/raid1/www/Hosts/bankrupt/TCRLA_Public/080215.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
Friday, February 15, 2008, Vol. 9, No. 33
Headlines
A R G E N T I N A
ACXIOM CORP: Paying Six Cents Per Share Dividend on March 17
ACXIOM CORP: Increases Stock Repurchase Program by US$25 Mil.
ALITALIA SPA: AirOne Woos Lombardy Investors to Join Bid
ASOCIACION ARGENTINA: Claims Verification Deadline is May 9
BALLY TECH: Earns US$24.4 Million in Quarter Ended Dec. 31, 2007
BALLY TECH: To Provide Casino Management Systems for Harrah's
CAFE DEL PILAR: Proofs of Claim Verification Ends on March 10
COMPANIA TEXTIL: Trustee Verifies Proofs of Claim Until April 4
DELTA AIR: Bank of NY and Hillsborough Demand Summary Judgment
DELTA AIR: District Judge Affirms Ruling on Kenton Settlement
DELTA AIR: To Focus on Joint Pilot Contract with Northwest
DELTA AIR: VIAD Corp. Nips at Objection to Environmental Claims
DOMITEX SRL: Trustee Verifies Proofs of Claim Until April 4
FARMA 10: Proofs of Claim Verification Deadline is April 11
MACCHI GROUP: Proofs of Claim Verification Ends on April 17
MUTIENVASES SA: Proofs of Claim Verification is Until April 17
NVIDIA CORPORATION: Completes Acquisition of AGEIA Technologies
NVDIA CORP: Fiscal 2008 Earnings Up 78% to US$797.6 Million
SCHUCHNER SILVIO: Trustee Verifies Proofs of Claim Until April 4
WR GRACE: Seeks Court OK to Extend DIP Facility Until April 2010
WR GRACE: Asbestos Claims Estimation Trial to Resume March 24
WR GRACE: Wants to Contribute US$17 Million to Pension Plan
B A H A M A S
HARRAH'S ENT: Bally to Provide Casino Management System
METROPOLITAN BANK: Top Trust Fund Manager, Says Watson Wyatt
PINNACLE ENT: Rouge Parish Voters OK US$250 Mil. Riviere Dev't
B E R M U D A
MAGELLAN INSURANCE: Proofs of Claim Filing Ends on February 20
SECURITAS EDC: Proofs of Claim Filing is Until on February 28
SECURITAS ALLIED: Proofs of Claim Filing Deadline is February 28
SECURITAS ALLIED: Final Shareholders Meeting is on March 19
SECURITAS EDC: Sets Final Shareholders Meeting for March 19
B R A Z I L
ATARI INC: Dec. 31 Balance Sheet Upside-Down by US$16,811,000
FREESCALE SEMI: Appoints Rich Beyer as Chairman and CEO
FREESCALE SEMICONDUCTOR: Fitch Shifts Rating Outlook to Negative
GERDAU AMERISTEEL: Earns US$537.9-Mln in Year Ended December 31
INGRAM MICRO: Earns US$114.1 Million in Fourth Quarter 2007
NORTEL NETWORKS: In Talks with Motorola to Merge Wireless Units
NOVELL INC: Extends To Open Collaboration Biz With SiteScape Buy
PROPEX INC: Gets Access to Additional US$40 Mln of DIP Financing
PROPEX INC: Shaw and IRS Balk at BNP Paribas DIP Fund Agreement
C A Y M A N I S L A N D S
BANK OF AYUDHYA: Plans To Sell THB20 Billion in Bonds
BBH AOF: Holding Final Shareholders Meeting on February 28
MARCO POLO: Final Shareholders Meeting is on February 28
MODULUS SELECT: Sets Final Shareholders Meeting for February 28
C H I L E
BOSTON SCIENTIFIC: Will Pay US$431 Mil. in Stent Patent Dispute
FIDELITY NATIONAL: Declares US$0.05 Per Common Share Dividend
FIDELITY NAT'L: Jeff Carbiener to Lead Lender Processing Unit
WARNER MUSIC: Moody's Downgrades Corporate Family Rating to B1
C O L O M B I A
BANCOLOMBIA SA: Jan. 2008 Unconsolidated Income is COP47,048MM
ECOPETROL SA: Seeking Oil & Gas with Turkish Petroleum
SOLUTIA INC: Lenders Seek Clarification of Funding Commitment
SOLUTIA INC: Resolves EPA Environmental Claim for US$3,600,000
C O S T A R I C A
DENNY'S CORP: Net Income Increases to US$34.7 Mil. in FY 2007
D O M I N I C A N R E P U B L I C
AES CORP: Restarts Redondo Beach Unit
* DOMINICAN REPUBLIC: Inter-American Offers Electrical Pact
E C U A D O R
PETROBRAS ENERGIA: 4th Qtr. Net Income Drops to ARS206 Million
E L S A L V A D O R
HERBALIFE LTD: Signs Three-Year Pact With Kaiser Permanente
G U A T E M A L A
ALCATEL-LUCENT SA: Posts EUR3.52 Billion Net Loss for 2007
AFFILIATED COMPUTER: Amends Solano County Customer Service Pact
J A M A I C A
AIR JAMAICA: Loses Court Battle Against Flight Attendants
AIR JAMAICA: Union Wants Airline To Pay All Bills Before Sale
SUGAR CO: Frome Eyes 50,090 Tons of Sugar Production in 2008
M E X I C O
BERRY PLASTICS: Completes Acquisition of Captive Plastics Inc.
COLLINS & AIKMAN: Bayer Unit Buys IP Rights on Thermoplastics
COTT CORP: Net Loss Ups to US$76.8 Mil. in Quarter Ended Dec. 29
DAVE & BUSTER'S: Rtgs. Unaffected by Firm Sale Report, S&P Says
FORD MOTOR: Fitch Affirms B Issuer Default Rating; Outlook Neg.
WENDY'S INT'L: Trian Partners Moves to Raise Board Size to 15
P A N A M A
* PANAMA: To Enter Free Trade Talks with Guatemala
P U E R T O R I C O
ADELPHIA COMMS: Recovery Trust Assets Valued at $677,700,000
AGILENT TECH: Reports US$120 Million Net Income in First Quarter
AGILENT TECHNOLOGIES: Adds WiMAX Protocol Testing in Runcom Deal
DIRECTV GROUP: Earns US$348 Million in Fourth Qtr. Ended Dec. 31
FUNDACION DR: Wants Cash Collateral Access for Hospital Sale
GLOBAL HOME: Judge Gross Confirms Joint Amended Chapter 11 Plan
JETBLUE AIRWAYS: Names Edward Barnes as Chief Financial Officer
ROYAL CARIBBEAN: Inks US$530 Mil. Credit Pact with Nordea Bank
U R U G U A Y
GERDAU SA: Earns BRL4.3 Billion in 2007 Fiscal Year
GERDAU SA: Investing US$6.4 Billion in Technological Upgrades
V E N E Z U E L A
CATALYST PAPER: Posts US$31.6MM Net Loss on US$1,714.6MM Sales
CHRYSLER LLC: Extends Exclusive Deal w/ SIRIUS Until Sept. 2017
CHRYSLER LLC: Insists That It Owns Tooling Equipment
NORTHWEST AIRLINES: To Focus on Joint Pilot Contract with Delta
PETROLEOS DE VENEUZELA: Depositing Oil Sales Receipts with UBS
PETROLEOS DE VENEZUELA: May File Lawsuit Against Exxon Mobil
SHAW GROUP: E&I Unit Bags Two Task Order Contracts from US Navy
X X X X X X
* LatAm Voice Services Market To Top US$775.8 Million by 201
- - - - -
=================
A R G E N T I N A
=================
ACXIOM CORP: Paying Six Cents Per Share Dividend on March 17
------------------------------------------------------------
Acxiom(R) Corporation's board of directors has declared a
quarterly cash dividend of six cents per share payable on
March 17 to shareholders of record as of the close of business on
Feb. 25.
While Acxiom intends to pay regular quarterly dividends for the
foreseeable future, all subsequent dividends will be reviewed
quarterly and declared by the board at its discretion.
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 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.
ACXIOM CORP: Increases Stock Repurchase Program by US$25 Mil.
-------------------------------------------------------------
Acxiom(R) Corporation's board of directors has authorized a
US$25 million increase in its stock repurchase program. On
Oct. 26, 2007, the company announced a 12-month, US$75 million
program whereby the company would repurchase its common stock in
open market or privately negotiated transactions, depending on
prevailing market conditions and other factors. Since the
inception of the program, the company has purchased approximately
4.175 million shares for a total purchase price of US$50.6
million. At a meeting Feb. 13, 2008, the board voted to increase
the authorization to US$100 million. The repurchase program may
be suspended or discontinued at any time.
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 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.
ALITALIA SPA: AirOne Woos Lombardy Investors to Join Bid
--------------------------------------------------------
AirOne S.p.A. chairman Carlo Toto is inviting businessmen from the
Lombardy region to join the airline's bid to acquire the Italian
government's 49.9% stake in Alitalia S.p.A., Reuters reports.
According to the report, Mr. Toto held a meeting with Gaetano
Micciche, head of Intesa Sanpaolo S.p.A.'s corporate division, and
other business leaders in the region, where Milan Malpensa airport
is located.
Around 20 businessmen expressed interest in joining the bid,
Reuters relates, citing local reports.
As reported in the TCR-Europe on Feb. 7, 2008, AirOne said its
offer will be financially backed by Intesa Sanpaolo S.p.A.,
Goldman Sachs Group Inc., Morgan Stanley and Nomura Holdings
Plc.
TPG Inc. and Pirelli & S.p.A. chairman Marco Tronchetti Provera
may join AirOne in its Alitalia bid. Reuters said MyChef may also
participate in the offer.
Politicians and businessmen in the region have expressed concern
on the impact of the possible sale of the stake to Air France-KLM
SA, which business plan for Alitalia entails downscaling
operations at Malpensa. An official at Italian slot coordinator
Assoclearance has said that Alitalia will release around 180 of
its 357 slots at Malpensa as part of its downscale strategy.
Alitalia said the slots are unused ones during the summer season,
which starts March 30, 2008, and ends Oct. 25, 2008.
AirOne said it would present a binding offer once it wins an
appeal at the Italian Regional Administration Court of Lazio.
As reported in the TCR-Europe on Feb. 5, 2008, AP Holding
S.p.A., investment arm of AirOne, has filed an appeal with the
court to declare null and void a Dec. 28, 2007, decision of
Italy's Ministry of Economy and Finance to commence exclusive
talks to sell the Italy's stake to Air France.
AirOne winning the suit would allow it to present its binding
offer for the state-owned carrier.
As reported in the TCR-Europe on Jan. 17, 2008, Alitalia and
Italy have commenced exclusive sale talks with Air France-KLM.
The carriers have until mid-March to reach an agreement, which
would be approved by the government.
In its non-binding offer, Air France plans to:
-- acquire 100% of the shares of Alitalia through an
exchange offer;
-- acquire 100% of Alitalia convertible bonds; and
-- immediately inject at least EUR750 million into
Alitalia through a capital increase, that will be open to
all shareholders and be fully underwritten by Air France.
About Alitalia
Headquartered in Rome, Italy, Alitalia S.p.A. --
http://www.alitalia.it/-- provides air travel services for
passengers and air transport of cargo on national, international
and inter-continental routes. The Italian government owns 49.9%
of Alitalia. The company has operations in Argentina.
Despite a EUR1.4 billion state-backed restructuring in 1997,
Alitalia posted net losses of EUR256 million and EUR907 million
in 2000 and 2001 respectively. Alitalia posted EUR93 million in
net profits in 2002 after a EUR1.4 billion capital injection.
The carrier booked annual net losses of EUR520 million in 2003,
EUR813 million in 2004, EUR168 million in 2005, and
EUR625.6 million in 2006.
Italian Transport Minister Alessandro Bianchi has warned that
Alitalia may file for bankruptcy if the current attempt to sell
the government's 49.9% stake fails.
ASOCIACION ARGENTINA: Claims Verification Deadline is May 9
-----------------------------------------------------------
Osvaldo Luis Weiss, the court-appointed trustee for Asociacion
Argentina de Establecimientos Geriatricos' bankruptcy proceeding,
verifies creditors' proofs of claim until May 9, 2008.
Mr. Weiss will present the validated claims in court as individual
reports on June 20, 2008. The National Commercial Court of First
Instance in Buenos Aires will determine if the verified claims are
admissible, taking into account the trustee's opinion, and the
objections and challenges that will determine if the verified
claims are admissible, taking into account the trustee's opinion,
and the objections and challenges that will be raised by
Asociacion Argentina and its creditors.
Inadmissible claims may be subject for appeal in a separate
proceeding known as an appeal for reversal.
A general report that contains an audit of Asociacion Argentina's
accounting and banking records will be submitted in court on Aug.
15, 2008.
Mr. Weiss is also in charge of administering Asociacion
Argentina's assets under court supervision and will take part in
their disposal to the extent established by law.
The trustee can be reached at:
Osvaldo Luis Weiss
Roque Saenz Pena 651
Buenos Aires, Argentina
BALLY TECH: Earns US$24.4 Million in Quarter Ended Dec. 31, 2007
----------------------------------------------------------------
Bally Technologies Inc. has announced results for the three months
and six months ended Dec. 31, 2007.
"We are very pleased to report record quarterly results for our
second quarter," said Chief Executive Officer, Richard M. Haddril.
"Our great game performance and continued system success is
reflected in record quarterly revenues in each of our game sales,
gaming operations and systems businesses."
Second Quarter Fiscal 2008 Highlights
Three Months Ended Dec. 31, 2007 Vs. Three Months Ended
Dec. 31, 2006
-- Total revenues increased 53% to US$230.7 million as
compared with US$150.9 million in the same period last
year.
-- Operating income increased by US$41.1 million to
US$46.8 million, as compared with US$5.7 million in the
same period last year; operating margin was 20% in the
three months ended Dec. 31, 2007.
-- Net income increased by US$26.9 million to
US$24.4 million, as compared with a loss of US$2.5 million
in the same period last year, primarily as a result of
improved margin and cost leverage.
-- Adjusted EBITDA was US$63.9 million, a 172% increase as
compared with the same period last year.
-- Selling, general and administrative expenses declined to
26% of total revenue from 33% as compared with the same
period last year.
Six Months Ended Dec. 2007, Vs. Six Months Ended Dec. 2006
-- Total revenues increased 38% to US$419.7 million as
compared with US$304.7 million in the same period last
year.
-- Operating income increased by US$74 million to US$88
million, as compared with US$14 million in the same period
last year; operating margin was 21% in the six months
ended Dec. 31, 2007.
-- Net income increased by US$48.4 million to US$45.7
million, as compared with a loss of US$2.7 million in the
same period last year, primarily as a result of improved
margin and cost leverage.
-- Adjusted EBITDA was US$122.4 million, a 146% increase as
compared with the same period last year.
-- Selling, general and administrative expenses declined to
27% of total revenue from 33% as compared with the same
period last year.
"We are again pleased with our operating leverage this quarter,"
said Chief Financial Officer, Robert C. Caller. "Our SG&A in the
current quarter compared with the September 2007 quarter increased
by US$8.7 million primarily due to higher professional and
accounting fees, Global Gaming Expo trade-show expenses, and
commission and bad-debt expenses associated with higher revenue.
However, as a% of revenue, SG&A decreased to 26% from 28% in the
September 2007 quarter."
Certain Results Highlights for
the Three Months Ended Dec. 31, 2007
Gaming Equipment
-- Revenues increased to approximately US$108.4 million, a
54% increase as compared with the same period last year.
-- A 53% increase in new gaming device sales to 7,144 units
as compared with 4,672 units in the same period last year.
-- A 4% increase in the ASP of new gaming devices, excluding
OEM sales, primarily due to product mix and the effect of
foreign currency exchange rates on international pricing.
-- Gross margin increased from 34% in the same period last
year to 44%, a slight decline from 46% in the first
quarter of fiscal 2008. The improvement in margins over
the same period last year was primarily related to the
increase in ASP discussed above, the elimination of lower
margin OEM sales, and improved purchasing and
manufacturing efficiencies due to increased volumes and
lower manufacturing costs. Game equipment margins were
negatively impacted by approximately US$2 million in one-
time expenses related to the entrance into new
international markets in the current quarter.
Gaming Operations
-- Revenues increased 34% to approximately US$54.2 million as
compared with the same period last year.
-- Gross margin remained consistent at 58% in this year and
in the same period last year.
-- Revenue and gross margin in fiscal 2007 includes daily
fees that relate to certain contracts that were deferred
in the first and second quarter of fiscal 2008 due to new
contractual commitments made to the customers.
Approximately US$4.4 million in daily fees generated
during the second quarter of fiscal 2008 were deferred
pending delivery of the commitments.
-- Revenue and gross margin was negatively impacted by US$1.1
million due to the additional deferred revenue and normal
seasonality and the softness in casino revenues in the
domestic market compared with the September 2007 quarter.
-- Gross margins were negatively impacted by the deferral of
revenue discussed above and approximately US$2 million of
jackpot expenses compared with the September 2007 quarter
and the same period last year.
Systems
-- Revenues increased 95% to approximately US$56.3 million as
compared with the same period last year, primarily as a
result of continued acceptance of the company's products
and an increase in the number of go-lives.
-- Gross margin increased slightly to 73% from 72% in the
same period last year.
-- Maintenance revenues increased to approximately US$9.9
million from approximately US$8.3 million in the same
period last year.
-- As of Dec. 31, 2007, the company had sold approximately
67,000 units of its iVIEW(TM) player-communication units.
iVIEW units purchased and committed to be purchased now
exceed 97,000.
Certain Results Highlights for
the Six Months Ended Dec. 31, 2007
Gaming Equipment
-- Revenues increased 45% to approximately US$192.7 million
as compared with the same period last year.
-- A 52% increase in new gaming device sales to 12,295 units
as compared with 8,099 units in the same period last year.
-- A 7% increase in the ASP of new gaming devices, excluding
OEM sales, primarily due to product mix and the effect of
foreign currency exchange rates on international pricing.
ASP was negatively impacted in the prior year as a result
of incentive pricing and discounts offered to customers
related to the roll-out of Bally's Alpha OS(TM) platform
products.
-- Gross margin increased to 45% from 33% in the same period
last year. The improvement in margins was primarily
related to the increase in ASP discussed above, the
elimination of lower margin OEM sales, and improved
purchasing and manufacturing efficiencies related to
increased volumes and lower manufacturing costs.
Gaming Operations
-- Revenues increased 34% to approximately US$108.3 million
as compared with the same period last year.
-- Revenue and gross margin in fiscal 2007 include daily fees
that relate to certain contracts that were deferred in the
first and second quarter of fiscal 2008 due to new
contractual commitments made to customers. Approximately
US$7.6 million in daily fees generated during the six
months ended Dec. 31, 2007 was deferred pending delivery
of the commitments.
Systems
-- Revenues increased 41% to approximately US$95.5 million as
compared with the same period last year primarily as a
result of continued acceptance of the company's products
and an increase in the number of go-lives principally in
the second quarter for fiscal 2008.
-- Gross margin increased to 74% from 68% in the same period
last year primarily as a result of an increase in the
proportion of software and maintenance sales as compared
with hardware sales. Hardware sales have lower gross
margins compared with software and maintenance revenue.
-- Maintenance revenues increased to approximately US$19.3
million from approximately US$15.9 million in the same
period last year.
Fiscal 2008 Business Update
The company raised its fiscal 2008 guidance for Diluted EPS to
US$1.62 to US$1.87, from an earlier range of US$1.60 to US$1.90.
Adjusted EPS is now estimated between US$1.75 to US$2.05 from an
earlier range of US$1.70 to US$2.00.
The company expects revenues in fiscal 2008 to exceed
US$875 million, with continued year-over-year growth in each of
game sales, gaming operations and system revenues. The company
continues to forecast an increase in the placement of premium
daily-fee games and an increase in the number of gaming devices
sold, and also expects margins on game sales and operations to
continue to improve in fiscal 2008 as compared with fiscal 2007.
The company also continues to expect its selling, general and
administrative expenses as a%age of revenue to be lower in fiscal
2008 as compared with fiscal 2007. The company expects its
effective tax rate for fiscal 2008 will be between 37% and 38%.
The company has provided this broad range of earnings guidance to
give investors general information on the overall direction of its
business. The guidance provided is subject to numerous
uncertainties, including, among others, overall economic
conditions, the market for gaming devices and systems, competitive
product introductions, complex revenue recognition rules related
to the company's business, and assumptions about the company's new
product introductions and regulatory approvals. The company may
update this fiscal 2008 guidance from time to time as the year
progresses.
About Bally Technologies Inc.
Headquartered in Las Vegas, Nevada, Bally Technologies, Inc.
(NYSE: BYI) -- http://www.BallyTech.com/-- designs,
manufactures, operates, and distributes advanced gaming devices,
systems, and technology solutions worldwide. Bally's product line
includes reel-spinning slot machines, video slots, wide-area
progressives and Class II lottery and central determination games
and platforms. Bally Technologies also offers an array of casino
management, slot accounting, bonus, cashless, and table management
solutions. The company also owns and operates Rainbow Casino in
Vicksburg, Mississippi. The company's South American operations
are located in Argentina. The company also has operations in
France, Germany, Macau, China, India, and the United Kingdom.
* * *
As reported in the Troubled Company Reporter-Latin America on
Dec. 27, 2007, Fitch Ratings upgraded Bally Technologies' Issuer
Default Rating and senior secured bank debt ratings as: IDR to 'B'
from 'B-' and Secured bank credit facilities to 'BB/RR1' from
'B/RR3'.
BALLY TECH: To Provide Casino Management Systems for Harrah's
-------------------------------------------------------------
Bally Technologies Inc. has extended its domestic relationship
with Harrah's Entertainment, Inc. to provide key casino slot and
gaming management and marketing systems for Harrah's international
operations.
The transaction is subject to Harrah's corporate approvals,
execution of definitive agreements, and receipt of required
regulatory approvals.
Bally and Harrah's commitment to work together internationally
comes on the heels of Bally's recent announcement that it
continues to bolster its international product portfolio and
infrastructure. Bally is developing more games and systems
technology specifically for international markets and has recently
opened new sales and support offices in Spain and South Africa,
with a Mexico City office slated to open this spring.
"We're pleased to be extending our relationship with Bally
Technologies as we pursue an aggressive global growth strategy,"
said Harrah's Entertainment Chief Information Officer and Senior
Vice President of Innovation & Gaming, Tim Stanley. "Bally has
been a provider of choice in supplying the operational, accounting
and management systems that support our industry-leading Total
Rewards(TM) capabilities that enhance our guests' experience
through interactive entertainment offerings. Under this new
agreement, Bally will also become a key software supplier for our
casino and gaming management systems at our current and planned
international operations."
Bally also announced that Harrah's has licensed Bally Power
Winners(TM) and Power Promotions(TM) technologies for use as part
of Harrah's new and proprietary PRISM interactive customer
relationship management initiative. Under the licensing
agreement, which is also subject to Harrah's corporate approvals,
execution of definitive agreements, and receipt of regulatory
approvals, Harrah's can implement Bally's new promotional and
downloadable credit features as an integral part of Harrah's Total
Rewards(TM) marketing programs worldwide.
Harrah's PRISM initiative, an acronym for Personalized Real-time
Interactive Slot Marketing, is designed to introduce unique CRM
features and capabilities to the millions of Harrah's Total
Rewards cardholders who play the company's 60,000-plus slots.
"We are very excited about extending our partnership with Harrah's
to supply these system products internationally and cutting-edge
promotional and downloadable credit features worldwide," said
Bally Technologies Chief Executive Officer, Richard M. Haddrill.
"The flexibility and configuration options built into our products
will allow Harrah's to build on the existing strength of its
player-loyalty program and manage their business both domestically
and globally."
About Harrah's Entertainment
Headquartered in Las Vegas, Nevada, Harrah's Entertainment Inc.
(NYSE: HET) -- http://www.harrahs.com/-- through its wholly owned
subsidiary Harrah's Operating Company Inc., provides branded
casino entertainment. Since its beginning in Reno, Nevada 70
years ago, Harrah's has grown through development of new
properties, expansions and acquisitions, and now owns or manages
casinos on four continents. The company's properties operate
primarily under the Harrah's(R), Caesars(R) and Horseshoe(R) brand
names; Harrah's also owns the London Clubs International family of
casinos. In January 2007, it signed a joint venture agreement
with Baha Mar Resorts Ltd. to operate a resort in Bahamas.
About Bally Technologies Inc.
Headquartered in Las Vegas, Nevada, Bally Technologies, Inc.
(NYSE: BYI) -- http://www.BallyTech.com/-- designs, manufactures,
operates, and distributes advanced gaming devices, systems, and
technology solutions worldwide. Bally's product line includes
reel-spinning slot machines, video slots, wide-area progressives
and Class II lottery and central determination games and
platforms. Bally Technologies also offers an array of
casino management, slot accounting, bonus, cashless, and table
management solutions. The company also owns and operates Rainbow
Casino in Vicksburg, Mississippi. The company's South American
operations are located in Argentina. The company also has
operations in France, Germany, Macau, China, India, and the United
Kingdom.
* * *
As reported in the Troubled Company Reporter-Latin America on Dec.
27, 2007, Fitch Ratings upgraded Bally Technologies' Issuer
Default Rating and senior secured bank debt ratings as: IDR to 'B'
from 'B-' and Secured bank credit facilities to 'BB/RR1' from
'B/RR3'.
CAFE DEL PILAR: Proofs of Claim Verification Ends on March 10
-------------------------------------------------------------
Pedro Valle, the court-appointed trustee for Cafe del Pilar SRL's
bankruptcy proceeding, verifies creditors' proofs of claim until
March 10, 2008.
Mr. Valle will present the validated claims in court as individual
reports. The National Commercial Court of First Instance No. 14
in Buenos Aires, with the assistance of Clerk No. 28, will
determine if the verified claims are admissible, taking into
account the trustee's opinion, and the objections and challenges
that will determine if the verified claims are admissible, taking
into account the trustee's opinion, and the objections and
challenges that will be raised by Cafe del Pilar and its
creditors.
Inadmissible claims may be subject for appeal in a separate
proceeding known as an appeal for reversal.
A general report that contains an audit of Cafe del Pilar's
accounting and banking records will be submitted in court.
La Nacion didn't state the reports submission deadlines.
Mr. Valle is also in charge of administering Cafe del Pilar's
assets under court supervision and will take part in their
disposal to the extent established by law.
The debtor can be reached at:
Cafe del Pilar SRL
Juncal 776
Buenos Aires, Argentina
The trustee can be reached at:
Pedro Valle
Avenida de Mayo 1260
Buenos Aires, Argentina
COMPANIA TEXTIL: Trustee Verifies Proofs of Claim Until April 4
---------------------------------------------------------------
Mario Daniel Krasnasky, the court-appointed trustee for Compania
Textil de Servicios S.R.L.'s reorganization proceeding, will be
verifying creditors' proofs of claim until April 4, 2008.
Mr. Krasnasky will present the validated claims in court as
individual reports on May 19, 2008. The National Commercial Court
of First Instance in Buenos Aires will determine if the verified
claims are admissible, taking into account the trustee's opinion,
and the objections and challenges that will be raised by Compania
Textil and its creditors.
Inadmissible claims may be subject for appeal in a separate
proceeding known as an appeal for reversal.
A general report that contains an audit of Compania Textil's
accounting and banking records will be submitted in court on
July 1, 2008.
Creditors will vote to ratify the completed settlement plan during
the assembly on Dec. 23, 2008.
The trustee can be reached at:
Mario Daniel Krasnasky
Viamonte 1785
Buenos Aires, Argentina
DELTA AIR: Bank of NY and Hillsborough Demand Summary Judgment
--------------------------------------------------------------
The Bank of New York and Hillsborough County Aviation Authority
ask the Hon. Adlai S. Hardin of the U.S. Bankruptcy Court for the
Southern District of New York to grant summary judgment in their
favor to clarify that:
* the Hillsborough Agreement between Delta and HCAA does not
constitute a "true lease" within the meaning of Section 365
of the Bankruptcy Code; and
* HCCA and BNY's claims for damages arising out of Delta's
rejection of the Hillsborough Agreement are not subject to
the limitations on damages under Section 502(b)(6) of the
Bankruptcy Code.
As previously reported, Hillsborough issued bonds to Delta
Air Lines, Inc., with BNY as the Indenture Trustee, pursuant to a
1982 Indenture. Delta used the proceeds to construct a hanger
and maintenance facility and to make other improvements to a
Tampa International Airport property in Florida. The bonds were
refinanced in 1988 and 1993.
Pursuant to a stipulation requiring rejection of the Tampa Lease,
Delta made the required periodic payments for use and occupancy
of the Leased Premises, as required by the Indenture.
When Delta discontinued the payments, Hillsborough and BNY filed
an US$8,110,311 claim for debt service payments. Hillsborough has
a separate US$4,181,735 claim for periodic payments, which the
Debtors refuse to pay.
Hillsborough and BNY contend that the payments constitute debt
obligations and should be treated as prepetition general
unsecured claims. Both parties also seek Delta's payment of the
costs and disbursements incurred during the proceeding, including
reasonable attorney's fees.
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. (Delta Air Lines Bankruptcy News, Issue No. 89; Bankruptcy
Creditors' Service, Inc., http://bankrupt.com/newsstand/or
215/945-7000)
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.
* * *
As reported in the Troubled Company Reporter-Latin America on
Jan. 18, 2008, Standard and Poor's said that media reports that
Delta Air Lines Inc. (B/Positive/--) entered into merger talks
with UAL Corp. (B/Stable/--) and Northwest Airlines Corp.
(B+/Stable/--) will have no effect on the 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
DELTA AIR: District Judge Affirms Ruling on Kenton Settlement
------------------------------------------------------------
Judge John G. Koetl of the U.S. District Court of the Southern
District of New York affirmed the ruling entered by the
Bankruptcy Court with respect to Delta Air Lines Inc.'s
settlement agreement with Kenton County Airport Board, and UMB
Bank, N.A., as indenture trustee.
The Agreement dated March 8, 2007, relates to two special
facilities revenue bonds -- the US$419,000,000 Kenton County
Airport Special Facilities Revenue Bonds, 1992 Series A, and the
US$19,000,000 Kenton County Airport Special Facilities Revenue
Bonds, 1992 Series B.
Pursuant to the Settlement Agreement, the Debtors agreed to
amend their Joint Plan of Reorganization to provide the 1992
Bondholders approximately US$67,000,000 in aggregate principal
amount of senior unsecured notes with a term not extending
beyond 2015 and an 8.00% annual interest rate.
Essentially, the Ad Hoc Committee of Kenton County Bondholders
maintained that the District Court should vacate the Bankruptcy
Court's Settlement Order and for the Appellees to either ratify
the Agreement without Bankruptcy Court approval of the releases
or to reform the Settlement to address objections.
However, Judge Koetl ruled that nullifying the releases while
leaving the remainder of the consummated Settlement intact would
ignore the trade-off that allowed the parties to settle.
Similarly, undoing the Settlement would complicate Delta's
rights to the Cincinnati/Northern Kentucky Airport as an
important hub of its operations, and would risk negative effects
on Delta's vitality as a reorganized entity.
Vacating the Bankruptcy Court's Settlement Order would "knock
the props out from under the authorization for every transaction
. . . and create an unmanageable, uncontrollable situation for
the Bankruptcy Court" considering the irreversible financial
transactions that have occurred, Judge Koetl said, citing
Metromedia, 416 F.3d at 144 (quoting Chateaugay II, 10 F.3d at
953).
Moreover, the KCAB Bondholders could freely trade the
distributed stock at the same time as other creditors to avoid
market risk, which showed good cause to coincide the Settlement
Closing with initial distributions under the Debtors' Plan,
Judge Koetl added.
Under Section 1334(b) of the Bankruptcy Code, the Bankruptcy
Court has jurisdiction to approve the Settlement binding non-
Debtors because the litigation had a "conceivable effect" on
Delta's estate and obligations. The Bankruptcy Court is also
authorized to approve third party claim releases that played an
important part in the Plan, Judge Koetl maintained.
The District Court also concurred with Bankruptcy Judge Adlai S.
Hardin's conclusion that the Indenture authorized the Bond
Trustee to conduct remedial proceedings at the behest of a
majority of the Bondholders, and that the Bond Trustee's
remedial powers included the right to enter the Settlement that
was ultimately approved by the Bankruptcy Court.
According to Judge Koetl, the Bankruptcy Court correctly found
that the Indenture did not bar it from approving the Settlement,
particularly in view of (i) the agreement by the Bond Trustee at
the direction of a majority in principal amount of the
Bondholders, (ii) the finding that the Settlement was fair and
reasonable, and (iii) the approval of the Joint Plan of
Reorganization, which incorporates the Settlement, by a large
majority of the Bondholders.
Judge Koetl maintained that "the effect on creditors who are not
parties to an appeal moots an appeal." Hence, the absence of
the vast majority of KCAB Bondholders from the proceeding
renders it inequitable to undo the Settlement to benefit a small
number of dissenting Bondholders.
Accordingly, Judge Koetl maintained that ". . . there is no
doubt as to the finality of the Bankruptcy Court's [Settlement]
Order."
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. (Delta Air Lines Bankruptcy News, Issue No. 89;
Bankruptcy Creditors' Service, Inc.,
http://bankrupt.com/newsstand/or 215/945-7000)
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.
* * *
As reported in the Troubled Company Reporter-Latin America on
Jan. 18, 2008, Standard and Poor's said that media reports that
Delta Air Lines Inc. (B/Positive/--) entered into merger talks
with UAL Corp. (B/Stable/--) and Northwest Airlines Corp.
(B+/Stable/--) will have no effect on the 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.
DELTA AIR: To Focus on Joint Pilot Contract with Northwest
----------------------------------------------------------
To avoid a messy, protracted labor wrangle that could arise from
consolidation, Delta Air Lines Inc. and Northwest Airlines Corp.
are making efforts to come up with a "common labor contract" for
their 11,000 pilots before a merger deal is completed, The Wall
Street Journal reports.
Delta and Northwest shared details of their proposed combination
with each airline's Air Line Pilots Association chapter so that
union leaders will study how to mesh seniority lists, a unnamed
source familiar with the situation told Bloomberg News. As the
pilot talks could lead to improved contract terms for both
groups
compared with their current contracts, the unions are engaged,
WSJ said, citing one person close to the situation.
Delta and Northwest might finalize their proposed merger, at the
earliest, late next week, according to reports.
Amid merger rumors, Delta flight attendants are aiming for
representation by the Association of Flights Attendants, says
The Associated Press. Reports note that more than half of
Delta's 12,000 flight attendants have supported this goal, and
are expected to vote on Feb. 14, 2008, with the National
Mediation Board on whether or not to join AFA. At least 35
percent of the 12,000 active flight attendants must sign cards
for the NMB to call an election.
A similar effort made by the flight attendants in late 2001 or
early 2002 failed, says the AP.
Delta spokesperson Betsy Talton said the airline is "not
surprised" by the attendants' plans.
Delta and Northwest declined to comment on the merger talks and
the pilot negotiations.
Delta's Merger Review Continues,
Delta-Northwest Deal Nears
Delta's chief executive officer, Richard Anderson, says Delta's
board and management team are continuing their review of the
airline's strategic options, including mergers, Reuters reports.
While prospects of a merger might unsettle certain people at
Delta, Mr. Anderson assured employees that the management will
ensure a thorough process where "Delta people are at the center
of every decision being considered".
The Delta CEO did not disclose when the review will end.
"If we do any transaction, we have to do the right thing
for the people. I don't know if we can accomplish those goals .
