD 7-Series chipset.
* Since their introduction, ATI Radeon HD 3800 series cards
have won more than 25 editorial awards worldwide,
including HardOCP.com's prestigious Gold Award in the US,
Clubic.com's 'Tres Bon' award in France, and Hexus.net's
'Good Value Gaming' award in the UK.
* Toshiba launched its first AMD-based business notebooks,
the Satellite Pro A210 Series, and expanded its AMD-based
consumer notebook offerings.
* Advanced Micro received net investment proceeds of US$608
million from a wholly owned subsidiary of Mubadala
Development Company, a strategic investment and
development company headquartered in Abu Dhabi, the
capital of the United Arab Emirates.
Headquartered in Sunnyvale, California, Advanced Micro Devices
Inc. -- http://www.amd.com/-- (NYSE: AMD) designs and
manufactures microprocessors and other semiconductor products.
The company has a facility in Singapore. It has sales offices in
Belgium, France, Germany, the United Kingdom, Mexico and Brazil.
* * *
As reported in the Troubled Company Reporter on Aug. 14, 2007,
Standard & Poor's Ratings Services affirmed its B/Negative/--
corporate credit rating on Sunnyvale, California-based Advanced
Micro Devices Inc. At the same time, S&P assigned its 'B'
rating to the company's US$1.5 billion 5.75% senior convertible
notes due 2012, and raised the rating on the company's existing
senior unsecured debt to 'B' from 'B-', because the company no
longer has secured debt in its capital structure.
Fitch Ratings has assigned a 'CCC+/RR6' rating to Advanced Micro
Devices Inc.'s private placement of US$1.5 billion 5.75%
convertible senior notes due 2012. Fitch also affirmed the
company's Issuer Default Rating at 'B'; and Senior unsecured
debt at 'CCC+/RR6'.
AMERICAN AXLE: UAW Associates Join Buffalo Separation Program
-------------------------------------------------------------
American Axle & Manufacturing Holdings, Inc. has announced that
558 United Auto Workers represented associates have agreed to
participate in American Axle's Buffalo Separation Program.
The Buffalo Program is a voluntary separation program that was
offered to approximately 650 UAW represented associates at
American Axle's Buffalo Gear, Axle & Linkage facility in
Buffalo, New York. Production at this facility was idled in
December 2007.
Under this voluntary separation program, American Axle offered a
range of retirement incentives and buy-outs to eligible
associates beginning in September 2007. Associates who retired
as part of this program will retain all vested pension and
postretirement benefits. Associates who accepted a buy-out will
retain vested pension benefits, but forfeited other
postretirement benefits.
On Aug. 14, 2007, American Axle estimated that it would incur
special charges of as much as US$85 million for the program,
including pension and other postretirement benefit curtailments
and special termination benefits.
American Axle currently estimates that the total cost of the
program will approximate US$56 million.
American Axle will be presenting at the Auto Analyst of New York
Detroit Auto Show Conference on Thursday, Jan. 17, 2008 at 10:15
a.m. EST. The company will webcast the presentation through its
investor web site at http://investor.aam.com. The presentation
will be made by American Axle's Co-Founder, Chairperson & Chief
Executive Officer, Richard E. Dauch.
The company has also scheduled a conference call to review its
fourth quarter and full year 2007 results on Feb. 1, 2008 at
10:00 a.m. EST. Interested participants may listen to the live
conference call by logging onto the company's investor web site
at http://investor.aam.comor calling (877) 278-1452 from the
United States or (706) 643-3736 from outside the United States.
About American Axle
American Axle & Manufacturing Holdings, Inc. (NYSE:AXL) --
http://www.aam.com/-- and its wholly owned subsidiary, American
Axle & Manufacturing, Inc. manufactures, engineers, designs and
validates driveline and drivetrain systems and related
components and modules, chassis systems and metal-formed
products for light trucks, sport utility vehicles and passenger
cars. In addition to locations in the United States (in
Michigan, New York and Ohio), the company also has offices or
facilities in Brazil, China, Germany, India, Japan, Luxembourg,
Mexico, Poland, South Korea and the United Kingdom.
* * *
As reported in the Troubled Company Reporter-Latin America on
Nov. 28, 2007, Moody's Investors Service affirmed American Axle
& Manufacturing Holdings, Inc.'s Corporate Family rating of Ba3
as well as the senior unsecured rating of Ba3 to American Axle &
Manufacturing, Inc.'s notes and term loan. At the same time,
the rating agency revised the rating outlook to stable from
negative and renewed the Speculative Grade Liquidity rating of
SGL-1.
Ratings affirmed and updated loss given default assessments:
American Axle & Manufacturing Holdings, Inc.
-- Corporate Family, Ba3
-- Probability of Default, Ba3
-- Unsecured guaranteed convertible note, Ba3 (LGD-4, 56%)
American Axle & Manufacturing, Inc.
-- Unsecured guaranteed notes, Ba3 (LGD-4, 56%)
-- Unsecured guaranteed term loan, Ba3 (LGD-4, 56%)
-- Speculative Grade Liquidity, SGL-1
AMERICA AXLE: Continues Driveline Deal for GM's Truck Program
-------------------------------------------------------------
American Axle & Manufacturing Holdings, Inc. will continue its
role as driveline supplier for the next generation of General
Motor Corp.'s full-size trucks.
American Axle's sales of driveline components relating to GM's
full-size pick-ups and SUVs represent more than half of the
company's annual sales.
While GM has not yet finalized product definitions and other
pertinent engineering details, American Axle expects the scope
and magnitude of its role on the successor program to be
substantially the same as on the existing program.
"We are extremely pleased that General Motors has recognized
AAM's exceptional capabilities in the design, engineering,
testing, validation and manufacturing of premier driveline
systems and selected us for this critical program," said
American Axle's Co-Founder, Chairperson and Chief Executive
Officer, Richard E. Dauch. "AAM's continued emphasis on product
innovation, superior engineering and design, as well as world-
class quality, warranty, delivery, and launch performance is
attracting significant new business in our expanding global
market. Our worldwide team is dedicated to the application of
AAM's expertise in these areas to further develop high-
efficiency axle technology for this and other new customer
programs."
2008-2012 New Business Backlog
American Axle also announced that its backlog of new and
incremental business launching from 2008 through 2012 has been
increased to US$1.3 billion in future annual sales.
The company measures its new and incremental business backlog by
the estimated annual sales value of agreements with its
customers to provide axle or other driveline or drivetrain
products for future product programs, as well as incremental
content or volume awards on existing programs, including
customer requested engineering changes. Its new business
backlog may be impacted by various assumptions such as
production volume estimates, changes in program launch timing
and fluctuation in foreign currency exchange rates.
American Axle's new business backlog reflects the company's
successful efforts to expand its product portfolio by adding
all-wheel-drive applications for passenger cars and crossover
vehicles, expanded electronics integration and new drivetrain
components such as transfer cases and power transfer units.
Recent new business wins include:
-- On Oct. 30, 2007, the company announced the formation of a
new joint venture in India, AAM Sona Axle Private Ltd.
The joint venture will provide axles to Tata Motors for a
light duty truck program beginning in the second half of
2008.
-- American Axle has earned an order from Mahindra
International Limited to provide driving heads in India
for a commercial vehicle program. Mahindra International
is a joint venture involving Mahindra & Mahindra Limited
from India and International Truck & Engine Corp. from the
United States.
-- The company has earned its first major award from
Volkswagen AG to supply the rear driveline system for a
new global light vehicle program launching in 2009.
-- AAM has earned its first award from Chery Automobile Co.,
Ltd. to produce rear drive modules for a 2010 model-year
crossover vehicle.
Other highlights of the company's US$1.3 billion new business
backlog include:
-- Approximately 75% of the new business backlog has been
sourced to the company's non-U.S. facilities. These
awards will accelerate the expansion of its manufacturing
facilities in Mexico, South America, Asia and Europe.
These awards will also lead to the construction of new
facilities in India and Thailand in 2008.
-- Approximately half of the new business backlog relates to
awards supporting rear-wheel-drive and all-wheel-drive
passenger car and crossover vehicle applications. These
awards relate to 10 different product programs developed
by four different customers launching in at least four
major regional markets.
-- The company will launch approximately 60% of its new
business backlog in the 2008, 2009 and 2010 calendar
years. The balance of the backlog will launch in 2011 and
2012.
The company presented at the 2008 Auto Analyst of New York
Detroit Auto Show Conference Jan. 17, 2008, at 10:15 a.m. EST.
