/raid1/www/Hosts/bankrupt/TCRLA_Public/080307.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, March 7, 2008, Vol. 9, No. 48
Headlines
A R G E N T I N A
AVENIDA CORDOBA: Proofs of Claim Verification Is Until April 25
AVENIDA DEL TEJAR: Claims Verification Deadline Is April 25
AVENIDA SAN MARTIN: Claims Verification Is Until April 25
BOEDO 1967: Proofs of Claim Verification Deadline Is April 25
CEREAL PRO: Files for Reorganization in Court
CHRYSLER LLC: Has Unlimited Access to Daimler AG's Technology
GIRASOLES DEL CAMPO: Files for Reorganization in Court
HOTEL GRAN DUC: Proofs of Claim Verification Deadline Is May 5
MIGUEL ACOSTA: Trustee to Verify Proofs of Claim Until April 4
PAGLIETTINI SA: Files for Reorganization in Court
RED HAT: Hires Robert Tiller & Richard Fontana as Counsel
ROOSEVELT 5269: Proofs of Claim Verification Ends on April 25
VALEANT PHARMA: To Restate Financial Statements Due to Errors
WESTERN OIL: Proofs of Claim Verification Is Until May 2
B A H A M A S
PINNACLE ENT: Posts US$19 Mil. Net Loss in Quarter Ended Dec. 31
B E R M U D A
ANNUITY & LIFE: Closes Sale of American Unit to Heritage Union
INTELSAT LTD: Subsidiaries Commence Change of Control Offers
TYCO INT'L: Sells Nippon Dry-Chemical Biz to Daiwa Securities
B R A Z I L
AAR CORP: Closes Avborne Heavy Maintenance Acquisition
BANCO BMG: Says Bond Issue to Bring In at Least US$100 Million
BANCO BRADESCO: BBVA Sells 5% Stake for EUR976 Million
BANCO NACIONAL: Board Grants BRL354.7 Million Loan to Coelce
BANCO NACIONAL: Approves BRL38.1 Mil. Financing to Deib Otoch
COMPANHIA ENERGETICA: Earns BRL178.6 Million in 2007
DELPHI CORP: Gets Exit Financing Proposal from General Motors
DRESSER-RAND: Earnings Rise to US$44MM in Quarter Ended Dec. 31
ENERGIAS DO BRASIL: 2007 Net Income Rises 11.6% to BRL439.8MM
GENERAL MOTORS: Offers Additional Exit Financing to Delphi Corp.
GENERAL MOTORS: American Axle Strike Affects More GM Plants
GERDAU SA: Has Most Expertise in Acquisitions, Analyst Says
HEXION SPECIALTY: Discloses Post-Merger Senior Officers
JBS SA: Major Acquisition Spurs Moody's to Continue Review
MERCANTIL DO BRASIL: Earns BRL36.7 Million in 2007
NATIONAL BEEF: JBS Buyout Cues Moody's to Change Outlook to Neg.
SMITHFIELD FOODS: Asset Sale Prompts Moody's to Hold Ba2 Ratings
USINAS SIDERURGICA: Concludes BRL500 Million Debenture Issuance
* BRAZIL: Moody's Eyes Solid Growth for Homebuilding Industry
C A Y M A N I S L A N D S
ATLANTIS YACHTING: Proofs of Claim Filing Is Until March 17
GUIMARAES DE MELLO: Final Shareholders' Meeting Is on March 16
MERLIN BIOMED: Sets Final Shareholders' Meeting for March 14
MORLEY BALANCED: Final Shareholders' Meeting Is on March 17
TIME FOR US: Proofs of Claim Filing Deadline Is March 17
C H I L E
AES GENER: Shareholders Okay US$350 Million Capital Increase
ROCK-TENN CO: Completes Southern Container Acquisition
C O L O M B I A
QUEBECOR WORLD: WEB Printing Backs Reclamation Objections
QUEBECOR WORLD: Reaches Settlement With Utility Providers
QUEBECOR WORLD: Seeks to Reject Banc of America Aircraft Lease
QUEBECOR WORLD: Six Creditors Balk at US$1 Billion DIP Facility
SOLUTIA INC: Flexsys Unit Raises Prices to Ensure Reinvestment
SOLUTIA INC: Agrees to GE Betz's $255,575 Unsecured Claim
SOLUTIA INC: To Issue 7,450,000 Shares for Employee Plans
C O S T A R I C A
COVANTA HOLDING: Earns US$72 Million in Quarter Ended Dec. 31
SIRVA INC: Agrees With Creditors on Prepetition Claims Payment
SIRVA INC: Court Approves Hiring of Kirkland & Ellis as Attorney
SIRVA INC: Court Approves Motion to Hire E&Y as Accountant
SIRVA INC: Court Allows Rejection of Devens & Bridgewater Leases
US AIRWAYS: Will Pay US$1.88 Million to Boston City
US AIRWAYS: Gets Approval to Modify Agreements With United
US AIRWAYS: Employees Want Management to Address Labor Issues
US AIRWAYS: Various Entities Disclose Ownership of Interest
E L S A L V A D O R
AES CORP: POSCO Engineering to Build Plant for El Salvador Unit
G U A T E M A L A
BANCO INDUSTRIAL: Takes Over Banquetzal
GOODYEAR TIRE: Fitch Lifts Issuer Default Rating to BB- From B+
J A M A I C A
NATIONAL COMMERCIAL: AIC Barbados Sells 13.6MM Shares in Firm
M E X I C O
BERRY PLASTICS: B. Scheu Takes Helm at Rigid Closed Top Division
CEMEX SAB: Sees Increased Synergies from Rinker Integration
CLEAR CHANNEL: Trial on Sale Funding Dispute Set for April 7
EMPRESAS ICA: Industrial Unit Bags US$100 Mil. Deal With Energia
INTERNATIONAL RECTIFIER: Tom Lacey Joins Board of Directors
P A N A M A
AES CORP: Defaults on Debt Facilities due to Misrepresentation
P E R U
CUMMINS INC: Names Jean Blackwell as EVP & CEO of Foundation
P U E R T O R I C O
DIRECTV GROUP: Amends Distribution Pact With Crown Media
GENESCO INC: Terminates Finish Line-Merger and Settles Dispute
GENESCO INC: Merger Termination Cues S&P to Hold B+ Rating
UNIVISION COMM: Posts US$314.8 Million Net Loss in 2007
V E N E Z U E L A
PETROLEOS DE VENEZUELA: Foreign Clients Must Pay Through Bank
PETROLEOS DE VENEZUELA: Gets OPEC'S Support in Exxon Conflict
X X X X X X
* Moody's Says LatAm Telecom Industry Faces Competitive Pressure
- - - - -
=================
A R G E N T I N A
=================
AVENIDA CORDOBA: Proofs of Claim Verification Is Until April 25
---------------------------------------------------------------
Estudio Bejar, Pantin y Asoc., the court-appointed trustee for
Avenida Cordoba 4867 S.A.'s bankruptcy proceeding, will be
verifying creditors' proofs of claim until April 25, 2008.
Estudio Bejar will present the validated claims in court as
individual reports on June 12, 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 Avenida Cordoba 4867 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 Avenida Cordoba's
accounting and banking records will be submitted in court on
Aug. 15, 2008.
Estudio Bejar is also in charge of administering Avenida
Cordoba's assets under court supervision and will take part in
their disposal to the extent established by law.
The trustee can be reached at:
Estudio Bejar, Pantin y Asoc.
Suipacha 211
Buenos Aires, Argentina
AVENIDA DEL TEJAR: Claims Verification Deadline Is April 25
-----------------------------------------------------------
Estudio Bejar, Pantin y Asoc., the court-appointed trustee for
Avenida del Tejar 2551 S.A.'s bankruptcy proceeding, will be
verifying creditors' proofs of claim until April 25, 2008.
Estudio Bejar will present the validated claims in court as
individual reports on June 12, 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 Avenida del Tejar 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 Avenida del Tejar's
accounting and banking records will be submitted in court on
Aug. 15, 2008.
Estudio Bejar is also in charge of administering Avenida del
Tejar's assets under court supervision and will take part in
their disposal to the extent established by law.
The trustee can be reached at:
Estudio Bejar, Pantin y Asoc.
Suipacha 211
Buenos Aires, Argentina
AVENIDA SAN MARTIN: Claims Verification Is Until April 25
---------------------------------------------------------
Estudio Bejar, Pantin y Asoc., the court-appointed trustee for
Avenida San Martin 5404 S.A.'s bankruptcy proceeding, will be
verifying creditors' proofs of claim until April 25, 2008.
Estudio Bejar will present the validated claims in court as
individual reports on June 12, 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 Avenida San Martin 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 Avenida San Martin's
accounting and banking records will be submitted in court on
Aug. 15, 2008.
Estudio Bejar is also in charge of administering Avenida San
Martin's assets under court supervision and will take part in
their disposal to the extent established by law.
The trustee can be reached at:
Estudio Bejar, Pantin y Asoc.
Suipacha 211
Buenos Aires, Argentina
BOEDO 1967: Proofs of Claim Verification Deadline Is April 25
-------------------------------------------------------------
Estudio Bejar, Pantin y Asoc., the court-appointed trustee for
Boedo 1967 S.A.'s bankruptcy proceeding, will be verifying
creditors' proofs of claim until April 25, 2008.
Estudio Bejar will present the validated claims in court as
individual reports on June 12, 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 Boedo 1967 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 Boedo 1967's
accounting and banking records will be submitted in court on
Aug. 15, 2008.
Estudio Bejar is also in charge of administering Boedo 1967's
assets under court supervision and will take part in their
disposal to the extent established by law.
The trustee can be reached at:
Estudio Bejar, Pantin y Asoc.
Suipacha 211
Buenos Aires, Argentina
CEREAL PRO: Files for Reorganization in Court
---------------------------------------------
Cereal Pro S.A. has requested for reorganization approval after
failing to pay its liabilities.
The reorganization petition, once approved by the court, will
allow Cereal Pro to negotiate a settlement with its creditors in
order to avoid a straight liquidation.
The case is pending in the National Commercial Court of First
Instance in Buenos Aires.
The debtor can be reached at:
Cereal Pro S.A.
Uruguay 705
Buenos Aires, Argentina
CHRYSLER LLC: Has Unlimited Access to Daimler AG's Technology
------------------------------------------------------------
Daimler AG granted Chrysler LLC a no-frills access to its
advanced technology, Mike Spector of The Wall Street Journal
reports.
Chrysler can use the technology in order to pursue and enhance
fuel-economy and mileage on its products, says WSJ, citing
Chrysler vice chairman Jim Press at a Geneva auto convention.
Chrysler previously streamlined its production by rejecting the
"car cloning" practice, and instead will focus on selling its
remaining, unique car models. As reported in the Troubled
Company Reporter on Feb. 27, 2008, the company's streamlining
measures came after it lost its tooling battle with Plastech
Engineered Products Inc. The U.S. Bankruptcy Court for the
Eastern District of Michigan denied the company's request to
pull out tooling equipment from Plastech's plants.
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-Latin America on
Nov. 13, 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.
GIRASOLES DEL CAMPO: Files for Reorganization in Court
------------------------------------------------------
Girasoles del Campo SA has requested for reorganization approval
after failing to pay its liabilities since Feb. 14, 2008.
The reorganization petition, once approved by the court, will
allow Girasoles del Campo to negotiate a settlement with its
creditors in order to avoid a straight liquidation.
The case is pending in the National Commercial Court of First
Instance No. 3 in Buenos Aires. Clerk No. 5 assists the court
in this case.
The debtor can be reached at:
Girasoles del Campo SA
Corrientes 2330
Buenos Aires, Argentina
HOTEL GRAN DUC: Proofs of Claim Verification Deadline Is May 5
--------------------------------------------------------------
Raul Trejo, the court-appointed trustee for Hotel Gran Duc
S.A.'s bankruptcy proceeding, will be verifying creditors'
proofs of claim until May 5, 2008.
Mr. Trejo will present the validated claims in court as
individual reports on June 16, 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 Hotel Gran Duc 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 Hotel Gran Duc's
accounting and banking records will be submitted in court on
Aug. 14, 2008.
Mr. Trejo is also in charge of administering Hotel Gran Duc's
assets under court supervision and will take part in their
disposal to the extent established by law.
The debtor can be reached at:
Hotel Gran Duc S.A.
Jose E. Uriburu 1544
Buenos Aires, Argentina
The trustee can be reached at:
Raul Trejo
Avenida Corrientes 818
Buenos Aires, Argentina
MIGUEL ACOSTA: Trustee to Verify Proofs of Claim Until April 4
--------------------------------------------------------------
The court-appointed trustee for Miguel Acosta e Hijos S.R.L.'s
reorganization proceeding will be verifying creditors' proofs of
claim until April 4, 2008.
The trustee will present the validated claims in court as
individual reports. The National Commercial Court of First
Instance in Cordoba 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 Miguel Acosta
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 Miguel Acosta's
accounting and banking records will be submitted in court.
Infobae didn't state the submission dates for the reports.
The debtor can be reached at:
Miguel Acosta e Hijos S.R.L.
Avenida Velez Sarfield 79, Ciudad de Cordoba
Cordoba, Argentina
PAGLIETTINI SA: Files for Reorganization in Court
-------------------------------------------------
Pagliettini SA has requested for reorganization approval after
failing to pay its liabilities since July 16, 2007.
The reorganization petition, once approved by the court, will
allow Pagliettini to negotiate a settlement with its creditors
in order to avoid a straight liquidation.
The case is pending in the National Commercial Court of First
Instance No. 11 in Buenos Aires. Clerk No. 22 assists the court
in this case.
The debtor can be reached at:
Pagliettini SA
Diaz Colodrero 3130
Buenos Aires, Argentina
RED HAT: Hires Robert Tiller & Richard Fontana as Counsel
---------------------------------------------------------
Red Hat Inc. has appointed intellectual property experts Robert
Tiller, as Vice President and Assistant General Counsel, and
Richard Fontana, as Open Source Licensing and Patent Counsel.
Both will report to Executive Vice President and General
Counsel, Michael Cunningham.
Mr. Tiller brings over 20 years of legal expertise to Red Hat
and joins the company from Helms, Mulliss & Wicker, where he
gained experience in intellectual property and technology
litigation, commercial litigation and antitrust. Previously,
Mr. Tiller was an Associate Partner at Parker, Poe, Adams &
Bernstein, focusing on intellectual property and technology,
business torts and employment, education and general commercial
litigation. Mr. Tiller also held roles as Associate for Onek,
Klein & Farr, as Clerk for Antonin Scalia of the United States
Supreme Court and as Clerk for Stephen Williams of the United
States Court of Appeals for the District of Columbia Circuit.
Mr. Tiller earned his J.D. From the University of Virginia
School of Law and received his bachelor’s degree from Oberlin
College.
At Red Hat, Mr. Tiller will be responsible for overseeing the
Company’s internal intellectual property team, with
responsibilities covering open source licensing, copyright,
patent and trademark. Additionally, Mr. Tiller will work on the
development of new policies and strategies related to legal
issues in open source.
Mr. Fontana most recently served as Counsel for the Software
Freedom Law Center, where he partnered with Eben Moglen to
advise the Free Software Foundation on the drafting of version 3
of the GNU General Public License. In this role, Mr. Fontana
drafted GPLv3 license provisions, analyzed and advised clients
on competing proposals, conducted the public GPLv3 discussion
process, led GPLv3 discussion committees and researched matters
of U.S. and international copyright and patent law.
Prior to his work on GPLv3, Mr. Fontana prepared and prosecuted
patent applications as an Associate at Darby & Darby, P.C. and
Leydig, Voit & Mayer, Ltd. At Rogers & Wells, he was an
Associate in the firm’s Litigation Department, where he worked
in intellectual property, antitrust and securities litigation
practice groups. Mr. Fontana received his J.D. From the
University of Michigan Law School, earned master’s degrees in
Computer Science from New York University and Yale University
and obtained his bachelor’s degree in History from Wesleyan
University.
At Red Hat, Mr. Fontana will manage matters relating to patents
and open source licensing. He will also serve as a Red Hat
liaison with the open source community on licensing issues.
"It is an honor to call these experienced intellectual property
litigators Red Hat’s own," said Mr. Cunningham. "With the
combination of Richard and Robert’s backgrounds, our team has
gained important ground in regard to intellectual property, open
source licensing and patents -- areas that have increasingly
gained importance in the success of Red Hat and the open source
community."
Mr. Fontana will be based at Red Hat’s Westford, Mass. office.
Tiller will be based at Red Hat’s headquarters in Raleigh, N.C.
Headquartered in Raleigh, North Carolina Red Hat, Inc.
-- http://www.redhat.com/-- is an open source and Linux
provider. Red Hat provides operating system software along with
middleware, applications and management solutions. Red Hat also
offers support, training, and consulting services to its
customers worldwide and through top-tier partnerships.
The company has offices in Singapore, Germany, and Argentina,
among others.
* * *
As reported in the Troubled Company Reporter-Latin America on
Oct. 19, 2007, Standard & Poor's Ratings Services revised its
outlook on Red Hat Inc. to positive from stable and affirmed
the ratings, including the 'B+' corporate credit rating.
ROOSEVELT 5269: Proofs of Claim Verification Ends on April 25
-------------------------------------------------------------
Estudio Bejar, Pantin y Asoc., the court-appointed trustee for
Roosevelt 5269 S.A.'s bankruptcy proceeding, will be verifying
creditors' proofs of claim until April 25, 2008.
Estudio Bejar will present the validated claims in court as
individual reports on June 12, 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 Roosevelt 5269 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 Roosevelt 5269's
accounting and banking records will be submitted in court on
Aug. 15, 2008.
Estudio Bejar is also in charge of administering Roosevelt
5269's assets under court supervision and will take part in
their disposal to the extent established by law.
The trustee can be reached at:
Estudio Bejar, Pantin y Asoc.
Suipacha 211
Buenos Aires, Argentina
VALEANT PHARMA: To Restate Financial Statements Due to Errors
-------------------------------------------------------------
Valeant Pharmaceuticals International disclosed in a regulatory
filing that its Board of Directors on March 1, 2008, determined
that certain of the company's annual and interim financial
statements, earnings press releases and similar communications,
should no longer be relied upon.
During the preparation process for the 2007 Annual Report on
Form 10-K, the company identified certain accounting errors
related to certain foreign operations which primarily arose
during the period Jan. 1, 2002, to Sept. 30, 2007, and, in
aggregate, would have resulted in a net charge to income from
continuing operations before income taxes of approximately
US$2.8 million to correct the cumulative effect of the errors in
the fourth quarter of 2007.
These included adjustments impacting annual periods prior to
2007 with a cumulative charge to income from continuing
operations before income taxes of approximately US$5.2 million
as of Jan. 1, 2007. The adjustments also included items
originating in the first, second and third quarters of 2007 with
a net benefit to income from continuing operations before income
taxes of approximately US$2.4 million.
The errors and the estimated cumulative effect of the
corrections are:
a. Increase in reserves for anticipated product returns based
on historical trends and for certain credit memos in
Mexico, the cumulative effect of which is an expected
reduction in revenue of approximately US$4.0 million;
b. Decrease in revenues associated with sales to certain
customers in Italy where preexisting rights of return
became known in the fourth quarter of 2007, the cumulative
effect of which is an estimated reduction of revenues of
approximately US$1.8 million;
c. Decrease in costs of goods sold related to bookkeeping
errors in recording inventory costing and manufacturing
variances in the UK and France, the cumulative effect of
which is an expected reduction in cost of goods sold and a
corresponding increase in gross profit of approximately
US$4.9 million;
d. Increase in pension expense in the UK and the Netherlands
resulting from incorrect application of Statement of
Financial Accounting Standard No. 87, Employers Accounting
for Pensions, the cumulative effect of which is an expected
increase in general and administrative expenses of
approximately US$1.9 million; and
e. Increase in income tax expense due to correction of
deferred income taxes in certain foreign locations
resulting in a decrease in income of approximately
US$500,000. Additionally income tax expense is reduced by
approximately US$800,000 resulting from the income tax
effects of the pre-tax adjustments described above.
About Valeant Pharmaceuticals
Headquartered in Costa Mesa, California, Valeant Pharmaceuticals
International (NYSE: VRX) -- http://www.valeant.com/-- is a
global specialty pharmaceutical company that develops,
manufactures and markets a broad range of pharmaceutical
products primarily in the areas of neurology, infectious disease
and dermatology. It has offices in Argentina, Singapore and
Taiwan.
* * *
In January 2007, Moody's Investors Service confirmed the ratings
of Valeant, including the B2 Corporate Family Rating, and
concluded the rating review for possible downgrade, which was
first initiated on Oct. 23, 2006. Ratings hold to date.
WESTERN OIL: Proofs of Claim Verification Is Until May 2
--------------------------------------------------------
Ignacio Victor Kaczer, the court-appointed trustee for Western
Oil S.R.L.'s bankruptcy proceeding, will be verifying creditors'
proofs of claim until May 2, 2008.
Mr. Kaczer will present the validated claims in court as
individual reports on June 13, 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 Western Oil 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 Western Oil's
accounting and banking records will be submitted in court on
Aug. 12, 2008.
Mr. Kaczer is also in charge of administering Western Oil's
assets under court supervision and will take part in their
disposal to the extent established by law.
The trustee can be reached at:
Ignacio Victor Kaczer
Avenida Callao 441
Buenos Aires, Argentina
=============
B A H A M A S
=============
PINNACLE ENT: Posts US$19 Mil. Net Loss in Quarter Ended Dec. 31
----------------------------------------------------------------
Pinnacle Entertainment Inc. reported financial results for the
fourth quarter and full year ended Dec. 31, 2007.
For the fourth quarter of 2007, on a Generally Accepted
Accounting Principles basis, the company reported a net loss of
US$19.2 million compared to a net loss of US$5 million in the
same quarter of 2006. The change in results reflects increased
pre-opening and development expenses related to the company's
development activities, the hiring, training and marketing costs
for the Lumiere Place Casino, and additional depreciation costs
associated with that new property and a full quarter's ownership
of The Admiral Riverboat Casino. Partially offsetting these
costs is an increase in capitalized interest.
For the full year, on a GAAP basis, the net loss for the year
ended Dec. 31, 2007, was US$1.4 million compared to net income
of US$76.9 million for the same period in the previous year.
The 2006 results included the performance at Boomtown New
Orleans, net proceeds of approximately US$44.7 million related
to the terminated merger agreement with Aztar Corporation and
pre-tax gains of US$27.2 million from the sale of the California
card club operations.
While the company had a slight net loss in 2007, the company has
substantial operating cash flow due to its depreciation charges,
reflecting the fact that much of its assets were built by the
company in recent years.
On a GAAP basis, cash flow from operations was US$145 million
and US$207 million for the years ended Dec. 31, 2007, and 2006.
Cash flow from operations before pre-opening and development
expenses(1) was US$205 million and US$234 million for the years
ended Dec. 31, 2007 and 2006.
"Our company made significant progress in 2007," Daniel R. Lee,
chairman and chief executive officer of Pinnacle Entertainment,
said. "Our existing operations performed solidly overall in
2007, including a record year at L'Auberge and a near-record
year at Belterra. Our New Orleans property stabilized at strong
levels of profitability and we completed and opened Lumiere
Place.
"Strategically, we remain focused on reinvesting our
shareholders' cash flow into new casino resorts with compelling
and innovative designs, tying them together into a national
network," Mr. Lee continued. "We continue to cultivate each of
the projects in our growth pipeline while carefully monitoring
the credit markets."
"These development projects often take years of work, including
acquiring the land and obtaining the necessary gaming
licenses," Mr. Lee added. "In the early years, the cash outlays
are relatively minor compared to the later stages of
construction. The current disruption in the credit markets is
quite severe and the availability of capital is constrained and,
where available, its cost is quite high in comparison to the
recent past. If interest rates for corporate borrowers such as
us do not improve, it may be in our shareholders' best interests
to delay such
projects in our development pipeline until credit markets
improve and the expected returns of such projects again exceed
the anticipated long-term cost of capital."
Liquidity
The company had approximately $191 million in cash and cash
equivalents at Dec. 31, 2007. Of the company's $625 million
revolving credit facility, approximately $161 million is
utilized, including $50 million borrowed in late 2007, $90
million borrowed in early 2008, and $21.2 million of letters of
credit issued.
Funding of Lumiere Place and the L'Auberge du Lac hotel
expansion is substantially completed. Utilization of the credit
facility is currently restricted to $350 million by the
company's indenture governing its 8.75% senior subordinated
notes, which become callable in 2008.
At Dec. 31, 2007, the company's balance sheet showed total
assets of $2.19 billion, total liabilities of $1.14 billion and
total stockholders' equity of $1.05 billion.
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
=============
ANNUITY & LIFE: Closes Sale of American Unit to Heritage Union
--------------------------------------------------------------
Heritage Union has purchased Annuity & Life Re (Holdings),
Ltd.'s indirect, wholly-owned subsidiary, Annuity & Life
Reassurance America, Inc. The acquisition enables Heritage
Union and its family of companies to serve customers in 43
states, the District of Columbia and the United States territory
of Guam and introduce its breakthrough SalaryShield(R) life
insurance products.
"This acquisition represents a major milestone in the history of
our young company, giving us the capacity to begin widely
serving those middle-income families who need the peace of mind
and security that our products provide," said Heritage Union
Chief Executive Officer. Philip Walker. "We now are able to
accelerate our outreach to families across the country with
products specifically designed to be more affordable, less
complicated and more in tune with the many demands of their
lives."
Annuity and Life Re (Holdings), Ltd. announced the sale Aug. 8,
2007. The sale was approved by the Connecticut Department of
Insurance in mid-February. In conjunction with the closing,
Annuity and Life Reassurance America, Inc. paid a dividend of
US$300,000 to its direct parent, Annuity & Life Re America, Inc.
and it received proceeds from the buyer of US$11,058,716. This
amount is subject to possible closing date balance sheet
adjustments within ten business days following the sale
transaction. The company will use a portion of the proceeds to
pay transaction costs related to the sale.
About Heritage Union
Founded in 2005, the Richmond, Virgina-based Heritage Union
Services, LLC -- http://www.salaryshield.com-- designs life
insurance products aimed specifically at helping middle class
American families protect their income in the face of premature
death. SalaryShield is a registered servicemark of Heritage
Union.
About Annuity Life Re (Holdings) Ltd.
Bermuda-based Annuity & Life Re (Holdings), Ltd. --
http://www.alre.bm/or -- http://www.annuityandlifere.com/--
provides annuity and life reinsurance to insurers through its
wholly owned subsidiaries, Annuity & Life Reassurance, Ltd. and
Annuity & Life Reassurance America, Inc.
Going Concern Doubt
Chartered Accountants of Hamilton, Bermuda, raised substantial
doubt about Annuity and Life Re (Holdings), Ltd.'s ability to
continue as a going concern after it audited the company's
annual report for 2004. The auditor pointed to the company's
significant losses from operations and experience of liquidity
demands.
Annuity and Life Re incurred losses for two consecutive
quarters. The company posted a net loss of US$92,056 for the
three months ended June 30, 2007, compared to a net loss of
US$649,949 for the same period in 2006. The company incurred a
net loss from continuing operations of US$88 million for the
three months ended Sept. 30, 2007, as compared to a net loss
from continuing operations of US$212.2 million for the same
period in 2006.