. . because there's somebody on the other side [who has to be in
agreement]," Delta President Ed Bastian said in an interview
with The Atlanta Journal-Constitution.
Rumors have also swirled that Delta is looking toward
Continental Airlines Inc., but held only preliminary talks with
the Houston-based airline recently.
Delta also reportedly held separate discussions with United
Airlines parent UAL Corp.
With a Delta-Northwest combination in the works, Continental and
UAL are looking into "negotiations of their own," according to
The New York Times.
Delta and Northwest would become the world's biggest carrier if
they combined.
About Northwest Airlines
Northwest Airlines Corp. (NYSE: NWA) -- http://www.nwa.com/--
is the world's fourth largest airline with hubs at Detroit,
Minneapolis/St. Paul, Memphis, Tokyo and Amsterdam, and about
1,400 daily departures. Northwest is a member of SkyTeam, an
airline alliance that offers customers one of the world's most
extensive global networks. Northwest and its travel partners
serve more than 1000 cities in excess of 160 countries on six
continents. Northwest and its travel partners serve more than
1000 cities in excess of 160 countries on six continents,
including Italy, Spain, Japan, China, Venezuela and Argentina.
The company and 12 affiliates filed for chapter 11 protection on
Sept. 14, 2005 (Bankr. S.D.N.Y. Lead Case No. 05-17930). Bruce
R. Zirinsky, Esq., and Gregory M. Petrick, Esq., at Cadwalader,
Wickersham & Taft LLP in New York, and Mark C. Ellenberg, Esq.,
at Cadwalader, Wickersham & Taft LLP in Washington represent the
Debtors in their restructuring efforts. The Official Committee
of Unsecured Creditors has retained Akin Gump Strauss Hauer &
Feld LLP as its bankruptcy counsel in the Debtors' chapter 11
cases.
When the Debtors filed for bankruptcy, they listed US$14.4
billion in total assets and US$17.9 billion in total debts. On
Jan. 12, 2007 the Debtors filed with the Court their Chapter 11
Plan. On Feb. 15, 2007, they Debtors filed an Amended Plan &
Disclosure Statement. The Court approved the adequacy of the
Debtors' Disclosure Statement on March 26, 2007. On May 21,
2007, the Court confirmed the Debtors' Plan. The Plan took
effect May 31, 2007.
About UAL Corp.
Based in Chicago, Illinois, UAL Corporation (NASDAQ: UAUA)
-- http://www.united.com/-- is the holding company for United
Airlines, Inc. United Airlines is the world's second largest
air carrier. The airline flies to Brazil, Korea and Germany.
The company filed for chapter 11 protection on Dec. 9, 2002
(Bankr. N.D. Ill. Case No. 02-48191). James H.M. Sprayregen,
Esq., Marc Kieselstein, Esq., David R. Seligman, Esq., and
Steven R. Kotarba, Esq., at Kirkland & Ellis, represented the
Debtors in their restructuring efforts. Fruman Jacobson, Esq.,
at Sonnenschein Nath & Rosenthal LLP represented the Official
Committee of Unsecured Creditors before the Committee was
dissolved when the Debtors emerged from bankruptcy. Judge
Wedoff confirmed the Debtors' Second Amended Plan on
Jan. 20, 2006. The company emerged from bankruptcy protection
on Feb. 1, 2006. (United Airlines Bankruptcy News, Bankruptcy
Creditors' Service Inc., http://bankrupt.com/newsstand/or
215/945-7000).
About Continental Airlines
Continental Airlines Inc. (NYSE: CAL) -- http://continental.com/
-- is the world's fifth largest airline. Continental, together
with Continental Express and Continental Connection, has more
than 2,900 daily departures throughout the Americas, Europe and
Asia, serving 144 domestic and 139 international destinations.
More than 500 additional points are served via SkyTeam alliance
airlines. With more than 45,000 employees, Continental has hubs
serving New York, Houston, Cleveland and Guam, and together with
Continental Express, carries approximately 69 million passengers
per year.
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. (Delta Air Lines Bankruptcy News, Issue No. 89;
Bankruptcy Creditors' Service, Inc.,
http://bankrupt.com/newsstand/or 215/945-7000)
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.
* * *
As reported in the Troubled Company Reporter-Latin America on
Jan. 18, 2008, Standard and Poor's said that media reports that
Delta Air Lines Inc. (B/Positive/--) entered into merger talks
with UAL Corp. (B/Stable/--) and Northwest Airlines Corp.
(B+/Stable/--) will have no effect on the 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.
DELTA AIR: VIAD Corp. Nips at Objection to Environmental Claims
---------------------------------------------------------------
VIAD Corp., and its former subsidiaries Dispatch Services, Inc.,
Florida Aviation Fueling Co., Inc., and Aircraft Service
International Inc., maintain that Delta Air Lines Inc. and its
debtor-affiliates' objection to their Claim No. 7352 does not
overcome prima facie validity of the Claim.
VIAD filed Claim No. 7352 against Delta for allegations of
environmental contamination made by the Miami-Dade County
Aviation Department. Delta argued that the Claim should be
expunged because it is not reflected in their books and records.
Richard S. Kanowitz, Esq., at Cooley Godward Kronish LLP, in New
York, recounts that in December 2005, MDAD filed suit against
VIAD seeking over US$11,000,000 in damages for environmental
contamination at the Miami International Airport. As amended in
2006, MDAD's Claim included damage to the Tank Farm, an aviation
fuel storage facility at MIA -- where Delta owned and operated
the fuel storage facility known as Dike Area #5. MDAD alleged
that the areas are contaminated with, among other things,
petroleum hydrocarbons, including Jet A Fuel.
MDAD's allegation of liability for environmental contamination
at the MIA concourses and the Tank Farm gives rise to VIAD's
Claim No. 7352 against the Debtors.
VIAD's former subsidiary, ASII, began certain operations at the
Tank Farm in 1994, including Dike Area #5, under a Management
and Operation Agreement with MDAD. Pursuant to the Agreement,
Delta engaged in various transactions with ASII in order to fuel
its aircraft and otherwise conduct business at the MIA terminal
area, the tank farm, and Dike Area #5, Mr. Kanowitz tells the
Court.
Based on the 1994 Agreement, VIAD is neither responsible nor
liable for any environmental violation existing prior to the
execution of the 1994 Management and Operation Agreement,
including contamination or damages arising from Delta's
operations at the concourses, Dike Area #5 or other areas it
controlled or maintained, and contamination for which VIAD was
obligated to remediate pursuant to the 1994 Management and
Operating Agreement.
Delta or other third parties caused the contamination, and
therefore, VIAD is neither responsible nor liable for any
contamination-related damages, Mr. Kanowitz tells Judge Hardin.
Mr. Kanowitz maintains that contrary to the Debtors' assertion
that their books and records do not reflect the Claim, Delta in
fact knew of the Claim and possessed documents to support VIAD's
Claim.
As Delta was a member of the Cooperating Parties Group and
the CPG Executive Committee, it was aware of the claims made by
MDAD against various potentially responsible parties, Mr.
Kanowitz adds.
Furthermore, Mr. Kanowitz says that Delta has settled its
environmental claims with MDAD in 2007, so it clearly had
documentation demonstrating potential liability as to Dike Area
#5 and other areas.
Judge Hardin Expunges Several Claims
Meanwhile, the Hon. Adlai S. Hardin of the U.S. Bankruptcy Court
for the Southern District of New York expunged several claims
related to the Debtors' bankruptcy case, including:
* 16 claims totaling US$259,030 which are not reflected in
the Debtors' books and records;
* Claim Nos. 1214, 247, 7773, 348, 4616, 4618 and 8582
totaling US$64,929,201 that were amended and superseded by
subsequently filed claims;
* 27 claims aggregating US$22,722,022 that, according to the
Debtors, have been paid in full;
* Claim Nos. 8152, 8612 and 8614 aggregating US$151,418 that
were filed past the Claims Bar Date;
* Claim Nos. 657, 7693, 7902 and 159 totaling US$2,781,535
which lack sufficient supporting documentation;
* Mary Daly's Claim No. 4446 for an unspecified amount,
because it has already been dismissed on the merits and
holds no basis for the alleged liability; and
* Marie R. James' Claim No. 8217 which asserts an equity
interest and should instead be treated in accordance with
the Plan.
The Court also allowed Claim Nos. 349, 8328, 8091, 8161 and 8288
in their reduced amounts, totaling US$110,541. Monroe Country
Tax Co.'s unsecured Claim No. 7739 for US$75 is reclassified as
a secured claim.
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. (Delta Air Lines Bankruptcy News, Issue No. 89;
Bankruptcy Creditors' Service, Inc.,
http://bankrupt.com/newsstand/or 215/945-7000).
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.
* * *
As reported in the Troubled Company Reporter-Latin America on
Jan. 18, 2008, Standard and Poor's said that media reports that
Delta Air Lines Inc. (B/Positive/--) entered into merger talks
with UAL Corp. (B/Stable/--) and Northwest Airlines Corp.
(B+/Stable/--) will have no effect on the 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.
DOMITEX SRL: Trustee Verifies Proofs of Claim Until April 4
-----------------------------------------------------------
Mario Daniel Krasnasky, the court-appointed trustee for Domitex
S.R.L.'s reorganization proceeding, will be verifying creditors'
proofs of claim until April 4, 2008.
Mr. Krasnasky will present the validated claims in court as
individual reports on May 19, 2008. The National Commercial
Court of First Instance in Buenos Aires will determine if the
verified claims are admissible, taking into account the
trustee's opinion, and the objections and challenges that will
be raised by Domitex and its creditors.
Inadmissible claims may be subject for appeal in a separate
proceeding known as an appeal for reversal.
A general report that contains an audit of Domitex's accounting
and banking records will be submitted in court on July 1, 2008.
Creditors will vote to ratify the completed settlement plan
during the assembly on Dec. 23, 2008.
The trustee can be reached at:
Mario Daniel Krasnasky
Viamonte 1785
Buenos Aires, Argentina
FARMA 10: Proofs of Claim Verification Deadline is April 11
-----------------------------------------------------------
Bernardino Kopcow, the court-appointed trustee for Farma 10
S.A.'s bankruptcy proceeding, verifies creditors' proofs of
claim until April 11, 2008.
Mr. Kopcow will present the validated claims in court as
individual reports on May 26, 2008. The National Commercial
Court of First Instance in Buenos Aires will determine if the
verified claims are admissible, taking into account the
trustee's opinion, and the objections and challenges that will
determine if the verified claims are admissible, taking into
account the trustee's opinion, and the objections and challenges
that will be raised by Farma 10 and its creditors.
Inadmissible claims may be subject for appeal in a separate
proceeding known as an appeal for reversal.
A general report that contains an audit of Farma 10's accounting
and banking records will be submitted in court on July 8, 2008.
Mr. Kopcow is also in charge of administering Asociacion
Argentina's assets under court supervision and will take part in
their disposal to the extent established by law.
The trustee can be reached at:
Bernardino Kopcow
Lavalle 1527
Buenos Aires, Argentina
MACCHI GROUP: Proofs of Claim Verification Ends on April 17
-----------------------------------------------------------
Fernando Altare, the court-appointed trustee for Macchi Grupo
Editor SA's bankruptcy proceeding, verifies creditors' proofs of
claim until April 17, 2008.
Mr. Altare will present the validated claims in court as
individual reports. The National Commercial Court of First
Instance No. 17 in Buenos Aires, with the assistance of Clerk
No. 27, will determine if the verified claims are admissible,
taking into account the trustee's opinion, and the objections
and challenges that will determine if the verified claims are
admissible, taking into account the trustee's opinion, and the
objections and challenges that will be raised by Macchi Grupo
and its creditors.
Inadmissible claims may be subject for appeal in a separate
proceeding known as an appeal for reversal.
A general report that contains an audit of Macchi Grupo's
accounting and banking records will be submitted in court.
La Nacion didn't state the reports submission deadlines.
Mr. Altare is also in charge of administering Macchi Grupo's
assets under court supervision and will take part in their
disposal to the extent established by law.
The debtor can be reached at:
Macchi Grupo Editor SA
Avenida Cordoba 2015
Buenos Aires, Argentina
The trustee can be reached at:
Fernando Altare
Piedras 153
Buenos Aires, Argentina
MUTIENVASES SA: Proofs of Claim Verification is Until April 17
--------------------------------------------------------------
Nora Mabel Pszemiarower, the court-appointed trustee for
Multienvases S.A.'s bankruptcy proceeding, verifies creditors'
proofs of claim until April 17, 2008.
Ms. Pszemiarower will present the validated claims in court as
individual reports on May 30, 2008. The National Commercial
Court of First Instance in Buenos Aires will determine if the
verified claims are admissible, taking into account the
trustee's opinion, and the objections and challenges that will
determine if the verified claims are admissible, taking into
account the trustee's opinion, and the objections and challenges
that will be raised by Multienvases and its creditors.
Inadmissible claims may be subject for appeal in a separate
proceeding known as an appeal for reversal.
A general report that contains an audit of Multienvases'
accounting and banking records will be submitted in court on
July 15, 2008.
Ms. Pszemiarower is also in charge of administering
Multienvases' assets under court supervision and will take part
in their disposal to the extent established by law.
The trustee can be reached at:
Nora Mabel Pszemiarower
Avenida Corrientes 1257
Buenos Aires, Argentina
NVIDIA CORPORATION: Completes Acquisition of AGEIA Technologies
---------------------------------------------------------------
NVIDIA has completed the acquisition of AGEIA Technologies Inc.
On Feb. 5, the company announced the signing of a definitive
agreement to acquire the privately-held, California-based AGEIA.
NVIDIA president and Chief Executive Officer, Jen-Hsun Huang
said that the collaboration will bring NVIDIA's GeForce(R)-
accelerated PhysX to millions of gamers around the world.
AGEIA's PhysX(R) software is widely adopted with more than 140
PhysX-based games shipping or in development on Sony Playstation
3, Microsoft XBOX 360, Nintendo Wii, and gaming PCs. AGEIA
physics software is pervasive with over 10,000 registered and
active users of the PhysX SDK.
About NVIDIA
Headquartered in Santa Clara, California, NVIDIA Corp. (Nasdaq:
NVDA) -- http://www.nvidia.com/-- creates innovative, industry-
changing products for computing, consumer electronics, and
mobile devices. The NVIDIA(R) graphics processing unit and
media and communications processor brands include NVIDIA
GeForce(R), NVIDIA GoForce(R), NVIDIA Quadro(R), and NVIDIA
nForce(R). These product families are transforming visually-
rich applications such as video games, film production,
broadcasting, industrial design, space exploration, and medical
imaging. The company has offices throughout Asia, Europe, and
the Americas including Brazil and Argentina.
* * *
As reported in the Troubled Company Reporter-Latin America on
Oct. 4, 2007, Standard & Poor's Ratings Services revised its
outlook on Nvidia Corp. to positive from stable, following
several quarters of strong operating performance despite the
acquisition of a key competitor by Advanced Micro Devices Inc.
The corporate credit rating is affirmed at 'BB-'.
NVDIA CORP: Fiscal 2008 Earnings Up 78% to US$797.6 Million
-----------------------------------------------------------
NVIDIA Corporation reported financial results for the fourth
quarter of fiscal 2008 and the fiscal year ended Jan. 27, 2008.
For the fourth quarter of fiscal 2008, revenue increased to a
record US$1.20 billion, compared to US$878.9 million for the
fourth quarter of fiscal 2007, an increase of 37%. Net income
computed in accordance with United States generally accepted
accounting principles for the fourth quarter of fiscal 2008 was
US$257 million compared to net income of US$163.5 million for
the fourth quarter of fiscal 2007, a net income increase of 57%.
Non-GAAP net income for the fourth quarter of fiscal 2008, which
excludes stock-based compensation charges, a charge for in-
process research and development related to an acquisition
closed during the quarter, and the associated tax impact, was
US$292.6 million.
Annual revenue for the fiscal year ended Jan. 27, 2008, was a
record US$4.10 billion, compared to revenue of US$3.07 billion
for the fiscal year ended Jan. 28, 2007, an increase of 34%.
GAAP net income for the fiscal year ended Jan. 27, 2008, was
US$797.6 million compared to GAAP net income of US$448.8 million
for the fiscal year ended Jan. 28, 2007, a net income increase
of 78%.
Non-GAAP net income for the fiscal year ended Jan. 27, 2008,
which excludes stock-based compensation charges, a charge for
in-process research and development related to an acquisition
closed during the year, and the associated tax impact, was
US$919.3 million.
"Fiscal 2008 was another outstanding and record year for us.
Strong demand for GPUs in all market segments drove our growth.
Relative to Q4 one year ago, our discrete GPU business grew 80%.
Our growth reflects the ever-increasing use of rich graphics in
applications from Google Earth to Apple iTunes to online virtual
worlds," said NVIDIA president and Chief Executive Officer, Jen-
Hsun Huang.
Mr. Huang continued: "This is the era of visual computing. The
richness of the graphics is increasingly central to our
computing experience. And at the core of that experience is the
GPU, the processor that defines the modern PC."
Fourth Quarter, Fiscal Year 2008, and Recent Highlights:
-- Fourth Quarter revenue grew 37% year-over-year to a record
US$1.20 billion.
-- Annual revenue increased 34% year-over-year to a record
US$4.10 billion.
-- GAAP annual net income increased 78% year-over-year to a
record US$797.6 million.
-- GAAP annual gross margin reached a Company high of 45.6%,
a year-over-year increase of 320 basis points.
-- The company launched multiple industry-defining products
and initiatives:
* GeForce(R) 8800 graphics processing family, including
the highly-acclaimed 8800GT
* GeForce 7000 mGPU -- the first single-chip motherboard
GPU for Intel systems
* Tesla (TM) computing system -- the high performance
computing industry's first C-programmable GPU
* Hybrid SLI(R) technology -- the first hybrid technology
for PC platforms
* CUDA(TM) technology -- the first C-compiler for the GPU
* PureVideo(R) HD technology -- the first video decode and
post processing technology for Blu-ray and HD DVD
-- NVIDIA(R) held #1 segment share in desktop and notebook
GPU (Mercury Research PC Graphics 2008 Market Strategy and
Forecast Report).
-- The company held #1 segment share in workstation solutions
(Jon Peddie Research third quarter 2007 Workstations and
Professional Graphics Report).
-- The company was named Most Respected Public Company by
members of the Fabless Semiconductor Association for the
second consecutive year.
-- NVIDIA was named Forbes Company of the Year.
-- The company acquired Mental Images, the industry's leading
photorealistic rendering technology provider. Mental
Image's Mental Ray is the most pervasive ray tracing
renderer in industry.
-- In February, the company announced and completed the
acquisition of AGEIA, the industry leader in gaming
physics technology.
About NVIDIA Corp.
Headquartered in Santa Clara, California, NVIDIA Corp. (Nasdaq:
NVDA) -- http://www.nvidia.com/-- creates innovative, industry-
changing products for computing, consumer electronics, and
mobile devices. The NVIDIA(R) graphics processing unit and
media and communications processor brands include NVIDIA
GeForce(R), NVIDIA GoForce(R), NVIDIA Quadro(R), and NVIDIA
nForce(R). These product families are transforming visually-
rich applications such as video games, film production,
broadcasting, industrial design, space exploration, and medical
imaging. The company has offices throughout Asia, Europe, and
the Americas including Brazil and Argentina.
* * *
As reported in the Troubled Company Reporter-Latin America on
Oct. 4, 2007, Standard & Poor's Ratings Services revised its
outlook on Nvidia Corp. to positive from stable, following
several quarters of strong operating performance despite the
acquisition of a key competitor by Advanced Micro Devices Inc.
The corporate credit rating is affirmed at 'BB-'.
SCHUCHNER SILVIO: Trustee Verifies Proofs of Claim Until April 4
----------------------------------------------------------------
Mario Daniel Krasnasky, the court-appointed trustee for
Schuchner Silvio Fabian's reorganization proceeding, will be
verifying creditors' proofs of claim until April 4, 2008.
Mr. Krasnasky will present the validated claims in court as
individual reports on May 19, 2008. The National Commercial
Court of First Instance in Buenos Aires will determine if the
verified claims are admissible, taking into account the
trustee's opinion, and the objections and challenges that will
be raised by Schuchner Silvio and its creditors.
Inadmissible claims may be subject for appeal in a separate
proceeding known as an appeal for reversal.
A general report that contains an audit of Schuchner Silvio's
accounting and banking records will be submitted in court on
July 1, 2008.
Creditors will vote to ratify the completed settlement plan
during the assembly on Dec. 23, 2008.
The trustee can be reached at:
Mario Daniel Krasnasky
Viamonte 1785
Buenos Aires, Argentina
WR GRACE: Seeks Court OK to Extend DIP Facility Until April 2010
----------------------------------------------------------------
W.R. Grace Co. and its debtor-affiliates' US$250,000,000 DIP
Financing Facility with Bank of America, as administrative agent
for a syndicate of bank lenders, will expire on April 1, 2008.
Against this backdrop, the Debtors seek the United States
Bankruptcy Court District of Delaware's authority to:
(1) extend the DIP Facility's termination date until the
earlier of (i) the Debtors' emergence from Chapter 11, or
(ii) April 1, 2010;
(2) modify certain of the DIP Facility's covenants and other
provisions to provide, among other things, that they need
to maintain, at all times, cash and cash equivalents of
not less than US$50,000,000 in the aggregate; and
(3) pay US$2,012,500 to BofA for administrative agent fees,
which amount will change depending on market conditions
at the time of the final commitments by the DIP Lenders.
A full-text copy of the DIP Amendments is available for free
at: http://ResearchArchives.com/t/s?27fe
James E. O'Neill, Esq., at Pachulski Stang Ziehl & Jones, LLP,
in Wilmington, Delaware, relates that the Debtors and BofA have
agreed to extend the DIP Facility until May 31, 2008, if the
Court is unable to approve the DIP Amendments before April 1.
The Debtors will pay BofA a fee of not more than US$100,000 for
the Interim Extension.
As of January 31, 2008, approximately US$58,500,000 in letters
of credit issued pursuant to the DIP Facility remain
outstanding, Mr. O'Neill says.
Mr. O'Neill tells the Court that, after analyzing their options
for continuing their postpetition financing and reviewing recent
comparable transactions in the capital markets, the Debtors have
determined that the most cost-effective approach would be to
seek a further extension of the DIP Facility instead of seeking
a replacement postpetition financing facility.
The Debtors expect that ongoing fees and interest rates will be
at or below comparable market rates, Mr. O'Neill says. He adds
that by extending the DIP Facility, the Debtors will avoid the
substantial expenses attendant with negotiating a new credit
agreement with a new agent and lenders.
The DIP Amendments, according to Mr. O'Neill, are intended to
ensure the Debtors' continued financial flexibility and a stable
environment while the Debtors work to conclude their Chapter 11
cases. Specifically, the DIP Facility will:
(a) continue to support general trade initiatives, as well as
risk management and capital investment initiatives;
(b) provide liquidity protection in the face of significant
economic uncertainty;
(c) support strategic business initiatives that are in the
best interest of the Debtors and their shareholders; and
(d) manage significant contingencies related to the Debtors'
past and present operations.
Specific liquidity contingencies, according to Mr. O'Neill,
include:
-- the likelihood of significant contributions to U.S.
qualified pension plans to satisfy the funding
requirements of the Employee Retirement Income Security
Act;
-- possible settlements of environmental, tax and other
disputes as may be proposed by the Debtors and approved
for funding by the Court and creditors in advance of a
confirmed plan of reorganization; and
-- attorneys' fees and expenses in connection with disputes,
including civil and criminal litigation in Montana and New
Jersey.
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 Nov. 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. 151; Bankruptcy
Creditors' Service, Inc., http://bankrupt.com/newsstand/or
215/945-7000)
WR GRACE: Asbestos Claims Estimation Trial to Resume March 24
-------------------------------------------------------------
The Honorable Judith Fitzgerald of United States Bankruptcy
Court District of Delaware will resume the asbestos personal
injury claims estimation trial on March 24, 2008. The trial is
expected to conclude in May.
W.R. Grace & Co. and its debtor-affiliates, and the Official
Committee of Asbestos Personal Injury Claimants filed separate
and opposing briefs regarding the admissibility of personal
injury questionnaires and proofs of claim as evidence at the
estimation trial.
The Debtors' counsel, David M. Bernick, P.C., Esq., at Kirkland
& Ellis, LLP, in Chicago, Illinois, maintains that the PI
Questionnaires and the proofs of claim should be admitted into
evidence during the estimation trial for three reasons:
(1) Claims estimation is a "contested matter" under Rule 9014
of the Federal Rules of Bankruptcy Procedure. As a
contested matter, the PI Claims estimation is not a
separate proceeding, but part of the Debtors' Chapter 11
cases.
(2) Every party who has filed a proof of claim against the
Debtors is a party to the Debtors' bankruptcy cases.
Because the PI Claimants have filed claims against the
Debtors, they are parties to the Debtors' bankruptcy
cases. And because they are parties to the Debtors'
bankruptcy cases, the PI Claimants are parties to the PI
estimation.
(3) The PI Questionnaires were served on the claimants as
discovery in connection with the estimation proceedings.
The Questionnaires are a hybrid form of discovery: part
fact interrogatory, part contention interrogatory, part
document request, and part deposition by written
question.
The PI Committee, on the other hand, insists that the Court
should not accept as evidence the PI Questionnaires and the
proof of claim responses.
The PI Committee's counsel, Elihu Inselbuch, Esq., at Caplin &
Drysdale, Chartered, in New York, asserts that the estimation
proceedings is a contested matter within the Debtors' Chapter 11
cases, which is being conducted solely for confirmation of a
plan of reorganization, involving only the parties who have
filed one of the two competing reorganization plans filed in the
Debtors' bankruptcy cases.
Because the Debtors' reorganization plan purports to "cap" their
total asbestos liability, an estimate of their aggregate
liability for pending and future asbestos claims may be relevant
to determine whether any non-consensual reorganization plan
meets the requirements of Sections 524(g)(4)(B)(ii) and 1129(b)
of the Bankruptcy Code, Mr. Inselbuch contends.
Mr. Inselbuch adds that the only parties to the estimation
proceeding are the Debtors, the PI Committee, the Future Claims
Representative and the other official committees, pursuant to
(i) the procedural route the Debtors have undertaken in seeking
an estimate of their aggregate asbestos liability rather than an
individual claims allowance process, and (ii) the terms of the
case management order, which govern the estimation hearing.
The sole purpose of the estimation proceeding is to determine
the Debtors' aggregate liability for pending and future asbestos
PI claims, and not to estimate those claims for purposes of
individual allowance or disallowance, Mr. Inselbuch maintains.
Mr. Inselbuch asserts that the mere filing of a proof of claim
of a creditor does not make that creditor a party to each and
every contested matter in the Debtors' bankruptcy case.
Futures Rep Says Stallard Doc Valid
David T. Austern, the Court-appointed Future Claims
Representative, tells the Court that the issues raised in the
declarations of P.J. Eric Stallard have been presented in open
court during the January 2008 estimation hearings. The Futures
Representative wants the Debtors' request to strike the
declaration denied.
The FCR relates that Prof. Stallard's declarations establish
that, as a matter of science, it is not appropriate to assign to
individual workers a cumulative lifetime asbestos exposure that
is equal to the average lifetime asbestos exposure for all
workers within the Debtors' defined occupational categories.
The FCR asserts that Prof. Stallard's Declarations does not
violate any case management order regarding the estimation
proceedings.
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 Nov. 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. 151; Bankruptcy
Creditors' Service, Inc., http://bankrupt.com/newsstand/or
215/945-7000)
WR GRACE: Wants to Contribute US$17 Million to Pension Plan
-----------------------------------------------------------
W.R. Grace Co. and its debtor-affiliates seek the United States
Bankruptcy Court District of Delaware's authority to contribute
US$17,823,645 to their defined benefit retirement plans covering
their employees in the United States.
The contributions are due April 15, 2008, and are necessary to
assure compliance with the minimum funding requirements under
applicable federal law, James E. O'Neill, Esq., at Pachulski
Stang Ziehl & Jones, LLP, in Wilmington, Delaware, says.
The Court has previously authorized the Debtors to contribute
approximately US$284,800,000 to the Retirement Plans:
Date Contribution
---- ------------
2003 US$48,500,000
2004 20,000,000
2005 24,100,000
2006 101,400,000
2007 76,000,000
Jan. 2008 14,800,000
------------
Total US$284,800,000
============
Mr. O'Neill relates that under applicable law, the total of the
required quarterly minimum contributions for the 2008 plan year
due on April 15, 2008, must be the lesser of (a) 25% of the
total 2007 minimum contributions, or (b) the quarterly minimum
amount calculated specifically for the 2008 plan year, which
will be included in the Debtors' actuarial report for 2008.
The actuarial report, however, is not yet complete as of
Feb. 11, 2008, according to Mr. O'Neill. The Debtors and their
actuaries anticipate the 2008 actuarial report to be finalized
in April 2008. If the report is not finalized within a
reasonable time before April 15, the April 2008 Contribution
will be approximately US$17,823,645.
Any portion of the US$17,823,645 Contribution that is greater
than the actual 2008 Retirement Plan year quarterly minimum
contributions, as eventually specified in the final 2008
actuarial report, will be used to offset subsequent required
minimum contributions, Mr. O'Neill tells the Court.
After the 2008 actuarial report is finalized, the Debtors tell
the Court that they intend to submit another request for
permission to make required contributions for the remainder of
2008 and early 2009.
The Debtors contend that continuing to make at least the legally
required minimum contributions to each of the Grace Retirement
Plans is essential to maintaining the morale of their workforce
and the workforce' confidence in management.
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 Nov. 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. 151; Bankruptcy
Creditors' Service, Inc., http://bankrupt.com/newsstand/or
215/945-7000)
=============
B A H A M A S
=============
HARRAH'S ENT: Bally to Provide Casino Management System
-------------------------------------------------------
Bally Technologies Inc. has extended its domestic relationship
with Harrah's Entertainment Inc. to provide key casino slot and
gaming management and marketing systems for Harrah's
international operations.
The transaction is subject to Harrah's corporate approvals,
execution of definitive agreements, and receipt of required
regulatory approvals.
Bally and Harrah's commitment to work together internationally
comes on the heels of Bally's recent announcement that it
continues to bolster its international product portfolio and
infrastructure. Bally is developing more games and systems
technology specifically for international markets and has
recently opened new sales and support offices in Spain and South
Africa, with a Mexico City office slated to open this spring.
"We're pleased to be extending our relationship with Bally
Technologies as we pursue an aggressive global growth strategy,"
said Harrah's Entertainment Chief Information Officer and Senior
Vice President of Innovation & Gaming, Tim Stanley. "Bally has
been a provider of choice in supplying the operational,
accounting and management systems that support our industry-
leading Total Rewards(TM) capabilities that enhance our guests'
experience through interactive entertainment offerings. Under
this new agreement, Bally will also become a key software
supplier for our casino and gaming management systems at our
current and planned international operations."
Bally also announced that Harrah's has licensed Bally Power
Winners(TM) and Power Promotions(TM) technologies for use as
part of Harrah's new and proprietary PRISM interactive customer
relationship management initiative. Under the licensing
agreement, which is also subject to Harrah's corporate
approvals, execution of definitive agreements, and receipt of
regulatory approvals, Harrah's can implement Bally's new
promotional and downloadable credit features as an integral part
of Harrah's Total Rewards(TM) marketing programs worldwide.
Harrah's PRISM initiative, an acronym for Personalized Real-time
Interactive Slot Marketing, is designed to introduce unique CRM
features and capabilities to the millions of Harrah's Total
Rewards cardholders who play the company's 60,000-plus slots.
"We are very excited about extending our partnership with
Harrah's to supply these system products internationally and
cutting-edge promotional and downloadable credit features
worldwide," said Bally Technologies Chief Executive Officer,
Richard M. Haddrill. "The flexibility and configuration options
built into our products will allow Harrah's to build on the
existing strength of its player-loyalty program and manage their
business both domestically and globally."
About Bally Technologies Inc.
Headquartered in Las Vegas, Nevada, Bally Technologies, Inc.
(NYSE: BYI) -- http://www.BallyTech.com/-- designs,
manufactures, operates, and distributes advanced gaming devices,
systems, and technology solutions worldwide. Bally's product
line includes reel-spinning slot machines, video slots, wide-
area progressives and Class II lottery and central determination
games and platforms. Bally Technologies also offers an array of
casino management, slot accounting, bonus, cashless, and table
management solutions. The company also owns and operates
Rainbow Casino in Vicksburg, Mississippi. The company's South
American operations are located in Argentina. The company also
has operations in France, Germany, Macau, China, India, and the
United Kingdom.
About Harrah's Entertainment
Headquartered in Las Vegas, Nevada, Harrah's Entertainment Inc.
(NYSE: HET) -- http://www.harrahs.com/-- through its wholly
owned subsidiary Harrah's Operating Company Inc., provides
branded casino entertainment. Since its beginning in Reno,
Nevada 70 years ago, Harrah's has grown through development of
new properties, expansions and acquisitions, and now owns or
manages casinos on four continents. The company's properties
operate primarily under the Harrah's(R), Caesars(R) and
Horseshoe(R) brand names; Harrah's also owns the London Clubs
International family of casinos. In January 2007, it signed a
joint venture agreement with Baha Mar Resorts Ltd. to operate a
resort in Bahamas.
* * *
As reported in the Troubled Company Reporter-Latin America on
Jan. 17, 2008, Moody's Investor Service assigned a B2 Corporate
FamilyRating and Speculative Grade Liquidity Rating of SGL-3 to
Harrah's Entertainment Inc. Moody's also assigned ratings to
the these new debt to be issued by Harrah's Operating Company
Inc.: senior secured guaranteed bank revolving credit facility
at Ba2, senior secured guaranteed term loans at Ba2, and senior
unsecured guaranteed notes at B3.
METROPOLITAN BANK: Top Trust Fund Manager, Says Watson Wyatt
------------------------------------------------------------
Metropolitan Bank & Trust Company emerged as the country's top
Trust Fund Manager in the latest survey conducted by independent
consulting firm Watson Wyatt Worldwide.
Results of the 88th Survey on Investment Performance of
Retirement Funds in the Philippines show that Metrobank bested
eight other banks in the All Trusteed Funds category with the
highest performance of 23.90% p.a. for the year ended
Dec. 31, 2006. The bank's fourth quarter performance was even
higher at 39.80% p.a. The survey, which was released in January
2008, is the latest conducted by Watson Wyatt to date. It
covered the performance of retirement funds handled by 11 banks
and one investment house.
The results of the survey were based on financial reports that
adopted Philippine Accounting Standards. According to the
Watson Wyatt report, this allowed for a consistent comparison of
the returns of the funds. The PAS was adopted by most
Philippine corporations beginning 2005 in compliance with the
new International Accounting Standards.
"The survey validates one of the key strengths of our Trust
Banking business, which is our expertise in fund management,"
said Metrobank executive vice president and Trust Banking Group
head Josefina E. Sulit.
This is the fourth time in five years that the bank has figured
in the top three spot. At least five funds are handled by
investment managers in this category. The combined plan assets
of all 160 funds from 122 companies surveyed amounted
PHP39.34 billion for an average fund size of P245.90 million.
In the same survey, Metrobank recorded an 18.86% p.a. return in
the Trusteed Funds with Full Discretion category. In this
class, Metrobank turned in a 32.04% p.a. performance in the
fourth quarter, maintaining its consistent top three ranking for
the period studied.
