/raid1/www/Hosts/bankrupt/TCRLA_Public/080320.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
Thursday, March 20, 2008, Vol. 9, No. 57
Headlines
A R G E N T I N A
BOWNE & CO: Incurs Net Loss of US$76,000 for 2007 Fourth Quarter
CASSANO ARGENTINA: Proofs of Claim Verification is Until May 8
CLINICA TODOS: Proofs of Claim Verification is Until May 7
DELTA AIR: Will Cut Flights & 30,000 Jobs
ESCUELA PANAMERICANA: Claims Verification Deadline is April 25
ESPECTACULOS DEL PILAR: Concludes Reorganization Process
EXPORTACIONES AGROINDUSTRIALES: Concludes Reorganization Process
NATIONAL ADVISORS: Trustee to Verify Proofs of Claim Until May 5
PROTEL SERVICIOS: Seeks Out-of-Court Preventive Agreement
ROYAL & SUN (ARGENTINA): Moody's Holds Global IFS Rating at B2
SCO GROUP: Bankruptcy Court Sets April 21 as Claims Bar Date
* ARGENTINA: 2008 Provincial Finances May Deteriorate, S&P Says
B A H A M A S
HARRAH'S ENTERTAINMENT: Reports US$47.8MM Net Loss in 4th Qtr.
B O L I V I A
COEUR D'ALENE: Underwriters to Exercise Option for Senior Notes
INTERNATIONAL PAPER: Analysts Downgrade Firm's Shares to Neutral
B R A Z I L
ABITIBIBOWATER INC: Moody's Junks Corporate Family Ratings
AES CORP: May Acquire Banco Nacional's Stake in Brasiliana
BANCO NACIONAL: AES Corp May Buy Firm's Stake in Brasiliana
BANCO NACIONAL: Okays BRL10MM Financing for Hospital Expansion
BANCO NACIONAL: Okays BRL6.6 Billion in Loans for Power Sector
COMPANHIA ENERGETICA: Two Firms Unsure of Bidding for Company
COMPANHIA PARANAENSE: Net Income Rises to BRL1,107 Mil. in 2007
DELPHI CORP: Completes Rights Offering for 62,707,305 Shares
DELPHI CORP: Moody's Holds (P)B2 Rtg. on US$3.7-Bil. Term Loans
ENERGIAS DO BRASIL: Hasn't Decided on Companhia Energetica Bid
GENERAL MOTORS: Strike Cues S&P to Put Ratings on Negative Watch
GOL LINHAS: Unit Implements Sabre Airline Solutions
NORTEL NETWORKS: Inks Settlement Agreement with Vonage
USINAS SIDERURGICAS: Will Install Hot Strip Mill at Cosipa
C A Y M A N I S L A N D S
AAM EMERGING: Proofs of Claim Filing Deadline is March 21
BRAZVEST FUND: Proofs of Claim Filing Will End on March 25
CHEYNE GLOBAL: Proofs of Claim Filing is Until March 21
FINANCIAL RISK: Proofs of Claim Filing Deadline is March 21
GLOBALVEST VALUE: Proofs of Claim Filing Will End on March 25
LATINVEST HOLDINGS: Proofs of Claim Filing is Until March 25
LATINVEST PARTNERS: Proofs of Claim Filing Deadline is March 25
TIME FOR US: Sets Final Shareholders Meeting for March 24
UTILITIVEST II: Proofs of Claim Filing Deadline is March 25
UTILITIVEST III: Proofs of Claim Filing is Until March 25
C H I L E
INVENSYS PLC: Fitch Withdraws BB Rating on Senior Notes
C O L O M B I A
BANCO PICHINCHA: To Sell Inversora Pichincha to AIG Consumer
D O M I N I C A N R E P U B L I C
GUESS? INC: Co-Founder Wins Agreements From Christie's
PRC LLC: Can Sell Real Property to Brett Houston for US$2.2 Mil.
G U A T E M A L A
ALLIANCE ONE: S&P Changes Outlook to Stable; Retains 'B+' Rating
J A M A I C A
AIR JAMAICA: Union Seeks Ministry's Intervention in Wage Talks
AIR JAMAICA: Public Accounts Comm. Probes Contract Extensions
NACIONAL COMMERCIAL: Fights Olint's Injunction in Court
M E X I C O
AMERICAN AXLE: Work Stoppage Prompts S&P's Negative Watch
DURA AUTOMOTIVE: Files Amended First Revised Chapter 11 Plan
DURA AUTO: Claims Treatment & Classification of Revised Plan
DURA AUTO: Unveils Financial Projections Under Revised Plan
FEDERAL-MOGUL: Professionals Bill US$323 Mil. in Fees & Expenses
INNOPHOS HOLDINGS: Posts US$3.9 Mil. Net Loss for 4th Quarter
LEAR CORP: S&P Puts Ratings on Negative Watch on Extended Strike
ODYSSEY RE: Okays Additional US$200 Mln Share Repurchase Program
N I C A R A G U A
INTERPUBLIC GROUP: Put Option for 4.50% Senior Notes Expires
P U E R T O R I C O
COOPER COMPANIES: Picks Nine Directors; Hires KPMG as Auditors
V E N E Z U E L A
HARVEST NATURAL: Posts US$57.2 Million Net Loss in December 2007
PETROLEOS DE VENEZUELA: Wins Exxon Lawsuit
PETROLEOS DE VENEZUELA: CITGO Commends PDVSA on Lawsuit Victory
X X X X X X
* Moody's Sovereign Issuers Has Increased to 107 in 2007
- - - - -
=================
A R G E N T I N A
=================
BOWNE & CO: Incurs Net Loss of US$76,000 for 2007 Fourth Quarter
----------------------------------------------------------------
Bowne & Co. Inc. reported net loss of US$76,000 for the 2007
fourth quarter ended Dec. 31 compared to US$2.234 million for
the 2006 fourth quarter. For the full fiscal year ended
Dec. 31, 2007, the company's net income was at US$27.104 million
compared to US$1.768 million net loss in 2006.
For the year ended Dec. 31, 2007, revenue was US$850.6 million,
up US$16.9 million from US$833.7 million in 2006. Gross margin
improved to 37.5% from 34.8% and segment profit increased 29.7%,
or US$16.2 million, to US$70.6 million in 2007 compared to 2006.
Income from continuing operations increased to US$27.3 million
from US$12.2 million in 2006.
For the fourth quarter, revenue increased to US$194.7 million
from US$191.4 million. Gross margin improved to 38.0% from
34.7% and segment profit increased 45.4%, or US$3.6 million to
US$11.4 million in 2007 from US$7.9 million in 2006.
"2007 was a year of strong operating performance and we
effectively positioned the company for future growth," David J.
Shea, chairman and chief executive officer, said. "Since 2006,
we have successfully implemented our strategic vision by
introducing new products and services, completing several
strategic acquisitions and continuing to grow our non-
transactional revenue."
"During this two-year period of growth, we have also streamlined
and automated many processes thereby improving efficiencies
while reducing costs," Mr. Shea continued.
"Client demand for more of our services increasingly overlaps;
the technology serving them and the marketing and channel
requirements for reaching them are virtually identical," William
P. Penders, president of Bowne, said. "Last year, we announced
several significant changes to our organizational structure and
manufacturing capabilities to consolidate our operations into a
unified model that supports our ability to market and deliver
our full range of services."
For the year ended Dec. 31, 2007, cash and marketable securities
increased US$18.1 million from Dec. 31, 2006. The company had
net cash provided by operating activities of US$98.4 million for
the year ending Dec. 31, 2007 as compared to US$3.6 million for
the year ending Dec. 31, 2006. This US$95 million increase was
primarily driven by the improvement in operating results and by
the reduction in accounts receivable resulting from higher
collections of receivables during 2007 and as a result of
improved billing and collection efforts.
Accounts receivable decreased approximately US$18.7 million from
December 2006 principally due to lower days sales outstanding.
Days sales outstanding improved 10 days to 62 days in
December 2007 from 72 days in December 2006. Financial
Communications work-in-process inventory was US$15.5 million at
Dec. 31, 2007 compared to US$18.7 million at Dec. 31, 2006. The
company had no borrowings outstanding under its US$150 million
five-year senior, unsecured revolving credit facility as of
Dec. 31, 2007.
The share repurchase authorization was completed in 2007. From
December 2004, the inception of the company's share repurchase
program, through Dec. 31, 2007, Bowne spent US$196.3 million to
repurchase 12.9 million shares. In 2007, the company spent
US$51.7 million repurchasing 3.1 million shares at an average
price per share of US$16.52, of which approximately 700,000
shares were purchased in the fourth quarter. Total shares
outstanding as of Feb. 29, 2008 were 26,307,627.
As of Dec. 31, 2007, the company's balance sheet showed total
assets of US$509.417 million, total liabilities of US$258.938
million and a total stockholders' equity of US$250.479 million.
About Bowne & Co. Inc.
Headquartered in New York City, Bowne & Co. Inc. (NYSE: BNE)
-- http://www.bowne.com/ -- provides financial, marketing and
business communications services around the world. The company
has 3,200 employees and 60 offices worldwide. The company's
Latin American offices are located in Argentina, Brazil and
Mexico.
* * *
Bowne & Co. Inc. still carries Moody's 'Ba3' corporate family
rating which was affirmed in January 2007. The outlook remains
positive.
CASSANO ARGENTINA: Proofs of Claim Verification is Until May 8
--------------------------------------------------------------
Francisco Marcelo Fabian, the court-appointed trustee for
Cassano Argentina S.A.'s bankruptcy proceeding, will be
verifying creditors' proofs of claim until May 8, 2008.
Mr. Fabian will present the validated claims in court as
individual reports on June 19, 2008. The National Commercial
Court of First Instance in Buenos Aires will determine if the
verified claims are admissible, taking into account the
trustee's opinion, and the objections and challenges that will
be raised by Cassano Argentina and its creditors.
Inadmissible claims may be subject for appeal in a separate
proceeding known as an appeal for reversal.
A general report that contains an audit of Cassano Argentina's
accounting and banking records will be submitted in court on
Aug. 15, 2008.
Mr. Fabian is also in charge of administering Cassano
Argentina's assets under court supervision and will take part in
their disposal to the extent established by law.
The trustee can be reached at:
Francisco Marcelo Fabian
Uruguay 328 Capital Federal
Buenos Aires, Argentina
CLINICA TODOS: Proofs of Claim Verification is Until May 7
----------------------------------------------------------
Marcelo Carlos Rodriguez, the court-appointed trustee for
Clinica Todos Los Santos S.A.'s bankruptcy proceeding, will be
verifying creditors' proofs of claim until May 7, 2008.
Mr. Rodriguez will present the validated claims in court as
individual reports on June 5, 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 Clinica Todos 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 Clinica Todos'
accounting and banking records will be submitted in court on
Aug. 5, 2008.
Mr. Rodriguez is also in charge of administering Clinica Todos'
assets under court supervision and will take part in their
disposal to the extent established by law.
The trustee can be reached at:
Marcelo Carlos Rodriguez
Cerrito 146
Buenos Aires, Argentina
DELTA AIR: Will Cut Flights & 30,000 Jobs
-----------------------------------------
Delta Air Lines Inc. chief executive officer, Richard Anderson,
and president and chief financial officer, Edward H. Bastian,
wrote a statement on March 18, 2008, to the company's global
staff discussing the company's move to address record fuel
prices and the weakening U.S. economy.
In the statement, the executives said that despite the
significant momentum at Delta, the rapid increase in fuel costs
to record highs and the weakening U.S. economy are placing
pressure on the business. In the past three months, fuel prices
have climbed nearly 20% and 2008 fuel bill is now expected to
increase by nearly US$900 million compared to the business plan
(based on US$90 per barrel fuel) and more than US$2 billion over
2007.
Messrs. Anderson and Bastian said Delta must act quickly and
decisively, as speed in execution leads to success. With fuel
expected to remain at approximately US$100 per barrel for the
foreseeable future, the officers indicated that they must take
action to keep Delta strong. The executives are scheduled to
announce the plans to manage revenues, capacity, fleet and costs
at an investor conference in New York. They said that efforts
are focused on four key areas: continued international
expansion, further domestic capacity rationalization, improving
RASM to more than 100% of industry average, and a heightened
focus on cost and cash flow discipline, which will include
voluntary reductions in staff.
Voluntary Headcount Reductions
The executives disclosed plans to reduce cost and domestic
capacity will change the number of people needed to operate the
airline. To manage these reductions, in April the company will
offer two comprehensive voluntary programs for U.S., non-pilot
employees:
1. The 60-Point Retirement Program for those who are already
eligible for retirement or for those whose age and years
of service add up to at least 60, with 10 or more years of
service.
2. The Early Out Program for frontline employees with 10 or
more years of service and for administrative and
management employees with one or more years of service.
According to the statement, both programs offer a severance
payment, travel privileges, and additional benefits to manage
career transitions. Specifics differ based on age, retirement
eligibility and years of service. Approximately 30,000
employees will be eligible for one of the two voluntary
programs.
In addition to meeting the company's business needs, these
programs are influenced by the many requests for early
retirement and early out programs that give an opportunity to
make a career choice that benefits the worker, their family and
the company. Importantly, for frontline employees, the company
expects to achieve the necessary reduction of approximately
1,300 positions through attrition, retirements, limited hiring
and the introduction of these voluntary programs. The number of
frontline employees who want to participate in these programs
will not be limited.
For the administrative and management teams, the company has
even more aggressive productivity improvement targets, including
the reduction of more than 700 merit positions. The executives
hope these enhanced voluntary programs will minimize the need
for involuntary reductions for the merit group.
In the next few weeks Delta workers will have opportunities to
learn more about these programs prior to the April 14 to May 12
enrollment window. Beginning March 31, DeltaNet will be updated
with more information and the Employee Service Center will be
available to answer questions. These programs reflect yet
another aspect of the Delta Difference. The company's overall
flexibility allows it to offer creative, generous, employee-
focused solutions to achieve the necessary reductions
voluntarily.
In addition to these initiatives, the company said it is
deferring any decision on 2008 pay increases until it better
understands the outlook for its business. Delta, according to
the statement, remains committed to moving toward industry
standard pay over time; however, it is important that it
proceeds cautiously in the current economic and fuel climate.
Domestic Rationalization
Domestically, fuel prices -- combined with a weakening domestic
economy -- have put significant pressure on the profitability of
Delta's U.S. network. Because of this, the company is reducing
2008 domestic capacity by an additional 5% by August, resulting
in a 10% year-over-year domestic reduction. These reductions
will be made through a combination of decreased utilization and
parking 15-20 mainline aircraft and 20-25 regional jets. Delta
will continue to be an aggressive domestic competitor and will
complete these capacity reductions primarily by thinning
frequencies and reducing point-to-point routes. As with past
schedule reductions, changes will also be focused at off-peak
times or in markets where regional jets are not profitable at
the current fuel levels.
International Expansion
The executives also stated that this summer more than 40% of
Delta's capacity will be dedicated to international flying where
fares more readily cover higher fuel costs. They said they
firmly believe that global expansion, and the network diversity
that it provides, is key to long-term success.
Delta is in its third consecutive year of record international
expansion, including the important additions of Shanghai and
Heathrow in the first quarter, the statement revealed. Delta's
international growth will continue to be supported by
investments in its fleet, including the continued delivery of 22
international-capable 737-700s, 757-200-ETOPS and 777-200LRs
through 2009. Because of their importance in achieving the
company's international growth, Delta has no plans to defer or
delay the delivery of these aircraft. While the company will
make small adjustments to its international plans to ensure it
is focused on the most profitable routes, the company will still
increase international capacity by more than 15% in 2008. Any
adjustments to international flying will focus on reducing
frequencies or eliminating select seasonal routes, the statement
said. For example, Delta will serve Edinburgh this summer from
the company's JFK hub but will not reinstate seasonal flights
from Edinburgh to Atlanta.
RASM Improvement
Based on the statement, Delta made significant progress in
closing its unit revenue gap versus the industry, moving from
86% of industry average in 2005 to 95% last year. So far this
year, the company has reached 98% of industry RASM and it must
accelerate efforts to improve RASM performance to more than 100%
of industry average in 2008 -- up from Delta's original goal of
98%. Delta, the statement asserted, is aggressively acting to
recover the fuel price increase in its fare structure. In the
past year, the company has regularly increased systemwide
domestic fares, boosted fuel surcharges, increased international
fares, and increased select service fees.
Cost and Cash Flow Discipline
While Delta will partially offset fuel's impact through fare
increases and long-term fuel hedging program, the domestic
environment limits the company's ability to increase fares to
cover the full cost of fuel, the statement warned. Delta's
current fuel hedges for 2008 have a value of approximately
US$300 million and cover 25% of its 2008 requirements.
According to the statement, Delta must look to all areas of its
business for cost savings and revenue enhancements. Delta has
now targeted $550 million in productivity initiatives for 2008,
a US$150 million increase over its plan. Every Delta employee
will play a role in achieving productivity goal, the statement
stressed.
The company is also taking a prudent approach to cash outflows
and have identified $200 million in capital expenditures to be
deferred or eliminated, the statement revealed. Delta will sell
mainline and regional aircraft as they are removed from the
schedule. By selling these aircraft, Delta said it can improve
its liquidity and eliminate overhead.
Exploring Strategic Options
The doard of directors and senior management will continue to
explore Delta's strategic options, the statement asserted. As
the company has previously stated, it supports industry
consolidation as a vehicle to ensure Delta remains an industry
leader. The special committee of the board continues to work
with senior leadership team on strategic alternatives, based on
the statement. The board, at its discretion, will act in the
best interest of all Delta stakeholders, Delta assured. While
the rise in fuel and the weakening economy present near-term
challenges, Delta's long-term view remains that consolidation
may be the right course of action.
At the end of the statement, Messrs. Anderson and Bastian
comforted employees by saying that through all of Delta's many
challenges, the employees have shown unquestionable commitment
and unparalleled service.
About Delta Air
Based in Atlanta, Georgia, Delta Air Lines Inc. (NYSE:DAL) --
http://www.delta.com/-- is the world's second-largest airline
in terms of passengers carried and the leading U.S. carrier
across the Atlantic, offering daily flights to 328 destinations
in 56 countries on Delta, Song, Delta Shuttle, the Delta
Connection carriers and its worldwide partners. Delta flies to
Argentina, Australia and the United Kingdom, among others.
The company and 18 affiliates filed for chapter 11 protection on
Sept. 14, 2005 (Bankr. S.D.N.Y. Lead Case No. 05-17923).
Marshall S. Huebner, Esq., at Davis Polk & Wardwell, represents
the Debtors in their restructuring efforts. Timothy R. Coleman
at The Blackstone Group L.P. provides the Debtors with financial
advice. Daniel H. Golden, Esq., and Lisa G. Beckerman, Esq., at
Akin Gump Strauss Hauer & Feld LLP, provide the Official
Committee of Unsecured Creditors with legal advice. John
McKenna, Jr., at Houlihan Lokey Howard & Zukin Capital and James
S. Feltman at Mesirow Financial Consulting, LLC, serve as the
Committee's financial advisors.
The Debtors filed a chapter 11 plan of reorganization and
disclosure statement explaining that plan on Dec. 19, 2007. On
Jan. 19, 2007, they filed revisions to the plan and disclosure
statement, and submitted further revisions to the plan on
Feb. 2, 2007. On Feb. 7, 2007, the Court approved the Debtors'
disclosure statement. In April 25, 2007, the Court confirmed
the Debtors' plan. That plan became effective on
April 30, 2007. The Court entered a final decree closing 17
cases on Sept. 26, 2007. (Delta Air Lines Bankruptcy News,
Issue No. 92; Bankruptcy Creditors' Service, Inc.,
http://bankrupt.com/newsstand/or 215/945-7000)
* * *
As reported in the Troubled Company Reporter-Latin America on
Jan. 18, 2008, Standard and Poor's said that media reports that
Delta Air Lines Inc. (B/Positive/--) entered into merger talks
with UAL Corp. (B/Stable/--) and Northwest Airlines Corp.
(B+/Stable/--) will have no effect on the ratings or outlook on
Delta, but that confirmed merger negotiations would result in
S&P's placing ratings of Delta and other airlines involved on
CreditWatch, most likely with developing or negative
implications.
ESCUELA PANAMERICANA: Claims Verification Deadline is April 25
--------------------------------------------------------------
Roberto Di Martino, the court-appointed trustee for Escuela
Panamericana de Arte S.A.'s bankruptcy proceeding, will be
verifying creditors' proofs of claim until April 25, 2008.
Mr. Di Martino will present the validated claims in court as
individual reports on June 9, 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 Escuela Panamericana 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 Escuela
Panamericana's accounting and banking records will be submitted
in court on Aug. 6, 2008.
Mr. Di Martino is also in charge of administering Escuela
Panamericana's assets under court supervision and will take part
in their disposal to the extent established by law.
The trustee can be reached at:
Roberto Di Martino
Avenida Callao 449
Buenos Aires, Argentina
ESPECTACULOS DEL PILAR: Concludes Reorganization Process
--------------------------------------------------------
Espectaculos del Pilar S.A. has concluded its reorganization
process, according to data released by Infobae on its Web site.
The closure came after the National Commercial Court of First
Instance in Buenos Aires homologated the debt plan signed
between the company and its creditors.
EXPORTACIONES AGROINDUSTRIALES: Concludes Reorganization Process
----------------------------------------------------------------
Exportaciones Agroindustriales Argentinas S.A. has concluded its
reorganization process, according to data released by Infobae on
its Web site. The closure came after the National Commercial
Court of First Instance in Buenos Aires homologated the debt
plan signed between the company and its creditors.