INTELSAT LTD: Subsidiaries Commence Change of Control Offers
------------------------------------------------------------
Intelsat Ltd.'s indirect wholly owned subsidiaries:
-- Intelsat Subsidiary Holding Company, Ltd., has offered to
purchase for cash any and all of its outstanding 8.25%
Senior Notes due 2013 and 8.625% Senior Notes due 2015;
and
-- Intelsat Corporation is offering to purchase for cash any
and all of its outstanding 9% Senior Notes due 2014 and
9% Senior Notes due 2016,
in each case at a purchase price of 101% of the principal amount
of those Notes.
Intelsat Sub Holdco and Intelsat Corporation are required by the
terms of the respective indentures governing the Notes to make
these offers as a result of the previously announced acquisition
of Intelsat Holdings, Ltd., the indirect parent of Intelsat,
Ltd., by Intelsat Global Subsidiary, Ltd. (formerly known as
Serafina Acquisition Limited), a direct wholly-owned subsidiary
of Intelsat Global, Ltd. (formerly known as Serafina Holdings
Limited), an entity formed by funds advised by BC Partners
Holdings Limited, Silver Lake Partners and certain other equity
investors. The Acquisition constitutes a change of control
under each of the indentures governing the Notes.
The terms of the change of control offers are described in a
Notice of Change of Control and Offer to Purchase with respect
to the Intelsat Sub Holdco Notes, a Notice of Change of Control
and Offer to Purchase with respect to the 2014 Notes, and a
Notice of Change of Control and Offer to Purchase with respect
to the 2016 Notes, each dated March 5, 2008, and the Letters of
Transmittal related thereto, which will be distributed to
holders of the respective Notes.
The change of control offers will expire at 5:00 p.m., New York
City time, on April 29, 2008, and will have a settlement date of
May 2, 2008. Holders whose Notes are accepted for payment
pursuant to the offers will also receive accrued and unpaid
interest to the Settlement Date.
Intelsat Sub Holdco and Intelsat Corporation have retained Wells
Fargo Bank, National Association to act as Depositary in
connection with the change of control offers for the Intelsat
Sub Holdco Notes and the 2016 Notes. Intelsat Corporation has
retained The Bank of New York Mellon to act as Depositary in
connection with the change of control offers for the 2014 Notes.
About Intelsat
Headquartered in Pembroke, Bermuda, Intelsat, Ltd. --
http://www.intelsat.com/-- is the largest fixed
satellite service operator in the world and is owned by Apollo
Management, Apax Partners, Madison Dearborn, and Permira. The
company has a sales office in Brazil.
* * *
As reported in the Troubled Company Reporter-Latin America on
Feb. 19, 2008, Standard & Poor's Ratings Services lowered its
corporate credit rating on Bermuda-based Intelsat Ltd. to 'B'
from 'B+' and removed the ratings from CreditWatch. S&P said
the outlook is stable.
TYCO INT'L: Sells Nippon Dry-Chemical Biz to Daiwa Securities
-------------------------------------------------------------
Tyco International Ltd. has sold its subsidiary, Nippon Dry-
Chemical Co. Ltd., to the SPC owned by Daiwa Securities SMBC
Principal Investments Co. Ltd., a subsidiary of Japan-based
investment bank Daiwa Securities SMBC Co. Ltd., pursuant to an
agreement entered into on Feb. 19, 2008. Financial terms were
not announced.
The sale of Nippon Dry-Chemical is one of a series of steps Tyco
is taking to divest or exit certain non-core fire business in
Asia and Latin America. These actions are part of a larger
portfolio refinement strategy that includes the previously-
announced sale of Tyco's Infrastructure Services unit as well as
small bolt-on acquisitions of two technology businesses --
TridentTek and Retail Expert -- in Tyco's core electronic
security business.
Nippon Dry-Chemical manufactures and sells dry chemical fire
extinguishers, fire trucks and security systems for the Japan
market. The Tokyo-headquartered firm has about 420 employees.
Nippon Dry-Chemical has been treated as a discontinued operation
in Tyco's financial statements beginning with the first quarter
of fiscal 2008.
Based in Pembroke, Bermuda, Tyco International Ltd. (NYSE: TYC)
-- http://www.tyco.com/-- provides security, fire protection
and detection, valves and controls, and other industrial
products and services to customers in four business segments:
Electronics, Fire & Security, Healthcare, and Engineered
Products & Services. With 2007 revenue of US$18 billion, Tyco
employs approximately 118,000 people worldwide. In Latin
America, Tyco has presence in Argentina, Brazil, Chile, Costa
Rica, Ecuador, Honduras, and the Bahamas.
Effective June 29, 2007, Tyco International Ltd. completed the
spin-offs of Covidien and Tyco Electronics, formerly its
Healthcare and Electronics businesses, respectively, into
separate, publicly traded companies in the form of a
distribution to Tyco shareholders.
* * *
As reported in the Troubled Company Reporter on Dec. 21, 2007,
in its annual report for the year ended Sept. 28, 2007, Tyco
said that on Nov. 8, 2007, The Bank of New York delivered to the
company a notice of events of default. The notice claims that
the actions taken by the company in connection with its
separation into three public entities constitute events of
default under certain indentures.
===========
B R A Z I L
===========
AAR CORP: Closes Avborne Heavy Maintenance Acquisition
------------------------------------------------------
AAR Corp. has completed the acquisition of Avborne Heavy
Maintenance, Inc., an independent provider of aircraft heavy
maintenance checks, modifications and painting services located
in Miami, Florida. The newly acquired business will operate as
part of the company's Maintenance, Repair and Overhaul (MRO)
segment as AAR Aircraft Services -- Miami.
The acquisition significantly increases the company's MRO
capacity, workforce and capabilities. The move adds 226,000
square feet of modern hangar space at Miami International
Airport and 467 aviation maintenance technicians, increasing
AAR's hangar space by 22 percent and bringing the total number
of aviation maintenance technicians to more than 2,000
worldwide.
"We're very impressed with the strong management team, skilled
workforce and the high levels of customer satisfaction that
they've achieved at Avborne," said AAR Corp. Chairperson and
Chief Executive Officer, David P. Storch. "The acquisition
expands our capacity and capabilities at a time when airlines
are seeking ways to operate more efficiently, lower their
operating expenses and combat the rising cost of fuel."
AAR achieved a 26% compound annual growth rate in its MRO
segment over the past three years and was ranked among the top
10 MROs in the world according to a 2007 study conducted by
Aviation Week's Overhaul and Maintenance magazine.
About AAR Corp.
AAR Corp. (NYSE: AIR) -- http://www.aarcorp.com/-- provides
products and value-added services to the worldwide aviation and
aerospace industry. With facilities and sales locations around
the world, AAR uses its lose-to-the-customer business model to
serve airline and defense customers through Aviation Supply
Chain; Maintenance, Repair and Overhaul; Structures and Systems
and Aircraft Sales and Leasing. In Asia Pacific, the company
has offices in Singapore, China, Japan and Australia. In Latin
America, the company has a sales office in Rio de Janeiro,
Brazil.
* * *
AAR Corporation continues to carry Moody's Investors Service's
'Ba3' long-term corporate family rating, which was assigned on
November 2006.
BANCO BMG: Says Bond Issue to Bring In at Least US$100 Million
--------------------------------------------------------------
Banco BMG wants to raise at least US$100 million from a two-year
bond issue on the Luxembourg stock exchange.
Business News Americas relates that the offering would close
next week, with US investment bank BCP Securities handling the
sale.
According to BNamericas, the notes will mature in March 2010 and
will pay a fixed coupon of 7%.
Banco BMG told BNamericas that it will decide by July whether or
not to conduct an initial public offering on the Sao Paulo stock
exchange Bovespa.
Banco BMG is the banking arm of Grupo BMG, which also has real
estate, food manufacturing and agro industry holdings. The bank
is a niche player focused on loans to civil servants, with
repayments taken monthly from payrolls. BMG operates mainly
through in-house representatives in state companies. It also
offers leasing and asset management services.
* * *
As reported in the Troubled Company Reporter-Latin America on
June 26, 2007, Standard & Poor's Ratings Services raised its
long-term counterparty credit rating on Banco BMG S.A. to 'BB-'
from 'B+'. The rating was removed from CreditWatch Positive
where it was placed June 11, 2007. S&P said the outlook is
stable.
On Aug. 23, 2007, Moody's Investors Service placed a Ba2 long-
term bank deposit rating on Banco BMG.
BANCO BRADESCO: BBVA Sells 5% Stake for EUR976 Million
------------------------------------------------------
Banco Bilbao Vizcaya Argentaria, S.A., aka BBVA has decided to
exercise the option to sell its 5.01% holding of ordinary stocks
in Banco Bradesco SA, for EUR976 million, which will represent a
capital gain of around EUR740 million for the group, at the time
the transaction is closed.
BBVA has decided to launch its own platform in Brazil to develop
its global business activity, providing services to its
corporate customers from Europe, the US, Latin America, and
Asia.
BBVA has been working with Banco Bradesco since January 2003,
when it announced it had taken a stake in the Brazilian bank's
capital via an agreement whereby it sold its subsidiary BBV
Brazil to Banco Bradesco in exchange for US$632 million and 4.4%
of its stock. The group subsequently raised its stake to over
5%.
Five years later, BBVA informed the Spanish Securities Market
Commission that it has exercised the option to sell its stake in
Banco Bradesco to the majority shareholders of the Brazilian
entity -- Cidade de Deus Companhia Comercial de Participacoes
and Fundacao Bradesco -- in line with the Shareholders Agreement
signed by both parties, which provided for this sale option
through June 2010.
The agreement with Banco Bradesco included a business area in
the bank specializing in originating business between both
entities, and provided for the bank to offer banking services to
BBVA’s corporate customers in Brazil, along with other potential
areas of cooperation within a non-competitive framework.
About BBVA
Banco Bilbao Vizcaya Argentaria, S.A., aka BBVA is a diversified
international financial group with operations in retail banking,
asset management, private banking and wholesale banking. BBVA
is organized into five business areas: Retail Banking in Spain
and Portugal, Wholesale Businesses, Mexico and the United
States, South America and Corporate Activities.
About Banco Bradesco
Headquartered in Sao Paulo, Brazil, Banco Bradesco S.A. (NYSE:
BBD) -- http://www.bradesco.com.br/-- prides itself on serving
low-and medium-income individuals in Brazil since the 1960s.
Bradesco is Brazil's largest private bank, with more than 3,000
banking branches, and also a leader in insurance and private
pension management. Bradesco has branches throughout Brazil as
well as one in New York, and Japan. Bradesco offers Internet
banking, insurance, pension plans, annuities, credit card
services (including football-club affinity cards for the soccer-
mad population), and Internet access for customers. The bank
also provides personal and commercial loans, along with leasing
services.
* * *
On Nov. 12, 2007, Moody's Investors Service assigned a Ba2
foreign currency deposit rating to Banco Bradesco.
BANCO NACIONAL: Board Grants BRL354.7 Million Loan to Coelce
------------------------------------------------------------
Banco Nacional de Desenvolvimento Economico e Social's board of
directors has approved a BRL354.7 million financing to Companhia
Energetica do Ceara [Energy Company of Ceara] - Coelce. The
resources will be destined to the triennial investments plan --
2007/2009 -- and transferred by Unibanco, Votorantim, Itau BBA
and Bradesco.
Coelce's program for the period, amounting to BRL652.7 million,
encompasses expansion works, modernization and improvements in
the electrical system, distributed throughout the municipalities
that comprise its concession area in the State of Ceara.
Amongst the operation's benefits, which will count on BNDES
support of 54.3%, one finds the expansion of the supply of
energy to new consumers and the improvement in quality and
accountability of the supply of electric energy in the region
where the distributor operates. Furthermore, it bears a
regional development character that will generate jobs and the
purchasing of equipment from national vendors.
The investments plan also contemplates the construction and
modernization of substations; implementation of information
technology systems, automation and implementation of technical
systems; modernization of communication systems; and widening
and modernization of the sales and administrative
infrastructure.
BNDES has already approved, since 2003, 188 electric energy
projects, totaling financings of BRL29 billion, which opened
room for total investments of BRL49.7 billion. Within that
period, the Bank's support enabled 14.4 thousand MW of installed
capacity generation. As to distribution, BNDES approved 28
projects, equivalent to financings of BRL3.9 billion and total
investments of BRL6.6 billion.
Coelce, a company from the Endesa Brasil group, controlled by
Spanish Company Endesa, manages several projects focused on
environmental education and performs impact studies of its
activity upon the environment, with regards to the supply of
clean and safe energy. It participates in Clean Development
Mechanism [MDL] projects, based on the Kyoto protocol, and is
signatory of the United Nations' Global Pact.
Amongst the environmental projects and actions developed, one
may highlight the development of ecological oils for
transformers in partnership with Parque de Desenvolvimento
Tecnologico [Technological Development Complex] and with
Universidade Federal do Ceara [Federal University of Ceara]; the
development of Composting Process for Recycling of Tree Trimming
Tailings; and the Solid Wastes Management Program, in which the
final disposal of lamps for recycling is underlined.
In 2006, Coelce contracted 7.8 thousand GWh of electric energy,
from which 56% derived from hydraulic sources, 43% from thermal
energy and 1% from wind energy.
Banco Nacional de Desenvolvimento Economico e Social is Brazil's
national development bank. It provides financing for projects
within Brazil and plays a major role in the privatization
programs undertaken by the federal government.
* * *
Banco Nacional currently carries a Ba2 foreign long-term bank
deposit rating from Moody's Investors Service, and a BB+ long-
term foreign issuer credit rating from Standards and Poor's
Ratings Services. The ratings were assigned in August and May
2007.
BANCO NACIONAL: Approves BRL38.1 Mil. Financing to Deib Otoch
-------------------------------------------------------------
Banco Nacional de Desenvolvimento Economico e Social's directors
have approved a BRL38.1 million financing to Deib Otoch S.A.
The credit is destined to expansion of the retail network, upon
the opening of ten stores in the Northern and Northeastern
Regions, during the period 2008-2009. The new stores will be
located in the States of Bahia, Piaui, Rio Grande do Norte,
Ceara, Maranhao, Sergipe and Para.
The Bank's participation corresponds to 66% of total project
investment, of BRL58 million. The funds will be transferred
through Banco Bradesco S.A. Among the merits of the operation,
the Bank can highlight the consolidation of the retail network
presence in the Northeastern Region, expansion of activities to
the Northern Region and the estimated generation of
approximately 840 direct jobs in the stores and 4 thousand
indirect ones, as suppliers, transportation, cafeteria,
cleaning, maintenance and security guard service providers,
among others. Currently, around 60% of its suppliers are micro,
small and medium-sized companies, mainly confections, handicraft
and service provision, and 62% originated in the Northeastern
Region.
The company - Headquartered in Fortaleza, Deib Otoch operates in
the retail commerce, under the flags "Esplanada" and "By
Express", having, as its main products, confections of women's,
men's, infant and baby clothes, bed, table and bath linen,
decoration items, shoes, perfumes, CDs, watches, traveling
items, among others. The supply of merchandises to the stores
is carried out by means of a proprietary Distribution Center,
located by the company administrative headquarters. The network
has 30 department stores spread throughout eight States of the
Northeastern Region and the Federal District. The flow of
clients in the stores is estimated to be in the range of
2.5 million per year. Upon project completion, company
invoicing is expected to increase by 72%.
Banco Nacional de Desenvolvimento Economico e Social is Brazil's
national development bank. It provides financing for projects
within Brazil and plays a major role in the privatization
programs undertaken by the federal government.
* * *
Banco Nacional currently carries a Ba2 foreign long-term bank
deposit rating from Moody's Investors Service, and a BB+ long-
term foreign issuer credit rating from Standards and Poor's
Ratings Services. The ratings were assigned in August and May
2007.
COMPANHIA ENERGETICA: Earns BRL178.6 Million in 2007
----------------------------------------------------
Companhia Energetica de Sao Paulo's net income was BRL178.6
million in 2007, compared to a loss of BRL118.4 million in 2006.
EBITDA increased 19.4% to BRL1.5 billion in 2007, energy sales
rose 9.5% to BRL2.6 billion.
Net Operating Revenue increased 8.5% to BRL2.2 billion in 2007,
from 2006. Revenue from services rose 31.7% to BRL1.0 billion.
Net debt dropped by 15.7% to BRL5.9 billion in 2007, compared to
BRL6.9 billion in 2006. Net financial result was an expense of
BRL314.3 million, improving by 64.7% in relation to the
expense of BRL889.3 million in 2006.
Companhia Energetica's privatization process resumed in the
fourth quarter 2007, with the auction scheduled for March 26
on the Sao Paulo Stock Exchange (BOVESPA), with a minimum set
price of BRL49.75 per share.
In 2007, assured energy was commercialized in these
environments:
i) Regulated Contracting Environment (ACR) through
Energy Purchase Contracts in the Regulated
Environment (CCEAR) with distributors, as well as
sales contracts with small distributors with loads
of less than 500 giga watts per year;
ii) Free Contracting Environment (ACL), through long-,
medium- and short-term (ex-post) energy sales
contracts negotiated with sellers and free
consumers; and
iii) the differences between generated energy, assured
energy and contracted energy were booked and
settled at the Electricity Commercialization Board
(CCEE).
Companhia Energetica's customers are the main energy
distributors in Brazil, which buy its output through long-term
contracts and auctions and in the regulated market; and free
consumers, including sellers and large final consumers in the
industry, which acquire their power through medium- and long-
term bilateral contracts.
Revenue from electricity sales in the regulated environment
(49%) continued to surpass sales in the free contracting
environment (47%). The Electricity Commercialization Board
(CCEE) accounted for 4% of power sales.
Energy Sales totaled 2007 in BRL2,624.8 million, 9.5% higher
year on year, driven mainly by energy prices in the free
contracting environment, which includes both electricity supply
contracts to large consumers and supply contracts with agents.
Deductions from revenue in 2007 totaled BRL441.8 million, up
14.4% in relation to the BRIL386.2 million in 2006. These
deductions represent 16.8% of gross revenue, versus 16.1% in
2006. Net Operating Revenue in 2007 reached
BRL2,183.7 million, 8.5% higher than in 2006.
Operating Expenses in the year stood at BRL1,162.8 million, 6%
lower year on year. The reduction was due to the accounting of
an actuarial adjustment at the Companhia Energetica Foundation
and expenses with provisions for the realization of credits and
operating provisions, charges for use of the grid/transmission
system services (tariffs set by ANEEL), as well as other
expenses that increased in the year.
In 2007, EBIT rose to BRL1,020.9 million, growing by 31.7% year
on year, for EBIT margin of 46.7%. The increase was driven by
higher revenue and the actuarial adjustment at the private
pension plan for employees. As a result, net income was
BRL178.6 million in 2007, with growth in non-operating income of
770%.
EBITDA reached BRL1,499.9 million in 2007, an increase of 19.4%
year on year, with EBITDA margin of 68.7%, expanding by 6.3
percentage points in relation to 2006.
The Net Financial Result was an expense of BRL314.3 million in
2007, versus an expense of BRL889.3 million a year earlier. The
company’s debt was the main factor in its net financial result.
Debt denominated in foreign currency, which accounts for 36% of
total debt, was benefited by the appreciation of 17.2% in the
Brazilian real against the U.S. dollar, which provided a
foreign-exchange gain of BRL520 million. A negative factor was
the accounting of debt charges of BRL502 million (denominated in
both local and foreign currency), as well as expenses with local
monetary restatement in the amount of BRL327 million.
On Dec. 31, 2007, Companhia Energetica's balance sheet had Total
Debt of BRL6,702.2 million, down 11.1% in relation to 2006. On
the same date, Cash and Cash Equivalents totaled BRL679.7
million, versus BRL328.6 million in 2006. Beyond interest of
BRL165.0 million paid in advanced in 2007.
The amount represents the balance of funding from the fund FIDC
IV in the amount of BRL1.25 billion, which was allocated for
paying down debt. Net Debt totaled BRL5,857.5 million, a
decline of 15.7% in comparison with 2006.
In October 2007, the Treasury Department of the State of Sao
Paulo, in conformance with State Decree No. 51,760 dated
April 17, 2007, contracted Banco Fator S.A. to execute Service A
(the economic-financial valuation) and the consortium led by
Banco Citibank S.A. to execute Service B ( the economic-
financial valuation, modeling and sale execution) involving
Companhia Energetica. Based on the studies presented by the
contracted parties, the Executive Council of the State
Privatization Program (PED) recommended to the state’s governor
(which he duly approved in December 2007) the resumption of the
work and studies required for the company’s privatization, with
the privatization auction slated for the end of the first
quarter of 2008. On Feb. 25, 2008, the Privatization Notice was
made available; containing the conditions for the auction
process, including the minimum set auction price of BRL49.75 per
share per share. According to the Privatization Notice, the
privatization auction of Companhia Energetica is scheduled for
March 26, 2008 at the Sao Paulo Stock Exchange (Bovespa).
In 2007, the Ibovespa index rose by 41% and the Electricity
Index (IEE) increased by 23%.
Headquartered in Sao Paulo, Brazil, Companhia Energetica de Sao
Paulo (BOVESPA: CESP3, CESP5 and CESP6) is the country's third
largest power generator, majority owned by the State of Sao
Paulo. CESP operates 6 hydroelectric plants with total
installed capacity of 7,456 MW and reported net revenues of
BRL1,983 million in the last twelve months through Sept. 30,
2006.
As reported in the Troubled Company Reporter-Latin America on
Oct. 10, 2007, Standard & Poor's Ratings Services raised its
ratings on electricity generator Companhia Energetica de Sao
Paulo, including its corporate credit rating to 'B' from 'B-'.
At the same time, S&P raised its Brazil national scale ratings
on CESP to 'brBBB-' from 'brBB'. S&P said the outlook remains
positive on both scales.
DELPHI CORP: Gets Exit Financing Proposal from General Motors
-------------------------------------------------------------
Delphi Corp. is taking the steps necessary to enable the
completion of its exit financing syndication. Delphi said that
it has been advised by General Motors Corp. that GM is prepared
to provide additional exit financing.
The company's US$6.1 billion exit financing package is now
expected to include a US$1.6 billion asset-backed revolving
credit facility, at least US$1.7 billion of first-lien term
loan, an up to US$2.0 billion first-lien term note to be issued
to GM (junior to the US$1.7 billion first-lien term loan), and
an US$825 million second-lien term loan, of which any unsold
portion would be issued to GM.
Delphi believes that GM's increased participation in the exit
financing structure is necessary to successfully syndicate its
exit financing on a timely basis and is consistent with its
First Amended Joint Plan of Reorganization and the investment
agreement with its plan investors. However, certain of Delphi's
plan investors have advised the company they believe the
proposed exit financing with increased GM participation would
not comply with conditions in the company's investment agreement
between Delphi and the plan investors.
To clarify that GM's increased participation complies with the
Plan and the investment agreement, and to require each of the
Plan Investors to perform their obligations under the investment
agreement, Delphi asks the U.S. Bankruptcy Court for the
Southern District of New York seeking limited relief from the
Court under section 1142 of the Bankruptcy Code with respect to
the Plan, which was confirmed by the Court on Jan. 25, 2008.
Under Section 1142 of the Bankruptcy Code, bankruptcy courts may
direct the debtor and any other necessary party to perform any
act that is necessary for the consummation of a plan that has
been confirmed by the Bankruptcy Court.
Delphi's lead plan investor has also agreed to extend from
March 31, 2008 to Apr. 5, 2008 the first date by which it could
terminate the investment agreement with Delphi if the effective
date of the Plan has not occurred, which would provide Delphi
additional time to comply with closing conditions under the
investment agreement.
About GM
Headquartered in Detroit, Michigan, General Motors Corp. (NYSE:
GM) -- http://www.gm.com/-- was founded in 1908. GM employs
about 266,000 people around the world and manufactures cars and
trucks in 35 countries. In 2007, nearly 9.37 million GM cars
and trucks were sold globally under the following brands: Buick,
Cadillac, Chevrolet, GMC, GM Daewoo, Holden, HUMMER, Opel,
Pontiac, Saab, Saturn, Vauxhall and Wuling. GM's OnStar
subsidiary is the industry leader in vehicle safety, security
and information services.
About Delphi Corp.
Headquartered in Troy, Michigan, Delphi Corporation (PINKSHEETS:
DPHIQ) -- http://www.delphi.com/-- is the single supplier of
vehicle electronics, transportation components, integrated
systems and modules, and other electronic technology. The
company's technology and products are present in more than
75 million vehicles on the road worldwide. Delphi has regional
headquarters in Japan, Brazil and France.
The company filed for chapter 11 protection on Oct. 8, 2005
(Bankr. S.D.N.Y. Lead Case No. 05-44481). John Wm. Butler Jr.,
Esq., John K. Lyons, Esq., and Ron E. Meisler, Esq., at Skadden,
Arps, Slate, Meagher & Flom LLP, represent the Debtors in their
restructuring efforts. Robert J. Rosenberg, Esq., Mitchell A.
Seider, Esq., and Mark A. Broude, Esq., at Latham & Watkins LLP,
represents the Official Committee of Unsecured Creditors. As of
March 31, 2007, the Debtors' balance sheet showed
US$11,446,000,000 in total assets and US$23,851,000,000 in total
debts.
The Court approved Delphi's First Amended Joint Disclosure
Statement and related solicitation procedures for the
solicitation of votes on the First Amended Plan on Dec. 20,
2007. The Court confirmed the Debtors' First Amended Plan on
Jan. 25, 2008.
(Delphi Bankruptcy News; Bankruptcy Creditors' Service Inc.,
http://bankrupt.com/newsstand/or 215/945-7000)
* * *
As reported in the Troubled Company Reporter-Latin America on
Jan. 16, 2008, Moody's Investors Service assigned ratings to
Delphi Corporation for the company's financing for emergence
from Chapter 11 bankruptcy protection: Corporate Family Rating
of (P)B2; US$3.7 billion of first lien term loans, (P)Ba3; and
US$0.825 billion of 2nd lien term debt, (P)B3. In addition, a
Speculative Grade Liquidity rating of SGL-2 representing good
liquidity was assigned. The outlook is stable.
As reported in the Troubled Company Reporter on Jan. 11, 2008,
Standard & Poor's Ratings Services expects to assign its 'B'
corporate credit rating to Troy, Michigan-based automotive
supplier Delphi Corp. upon the company's emergence from Chapter
11 bankruptcy protection, which may occur by the end of the
first quarter of 2008. S&P expects the outlook to be negative.
In addition, Standard & Poor's expects to assign these
issue-level ratings: a 'B+' issue rating (one notch above the
corporate credit rating), and '2' recovery rating to the
company's proposed US$3.7 billion senior secured first-lien term
loan; and a 'B-' issue rating (one notch below the corporate
creditrating), and '5' recovery rating to the company's proposed
US$825 million senior secured second-lien term loan.
DRESSER-RAND: Earnings Rise to US$44MM in Quarter Ended Dec. 31
---------------------------------------------------------------
Dresser-Rand Group Inc. reported financial results for fourth
quarter and year ended Dec. 31, 2007.
The company reported net income of US$43.8 million for the
fourth quarter 2007, compared with net income of US$32.9 million
for the fourth quarter 2006.