"These results highlight our consistency in providing superior
returns for our clients," Sulit added. Metrobank's Investment
Funds also came out as top performers in 2007 as reflected in
the December 28, 2007 industry-wide historical performance of
investment funds tracked in the UITF website
http://www.uitf.com.ph This is a UITF Resource Center sponsored
by the members of the Trust Officers Association of the
Philippines. Metrobank's MetroFund Starter and MetroDollar
Philippine Liquid Fund bested other funds in their respective
classes with year-on-year performances of 4.475% and 5.718%,
respectively. Its balanced fund, MetroCapital Growth Fund
placed second at 15.109%. As of December 31, 2007, Metrobank's
total Assets Under Management stood at PHP141.82 billion.
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.
* * *
The bank carries Moody's Investors Service's B1 foreign currency
long-term deposit rating, Ba3 foreign currency hybrid tier-1
rating and a foreign currency subordinated debt rating of Ba2.
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.
PINNACLE ENT: Rouge Parish Voters OK US$250 Mil. Riviere Dev't
--------------------------------------------------------------
Pinnacle Entertainment Inc. disclosed that voters in East Baton
Rouge Parish approved the development and construction of
Riviere, the company's US$250 million gaming entertainment
complex that will be built on more than 550 acres the company
owns in Baton Rouge, Louisiana. The project requires adherence
to certain conditions imposed by the Louisiana Gaming Control
Board, which approved Pinnacle's plans for Riviere in September
2007.
The project, designed to be built in phases, features a gaming
resort. The first phase includes a state-of-the-art casino with
approximately 1,500 slot machines and 50 table games. An
adjoining hotel will offer visitors an atmosphere of casual
elegance and comfort. Several of the restaurants will be
located above the casino and will take advantage of the site's
views of the Mississippi River. An entertainment venue will
host an array of entertainment, live music and other exciting
attractions.
Future planned phases of Riviere include a residential community
and additional hotel rooms. Planned recreation and leisure
amenities include a full-service spa and health club; tennis
club; equestrian center and riding trails; and a championship
golf course, with the historic Longwood mansion serving as its
clubhouse.
"We're extremely grateful to the people of Baton Rouge, who are
allowing us to become a part of one of the most exciting and
fastest-growing cities in the South," Daniel R. Lee, Pinnacle
Entertainment's chairman and chief executive officer, said. "We
plan to generate 1,200 direct permanent jobs in Phase One alone,
along with millions of dollars per year in incremental tax
revenues for the State and Parishes of Louisiana.
"Our next steps will be to work with local and regional
officials on a development agreement, and to move forward on
other aspects of zoning, design, planning and safety," Mr. Lee
added. "I would like to thank the voters of East Baton Rouge
for the confidence that they have placed in us. "We look
forward to creating a unique entertainment experience that will
make all citizens of Baton Rouge proud."
About Pinnacle Entertainment
Headquartered in Las Vegas, Nevada, Pinnacle Entertainment Inc.
(NYSE: PNK) -- http://www.pnkinc.com/-- owns and operates
casinos in Nevada, Louisiana, Indiana, Missouri, Argentina and
the Bahamas. The company also owns a hotel in Missouri.
* * *
Pinnacle Entertainment Inc. continues to carry Fitch's 'B' long-
term issuer default rating which was assigned in March 2007.
=============
B E R M U D A
=============
MAGELLAN INSURANCE: Proofs of Claim Filing Ends on February 20
--------------------------------------------------------------
Magellan Insurance Company Ltd.'s creditors are given until
Feb. 20, 2008, to prove their claims to Jon W. Yoskin, II, 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.
Magellan Insurance' shareholder decided on Feb. 1, 2008, to
place the company into voluntary liquidation under Bermuda's
Companies Act 1981.
The liquidator can be reached at:
Jon W. Yoskin, II
Conyers Dill & Pearman, Liquidation Department
Clarendon House, Church Street
Hamilton, HM DX, Bermuda
SECURITAS EDC: Proofs of Claim Filing is Until on February 28
-------------------------------------------------------------
Securitas EDC, Ltd.'s creditors are given until Feb. 28, 2008,
to prove their claims to Jennifer Y. Fraser, 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.
Securitas EDC' shareholder decided on Feb. 11, 2008, to place
the company into voluntary liquidation under Bermuda's Companies
Act 1981.
The liquidator can be reached at:
Jennifer Y. Fraser
Canon's Court, 22 Victoria Street
Hamilton, Bermuda
SECURITAS ALLIED: Proofs of Claim Filing Deadline is February 28
----------------------------------------------------------------
Securitas Allied, Ltd.'s creditors are given until Feb. 28,
2008, to prove their claims to Jennifer Y. Fraser, 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.
Securitas Allied' shareholders agreed on Feb. 11, 2008, to place
the company into voluntary liquidation under Bermuda's Companies
Act 1981.
The liquidator can be reached at:
Jennifer Y. Fraser
Canon's Court, 22 Victoria Street
Hamilton, Bermuda
SECURITAS ALLIED: Final Shareholders Meeting is on March 19
-----------------------------------------------------------
Securitas Allied, Ltd., will hold its final shareholders meeting
on March 19, 2008, at 10:00 a.m., at Canon's Court, 22 Victoria
Street, Hamilton, Bermuda.
These matters will be taken up during the meeting:
-- receiving an account showing the manner in which
the winding-up of the company has been conducted
and its property disposed of and hearing any
explanation that may be given by the liquidator;
-- determination by resolution the manner in
which the books, accounts and documents of the
company and of the liquidator shall be
disposed; and
-- passing of a resolution dissolving the
company.
Securitas Allied's shareholders agreed on Feb. 11, 2008, to
place the company into voluntary liquidation under Bermuda's
Companies Act 1981.
SECURITAS EDC: Sets Final Shareholders Meeting for March 19
-----------------------------------------------------------
Securitas EDC, Ltd., will hold its final shareholders meeting on
March 19, 2008, at 9:00 a.m., at Canon's Court, 22 Victoria
Street, Hamilton, Bermuda.
These matters will be taken up during the meeting:
-- receiving an account showing the manner in which
the winding-up of the company has been conducted
and its property disposed of and hearing any
explanation that may be given by the liquidator;
-- determination by resolution the manner in
which the books, accounts and documents of the
company and of the liquidator shall be
disposed; and
-- passing of a resolution dissolving the
company.
Securitas EDC's shareholders agreed on Feb. 11, 2008, to place
the company into voluntary liquidation under Bermuda's Companies
Act 1981.
===========
B R A Z I L
===========
ATARI INC: Dec. 31 Balance Sheet Upside-Down by US$16,811,000
-------------------------------------------------------------
Atari Inc. incurred a net loss of US$348,000 on net revenues of
US$41,115,000 for the three months ended Dec. 31, 2007, compared
to net loss of US$644,000 on net revenues of US$47,277,000 for
the same period last year.
For the nine months ended Dec. 31, 2007, Atari reported a net
loss of US$19,980,000 on net revenues of US$64,845,000 compared
to a net loss of US$8,008,000 on net revenues of US$95,338,000
for the nine months ended Dec. 31, 2006.
The company's balance sheet at Dec. 31, 2007 showed total assets
of US$43,523,000 and total liabilities of US$60,334,000
resulting in a total stockholders' deficiency of US$16,811,000.
Liquidity and Capital Resources
Because of funding difficulties, Atari sharply reduced its
expenditures for research and product development. During the
year ended March 31, 2007, expenditures on research and product
development decreased by 42.0%, to US$30.1 million, compared
with US$51.9 million in fiscal 2006. During the nine months
ended Dec. 31, 2007, expenditures on research and product
development was US$12.4 million versus US$20.0 million in the
comparable fiscal 2007 period. This will reduce the flow of new
games that will be available to Atari in fiscal 2008 and 2009,
and possibly after that.
Atari's lack of financial resources to fund a full product
development program has led it to focus on distribution and
acquisition of finished goods. As such, Atari has exited all
internal development activities and has limited the amount of
its investment in external development.
During fiscal 2007, Atari raised approximately US$35.0 million
through the sale of certain intellectual property and the
divestiture of its internal development studios. In May 2007,
Atari announced a plan to reduce its total workforce by
approximately 20% as a cost cutting initiative. Further in
November 2007, Atari announced a plan to reduce total workforce
by an additional 30%. To reduce working capital requirements
and further conserve cash Atari will need to take additional
actions in the near-term, which may include additional personnel
reductions and suspension of additional development projects.
During the nine months ended Dec. 31, 2007, Atari's operations
used cash of approximately US$21.1 million to support net loss
of US$20.0 million for the period. During the nine months ended
Dec. 31, 2006, Atari's operations used cash of approximately
US$46.6 million driven by the net loss of US$8.0 million for the
period, compounded by increased payments of trade payables and
royalties payable and timing of accounts receivable collections.
During the nine months ended Dec. 31, 2007, cash provided by
investing activities of US$0.3 million due to a refund from
Atari's New York office security deposit of US$0.8 million
offset by purchases of property and equipment. During the nine
months ended Dec. 31, 2006, investing activities provided cash
of US$28.5 million due to several sale transactions completed
during the period:
* proceeds of US$21.6 million received in connection with the
sale of Atari's Reflections studio;
* proceeds of US$9.0 million from the sale of the Stuntman
intellectual property; and
* proceeds of US$1.6 million from the sale of Atari's Shiny
studio in the current period.
The cash proceeds are partially offset by the increase in
restricted cash of US$1.8 million for the collateralizing of a
letter of credit related to Atari's new office lease and the
purchase of assets (intangibles and property and equipment) of
US$2.1 million.
During the nine months ended Dec. 31, 2006 and 2007, financing
activities provided cash primarily from borrowings from credit
facilities. During the nine months ended Dec. 31, 2007, Atari
received US$5.0 million in cash proceeds from the related party
license advance.
Forbearance Agreement
Atari's US$10.0 million Senior Credit Facility with BlueBay
matures on Dec. 31, 2009, charges an interest rate of the
applicable LIBOR rate plus 7% per year. On Dec. 4, 2007, under
the Waiver Consent and Third Amendment to the Credit Facility,
as part of entering the Global MOU, BlueBay raised the maximum
borrowings of the Senior Credit Facility to US$14.0 million.
The maximum borrowings Atari can make under the Senior Credit
Facility will not by themselves provide all the funding Atari
will need for its working capital needs.
Further, the Senior Credit Facility may be terminated if Atari
does not comply with financial and other covenants.
As of Dec. 31, 2007 and through Feb. 12, 2008, Atari is in
violation of its weekly cash flow covenants. BlueBay has not
waived the violation and Atari has entered into a forbearance
agreement which states that its lender will not exercise its
rights on the facility until the earlier of:
(i) March 3, 2008,
(ii) additional covenant defaults; or
(iii) if any actions transpires which is viewed to be
adverse to the position of the lender.
Atari's management said it continues to seek additional
financing and is pursuing other options to meet the cash
requirements for funding working capital cash requirements but
there is no guarantee that they will be able to do so.
NASDAQ Delisting Notice
On Dec. 21, 2007, Atari received a notice from Nasdaq advising
that in accordance with Nasdaq Marketplace Rule 4450(e)(1), it
has 90 calendar days, or until March 20, 2008, to regain
compliance with the minimum market value of its publicly held
shares required for continued listing on the Nasdaq Global
Market, as set forth in Nasdaq Marketplace Rule 4450(b)(3).
The company received the notice because the market value of its
publicly held shares was less than US$15.0 million for 30
consecutive business days prior to Dec. 21, 2007.
The notice letter also states that if, at any time before
March 20, 2008, the market value of the company's publicly held
shares is US$15.0 million or more for a minimum of 10
consecutive trading days, the Nasdaq staff will provide Atari
with written notification that it has achieved compliance with
the minimum market value of publicly held shares rule. However,
the notice states that if Atari cannot demonstrate compliance
with such rule by March 20, 2008, the Nasdaq staff will provide
the company with written notification that its common stock will
be delisted.
Any delisting determination is subject to appeal.
A full-text copy of Atari's quarterly report is available for
free at http://researcharchives.com/t/s?280b
About Atari Inc.
Headquartered in New York, Atari Incorporated, (NASDAQ: ATAR) --
http://www.atari.com/-- develops interactive games for all
platforms and is a third-party publisher of interactive
entertainment software in the U.S. Atari Inc. is a majority-
owned subsidiary of France-based Infogrames Entertainment SA, an
interactive games publisher in Europe. Atari has offices in
Brazil, the United Kingdom and Japan.
Going Concern Doubt
New York-based Deloitte & Touche LLP expressed substantial doubt
about Atari's ability to continue as a going concern after
auditing the company's consolidated financial statements for the
year ended March 31, 2007. The auditing firm pointed to the
company's significant operating losses.
FREESCALE SEMI: Appoints Rich Beyer as Chairman and CEO
-------------------------------------------------------
Freescale Semiconductor Inc. has named Rich Beyer as its
chairman and Chief Executive Officer, effective March 2008.
Mr. Beyer comes to Freescale from Intersil Corporation, a world
leader in the design and manufacture of high performance analog
semiconductors, where he was CEO and a member of its board of
directors. He will be based in Austin, TX.
Mr. Beyer succeeds Michel Mayer, who will continue to serve as
chairman of the board and CEO until the transition is effective
in March 2008.
"On behalf of the Board of Directors, I am pleased to welcome
Rich to Freescale," said Daniel F. Akerson, director of
Freescale Semiconductor and managing director of The Carlyle
Group. "He is uniquely qualified to build upon Freescale's
success and drive the long-term execution of our strategic plan.
He is a strong leader with a proven track record in delivering
above-market revenue growth and profitability, and Intersil's
track record with Rich at the helm has been remarkable. With
Freescale's unparalleled technology base, superb management
team, strong customer relationships and substantial financial
resources, Rich is well equipped to drive significant organic
and acquisitive growth while continuing to improve profitability
at Freescale."
"This is a tremendous opportunity to lead a world-class company
and its talented team of professionals through the next stage of
growth," said Mr. Beyer. "The breadth and depth of Freescale's
technology, its market leadership positions and the strength of
its global customer base provide an exceptional foundation for
the company's future success. I look forward to working with
the entire Freescale team to build on the long-standing culture
of innovation and to solidify our position as a pre-eminent
designer and manufacturer of semiconductor solutions."
Mr. Beyer joined Intersil in 2002 when it acquired Elantec
Semiconductor, Inc., where Mr. Beyer was President, Chief
Executive Officer and Director. Since Mr. Beyer was named CEO
of Intersil in 2002 the company has outgrown its peer group by a
wide margin and has substantially increased profitability.
Prior to joining Elantec, Mr. Beyer served as President, Chief
Operating Officer and Director of VLSI Technology, Inc. from
1996 to 1998. Prior to his term at VLSI, he was Executive Vice
President and Chief Operating Officer of National Semiconductor
Corporation from 1995 to 1996 and President of National
Semiconductor's Communications and Computing Group from 1993 to
1995. Before joining National, Beyer served in a number of
senior management positions in the telecommunications and
computer industries.
Mr. Beyer serves as Director of Credence Systems Corporation and
Xceive Corporation, and is also on the Board of Directors of the
Semiconductor Industry Association.
Mr. Beyer served three years as an officer in the United States
Marine Corps. He earned a BS degree and an MS degree in Russian
from Georgetown University, and an MBA degree in marketing and
international business from Columbia University.
Based in Austin, Texas, Freescale Semiconductor, Inc. (NYSE:FSL)
(NYSE:FSL.B) -- http://www.freescale.com/-- designs and
manufactures embedded semiconductors for the automotive,
consumer, industrial, networking and wireless markets.
Freescale Semiconductor became a publicly traded company in July
2004. The company has design, research and development,
manufacturing or sales operations in more than 30 countries. In
Latin America, the company has operations in Argentina, Brazil
and Mexico. In Europe, the company has operations in Czech
Republic, France, Germany, Ireland, Italy, Romania, Turkey and
the United Kingdom. Revenues for the 12 months ended
Mar. 31, 2007, were US$6.2 billion.
FREESCALE SEMICONDUCTOR: Fitch Shifts Rating Outlook to Negative
----------------------------------------------------------------
Fitch Ratings has revised the Rating Outlook on Freescale
Semiconductor Inc. to Negative from Stable and affirmed these
ratings:
-- Issuer Default Rating at 'B+';
-- Senior secured bank revolving credit facility at 'BB+/RR1';
-- Senior secured term loan at 'BB+/RR1';
-- Senior unsecured notes at 'B/RR5';
-- Senior subordinated notes at 'CCC+/RR6'.
Fitch's actions affect approximately US$9.5 billion of total
debt.
The revision of the Rating Outlook to Negative reflects:
-- Fitch's expectations that revenue growth and profitability
from the company's automotive unit will be challenged
throughout 2008 due to the anticipated collective ongoing
market share erosion of the Big 3 United States-based car
makers, as well as production level cuts, although some of
these pressures should be offset by the company's design
wins in Asia-Pacific and the trend of increasing
electronics content per vehicle;
-- Fitch's belief that the delayed turnaround of Motorola
Inc.'s ('Motorola', currently rated 'BBB'/F2 on Negative
Rating Watch by Fitch) mobile devices business until 2009,
from the first half of 2008, will be accompanied by a
limited number of new product introductions over the near-
term, which is likely to lead to lower average selling
prices and/or further market share erosion for Motorola,
both of which are expected to pressure profitability for
Freescale's cellular business; some event risk exists as
well as Motorola has announced that it is exploring
strategic alternatives for its mobile devices business;
-- A meaningfully more cautious view on the wireless
infrastructure market for 2008, driven by recent weaker
than anticipated outlooks and reduced capital spending
budgets across a number of key customers, as well as less
enthusiastic demand prospects for WiMax; and
-- Uncertainty related to the company's strategic direction
following the recent resignation of Freescale's Chief
Executive Officer, Michel Mayer, since the company was
spun-off from Motorola at the end of 2004.
While Fitch believes Freescale's product, customer, and end
market diversification will continue to limit significant
volatility in the company's operating performance, the
meaningfully weaker than previously anticipated operating
environment in 2008 will thwart profitability expansion in each
of its key businesses and further pressure the company's
relatively weak credit protection measures over the near-term.
For 2007, Fitch estimates leverage (total debt/operating EBITDA)
was at nearly 7.0 times (2.4 secured debt/operating EBITDA),
interest coverage (operating EBITDA/gross interest expense) was
less than 2.0, and free cash flow/total debt was just over 1%.
However, despite minimal debt amortization requirements over the
intermediate-term, Freescale is expected to have more than
US$500 million of proceeds from the Motorola settlement and
equipment sales available for debt reduction.
Fitch may downgrade Freescale if:
-- Credit protection measures deteriorate due to meaningful
erosion in the company's profitability or free cash flow;
-- Management does not execute on its restructuring efforts,
including successful site consolidation, asset sales, and
meaningful improvement in the company's cash conversion
cycle.
Conversely, Fitch may stabilize the ratings if the company:
-- Improves its operating margin profile and free cash flow
characteristics via successful expansion of higher-margin
products along with a successful design win at another
significant wireless handset manufacturer;
-- Utilizes the aforementioned anticipated proceeds from
equipment sales and its settlement with Motorola to
materially reduce debt.
Fitch believes Freescale's liquidity was adequate as of Dec. 31,
2007 and supported by approximately US$751 million of cash and
cash equivalents, approximately half of which is located in the
U.S., and an undrawn US$750 million revolving bank credit
facility expiring Dec. 1, 2012; Fitch anticipates annual free
cash flow will be break even to US$200 million annually over the
next few years, modestly supporting liquidity. With no
borrowings outstanding under the revolving bank credit facility,
the company's only debt amortization until 2013 is 1% per annum
under the term loan facility, or approximately US$35 million per
year.
At Dec. 31, 2007, total debt was approximately US$9.5 billion
and Fitch believes consisted primarily of:
i) US$3.5 billion of senior secured term loan expiring Dec.
1, 2013;
ii) US$500 million of floating rate senior notes due 2014;
iii) US$1.5 billion of 9.125% PIK-election senior notes due
2014;
iv) US$2.35 billion of 8.875% senior notes due 2014; and
v) US$1.6 billion of 10.125% senior subordinated notes due
2016.
The Recovery Ratings for Freescale reflect Fitch's recovery
expectations under a distressed scenario, as well as Fitch's
expectation that the enterprise value of the company, and hence
recovery rates for its creditors, will be maximized in a
restructuring scenario as a going concern, rather than a
liquidation scenario. In deriving a distressed enterprise
value, Fitch applies a 35% discount to Fitch's estimate of the
company's 2007 operating EBITDA of approximately US$1.4 billion.
The discount is equivalent to Fitch's estimate of maintenance
capital spending, rent expense, and total interest expense,
assuming the company exercises its option to pay in kind
interest expense on the above referenced US$1.5 billion PIK-
election senior notes. Fitch then applies a 6 times distressed
EBITDA multiple, which considers that a stress event would
likely result in a contraction to the company's current
multiple. As is standard with Fitch's recovery analysis, the
revolver is assumed to be fully drawn and cash balances fully
depleted to reflect a stress event. The 'RR1' for Freescale's
secured bank facility and term loan reflects Fitch's belief that
91%-100% recovery is likely. The 'RR5' for Freescale's senior
notes reflects Fitch's belief that 11%-30% recovery is
realistic. The 'RR6' for the company's senior subordinated debt
reflects Fitch's belief that 0%-10% recovery is realistic.
Based in Austin, Texas, Freescale Semiconductor, Inc. (NYSE:FSL)
(NYSE:FSL.B) -- http://www.freescale.com/-- designs and
manufactures embedded semiconductors for the automotive,
consumer, industrial, networking and wireless markets.
Freescale Semiconductor became a publicly traded company in July
2004. The company has design, research and development,
manufacturing or sales operations in more than 30 countries. In
Latin America, the company has operations in Argentina, Brazil
and Mexico. In Europe, the company has operations in Czech
Republic, France, Germany, Ireland, Italy, Romania, Turkey and
the United Kingdom.
GERDAU AMERISTEEL: Earns US$537.9-Mln in Year Ended December 31
---------------------------------------------------------------
Gerdau Ameristeel Corporation reported net income of
US$141.4 million for the three months ended Dec. 31, 2007, a
112% increase in comparison to net income of US$66.7 million for
the three months ended Dec. 31, 2006.
For the year ended Dec. 31, 2007, net income was
US$537.9 million an increase of 44% compared to net income of
US$374.6 million for the year ended Dec. 31, 2006. This
represents a record level of annual net income earned by Gerdau
Ameristeel.
Net sales for the three months ended Dec. 31, 2007 increased 70%
to US$1.7 billion from US$1.0 billion for the three months ended
Dec. 31, 2006. For the three months ended Dec. 31, 2007,
finished steel shipments increased to 2.2 million tons, an
increase of 689 thousand tons from the three months ended
Dec. 31, 2006, primarily as a result of the acquisition of
Chaparral Steel. Additionally, average mill finished steel
selling prices for the three months ended Dec. 31, 2007
increased 17% over the level in this same period in 2006.
For the year ended Dec. 31, 2007, net sales were US$5.8 billion
compared to US$4.5 billion for the year ended Dec. 31, 2006.
For the year ended Dec. 31, 2007, finished steel shipments
increased to 7.6 million tons, an increase of 998 thousand tons
from the year ended Dec. 31, 2006, primarily as a result of the
2007 acquisition of Chaparral Steel, and the 2006 acquisitions
of Sheffield Steel and Pacific Coast Steel. Additionally,
average mill finished steel selling prices for the year ended
Dec. 31, 2007 increased 13% over those in 2006.
For the three months ended Dec. 31, 2007, metal spread, the
difference between mill selling prices and scrap raw material
costs, was US$456 per ton, and an increase of US$52 per ton from
the same period in 2006. For the year ended Dec. 31, 2007,
metal spread was US$421 per ton, an increase of US$40 per ton
from 2006.
EBITDA was US$313.8 million for the three months ended Dec. 31,
2007 and US$1.0 billion for the year ended Dec. 31, 2007,
compared to EBITDA of US$145.1 million for the three months
ended Dec. 31, 2006, and US$751.2 million for the year ended
Dec. 31, 2006.
Included in selling and administrative expense for the three
months and year ended Dec. 31, 2007 is a non-cash pretax expense
of US$6.7 million and US$22.7 million, respectively, to mark to
market outstanding stock appreciation rights and expenses
associated with other executive compensation agreements compared
to a non-cash pretax expense of US$3.8 million and
US$34.4 million, respectively, for the three months and year
ended Dec. 31, 2006.
On Nov. 7, 2007, the company completed its offering of
126.5 million common shares raising net proceeds of
approximately US$1.5 billion. The funds were primarily used to
partially repay debt that was incurred to finance the
acquisition of Chaparral Steel, which was completed in the third
quarter of 2007.
On Feb. 12, 2008, in addition to the normal quarterly dividend
of US$0.02, the Board of Directors also approved a special cash
dividend of US$0.25 per common share, payable March 13, 2008 to
shareholders of record at the close of business on Feb. 28,
2008.
Executive Comments
Gerdau Ameristeel President and Chief Executive Officer, Mario
Longhi commented:
"This was another outstanding year for Gerdau Ameristeel. It was
a record year for our financial performance, surpassing US$1.0
billion in EBITDA for the first time in our history. When you
look past all the financial accomplishments, I am particularly
proud that we continue to make progress toward our vision of an
injury free workplace by continuously reducing our lost time
accident rate; creating a safer work environment for our
employees."
Mr. Longhi continued, "We are also making steady progress with
the integration of our acquisitions, including the recently
acquired mills in Midlothian, Texas and Petersburg, Virginia.
We have already begun to see great results in the commercial
area, which is helping to ensure a seamless transition with our
customers, as well as many operational improvements through the
implementation of the Gerdau business system and sharing of best
practices. We were able to capture approximately US$15 million
dollars of synergies in 2007 for an annualized rate of over
US$50 million. We are confident that we can achieve our target
of a US$75 million annual rate of synergies by the end of
2008."
"With the completion in November 2007 of one of the largest
follow-on equity offerings in the North American steel industry,
our balance sheet is strong and well positioned to continue to
support further growth. In accordance with our strategic growth
plans, earlier we announced that our downstream joint venture
Pacific Coast Steel (PCS) has reached an agreement to acquire
Century Steel, a reinforcing and structural steel contracting
and placing services business in Nevada, California, Utah, and
New Mexico and concurrently with the closing of this transaction
we will increase our ownership of PCS to over 80%." noted Mr.
Longhi.
Mr. Longhi concluded, "Despite signs of a slowing North American
economy, as we enter 2008, market conditions remain positive.
Import levels remain lower than recent years, global steel
demand and prices are creating export opportunities, and
inventory levels in North America remain at low levels
throughout the system. We have announced price increases in
order to offset increases in scrap and other input costs and we
remain focused on keeping metal spreads robust."
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 the ratings of Gerdau
Ameristeel Corporation including its 'Ba1' Corporate Family
Rating and Probability of Default Rating, as well as the US$405
million Senior Unsecured Regular Bond issued. Moody's outlook
for all ratings is stable.
Moody's also affirmed Gerdau Brazil's (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 SA) Ba1 Global
Local Currency Corporate Family Rating.
INGRAM MICRO: Earns US$114.1 Million in Fourth Quarter 2007
-----------------------------------------------------------
Ingram Micro Inc. announced financial results for the fourth
quarter and fiscal year of 2007, which ended Dec. 29, 2007.
Worldwide sales for the fourth quarter were US$10.01 billion, a
13% increase from US$8.85 billion in the prior-year period. The
translation impact of the relatively stronger foreign currencies
had an approximate six- percentage-point positive effect on
comparisons to the prior year. Sales for the 2007 fiscal year
were a record US$35.05 billion, a 12% increase over 2006.
Fourth quarter net income was US$114.1 million compared with net
income of US$91.7 million in the prior year.
Fourth quarter 2007 results include these items:
-- The release of a portion of the reserve recorded in the
first quarter of 2007 for commercial taxes on software
imports into Brazil. The partial reserve release relates
to the period from October through December 2002, for
which the statute of limitations for an assessment has
expired. The benefit from this reserve release was
US$3.6 million, before and after tax.
-- A gain of approximately US$2.9 million from the sale of
the company's Asian semiconductor business, which was
acquired in the late 1990s as part of the company's
initial entry into Asia-Pacific. As the business no
longer fits the company's strategy, it was sold to Tomen
Electronics, a Japanese company, in late December.
"I'm pleased with the progress we made in 2007 -- both for the
fourth quarter and the fiscal year," said Ingram Micro chief
executive officer, Gregory M. Spierkel. "Our record sales and
net income results were driven by operational improvements and
long-term strategic investments in our four market-leading
regional operations."
Additional Fourth-Quarter Highlights
Regional Sales
-- North American sales were US$3.83 billion (38 percent of
total revenues), an increase of four percent versus the
US$3.68 billion reported in the year-ago quarter. As
described throughout 2007, warranty contract sales on
behalf of vendors are now recognized as net fees, rather
than gross revenues and cost of sales as reported in the
prior-year period, which had an approximate four-
percentage-point negative impact on growth rates when
compared to the year-ago quarter.
-- Europe, Middle East and Africa (EMEA) sales were US$3.75
billion (38%t of total revenues), an increase of 16%
versus the US$3.23 billion in the year-ago quarter. The
translation impact of the relatively stronger European
currencies had an approximate 12-percentage-point
positive effect on comparisons to the prior year.
-- Asia-Pacific sales were US$1.94 billion, an increase of
29% versus the US$1.50 billion reported in year-ago
quarter. The translation impact of the relatively
stronger regional currencies had an approximate 12-
percentage-point positive effect on comparisons to the
prior year.
-- Latin American sales were US$481 million, an increase of
8% versus the US$444 million in the year-ago quarter.
Gross Margin
Gross margin was 5.82%, an increase of 37 basis points versus
the prior-year quarter. The partial release of commercial tax
reserves in Brazil, described above, had a positive impact of
four basis points. The remaining increase is primarily
attributable to the resolution of operational issues related to
the upgrade to a new warehouse management system in Germany in
late 2006, as well as the positive effect of the net reporting
of warranty contract sales, described previously, which had a
favorable impact of approximately eight basis points. Gross
margin was also enhanced by the higher-margin sales of DBL
Distributing, acquired in the second quarter of 2007, and by
year-over-year growth in the company's fee-for-service logistics
business. Sequentially, gross margin improved 30 basis points
versus the third quarter of 2007, driven by greater holiday
activity in the logistics business and higher-margin specialty
areas.
Operating Expenses
Total operating expenses were US$406.7 million, or 4.06% of
revenues, versus US$340.7 million, or 3.85% of revenues, in the
year-ago quarter. The increase in operating expenses as a
percentage of revenues is primarily attributable to growth in
the fee-for-services business, investments in adjacencies and
services and higher stock-based compensation. In addition, the
net reporting of warranty contract sales, as described above,
had a five-basis-point unfavorable impact on expenses as a
percentage of revenues in the current year.
Operating Income
Worldwide operating income was US$176 million or 1.76% of
revenues, which included the gains on the release of the
Brazilian commercial tax reserves and on the sale of the Asian
semiconductor business described above, for a total positive
impact of six basis points of revenues. In the year-ago
quarter, operating income was US$141.7 million or 1.60% of
revenues which included a US$4 million recovery from a customer
bankruptcy.
-- North American operating income was US$68.9 million. In
the prior year, operating income was US$64.6 million
which included a US$4-million recovery from a customer
bankruptcy, as described above.
-- EMEA operating income increased nearly 32 percent -- to
US$64.7 million from US$49.2 million in the year-ago
quarter -- due, in part, to the resolution of operational
issues related to the German warehouse management system
in the prior year.
-- Asia-Pacific operating income was US$35.9 million versus
US$22.8 million in the year-ago quarter. The current
year operating income includes a US$2.9 million gain, or
15 basis points of revenues, on the sale of the
semiconductor business in Asia.
-- Latin American operating income was US$16.1 million which
includes the previously described release of the
commercial tax reserve in Brazil of US$3.6 million or 75
basis points of revenues. In the year-ago quarter
operating income was US$11.8 million.
-- Stock-based compensation expense of US$9.6 million in the
current quarter and US$6.7 million in the prior-year
quarter is presented as a separate reconciling amount in
the company's segment reporting in both periods. As
such, these expenses are not included in the regional
operating results, but are included in the worldwide
operating results.
Other expenses for the quarter were US$18.2 million versus US$16
million in the year-ago period.
The effective tax rate was approximately 28% versus 27% in the
prior year quarter, primarily due to the mix of profits among
various tax jurisdictions.
Total depreciation and amortization was US$17.3 million.
Capital expenditures were approximately US$15.2 million.
Balance Sheet
-- The cash balance at the end of the quarter was US$580
million, an increase of US$246 million over the balance
at the end of 2006.
-- Total debt was US$523 million, an increase of US$14
million from year-end 2006. In the prior-year period,
the debt balance excluded US$69 million of off-balance
sheet debt related to receivables that were sold under
a factoring facility. Debt-to-capitalization was 13%, a
decrease of two-percentage-points versus the end of 2006.
-- The company repurchased approximately 1.3 million shares
during the fourth quarter of 2007, for an aggregate
amount of US$25 million, with another 0.9 million shares
repurchased in January for US$15 million.
-- Inventory was US$2.77 billion compared to US$2.68 billion
at the end of the prior year. Days of inventory
outstanding were 27, a two-day improvement compared to
year-end 2006.
-- Working capital days were 22, essentially flat when
compared to year-end 2006.
"While I'm proud that we surpassed the US$10-billion mark in
quarterly sales and broke another annual sales record,
the profitability of our regions -- all exceeding operating
margins of 170 basis points for the first time -- is a
greater achievement," said Ingram Micro executive vice president
and chief financial officer, William D. Humes.
"Sales and net income out-performed our guidance range, due in
large part to our overall achievement in Asia-Pacific
and operating income growth in EMEA."
Fiscal Year Results
For the fiscal year ended Dec. 29, 2007, worldwide sales were
US$35.05 billion, a 12- percent increase over the US$31.36
billion reported a year ago, to which the translation impact of
stronger foreign currencies had an approximate five-
percentage-point positive effect on comparisons to the prior
year. Regional sales were US$13.92 billion for North
America; US$12.44 billion for Europe; US$7.13 billion for Asia-
Pacific; and US$1.55 billion for Latin America.
Full-year results were impacted by previously disclosed charges
totaling US$45.1 million pre-tax, (US$39.3 million after
tax) which included: 1) a net charge for commercial taxes on
software imports into Brazil of US$30.1 million before
and after tax, including the current quarter release of a
portion of these reserves as described previously; and 2)
a second-quarter pre-tax charge of US$15 million, (US$9.2
million after tax) related to an SEC inquiry.
Worldwide operating income for the 2007 fiscal year was US$446.4
million, or 1.27 percent of revenues, which includes
the charges described above. The net Brazilian tax charge had a
nine-basis-point negative impact on full-year
operating margin and the SEC-inquiry charge had a four-basis-
point negative impact on full-year operating margin.
In the year-ago period, operating income was US$422.4 million,
or 1.35 percent of revenues.
Net income for the 2007 fiscal year was US$275.9 million, which
includes the charges described above. In the year-ago
period, net income was US$265.8 million.
Capital expenditures for the full year were US$49.8 million,
while total depreciation and amortization was
US$64.1 million.
First Quarter Outlook
The following statements are based on the company's current
expectations and internal forecasts. These statements
are forward-looking and actual results may differ materially, as
outlined in the company's periodic filings with the
Securities and Exchange Commission.
The company's expected results for the first quarter ending
March 29, 2008, include:
-- Revenue of US$8.75 billion to US$9 billion.
-- Net income of US$63 million to US$71 million.