The company will webcast the presentation through its investor
web site at http://investor.aam.com. The presentation will be
made by American Axle's Co-Founder, Chairperson & Chief
Executive Officer, Mr. Dauch.
About American Axle
American Axle & Manufacturing Holdings, Inc. (NYSE:AXL) --
http://www.aam.com/-- and its wholly owned subsidiary, American
Axle & Manufacturing, Inc. manufactures, engineers, designs and
validates driveline and drivetrain systems and related
components and modules, chassis systems and metal-formed
products for light trucks, sport utility vehicles and passenger
cars. In addition to locations in the United States (in
Michigan, New York and Ohio), the company also has offices or
facilities in Brazil, China, Germany, India, Japan, Luxembourg,
Mexico, Poland, South Korea and the United Kingdom.
* * *
As reported in the Troubled Company Reporter-Latin America on
Nov. 28, 2007, Moody's Investors Service affirmed American Axle
& Manufacturing Holdings, Inc.'s Corporate Family rating of Ba3
as well as the senior unsecured rating of Ba3 to American Axle &
Manufacturing, Inc.'s notes and term loan. At the same time,
the rating agency revised the rating outlook to stable from
negative and renewed the Speculative Grade Liquidity rating of
SGL-1.
Ratings affirmed and updated loss given default assessments:
American Axle & Manufacturing Holdings, Inc.
-- Corporate Family, Ba3
-- Probability of Default, Ba3
-- Unsecured guaranteed convertible note, Ba3 (LGD-4, 56%)
American Axle & Manufacturing, Inc.
-- Unsecured guaranteed notes, Ba3 (LGD-4, 56%)
-- Unsecured guaranteed term loan, Ba3 (LGD-4, 56%)
-- Speculative Grade Liquidity, SGL-1
BURGER KING: Brings In Robert Perkins as Vice President
-------------------------------------------------------
Burger King Corp. has appointed Robert Perkins as vice
president, inclusion and talent management. In this newly
created position, Perkins will oversee BKC's internal and
external inclusion strategies, and be responsible for ensuring
progress against objectives in each of the company's inclusion
pillars. These four pillars consist of workforce, community,
guests and operators/suppliers. Perkins will also be
responsible for BKC's talent management group. He will oversee
management development, including talent assessment and reviews,
leadership development and training, and succession planning.
He reports to Pete Smith, chief human resources officer.
"Robert's unique experience enables us to merge our talent
management and inclusion departments under one person and most
effectively deliver against our people strategies," Mr. Smith
said. "We also believe Robert can maximize the opportunities
around our inclusion initiative as we incorporate inclusion into
our business strategies. Our inclusion pillars were designed to
reinforce the importance of working as one cohesive group, while
respecting and embracing all the differences we bring to the
BK(R) brand every day. In addition, Robert will work closely
with the Diversity Action Council to elevate the importance of
inclusion among our employees and franchisees."
Mr. Perkins comes to BKC as a senior human resources executive
with extensive global experience in the consumer products, media
and entertainment industries. He worked most recently at Sony
BMG Music where he directed the company's efforts in management
and executive development, talent acquisition and diversity
compliance. His prior experience also includes leadership roles
of increasing responsibility at Time Warner, Philip Morris,
Kraft Foods, Avon Products and Proctor and Gamble. At several
of these corporations, he assisted senior management with
developing company-wide diversity business plans, integrating
diversity into all systems and processes, and coaching managers
on diversity awareness and skills.
Mr. Perkins holds a bachelor's degree in business
administration/marketing from the University of Illinois.
Headquartered in Miami, Florida, The Burger King (NYSE: BKC)
-- http://www.burgerking.com/-- operates more than 11,000
restaurants in more than 69 countries and territories worldwide.
Approximately 90% of Burger King restaurants are owned and
operated by independent franchisees, many of them family owned
operations that have been in business for decades. Burger King
Holdings Inc., the parent company, is private and independently
owned by an equity sponsor group comprised of Texas Pacific
Group, Bain Capital and Goldman Sachs Capital Partners.
Burger King Corp. operates restaurants in the Latin American,
Caribbean and Mexican Region. The company's first international
restaurant opened in 1963 in Puerto Rico. Since 1994, Burger
King has opened more than 300 restaurants in the Latin American
region, producing some of the strongest comparable store sales
growth for the brand around the world. Burger King(R)
restaurants in Latin America serve approximately 1,600 customers
per day each, making them some of the highest volume restaurants
in the system.
* * *
As reported in the Troubled Company Reporter-Latin America on
Dec. 3, 2007, Moody's Investors Service has affirmed the Ba2
corporate family rating of Burger King Corporation. Moody's also
affirmed the Ba2 rating assigned to the company's US$250 million
senior secured term loan A, US$1.1 billion senior secured term
loan B, and US$150 million senior secured revolving credit
facility. In addition, Moody's changed the outlook for Burger
King to stable from negative.
CINRAM INT'L: Subsidiary Welcomes Four New Trustees on Board
------------------------------------------------------------
Cinram International Income Fund's Board of Trustees has
appointed four new trustees.
"We are very pleased to welcome William, Andrew, Bruno and
Robert to our Board of Trustees," said Cinram's Board of
Trustees Chairperson, Henri A. Aboutboul. "Each of them brings
valuable skills, including capital markets and financial
expertise which will complement and strengthen the composition
of our Board."
William Anderson is a portfolio strategist for Polar Securities
Inc, a Canadian hedge fund manager based in Toronto. Mr.
Anderson had a major career in the oil and gas industry as
Chairperson and chief executive officer of Inverness Petroleum
Ltd. before joining the hedge fund industry in 1993. Mr.
Anderson has acted as Chairperson, director and/or officer of a
number of public and private companies and is currently
Chairperson of Caxton International and its related hedge funds.
Mr. Anderson is a Chartered Accountant and holds a B. Comm.
(Honours) from McMaster University.
Andrew Brenton is chief executive officer of the Turtle Creek
Group, a Canadian investment management firm. Prior to joining
Turtle Creek in early 2007, Mr. Brenton was involved with the
Turtle Creek Investment Fund as a trustee from its formation in
1998. From 1997 to 2007, Mr. Brenton was the founder and
president of the private equity subsidiary of a major Canadian
chartered bank where he was responsible for investing and
managing a US$300 million fund in private equity investments.
From 1993 to 1996, Mr. Brenton was head of the high technology
investment banking practice of the investment dealer of a major
Canadian chartered bank and prior to that, he was a founding
member and managing director in the firm's mergers and
acquisitions practice. Mr. Brenton holds an MBA from the Ivey
School of Business (University of Western Ontario) and a B.Sc.
from Mount Allison University.
Bruno Ducharme is chief executive officer of TIW Capital
Partners, a management advisory company specialized in
telecommunications, media and technology. Since 2005 he has
participated in several acquisitions of telecommunications
companies alongside private equity groups in Europe,
including TIM Hellas in Greece, One in Austria, Bite Group in
the Baltics, and Vizada in Norway and France, for aggregate
consideration in excess of US$5 billion. From 1994 to 2005 Mr.
Ducharme was chief executive officer of TIW, a mobile
communications company which he helped found as a start-up and
whose operations in Central and Eastern Europe were sold for an
enterprise value in excess of US$5 billion in 2005. From 1990
to 1994 Mr. Ducharme served in various positions, including
executive vice-president of Telesystem, executive vice-president
of Teleglobe, and chief executive officer of Microcell. Mr
Ducharme holds an MBA and an MA from The Wharton School, and a
BCL from McGill University.
Robert Poile is a lead portfolio strategist for Polar Securities
Inc. and has been involved in the investment business for the
majority of his career. Mr. Poile has acted as Chairperson,
director or officer of various entities including Repap
Enterprises Inc., Spar Aerospace, Call-Net Enterprises Inc. and
Clublink Corporation. In 2004, he became president and chief
executive officer of Clublink, resigning in April 2007. Mr.
Poile holds a B.A. from Harvard University.
The Fund's Board of Trustees has received notification of Nadir
Mohamed's decision to resign from his position as a trustee of
the Fund for personal reasons. "It is with great regret that we
accept Nadir's resignation. We wish to thank him for his
invaluable contribution and guidance," added Mr. Aboutboul. As
a result of these changes, Cinram will have increased the size
of its Board to eight trustees.