Net income was US$106.7 million for 2007 compared to a net
income of US$78.8 million for 2006.
"2007 was a year of record performance. Revenues increased 11%,
operating income increased 12% and our year-end backlog was at a
record level," Vincent R. Volpe Jr., president and chief
executive officer of Dresser-Rand, said.
"Consistent with our expectation at the start of the fourth
quarter, we experienced a strong recovery in our aftermarket
bookings and shipments," Mr. Volpe added. "Aftermarket bookings
in the fourth quarter of 2007 increased approximately 16% over
the fourth quarter of 2006.
"I am also pleased that our bargaining unit employees at our
Painted Post, New York facility have returned to work after a
17 week work stoppage," Mr. Volpe continued. "They have chosen
to return to work under the terms of the company's implemented
last offer, which includes important changes to work rules and
the elimination of future retiree healthcare benefits for
certain employees."
"We had expected to be able to record a non-cash curtailment
gain in 2007 in connection with the elimination of retiree
heathcare benefits for certain employees, Mr. Volpe related.
"However, it has been determined that the benefit change as
implemented represents a plan amendment. Therefore, the
resulting curtailment amendment reduction of US$18.6 million in
the accumulated benefit obligation is expected to be amortized
to income over 36 months beginning in January 2008."
"We enter 2008 with a backlog of approximately US$1.9 billion,
continuing strong markets and a well-defined business strategy
focused on increased production and bolt-on acquisitions," he
said.
Liquidity and Capital Resources
As of Dec. 31, 2007, cash and cash equivalents totaled
US$206.2 million and borrowing availability under the company's
US$500 million senior secured credit facility was US$273.0
million, as US$227.0 million was used for outstanding letters of
credit.
In 2007, cash provided by operating activities was US$216.0
million compared to US$164.1 million in 2006. The increase of
US$51.9 million in net cash provided by operating activities was
principally from changes in working capital and improved
operating performance.
In 2007, net capital investments totaled US$26.0 million and the
company prepaid US$137.2 million of its outstanding indebtedness
under its senior secured credit facility. As of Dec. 31, 2007,
total debt was US$370.5 million and total debt net of cash and
cash equivalents was approximately US$164.3 million.
In August 2007, the company amended its senior secured credit
facility. The amended credit facility is a five year,
US$500 million revolving credit facility. The amendment
increased the size of the facility by US$150 million, lowered
borrowing costs 50 basis points to LIBOR plus 150 basis points
at present leverage and extended the maturity date from Oct. 29,
2009, to Aug. 30, 2012. The amendment also reduced the
commitment fee from 37.5 basis points to 30.0 basis points.
At Dec. 31, 2007, the company's balance sheet showed total
assets of US$1.95 billion, total liabilities of US$1.15 billion
and total stockholders' equity of US$0.80 billion.
Internal Control Over Financial Reporting
The company concluded that its internal control over financial
reporting as of Dec. 31, 2007, was effective. "Eliminating all
of the disclosed material weaknesses is a great milestone for
the company and reflects the hard work and excellent team effort
of many of our employees across the entire worldwide
organization," Lonnie A. Arnett, vice president, controller and
chief accounting officer of Dresser-Rand, said.
About Dresser-Rand Group
Headquartered in Houston, Texas, Dresser-Rand Group Inc. (NYSE:
DRC) -- http://www.dresser-rand.com/-- supplies rotating
equipment solutions to the worldwide oil, gas, petrochemical,
and process industries. The company operates manufacturing
facilities in the United States, France, Germany, Norway, India,
and Brazil, and maintains a network of 26 service and support
centers covering more than 140 countries.
* * *
Moody's Investor Service placed Dresser-Rand Group Inc.'s
probability of default rating at 'Ba3' in September 2006. The
rating still holds to date with a stable outlook.
ENERGIAS DO BRASIL: 2007 Net Income Rises 11.6% to BRL439.8MM
-------------------------------------------------------------
Energias do Brasil S.A. reported its results for the fiscal year
2007. The information is presented on a consolidated basis in
accordance with Brazilian Corporate Law and is based on reviewed
financial information. The independent auditors did not review
the operating information. Amounts are expressed in thousands
of Brazilian Reais, except where otherwise stated.
-- Energy volumes distributed in 2007 totaled 25,029 GWh,
4.5% more than recorded in 2006. Volumes were boosted by
a growth in demand from residential and commercial
customers, notably in Bandeirante's and Escelsa's
concession areas and from rural customers in the regions
served by Escelsa and Enersul.
-- Enertrade's volumes grew 7.2% in 2007 when compared to
2006, totaling 7,188 GWh, driven by a growth of 16.8% in
the volume of sales to free consumers.
-- The volume of energy sold in 2007 was 5,568 GWh, a 17%
hike over the same quarter in 2006, largely reflecting the
additional energy from the Peixe Angical Hydroelectric
Power Plant, the 4th generating unit at the Mascarenhas
Hydroelectric Power Plant and from the Sao Joao Small
Hydroelectric Plant.
-- Net operating revenue in 2007 was BRL4,513.5 million,
13.3% when compared to the previous year. This
performance resulted mainly from the increase in installed
generation capacity and the growth in distributed energy
volume. Net Operating Revenue was adversely affected in
BRL183.1 million following Aneel's decision to reduce
Enersul's RAB.
-- In April, the start-up of Sao Joao Small Hydroelectric
Plant added 25 MW to the group's installed capacity.
Additionally in 2007, Energias do Brasil sold 615 MW of
energy to be generated by the Pecem TPP and 11.7 average
MW from repowering projects. Finally, the Santa Fe Small
Hydroelectric Plant, a 29 MW plant, started to be built.
Therefore, in 2012, after the start-up of the Pecem TPP,
the group's installed capacity will have increased by 39%.
-- EBITDA for 2007 reached BRL1,123 million, a yoy increase
of 4.6%. It is important to highlight the 62.1% growth in
generation EBITDA, which reached BRL442 million.
-- Net income amounted BRL439.8 million, an 11.6% growth over
2006 earnings.
-- Capital expenditures amounted to BRL665.2 million in 2007,
a reduction of 19.9% when compared to 2006, mainly a
reflection of the conclusion of Peixe Angical
Hydroelectric Power Plant.
-- On Dec. 4 2007, Aneel decided to reduce Enersul's RAB as
related to the 2003 tariff review. The net RAB was
reduced in BRL126 million and the gross RAB, in BRL265
million.
-- On Dec. 18 2007, the Board of Directors approved: (i) the
payment of interest on shareholders' equity of BRL119.9
million or BRL0.730546 per share with respect to fiscal
year 2007 and (ii) a share buyback program. Additionally,
on March 5 2008, the Board approved an additional dividend
of BRL87.3 million or BRL0.545028 per share, with respect
to fiscal year 2007.
-- On Jan. 8 2008, the Board of Directors approved the
restructuring of the Board of Executive Officers. The new
executive board proposed to the Board of Directors the
increase in the minimum payout to 50%.
Energias do Brasil S.A. is an integrated utility group
controlled by Energias de Portugal, with activities in
generation, distribution and commercialization of electricity.
Its power distribution subsdiaries Bandeirante, Escelsa and
Enersul represent altogether some 64% of consolidated total
assets, while the power generation assets represent some 31%.
* * *
In May 2007, Moody's Investors Service placed a Ba2 long-term
corporate family rating on Energias do Brasil.
GENERAL MOTORS: Offers Additional Exit Financing to Delphi Corp.
----------------------------------------------------------------
Delphi Corp. is taking the steps necessary to enable the
completion of its exit financing syndication. Delphi said that
it has been advised by General Motors Corp. that GM is prepared
to provide additional exit financing. The company's US$6.1
billion exit financing package is now expected to include a
US$1.6 billion asset-backed revolving credit facility, at least
US$1.7 billion of first-lien term loan, an up to US$2.0 billion
first-lien term note to be issued to GM (junior to the US$1.7
billion first-lien term loan), and an US$825 million second-lien
term loan, of which any unsold portion would be issued to GM.
Delphi believes that GM's increased participation in the exit
financing structure is necessary to successfully syndicate its
exit financing on a timely basis and is consistent with its
First Amended Joint Plan of Reorganization and the investment
agreement with its plan investors. However, certain of Delphi's
plan investors have advised the company they believe the
proposed exit financing with increased GM participation would
not comply with conditions in the company's investment agreement
between Delphi and the plan investors.
To clarify that GM's increased participation complies with the
Plan and the investment agreement, and to require each of the
Plan Investors to perform their obligations under the investment
agreement, Delphi asks the U.S. Bankruptcy Court for the
Southern District of New York seeking limited relief from the
Court under section 1142 of the Bankruptcy Code with respect to
the Plan, which was confirmed by the Court on Jan. 25, 2008.
Under Section 1142 of the Bankruptcy Code, bankruptcy courts may
direct the debtor and any other necessary party to perform any
act that is necessary for the consummation of a plan that has
been confirmed by the Bankruptcy Court.
Delphi's lead plan investor has also agreed to extend from
March 31, 2008 to Apr. 5, 2008 the first date by which it could
terminate the investment agreement with Delphi if the effective
date of the Plan has not occurred, which would provide Delphi
additional time to comply with closing conditions under the
investment agreement.
About Delphi Corp.
Headquartered in Troy, Michigan, Delphi Corporation (PINKSHEETS:
DPHIQ) -- http://www.delphi.com/-- is the single supplier of
vehicle electronics, transportation components, integrated
systems and modules, and other electronic technology. The
company's technology and products are present in more than
75 million vehicles on the road worldwide. Delphi has regional
headquarters in Japan, Brazil and France.
The company filed for chapter 11 protection on Oct. 8, 2005
(Bankr. S.D.N.Y. Lead Case No. 05-44481). John Wm. Butler Jr.,
Esq., John K. Lyons, Esq., and Ron E. Meisler, Esq., at Skadden,
Arps, Slate, Meagher & Flom LLP, represent the Debtors in their
restructuring efforts. Robert J. Rosenberg, Esq., Mitchell A.
Seider, Esq., and Mark A. Broude, Esq., at Latham & Watkins LLP,
represents the Official Committee of Unsecured Creditors. As of
March 31, 2007, the Debtors' balance sheet showed
US$11,446,000,000 in total assets and US$23,851,000,000 in total
debts.
The Court approved Delphi's First Amended Joint Disclosure
Statement and related solicitation procedures for the
solicitation of votes on the First Amended Plan on Dec. 20,
2007. The Court confirmed the Debtors' First Amended Plan on
Jan. 25, 2008.
(Delphi Bankruptcy News; Bankruptcy Creditors' Service Inc.,
http://bankrupt.com/newsstand/or 215/945-7000)
About GM
Headquartered in Detroit, Michigan, General Motors Corp. (NYSE:
GM) -- http://www.gm.com/-- was founded in 1908. GM employs
about 266,000 people around the world and manufactures cars and
trucks in 35 countries, including the United Kingdom, Germany,
France, Russia, Brazil and India. In 2007, nearly 9.37 million
GM cars and trucks were sold globally under the following
brands: Buick, Cadillac, Chevrolet, GMC, GM Daewoo, Holden,
HUMMER, Opel, Pontiac, Saab, Saturn, Vauxhall and Wuling. GM's
OnStar subsidiary is the industry leader in vehicle safety,
security and information services.
* * *
As reported in the Troubled Company Reporter-Latin America on
Feb. 28, 2008, Fitch Ratings affirmed the Issuer Default Rating
of General Motors at 'B', with a Rating Outlook Negative.
As reported in the Troubled Company Reporter on Nov. 9, 2007,
Moody's Investors Service affirmed its rating for General Motors
Corporation (B3 Corporate Family Rating, Ba3 senior secured,
Caa1 senior unsecured and SGL-1 Speculative Grade Liquidity
rating) but changed the outlook to Stable from Positive. In an
environment of weakening prospects for US auto sales GM has
announced that it will take a non-cash charge of US$39 billion
for the third quarter of 2007 related to establishing a
valuation allowance against its deferred tax assets in the US,
Canada and Germany.
As reported in the Troubled Company Reporter on Oct. 23, 2007,
Standard & Poor's Ratings Services affirmed its 'B' corporate
credit rating and other ratings on General Motors Corp. and
removed them from CreditWatch with positive implications, where
they were placed Sept. 26, 2007, following agreement on the new
labor contract. S&P said the outlook is stable.
GENERAL MOTORS: American Axle Strike Affects More GM Plants
-----------------------------------------------------------
General Motors Corp. anticipates to shut down a transmission
plant in Toledo, Ohio, a metal casting plant in Saginaw,
Michigan, and a DMAX plant in Moraine, Ohio, on Monday,
March 10, 2008, as United Auto Workers union workers of key
supplier American Axle & Manufacturing Inc. continue their labor
strike, according to GM's production statement.
An assembly plant in Janesville, Wisconsin will continue
production but on shortened shifts next week. If the strike
lasts beyond next week, other alternative work schedules will be
evaluated.
Roughly 680 hourly and 170 salaried workers at the Saginaw plant
will be affected, while 1,008 hourly and 187 salaried employees
at the DMAX plant will be displaced. About 2,246 hourly and 193
salaried workers of the Janesville plant will be affected with
the shortened shifts.
As reported in the Troubled Company Reporter on March 5, 2008,
the Toledo Transmission plant is expecting 1,444 hourly and 219
salaried workers to be laid off.
As previously disclosed UAW president Ron Gettelfinger and Vice
President James Settles disclosed that members at American Axle
began an unfair labor practices strike at 12:01 a.m. on Feb. 26,
2008, following expiration of a four-year master labor
agreement.
Lay-off numbers will vary on a day-to-day basis, as some
employees will be needed at work for training, maintenance and
other activities. The figures of employees displaced is for
employees at manufacturing operations only, excluding Service
Parts and Operations and other automotive (non-manufacturing)
sites.
Headquartered in Detroit, Michigan, General Motors Corp. (NYSE:
GM) -- http://www.gm.com/-- was founded in 1908. GM employs
about 266,000 people around the world and manufactures cars and
trucks in 35 countries, including the United Kingdom, Germany,
France, Russia, Brazil and India. In 2007, nearly 9.37 million
GM cars and trucks were sold globally under the following
brands: Buick, Cadillac, Chevrolet, GMC, GM Daewoo, Holden,
HUMMER, Opel, Pontiac, Saab, Saturn, Vauxhall and Wuling. GM's
OnStar subsidiary is the industry leader in vehicle safety,
security and information services.
* * *
As reported in the Troubled Company Reporter-Latin America on
Feb. 28, 2008, Fitch Ratings affirmed the Issuer Default Rating
of General Motors at 'B', with a Rating Outlook Negative.
As reported in the Troubled Company Reporter on Nov. 9, 2007,
Moody's Investors Service affirmed its rating for General Motors
Corporation (B3 Corporate Family Rating, Ba3 senior secured,
Caa1 senior unsecured and SGL-1 Speculative Grade Liquidity
rating) but changed the outlook to Stable from Positive. In an
environment of weakening prospects for US auto sales GM has
announced that it will take a non-cash charge of US$39 billion
for the third quarter of 2007 related to establishing a
valuation allowance against its deferred tax assets in the US,
Canada and Germany.
As reported in the Troubled Company Reporter on Oct. 23, 2007,
Standard & Poor's Ratings Services affirmed its 'B' corporate
credit rating and other ratings on General Motors Corp. and
removed them from CreditWatch with positive implications, where
they were placed Sept. 26, 2007, following agreement on the new
labor contract. S&P said the outlook is stable.
GERDAU SA: Has Most Expertise in Acquisitions, Analyst Says
-----------------------------------------------------------
Gerdau SA has the most expertise when it comes to acquisitions
among local steel makers, Business News Americas reports, citing
Brokerage Socopa Corretora's analysis department head Daniel
Lemos.
Mr. Lemos told BNamericas that Gerdau would continue to beat its
competitors in terms of acquisitions.
BNamericas relates that Gerdau carried out over 10 acquisitions
last year, including the purchase of US firm Chaparral Steel for
US$4.22 billion, which PricewaterhouseCoopers considered as the
biggest takeover transaction by a Brazilian company in 2007.
Gerdau is in more markets compared to its competitors, "which
facilitates even more this consolidation movement," Mr. Lemos
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.
HEXION SPECIALTY: Discloses Post-Merger Senior Officers
-------------------------------------------------------
Hexion Specialty Chemicals Inc. disclosed the post-merger senior
leaders for the company, contingent on the close of its
acquisition of Huntsman Corporation. The transaction is
expected to close during the second quarter of 2008, pending
receipt of regulatory approvals and the satisfaction of other
closing conditions.
Once the merger transaction is completed:
-- Peter R. Huntsman, President and CEO of Huntsman
Corporation, will become Chairman of the Board for the
combined company;
-- Craig O. Morrison, Chairman, CEO and President of Hexion
Specialty Chemicals, will become President and Chief
Executive Officer;
-- Donald J. Stanutz, Division President, Performance
Products, of Huntsman Corporation, will become Chief
Operating Officer;
-- William H. Carter, Executive Vice President and CFO for
Hexion, will assume that role in the new company.
"We are pleased to have a talented and highly experienced team
of chemical industry executives in place to build an industry-
leading enterprise, once the transaction is completed," said
Joshua J. Harris, founding partner with Apollo Management L.P.
"This combination will form one of the world’s largest specialty
chemical companies. It will have annual sales of more than
$14 billion, and more than 21,000 associates and 180 facilities
around the world serving a diverse range of customers and
industries with leading technologies and products."
Mr. Huntsman has served in his current role with Huntsman
Corporation since July 2000 and previously served as President
and Chief Operating Officer since 1994. In 1987, he joined
Huntsman Polypropylene Corporation as Vice President before
serving as Senior Vice President and General Manager. He has
also served as President of Olympus Oil, as Senior Vice
President of Huntsman Chemical Corporation and as a Senior Vice
President of Huntsman Packaging Corporation, a former subsidiary
of the company.
Mr. Morrison joined Borden Chemical, Inc., a predecessor company
of Hexion Specialty Chemicals, in March 2002 as President and
CEO. He was named Chairman in 2005. Prior to joining Hexion,
he served as President and General Manager of Alcan
Pharmaceutical and Cosmetic Packaging, a division of Alcan,
Inc., and as President and General Manager of Van Leer
Containers, Inc. He also served as a management consultant with
Bain & Company, and worked in a variety of management roles
within GE Plastics.
Mr. Stanutz has served in his current role as Division
President, Performance Products since 2004. He also has served
the Huntsman organization as Executive Vice President and Chief
Operating Officer of Huntsman LLC, as Executive Vice President,
Global Sales and Marketing, and as Executive Vice President,
Polyurethanes, PO and Performance Chemicals. Prior to joining
Huntsman in 1994, Mr. Stanutz served in a variety of senior
positions with Texaco Chemical Company.
Mr. Carter has served as Executive Vice President and Chief
Financial Officer of Hexion Specialty Chemicals, Inc., and its
predecessors, Borden Chemical, Inc., and Borden, Inc., since
1995. Prior to joining Hexion, he served as the Price
Waterhouse engagement partner for Borden. He previously served
Price Waterhouse in various client assignments in manufacturing,
real estate and financial services.
About Hexion Specialty
Based in Columbus, Ohio, Hexion Specialty Chemicals Inc. --
http://www.hexion.com/-- serves the global wood and industrial
markets through a broad range of thermoset technologies,
specialty products and technical support for customers in a
diverse range of applications and industries. Hexion Specialty
Chemicals is owned by an affiliate of Apollo Management, L.P.
The company has locations in Singapore, China, Australia,
Netherlands, and Brazil. It is an Apollo Management L.P.
portfolio company. Hexion had 2006 sales of US$5.2 billion and
employs more than 7,000 associates.
* * *
As reported in the Troubled Company Reporter on July 9, 2007,
Standard & Poor's Ratings Services placed its 'B' corporate
credit rating and other ratings on Columbus, Ohio-based Hexion
Specialty Chemicals Inc. on CreditWatch with negative
implications. The ratings on related entities were also placed
on CreditWatch.
JBS SA: Major Acquisition Spurs Moody's to Continue Review
----------------------------------------------------------
Moody's Investors Service's ratings for JBS S.A., including its
B1 local currency corporate family rating and B1 senior
unsecured bond rating, will remain under review for possible
downgrade following the company's announced agreement to acquire
National Beef Packing Company, LLC; Smithfield Beef Group Inc.,
including full ownership of its subsidiary, Five Rivers Ranch
Cattle Feeding; and Tasman Group for a total consideration of
approximately US$1.8 billion. The closing of all transactions
are subject to regulatory approvals.
"If the transactions receive regulatory approval, JBS will
become the largest beef processor in the United States and
further consolidate its position as the largest beef processor
globally with improved size, scale and geographic and product
diversification", said Moody's analyst Soummo Mukherjee. At the
same time, Moody's highlights the integration and execution
challenges that JBS will face because of its recent flurry of
acquisitions, including ten acquisitions since 2007. "Moody's
will particularly focus its review on the ability of JBS to turn
around its troubled US beef operations in an operating
environment that may continue to present cost pressures and
weaker demand," added Mr. Mukherjee.
In order to finance the acquisitions, the company will raise
approximately BRL2.55 billion (US$1.5 billion) in shares
through a private placement at an issuance price of BRL7.07 per
share and pay for the remainder with company's own cash.
Moody's also notes that JBS recently refinanced the US$750
million in short-term maturities at Swift & Company for a period
of three to five years with three local banks, thus alleviating
immediate liquidity concerns.
The review for possible downgrade will continue to focus on
whether JBS's growth and acquisition strategy will be compatible
with a credit profile that is commensurate with its current B1
rating. More specifically, the review will consider the
company's operational strategy for the United States market,
especially related to beef operations, as well as examine all of
the company's operational and business segments on a projected
basis and compare expected credit metrics with those of rated
global and domestic industry peers.
About National Beef Packing
Headquartered in Kansas City, Missouri, National Beef Packing
Co., is a processor of fresh beef products. The company also
provides refrigerated transportation services. Revenues for the
twelve months ended Nov. 24, 2007, were approximately US$5.7
billion.
About Smithfield Beef
Headquartered in Smithfield Virginia, Smithfield Beef Group,
Inc. -- http://www.smithfieldbeefgroup.com/Home.html-- is the
fifth largest U.S. beef processor. Sales for the twelve months
ended Oct. 31,2007, were approximately US$2.8 billion.
About Tasman Group
Headquartered in Brooklyn, Australia, Tasman Group is one of
Australia's largest meat processors with net revenues of
approximately US$465 million and processing approximately 2.7
million heads of cattle and small stocks per annum.
About JBS
Headquartered in Sao Paulo, Brazil, JBS SA --
http://www.jbs.com.br/ir/-- is a public company with its shares
listed on Bovespa's Novo Mercado under the symbol JBSS3. The
company operates 23 plants in Brazil and six plants in Argentina
in addition to its operations in Australia and the United States
resulting from last year's purchase of Swift & Company. In the
12 months ending September 2007, JBS generated pro forma net
revenue of US$11.9 billion and processed nine million head of
cattle.
MERCANTIL DO BRASIL: Earns BRL36.7 Million in 2007
--------------------------------------------------
Banco Mercantil do Brasil increased net profits by 86% to
BRL36.7 million in 2007, compared to 2006.
Business News Americas relates that Mercantil do Brasil's
lending grew 33.9% to BRL3.72 billion in 2007, compared to 2006,
with retail loans increasing 59%. Mercantil do Brasil's vehicle
financing rose 87% in 2007, from 2006, and payroll and
retirement loans increased 63%, the report says. According to
BNamericas, Mercantil do Brasil's time deposits, its primary
source of funding, increased 15.4% to BRL2.42 billion in 2007,
compared to 2006. Mercantil do Brasil increased external debt
issues by 117% to BRL830 million in 2007, from 2006, BNamericas
notes. Mercantil do Brasil's assets increased 30% to BRL7.25
billion in 2007, compared to 2006, BNamericas states.
Banco Mercantil do Brasil is headquartered in Belo Horizonte,
Brazil and had BRL5.6 billion (US$2.6 billion) in total assets
and BRL567 million (US$269 million) in shareholders' equity as
of December 2006.
* * *
As reported in the Troubled Company Reporter-Latin America on
Nov. 2, 2007, Standard & Poor's Ratings Services assigned its
'B' long-term senior unsecured debt rating to Banco Mercantil Do
Brasil S.A.'s US$100 million senior unsecured MTNs with final
maturity in November 2010.
NATIONAL BEEF: JBS Buyout Cues Moody's to Change Outlook to Neg.
----------------------------------------------------------------
Moody's Investors Service affirmed the ratings of National Beef
Packing Company LLC, including the company's B2 corporate family
rating and B2 probability of default rating. The rating outlook
was changed to negative from stable.
Ratings affirmed:
-- Corporate family rating at B2
-- Probability of default rating at B2
Rating affirmed, with LGD percentage revised:
-- US$160 million 10.50% senior unsecured notes due 2011 at
Caa1 (LGD5); LGD percentage to 86% from 87%
The change in outlook to negative is based on Moody's concern
that National Beef will be challenged to maintain credit metrics
that are appropriate for its rating over the near term, given
margin pressure as beef costs remain high for processors.
Separately, National Beef and the holders of membership
interests in the company reported on March 4, that JBS S.A.
would acquire the membership interests, subject to regulatory
and other approvals. The rated debt of National Beef will have
to be refinanced or amended upon the change of control. The
rating of JBS and the position of the rated debt, if it remains
outstanding, in JBS' capital structure, will determine the post-
acquisition ratings.
The company's B2 corporate family rating is supported by
National Beef's moderate scale, solid volume growth and lower
earnings volatility relative to other processors. However,
these attributes are offset by the speculative grade elements in
the company's profile, primarily anemic credit metrics, narrow
product focus, and the concentration of its raw material
sources. Moody's also views its capital structure as weak,
given the ability of two shareholder groups to put back their
capital to the company at any time beginning in August 2008,
which could result in either a leveraged recapitalization or an
outright sale of the company.
About National Beef Packing
Headquartered in Kansas City, Missouri, National Beef Packing
Co., is a processor of fresh beef products. The company also
provides refrigerated transportation services. Revenues for the
twelve months ended Nov. 24, 2007, were approximately US$5.7
billion. The company is majority owned and controlled by U.S.
Premium Beef, LLC.
JBS S.A. recently signed agreement to acquire National to
acquired National Beef Packing Company, LLC; Smithfield Beef
Group Inc., including full ownership of its subsidiary, Five
Rivers Ranch Cattle Feeding; and Tasman Group for a total
consideration of approximately US$1.8 billion.
SMITHFIELD FOODS: Asset Sale Prompts Moody's to Hold Ba2 Ratings
----------------------------------------------------------------
Moody's Investors Service affirmed the long-term ratings of
Smithfield Foods, Inc., including the company's Ba2 corporate
family rating and Ba2 probability of default rating, following
the company's announcement that it will sell its beef processing
and cattle feeding operation to JBS S.A. for US$565 million in
cash. The company's speculative grade liquidity rating of SGL-3
was also affirmed. The rating outlook remains negative.