NATIONAL ADVISORS: Trustee to Verify Proofs of Claim Until May 5
----------------------------------------------------------------
Horacio Fernando Crespo, the court-appointed trustee for
National Advisors S.A.'s reorganization proceeding, will be
verifying creditors' proofs of claim until May 5, 2008.
Mr. Crespo will present the validated claims in court as
individual reports on June 18, 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 National Advisors 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 National Advisors'
accounting and banking records will be submitted in court on
Aug. 14, 2008.
Creditors will vote to ratify the completed settlement plan
during the assembly on Feb. 18, 2009.
The trustee can be reached at:
Horacio Fernando Crespo
Maipu 464
Buenos Aires, Argentina
PROTEL SERVICIOS: Seeks Out-of-Court Preventive Agreement
---------------------------------------------------------
The National Commercial Court of First Instance in Buenos Aires
is studying the request for an out-of-court preventive agreement
submitted by Protel Servicios S.A.
Protel Servicios started reorganization after the court approved
its petition.
The debtor can be reached at:
Protel Servicios S.A.
Cordoba 838
Buenos Aires, Argentina
ROYAL & SUN (ARGENTINA): Moody's Holds Global IFS Rating at B2
--------------------------------------------------------------
Moody's Investors Service affirmed the ratings and stable
outlook on the B2 global local-currency insurance financial
strength (IFS) rating and the A1.ar IFS rating on Argentina's
national scale of Royal & Sun Alliance Seguros (Argentina); the
agency has also affirmed the ratings and outlook on the Baa3
global local-currency IFS rating and the Aa1.uy IFS rating on
the Uruguayan national scale of Royal & Sun Alliance Seguros
(Uruguay). Moody's notes that the two insurance companies are
subsidiaries of Royal & Sun Alliance Insurance plc. This rating
and outlook affirmation follows the change in the outlook of
Royal & Sun Alliance Insurance's A3 IFS rating to positive
from stable announced on Feb. 29, 2008.
The rating agency explained that although the ratings of the two
subsidiaries in Latin America include some implicit support from
their ownership and affiliation with the larger Royal & Sun
Alliance group, the ratings primarily reflect the stand-alone
credit profile of the companies. Moody's added that the ratings
of the two subsidiaries are not directly linked to the parent
company, Royal & Sun Alliance Insurance Group Plc's rating as
there is no explicit support from the parent, whose policy is
not to provide guarantees to its subsidiaries. The ratings of
these two companies reflect that they conduct their operations
in countries with operating environments that are much weaker
than those of Europe; moreover, the two subsidiaries have
investment concentrations in speculative grade assets and highly
volatile profitability. These rating factors exert more
influence on their ratings than the positive financial strength
trend of their parent company, according to Moody's.
Based in Montevideo, Uruguay, Royal & Sun Alliance Seguros
(Uruguay), reported a net profit of UYU10.1 million during 2007
fiscal year ended Dec. 31, 2007. Total assets amounted to
UYU850.5 million and shareholders' equity was reported at
UYU358.6 million.
Based in Buenos Aires, Argentina, Royal & Sun Alliance Seguros
(Argentina) reported a net loss of ARS12.4 million during the
first half of the 2007/2008 fiscal year ended Dec. 31 2007.
This was the result of underwriting losses of ARS11.3 million
coupled with a negative financial result of ARS1.1 million.
Total reported assets amounted to ARS357.6 million, and
shareholders' equity reached approximately ARS60 million at
Dec. 31, 2007.
SCO GROUP: Bankruptcy Court Sets April 21 as Claims Bar Date
------------------------------------------------------------
The United States Bankruptcy Court for the District of Delaware
established April 21, 2008, as deadline for creditors of The SCO
Group Inc. and its debtor-affiliates to file proofs of claim.
All entities, including governmental units, which assert any
prepetition claims against the Debtors, must deliver proofs of
claim with Epiq Bankruptcy Solutions, LLC, the claims, noticing
and balloting agent of these Chapter 11 cases.
Original proofs of claims must submitted no later than 4:00
p.m., Eastern Time, at:
The SCO Group Inc.
c/o Epiq Bankruptcy Solutions LLC
FDR Station
P.O. Box 5012
New York, NY 10150-5012
Headquartered in Lindon, Utah, The SCO Group Inc. (Nasdaq: SCOX)
fka Caldera International Inc. -- http://www.sco.com/--
provides software technology for distributed, embedded and
network-based systems, offering SCO OpenServer for small to
medium business and UnixWare for enterprise applications and
digital network services.
The company has office locations in Australia, Austria,
Argentina, Brazil, China, Japan, Poland, Russia, the United
Kingdom, among others.
The company and its affiliate, SCO Operations Inc., filed for
Chapter 11 protection on Sept. 14, 2007, (Bankr. D. Del. Lead
Case No. 07-11337). Epiq Bankruptcy Solutions, LLC, acts as the
Debtors' claims and noticing agent. The United States Trustee
failed to form an Official Committee of Unsecured Creditors in
these cases due to insufficient response from creditors. The
Debtors' exclusive period to file a chapter 11 plan expires on
March 12, 2008. The Debtors' schedules of assets and
liabilities showed total assets of US$9,549,519 and total
liabilities of US$3,018,489. The Debtors’ exclusive period to
file a Chapter 11 plan expires on May 11, 2008.
* ARGENTINA: 2008 Provincial Finances May Deteriorate, S&P Says
---------------------------------------------------------------
While the Republic of Argentina (B+/Stable/B sovereign credit
ratings) has not issued new bonds in the international capital
markets since it cured its default in 2005, two of its
provinces, Buenos Aires and Neuquen, together raised US$1.125
billion over the last one and one half years. Will other
provinces follow suit? Standard & Poor's Ratings Services
estimates that an additional US$1 billion could be issued by
provincial governments in international markets in 2008.
This commentary reviews the fiscal performances of Argentina's
provinces in the wake of the 2001 crisis, highlights how the
institutional relationship between the central government and
the provinces has changed, and explains current restrictions on
the provinces' fiscal and financial autonomy. The purpose is
twofold: to evaluate the potential impact of provincial
developments on Argentina's consolidated fiscal health, and to
assess the likelihood that the provinces will increase their
participation in global capital markets.
Continuing deterioration of provincial fiscal outlooks is
expected over the medium term, driven by a sustained increase in
salaries that weighs more heavily on provincial budgets than on
that of the republic. However, fiscal implications at the
consolidated level in Argentina are still not material, given
still-low provincial deficits and the more solid fiscal position
expected at the central government level. Nonetheless,
increasing fiscal strain at the provincial level, in particular
in the Province of Buenos Aires, will represent a greater
challenge in the political than the fiscal arena and could
result in new conflicts between some provinces and the central
government in the future. While these issues are of no great
concern over the short term, given the ability of the central
government to "bridge the conflict" by transferring
discretionary funds to the provinces, the risk will certainly
increase in proportion to the provincial fiscal imbalance.
How The Intergovernmental System Changed After The Crisis
While there is consensus among analysts on the structural
weakness of provincial finances in Argentina, there is no
consensus on the role this fragility played in the development
of the crisis that exploded in 2001. More important, however,
there has been no substantial debate at the political level over
how to strengthen provincial finances over the medium to long
term. Discussions about reforming the system that regulates
intergovernmental issues in Argentina are not part of the
political debate underway in the country today. The political
cost of dealing with this issue is high. Nonetheless, the 2001-
2002 crisis reconfigured the economic and fiscal structure of
the provinces in various ways.
First, in a purely fiscal move that proved negative to
provincial finances, the central government's post-crisis tax
structure introduced two new taxes -— export duty and the
financial transaction tax -— the revenue from which, unlike for
most taxes in Argentina, is not transferable to the provinces.
Therefore, provincial governments cannot count upon additional
fiscal revenue from these new taxes, which in 2007 accounted for
17.8% of total central government revenue and 4.4% of the
country's GDP. This is one of the factors supporting a stronger
fiscal performance at the national than at the provincial level.
Second, there was a major modification to the provincial debt
structure. Before the crisis, most of the debt was held by the
private sector. Domestic and international bonds and commercial
loans accounted for about 70% of provincial indebtedness in
2000. The federal government assumed a material portion of
provincial debt at the end of 2001, thereby becoming the
provinces' most important creditor; it now holds 68% of
provincial debt.
The combination of these two factors -— a central government
with stronger fiscal results that is also the provinces' major
creditor —- modified the distribution of power between the
central government and the provinces. It gave more discretion
to the former in intervening in the policy decisionmaking of the
latter. Provincial fiscal and financial autonomy was therefore
restricted, making it easier for the central government to exert
some control on provincial fiscal performance.
The financial assistance provided by the central government to
the provinces since 2002 therefore enabled it to impose
restrictions that were impossible to implement in the 1990s.
The most important among them was to constrain the issuance of
new debt. Unless in compliance with preset fiscal and debt
targets prescribed by both the Fiscal Responsibility Law, signed
in 2004, and bilateral agreements signed each year between the
central government and the provinces (Programas de Asistencia
Financiera), provincial governments cannot issue new debt.
Although this restriction still has to gain credibility, its
mere existence provides the central government with a new
instrument for managing the provincial debt problem. Both the
Fiscal Responsibility Law and Programas de Asistencia Financiera
introduced important tools for dealing with provincial finances.
However, as with numerous economic legislation implemented in
Argentina in the past (e.g., the Convertibility Law and other
laws that protect depositors), its strength will only gain
credibility once tested. In addition, the original law already
incorporated some contradictions to other current legislation in
Argentina (e.g., the Federal Education Law, which obliges
provinces to increase expenditure on education at a pace that
make it impossible to comply with the Fiscal Responsibility Law
limit on nominal expenditure growth).
However, the most relevant aspect of the intergovernmental
relationship -— namely, the formal system that regulates the
relationship between different levels of governments in
Argentina, the now internationally famous coparticipation
regime -— did not change after the crisis. The system must be
modernized to fulfill the two basic objectives that any system
of this type requires: first, distributing funds according to a
criteria of efficiency (e.g., transferring more resources to the
entities that do a better job collecting their own), and second,
achieving criteria of equality (e.g., compensating relatively
poorer provinces). The current system has been unsuccessful in
meeting these two requirements. However, the political process
necessary to reform the system requires that the coparticipation
law be approved by each single provincial government and
legislature in Argentina, making the process extremely risky for
all political leaders and politically impossible to pass. This
old intrinsic problem of getting a new law passed is what
actually led negotiators to pass a temporary (Coparticipation
Law) instead of a permanent law back in 1988. Nonetheless,
despite all the structural problems in Argentina's
intergovernmental relations, the coparticipation system does not
compare that unfavorably to other systems in Latin America and
clearly does not preclude the provinces from doing a better job
in taking care of their own finances.
How Provincial Finances Are Faring
Provincial fiscal performance in Argentina, unlike that of the
republic, depends to a large degree on the level of real
salaries in the economy. Therefore, fiscal performance after
the crisis could be split into two periods: before and after
2005. Before 2005, uncertainty about the strength of the
recovery matched the still-prevalent sense of fragility among
the population in the wake of the economy's extraordinary
meltdown and its social costs, precluding major claims on salary
increases. The rapid increase in economic activity beginning in
2003, combined with increasing inflation, contributed to
correcting the fiscal performance through the revenue part of
the provincial budget. The beginning of the electoral cycle,
starting with congressional elections in October 2005, changed
this scenario. Negotiations for salary increases across all
sectors grew as a significant credit factor as the country moved
closer toward the 2007 presidential elections, and is probably
the most significant credit factor evolving today for both the
provinces, because of its direct impact on their finances and
the federal government, because of the direct impact on
inflation.
Payroll expenses represent about 50% of the provinces'
consolidated budgets and only 12% of the central government's.
Similar salary increases will affect the provinces' budgets
proportionally much more than that of the central government.
This structural difference is explained by the fact that most
educational and health expenses were transferred to the
provinces in 1992 and 1993. Therefore, as happened clearly
throughout 2007, salary increases are announced at the central
level but paid and suffered fiscally at the provincial level.
This is another sign of how vulnerable and fragile the provinces
remain to decisions made in the capital of Argentina, despite
the preponderant federal structure the country has on paper. As
mentioned below, this vulnerability remains as one of the key
credit weaknesses in provincial governments, in particular in
the Province of Buenos Aires, which will remain dependent upon
whatever the central government decides to transfer as
discretionary revenue.
The recovery peaked in 2004 and, while the economy continues to
grow strongly, pressures for significant salary increases began
affecting provincial performance in 2005. Although the
provinces continued to run primary surpluses until 2007, there
has been a deteriorating trend since 2005 despite the country's
high economic growth rates. Pressures grew in 2007 and in the
beginning of 2008, due to high inflation that intensified claims
for salary increases.
The fiscal surplus provincial governments exhibited until 2006
was replaced in 2007 by a small deficit estimated ARS100 million
(US$32 million; estimate from Economia y Regiones, official
figures not yet available). However, the fiscal stance is not
similar across all Argentine provinces. The Province and City
of Buenos Aires—the country's two largest entities—showed
significant fiscal deficits in 2007 (ARS1.3 billion and ARS300
million, respectively) that were partially offset by the rest of
the provinces. Not surprisingly, their payroll expenses are the
highest of all Argentine provinces in terms of their budgets.
The good news is that the provincial deficit is still
insignificant in terms of GDP (about 0.1%). However, the
deficit occurred at the peak of the cycle and S&P expects
Argentina's GDP to slow in the future. S&P therefore expects
balances to deteriorate rather than improve in the medium term.
Economía y Regiones projects a deficit of ARS1.8 billion for
2008, which, although growing, represents only about 0.2% of
GDP. Therefore, over the short to medium term, the problem
seems more political than fiscal. The provinces by themselves
will not damage Argentina's fiscal stance as long as the central
government performs well, but the provincial deterioration is
expected to increase—adding political noise to the country's
always-challenging governability.
Prospects For New Bond Issuance
While the large provinces may issue more bonds, others provinces
will be financed by the central government.
Assuming increasing salary pressures in some cases and higher
requirements of funds for investment in infrastructure in
others, it is pretty clear that the provinces will need
financing. Nonetheless, only a few of Argentina's 23 provinces
and the City of Buenos Aires are expected to tap international
capital markets over the near term. However, since the larger
provinces may be issuing debt, the total amount could be
relatively high. S&P estimates total capital debt issuance by
Argentine provinces at US$1 billion.
Several factors explain why only few provinces are expected to
issue bonds. First, and despite the substantial decline in
provincial debt levels compared to revenue, most of the
provinces still have high level of indebtedness. Therefore,
most of them will be denied access to borrowing unless they
reduce their debt ratios dramatically, something that is not
expected to happen any time soon. Most of the provinces
currently have debt levels that surpass the size of their
respective budgets, and debt services above or approaching 15%
of revenue.
More importantly, the central government, their major creditor,
is expected to continue to refinance their debt -— and with
that, to continue to have a say in the provinces internal
policymaking process.
However, not all provincial debt was restructured with the
central government in 2001. International capital market bonds
continued to represent about 17% of the provinces' total debt in
2007, similar to its level before the crisis. Most of the
US$5.15 billion of bonds outstanding at year-end 2007
corresponded to international bonds issued by only five entities
(all rated by S&P): the provinces of Buenos Aires (eight
international issues outstanding), Mendoza (1), Neuquen (2), and
Salta (1), and the autonomous City of Buenos Aires (4).
One interesting perspective is that economic and fiscal
distribution across Argentina's provinces is so unequal that
the Province and City of Buenos Aires account together for about
60% of the country's GDP, 46% of the country's population, and
36% of the consolidated provincial budget. Having said that,
potential bond issuances by the Province of Buenos Aires (with a
budget estimated at US$10.4 billion in 2008) or the City of
Buenos Aires (estimated at US$3.7 billion), could be as
attractive for institutional investors as some sovereign issuers
in South America, such as the Republic of Ecuador (with a
government budget of US$8.4 billion) or the Oriental Republic of
Uruguay (US$7 billion).
Larger provinces have sophisticated debt management systems that
allow them to manage relatively large levels of capital market
debt appropriately. In addition, several provinces restructured
their international bonds after the crisis, offering better
terms than the sovereign in the hope this would help provide
access to international markets. It is worth mentioning that,
unlike the sovereign, there is no "holdout" problem at the
provincial level. International debt restructurings carried on
by the Province and City of Buenos and the Province of Mendoza
all were very well received and reached high levels of
acceptance. In addition, at a time when exotic issuers were
becoming fashionable, these provinces could easily attract
substantial interest from institutional investors.
Among other governments, S&P expects both the Province and City
of Buenos Aires to issue new international bonds over the next
three to six months as new administrations now are in office --
the terms began on Dec. 10, 2007, for most entities -- and as
long as reasonable international conditions return to the
markets.
The Outlook For 2008 And Beyond
Provincial finances are expected to continue to deteriorate
through 2008. The macroeconomic relevance of any deficits is
not material. However, any continuing deterioration in the
provinces or a material increase in the Province of Buenos
Aires' deficit would be focus of increasing attention for
political rather than fiscal considerations.
While the provinces are not expected to become a source of
fiscal instability over the medium term, the quality of
provincial performance will still depend upon the central
government. This is because most of the key issues governing
provincial finances are still under its control, including the
source of funds to cover financing needs through mechanisms such
as the Programas de Asistencia Financiera and the possibility of
renegotiating the terms of provincial debt restructured at the
end of 2001, which bear costly for the provinces indexation to
inflation. In addition, as the tax structure continues to
benefit the sovereign more than the subnational governments, the
division of power will continue to favor a relatively strong
fiscal position at the central level and a slowly deteriorating
position for the provinces, increasing the central authority's
leverage in determining the luck and health of provincial
finances. In a few words: bad but not dangerous.
=============
B A H A M A S
=============
HARRAH'S ENTERTAINMENT: Reports US$47.8MM Net Loss in 4th Qtr.
--------------------------------------------------------------
Harrah's Entertainment Inc. reported a fourth-quarter net loss
of US$47.8 million, compared with net income of US$47.6 million
in the 2006 fourth quarter. On a GAAP basis, fourth-quarter
income from operations was US$145.8 million, compared with
US$229.7 million in the year-ago quarter.
The fourth-quarter 2007 loss was due to impairment charges of
US$169.6 million recorded in the period for certain intangible
assets.
On Jan. 28, 2008, Harrah's Entertainment was acquired by
affiliates of Apollo Global Management, LLC and TPG Capital, LP
in a transaction valued at US$29.7 billion, including assumption
of US$12.4 billion of debt but excluding transaction costs.
Harrah's stockholders received US$90 cash for each share of
common stock, or a total of US$17.3 billion.
Harrah's Entertainment, Inc. -- http://www.harrahs.com-- is the
world's largest provider of branded casino entertainment. Since
its beginning in Reno, Nevada, more than 70 years ago, Harrah's
has grown through development of new properties, expansions and
acquisitions, and now owns or manages casinos on four
continents. The company's properties operate primarily under the
Harrah's, Caesars and Horseshoe brand names; Harrah's also owns
the London Clubs International family of casinos and the World
Series of Poker. The company has operations in Bahamas.
* * *
As reported in the Troubled Company Reporter-Latin America on
Jan. 21, 2008, Standard & Poor's Ratings Services lowered its
ratings on Harrah's Entertainment Inc. and its wholly owned
subsidiary, Harrah's Operating Co. Inc. The corporate credit
rating on each entity was lowered to 'B+' from 'BB'. In
addition, S&P's senior unsecured and subordinated debt ratings
on approximately US$4.6 billion of existing notes, which will be
rolled over as part of the leveraged buyout, were both lowered
to 'B-', from 'BB' and 'B+'. The ratings were removed from
CreditWatch, where they were placed with negative implications
on Oct. 2, 2006. The rating outlook is stable.
=============
B O L I V I A
=============
COEUR D'ALENE: Underwriters to Exercise Option for Senior Notes
---------------------------------------------------------------
Coeur d'Alene Mines Corporation related that the underwriters
have elected to exercise their over-allotment option in full,
increasing the aggregate principal amount of 3.25% Senior
Convertible Notes due 2028 from US$200 million to
US$230 million.
The Company has filed a final prospectus supplement with U.S.
the Securities and Exchange Commission relating to the public
offering of the convertible
senior notes. Copies of this final prospectus supplement may be
obtained from:
Deutsche Bank Securities Inc.
Prospectus Department
100 Plaza One
Jersey City, NJ 07311-3901
Tel: 1-800-503-4611
About Coeur d'Alene
Coeur d'Alene Mines Corp. (NYSE:CDE) (TSX:CDM) --
http://www.coeur.com/-- is the world's largest primary silver
producer, as well as a significant, low-cost producer of gold.
The company has mining interests in Nevada, Idaho, Alaska,
Argentina, Chile, Bolivia and Australia.
* * *
Coeur d'Alene Mines Corp.'s US$180 Million notes due
Jan. 15, 2024, carry Standard & Poor's Ratings Services B-
rating.
INTERNATIONAL PAPER: Analysts Downgrade Firm's Shares to Neutral
----------------------------------------------------------------
Analysts have downgraded International Paper Co.'s shares to
“neutral,” Newratings.com reports.
Newratings.com relates that JP Morgan analysts have downgraded
International Paper's shares to "neutral" from "overweight,"
while DA Davidson analysts have downgraded the firm's shares to
"neutral" from "buy."
JP Morgan has decreased the target price for International
Paper's shares to US$33 from US$42, Newratings.com states.
Headquartered in Stamford, Connecticut, International Paper Co.