The expected results are based on approximately 177 million
weighted average shares outstanding and a 28% effective tax
rate.
"We believe our outlook is solid in light of concerns about the
worldwide economic environment," said Mr. Spierkel. "We are
experiencing some softness in Europe and North America, which is
reflected in our guidance, but Asia-Pacific and Latin America
remain strong. Our strategic investments are an advantage in
this environment by providing geographic, market-segment and
business-model diversity. Our focus during the quarter will be
on tightly managing expenses while continuing to cultivate areas
that will drive growth. I'm confident that our team will
continue to perform, as we have proven our ability to excel in
challenging markets. I look forward to our future success."
About Ingram Micro
Headquartered in Santa Ana, California, Ingram Micro Inc. (NYSE:
IM) -- http://www.ingrammicro.com/-- together with its
subsidiaries, distributes information technology products and
supply chain solutions worldwide. Its IT products include
peripherals, networking, software, and systems. The company has
Latin America operations in Brazil, Chile and Mexico.
* * *
Ingram Micro Inc. continues to carry Moody's Ba1 long-term
corporate family and probability-of-default ratings.
NORTEL NETWORKS: In Talks with Motorola to Merge Wireless Units
---------------------------------------------------------------
Nortel Networks Corporation and Motorola Inc. are discussing a
deal concerning a possible merger of their wireless
infrastructure units, The Wall Street Journal reported Monday,
citing sources familiar with the matter. WSJ said that the
joint venture could result in around US$10 billion revenue for
both companies.
According to Monday's reports, Motorola's stock price increased
by about 2.8%, or US$0.31, following the news on the joint
venture while Nortel's stock price dropped US$0.18.
However, the merger plan, which has been boiling for about a
month, is encountering pressures as network companies await for
the next wave of wireless technology, sources told WSJ. New
entrants from China are also pressuring prices to decline, WSJ
revealed.
Motorola and Nortel had suspended a previous plan of owning 40%
each on a joint venture and hand the remaining 20% to an
investor, WSJ related. The companies failed to find the third
party in the joint venture, WSJ added. According to the report,
the joint venture at hand intends to make Nortel as major
shareholder and Motorola as minority shareholder.
WSJ related that the talks with Nortel is independent from
Motorola's plan to separate its Mobile Devices from its other
businesses.
Recent Events at Motorola
Motorola said on Jan. 31, 2008, that it is exploring the
structural and strategic realignment of its businesses to better
equip its Mobile Devices business to recapture global market
leadership and to enhance shareholder value. Greg Brown,
President and Chief Executive Officer said that "We are
exploring ways in which our Mobile Devices Business can
accelerate its recovery and retain and attract talent while
enabling our shareholders to realize the value of this great
franchise."
At that time, Motorola said it does not intend to discuss
developments with respect to the exploration of strategic
alternatives unless or until its board of directors has approved
a definitive transaction or the process is otherwise complete.
On Feb. 1, 2008, Motorola confirmed receipt of notice from Carl
Icahn announcing his intent to nominate a slate of four
directors to stand for election at the company's 2008 Annual
Meeting of Stockholders. The company said it has not yet
scheduled its 2008 Annual Meeting and is currently reviewing the
notice.
The notice states that the Carl Icahn entities may be deemed to
beneficially own, in the aggregate, 114,289,100 shares of
Motorola common stock, representing about 5% of Motorola's
outstanding shares.
Recent Events at Nortel
Meanwhile, Nortel was able to resolve dispute with Vonage
Holdings Corp. after both companies have agreed in principle to
end the litigation pending between them.
As reported in the Troubled Company Reporter on Jan. 2, 2008,
the contemplated settlement involves a limited cross license to
three Nortel and three Vonage patents and will not call for any
monetary payments by any party. Claims relating to past damages
and the remaining patents will be dismissed without prejudice.
The settlement is subject to final documentation.
About Vonage
Headquartered in Holmdel, New Jersey, Vonage Holdings Corp.
(NYSE:VG) -- http://www.vonage.com/-- provides broadband
telephone services with over 1.4 million subscriber lines as of
Feb. 8, 2006. Utilizing its voice over Internet protocol
technology platform, the company offers feature-rich, low-cost
communications services with a call quality comparable to
traditional telephone services. While customers in the United
States represent over 95% of its subscriber lines, Vonage
continues to expand internationally, having launched its service
in Canada in November 2004, and in the United Kingdom in May
2005.
About Motorola
Schaumburg, Illinois-based Motorola Inc. (NYSE: MOT) --
http://www.motorola.com/-- builds, markets and sells products,
services and applications that make connections to people,
information and entertainment through broadband, embedded
systems and wireless networks. It has three segments: Mobile
Devices, Networks and Enterprise, and Connected Home Solutions.
It provides wireless handsets, which transmit and receive voice,
text, images, multimedia and other forms of information,
communication and entertainment. It offers a family of point-
to-point and point-to-multipoint wireless broadband products to
serve wireless fidelity and digital subscriber line operators.
About Nortel Networks
Headquartered in Ontario, Canada, Nortel Networks Corporation
(NYSE/TSX: NT) -- http://www.nortel.com/-- delivers next-
generation technologies, for both service provider and
enterprise networks, support multimedia and business-critical
applications. Nortel's technologies are designed to help
eliminate today's barriers to efficiency, speed and performance
by simplifying networks and connecting people to the information
they need, when they need it. Nortel does business in more than
150 countries around the world. Nortel Networks Limited is the
principal direct operating subsidiary of Nortel Networks
Corporation.
Nortel does business in more than 150 countries including
Indonesia, the United Kingdom, Denmark, Russia, Norway,
Australia, Brazil, China, Singapore, among others.
* * *
Nortel Networks Corp. still carries Moody's Investors Service
'B3' Senior Unsecured Debt rating which was placed on March 22,
2007.
NOVELL INC: Extends To Open Collaboration Biz With SiteScape Buy
----------------------------------------------------------------
Novell has acquired SiteScape, extending Novell's leadership and
commitment to innovative and open collaboration solutions.
SiteScape, the founder of the ICEcore open source collaboration
project, brings impressive team workspace and real-time
collaboration capabilities to Novell -- key components of a
broad unified communications and collaboration strategy. The
melding of the two firms creates the industry's clear leader in
open, enterprise-strength collaboration and social networking
offerings, giving customers powerful, flexible ways to integrate
new communications technologies into their environment and drive
employee productivity and business innovation.
"Advances in Web 2.0 technologies are driving new opportunities
for unified communications (UC) and team collaboration," said
IDC program vice president for Collaborative Computing and the
Enterprise Workplace, Mark Levitt. "Enterprise and SMB
customers are looking for solutions that combine real-time
messaging, conferencing and IP voice calling along with online
workspaces, social networking, blogs, and wikis to improve team
and enterprise productivity and innovation. Solutions that
combine team collaboration and UC like those offered by the
combined Novell-SiteScape, which are based around open source
for rapid innovation and open standards for interoperability
and platform flexibility, represent the next major step forward
for business collaboration."
Long a leader in enterprise e-mail with GroupWise(R), Novell
partnered with SiteScape to add to its collaboration portfolio
with Novell(R) Teaming + Conferencing, a team workspace and
real-time conferencing solution centered on the ICEcore open
source technology. Consistent with Novell's commitment to
interoperabilty, Novell Teaming + Conferencing runs on both
Linux and Windows, and works with Lotus Notes and Microsoft
Exchange, in addition to GroupWise. These team workspaces,
accessible securely by team members both inside and outside the
company, incorporate multiple integrated collaboration tools,
including blogs, wikis, instant message, chat, voice over IP
and web conferencing, providing the powerful core of a unified
communications and collaboration solution. By acquiring
SiteScape, Novell strengthens its commitment to the technology,
gains the flexibility to create the solutions customers and
partners need, and increases its capacity to deliver even more
innovation and interoperability around open collaboration.
"As SiteScape's largest European partner, we see exciting
benefits coming out of this merger -- to our business and
to our customers," said Axel Amelung, managing director of
comm.world collaboration, a solution provider serving mid-sized
to enterprise-level customers in the chemical, telecom and
construction industries. "Our major SiteScape customers are
serious about leveraging Web 2.0 and enterprise social
networking technologies to the fullest to boost productivity and
innovation coming out of their teams. Combining SiteScape's
leading technology with Novell's commitment and long- time focus
on collaboration will yield even more business-focused
innovations. The merger will also lend Novell's enterprise-
class reputation and partner programs to help support our sales
and service operations."
"The acquisition of SiteScape fits squarely into the corporate
strategy we have laid out," said Novell president and Chief
Executive Officer, Ron Hovsepian. "It extends our leadership in
promoting open source in the enterprise market and is a key
technology addition in an area where we see great growth
potential. Most importantly, it allows us to move aggressively
to give customers a new, open option for collaboration, helping
them escape vendor lock-in and offering easy integration across
platforms, whether Linux or Windows."
"Joining Novell helps us expand our technology much more broadly
than we've been able to do to date," said SiteScape chief
technology officer, Andy Fox. "Novell and SiteScape have
already been strong partners, both in the ICEcore project and in
taking products to market. With the merger, SiteScape customers
gain a strong new partner supporting their deployments,
enhancing the technology, and helping them meet their rapidly
evolving collaboration needs."
Financial terms of the deal are not being disclosed.
About SiteScape
Founded in 1995, SiteScape provides open source team
collaborative solutions for communication and management for
distributed teams across a wide range of business and government
customers. SiteScape's integrated Web-based solutions support
knowledge management, project management, communities of
practice, telework, business and government continuity, and many
other workflow-driven functions.
About Novell
Headquartered in Waltham, Massachusetts, Novell Inc. (Nasdaq:
NOVL) -- http://www.novell.com/-- delivers infrastructure
software for the Open Enterprise. Novell provides desktop to
data center operating systems based on Linux and the software
required to secure and manage mixed IT environments.
The company has offices in Australia, Argentina, Austria,
Belgium, Brazil, China, Czech Republic, Finland, Germany, Hong
Kong, Hungary, India, Ireland, Japan, Luxembourg, Malaysia,
Netherlands, New Zealand, Norway, Philippines, Poland,
Singapore, South Korea, Spain, Sweden, Switzerland, Taiwan,
Thailand and United Kingdom.
* * *
Novell Inc.'s subordinated debt carries Moody's Investors
Service's B1 rating.
PROPEX INC: Gets Access to Additional US$40 Mln of DIP Financing
----------------------------------------------------------------
The U.S. Bankruptcy Court for the Eastern District of Tennessee
has authorized Propex Inc. and its debtor affiliates to access
an additional US$40 million of a US$60 million DIP credit
facility on Feb. 13, 2008. The Court originally approved
immediate access to US$20 million of the DIP financing on
Jan. 23, 2008. The Court's ruling will provide Propex with
immediate and sufficient liquidity to continue to operate its
business on an ongoing basis.
"We are once again pleased to have received Court approval for
access to the additional $40 million of our $60 million credit
facility," Joe Dana, President of Propex Inc., said in a press
release. "This is further proof that our plan to restructure
our balance sheet and emerge from Chapter 11 a stronger and more
nimble Propex better able to serve our customers continues to
progress on schedule and as anticipated."
About Propex
Headquartered in Chattanooga, Tennessee, Propex Inc. --
http://www.propexinc.com/-- produces geosynthetic, concrete,
furnishing, and industrial fabrics and fiber. It is produces
primary and secondary carpet backing. Propex operates in North
America, Europe, and Brazil.
The company and its debtor-affiliates filed for Chapter 11
protection on Jan. 18, 2008 (Bankr. E.D. Tenn. Case No. 08-
10249). The debtors' has selected Edward L. Ripley, Esq., Henry
J. Kaim, Esq., and Mark W. Wege, Esq. at King & Spalding, in
Houston, Texas, to represent them. As of Sept. 30, 2007, the
debtors' balance sheet showed total assets of US$585,700,000 and
total debts of US$527,400,000. (Propex Bankruptcy News;
Bankruptcy Creditors' Service Inc.,
http://bankrupt.com/newsstand/or 215/945-7000)
PROPEX INC: Shaw and IRS Balk at BNP Paribas DIP Fund Agreement
---------------------------------------------------------------
As previously reported, Propex Inc. and its debtor-affiliates
submitted a draft of their DIP Credit Agreement with BNP Paribas
and certain lenders to the U.S. Bankruptcy Court for the Eastern
District of Tennessee on Jan. 18, 2008.
The Debtors have delivered to the Court the finalized DIP Credit
Agreement dated Jan. 23, 2008, a full-text copy of which is
available for free at:
http://bankrupt.com/misc/Propex_CreditAgreement.pdf
Responses
A. Shaw Industries
Shaw Industries Group Inc., filed a complaint against the
Debtors in the Superior Court of the State of Delaware on Sept.
7, 2007, asserting claims for misappropriation of trade secrets,
fraud, and breach of contract and seeks a declaratory judgment
as to its ownership of Cobra Technology, Cobra Technology
Patents, and General Know-How related to Cobra Technology.
Thus, Shaw opposes the proposed postpetition financing to the
extent that a Final DIP order or the DIP Credit Agreement
prejudices its rights or its intellectual property rights.
B. Internal Revenue Service
As of the bankruptcy filing, Propex Inc. owed approximately
US$1,485,986 to the Internal Revenue Service for federal
employment tax liabilities, all of which is an unsecured
priority claim under Section 507(a)(8) of the Bankruptcy Code,
M. Kent Anderson, Esq., assistant U.S. attorney, relates.
Furthermore, since Propex Inc., has not filed its Form 941 for
the third quarter of 2007 as required by law, a portion of the
IRS's claim will be estimated, Mr. Anderson notes.
Similarly, Mr. Anderson continues, as of the bankruptcy filing,
Propex Concrete Systems Corporation also owed the IRS taxes
aggregating US$130,216 for federal employment tax liabilities,
of which US$38,152 is a secured claim pursuant to Section 506 of
the Bankruptcy Code, and US$92,064 is an unsecured priority
claim under Section 507 (a)(8).
Mr. Anderson points out that the Debtors' interim order states
that "the DIP agent and the DIP lenders will not be deemed to be
in control of the operations of any of the Debtors or to be
acting as a 'responsible person' or 'owner or operator' with
respect to the operation or management of any of the Debtors".
Mr. Anderson notes that this portion of the Interim Order could
be interpreted to apply to the IRS' and the DIP Lenders'
liability under the Sections 3505 and 6673 of the Internal
Revenue Code.
Accordingly, the IRS asks the Court to deny the Interim DIP
Order.
About Propex Inc.
Headquartered in Chattanooga, Tennessee, Propex Inc. --
http://www.propexinc.com/-- produces geosynthetic, concrete,
furnishing, and industrial fabrics and fiber. It is produces
primary and secondary carpet backing. Propex operates in North
America, Europe, and Brazil.
The company and its debtor-affiliates filed for Chapter 11
protection on Jan. 18, 2008 (Bankr. E.D. Tenn. Case No. 08-
10249). The debtors' has selected Edward L. Ripley, Esq., Henry
J. Kaim, Esq., and Mark W. Wege, Esq. at King & Spalding, in
Houston, Texas, to represent them. As of Sept. 30, 2007, the
debtors' balance sheet showed total assets of US$585,700,000 and
total debts of US$527,400,000. The Debtors' exclusive period to
file a plan of reorganization expires on May 17, 2008. (Propex
Bankruptcy News, Issue No. 5; Bankruptcy Creditors' Service
Inc., http://bankrupt.com/newsstand/or 215/945-7000)
==========================
C A Y M A N I S L A N D S
==========================
BANK OF AYUDHYA: Plans To Sell THB20 Billion in Bonds
-----------------------------------------------------
Bank of Ayudhya intends to sell up to THB20 billion of medium-
term debentures next month, Darana Chudasri at Bangkok Post
reports.
Proceeds from the sale will be used to finance the bank's loan
growth plans, the same report says, citing Executive Vice-
President Tak Bunnag. The bank sees growth in its finance
lending as a result of the government's new infrastructure
megaproject investments. It targets THB39 billion in its loan
portfolio for this year.
The planned bonds' rate will be fixed next month, and will
mature in two to four years, the Post says.
Headquartered in Bangkok, Thailand, Bank of Ayudhya Public Co.
Ltd. -- http://www.krungsri.com/-- provides a full range of
banking and financial services. The bank offers corporate and
personal lending, retail and wholesale banking; international
trade financing asset management; and investment banking
services to customers through its branches.
It has branches in Hong Kong, Vietnam, Laos, and the Cayman
Islands.
Bank of Ayudhya's subordinated debts carry Fitch Ratings
Services' BB+ rating, effective September 2007.
BBH AOF: Holding Final Shareholders Meeting on February 28
----------------------------------------------------------
BBH AOF Genpar, Limited, will hold its final shareholders
meeting on Feb. 28, 2008, at Brown Brothers Harriman & Co, 140
Broadway, New York, New York, at 10:00 a.m.
These agendas will be taken during the meeting:
1) accounting of the winding-up process; and
2) determining the manner in which the books,
accounts and documentation of the company,
and of the liquidator should be disposed of.
BBH AOF's shareholders decided on Nov. 26, 2007, to place the
company into voluntary liquidation under The Companies Law (2004
Revision) of the Cayman Islands.
The liquidator can be reached at:
c/o Walkers
Walker House, 87 Mary Street
George Town, Grand Cayman KY1-9001
Cayman Islands
MARCO POLO: Final Shareholders Meeting is on February 28
--------------------------------------------------------
Marco Polo Hotels International Limited will hold its final
shareholders meeting on Feb. 28, 2008, at 16th Floor, Ocean
Center, Harbour City, Canton Road, Kowloon, Hong Kong, at 10:00
a.m.
These agendas will be taken during the meeting:
1) accounting of the winding-up process; and
2) determining the manner in which the books,
accounts and documentation of the company,
and of the liquidator should be disposed of.
Marco Polo's shareholders decided on Dec. 28, 2007, to place the
company into voluntary liquidation under The Companies Law (2004
Revision) of the Cayman Islands.
The liquidator can be reached at:
Kevin Chung Ying Hui
16th Floor, Ocean Center
Harbor City, Canton Road
Kowloon, Hong Kong
Tel: 1 345 949 2648
Fax: 1 345 949 8613
MODULUS SELECT: Sets Final Shareholders Meeting for February 28
---------------------------------------------------------------
Modulus Select Fund Limited will hold its final shareholders
meeting on Feb. 28, 2008, at Kroll (Cayman) Limited, 4th Floor,
Bermuda House, Dr. Roy's Drive, Grand Cayman, Cayman Islands.
These agendas will be taken during the meeting:
1) accounting of the winding-up process; and
2) giving explanation thereof.
Modulus Select's shareholders decided on Jan. 8, 2008, to place
the company into voluntary liquidation under The Companies Law
(2004 Revision) of the Cayman Islands.
The liquidator can be reached at:
Richard E.L. Fogerty
Attn: Gemma Sherwood
Kroll (Cayman) Limited
4th Floor, Bermuda House
Dr. Roy's Drive, Grand Cayman
Cayman Islands
Telephone: (345) 946-0081
=========
C H I L E
=========
BOSTON SCIENTIFIC: Will Pay US$431 Mil. in Stent Patent Dispute
---------------------------------------------------------------
The U.S. District Court jury in Marshall, Texas found that
Boston Scientific Corporation's TAXUS Express, and TAXUS Liberte
drug-eluting stent products infringe Dr. Bruce Saffran's patent
and that the patent is valid. No injunction was requested, but
the jury awarded damages of US$431 million.
The company says that the jury verdict is unsupported by both
the evidence and the law. On these grounds, the company plans
to seek to overturn the verdict in post-trial motions before the
District Court and, if unsuccessful, to appeal to the U.S. Court
of Appeals for the Federal Circuit. The company relates it will
prevail on appeal.
Headquartered in Natick, Massachusetts, Boston Scientific
Corporation (NYSE: BSX) -- http://www.bostonscientific.com/--
develops, manufactures and markets medical devices used in a
broad range of interventional medical specialties. The company
has offices in Argentina, Chile, France, Germany, and Japan,
among others.
* * *
As reported in the Troubled Company Reporter-Latin America on
Jan. 11, 2008, Boston Scientific's corporate credit rating is
rated 'BB+' with a negative outlook by Standard and Poor's
Ratings Services.
FIDELITY NATIONAL: Declares US$0.05 Per Common Share Dividend
-------------------------------------------------------------
Fidelity National Information Services Inc. announced a regular
quarterly dividend of US$0.05 per common share. The dividend is
payable March 27, 2008, to shareholders of record as of the
close of business March 13, 2008.
Based in Jacksonville, Florida, Fidelity National Information
Services, Inc. -- http://www.fidelityinfoservices.com/--
provides core processing for financial institutions; card issuer
and transaction processing services; mortgage loan processing
and mortgage related information products; and outsourcing
services to financial institutions, retailers, mortgage lenders
and real estate professionals. FIS has processing and
technology relationships with 35 of the top 50 global banks,
including nine of the top ten. Nearly 50% of all US residential
mortgages are processed using FIS software. FIS maintains a
strong global presence, serving over 9,000 financial
institutions in more than80 countries worldwide, including
Brazil, Chile, Australia, Canada and Japan.
* * *
As reported in the Troubled Company Reporter-Latin America on
Oct. 29, 2007, Standard & Poor's Ratings Services has placed its
ratings, including the 'BB' corporate credit rating, on Fidelity
National Information Services Inc. on CreditWatch with negative
implications.
Moody's Investors Service also placed these ratings on review
for possible downgrade: US$1.6 billion First Lien Senior Secured
Term Loan B Ba1; US$2.1 billion First Lien Senior Secured Term
Loan A Ba1; US$900 million First Lien Senior Revolving Credit
Facility Ba1; US$200 million 4.75% (Certegy) notes due September
2008 Ba1; and Corporate Family Rating Ba1.
FIDELITY NAT'L: Jeff Carbiener to Lead Lender Processing Unit
-------------------------------------------------------------
Fidelity National Information Services Inc.'s Lender Processing
division, which the company plans to spin off in mid-2008, will
be named Lender Processing Services Inc. (LPS). Current
Executive Vice President and Chief Financial Officer, Jeff
Carbiener, will be President and Chief Executive Officer of LPS.
"Jeff has strong financial and operational experience and has
been an integral part of the company since the Certegy
acquisition in 2006," said FIS Executive Chairperson, William P.
Foley II. "The LPS management team, under Jeff's leadership,
has the experience and expertise to support the current and
future success of LPS."
After the spin off, these LPS executives will report to Mr.
Carbiener: Executive Vice President of the Mortgage Processing
Services division, Dan Scheuble; Executive Vice President of the
Mortgage Information Services division, Eric Swenson; Executive
Vice President and Chief Information Officer, Fred Parvey; and
Executive Vice President and Chief Financial Officer, Francis
Chan. Mr. Chan is currently Fidelity's Senior Vice President
and Chief Accounting Officer. Parag Bhansali recently joined
the company and will serve as Senior Vice President of Investor
Relations for LPS. Prior to joining, Mr. Bhansali served as
Vice President of Finance at Rayonier Inc. and Vice President of
Corporate Development and Strategy at Covance Inc.
Lee Kennedy will continue to serve as President and Chief
Executive Officer. As previously announced, reporting to Mr.
Kennedy are Executive Vice President and Chief Operating
Officer, Gary Norcross and President of Strategic Development,
Frank Sanchez. Mr. Norcross will be responsible for all global
banking business, including Integrated Financial Solutions,
Enterprise Banking and International. Mr. Sanchez will be
responsible for all strategic development initiatives worldwide.
George Scanlon recently joined the company as Executive Vice
President of Finance. After the spin off is complete, Mr.
Scanlon will assume the role of Chief Financial Officer. He
most recently served as Chief Financial Officer for BFC
Financial Corporation and has significant expertise in finance
and accounting. Mr. Scanlon also served as Chief Financial
Officer for Levitt Corporation and Datacore Software
Corporation, and as Controller for Ryder System. Mary Waggoner
will continue to serve as Senior Vice President of Investor
Relations for Fidelity.
About Fidelity National
Based in Jacksonville, Florida, Fidelity National Information
Services, Inc. -- http://www.fidelityinfoservices.com/--
provides core processing for financial institutions; card issuer
and transaction processing services; mortgage loan processing
and mortgage related information products; and outsourcing
services to financial institutions, retailers, mortgage lenders
and real estate professionals. FIS has processing and
technology relationships with 35 of the top 50 global banks,
including nine of the top ten. Nearly 50% of all US residential
mortgages are processed using FIS software. FIS maintains a
strong global presence, serving over 9,000 financial
institutions in more than 80 countries worldwide, including
Brazil, Chile, Australia, Canada and Japan.
* * *
As reported in the Troubled Company Reporter-Latin America on
Oct. 29, 2007, Standard & Poor's Ratings Services placed its
ratings, including the 'BB' corporate credit rating, on Fidelity
National Information Services Inc. on CreditWatch with negative
implications.
Moody's Investors Service also placed these ratings on review
for possible downgrade: US$1.6 billion First Lien Senior Secured
Term Loan B Ba1; US$2.1 billion First Lien Senior Secured Term
Loan A Ba1; US$900 million First Lien Senior Revolving Credit
Facility Ba1; US$200 million 4.75% (Certegy) notes due September
2008 Ba1; and Corporate Family Rating Ba1.
WARNER MUSIC: Moody's Downgrades Corporate Family Rating to B1
--------------------------------------------------------------
Moody's Investor Services has lowered Warner Music Group Corp.'s
corporate family rating and probability of default rating to B1
from Ba3 and changed the rating outlook to stable from
developing. In addition, Moody's lowered WMG Holdings Corp.'s
senior discount notes rating to B3 (LGD6, 95%) from B2 (LGD6,
95%) as well as the ratings of WMG Acquisition Corp.'s senior
secured loan to Ba3 (LGD3, 30%) from Ba2 (LGD2, 29% ) and WMG
Acquisition Corp.'s senior subordinated notes to B3 (LGD5, 84%)
from B2 (LGD5, 84%). Moody's also lowered Warner Music's
speculative grade liquidity rating to SGL-3 from SGL-2.
The rating actions reflect the ongoing challenges within the
recorded music industry, most-notably, the rapid decline in
physical sales which is outpacing digital growth. "While the
music industry has shown weakness for some time, the decline in
physical sales exceeds Moody's prior expectations and, as a
consequence, has led to weaker credit protection measures for
WMG than we had previously anticipated (including higher
leverage and less free cash flow)", noted Senior Vice President,
Christina Padgett.
The B1 rating incorporates Moody's view that the group will
continue to experience deterioration in its recorded music
business but will modestly benefit from growth in digital music
sales as well as from the greater stability and profitability it
continues to derive from its music publishing assets. Further,
the rating action reflects the acquisitive nature of the company
in light of the ongoing consolidation in the music industry and
its potential impact on financial flexibility.
The group's SGL-3 speculative grade liquidity rating reflects a
significant decline in balance sheet cash in First Quarter 2008,
which reflects in part an increase in accounts receivable due to
holiday sales that occurred toward the end of First Quarter
2008, and the prospect of reduced flexibility under the group's
financial covenants. The SGL-3 rating also reflects Moody's
belief that Warner Music will remain in compliance with its
financial covenants throughout the fiscal year, although the
leverage covenant in particular may be tight. However, Moody's
notes that future step downs will likely require an amendment,
potentially as early as 2009.
The stable outlook reflects Moody's expectation that the group
will generate sufficient EBITDA and cash flows to maintain
credit metrics at current levels and remain in compliance with
its Credit Agreement. Moody's outlook also assumes a continued
challenging climate as the recorded-music industry is further
negatively impacted by steady declines in CD sales, piracy, lack
of compelling new artists and artist migration. Moody's
believes that there is sufficient room in the current rating for
Warner Music to continue pursuing modest acquisitions without
negative pressure.
Headquartered in New York, Warner Music Group Corp. (NYSE: WMG)
-- http://www.wmg.com/-- provides, promotes and distributes
recorded music and music publishing services across a network of
affiliates and licensees in more than 50 countries in the United
States, United Kingdom, Germany, Japan, France, Italy and
others. It has Latin American operations in Argentina, Brazil
and Chile.
===============
C O L O M B I A
===============
BANCOLOMBIA SA: Jan. 2008 Unconsolidated Income is COP47,048MM
--------------------------------------------------------------
Bancolombia S.A. reported unconsolidated net income of
COP47,048 million during the past month of January.
During January, total net interest income, including investment
securities amounted to COP172,295 million. Additionally, total
net fees and income from services totaled COP60,642 million.
Total assets amounted to COP33.20 trillion, total deposits
totaled COP20.88 trillion and Bancolombia's total shareholders'
equity amounted to COP5.10 trillion.
Bancolombia's unconsolidated level of past due loans as a
percentage of total loans was 3.02% as of Jan. 31, 2008,
and the level of allowance for past due loans was 136.47% as of
the same date.
Market Share
According to ASOBANCARIA (Colombia's national banking
association), Bancolombia's market share of the Colombian
financial system as of January 2008 was as follows: 19.0% of
total deposits, 21.5% of total net loans, 19.8% of total savings
accounts, 22.3% of total checking accounts and 14.6% of total
time deposits.
Bancolombia is Colombia's largest full-service financial
institution, formed by a merger of three leading Colombian
financial institutions. Bancolombia's market capitalization is
over US$5.5 billion, with US$13.8 billion asset base and US$1.4
billion in shareholders' equity as of Sept. 30, 2006.
Bancolombia is the only Colombian company with an ADR level III
program in the New York Stock Exchange.
* * *
As reported in the Troubled Company Reporter-Latin America on
June 27, 2007, Moody's Investors Service changed the outlook to
positive from stable on its Ba3 long-term foreign currency
deposit ratings and Ba1 long-term foreign currency subordinated
bond rating for Bancolombia, S.A.
ECOPETROL SA: Seeking Oil & Gas with Turkish Petroleum
------------------------------------------------------
Colombian state-run oil firm Ecopetrol SA told Diana Delgado at
Dow Jones Newswires that it has collaborated with a unit of
Turkey's state oil company Turkish Petroleum Corp. to explore
the Colombian province of Norte de Santander for oil and gas.
Dow Jones relates that Ecopetrol and Turkish Petroleum each hold
50% of the project.
According to Dow Jones, Ecopetrol said that the company and the
Turkish Petroleum unit will drill a well and purchase at least
20 kilometers of seismic studies, with the Turkish company
paying for the initial works.
The collaboration with Turkish Petroleum is part of Ecopetrol's
strategy to invest heavily in Colombia and in other countries to
find new reserves. Ecopetrol already secured the rights to seek
oil in Brazil, Peru and the Gulf of Mexico, Dow Jones states.
Ecopetrol is an integrated-oil company that is wholly owned by
the Colombian government. The company's activities include
exploration for and production of crude oil and natural gas, as
well as refining, transportation, and marketing of crude oil,
natural gas and refined products. Ecopetrol is Latin America's
fourth-largest integrated-oil concern. Operations are organized
into Exploration & Production, Refining & Marketing,
Transportation, and International Commerce & Gas. Ecopetrol
produced 385,000 barrels a day of oil and gas in 2006 and has
330,000 barrels a day of refining capacity, according to the
company's Web site. In 2005 it produced about 60 percent of
Colombia's daily output.
* * *
As reported in the Troubled Company Reporter-Latin America on
Nov. 6, 2007, Fitch Ratings affirmed Ecopetrol S.A.'s foreign
and local currency issuer default ratings at 'BB+' and 'BBB-',
respectively.
SOLUTIA INC: Lenders Seek Clarification of Funding Commitment
-------------------------------------------------------------
Citigroup Global Markets Inc., Goldman Sachs Credit Partners
LP, Deutsche Bank Trust Company Americas and Deutsche Bank
Securities Inc., are seeking a declaratory judgment that:
(a) their funding obligations are conditioned upon
satisfaction of the "Adverse Market Change Provision";
(b) they are not in breach of the Commitment Letter because
all conditions precedent to the commitment of each
Commitment Party for closing of the "Facilities" have not
been met; and
(c) Solutia Inc., remains obligated under the Commitment
Letter to indemnify the Commitment Parties in connection
with any investigation, litigation or proceeding related
to the Commitment Letter or the documentation and
transaction contemplated, including the cost of the
Adversary Proceeding, as well as for transaction costs.
D. J. Baker, Esq., at Skadden, Arps, Slate, Meagher & Flom LLP,
in New York, counsel for the Commitment Parties, contends that
Solutia "goes to great lengths to create a smokescreen of
alleged extraneous and irrelevant matters in order to distract
from the fact that the Commitment Letter is a simple contract
with unambiguously clear, concise and enforceable terms and
conditions which have not been satisfied."
These terms and conditions were heavily negotiated and agreed to
in writing by the parties, Mr. Baker argues, saying that the
Commitment Letter is "explicit and unequivocal."
Mr. Baker also notes that one important condition to each
Commitment Party's obligation to assume the risk of completing
syndication and fund the loan was that there not be "any adverse
change since the date of this Commitment Letter, Oct. 25, 2007,
in the loan syndication, financial or capital markets generally
that, in the reasonable judgment of such Commitment Party,
materially impairs syndication of the Facilities."
According to Mr. Baker, when the market disruptions developed in
July and August, Solutia temporarily suspended its exit
financing search. Solutia resumed its efforts when the markets
showed signs of improvement in September. At that time, he
notes, Solutia recommenced its exit financing solicitation, and
each of the Commitment Parties submitted separate and
independent proposals, which included an adverse market change
provision.
Indeed, Citigroup explicitly advised Solutia that the inclusion
of an adverse market change provision was a condition for
approval of the financing by its credit committee, Mr. Baker
tells the U.S. Bankruptcy Court for the Southern District of New
York. The precise wording of the Adverse Market Change
Provision was specifically negotiated over a period of days, and
several proposals and counter-proposals were exchanged, as
Solutia and its advisors tried to narrow and limit the Adverse
Market Change Provision, before the parties agreed to the
version that appears in the executed contract, he relates.
Mr. Baker further states that "there can be no doubt that the
markets have changed adversely since Oct. 25, 2007" -- a fact
recognized by the Federal Reserve Board, and "virtually every
financial regulator, newspaper, commentator and practitioner in
the world."
Under the Commitment Letter, Solutia agreed to provide certain
information necessary for the Commitment Parties to offer the
Facilities to the market. Mr. Baker alleges that Solutia did
not provide the required information until early January. Due
to the adverse changes in the markets that had occurred since
Oct. 25, and despite the Commitment Parties' diligent efforts,
few potential buyers have shown interest in the syndication, he
avers.
Mr. Baker maintains that the Commitment Parties have not
breached the Commitment Letter and related agreements, and are
entitled to have those agreements enforced according to their
express terms.
The Commitment Parties' judgment that the adverse market changes
have materially impaired the syndication is "eminently
reasonable" and is supported not only by their inability to
syndicate the deal, but by objective evidence and views of
market experts, insists Mr. Baker.
Solutia Wants Counterclaims Barred
Solutia tells the Court that the Counterclaims of the Commitment
Parties should be barred, in whole or it part:
(i) because the Commitment Parties have failed to state a
claim upon which relief can be granted;
(ii) by the equitable doctrine of unclean hands; and
(iii) by the doctrines of estoppel, and waiver or ratification.
Any recovery by the Commitment Parties would constitute unjust
enrichment, Richard I. Werder, Jr., Esq., at Quinn Emanuel
Urquhart Oliver & Hedges LLP, in New York, asserts, on Solutia's
behalf. Solutia, at all relevant times, acted in good faith and
with reasonable diligence, he says.