About Cinram
Cinram International Inc. (TSX: CRW.UN) - http://www.cinram.com/
-- an indirect wholly owned subsidiary Cinram International
Income Fund, provides pre-recorded multimedia products and
related logistics services. With facilities in North America
and Europe, Cinram International Inc. manufactures and
distributes pre-recorded DVDs, VHS video cassettes, audio CDs,
audio cassettes and CD-ROMs for motion picture studios, music
labels, publishers and computer software companies around the
world. The company has sales offices in Mexico.
* * *
As reported in the Troubled Company Reporter-Latin America on
Dec. 27, 2007, Moody's Investors Service affirmed the B1
Corporate Family rating and B1 Senior Secured debt rating of
Cinram International Inc. The rating action follows the
company's recent weaker than expected operating results, which
has caused Moody's to significantly reduce expectations for
Cinram's future profitability. The rating has nonetheless been
affirmed as Moody's believes Cinram's decision to eliminate all
distribution payments to unit holders should enable the company
to generate meaningful levels of free cash flow and maintain key
credit metrics appropriate for its current rating. The long
term ratings reflect a B2 probability of default and loss given
default assessment of LGD 3, 30% for the senior secured credit
facility. Moody's said the outlook remains stable.
CORPORACION INTERAMERICANA: Launches Tender Offer on 8.87% Notes
----------------------------------------------------------------
Corporacion Interamericana de Entretenimiento, S.A.B. de C.V.
has commenced a cash tender offer and consent solicitation for
any and all of its outstanding 8.875% Senior Notes due 2015,
upon the terms and subject to the conditions set forth in the
Offer to Purchase and Consent Solicitation Statement dated as of
Jan. 17, 2008, and the related Consent and Letter of
Transmittal.
The Offer will expire at 12:00 a.m., New York City time, on
Feb. 15, 2008, unless extended by the company. Settlement for
all tendered Notes will occur promptly following the Expiration
Date.
Holders who validly tender their Notes on or prior to 5:00 p.m.,
New York City time, on Jan. 31, 2008, unless extended by the
company will be eligible to receive the total consideration with
respect to the Notes, which includes an early tender premium, as
set forth in the table below. Holders who validly tender their
Notes after Jan. 31, 2007, but on or prior to Feb. 15, 2008,
will be eligible to receive the purchase price for the Notes,
which equals the total consideration less the early tender
premium, as set forth in the table below.
In addition, all Notes accepted for payment will be entitled to
receive accrued and unpaid interest in respect of such Notes
from the last interest payment date prior to the settlement date
to, but not including, the settlement date.
Summary of the material pricing terms for the Offer:
Outstanding Early
ISIN and Principal Title of Purchase Tender Total
CUSIP Nos. Amnt Security Price Premium Consideration
USP3142LAN93, US$185MM 8.875% US$1,025 US$30 US$1,055
21988JAA8 Senior
& P3142LAN9 Notes due
2015
Holders tendering their Notes will be required to consent to
certain proposed amendments to the indenture governing the
Notes, which would eliminate or modify substantially all of the
restrictive covenants, certain events of default and related
provisions contained in the indenture.
Notes tendered and consents delivered may be validly withdrawn
or revoked at any time until such time as the supplement
indenture implementing the proposed amendments is executed. The
company intends to execute the supplemental indenture as soon as
practicable following receipt of the requisite consents. The
proposed amendments to the indenture will only become operative
if the company receives tenders and consents from holders of at
least a majority of the outstanding principal amount of the
Notes.
Consummation of the Offer and payment for the tendered Notes is
subject to the satisfaction or waiver of certain conditions,
including a financing condition. The company's obligation to
purchase the Notes is not conditioned upon receipt of any
minimum principal amount of the Notes.
Citi is acting as Dealer Manager for the Offer. The Depositary
and the Information Agent is Global Bondholder Services Corp.
The Luxembourg Agent is Dexia Banque Internationale a
Luxembourg.
Requests for documentation should be directed to Global
Bondholder Services Corporation at (866) 794-2200. Questions
regarding the Offer should be directed to Citi at (800) 558-3745
(toll-free) or (212) 723-6108 (collect). Requests for
documentation may also be directed to the Luxembourg Agent at
+ 352 4590 1.
Corporacion Interamericana de Entretenamiento is a Mexican
entertainment company involved in the promotion of live events,
including concerts, theatrical productions, amusement parks,
betting on foreign sports and number games, trade fairs and
exhibitions, as well as sporting and other events. The
company's operations are divided into five strategic areas:
Corporacion Interamericana Entertainment, which promotes musical
concerts, theatrical productions, family shows and other live
events; Corporacion Interamericana Las Americas, which centers
on the operation and development of the Las Americas Complex in
Mexico City, including the Las Americas Hippodrome; Corporacion
Interamericana Amusement Parks, which operates nine parks in
Mexico and two in Columbia and has also opened the Wannado City
Theme Park in Fort Lauderdale, Florida; Corporacion
Interamericana Commercial, which attracts and channels customers
via advertising and public relations, and Corporacion
Interamericana International, which develops live events outside
of Mexico, mainly in Argentina, Brazil, Colombia and the United
States.
CORPORACION INTERAMERICANA: Moody's Cuts Corp. Family to Ba3
------------------------------------------------------------
Moody's Investors Service has downgraded the ratings of
Corporacion Interamericana de Entretenimiento, S.A.B. de C.V. to
Ba3 and A3.mx from Ba2 and A2.mx and changed the outlook to
stable from negative. The rating downgrades were based on
increased uncertainty with regard to the company's future
operating results due to increased taxes in the Mexican gaming
sector and the possible impact on Mexican consumer disposable
income of the United States economic slowdown. The downgrade
already considers the announced tender offer for its notes due
in 2015.
These ratings were affected:
-- Corporate Family Rating -- downgraded to Ba3 from Ba2
-- US$186 million Senior Unsecured Notes due 2015 --
downgraded to Ba3 from Ba2
-- MXN1,400 million in Certificados Bursatiles due 2010 --
downgraded to A3.mx from A2.mx
-- MXN500 million in Certificados Bursatiles due 2009 --
downgraded to A3.mx from A2.mx
The rating outlook is stable.
Corporacion de Entretenimiento's Ba3 rating reflects its
dominant market share position in the out-of-home entertainment
sector in Mexico as well as the company's attractive adjusted
EBITDA margin of at 25% on a last-twelve-month basis as of
Sept. 30, 2007. The rating is also supported by the company's
competitive advantage against other market
participants/competitors in the entertainment business that is
not vertically integrated nor have the same size as the company.
Because of its well-developed vertical strategy and ability to
enhance the value of its businesses with advertising and
promotional products, the company has been able to protect its
market position. The ratings benefit as well from its long-term
partnerships with foreign operators (e.g. joint venture with
Ticketmaster and Televisa, relationship with NASCAR), which
provide the company with the opportunity to capitalize on the
strength of these operators' existing skills, as well as
mitigate its exposure to cash-consumptive investments in these
segments. Finally, the ratings are supported by the value of
its exceptional venues in Mexico, including Mexico City's only
government-authorized horse race track (Hippodrome), the
exhibition and convention center Centro Banamex and Foro Sol.
The ratings are principally constrained by uncertainty with
regard to the company's future operating results due to
increased taxes in the Mexican gaming sector and the possible
impact on Mexican consumer disposable income of the U.S.
economic slowdown. The ratings are also constrained by the
company's relatively aggressive liquidity policy.
In June 2006, Moody's changed the company's ratings outlook to
negative from stable due to negative free cash flow beyond
Moody's expectations as well as liquidity pressures. Since
then, besides liquidity pressures, additional business risks
have arisen as the company's cash generation is now heavily
dependent on the gaming division. The gaming business, despite
presenting one of the highest profit margins of its services
portfolio, is vulnerable to an unpredictable regulatory and tax
environment as observed in recent months with the new 20%
federal tax on gaming revenues, effective starting in January
2008, which Moody's expects to have an impact on the company's
operating margins and payback time for investments in gaming.
Also driving the downgrade was Moody's concern with the
Commercial and Entertainment divisions, the second and third
most important contributors to the company's cash generation.
The Entertainment division is deeply dependent on disposable
income, which Moody's believes is likely to come under pressure
in the next 12-18 months due to the importance of the slowing
U.S. economy for Mexican exports and jobs; the Commercial
division, by the same token, should be pressured by anticipated
lower advertising spending, also due to reduced economic
activity. Accordingly, Moody's views the company's business mix
as exposed to important swings in margins and cash generation,
with direct consequences for credit protection metrics.