(NYSE: IP) -- http://www.internationalpaper.com/-- is an
uncoated paper and packaging company with primary markets and
manufacturing operations in North America, Europe, Russia, Latin
America, Asia and North Africa. International Paper employs
approximately 54,000 people in more than 20 countries, and
serves customers worldwide. Its South American operations
include, among others, facilities in Argentina, Brazil, Bolivia,
and Venezuela.
* * *
Moody's Investors Service placed International Paper Co.'s
senior subordinate rating at 'Ba1' in December 2005. The rating
still holds to date with a stable outlook.
===========
B R A Z I L
===========
ABITIBIBOWATER INC: Moody's Junks Corporate Family Ratings
----------------------------------------------------------
Moody's Investors Service downgraded the corporate family
ratings of AbitibiBowater Inc.'s subsidiaries Abitibi-
Consolidated Inc. and Bowater Incorporated to Caa1 from B2.
The rating action results from AbitibiBowater's deteriorating
liquidity profile, the anticipated challenges associated with
the company's recently announced US$1.4 billion refinancing plan
and weakened credit protection measures. At the same time,
Moody's downgraded the probability-of-default rating of Abitibi
to Caa3 from B2 and the probability-of-default rating of Bowater
to Caa1 from B2. Moody's assigned a B1 rating to the new US$415
million secured notes due 2011 at Abitibi and downgraded the
senior unsecured ratings for bonds and debentures issued by
Abitibi and Bowater to Caa2 from B3. In addition, Abitibi's and
Bowater's speculative grade liquidity ratings were downgraded to
SGL-4 and SGL-3 respectively from SGL-2. The rating outlooks
for Abitibi and Bowater are negative.
The ratings of Abitibi reflect the company's weakened liquidity
profile and the anticipated challenges of completing the
company's recently announced exchange offer whereby the company
has offered to exchange the 6.95% notes of Abitibi due
April 1, 2008, the 5.25% Notes of Abitibi-Consolidated Company
of Canada due June 20, 2008, and the 7.875% notes of Abitibi due
Aug. 1, 2009 (the affected notes) in a private placement for a
combination of cash and new 15% notes due 2010 to be issued by
Abitibi-Consolidated Company of Canada. Moody's considers the
exchange offer to be occurring under distressed circumstances
and upon the completion of the exchange, would downgrade
Abitibi's probability-of-default rating on the affected notes to
LD from Caa3 reflecting a limited default.
The ratings of Abitibi and Bowater also reflect their weak
operating performance, negative free cash flow and high debt
levels from past debt-financed acquisitions. The ratings
incorporate declining demand for newsprint, deteriorating
markets for their sawmill operations, rising input costs
(especially in eastern Canada), the strong Canadian dollar, and
a weakened liquidity profile. Positive factors that support the
ratings include AbitibiBowater's large scale as the largest
newsprint producer in the world, which provides flexibility to
reduce costs, the potential to realize a large portion of the
US$375 million of identified synergies, and cost-competitive
operations. It is noted that even as newsprint consumption
continues to decline in 2008 owing to rising substitution by
electronic media and the slowing US economy, the newsprint
capacity reductions by AbitibiBowater and its competitors should
provide support to the price increases implemented in the first
quarter of 2008. Some improvement in cash flow generation
should be observed as the effects of price increases work their
way through the company's results.
The speculative grade liquidity ratings for Abitibi and Bowater
result from minimal availability under each company's respective
credit facilities, and expectations that cash flow will be
slightly negative to neutral over the next four quarter SGL time
horizon. The weaker SGL rating for Abitibi reflects the
scheduled debt maturity of US$346 million in the next quarter
and the limited cash and credit availability of approximately
US$100 million. The SGL ratings also incorporate the
expectation that financial covenant compliance may become a
problem should the company prove unsuccessful in extending an
expiring waiver or financial performance fails to improve
materially in the next few quarters. Moody's believes that
AbitibiBowater has some alternative liquidity potential with the
ability to sell certain non-core assets including the company's
hydro assets, timberlands and operating assets in the UK and
South Korea. In addition, the company expects to receive
approximately US$160 million in cash proceeds in the second
quarter of this year from the recent sale of the Snowflake,
Arizona newsprint mill to Catalyst Paper Corporation.
The negative outlook reflects the potential for further downward
ratings adjustment should the refinancing plan fail to be
completed in the amounts and in the timeframe required to
address Abitibi's debt maturities. The negative rating outlook
also reflects expectations that AbitibiBowater's liquidity
profile will be at risk should declining newsprint demand, the
strong Canadian dollar and rising input costs offset the
expected improved financial results from the newsprint price
increases implemented since November 2007.
Downgrades:
Issuer: Abitibi-Consolidated Company of Canada
-- Senior Unsecured Regular Bond/Debenture, Downgraded
to Caa2, LGD4-62% from B3, LGD4-57%
-- Senior Unsecured Shelf, Downgraded to (P)Caa2 from (P)B3
Issuer: Abitibi-Consolidated Finance L.P.
-- Multiple Seniority Shelf, Downgraded to (P)Caa2
from (P)B3
-- Senior Unsecured Regular Bond/Debenture, Downgraded
to Caa2, LGD4-62% from B3, LGD4-57%
Issuer: Abitibi-Consolidated Inc.
-- Probability of Default Rating, Downgraded to Caa3
from B2
-- Speculative Grade Liquidity Rating, Downgraded to SGL-4
from SGL-2
-- Corporate Family Rating, Downgraded to Caa1 from B2
-- Multiple Seniority Shelf, Downgraded to (P)Caa2
from (P)B3
-- Senior Unsecured Regular Bond/Debenture, Downgraded
to Caa2, LGD 4-62% from B3, LGD4-57%
Issuer: Bowater Canada Finance Corp.
-- Senior Unsecured Regular Bond/Debenture, Downgraded
to Caa2, LGD4-61% from B3, LGD4-60%
Issuer: Bowater Incorporated
-- Probability of Default Rating, Downgraded to Caa1
from B2
-- Speculative Grade Liquidity Rating, Downgraded to SGL-3
from SGL-2
-- Corporate Family Rating, Downgraded to Caa1 from B2
-- Senior Unsecured Regular Bond/Debenture, Downgraded
to Caa2, LGD4-61% from B3, LGD4-60%
Issuer: Maine Finance Authority
-- Senior Unsecured Revenue Bonds, Downgraded to Caa2,
LGD4-61% from B3, LGD4-60%
Issuer: McMinn (County of) TN, I.D.B.
-- Senior Unsecured Revenue Bonds, Downgraded to Caa2,
LGD4-61% from B3,LGD4-60%
Issuer: York (County of) SC
-- Senior Unsecured Revenue Bonds, Downgraded to Caa2,
LGD4-61% from B3,LGD4-60%
Assignments:
Issuer: Abitibi-Consolidated Company of Canada
-- Senior Secured Regular Bond/Debenture, Assigned B1,
LGD1-08%
Outlook Actions:
Issuer: Abitibi-Consolidated Company of Canada
-- Outlook, Changed To Negative From Developing
Issuer: Abitibi-Consolidated Finance L.P.
-- Outlook, Changed To Negative From Developing
Issuer: Abitibi-Consolidated Inc.
-- Outlook, Changed To Negative From Developing
Issuer: Bowater Canada Finance Corp.
-- Outlook, Changed To Negative From Developing
Issuer: Bowater Incorporated
-- Outlook, Changed To Negative From Developing
Headquartered in Montreal, Quubec, with a regional office in
Greenville, South Carolina, AbitibiBowater is North America's
leader in newsprint and commercial printing papers. The company
also produces lumber and market pulp. The company was formed
from the merger of Abitibi and Bowater in October 2007.
AbitibiBowater owns or operates 27 paper and pulp facilities
(excluding the Snowflake, Arizona newsprint mill) and 35 wood
products facilities located in the United States, Canada, Brazil
the United Kingdom and South Korea.
AES CORP: May Acquire Banco Nacional's Stake in Brasiliana
----------------------------------------------------------
AES Corp. is eyeing Banco Nacional de Desenvolvimento Economico
e Social SA's 49.99% stake in Brasiliana, Business News Americas
reports.
AES' Vice President and Chief Operating Officer Andres Gluski
said in a Web cast that Banco Nacional will likely sell the
asset in June, BNamericas notes.
Mr. Gluski told BNamericas, "We have the first right of refusal,
we're keeping our options open and have a local line of credit
in place."
According to BNamericas, AES owns the remaining stake in
Brasiliana, which controls power companies AES Eletropaulo, AES
Tiete, AES Sul and AES Uruguaiana.
If AES doesn't claim the stake in Brasiliana, companies like
Light, Tractebel Energia, Cemig and CPFL Energia are interested
in bidding for it, BNamericas states.
AES Corp. -- http://www.aes.com/-- is a global power company.
The company operates in South America, Europe, Africa, Asia and
the Caribbean countries. Specifically, it has operations
in India. Generating 44,000 megawatts of electricity through
124 power facilities, the company delivers electricity through
15 distribution companies.
The company has Latin America operations in Argentina, Brazil,
Chile, Dominican Republic, El Salvador and Panama.
* * *
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 carried Fitch
Ratings' 'BB/RR1' rating on US$500 million issue of senior
unsecured notes due 2017.
BANCO NACIONAL: AES Corp May Buy Firm's Stake in Brasiliana
-----------------------------------------------------------
AES Corp. is considering the purchase of Banco Nacional de
Desenvolvimento Economico e Social SA's 49.99% stake in
Brasiliana, Business News Americas reports.
AES' Vice President and Chief Operating Officer Andres Gluski
said in a Web cast that Banco Nacional will likely sell the
asset in June, BNamericas notes.
Mr. Gluski told BNamericas, "We have the first right of refusal,
we're keeping our options open and have a local line of credit
in place."
According to BNamericas, AES owns the remaining stake in
Brasiliana, which controls power companies AES Eletropaulo, AES
Tiete, AES Sul and AES Uruguaiana.
If AES doesn't claim the stake in Brasiliana, companies like
Light, Tractebel Energia, Cemig and CPFL Energia are interested
in bidding for it, BNamericas states.
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: Okays BRL10MM Financing for Hospital Expansion
--------------------------------------------------------------
Banco Nacional de Desenvolvimento Economico e Social’s
president, Luciano Coutinho, signed on March 14, a financing
contract of BRL10 million to Irmandade do Senhor Jesus dos
Passos, supporter of Hospital de Caridade, located in the city
of Florianopolis (State of Santa Catarina). This BNDES
financing corresponds to 51% of the total project amount
BRL19.7 million. The resources will be transferred by Banco
Regional de Desenvolvimento do Extremo Sul [Regional Development
Bank of the Deep South] BRDE.
The financing is destined to the construction of a new surgical
and support services center to the Intensive Care Unit and to
the Intensive Coronary Care Unit, each with 20 hospital beds,
within a total area of 7.4 thousand square meters. The new
building, which will make up a new intensive assistance block
of Hospital de Caridade, will have six floors, besides a
helicopter pad on the roof. The project also provides the
acquisition of national equipment and furniture and utensils.
The new unit will enable the expansion of the hospital’s
assistance capacity, in a way to make up for the deficit of
approximately 300 beds in the metropolitan region of
Florianopolis.
The entire architectonic project was developed and coordinated
by the State Government of Santa Catarina, through the
Edifications and Hydraulic Construction Board, entailed to the
State Infrastructure Department of the State Infrastructure
Office.
Irmandade do Senhor Jesus dos Passos is an association providing
hospital assistance activities, with effects of a mid-size
company. Hospital de Caridade, founded in 1765, is supported by
Irmandade do Senhor Jesus dos Passos. It provides medical and
hospital services within almost all specialty areas, assisting
the population of the entire State of Santa Catarina.
The hospital is reference in high complexity surgery, including
heart surgery, brain surgery, vascular surgery, digestive system
surgery, video-surgeries in several medical specialties and
organ transplant.
In order to assist this wide gamut of procedures, the hospital
counts on 14 hospitalization sectors, including a high
complexity ICU and a coronary unit.
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: Okays BRL6.6 Billion in Loans for Power Sector
--------------------------------------------------------------
Banco Nacional de Desenvolvimento Economico e Social's loans to
the power sector increased 109% to BRL6.6 billion in the 12
months ended February 2008, compared to the 12 months ended
February 2007, Business News Americas reports.
Banco Nacional told BNamericas that it authorized some
BRL13.4 billion in loans between March 2007 and February 2008
for the power sector.
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: Two Firms Unsure of Bidding for Company
-------------------------------------------------------------
Energias do Brasil and Tractebel Energia haven't decided on
whether to bid for a stake in Companhia Energetica de Sao Paulo,
Business News Americas reports.
As reported in the Troubled Company Reporter-Latin America on
March 13, 2008, Energias do Brasil registered as a bidder in the
March 26 auction of a controlling stake in Companhia Energetica.
Other bidders in the auction include Alcoa, Neoenergia, and CPFL
Energia. Interested parties who failed to register can still
compete in the auction by partnering with one of the five
registered firms.
BNamericas relates that “one risk is whether Companhia
Energetica can renew concessions at some of its hydro plants.”
"We are trying to understand how this works legally and how it
impacts the price we are willing to pay for the company,"
Energias do Brasil's Investor Relations Executive Flavia Heller
told BNamericas.
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.
COMPANHIA PARANAENSE: Net Income Rises to BRL1,107 Mil. in 2007
---------------------------------------------------------------
Companhia Paranaense de Energia aka. Copel reported its results
of 2007. All figures included in this report are in Reais and
were prepared in accordance with Brazilian GAAP (corporate law
method).
The company's consolidated financial statements present, in
addition to the figures of the wholly-owned subsidiaries (Copel
Geracao e Transmissao, Copel Distribuicao, Copel
Telecomunicacoes and Copel Participacoes), those of Compagas,
Elejor, UEG Araucaria and Centrais Eolicas do Parana (companies
in which Copel retains a majority stake).
Net operating revenues for 2007 were BRL5,422 million, an
increase of 10.9% compared to 2006. In the fourth quarter of
2007, net operating revenues were BRL1,434 million.
Operating income for 2007 is BRL1,629 million. In the 2007
fourth quarter, operating income was BRL437 million.
Year-to-date Net income was BRL1,107 million. Net income in
fourth quarter 2007 alone was BRL312 million.
EBITDA (earnings before interest, taxes, depreciation and
amortization) was BRL2,029 million in 2007. In the fourth
quarter 2007, EBITDA was BRL518 million. The return on net
equity was 15.3%.
Total power consumption billed by the company in 2007 rose 6.8%
over the figure for the same period last year.
During 2007, the company's shares appreciated at these rates:
CPLE3 (common/Bovespa) = 37.2%
CPLE6 (preferred B/Bovespa) = 7.2%
ELP (ADR/NYSE) = 29.5%
XCOP (preferred B/Latibex) = 18.3%
Headquartered in Parana, Brazil, COPEL aka Companhia Paranaense
de Energia SA -- http://www.copel.com/ir-- (NYSE: ELP/LATIBEX:
XCOP/BOVESPA: CPLE3, CPLE5, CPLE6) transmits and distributes
electricity to more than 3 million customers in the state of
Parana and has a generating capacity of nearly 4,600 megawatts,
primarily from hydroelectric plants. COPEL also offers
telecommunications, natural gas, engineering, and water and
sanitation services. The company restructured its utility
operations in 2001 into separate generation, transmission, and
distribution subsidiaries to prepare for full privatization,
which has been indefinitely postponed. In response, Copel is
re-evaluating its corporate structure. The government of Parana
controls about 59% of Copel.
* * *
As reported in the Troubled Company Reporter-Latin America on
Dec. 13, 2006, Moody's America Latina upgraded the corporate
family rating of Companhia Paranaense de Energia aka Copel to
Ba2 from Ba3 on its global scale. Moody's also upgraded its
rating on the company's BRL500 million senior unsecured
guaranteed debentures due 2007 to Ba2 from Ba3 (Global Local
Currency) as well as its rating on the BRL400 million senior
secured Guaranteed debentures due 2009 to Ba1 from Ba2 (Global
Local Currency). Moody's said the rating outlook is stable.
This rating action concludes the review process initiated on
July 26, 2006, and still hold to date.
DELPHI CORP: Completes Rights Offering for 62,707,305 Shares
------------------------------------------------------------
Delphi Corp.'s registration statement regarding subscription
rights and warrants to purchase shares of common stock in
Reorganized Delphi became effective on March 11, 2008.
Prior to the Effective Date of its confirmed Plan of
Reorganization, Delphi will initiate a sale and offer of
subscription rights to purchase up to 62,707,305 of Reorganized
Delphi common stock.
After the Effective Date of the Plan, Reorganized Delphi will
sell warrants to purchase up to 15,384,616 shares of the
company's common stock. The warrants are immediately
exercisable from and after the date of issuance until the six-
month anniversary of the date of issuance.
A full-text copy of Delphi's Registration Statement filed with
the U.S. Securities and Exchange Commission is available at:
http://ResearchArchives.com/t/s?2944
Rights Offering
The Rights Offering is comprised of a Par Rights Offering and a
Discount Rights Offering.
Under the Par Rights Offering, each holder of Delphi common
stock will receive, for each 26 shares of common stock owned of
record at 5:00 p.m., New York City time, on Jan. 17, 2008, one
nontransferable right to purchase one share of Reorganized
Delphi common stock for US$59.61 in cash. Fractional par rights
will not be issued.
Under the Discount Rights Offering, holders of allowed General
Unsecured Claims, Section 510(b) Note Claims, Section 510(b)
Equity Claims, or Section 510(b) ERISA Claims, as those claims
are defined in the Plan, will receive, for each US$99.07 of
their claim, one transferable right to purchase one share of
Reorganized Delphi common stock for US$38.39 in cash.
To the extent that Delphi's provisional claim allowance or
estimation results in a particular claimholder receiving more
discount rights than what the claimholder should have received
based on the ultimate allowed amount of its claim, and those
excess discount rights are transferred or exercised, Delphi, in
its sole discretion:
(a) will withhold an amount of Reorganized Delphi common
stock equal to the value of the Excess Discount Rights
from the Overpaid Eligible Holder's ultimate
distribution; or
(b) require the Overpaid Eligible Holder to return the value
of the Excess Discount Rights.
To the extent Delphi's provisional claim allowance or estimation
results in a particular claimholder receiving fewer discount
rights than it should have received based on the ultimate
allowed amount of its claim, no subsequent adjustment will be
made in respect of the claimholder's Claim.
Each discount right entitles a claimholder who fully exercise
its basic subscription privilege to subscribe, prior to the
expiration date of the Discount Rights Offering, for additional
shares of Reorganized Delphi common stock at an exercise price
of US$38.64 per full share. If an insufficient number of shares
are available to fully satisfy Oversubscription Privilege
requests, the available shares, if any, will be allocated pro
rata among the applicants. If there is a pro rata allocation of
the remaining shares and an applicant receives an larger
allocation than it subscribed for under its Oversubscription
Privilege, Reorganized Delphi will issue the number of shares
subscribed and allocate the remaining shares pro rata among the
remaining applicants.
There is no Oversubscription Privilege in the Par Rights
Offering.
The Par Rights and Discount Rights will expire at 5:00 p.m., New
York City time, on March 31, 2008.
Appaloosa Management L.P. and the other Plan Investors have
agreed to backstop the Discount Rights Offering, on the terms
and subject to the conditions of their New Equity Purchase and
Commitment Agreement with the Debtors. Pursuant to the Backstop
Agreement, the Plan Investors will purchase, for the US$38.39 in
cash per full share, any shares that are not purchased pursuant
to the exercise of Discount Rights.
The Plan Investors' Backstop Agreement does not apply to the Par
Rights Offering. If all of the Par Rights are not exercised in
the Par Rights Offering, the remaining shares of Reorganized
Delphi common stock will be issued to certain creditors in
partial satisfaction of their claims.
Use of Proceeds
The Rights Offering is conducted to raise a portion of the funds
necessary to consummate the Plan, Rodney O'Neal, Delphi Corp.'s
chief executive officer and president, related in Delphi's
Registration Statement.
On the Effective Date of the Plan, all existing shares of
Delphi's common stock, and any options, warrants, rights to
purchase shares of Delphi common stock or other outstanding
equity securities will be canceled. On or shortly after the
Effective Date, Reorganized Delphi will make the distributions
provided for in the Plan, including issuing the shares of new
common stock for which Par Rights and Discount Rights are
exercised in the Rights Offerings.
On the Effective Date, Reorganized Delphi will have up to
160,124,155 shares of common stock outstanding assuming:
(1) the conversion of up to 35,381,155 shares of Convertible
Preferred Stock;
(2) no exercise of Par Rights and exercise in full of
Discount Rights or the Plan Investors' Backstop Agreement
regarding the Discount Rights Offering;
(3) the exercise in full of six-month warrants, seven-year
warrants and ten-year warrants that are initially
exercisable for the purchase of up to 25,113,275 shares
of Reorganized Delphi common stock; and
(4) the issuance of 17,237,418 shares of Reorganized Delphi
common stock to creditors in respect of Trade and Other
Unsecured Claims, aggregating approximately
US$1,310,000,000.
Assuming that all Par Rights are exercised, Delphi anticipates
receiving up to US$2,900,000,000 in gross proceeds from the
Rights Offerings before deducting fees, including the Plan
Investors' backstop commitment fee, and expenses related to the
rights offerings:
* US$1,600,000,000 from the Discount Rights Offering; and
* US$1,300,000,000 from the Par Rights Offering.
If any shares of Reorganized Delphi common stock are purchased
pursuant to the exercise of Oversubscription Privileges in the
Discount Rights Offering, Reorganized Delphi will receive
additional gross proceeds of US$0.25 per Oversubscription
Privilege share, Mr. O'Neal disclosed.