Ratings affirmed:
-- Corporate family rating at Ba2
-- Probability of default rating at Ba2
-- Speculative Grade Liquidity Rating at SGL-3
Ratings affirmed, with LGD percentage changed:
-- Senior unsecured debt at Ba3 (LGD5). LGD percentage to 84%
from 82%
The affirmation of the company's long term ratings is based on
the expectation that material portion of proceeds from the
transaction will be applied to debt reduction. In addition to
the initial proceeds of US$565 million, live cattle owned by
Smithfield Foods and its Five Rivers joint venture are excluded
from the transaction. Proceeds to the company from the
liquidation of cattle over the next 12 months are likely to
exceed US$200 million, after payment of joint venture debt. In
total, cash proceeds could exceed US$750 million. This inflow
and the related debt reduction will improve the company's
liquidity, and should strengthen credit ratios. Moody's will
monitor the timeliness of payments and the receipt of regulatory
and other approvals, if any, for the transaction. The continued
negative outlook reflects Moody's expectation that credit
metrics could remain weak for the rating level, given margin
pressure on the company's hog production business.
The company's Ba2 corporate family rating reflects the company's
high leverage, somewhat volatile earnings and cash flow stream,
aggressive historical acquisition strategy, and complex and
changing business structure. Smithfield's ratings are supported
by the company's large size, very strong market position,
geographic and product diversity, and solid brand in the United
States pork industry.
The company's speculative grade liquidity rating of SGL-3 is
affirmed, based on Moody's expectation that its liquidity will
remain adequate. Moody's assumes that the sale of the beef
business will proceed without significant delay or opposition.
The SGL reflects the company's reliance on its external sources
of cash in order to cover some cash demands such as capital
expenditures, working capital requirements and scheduled debt
maturities. Smithfield Foods recently increased the size of its
domestic revolving credit by US$75 million and obtained US$200
million in uncommitted short term credit lines. The US$1.275
billion domestic revolving credit expires in August 2010, and a
EUR300 million revolving credit expires in August 2009.
Headroom under financial covenants has historically been limited
due to weak operating performance in the recent past.
International assets are generally unencumbered, and the
company's bank facility permits the establishment of an accounts
receivable facility for up to 5% of total assets.
About Smithfield Beef
Headquartered in Smithfield Virginia, Smithfield Foods, Inc. --
http://www.smithfieldfoods.com/-- is the world's largest pork
producer and processor and the fifth largest U.S. beef
processor. Sales for the twelve months ended Jan. 27, 2008,
were approximately US$13.67 billion.
JBS S.A. recently signed agreement to acquire National to
acquired National Beef Packing Company, LLC; Smithfield Beef
Group Inc., including full ownership of its subsidiary, Five
Rivers Ranch Cattle Feeding; and Tasman Group for a total
consideration of approximately US$1.8 billion.
USINAS SIDERURGICA: Concludes BRL500 Million Debenture Issuance
---------------------------------------------------------------
Usinas Siderurgicas de Minas Gerais SA aka Usiminas has
concluded the issuance of BRL500 million in non-convertible
five-year debentures.
According to Business News Americas, the debentures were priced
at BRL100,000 each. The issuance was approved during a
shareholders meeting in December 2007, BNamericas states.
Headquartered in Minas Gerais, Brazil, Usinas Siderurgicas de
Minas Gerais SA is among the world's 20 largest steel
manufacturing complexes, with a production capacity of
approximately 10 million tons of steel. Usiminas System
companies produces galvanized and non-coated flat steel products
for the automotive, small and large diameter pipe, civil
construction, hydro-electronic, rerolling, agriculture, and road
machinery industries. Brazil consumes 80% of its products and
the company's largest export markets are the US and Latin
America. The company also sells in China and Japan.
* * *
As reported in the Troubled Company Reporter-Latin America
on Feb. 5, 2008, Moody's Investors Service assigned a Ba1 local
currency rating and an Aa1.br rating on its Brazilian national
scale to the BRL500 million non-guaranteed subordinated
debentures due 2013 to be issued by Usinas Siderurgicas de
Minas Gerais S.A. (aka Usiminas). Net proceeds from the
debentures issuance will be used to partially fund the
company's capex program. The rating outlook is stable.
As reported in the Troubled Company Reporter-Latin America
on Jan. 3, 2007, Standard & Poor's Ratings Services revised
its outlook on Brazil-based steelmaker Usinas Siderurgicas
de Minas Gerais S.A., aka Usiminas, to positive from stable.
Standard & Poor's also it affirmed its 'BB+' local and
foreign currency corporate credit ratings on Usiminas.
* BRAZIL: Moody's Eyes Solid Growth for Homebuilding Industry
-------------------------------------------------------------
The homebuilding industry in Brazil should see solid growth over
the next several years, says Moody's Investors Service in a new
report.
"The combination of structural changes, favorable demographics,
and pent-up demand for homes bodes well for activity in the
homebuilding industry over the next few years," says Moody's
analyst for the homebuilding sector, Soummo Mukherjee. "The
government's drive to ease regulation on many fronts amid an
improvement in the macro-economic environment and a large
housing deficit has led to increased availability of mortgage
financing for home buyers."
"We are also increasingly seeing banks and homebuilders working
together to improve the availability of financing for
homebuyers," says Mr. Mukherjee.
The solid growth depends, however, on continued economic
expansion in Brazil, stable or lower interest rates, and
homebuyers continuing to have increasing access to mortgages.
Current market conditions may also strain the liquidity and
credit quality of some of the homebuilders as they find it
difficult to raise the additional capital to satisfy their high
financing needs.
Moody's explains that for a long period high inflation and
elevated interest rates stifled the Brazilian homebuilding
industry as mortgage financing remained limited. In addition to
the improved economic environment, various regulatory reforms
since 2005 have led to its current growth.
The reforms included changes in foreclosure law, several tax
incentives, and an increase in the funds available for real
estate financing.
Moody's notes that the Brazilian homebuilding market remains
extremely fragmented, with no builder holding more than 8% of
the total market. Given homebuilders' high financing needs, the
difficult environment for raising capital, and the advantages of
scale in this business, Moody's expects to see a number of
mergers and acquisitions in the sector over the next few years.
==========================
C A Y M A N I S L A N D S
==========================
ATLANTIS YACHTING: Proofs of Claim Filing Is Until March 17
-----------------------------------------------------------
Atlantis Yachting Ltd.'s creditors have until March 17, 2008, to
prove their claims to North County Holdings Inc., 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.
Atlantis Yachting's shareholders agreed on Jan. 16, 2008, to
place the company into voluntary liquidation under The Companies
Law (2004 Revision) of the Cayman Islands.
The liquidator can be reached at:
North County Holdings Inc.
4500 PGA Blvd. Suite 207
Palm Beach Gardens, Florida 33418, USA
GUIMARAES DE MELLO: Final Shareholders' Meeting Is on March 16
--------------------------------------------------------------
Guimaraes de Mello Europe Ltd. will hold its final shareholders'
meeting on March 16, 2008, at 10:30 a.m. in Lisbon, Portugal.
These matters will be taken up during the meeting:
1) accounting of the winding-up process; and
2) authorizing the liquidator to retain the records
of the company for a period of seven years from
the dissolution of the company, after which they
may be destroyed.
Guimaraes de Mello's shareholders agreed to place the company
into voluntary liquidation under The Companies Law (2004
Revision) of the Cayman Islands.
The liquidators can be reached at:
John L. Herod and Robert N. Forster
Attn: Kathryn Myles
P.O. Box 705, Grand Cayman KY1-1107
Cayman Islands
Telephone: 345-949-7055
Fax: 345-949-7004
MERLIN BIOMED: Sets Final Shareholders' Meeting for March 14
------------------------------------------------------------
Merlin Biomed Round Table Fund (Cayman) Limited will hold its
final shareholders' meeting on March 14, 2008, at 10:00 a.m. at
Ogier, Attorneys, Queensgate House, South Church Street, Grand
Cayman, Cayman Islands.
These matters will be taken up during the meeting:
1) accounting of the winding-up process; and
2) authorizing the liquidator to retain the records
of the company for a period of five years from
the dissolution of the company, after which they
may be destroyed.
Merlin Biomed's shareholders agreed on Jan. 11, 2008, to place
the company into voluntary liquidation under The Companies Law
(2004 Revision) of the Cayman Islands.
The liquidator can be reached at:
OGIER
Attn: Michael Lubin
Queensgate House
South Church Street, Grand Cayman
Cayman Islands
Telephone: (345) 949 9876
Fax: (345) 945 8604
MORLEY BALANCED: Final Shareholders' Meeting Is on March 17
-----------------------------------------------------------
Morley Balanced Fund Limited will hold its final shareholders'
meeting on March 17, 2008, at 11:00 a.m. at the offices of
Maricorp Services Ltd.
These matters will be taken up during the meeting:
1) accounting of the winding-up process; and
2) authorizing the liquidator to retain the records
of the company for a period of five years from
the dissolution of the company, after which they
may be destroyed.
Morley Balanced's shareholders agreed on Jan. 22, 2008, to place
the company into voluntary liquidation under The Companies Law
(2004 Revision) of the Cayman Islands.
The liquidator can be reached at:
Maricorp Services Ltd.
31 The Strand, 46 Canal Point Drive
Grand Cayman KY1-1105, Cayman Islands
TIME FOR US: Proofs of Claim Filing Deadline Is March 17
--------------------------------------------------------
Time for Us Marine Ltd.'s creditors have until March 17, 2008,
to prove their claims to Kevin Jantzen, 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.
Time for Us' shareholders agreed on Feb. 4, 2008, to place the
company into voluntary liquidation under The Companies Law (2004
Revision) of the Cayman Islands.
The liquidator can be reached at:
Kevin Jantzen
8621 East 21st St. N.
Wichita KS 67206, USA
Telephone: 1 316 631 1332
Fax: 1 316 631 1382
=========
C H I L E
=========
AES GENER: Shareholders Okay US$350 Million Capital Increase
------------------------------------------------------------
AES Gener told Reuters that its shareholders have authorized an
up to US$350 million capital increase to fund projects and pay
off debt.
As reported in the Troubled Company Reporter-Latin America on
Feb. 18, 2008, AES Gener said that it resumed an up to
US$350 million capital increase, which was suspended in December
2007. AES Gener had said that it would ask its shareholders to
authorize the capital increase. According to AES Gener,
proceeds from the bond issue would be used in funding expansion
plans within Chile and to refinance debt.
AES Gener is the second-largest electricity generation group in
Chile in terms of generating capacity (20% market share) with an
installed capacity of 2,428 megawatts. Gener serves both the
Central Interconnected System or SIC and the Northern
Interconnected System or SING through various subsidiaries and
related companies, including affiliate Guacolda and the
TermoAndes subsidiary. TermoAndes has a generation capacity of
642.8 megawatts, which while located in Argentina serves Chile's
SING via InterAndes transmission line. Gener also participates
in electricity generation in Colombia through Chivor
hydroelectric plant of 1,000 megawatts, and a 25% participation
in Itabo's facilities in the Dominican Republic (432.5
megawatts). Gener is 91.2% owned by AES (IDR rated 'B+' by
Fitch).
* * *
To date, AES Gener carries Moody's Investors Service's Ba2 long-
term foreign bank deposit rating with a stable outlook. The
firm also carries Standard & Poor's Ratings Services' BB+ long-
term foreign issuer credit rating with a positive outlook.
ROCK-TENN CO: Completes Southern Container Acquisition
------------------------------------------------------
Rock-Tenn Company has completed its previously announced
acquisition of Southern Container Corp. Southern Container
manufactures containerboard and corrugated packaging and is
believed to have one of the lowest system costs and the highest
EBITDA margins of any major integrated containerboard company in
North America. With the acquisition, Rock-Tenn becomes the
eighth largest manufacturer of containerboard in North America,
and continues as one of America’s leading manufacturers of
bleached and recycled paperboard with annual capacity of
approximately 2.3 million tons of paperboard and containerboard,
pro forma annual revenues of US$2.9 billion and Pro Forma
Adjusted EBITDA of US$440 million for the 12 months ended
Dec. 31, 2007.
Rock-Tenn Chairman and Chief Executive Officer, James Rubright,
said, "With the acquisition of Southern Container we have
completed another major step toward making Rock-Tenn the most
respected and profitable integrated paperboard and packaging
company in North America. We believe our very low cost mills
and converting plants and reputation for exceptional product
quality and service just got better with the acquisition of
Southern Container."
Rock-Tenn financed the acquisition with US$1.4 billion in new
financing, including US$1.2 billion of new senior secured credit
facilities and US$200 million of 9.25% senior notes due 2016.
Due to strong demand for the company’s bank credit facilities,
the company was able to increase the size of the senior
secured credit facilities from US$1.0 billion to US$1.2 billion,
and reduce the size of the senior notes offering from US$400
million to US$200 million, which based on current market rates
results in a reduction of annual interest expense of
approximately US$7.5 million per year.
Wachovia Bank, N.A., Bank of America and SunTrust Bank and
certain affiliates of each arranged the syndication of the
US$1.2 billion senior secured credit facilities. Wachovia
Capital Markets, LLC acted as financial advisor to Rock-Tenn on
the transaction.
Rock-Tenn disclosed that based on the pro forma combination of
the 12 months ended Dec. 31, 2007 results for Rock-Tenn and the
unaudited 52 weeks ended Dec. 29, 2007 results for Southern
Container and preliminary purchase price allocation, pro forma
combined net income and pro forma diluted income per share of
combined Rock-Tenn was US$95.2 million and $2.42 per share,
respectively, and Pro Forma Adjusted EBITDA (as hereinafter
defined) was US$440.2 million, in each case higher than the
US$90.3 million, US$2.29 per share and US$429.6 million,
respectively, for the 12 months ended Sept. 30, 2007. The pro
forma net income per share of US$2.42 for the combined Rock-Tenn
for the 12 months ended Dec. 31, 2007 is US$0.28 per share
higher than Rock-Tenn’s reported net income per share of US$2.14
per share for the 12 months ended Dec. 31, 2007.
Headquartered in Norcross, Georgia, Rock-Tenn Company (NYSE:
RKT) -- http://www.rocktenn.com/-- provides a wide range of
marketing and packaging solutions to consumer products
companies, with operating locations in the United States,
Canada, Mexico, Argentina and Chile. The company is one of
North America's manufacturers of packaging products,
merchandising displays and bleached and recycled paperboard.
* * *
As reported in the Troubled Company Reporter-Latin America on
Jan. 31, 2008, Moody's Investors Service confirmed Rock-Tenn
Company's Ba2 corporate family rating and the Ba3 rating on the
company's existing senior notes. At the same time Moody's
assigned a Ba2 rating to the company's new US$1 billion senior
secured credit facilities and a Ba3 rating to the company's new
US$400 million senior unsecured notes. Moody's said the rating
outlook is negative.
===============
C O L O M B I A
===============
QUEBECOR WORLD: WEB Printing Backs Reclamation Objections
---------------------------------------------------------
WEB Printing Company, Inc., supports the objection raised by
Packaging Corporation of America; and Abitibi Consolidated Sales
Corp., Abitibi-Consolidated US Funding Corp., and Bowater
America Inc. regarding the reclamation procedures proposed by
Quebecor World Inc. and its debtor-affiliates.
WEB Printing also asks the U.S. Bankruptcy Court for the
Southern District of New York to require the Debtors to:
(a) provide liquid collateral, in the form of irrevocable
letters of credit in a amount at least equal to 125% of
the reclamation claims; and
(b) preclude the necessity of the Debtors obtaining the
approval of any DIP Lender, the U.S. Trustee, or the
Unsecured Creditors Committee to the resolution of any
reclamation claim.
As reported in the Troubled Company Reporter on Feb. 25, 2008,
in separate filings Abitibi Consolidated Sales Corp., Abitibi-
Consolidated US Funding Corp., Bowater America Inc. and Bowater
Inc.; Packaging Corporation of America; Catalyst Pulp and Paper
Sales Inc., and Catalyst Paper (USA) Inc.; Rock-Tenn Company;
Midland Paper Company; and Day International Inc., objected to
the Debtors' proposed claims treatment procedures.
The initial objectors demanded the return of supplies worth more
than US$30 million.
The Suppliers asserted that the proposed Reclamation Procedures
will effectively deny their right of reclamation stating that
after a 120-day stay has expired, the Suppliers' goods will have
almost certainly been entirely consumed by the Debtors.
The Suppliers believe that they have satisfied the requirements
of Section 546(c), which gives them an absolute right to reclaim
the goods they sold to the Debtors which was received 45 days
before the bankruptcy filing.
These 22 suppliers filed notices of demand for reclamation
from Feb. 5, 2008, to March 2, 2008, to recover goods supplied
to the Debtors with 45 days before the bankruptcy filing:
Claimant Claim Amount
-------- ------------
Forbo Adhesives US$106,684,453
Abitibi Consolidated Sales Corp. 15,109,949
Bowater America Inc. 7,554,670
Bowater Inc. unspecified
Catalyst Paper (USA) Inc. 8,388,821
NewPage Corporation 3,553,262
Midland Paper 3,070,833
Packaging Corporation of America 1,454,988
Day International 1,225,783
AEP Industries, Inc. 1,099,710
A.T. Clayton & Company 721,305
Rock-Tenn Company 387,380
MSC Industrial Supply Co. 327,402
ACTEGA Kelstar, Inc. 325,711
Goss International 293,642
C&W Pressroom Products 182,170
Roosevelt Paper Company 74,226
WEB Printing Controls Company, Inc. 50,482
Holliston LLC 45,967
Valley Industrial Rubber Products Co. 25,610
WESCO 19,544
Newsweek, Inc. unspecified
About Quebecor World
Based in Montreal, Quebec, Quebecor World Inc. (TSX: IQW) (NYSE:
IQW), -- http://www.quebecorworldinc.com/-- provides market
solutions, including marketing and advertising activities, well
as print solutions to retailers, branded goods companies,
catalogers and to publishers of magazines, books and other
printed media. It has 127 printing and related facilities
located in North America, Europe, Latin America and Asia. In
the United States, it has 82 facilities in 30 states, and is
engaged in the printing of books, magazines, directories, retail
inserts, catalogs and direct mail. In Canada it has 17
facilities in five provinces, through which it offers a mix of
printed products and related value-added services to the
Canadian market and internationally. The company has operations
in Mexico, Brazil, Colombia, Chile, Peru, Argentina and the
British Virgin Islands.
The company is an independent commercial printer in Europe with
19 facilities, operating in Austria, Belgium, Finland, France,
Spain, Sweden, Switzerland and the United Kingdom. In March
2007, it sold its facility in Lille, France. Quebecor World
(USA) Inc. is its wholly owned subsidiary.
Quebecor World and 53 of its subsidiaries, including those in
Canada, filed a petition under the Companies' Creditors
Arrangement Act before the Superior Court of Quebec, Commercial
Division, in Montreal, Canada, on Jan. 20, 2008. The Honorable
Justice Robert Mongeon oversees the CCAA case. Francois-David
Pare, Esq., at Ogilvy Renault, LLP, represents the Company in
the CCAA case. Ernst & Young Inc. was appointed as Monitor.
On Jan. 21, 2008, Quebecor World (USA) Inc., its U.S.
subsidiary, along with other U.S. affiliates, filed for chapter
11 bankruptcy on Jan. 21, 2008 (Bankr. S.D.N.Y Lead Case No.
08-10152). Anthony D. Boccanfuso, Esq., at Arnold & Porter LLP
represents the Debtors in their restructuring efforts. The
Official Committee of Unsecured Creditors is represented by Akin
Gump Strauss Hauer & Feld LLP.
Based in Corby, Northamptonshire, Quebecor World PLC --
http://www.quebecorworldplc.com/-- is the U.K. subsidiary of
Quebecor World Inc. that specializes in web offset magazines,
catalogues and specialty print products for marketing and
advertising campaigns. The company employs around 290 people.
Quebecor PLC was placed into administration with Ian Best and
David Duggins of Ernst & Young LLP appointed as joint
administrators effective Jan. 28, 2008.
As of Sept. 30, 2007, Quebecor World's unaudited consolidated
balance sheet showed total assets of US$5,554,900,000, total
liabilities of US$3,964,800,000, preferred shares of
US$175,900,000, and total shareholders' equity of
US$1,414,200,000.
The company has until May 20, 2008, to file a plan of
reorganization in the Chapter 11 case. The Debtors' CCAA stay
has been extended to May 12, 2008. (Quebecor World Bankruptcy
News, Issue No. 7; Bankruptcy Creditors' Service, Inc.,
http://bankrupt.com/newsstand/or 215/945-7000)
* * *
As reported in the Troubled Company Reporter-Latin America on
Feb. 13, 2008, Moody's Investors Service assigned a Ba2 rating
to the US$400 million super priority senior secured revolving
term loan facility of Quebecor World Inc. as a Debtor-in-
Possession. The related US$600 million super priority senior
secured term loan was rated Ba3 (together, the DIP facilities).
The RTL's better asset value coverage relative to the TL
accounts for the ratings' differential.
QUEBECOR WORLD: Reaches Settlement With Utility Providers
---------------------------------------------------------
The U.S. Bankruptcy Court for the Southern District of New York
approved five stipulations entered into by Quebecor World Inc.
and its debtor-affiliates and certain utility providers to
resolve some objections to the Debtors' Utility Motion.
Consolidated Edison Company of New York, Inc., Duke Energy Ohio,
Inc., Duke Energy Carolinas, LLC, New York State Electric and
Gas Corporation, The Commonwealth Edison Company, PECO Energy
Company, Piedmont Natural Gas Company and Virginia Electric and
Power Company, d/b/a Dominion Virginia Power, CenterPoint Energy
Arkansas Gas, CenterPoint Energy Gas Transmission, Inc., and
Merced Irrigation District entered into a letter agreement dated
Feb. 20, 2008, with the Debtors pursuant to which the Debtors
will provide certain adequate assurance of payment for future
utilities services to the Utilities. The parties agreed that
upon delivery of the adequate assurance by the Debtors pursuant
to the Letter Agreement, the Utilities will be deemed to be
adequately assured of payment for future utility services within
the meaning of Section 366 of the Bankruptcy Code. The amount
of adequate assurance was not disclosed.
BP Canada Energy Marketing Corp., BP Energy Company, IGI
Resources, Inc., Hess Corporation formerly known as Amerada Hess
Corporation and the Debtors have engaged in negotiations to
resolve their Objections and seek an adjournment of a hearing on
the Objection to continue those efforts. The parties agreed
that the hearing on the Objections is adjourned to March 20,
2008. Pending the hearing and resolution or adjudication of the
Objections, BP and Hess will be excluded from the definition of
Utility Provider and none of the parties will be included on the
Utility Service List, and the Debtors, Hess and BP reserve their
rights. Hess waives any and all objections to (a) the Proposed
Adequate Assurance for Utility Providers proposed in the Motion,
provided, however, Hess's Objection is preserved to the extent
that it seeks adequate assurance in the manner and form that
existed pre-petition, viz. posting of a US$1,500,000 letter of
credit by the Debtors with Hess as beneficiary and (b) the
Adequate Assurance Procedures and the procedures for opting out
of Adequate Assurance Procedures.
The Debtors also entered into a letter agreement with Integrys
Energy Services of Canada Corp. and Integrys Energy Services,
Inc. The parties agreed that the Debtors agree not to assert in
their chapter 11 cases that Integrys is a "utility" within the
meaning and subject to the application of Section 366 of the
Bankruptcy Code. The Debtors further agree that Integrys is not
subject to the Utility Motion, or any related orders. Integrys
withdraws with prejudice, and will not seek Bankruptcy Court
consideration of, its Objection. The parties also agree that
Integrys US is authorized to apply the prepetition deposit in
its possession to the net, outstanding prepetition balances owed
to Integrys US.
The Debtors previously asked the Court to enter an order (i)
determining that utility providers have been provided with
adequate assurance of payment within the meaning of Section 366
of the Bankruptcy Code; (ii) approving proposed procedures for
granting adequate assurance payments to certain utility
providers; and (iii) prohibiting utility providers from
altering, refusing or discontinuing services on account of
prepetition amounts owed.
Michael J. Canning, Esq., at Arnold & Porter LLP, in New York,
proposed counsel for the Debtors, told the Court that the
Debtors operate 78 printing facilities in 29 states. As an
indispensable part of those operations, the Debtors obtain
electric, gas, water, sewer, telephone and other similar utility
services provided by 200 utility companies. The Debtors pay
utility providers, on average, about US$10,000,000 per month for
services rendered. The Debtors, pursuant to an Energy Sourcing
and Management agreement, transfer US$3,000,000 every week to
Summit Energy Systems, Inc., which then transmits payment to
majority of the Debtors' utility providers. Mr. Canning averred
that uninterrupted utility services are essential to the
Debtors' ongoing operations and, therefore, to the success of
the Debtors' reorganization.
Judge James Peck issued an order in February determining
adequate assurance of payment for future utility services. The
Court ordered that utilities identified by the Debtors are
forbidden to discontinue, alter or refuse service on account of
any unpaid prepetition charges, or require additional adequate
assurance of payment other than the Debtors' adequate assurance.
A copy of the Utility Service List is available for free at:
http://bankrupt.com/misc/Quebecor_FinalUtilityServiceList.pdf
About Quebecor World
Based in Montreal, Quebec, Quebecor World Inc. (TSX: IQW) (NYSE:
IQW), -- http://www.quebecorworldinc.com/-- provides market
solutions, including marketing and advertising activities, well
as print solutions to retailers, branded goods companies,
catalogers and to publishers of magazines, books and other
printed media. It has 127 printing and related facilities
located in North America, Europe, Latin America and Asia. In
the United States, it has 82 facilities in 30 states, and is
engaged in the printing of books, magazines, directories, retail
inserts, catalogs and direct mail. In Canada it has 17
facilities in five provinces, through which it offers a mix of
printed products and related value-added services to the
Canadian market and internationally. The company has operations
in Mexico, Brazil, Colombia, Chile, Peru, Argentina and the
British Virgin Islands.
The company is an independent commercial printer in Europe with
19 facilities, operating in Austria, Belgium, Finland, France,
Spain, Sweden, Switzerland and the United Kingdom. In March
2007, it sold its facility in Lille, France. Quebecor World
(USA) Inc. is its wholly owned subsidiary.
Quebecor World and 53 of its subsidiaries, including those in
Canada, filed a petition under the Companies' Creditors
Arrangement Act before the Superior Court of Quebec, Commercial
Division, in Montreal, Canada, on Jan. 20, 2008. The Honorable
Justice Robert Mongeon oversees the CCAA case. Francois-David
Pare, Esq., at Ogilvy Renault, LLP, represents the Company in
the CCAA case. Ernst & Young Inc. was appointed as Monitor.
On Jan. 21, 2008, Quebecor World (USA) Inc., its U.S.
subsidiary, along with other U.S. affiliates, filed for chapter
11 bankruptcy on Jan. 21, 2008 (Bankr. S.D.N.Y Lead Case No.
08-10152). Anthony D. Boccanfuso, Esq., at Arnold & Porter LLP
represents the Debtors in their restructuring efforts. The
Official Committee of Unsecured Creditors is represented by Akin
Gump Strauss Hauer & Feld LLP.
Based in Corby, Northamptonshire, Quebecor World PLC --
http://www.quebecorworldplc.com/-- is the U.K. subsidiary of
Quebecor World Inc. that specializes in web offset magazines,
catalogues and specialty print products for marketing and
advertising campaigns. The company employs around 290 people.