The change in the ratings took into consideration the fact that
the company announced its plans to redeem up to 100% of
approximately US$186 million in outstanding senior unsecured
notes, due 2015. The redemption of the notes will be partially
funded with the net proceeds obtained from the sale of an equity
stake in the Las Americas division to Codere, as announced in
June 2007 by management. US$140 million in proceeds from this
asset sale were received in November 2007, after the Mexican
anti-trust body authorized the transaction. Despite the
expected reduction in indebtedness, which is positive for the
company's ratings, the company still has an aggressive liquidity
policy compared to peers in the U.S. and Latin America.
As of Sept. 30, 2007, LTM revenues and adjusted EBITDA amounted
to US$931 million and US$230 million, respectively.
Corporacion Interamericana de Entretenamiento is a Mexican
entertainment company involved in the promotion of live events,
including concerts, theatrical productions, amusement parks,
betting on foreign sports and number games, trade fairs and
exhibitions, as well as sporting and other events. The
company's operations are divided into five strategic areas:
Corporacion Interamericana Entertainment, which promotes musical
concerts, theatrical productions, family shows and other live
events; Corporacion Interamericana Las Americas, which centers
on the operation and development of the Las Americas Complex in
Mexico City, including the Las Americas Hippodrome; Corporacion
Interamericana Amusement Parks, which operates nine parks in
Mexico and two in Columbia and has also opened the Wannado City
Theme Park in Fort Lauderdale, Florida; Corporacion
Interamericana Commercial, which attracts and channels customers
via advertising and public relations, and Corporacion
Interamericana International, which develops live events outside
of Mexico, mainly in Argentina, Brazil, Colombia and the United
States.
GENERAL MOTORS: Outlines Turnaround Progress & 2008 Priorities
--------------------------------------------------------------
General Motors Corp. Chairman and CEO Rick Wagoner and Vice
Chairman and CFO Fritz Henderson spoke to automotive analysts at
a GM conference on Jan. 17, 2008, giving detailed reviews of the
company's turnaround progress, outlining the automaker's
priorities for the year and providing a preview of improvement
opportunities for 2010 and beyond.
"We're delivering on the turnaround plan we established in 2005,
and have exceeded expectations on virtually all counts," Mr.
Wagoner said. "We've set a strong foundation that we can truly
build on. We're encouraged by our progress in revitalizing our
product portfolio, strengthening our brands, reducing structural
cost and growing the business globally. At the same time, it's
clear that we'll face some challenging headwinds in 2008.
"To continue driving the company's transformation, we'll remain
steadfast in our efforts to introduce great cars and trucks and
new advanced propulsion technologies, take full advantage of
growth markets around the world, and accelerate our efforts to
reduce structural costs to even more competitive levels in North
America," Mr. Wagoner added.
Turnaround Progress
Since introducing its North America turnaround plan in 2005, GM
has delivered significant progress in its massive restructuring,
including:
a) Product excellence
Dramatically improved vehicle design and performance is
gaining broad recognition, demonstrated by robust sales of
recently launched vehicles and numerous industry awards,
including 2008 North America Car of the Year for the
Chevrolet Malibu, 2008 Motor Trend Car of the Year for the
Cadillac CTS, and 2007 North America Car and Truck of the
Year awards for the Saturn Aura and Chevrolet Silverado;
b) Revitalize the sales and marketing strategy
The company has fundamentally changed its "go to market"
approach, resulting in stronger brands, re-alignment of its
brand distribution channels, stabilized retail market share,
significant reductions in daily rental sales and higher
average transaction prices;
c) Intensify the focus on cost and quality
GM reduced annual structural cost in North America from 2005
to 2007 by US$9 billion, driven by the 2005 hourly healthcare
agreement, revisions to U.S. salaried healthcare and pension
programs, capacity reduction actions, special attrition
programs for 34,000 hourly employees, and efficiencies
achieved in other activities. Significant improvements also
continue to be made in vehicle quality, as measured by both
internal and industry metrics;
d) Address healthcare/legacy cost burden
Reflecting the impact of historical agreements with the
United Auto Workers union and several other key initiatives,
GM anticipates that its spending on U.S. hourly and salaried
pension and healthcare will be reduced from an average of
US$7 billion per year over the last 15 years, to
approximately US$1 billion per year beginning in 2010.
Despite continued pressures in the German market, GM has also
made significant progress in its Europe operations, driven by
strong new products, successful implementation of its multi-
brand strategy, especially the rapid growth of the Chevrolet
brand, which contributed to record GME unit sales of over 2
million in 2007. Rapid expansion in Russia and Eastern Europe,
and further structural cost reductions have also contributed to
the improvements.
GM's total automotive results have demonstrated strong progress
since 2005, marked by significant improvements in both adjusted
net income and adjusted operating cash flow through the first
three quarters of 2007. GM continues to have strong liquidity,
with 2007 year-end gross liquidity estimated to be more than
US$27 billion, up from US$20.4 billion at year-end 2005.
2008 Outlook
Acknowledging headwinds facing the industry, including weak U.S.
auto industry sales volumes, high fuel prices, high commodity
and steel prices, and mounting regulatory requirements, Mr.
Wagoner outlined the following focus areas for 2008 designed to
continue the momentum and achieve improved financial results:
-- Continue to execute great products;
-- Build strong brands and distribution channels;
-- Execute additional cost reduction initiatives;
-- Take full advantage of growth in emerging markets;
-- Build GM's advanced propulsion leadership position; and
-- Maximize the benefits of running the business globally.
For 2008, GM projects global industry volume to reach a record
high of approximately 73 million units, up from about 71 million
in 2007, with growth in Asia Pacific, Latin America, Africa and
the Middle East and Europe. GM anticipates U.S. industry sales
will likely be in the low 16-million range, reflecting
continuing high fuel prices and sub-par consumer confidence.
Despite industry pressures, GM expects to increase revenues in
all of its regions, particularly in emerging markets.
Building on notable product successes including the Cadillac
CTS, Chevrolet Malibu, GMC Acadia, Saturn Outlook and Buick
Enclave in the U.S. and the Opel Corsa in Europe, GM will
continue to introduce a host of new products including the
Pontiac G8 and Chevrolet Traverse in the U.S. and Opel Insignia
in Europe. Capital spending is projected to be up slightly from
2007 levels to about US$8 billion in 2008.
On the sales and marketing front, GM will continue its efforts
-- most clearly demonstrated in the recent launch of the Chevy
Malibu in the U.S. -- to more effectively integrate product and
brand marketing strategies. GM will accelerate the alignment of
its seven U.S. brands into four distinct dealer channels:
Chevrolet, Saturn, Buick/Pontiac/GMC and Cadillac/Hummer/SAAB.
By doing this, the company expects to enhance dealer
profitability and over time facilitate more highly
differentiated products and brands.
With regard to cost competitiveness, GM has made major strides
toward achieving its global target of reducing automotive
structural costs to benchmark levels of 25% of revenue by 2010.
Structural costs are already below 30%, compared to 34% in 2005,
despite weaker than expected U.S. industry volumes. In light of
the progress already made, the company fully expects structural
costs as a percentage of revenue to be further reduced beyond
2010, with a target of 23% by 2012.
In support of those goals, the company plans to reduce annual
U.S. labor costs by an additional estimated US$5 billion by
2011.
A significant portion of those reductions will be driven by the
implementation of the 2007 GM-UAW contract, including the
independent healthcare VEBA scheduled to begin in 2010, and in
the shorter term by taking full advantage of the workforce
restructuring opportunities included in the contract, including
a "non-core" wage and benefit structure which will result in the
re-classification of a significant number of jobs over time.
To facilitate these changes, GM launched, in cooperation with
the UAW, the first phase of a voluntary special attrition
program for hourly workers in January 2008. This phase applies
to those at select job banks, Service Parts Operations, and
other key sites. Employees participating in this phase will
begin to exit in March. GM disclosed that Phase 2 of the
program, under active discussion with the UAW, will be launched
in February in all other plants. Participating employees will
begin exiting in April. For both phases of the program, 46,000
existing employees are eligible for retirement.
During the conference, GM also reiterated its strategy to
achieve manufacturing capacity utilization of 100%, or greater,
in countries with higher labor costs. Based on current U.S.
industry volume levels, additional capacity actions would be
required in vehicle assembly, stamping and powertrain
facilities. The company will continue to assess U.S. industry
and product mix trends, and what potential actions may be
required over the coming months.