Delphi intends to use the net proceeds from the Rights Offering
to make payments and distributions contemplated by the Plan and
for general corporate purposes. The net proceeds from the
Discount Rights Offering will be used for general corporate
purposes, Mr. O'Neal elaborated. On the other hand, the net
proceeds from the Par Rights Offering will be used to (i)
satisfy certain liquidity requirements and claims asserted by
the Debtors' labor unions; (ii) reduce the amount of preferred
stock distributed to General Motors Corp.; and (iii) partially
satisfy certain unsecured creditors' claims.
As of March 10, 2008, the Appaloosa Plan Investors and their
affiliates beneficially owned 125,739,448 shares, or 22.3%, of
Delphi's existing common stock.
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, Issue No. 117; Bankruptcy Creditors'
Service Inc., http://bankrupt.com/newsstand/or 215/945-7000)
* * *
As reported in the Troubled Company Reporter-Latin America on
March 18, 2008, Standard & Poor's Ratings Services still expects
to assign a 'B' corporate credit rating to Delphi Corp. if the
company emerges from bankruptcy in early April.
S&P has revised its expected issue-level ratings because
changes to the structure of the proposed financings have
affected relative recovery prospects among the various term
loans. S&P's expected ratings are:
-- The US$1.7 billion "first out" first-lien term loan B-1 is
expected to be rated 'BB-' (two notches higher than the
expected corporate credit rating on Delphi), with a '1'
recovery rating, indicating the expectation of very high
(90%-100%) recovery in the event of payment default.
-- The US$2 billion "second out" first-lien term loan B-2 is
expected to be rated 'B' (equal to the corporate credit
rating), with a '4' recovery rating, indicating the
expectation of average (30%-50%) recovery in the event of
payment default.
-- The US$825 million second-lien term loan is expected to be
rated 'B-' (one notch lower than the corporate credit
rating), with a '5' recovery rating, indicating the
expectation of modest (10%-30%) recovery in the event of
payment default.
DELPHI CORP: Moody's Holds (P)B2 Rtg. on US$3.7-Bil. Term Loans
---------------------------------------------------------------
Moody's Investors Service affirmed Delphi Corporation's
Corporate Family Rating of (P)B2 but revised the rating on the
company's US$3.7 billon of first lien term loans. Moody's also
affirmed Delphi's (P)B3 rating on the company's proposed US$825
million of second lien term loans and its Speculative Grade
Liquidity rating of SGL-2.
The actions follow revisions to Delphi's financing arranged for
its planned emergence from Chapter 11 bankruptcy protection.
While the total amount of the first lien term loan is unchanged
at US$3.7 billion, it will now be separated into a senior
tranche ("B-1") for US$1.7 billion, and a junior tranche ("B-2")
for US$2.0 billion which an affiliate of General Motors
Corporation will hold as consideration as part of GM's emergence
claims.
Moody's upgraded the rating on US$1.7 billion of the more senior
B-1 tranche to (P)Ba2 from (P)Ba3 (the rating applies to both
the domestic portion of US$1.5 billion (previously US$2.95
billion), and the equivalent of US$0.2 billion to its European
subsidiary borrower (previously the equivalent of US$0.75
billion)). Moody's assigned a rating of (P)B2 to the B-2
tranche. The outlook is stable.
Moody's assigned prospective ratings to Delphi's emergence
financing on Jan. 14, 2008. Those facilities were launched on a
"best efforts" basis. In response to challenging credit
markets, certain provisions to the earlier structure have been
revised. GM will now receive a lower amount of cash at the time
of Delphi's emergence and will accept Delphi notes. An
affiliate of GM has agreed to accept US$2.0 billion of notes
under the B-2 tranche whose principal will be junior in a
bankruptcy waterfall to claims of the B-1 tranche. The amount
of cash GM will receive will depend upon amounts raised from
market sources of the second lien term loan issuance but will be
at least US$175 million. The first US$75 million obtained from
market sources from the second lien term loan would be retained
by Delphi. GM would be paid any amounts received above US$75
million. To the extent that market sources subscribe to less
than US$825 million, GM would accept the remainder of the notes
as reimbursement.
Pricing and certain other provisions have also been altered from
the earlier structure. While lending margins have been
increased from previous levels, LIBOR rates to which those
margins would be added have materially declined in response to
actions taken by the Federal Reserve Bank. As a result, Delphi
anticipates that its prospective interest expense post emergence
will be slightly less than earlier expectations, but it has
agreed to a floor on LIBOR and would be exposed to any increases
in LIBOR above the floor to the extent it has not hedged that
exposure.
Delphi's operating performance in the final quarter of 2007
exceeded levels in its approved Plan of Reorganization, and, on
a pro forma basis, it would expect to emerge with slightly more
consolidated cash balances than previously contemplated. While
such trends are encouraging, prospects for North American
automotive production in 2008 have dimmed as macro-economic
factors have increased uncertainty on consumer expenditures on
durable goods such as automobiles. Should North American
production volumes decline as a result, operating profitability
would likely diminish and could offset any assumption of
incremental performance based on recent experience. In Moody's
view, there has been no material change in Delphi's prospective
aggregate indebtedness, interest expense or cash flows from
previous expectations. As a result, Moody's affirmed the (P)B2
Corporate Family Rating since many key metrics remain consistent
with the B2 rating category.
The (P)B2 CFR reflects the magnitude of the company's
indebtedness upon emergence, weak but improving coverage over
the intermediate term as the anticipated benefits of
restructuring initiatives take hold, and the absence of free
cash flow in its initial year after emergence. The rating
recognizes substantial improvements in the company's cost
structure and operational efficiencies achieved during its
period of bankruptcy re-organization and ongoing benefits from
its global scale and manufacturing footprint. However, the
rating also considers the extent of the company's exposure to
General Motors Corporation's North American operations. While
GMNA exposure has significantly declined, it will continue as
the largest individual component in the customer base, leaving
Delphi vulnerable to any further reduction in GM's production
volumes or market share in this critical region.
Delphi's strengths include its geographic diversification, and
large book of long term contracts to supply components for
various vehicle platforms. The company will have significantly
reduced its legacy liabilities through the bankruptcy process,
shed unprofitable operations, and identified other initiatives
that should improve its operating cost structure and better
position it to compete in the auto parts supply business.
However, the full benefit of these initiatives will only be
achieved over time, and during the near term the company's
financial metrics will remain consistent with ratings at the low
end of the B range.
In particular, it is noted that Delphi will require incremental
restructuring disbursements of roughly US$800 million over the
next few years, which will likely preclude free cash flow
generation during 2008. It is also noted that Delphi will be
emerging from bankruptcy at a time when economic trends suggest
potential for further weakness in automotive sales. While the
benefits of restructuring initiatives should yield improvement
in financial metrics over time, economic pressures could temper
the rate of improvement. Consequently, Moody's continues to
view the company's rating profile as more consistent with the B2
rating category at this time.
The stable outlook is supported by Delphi's liquidity profile,
expectations that the pace of operational improvements will gain
traction over the intermediate term, and the company's
participation in multiple geographic regions with different
growth prospects. These factors along with an expected
transition to positive free cash flow in 2009 have the potential
to produce stronger coverage ratios and lower leverage going
forward. Nonetheless, should a weaker environment for
automotive sales develop in 2008, pressure on Delphi's liquidity
and outlook could ensue.
Ratings affirmed with updated LGD assessment:
Delphi Corporation
-- Corporate Family Rating, (P)B2
-- Probability of Default Rating, (P)B2
-- US$825 million second lien term loan, (P)B3 (LGD-4, 65%)
-- Speculative Grade Liquidity rating, SGL-2
Ratings revised on reduced amounts issued:
Delphi Corporation
-- US$1,500 million first lien secured term loan, tranche B-1,
(P)Ba2 (LGD 2, 17%) from (P)Ba3, (LGD-2-62%)
Delphi Holdings Luxembourg S.ar.l.
-- equivalent of US$200 million first lien term loan, tranche
B-1, guaranteed by Delphi Corporation, (P)Ba2 (LGD-2, 17%)
from (P)Ba3 (LGD-2, 26%)
Ratings assigned
Delphi Corporation
-- US$2,000 million first lien secured term loan, tranche B-2,
(P)B2 (LGD-3, 47%)
The higher rating on the B-1 tranche of the first lien term loan
reflects the application of a probability of default rating of
(P)B2 and a loss given default assessment of LGD-2, 17%. The
rating benefits from the priority of its secured claims and a
substantial increase in the amount of junior debt from the
introduction of the B-2 tranche. The assigned rating of (P)B2
to the B-2 tranche results from the application of the same PDR
and an LGD of LGD-3, 47%. Its rating, level with the underlying
CFR, flows from its secured position in the waterfall behind the
B-1 tranche but ahead of the second lien obligation. The rating
on the second lien term loan is unchanged as the total amount of
more senior claims has not changed. Its LGD assessment has
changed slightly as a result of up-dated amounts of unsecured
non-debt claims.
The above ratings were assigned on a prospective basis and
assumed a full subscription to Delphi's proposed financing as
well as recieving bankruptcy court affirmation of an effective
date of emergence. Upon confirmation that those events have
occurred, the (P) modifier will be removed. Should any of those
assumptions prove to be incorrect, the ratings may be subject to
change or could be withdrawn.
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.
ENERGIAS DO BRASIL: Hasn't Decided on Companhia Energetica Bid
--------------------------------------------------------------
Energias do Brasil's Investor Relations Executive Flavia Heller
told investors that the company hasn't decided whether to bid
for Companhia Energetica de Sao Paulo, Business News Americas
reports.
As reported in the Troubled Company Reporter-Latin America on
March 13, 2008, Energias do Brasil registered as a bidder in the
March 26 auction of a controlling stake in Companhia Energetica.
Energias do Brasil's President Antonio Pita de Abreu said that
the company wants to join a consortium to bid for Companhia
Energetica because the company is too big a company for one
single player to purchase.
BNamericas relates that “one risk is whether Companhia
Energetica can renew concessions at some of its hydro plants.”
"We are trying to understand how this works legally and how it
impacts the price we are willing to pay for the company," Mr.
Heller commented to BNamericas.
Meanwhile, Energias do Brasil is seeking for other market
opportunities in the distribution segment, BNamericas notes.
"It is all a matter of price and how, in case of acquiring
assets, they would fit in our current portfolio," Mr. Heller
told BNamericas.
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: Strike Cues S&P to Put Ratings on Negative Watch
----------------------------------------------------------------
Standard & Poor's Ratings Services placed the ratings on General
Motors Corp., American Axle & Manufacturing Holdings Inc., Lear
Corp., and Tenneco Inc. on CreditWatch with negative
implications. The CreditWatch placement reflects S&P's
decision to review the ratings in light of the extended American
Axle (BB/Watch Neg/--) strike.
The work stoppage that began Feb. 25 at American Axle's U.S.
United Auto Workers plants has forced closure of many GM
(B/Watch Neg/--) plants, as well as plants of certain GM
suppliers. The strike began after the expiration of the four-
year master labor agreement with American Axle. Although S&P
still expect American Axle and the UAW to reach an agreement
that will reflect more competitive labor costs, the timing is
unknown. The two sides resumed negotiations last week.
"We believe the strike has gone on long enough to possibly begin
to affect the financial resources of GM and those suppliers most
exposed to the automaker," said Standard & Poor's credit analyst
Robert Schulz.
To resolve the CreditWatch listings, Standard & Poor's will
assess the strike's impact on the companies' credit profiles,
particularly liquidity, once production resumes. S&P could
lower the ratings any time prior to a resolution of the Axle
strike if the liquidity of the companies becomes compromised,
although downgrades are not likely for another several weeks.
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.
GOL LINHAS: Unit Implements Sabre Airline Solutions
---------------------------------------------------
GOL Linhas Aereas Inteligentes S.A., the parent company of
Brazilian airlines GOL Transportes Aereos S.A. and VRG Linhas
Aereas S.A. reported that VRG Linhas implemented Sabre Airline
Solutions.
The SabreSonic suite is a comprehensive, modern solution that
helps airlines attain their top priorities, delivering an
advanced customer-focused and efficient solution. From powerful
multi-channel sales to comprehensive reporting and analysis, the
SabreSonic suite provides the operational flexibility VRG Linhas
aspiries in today's competitive marketplace.
The solution will establish sales and customer service systems
integration -- which used to be a combination of two different
systems, now is just a unique platform. That means shorter and
faster operations in a single environment. Another important
factor is that the platform will not be locally installed,
therefore, the company will have no costs for maintaining
equipment and servers; instead, Sabre Airline Solutions will be
in charge of this service.
SabreSonic capabilities, such as Automated Exchange and Refund,
Frequent Traveler Profiles, traveler Check-In and many other
features located within an easy-to-use graphical user interface,
will help the company enhance productivity while exceeding
customers' expectations with superior customer service.
"The SabreSonic solution has an advanced sales suite via
Internet that will provide customers with a positive experience
on using this sales channel. As a result, the company expects a
highly increment on sales via Internet, either directly to end
users or through travel agents, with a subsequent reduction on
selling costs," says VRG Linhas Commercial director, Lincoln
Amano.
VRG Linhas will also become a member of Sabre Airline Solutions'
advanced customer community, a forum for member airlines to
collaborate with each other to help drive the investment
prioritization of Sabre Airline Solutions' technology projects.
Based in Sao Paulo, Brazil, GOL Intelligent Airlines aka GOL
Linhas Areas Inteligentes S.A. (NYSE: GOL and Bovespa: GOLL4) --
http://www.voegol.com.br-- through its subsidiary, GOL
Transportes Aereos S.A., provides airline services in Brazil,
Argentina, Bolivia, Uruguay, and Paraguay. The company's
services include passenger, cargo, and charter services. As of
March 20, 2006, Gol Linhas provided 440 daily flights to 49
destinations and operated a fleet of 45 Boeing 737 aircraft.
The company was founded in 2001.
* * *
As reported in the Troubled Company Reporter-Latin America on
July 25, 2007, Fitch Ratings affirmed the 'BB+' foreign and
local currency issuer default ratings of Gol Linhas Aereas
Inteligentes S.A. Fitch also affirmed the outstanding US$200
million perpetual bonds and US$200 million of senior notes due
2017 at 'BB+' as well as the company's 'AA-' (bra) national
scale rating. Fitch said the rating outlook is stable.
NORTEL NETWORKS: Inks Settlement Agreement with Vonage
------------------------------------------------------
Vonage Holdings Corp. said in a regulatory filing that on
March 10, 2008, the company, Nortel Networks Inc., and Nortel
Networks Limited entered into a settlement agreement effective
Jan. 1, 2008, to implement the terms of a Memorandum of
Understanding entered into by the parties on Dec. 28, 2007.
Pursuant to the terms of the agreement, the company and Nortel
agree to file within five days of the agreement between the
parties joint stipulations for dismissal, without costs,
dismissing without prejudice all claims and counterclaims in:
-- Vonage Holdings Corp. v. SBC Internet Services Inc., et
al., pending in the United States District Court for the
Northern District of Texas, Fort Worth Division; and
-- Vonage Holdings Corp. v. Nortel Networks Inc., et al.,
pending in the United States District Court for the
District of Delaware.
Further, the company agrees to dismiss without prejudice Central
Telephone Company of Texas from all claims related to three of
the company's patents in the Texas Action.
Pursuant to the agreement, the company grants to Nortel and its
affiliates a worldwide, non-exclusive, paid-up, transferable --
subject to certain limitations -- license under three of the
company's patents relating to Voice over Internet Protocol
technology.
Nortel has the right to grant limited sublicenses to its
customers to use the licensed products and services when
manufactured or sold by Nortel, and to transfer the license
rights in conjunction with a change of control of Nortel.
Pursuant to the agreement, Nortel grants to the company and its
affiliates a worldwide, non-exclusive, paid-up, transferable
license under three of Nortel patents relating to VoIP
technology. The company has the right to grant limited
sublicenses to its customers to use the licensed products and
services, and to transfer the license rights in conjunction with
a change of control of the company.
Either party may terminate the licenses described above if the
other party:
(a) brings a patent infringement suit against that party with
respect to patents not licensed thereunder; or
(b) brings a patent infringement suit against a third party
which third party asserts a good faith claim of
indemnification against either the company or Nortel or
any of their affiliates.
The company covenants not to sue Nortel customers for patent
infringement of the three licensed Vonage Patents by reason of
Nortel customers using licensed products or services and will
not seek any damages or costs either during the term of the
license or prior to Jan. 1, 2008, from Nortel customers for such
use; provided, however, such covenant will become ineffective
should Nortel bring a patent infringement suit against the
company or any of its customers, prior to the company bringing
any such suit against Nortel.
Nortel covenants not to sue suppliers of products or services to
the company, during the term of any Nortel Patent, for
infringement of any Nortel Patent to the extent the company
indemnifies them for patent infringement for providing products
or services to the company.
The company also releases Central Telephone Company of Texas and
its customers from all claims, demands and rights of action with
respect to any act of infringement or alleged infringement of
any of the Vonage Patents by Central Telephone Company of Texas
or its customers prior to Jan. 1, 2008.
About Vonage Holdings
Headquartered in Holmdel, New Jersey, Vonage Holdings Corp.
(NYSE:VG) -- http://www.vonage.com/-- provides broadband
telephone services with nearly 2.6 million subscriber lines.
The company's Residential Premium Unlimited and Small Business
Unlimited calling plans offer consumers unlimited local and long
distance calling, and features like call waiting, call
forwarding and voicemail for a flat monthly rate. Vonage's
service is sold on the web and through national retailers
including Best Buy, Circuit City, Wal-Mart Stores Inc. and
Target and is available to customers in the U.S., Canada and the
United Kingdom.
* * *
At Dec. 31, 2007, the company had US$462.3 million in total
assets and US$537.4 million in total liabilities, resulting in a
US$75.1 million total stockholders' deficit.
About Nortel Networks Corporation
Headquartered in Ontario, Canada, Nortel Networks Corporation
(NYSE/TSX: NT) -- http://www.nortel.com/-- is a recognized
leader in delivering communications capabilities that enhance
the human experience, ignite and power global commerce, and
secure and protect the world's most critical information.
Serving both service provider and enterprise customers, Nortel
delivers innovative technology solutions encompassing end-to-end
broadband, Voice over IP, multimedia services and applications,
and wireless broadband designed to help people solve the world's
greatest challenges. Nortel does business in more than 150
countries including Indonesia, Australia, Brazil, China, Hong
Kong, India, Philippines, Singapore, Taiwan and Thailand.
* * *
Nortel Networks Corp. still carries Moody's Investors Service's
B3 senior unsecured debt rating assigned on July 6, 2005.
Outlook is Stable.
USINAS SIDERURGICAS: Will Install Hot Strip Mill at Cosipa
----------------------------------------------------------
Usinas Siderurgicas de Minas Gerais SA said that works for the
deployment of a new hot strip mill at Companhia Siderurgica
Paulista aka Cosipa will begin in August.
Business News Americas relates that Cosipa signed a
US$1.0 billion contract with Japan's Mitsubishi Corporation for
the supply of equipment for the project.
According to Usinas Siderurgicas, the mill will have output
capacity of 2.3 million tons per year of coils in a first stage
of operations and could churn out 4.7 million tons per year. It
will provide products to the automobile and household appliances
industries. Operations at the mill reportedly will begin in
April 2011.
BNamericas says that the mill's output will target the Brazilian
market.
Meanwhile, Cosipa is investing some US$100 million in new
continuous casting equipment that will be launched in April,
Usinas Siderurgicas said.
About Cosipa
Companhia Siderurgica Paulista aka Cosipa is forging ahead with
its steel operations. Cosipa is among Brazil's largest
steelmakers, along with ArcelorMittal Brasil and Companhia
Siderúrgica Nacional. The company manufactures cold- and hot-
rolled steel sheets, as well as heavy plates and slabs. Cosipa
sells its products internationally to auto, home appliance, and
pipe manufacturers, with most exports going throughout the
Americas and to Europe, Asia, and Oceania. It also runs its own
domestic port terminal for receiving raw materials used in steel
production and for exporting steel products. Usiminas had owned
just under half of the company until 2005, when it made Cosipa a
wholly owned subsidiary.
About Usinas Siderurgicas
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. Moody's said 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.
==========================
C A Y M A N I S L A N D S
==========================
AAM EMERGING: Proofs of Claim Filing Deadline is March 21
---------------------------------------------------------
AAM Emerging Managers Offshore, Ltd.'s creditors have until
March 21, 2008, to prove their claims to John Cullinane and
Derrie Boggess, the company's liquidators, 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.
AAM Emerging's shareholder decided on Feb. 22, 2008, to place
the company into voluntary liquidation under The Companies Law
(2004 Revision) of the Cayman Islands.
The liquidators can be reached at:
John Cullinane and Derrie Boggess
c/o Walkers SPV Limited
Walker House, 87 Mary Street
George Town, Grand Cayman, KY1-9002
Cayman Islands
Telephone: (345) 914-6305
BRAZVEST FUND: Proofs of Claim Filing Will End on March 25
----------------------------------------------------------
Brazvest Fund, Limited's creditors have until March 25, 2008, to
prove their claims to David A.K. Walker and Lawrence Edwards,
the company's liquidators, 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.
Brazvest Fund's shareholder decided on Dec. 13, 2007, to place
the company into voluntary liquidation under The Companies Law
(2004 Revision) of the Cayman Islands.