Mr. Werder argues that the Commitment Parties' counterclaim for
indemnity fails because the Commitment Letter provides, in part,
that parties may not seek indemnification "to the extent such
actual claim, damage, loss, liability or expense (x) is caused
by the bad faith, gross negligence or willful misconduct of such
Indemnified Party, as determined by a final judgment of a court
of competent jurisdiction . . ."
Solutia reserves the right to assert defenses, whether
affirmative or otherwise, about which it presently lacks
knowledge or information, but which may become available to it
during the course of the Adversary Proceeding. Solutia also
reserves the right to amend its answer.
Retirees Committee Seeks to Intervene
The Official Committee of Retirees in the Debtors' Chapter 11
cases relates that Solutia has consented to the panel's
intervention as a plaintiff in the Adversary Proceeding.
Representing the Retirees Committee, Daniel D. Doyle, Esq., at
Spencer Fane Britt & Browne LLP, in St. Louis, Missouri, states
that, as the representative of approximately 20,000 retirees who
are claimholders under the Debtors' confirmed Fifth Amened Joint
Plan of Reorganization, the Retirees Committee has an
unconditional right to intervene in the Adversary Proceeding.
The Retirees Committee also has a right to permissive
intervention under Federal Rule of Civil Procedure 24 (a) or
(b), Mr. Doyle adds.
The outcome of the Adversary Proceeding will directly affect the
Plan and will, therefore, affect future benefits to be provided
to the retirees, says Mr. Doyle.
Pursuant to Bankruptcy Rule 7024(c), the Retirees Committee
adopts the same claims asserted in the Complaint, and adopts the
Complaint as its pleading setting forth the claims for which the
Retirees Committee seeks intervention as a plaintiff.
Solutia Wants Testimonies
Solutia seeks to compel the deposition of corporate
representatives of the Commitment Parties and Citigroup Chief
Executive Officer Vikram Pandit.
Mr. Werder tells the Court that the Commitment Parties have
refused to produce corporate representatives in response to Rule
30(b)(6) of the Federal Rules of Civil Procedure deposition
notices to produce a person most knowledgeable on certain
limited topics.
According to Mr. Werder, the Commitment Parties have stated
that, at this point, they will not designate 30(b)(6) witnesses
at all. After all percipient depositions are completed, the
Commitment Parties "will" consider the request to designate
these witnesses.
Mr. Werder argues that the Commitment Parties' actions are
improper because:
-- the Commitment Parties are required to produce the
witness that have properly been noticed;
-- the Rules do not afford a party discretion to choose who
they want to testify; and
-- percipient witnesses are not the same as corporate
representatives.
Mr. Werder notes that percipient witnesses might be third
parties or employees who just happened to be in the right place
at the right time to have relevant information. A 30(b)(6)
witness, on the other hand, must testify about information not
only known to himself, but also information known or reasonably
available to the organization, he explains.
The Commitment Parties' refusal to comply with Rule 30(b)(6) is
"a stall tactic" to delay discovery with the hope that the clock
will expire in this expedited proceeding before the deposition
of their corporate representatives can be taken, Mr. Werder
contends. The Court has ordered that fact witness depositions
will be completed no later than Feb. 18, 2008.
The 30(b)(6) notices called for the designation of witnesses to
testify about:
(a) the history and extent of each Commitment Party's use of
Adverse Change Provisions or Market MAC Provisions in
commitment letters, agreements, and other documents
relating to the provision of financing;
(b) all instances in which each Commitment Party has
declined, refused or failed to fund a loan facility or
loan facilities by invoking, citing, or otherwise relying
on an Adverse Change Provision or Market MAC Provision,
and all instances in which each Commitment Party has
threatened to call a MAC; and
(c) the reason that each Commitment Party decided not to fund
Solutia's Exit Financing package.
With respect to Mr. Pandit, Solutia has noticed the need to
depose the CEO on Feb. 7, 2008. However, counsel to Citigroup
said in a conference call to Solutia's counsel that Citigroup
would not produce Mr. Pandit because Solutia had no good faith
basis to assert the CEO was involved in any issue relevant to
the case.
According to Susheel Kirpalani, Esq., at Quinn Emanuel Urquhart
Oliver & Hedges, LLP, in New York, the decision not to fund
Solutia's Exit Financing was made by none other than Mr. Pandit
himself. Only Mr. Pandit possesses unique knowledge as to the
decision he himself made to withdraw from fund the Exit
Financing in reliance upon market conditions -- a first ever for
Citigroup, Mr. Kirpalani tells the Court.
The Exit Financing is crucial to Solutia's hope to emerge from
Chapter 11 as planned, and to financially support its confirmed
Plan, Mr. Kirpalani asserts.
The possibility that Citigroup may not believe Mr. Pandit has
sufficiently relevant information to justify his disposition is
simply not a basis to withhold him, Mr. Kirpalani maintains.
* * *
To accommodate Solutia's financing needs, the Court agreed to
commence the trial with respect to the Complaint on Feb. 21,
2008, and conclude it on February 26, Rosemary L. Klein,
Solutia's senior vice president, general counsel and secretary,
disclosed in a filing with the Securities and Exchange
Commission.
As previously reported, funding of the obligations under the
Commitment Letter by the Commitment Parties is a condition to
consummation of Solutia's confirmed Plan. The equity commitment
letter with respect to the creditor rights offering contains
closing conditions including that the effective date of
Solutia's Plan will have occurred by Feb. 28, 2008, according to
Ms. Klein.
No assurance can be given that Solutia will prevail in its
dispute with the Commitment Parties or that the Court will enter
an order in time to force closing by Feb. 28, 2008, Ms. Klein
states. Even if a timely order is entered, no assurance can be
given that the Commitment Parties would not be able to obtain a
stay pending appeal. Any of these factors could cause Solutia
to fail to meet a closing condition under the creditor rights
offering commitment, she adds.
About Solutia Inc.
Based in St. Louis, Missouri, Solutia Inc. (OTCBB:SOLUQ) --
http://www.solutia.com/-- and its subsidiaries, engage in the
manufacture and sale of chemical-based materials, which are used
in consumer and industrial applications worldwide. Solutia has
operations in Malaysia, China, Singapore, Belgium, and Colombia.
The company and 15 debtor-affiliates filed for chapter 11
protection on Dec. 17, 2003 (Bankr. S.D.N.Y. Case No. 03-17949).
When the Debtors filed for protection from their creditors, they
listed US$2,854,000,000 in assets and US$3,223,000,000 in debts.
Solutia is represented by Richard M. Cieri, Esq., Jonathan S.
Henes, Esq., and Michael A. Cohen, Esq., at Kirkland & Ellis
LLP, in New York, as lead bankruptcy counsel, and David A.
Warfield, Esq., and Laura Toledo, Esq., at Blackwell Sanders
LLP, in St. Louis Missouri, as special counsel. Trumbull Group
LLC is the Debtor's claims and noticing agent. Daniel H.
Golden, Esq., Ira S. Dizengoff, Esq., and Russel J. Reid, Esq.,
at Akin Gump Strauss Hauer & Feld LLP represent the Official
Committee of Unsecured Creditors, and Derron S. Slonecker at
Houlihan Lokey Howard & Zukin Capital provides the Creditors'
Committee with financial advice. The Official Committee of
Retirees of Solutia, Inc., et al., is represented by Daniel D.
Doyle, Esq., Nicholas A. Franke, Esq., and David M. Brown, Esq.,
at Spencer Fane Britt & Browne, LLP, in St. Louis, Missouri, and
Frank M. Young, Esq., Thomas E. Reynolds, Esq., R. Scott
Williams, Esq., at Haskell Slaughter Young & Rediker, LLC, in
Birmingham, Alabama.
On Feb. 14, 2006, the Debtors filed their Reorganization Plan &
Disclosure Statement. On May 15, 2007, they filed an Amended
Reorganization Plan and on July 9, 2007, filed a 2nd Amended
Reorganization Plan. The Bankruptcy Court approved the Debtors'
amended Disclosure Statement on Oct. 19, 2007. On Oct. 22,
2007, the Debtor re-filed a Consensual Plan & Disclosure
Statement and on Nov. 29, 2007, the Court confirmed the Debtors'
Consensual Plan. (Solutia Bankruptcy News, Issue No. 118;
Bankruptcy Creditors' Service, Inc.,
http://bankrupt.com/newsstand/or 215/945-7000)
* * *
As reported in the Troubled Company Reporter-Latin America on
Dec. 10, 2007, Standard & Poor's Ratings Services assigned its
'B+' loan rating to Solutia Inc.'s (D/--/--) proposed US$1.2
billion senior secured term loan and a '3' recovery rating,
indicating the likelihood of a meaningful (50%-70%) recovery of
principal in the event of a payment default. The ratings are
based on preliminary terms and conditions. S&P also assigned
its 'B-' rating to the company's proposed US$400 million
unsecured notes.
Standard & Poor's expects to assign its 'B+' corporate credit
rating to Solutia if the company and its subsidiaries emerge
from Chapter 11 bankruptcy proceedings in early 2008 as planned.
S&P expect the outlook to be stable.
SOLUTIA INC: Resolves EPA Environmental Claim for US$3,600,000
--------------------------------------------------------------
Judge Prudence Carter Beatty of the U.S. Bankruptcy Court for
the Southern District of New York approved a settlement
agreement between Solutia Inc. and the Environmental Protection
Agency, giving the government a US$3,600,000 unsecured claim to
compensate for costs incurred to clean a toxic industrial site
on Ferry Street in St. Louis, Missouri.
The original environmental claim -- Claim No. 11276 -- asserted
contamination charges for US$9,800,000.
The Allowed EPA Claim and its remaining portions will be treated
in accordance with Solutia's Consensual Plan of Reorganization,
as confirmed on Nov. 29, 2007.
About Solutia Inc.
Based in St. Louis, Missouri, Solutia Inc. (OTCBB:SOLUQ) --
http://www.solutia.com/-- and its subsidiaries, engage in the
manufacture and sale of chemical-based materials, which are used
in consumer and industrial applications worldwide. Solutia has
operations in Malaysia, China, Singapore, Belgium, and Colombia.
The company and 15 debtor-affiliates filed for chapter 11
protection on Dec. 17, 2003 (Bankr. S.D.N.Y. Case No. 03-17949).
When the Debtors filed for protection from their creditors, they
listed US$2,854,000,000 in assets and US$3,223,000,000 in debts.
Solutia is represented by Richard M. Cieri, Esq., Jonathan S.
Henes, Esq., and Michael A. Cohen, Esq., at Kirkland & Ellis
LLP, in New York, as lead bankruptcy counsel, and David A.
Warfield, Esq., and Laura Toledo, Esq., at Blackwell Sanders
LLP, in St. Louis Missouri, as special counsel. Trumbull Group
LLC is the Debtor's claims and noticing agent. Daniel H.
Golden, Esq., Ira S. Dizengoff, Esq., and Russel J. Reid, Esq.,
at Akin Gump Strauss Hauer & Feld LLP represent the Official
Committee of Unsecured Creditors, and Derron S. Slonecker at
Houlihan Lokey Howard & Zukin Capital provides the Creditors'
Committee with financial advice. The Official Committee of
Retirees of Solutia, Inc., et al., is represented by Daniel D.
Doyle, Esq., Nicholas A. Franke, Esq., and David M. Brown, Esq.,
at Spencer Fane Britt & Browne, LLP, in St. Louis, Missouri, and
Frank M. Young, Esq., Thomas E. Reynolds, Esq., R. Scott
Williams, Esq., at Haskell Slaughter Young & Rediker, LLC, in
Birmingham, Alabama.
On Feb. 14, 2006, the Debtors filed their Reorganization Plan &
Disclosure Statement. On May 15, 2007, they filed an Amended
Reorganization Plan and on July 9, 2007, filed a 2nd Amended
Reorganization Plan. The Bankruptcy Court approved the Debtors'
amended Disclosure Statement on Oct. 19, 2007. On Oct. 22,
2007, the Debtor re-filed a Consensual Plan & Disclosure
Statement and on Nov. 29, 2007, the Court confirmed the Debtors'
Consensual Plan. (Solutia Bankruptcy News, Issue No. 118;
Bankruptcy Creditors' Service, Inc.,
http://bankrupt.com/newsstand/or 215/945-7000)
* * *
As reported in the Troubled Company Reporter-Latin America on
Dec. 10, 2007, Standard & Poor's Ratings Services assigned its
'B+' loan rating to Solutia Inc.'s (D/--/--) proposed US$1.2
billion senior secured term loan and a '3' recovery rating,
indicating the likelihood of a meaningful (50%-70%) recovery of
principal in the event of a payment default. The ratings are
based on preliminary terms and conditions. S&P also assigned
its 'B-' rating to the company's proposed US$400 million
unsecured notes.
Standard & Poor's expects to assign its 'B+' corporate credit
rating to Solutia if the company and its subsidiaries emerge
from Chapter 11 bankruptcy proceedings in early 2008 as planned.
S&P expect the outlook to be stable.
==================
C O S T A R I C A
==================
DENNY'S CORP: Net Income Increases to US$34.7 Mil. in FY 2007
-------------------------------------------------------------
Denny's Corporation reported US$34.7 million of net income for
the fiscal year of 2007, compared to US$30.3 million of net
income in 2006. For the three months ended Dec. 26, 2007, the
company earned US$16.7 million compared to net earnings of
US$2.3 million for the three months ended Dec. 27, 2006.
Nelson Marchioli, President and Chief Executive Officer, stated,
"Despite a challenging operating environment which got
progressively more difficult throughout the year, we were able
to deliver positive same store sales growth in 2007 and generate
earnings above our expectations. As importantly, we made
significant progress on our Franchise Growth Initiative (FGI).
The early success of FGI is moving us more quickly towards our
optimal business model with franchise restaurants now comprising
75% of the Denny's system and contributing to a 34% increase in
franchise income in the fourth quarter. We achieved positive
net unit growth for the first time in seven years and began to
build a robust franchise development pipeline. Our growth in
cash flow from operations combined with the proceeds from our
asset sales enabled Denny's to pay down over US$100 million in
debt for the second consecutive year."
Mr. Marchioli concluded, "Given the current economic conditions
and weak consumer spending environment, it is difficult to make
projections for 2008, but we will continue to execute on our
strategic initiatives which we believe will improve our long-
term financial performance and enhance shareholder value. We
are excited about the launch of our new `Real Breakfast 24/7'
campaign and the opportunity to reinforce Denny's real breakfast
dominance. We expect to expand our development pipeline to
facilitate consistent growth in our franchise system. We will
also continue to focus on increasing operating cash flow,
rationalizing our operating assets and strengthening our balance
sheet."
Fourth Quarter Results
For the fourth quarter of 2007, Denny's reported total operating
revenue, including company restaurant sales and franchise
revenue, of US$220.3 million compared with US$244.4 million in
the prior year quarter. The company restaurant sales component
of total revenue decreased US$29.9 million due primarily to the
sale of company restaurants to franchisees under the Franchise
Growth Initiative. During the fourth quarter, Denny's opened
two new company restaurants, closed two and sold 74 to
franchisee operators. A 1.2% decrease in same-store sales at
company restaurants added to the impact of 74 fewer equivalent
company restaurants in the fourth quarter.
Franchise revenue in the fourth quarter increased
US$5.8 million, or 28%, to US$26.6 million primarily as a result
of the Franchise Growth Initiative. During the quarter, Denny's
franchisees opened eleven new restaurants, closed four and
purchased 74 company restaurants for a net 63-unit increase in
equivalent franchise restaurants. The fourth quarter franchise
revenue increase included a US$3.1 million increase in franchise
fees, a US$1.6 million increase in franchise rental income, and
a US$1.1 million increase in royalties. A US$1.0 million
increase in franchise costs, primarily franchise rental expense,
partially offset the US$5.8 million increase in franchise
revenue resulting in a US$4.8 million, or 34%, increase in
franchise operating margin in the fourth quarter.
Company restaurant operating margin (as a percentage of company
restaurant sales) for the fourth quarter was 12.0%, a decrease
of 3.5 percentage points compared with the same period last
year. The margin decrease is partially attributable to the
impact on fixed costs from lower same-store sales as well as
continued cost pressures. Product costs for the fourth quarter
increased 0.2 percentage points to 25.3% of sales due primarily
to increasing commodity costs. Payroll and benefit costs
increased 2.0 percentage points to 42.6% of sales due primarily
to investment in customer experience through improved staffing
levels for both restaurant crew and management. Legal
settlement expense of US$0.5 million in the fourth quarter was
US$1.2 million, or 0.6 percentage points, higher due to an
atypical benefit of US$0.7 million in the prior year.
General and administrative expenses for the fourth quarter
increased US$1.1 million from the same period last year due
primarily to a US$1.5 million increase in core G&A expenses
attributable to higher incentive compensation along with
investments in staffing for growth initiatives, partially offset
by a US$400,000 reduction in share-based compensation.
Depreciation and amortization expense for the fourth quarter
decreased by US$1.4 million compared with the prior year period
due primarily to the sale of restaurant and real estate assets
over the past year. Operating gains, losses and other charges,
net, which reflect restructuring charges, exit costs, impairment
charges and gains or losses on the sale of assets, increased
US$14.0 million in the quarter due primarily to an US$11.3
million increase in gains on the sale of restaurants and real
estate from the prior year quarter.
Operating income for the fourth quarter increased US$7.5 million
to US$30.2 million due primarily to the increase in operating
gains. Excluding operating gains in both periods, operating
income for the fourth quarter decreased US$6.6 million on
US$24.1 million less total operating revenue.
Interest expense for the fourth quarter decreased
US$3.1 million, or approximately 23%, to US$10.2 million due
primarily to reduced debt balances and improved borrowing costs.
Franchise Growth Initiative
During the fourth quarter, Denny's made considerable progress on
its strategic initiative to increase franchise restaurant
development through the sale of certain company restaurants.
The company sold 74 restaurant operations and certain related
real estate to 19 franchisees for net asset sale proceeds of
US$42.6 million. This brings the total number of company
restaurants sold in 2007 to 130 and the total net asset sale
proceeds to US$73.2 million.
Fulfilling the unit growth expectations of this program, the
franchisees that purchased company restaurants during the
quarter signed development agreements to build an additional 32
new franchise restaurants. This brings the total number of
franchise restaurant development agreements signed in 2007 under
FGI to 67.
In addition to franchise development agreements signed under
FGI, Denny's has been negotiating development agreements outside
of the FGI program under its Market Growth Incentive Plan.
During the fourth quarter, franchisees signed MGIP agreements to
build an additional 17 franchise restaurants. This brings the
total for MGIP development agreements signed in 2007 to 53
restaurants.
The company also divested three other real estate assets during
the fourth quarter for net proceeds of US$2.1 million, bringing
the full year total for other real estate proceeds to
US$7.5 million.
During the fourth quarter, net cash proceeds from asset sales
along with cash flow from operations were used to reduce
outstanding debt by US$55.1 million. For 2007, total
outstanding debt was reduced by US$100.3 million, or
approximately 22%.
Business Outlook
Certain key considerations for understanding the company's
outlook for fiscal 2008 compared with its 2007 results include:
* 2008 will include 53 operating weeks (14 in the fourth
quarter) compared with 52 operating weeks in 2007
* The expectation of approximately 150 fewer equivalent
company restaurants in 2008 compared with 2007 due to the
impact of FGI across both years
* The expectation that guest traffic may remain negative for
much of 2008
* Improved product cost margins due to proactive menu mix
efforts which are expected to help offset higher commodity
costs
* Higher payroll costs as a result of higher minimum wage
rates and improved staffing levels
* Flat general and administrative expenses excluding
incentive and share-based compensation
* Lower interest expense due to significantly lower average
debt balances in 2008 compared with 2007
About Denny's Corp.
Headquartered in Spartanburg, South Carolina, Denny's
Corporation (Nasdaq: DENN) -- http://www.dennys.com/-- is a
full-service family restaurant chain in the U.S., with 394
company-owned units and 1,152 franchised and licensed units,
with operations in the United States, Canada, Costa Rica, Guam,
Mexico, New Zealand and Puerto Rico.
* * *
Denny's Corp. carries Standard & Poor's 'B+' Long Term Foreign
Issuer and 'B+' Long Term Local Issuer ratings.
===================================
D O M I N I C A N R E P U B L I C
===================================
AES CORP: Restarts Redondo Beach Unit
-------------------------------------
AES Corp. has restarted the 480-megawatt Unit 7 at its natural
gas-fired power station in Redondo Beach, Reuters reports,
citing the California Independent System Operator.
Reuters relates that Unit 7 was closed down on Feb. 11, 2008,
due to planned work.
According to Reuters, the Redondo station has four units:
-- 175-megawatt Unit 5,
-- 175-megawatt Unit 6,
-- 480-megawatt Unit 7, and
-- 480-megawatt Units 8.
Unit 8 was also shut down on Jan. 6, 2007, due to planned work,
Reuters states.
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.
The company has Latin America operations in Argentina, Brazil,
Chile, Dominican Republic, El Salvador and Panama.
* * *
The AES Corporation still carries Moody's Investors Service's
Corporate Family Rating and the senior unsecured rating assigned
at B1.
As of Feb. 6, 2008, the company still carries Fitch's 'BB/RR1'
rating on US$500 million issue of senior unsecured notes due
2017.
* DOMINICAN REPUBLIC: Inter-American Offers Electrical Pact
-----------------------------------------------------------
Moises Pineda, Inter-American Development Bank's representative
in the Dominican Republic, has offered an electrical agreement
to the country to help solve energy problem, Listin Diario
reports.
According to Listin Diario, Mr. Pineda proposes a pact in order
to protect institutions so they can function and the country can
reach its competitiveness. The Inter-American Development
prefers that the energy distributors being run by the government
be privatized, whenever the regulatory agencies are strong
enough to demand the required investments.
Mr. Pineda told Listin Diario that many people have asked him
why the Dominican Republic's energy problem hasn't been solved.
He said that "the advances aren't so great" due to political
factors, blaming the "institutional weakness."
The Inter-American Development acknowledges that it is the
country which has to implement its own policy in the electrical
area, Listin Diario says, citing Mr. Pineda. He said he has
spoken with people to favor more Inter-American interference.
"We do so through the conditions we request in the loans and
sometimes the advance is gradual. What we cannot do is to play
the role of the national institutions," Mr. Pineda commented to
Listin Diario.
Mr. Pineda told Listin Diario that though the Inter-American
Development may be allowed to interfere in the Dominican
Republic's decision making autonomy, and through the credits the
information is bolstered for decision-making process, the
advances may not be so great as they depend on political
factors.
* * *
As reported in the Troubled Company Reporter-Latin America on
Feb. 12, 2008, Standard & Poor's Ratings Services placed its
'B+' long- and 'B' short-term sovereign credit ratings on the
Dominican Republic on CreditWatch with negative implications.
=============
E C U A D O R
=============
PETROBRAS ENERGIA: 4th Qtr. Net Income Drops to ARS206 Million
--------------------------------------------------------------
Petrobras Energia Participaciones S.A.'s net income decreased to
ARS206 million in the fourth quarter ended Dec. 31, 2007,
compared to ARS214 million in the same quarter in 2006. This
result is attributable to the 75.82% interest in Petrobras
Energia S.A., Petrobras Energia Participaciones' only asset,
whose net income for 2007 quarter was ARS$276 million.
Other income, net accounted for ARS156 million and ARS95 million
gains in 2007 and 2006 quarters, respectively. Other income net
for 2007 quarter mainly reflect:
-- ARS62 million gain from the sale of oil areas in
Argentina,
-- ARS40 million gain from the sale of Petroquimica Cuyo
S.A.,
-- ARS16 million gain from the sale of Yacylec S.A.,
-- ARS1,014 million gain from the sale of a 40% interest in
Petrobras de Valores Internacional de Espa¤a S.L. (assets
in Peru),
-- ARS214 million impairment charge on assets in Venezuela,
and
-- ARS759 million impairment charge on assets in Ecuador.
Other income net for 2006 quarter mainly reflect:
-- ARS85 million gain from the sale of oil areas in
Argentina,
-- ARS10 million gain from reversal of an allowance on
the investment in Hidroneuquen S.A., and
-- ARS6 million impairment charge on assets in
Venezuela.
Operating Income by Business Segment
* Oil and Gas Exploration and Production
In 2007 quarter net sales increased 28.1% to ARS1,359 million,
mainly in Peru, Ecuador and Argentina, primarily due to a
significant increase of 40% in average prices, in line with
international reference prices. This improvement was partially
offset by a 7% reduction in sales volumes, mainly in Bolivia and
Argentina, to 116 thousand barrels of oil equivalent per day in
2007 quarter. This drop is in line with the 7.2% decline in
production volumes of oil equivalent, which averaged a daily
volume of 117 thousand barrels.
This reduction is basically attributable to reduced oil
production in Argentina and Bolivia. In the case of Bolivia,
reduced production derives from changes in the terms and
conditions of the operating agreement in 2007. Reduced
production in Argentina results from a strong drop in oil
deliveries mainly due to strikes associated with trade union
conflicts in 2007 quarter and, to a lesser extent, the natural
decline of mature fields. In Ecuador, reduced production is
attributable to a gradual recovery in the development of Block
18 after the impasse derived from strikes organized by local
communities during the first half of 2007. In Peru, production
rose by 9.2% as a consequence of higher investments in well
drilling and repair works.
Crude oil sales increased 35.6% to ARS1,214 million in 2007
quarter, mainly as a result of a 43% increase in average prices,
in line with international reference prices. This improvement
was partially offset by a 3.8% decline in sales volumes, mainly
in Argentina, lessened by an improvement in operations in Peru.
Gas sales decreased 16.3% to ARS123 million in 2007 quarter,
primarily as a consequence of reduced revenues in Bolivia due to
the new terms and conditions of the operating agreement. In
Argentina, revenues from gas sales slightly declined 2.2% to
P$91 million in 2007 quarter, due to a 7.1% reduction in sales
volumes as a consequence of lower production volumes available
as a result of union strikes in 2007 quarter. This drop was
offset by a 5.4% improvement in sales prices that was primarily
attributable to the recovery in gas prices for industries and
power generation companies in compliance with the plan created
by the Secretary of Energy and higher export prices as a
consequence of contract renegotiation and the rise in
international reference prices.
Gross profit increased 8.8% to ARS571 million in 2007 quarter.
Margin on sales dropped to 42% in 2007 quarter from 49.5% in
2006 quarter. The lifting cost rose 16% to ARS16.5 per barrel
of oil equivalent, primarily due to the increase in fees for oil
services and labor costs of operations in Argentina, within the
framework of general price increases. In addition, increased
pulling and workover activities required to support production
at mature fields and the greater incidence of depreciation and
fixed costs derived from reduced production levels had a
negative impact in Argentina. In addition, amendment to the
Hydrocarbons Law 42 had a negative impact in Ecuador while in
Peru the higher royalty charge, due to the application of
progressive rates derived from improved prices, and the increase
in depreciation resulting from higher investments also had an
adverse effect.
* Liquid Hydrocarbon and Natural Gas Reserves
As of Dec. 31, 2007, liquid hydrocarbon and natural gas proved
reserves totaled 482,7 million barrels of oil equivalent (264.9
million oil barrels and 1,307 billion cubic feet of gas),
accounting for an 8% decrease in reserves compared to reserves
as of Dec. 31, 2006, almost all attributable to the sale of a
40% interest in Petrobras de Valores Internacional de Espana
S.L., holding company whose main asset is its 99.79% interest in
the capital stock of Petrobras Energia Peru S.A., a company that
operates Lote X.
Estimated reserves as of Dec. 31, 2007, were audited by De
Golyer and Mac Naughton, international technical consultants,
and the audit covered approximately 90% of estimated reserves
operated by the Company and 71% of the Company's total reserves.
During 2007 fiscal year, a net addition of reserves of
approximately 54 million barrels of oil equivalent was recorded:
-- 18 million barrels of oil equivalent were added due to
extensions of known accumulations through exploration
and revisions of estimated reserves in gas fields in
Argentina; and
-- 33 million barrels of oil equivalent were added due to
extension of drilling and secondary recovery projects in
Peru.
Divestment of assets in Peru resulted in a 46 million barrels of
oil equivalent reduction. In addition, divestment of an asset at
the Neuquen basin in Argentina resulted in a one million barrels
of oil equivalent reduction.
Production totaled 50.6 million barrels of oil equivalent.
Liquid hydrocarbon and natural gas accounted for 55% and 45%,
respectively, of total proved reserves; 56% of total proved
reserves are located in Argentina.
As of December 2007, total oil and gas proved reserves of
Petrobras Energia were equal to 9.5 years of production,
measured according to 2007 oil and gas production levels.
* Refining and Distribution
Gross profit totaled a ARS33 million gain in 2007 quarter
compared to a ARS36 million loss in 2006 quarter, with a
positive gross margin of 2% in 2007 quarter and a negative gross
margin of 3% in 2006 quarter. The rise in 2007 quarter
primarily derives from a recovery of marketing margins due to an
improvement in sales prices.
Net sales for refined products rose 35.3% to ARS1,630 million in
2007 quarter, basically due to a 28% improvement in sales prices
attributable to increased domestic and international prices,
partially offset by the new withholding policy implemented as
from November 2007, and a 6.7% rise in sales volumes.
Crude oil volumes processed during 2007 quarter averaged 76.7
thousand barrels per day, 9% higher compared to 2006 quarter, as
a consequence of the processing capacity expansion carried out
at San Lorenzo Refinery, with effect as from November 2006.
Total diesel oil sales volumes rose 4.9% due to increased demand
in the domestic market.
Total sales volumes of commercial gasoline remained almost
unchanged in 2007 quarter compared to 2006 quarter, with an
increase in domestic market sales directed to supply the growing
domestic demand for gasoline to the detriment of exports.
Domestic sales increased 6.2%, driven by the growth of the
gasoline market.
Sales volumes of reformer plant by-products rose 21.2% and other
heavy distillates and cracking feedstock sales volumes increased
15%. Cracking feedstock was primarily directed to supply the
growing domestic demand for electric power and surplus volumes
were sold in export markets. The rise in sales volumes was
possible due to increased product availability derived from the
above mentioned expansion works.
* Petrochemicals
Net sales rose 32.9% to ARS1,021 million in 2007 quarter, mainly
due to improved sales prices, in line with the increase in
international reference prices.
Total styrenics sales in Argentina increased 6% to ARS291
million in 2007 quarter, primarily due to a 11,4% improvement in
sales average prices, partially offset by a 4% drop in sales
volumes.
Styrenics sales in Brazil rose 21.6% to ARS400 million in 2007
quarter, due to the combined effect of an 11% improvement in
prices, in line with the rise in international reference prices,
and a 10% increase in sales volumes of the main products.
Fertilizers sales rose 53.7% to ARS355 million in 2007 quarter,
mainly due to a 64% increase in sales prices in line with the
rise in international prices as a result of the growing world
demand for these products, partially offset by a 6% decline in
sales volumes. The drop in sales volumes derives from reduced
production of the main inputs as a result of the ammonia plant
shutdown for scheduled maintenance works.
Gross profit totaled ARS126 million in 2007 quarter. Margin on
sales decreased to 12.3% in 2007 quarter from 15.2% in 2006
quarter, primarily due to a significant increase in raw material
costs which could only be partially passed through to sales
prices.
Administrative and selling expenses grew to ARS104 million in
2007 quarter from ARS83 million in 2006 quarter, predominately
in the freight, logistics costs, storage, charges and taxes
lines.
* Hydrocarbon Marketing and Transportation
Sales revenues dropped 11.4% to ARS195 million in 2007 quarter,
mainly due to a significant decline in gas and liquefied
petroleum gas brokerage services and reduced revenues from gas
sales, partially offset by improved revenues from liquid fuel
sales.
Sales revenues from gas and LPG brokerage services totaled ARS17
million and ARS32 million in 2007 and 2006 quarters,
respectively.
Sales revenues from gas produced by the Company decreased 17.8%
to ARS88 million in 2007 quarter, primarily due to reduced
production at the Austral basin as a result of the 13-day strike
in November and December 2007, partially offset by the start up
of production in El Mangrullo field in 2007.
Liquid fuel sales revenues increased 10.6% to ARS90 million in
2007 quarter, primarily due to a 23.7% rise in sales prices, in
line with international reference prices, partially offset by a
10.6% decline in sales volumes. Sales volumes decreased to 64.7
thousand tons in 2007 quarter from 72.4 thousand tons in 2006
quarter, due to lower gas availability as a result of the strike
mentioned above.
* Electricity
Net sales of electricity generation decreased 15% to ARS113
million in 2007 quarter, mainly due to a 28.8% reduction in
sales volumes, partially offset by a 19.4% improvement in energy
average sales prices. The increase in sales prices is
attributable to the higher electricity demand that resulted in
energy deliveries by less efficient power plants and contract
renewal at higher prices.
Net sales attributable to Genelba Power Plant decreased 4.6% to
ARS103 million in 2007 quarter, primarily due to lower sales
volumes, offset by improved sales prices. Energy sales dropped
17.8% to 1,104 giga watt-hour in 2007 quarter, mainly derived
from scheduled maintenance works performed in November 2007.
The sales average price increased 16% to ARS93.3 per megawatt-
hour in 2007 quarter. As a result of the maintenance works
mentioned above, the plant factor fell to 65% in 2007 quarter
from 92% in 2006 quarter and availability dropped to 69% in 2007
quarter from 91% in 2006 quarter.
Net sales attributable to Pichi Picun Leufu Hydroelectric
Complex decreased 57.7% to ARS11 million in 2007 quarter due to
the effect of lower sales volumes, partially offset by improved
sales prices. During 2007 quarter, energy delivered declined
70.9% to 102 giga watt-hour, primarily due to reduced water
flows at the Comahue basin in 2007 quarter. Average prices rose
45.2% to ARS107.8 per megawatt-hour in 2007 quarter.
(in millions of pesos)
(Consolidated Information) Dec-07 Dec-06
Current Assets
Cash & Investments 1,192 1,565
Accounts receivable-trade 1,605 1,438
Inventories & Other Assets 3,655 2,071
Total Current Assets 6,452 5,074
Non-current Assets
Investments 3,270 3,630
Fixed Assets 10,609 10,838
Other Assets 1,026 937
Total Non-current Assets 14,905 15,405
Total Assets 21,357 20,479
Current Liabilities
Accounts payable 1,867 1,603
Short-Term Debt 1,922 2,646
Other Liabilities 932 916
Total Current Liabilities 4,721 5,165
Non-Current Liabilities
Long-Term Debt 5,430 4,716
Other Liabilities 1,959 2,028
Total Non-current Liabilities 7,389 6,744
Total Liabilities 12,110 11,909
Minority Interest in Subsidiaries 2,583 2,350
Shareholders' Equity 6,664 6,220
About Petrobras Energia
Petrobras Energia Participaciones SA (Buenos Aires: PBE,
NYSE:PZE) through its subsidiary, explores, produces, and
refines oil and gas, as well as generates, transmits, and
distributes electricity. It also offers petrochemicals, as well
as markets and transports hydrocarbons. The company conducts
oil and gas exploration and production operations in Argentina,
Venezuela, Peru, Ecuador, and Bolivia.
* * *
In January 2007, Fitch Argentina Calificadora de Riesgo affirmed
Petrobras Energia's B+ international currency rating, B+
unsecured senior debt rating and BB- local currency rating.
====================
E L S A L V A D O R
====================
HERBALIFE LTD: Signs Three-Year Pact With Kaiser Permanente
-----------------------------------------------------------
Herbalife Ltd. and the Kaiser Permanente Los Angeles Triathlon
have entered into a three-year agreement naming Herbalife the
presenting sponsor and official nutrition company of the event,
to be held on Sunday, Sept. 7, 2008. For the first time, the
triathlon will feature a corporate relay division where
companies can field teams vying for the Herbalife Corporate
Triathlon Championship.