GM will continue its aggressive plans to grow in emerging
markets such as China, Brazil, Russia and India. To strengthen
its position in China, where it was the first automaker to sell
1 million units in a single year, GM intends to continue to
build its corporate reputation, expand its product portfolio
with fuel-efficient products, drive full implementation of its
multi-brand strategy, expand capacity, and develop our local
supply base and technology capability.
At GMAC Financial Services, while its mortgage business faces
continued challenges relating to weaknesses in the housing and
credit markets, its auto financing business remains profitable
and its insurance operations continue to perform well. GMAC
expects Residential Capital, LLC to meet its year-end 2007
financial covenants, and GM believes GMAC remains adequately
capitalized.
In addition, GMAC's liquidity position is at relatively high
historical levels and GMAC expects to be profitable in 2008,
with substantially reduced losses at ResCap due to risk
mitigation actions undertaken by the company.
Looking Ahead to 2010
Looking ahead, GM expects continued cost savings and improved
automotive pre-tax earnings by 2010, compared to 2007 levels,
driven by a number of factors.
The most significant savings is the estimated US$4-5 billion GM
expects to gain in 2010 once it realizes the full-impact of the
2007 GM-UAW labor agreement related to the shift of U.S. hourly
health care to an independent VEBA, and takes advantage of
favorable labor demographics to adjust workforce levels and
transition a portion of the workforce to the new non-core wage
structure.
In addition, GM will reduce the cost premiums it has
historically paid to Delphi for systems, components and parts by
approximately US$1 billion by 2010. Those savings will be
offset by various labor and transitional subsidies of US$400-500
million under Delphi's proposed reorganization, resulting in net
savings of approximately US$500 million.
GM also sees the probability of a stronger U.S. industry in 2009
and beyond, as compared to the relatively low 16.5 million total
industry in 2007. All indications are that 16.5 million units
are approximately 1 million units below trend. It is estimated
that a move of the industry back to trend levels by 2010 would
generate additional pre-tax income to GM in the range of
approximately US$1 billion to US$1.5 billion annually.
Beyond these factors, there are a number of additional
opportunities to further improve GM earnings and cash flow by
2010, though they are more difficult to predict with
specificity. These include: additional material cost reductions
due to continued leveraging of global vehicle architectures,
improved pricing driven by compelling designs and stronger
brands, continued explosive growth in revenue and profitability
in emerging markets, and improved performance at GMAC.
At the same time, continued U.S. industry product mix
deterioration, regulatory cost increases and the ongoing
competitiveness of the marketplace pose potential risks to GM's
profitability.
Considering the foregoing, GM management expects to
significantly improve operating results, including earnings and
cash flow, over the next two to three years.
About GM
Headquartered in Detroit, Michigan, General Motors Corp. (NYSE:
GM) -- http://www.gm.com/-- was founded in 1908. GM employs
about 280,000 people around the world and manufactures cars and
trucks in 33 countries, including the United Kingdom, Germany,
France, Russia, Brazil and India. In 2006, nearly 9.1 million
GM cars and trucks were sold globally under the following
brands: Buick, Cadillac, Chevrolet, GMC, GM Daewoo, Holden,
HUMMER, Opel, Pontiac, Saab, Saturn and Vauxhall. GM's OnStar
subsidiary is the industry leader in vehicle safety, security
and information services.
* * *
As reported in the Troubled Company Reporter-Latin America on
Nov. 9, 2007, Moody's Investors Service affirmed its rating for
General Motors Corporation (B3 Corporate Family Rating, Ba3
senior secured, Caa1 senior unsecured and SGL-1 Speculative
Grade Liquidity rating) but changed the outlook to Stable from
Positive. In an environment of weakening prospects for US auto
sales GM has announced that it will take a non-cash charge of
US$39 billion for the third quarter of 2007 related to
establishing a valuation allowance against its deferred tax
assets (DTAs) in the US, Canada and Germany.
As reported in the Troubled Company Reporter on Oct. 23, 2007,
Standard & Poor's Ratings Services affirmed its 'B' corporate
credit rating and other ratings on General Motors Corp. and
removed them from CreditWatch with positive implications, where
they were placed Sept. 26, 2007, following agreement on the new
labor contract. S&P said the outlook is stable.
HARMAN INTERNATIONAL: Promotes Ken Yasuda as Japan Manager
----------------------------------------------------------
Harman International Industries Incorporated has disclosed Ken
Yasuda, President of Harman Japan, is expanding his
responsibilities effective immediately to assume the newly
created position of Country Manager of Harman Japan. In his new
assignment, Mr. Yasuda will report directly to Harman
International Chief Executive Officer Dinesh Paliwal.
As Country Manager of Harman Japan, Mr. Yasuda will be
responsible for the management of support functions that cross
division and business lines. He will serve as the country
champion for functional best practices and will directly
participate in such business activities as project risk review,
large supply contracts or investment proposals, significant
operational changes or restructurings, organizational and legal
issues, and key human resource decisions. Furthermore, he will
serve as the chief spokesperson for Harman in Japan to build
brand equity. He will also serve as liaison to the chief
executive officer for implementation of group directives.
"The successful implementation of Harman's new best practices
management program will play an important role in driving our
long-term growth in Japan and throughout Asia," Mr. Yasuda said.
"I am honored to have been selected to lead this initiative for
Harman International, as I am convinced this approach will
produce results that will directly benefit Harman customers in
all professional, consumer, and automotive market segments."
Mr. Yasuda has served as President of Harman Japan since 1999.
Harman Japan is a unit of Harman International Industries Inc.,
the leading global producer of premium audio and infotainment
products. The group employs nearly 11,000 worldwide and
operates more than 40 facilities throughout the Americas,
Europe, Africa and Asia.
In addition to serving as President of Harman Japan, Mr. Yasuda
is also Chairman of the International Audio Society of Japan
http://www.iasj.info/
The IASJ is a voluntary association of importers and
manufacturers of advanced audio products. The group's objective
is to promote the distribution and innovation of world-class
audio products and related devices. It was formerly called the
Society of Imported Audio Products Distributors.
Headquartered in Washington, D.C., Harman International
Industries Inc. (NYSE: HAR) -- http://www.harman.com/-- makes
audio systems through auto manufacturers, including
DaimlerChrysler, Toyota/Lexus, and General Motors. Also the
company makes audio equipment, like studio monitors, amplifiers,
microphones, and mixing consoles for recording studios, cinemas,
touring performers, and others. Harman Int'l has operations in
Japan, Mexico and France.
* * *
As reported in the Troubled Company Reporter-Latin America on
Oct. 26, 2007, Standard & Poor's Ratings Services revised its
CreditWatch implications for the 'BB-' corporate credit rating
on Harman International Industries Inc. to positive from
developing.
TRIMAS CORP: Operating Unit Bags Hi-Vol's Production Contracts
--------------------------------------------------------------
TriMas Corporation's Hi-Vol Products operating unit has been
awarded production contracts for several components that will be
utilized on a next generation gasoline direct injection (GDI)
engine for a major North American automobile manufacturer.
Hi-Vol Products will be an indirect, tiered supplier to the
engines through an existing Hi-Vol Products customer.
The GDI engine features improvements in fuel economy and
horsepower, as well as reduced start up emissions relative to
comparable current generation non-GDI engines. The awarded
components represent engineered products that were developed
through a highly collaborative effort between Hi-Vol's
engineering resources and those at the customer.
Hi-Vol Products General Manager, Eli Crotzer commented, "We are
extremely pleased to have been awarded this new business after a
lengthy period of development with our customer and the engine
manufacturer. It is particularly satisfying to know that these
engineered products will be instrumental components in making
advancements in fuel economy and start up emissions reductions."
The next generation GDI engine is scheduled to go into
production in 2009 for use on 2010 model year vehicles. There
is also potential for follow-on awards for separate programs.
About Hi-Vol Products
Headquartered in Livonia, Michigan, Hi-Vol Products is a
manufacturer of specialized cold-formed and precision-machined
parts for multiple applications and industries. In particular,
Hi-Vol Products has developed a reputation for being able to
successfully cold form some of the most challenging parts and is
among the first in the industry to achieve TS 16949 and ISO
14001 certification.
About TriMas
Headquartered in Bloomfield Hills, Michigan, TriMas Corporation
(NYSE:TRS) -- http://www.trimascorp.com/-- is a diversified
growth company of high-end, specialty niche businesses
manufacturing a variety of products for commercial, industrial
and consumer markets worldwide. TriMas Corporation is organized
into five strategic business groups: Packaging Systems, Energy
Products, Industrial Specialties, RV & Trailer Products, and
Recreational Accessories. TriMas Corporation has nearly 5,000
employees at 80 different facilities in 10 countries. The
company has manufacturing facilities in Indiana, Mexico,
England, Germany, Italy, and China.