Quebecor PLC was placed into administration with Ian Best and
David Duggins of Ernst & Young LLP appointed as joint
administrators effective Jan. 28, 2008.
As of Sept. 30, 2007, Quebecor World's unaudited consolidated
balance sheet showed total assets of US$5,554,900,000, total
liabilities of US$3,964,800,000, preferred shares of
US$175,900,000, and total shareholders' equity of
US$1,414,200,000.
The company has until May 20, 2008, to file a plan of
reorganization in the Chapter 11 case. The Debtors' CCAA stay
has been extended to May 12, 2008. (Quebecor World Bankruptcy
News, Issue No. 7; Bankruptcy Creditors' Service, Inc.,
http://bankrupt.com/newsstand/or 215/945-7000)
* * *
As reported in the Troubled Company Reporter-Latin America on
Feb. 13, 2008, Moody's Investors Service assigned a Ba2 rating
to the US$400 million super priority senior secured revolving
term loan facility of Quebecor World Inc. as a Debtor-in-
Possession. The related US$600 million super priority senior
secured term loan was rated Ba3 (together, the DIP facilities).
The RTL's better asset value coverage relative to the TL
accounts for the ratings' differential.
QUEBECOR WORLD: Seeks to Reject Banc of America Aircraft Lease
--------------------------------------------------------------
Quebecor World Inc. and its debtor-affiliates seek authority
from the U.S. Bankruptcy Court for the Southern District of New
York to reject an aircraft lease agreement with Banc of America
Leasing and Capital, LLC.
The Debtors further ask the Court to lift the automatic stay so
that Banc of America can exercise its rights to the Aircraft
Lease Agreement, which includes one Bombardier CL-601-3A
aircraft, two General Electric CF34-3A engines and certain
appliances, parts, instruments, appurtenances, accessories,
furnishings, seats and other equipment incorporated to the
aircraft. The Aircraft Lease expired on January 18, 2008.
The Debtors want to reject the Aircraft Lease effective as of
the Petition Date out of an abundance of caution, and to confirm
that their bankruptcy estates do not retain any equitable
interest in the aircraft or the Aircraft Lease. In addition,
the Debtors request clarification that Banc of America's
exercise of remedies under the Aircraft Lease and actions to
take possession of the aircraft will not be construed as a
violation of the automatic stay under Section 362 of the
Bankruptcy Code.
As of Jan. 7, 2008, the Debtors owe US$12,218,351 under the
Lease.
According to Michael Canning, Esq., at Arnold & Porter LLP, in
New York, the aircraft is not operational and is hangered in
Montreal, Canada. The Debtors are also continuing to incur
costs associated with its storage and insurance.
The Debtors have determined that the fair market value of the
aircraft is significantly less than the US$12,218,351 payment
amount. Based on an Aircraft Appraisal Report prepared by
Aeronautical Systems, Joseph T. Zulueta, ASA, dated Jan. 28,
2008, the fair market value of the aircraft is at an estimated
US$9,633,000.
Mr. Canning relates that Banc of America desires to retake
possession of the aircraft as soon as possible, and has agreed
to waive any and all postpetition claims, as well as any
rejection damages arising from the Debtors' rejection of the
Aircraft Lease. Accordingly, the Debtors have entered into
discussions with Banc of America regarding the Aircraft Lease
rejection and relief from the automatic stay.
About Quebecor World
Based in Montreal, Quebec, Quebecor World Inc. (TSX: IQW) (NYSE:
IQW), -- http://www.quebecorworldinc.com/-- provides market
solutions, including marketing and advertising activities, well
as print solutions to retailers, branded goods companies,
catalogers and to publishers of magazines, books and other
printed media. It has 127 printing and related facilities
located in North America, Europe, Latin America and Asia. In
the United States, it has 82 facilities in 30 states, and is
engaged in the printing of books, magazines, directories, retail
inserts, catalogs and direct mail. In Canada it has 17
facilities in five provinces, through which it offers a mix of
printed products and related value-added services to the
Canadian market and internationally. The company has operations
in Mexico, Brazil, Colombia, Chile, Peru, Argentina and the
British Virgin Islands.
The company is an independent commercial printer in Europe with
19 facilities, operating in Austria, Belgium, Finland, France,
Spain, Sweden, Switzerland and the United Kingdom. In March
2007, it sold its facility in Lille, France. Quebecor World
(USA) Inc. is its wholly owned subsidiary.
Quebecor World and 53 of its subsidiaries, including those in
Canada, filed a petition under the Companies' Creditors
Arrangement Act before the Superior Court of Quebec, Commercial
Division, in Montreal, Canada, on Jan. 20, 2008. The Honorable
Justice Robert Mongeon oversees the CCAA case. Francois-David
Pare, Esq., at Ogilvy Renault, LLP, represents the Company in
the CCAA case. Ernst & Young Inc. was appointed as Monitor.
On Jan. 21, 2008, Quebecor World (USA) Inc., its U.S.
subsidiary, along with other U.S. affiliates, filed for chapter
11 bankruptcy on Jan. 21, 2008 (Bankr. S.D.N.Y Lead Case No.
08-10152). Anthony D. Boccanfuso, Esq., at Arnold & Porter LLP
represents the Debtors in their restructuring efforts. The
Official Committee of Unsecured Creditors is represented by Akin
Gump Strauss Hauer & Feld LLP.
Based in Corby, Northamptonshire, Quebecor World PLC --
http://www.quebecorworldplc.com/-- is the U.K. subsidiary of
Quebecor World Inc. that specializes in web offset magazines,
catalogues and specialty print products for marketing and
advertising campaigns. The company employs around 290 people.
Quebecor PLC was placed into administration with Ian Best and
David Duggins of Ernst & Young LLP appointed as joint
administrators effective Jan. 28, 2008.
As of Sept. 30, 2007, Quebecor World's unaudited consolidated
balance sheet showed total assets of US$5,554,900,000, total
liabilities of US$3,964,800,000, preferred shares of
US$175,900,000, and total shareholders' equity of
US$1,414,200,000.
The company has until May 20, 2008, to file a plan of
reorganization in the Chapter 11 case. The Debtors' CCAA stay
has been extended to May 12, 2008. (Quebecor World Bankruptcy
News, Issue No. 7; Bankruptcy Creditors' Service, Inc.,
http://bankrupt.com/newsstand/or 215/945-7000)
* * *
As reported in the Troubled Company Reporter-Latin America on
Feb. 13, 2008, Moody's Investors Service assigned a Ba2 rating
to the US$400 million super priority senior secured revolving
term loan facility of Quebecor World Inc. as a Debtor-in-
Possession. The related US$600 million super priority senior
secured term loan was rated Ba3 (together, the DIP facilities).
The RTL's better asset value coverage relative to the TL
accounts for the ratings' differential.
QUEBECOR WORLD: Six Creditors Balk at US$1 Billion DIP Facility
---------------------------------------------------------------
Flint Group North America Corporation, Abitibi Consolidated
Sales Corp., Abitibi-Consolidated US Funding Corp., Bowater
America Inc., and Bowater Inc., and Corporate Property
Associates 9 LP, object to the request of Quebecor World Inc.
and its debtor-affiliates to obtain US$1,000,000,000 of DIP
financing.
As reported in the Troubled Company Reporter on Feb. 6, 2008,
Judge James Peck of the U.S. Bankruptcy Court for the Southern
District of New York authorized the Debtors, in the interim, to
enter into a US$1,000,000,000 DIP facility with Credit Suisse
Securities (USA), LLC, and Morgan Stanley Senior Funding Inc.
The Honorable Justice Robert Mongeon at the Superior Court of
Justice (Commercial Division), for the Province of Quebec, who
oversees the Debtors' insolvency proceedings under the
Canadian Creditors' Companies Arrangement Act, also authorizes
the Canadian Applicants to enter into the US$1,000,000,000 DIP
Facility.
(1) Flint Group
Flint Group notes that the DIP Motion purports to grant the DIP
Collateral Agent and the DIP Lenders first priority and junior
liens on virtually all of the Debtors' property, including
inventory.
Flint Group relates that, pursuant to an ink supply agreement,
it has delivered ink worth about US$5,400,000 and equipment to
the Debtors as of the Petition Date. Ira A. Reid, Esq., at
Baker & McKenzie LLP, in New York, says those goods are "bailed"
goods.
Mr. Reid relates that Flint Group has asked the Debtors to
confirm that the DIP Motion do not purport to grant the
Collateral Agent, the DIP Lenders, or any third parties any
rights in any of Flint Group's Bailed Goods located at
facilities owned by the Debtors or any of their affiliates.
However, as of Feb. 28, 2008, the Debtors have not responded to
Flint Group's request.
Flint Group, accordingly, asks the Court to modify any proposed
order on the DIP Motion to provide that the DIP Order does not
grant the Collateral Agent, the DIP Lenders, or any third
parties any rights in any of Flint Group's Bailed Goods or
Equipment.
Mr. Reid asserts that Flint Group's Bailed Goods and Equipment
are not property of the estate, therefore the Debtors cannot
grant a security interest in them.
(2) Abitibi/Bowater
Abitibi/Bowater, the Debtors' largest supplier of paper, objects
to the DIP Motion to the extent that the Collateral Agent and
the DIP Lenders have the right to eliminate, prime or otherwise
impair Abitibi/Bowater's set-off and reclamation rights.
Abitibi/Bowater seeks clarification that (i) its prepetition
setoff and reclamation rights -- regardless of whether those
rights have been exercised as of February 28, 2008 -- constitute
valid, perfected and unavoidable liens in existence immediately
before the Petition Date, or (ii) its set-off and reclamation
rights are otherwise preserved in the DIP Motion so that the
liens granted to the DIP Lenders do not eliminate, prime or
otherwise impair the setoff and reclamation rights.
Abitibi/Bowater relates that it may own certain potential
rebates to the Debtors in connection with sales of paper.
Abitibi/Bowater believes that to the extent it owes Potential
Rebates to the Debtors, it has setoff and recoupment rights
against any monies owed by the Debtors.
Abitibi/Bowater adds that it has submitted a reclamation demand
to the Debtors demanding reclamation of all paper the Debtors
received from Abitibi/Bowater within 45 days before the Petition
Date.
Packaging Corporation of America, which has sent a reclamation
demand to the Debtors, joins Abitibi/Bowater's objections.
(3) Corporate Property
Corporate Property and Debtor Quebecor Printing Atlanta, Inc.,
are parties to a lease agreement related to the Debtor's
facility in DeKalb County, Georgia.
Corporate Property seeks modification of the DIP Credit
Agreement to provide that:
(a) Quebecor Atlanta's liability under the DIP Facility is
limited to its pro rata benefit from the DIP Facility or
Quebecor Atlanta be provided a superpriority claim
together with a first priority lien against each other
Debtor to the extent of any claim for indemnification or
contribution based on the other Debtor receiving the
benefits from the DIP Facility;
(b) any lien rights granted to the DIP Lenders are subject to
any restrictions in applicable leases including the
Corporate Property Lease; and
(c) any proposed disposition of the Debtors' interest in the
Corporate Property Lease will be subject to the
requirements of Section 365 of the Bankruptcy Code and
the terms of the Lease.
Corporate Property asserts that should Quebecor Atlanta's
guaranty obligations be called on, it will not be able to pay
postpetition rent pursuant to the Lease.
Corporate Property also objects to the DIP Motion because it
does not contain sufficient disclosure concerning Quebecor World
Finance Inc., from which entity the Debtors seek authorization
to purchase the Receivables Portfolio for approximately
US$416,800,000. The DIP Motion, Corporate Property notes, fails
to disclose QWF's relationship, if any, to the Debtors. The DIP
Motion also fails to provide sufficient justification for the
large expenditure.
About Quebecor World
Based in Montreal, Quebec, Quebecor World Inc. (TSX: IQW) (NYSE:
IQW), -- http://www.quebecorworldinc.com/-- provides market
solutions, including marketing and advertising activities, well
as print solutions to retailers, branded goods companies,
catalogers and to publishers of magazines, books and other
printed media. It has 127 printing and related facilities
located in North America, Europe, Latin America and Asia. In
the United States, it has 82 facilities in 30 states, and is
engaged in the printing of books, magazines, directories, retail
inserts, catalogs and direct mail. In Canada it has 17
facilities in five provinces, through which it offers a mix of
printed products and related value-added services to the
Canadian market and internationally. The company has operations
in Mexico, Brazil, Colombia, Chile, Peru, Argentina and the
British Virgin Islands.
The company is an independent commercial printer in Europe with
19 facilities, operating in Austria, Belgium, Finland, France,
Spain, Sweden, Switzerland and the United Kingdom. In March
2007, it sold its facility in Lille, France. Quebecor World
(USA) Inc. is its wholly owned subsidiary.
Quebecor World and 53 of its subsidiaries, including those in
Canada, filed a petition under the Companies' Creditors
Arrangement Act before the Superior Court of Quebec, Commercial
Division, in Montreal, Canada, on Jan. 20, 2008. The Honorable
Justice Robert Mongeon oversees the CCAA case. Francois-David
Pare, Esq., at Ogilvy Renault, LLP, represents the Company in
the CCAA case. Ernst & Young Inc. was appointed as Monitor.
On Jan. 21, 2008, Quebecor World (USA) Inc., its U.S.
subsidiary, along with other U.S. affiliates, filed for chapter
11 bankruptcy on Jan. 21, 2008 (Bankr. S.D.N.Y Lead Case No.
08-10152). Anthony D. Boccanfuso, Esq., at Arnold & Porter LLP
represents the Debtors in their restructuring efforts. The
Official Committee of Unsecured Creditors is represented by Akin
Gump Strauss Hauer & Feld LLP.
Based in Corby, Northamptonshire, Quebecor World PLC --
http://www.quebecorworldplc.com/-- is the U.K. subsidiary of
Quebecor World Inc. that specializes in web offset magazines,
catalogues and specialty print products for marketing and
advertising campaigns. The company employs around 290 people.
Quebecor PLC was placed into administration with Ian Best and
David Duggins of Ernst & Young LLP appointed as joint
administrators effective Jan. 28, 2008.
As of Sept. 30, 2007, Quebecor World's unaudited consolidated
balance sheet showed total assets of US$5,554,900,000, total
liabilities of US$3,964,800,000, preferred shares of
US$175,900,000, and total shareholders' equity of
US$1,414,200,000.
The company has until May 20, 2008, to file a plan of
reorganization in the Chapter 11 case. The Debtors' CCAA stay
has been extended to May 12, 2008. (Quebecor World Bankruptcy
News, Issue No. 7; Bankruptcy Creditors' Service, Inc.,
http://bankrupt.com/newsstand/or 215/945-7000)
* * *
As reported in the Troubled Company Reporter-Latin America on
Feb. 13, 2008, Moody's Investors Service assigned a Ba2 rating
to the US$400 million super priority senior secured revolving
term loan facility of Quebecor World Inc. as a Debtor-in-
Possession. The related US$600 million super priority senior
secured term loan was rated Ba3 (together, the DIP facilities).
The RTL's better asset value coverage relative to the TL
accounts for the ratings' differential.
SOLUTIA INC: Flexsys Unit Raises Prices to Ensure Reinvestment
--------------------------------------------------------------
Solutia Inc. said that its Flexsys subsidiary is initiating
price increases across select product groups including Crystex
(R) insoluble sulfur, Santoflex (R) 6 PPD antiozonant, and other
rubber chemicals.
"These price increases are driven by a number of factors," said
Jim Voss, president of Flexsys. "We must continue to reinvest
to ensure our long-term success and the success of our
customers. We have successfully differentiated ourselves from
our competition in the areas of technology, quality,
manufacturing reliability, and supply chain excellence. We will
continue to invest in capacity expansions and new technology to
provide our customers with the high-quality and innovative
products backed by superior customer service and world-class
technical support that they have come to expect from Flexsys."
"The continued upward trend of energy and raw material costs
makes this action necessary," said Tim Wessel, vice president,
Antidegradants and Crystex. "We have seen an unprecedented rise
in the cost of raw material ingredients, such as sulfur." He
noted that the global agricultural boom and demand for
fertilizer has significantly tightened the sulfur market.
The price increases are effective April 1, 2008, or as soon as
permitted by contract.
Crystex insoluble sulfur is the vulcanizing agent of choice for
critical applications in the tire industry, providing the
highest level of quality and performance. In addition, Crystex
HD insoluble sulfur offers tire manufacturers improved
productivity and safety in their manufacturing processes.
Santoflex 6 PPD antiozonant is used to improve tire longevity by
protecting against degradation by oxygen, ozone, and fatigue.
Flexsys products play an essential role in the manufacturing of
tires and other rubber products, such as belts, hoses, seals,
and footwear. Flexsys is a global business with offices,
manufacturing facilities and technology centers around the
world. Flexsys has annual sales of over US$650 million, about
two-thirds of which take place outside the United States.
About Solutia Inc.
Based in St. Louis, Missouri, Solutia Inc. (OTCBB: SOLUQ) (NYSE:
SOA-WI) -- 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. Lead 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 emerged from chapter 11 protection
Feb. 28, 2008. (Solutia Bankruptcy News, Issue No. 120;
Bankruptcy Creditors' Service, Inc.,
http://bankrupt.com/newsstand/or 215/945-7000).
* * *
As reported in the Troubled Company Reporter-Latin America on
March 5, 2008, Standard & Poor's Ratings Services raised its
corporate credit rating on Solutia Inc. to 'B+' from 'D',
following the company's emergence from bankruptcy on Feb. 28,
2008, and the implementation of its financing plan. The outlook
is stable. S&P also affirmed its 'B+' rating and '3' recovery
rating on Solutia's proposed senior secured term loan. In
addition, S&P assigned its 'B-' rating to Solutia's US$400
million unsecured bridge loan facility. S&P also withdrew its
'B-' rating on the proposed US$400 million unsecured notes,
which have been replaced by the bridge facility in Solutia's
capital structure.
SOLUTIA INC: Agrees to GE Betz's $255,575 Unsecured Claim
---------------------------------------------------------
On Nov. 22, 2004, GE Betz, Inc., filed Claim No. 5640 alleging a
total claim of US$406,006, of which US$124,545 was secured by a
right of offset.
On Feb. 4, 2008, GE Betz filed Claim No. 14845 for US$380,119,
of which US$124,545 is secured by a right of offset. Claim No.
14845 is intended to amend and supersede Claim No. 5640.
Solutia Inc. and GE Betz have agreed that:
-- Claim No. 14845 will amend and supersede Claim No. 5640;
-- GE Betz may exercise its right of setoff. GE Betz
withdraws the secured claim of US$124,545; and
-- GE Betz will retain an allowed general unsecured claim of
US$255,575.
About Solutia Inc.
Based in St. Louis, Missouri, Solutia Inc. (OTCBB: SOLUQ) (NYSE:
SOA-WI) -- 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. Lead 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 emerged from chapter 11 protection
Feb. 28, 2008. (Solutia Bankruptcy News, Issue No. 120;
Bankruptcy Creditors' Service, Inc.,
http://bankrupt.com/newsstand/or 215/945-7000).
* * *
As reported in the Troubled Company Reporter-Latin America on
March 5, 2008, Standard & Poor's Ratings Services raised its
corporate credit rating on Solutia Inc. to 'B+' from 'D',
following the company's emergence from bankruptcy on Feb. 28,
2008, and the implementation of its financing plan. The outlook
is stable. S&P also affirmed its 'B+' rating and '3' recovery
rating on Solutia's proposed senior secured term loan. In
addition, S&P assigned its 'B-' rating to Solutia's US$400
million unsecured bridge loan facility. S&P also withdrew its
'B-' rating on the proposed US$400 million unsecured notes,
which have been replaced by the bridge facility in Solutia's
capital structure.
SOLUTIA INC: To Issue 7,450,000 Shares for Employee Plans
---------------------------------------------------------
Solutia Inc. informed the U.S. Securities and Exchange
Commission that it is registering 7,450,000 shares of stock
common stock, US$0.01 par value, which it intends to sell at a
maximum offering price of US$20.00 a share. The move is in
pursuance to its Plan of Reorganization, approved by the U.S.
Bankruptcy Court for the Southern District of New York, which
became effective Feb. 28, 2008, and provided for the
cancellation of its existing stock and the issuance of new
stock.
Kirkland & Ellis LLP, special counsel to Solutia, says the
company will issue the shares pursuant to its Management Long-
Term Incentive Plan and Non-Employee Director Stock Compensation
Plan.
The Non-Employee Director Stock Compensation Plan is aimed to
further the growth and profitability of the company by
increasing incentives and encouraging share ownership on the
part of the Members of the Board of Solutia. Pursuant to the
Plan, board members will be granted awards that constitute
options, stock appreciation rights, restricted stock, restricted
stock units and other stock awards, in the aggregate of up to
250,000 shares. A full-text copy of the Plan is available at:
http://ResearchArchives.com/t/s?28b3
The 2007 Management Long-Term Incentive Plan is aimed to further
the growth and profitability of the company by increasing
incentives and encouraging share ownership on the part of the
employees and independent contractors of Solutia. The Plan is
intended to permit the grant of awards that constitute Incentive
Stock Options, Non-Qualified Stock Options, Stock Appreciation
Rights, Restricted Stock, Restricted Stock Units and Other Stock
Awards, and Cash Incentive Awards. The Up to US$7,200,000
shares will be made available for grants and awards under the
Plan. A copy of the Plan is available at:
http://ResearchArchives.com/t/s?28b4
About Solutia Inc.
Based in St. Louis, Missouri, Solutia Inc. (OTCBB: SOLUQ) (NYSE:
SOA-WI) -- 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. Lead 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 emerged from chapter 11 protection
Feb. 28, 2008. (Solutia Bankruptcy News, Issue No. 120;
Bankruptcy Creditors' Service, Inc.,
http://bankrupt.com/newsstand/or 215/945-7000).
* * *
As reported in the Troubled Company Reporter-Latin America on
March 5, 2008, Standard & Poor's Ratings Services raised its
corporate credit rating on Solutia Inc. to 'B+' from 'D',
following the company's emergence from bankruptcy on Feb. 28,
2008, and the implementation of its financing plan. The outlook
is stable. S&P also affirmed its 'B+' rating and '3' recovery
rating on Solutia's proposed senior secured term loan. In
addition, S&P assigned its 'B-' rating to Solutia's US$400
million unsecured bridge loan facility. S&P also withdrew its
'B-' rating on the proposed US$400 million unsecured notes,
which have been replaced by the bridge facility in Solutia's
capital structure.
==================
C O S T A R I C A
==================
COVANTA HOLDING: Earns US$72 Million in Quarter Ended Dec. 31
-------------------------------------------------------------
Covanta Holding Corporation reported financial results for the
three and twelve months ended Dec. 31, 2007.
For the three months ended Dec. 31, 2007, net income was
US$72 million, up from US$12 million in the prior year
comparative period. This increase was impacted by lower
interest expense, resulting from the recapitalization completed
in early 2007, and a lower effective tax rate, driven by the
release of a valuation allowance.
Cash flow provided by operating activities was US$98 million in
the fourth quarter.
For the twelve months ended Dec. 31, 2007, net income grew 23%
to US$131 million, up from US$106 million in 2006. This
increase was impacted by lower interest expense and a lower
effective tax rate. Operating cash flow was US$358 million for
the year.
The company incurred US$86 million of capital expenditures in
2007, which included US$18 million related to the SEMASS fire,
US$12 million of capital improvements at facilities acquired
during the year, and US$55 million primarily to maintain
existing facilities. In addition, the company repaid US$164
million of project debt and invested US$110 million in
acquisitions and US$11 million in equity interests. In total,
the company reinvested all of its operating cash flow back into
the business.
Liquidity and Capital Resources
As of Dec. 31, 2007, the company had available credit for
liquidity of US$268.8 million under the revolving loan facility
and unrestricted cash of US$149.4 million.
The company was in compliance, as of Dec. 31, 2007, with the
covenants under the credit facilities.
At Dec. 31, 2007, the company's balance sheet showed total
assets of US$4.36 billion, total liabilities of US$3.34 billion
and total shareholders' equity of US$1.02 billion.
"2007 was a milestone year for Covanta, as we made significant
progress towards our strategic goals," Anthony Orlando,
president and chief executive officer of Covanta. "We
recapitalized our balance sheet to provide the financial
flexibility to seize growth opportunities, successfully
integrated several acquisitions to complement our domestic
fleet, and we established platforms to expand our energy-from-
waste business in Europe and China. In addition, we extended
our track record of consistent operational performance, safely
converting 15 million tons of waste into clean, renewable energy
for our clients, while again generating strong financial results
within or above our guidance ranges."
About Covanta Holding Corp.
Headquartered in Fairfield, New Jersey, Covanta Holding Corp. --
http://www.covantaenergy.com/-- is a publicly traded holding
company whose subsidiaries develop, own or operate power
generation facilities and water and wastewater facilities in the
United States and abroad. Covanta has operations in the
Philippines, China, Costa Rica, India, and Bangladesh.
* * *
Covanta Holding Corp. continues to carry Standard & Poor's
Ratings Services' 'BB-' long term foreign and local issuer
credit ratings, which were place in January 2007.
SIRVA INC: Agrees With Creditors on Prepetition Claims Payment
--------------------------------------------------------------
Sirva Inc. and its debtor-affiliates, the Official Committee of
Unsecured Creditors in their Chapter 11 cases, and the Official
Committee of Unsecured Creditors of 360networks (USA) Inc.,
entered into an agreement resolving the issues relating to the
360network Committee's request for the Court to reconsider its
order authorizing the payment of prepetition unsecured claims.
The 360network Committee withdrew its Motion, and the Sirva
Creditors' Committee withdrew its joinder to the Motion.
The Debtors agreed that all future payments pursuant to the
Prepetition Claims Order will be made only if those payments are
necessary to avoid material, near term, and foreseeable harm to
the Debtors' estates.
The parties also agreed that:
-- the payments will be treated as made under any plan of
reorganization;
-- neither the Creditors' Committee nor any other creditor
will be estopped from objecting to the confirmation of a
Plan, by virtue of entry of the Prepetition Claims Order;
-- certain Class 4 Claims, or a similar unimpaired class of
unsecured creditors, will remain outstanding at the time
of confirmation;
-- the Debtors will not argue that payments made under the
Prepetition Claims Order will render moot any confirmation
objection by the Creditors' Committee or any creditor;
-- the Debtors will not amend a Plan to eliminate Class 4
without the consent of Creditors' Committee and the
360networks Committee.
Judge James Peck approved the Stipulation.
As reported by the Troubled Company Reporter on March 4, the
Debtors opposed the Reconsideration Motion filed by the Official
Committee of Unsecured Creditors of 360networks (USA) and its
debtor-subsidiaries, asserting that it failed to demonstrate
extreme and undue hardship required for its approval, and is
merely the creditor's attempt to enhance its recovery.
On Feb. 26, 2008, the TCR reported that the Official Committee
of Unsecured Creditors of 360networks (USA) and its debtor-
subsidiaries asked the U.S. Bankruptcy Court for the Southern
District of New York to reconsider its order authorizing the
payment of the Debtors' pre-bankruptcy filing unsecured claims
dated Feb. 5, 2008, pursuant to Rules 59 and 60 of the Federal
Rules of Civil Procedure.
The 360networks Committee holds an unliquidated claim against
Debtor SIRVA Relocation LLC resulting from an action captioned
"The Official Committee of Unsecured Creditors of 360networks
(USA) Inc., et al. v. U.S. Relocation Services, Inc.," Adv. Pro.
