/raid1/www/Hosts/bankrupt/TCRLA_Public/080403.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, April 3, 2008, Vol. 9, No. 66
Headlines
A R G E N T I N A
ASOCIACION MUTUAL: Files for Reorganization in Court
GEN SISTEMAS: Proofs of Claim Verification Deadline is May 15
HUNTER JUNIORS: Proofs of Claim Verification is Until May 29
INDIAN CREEK: Proofs of Claim Verification Deadline is April 25
LOS REYES: Proofs of Claim Verification Deadline is May 12
MARASCO Y SPEZIALE: Files for Reorganization in Court
PERNOD RICARD: Fitch Lowers Ratings on Vin & Spirit Buy
QUIKSILVER INC: S&P Puts BB- Credit Rating under Negative Watch
RADIO REMISE: Proofs of Claim Verification is Until June 27
TALLERES UNION: Proofs of Claim Verification Deadline is June 16
B A H A M A S
PINNACLE ENTERTAINMENT: Moody's Holds 'B2' Corp. Family Rating
B E R M U D A
ELAN CORP: Court Dismisses Tysabri Investor Lawsuit
GLOBAL PARTNERS: Proofs of Claim Filing Deadline is April 18
GLOBAL PARTNERS: Final Shareholders Meeting Set for April 30
SECURITY CAPITAL: Unit Files Counterclaims Against Merrill Lynch
TYCO INTERNATIONAL: To Report 2nd Qtr. 2008 Results on May 1
B O L I V I A
ALCATEL-LUCENT SA: To Build Bolivia's 1st WiMAX System for Entel
COEUR D'ALENE: Begins Commissioning San Bartolome Silver Mine
B R A Z I L
BANCO BMG: To Sell Up to BRL100MM/Month Payroll Loans to Nossa
BANCO ITAU: To Spend US$10 Mln. for Chilean Life Insurance Unit
BANCO NACIONAL: OKs BRL7.30 Bil. Credit Line for Companhia Vale
BANCO NOSSA: To Buy Up to BRL100MM/Month Payroll Loans from BMG
NOVELL INC: Augments Operations With PlateSpin Buyout Completion
REALOGY CORP: CFO Hull Comments on S&P's March Outlook Action
TAM: Sao Paulo/Milan Route Carries 131,000 Passengers in 1st Yr.
UNIAO DE BANCOS: Will Establish Investment Bank
VALMONT INDUSTRIES: Revenue Growth Cues Moody's Rtng Lift to Ba1
C A Y M A N I S L A N D S
AAM EMERGING: Sets Final Shareholders Meeting for April 4
CARBON TRADING: Will Hold Final Shareholders Meeting on April 4
CARBON TRADING MASTER: Final Shareholders Meeting is on April 4
CC CAYCO: Sets Final Shareholders Meeting for April 4
CHEYNE GLOBAL: Sets Final Shareholders Meeting for April 4
FINANCIAL RISK: Sets Final Shareholders Meeting for April 4
GLOBAL YACHT: Will Hold Final Shareholders Meeting on April 4
HIGHLAND SPECIAL: Proofs of Claim Filing Deadline is Tomorrow
NEW ORIENTAL: Will Hold Final Shareholders Meeting on April 4
PARMALAT SPA: Warrant Exercise Hikes Capital by EUR6.29 Million
SNOWBALL MULTI: Final Shareholders Meeting is on April 4
TGM CURRENCY: Sets Final Shareholders Meeting for April 4
C H I L E
QUEBECOR WORLD: Jefferies & Co. as Committee Bankers Approved
QUEBECOR WORLD: Kurtzman Carson Hiring as Committee Agent Okayed
QUEBECOR WORLD: Mesirow Hiring as Panel Financial Advisor Okayed
C O S T A R I C A
CINEMARK HOLDINGS: Elects Steven P. Rosenberg to Board
US AIRWAYS: Court of Appeals Upholds Ruling on R. Bosiger's Suit
US AIRWAYS: To Settle MD Aviation Claim by Paying US$11,500,000
US AIRWAYS: R. Thomas Demands Retirement Benefits Continued
D O M I N I C A N R E P U B L I C
CAP CANA: Land Court Judges Issue Arrest Warrant for R. Hazoury
DELTA AIR: Launches Food-for-Purchase Program in Caribbean
E L S A L V A D O R
AES CORP: Unit Gets Regulator Nod to Acquire Bioenergia Assets
G U A T E M A L A
BRITISH AIRWAYS: Facing GBP20Mln Costs Over Flight Cancellations
H A I T I
DYNCORP INT'L: Realigns Business, Adds Third Reporting Segment
H O N D U R A S
CHIQUITA BRANDS: Recalling Cantaloupes from Honduras
J A M A I C A
AIR JAMAICA: Will Suspend Three Weekly Flights to St. Lucia
CABLE & WIRELESS: Jamaican Unit Raises Line Rental Fee
CASH PLUS: Debt Exceeds Income; Goes Into Receivership
M E X I C O
CONSTELLATION COPPER: Defaults in CN$69 Million Debentures
COREL CORP: Gets Proposal from Shareholder Corel Holdings
DURA AUTOMOTIVE: Further Amends First Revised Chapter 11 Plan
DURA AUTOMOTIVE: Court Extends Exclusivity Deadline to April 30
* MEXICO: 2008 Outlook for Major Banks is Adequate, Fitch Says
P U E R T O R I C O
DORAL FINANCIAL: S&P Lifts LT Counterparty Credit Rating to B+
V E N E Z U E L A
PETROLEOS DE VENEZUELA: Debt Up 449% in 2007, 28.5% of Assets
X X X X X X
* Moody's Sees Neg. Outlook for Global Paper & Forest Products
- - - - -
=================
A R G E N T I N A
=================
ASOCIACION MUTUAL: Files for Reorganization in Court
----------------------------------------------------
Asociacion Mutual del Personal de la Administracion Publica
Buenos Aires has requested for reorganization approval after
failing to pay its liabilities.