The liquidators can be reached at:
David A.K. Walker and Lawrence Edwards
Attn: Skye Quinn
P.O. Box 258, George Town
Grand Cayman, Cayman Islands
Telephone: (345) 914 8678
Fax: (345) 949 4590
CHEYNE GLOBAL: Proofs of Claim Filing is Until March 21
-------------------------------------------------------
Cheyne Global Opportunities Fund Inc.'s creditors have until
March 21, 2008, to prove their claims to John Cullinane and
Derrie Boggess, the company's liquidators, 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.
Cheyne Global's shareholder decided on Feb. 11, 2008, to place
the company into voluntary liquidation under The Companies Law
(2004 Revision) of the Cayman Islands.
The liquidators can be reached at:
John Cullinane and Derrie Boggess
c/o Walkers SPV Limited
Walker House, 87 Mary Street
George Town, Grand Cayman, KY1-9002
Cayman Islands
Telephone: (345) 914-6305
FINANCIAL RISK: Proofs of Claim Filing Deadline is March 21
-----------------------------------------------------------
Financial Risk Management Water Fund Limited's creditors have
until March 21, 2008, to prove their claims to John Cullinane
and Derrie Boggess, the company's liquidators, 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.
Financial Risk's shareholder decided on Feb. 20, 2008, to place
the company into voluntary liquidation under The Companies Law
(2004 Revision) of the Cayman Islands.
The liquidators can be reached at:
John Cullinane and Derrie Boggess
c/o Walkers SPV Limited
Walker House, 87 Mary Street
George Town, Grand Cayman, KY1-9002
Cayman Islands
Telephone: (345) 914-6305
GLOBALVEST VALUE: Proofs of Claim Filing Will End on March 25
-------------------------------------------------------------
Globalvest Value Fund LP's creditors have until March 25, 2008,
to prove their claims to David A.K. Walker and Lawrence Edwards,
the company's liquidators, 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.
Globalvest Value's shareholder decided on Dec. 7, 2007, to place
the company into voluntary liquidation under The Companies Law
(2004 Revision) of the Cayman Islands.
The liquidators can be reached at:
David A.K. Walker and Lawrence Edwards
Attn: Skye Quinn
P.O. Box 258, George Town
Grand Cayman, Cayman Islands
Telephone: (345) 914 8678
Fax: (345) 949 4590
LATINVEST HOLDINGS: Proofs of Claim Filing is Until March 25
------------------------------------------------------------
Latinvest Holdings, LDC's creditors have until March 25, 2008,
to prove their claims to David A.K. Walker and Lawrence Edwards,
the company's liquidators, 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.
Latinvest Holdings' shareholder decided on Dec. 13, 2007, to
place the company into voluntary liquidation under The Companies
Law (2004 Revision) of the Cayman Islands.
The liquidators can be reached at:
David A.K. Walker and Lawrence Edwards
Attn: Skye Quinn
P.O. Box 258, George Town
Grand Cayman, Cayman Islands
Telephone: (345) 914 8678
Fax: (345) 949 4590
LATINVEST PARTNERS: Proofs of Claim Filing Deadline is March 25
---------------------------------------------------------------
Latinvest Partners LP's creditors have until March 25, 2008, to
prove their claims to David A.K. Walker and Lawrence Edwards,
the company's liquidators, 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.
Latinvest Partners' shareholder decided on Dec. 7, 2007, to
place the company into voluntary liquidation under The Companies
Law (2004 Revision) of the Cayman Islands.
The liquidators can be reached at:
David A.K. Walker and Lawrence Edwards
Attn: Skye Quinn
P.O. Box 258, George Town
Grand Cayman, Cayman Islands
Telephone: (345) 914 8678
Fax: (345) 949 4590
TIME FOR US: Sets Final Shareholders Meeting for March 24
---------------------------------------------------------
Time For Us Marine Ltd. will hold its final shareholders'
meeting on March 24, 2008, at its representative office at 8621
East 21st St. N., Wichita KS 67206, USA.
These matters will be taken up during the meeting:
1) accounting of the winding-up process; and
2) giving explanation thereof.
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
UTILITIVEST II: Proofs of Claim Filing Deadline is March 25
-----------------------------------------------------------
Utilitivest II LP's creditors have until March 25, 2008, to
prove their claims to David A.K. Walker and Lawrence Edwards,
the company's liquidators, 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.
Utilitivest II's shareholder decided on Dec. 7, 2007, to place
the company into voluntary liquidation under The Companies Law
(2004 Revision) of the Cayman Islands.
The liquidators can be reached at:
David A.K. Walker and Lawrence Edwards
Attn: Skye Quinn
P.O. Box 258, George Town
Grand Cayman, Cayman Islands
Telephone: (345) 914 8678
Fax: (345) 949 4590
UTILITIVEST III: Proofs of Claim Filing is Until March 25
---------------------------------------------------------
Utilitivest III, LP's creditors have until March 25, 2008, to
prove their claims to David A.K. Walker and Lawrence Edwards,
the company's liquidators, 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.
Utilitivest III's shareholder decided on Dec. 7, 2007, to place
the company into voluntary liquidation under The Companies Law
(2004 Revision) of the Cayman Islands.
The liquidators can be reached at:
David A.K. Walker and Lawrence Edwards
Attn: Skye Quinn
P.O. Box 258, George Town
Grand Cayman, Cayman Islands
Telephone: (345) 914 8678
Fax: (345) 949 4590
=========
C H I L E
=========
INVENSYS PLC: Fitch Withdraws BB Rating on Senior Notes
-------------------------------------------------------
Fitch Ratings has withdrawn the 'BB' rating of UK-based Invensys
plc's remaining 9.875% US$177 million and EUR345 million senior
unsecured notes due in March 2011, following the redemption of
all the outstanding notes on 17 March 2008 through a call
option. The redemption price amounts to about GBP360m at 31
December 2007 exchange rates and has been paid out of Invensys's
cash balances.
At Dec. 31, 2007, Invensys's liquidity was supported by an
undrawn GBP130m revolving credit facility (GBP20m reduction of
the original facility amount following the APV disposal) and a
GBP396m bonding facility (undrawn on a cash basis), both of
which mature on Dec. 15, 2010.
Fitch will continue to rate Invensys plc (rated 'BB'/'B'/Outlook
Stable) and Invensys International Holdings Ltd (rated
'BB'/'B'/Outlook Stable; senior secured rating 'BBB-' (BBB
minus)).
Invensys is a diversified industrial automation, transportation
and controls group providing solutions to customers. It operates
four divisions: Process Systems, Controls, Rail Systems, and
Eurotherm. In Latin America, the company has operations in
Argentina, Brazil, Chile, Mexico and Venezuela.
===============
C O L O M B I A
===============
BANCO PICHINCHA: To Sell Inversora Pichincha to AIG Consumer
------------------------------------------------------------
Banco Pichincha has agreed to sell Colombian unit Inversora
Pichincha to AIG Consumer Finance Group, a unit of U.S. insurer
American International Group, Inc., Business News Americas
reports.
According to AIG Consumer, the transaction needs regulatory
approval in Colombia and other customary closing conditions.
"Inversora Pichincha's broad distribution and leadership
position in Colombia presents a singular opportunity to expand
the AIG Consumer Finance Group's product mix in Latin America
while diversifying geographically," AIG Consumer Finance Group
Chief Executive Officer Richard Pfeiffer told BNamericas.
About AIG Consumer
AIG Consumer Finance Group provides consumer finance products
and services including credit cards, auto loans, consumer loans
and sales finance. In Latin America, the group already operates
in Argentina, Brazil and Mexico.
About Inversora Pichincha
Inversora Pichincha provides consumer auto loans, commercial
vehicle loans and unsecured consumer credit through direct and
indirect distribution channels including auto dealerships,
affiliated businesses and government agencies. The company has
17 branches in Colombia's four largest cities.
About Banco Pichincha
Banco Pichincha is Ecuador's largest bank with about 26% of
deposits and 28% of loans at March 2007. Incorporated in 1906,
the group offers a wide array of services to corporate, middle
market and consumer customers. Pichincha is tightly controlled
by Mr. Fidel Egas Grijalva who holds over 65% of the company's
stock.
* * *
As reported in the Troubled Company Reporter-Latin America on
Aug. 16, 2007, Fitch Ratings affirmed Banco Pichincha C.A. y
Subsidiarias' 'B-' foreign currency long-term issuer default
rating. Fitch said the rating outlook is negative.
===================================
D O M I N I C A N R E P U B L I C
===================================
GUESS? INC: Co-Founder Wins Agreements From Christie's
------------------------------------------------------
Georges Marciano, co-founder of Guess? Inc. won a two year legal
battle with the famed Beverly Hills auction house Christie's,
Inc., when attorneys for the company agreed to provide documents
that Marciano had been seeking in connection with the theft of
his art works valued at tens of millions of dollars.
Mr. Marciano represented himself during a hearing in Los Angeles
Superior Court. Attorneys for Christie's had sought to quash
Mr. Marciano's motion seeking documents related to the missing
art. However, during the hearing, Judge Elisabeth White
suggested both sides meet in the court's jury room and see
whether some agreement could be reached. After meeting for 45
minutes, Mr. Marciano and Christie's attorneys reached an
agreement providing Mr. Marciano with key documents that he had
been seeking. The agreement is seen as a key step in
Mr. Marciano's efforts to recover his missing art works.
Mr. Marciano maintains these documents will be crucial to
investigating the disappearance of more than 600 works of art,
including:
* original paintings by Indiana, Rauschenberg, and Ruscha;
* monumental sculptures, including Chamberlain sculpture and
Miro sculptures;
* prints, including Warhol, Chagall, Indiana, Dine, Jasper
Jones and more;
* a wine collection of over 26,000 bottles, including Petrus,
Margaux, Lafitte, Yquiem, and Cheval Blanc Vintage from the
1970's to 2000, and sales proceeds.
After the hearing, Mr. Marciano declared, "Today, my position
was vindicated and now and I look forward to pursuing the return
of my missing art collection. I have been asking Christie's to
produce these documents for over two years."
In 2007, Mr. Marciano sued several of his former employees and
others on a variety of charges including art theft and
negligence, theft of millions of dollars worth of funds, art,
and wine and the destruction of his computer, financial and
personal records, as well as conspiring to commit theft. Mr.
Marciano has been seeking records from Christie's to help in
legal actions against his former accountant, a former Christie's
employee, and several ex-employees.
These actions allege that five former employees, a former
accountant, a former employee of Christie's and an art shipping
company illegally conspired to deliver a one-two punch to Mr.
Marciano -- first stealing millions of dollars worth of funds
and then tens of millions in fine art.
"I was shocked at this massive betrayal by people I had known,
loved and trusted for so many years," Mr. Marciano said upon the
discovery of this massive theft. "This is one of the largest,
if not the largest, art thefts as measured by the quantity of
art stolen in the history of America," he said.
While no criminal charges have been brought by law enforcement
to date, Marciano hopes that his efforts to prove civil
liability will produce a body of evidence that can be used to
bring this virtually unprecedented conspiracy and theft into the
criminal courts in the future.
As a first step, Marciano's attorneys have brought a civil
action which seeks to prove that he was damaged in an amount of
more than US$60 million. He is seeking those damages, plus
punitive or exemplary damages, to punish the wrongdoers for
egregious conduct and to deter the wrongdoers and others from
similar conduct in the future.
Guess? Inc. (NYSE: GES) -- http://www.guessinc.com/-- designs,
markets, distributes and licenses a lifestyle collection of
contemporary apparel, accessories and related consumer products.
At May 5, 2007, the company operated 336 retail stores in the
United States and Canada. The company also distributes its
products through better department and specialty stores around
the world, including the Philippines, Hungary and the Dominican
Republic.
* * *
Guess? Inc. still carries Standard & Poor's "BB" long-term
foreign and local issuer credit ratings, which were assigned in
December 2006.
PRC LLC: Can Employ Weil Gotshal as Bankruptcy Counsel
------------------------------------------------------
PRC LLC and its debtor-affiliates obtained authority from the
U.S. Bankruptcy Court for the Southern District of New York to
employ Weil, Gotshal & Manges LLP, as their primary bankruptcy
counsel.
Weil Gotshal is expected to:
a. take all actions to protect and preserve the Debtors'
estates;
b. prepare legal documents on behalf of the Debtors;
c. take necessary or appropriate actions in connection with a
plan or plans of reorganization, disclosure statement and
related documents; and
d. provide other necessary legal services in connection with
the prosecution of the bankruptcy cases.
Weil Gotshal will be paid on an hourly basis and be reimbursed
for the expenses it may incur for any related works undertaken.
The firm's hourly rates range from US$155 to US$950, depending
upon the level of seniority and expertise of the lawyer or
paralegal involved. The firm also received a retainer fee and
an advance against expenses for US$2,022,780.
Alfredo R. Perez, Esq., at Weil Gotshal & Manges, LLP, in
Houston, Texas, assured the Court that the firm does not have
any connection with any of the Debtors or parties-in-interest.
He added that Weil Gotshal is a "disinterested person" as that
phrase is defined in Section 101(14) of the Bankruptcy Code, as
modified by Section 1107(b).
About PRC LLC
Founded in 1982 and based in Fort Lauderdale, Florida, PRC, LLC
-- http://www.prcnet.com/-- is a leading provider of customer
management solutions. PRC markets its services to brand-
focused, Fortune 500 U.S. corporations and delivers these
services through a global network of call centers in the U.S.,
Philippines, India, and the Dominican Republic.
PRC is the sole member of each of PRC B2B, LLC, and Precision
Response of Pennsylvania, LLC, and the sole shareholder of
Access Direct Telemarketing, Inc., each of which is a debtor and
debtor-in-possession in PRC's joint Chapter 11 cases.
Panther/DCP Intermediate Holdings, LLC, is the sole member of
PRC.
PRC, together with its operating subsidiaries PRC B2B, Access
Direct, and PRC PA, is a leading provider of complex,
consultative, outsourced services in the Customer Care and Sales
& Marketing segments of the business process outsourcing
industry. Since 1982, the company has acquired and grown
customer relationships for some of the world's largest and most
brand-focused corporations in the financial services, media,
telecommunications, transportation, and retail industries.
The company and four of its affiliates filed for Chapter 11
protection on Jan. 23, 2008 (Bankr. S.D.N.Y. Lead Case No. 08-
10239). Alfredo R. Perez, Esq., at Weil, Gotshal & Manges, LLP,
represents the Debtors in their restructuring efforts. The
Debtors chose Stephen Dube, at CXO LLC, as their restructuring
and turnaround advisor. Additionally, Evercore Group LLC
provides investment and financial counsel to the Debtors.
The Debtors' consolidated financial condition as of
Dec. 31, 2007, showed total assets of US$354,000,000 and total
debts of US$261,000,000.
The Debtors submitted to the Court a Chapter 11 Plan of
Reorganization on Feb. 12, 2008. (PRC LLC Bankruptcy News,
Issue No. 6; Bankruptcy Creditors' Service, Inc.,
http://bankrupt.com/newsstand/or 215/945-7000)
PRC LLC: Wants to Employ Regis McElhatton as CEO
------------------------------------------------
PRC LLC and its debtor-affiliates seek authority from the U.S.
Bankruptcy Court for the Southern District of New York to employ
Regis McElhatton as their chief executive officer effective as
of the date of bankruptcy.
The Debtors assert that Mr. McElhatton's employment is critical
to their efforts to effectively reorganize and emerge from
bankruptcy. Mr. McElhatton brings a 40-year background in
banking and financial services to the Debtors, Alfredo R. Perez,
Esq., at Weil, Gotshal & Manges LLP, in Houston, Texas, informs
the Court.
Mr. Perez relates that Mr. McElhatton spent 10 1/2 years at
MasterCard Worldwide, as President of Global Technology and
Operations and Senior Executive Vice President. Prior to
that, he spent seven years as President of Payment Systems
Technology and Consulting, a global payments consulting company
in the United Kingdom. He has also held various executive
management positions at banking institutions in the United
States.
Moreover, before the bankruptcy filing, Mr. McElhatton served as
Debtor PRC LLC's consultant under a Consulting Services
Agreement dated March 27, 2007. Simultaneously, Mr. McElhatton
served as chief executive officer of PRC from Aug. 13, 2007
through the date of bankruptcy. He also serves as the Vice-
Chair of the Board of Managers for Debtor Panther/DCP Holdings,
LLC.
As CEO for PRC, Mr. McElhatton has worked closely with other
members of the Debtors' management, creditors, other
professionals and advisors in exploring various restructuring
alternatives and otherwise assisting the Debtors during these
cases, Mr. Perez relates.
"If the Debtors were required to hire another person to serve as
CEO in connection with these cases, the Debtors, their estates
and all parties-in-interest would be unduly prejudiced by the
loss of Mr. McElhatton's familiarization with the intricacies of
the Debtors' business operations and restructuring efforts," Mr.
Perez says.
In light of these, the Debtors and Mr. McElhatton entered into
an employment agreement on Jan. 23, 2008. The Employment
Agreement provides, among other things, that:
(1) Mr. McElhatton will serve as chief executive officer of
PRC from Jan. 23, 2008, through Jan. 23, 2009;
(2) Mr. McElhatton is entitled to avail of the benefits
provided under PRC's employee benefit plans or programs
for its senior executives;
(3) Mr. McElhatton is not entitled to any fee for serving in
Panther/DCP Holdings' Board of Managers;
(4) PRC has the right to terminate the employment upon 30
days' notice; and
(5) Mr. McElhatton may terminate his employment for good
reason within 30 days after the occurrence of a change of
control, consummation of a Chapter 11 plan, a material
breach of the employment agreement by PRC, among others.
In exchange for his services, Mr. McElhatton will be entitled
for receive a US$75,000 monthly salary and will be reimbursed
for the expenses he may incur in discharging his duties.
Mr. McElhatton will also be entitled to a bonus of between:
(i) 0% to 125% of a target Client Retention Incentive Bonus
of US$100,000;
(ii) 0% to 110% of a target Exit Incentive Bonus of
US$100,000; and
(iii) 0% to 100% of a target Restructuring Incentive Bonus of
US$100,000.
Moreover, PRC agrees to indemnify Mr. McElhatton under the terms
of the company's operating agreement and directors and senior
officers' liability insurance.
A full-text copy of the McElhatton Employment Agreement is
available for free at:
http://researcharchives.com/t/s?2934
About PRC LLC
Founded in 1982 and based in Fort Lauderdale, Florida, PRC, LLC
-- http://www.prcnet.com/-- is a leading provider of customer
management solutions. PRC markets its services to brand-
focused, Fortune 500 U.S. corporations and delivers these
services through a global network of call centers in the U.S.,
Philippines, India, and the Dominican Republic.
PRC is the sole member of each of PRC B2B, LLC, and Precision
Response of Pennsylvania, LLC, and the sole shareholder of
Access Direct Telemarketing, Inc., each of which is a debtor and
debtor-in-possession in PRC's joint Chapter 11 cases.
Panther/DCP Intermediate Holdings, LLC, is the sole member of
PRC.
PRC, together with its operating subsidiaries PRC B2B, Access
Direct, and PRC PA, is a leading provider of complex,
consultative, outsourced services in the Customer Care and Sales
& Marketing segments of the business process outsourcing
industry. Since 1982, the company has acquired and grown
customer relationships for some of the world's largest and most
brand-focused corporations in the financial services, media,
telecommunications, transportation, and retail industries.
The company and four of its affiliates filed for Chapter 11
protection on Jan. 23, 2008 (Bankr. S.D.N.Y. Lead Case No. 08-
10239). Alfredo R. Perez, Esq., at Weil, Gotshal & Manges, LLP,
represents the Debtors in their restructuring efforts. The
Debtors chose Stephen Dube, at CXO LLC, as their restructuring
and turnaround advisor. Additionally, Evercore Group LLC
provides investment and financial counsel to the Debtors.
The Debtors' consolidated financial condition as of
Dec. 31, 2007, showed total assets of US$354,000,000 and total
debts of US$261,000,000.
The Debtors submitted to the Court a Chapter 11 Plan of
Reorganization on Feb. 12, 2008. (PRC LLC Bankruptcy News,
Issue No. 7; Bankruptcy Creditors' Service, Inc.,
http://bankrupt.com/newsstand/or 215/945-7000)
PRC LLC: Can Sell Real Property to Brett Houston for US$2.2 Mil.
----------------------------------------------------------------
The U.S Bankruptcy Court for the Southern District of New York
granted PRC LLC and its debtor-affiliates' request to assume an
amended agreement on the sale of about three acres of
undeveloped real property to J. Brett Houston for US$2,275,000,
free and clear of liens.
The Court approved the Sale Agreement and the contemplated
transactions, and ruled that there are no existing defaults
under the Sale Agreement that must be cured pursuant to Section
365(b) of the U.S. Bankruptcy Code.
The Court overruled all objections to the Debtors' request,
including an objection filed by the Official Committee of
Unsecured Creditors.
In its objection, the Creditors Committee asserted that Court
approval of the Debtors' request should be subject to and
conditioned upon the preservation of the sales proceeds as
unencumbered asset, which should be escrowed, segregated, among
others, as an asset to be preserved and made available toward a
recovery by the general unsecured creditors.
In response, the Debtors asserted that the Creditors Committee's
arguments are misplaced for these reasons:
(i) The property is encumbered by new liens granted to the
Postpetition Lenders under the Interim DIP Order.
(ii) The Debtors anticipate using the funds obtained from the
sale to fund costs of administration, which will reduce
their need to borrow under their postpetition financing
facility and incur additional interest expenses.
(iii) The Creditors Committee ignored the basic priority rules
by seeking to elevate the claims of unsecured creditors
above secured and administrative expense priority claims.