No. 03-03127 (ALG), pending before Judge Allan L. Gropper before
the United States Bankruptcy Court for the Southern District of
New York.
In the Preference Action before Judge Gropper, the 360networks
Committee, on behalf of itself and 360networks (USA), Inc., and
360fiber Inc. and their debtor subsidiaries, are seeking the
avoidance, recovery and return, from U.S. Relocation Services,
Inc. -- now known as SIRVA Relocation LLC -- of US$1,863,014 in
preferential transfers made by 360 to U.S. Relocation, plus
prejudgment interest at the highest applicable rate from
March 26, 2002, plus sanctions in connection with counsel for
U.S. Relocation's conduct in defending the Preference Action,
for a total claim against U.S. Relocation estimated to be in the
excess of US$2,200,000.
The Preference Action, prior to it being stayed by the
commencement of the Sirva bankruptcy proceedings, had been sub
judice with Judge Gropper on fully-briefed cross motions for
summary judgment.
On behalf of the 360networks Committee, Norman N. Kinel, Esq.,
at Dreier LLP in New York, asserted that the Debtors' proposed
treatment of unsecured creditors is discriminatory and
impermissible under applicable law. The Debtors propose, in
their Plan of Reorganization dated Jan. 28, 2008, that in the
two classes of unsecured creditors -- one will receive a 100%
distribution, and the other will receive no distribution.
Mr. Kinel explained that although debtors are permitted to pay
unsecured prepetition debts to critical vendors, the relief
sought and obtained by the Debtors in the Prepetition Claims
Order classifies an open-ended category of creditors as
critical, without adequate basis.
Moreover, the Prepetition Claims Order was entered without due
notice to the parties-in-interest that are adversely affected,
including the 360networks Committee, depriving them of the
opportunity to object or be heard, Mr. Kinel stated.
"[T]he 360networks Committee is not even listed as a creditor in
the Debtors' list of thirty (30) largest creditors attached to
their petitions, even though the 360networks Committee is in
fact one of the 10 largest creditors of the Debtors,
notwithstanding that such claim is presently unliquidated," Mr.
Kinel maintained.
Debtors Respond
Representing the Sirva Debtors, Marc Kieselstein, P.C., at
Kirkland and Ellis LLP in Chicago, Illinois, said pursuant to
Rule 59 and 60 of the Federal Rules of Civil Procedure, the
Court may grant extraordinary remedies in extraordinary
circumstances to prevent extreme and undue hardship, citing In
re Miller, No. 07-13481, 2008 WL 110907 (Bankr. S.D.N.Y. Jan.
4,2008). He points out that the relief provided by the order
dated February 5, 2008, authorizing the payment of prepetition
unsecured claims, is not extraordinary, and is a "typical first
day order."
According to Mr. Kieselstein, the 360networks Committee has not
demonstrated that the Debtors' ability to honor their existing
obligations in the ordinary course of business creates the level
of harm necessary to warrant a reconsideration; and does not
make specific allegations with respect to its disputed,
unliquidated, and unsecured claim.
In addition, the Debtors had complied with the notice
requirements by providing copies of their first day pleadings to
the United States Trustee two business days in advance of the
Petition Date. Accordingly, the Debtors ask the Court to deny
the Reconsideration Motion with prejudice.
Parties React
The 360networks Committee said all debtors, including the
Debtors in the Chapter 11 cases, must meet the burdens of the
Bankruptcy Code and Bankruptcy Rules, as well as the
requirements of due process.
According to the 360networks Committee, the Debtors have
improperly taken advantage of standard first-day orders, by
including unnecessary and discriminatory terms, and failing to
provide any advance notice to parties-in-interest that are
adversely affected. The Prepetition Claims Order was entered
without advance notice to any party other than the United States
Trustee and the Debtors' prepetition secured lenders, enabling
the Debtors to pay certain chosen unsecured prepetition
creditors
at will.
The 360networks Committee believes that it was improper for the
Prepetition Claims Order to be entered on a final basis, without
giving any other party-in-interest aside from the U.S. Trustee
and the Debtors' Prepetition Secured Lenders, an opportunity to
be heard and object.
The Official Committee of Unsecured Creditors of the Debtors'
Chapter 11 cases, on the other hand, told Judge Peck that the
Prepetition Claims Order gives the Debtors authority to pay
unsecured claims which cannot be argued as critical.
According to the Committee, the Debtors have justified the
relief they sought by asserting that it is typical in
"prepackaged" bankruptcy cases. However, the Committee says,
not all prepackaged cases are the same. In fact, the Debtors'
case is unusual since they propose to pay nothing to a broad
group of unsecured creditors under their Plan.
The Committee maintained that neither the Bankruptcy Code, nor
any necessity doctrine or general Court order, support the
proposition that debtors can make unlimited and unspecified cash
payments to unidentified general unsecured creditors, in the
context of a cram-down plan. Accordingly, the Committee insists
that a reconsideration of the Prepetition Claims Order is
warranted.
Similarly, Triple Net Investments IX, LP, supports the
360networks Committee's request stating that the Prepetition
Claims Order was entered without notice and with no opportunity
for affected creditors, including itself, to be heard.
About SIRVA Inc.
Headquartered in Westmont, Illinois, SIRVA Inc. (Pink Sheets :
SIRV.PK) -- http://www.sirva.com/-- is a provider of relocation
solutions to a well-established and diverse customer base. The
company handles all aspects of relocation, including home
purchase and home sale services, household goods moving,
mortgage services and home closing and settlement services.
SIRVA conducts more than 300,000 relocations per year,
transferring corporate and government employees along with
individual consumers. SIRVA's brands include Allied, Allied
International, Allied Pickfords, Allied Special Products, DJK
Residential, Global, northAmerican, northAmerican International,
Pickfords, SIRVA Mortgage, SIRVA Relocation and SIRVA
Settlement. The company has operation in Costa Rica.
The company and 61 of its affiliates filed separate petitions
for Chapter 11 protection on Feb. 5, 2008 (Bankr. S.D.N.Y. Case
No. 08-10433). Marc Kieselstein, Esq. at Kirkland & Ellis,
L.L.P. is representing the Debtor. An official Committee of
Unsecured Creditors has been appointed in this case. When the
Debtors filed for bankruptcy, it reported total assets of
US$924,457,299 and total debts of US$1,232,566,813 for the
quarter ended Sept. 30, 2007.
(Sirva Inc. Bankruptcy News, Issue No. 5; Bankruptcy Creditors'
Services Inc. http://bankrupt.com/newsstand/or 215/945-7000)
SIRVA INC: Court Approves Hiring of Kirkland & Ellis as Attorney
----------------------------------------------------------------
The U.S. Bankruptcy Court for the Southern District of New York
approved a request by Sirva Inc. and its debtor-affiliates to
employ Kirkland & Ellis LLP, as their attorneys in their Chapter
11 cases, effective as of the bankruptcy petition date.
Eryk J. Spytek, senior vice president, general counsel &
secretary of SIRVA, Inc., related that the Debtors selected
Kirkland & Ellis because of the firm's expertise and knowledge
in the field of debtors' protections, creditors' rights, and
business reorganizations under Chapter 11 of the Bankruptcy
Code.
Mr. Spytek noted that in preparing for its representation of the
Debtors in the Chapter 11 cases, Kirkland & Ellis has become
familiar with the Debtors' business and many of the potential
legal issues that may arise in the context of the Chapter 11
cases.
As the Debtors' attorneys, Kirkland & Ellis will:
* advise the Debtors with respect to their powers and duties
as debtors-in-possession in the continued management and
operation of their business and properties;
* attend meetings and negotiate with the parties-in-
interest's representatives;
* take necessary actions to protect and preserve the estates,
which include prosecuting actions on the Debtors' behalf,
defending any action commenced against the Debtors, among
others;
* prepare pleadings in connection with the bankruptcy cases;
* represent the Debtors in connection with obtaining
postpetition financing;
* advise the Debtors in connection with any potential sale of
assets;
* appear before the Court and any appellate courts to
represent the interests of the Debtors' estates;
* consult with the Debtors regarding tax matters;
* take any necessary action on behalf of the Debtors to
negotiate, prepare on behalf of the Debtors, and obtain
approval of a Chapter 11 plan and all related documents;
and
* perform other necessary or otherwise beneficial legal
services for the Debtors in connection with the prosecution
of these chapter 11 cases.
In exchange for the contemplated services, the Debtors will
pay Kirkland & Ellis based on the firm's applicable hourly
rates:
Professional Hourly Rates
------------ ------------
Partners US$520 - US$915
Counsel US$330 - US$595
Associates US$295 - US$600
Paraprofessionals US$150 - US$265
The Debtors will also reimburse the firm for expenses it may
incur, including travel costs and temporary employment of
additional staff, relating to any work undertaken.
Three Kirkland & Ellis professionals are presently expected to
have primary responsibility for providing services to the
Debtors:
Professional Hourly Rates
------------ ------------
Marc Kieselstein, P.C. US$815
Adam C. Paul US$645
Scott R. Zemnick US$590
In addition, from time to time, other Kirkland & Ellis
professionals and paraprofessionals will provide services to the
Debtors.
On Dec. 27, 2007, the Debtors paid US$175,000 to Kirkland &
Ellis as a retainer. As of the Petition Date, the Debtors do
not owe Kirkland & Ellis any amounts for legal services rendered
before the Petition Date.
Marc Kieselstein, Esq., a partner at Kirkland & Ellis, in New
York, assures the Court that the firm is a "disinterested
person," as the term is defined in Section 101(14) of the
Bankruptcy Code.
About SIRVA Inc.
Headquartered in Westmont, Illinois, SIRVA Inc. (Pink Sheets :
SIRV.PK) -- http://www.sirva.com/-- is a provider of relocation
solutions to a well-established and diverse customer base. The
company handles all aspects of relocation, including home
purchase and home sale services, household goods moving,
mortgage services and home closing and settlement services.
SIRVA conducts more than 300,000 relocations per year,
transferring corporate and government employees along with
individual consumers. SIRVA's brands include Allied, Allied
International, Allied Pickfords, Allied Special Products, DJK
Residential, Global, northAmerican, northAmerican International,
Pickfords, SIRVA Mortgage, SIRVA Relocation and SIRVA
Settlement. The company has operation in Costa Rica.
The company and 61 of its affiliates filed separate petitions
for Chapter 11 protection on Feb. 5, 2008 (Bankr. S.D.N.Y. Case
No. 08-10433). Marc Kieselstein, Esq. at Kirkland & Ellis,
L.L.P. is representing the Debtor. A Committee of Unsecured
Creditors has been appointed in the case. At its bankruptcy
filing, the company reported total assets of US$924,457,299 and
total debts of US$1,232,566,813 for the quarter ended Sept. 30,
2007.
(Sirva Inc. Bankruptcy News, Issue No. 6; Bankruptcy Creditors'
Services Inc. http://bankrupt.com/newsstand/or 215/945-7000)
SIRVA INC: Court Approves Motion to Hire E&Y as Accountant
----------------------------------------------------------
The U.S. Bankruptcy Court for the Southern District of New York
approved a motion filed by SIRVA Inc. and its debtor-affiliates
to employ Ernst & Young LLP as their accountants, auditors, and
tax advisors in connection with their Chapter 11 cases, nunc pro
tunc to their Chapter 11 protection filing.
Eryk J. Spytek, senior vice president, general counsel and
secretary of SIRVA, told the Court in its motion that Ernst &
Young is a national professional services firm, with more than
1,600 partners and over 17,000 professional staff.
Significantly, Ernst & Young has extensive experience in
delivering accounting, auditing, and tax services in Chapter 11
cases.
Mr. Spytek added that the Debtors have previously employed Ernst
& Young for audit, accounting, and tax services, allowing the
firm to gain considerable knowledge and familiarity in the
Debtors' business affairs.
The Debtors disclosed that 90 days immediately preceding the
Petition Date, they paid Ernst & Young US$1,574,573 in fees. As
of the Petition Date, the Debtors did not owe the firm any
amount in respect of prepetition services.
Also, as of the Petition Date, Ernst & Young held a retainer of
US$330,726. Upon approval of Ernst & Young's retention, the
firm will waive its right to receive any prepetition fees or
expenses incurred.
Ernst & Young has agreed to provide accounting, auditing, and
tax services, including integrated audit services; internal
control audit services; financial statement audit services; tax
advisory services relating to the Debtors' Chapter 11 filings;
tax compliance services; services relating to an earnings and
profit and basis study of the Debtors' foreign subsidiaries;
services relating to an Israel withholding tax project; and
miscellaneous tax advisory services.
In exchange for accounting and auditing services, the Debtors
will pay Ernst & Young:
Professional Hourly Rate
------------ -----------
Partners and Principals US$600
Executive Directors US$525
Senior Managers US$495
Managers US$375
Seniors US$285
Staff US$195
For tax compliance assistance services, the Debtors will pay:
Professional Hourly Rate
------------ -----------
Executive Director/ US$470-$US560
Principal/Partner
Senior Manager US$445-US$470
Manager US$400-US$445
Senior Staff US$295-US$320
Staff US$130-US$190
Client Serving Associate US$85-US$100
For earnings and profits, and basis study services, the Debtors
will pay:
Professional Hourly Rate
------------ -----------
National Executive/ US$700-US$925
Principal/Partner
Executive Director/ US$550-US$730
Principal/Partner
Manager/Senior Manager US$460-US$580
Senior/Staff US$150-US$370
James J. Doyle, a partner at Ernst & Young, assures the Court
that the firm is a "disinterested person," as the term is
defined in Section 101(14) of the Bankruptcy Code.
About SIRVA Inc.
Headquartered in Westmont, Illinois, SIRVA Inc. (Pink Sheets :
SIRV.PK) -- http://www.sirva.com/-- is a provider of relocation
solutions to a well-established and diverse customer base. The
company handles all aspects of relocation, including home
purchase and home sale services, household goods moving,
mortgage services and home closing and settlement services.
SIRVA conducts more than 300,000 relocations per year,
transferring corporate and government employees along with
individual consumers. SIRVA's brands include Allied, Allied
International, Allied Pickfords, Allied Special Products, DJK
Residential, Global, northAmerican, northAmerican International,
Pickfords, SIRVA Mortgage, SIRVA Relocation and SIRVA
Settlement. The company has operation in Costa Rica.
The company and 61 of its affiliates filed separate petitions
for Chapter 11 protection on Feb. 5, 2008 (Bankr. S.D.N.Y. Case
No. 08-10433). Marc Kieselstein, Esq. at Kirkland & Ellis,
L.L.P. is representing the Debtor. A Committee of Unsecured
Creditors has been appointed in the case. At its bankruptcy
filing, the company reported total assets of US$924,457,299 and
total debts of US$1,232,566,813 for the quarter ended Sept. 30,
2007.
(Sirva Inc. Bankruptcy News, Issue No. 6; Bankruptcy Creditors'
Services Inc. http://bankrupt.com/newsstand/or 215/945-7000)
SIRVA INC: Court Allows Rejection of Devens & Bridgewater Leases
----------------------------------------------------------------
The U.S. Bankruptcy Court for the Southern District of New York
authorized Sirva Inc. and its debtor-affiliates to reject the
Bridgewater Lease, effective as of the Petition Date, as well as
the Devens Lease, effective as of Feb. 6, 2008.
The Debtors are party to two nonresidential real property
leases, located at 36 Saratoga Boulevard, in Devens,
Massachusetts, and at 1140 Route 22 East in Bridgewater, New
Jersey.
The Devens Lease, which covers 164,850 square feet of unused
warehouse space, has a US$1,300,000 annual rent, and will expire
on Nov. 30, 2014. The Debtors formerly operated a warehouse and
cross-docking facility at the Devens premises, and have not used
the premises since 2004. The Debtors do not intend to use the
premises in the future.
The Bridgewater Lease, which covers 5,994 square feet of office
space, has a US$128,868 annual rent, and will expire on Jan. 31,
2009.
According to the Debtors' proposed counsel, Richard M. Cieri,
Esq., at Kirkland & Ellis LLP in New York, the Leases constitute
a net drain on the Debtors' estates. By rejecting the Devens
Lease, the Debtors will eliminate at least US$111,000 in monthly
administrative costs, that will otherwise result from their
continued tenancy.
In sum, the rejection of the Leases will remove a significant
burden from the Debtors estates, and eliminate at least
US$121,000 in monthly expenses, Mr. Cieri says. This will
remove burdensome obligations from the Debtors' estates, and
permit the Debtors' management to focus on implementing the
Debtors' prepackaged reorganization plan.
Accordingly, the Debtors seek the Court's authority to walk away
from the Leases, effective as of the Petition Date.
Permission to Reject Bridgewater Lease
The Court authorized the Debtors to reject the Bridgewater
Lease, effective as of the Petition Date, as well as the Devens
Lease, effective as of February 6, 2008.
Prior to the Court's approval, Triple Net Investments IX, LP,
had told Judge James M. Peck that it will be prejudiced by the
rejection of the Leases. Of its US$2,021,546 claim against the
Debtors, US$89,624 is an administrative claim for the February
2008 rent, due under a non-residential real property lease
between Triple Net and Debtor North American Van Lines, Inc.
Triple Net insisted that it was not given prior notice of an
intent to reject, and therefore is entitled to one month's
administrative claim for having to seek a tenant for the vacant
property.
The Court ruled that Triple Net will have an allowed
administrative rent claim for US$10,218, pursuant to Section
503(b)(1)(A) of the Bankruptcy Code.
About SIRVA Inc.
Headquartered in Westmont, Illinois, SIRVA Inc. (Pink Sheets :
SIRV.PK) -- http://www.sirva.com/-- is a provider of relocation
solutions to a well-established and diverse customer base. The
company handles all aspects of relocation, including home
purchase and home sale services, household goods moving,
mortgage services and home closing and settlement services.
SIRVA conducts more than 300,000 relocations per year,
transferring corporate and government employees along with
individual consumers. SIRVA's brands include Allied, Allied
International, Allied Pickfords, Allied Special Products, DJK
Residential, Global, northAmerican, northAmerican International,
Pickfords, SIRVA Mortgage, SIRVA Relocation and SIRVA
Settlement. The company has operation in Costa Rica.
The company and 61 of its affiliates filed separate petitions
for Chapter 11 protection on Feb. 5, 2008 (Bankr. S.D.N.Y. Case
No. 08-10433). Marc Kieselstein, Esq. at Kirkland & Ellis,
L.L.P. is representing the Debtor. A Committee of Unsecured
Creditors has been appointed in the case. At its bankruptcy
filing, the company reported total assets of US$924,457,299 and
total debts of US$1,232,566,813 for the quarter ended Sept. 30,
2007.
(Sirva Inc. Bankruptcy News, Issue No. 6; Bankruptcy Creditors'
Services Inc. http://bankrupt.com/newsstand/or 215/945-7000)
US AIRWAYS: Will Pay US$1.88 Million to Boston City
---------------------------------------------------
The City of Boston, Massachusetts, filed Claim Nos. 4279 and
4461 each for US$595,525 asserting priority claims for fiscal
year 2002 taxes. Boston also filed Claim No. 4925 for US$4,510
asserting 2002 tax claims.
US Airways Group Inc. and its debtor-affiliates objected to the
claims. The Court expunged Claim No. 4279 and designated Claim
No. 4461 as a surviving claim.
Consequently, Boston filed Claim No. 5236 for US$1,336,906 to
amend Claim No. 4461. The Claimant amended Claim No. 5236 by
filing Claim No. 5464 for US$2,078,287.
The Debtors also objected to the claims. The U.S. Bankruptcy
Court for the Northern District of Illinois determined that
pursuant to Section 505 of the Bankruptcy Code, it has
jurisdiction to determine the correct amount of taxes owed by
the Debtors to Boston for the fiscal tax year 2003. The Fiscal
Year 2003 Tax Claims are Boston's only surviving claims and the
Debtors' First Chapter 11 Cases and are subject to the Court's
determination. The determination was continued to the Debtors'
second Chapter 11 Cases and is pending.
Boston sought the Court's permission to file its 2005 tax claims
after the Nov. 4, 2002 Claims Bar Date. The Debtors objected to
Boston's request.
The Debtors have pending appeals before the Commonwealth of
Massachusetts Appellate Tax Board relating to Boston's
computations of the Debtors' taxes for the fiscal years 2004 and
2006.
Boston contests that the Bankruptcy Court has jurisdiction under
Section 505 to determine any of their claims and that there is
any basis to reduce the taxes. The Debtors dispute Boston's
contentions.
Settlement Agreement with Boston City
To resolve the matter, the Debtors and Boston agreed to settle:
-- the Court's 505 Action;
-- Boston's claims for fiscal years 2003, 2004, 2005 and
2006;
-- Boston's request to file late claim; and
-- all defenses, objections, appeals and requests for
abatement.
Specifically, the parties agreed that:
1. the Debtors will pay US$1,880,000 to Boston for all of its
claims;
2. Boston will not challenge the disallowance nor attempt to
revive its claims;
3. upon receiving the payment, Boston will be deemed to have
withdrawn its request to file claims after the Feb. 3,
2005 Bar Date in the Debtors' Second Chapter 11 Cases;
4. the Parties will cause to be filed with the Appellate Tax
Board stipulations dismissing the appeals related to the
fiscal years 2004 and 2006 taxes, and the appeal related
to the fiscal year 2007 taxes.
The Stipulation is deemed effective without further Court order.
About US Airways
Based in Tempe, Arizona, US Airways Group Inc.'s (NYSE: LCC) -
http://www.usairways.com/-- primary business activity is the
ownership of the common stock of US Airways, Inc., Allegheny
Airlines, Inc., Piedmont Airlines, Inc., PSA Airlines, Inc.,
MidAtlantic Airways, Inc., US Airways Leasing and Sales, Inc.,
Material Services Company, Inc., and Airways Assurance Limited,
LLC.
US Airways has operations in Japan, Australia, China, Costa
Rica, Philippines, and Spain, among others.
Under a Chapter 11 plan declared effective on March 31, 2003,
USAir emerged from bankruptcy with the Retirement Systems of
Alabama taking a 40% equity stake in the deleveraged carrier in
exchange for $240 million infusion of new capital.
US Airways and its subsidiaries filed another chapter 11
petition on Sept. 12, 2004 (Bankr. E.D. Va. Case No. 04-13820).
Brian P. Leitch, Esq., Daniel M. Lewis, Esq., and Michael J.
Canning, Esq., at Arnold & Porter LLP, and Lawrence E. Rifken,
Esq., and Douglas M. Foley, Esq., at McGuireWoods LLP, represent
the Debtors in their restructuring efforts. In the Company's
second bankruptcy filing, it lists US$8,805,972,000 in total
assets and US$8,702,437,000 in total debts.
The Debtors' Chapter 11 plan for its second bankruptcy filing
became effective on Sept. 27, 2005. The Debtors completed their
merger with America West on the same date. (US Airways
Bankruptcy News, Issue No. 156; Bankruptcy Creditors' Service,
Inc., http://bankrupt.com/newsstand/or 215/945-7000)
* * *
US Airways Group Inc.'s US$1.6 billion secured credit facility
due 2014, currently being syndicated, carries Standard & Poor's
Ratings Services 'B' rating. That rating was assigned in March
2007.
US AIRWAYS: Gets Approval to Modify Agreements With United
----------------------------------------------------------
US Airways Group Inc. and United Air Lines, Inc., continued
their discussions regarding modifications to, and assumption of:
-- the Restated Code Share and Regulatory Cooperation
Agreement; and
-- the Restated Star Alliance Participation Agreement.
In an order dated Feb. 20, 2008, the U.S. Bankruptcy Court for
the Northern District of Illinois approved the assumption of the
agreements, subject to consensually modified terms agreed upon
by the parties, and there is no cure, assurance or other payment
required to be made by the Debtors.
The Carriers waive and release all claims against each other or
any of their affiliates arising under the modified United
Agreements or the United Agreements arising before the date of
execution of the modified agreements, provided that current
ordinary and customary charges for services rendered or
performed
by the Carriers within the last 120 days under the Modified
United Agreements will be dealt with, reconciled, paid or
disputed by the Carriers in the ordinary course of business.
The mutual releases will not apply to or affect any rights or
obligations, or any claims related to thereto, of either
Carrier:
(i) as to claims of United against the Debtors, under any
other agreement between the Carriers or otherwise
between the Carriers or their affiliates or
predecessors-in-interest that have arisen since the
effective date of the Debtors' plan of reorganization
in Case No. 04-13819 in the United States Bankruptcy
Court for the Eastern District of Virginia, and as to
claims of the Reorganized Debtors against United,
under any other agreement between the Carriers or
otherwise between the Carriers or their affiliates or
predecessors-in-interest that have arisen since the
effective date of United's plan of reorganization in
Case No. 02-48191 in the Bankruptcy Court for the
Northern District of Illinois; or
(ii) without regard to the effective date of the Debtors'
plan of reorganization or the effective date of
United's plan of reorganization, against the other
arising under any agreement between the Carriers or
their predecessors-in-interest that provides for or
relates to the leasing, subleasing, or use of space,
including:
(1) the United Contract 121666, dated Dec. 22, 1993;
(2) the Sublease from US Airways, Inc. to United Air
Lines, Inc. of Certain Premises Located at
Chicago-O'Hare International Airport dated as of
Dec. 22, 1993;
(3) the Sublease from US Airways, Inc. to United Air
Lines, Inc. of Certain Premises Located at
Chicago-O'Hare International Airport dated as of
Oct. 29, 1998; or
(4) the letter agreement dated as of Oct. 29, 1998,
executed by Larry D. Clark and Robert A. Hazel
regarding "United's Exercise of Options to ORD,
Terminal 2/Concourse F Gates 6A, 6, 8 and 10."
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, Issue No.
153 Bankruptcy Creditors' Service Inc.,
http://bankrupt.com/newsstand/or 215/945-7000)
About US Airways
Based in Tempe, Arizona, US Airways Group Inc.'s (NYSE: LCC) -
http://www.usairways.com/-- primary business activity is the
ownership of the common stock of US Airways, Inc., Allegheny
Airlines, Inc., Piedmont Airlines, Inc., PSA Airlines, Inc.,
MidAtlantic Airways, Inc., US Airways Leasing and Sales, Inc.,
Material Services Company, Inc., and Airways Assurance Limited,
LLC.
US Airways has operations in Japan, Australia, China, Costa
Rica, Philippines, and Spain, among others.
Under a Chapter 11 plan declared effective on March 31, 2003,
USAir emerged from bankruptcy with the Retirement Systems of
Alabama taking a 40% equity stake in the deleveraged carrier in
exchange for $240 million infusion of new capital.
US Airways and its subsidiaries filed another chapter 11
petition on Sept. 12, 2004 (Bankr. E.D. Va. Case No. 04-13820).
Brian P. Leitch, Esq., Daniel M. Lewis, Esq., and Michael J.
Canning, Esq., at Arnold & Porter LLP, and Lawrence E. Rifken,
Esq., and Douglas M. Foley, Esq., at McGuireWoods LLP, represent
the Debtors in their restructuring efforts. In the Company's
second bankruptcy filing, it lists US$8,805,972,000 in total
assets and US$8,702,437,000 in total debts.