Now in its ninth year, the Kaiser Permanente Los Angeles
Triathlon presented by Herbalife is one of the city's leading
sporting and fitness events attracting participants from across
the country and around the world. The agreement gives Herbalife
rights on all race materials, signage at the event, and booth
space at the pre- and race-day expo where Herbalife independent
distributors will sample products.
The 2008 event, which is part of the Lifetime Fitness Triathlon
Series, has Olympic and sprint distance courses that start at
Venice Beach with an ocean swim and travels 24-miles on a bike
and run course through some of Los Angeles' most historic and
memorable landscapes, ending downtown at the STAPLES Center.
"Health and fitness and the sport of triathlon go hand-in-hand,
particularly here in Southern California," said Jack Caress, Los
Angeles Triathlon race director. "Our participants have an
inherent interest in nutrition and performance, and the
Herbalife partnership and products will be of real importance to
them. We are very excited about being able to offer this
opportunity to them."
"The LA Tri is a great opportunity for company leaders to
encourage their employees to lead active, healthy lifestyles by
supporting teams to participate in the corporate challenge,"
said Herbalife Chairman and CEO Michael Johnson, who is also a
triathlete. "In addition to Team Herbalife competing, along
with several triathletes we sponsor from around the world, we're
looking forward to our independent distributors cheering on
competitors through the streets of LA."
About Herbalife Ltd.
Herbalife Ltd. (NYSE: HLF) -- http://www.herbalife.com/--
Herbalife, now in its 26th year, conducts business in 62
countries. The company does business with several manufacturers
worldwide and has its own manufacturing facility in Suzhou,
China as well as major distribution centers in Venray,
Netherlands, Japan, Los Angeles, Calif., Memphis, Tenn.,
Guadalajara, Mexico, and El Salvador. The company also has
operations in Venezuela.
* * *
As reported in the Troubled Company Reporter on April 5, 2007,
Standard & Poor's Ratings Services said that its 'BB+' corporate
credit rating on Los Angeles-based Herbalife Ltd. remains on
CreditWatch with negative implications following the company's
announcement that the company's board of directors has rejected
a bid to be acquired by Whitney V L.P. The board indicated that
although it views Whitney's bid as too low, it would consider an
improved offer.
=================
G U A T E M A L A
=================
ALCATEL-LUCENT SA: Posts EUR3.52 Billion Net Loss for 2007
----------------------------------------------------------
Alcatel-Lucent S.A. released its financial results for full year
and fourth quarter ended Dec. 31, 2007.
Alcatel-Lucent posted EUR3.52 billion in net losses on
EUR17.79 billion in net revenues for full year 2007, compared
with EUR522 million in net profit on EUR18.25 billion in net
revenues for 2006.
The company registered EUR2.58 billion in net losses on
EUR5.23 billion in net revenues for the fourth quarter 2007,
compared with EUR618 million in net losses on EUR4.42 billion in
net revenues for the same period in 2006.
As of Dec. 31, 2007, Alcatel-Lucent had EUR271 million in net
cash, compared with EUR24 million in net debt as of
Sept. 30, 2007.
The funded status of pensions and other post retirement benefits
(OPEB) amounted to EUR2.81 billion at year-end 2007, compared
with EUR2.44 million as of Sept. 30, 2007.
The group reduced its exposure to equity markets in November
2007. As of Dec. 31, 2007, the global asset allocation of the
group's funds was:
* 20% in equity securities,
* 60% in bonds, and
* 20% in alternatives.
Alcatel-Lucent's board of directors, after considering the
results and more uncertain market outlook, has decided to
suspend dividend payment for 2007.
"This quarter, we delivered solid year-over-year revenue growth
of 18.4% with the strongest performance in the carrier and
services businesses," Patricia Russo, Alcatel-Lucent CEO, said.
"These results reflect the strengthening of our position in IP
and optics, a recovery of our GSM business and the ramp up of
WCDMA.
"Our adjusted gross margin -- excluding the one-time impact of
the charge in the cost recognition methodology for this large
wireless construction contract -- was roughly flat quarter-over-
quarter, despite a challenging pricing environment and an
unfavorable shift in our geographic and product mix. Our
adjusted operating margin has significantly improved
sequentially, reflecting higher volumes and, to a lesser extent,
a reduction in our operating expenses.
"As we have said, 2007 was a transition year for the company as
we executed our integration plans in a difficult market
environment. Notwithstanding these challenges, the performance
of our wireline, enterprise and services business has been
solid. On the other hand, the slower-than-expected ramp up of
revenues in WCDMA and NGN/IMS, two areas in which we have been
investing, has severely impacted profitability."
Outlook
Alcatel-Lucent expects a sequential drop in revenues of 20% to
25% in the first quarter of 2008. The company expects to incur
a loss at the adjusted2 operating income1 level in the first
quarter of 2008 as a result of this seasonality.
Given the expected improvement in the gross margin as well as a
reduction in adjusted operating expenses, Alcatel-Lucent expects
an adjusted operating margin in the low to mid single digit
range in percentage of revenues in full year 2008.
"While the long term prospects of our industry remain good, the
macroeconomic environment has created uncertainty in our markets
in the last few months," Ms. Russo said. "Our initial
projections for 2008 indicate that the global Telecommunications
equipment and related services market should be flat to slightly
up at constant EUR/US$ rate and slightly down at current rate.
"With this in mind, we will continue to execute against our
three-year plan. The ongoing implementation of a more selective
pricing approach as well as product cost reduction program
should enable us to improve our gross margin. We also intend to
make continued good progress in our fixed costs reduction plan."
About Alcatel-Lucent
Headquartered in Paris, France, Alcatel-Lucent S.A. --
http://www.alcatel-lucent.com/-- provides solutions that enable
service providers, enterprises and governments worldwide to
deliver voice, data and video communication services to end
users.
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 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.
AFFILIATED COMPUTER: Amends Solano County Customer Service Pact
---------------------------------------------------------------
Affiliated Computer Services Inc. has amended the contract with
Solano County, California, to establish and operate a 311
customer service center within the county. The 3.5-year
contract has a value of US$4 million.
The agreement leverages Affiliated Computer's existing
information technology services contract with the county and its
global call center expertise to implement a 311 customer service
center to handle citizen requests for non-emergency services.
The company will provide implementation services, including
development of a knowledge database and service request workflow
and its employees will manage and staff the customer service
center.
The consolidated customer service center is a key component of
the Solano County Board of Supervisors' goal to improve customer
service. Along with processing citizen requests, the new center
will track performance trends in the delivery of services,
helping the county better understand and meet the evolving needs
and expectations of citizens in the 21st century.
"Through this pilot program, the county will be able to move
swiftly in the development of the customer service center,
taking advantage of ACS' deep experience in this area," said
Solano County Administrator, Michael D. Johnson. "The county is
partnering with a company that has a proven track record in
Solano County and is well-recognized for the quality of customer
service provided by its service centers."
The company has provided IT services to Solano County since
1989. Services provided support the county's infrastructure,
including desktop, applications, and helpdesk environments.
Affiliated Computer and the county signed a renewed contract in
2006 with a length of up to seven years if all options are
exercised.
"We're focused on expanding our successful relationship with
Solano County," said Affiliated Computer Services managing
director for State and Local Solutions, Ann Kieffaber. "This
partnership demonstrates that we work closely with our clients
to identify and deliver innovative solutions that benefit the
county's citizens."
Affiliated Computer currently operates more than 70 customer
service centers globally in support of government and commercial
clients, handling 750,000 calls daily. The centers employ
17,000 professionals.
About Affiliated Computer Services
Headquartered in Dallas, Texas, Affiliated Computer Services
Inc. (NYSE:ACS) -- http://www.acs-inc.com/-- provides business
process outsourcing and information technology services to
commercial and government clients. The company has two segments
based on the clients it serves: commercial and government. The
company provides services to a variety of clients including
healthcare providers and payers, manufacturers, retailers,
wholesale distributors, utilities, entertainment companies,
higher education institutions, financial institutions, insurance
and transportation companies. The company has global operations
in Brazil, China, Dominican Republic, India, Guatemala, Ireland,
Philippines, Poland, and Singapore.
* * *
As reported in the Troubled Company Reporter on Jan. 30, 2008,
Moody's Investors Service confirmed Affiliated Computer
Services' Ba2 corporate family rating with a stable rating
outlook. The rating confirmation concluded a review for
possible downgrade initiated on March 20, 2007. The ratings of
ACS remained under review for possible downgrade.
=============
J A M A I C A
=============
AIR JAMAICA: Loses Court Battle Against Flight Attendants
---------------------------------------------------------
The Industrial Disputes Tribunal has ruled against Air Jamaica
in the airline's long-standing battle with its flight
attendants, Janet Silvera at The Jamaica Gleaner reports.
According to The Gleaner, Air Jamaica will have to give out US$1
million in retroactive payments to the attendants.
The attendants were entitled to receive retroactive payments for
pre- and post-flight duties from June 1, 2003, up to October
2007, The Gleaner says, citing the Industrial Disputes Tribunal.
Kavan Gayle, head of the Bustamante Industrial Trade Union that
represents the flight attendants, commented to The Gleaner,
"They are supposed to perform certain duties one hour and 15
minutes before departure and 30 minutes after flight arrivals,
but this was never calculated in their earnings."
The union expressed its concerns in October 2005. It agreed
with the Air Jamaica's management that the payment would be
made, but could not agree on the retroactivity, The Gleaner
says, citing Mr. Gayle.
The two parties have been facing each other at the Industrial
Disputes Tribunal from February 2006 to Dec. 19, 2007, The
Gleaner notes.
Mr. Gayle told The Gleaner, "We were willing to work out
something with the airline, and were still willing to negotiate
an agreement. We have since written to the company indicating
that we have received our copy of the award, and we have
requested that they indicate to us the earliest date when
payment will be made."
Headquartered in Kingston, Jamaica, Air Jamaica --
http://www.airjamaica.com/-- was founded in 1969. It flies
passengers and cargo to almost 30 destinations in the Caribbean,
Europe, and North America. Air Jamaica offers vacation packages
through Air Jamaica Vacations. The company closed its intra-
island services unit, Air Jamaica Express, in October 2005. The
Jamaican government assumed full ownership of the airline after
an investor group turned over its 75% stake in late 2004. The
government had owned 25% of the company after it went private in
1994. The Jamaican government does not plan to own Air Jamaica
permanently.
* * *
As reported in the Troubled Company Reporter-Latin America on
June 12, 2007, Moody's Investors Service assigned a rating of B1
to Air Jamaica Limited's guaranteed senior unsecured notes.
On July 21, 2006, Standard & Poor's Rating Services assigned a
"B" long-term foreign issuer credit rating on Air Jamaica Ltd.,
which is equal to the long-term foreign currency sovereign
credit rating on Jamaica, based on the government's
unconditional guarantee of both principal and interest payments.
AIR JAMAICA: Union Wants Airline To Pay All Bills Before Sale
-------------------------------------------------------------
Air Jamaica must pay all outstanding bills before its sale,
Radio Jamaica reports, citing Granville Valentine, vice
president of the National Workers Union representing the
airline's employees.
Radio Jamaica relates that Jamaica's finance ministry is seeking
a buyer to take control of the cash strapped national airline.
According to Radio Jamaica, the union is demanding payment in
workers' statutory deductions before the airline is sold. Union
vice president Granville Valentine is insisting that the Air
Jamaica prioritize the issue of National Housing Trust arrears.
The union is worried that Air Jamaica "could change hand without
a settlement being reached" on arrears that have been overdue
for over ten years.
"If any persons are going to be made redundant or any positions
are going to be made redundant then all monies owed on behalf of
that worker must be paid also," Mr. Valentine commented to Radio
Jamaica.
Headquartered in Kingston, Jamaica, Air Jamaica --
http://www.airjamaica.com/-- was founded in 1969. It flies
passengers and cargo to almost 30 destinations in the Caribbean,
Europe, and North America. Air Jamaica offers vacation packages
through Air Jamaica Vacations. The company closed its intra-
island services unit, Air Jamaica Express, in October 2005. The
Jamaican government assumed full ownership of the airline after
an investor group turned over its 75% stake in late 2004. The
government had owned 25% of the company after it went private in
1994. The Jamaican government does not plan to own Air Jamaica
permanently.
* * *
As reported in the Troubled Company Reporter-Latin America on
June 12, 2007, Moody's Investors Service assigned a rating of B1
to Air Jamaica Limited's guaranteed senior unsecured notes.
On July 21, 2006, Standard & Poor's Rating Services assigned a
"B" long-term foreign issuer credit rating on Air Jamaica Ltd.,
which is equal to the long-term foreign currency sovereign
credit rating on Jamaica, based on the government's
unconditional guarantee of both principal and interest payments.
SUGAR CO: Frome Eyes 50,090 Tons of Sugar Production in 2008
------------------------------------------------------------
The Sugar Company of Jamaica Limited's Frome factory is
expecting sugar production of 50,090 tons this year, The Jamaica
Gleaner reports.
According to The Gleaner, Frome's expected sugar output is just
under half of the 111,867 tons that the Sugar Company's five
factories are expected to churn out in the 2008 crop year ending
July.
As reported in the Troubled Company Reporter-Latin America on
Feb. 13, 2008, Frome is conducting experiments with green cane
harvesting in a move to boost harvest and lessen losses due to
sugar cane burning, the Jamaica Information Service reports.
Jamaican agriculture minister Christopher Tufton had said that
he started collaborating with stakeholders in the sugar industry
to lessen cane fires at sugar estates, particularly that of the
Sugar Company of Jamaica. The Frome Estate in Westmoreland
suffered six cane fires in December 2007. About 15 cane fires
were reported in Frome since October 2007. Minister Tufton said
that the fires raised serious concerns against the background of
the burning of some 200,000 tons of cane (one-third of Frome's
production) in 901 illicit fires in 2006. The Sugar Company's
operations vice-president Ashton Smith said that illegal fires
at Frome in 2006 cost the sugar industry J$150 million in
revenue. He said that once the cane is burnt, it must be
processed within 24 hours, but Frome could process about 5,500
tons daily while at times, as much as 20,000 tons of cane are
burnt illegally at a time. The Frome Division operations vice
president Aston Smith believed that the Frome factory would
exceed the 2008 target of producing 51,249 tons of sugar from
625,000 tons of cane.
Mr. Smith told The Gleaner that the European Union, Jamaica's
sugar chief market, called for all imports to be derived from
green cane by 2010.
The Gleaner relates that the increased global demand for green
cane costs the Sugar Company less energy to process and the cane
stays fresher longer.
The Sugar Company has been facing big reductions in European
Union subsidies for producers in the Caribbean, Africa, and the
Pacific. The firm will be privatized later in 2008 after years
of amassing over US$13 billion debt. The government is selling
the firm's five sugar factories, but not the cane lands, The
Gleaner states.
About The Sugar Company
The Sugar Company of Jamaica Limited aka SCJ was formed in
November 1993 by a consortium made up of J. Wray & Nephew
Limited, Manufacturers Investments Limited and Booker Tate
Limited. The three companies each held 17% equity in SCJ, with
the remaining 49% being held by the government of Jamaica. In
1998, the government became the sole shareholder of SCJ by
acquiring the interests of the members of the consortium. Its
stated goal was to maximise efficiency, productivity and
profitability of the three sugar factories, within three years.
The principal activities of the company are the cultivation of
cane and the manufacture and sale of sugar and molasses.
The Sugar Company of Jamaica Limited registered a net loss of
almost US$1.1 billion for the financial year ended Sept. 30,
2005, 80% higher than the US$600 million reported in the
previous financial year. Sugar Company blamed its financial
deterioration to the reduction in sugar cane production.
According to published reports, the Jamaican government has
taken responsibility for the payment of the firm's debts. Radio
Jamaica has said that to date, the five sugar factories have
incurred J$3 billion in debts. The government is now selling
the factories.
===========
M E X I C O
===========
BERRY PLASTICS: Completes Acquisition of Captive Plastics Inc.
--------------------------------------------------------------
Berry Plastics Corporation, an Apollo Management, L.P. and
Graham Partners portfolio company, completed the previously
disclosed acquisition of 100% of the outstanding common stock of
Captive Holdings Inc., the parent company of Captive Plastics
Inc., a First Atlantic Capital, Ltd. portfolio company.
About the Transaction
The Troubled Company Reporter on Jan. 7, 2008 reported that the
company has entered into an agreement to acquire 100% of the
outstanding common stock of Captive Holdings Inc.
Pursuant to the acquisition agreement, Berry will pay
US$500 million for Captive, subject to certain customary
adjustments. Berry has obtained financing commitments to
finance the transaction. The transaction will close in the
first quarter of 2008 and is subject to customary closing
conditions.
About Captive Plastics
Based in Piscataway, New Jersey, Captive Plastics --
http://www.captiveplastics.com -- makes plastic containers for
the health care, personal care, and food and beverage
industries. Captive Plastics operates over a dozen
manufacturing facilities across the US and provides over 550
varieties of rigid plastic packaging products, including wide
mouth, cylinder, round, and square containers. Its services
include engineering, computer aided design, mold construction,
production, decorating, and filling. First Atlantic Capital, a
private investment firm, owns a majority interest in Captive
Plastics.
About Berry Plastics
Headquartered in Evansville, Nebraska, Berry Plastics
Corporation -- http://www.berryplastics.com/ -- is a
manufacturer and supplier of a diverse mix of rigid plastics
packaging products focusing on the open top container, closure,
aerosol overcap, drink cup and housewares markets. The company
sells a broad product line to over 12,000 customers. Berry
Plastics concentrates on manufacturing high quality, value-added
products sold to marketers of institutional and consumer
products. In 2004, the company created its international
division as a separate operating and reporting division to
increase sales and improve service to international customers
utilizing existing resources. The international segment
includes the company's foreign facilities and business from
domestic facilities that is shipped or billed to foreign
locations. The company has manufacturing facilities in the
United States, Mexico, Canada, Europe and China.
* * *
As reported in the Troubled Company Reporter-Latin America on
Feb. 13, 2008, Moody's Investors Service affirmed the Corporate
Family Rating of B3 of Berry Plastics Corporation (fka Berry
Plastics Holdings Corp.) and downgraded certain instrument
ratings. Moody's said the outlook is stable. The rating action
is in response to the company's announcement on Feb. 11, 2008,
that it had entered into a US$520 million senior secured bridge
loan facility (not rated by Moody's) to finance its
US$500 million acquisition of Captive Holdings Inc.
COLLINS & AIKMAN: Bayer Unit Buys IP Rights on Thermoplastics
-------------------------------------------------------------
Bayer MaterialScience AG has purchased the thermoplastic
polyurethanes related intellectual property rights from Collins
& Aikman Corporation. In this way, Bayer MaterialScience is
extending its portfolio for TPU molded skins used in instrument
panels in the vehicle interior.
Financial details of the transaction were not being disclosed.
The intellectual property rights acquired comprise different TPU
formulations and patents and the expertise that goes with it.
The thermoplastic "size-reduction technologies" developed by C&A
were a critical factor in the decision to buy. These "micro-"
and "mini-beading" methods lend powder particles a specific
shape and a size distribution that enables superior flow in the
mold during the melting process. TPU grades produced in this
way are ideal for slush molding (sintering), for which Bayer
MaterialScience already holds a wide range of patents. This
method is used to mass-produce molded skins for instrument
panels. The uniform size of the powder particles enables
components to be produced in the quality required by the
automotive industry when the design includes deep undercuts,
sharp radii, surface logos or a deep grain.
The formulations are aliphatic TPU grades which are lightfast
and therefore do not discolor over time when exposed to UV
light. Aliphatics of this kind do not have to be post-painted
or in-mold coated, thus saving OEMs and part manufacturers the
outlay and expense of applying a coating to the finished
instrument panels and interior parts. In the future, Bayer
MaterialScience is looking to offer the relevant TPU product in
the form of a colored powder that exactly matches the interior
colors specified by the OEM.
By acquiring C&A's know-how, Bayer MaterialScience said it can
now provide a material technology that is deployed in a series
of OEM applications for molded skins in car instrument panels.
For example, General Motors, Ford, Chrysler and various Asian
transplants use TPU in current and future vehicle models fitted
with invisible passenger airbags. In this design, the molded
skin must retain its properties over the entire life cycle of
the vehicle.
"The surface material for instrument panels must remain ductile
even at temperatures of below -30 øC. This is one of the OEMs'
main performance requirements, in order to prevent splintering
when the airbag is deployed," explained Mike Zierden, who heads
the TPU Resins Business Unit at Bayer MaterialScience LLC in the
U.S. "The new TPU formulation in our portfolio offers superior
mechanical properties, including excellent scratch resistance.
At the same time it is providing a nice leather-like feel."
The long-term heat resistance of TPU is also superior to most
alternative materials.
About Bayer MaterialScience
Bayer MaterialScience AG -- http://www.bayermaterialscience.com/
-- had 2006 sales of EUR10.2 billion (continuing operations),
making it among the world's largest polymer companies. It
manufactures polymer materials and develops solutions for every
day customer products. The main segments served are the
automotive, electrical and electronics, construction and sports
and leisure industries. Bayer MaterialScience has 30 production
sites around the globe and employed approximately 14,900 people
at the end of 2006. Bayer MaterialScience is a Bayer Group
company.
About Collins & Aikman
Headquartered in Troy, Mich., Collins & Aikman Corporation --
http://www.collinsaikman.com/-- is a global leader in cockpit
modules and automotive floor and acoustic systems and is a
leading supplier of instrument panels, automotive fabric,
plastic-based trim, and convertible top systems. The Company
has a workforce of approximately 23,000 and a network of more
than 100 technical centers, sales offices and manufacturing
sites in 17 countries throughout the world. The Company
operates in Latin America through its facilities in Mexico. The
Company and its debtor-affiliates filed for chapter 11
protection on May 17, 2005 (Bankr. E.D. Mich. Case No. 05-
55927). Richard M. Cieri, Esq., at Kirkland & Ellis LLP,
represents C&A in its restructuring. Lazard Freres & Co., LLC,
provides the Debtors with investment banking services. Michael
S. Stammer, Esq., at Akin Gump Strauss Hauer & Feld LLP,
represents the Official Committee of Unsecured Creditors
Committee. When the Debtors filed for protection from their
creditors, they listed US$3,196,700,000 in total assets and
US$2,856,600,000 in total debts.
On Aug. 30, 2006, the Debtors filed a Joint Chapter 11 Plan and
a Disclosure Statement explaining that plan. On Dec. 22, 2006,
they filed an Amended Plan and on Jan. 22, 2007, filed a
modified Amended Plan. On Jan. 25, 2007, the Court approved the
adequacy of the Disclosure Statement. On July 18, 2007, the
Court confirmed the Debtors' Liquidation Plan which became
effective on Oct. 12, 2007. The Debtors' cases are set to be
closed on Feb. 28, 2008.
COTT CORP: Net Loss Ups to US$76.8 Mil. in Quarter Ended Dec. 29
----------------------------------------------------------------
Cott Corporation reported results for the fourth quarter and
fiscal year ended Dec. 29, 2007.
Net loss in the fourth quarter was US$76.8 million compared to a
net loss of US$29.6 million in the fourth quarter of 2006.
Asset impairment charges for the quarter amounted to US$65.5
million pre-tax, which comprised of US$55.8 million goodwill
impairment, and US$9.7 million of asset impairments in North
America.
The comparable prior year quarter included US$23.5 million of
restructuring and asset impairment charges, plus US$23.3 million
of unusual costs. Absent these charges, Cott would have
generated a US$8.8 million operating loss for the current
quarter as compared to US$6.5 million of income in the
comparable prior year period.
"In 2007, we were impacted by an extreme commodity environment,
CSD decline in North America, higher competitive promotional
activities, and various internal challenges that prevented us
from achieving our objectives," Brent Willis, Cott's chief
executive officer, said. "This very difficult year is now
behind us, and most importantly, in 2007, we took essential
steps to remake the company in various areas, such as people,
structure, process changes, product manufacturing capability,
pricing and cost management. We expect these initiatives to
significantly improve our performance in 2008."
"In the fourth quarter, we sharpened our focus on a few key
initiatives with our most important customers," Rick Dobry,
Cott's president for North America, said. "These include the
roll out of our new water program, continued distribution
expansion and brand development of our new products, and
merchandising of our core business. Late in the quarter, we
secured the final round of pricing for the year."
"As a result of this year's performance in our U.S. operations,
our annual asset impairment analysis resulted in a non-cash
goodwill impairment of US$55.8 million," Juan Figuereo, Cott's
chief financial officer, said.
"With experienced leaders in the U.K., Mexico, and RC
International, we are confident about the future success and
continued growth of our international operations," Mr. Willis
said. "We expect our International business unit to continue
delivering strong gains in 2008, and I am working closely with
each of these business unit leaders to accelerate our profitable
growth."
Full Year Results
For the full year ended Dec. 29, 2007, net loss in 2007 was
US$73.1 million compared to US$17.5 million in 2006.
Restructuring, asset impairments, and other charges for the year
were US$90.8 million compared to US$38.5 million in the prior
year. The full-year operating loss was US$57.1 million, as
compared to income of US$2.3 million in the prior year.
At Dec. 29, 2007, the company's balance sheet showed total
assets of US$1.14 billion, total liabilities of US$0.71 billion
and total shareholders' equity of US$0.43 billion.
About Cott Corporation
Headquartered in Toronto, Ontario, Cott Corporation --
http://www.cott.com/--is a provider of retailer brand soft
drinks. The company commercializes its business in over 60
countries worldwide, with its principal markets being the United
States, Canada, the United Kingdom and Mexico. Cott markets or
supplies over 200 retailer and licensed brands, and company-
owned brands including Cott, RC, Vintage, Vess and So Clear.
Its products include carbonated soft drinks, sparkling and
flavored waters, energy drinks, sports drinks, juices, juice
drinks and smoothies, ready-to-drink teas, and other non-
carbonated beverages.
* * *
As reported in the Troubled Company Reporter-Latin America on
Nov. 21, 2007, Moody's Investors Service downgraded the
Corporate Family Rating of Cott Corporation to B1 from Ba3. The
outlook is negative. This concludes the review for downgrade
initiated on Sept. 21, 2007.
DAVE & BUSTER'S: Rtgs. Unaffected by Firm Sale Report, S&P Says
---------------------------------------------------------------
Standard & Poor's Ratings Services disclosed that an
unsubstantiated report about Dave & Buster's Inc.'s (B- COrp.
Credit; Stable Outlook) possible sale to another private equity
firm has no immediate effect on the company's rating or outlook.
It was reported that the company's private equity sponsors,
Wellsping Capital Management, has hired Jeffries & Co. to
conduct a strategic review that may result in the sale of the
Dallas-based company. A sale may increase debt and worsen
credit ratios. At this time, however, S&P cannot accurately
assess the likelihood of a sale and what the resulting capital
structure would be. A transaction would likely mean that the
company would have to refinance its existing capital structure
because of the "Fundamental Changes" covenant of Dave & Buster's
senior secured credit facility and because of the "Change of
Control" covenant in the indenture of the company's senior
unsecured notes.
Currently S&P's lease-adjusted debt to EBITDA calculation for
the company is 6.0 and EBITDA interest coverage is 1.7.0 at the
end of the company's third quarter ended Nov. 4, 2007. If there
are confirmed discussions, S&P will respond to them as
appropriate.
Headquarted in Dallas, Texas, Dave & Buster's, Inc. --
http://www.daveandbusters.com/-- is an operator of large-
format, high-volume, regional entertainment complexes. Each
entertainment complex offers an array of entertainment
attractions, such as pocket billiards, shuffleboard, interactive
simulators and virtual reality systems, as well as traditional
carnival-style games of skill. The company's complexes offers
food and beverages. As of the fiscal year ended Feb. 4, 2007,
the company operated 48 restaurant/entertainment complexes
across the United States, Canada and Mexico.
FORD MOTOR: Fitch Affirms B Issuer Default Rating; Outlook Neg.
---------------------------------------------------------------
Fitch Ratings has affirmed the Issuer Default Ratings of Ford
Motor Company and Ford Motor Credit Company at 'B', and
maintained the Rating Outlook at Negative. Ford continues to
make steady progress on its restructuring actions, but continued
weakness in the North American auto market, combined with
industry cost, pricing and supplier pressures continue to limit
the impact of structural cost improvements on the bottom line.
International operations have shown steady improvement,
benefiting the company's consolidated credit profile. Liquidity
remains healthy, and sufficient to weather a significant
downturn in 2008 U.S. industry sales, but will decline through
at least 2008. Cash outflows in 2008 will be material as a
result of operating losses in North America, restructuring
costs, and higher net interest expense. The funding of the
United Auto Workers VEBA will also impact liquidity in 2008,
although the benefits from healthcare savings will not be
realized until 2010. The Negative Rating Outlook is expected to
remain in place until a firmer path to positive free cash flow
is established.
In North America, revenues will remain under pressure,
particularly in the first half, due to economic conditions,
the impact of the housing market on pickup sales, projected
lower fleet sales and the trend to lower-priced, fuel-efficient
vehicles. The new UAW contract has provided the OEMs with
greater flexibility to cut production and manage inventories in
response to weaker market demand -- a factor that will also
result in increased production cyclicality going forward.
Ford has made material improvement in its cost structure,
although higher product and commodity costs have limited
the impact on the bottom line. Ford's earlier buyout program
extended through the third quarter of 2007, indicating that the
full realization of these cost savings will continue to flow
through reported results over the next several quarters.
Together with Ford's new buyout program, for all North American
UAW workers, that is weighted to the first quarter of 2008 and
the gradual growth in Tier-2 wage employees, Ford is positioned
to show demonstrable fixed cost savings through 2008. Although
commodity costs are not expected to wane, the rate of growth
should slow substantially, allowing structural cost savings to
become more evident. Continued improvement in material,
engineering and other product costs should augment margin
improvement projected from labor savings. North American hourly
workers could be reduced by more than 40% over the period from
yearend 2005-2009, with incremental wage and benefit savings
realized from the implementation of Tier-2 wages. The reduction
in personnel at the former Visteon assets, the outsourcing of
certain non-production functions and the conversion of several
plants to 100% Tier 2 wage levels will also benefit Ford's cost
structure. Tier 2 wage levels incorporate meaningful reductions
in long-term benefit accruals through the lack of retiree health
care and enrollment in defined contribution pension plans.
Ford also faces the expiration of the Canadian Auto Workers
contract in September 2008. Given the terms of the recent UAW
agreement, the Detroit Three will certainly be targeting
additional wage, benefit and other cost-saving opportunities in
Canada. The Detroit Three may be seeking different goals under
a new contract, and talks may not be as smooth as the recent UAW
talks
Ford showed healthy revenue growth in the third and fourth
quarters of 2007, aided by easy comparisons with 2006 and
support from a number of vehicle models (Fusion, Edge and
Escape). Ford's focus on managing production and inventory
levels has benefited results through progress on pricing and
residual values. Overall results were severely impacted by a
13% reduction in high-margin pickup sales.
Although Ford has shown decent balance across segments, the
company's product portfolio remains misaligned with market
trends that favor smaller, more fuel-efficient vehicles. The
transition to a more market-weighted product portfolio, along
with the efficiencies of fewer platforms and higher number of
products per platform, will not be achieved through 2010.
Although Ford's cost reduction programs are in line with
expectations, achievement of viable long-term operating margins
will require market share stability and eventual growth in
revenues. Achievement of these margin levels is not expected
through 2010. Ford has also made clear strides in quality,
which should benefit the company's market acceptance and pricing
if the trend is maintained. The company's Sync dashboard
technology (developed with Microsoft), has also benefited the
company in terms of progressive technology.
Ford's international operations continue to show healthy
improvement. European operations have shown modest share
gains, improved pricing and growing profitability, resulting
from structural cost improvements and well-received product
introductions. Latin America has shown very strong
profitability, which is expected to continue although
perhaps not at the heights achieved in 2007. Further growth is
also expected in developing markets including China and Russia.
In total, Ford's international operations have transitioned from
a key risk factor several years ago into a moderate positive for
the company's credit position.
While FMCC has been profitable, Fitch believes that operating
performance will remain under pressure due to lower contract
volume and asset quality deterioration which is affecting all
auto lenders. Slower portfolio growth will tend to inflate
credit metrics further. Fitch also believes that FMCC access to
liquidity via the securitization markets will come at a higher
cost as the continual credit market dislocation widens.
A downgrade could result if Ford experiences:
-- A material problem with the launch of the new F-150.
-- A decline in U.S. industry sales below 14.5 million units
(light vehicle sales) combined with lack of projected fixed
cost reductions that result in a material deferral of the
anticipated timeline to positive free cash flow.
-- Ford Credit experiences restricted access to the
securitization market.
-- A significant decline in the U.S. market combined with a
reversal of operating profits across Ford's international
operations.
A return to a Stable Rating Outlook would be anticipated in the
event that a clear path to positive free cash flow is
established. This scenario would include continued stability in
the company's retail market share, a solid F-150 launch,
realization of expected fixed cost reductions in North America,
stability or continued growth in the company's international
operations and maintenance of healthy liquidity. A projected
return to positive cash flow will likely require stabilization
of the housing market, due to the impact of pickup sales on
Ford's operating results.
Ford will continue to face increased cost and potential supply
disruptions from its stressed supply chains. Although most
Tier-1 suppliers have ample liquidity during 2008 due to timely
accessing of the leveraged loan market, lower-tier suppliers are
more exposed to projected production declines at the Detroit
Three, pricing and commodity cost pressures, and lack of access
to capital. The higher risk of production disruptions or
supplier liquidations will cause the OEM's and Tier-1 suppliers
to incur additional costs in order to address particular
situations.
Ford's liquidity has been boosted by substantial debt issuance
over the past eighteen months. Total automotive debt, including
US$6.3 billion of new debt associated with the UAW VEBA
agreement, is approximately US$33 billion (following a US$2.6
billion reduction in debt through two equity-for-debt
transactions). Total debt is now roughly US$20 billion more
than at yearend 2002. Net interest expense, augmented by the
expected decline in cash holdings and the associated decline in
interest income, will continue to represent a more material
claim on consolidated cash flows than in the past. Fitch
expects that even in a relatively harsh downturn in 2008,
liquidity would remain well above the level needed to finance
Ford's operations and its restructuring requirements.
Ford has a light maturity schedule over the next three years,
and is unlikely to require external capital, although Ford may
seek opportunities to further boost liquidity if the markets
become receptive. The company may also continue to seek
opportunities to exchange equity for debt. The company retains
access to US$11.5 billion in credit lines, which contain no
financial tests. Access is subject to a borrowing base, which
would be expected to reduce availability in the event of further
deterioration in operating results. Recovery ratings remain in
the same range, as a decrease in healthcare liabilities has been
offset by an increase in debt. Fixed cost reductions that were
anticipated to be realized in a bankruptcy scenario have been
partially achieved through the new UAW contract. Recoveries
from international operations have also increased.
Ratings affirmed with a Negative Rating Outlook:
Ford Motor Co.
-- Long-term IDR at 'B';
-- Senior secured credit facility at 'BB/RR1';
-- Senior secured term loan at 'BB/RR1';
-- Senior unsecured at 'B-/RR5'.
Ford Motor Co. Capital Trust II
-- Trust preferred stock at 'CCC+/RR6'.
Ford Holdings, Inc.
-- Long-term IDR at 'B';
-- Senior unsecured at 'B-/RR5'.
Ford Motor Co. of Australia
-- Long-term IDR at 'B';
-- Senior unsecured at 'B-/RR5'.
Ford Motor Credit Co.