As reported in the Troubled Company Reporter on Feb. 11, 2008,
the sale agreement provides that:
i) Mr. Houston will provide earnest money deposits
for US$250,000 with Shutts & Bowen LLP, to be credited
toward the purchase price at closing or retained by the
Debtors as liquidated damages in the event of Mr.
Houston's material breach or default.
ii) Aside from the real property, other assets to be sold
include the buildings and improvements located in the
area, if any; the Debtors' right, title and interest in
easements, tenements, and appurtenances pertaining to
the property; all fixtures found in the property, if
any; and the Debtors' right, title and interest in all
documents, including licenses, permits, architectural
and engineering plans, among others.
iii) The sale agreement may be terminated by the Debtors or
by Mr. Houston in the event of a material breach or
default by the other party.
iv) The Debtors should pay US$182,000 in brokerage fees and
commissions due to ComReal Miami, and Dave Colonna
Properties, Inc.
About PRC LLC
Founded in 1982 and based in Fort Lauderdale, Florida, PRC, LLC
-- http://www.prcnet.com/-- is a leading provider of customer
management solutions. PRC markets its services to brand-
focused, Fortune 500 U.S. corporations and delivers these
services through a global network of call centers in the U.S.,
Philippines, India, and the Dominican Republic.
PRC is the sole member of each of PRC B2B, LLC, and Precision
Response of Pennsylvania, LLC, and the sole shareholder of
Access Direct Telemarketing, Inc., each of which is a debtor and
debtor-in-possession in PRC's joint Chapter 11 cases.
Panther/DCP Intermediate Holdings, LLC, is the sole member of
PRC.
PRC, together with its operating subsidiaries PRC B2B, Access
Direct, and PRC PA, is a leading provider of complex,
consultative, outsourced services in the Customer Care and Sales
& Marketing segments of the business process outsourcing
industry. Since 1982, the company has acquired and grown
customer relationships for some of the world's largest and most
brand-focused corporations in the financial services, media,
telecommunications, transportation, and retail industries.
The company and four of its affiliates filed for Chapter 11
protection on Jan. 23, 2008 (Bankr. S.D.N.Y. Lead Case No. 08-
10239). Alfredo R. Perez, Esq., at Weil, Gotshal & Manges, LLP,
represents the Debtors in their restructuring efforts. The
Debtors chose Stephen Dube, at CXO LLC, as their restructuring
and turnaround advisor. Additionally, Evercore Group LLC
provides investment and financial counsel to the Debtors.
The Debtors' consolidated financial condition as of
Dec. 31, 2007, showed total assets of US$354,000,000 and total
debts of US$261,000,000.
The Debtors submitted to the Court a Chapter 11 Plan of
Reorganization on Feb. 12, 2008. (PRC LLC Bankruptcy News,
Issue No. 6; Bankruptcy Creditors' Service, Inc.,
http://bankrupt.com/newsstand/or 215/945-7000)
=================
G U A T E M A L A
=================
ALLIANCE ONE: S&P Changes Outlook to Stable; Retains 'B+' Rating
----------------------------------------------------------------
Standard & Poor's Ratings Services revised its rating outlook on
Alliance One International Inc. and its wholly owned subsidiary,
Intabex Netherlands B.V., to stable from negative. At the same
time, the ratings on the Morrisville, North Carolina-based
company, including the 'B+' corporate credit rating, were
affirmed.
"The outlook revision principally reflects steady reduction in
debt leverage since the acquisition of Standard Commercial in
May 2005, and improved liquidity," said Standard & Poor's credit
analyst Kenneth Shea.
The ratings on Alliance One reflect the challenging business
environment in which the company operates, marked by global
competition, political unrest in certain leaf-tobacco producing
countries, the weak U.S. dollar, and declining cigarette
consumption in most mature markets, including the U.S. and
Western Europe. In addition, there is customer concentration
risk and
relatively high debt leverage. These concerns are tempered by
the company's position as one of the two leading independent
leaf tobacco merchants; its sourcing diversification; and solid
customer relationships with the leading cigarette manufacturers.
Based in Morrisville, North Carolina, Alliance One International
Inc. (NYSE: AOI) -- http://www.aointl.com/-- is a leaf tobacco
merchant. The company has worldwide operations in Argentina,
Bangladesh, Brazil, Bulgaria, Canada, China, France, Guatemala,
Philippines, Malaysia, Mexico and Singapore.
=============
J A M A I C A
=============
AIR JAMAICA: Union Seeks Ministry's Intervention in Wage Talks
--------------------------------------------------------------
The Bustamante Industrial Trade Union head Kavon Gayle has asked
Labor and Social Security Minister Pearnel Charles to intervene
in its wage negotiations with Air Jamaica, Radio Jamaica
reports.
According to Radio Jamaica, Air Jamaica has an ongoing wage
dispute with its ground staff and flight attendants.
Mr. Gayle told Radio Jamaica that the workers were dissatisfied
over the management's delay in starting talks on new wage
contracts for the flight attendants and the ground staff.
The last accord for the ground staff expired in December 2006,
while the agreement for flight attendants expired in May 2007,
Radio Jamaica states, citing Mr. Gayle.
Headquartered in Kingston, Jamaica, Air Jamaica --
http://www.airjamaica.com/-- was founded in 1969. It flies
passengers and cargo to almost 30 destinations in the Caribbean,
Europe, and North America. Air Jamaica offers vacation packages
through Air Jamaica Vacations. The company closed its intra-
island services unit, Air Jamaica Express, in October 2005. The
Jamaican government assumed full ownership of the airline after
an investor group turned over its 75% stake in late 2004. The
government had owned 25% of the company after it went private in
1994. The Jamaican government does not plan to own Air Jamaica
permanently.
* * *
As reported in the Troubled Company Reporter-Latin America on
June 12, 2007, Moody's Investors Service assigned a rating of B1
to Air Jamaica Limited's guaranteed senior unsecured notes.
On July 21, 2006, Standard & Poor's Rating Services assigned a
"B" long-term foreign issuer credit rating on Air Jamaica Ltd.,
which is equal to the long-term foreign currency sovereign
credit rating on Jamaica, based on the government's
unconditional guarantee of both principal and interest payments.
AIR JAMAICA: Public Accounts Comm. Probes Contract Extensions
-------------------------------------------------------------
The Public Accounts Committee has launched a probe over Air
Jamaica's extension of contracts to firms who failed to comply
with the requirements of the Contracts Commission, Radio Jamaica
reports.
Radio Jamaica relates that Air Jamaica named four petrol
stations as being retained to provide petrol lifting services
despite their failure to provide Tax Compliance Certificates.
According to Radio Jamaica, Air Jamaica's financial head
Millicent Hughes told the committee that the petrol stations'
service contracts were extended to prevent a disruption of
operations.
Ms. Hughes commented to Radio Jamaica, "That's the bottom line,
we can't just say because you have not submitted I will no
longer do it. What do we do in terms of operations in the
meanwhile?"
Radio Jamaica notes that the committee's chairperson Omar Davies
asked Ms. Hughes, "What you are saying that unilaterally, you
are going to revise the government's procurement rules because
of your cash flow problems?"
"Because the contract is in perpetuity now unless terminated
with 30 days notice, I am saying that that is what exists. So I
am giving them notice that this is the position that because you
are unable to provide the TCC then we will terminate the
contract," Radio Jamaica states, citing Ms. Hughes.
Headquartered in Kingston, Jamaica, Air Jamaica --
http://www.airjamaica.com/-- was founded in 1969. It flies
passengers and cargo to almost 30 destinations in the Caribbean,
Europe, and North America. Air Jamaica offers vacation packages
through Air Jamaica Vacations. The company closed its intra-
island services unit, Air Jamaica Express, in October 2005. The
Jamaican government assumed full ownership of the airline after
an investor group turned over its 75% stake in late 2004. The
government had owned 25% of the company after it went private in
1994. The Jamaican government does not plan to own Air Jamaica
permanently.
* * *
As reported in the Troubled Company Reporter-Latin America on
June 12, 2007, Moody's Investors Service assigned a rating of B1
to Air Jamaica Limited's guaranteed senior unsecured notes.
On July 21, 2006, Standard & Poor's Rating Services assigned a
"B" long-term foreign issuer credit rating on Air Jamaica Ltd.,
which is equal to the long-term foreign currency sovereign
credit rating on Jamaica, based on the government's
unconditional guarantee of both principal and interest payments.
NACIONAL COMMERCIAL: Fights Olint's Injunction in Court
-------------------------------------------------------
The National Commercial Bank Jamaica Limited's legal
representative Michael Hylton will appeal the court's granting
of an extension to an injunction that will stop the bank from
closing Olint Corporation Ltd.'s account, The Jamaica Gleaner
reports.
As reported in the Troubled Company Reporter-Latin America on
March 4, 2008, Jamaica's High Court Judge Roy Jones extended the
injunction alternative investment scheme Olint Limited secured
to block the National Commercial from closing its accounts. The
Supreme Court granted Olint extended the injunction until Feb.
15, preventing the bank from closing Olint's accounts. Olint
had taken out the injunction on Jan. 11, 2008, when the National
Commercial had planned to close Olint's accounts, alleging that
the company was unregulated and was operating in breach of the
Securities Act.
Radio Jamaica relates that Justice Jones reserved judgment in
the case.
According to Radio Jamaica, Justice Jones said that he will hand
down his decision soon, but did not give a date.
Radio Jamaica notes that the National Commercial strongly
opposes the injunction, claiming that Olint is unregulated and
has consistently failed to submit its audited financial
statements as required by law.
Meanwhile, Olint claims that the National Commercial is
violating the Fair Competition Act as it sees the investment
company as a competitor and that the bank is pressing for the
audited financial statements for improper use, Radio Jamaica
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
===========
AMERICAN AXLE: Work Stoppage Prompts S&P's Negative Watch
---------------------------------------------------------
Standard & Poor's Ratings Services placed the ratings on General
Motors Corp., American Axle & Manufacturing Holdings Inc., Lear
Corp., and Tenneco Inc. on CreditWatch with negative
implications. The CreditWatch placement reflects S&P's
decision to review the ratings in light of the extended American
Axle (BB/Watch Neg/--) strike.
The work stoppage that began Feb. 25 at American Axle's U.S.
United Auto Workers plants has forced closure of many GM
(B/Watch Neg/--) plants, as well as plants of certain GM
suppliers. The strike began after the expiration of the four-
year master labor agreement with American Axle. Although S&P
still expect American Axle and the UAW to reach an agreement
that will reflect more competitive labor costs, the timing is
unknown. The two sides resumed negotiations last week.
"We believe the strike has gone on long enough to possibly begin
to affect the financial resources of GM and those suppliers most
exposed to the automaker," said Standard & Poor's credit analyst
Robert Schulz.
To resolve the CreditWatch listings, Standard & Poor's will
assess the strike's impact on the companies' credit profiles,
particularly liquidity, once production resumes. S&P could
lower the ratings any time prior to a resolution of the Axle
strike if the liquidity of the companies becomes compromised,
although downgrades are not likely for another several weeks.
Headquartered in Detroit, Michigan, American Axle &
Manufacturing Holdings Inc. (NYSE:AXL) -- http://www.aam.com/--
and its wholly owned subsidiary, American Axle & Manufacturing,
Inc., manufactures, engineers, designs and validates driveline
and drivetrain systems and related components and modules,
chassis systems and metal-formed products for light trucks,
sport utility vehicles and passenger cars. In addition to
locations in the United States (in Michigan, New York and Ohio),
the company also has offices or facilities in Brazil, China,
Germany, India, Japan, Luxembourg, Mexico, Poland, South Korea
and the United Kingdom.
DURA AUTOMOTIVE: Files Amended First Revised Chapter 11 Plan
------------------------------------------------------------
DURA Automotive Systems, Inc., and its debtor affiliates filed
an amended First Revised Joint Plan of Reorganization and
Disclosure Statement explaining the Plan on March 13, 2008.
The Hon. Kevin Carey of the U.S. Bankruptcy Court for the
District of Delaware will convene a hearing on April 3, 2008, to
determine whether the Disclosure Statement contains adequate
information. Disclosure Statement Objections must be filed on
or before March 28. The Debtors will begin soliciting votes on
the Revised Plan upon approval of the Disclosure Statement.
According to Lawrence A. Denton, DURA's chairman, president and
chief executive officer, despite the Debtors' progress -- with
the overwhelming support of their creditor constituencies -- to
the very cusp of confirmation, they were unable to proceed
further with the Original Plan, filed Aug. 22, 2007, because
they could not obtain the sufficient exit financing on
acceptable terms in view of tightening credit markets and a
deteriorating outlook in the North American automotive sector.
The Original Plan had contemplated payment in cash, in full, of
all Class 2 - Second Lien Facility Claims, a backstopped rights
offering open to certain Class 3 Claims and certain Class 5
claims, and an equity or cash distribution equal to
approximately 55% for the Class 3 Claims and 22% for the Class 5
Claims. However, without the level of exit financing envisioned
by the Original Plan, these recoveries are no longer realistic.
The Debtors and their creditor constituencies, therefore,
devised the Revised Plan based upon equitizing claims in Classes
2, 3 and 5.
Exit Financing
The Revised Plan contemplates that on or before the Effective
Date, the Reorganized Debtors will enter into definitive
documentation with respect to:
(a) an exit credit facility comprised of:
-- a US$150,000,000, first lien term loan, and
-- a US$110,000,000, revolving credit facility, which
includes a US$25,000,000, letter of credit sub
facility; and
(b) a New Money Second Lien Loan with certain existing
creditors that will provide a second lien secured term
loan with a new capital infusion of US$80,000,000, and a
face amount of US$100,000,000.
US$440-Mil. to $550-Mil. Reorganization Value
DURA, with the help of its financial advisor, Miller Buckfire &
Co., LLC, prepared a valuation of the company's going concern
value post-confirmation.
Miller Buckfire estimates that the total enterprise value of the
Reorganized Debtors will be between US$440,000,000, and
US$550,000,000, with a mid-point of US$495,000,000, as of an
assumed May 31, 2008 Effective Date.
In August 2007, Miller Buckfire estimated that the total
enterprise value of the Reorganized Debtors is between
US$540,000,000 and US$660,000,000, with a US$600,000,000 mid-
point, as of an assumed Effective Date of November 1, 2007.
Miller Buckfire also estimates that the range of total equity is
between US$257,000,000 and US$367,000,000, with a mid-point of
US$312,000,000.
To calculate the estimated value of common equity, Mr. Denton
relates that Miller Buckfire deducted Convertible Preferred
Stock at its liquidation preference as of the Effective Date of
US$228,000,000, from total equity value. Miller Buckfire
estimates the range of common equity value to be between
US$29,000,000 and US$319,000,000, with a mid-point of
US$84,000,000.
Pension Plans
The Reorganized Debtors will continue to sponsor and maintain
pension plans unless terminated before the entry of the
Confirmation Order. All Compensation and Benefits Programs will
be treated as executory contracts and deemed assumed on the
Effective Date, except for, among others, Compensation and
Benefits Programs specifically rejected pursuant to the Plan and
all employee equity or equity based incentive plans.
Mr. Denton relates that each of the Debtors is either a sponsor
or a controlled group member of a sponsor of four pension plans
covered by the Employee Retirement Income Security Act:
Pension Plan EIN-PN
------------ ------
DURA Master Pension Plan 382961431/001
DURA Automotive Systems, Inc. 382961431/004
Mancelona Union-Represented
Employees' Pension Plan
Atwood Mobile Products, Inc. 364334203/005
Supplementary Retirement
Plan
DURA Retirement Plan for 364334203/024
La Grange Bargaining
Employees
Mr. Denton says the Pension Benefit Guaranty Corporation has the
authority to initiate termination proceedings, subject to
certain statutory rights, regarding the Pension Plans. If the
Pension Plans were to terminate before the date of Plan
confirmation, certain claims, including claims that may be
entitled to priority under various Bankruptcy Code provisions,
would arise.
In the event that the Pension Plans do not terminate before the
Confirmation Date, all claims of, or with respect to, the
Pension Plans, including the PBGC's claims for unfunded benefit
liabilities, for termination premiums, and for unpaid
contributions owing to the Pension Plans, will become
obligations of the Reorganized Debtors and each member of any
controlled group, and will be unaffected by the confirmation of
the Plan. There will be no discharge in favor of any
Reorganized Debtors with respect to any fiduciary Claims under
ERISA, any Pension Plan-related Claims, and any PBGC Claims.
Special Transaction Committee
The Revised Plan provides that a Special Transactions Committee
will be created to initiate a redemption of Convertible
Preferred Stock at any time, provided that the post-transaction
cost of funds meets certain customary parameters for refinancing
indebtedness typically found in an indenture. Any redemption
using funds from debt senior to the Convertible Preferred Stock
if the size of the proposed redemption is less than
US$112,500,000, must be approved by the entire Board of
Directors.
Canadian Creditor Distribution
The Revised Plan also provides that cash will be distributed pro
rata to holders of Allowed Canadian General Unsecured Claims
equal to the higher of (a) the median value of Dura Automotive
Systems (Canada), Ltd.'s assets in a liquidation; or (b) the
median value of the Dura Canada's assets in a liquidation.
Allowed Canadian General Unsecured Claims are claims filed
against Dura Canada. Mr. Denton says no claims, other than
intercompany claims, are pending against the other Dura
affiliates in reorganization under the Canadian Companies'
Creditors Arrangement Act.
Proposed Confirmation Timeline
DURA asks the Court to set this time line for the solicitation
of votes and confirmation of its Plan:
April 10, 2008 -- Commencement of solicitation on the Plan
May 2, 2008 -- Confirmation Objection Deadline
May 7, 2008 -- Voting Deadline
May 13, 2008 -- Confirmation Hearing
Mr. Denton asserts that a "fast-paced confirmation time line" is
needed to accommodate the terms of the US$170,000,000
Replacement Facility extended by Ableco Finance LLC. The
Replacement Financing provides that DURA has to have the revised
Disclosure Statement approved by May 15 and the Plan confirmed
by June 9. The Replacement Financing gives DURA until June 20
to exit from Chapter 11. The Replacement Financing will mature
on June 30.
A full-text copy of a blacklined version of the Plan is
available for free at
http://bankrupt.com/misc/DURAblacklinedPlan.pdf
A full-text copy of the Disclosure Statement is available for
free at http://bankrupt.com/misc/DURA_AmendedDiscStatement.pdf
About DURA
Rochester Hills, Michigan-based DURA Automotive Systems Inc.
(Nasdaq: DRRA) -- http://www.DURAauto.com/-- is an independent
designer and manufacturer of driver control systems, seating
control systems, glass systems, engineered assemblies,
structural door modules and exterior trim systems for the global
automotive industry. The company is also a supplier of similar
products to the recreation vehicle and specialty vehicle
industries. DURA sells its automotive products to North
American, Japanese and European original equipment manufacturers
and other automotive suppliers.
The company has three locations in Asia -- China, Japan and
Korea. It has locations in Europe and Latin-America,
particularly in Mexico, Germany and the United Kingdom.
The Debtors filed for chapter 11 petition on Oct. 30, 2006
(Bankr. D. Del. Case No. 06-11202). Richard M. Cieri, Esq.,
Marc Kieselstein, Esq., Roger James Higgins, Esq., and Ryan
Blaine Bennett, Esq., of Kirkland & Ellis LLP are lead counsel
for the Debtors' bankruptcy proceedings. Mark D. Collins, Esq.,
Daniel J. DeFranseschi, Esq., and Jason M. Madron, Esq., of
Richards Layton & Finger, P.A. Attorneys are the Debtors' co-
counsel. Baker & McKenzie acts as the Debtors' special counsel.
Togut, Segal & Segal LLP is the Debtors' conflicts counsel.
Miller Buckfire & Co., LLC is the Debtors' investment banker.
Glass & Associates Inc., gives financial advice to the Debtor.
Kurtzman Carson Consultants LLC handles the notice, claims and
balloting for the Debtors and Brunswick Group LLC acts as their
Corporate Communications Consultants for the Debtors.
As of July 2, 2006, the Debtor had US$1,993,178,000 in total
assets and US$1,730,758,000 in total liabilities. The Debtors
have asked the Court to extend their plan filing period to
April 30, 2008.
(Dura Automotive Bankruptcy News, Issue No. 49; Bankruptcy
Creditors' Service Inc., http://bankrupt.com/newsstand/or
215/945-7000)
DURA AUTO: Claims Treatment & Classification of Revised Plan
------------------------------------------------------------
The First Revised Joint Plan of Reorganization of Dura
Automotive Systems Inc. and its debtor-affiliates contemplate
this classification and treatment of claims:
Projected Recovery
Projected Treatment of --------------------
Allowed Claim Under Revised Original
Class Claim Amt. Revised Plan Plan Plan
----- ---------- ------------ --------- --------
DIP - Paid in full 100% 100%
Facility in cash.
Claims
Admin. US$28.5MM Paid in full in 100% 100%
Claims cash unless
otherwise specified
by agreement.
Priority Tax US$5.2MM Paid in full 100% 100%
Claims in cash.
Other Priority US$0 Paid in full 100% 100%
Claims in cash.
Class 1 - US$0.8MM Holder of Allowed 100% 100%
Other Secured Other Secured Claim
Claims will receive either:
* the collateral
securing the Claim;
* the cash equivalent
of the collateral;
* the treatment that
leaves the Claim
reinstated or
unimpaired.
Class 2 - US$228.1MM Holder of Allowed 100% 100%
Second Lien Second Lien Facility
Facility Claims Claim will receive its
pro rata share of the
Second Lien
Distribution.