* * *
As reported on May 28, 2007, Standard & Poor's Ratings Services
raised its ratings on Bloomfield Hills, Michigan-based TriMas
Corp., including its corporate credit rating, which goes to 'B+'
from 'B'.
At the same time, all ratings were removed from CreditWatch,
where they were placed with positive implications on
Aug. 4, 2006, following the company's announcement that it had
filed a registration statement for an IPO. S&P said the outlook
is stable.
UNITED RENTALS: Names John Fahey as Vice President-Controller
-------------------------------------------------------------
United Rentals Inc. has appointed John J. Fahey as vice
president - controller, effective immediately. He will continue
to serve as the company's principal accounting officer.
Martin E. Welch, executive vice president and chief financial
officer of United Rentals, said, "John's expertise has proven
invaluable in driving process improvements and beneficial
controls within our accounting environment over the past two
years. We look forward to his expanded role on our financial
leadership team."
John Fahey brought more than 15 years of financial executive
experience to United Rentals when he joined the company in 2005
as vice president - assistant corporate controller. In 2006, he
assumed the additional role of principal accounting officer.
Mr. Fahey's prior experience includes senior positions as
manager - corporate business development with Xerox Corporation;
vice president and chief financial officer with Xerox
Engineering Systems, Inc.; and vice president - finance and
controller with Faulding Pharmaceutical Company. He is a
licensed certified public accountant who previously served as a
general practice manager in accounting and auditing for Deloitte
& Touche LLP.
United Rentals Inc. -- http://www.unitedrentals.com/-- (NYSE:
URI) is an equipment rental company with an integrated network
of over 690 rental locations in 48 states, 10 Canadian provinces
and one location in Mexico. The company's approximately 11,500
employees serve construction and industrial customers,
utilities, municipalities, homeowners and others. The company
offers for rent over 20,000 classes of rental equipment with a
total original cost of US$4.3 billion.
* * *
As reported in the Troubled Company Reporter-Latin America on
Jan. 2, 2008, Standard & Poor's Ratings Services affirmed its
'BB-' corporate credit rating on United Rentals Inc. (URI) and
its major operating subsidiary United Rentals (North America)
Inc. and removed all ratings from CreditWatch with negative
implications. S&P said the outlook is stable.
At the same time, Standard & Poor's raised the rating on the
company's senior secured facilities to 'BB+', two notches above
the corporate credit rating, from 'BB-' due to a considerable
paydown in the term loan since it was issued and the increased
value of the company's fleet.
=================
N I C A R A G U A
=================
* NICARAGUA: In Cooperation Talks with Venezuela
------------------------------------------------
Venezuelan President Hugo Chavez and his Nicaraguan counterpart,
Daniel Ortega, will assess cooperation between both governments
and peoples for the past year, Inside Costa Rica relates, citing
government minister and first lady Rosario Murillo.
The report says that both leaders were listing the points of
cooperation for 2008 both bilaterally as well as in the
framework of the Bolivarian Alternative for the Americas.
Ms. Murillo, according to the same paper, disclosed that ALBA
will schedule on January 25 and 26 its presidential summit in
Caracas. She added that ALBA represented a sunrise for the
peoples, a dawn of humanity and brotherhood and true
interdependent development.
* * *
Moody's Investor Service assigned these ratings to Nicaragua:
Rating Rating Date
------ -----------
Long Term Caa1 June 30, 2003
Senior Unsecured
Debt B3 June 30, 2003
=======
P E R U
=======
QUEBECOR WORLD: Interest Nonpayment Spurs S&P to Give D Ratings
---------------------------------------------------------------
Standard & Poor's Ratings Services lowered its long-term
corporate credit rating on Montreal-based printing company
Quebecor World Inc. to 'D' from 'CCC'. Standard & Poor's also
lowered the rating on the company's US$400 million 9.75% senior
unsecured notes due 2015 to 'D' from 'CCC-'. In addition, S&P
lowered the rating on the company's other senior unsecured notes
to 'CC' from 'CCC-'. The preferred stock rating remains
unchanged at 'D'. With these rating actions, S&P also removed
the ratings from CreditWatch with negative implications, where
they were placed Aug. 9, 2007.
"The downgrade follows Quebecor World's nonpayment of interest
expense on its $400 million 9.75% senior unsecured notes, due
Jan. 15, 2008," said Standard & Poor's credit analyst Lori
Harris. "In the unlikely event that the company makes the
payment within the 30-day cure period, we could raise the
ratings," Ms. Harris added.
The interest payments on Quebecor World's remaining senior
unsecured notes remain current, hence S&P hasn't lowered the
ratings on these issues to 'D'. However, S&P will lower the
ratings on these issues should the senior unsecured notes go
into default.
Quebecor World is in default on its US$750 million revolving
credit facility because the company was unable to raise the
required US$125 million by Jan. 15, 2008, which was a condition
to the covenant waiver on Dec. 31, 2007. Although Quebecor
World had requested an extension from the bank group regarding
the requirement for US$125 million in new funds, it did not
receive it. The nonsatisfaction of this condition does not
automatically result in the termination of the bank group's
waiver, an acceleration of the maturity of indebtedness under
the credit facilities, or a cross-default under Quebecor
World's other debt obligations. Any such action would require
formal notification from a majority of the bank group to
Quebecor World.
Headquartered in Montreal, Quebec, Canada, Quebecor World Inc.
(TSX: IQW) (NYSE: IQW) -- http://www.quebecorworld.com/--
provides marketing and advertising solutions to leading
retailers, catalogers, branded-goods companies and other
businesses with marketing and advertising activities, as well as
complete, full-service print solutions for publishers. The
company's major product categories include advertising inserts
and circulars, catalogs, direct mail products, magazines, books,
directories, digital premedia, logistics, mail list technologies
and other value-added services. Quebecor World has
approximately 27,500 employees working in more than 120 printing
and related facilities in the United States, Canada, Argentina,
Austria, Belgium, Brazil, Chile, Colombia, Finland, France,
India, Mexico, Peru, Spain, Sweden, Switzerland and the United
Kingdom.
=====================
P U E R T O R I C O
=====================
AVNET INC: Unit Signs Distribution Deal with Taiyo Yuden
--------------------------------------------------------
Avnet Electronics Marketing Americas, a part of Avnet, Inc., has
entered a distribution agreement with TAIYO YUDEN (U.S.A.) INC.
Under the pact, Avnet will distribute TAIYO YUDEN's full line of
ceramic capacitors, filters, inductors, high frequency and
magnetic components in North and South America.
TAIYO YUDEN utilizes industry-leading resources to raise
standards and outcomes in research and development, technology,
production and distribution to offer customers top-flight
solutions worldwide. "We are very impressed by Avnet's leading
position in the global distribution market and look to leverage
their fulfillment and supply chain expertise to help TAIYO YUDEN
enhance service levels while bringing our cutting edge
technology products to our customer base in the North and South
American markets," said Hisashi Oi, CEO of TAIYO YUDEN (U.S.A.),
INC. "We are excited about the relationship and feel that
combining TAIYO YUDEN's product technology with Avnet's
logistics services is an ideal way to streamline operations
while focusing more resources on developing new business in the
Americas."
"As one of the largest manufacturers of surface-mount capacitors
and inductive components, TAIYO YUDEN's product portfolio is a
strong complement to Avnet's current offerings," said Pat
Wastal, senior vice president of IP&E for Avnet Electronics
Marketing. "The agreement will allow us to augment our
historical supply chain solutions and position Avnet and TAIYO
YUDEN as premier logistics support providers for our customers."
About Avnet Electronics Marketing
Avnet Electronics Marketing -- http://www.em.avnet.com/-- is an
operating group of Phoenix-based Avnet, Inc. (NYSE:AVT), a
Fortune 500 company. Avnet Electronics Marketing serves
electronic original equipment manufacturers (EOEMs) and
electronic manufacturing services (EMS) providers in 73
countries, distributing electronic components from leading
manufacturers and providing associated design-chain and supply-
chain services.
About Avnet Inc.