-- Long-term IDR at 'B';
-- Short-term IDR at 'B';
-- Senior unsecured at 'BB-/RR2';
-- Commercial paper at 'B'.
FCE Bank Plc
-- Long-term IDR at 'B';
-- Senior unsecured at 'BB-/RR2';
-- Short-term IDR at 'B';
-- Commercial paper at 'B';
-- Short-term deposits at 'B'.
Ford Capital B.V.
-- Long-term IDR at 'B';
-- Senior unsecured at 'BB-/RR2'.
Ford Credit Canada Ltd.
-- Long-term IDR at 'B'.
-- Short-term IDR at 'B';
-- Commercial paper at 'B';
-- Senior unsecured at 'BB-/RR2'.
Ford Credit Australia Ltd.
-- Long-term IDR at 'B';
-- Senior unsecured at 'BB-/RR2';
-- Short-term IDR at 'B';
-- Commercial paper at 'B'.
PRIMUS Financial Services (Japan)
-- Long-term IDR at 'B';
-- Short-term IDR at 'B'.
Ford Credit de Mexico, S.A. de C.V.
-- Long-term IDR at 'B';
-- Senior unsecured at 'BBB+'.
Ford Credit Co S.A. de CV
-- Long-term IDR at 'B'.
-- Senior unsecured at 'BB-/RR2'.
Ford Motor Credit Co. of New Zealand
-- Long-term IDR at 'B';
-- Senior unsecured at 'BB-/RR2';
-- Short-term IDR at 'B';
-- Commercial paper at 'B'.
Ford Motor Credit Co. of Puerto Rico, Inc.
-- Short-term IDR at 'B'.
About Ford Motor
Based in Dearborn, Michigan, Ford Motor Co. (NYSE: F) --
http://www.ford.com/-- manufactures or distributes automobiles
in 200 markets across six continents. With about 260,000
employees and about 100 plants worldwide, the company's core and
affiliated automotive brands include Ford, Jaguar, Land Rover,
Lincoln, Mercury, Volvo, Aston Martin, and Mazda. The company
provides financial services through Ford Motor Credit Company.
The company has operations in Japan in the Asia Pacific region.
In Europe, the company maintains a presence in Sweden, and the
United Kingdom. The company also distributes its brands in
various Latin American regions, including Argentina, Brazil and
Mexico.
WENDY'S INT'L: Trian Partners Moves to Raise Board Size to 15
-------------------------------------------------------------
Wendy's International Inc. told shareholders in a letter Monday
that Trian Partners LP in Delaware submitted a notice to the
company pursuant to the requirements in the Securities Exchange
Commission Rule 14a-4, the company's proxy statement on schedule
14A filed with the SEC on March 12, 2007, the company's report
on Form 8-K filed on Jan. 28, 2008, and the applicable laws of
Ohio.
Trian's Proposals 1 and 2
Train is set to move two proposals during the company's annual
meeting:
Proposal 1: to increase and fix the size of the board to
fifteen (15) directors, and to increase the number of directors
authorized to be in the class of directors to be voted upon at
the annual meeting to six (6) directors.
Proposal 2: to fix the number of directors authorized to
be in each class of directors to (i) six directors in the class
of directors whose term expires in 2011, (ii) five directors in
the class of directors whose term expires in 2009, and (iii)
four directors in the class of directors whose term expires in
2010.
Trian's address is 280 Park Avenue, 41st Floor in New York, and
is the record owner of 100 shares of common stock, par value
US$0.10 per share. The company also informed shareholders that
Trian's nominees and other related parties may be part of a
group deemed to beneficially own 8,559,243 shares.
Trian represented itself as (i) a shareholder of record of
shares entitled to vote at the annual meeting and (ii) intends
to appear in person or by proxy at the annual meeting and to
take these actions:
(a) to nominate for election as directors: Jerry W. Levin,
Jeffrey C. Bloomberg, Ulysses L. Bridgeman, Jr.,
Kenneth W. Gilbert, Richard A. Mandell, and Gregory H.
Sachs, if proposals 1 and 2 are approved; or
(b) to nominate for election as directors Jerry W. Levin,
Ulysses L. Bridgeman, Jr., Kenneth W. Gilbert, and
Richard A. Mandell, if proposals 1 and 2 are not
approved; or
(c) if applicable, to nominate for election as directors one
or more additional nominees or alternate nominees.
The company stated that Trian intends to deliver a proxy
statement and form of proxy to at least the percentage of
shareholders that will be required to carry each proposal.
Trian intends to nominate persons for election to the Board and
propose certain business at the 2008 annual meeting of
shareholders.
Date of Annual Meeting for Confirmation
The company's annual meeting is usually held on the first Monday
of April each year. However, the company told shareholders that
annual meeting for the last three years has been held on the
fourth Thursday of April. The company informed shareholders
to send confirmation that its annual meeting will be held on
April 24, 2008, which is the fourth Thursday of April. If the
meeting will not be held on April 24, 2008, the company wants
shareholders to advise it when the meeting will be held.
Peltz's Trian to Seize Control of Board
According to various reports, Nelson Peltz's Triarc Cos. offered
to buy Wendy's in November 2007 for a price lower than the
initial offer of US$37 to US$41 per share made in July 2007.
When Trian, also controlled by Mr. Peltz, succeeds in its plan,
it would seize major control in Wendy's board of directors,
reports say.
Glen Petraglia at Citi Investment Research told reporters that
Trian is also posed to oust Wendy's CEO, Kerrii Anderson, who
stands for reelection this year.
About Wendy's International
Based in Dublin, Ohio, Wendy's International Inc. (NYSE:
WEN) -- http://www.wendysintl.com/-- is one of the world's
largest and most successful restaurant operating and franchising
companies, with more than 6,300 Wendy's Old Fashioned Hamburgers
restaurants in North America and more than 300 international
Wendy's restaurants. It has restaurants in the United States,
Canada, Mexico, Argentina, among others.
At Dec. 30, 2007, the company's balance sheet showed total
assets of US$1.79 billion, total liabilities of US$0.99 billion,
and total shareholders' equity of US$0.80 billion.
* * *
Moody's Investors Service placed Wendy's International Inc.'s
corporate family and probability of default ratings at 'Ba3' in
June 2007. The ratings still hold as of Feb. 8, 2008.
===========
P A N A M A
===========
* PANAMA: To Enter Free Trade Talks with Guatemala
--------------------------------------------------
El Universal reports that Panama's free trade negotiations with
Guatemala is 90% advanced, citing Trade and Industry Minister
Alejandro Ferrer expressing his satisfaction.
According to the report, Mr. Ferrer would resume discussions
with Guatemalan counterpart Jose Carlos Garcia regarding tomato
byproducts, vegetable oil, and products with high content of
sugar, paper and cardboard.
The deal would lead to achieve the broadest access to a market
of 13 million people where many Panamanian products and services
have true potential growth, Chief Panamanian negotiator Leroy
Sheffer explained.
The same journal relates that 2007's bilateral trade grew 15% to
US$120 million compared last two years ago.
Panama made free trade pacts with other Central American
countries and proposed to enter into the same accord with the EU
en bloc, El Universal adds.
* * *
As reported in the Troubled Company Reporter-Latin America on
Jan. 31, 2008, Fitch Ratings affirmed the Republic of Panama's
long-term foreign currency and local currency Issuer Default
Ratings of 'BB+' and simultaneously revised the Rating Outlook
to Positive from Stable. Fitch also affirmed the short-term
foreign currency IDR of 'B'.
As reported in the Troubled Company Reporter-Latin America on
Dec. 26, 2007, Standard & Poor's Ratings Services has assigned
BB long-term sovereign local and foreign currency ratings on
Panama. S&P said the outlook for all the ratings is positive.
====================
P U E R T O R I C O
====================
ADELPHIA COMMS: Recovery Trust Assets Valued at $677,700,000
------------------------------------------------------------
The Adelphia Recovery Trust disclosed that the Feb. 13, 2007
effective date value for federal income tax purposes of the
assets
transferred to the ART was US$677,700,000, including cash of
US$25,000,000.
The ART Declaration of Trust and the Adelphia reorganization
plan require the ART to determine the value of the transferred
assets as of the Effective Date for federal income tax purposes
and to communicate that value to the ART's beneficiaries. Under
Section 8.01(a) of the ART Declaration of Trust, unless the
Internal Revenue Service or a court of competent jurisdiction
requires a different treatment, for all federal income tax
purposes the ART beneficiaries will be deemed to have received
ART's assets from the Adelphia Bankruptcy Estate and then to
have transferred those assets to the ART.
The valuation for federal income tax purposes was based on a
calculation of value prepared by Weiser LLP, which itself was
based on the trading values of interests in the ART after the
Effective Date. The assets transferred to the ART consist
largely of litigation claims that Adelphia Communications
Corporation and its subsidiaries held against third parties,
such
as certain banks, investment banks, and advisors. Those
litigation claims are contingent, and the value of those assets
is difficult to quantify with precision. Therefore, the ART
emphasizes that no inference can or should be drawn from this
tax
valuation as to the Trust's view of the value of any trust
certificates or of any litigation.
A copy of the ART's letter to beneficiaries with information
concerning the federal income tax valuation is available in the
"Important Documents-Adelphia Recovery Trust" section of
Adelphia's Web site at http://www.adelphiarestructuring.com
Beneficiaries may direct questions to
creditor.inquiries@adelphia.com
However, the ART does not intend to and will not provide tax
advice to beneficiaries. The ART strongly encourages
beneficiaries to consult their own tax advisors.
About the Adelphia Recovery Trust
The Adelphia Recovery Trust is a Delaware Statutory Trust that
was formed pursuant to the ACOM Debtors' First Modified Fifth
Amended Joint Plan of Reorganization, which became effective
Feb. 13, 2007. The ART holds certain litigation claims
transferred pursuant to the Plan against various third parties
and exists to prosecute the causes of action transferred to it
for the benefit of holders of ART interests.
About Adelphia Comms
Based in Coudersport, Pennsylvania, Adelphia Communications
Corporation (OTC: ADELQ) -- http://www.adelphia.com/--
is a cable television company. Adelphia serves customers in 30
states and Puerto Rico, and offers analog and digital video
services, Internet access and other advanced services over its
broadband networks. The company and its more than 200
affiliates filed for Chapter 11 protection in the Southern
District of New York on June 25, 2002. Those cases are jointly
administered under case number 02-41729. Willkie Farr &
Gallagher represents the Debtors in their restructuring efforts.
PricewaterhouseCoopers serves as the Debtors' financial advisor.
Kasowitz, Benson, Torres & Friedman, LLP, and Klee, Tuchin,
Bogdanoff & Stern LLP represent the Official Committee of
Unsecured Creditors.
Adelphia Cablevision Associates of Radnor, L.P., and 20 of its
affiliates, collectively known as Rigas Manged Entities, are
entities that were previously held or controlled by members of
the Rigas family. In March 2006, the rights and titles to these
entities were transferred to certain subsidiaries of Adelphia
Cablevision LLC. The RME Debtors filed for chapter 11
protection on March 31, 2006 (Bankr. S.D.N.Y. Case Nos. 06-10622
through 06-10642). Their cases are jointly administered under
Adelphia Communications and its debtor-affiliates' chapter 11
cases. The Bankruptcy Court confirmed the Debtors' Modified
Fifth Amended Joint Chapter 11 Plan of Reorganization on
Jan. 5, 2007. That plan became effective on Feb. 13, 2007.
(Adelphia Bankruptcy News, Issue No. 184; Bankruptcy Creditors'
Service, Inc., http://bankrupt.com/newsstand/or 215/945-7000)
AGILENT TECH: Reports US$120 Million Net Income in First Quarter
----------------------------------------------------------------
Agilent Technologies Inc. earned US$120 million for the three
months ended Jan. 31, 2008, compared to US$150 million of net
income for the same period in 2007.
The company reported orders of US$1.40 billion for the first
fiscal quarter ended Jan. 31, 2008, 12 percent above one year
ago. Revenues during the quarter were US$1.39 billion, 9
percent above last year.
Included in this quarter's GAAP income is US$30 million of
share-based compensation expense. Excluding this item and
US$10 million of other net adjustments, Agilent reported first
quarter adjusted net income of US$160 million. On a comparable
basis, the company earned US$162 million one year ago.
"Agilent had a good fiscal first quarter, with performance that
was very much in line with our expectations," said Bill
Sullivan, Agilent president and chief executive officer.
"Revenues of US$1.39 billion were up 9 percent from last year,
near the high end of guidance."
"Bio-Analytical markets showed sustained momentum, with segment
orders up 20 percent and revenues up 15 percent, the seventh
consecutive quarter of double-digit segment growth. Demand
remains robust in both life sciences and chemical analysis
markets, and across all geographies."
"While Electronic Measurement markets remain mixed, we did see
some overall improvement compared to prior quarters, with better
balance between general purpose and communications markets, and
across geographic regions. Segment orders were up 8 percent
while revenues were 5 percent ahead of last year."
"First quarter adjusted net income per share, at US$0.42, was
also near the top of our US$0.38 - US$0.43 guidance range."
First quarter Return on Invested Capital was 23 percent, equal
to last year's record first quarter, despite the addition of
nearly US$390 million of acquisitions. Inventory Days-On-Hand
was improved by 3 days from one year ago. During the period,
the company repurchased US$237 million of its common stock.
Looking ahead to the remainder of fiscal 2008, Sullivan said the
company had anticipated some slowing, mainly in U.S. markets,
and had planned the year conservatively as a result. Given
current trends, Sullivan said the company was still comfortable
with the range of analyst estimates for FY2008 revenues and
adjusted net income per share. For the fiscal second quarter of
2008, revenues are expected to be in the range of
US$1.40 billion to US$1.45 billion, up 6 percent to 10 percent
from last year. Second quarter adjusted net income per share is
expected to be in the range of US$0.46 to US$0.50 per share, 7
percent to 16 percent above last year's comparable earnings.
About Agilent Tech
Agilent Technologies Inc. (NYSE: A) -- http://www.agilent.com/
-- is the world's premier measurement company and a technology
leader in communications, electronics, life sciences and
chemical analysis. The company's 19,000 employees serve
customers in more than 110 countries.
The company has operations in India, Argentina, Puerto Rico,
Bolivia, Paraguay, Venezuela, and Luxembourg, among others.
* * *
As reported in the Troubled Company Reporter-Latin America on
Oct. 26, 2007, Moody's Investors Service assigned a Ba1
rating to Agilent Technologies, Inc.'s proposed offering of
US$500 million senior notes due 2017 and affirmed its existing
ratings and stable outlook.
AGILENT TECHNOLOGIES: Adds WiMAX Protocol Testing in Runcom Deal
----------------------------------------------------------------
Agilent Technologies Inc. and Runcom Technologies Ltd. will
extend their WiMAX(TM) collaboration to include Mobile WiMAX
Wave 2 Protocol Test.
All WiMAX(TM) devices must undergo protocol conformance test
(PCT) to become certified for use. To realize the promise of
interoperability, the WiMAX industry relies on traceable and
effective protocol test solutions. The assurance of
interoperability between WiMAX reference designs and protocol
test equipment creates customer confidence and enables industry
growth.
Agilent and Runcom will ensure that their customers can
confidently use Runcom Mobile WiMAX reference designs with
Agilent protocol test systems. Both companies will verify that
their designs are faithful implementations of the relevant
standards, bringing robust solutions to the market.
The Agilent N6430A WiMAX Protocol Conformance Test and
Development Solution, based on Agilent's E6651A Mobile WiMAX
Test Set, is undergoing pre-validation testing at a WiMAX
Forum(R) testing laboratory using mobile terminals and base
stations that use Runcom Mobile WiMAX chips.
"We are very enthusiastic about the development of a PCT
partnership with Runcom," said European operations general
manager for Agilent's Mobile Broadband Division's WiMAX/WLAN
portfolio, C. J. Meurell. "Our relationship will accelerate the
progress of both companies as we move ahead with Mobile WiMAX
Wave 2. Runcom has been a pioneer of WiMAX and we feel
fortunate to be able to partner with them on the development of
PCT."
"Our customers need independent and robust PCT solutions to be
available, and we are keen to support this," said Runcom's
Marketing vice president, Israel Koffman. "Working with the
wireless industry's test leader, Agilent, means that our
customers can count on solutions that work with our designs
wherever they are in the world. Agilent's ability to test
terminals, base stations, protocol, RF and application
performance is a unique value proposition that we believe will
benefit our customers."
About Runcom Technologies
Runcom Technologies Ltd. -- http://www.runcom.com-- is a of
chipsets for the IEEE 802.16e-2005 standard on which WiMAX Forum
mobile profiles are based. Runcom is a world pioneer in the
development of state-of-the-art OFDMA silicon solutions for
fixed and mobile WiMAX user-terminals and base-stations. The
RNA200 ASIC was the first Mobile WiMAX compliant ASIC on the
market.
About Agilent Tech
Agilent Technologies Inc. (NYSE: A) -- http://www.agilent.com/-
- is the world's premier measurement company and a technology
leader in communications, electronics, life sciences and
chemical analysis. The company's 19,000 employees serve
customers in more than 110 countries.
The company has operations in India, Argentina, Puerto Rico,
Brazil, Venezuela, Mexico, and Luxembourg, among others.
* * *
As reported in the Troubled Company Reporter-Latin America
on Oct. 26, 2007, Moody's Investors Service assigned a Ba1
rating to Agilent Technologies Inc.'s proposed offering of
$500 million senior notes due 2017 and affirmed its existing
ratings and stable outlook.
DIRECTV GROUP: Earns US$348 Million in Fourth Qtr. Ended Dec. 31
----------------------------------------------------------------
The DIRECTV Group Inc. reported net income of US$348 million for
the three months ended Dec. 31, 2007, compared to net income of
US$356 million for the same period in 2006. For the full year
of 2007, the company earned US$1.45 billion compared to net
income of US$1.42 billion in 2006.
The company reported that fourth quarter 2007 revenues increased
17% to US$4.88 billion, operating profit before depreciation and
amortization1 (OPBDA) increased 21% to US$1.10 billion and
operating profit increased 4% to US$617 million compared to last
year's fourth quarter. The DIRECTV Group reported that fourth
quarter net income of US$348 million declined 2% and earnings
per share increased one cent to US$0.30 compared with the same
period last year.
"DIRECTV's content and service leadership continue to drive
superior results in a tougher marketplace that reflects
increasing competition and a slowing economy. Advanced
services-including the launch of the industry's best HD
programming-played an increasingly important role in DIRECTV
U.S.'s top-line and bottom-line results," said Chase Carey,
president and CEO of The DIRECTV Group, Inc. "Strong net
subscriber additions of 275,000 were punctuated by the lowest
monthly churn rate in eight years. This 15 basis point
reduction in monthly
churn to 1.42% was largely due to the significant growth in
customers with HD and DVR services-increasing from about 30% of
our subscriber base last year to over 40% this year-as well as
tighter credit policies. The continued strong subscriber growth
coupled with an 8.3% increase in ARPU drove revenues up 14% to
US$4.38 billion. As with churn, the strong ARPU growth reflects
the improving quality of our customers who are purchasing an
array of new services."
Mr. Carey continued, "DIRECTV U.S. OPBDA increased 14% to
US$1.00 billion primarily due to the gross profit generated from
the strong revenue growth. OPBDA margin of 23% in the quarter
was unchanged from the prior year as operating efficiencies
gained in subscriber services and G&A were offset by higher
acquisition and upgrade costs associated with the significant
increase in new and existing customers purchasing advanced
services."
Mr. Carey added, "DIRECTV's operating momentum continued in
Latin America as these businesses also had very strong fourth
quarter results. An 82% increase in gross subscriber additions
plus continued low monthly churn of 1.35% drove a more than
doubling of net additions to 199,000 in the fourth quarter. In
addition, DIRECTV Latin America's revenues increased 41% to
US$499 million and OPBDA more than doubled to US$114 million
mostly due to the continued strong subscriber and ARPU growth,
as well as favorable exchange rates, primarily in Brazil."
Mr. Carey concluded, "We exit 2007 with tremendous operating and
financial momentum. We believe we are delivering on our goal to
provide the best television experience, including the most
extensive HD programming in America. With the launch of our
next satellite in a couple of months, we will extend DIRECTV's
leadership by introducing even more local and national HD
channels. With full awareness of an industry that will be
characterized by increasing competition and a slowing economy,
we're continuing to target extremely strong results in 2008
highlighted by a material increase in free cash flow driven by
DIRECTV's brand and content leadership, along with improved
operating scale and efficiencies."
Fourth Quarter Review
In the fourth quarter of 2007, The DIRECTV Group's revenues of
US$4.88 billion increased 17% over the same period last year
principally due to strong ARPU and subscriber growth at DIRECTV
U.S. and DIRECTV Latin America.
Operating profit before depreciation and amortization increased
21% to US$1.10 billion and operating profit increased 4% to
US$617 million primarily due to the gross profit associated with
the higher revenues, partially offset by higher acquisition and
upgrade costs at DIRECTV U.S. mostly due to the increased number
of new and existing customers adding HD and DVR services.
Operating profit was also impacted by higher depreciation and
amortization principally due to increased capitalization of
customer equipment under the DIRECTV U.S. lease program
implemented in March 2006.
Cash flow before interest and taxes2 of US$512 million increased
53% compared to the fourth quarter 2006 primarily due to the
higher operating profit before depreciation and amortization and
lower capital expenditures, partially offset by lower cash
provided by working capital. In addition, free cash flow was
impacted by higher tax payments and higher net interest expense
in the fourth quarter of 2007. The quarter also included share
repurchases of US$479 million.
Full Year Review
In 2007, The DIRECTV Group's revenues of US$17.25 billion
increased 17% compared to the prior year due to strong ARPU and
subscriber growth at DIRECTV U.S. and DIRECTV Latin America, as
well as the consolidation of Sky Brazil's financial results
subsequent to the merger with DIRECTV Brazil in August 2006.
Operating profit before depreciation and amortization in 2007
increased 23% to US$4.17 billion due to the higher gross profit
associated with the higher revenues and the capitalization of
customer equipment under the lease program implemented in March
2006 at DIRECTV U.S., as well as the consolidation of Sky
Brazil's results. These improvements were partially offset by
higher acquisition and upgrade costs at DIRECTV U.S. related to
the increased number of new and existing customers adding HD and
DVR services. Also impacting the comparison were two non-cash
pre-tax gains totaling US$118 million recorded in 2006 for the
completion of DIRECTV Latin America's Sky Mexico transaction and
the DIRECTV Brazil and Sky Brazil merger.
Operating profit of US$2.49 billion in 2007 increased 5%
compared with 2006 as the higher operating profit before
depreciation and amortization was partially offset by higher
depreciation and amortization resulting primarily from the
increased capitalization of customer equipment under the DIRECTV
U.S. lease program, as well as the merger with Sky Brazil.
Cash flow before interest and taxes increased 13% to US$1.48
billion in 2007 as higher operating profit before depreciation
and amortization was partially offset by increased capital
expenditures. Capital expenditures were higher primarily at
DIRECTV U.S. due to the implementation of the equipment lease
program in March 2006, higher costs for the increased number of
new and existing customers adding HD and DVR services, and
greater infrastructure costs associated with the rollout of
additional HD channels. Free cash flow declined to
US$953 million primarily because the increase in cash flow
before interest and taxes was more than offset by higher tax
payments made in 2007. Other uses of cash in 2007 were for
share repurchases of US$2.03 billion, the purchase of Darlene's
interest in DIRECTV Latin America for US$325 million and the
repayment of US$210 million of outstanding debt at Sky Brazil.
About The DIRECTV Group
Headquartered in El Segundo, California, The DIRECTV Group Inc.
(NYSE:DTV) -- http://www.directv.com/-- provides digital
television entertainment in the United States and Latin America.
It has two segments, DIRECTV U.S. and DIRECTV Latin America.
The DIRECTV U.S. segment provides direct-to-home digital
television services in the multichannel video programming
distribution industry in the United States. The DIRECTV Latin
America segment provides digital direct-to-home digital
television services to approximately 1.6 million subscribers in
27 countries, including Brazil, Argentina, Venezuela, and Puerto
Rico.
* * *
As of Feb. 9, 2008, The DIRECTV Group Inc. still carries
Standard & Poor's Ratings Services' 'BB' corporate credit and
'BB-' senior unsecured debt rating given on April 3, 2007. The
outlook remains stable.
FUNDACION DR: Wants Cash Collateral Access for Hospital Sale
------------------------------------------------------------
Fundacion Dr. Manuel de la Pila Iglesias Inc. seeks authority
from the U.S. Bankruptcy Court for the District of Puerto Rico
to use the cash collateral securing repayment of its obligation
to the Federal Housing Administration of the United States
Department of Housing and Urban Development.
The Debtor tells the Court that it needs US$750,000 of the cash
collateral to pay expenses necessary for the sale of Hospital
Dr. Pila.
The hospital is the Debtor's only business operation.
Specifically, the Debtor intends to use the fund for the:
a) engagement of professionals to assist in the
perfection and formalization of the sale;
b) payment of an appraisal report;
c) payment of stamps and vouchers required in several
deeds needed for the transfer of title; and
d) payment of an external auditor.
The Federal Housing Administration is the insurer of a
First Mortgage Deed executed by the Debtor on
February 4, 1985, to guarantee a Mortgage Note for the
amount of US$16,902,000 in favor of the Puerto Rico Government
Development Bank.
The total cash collateral amount owned by Federal Housing
Administration is US$1,322,000.
As adequate protection, the Debtor grants the Federal Housing
Administration a replacement lien including regular monthly
payments of principal and interest.
Fundacion Dr. Manuel de la Pila Iglesias Inc. dba Hospital
Dr. Pila -- http://www.drpila.com/-- operates a
Puerto-Rican hospital. The company filed for Chapter 11
protection on August 9, 2007 (Bankr. D. P.R. Case No. 07-04459).
F. David Godreau, Esq. at L timer, Biaggi, Rachid & Godreau LLP
represents the Debtor. When the Debtor filed for bankruptcy,
it listed total assets of US$55,930,498 and total debts of
US$53,455,603. As of bankruptcy filing, the Debtor listed
Cesar Castillo Inc., with a claim amount of US$1,929,103,
as its largest unsecured creditor.
GLOBAL HOME: Judge Gross Confirms Joint Amended Chapter 11 Plan
---------------------------------------------------------------
The Honorable Kevin Gross of the United States Bankruptcy Court
for the District of Delaware confirmed Global Home Products LLC
and its debtor-affiliates' Joint Amended Chapter 11 Plan of
Reorganization.
According to Bloomberg News reporter, Dawn McCarty, Cerberus
Home Products Investors LLC, an affiliate of Cerberus Capital
Management LP in New York, will retain 98.7% of the Debtors'
stock under the Plan.
General Unsecured creditors will expect to recover between 1%
and 1.5% of their claims, Bloomberg says.
Treatment of Claims
The Plan contemplates the distribution of about $8,500,000 in
cash to creditors by the Debtors and provides for the pro rata
distribution of:
-- up to $1,000,000 to the General Unsecured Claims plus
a percentage of certain Chapter 5 litigation recoveries;
and
-- $3.5 million to all Allowed 503(b)(9) Claim holders.
The remaining balance will be used to pay the allowed
Administrative and Priority Claims, and, to the extent possible,
Other Secured Claims.
A holder of a Non-GHPI Equity Interest who holds 1% of the
equity in the Debtors can retain its equity, if and only if,
they contribute 1% of $8,500,000.
Previous Asset Sale
Bloomberg reports that the Debtors have sold glassmaker Anchor
Hocking for $75 million in cash and assumed debts of about $20
million to Monomoy Capital Partners, while album manufacturer
Burne Operation Co. was sold to C.R. Gibson for $33.5 million
and WearEver for $21 million.
A full-text copy of the Debtors' Joint Amended Chapter 111 Plan
of Reorganization is available for free at:
http://ResearchArchives.com/t/s?2802
About Global Home
Headquartered in Westerville, Ohio, Global Home Products LLC
-- http://www.anchorhocking.com/and http:/www.burnesgroup.com/
-- sells houseware and home products and manufactures high
quality glass products for consumers and the food services
industry. The company also designs and markets photo frames,
photo albums and related home decor products. The company and
16 of its affiliates, including Burnes Puerto Rico, Inc., and
Mirro Puerto Rico, Inc., filed for Chapter 11 protection on
April 10, 2006 (Bankr. D. Del. Case No. Lead 06-10340).
Laura Davis Jones, Esq., David Bertenthal, Esq., Bruce Grohsgal,
Esq., and Joshua Fried, Esq, at Pachulski Stang Ziehl & Jones
LLP, represent the Debtors. Attorneys at Dinsmore & Shohl, LLP,
and Frost Brown Todd LCC are the Debtors' special counsel. Epiq
Bankruptcy Solutions, LLC acts as the Debtors' claims agent.
Ronald F. Stengel, Conway Del Genio Gries & Co., LLC, is the
Debtors' chief restructuring officer. Plante & Moran is the
Debtors' 401(k) plan auditors. PricewaterhouseCoopers LLP and
Deloitte Tax LLP provide tax services. Houlihan Lokey Howard &
Zukin Capital is Debtors' the investment bankers while Johnson
Associates Inc. is the special compensation advisor
Sharon Levine, Esq., and Bruce Buechler, Esq., at Lowenstein
Sandler PC; and David M. Fournier, Esq., at Pepper Hamilton LLP,
represent the Official Committee of Unsecured Creditors.
Attorneys at Basham, Ringer y Correa, SC is the Committee's
special counsel. Huron Consulting Services LLC acts as the
Committee's financial advisors.
Jesse H. Austin, III, Esq., at Paul, Hastings, Janofsky & Walker
LLP, and Robert J. Dehney, Esq., at Morris, Nichols, Arsht &
Tunnell LLP, represent Medeleine LLC. Global Home Products
Investors LLC, Cerberus Partners, LP, and Cerberus Capital
Management, LP, is represented in these bankruptcy proceedings
by Lawrence V. Gelber, Esq., and Sophie S. Kim, Esq., at Schulte
Roth & Zabel LLP; and Adam G. Landis, Esq., and Kerri Mumford,
Esq., at Landis Rath & Cobb LLP.
JETBLUE AIRWAYS: Names Edward Barnes as Chief Financial Officer
---------------------------------------------------------------
On Feb. 7, 2008, the board appointed Edward Barnes as the
company's chief financial officer and executive vice president,
effective immediately. Mr. Barnes had been serving as interim
chief financial officer since November 2007. Mr. Barnes will
continue to serve as the company's principal accounting officer.
Mr. Barnes joined the company in October 2006 as vice president,
cost management and financial analysis. He previously served as
vice president-controller of JDA Software from April 2005
through September 2006; senior vice president-chief financial
officer at assisted living concepts from December 2003 to March
2005; and vice president-controller at Pegasus Solutions from
June 2000 to December 2003. Previously, he held financial
positions of increasing responsibility at Southwest Airlines Co.
and America West Airlines Inc., with his final position at
America West Airlines Inc. as vice president-controller of The
Leisure Company, their vacation packaging subsidiary. He is a
certified public accountant and a member of the AICPA.
There are no arrangements or understandings between Mr. Barnes
and any other person pursuant to which he was selected as an
officer. Mr. Barnes does not have any familial relationship
with any director or other executive officer of the company or
any person nominated or chosen by the company to become a
director or executive officer, and there are no transactions in
which Mr. Barnes has an interest requiring disclosure under Item
404(a) of Regulation S-K. As the company's chief financial
officer, Mr. Barnes will receive an increase in his base salary
to the executive vice president salary level and a grant of
restricted stock units at the company's next scheduled grant
date equivalent to US$125,000. He will also be eligible for a
bonus ranging from 50% to 100% of his annual salary, depending
on achievement of certain performance targets.
On Feb. 7, 2008, the board increased the number of members on
the board to twelve and appointed Christoph Franz to fill the
newly created vacancy. Mr. Franz was appointed to the board in
connection with the previously disclosed stock purchase
agreement, dated as of Dec. 13, 2007, between Deutsche Lufthansa
AG and the company. Deutsche Lufthansa AG nominated Mr. Franz
for the appointment. Mr. Franz is Swiss International Air
Line's chief executive officer and has served in that capacity
since 2004. Prior to that, Mr. Franz spent nine years in top
management positions with Deutsche Bahn AG, the German national
railway, ending as a member of executive management in charge of
passenger sales. He holds a doctorate in Business
Administration at the Technische Universitat Darmstadt.
The Board expects to appoint Mr. Franz to a committee at the
conclusion of the company's annual meeting of stockholders in
May 2008. There are no transactions in which Mr. Franz has an
interest requiring disclosure under Item 404(a) of Regulation S-
K. Mr. Franz will be compensated in accordance with the
company's publicly disclosed director compensation policies.
On Feb. 7, 2008, the board of directors of JetBlue Airways
Corporation approved the company's entry into the form of
indemnification agreement between the company and each of its
directors and officers.
The company had entered into similar agreements with members of
the board and its officers in 2002 and is executing the
agreements with its directors and officers who have joined the
company subsequent to that time. The form of indemnification
agreement provides them with rights to indemnification and
expense advancement to the fullest extent permitted under the
General Corporation Law of the State of Delaware, in accordance
with the company's certificate of incorporation and bylaws.
The preceding description of the form of indemnification
agreement does not purport to be complete and is qualified in
its entirety by the terms of the Form of Director/Officer
Indemnification Agreement.
Effective Feb. 7, 2008, the board approved the amendment of the
bylaws to add these languages as the new second paragraph of
Article III, Section 11:
"At least two-thirds of the members of each committee of the
board shall be comprised of individuals who meet the definition
of "a citizen of the United States," as defined by the
Transportation Act 49 U.S.C 40102 or as subsequently amended
or interpreted by the Department of Transportation, provided
that if a committee of the board has one member, such member
shall be a "a citizen of the United States", as defined
immediately above."
About JetBlue Airways Corporation
Based in Forest Hills, New York, JetBlue Airways Corporation
(Nasdaq:JBLU) -- http://www.jetblue.com/-- is a passenger
airline that provides customer service on point-to-point routes.
As of Feb. 14, 2007, JetBlue operated approximately 502 daily
flights. The company serves 50 destinations in 21 states,
Puerto Rico, Mexico and the Caribbean. The company operates a
fleet of 98 Airbus A320 and 23 Embraer 190 aircrafts. The
company's operations primarily consists of transporting
passengers on its aircraft, with domestic United States
operations, including Puerto Rico, accounting for approximately
97.1% of its capacity during the year ended Dec. 31, 2006.
* * *
Moody's Investor Service placed JetBlue Airways Corporation's
long-term corporate family and probability rating at 'B3' and
its senior unsecured debt rating at 'Caa2' in May 2007. The
ratings still hold to date with a negative outlook.
ROYAL CARIBBEAN: Inks US$530 Mil. Credit Pact with Nordea Bank
--------------------------------------------------------------
Royal Caribbean Cruises Ltd. disclosed in a regulatory filing
dated Feb. 11, 2008, that the company has entered into a Credit
Agreement with various financial institutions and Nordea Bank
Finland PLC, acting through its New York Branch as
Administrative Agent. The agreement provides for the making of
an unsecured term loan of up to US$530,000,000 to the company
due through 2015.
The company intends to use the proceeds of the loan towards the
purchase of "Independence of the Seas."
A full-text copy of the Credit Agreement is available for free
at: http://researcharchives.com/t/s?27f9
About Royal Caribbean
Headquartered in Miami, Royal Caribbean Cruises Ltd. (NYSE: RCL)
-- http://www.royalcaribbean.com/-- is a global cruise vacation
company that operates Royal Caribbean International, Celebrity
Cruises and Pullmantur Cruises, Azamara Cruises and CDF
Croisieres de France. The company has a combined total of 35
ships in service and seven under construction. It also offers
unique land-tour vacations in Alaska, Australia, China, Canada,
Europe, Latin America and New Zealand. The company has
operations in Puerto Rico.