Class 3 - US$418.7MM Holder of Allowed 19% 55%
Senior Notes Senior Notes Claims
Claims will receive its pro
rata share of the Senior
Notes Distribution.
Class 4 - US$560.7MM Holders of Subordinated 0% 0%
Subordinated Notes Claims will neither
Notes Claims receive nor retain any
property under the
Revised Plan pursuant to
contractual subordination
provisions contained in
the Subordinated Notes
Indenture.
Class 5A - US$60MM Holders will receive 8% 22%
U.S. Other their pro rata share
General of the U.S. Unsecured
Unsecured Creditor Equity
Claims Distribution.
Class 5B - US$2.4MM Holders will receive [10.5]% 22%
Canadian their pro rata share
General of the Canadian Creditor
Unsecured Distribution.
Claims
If an Allowed Claim is
filed against both the
Canadian Operating Debtor
and the U.S. Debtors,
holder of that Claim
will receive a pro rata
share of either the
Canadian Creditor
Distribution or the U.S.
Equity Distribution,
whichever is the highest.
Class 6 - US$58.3MM Holders of Convertible 0% 0%
Convertible Subordinated Debentures
Subordinated Claims will neither
Debentures receive nor retain any
Claims property under the Plan.
Class 7 - - Holders of Claims will 0% 0%
Section 510 not receive any property
Subordinated under the Plan.
Claims
Class 8 - N/A Holders of Interests 0% 0%
Equity will not receive any
Interests property under the Plan.
About DURA
Rochester Hills, Michigan-based DURA Automotive Systems Inc.
(Nasdaq: DRRA) -- http://www.DURAauto.com/-- is an independent
designer and manufacturer of driver control systems, seating
control systems, glass systems, engineered assemblies,
structural door modules and exterior trim systems for the global
automotive industry. The company is also a supplier of similar
products to the recreation vehicle and specialty vehicle
industries. DURA sells its automotive products to North
American, Japanese and European original equipment manufacturers
and other automotive suppliers.
The company has three locations in Asia -- China, Japan and
Korea. It has locations in Europe and Latin-America,
particularly in Mexico, Germany and the United Kingdom.
The Debtors filed for chapter 11 petition on Oct. 30, 2006
(Bankr. D. Del. Case No. 06-11202). Richard M. Cieri, Esq.,
Marc Kieselstein, Esq., Roger James Higgins, Esq., and Ryan
Blaine Bennett, Esq., of Kirkland & Ellis LLP are lead counsel
for the Debtors' bankruptcy proceedings. Mark D. Collins, Esq.,
Daniel J. DeFranseschi, Esq., and Jason M. Madron, Esq., of
Richards Layton & Finger, P.A. Attorneys are the Debtors' co-
counsel. Baker & McKenzie acts as the Debtors' special counsel.
Togut, Segal & Segal LLP is the Debtors' conflicts counsel.
Miller Buckfire & Co., LLC is the Debtors' investment banker.
Glass & Associates Inc., gives financial advice to the Debtor.
Kurtzman Carson Consultants LLC handles the notice, claims and
balloting for the Debtors and Brunswick Group LLC acts as their
Corporate Communications Consultants for the Debtors.
As of July 2, 2006, the Debtor had US$1,993,178,000 in total
assets and US$1,730,758,000 in total liabilities. The Debtors
have asked the Court to extend their plan filing period to
April 30, 2008.
(Dura Automotive Bankruptcy News, Issue No. 49; Bankruptcy
Creditors' Service Inc., http://bankrupt.com/newsstand/or
215/945-7000)
DURA AUTO: Unveils Financial Projections Under Revised Plan
-----------------------------------------------------------
For the purpose of demonstrating the feasibility of the Revised
First Amended Joint Plan of Reorganization, DURA Automotive
Systems, Inc. and its debtor-affiliates, with the help of
various professionals, prepared financial projections for the
seven-month ended Dec. 31, 2008, and the three years ending
Dec. 31, 2009, 2010, and 2011:
Reorganized Debtors
Unaudited Projected Consolidated Balance Sheet
(in millions)
At December 31
----------------------------------
2008 2009 2010 2011
------- ------- ------- -------
ASSETS:
Cash & Equivalents US$88.3 US$98.9 US$148.5 US$188.1
Net Accounts
Receivable, Trade 241.1 230.8 229.3 221.3
Other Accounts Receivable 20.7 19.7 19.3 18.6
Net Inventory 124.4 122.5 120.9 118.7
Other Current Assets 98.6 95.1 92.4 89.3
------- ------- ------- -------
Total Current Assets 573.2 567.1 610.3 636.1
Net Property, Plant & Equipment 397.2 369.8 348.8 324.8
Other Long-term Assets 49.2 35.3 26.6 16.0
------- ------- ------- -------
Total Assets US$1,019.5 US$972.2 US$985.8 US$976.9
======= ======= ======= =======
LIABILITIES:
Accounts Payable US$180.1 US$166.8 US$169.6 US$166.1
Exit Line of Credit 11.5 - - -
Foreign Debt 4.8 4.5 6.6 7.8
Accruals 143.8 139.1 133.6 123.4
Short-Term Deferred Taxes 7.0 6.6 6.3 6.1
------- ------- ------- -------
Total Current Liabilities 347.2 317.1 316.2 303.4
First Lien Term Debt 149.3 147.8 146.3 144.8
Second Lien Term Debt 111.2 133.2 159.6 191.2
Long-term Deferred Taxes 8.9 8.6 8.4 8.1
Other Long-term Liabilities 96.2 87.4 79.8 71.2
------- ------- ------- -------
Total Liabilities 712.7 694.1 710.3 718.7
Convertible Preferred Stock 255.6 310.7 377.7 459.1
------- ------- ------- -------
Total Equity 51.2 (32.6) (102.1) (200.9)
------- ------- ------- -------
Total Liabilities & Equity US$1,019.5 US$972.2 US$985.8 US$976.9
======= ======= ======= =======
Reorganized Debtors
Unaudited Projected Consolidated Statement of Operations
(in millions)
For the
seven For the year ended December 31
mos. ended ------------------------------
12/31/08 2009 2010 2011
-------- -------- -------- --------
Total Sales US$975.9 US$1,600.6 US$1,593.4 US$1,576.4
Direct Manufacturing
Costs 618.2 995.5 988.4 981.0
-------- -------- -------- --------
Contribution Margin 357.7 605.1 605.0 595.4
Manufacturing
Overhead and
Selling, General
& Administrative 284.9 465.1 463.1 455.7
-------- -------- -------- --------
EBITDA 72.8 139.9 141.9 139.7
Other Expense (Income) 3.3 (1.5) (1.3) (0.0)
Professional Fees 4.1 - - -
Interest Expense (Net) 28.0 47.8 51.4 56.4
Restructuring Cost 13.2 13.9 1.0 -
Depreciation 46.8 74.2 73.3 70.7
-------- -------- -------- --------
Pre-Tax Income (22.7) 5.6 17.5 12.6
Income Tax Expense 4.3 5.3 4.8 6.0
-------- -------- -------- --------
Net Income (US$27.0) US$0.3 US$12.7 US$6.6
======== ======== ======== ========
Reorganized Debtors
Unaudited Projected Statement of Cash Flows
(in millions)
For the For the year
seven ended December 31
mos. ended ----------------------
12/31/08 2009 2010 2011
-------- ------ ------ ------
Net Income (US$27.0) US$0.3 US$12.7 US$6.6
Depreciation 46.8 74.2 73.3 70.7
Other 0.1 (6.4) (5.4) (9.5)
Changes in Working Capital:
Accounts Receivable 37.8 (0.5) (4.2) (0.5)
Inventory 2.7 (3.8) (1.4) (2.1)
Accounts Payable (3.8) (3.2) 7.9 4.3
All Other (35.4) 0.2 (2.1) (6.3)
-------- ------ ------ ------
Cash flow from Operations 21.2 60.7 80.9 63.1
Capital Expenditures (33.2) (59.2) (58.5) (55.2)
Proceeds from Sale of Assets - - - -
-------- ------ ------ ------
Cash flow from Investing (33.2) (59.2) (58.5) (55.2)
Change in Exit Revolver 3.4 (11.5) - -
Foreign Debt - 0.0 2.3 1.6
First Lien Debt Amortization (0.8) (1.5) (1.5) (1.5)
Second Lien Debt 11.2 22.0 26.4 31.6
-------- ------ ------ ------
Cash flow from Financing 13.8 9.1 27.2 31.7
Net Cashflow 1.8 10.6 49.6 39.6
Beginning Cash 86.5 88.3 98.9 148.5
-------- ------ ------ ------
Ending Cash US$88.3 US$98.9 US$148.5 $188.1
======== ====== ====== ======
A full-text copy of the Financial Projections is available for
free at http://bankrupt.com/misc/DURAFinancialProjections.pdf
About DURA
Rochester Hills, Michigan-based DURA Automotive Systems Inc.
(Nasdaq: DRRA) -- http://www.DURAauto.com/-- is an independent
designer and manufacturer of driver control systems, seating
control systems, glass systems, engineered assemblies,
structural door modules and exterior trim systems for the global
automotive industry. The company is also a supplier of similar
products to the recreation vehicle and specialty vehicle
industries. DURA sells its automotive products to North
American, Japanese and European original equipment manufacturers
and other automotive suppliers.
The company has three locations in Asia -- China, Japan and
Korea. It has locations in Europe and Latin-America,
particularly in Mexico, Germany and the United Kingdom.
The Debtors filed for chapter 11 petition on Oct. 30, 2006
(Bankr. D. Del. Case No. 06-11202). Richard M. Cieri, Esq.,
Marc Kieselstein, Esq., Roger James Higgins, Esq., and Ryan
Blaine Bennett, Esq., of Kirkland & Ellis LLP are lead counsel
for the Debtors' bankruptcy proceedings. Mark D. Collins, Esq.,
Daniel J. DeFranseschi, Esq., and Jason M. Madron, Esq., of
Richards Layton & Finger, P.A. Attorneys are the Debtors' co-
counsel. Baker & McKenzie acts as the Debtors' special counsel.
Togut, Segal & Segal LLP is the Debtors' conflicts counsel.
Miller Buckfire & Co., LLC is the Debtors' investment banker.
Glass & Associates Inc., gives financial advice to the Debtor.
Kurtzman Carson Consultants LLC handles the notice, claims and
balloting for the Debtors and Brunswick Group LLC acts as their
Corporate Communications Consultants for the Debtors.
As of July 2, 2006, the Debtor had US$1,993,178,000 in total
assets and US$1,730,758,000 in total liabilities. The Debtors
have asked the Court to extend their plan filing period to
April 30, 2008.
(Dura Automotive Bankruptcy News, Issue No. 49; Bankruptcy
Creditors' Service Inc., http://bankrupt.com/newsstand/or
215/945-7000)
FEDERAL-MOGUL: Professionals Bill US$323 Mil. in Fees & Expenses
----------------------------------------------------------------
Thirty-three professionals have sought final allowance of their
fees and expenses incurred in Federal-Mogul Corp. and its
debtor-affiliates' bankruptcy cases:
Final
Professional Fee Period Fees Expenses
------------ ---------- ---- --------
11/18/02 -
AlixPartners, LLP 12/27/07 US$5,517,712 US$34,839
Analysis, Research, & 01/16/02 -
Planning Corp. 12/27/07 4,383,484 29,992
Anderson, Kill & 02/20/03 -
Olick, P.C. 12/27/07 1,805,826 62,070
05/01/07 -
Baker & McKenzie LLP 12/27/07 530,218 7,116
10/23/01 -
Bayard, P.A. 12/27/07 1,364,465 218,176
12/13/02 -
Bederson & Company, LLP 12/27/07 3,493,141 37,333
06/17/02 -
Bifferato Gentilotti LLC 12/27/07 211,428 78,687
Bilzin Sumberg Baena 11/17/03 -
Price & Axelrod LLP 10/31/04 182,971 23,265
11/13/01 -
Campbell & Levine, LLC 12/27/07 1,306,504 188,782
Caplin & Drysdale, 11/13/01 -
Chartered 02/07/08 8,854,961 635,299
Deloitte Financial 07/11/02 -
Advisory Services LLP 12/27/07 2,181,374 19,805
10/01/01 -
Dykema Gossett PLLC 12/27/07 4,543,701 86,146
11/13/01 -
Elizabeth Warren 12/27/07 2,531 -
02/11/02 -
Eric D. Green 12/27/07 752,886 45,057
10/01/01 -
Ernst & Young LLP 12/28/07 40,339,616 1,058,947
Ferry, Joseph & 11/06/03 -
Pearce, P.A. 12/27/07 518,993 53,931
09/01/02 -
FTI Consulting, Inc. 12/27/07 1,991,634 50,524
10/01/01 -
Gilbert Randolph, LLP 12/27/07 9,134,237 504,449
01/14/02 -
Hanly & Conroy LLP 12/27/07 5,149,916 307,992
02/19/02 -
Herbert Smith LLP 12/27/07 3,174,253 182,914
12/03/03 -
J.H. Cohn LLP 12/27/07 894,238 14,212
09/18/06 -
Killian & Salisbury, P.C. 12/27/07 32,945 5,321
Legal Analysis 12/01/01 -
Systems, Inc. 12/27/07 1,830,547 81,127
01/23/02 -
Lovells, Inc. 12/27/07 7,474,452 831,206
Pachulski Stang 10/01/01 -
Ziehl & Jones LLP 12/27/07 3,000,578 3,097,847
10/01/01 -
PricewaterhouseCoopers LLP 12/27/07 14,859,721 1,347,569
05/01/02 -
Resolutions, LLC 12/27/07 458,462 35,467
10/01/01 -
Rothschild Inc. 09/30/03 4,800,000 362,857
11/09/01 -
Sidley Austin LLP 12/27/07 101,991,251 5,689,097
Sonnenschein Nath & 10/23/01 -
Rosenthal LLP 12/27/07 30,748,517 1,132,742
05/08/06 -
The Kenesis Group, LLC 12/27/07 3,217,501 27,392
06/01/04 -
Weil, Gotshal & Manges LLP 12/27/07 3,312,299 319,327
Young Conaway Stargatt & 01/07/02 -
Taylor, LLP 12/27/07 12,102,382 1,966,023
Bell, Boyd & Lloyd LLP also seeks payment of US$6,109,055 for
its fees and expenses during the period from June 17, 2002,
through Dec. 27, 2007. In addition, Jefferies & Company, Inc.,
asks the Court to award it US$19,145,389 for its fees and
expenses for the period from Oct. 26, 2001, through
Dec. 27, 2007.
The Professionals' fees and expenses total approximately
US$323,952,000.
The Official Committee of Asbestos Property Damage Claimants
also seeks reimbursement of US$41,592 for the actual and
necessary expenses incurred by its committee members for the
period from Oct. 23, 2001, through Dec. 27, 2007. The costs and
expenses incurred by the Asbestos Committee Members are in
connection with committee meetings that were actual and
necessary to the preservation of the Reorganized Debtors'
Chapter 11 estates, Kathleen Campbell Davis, Esq., at Campbell &
Levine, LLC, in Wilmington, Delaware, avers.
The Reorganized Debtors hired AlixPartners, Dykema Gossett,
Ernst & Young, FTI Consulting, Gilbert Randolph, Hanly & Conroy,
Kenesis, Killian & Salisbury, Pachulski Stang, PwC, Rothschild,
and Sidley Austin.
The Official Committee of Unsecured Creditors retained
Sonnenschein Nath, as counsel; Bayard, as co-counsel; and
Jefferies & Co., as financial advisor.
Baker & McKenzie, Bell Boyd and Bifferato Gentilotti act as
counsel to the Official Committee of Equity Security Holders.
Deloitte FAS serves as the Equity Committee' financial advisor.
Anderson Kill, Bilzin Sumberg, Campbell & Levine, Caplin &
Drysdale, Ferry Joseph, J.H. Cohn, Legal Analysis, Lovells, Ms.
Warren, and Weil Gotshal were retained by the Asbestos
Committee.
Eric D. Green is the legal representative for Future Asbestos
Claimants. As the Futures Representative, Mr. Green is
responsible for protecting the rights of all entities who have
not asserted asbestos-related claims against the Debtors prior
to the confirmation of the Plan of Reorganization but properly
assert Demands, as that term is defined in Section 524(g)(5) of
the Code, subsequent to the order confirming the Plan. Mr.
Green, with the assistance of Analysis Research, Bederson & Co.,
Herbert Smith, Resolutions, and Young Conaway, has investigated
the Reorganized Debtors' acts, conduct, and property on a
regular basis, including matters in connection with the
operation and reorganization of the Debtors' businesses.
Federal-Mogul Corporation -- http://www.federal-mogul.com/--
(OTCBB: FDMLQ) is a global supplier, serving the world's
foremost original equipment manufacturers of automotive, light
commercial, heavy-duty, agricultural, marine, rail, off-road and
industrial vehicles, as well as the worldwide aftermarket.
Founded in Detroit in 1899, the company is headquartered in
Southfield, Michigan, and employs 45,000 people in 35 countries.
Aside from the U.S., Federal-Mogul also has operations in other
locations which includes, among others, Mexico, Malaysia,
Australia, China, India, Japan, Korea, and Thailand.
The Company filed for chapter 11 protection on Oct. 1, 2001
(Bankr. Del. Case No. 01-10582). Lawrence J. Nyhan Esq., James
F. Conlan Esq., and Kevin T. Lantry Esq., at Sidley Austin Brown
& Wood, and Laura Davis Jones Esq., at Pachulski, Stang, Ziehl &
Jones, P.C., represent the Debtors in their restructuring
efforts. When the Debtors filed for protection from their
creditors, they listed US$10.15 billion in assets and US$8.86
billion in liabilities. Federal-Mogul Corp.'s U.K. affiliate,
Turner & Newall, is based at Dudley Hill, Bradford. Peter D.
Wolfson, Esq., at Sonnenschein Nath & Rosenthal; and Charlene D.
Davis, Esq., Ashley B. Stitzer, Esq., and Eric M. Sutty, Esq.,
at The Bayard Firm, represent the Official Committee of
Unsecured Creditors.
On March 7, 2003, the Debtors filed their Joint Chapter 11 Plan.
They submitted a Disclosure Statement explaining that plan on
April 21, 2003. They submitted several amendments and on
June 6, 2004, the Bankruptcy Court approved the Third Amended
Disclosure Statement for their Third Amended Plan. On
July 28, 2004, the District Court approved the Disclosure
Statement. The estimation hearing began on June 14, 2005. The
Debtors submitted a Fourth Amended Plan and Disclosure Statement
on Nov. 21, 2006, and the Bankruptcy Court approved that
Disclosure Statement on Feb. 6, 2007. The Fourth Amended Plan
was confirmed by the Bankruptcy Court on Nov. 8, 2007, and
affirmed by the District Court on Nov. 14. Federal-Mogul
emerged from Chapter 11 on Dec. 27, 2007.
* * *
As reported in the Troubled Company Reporter-Latin America on
Jan. 10, 2008, Moody's Investors Service confirmed the ratings
of the reorganized Federal-Mogul Corporation -- Corporate Family
Rating, Ba3; Probability of Default Rating, Ba3; and senior
secured bank credit facilities, Ba2. The outlook is stable.
The financing for the company's emergence from Chapter 11
bankruptcy protection has been funded in line with the structure
originally rated by Moody's in a press release dated
Nov. 28, 2007.
As reported in the Troubled Company Reporter on Jan. 7, 2008,
Standard & Poor's Ratings Services assigned its 'BB-' corporate
credit rating to Southfield, Michigan-based Federal-Mogul Corp.
following the company's emergence from Chapter 11 on
Dec. 27, 2007. The outlook is stable.
INNOPHOS HOLDINGS: Posts US$3.9 Mil. Net Loss for 4th Quarter
-------------------------------------------------------------
Innophos Holdings, Inc. reported net loss of US$3.9 million for
the fourth quarter 2007 and net loss of US$5.487 million for
full year 2007.
Net sales for the fourth quarter 2007 were US$143.9 million, an
increase of US$12.3 million, or 9.4%, as compared to US$131.6
million for the same period in 2006.
Operating income for the fourth quarter 2007 was US$6.4 million,
an increase of US$10.3 million, compared to an operating loss of
US$3.9 million for the comparable period in 2006. The fourth
quarter 2007 was negatively affected by approximately US$10.5
million from planned and unplanned outages at the Company's
Coatzacoalcos, Mexico facility, with approximately US$5.4
million coming from maintenance costs, US$4.0 million from
reduced volumes and US$1.1 million from raw material replacement
costs, and US$2.4 million in legal fees to comply with a sodium
tripolyphosphate (STPP) document request subpoena from the U.S.
Department of Justice. The fourth quarter 2006 was negatively
affected by US$13.3 million of unusual expense items primarily
related to the Company's termination of a management advisory
agreement and its initial public equity offering.
Net loss for the fourth quarter 2007 was US$3.9 million, an
improvement of US$20.8 million compared to a net loss of
US$24.7 million for the same period in 2006. Diluted loss per
share for the fourth quarter 2007 was US$0.19. Innophos had
20.9 million shares issued and outstanding at Dec. 31, 2007.
Cash and Cash Equivalents
As of December 31, 2007, Innophos had US$15.7 million of cash
and cash equivalents. Net debt at the end of the fourth quarter
2007 was US$368.8 million, a reduction of US$4.3 million from
US$373.1 million at September 30, 2007. Capital expenditures
for the fourth quarter 2007 were US$5.3 million versus US$6.0
million in the same quarter of 2006.