Headquartered in Phoenix, Arizona, Avnet, Inc. --
http://www.avnet.com/-- distributes electronic components and
computer products, primarily for industrial customers. It has
operations in the following countries: Australia, Belgium,
China, Germany, Hong Kong, India, Indonesia, Italy, Japan,
Malaysia, New Zealand, Philippines, Singapore, and Sweden,
Brazil, Mexico and Puerto Rico.
* * *
Moody's Investors Service affirmed Avnet's Ba1 corporate family
long-term debt ratings in March 2007. Moody's said the outlook
is positive.
DORAL FINANCIAL: FDIC Lifts Cease & Desist Order with Unit
----------------------------------------------------------
Doral Financial Corporation reported that the Federal Deposit
Insurance Corporation terminated the Order to Cease and Desist
with its principal banking subsidiary, Doral Bank Puerto Rico.
The order, dated March 16, 2006, related to financial safety and
soundness and was put in place as a result of the announcement
in April 2005 of the need to restate its financial statements
for the period from 2000 to 2004.
"We are delighted with the release of the order. It represents
an important step forward for our institution and recognizes the
financial strength that has been created over the past year.
However, much work remains to be done to improve our regulatory
compliance overall. This is a key area of focus for us and
continues to have management's undivided attention," said Glen
R. Wakeman, President and Chief Executive Officer of Doral
Financial Corporation.
After the restatement of its financial statements for the period
from 2000 to 2004 and recapitalization of the Company in July
2007, Doral Financial's highly-skilled teams have been committed
to transforming the company by further developing talent,
creating a culture of compliance, maximizing the use of
technology, increasing efficiencies, establishing new delivery
channels, launching new products, and implementing cross selling
programs.
Based in New York City, Doral Financial Corp. (NYSE: DRL)
-- http://www.doralfinancial.com/-- is a diversified financial
services company engaged in mortgage banking, banking,
investment banking activities, institutional securities and
insurance agency operations. Its activities are principally
conducted in Puerto Rico and in the New York City metropolitan
area. Doral is the parent company of Doral Bank, a Puerto Rico
based commercial bank, Doral Securities, a Puerto Rico based
investment banking and institutional brokerage firm, Doral
Insurance Agency Inc. and Doral Bank FSB, a federal savings bank
based in New York City.
* * *
As reported in the Troubled Company Reporter-Latin America on
Dec. 28, 2007, Standard & Poor's Ratings Services said that its
'B' long-term counterparty credit rating on Doral Financial
Corp. remains on CreditWatch Positive, where it was placed
July 20, 2007.
PEP BOYS: Harry Yanowitz To Resign as Chief Financial Officer
-------------------------------------------------------------
The Pep Boys - Manny, Moe & Jack has reported the planned
departure of Chief Financial Officer Harry Yanowitz in order to
pursue other business interests. Mr. Yanowitz will continue in
his duties until such time as the company's financial statements
for fiscal 2007 are completed and will assist the company in its
search for his replacement.
President & Chief Executive Officer Jeff Rachor said, "Harry has
been instrumental in building Pep Boys' potential and strong
financial condition. He engineered a strong balance sheet,
affording us great flexibility to achieve success with our long-
term strategic plan. We wish him well in his future endeavors
and greatly appreciate his willingness to close out fiscal 2007
and facilitate a smooth transition."
Mr. Yanowitz remarked, "I am pleased to have had the opportunity
to work with Jeff and our new management team in developing Pep
Boys' long-term strategic plan. With the initial steps in the
execution of that plan successfully underway, I believe that the
timing is now right for me to pursue other long-held interests.
Pep Boys is well positioned to continue to reduce indebtedness,
grow the business and create substantial value for its
shareholders."
About Pep Boys
The Pep Boys - Manny, Moe & Jack (NYSE: PBY) --
http://pepboys.com/-- has 593 stores and more than 6,000
service bays in 36 states and Puerto Rico. Along with its
vehicle repair and maintenance capabilities, the Company also
serves the commercial auto parts delivery market and is one of
the leading sellers of replacement tires in the United States.
* * *
As reported in the Troubled Company Reporter on Sept. 22, 2006,
Standard & Poor's Ratings Services affirmed its 'B+' rating on
Pep Boys-Manny, Moe & Jack's term loan after the company
announced plans to increase the size of the facility by USUS$120
million to USUS$320 million. Proceeds from the additional
US$120 million term loan will be used to refinance its
convertible notes which mature in June 2007. At the same time,
the rating on the US$357.5 million asset-based revolver was
raised to 'B+' from 'B' to properly realign its ratings with the
term loan and to reflect Standard & Poor's increased comfort
with the collateral and terms securing this facility. The 'B-'
corporate credit and other ratings were affirmed; the outlook is
negative.
=================
V E N E Z U E L A
=================
CITGO PETROLEUM: Lays Off Over 500 Contract Maintenance Workers
---------------------------------------------------------------
Citgo Petroleum Corp. has dismissed over 500 contract
maintenance workers at its Louisiana plant in December 2007,
Erwin Seba at Reuters reports, citing sources.
The sources told Reuters that between 500 and 700 employees were
laid off at the Lake Charles plant. The lay-offs were part of a
program to boost returns to parent firm Petroleos de Venezuela
SA.
Reuters relates that the contractors were initially employed for
the Lake Charles plant's recovery from Hurricane Rita, which
struck western Louisiana and east Texas on Sept. 24, 2005. They
were kept on to maintain the plant.
A source commented to Reuters, "Citgo wants to send 100% of what
it makes to Venezuela. They're only spending what's needed to
meet legal and regulatory obligations."
According to Reuters, the work that used to be conducted by the
contractors will be assigned to 150 maintenance workers who work
full-time for the plant.
The sources told Reuters that without the contractors,
preventative maintenance at the plant may fall off.
"I don't see how effective a maintenance program can be if
you're just chasing urgent jobs," the source commented to
Reuters.
Headquartered in Houston, Texas, Citgo Petroleum Corp. --
http://www.citgo.com/-- is owned by PDV America, an indirect,
wholly owned subsidiary of Petroleos de Venezuela SA, the state-
owned oil company of Venezuela.
Petroleos de Venezuela 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.
As reported in the Troubled Company Reporter-Latin America on
Dec. 21, 2007, CITGO Petroleum Corporation's Issuer Default
Rating was lowered to 'BB-' from 'BB' following the company's
announcement that it has taken out a US$1 billion bridge loan
and used the proceeds to make a US$1 billion loan to parent
Petroleos de Venezuela SA (PDVSA IDR 'BB-', Negative Outlook).
Fitch rates CITGO Petroleum Corp. as:
-- Issuer Default Rating 'BB-';
-- Senior Secured Credit Facility 'BBB-';
-- Secured Term Loan 'BBB-';
-- Fixed Rate IRBs 'BBB-'.
PETROLEOS DE VENEZUELA: Chalmette Maintenance Work Is Until Feb.
----------------------------------------------------------------
Maintenance work at a refinery run by Chalmette Refining LLC,
Venezuelan state-run oil firm Petroleos de Venezuela SA's joint
venture with Exxon Mobil Corp., will be until the end of
February, The Times-Picayune reports, citing the plant's
spokesperson John David Estes.
Mr. Estes told The Times-Picayune that work on a fluid catalytic
cracker and other units in Chalmette started on Jan. 4, 2007.
The plant can process 192,000 barrels a day, The Times-Picayune
states.
Petroleos de Venezuela SA -- http://www.pdv.com/-- 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. The company has a commercial office in China.
* * *
In March 2007, Standard & Poor's Ratings Services assigned its
'BB-' senior unsecured long-term credit rating to Petroleos de
Venezuela S.A.'s US$2 billion notes due 2017, US$2 billion notes
due 2027, and US$1 billion notes due 2037.
PETROLEOS DE VENEZUELA: El Palito's Cat Cracker Shuts Down
----------------------------------------------------------
A cat cracker at Venezuelan state-run oil firm Petroleos de
Venezuela SA's El Palito plant was shut down after attempts to
boost runs at the unit, Reuters reports, citing a source.
The increased runs boosted pressure inside the cracking unit,
the source told Reuters. They threw one of the unit's turbines
off balance and damaged turbine blades.
The source commented to Reuters, "This happens when you increase
runs, you increase the pressure. They increased the runs, but I
do not know by how much."
As reported in the Troubled Company Reporter-Latin America on
Jan. 14, 2008, Petroleos de Venezuela SA said it would expand
its El Palito plant to boost the production of gasoline
components. El Palito processes some 140,000 barrels per day to
produce fuels for the Venezuelan market. Petroleos de Venezuela
had been buying significant amounts of gasoline components in
recent months from other nations to meet domestic demand. The
pre-ignition catalytic converter project for El Palito will
increase the flexibility of the plant's fluid catalytic cracking
plant.