The Debtors' Chapter 11 plan for its second bankruptcy filing
became effective on Sept. 27, 2005. The Debtors completed their
merger with America West on the same date. (US Airways
Bankruptcy News, Issue No. 156; Bankruptcy Creditors' Service,
Inc., http://bankrupt.com/newsstand/or 215/945-7000)
* * *
US Airways Group Inc.'s US$1.6 billion secured credit facility
due 2014, currently being syndicated, carries Standard & Poor's
Ratings Services 'B' rating. That rating was assigned in March
2007.
US AIRWAYS: Employees Want Management to Address Labor Issues
-------------------------------------------------------------
US Airways Group Inc.'s employees demanded that management
address workers' issues and work with labor groups to turnaround
the fledgling airline. Employees picketed corporate
headquarters with a large, 30-foot rat as a symbol of US Airways
management's anti-worker tactics. The following statement is
from the US Airways Labor Coalition, which represents the
customer service representatives, dispatchers, fleet service,
flight attendants, flight crew training instructors, maintenance
training specialists, mechanic and related, pilots, simulator
engineers, and all other labor groups at US Airways.
"Shared fury and frustration among the employees of US Airways
brought us together today in an effort to get management to
complete the merger that began nearly three years ago. We are
furious that, due to management inaction, we have become the
poster child for what not to do in a merger. We are frustrated
with management's hands-off approach to resolving labor issues.
"Instead of working with labor to develop long-term solutions
that would fix the problems plaguing our airline, US Airways
management continues employing tactics that demoralize its
workers. As a result, employee morale is at an all-time low,
our stock has plummeted, and our passengers are left literally
holding their bags. Management's quick-fix is to hire more
executives and bunker down together to ignore these problems,
hoping that they will resolve themselves.
"Management's most recent attempts to depict an airline that has
finally turned the corner toward success will not fool anyone.
When compared with its peers, US Airways continues to rank at or
near the bottom in terms of customer complaints and other
categories tracked by the government, and the only reason the
airline was number one in on-time performance was because
management has mastered the art of manipulating statistics.
Management wasted millions of dollars--money that belonged to
our employees, passengers and investors--to create this illusion
rather than work with labor.
"We want to work for a successful airline -- one that is a
positive example of how a merger should be conducted. It's time
for management to empower the employees with the necessary tools
to do their jobs effectively. Specifically, management needs to
adhere to current labor contracts and reach new collective
bargaining agreements that improve the wages, benefits and
working conditions of all US Airways employees."
The US Airways Labor Coalition represents approximately 30,000
employees from the two merged carriers -- America West and
US Airways. The pilots are represented by the Air Line Pilots
Association, Int'l. (ALPA). The flight attendants are
represented by the Association of Flight Attendants-CWA (AFA-
CWA). The customer service representatives are represented by
the Airline Customer Service Employee Association-IBT/CWA. The
fleet service, mechanic and related, and maintenance training
specialist employees are represented by the International
Association of Machinists and Aerospace Workers (IAM). The
dispatchers, flight crew training instructors and simulator
engineers are represented by the Transport Workers Union of
America (TWU).
US Airways Pilots to Vote on New Union
The US Airline Pilots Association (USAPA) was notified by the
National Mediation Board (NMB) that a representational election
for the US Airways Pilots has been called for. In the NMB
communication, US Airways management has been directed to
provide mailing labels to the NMB that match the list of
eligible voting pilots the carrier provided earlier.
"On Nov. 13, 2007 USAPA filed an application with the NMB that
included thousands of written election requests from US Airways
pilots," said Stephen Bradford, USAPA's President. "We are
gratified to know that the US Airways pilots will finally be
afforded an opportunity to select a new collective bargaining
agent."
USAPA is the independent labor union specifically designed to
represent the interests of US Airways Pilots. Headquartered
in Charlotte, NC, USAPA represents only US Airways pilots.
Because USAPA represents only US Airways pilots, far greater
focus is placed on the specific career needs of the US Airways
pilot workforce. USAPA notes that the most highly-compensated
pilots in the U.S. passenger transport business are represented
by company-specific unions.
For additional information about USAPA, visit --
http://www.USAirlinePilots.org/or contact --
media@USAirlinePilots.org
USAPA is represented by the law firm of Seham, Seham, Meltz &
Peterson LLP.
* * *
The vote between the incumbent ALPA and USAPA will be conducted
over the Internet and telephone, Dawn Gilbertson of the Arizona
Republic reports. The group that receives 50% plus one of the
votes cast will win. USAPA Spokesman Scott Theuer says they
expect the election will occur within the next few weeks, with
voting then open for 30 days, according to the Arizona Republic.
About US Airways
Based in Tempe, Arizona, US Airways Group Inc.'s (NYSE: LCC) -
http://www.usairways.com/-- primary business activity is the
ownership of the common stock of US Airways, Inc., Allegheny
Airlines, Inc., Piedmont Airlines, Inc., PSA Airlines, Inc.,
MidAtlantic Airways, Inc., US Airways Leasing and Sales, Inc.,
Material Services Company, Inc., and Airways Assurance Limited,
LLC.
US Airways has operations in Japan, Australia, China, Costa
Rica, Philippines, and Spain, among others.
Under a Chapter 11 plan declared effective on March 31, 2003,
USAir emerged from bankruptcy with the Retirement Systems of
Alabama taking a 40% equity stake in the deleveraged carrier in
exchange for $240 million infusion of new capital.
US Airways and its subsidiaries filed another chapter 11
petition on Sept. 12, 2004 (Bankr. E.D. Va. Case No. 04-13820).
Brian P. Leitch, Esq., Daniel M. Lewis, Esq., and Michael J.
Canning, Esq., at Arnold & Porter LLP, and Lawrence E. Rifken,
Esq., and Douglas M. Foley, Esq., at McGuireWoods LLP, represent
the Debtors in their restructuring efforts. In the Company's
second bankruptcy filing, it lists US$8,805,972,000 in total
assets and US$8,702,437,000 in total debts.
The Debtors' Chapter 11 plan for its second bankruptcy filing
became effective on Sept. 27, 2005. The Debtors completed their
merger with America West on the same date. (US Airways
Bankruptcy News, Issue No. 156; Bankruptcy Creditors' Service,
Inc., http://bankrupt.com/newsstand/or 215/945-7000)
* * *
US Airways Group Inc.'s US$1.6 billion secured credit facility
due 2014, currently being syndicated, carries Standard & Poor's
Ratings Services 'B' rating. That rating was assigned in March
2007.
US AIRWAYS: Various Entities Disclose Ownership of Interest
-----------------------------------------------------------
Several entities made separate filings with the United States
Securities and Exchange Commission disclosing their interest
ownership in US Airways Group Inc.
1. FMR LLC
In a regulatory filing with the Securities and Exchange
Commission dated Feb. 14, 2008, FMR LLC, reported its beneficial
ownership of 12,922,235 shares of US Airways Group, Inc., common
stock as of Dec. 31, 2007. The shares comprise 14.079% of the
total US Airways shares outstanding.
FMR LLC has sole voting power to 3,470,781 of the shares and
sole dispositive power to all the shares it owns.
Edward C. Johnson 3d also beneficially owns 12,922,235 USAir
shares.
Pyramis Global Advisors, LLC, an indirect wholly owned
subsidiary of FMR LLC, is the beneficial owner of 1,217,000
shares comprising 1.326% of the outstanding US Airways common
stock by virtue of its service as an investment adviser to
institutional accounts, non-U.S. mutual funds, or investment
companies owning the shares.
Edward C. Johnson 3d and FMR LLC, through their control of
PGALLC, each has sole dispositive power over and sole power to
vote or to direct the voting of 1,217,000 shares of common stock
owned by the institutional accounts or funds advised by PGALLC.
Pyramis Global Advisors Trust Company, an indirect wholly owned
subsidiary of FMR LLC, is the beneficial owner of 1,111,300
shares or 1.211% of the outstanding Common Stock of the US
Airways Group, Inc., as a result of its serving as investment
manager of institutional accounts owning the shares.
Edward C. Johnson 3d and FMR LLC, through their control of
Pyramis Global Advisors Trust Company, each has sole dispositive
power over 1,111,300 shares and sole power to vote or to direct
the voting of 996,600 shares of Common Stock owned by the
institutional accounts managed by PGATC.
Fidelity International Limited, Pembroke Hall, 42 Crow Lane,
Hamilton, Bermuda, and various foreign-based subsidiaries
provide investment advisory and management services to a number
of non-U.S. investment companies and certain institutional
investors. FIL, is the beneficial owner of 1,076,601 shares or
1.173% of the Common Stock outstanding of the Company.
There were 91,868,160 total shares outstanding of US Airways
Group, Inc., common stock as of February 15, 2008.
2. D.E. Shaw & Co.
D.E. Shaw & Co., reported to the SEC on Feb. 14, 2008, that it
owns 1,850,241 shares of US Airways Group Inc. common stock as
of December 31, 2007. The shares constitute 2% of the total
stock outstanding.
3. Wellington Management Company, LLP
In a regulatory filing with the SEC dated Feb. 15, 2008,
Wellington Management Company, LLP, disclosed it beneficially
owns as of Dec. 31, 2007, 5,111,582 shares of US Airways Group,
Inc.'s, common stock, representing 5.58% of the US Airways
shares outstanding.
The company has shared voting and shared dispositive power on
account of all the shares.
Wellington's stake include 642,858 shares with shared voting
power and 5,103,882 with shared dispositive power.
4. Barclays Global Investors (Deutschland) AG
Barclays Global Investors (Deutschland) AG disclosed in a
regulatory filing with the SEC dated Feb. 14, 2008, that as of
Dec. 31, 2007, it beneficially owned 5,072,907 shares of US
Airways Group, Inc.'s, common stock, representing 5.54% of the
shares outstanding.
Barclays Deutschland has the sole power to vote or to direct the
vote of 4,222,774 of the shares it owns and to dispose or to
direct the disposition of all its shares.
About US Airways
Based in Tempe, Arizona, US Airways Group Inc.'s (NYSE: LCC) -
http://www.usairways.com/-- primary business activity is the
ownership of the common stock of US Airways, Inc., Allegheny
Airlines, Inc., Piedmont Airlines, Inc., PSA Airlines, Inc.,
MidAtlantic Airways, Inc., US Airways Leasing and Sales, Inc.,
Material Services Company, Inc., and Airways Assurance Limited,
LLC.
US Airways has operations in Japan, Australia, China, Costa
Rica, Philippines, and Spain, among others.
Under a Chapter 11 plan declared effective on March 31, 2003,
USAir emerged from bankruptcy with the Retirement Systems of
Alabama taking a 40% equity stake in the deleveraged carrier in
exchange for $240 million infusion of new capital.
US Airways and its subsidiaries filed another chapter 11
petition on Sept. 12, 2004 (Bankr. E.D. Va. Case No. 04-13820).
Brian P. Leitch, Esq., Daniel M. Lewis, Esq., and Michael J.
Canning, Esq., at Arnold & Porter LLP, and Lawrence E. Rifken,
Esq., and Douglas M. Foley, Esq., at McGuireWoods LLP, represent
the Debtors in their restructuring efforts. In the Company's
second bankruptcy filing, it lists US$8,805,972,000 in total
assets and US$8,702,437,000 in total debts.
The Debtors' Chapter 11 plan for its second bankruptcy filing
became effective on Sept. 27, 2005. The Debtors completed their
merger with America West on the same date. (US Airways
Bankruptcy News, Issue No. 156; Bankruptcy Creditors' Service,
Inc., http://bankrupt.com/newsstand/or 215/945-7000)
* * *
US Airways Group Inc.'s US$1.6 billion secured credit facility
due 2014, currently being syndicated, carries Standard & Poor's
Ratings Services 'B' rating. That rating was assigned in March
2007.
====================
E L S A L V A D O R
====================
AES CORP: POSCO Engineering to Build Plant for El Salvador Unit
---------------------------------------------------------------
AES Corp.'s El Salvadorian unit AES Fonseca has awarded a US$500
million contract to South Korean builder POSCO Engineering &
Construction Co. for the construction of a 260-megawatt coal
power plant, reports say.
POSCO Engineering said that it will "ground break for the plant"
in July 2008, completing it by September 2011.
Reports say that POSCO Engineering will construct the plant at
La Union port, 160 kilometers southeast of San Salvador, El
Salvador.
According to AES Fonseca, construction of the plant will take up
to 40 months.
AES Fonseca told Business News Americas that the plant will help
meet increasing demand and diversify El Salvador's energy matrix
to help to stabilize energy prices.
About POSCO Engineering
POSCO Engineering & Construction Co. operates as an integrated
steel producer in Korea. The company manufactures and sells a
line of steel products, including hot rolled products, plates,
wire rods, cold rolled products, silicon steel sheets and
stainless steel products.
About AES Corp.
AES Corp. -- http://www.aes.com/-- is a global power company.
The company operates in South America, Europe, Africa, Asia and
the Caribbean countries. Specifically, it has operations
in India. Generating 44,000 megawatts of electricity through
124 power facilities, the company delivers electricity through
15 distribution companies.
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 Ratings'
'BB/RR1' rating on US$500 million issue of senior unsecured
notes due 2017.
=================
G U A T E M A L A
=================
BANCO INDUSTRIAL: Takes Over Banquetzal
---------------------------------------
Banco Industrial SA's International Banking Director Luis Prado
told Business News Americas that the bank absorbed Banquetzal
last month.
BNamericas relates that Banco Industrial disclosed the
acquisition of Banquetzal last year. Banquetzal, which had a
1.3% asset market share in 2007, adds US$210 million to Banco
Industrial's asset base of US$4.38 billion, BNamericas says,
citing financial sector regulator Superintendencia de Bancos
data. Banco Industrial will have an asset market share of
around 29%, BNamericas states.
Banco Industrial SA is the largest bank in Guatemala. As of
June 30, 2007, it had consolidated assets of approximately
US$4.5 billion and equity of US$373.3 million. As of Sept. 30,
2007, Banpais had US$925 million in assets, US$600 million in
deposits, and earnings of approximately US$22 million.
* * *
As reported in the Troubled Company Reporter-Latin America on
Jan. 21, 2008, Moody's Investors Service affirmed its Ba3 long-
term foreign currency deposit rating on Banco Industrial S.A.
Mooyd's said the outlook is positive.
As reported in Troubled Company Reporter-Latin America on
Jan. 15, 2008, Standard & Poor's Ratings Services affirmed its
'BB-/B' counterparty credit and CD ratings on Banco Industrial
S.A. S&P said the outlook is stable.
GOODYEAR TIRE: Fitch Lifts Issuer Default Rating to BB- From B+
---------------------------------------------------------------
Fitch Ratings has upgraded The Goodyear Tire & Rubber Company's
Issuer Default Rating and senior unsecured debt rating as:
-- IDR to 'BB-' from 'B+';
-- Senior unsecured debt to 'B+' from 'B-/RR6'.
In addition, Fitch has affirmed these ratings:
The Goodyear Tire & Rubber Company:
-- US$1.5 billion first lien credit facility at 'BB+';
-- US$1.2 billion second lien term loan at 'BB+'.
Goodyear Dunlop Tires Europe B.V.:
-- EUR505 million European secured credit facilities at
'BB+'.
The ratings cover approximately US$4.1 billion of outstanding
debt. The Rating Outlook is Stable.
Furthermore, Fitch is withdrawing its ratings for Goodyear
Tire's third lien senior secured debt following repayment of the
debt.
The two-notch rating difference between Goodyear Tire's secured
debt and its IDR reflect the benefit of significant collateral
support. The company's first lien credit facility and the second
lien term loan are given the same rating due to Fitch's opinion
that the collateral package provides sufficient coverage to both
facilities even in the case of the first lien revolver being
fully drawn. The one-notch difference between the unsecured
debt and the IDR reflects the unsecured debt's junior position
in the capital structure, as well as credit concerns described
below.
The rating upgrades reflect the positive impact on the company's
balance sheet from its continued debt reduction, significant
cost reduction in the past year, and a successful strategic
shift to selling more premium-priced products. The senior
unsecured debt also benefits from the reduced amount of secured
debt in the capital structure after Goodyear Tire redeemed
US$650 million of senior secured third lien notes on March 3.
Combined with the expected repayment of US$100 million of 6 3/8%
notes that mature on March 17, 2008, the company will have
reduced its debt by US$3.2 billion since the beginning of 2007.
The ratings and Stable Outlook for Goodyear Tire reflect an
improving cost structure, a more focused marketing strategy,
growing international sales, and a solid liquidity position.
The company has exited low-margin segments of the wholesale
private label tire business and expanded its higher margin
premium tire business. Results in its North American
operations, while improving, remain weaker than its
international operations, and the company remains exposed to
declining vehicle sales in the United States and an uncertain
economy. An increasing proportion of sales outside the U.S.
should help alleviate this concern over the long term. Other
rating concerns also include high raw material costs,
competitive pricing in certain international markets and cash
requirements for capital expenditures and pension contributions.
Further upside changes in the ratings or Outlook will depend on
the company's ability to extend its recent progress in
addressing operating challenges and in building stronger credit
metrics.
Cash flow from operations continued to be weak in 2007 due to
large pension contributions and higher working capital
requirements as the company recovered from the labor strike in
late 2007. In 2008, cash flow will remain challenging but
should be favorably affected by reduced pension contributions, a
better working capital position, and lower interest expense
related to debt reduction. Cost pressures from raw materials,
including rubber, which Goodyear Tire estimates may rise 7%-9%
in 2008, could be mitigated by the company's ongoing cost-
reduction program. At the end of 2007, it had achieved more
than half of its US$1.8 billion-US$2 billion four-year cost
reduction goal. The program involves cost savings from higher
productivity, a reduction in Goodyear Tire's global footprint,
and a further transition to low-cost sourcing. The company has
been effective at reducing the negative impact of high raw
material costs by raising prices and emphasizing higher-margin
premium tires.
At the end of 2007, the company had a liquidity position of
approximately US$4.9 billion, consisting of US$3.5 billion of
cash and US$1.8 billion of credit facility availability, less
US$396 million of short-term debt and current maturities. Year-
end cash balances were used to execute the debt reduction
mentioned above, and they will be utilized to fund the planned
US$1 billion contribution to Goodyear Tire's Voluntary
Employees' Beneficiary Association (VEBA) trust. The transaction
would significantly reduce OPEB liabilities and associated cash
requirements in future years. Other cash requirements in 2008
will include pension contributions, though at a much lower level
than previous years, increased capital expenditures, and modest
debt reduction. The company's debt-to-EBITDA ratio has declined
from an unusually high level one year ago and stood at 3.0 times
as of Dec. 31, 2007. Its long-term target for debt/EBITDA is
2.5 as measured by its bank facilities and differs somewhat from
Fitch's calculation. EBITDA-to-Interest coverage improved to
3.4 at the end of 2007 compared to 2.4 at the end of 2006.
All previously assigned Recovery Ratings have been withdrawn as
a result of the IDR upgrade to 'BB-'. Fitch assigns explicit
recovery ratings's only for companies with an IDR of 'B+' or
below. Notching for companies with IDR's above 'B+' continues to
be heavily influenced by broader historical recovery patterns.
Headquartered in Akron, Ohio, The Goodyear Tire & Rubber Company
(NYSE: GT) -- http://www.goodyear.com/-- is the world's largest
tire company. The company manufactures tires, engineered rubber
products and chemicals in more than 90 facilities in 28
countries. Goodyear's operations are located in Argentina,
Austria, Chile, Colombia, France, Italy, Guatemala, Jamaica,
Peru, Russia, among others. Goodyear employs more than 80,000
people worldwide.
=============
J A M A I C A
=============
NATIONAL COMMERCIAL: AIC Barbados Sells 13.6MM Shares in Firm
-------------------------------------------------------------
AIC Barbados Limited has sold 13.6 million shares in the
National Commercial Bank, The Jamaica Gleaner reports.
AIC Barbados could be looking for cash to fund an acquisition,
The Gleaner says, citing market sources. According to The
Gleaner, AIC Barbados has sold 1.5% of its holdings in National
Commercial since November 2007 for an estimated US$630 million.
AIC Barbados has either purchased a new asset and is seeking
equity for the payment, or is about to make a new purchase, The
Gleaner says, citing sources.
AIC Barbados owner Michael Lee Chin has acquired a number of
businesses -- which include insurance, media, tourism, and
medical services -- in Jamaica since he bought the National
Commercial in 2002, The Gleaner states.
Headquartered in Kingston, Jamaica, the National Commercial Bank
Jamaica Limited -- http://www.jncb.com/-- provides commercial
and retail banking, wealth management services. The company's
services include personal banking, business banking, mortgage
loans, wealth management and insurance services. Founded in
1977, the bank primarily operates in West Indies and the UK.
* * *
As reported in the Troubled Company Reporter-Latin America on
Dec. 18, 2006, Standard & Poor's Rating Services affirmed its
'B/B' counterparty credit and CD ratings on National Commercial
Bank Jamaica Ltd. S&P said the outlook is stable.
As reported in the Troubled Company Reporter-Latin America on
May 2, 2007, Fitch Ratings affirmed these ratings on Jamaica-
based National Commercial Bank Jamaica Limited: long-term
foreign and local currency Issuer Default at 'B+'; short-term
foreign and local currency rating at 'B'; individual at 'D'; and
support at 4. The rating outlook on the bank's ratings is
stable, in line with Fitch's view of the sovereign's
creditworthiness.
===========
M E X I C O
===========
BERRY PLASTICS: B. Scheu Takes Helm at Rigid Closed Top Division
----------------------------------------------------------------
Berry Plastics Corp. disclosed on March 3, 2008 an
organizational change involving one of its operating segments.
Ben Scheu has accepted the role of president of Rigid Closed Top
Division. Randy Hobson, who formerly served as president of
Rigid Closed Top Division, has assumed the corporate role of
executive vice president for Commercial Development.
The company did not provide any additional information.
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. 14, 2008, Moody's Investors Service affirmed the B3
Corporate Family Rating of Berry Plastics Corporation and
downgraded certain instrument ratings. Moody's said the outlook
is stable.
CEMEX SAB: Sees Increased Synergies from Rinker Integration
-----------------------------------------------------------
CEMEX S.A.B. de C.V. has identified and is now capturing
recurring cost synergies worth approximately US$400 million from
the integration of Rinker Group Limited.
At the time of the acquisition, CEMEX estimated that it would
achieve US$130 million in annual synergies after the first three
years, but now expects to exceed US$200 million in 2008 alone.
In addition, the company originally anticipated that the average
cost of funding the Rinker acquisition would be 6 percent, but
it now expects that the average cost for 2008 will be closer to
4 percent.
Moreover, CEMEX will produce cost savings to improve efficiency,
that coupled with PMI savings, will reduce the ratio of SG&A to
sales by around 150 basis points this year.
"At CEMEX, consistently generating solid returns for our
shareholders has always been a top priority," said Lorenzo
Zambrano, Chairman and CEO of CEMEX. "Since 2000, CEMEX has
evolved from a cement company to a global integrated building
materials company, all the while maintaining our commitment to
our core strategies – operational excellence, industry-leading
integration capabilities, driving cost efficiency, rigorous
investment discipline and attracting and retaining the best
talent. We believe we have the right operating and financial
strategies in place and the right people to execute on those
strategies to ensure the continued success of CEMEX."
Over the past two years, CEMEX has invested almost US$2.2
billion in growth capital expenditures projects including
increasing cement capacity by 13.5 million metric tons in
Mexico, the U.S., Panama, Spain, and Latvia. Additionally, the
company is increasing cement grinding capacity by 3.2 million
metric tons in Spain, the U.K, and the United Arab Emirates.
In 2008, CEMEX plans to invest more than half of its expected
US$3 billion in free cash flow in growth capital expenditures,
primarily to complete projects already underway. These projects
are expected to produce a return on capital employed in excess
of 10% by 2010.
CEMEX expects to make significant progress toward achieving a
net-debt-to-EBITDA ratio of 2.7 times by mid 2009 and to
maintain interest coverage ratio above 4.5 times. As previously
announced, CEMEX expects to generate EBITDA of about US$5.6
billion in 2008, compared to US$4.6 billion last year.
Headquartered in Mexico, Cemex SA -- http://www.CEMEX.com/-- is
a growing global building solutions company that provides high
quality products and reliable service to customers and
communities in more than 50 countries throughout the world,
including Argentina, Colombia and Venezuela. Commemorating its
100th anniversary in 2006, CEMEX has a rich history of improving
the well-being of those it serves through its efforts to pursue
innovative industry solutions and efficiency advancements and to
promote a sustainable future.
* * *
On May 30, 2005, Moody's Investors Service revised the
ratings outlook on Cemex S.A. de C.V.'s Ba1 ratings to positive
from stable. Ratings affected include the company's Ba1 ratings
on approximately US$110 million in senior unsecured Euro notes
and its senior implied rating.
CLEAR CHANNEL: Trial on Sale Funding Dispute Set for April 7
------------------------------------------------------------
The Hon. Leo Strine of the Chancery Court of Delaware will hold
an April 7, 2008 a hearing to determine if Wachovia Corp. should
be compelled to extend financing to Providence Equity Partners
Inc. for the purchase of Clear Channel Communications Inc.'s
television stations, The Wall Street Journal and Reuters relate.
As reported in the Troubled Company Reporter on Feb. 19, 2008,
Clear Channel filed a lawsuit on Feb. 15, 2008, against
Providence Equity to compel the private equity firm to complete
its acquisition of Clear Channel's Television Group. The TV
Group has 56 television stations, including 18 digital multicast
stations, located in 24 markets across the United States.
Providence disclosed in November 2007 that it had reservations
about the transaction, which it entered with Clear Channel in
April 2007.
US$1.3 Billion Sale Approved by FCC
As reported in the TCR on Dec. 5, 2007, Clear Channel received
approval from the Federal Communications Commission to sell 35
television stations to Newport Television LLC, a private equity
firm controlled by Providence, for US$1.3 billion.
In its order, the FCC denied a petition filed by Buckley
Broadcasting of Monterey, seeking reconsideration of the 2002
Commission decision granting applications to transfer control of
the Ackerley Group Inc. to Clear Channel.
However, the FCC approval comes with certain conditions that
must be met by Newport in six months, including divesting TV
stations in nine markets where it is in violation with FCC
ownership rules. Companies must comply with the numerical
ownership limits of the FCC local television ownership rule.
The nine market areas are Bakersfield, San Francisco, Santa
Barbara, Fresno and Monterey in California; Salt Lake City;
Albany, New York; Jacksonville, Florida, and San Antonio, Texas.
Clear Channel then cut its selling price to US$1.1 billion.
Wachovia Wants to Get Out
Wachovia Corp.'s lawsuit filed on Feb. 22, 2008, with the North
Carolina Superior Court could thwart a sale deal between Clear
Channel and Providence.
Wachovia filed for a declaratory judgment to liberate itself
from funding the sale after the parties amended the terms of the
transaction, dropping the price to US$1.1 billion.
Wachovia, which agreed in April to finance US$500 million of the
deal, contends that the revision of the original transaction
terms nullified its financing commitment, the TCR said on
Feb. 27, 2008.
Newport Strikes Back
Providence previously said it may try to renegotiate the
purchase price, and should the deal fails, a US$45 million
break-up fee would have to be paid.