Full Year Results
Full year 2007 net sales were US$579.0 million, an increase of
US$37.2 million, or 6.9%, as compared to US$541.8 million in
2006.
Operating income for the year ended December 31, 2007 was
US$47.7 million, an increase of US$16.8 million, or 54.4%, as
compared to US$30.9 million in 2006. Included in 2007 results
are US$10.2 million of unusual expense items versus US$17.6
million unusual expense items in 2006 results.
Included in 2007 income (loss) before income taxes are unusual
expense items totaling US$13.9 million, resulting from the
Company's termination of the pharma sales agency agreement,
Mexican workforce reorganization and port tax settlements, and
debt retirement, all of which occurred in the first and second
quarters of 2007. Included in 2006 income (loss) before income
taxes are unusual expense items totaling US$24.6 million,
primarily due to the Company's termination of a management
advisory agreement and its November 2006 initial public equity
offering and related debt retirement.
Balance Sheet
Innophos reported total assets of US$542.699 million, total
liabilities of US$497.995 million and total stockholders' equity
of US$44.704 million
About Innophos Holdings, Inc.
Headquartered in Cranbury, New Jersey, Innophos Holdings, Inc.--
http://www.innophos.com-- the holding company for a North
American manufacturer of specialty phosphates, serves a diverse
range of customers across multiple applications, geographies and
channels. Innophos offers a broad suite of products used in a
wide variety of food and beverage, consumer products,
pharmaceutical and industrial applications. Innophos has
manufacturing operations in Nashville, Tenn.; Chicago Heights,
Ill.; Chicago (Waterway), Ill.; Geismar, La.; Port Maitland,
Ontario (Canada); and Coatzacoalcos, Veracruz and Mission Hills,
Guanajuato (Mexico).
* * *
As reported by the Troubled Company Reporter on April 17, 2007
Standard & Poor's Ratings Services assigned its 'CCC+' rating to
US$66 million of senior unsecured notes due 2012 to be issued by
Innophos Holdings, parent company of Innophos Inc. The rating
still holds to date. S&P also affirmed the 'B' corporate credit
rating and other ratings on Innophos Inc.
The TCR reported on April 18, 2008 that Moody's Investors
Service assigned a B1 corporate family rating to Innophos
Holdings, Inc. and a B3 rating to the company's new US$66
million senior unsecured notes due 2012. The ratings still hold
to date.
The new notes are being issued by Innophos Holdings to refinance
US$61 million of debt of its subsidiary, Innophos Investments
Holdings, Inc.
LEAR CORP: S&P Puts Ratings on Negative Watch on Extended Strike
----------------------------------------------------------------
Standard & Poor's Ratings Services placed the ratings on General
Motors Corp., American Axle & Manufacturing Holdings Inc., Lear
Corp., and Tenneco Inc. on CreditWatch with negative
implications. The CreditWatch placement reflects S&P's
decision to review the ratings in light of the extended American
Axle (BB/Watch Neg/--) strike.
The work stoppage that began Feb. 25 at American Axle's U.S.
United Auto Workers plants has forced closure of many GM
(B/Watch Neg/--) plants, as well as plants of certain GM
suppliers. The strike began after the expiration of the four-
year master labor agreement with American Axle. Although S&P
still expect American Axle and the UAW to reach an agreement
that will reflect more competitive labor costs, the timing is
unknown. The two sides resumed negotiations last week.
"We believe the strike has gone on long enough to possibly begin
to affect the financial resources of GM and those suppliers most
exposed to the automaker," said Standard & Poor's credit analyst
Robert Schulz.
To resolve the CreditWatch listings, Standard & Poor's will
assess the strike's impact on the companies' credit profiles,
particularly liquidity, once production resumes. S&P could
lower the ratings any time prior to a resolution of the Axle
strike if the liquidity of the companies becomes compromised,
although downgrades are not likely for another several weeks.
Based in Southfield, Michigan, Lear Corporation (NYSE:LEA) --
http://www.lear.com/-- supplies automotive interior systems and
components. Lear provides complete seat systems, electronic
products and electrical distribution systems and other interior
products. The company has more than 90,000 employees at 236
facilities in 33 countries.
Lear operates in Europe (France, Czech Republic, United Kingdom,
France, Germany, Hungary, Poland, Portugal, Romania, Russia,
Slovakia, Spain, Sweden), Latin America (Argentina, Mexico, and
Venezuela), and Asia (Singapore, China, India, Japan,
Philippines, South Korea, and Thailand).
ODYSSEY RE: Okays Additional US$200 Mln Share Repurchase Program
----------------------------------------------------------------
Odyssey Re Holdings Corp.'s Board of Directors has approved an
increase to the company’s existing share repurchase program,
authorizing the repurchase of up to an additional US$200 million
of the company’s common stock, bringing the total authorization
to US$400 million. Through March 17, 2008, the company has
purchased approximately 4.07 million shares under the program,
for an aggregate purchase price of approximately
US$146.9 million.
Under the program, which will terminate on June 15, 2009, shares
are repurchased by OdysseyRe from time to time on the open
market and are cancelled. Depending on market conditions and
other factors, these repurchases may be commenced or suspended
at any time, or from time to time, without prior notice.
Odyssey Re Holdings Corp. (NYSE: ORH) is an underwriter of
property and casualty treaty and facultative reinsurance, as
well as specialty insurance. Odyssey Re operates through its
subsidiaries, Odyssey America Reinsurance Corp., Hudson
Insurance Co., Hudson Specialty Insurance Co. Clearwater
Insurance Co., Newline Underwriting Management Limited and
Newline Insurance Co. Ltd. The Company underwrites through
offices in the United States, London, Paris, Singapore, Toronto
and Mexico City. Odyssey Re Holdings Corp. is listed on the New
York Stock Exchange under the symbol ORH.
* * *
To date, Odyssey Re Holdings Corp. carries Standard & Poor's
'BB' preferred stock ratings.
=================
N I C A R A G U A
=================
INTERPUBLIC GROUP: Put Option for 4.50% Senior Notes Expires
------------------------------------------------------------
The Interpublic Group of Companies Inc. disclosed that holders
of US$190,795,000 in aggregate principal amount of its 4.50%
Convertible Senior Notes due 2023 validly delivered purchase
notices for their Notes prior to the expiration of their right,
pursuant to the terms of the Notes, to require Interpublic to
purchase their Notes for cash. The Put Option expired at
midnight, New York City time, on March 14, 2008. Interpublic
has accepted for purchase all of the Notes for which a purchase
notice was validly delivered. The purchase price for the Notes
pursuant to the Put Option was US$1,000 in cash per US$1,000
principal amount of Notes, and the aggregate purchase price for
all the Notes for which a purchase notice was validly delivered
was US$190,795,000. Following Interpublic’s purchase of Notes
pursuant to the Put Option, US$9,205,000 in aggregate principal
amount of the Notes remains outstanding.
Prior to delivery of a purchase notice, the Notes purchased
pursuant to the Put Option had been convertible into 80.5153
shares of Interpublic's common stock per US$1,000 principal
amount of the Notes, and the aggregate US$190,795,000 principal
amount purchased by Interpublic had been convertible into an
aggregate 15,361,916 common shares.
New York-based, Interpublic Group of Companies Inc. (NYSE: IPG)
-- http://www.interpublic.com/-- is one of the world's leading
organizations of advertising agencies and marketing services
companies. Major global brands include Draftfcb, FutureBrand,
GolinHarris International, Initiative, Jack Morton Worldwide,
Lowe Worldwide, MAGNA Global, McCann Erickson, Momentum, MRM
Worldwide, Octagon, Universal McCann and Weber Shandwick.
Leading domestic brands include Campbell-Ewald, Carmichael
Lynch, Deutsch, Hill Holliday, Mullen, The Martin Agency and
R/GA.
The company has operations in Argentina, Brazil, Barbados,
Belize, Chile, Colombia, Costa Rica, Dominican Republic,
Ecuador, El Salvador, Guatemala, Honduras, Jamaica, Mexico,
Nicaragua, Panama, Paraguay, Puerto Rico, Peru, Uruguay and
Venezuela.
* * *
As reported in the Troubled Company Reporter-Latin America on
March 4, 2008, Standard & Poor's Ratings Services raised its
corporate credit rating on Interpublic Group of Cos. Inc. to
'B+' from 'B'. The outlook is positive. The New York City-
based global advertising agency holding company had
approximately US$2.3 billion in debt outstanding as of
Dec. 31, 2007.
====================
P U E R T O R I C O
====================
COOPER COMPANIES: Picks Nine Directors; Hires KPMG as Auditors
--------------------------------------------------------------
The Cooper Companies Inc.'s stockholders, at its March 18 annual
meeting held in New York City has elected nine directors and
ratified the appointment of KPMG LLP as the company's auditors
for fiscal 2008.
Cooper's stockholders elected the following as members of the
board of directors:
-- A. Thomas Bender, chairman of the board of the company;
-- Allan E. Rubenstein, M.D., vice-chairman of the board and
lead director of the company, chief executive officer of
NexGenix Pharmaceuticals, LLC and a member of the faculty
of the Mt. Sinai School of Medicine and the Mt. Sinai
Neurofibromatosis Research and Treatment Center;
-- Michael H. Kalkstein, of counsel of Dechert, LLP;
-- Jody S. Lindell, President and CEO of S.G. Management,
Inc.;
-- Moses Marx, general partner of United Equities;
-- Donald Press, executive vice president of Broadway
Management Company, Inc., and principal in the firm of
Donald Press, P.C.;
-- Steven Rosenberg, president, chief executive officer and
chief financial officer of Berkshire Bancorp, Inc.;
-- Robert S. Weiss, president and chief executive officer of
the company; and
-- Stanley Zinberg, M.D.
Following the stockholders' meeting, the board elected:
-- A. Thomas Bender, chairman of the board and Allan E.
Rubenstein, M.D.,
-- vice-chairman of the board and lead director.
The board also elected as officers of the Company:
-- Robert S. Weiss, president and chief executive officer;
-- Eugene J. Midlock, senior vice president and chief
financial officer;
-- Carol R. Kaufman, senior vice president of legal affairs,
secretary and chief administrative officer;
-- Daniel G. McBride, vice president and general counsel;
-- Albert G. White III, vice president, investor relations
and treasurer;
-- Benny Kirsh, chief information officer; and
-- Rodney E. Folden, corporate controller.
With corporate offices in Lake Forest and Pleasanton,
California, The Cooper Companies, Inc. --
http://www.coopercos.com/-- (NYSE:COO) manufactures and markets
specialty healthcare products through its CooperVision and
CooperSurgical units.
CooperVision -- http://www.coopervision.com/-- manufactures and
markets contact lenses and ophthalmic surgery products.
Headquartered in Lake Forest, Calif., it has manufacturing
operations in Albuquerque, New Mexico, Juana Diaz, Puerto Rico,
Norfolk, Virginia, Rochester, New York, Adelaide, Australia,
Hamble and Hampshire England, Ligny-en-Barrios, France, Madrid,
Spain and Toronto.
CooperSurgical -- http://www.coopersurgical.com/-- manufactures
and markets diagnostic products, surgical instruments and
accessories to the women's healthcare market. With headquarters
and manufacturing facilities in Trumbull, Conn., it also
manufactures in Pasadena, Calif., North Normandy, Illinois, Fort
Atkinson, Wisconsin, Montreal and Berlin.
Proclear(R) and Biomedics(R) are registered trademarks and
Biomedics XC(TM) and Biofinity(TM) are trademarks of The Cooper
Companies, Inc., and its subsidiaries or affiliates.
* * *
As reported in the Troubled Company Reporter-Latin America on
Oct. 18, 2007, Moody's Investors Service revised Cooper
Companies Inc.'s ratings outlook to negative from stable.
Additionally, Moody's downgraded the company's speculative grade
liquidity rating to SGL-2 from SGL-1. Concurrently, Moody's
affirmed the company's Ba3 corporate family rating, Ba3
probability of default rating and Ba3 rating on the $350 million
senior unsecured notes due 2015.
=================
V E N E Z U E L A
=================
HARVEST NATURAL: Posts US$57.2 Million Net Loss in December 2007
----------------------------------------------------------------
Harvest Natural Resources, Inc. reported its 2007 fourth quarter
and year-end results. The company posted fourth quarter
earnings of US$65.3 million compared with a net loss of US$8.6
million for the 2006 fourth quarter. Results for the 2007
fourth quarter include equity earnings for the company's 32%
interest in its Venezuelan affiliate, Petrodelta, S.A., for the
twenty-one months ended Dec. 31, 2007, and gains on financing
transactions.
The company's net loss for the twelve months ended Dec. 31,
2007, were US$57.2 million compared with a loss of US$62.5
million for 2006. Results for 2006 included charges of US$73.8
million, or US$59 million net to the company's 80% interest, for
additional taxes and related interest in Venezuela for 2001
through 2006 and a net US$3.9 million additional depletion and
amortization restatement to reflect the retrospective
application of the successful efforts method of accounting.
Harvest Natural President and Chief Executive Officer, James A.
Edmiston, said: "We are pleased to have completed the legal and
contractual conversion to Petrodelta as well as executing the
Contract for the Sale and Purchase of Hydrocarbons which paves
the way for us to report our share of Petrodelta's operating and
financial results. This will enable Petrodelta to finalize its
audited financial statements and to ultimately declare a
dividend to shareholders based on 2006 and 2007 financial
results. Petrodelta has invoiced for 2006 oil and gas
deliveries and expects to invoice for 2007 oil and gas
deliveries shortly."
Production and Reserves
Petrodelta delivered 1.2 million barrels of oil, or 13,100
barrels of oil per day, and 3.3 billion cubic feet (Bcf) of
natural gas to PDVSA Petroleo, S.A. during the fourth quarter
2007. The average price received for oil deliveries was
US$74.91, which was approximately 83% of the average price for
West Texas Intermediate and approximates world market prices for
the quality of oil produced by Petrodelta. The natural gas
price is contractually fixed at US$1.54 per thousand cubic feet.
During the twenty-one months beginning April 1, 2006, the
economical effective date for Petrodelta, and ended Dec. 31,
2007, Petrodelta produced and sold 10.6 million barrels of oil
and 25 Bcf of natural gas to PDVSA Petroleo SA. The average oil
price was US$54.85 per barrel, or 78% of the average price for
West Texas Intermediate during that period.
Harvest Natural engaged Ryder Scott Company, L.P., an
independent engineering firm, to prepare an estimate of proved
reserves and an estimate of the future net cash flows associated
with those reserves as of Dec. 31, 2007. Ryder Scott used an
oil price of US$75.86 per barrel, which was approximately 83% of
the average December 2007 West Texas Intermediate price, to
estimate the value of Harvest Natural's 32% interest in
Petrodelta. Natural gas prices were US$1.54 per thousand cubic
feet as fixed in the hydrocarbon sales contract. Based on their
evaluation, the company's share of Petrodelta's proved reserves,
net of royalty, and after tax cash flows discounted at 10%.
During the 2007 fourth quarter, Harvest Natural changed its
accounting method for recording the results of its oil and gas
exploration and development activities to the successful efforts
method of accounting. Previously, the company used the full
cost method of accounting. Petrodelta's financial statements
are prepared in accordance with International Financial
Reporting Standards which require the successful efforts method
of accounting. The change in accounting principle resulted in a
cumulative, non-cash increase to retained earnings of US$52.4
million as of Dec. 31, 2004.
Balance Sheet
On Dec. 31, 2007, Harvest Natural had US$120.8 million of cash
and US$6.8 million of restricted cash offset by US$9.3 million
equivalent of Bolivar denominated debt. During 2007, the
company reduced its Bolivar denominated debt by US$96 million
equivalent from US$105 million at year-end 2006.
Share Buyback Program
In June 2007, the board of directors authorized the company to
purchase up to US$50 million of its common stock though open
market purchases. During 2007, Harvest Natural purchased
3,000,000 shares for US$32.8 million including commissions.
Currently, US$17.2 million of the US$50 million share purchase
authorization remains available.
About Harvest Natural Resources
Harvest Natural Resources, Inc. (NYSE: HNR) --
http://www.harvestnr.com/-- is an independent energy company
engaged in the acquisition, exploration, development, production
and disposition of oil and natural gas properties. The Company
has acquired and developed significant interests in the
Venezuela, Russia and has also undeveloped acreage offshore of
China. The company’s only producing assets are in Venezuela.
Its subsidiary, Harvest Vinccler S.C.A. has been providing
operating services to Petroleos de Venezuela SA (PDVSA).
* * *
As reported in December 2007, Harvest Natural Resources said in
a statement that it incurred a US$6.5 million loss in the first
quarter 2007, and a net loss of $62.5 million as of
Dec. 31, 2006.
Moody's Investors Service Upgraded the company's senior implied
rating to Caa1 from Caa2 in September 2004. The rating still
hold to date.
PETROLEOS DE VENEZUELA: Wins Exxon Lawsuit
------------------------------------------
Judge Paul Walker of London Court has dissolved an injunction
freezing US$12 billion assets belonging to Petroleos de
Venezuela SA, Caroline Binham and Joe Carrol of Bloomberg News
report.
According to Bloomberg, PDVSA won the legal battle because the
dispute has no connection with the U.K. Exxon, which has battled
in arbitration to bag compensation for an oil field President
Hugo Chavez seized last year.
Erich Arispe, an analyst at Fitch Inc. in New York, said that
the decision would make PDVSA face less skepticism from lenders
as it aims financing for a US$70 billion expansion to double
crude output in the next four years, the report relates.
The report states that ExxonMobil claimed the order was not on
the merits of the underlying conflict. Exxon spokesman Alan
Jeffers, in its telephone interview, said that Judge Walker
"concluded that the English courts shouldn't be issuing pre-
judgment orders" with reference to international arbitrations.
As reported in the Troubled Company Reporter-Latin America on
March 10, 2008, Justice Walker could rule on the US$12 billion
asset freeze legal dispute between Exxon Mobil and Petroleos de
Venezuela last week. As previously reported, 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
the company was made so that Exxon Mobil would be able to
extract compensation should it win a pending arbitration.
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: CITGO Commends PDVSA on Lawsuit Victory
---------------------------------------------------------------
A decision by a London Court to lift a US$12 billion freeze on
assets owned by Petroleos de Venezuela, S.A., the national oil
company of the Bolivarian Republic of Venezuela, acknowledges
the international strength of CITGO’s ultimate parent and its
importance as a world class oil producer, which makes an asset
freeze unnecessary and incompatible with applicable laws, said
CITGO Chairman, President and CEO Alejandro Granado.
“We congratulate PDVSA on its victory in the ongoing legal fight
against ExxonMobil. The decision today supports the fact that
Venezuela and its national oil company have acted in compliance
with principles that ratify the sovereign right of nations over
their natural resources,” Mr. Granado noted.
“I am very proud to be part of the big PDVSA family. PDVSA
always acts in compliance with applicable laws, respecting its
commitments with the support of a highly ethical, morally
responsible and professional work force.”
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
===========
* Moody's Sovereign Issuers Has Increased to 107 in 2007
--------------------------------------------------------
There were no new sovereign defaults in 2007, says Moody's
Investors Service in a new report entitled, "Sovereign Default
and Recovery Rates, 1983-2007". With an increasing number of
emerging market countries gaining access to international
capital markets, the number of Moody's-rated sovereign issuers
has grown to 107 in 2007.
"The low default volume over the last couple of years has
reflected the strong global economic growth over the same
period," says Moody's Associate Analyst and author of the
report, Elena Duggar. "Last year, 18 sovereign issuers were
upgraded against only two downgrades."
Of the 18 upgrades, Moody's identifies four groups: Gulf oil
exporting countries; strong Asian performers; recovering Latin
America and Caribbean countries; and Euro zone new joiners.
In addition to presenting an analysis of all the sovereign
defaults since 1983, Moody's report compares and contrasts
sovereigns and corporates with regard to default, migration and
recovery rates as well as ratings accuracy measures. Sovereign
default rates have on average been lower than corporate default
rates. The differences in default rates, however, are not
likely significant as the overall size of the sovereign sample
is small and as default risk is highly correlated across
emerging market sovereigns, explains the analyst.
Moody's also finds that historically sovereign ratings have been
more stable at higher rating levels and modestly more stable
than their corporate counterparts. Sovereign upgrades have far
outnumbered downgrades in the last couple of years.
The two highest recovery rates in Moody's sample follow the
Belize and Dominican Republic defaults in 2006 and 2005,
respectively, when corporate recovery rates were generally high
and corporate default rates were low. "Issuer-weighted recovery
rates on defaulted sovereign bonds have averaged 54 percent
overall," says Ms. Duggar. She also points out that the value-
weighted recovery rate estimate is significantly lower than the
issuer-weighted recovery rate due to the large Argentinean and
Russian defaults, which garnered low recovery rates.
In terms of accuracy, the Moody's report notes that sovereign
ratings have historically proven to be accurate predictors of
relative default risk, providing consistent relative rank
ordering. All sovereign defaulters have had ratings of Ba2 or
less within one year prior to default. The historical average
one-year accuracy ratio for the sovereign ratings has been 94.3
percent for the period 1983-2007.
The full title of this Moody's report is "Sovereign Default and
Recovery Rates, 1983-2007."
***********
S U B S C R I P T I O N I N F O R M A T I O N
Troubled Company Reporter - Latin America is a daily newsletter
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Hills, Pennsylvania, USA, and Beard Group, Inc., Frederick,
Maryland USA. Marie Therese V. Profetana, Sheryl Joy P. Olano,
Rizande de los Santos, and Pamella Ritah K. Jala, Editors.
Copyright 2008. All rights reserved. ISSN 1529-2746.
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