Meanwhile, Petroleos de Venezuela told Reuters that it was
conducting a probe on a mechanical failure in the air blower of
the cracker's catalyst regeneration plant. Petroleos de
Venezuela admitted in a statement that a problem in the plant
forced El Palito to close down the cracking unit in December
2003.
Petroleos de Venezuela said in a statement that it acquired the
needed equipment for the expansion.
Petroleos de Venezuela SA -- http://www.pdv.com/-- 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. The company has a commercial office in China.
* * *
In March 2007, Standard & Poor's Ratings Services assigned its
'BB-' senior unsecured long-term credit rating to Petroleos de
Venezuela S.A.'s US$2 billion notes due 2017, US$2 billion notes
due 2027, and US$1 billion notes due 2037.
PETROLEOS DE VENEZUELA: Investing US$15.6 Billion in 2008
---------------------------------------------------------
Venezuelan state-run oil firm Petroleos de Venezuela SA will
invest US$15.6 billion to consolidate the "Sowing the Oil Plan"
and to guarantee the achievement of output goals for the year
2012, Agencia Bolivariana de Noticias reports, citing energy and
oil minister Rafael Ramirez.
The US$15.6 billion will make it possible to boost Venezuela's
oil production to 5.8 million barrels in five years, Minister
Ramirez told Agencia Boliviana. The amount represents a leap
forward regarding the investments Petroleos de Venezuela had
made. Petroleos de Venezuela had invested no more than US$3.3
billion in operations up to the year 2002. That amount has
increased due to the implementation of the "Sowing the Oil
Plan." Petroleos de Venezuela's investment in 2006 was US$5.8
billion. Last year it was US$10 billion.
Minister Ramirez emphasized to Agencia Bolivariana the need to
study Petroleos de Venezuela's processes by following an
evaluation proposed by President Hugo Chavez to face the
challenges of 2008:
-- revision,
-- rectification, and
-- re-boosting the revolution.
Petroleos de Venezuela SA -- http://www.pdv.com/-- 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. The company has a commercial office in China.
* * *
In March 2007, Standard & Poor's Ratings Services assigned its
'BB-' senior unsecured long-term credit rating to Petroleos de
Venezuela S.A.'s US$2 billion notes due 2017, US$2 billion notes
due 2027, and US$1 billion notes due 2037.
* VENEZUELA: Hugo Chavez Proposes Food Supply Agreement for ALBA
----------------------------------------------------------------
El Universal reports that Venezuelan President Hugo Chavez
suggested the member countries of the Bolivarian Alternatives
for the Americas to organize a production and trade mechanism,
calling it Alimentos del Caribe (Caribbean Food), with Central
American and Caribbean.
Mr. Chavez claimed that the country has encountered milk
shortage last year, adding that the crisis hurt him somehow
during a referendum on his proposed changes to the Constitution
last month, the same paper relates.
According to Mr. Chavez, Alcaribe would be "an international
structure to increase food production and supply among the
peoples comprising the ALBA."
"The same way we have the Bank of ALBA and Petrocaribe, the
subject matter of food will be assessed over the next few days
and during the Summit of the Bolivarian Alternative for the
Americas (ALBA)," el universal states, citing Mr. Chavez.
* * *
As reported in the Troubled Company Reporter on Nov. 20, 2006,
Fitch Ratings affirmed Venezuela's long-term foreign and local
currency Issuer Default Ratings at 'BB-'. At the same time, the
agency also affirmed the short-term foreign currency IDR at
'B'and the Country Ceiling at 'BB-'. Fitch said the outlook on
the ratings remains stable.
* VENEZUELA: To Evaluate Cooperation with Nicaragua
---------------------------------------------------
Venezuelan President Hugo Chavez and his Nicaraguan counterpart,
Daniel Ortega, will assess cooperation between both governments
and peoples for the past year, Inside Costa Rica relates, citing
government minister and first lady Rosario Murillo.
The report says that both leaders were listing the points of
cooperation for 2008 both bilaterally as well as in the
framework of the Bolivarian Alternative for the Americas.
Ms. Murillo, according to the same paper, disclosed that ALBA
will schedule on January 25 and 26 its presidential summit in
Caracas. She added that ALBA represented a sunrise for the
peoples, a dawn of humanity and brotherhood and true
interdependent development.
* * *
As reported in the Troubled Company Reporter on Nov. 20, 2006,
Fitch Ratings affirmed Venezuela's long-term foreign and local
currency Issuer Default Ratings at 'BB-'. At the same time, the
agency also affirmed the short-term foreign currency IDR at
'B'and the Country Ceiling at 'BB-'. Fitch said the outlook on
the ratings remains stable.
* BOND PRICING: For the Week January 14 to January 18
-----------------------------------------------------
Issuer Coupon Maturity Currency Price
------ ------ -------- -------- -----
ARGENTINA
---------
Argnt-Bocon PR11 2.000 12/3/10 ARS 63.86
Argnt-Bocon PR13 2.000 3/15/24 ARS 68.30
Arg Boden 2.000 9/30/08 ARS 29.54
Argent-Par 0.630 12/31/38 ARS 41.60
CAYMAN ISLANDS
--------------
Vontobel Cayman 7.250 3/29/49 USD 64.22
Vontobel Cayman 7.250 3/29/49 USD 67.00
Vontobel Cayman 7.350 1/25/08 CHF 63.20
Vontobel Cayman 7.450 2/22/08 CHF 53.40
Vontobel Cayman 7.500 1/25/08 CHF 63.60
Vontobel Cayman 7.650 1/25/08 CHF 72.10
Vontobel Cayman 7.900 2/22/08 CHF 63.55
Vontobel Cayman 8.250 1/25/08 CHF 68.50
Vontobel Cayman 8.250 4/25/08 CHF 72.80
Vontobel Cayman 8.250 7/28/08 CHF 65.00
Vontobel Cayman 8.300 3/20/08 CHF 71.70
Vontobel Cayman 8.500 3/27/08 CHF 65.75
Vontobel Cayman 8.700 3/27/08 CHF 62.95
Vontobel Cayman 8.750 3/27/08 CHF 62.15
Vontobel Cayman 9.050 7/1/08 CHF 65.00
Vontobel Cayman 9.250 2/22/08 CHF 70.10
Vontobel Cayman 9.350 1/25/08 CHF 74.90
Vontobel Cayman 9.350 1/25/08 CHF 66.55
Vontobel Cayman 9.600 2/22/08 CHF 42.35
Vontobel Cayman 10.050 1/25/08 CHF 37.85
Vontobel Cayman 10.050 1/25/08 CHF 73.10
Vontobel Cayman 10.100 1/25/08 CHF 60.60
Vontobel Cayman 10.200 2/04/08 CHF 68.20
Vontobel Cayman 10.400 7/8/08 CHF 64.20
Vontobel Cayman 10.500 1/25/08 CHF 63.20
Vontobel Cayman 10.850 3/27/08 EUR 72.50
Vontobel Cayman 11.000 6/20/08 CHF 62.00
Vontobel Cayman 11.400 2/15/08 CHF 69.20
Vontobel Cayman 11.500 6/27/08 EUR 70.90
Vontobel Cayman 12.250 6/27/08 EUR 72.70
Vontobel Cayman 13.450 1/25/08 CHF 64.40
Vontobel Cayman 13.500 2/22/08 CHF 42.60
Vontobel Cayman 16.000 2/4/08 USD 38.35
PUERTO RICO
-----------
Puerto Rico Cons. 5.900 4/15/34 USD 71.75
Puerto Rico Cons. 6.000 12/15/34 USD 67.00
VENEZUELA
---------
Petroleos de Ven 5.250 4/12/17 USD 73.40
Petroleos de Ven 5.375 4/12/27 USD 62.15
Petroleos de Ven 5.500 4/12/37 USD 60.35
***********
S U B S C R I P T I O N I N F O R M A T I O N
Troubled Company Reporter - Latin America is a daily newsletter
co-published by Bankruptcy Creditors' Service, Inc., Fairless
Hills, Pennsylvania, USA, and Beard Group, Inc., Frederick,
Maryland USA. Marjorie C. Sabijon, Sheryl Joy P. Olano, Rizande
de los Santos, and Pamella Ritah K. Jala, Editors.
Copyright 2008. All rights reserved. ISSN 1529-2746.
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