Newport then filed a countersuit against Wachovia in a Delaware
Court, demanding payment of break-up fee plus costs unless
Wachovia extends the needed fund. Providence demanded that the
lenders be held to the terms of the deal it had rejected.
About Clear Channel
Based in San Antonio, Texas, Clear Channel Communications Inc.
(NYSE:CCU) -- http://www.clearchannel.com/-- is a media and
entertainment company specializing in "gone from home"
entertainment and information services for local communities and
premiere opportunities for advertisers. The company's
businesses include radio, television and outdoor displays.
Outside U.S., the company operates in 11 countries -- Norway,
Denmark, the United Kingdom, Singapore, China, the Czech
Republic, Switzerland, the Netherlands, Australia, Mexico and
New Zealand.
* * *
As reported in the Troubled Company Reporter-Latin America on
Jan. 30, 2008, Standard & Poor's Ratings Services said its
ratings on Clear Channel Communications, including the 'B+'
corporate credit rating, remain on CreditWatch with negative
implications. S&P originally placed them on CreditWatch on Oct.
26, 2006, following the company's announcement that it was
exploring strategic alternatives to enhance shareholder value.
EMPRESAS ICA: Industrial Unit Bags US$100 Mil. Deal With Energia
----------------------------------------------------------------
ICA Fluor, the industrial engineering and construction
subsidiary of Fluor Corporation and Empresas ICA, S.A.B. de
C.V., has been awarded a US$100 million contract with Energia
Costa Azul, S. de R.L. de C.V, a subsidiary of Sempra LNG, for
the construction of a nitrogen injection plant and a power
generation facility. The project will be located within the
Energia Costa Azul liquefied natural gas (LNG) regasification
terminal north of Ensenada, Baja California, Mexico. The full
US$100 million will be booked in the first quarter of 2008.
ICA Fluor will perform engineering, procurement, construction
and start-up of the nitrogen injection plant with an estimated
22-month schedule. The completed plant will produce up to 18
million standard cubic feet of nitrogen per day. The facility
will allow greater flexibility and a wider range of gas imports
to the Energia Costa Azul receipt terminal. The availability of
the nitrogen injection process ensures that all the gas
transported from the terminal conforms to North American
standards.
The project also includes the construction of a 26-megawatt
power generation facility to complement the existing capacity at
the plant. The completed project will comply with stringent
international emissions and environmental standards.
"We are pleased with this opportunity to support Sempra LNG with
its continuing investment in Mexico and we are looking to repeat
the success we had at Sempra Generation's Termoelectrica de
Mexicali natural gas fueled power plant project," said Juan
Carlos Santos, Director General, ICA Fluor. "This new project
award confirms ICA Fluor's leadership in the LNG and power
sectors in Mexico."
About ICA Fluor
ICA Fluor is the leading industrial engineering and construction
company in Mexico. The company specializes in engineering,
procurement, maintenance and construction of industrial plants
for the gas, oil, chemical, petrochemical, automotive, power,
manufacturing, mining and telecommunication sectors.
About Fluor Corp.
Fluor Corporation -- http://www.fluor.com/-- provides services
on a global basis in the fields of engineering, procurement,
construction, operations, maintenance and project management.
Headquartered in Irving, Texas, Fluor is a FORTUNE 500 company
with revenues of $14.1 billion in 2006.
About Empresas ICA
Empresas ICA -- http://www.ica.com.mx/-- the largest
engineering, construction, and procurement company in Mexico,
was founded in 1947. ICA has completed construction and
engineering projects in 21 countries. ICA's principal business
units include civil construction and industrial construction.
Through its subsidiaries, ICA also develops housing, manages
airports, and operates tunnels, highways, and municipal services
under government concession contracts and/or partial sale of
long-term contract rights.
* * *
As reported in the Troubled Company Reporter-Latin America on
Sept. 20, 2007, Standard & Poor's Ratings Services affirmed its
'BB-' long-term corporate credit rating on Empresas ICA S.A.B.
de C.V. S&P said the outlook is stable.
INTERNATIONAL RECTIFIER: Tom Lacey Joins Board of Directors
-----------------------------------------------------------
International Rectifier Corporation has elected Tom Lacey to its
Board of Directors. Mr. Lacey will additionally serve as a
member of the Board’s Audit Committee and Corporate Governance
and Nominating Committee.
Mr. Lacey, 49, most recently served as President of Flextronics
International’s Components Division, now Vista Point
Technologies, from 2006 until his retirement in late 2007.
Prior to Flextronics, Mr. Lacey was Chairman and Chief Executive
Officer of International DisplayWorks, a liquid crystal display
company, from 2004. At International DisplayWorks, Mr. Lacey
significantly grew revenue, profit, market capitalization,
achieved listing on the Nasdaq National Market, and ultimately
led the sale of the company to Flextronics in 2006.
Prior to International DisplayWorks, Mr. Lacey spent 13 years at
Intel Corporation in various positions including serving as Vice
President and General Manager of Intel’s Flash Products Group.
During his tenure at Intel, Mr. Lacey also served as President
of Intel Americas/Vice President of Sales and Marketing from
1998 to 2003. Prior to that, he served as Director Product
Marketing/Business Management for Asia, Hong Kong after
progressing through other management roles of increasing
responsibility.
International Rectifier’s Chief Executive Officer and Director
Oleg Khaykin said, "We are very pleased to welcome Tom to our
Board as his extensive leadership, engineering, marketing,
sales, and management operations experience in our industry will
be very helpful as we work to strengthen IR."
Mr. Lacey was elected to serve a Board term scheduled to expire
at the Company’s next annual meeting.
In connection with Mr. Lacey’s election to the Board, the Board
amended the Bylaws of the Company to increase the size of the
Board from seven to eight members.
International Rectifier Corporation (NYSE:IRF) --
http://www.irf.com/-- provides power management technology.
IR's analog, digital, and mixed signal ICs, and other advanced
power management products, enable high performance computing and
save energy in a wide variety of business and consumer
applications. Manufacturers of computers, energy efficient
appliances, lighting, automobiles, satellites, aircraft, and
defense systems rely on IR's power management solutions to power
their next generation products. The company has manufacturing
facilities in the U.S., Mexico, United Kingdom, Germany and
Italy; and has subsidiaries in Japan and Singapore.
* * *
In September, 2007, Standard & Poor's Ratings Services said that
its 'BB' corporate credit rating on International Rectifier
Corp. remains on CreditWatch with negative implications.
===========
P A N A M A
===========
AES CORP: Defaults on Debt Facilities due to Misrepresentation
--------------------------------------------------------------
The AES Corporation is in default under its senior secured
credit facility and its senior unsecured credit facility due to
a breach of representation related to its financial statements
as set forth in the credit agreements.
As a result, US$200 million of the debt under the company's
senior secured credit facility will be classified as current on
the balance sheet as of Dec. 31, 2007. There are no outstanding
borrowings under the senior unsecured facility.
The company will seek a waiver of these defaults from its
lenders under these facilities. The company may not borrow
additional funds under either of these facilities until it
obtains the waiver.
The company would delay the filing of its 2007 Annual Report on
Form 10-K with the Securities and Exchange Commission. The
company discloses that it is still preparing its financial
statements as a result of its efforts to remediate the disclosed
material weaknesses.
In addition, the company relates that financial statements for
the years ended Dec. 31, 2005, and 2006, of the company's
independent registered public accounting firm, Deloitte & Touche
LLP, could no longer be relied upon.
Although the company provides no assurance that it will able to
file its 2007 Form 10-K within the 15 calendar day extension
period it relates that the Form 10-K will be filed within the
extension period.
About AES Corporation
AES Corporation -- http://www.aes.com/-- a global power
company, operates in South America, Europe, Africa, Asia and the
Caribbean countries. Generating 44,000 megawatts of electricity
through 124 power facilities, the company delivers electricity
through 15 distribution companies.
AES has been in Eastern Europe for over ten years, since it
acquired three power plants in Hungary in 1996. Currently, AES
has two distribution companies in Ukraine, which serve 1.2
million customers and generation plants in the Czech Republic
and Hungary. AES is also the leading company in biomass
conversion in Hungary, generating 37% of the nation's total
renewable generation in 2004. 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.
=======
P E R U
=======
CUMMINS INC: Names Jean Blackwell as EVP & CEO of Foundation
-------------------------------------------------------------
Cummins Inc. has appointed Jean Blackwell, the company’s chief
financial officer, as its executive vice president of corporate
responsibility and chief executive officer of the Cummins
Foundation. Pat Ward, currently Vice President and Engine
Business Controller, will become the Chief Financial Officer,
effective May 1.
"In her new role, Jean will help us re-define Cummins’
commitment to corporate responsibility, which is critical to our
success in this period of significant growth both in the U. S.
and around the world," said Tim Solso, Cummins Chairman and CEO.
"Jean’s new position also provides her with the opportunity
to make a direct and significant impact on the communities where
Cummins operates, which is very meaningful to her at this stage
in her career and one of the primary reasons she joined Cummins
11 years ago."
Ms. Blackwell has been with the Company since 1997 and has
served in various roles including General Counsel and Vice
President - Human Resources. Prior to joining Cummins, she was
a partner with the law firm of Bose McKinney & Evans in
Indianapolis. She also previously served as Budget Director for
the State of Indiana and Executive Director of the State Lottery
Commission.
Mr. Ward has held a number of finance leadership positions in
the Company over the last 20 years. He joined Cummins in 1987
as a member of the finance team for Cummins Generator
Technologies and moved to the Fuel Systems operation as
Controller in 1995. In 1996, he joined Corporate Finance as
Director - Business Planning and Analysis. He became Director -
Finance and Information Technology for Consolidated Diesel
Company in 1998, and in 2000 was named Controller for Cummins
Filtration, then known as Fleetguard. He became Power
Generation Controller in 2003 and transferred to the Engine
Business in 2005. He was named a Cummins Vice President in
2006.
"Both of these individuals are extremely talented and well
qualified for their new positions," Mr. Solso said. "We are
excited to have them in these critical roles."
About Cummins
Headquartered in Columbus, Indiana, Cummins Inc. (NYSE: CMI)
-- http://www.cummins.com/-- designs, manufactures, distributes
and services engines and related technologies, including fuel
systems, controls, air handling, filtration, emission solutions
and electrical power generation systems.
Cummins has Latin-American operations, particularly in
Venezuela, Brazil, Peru, Colombia, and Argentina. Its
operations in the Asia-Pacific are found in China, Japan and
Korea. Its also has facilities in Europe, particularly in the
United Kingdom.
* * *
Cummins' Junior Convertible Subordinated Debentures carry
Fitch Ratings' 'BB' rating with a stable outlook.
Moody's Investors Service raised Cummins' convertible preferred
stock rating to Ba1 from Ba2 and withdrew the company's SGL-1
Speculative Grade Liquidity rating and its Ba1 Corporate Family
Rating.
====================
P U E R T O R I C O
====================
DIRECTV GROUP: Amends Distribution Pact With Crown Media
--------------------------------------------------------
Crown Media Holdings, Inc., owner and operator of Hallmark
Channel and Hallmark Movie Channel, has renewed its distribution
agreement for Hallmark Channel with DIRECTV, Inc., for a multi-
year term. DIRECTV currently distributes Hallmark Channel to
nearly 15 million homes.
Additionally, DIRECTV will have the right to distribute the
Standard Definition and High Definition versions of Hallmark
Movie Channel.
"We are very happy to announce this renewal of our affiliation
agreement with DIRECTV, the second-largest distributor of our
programming and one of Crown Media's most important partners in
contributing to our ability to provide quality family friendly
programming," said Henry Schleiff, President and CEO, Crown
Media Holdings, Inc. "Clearly, this agreement reflects both
DIRECTV's and Crown Media's emphasis on quality, fair price and
service to our respective subscribers and viewers. On a
personal note, I would like to add that we particularly
appreciated not only DIRECTV's fair treatment of Hallmark
Channel but also, frankly, their willingness to go the extra
mile in closing this agreement in such a timely manner."
"Hallmark Channel continues to be an important programming
staple for DIRECTV families and we're pleased to extend our
relationship," said Derek Chang, executive vice president,
Content Strategy and Development, DIRECTV, Inc. "Crown Media
has set a high standard for quality, family-oriented programming
and that is reflected in the channel's consistently high
viewership."
About Crown Media
Crown Media Holdings, Inc. (NASDAQ: CRWN) owns and operates
cable television channels dedicated to high quality, broad
appeal, entertainment programming. The Company currently
operates and distributes Hallmark Channel in the U.S. to
84 million subscribers. The program service is distributed
through 5,450 cable systems and communities as well as direct-
to-home satellite services across the country. Hallmark Channel
consistently ranks among the top ten ad-supported cable networks
in Prime Time and Total Day household ratings and is the
nation's leading network in providing quality family
programming. Crown Media also operates a second 24-hour linear
channel, Hallmark Movie Channel and will launch Hallmark Movie
Channel HD in April 2008. Significant investors in Crown
Media Holdings include: Hallmark Entertainment Holdings, Inc., a
subsidiary of Hallmark Cards, Incorporated, Liberty Media Corp.,
and J.P. Morgan Partners (BHCA), LP, each through their
investments in Hallmark Entertainment Investments Co.; VISN
Management Corp., a for-profit subsidiary of the National
Interfaith Cable Coalition; and The DIRECTV Group, Inc.
About DirecTV
Headquartered in El Segundo, California, The DirecTV Group Inc.
(NASDAQ:DTV) -- http://www.DirecTV.com/-- provides digital
television entertainment in the United States and Latin America.
The company's two business segments, DirecTV U.S. and DirecTV
Latin America, are engaged in acquiring, promoting, selling
and/or distributing digi]tal entertainment programming via
satellite to residential and commercial subscribers. DirecTV
Holdings LLC and its subsidiaries are a provider of direct-to-
home digital television services and a provider in the multi-
channel video programming distribution industry in the United
States. DTVLA is a provider of DTH digital television services
throughout Latin America. In January 2007, the company acquired
Darlene Investments LLC's 14.1% equity interest in DirecTV Latin
America, LLC. DirecTV Latin America LLC is a multinational
company, which, as a result of this transaction, became a wholly
owned subsidiary of the company. 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.
* * *
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.
GENESCO INC: Terminates Finish Line-Merger and Settles Dispute
--------------------------------------------------------------
Genesco Inc. entered into a definitive agreement with The Finish
Line Inc., UBS LLC and UBS Loan Finance LLC for the termination
of a merger agreement with Finish Line and the settlement of all
related litigation among Finish Line and Genesco and UBS.
The terms of the settlement agreement are:
-- The merger agreement between Genesco and Finish Line will
be terminated; the financing commitment from UBS to Finish
Line will be terminated;
-- UBS and Finish Line will pay to Genesco an aggregate of
US$175 million in cash along with a number of Class A
shares of Finish Line common stock equal to 12% of the
total post-issuance Finish Line outstanding shares of
common stock. As part of the settlement, Genesco and
Finish Line have agreed to a mutual standstill agreement;
-- The payment of the cash and shares required by the
settlement is expected to occur on Friday, March 7, 2008;
-- It is anticipated that the Class A shares of Finish Line
will be remitted to Genesco's shareholders soon as
practicable after the registration of such shares by
Finish Line; and
-- The agreement provides for customary mutual releases of
the parties.
Shareholder Objection
In connection with the settlement, QVT Financial LP, Genesco's
largest shareholder, issued this statement:
"QVT Financial LP strenuously opposes the proposed settlement
between Genesco, The Finish Line and UBS and urges Genesco's
board of directors to reject the settlement. QVT believes that
the settlement is not in the best interests of Genesco's
shareholders and that approval by the board of the settlement
would be a breach of the directors' fiduciary duties to
shareholders."
"QVT wishes to meet immediately with the board and management to
explain our view that approval of the settlement would
constitute a breach of fiduciary duty and urges the board to
take no action prior to consulting with QVT and other major
shareholders."
About The Finish Line
The Finish Line Inc. (NASDAQ: FINL) --
http://www.finishline.com/-- and -- http://www.manalive.com/--
together with its subsidiaries, is a mall-based specialty
retailer in the United States, Canada and Puerto Rico. The
company operates under the Finish Line, Man Alive and Paiva
brand names. Finish Line is a mall-based specialty retailer of
men's, women's and children's brand name athletic, lifestyle and
outdoor footwear, soft goods, activewear and accessories. As of
April 20, 2007, the company operated 693 Finish Line stores in
47 states.
About Genesco Inc.
Headquartered in Nashville, Tennessee, Genesco Inc. (NYSE: GCO)
-- http://www.genesco.com/-- is a specialty retailer of
footwear, headwear and accessories in more than 1,900 retail
stores in the U.S., Canada and Puerto Rico, principally under
the names Journeys, Journeys Kidz, Shi by Journeys, Johnston &
Murphy, Underground Station, Hatworld, Lids, Hat Zone, Cap
Factory, Head Quarters and Cap Connection. The company also
sells footwear at wholesale under its Johnston & Murphy brand
and under the licensed Dockers.
* * *
As reported in the Troubled Company Reporter-Latin America on
Jan. 7, 2008, Standard & Poor's Ratings Services held its
ratings on specialty footwear and headwear retailer Genesco Inc.
on CreditWatch with developing implications. S&P lowered its
corporate credit rating on Genesco Inc. to 'B+' from 'BB-'. At
the same time, S&P lowered its issue-level rating on the
company's subordinated debt to 'B-' from 'B'.
GENESCO INC: Merger Termination Cues S&P to Hold B+ Rating
----------------------------------------------------------
Standard & Poor's Ratings Services affirmed its 'B+' corporate
credit and other ratings on Nashville, Tennessee-based Genesco
Inc. and removed them from CreditWatch, where they were placed
with developing implications on April 20, 2007. This action
follows the termination of the merger agreement with the Finish
Line and UBS and settlement of all related litigation. The
outlook is stable.
"The stable outlook reflects our expectations for minimal
improvements in operating performance over the near term," said
Standard & Poor's credit analyst David Kuntz. With the
resolution of the litigation from Finish Line and UBS, this will
no longer be a distraction for the company.
Headquartered in Nashville, Tennessee, Genesco Inc. (NYSE: GCO)
-- http://www.genesco.com/-- is a specialty retailer of
footwear, headwear and accessories in more than 1,900 retail
stores in the U.S., Canada and Puerto Rico, principally under
the names Journeys, Journeys Kidz, Shi by Journeys, Johnston &
Murphy, Underground Station, Hatworld, Lids, Hat Zone, Cap
Factory, Head Quarters and Cap Connection. The company also
sells footwear at wholesale under its Johnston & Murphy brand
and under the licensed Dockers.
UNIVISION COMM: Posts US$314.8 Million Net Loss in 2007
-------------------------------------------------------
Univision Communications Inc. posted a net loss of
US$314.8 million for the full year of 2007, compared to net
income of US$349.2 million in 2006. For the three months ended
Dec. 31, 2007, the company incurred a US$201.5 million net loss
compared to US$99.7 million of net income for the same period in
2006.
For the fourth quarter, net revenue increased 6.1% to US$544.3
million in 2007 from US$512.8 million in 2006. Adjusted
operating income before depreciation and amortization increased
10.9% to US$248.0 million in 2007 from US$223.7 million in 2006.
For the full year 2007, net revenue increased 8.4% to
US$2,072.8 million from US$1,912.0 million in 2006, excluding
2006 FIFA World Cup estimated incremental net revenues of
US$113.6 million. Including World Cup incremental revenue in
2006, net revenue increased 2.3% and adjusted operating income
before depreciation and amortization2 increased 7.8% to US$863.2
million in 2007 from US$800.6 million in 2006.
Joe Uva, Chief Executive Officer, said, "2007 has been a
tremendous year for Univision and I’m incredibly proud of all we
have achieved. From the smooth transition to new ownership, to
reorganizing and refocusing our advertising sales structure, to
implementing a host of initiatives to inform and educate our
audience, we achieved many milestones while cementing
Univision’s position as the leading Spanish language media
company."
Mr. Uva continued, "During this quarter, Univision once again
produced very strong results across all core platforms – the
Univision Network consistently outdelivered at least one of the
other major networks in primetime among young adults, Univision
Radio continued its double-digit year-over-year revenue growth
and Univision.com maintained its position as the #1 Internet
destination in the U.S. among Spanish-dominant and bilingual
Hispanics. We look forward to building on the momentum gained
in 2007 to drive growth in 2008 and beyond."
Andrew W. Hobson, Senior Executive Vice President and Chief
Financial Officer, said, "We are pleased with our fourth quarter
net revenue growth of 6.1% and OBIDA growth of 10.9%. This
continued growth further underscores the strength of our core
businesses."
About Univision Communications
Headquartered in Los Angeles, Calif., Univision Communications
Inc., (NYSE: UVN) -- http://www.univision.net/-- owns and
operates more than 60 television stations in the U.S. and Puerto
Rico offering a variety of news, sports, and entertainment
programming. The company had about US$2.6 billion in debts at
Dec. 31, 2006. Univision Music Group is a subsidiary of
Univision Communications Inc.
* * *
As reported in the Troubled Company Reporter-Latin America on
Feb. 28, 2008, Fitch Ratings published a review of its Recovery
Ratings methodology and updated analysis for rated issuers in
the United States media and entertainment space including
Univision Communication, Inc. (LT Issuer Default Rating at 'B';
Stable Outlook).
=================
V E N E Z U E L A
=================
PETROLEOS DE VENEZUELA: Foreign Clients Must Pay Through Bank
-------------------------------------------------------------
Petroleos de Venezuela SA has instructed foreign clients to pay
their purchases by making deposits in Banco Central de
Venezuela's account in Switzerland's UBS bank, El Universal
reports.
Banco Central de Venezuela agreed with Petroleos de Venezuela to
make the oil-related deposits in the UBS account that they own
jointly so they can determine what the payments for the oil
company's sales are, El Universal says, citing sources.
Traders told El Universal that over the last few weeks they made
the payments to that account, after a court order froze a US$315
million account of Petroleos de Venezuela's Cerro Negro in the
New York Bank at the request of US oil company Exxon Mobil.
Petroleos de Venezuela has an ongoing dispute with Exxon Mobil
over an asset freeze order issued by the London High Court,
among others.
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.
* * *
As of Feb. 14, 2008, Fitch Ratings held 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: Gets OPEC'S Support in Exxon Conflict
-------------------------------------------------------------
The Organization of Petroleum Exporting Countries told Thomson
Financial that will support Venezuela in the legal dispute
between Petroleos de Venezuela SA and Exxon Mobil Corp.
As reported in the Troubled Company Reporter-Latin America on
March 6, 2008, the Venezuelan government asked OPEC to discuss
during a March 5 meeting Exxon Mobil's seeking of asset freeze
court order against Petroleos de Venezuela. Exxon Mobil asked
the London High Court to uphold the order freezing
US$12 billion in Petroleos de Venezuela's assets to support the
arbitration process between both parties. The asset-freeze
order against Petroleos de Venezuela was made so that Exxon
Mobil Corp. would be able to extract compensation should it win
a pending arbitration. Petroleos de Venezuela has appealed the
asset-freeze order. Petroleos de Venezuela contends that the
U.K. court doesn't have the authority to award the injunction
because the case involved U.S. and Venezuelan firms.
According to news agency EFE, Exxon Mobil didn't explain why it
is seeking to freeze Petroleos de Venezuela's assets when the
U.S. giant is demanding compensation of no more than US$5
billion.
OPEC told Thomson Financial that its members unanimously agreed
at its production meeting to support Venezuela.
EFE relates that Samuel Moncada, Venezuela's ambassador to
Britain, thanked OPEC for the support. "It seems very important
to us that the world's organization of producing countries of
petroleum learned of the situation and of the potential danger
that this has for themselves. Other petroleum exporting
countries are taking account of the dangerous situation in that
Exxon, with this type of aggressive action, can put them in
foreign courts," Ambassador Moncada told EFE.
Ambassador Moncada said in a statement, "The conference
expressed its support to the Bolivarian Republic of Venezuela
and Petroleos de Venezuela SA, in the exercise of its sovereign
rights over its natural resources, in accordance with
international law. The Conference called for resolving any such
disputes through good faith and amicable negotiations."
EFE notes that Ambassador Moncada is confident that bilateral
relations with Britain wouldn't be affected by the Petroleos de
Venezuela-Exxon Mobil dispute. Ambassador Moncada told EFE that
he hoped that "reason prevails in this case and the limits of
national jurisdiction remain where they are now, in the national
territories." "We're surprised by this cunning and unexpected
attack because when the decision was made neither the PDVSA
[Petroleos de Venezuela] nor the (Venezuelan) nation was
informed. We were surprised by an order to freeze assets in an
English court when we had not the slightest idea of why that
could occur here. This is not a private case. This is a case
where a nation is involved."
El Universal relates that British deputies that included three
Labor Party representatives and members of the parliamentarian
group Friends of Venezuela, one Welsh nationalist, and a Green
Party representative led a protest against Exxon Mobil outside
the London High Court.
According to EFE, the protesters claimed that Exxon Mobil's
lawsuit against Petroleos de Venezuela has "a political
motivation."
Parliamentarian group Friends of Venezuela's chairperson Colin
Burgon told El Universal, "We are really concerned about the
fact that a multinational corporation such as Exxon is trying to
threaten the sovereignty of the Venezuelan State" to dispose of
its natural resources.
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.
* * *
As of Feb. 14, 2008, Fitch Ratings held 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.
===========
X X X X X X
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* Moody's Says LatAm Telecom Industry Faces Competitive Pressure
----------------------------------------------------------------
The fundamental credit outlook for the telecom industry in Latin
America should remain stable in the next 12-18 months due to
solid cash flow, high margins and ample liquidity, Moody's
Investors Service says in a new report. Strong competitive
pressure on revenues and margins continues to be the main
business risk in the region.
"Overall, most telcos are expected to generate stable levels of
operating cash flow, which sustains the industry's current
stable outlook and should help fund expected elevated capital
expenditures and possible M&A activity," said Moody's Assistant
Vice President Nymia Almeida and one of the authors of the
report, Moody's semi-annual update on the Latin American telecom
sector.
"But competition is the main risk for the telecom industry in
Latin America today," Ms. Almeida added. "Competition is
expected to heat up as telecom operators try to attract new
customers to their networks through number portability and new
third-generation wireless services offerings."
Although the fierce competition may pressure operating margins
and consume part of accumulated cash balances through increased
capex, Moody's believes that company managements will maintain a
conservative approach with regards to leverage and liquidity
over the near to medium term.
"Thus, the current adverse financial market conditions are not a
threat to telecom issuers in Latin America," concluded Ms.
Almeida.
Latin American revenues for the telecom industry are expected to
grow an average of 5% annually in 2008 and operating margins to
be in the 20% to 40% range because of continued cost-cutting
efforts and further industry consolidation, according to the
report.
Factors that could affect Latin American telecommunication
companies' ratings in the medium to long term include: the
competitive landscape, expected changes in regulation and the
resulting performance of operating margins and cash flows, says
Moody's.
The full title of this Moody's Industry Outlook is "Latin
America Telecom: Six-Month Industry Update."
***********
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. Sheryl Joy P. Olano, Rizande delos Santos,
Pamella Ritah K. Jala, Tara Eliza Tecarro, Frauline S. Abangan,
and Peter A. Chapman, Editors.
Copyright 2008. All rights reserved. ISSN 1529-2746.
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