* * *
Royal Caribbean Cruises Ltd. still carries Moody's 'Ba1' long-
term corporate family rating assigned on Feb. 22, 2005. Moody's
said the outlook is stable.
=============
U R U G U A Y
=============
GERDAU SA: Earns BRL4.3 Billion in 2007 Fiscal Year
---------------------------------------------------
Gerdau SA reported consolidated net income of BRL4.3 billion for
the 2007 fiscal year, an increase of 1.1% over 2006. In 2006,
net income was influenced by non-recurrent revenues of BRL263
million and in 2007 by non-recurrent expenses of BRL164 million.
Excluding those effects, net income would have been
BRL4.5 billion in 2007, representing a growth of 11.9%.
In 2007, the consolidated net sales reached BRL30.6 billion, a
growth of 18.3% as compared to 2006, basically due to the
greater sales volume during the period, the greater prices of
the steel products in the foreign markets and the acquisitions
made during the period.
Cash generation, represented by the EBITDA (earnings before
interest, taxes, depreciation and amortization) reached
BRL6.2 billion in 2007, which corresponds to an increase of 6.9%
over last year. The margin reached 20.4%.
Production
In 2007, the production of crude steel (slabs, blooms and
billets) totaled 17.9 million tonnes, an increase of 13.6% as
compared to 2006. This increase in volume is partially due to
the improvement in the operations of the several regions in
which Gerdau operates and also the consolidation of new
companies acquired during 2007.
The production of rolled products reached 15.2 million tonnes,
18.4% greater than the production in 2006.
Consolidated sales in 2007 totaled 17.2 million tonnes, an
increase of 15.2% as compared to 2006. Of this total, 41.0%
derived from operations in Brazil and the remaining 59.0%
derived from companies abroad. Excluding the acquisitions
carried out in the period in comparison, sales grew by 3.6%.
Investments
According to the investment program for the 2007-2009 triennium,
Gerdau invested US$1.5 billion in fixed assets in 2007.
Concurrently, Gerdau invested an additional US$4.8 billion in
acquisitions both in countries where it already has operations
as in geographical expansion.
Financial Liabilities
Net debt (loans and financing, plus debentures, less cash and
cash equivalents and securities), as of Dec. 31, 2007, amounted
to BRL10.8 billion. This amount is significantly greater than
the amount as of Dec. 31, 2006 because it included debt raised
for the payment of acquisitions carried out throughout the year,
in particular the acquisition of Chaparral, in September.
Considering the gross debt (loans and financing, plus
debentures), 16.0% was short term (BRL2.5 billion) and 84.0% was
long term (BRL13.4 billion). The average payment term of this
debt is 6 years and 4 months.
At the end of the year, cash and cash equivalents, plus
financial investments, totaled BRL5.1 billion, of which BRL3.1
billion (60.6%) was indexed to foreign currencies, mainly the
U.S. dollar.
About Gerdau SA
Headquartered in Porto Alegre, Brazil, Gerdau SA
-- http://www.gerdau.com.br/-- produces and distributes crude
steel and related long rolled products, drawn products, and long
specialty products. In addition to Brazil, Gerdau operates in
Argentina, Canada, Chile, Colombia, Uruguay, India and the
United States.
* * *
As reported in the Troubled Company Reporter-Latin America on
Nov. 26, 2007, Moody's Investors Service affirmed Gerdau S.A.'s
Ba1 corporate family rating and stable outlook.
GERDAU SA: Investing US$6.4 Billion in Technological Upgrades
-------------------------------------------------------------
Gerdau SA said in a statement that it will invest some
US$6.40 billion in technological upgrades and expansions over
the next three years.
Gerdau SA Chief Executive Officer Andre Gerdau Johannpeter told
the press that possible acquisitions are not included in the
budget alloted to the 2008-10 period.
BNamericas notes the US$6.4 billion investment comprised of:
-- US$4.40 billion for Gerdau's Brazilian operations,
-- US$785 million for US and Canada operations,
-- US$859 million for other Latin American nations, and
-- US$295 million for operations in Spain.
According to BNamericas, Gerdau's disbursements would be
US$1.50 billion in 2008, US$2.80 billion in 2009, and
US$2.10 billion in 2010.
BNamericas relates that other investment plans for the coming
years -- including US$500 million for Gerdau's joint ventures in
Mexico, the Dominican Republic and India -- are not part of the
US$6.40 billion investment.
"I would say we are very focused at the moment on the
integration of our new acquisitions. But we continue to be open
and looking at [acquisition] alternatives because the market is
dynamic and continues to reveal opportunities," Mr. Johannpeter
commented to BNamericas.
Headquartered in Porto Alegre, Brazil, Gerdau SA
-- http://www.gerdau.com.br/-- produces and distributes crude
steel and related long rolled products, drawn products, and long
specialty products. In addition to Brazil, Gerdau operates in
Argentina, Canada, Chile, Colombia, Uruguay, India and the
United States.
* * *
As reported in the Troubled Company Reporter-Latin America on
Nov. 26, 2007, Moody's Investors Service affirmed Gerdau S.A.'s
Ba1 corporate family rating and stable outlook.
=================
V E N E Z U E L A
=================
CATALYST PAPER: Posts US$31.6MM Net Loss on US$1,714.6MM Sales
--------------------------------------------------------------
Catalyst Paper posted a net loss of US$31.6 million on sales of
US$1,714.6 million during 2007. This compared with a net loss
of US$15.9 million on sales of US$1,882.5 million in 2006. The
company posted an operating loss of US$149.4 million for the
year, compared to operating earnings of US$3.9 million in 2006.
Catalyst continued to realize significant benefits over the
course of the year from its now long-standing focus on cost
reduction. Wide-ranging workforce restructuring initiatives were
announced during 2007, including a 15 per cent staffing
reduction, relocation of the head office from Vancouver to
Richmond, and the consolidation of some mill
support functions in Nanaimo.
Implementation was substantially completed at the end of the
year, entailing US$58.3 million in restructuring costs with
annual savings estimated at approximately US$67 million. Several
other initiatives, including product, grade and customer
optimization and productivity enhancements, brought year-over-
year realized performance improvements to a total of US$81
million.
"We're pleased with our demonstrated ability to deliver
performance improvement," says President and Chief Executive
Officer, Richard Garneau. "2007 was a year of decisions
affecting our employees, but these actions were needed to
position the company to return to profitability."
"The impact of these efforts is becoming more evident in our
recent quarterly results," Mr. Garneau added. "However, various
business challenges during 2007 erased the gains we made."
Key among those challenges was the 13-week coastal logging
strike. While Catalyst was not a party to it, the dispute
significantly impacted its fibre supply. This resulted in
shortages and cost increases, and necessitated production
curtailments at two Catalyst mills.
The rapid pace of currency appreciation -- with the Canadian
dollar exceeding parity to reach a 50-year high -- had a
significant eroding effect on 2007 results. Catalyst estimates
that the dollar's rise reduced EBITDA by US$47.7 million net of
hedging.
Positive momentum that became evident in Catalyst's third
quarter results steadied the company's fourth quarter results as
the continued strength of the Canadian dollar took its toll. At
US$28.8 million, EBITDA before specific items was down from
US$37.4 million in the immediately preceding quarter, but still
significantly higher than US$17.4 million in the second quarter.
Fourth quarter net earnings were positive at US$12.4 million
compared to a net loss of US$18.6 million in the third quarter.
Favourable income tax adjustments during the quarter were
primarily responsible for these results.
Pulp markets remained strong during 2007, and the final quarter
saw continued pricing momentum and higher average transaction
prices for both pulp and paper products. Overall, however,
market conditions for paper products were mixed over the course
of the year. Lower transaction prices for most grades, except
directory, more than offset the gains realized through pulp
sales.
Tightening supply for coated paper grades supported price
increases in the latter part of 2007, but average prices
for the year remained below 2006 levels. Demand for uncoated
grades was on balance flat, with prices slightly lower
than last year. Directory demand was steady and average prices
rose. In contrast, weak US newsprint consumption and demand
drove prices down.
Looking ahead, the current expectation is for improved market
conditions for both specialty papers and newsprint during 2008,
although the extent and duration of United States economic
contraction could significantly affect this outlook. In
addition, lower housing starts in the U.S. have affected sawmill
operating rates and with no improvement in sight, a tight fibre
supply situation is expected to continue into 2008 and this
could require additional production curtailment.
About Catalyst Paper
Headquartered in Vancouver, B.C., Catalyst Paper Corp. (TSX:CTL)
produces mechanical printing papers in North America. The
company also produces market kraft pulp and owns western
Canada's largest paper recycling facility. With five mills at
sites within a 160-kilometre radius on the south coast of BC,
Catalyst Paper has a combined annual capacity of 2.4 million
tonnes of product.
The company has sales distributions in the United States, Asia,
Australasia, and Europe. In Latin America, the company
specifically has sales distributions in Venezuela, Brazil, and
Mexico.
* * *
As reported in the Troubled Company Reporter-Latin America on
Feb. 13, 2008, Standard & Poor's Ratings Services said that the
ratings on Catalyst Paper Corp. (B/Negative/--) are unaffected
by the acquisition of the Snowflake, Arizona, mill from
AbitibiBowater Inc. for $161 million.
CHRYSLER LLC: Extends Exclusive Deal w/ SIRIUS Until Sept. 2017
---------------------------------------------------------------
SIRIUS Satellite Radio extends exclusive relationship with
Chrysler LLC through September 2017. All Chrysler LLC brands --
Chrysler, Jeep and Dodge -- are covered by the agreement.
SIRIUS is currently available in most Chrysler, Jeep and Dodge
models. This agreement targets a penetration rate for SIRIUS
factory-installed radios in greater than 70% of vehicles built
for the United States by Chrysler. Chrysler also installs
SIRIUS Backseat TV(TM) and SIRIUS Traffic in select vehicles.
"SIRIUS is proud to extend our exclusive relationship with
Chrysler, Jeep and Dodge," said SIRIUS Chief Executive Officer,
Mel Karmazin. "Chrysler will be selling millions of vehicles
with SIRIUS and we look forward to a very significant number of
Chrysler customers becoming part of our already very satisfied
SIRIUS family of more than 8.3 million subscribers."
About SIRIUS
SIRIUS Satellite Radio -- http://www.sirius.com-- delivers
more than 130 channels of the best programming in all of radio.
SIRIUS also delivers 65 channels of sports, news, talk,
entertainment, traffic, weather and data.
SIRIUS products for the car, truck, home, RV and boat are
available in more than 20,000 retail locations, including
Best Buy, Circuit City, Crutchfield, Costco, Target, Wal-Mart,
Sam's Club, RadioShack and at shop.sirius.com.
SIRIUS radios are offered in vehicles from Audi, Bentley, BMW,
Chrysler, Dodge, Ford, Infiniti, Jaguar, Jeep(R), Land Rover,
Lexus, Lincoln, Mercury, Maybach, Mazda, Mercedes-Benz, MINI,
Mitsubishi, Nissan, Rolls Royce, Scion, Toyota, Volkswagen, and
Volvo. Hertz also offers SIRIUS in its rental cars at major
locations around the country.
About Chrysler LLC
Based in Auburn Hills, Michigan, Chrysler LLC --
http://www.chrysler.com/-- a unit of Cerberus Capital
Management LP, produces Chrysler, Jeep(R), Dodge and Mopar(R)
brand vehicles and products. The company has dealers worldwide,
including Canada, Mexico, U.S., Germany, France, U.K.,
Argentina, Brazil, Venezuela, China, Japan and Australia.
* * *
As reported in the Troubled Company Reporter on Nov. 12, 2007,
Standard & Poor's Ratings Services affirmed its 'B' corporate
credit rating on Chrysler LLC and DaimlerChrysler Financial
Services Americas LLC and removed it from CreditWatch with
positive implications, where it was placed Sept. 26, 2007. S&P
said the outlook is negative.
CHRYSLER LLC: Insists That It Owns Tooling Equipment
----------------------------------------------------
Chrysler LLC reacted to Plastech Engineered Products Inc. and
its debtor-affiliates' argument that the tooling equipment the
carmaker is trying to recover is property of the Debtors'
estate.
Chrysler asks the U.S. Bankruptcy Court for the Eastern District
of Michigan to lift the automatic stay so it can immediately
possess the Tooling.
Chrysler argues that the objections of the Debtors and various
of the Debtors' lenders, which share a common theme -- that
Chrysler's entitlement to possession of the Tooling is somehow
conditioned on Chrysler proving "ownership" of the Tooling --
miss the mark.
"Possession of the Tooling, not ownership, is the issue before
the Court," Chrysler's counsel, Michael C. Hammer, Esq., at
Dickinson Wright PLLC, in Ann Arbor, Michigan, asserts.
Mr. Hammer points out that none of the objections to Chrysler's
lift stay request contest the fact that the accommodation
agreements entered between the Debtors and their customers,
including Chrysler, require the Debtors to deliver possession of
the Tooling to Chrysler.
The Financial Accommodation Agreement, Mr. Hammer further points
out, provides that "[Chrysler] . . . shall have the right to
take immediate possession of the [Tooling] at any time, without
payment of any kind from [Chrysler] to Plastech. The rights and
obligations contained in this Section shall continue
notwithstanding the expiration or termination of this
Agreement."
Mr. Hammer also tells the Court that Chrysler has paid valuable
consideration for the right to immediate possession of the
Tooling under the FAAs.
If the Court does not enforce Chrysler's request for immediate
possession of the Tooling, the Debtors will have another
opportunity to hold Chrysler hostage for extraordinary financial
accommodations, Mr. Hammer says. If Chrysler refuses to pay the
ransom that the Debtors said they will demand, Mr. Hammer adds
that Chrysler will again be forced to idle its plants and lay
off its workers.
Chrysler says that it does not object to preserving any lien
rights of the Debtors' prepetition lenders. Chrysler says it
will pay approximately $13,726,389 into escrow for the remaining
unpaid contract price, if any, with respect to any Tooling.
Mr. Hammer says any lien in the Unpaid Tooling can be
transferred to the proceeds and the Court can decide how those
proceeds should be divided amount competing lien claimants.
Chrysler also agrees that removal of the Tooling should be done
in a manner most reasonably calculated to cause the least
interruption of the Debtors' businesses.
As reported in the Troubled Company Reporter on Feb. 14, 2008,
rival carmakers General Motors Corp. and Ford Motor Co. showed
support to Chrysler LLC and its pursuit in recovering the
tooling equipment held up at the Debtors' plants.
Representatives for GM and Ford as well as for auto supplier
Johnson Controls Inc. told the Court they believe Chrysler has
the right to reclaim their own equipment under their contracts
with Plastech.
"GM is not taking a position regarding whether the court should
grant Chrysler the relief it is seeking," GM spokesman Frank
Sopata said, according to the Associated Press. "But GM does
strongly support Chrysler's position regarding the tooling since
we have entered into the same agreement as Chrysler and the
other major customers of Plastech to reclaim our tooling should
it be necessary."
About Plastech Engineered
Based in Dearborn, Michigan, Plastech Engineered Products, Inc.
-- http://www.plastecheng.com/-- is full-service automotive
supplier of interior, exterior and underhood components. It
designs and manufactures blow-molded and injection-molded
plastic products primarily for the automotive industry.
Plastech's products include automotive interior trim, underhood
components, bumper and other exterior components, and cockpit
modules. Plastech's major customers are General Motors, Ford
Motor Company, and Toyota, as well as Johnson Controls, Inc.
Plastech is a privately held company and is the largest family-
owned company in the state of Michigan. The company is
certified as a Minority Business Enterprise by the state of
Michigan. Plastech maintains more than 35 manufacturing
facilities in the midwestern and southern United States. The
company's products are sold through an in-house sales force.
The company and eight of its affiliates filed for Chapter 11
protection on Feb. 1, 2008 (Bankr. E.D. Mich. Lead Case No. 08-
42417). Gregg M. Galardi, Esq., at Skadden Arps Slate Meagher &
Flom LLP, and Deborah L. Fish, Esq., at Allard & Fish, P.C.,
represent the Debtors in their restructuring efforts. The
Debtors chose Jones Day as their special corporate and
litigation counsel. Lazard Freres & Co. LLC serves as the
Debtors' investment bankers, while Conway, MacKenzie & Dunleavy
provide financial advisory services. The Debtors also employed
Donlin, Recano & Company as their claims and noticing agent.
An Official Committee of Unsecured Creditors has been appointed
in the Debtors' cases.
As of Dec. 31, 2006, the company's books and records
reflected assets totaling $729,000,000 and total liabilities of
$695,000,000. (Plastech Bankruptcy News, Issue No. 5;
Bankruptcy Creditors' Service, Inc.,
http://bankrupt.com/newsstand/or 215/945-7000)
About Chrysler LLC
Based in Auburn Hills, Michigan, Chrysler LLC --
http://www.chrysler.com/-- a unit of Cerberus Capital
Management LP, produces Chrysler, Jeep(R), Dodge and Mopar(R)
brand vehicles and products. The company has dealers worldwide,
including Canada, Mexico, U.S., Germany, France, U.K.,
Argentina, Brazil, Venezuela, China, Japan and Australia.
* * *
As reported in the Troubled Company Reporter on Nov. 12, 2007,
Standard & Poor's Ratings Services affirmed its 'B' corporate
credit rating on Chrysler LLC and DaimlerChrysler Financial
Services Americas LLC and removed it from CreditWatch with
positive implications, where it was placed Sept. 26, 2007. S&P
said the outlook is negative.
NORTHWEST AIRLINES: To Focus on Joint Pilot Contract with Delta
---------------------------------------------------------------
To avoid a messy, protracted labor wrangle that could arise from
consolidation, Delta Air Lines Inc. and Northwest Airlines Corp.
are making efforts to come up with a "common labor contract" for
their 11,000 pilots before a merger deal is completed, The Wall
Street Journal reports.
Delta and Northwest shared details of their proposed combination
with each airline's Air Line Pilots Association chapter so that
union leaders will study how to mesh seniority lists, a unnamed
source familiar with the situation told Bloomberg News. As the
pilot talks could lead to improved contract terms for both
groups compared with their current contracts, the unions are
engaged, WSJ said, citing one person close to the situation.
Delta and Northwest might finalize their proposed merger, at the
earliest, late next week, according to reports.
Amid merger rumors, Delta flight attendants are aiming for
representation by the Association of Flights Attendants, says
The Associated Press. Reports note that more than half of
Delta's 12,000 flight attendants have supported this goal, and
are expected to vote on Feb. 14, 2008, with the National
Mediation Board on whether or not to join AFA. At least 35
percent of the 12,000 active flight attendants must sign cards
for the NMB to call an election.
A similar effort made by the flight attendants in late 2001 or
early 2002 failed, says the AP.
Delta spokesperson Betsy Talton said the airline is "not
surprised" by the attendants' plans.
Delta and Northwest declined to comment on the merger talks and
the pilot negotiations.
Delta's Merger Review Continues,
Delta-Northwest Deal Nears
Delta's chief executive officer, Richard Anderson, says Delta's
board and management team are continuing their review of the
airline's strategic options, including mergers, Reuters reports.
While prospects of a merger might unsettle certain people at
Delta, Mr. Anderson assured employees that the management will
ensure a thorough process where "Delta people are at the center
of every decision being considered".
The Delta CEO did not disclose when the review will end.
"If we do any transaction, we have to do the right thing
for the people. I don't know if we can accomplish those goals .
. . because there's somebody on the other side [who has to be in
agreement]," Delta President Ed Bastian said in an interview
with The Atlanta Journal-Constitution.
Rumors have also swirled that Delta is looking toward
Continental Airlines Inc., but held only preliminary talks with
the Houston-based airline recently.
Delta also reportedly held separate discussions with United
Airlines parent UAL Corp.
With a Delta-Northwest combination in the works, Continental and
UAL are looking into "negotiations of their own," according to
The New York Times.
Delta and Northwest would become the world's biggest carrier if
they combined.
About UAL Corp.
Based in Chicago, Illinois, UAL Corporation (NASDAQ: UAUA)
-- http://www.united.com/-- is the holding company for United
Airlines, Inc. United Airlines is the world's second largest
air carrier. The airline flies to Brazil, Korea and Germany.
The company filed for chapter 11 protection on Dec. 9, 2002
(Bankr. N.D. Ill. Case No. 02-48191). James H.M. Sprayregen,
Esq., Marc Kieselstein, Esq., David R. Seligman, Esq., and
Steven R. Kotarba, Esq., at Kirkland & Ellis, represented the
Debtors in their restructuring efforts. Fruman Jacobson, Esq.,
at Sonnenschein Nath & Rosenthal LLP represented the Official
Committee of Unsecured Creditors before the Committee was
dissolved when the Debtors emerged from bankruptcy. Judge
Wedoff confirmed the Debtors' Second Amended Plan on
Jan. 20, 2006. The company emerged from bankruptcy protection
on Feb. 1, 2006. (United Airlines Bankruptcy News, Bankruptcy
Creditors' Service Inc., http://bankrupt.com/newsstand/or
215/945-7000).
About Continental Airlines
Continental Airlines Inc. (NYSE: CAL) -- http://continental.com/
-- is the world's fifth largest airline. Continental, together
with Continental Express and Continental Connection, has more
than 2,900 daily departures throughout the Americas, Europe and
Asia, serving 144 domestic and 139 international destinations.
More than 500 additional points are served via SkyTeam alliance
airlines. With more than 45,000 employees, Continental has hubs
serving New York, Houston, Cleveland and Guam, and together with
Continental Express, carries approximately 69 million passengers
per year.
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.
About Northwest Airlines
Northwest Airlines Corp. (NYSE: NWA) -- http://www.nwa.com/--
is the world's fourth largest airline with hubs at Detroit,
Minneapolis/St. Paul, Memphis, Tokyo and Amsterdam, and about
1,400 daily departures. Northwest is a member of SkyTeam, an
airline alliance that offers customers one of the world's most
extensive global networks. Northwest and its travel partners
serve more than 1000 cities in excess of 160 countries on six
continents. Northwest and its travel partners serve more than
1000 cities in excess of 160 countries on six continents,
including Italy, Spain, Japan, China, Venezuela and Argentina.
The company and 12 affiliates filed for chapter 11 protection on
Sept. 14, 2005 (Bankr. S.D.N.Y. Lead Case No. 05-17930). Bruce
R. Zirinsky, Esq., and Gregory M. Petrick, Esq., at Cadwalader,
Wickersham & Taft LLP in New York, and Mark C. Ellenberg, Esq.,
at Cadwalader, Wickersham & Taft LLP in Washington represent the
Debtors in their restructuring efforts. The Official Committee
of Unsecured Creditors has retained Akin Gump Strauss Hauer &
Feld LLP as its bankruptcy counsel in the Debtors' chapter 11
cases.
When the Debtors filed for bankruptcy, they listed US$14.4
billion in total assets and US$17.9 billion in total debts. On
Jan. 12, 2007 the Debtors filed with the Court their Chapter 11
Plan. On Feb. 15, 2007, they Debtors filed an Amended Plan &
Disclosure Statement. The Court approved the adequacy of the
Debtors' Disclosure Statement on March 26, 2007. On May 21,
2007, the Court confirmed the Debtors' Plan. The Plan took
effect May 31, 2007. (Northwest Bankruptcy News, Bankruptcy
Creditors' Service Inc., http://bankrupt.com/newsstand/or
215/945-7000)
* * *
Moody's Investor Service placed Northwest Airlines Corp.'s long
term corporate family and probability of default ratings at 'B1'
in May 2007. The ratings still hold to date with a stable
outlook.
PETROLEOS DE VENEUZELA: Depositing Oil Sales Receipts with UBS
--------------------------------------------------------------
Energy and environmental policy newswire Greenwire reports that
Venezuela's state-owned oil firm Petroleos de Venezuela SA has
instructed its stock traders to deposit oil revenues with
Switzerland's UBS bank.
According to Greenwire, Petroleos de Venezuela allegedly wants
to protect its oil revenues from the recent court action against
the its finances by Exxon Mobil Corp.
As reported in the Troubled Company Reporter-Latin America on
Feb. 12, 2008, Petroleos de Venezuela is barred from taking or
disposing of up to US$12 billion in petroleum assets worldwide
after courts in Britain and the U.S. ordered freezing of those
assets. Exxon Mobil sought the ruling amid reports that
Petroleos de Venezuela could be looking to sell assets to
counter financial crisis.
Greenwire notes that the court order froze Petroleos de
Venezuela's US$12 billion in bank accounts and assets in the
Caribbean, Europe and New York, reducing Petroleos de
Venezuela's ability to move money through mercantile exchanges
in London and New York City.
Petroleos de Venezuela was undergoing "a profound crisis" and is
"mortgaging" its oil reserves due to a cash crunch, Greenwire
says, citing economist and former Venezuelan central bank
director Jose Guerra.
Cash problems may have urged Petroleos de Venezuela to sell
future oil output to two Japanese banks and renegotiate some
loans packaged by France's BNP Paribas, Inter-American
Development Bank economist and former Petroleos de Venezuela
official Ramon Espinasa told Greenwire.
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.
PDVSA is one of the top exporters of oil to the US with proven
reserves of 77.2 billion barrels of oil -- the most outside the
Middle East -- and about 150 trillion cu. ft. of natural gas.
PDVSA's exploration and production take place in Venezuela, but
the company also has refining and marketing operations in the
Caribbean, Europe, and the US.
PDVSA estimates it will achieve a 5 million 847 thousand barrel
per day production capacity by the year 2012.
* * *
As of Feb. 14, 2008, Fitch Ratings keeps Petroleos de Venezuela
SA's long term issuer default rating and local currency long
term issuer default rating at BB-. Fitch said the ratings
outlook was negative.
PETROLEOS DE VENEZUELA: May File Lawsuit Against Exxon Mobil
------------------------------------------------------------
Venezuelan state-run oil firm Petroleos de Venezuela SA is
considering countersue Exxon Mobil, Dow Jones Newswires reports,
citing Venezuelan oil minister Rafael Ramirez.
"We are evaluating a demand against Exxon," Minister Ramirez
told Venezuelan news daily Ultimas Noticias.
As reported in the Troubled Company Reporter-Latin America on
Sept. 14, 2007, Exxon Mobil filed for arbitration with the
International Center for Settlement of Investment Disputes to
resolve a conflict over its seized assets in Venezuela's Orinoco
oil belt. Exxon Mobil's 41.67% stake at Cerro Negro heavy-crude
project had a net-book
value of about US$750 million before Petroleos de Venezuela
expropriated Exxon's assets in June 2007. Exxon Mobil walked
away from
Venezuela's offer of a minority stake in the heavy-crude
projects as a result of the nationalization of the sector.
Petroleos de Venezuela is to have at least 60% in each of the
four Orinoco projects.
As reported on Feb. 11, 2008, Exxon Mobil secured a court ruling
barring Petroleos de Venezuela from taking or disposing of up to
US$12 billion in petroleum assets worldwide after courts in
Britain and the U.S. ordered freezing of those assets. Exxon
Mobil sought the ruling amid reports that Petroleos de Venezuela
could be looking to sell assets to counter financial crisis.
Petroleos de Venezuela's cash-flow would be unaffected by the
court-ordered freeze, Dow Jones says, citing Minister Ramirez.
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.
PDVSA is one of the top exporters of oil to the US with proven
reserves of 77.2 billion barrels of oil -- the most outside the
Middle East -- and about 150 trillion cu. ft. of natural gas.
PDVSA's exploration and production take place in Venezuela, but
the company also has refining and marketing operations in the
Caribbean, Europe, and the US.
PDVSA estimates it will achieve a 5 million 847 thousand barrel
per day production capacity by the year 2012.
* * *
As of Feb. 14, 2008, Fitch Ratings keeps Petroleos de Venezuela
SA's long term issuer default rating and local currency long
term issuer default rating at BB-. Fitch said the ratings
outlook was negative.
SHAW GROUP: E&I Unit Bags Two Task Order Contracts from US Navy
---------------------------------------------------------------
The Shaw Group Inc. disclosed that its Environmental &
Infrastructure Group has been awarded task orders by the Naval
Facilities Engineering Command (NAVFAC) Southwest Division and
the Naval Facilities Engineering Service Center (NFESC) in Port
Hueneme, Calif.
The first task order, awarded under Shaw's NAVFAC Southwest
Environmental Multiple Award Construction Contract, is for
services at Marine Corps Air Station El Toro in Southern
California, which was decommissioned in 1999 under the Base
Realignment and Closure program. As part of the site's
Installation Restoration Program, Shaw will be responsible for
designing and constructing landfill caps at two major landfills
that were used to dispose of incinerator ash, solvents and oily
wastes. The value of Shaw's three-year contract, which has been
included in the company's previously announced backlog, was not
disclosed.
Shaw's second task order, awarded under its worldwide NFESC Navy
Fuels prime contract, is for cleaning, inspecting and repairing
17 tanks located within fueling facilities at San Clemente
Island, North Island and the San Diego Fleet and Industrial
Supply Center, in California. The value of Shaw's one-year
contract, which has been included in the company's previously
announced backlog, was not disclosed.
"As an environmental remediation contractor of choice with the
Navy for more than 14 years, Shaw brings extensive knowledge and
experience in site closure activities to ensure land is viable
for long-term, sustainable use," said Ronald W. Oakley,
president of Shaw's Environmental & Infrastructure Group.
"Additionally, the contract with the Navy Engineering Service
Center provides the opportunity for Shaw to continue its
extensive environmental work at the three facilities, which
further strengthens our position in the fuels market."
About Shaw Group
Based in Baton Rouge, Louisiana, The Shaw Group Inc. (NYSE: SGR)
-- http://www.shawgrp.com/-- provides services to the
environmental, infrastructure and homeland security markets,
including consulting, engineering, construction, remediation and
facilities management services to governmental and commercial
customers. It is also a vertically integrated provider of
engineering, procurement, pipe fabrication, construction and
maintenance services to the power and process industries. The
company segregates its business activities into four operating
segments: Environmental & Infrastructure; Energy & Chemicals;
Maintenance, and Fabrication, Manufacturing & Distribution. In
January 2005, the company sold substantially all of the assets
of its Shaw Power Technologies, Inc. and Shaw Power Technologies
International, Ltd. units to Siemens Power Transmission and
Distribution Inc., a unit of Siemens AG.
The company has operations in Chile, China, Malaysia, the United
Kingdom and, Venezuela, among others.
* * *
Standard & Poor's Ratings Services affirmed its 'BB' corporate
credit rating on The Shaw Group Inc. and removed it from
CreditWatch, where it was placed with negative implications in
October 2006. S&P said the outlook is stable.
In addition, 'BB' senior secured debt rating was affirmed after
the US$100 million increase to the company's revolving credit
facility.
===========
X X X X X X
===========
* LatAm Voice Services Market To Top US$775.8 Million by 2012
-------------------------------------------------------------
Carriers and service providers in Latin America have been
extensively migrating to next-generation network infrastructure,
at a pace that is surpassing the overall economic growth of the
region. With the transition from circuit-switched to packet-
based technology in their networks, telecommunication service
providers are starting to offer hosted IP-based services to
their business customers, in order to captivate recurrent
revenues and increase penetration within current clients.
New analysis from Frost & Sullivan, Hosted IP and Next-
generation enterprise voice services trends in Latin America,
reveals that this market earned revenues of US$37.0 million in
2006 and estimates this to reach US$775.8 million in 2012.
If you are interested in a virtual brochure, which provides
manufacturers, service providers, end users, and other industry
participants with an overview of the latest analysis of the
hosted IP and next-generation enterprise voice services trends
in Latin America, then send an e-mail to Jose Mar¡a Jantus,
Corporate Communications, at jose.jantus@frost.com with your
full name, company name, title, telephone number, fax number,
address, and e-mail. Upon receipt of the above information, an
overview will be sent to you by e-mail.
Technical innovation in the telecommunications market is, to a
large extent, based on new IP communications technologies and
standards, such as IMS and triple play, rather than legacy
technologies. Some of the benefits of next-generation
enterprise voice services include delivery of bundled services
that enhance the features of rich-voice applications, faster and
smoother upgrades, flexibility and scalability of the services,
efficiency gains and cost reductions for voice communications
and cost savings from reduced in-house systems and network
management staff.
"The Latin America hosted IP and next-generation enterprise
voice services market is driven by three main factors: the
increasing IP infrastructure adoption by service providers and
enterprises, the demand for capital expenditure (CAPEX)
reduction and lower-cost voice services, and the increases in
broadband penetration and available bandwidth," notes Kristin
Crispin, Industry Manager at Frost & Sullivan. "In the medium
term, enterprise telephony vendors, as well as service providers
should push for this model, with the need to increase the
average revenue per user (ARPU), and to offer new services in
their portfolio."
At the same time, two of the biggest challenges in this market
are the need to educate business customers about the new
services that were not available over the traditional networks
and delivering hosted IP services under the current regulatory
framework, where issues such as last mile access and number
portability are yet to be discussed.
"Other short term challenges include the preference from Latin
American companies for premise-based systems and limited
broadband development in the small and medium-sized enterprises
(SME) segment," says Mr. Crispin. "This apart, the integration
of hosted IP voice services with legacy systems is also likely
to pose challenges."
Traditionally, only large enterprises have had the financial
resources to afford high-end IP-based customer premises
equipment (CPE), which has appreciably improved customer service
and operational efficiency, while concurrently reducing costs.
Therefore, telecommunication service providers need to
proactively develop new service portfolios that enable their
business customers to differentiate themselves from their
competitors, and to gain a competitive advantage. On the other
hand, as the Latin American enterprise fixed-voice services
market is declining, incumbent carriers and competitive local
exchange carriers (CLECs) need to develop alternative revenue
streams.
Hosted IP and Next-generation enterprise voice services trends
in Latin America is part of the Communication Services Growth
Partnership Service, which also includes research in the
following markets: Enterprise and Consumer Telecom Services
Markets, Broadband Access services, Data Communication Services,
North America Hosted Telephony Services Market, EMEA Hosted IP
Telephony Markets, APAC Next-Gen Enterprise Voice Services
Markets, North America and EMEA Hosted Contact Center Markets.
All research services included in subscriptions provide detailed
market opportunities and industry trends that have been
evaluated following extensive interviews with market
participants. Interviews with the press are available.
Frost & Sullivan -- http://www.frost.com/-- the Global Growth
Consulting Company, partners with clients to accelerate their
growth. The company's Growth Partnership Services, Growth
Consulting and Career Best Practices empower clients to create a
growth focused culture that generates, evaluates and
implements effective growth strategies. Frost & Sullivan
employs over 45 years of experience in partnering with Global
1000 companies, emerging businesses and the investment community
from more than 30 offices on six continents.
***********
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. Marie Therese V. Profetana, Sheryl Joy P. Olano,
Rizande delos Santos, and Pamella Ritah K. Jala, Editors.
Copyright 2008. All rights reserved. ISSN 1529-2746.
This material is copyrighted and any commercial use, resale or
publication in any form (including e-mail forwarding, electronic
re-mailing and photocopying) is strictly prohibited without
prior written permission of the publishers.
Information contained herein is obtained from sources believed
to be reliable, but is not guaranteed.
The TCR Latin America subscription rate is US$625 per half-year,
delivered via e-mail. Additional e-mail subscriptions for
members of the same firm for the term of the initial
subscription or balance thereof are US$25 each. For
subscription information, contact Christopher Beard at
240/629-3300.
* * * End of Transmission * * *