The reorganization petition, once approved by the court, will
allow Asociacion Mutual to negotiate a settlement with its
creditors in order to avoid a straight liquidation.
The case is pending in the National Commercial Court of First
Instance No. 9 in Buenos Aires. Clerk No. 18 assists the court
in this case.
The debtor can be reached at:
Asociacion Mutual del Personal de la
Administracion Publica Buenos Aires
Tucuman 1424
Buenos Aires, Argentina
GEN SISTEMAS: Proofs of Claim Verification Deadline is May 15
-------------------------------------------------------------
Diana Panitch, the court-appointed trustee for Gen Sistemas
Medicos SRL's bankruptcy proceeding, will be verifying
creditors' proofs of claim until May 15, 2008.
Ms. Panitch will present the validated claims in court as
individual reports. The National Commercial Court of First
Instance No. 18 in Buenos Aires, with the assistance of Clerk
No. 35, 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 Gen Sistemas 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 Gen Sistemas'
accounting and banking records will be submitted in court.
Ms. Panitch is also in charge of administering Gen Sistemas'
assets under court supervision and will take part in their
disposal to the extent established by law.
The debtor can be reached at:
Gen Sistemas Medicos SRL
Pasteur 174
Buenos Aires, Argentina
The trustee can be reached at:
Diana Panitch
Avenida Corrientes 1250
Buenos Aires, Argentina
HUNTER JUNIORS: Proofs of Claim Verification is Until May 29
------------------------------------------------------------
Edgardo Alberto Borghi, the court-appointed trustee for Hunter
Juniors SA's bankruptcy proceeding, will be verifying creditors'
proofs of claim until May 29, 2008.
Mr. Borghi will present the validated claims in court as
individual reports. The National Commercial Court of First
Instance No. 5 in Buenos Aires, with the assistance of Clerk
No. 9, 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 Hunter Juniors 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 Hunter Juniors'
accounting and banking records will be submitted in court.
Infobae didn't state the submission deadlines for the reports.
Mr. Borghi is also in charge of administering Hunter Juniors'
assets under court supervision and will take part in their
disposal to the extent established by law.
The debtor can be reached at:
Hunter Juniors SA
Yerbal 1032
Buenos Aires, Argentina
The trustee can be reached at:
Edgardo Alberto Borghi
Luis Viale 2176
Buenos Aires, Argentina
INDIAN CREEK: Proofs of Claim Verification Deadline is April 25
---------------------------------------------------------------
Elsa Ester Andrade, the court-appointed trustee for Indian Creek
S.A.'s bankruptcy proceeding, will be verifying creditors'
proofs of claim until April 25, 2008.
Ms. Andrade will present the validated claims in court as
individual reports. 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 Indian
Creek 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 Indian Creek's
accounting and banking records will be submitted in court.
Infobae didn't state the submission deadlines for the reports.
Ms. Andrade is also in charge of administering Indian Creek's
assets under court supervision and will take part in their
disposal to the extent established by law.
The debtor can be reached at:
Molise SA
La Pampa 5981
Buenos Aires, Argentina
The trustee can be reached at:
Elsa Ester Andrade
Avenida Callao 449
Buenos Aires, Argentina
LOS REYES: Proofs of Claim Verification Deadline is May 12
----------------------------------------------------------
Silvia Gloria Muavero, the court-appointed trustee for Los Reyes
Magos S.R.L.'s bankruptcy proceeding, will be verifying
creditors' proofs of claim until May 12, 2008.
Ms. Muavero will present the validated claims in court as
individual reports on June 23, 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 Los Reyes 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 Los Reyes' accounting
and banking records will be submitted in court on Aug. 25, 2008.
Ms. Muavero is also in charge of administering Los Reyes' assets
under court supervision and will take part in their disposal to
the extent established by law.
The trustee can be reached at:
Silvia Gloria Muavero
Alsina 1760
Buenos Aires, Argentina
MARASCO Y SPEZIALE: Files for Reorganization in Court
-----------------------------------------------------
Marasco y Speziale Sacifei has requested for reorganization
approval after failing to pay its liabilities since
Feb. 21, 2008.
The reorganization petition, once approved by the court, will
allow Marasco y Speziale to negotiate a settlement with its
creditors in order to avoid a straight liquidation.
The case is pending in the National Commercial Court of First
Instance No. 12 in Buenos Aires. Clerk No. 24 assists the court
in this case.
The debtor can be reached at:
Marasco y Speziale Sacifei
Pasco 763/65
Buenos Aires, Argentina
PERNOD RICARD: Fitch Lowers Ratings on Vin & Spirit Buy
-------------------------------------------------------
Fitch Ratings downgraded French Wine and Spirit maker Pernod
Ricard SA's Long-term Issuer Default and senior unsecured
ratings to 'BB+' from 'BBB-' (BBB minus). The Short-term IDR
has also been downgraded to 'B' from 'F3'. The Outlook for the
Long-term IDR has been changed to Negative from Stable.
These rating actions follow the March 31, 2008 announcement by
Pernod that it will be paying EUR5.6bn cash, including assumed
debt of EUR366m, for the acquisition of Swedish alcoholic
beverages group Vin & Sprit.
"While this transaction enables Pernod to address its two main
relative weaknesses compared to industry leader Diageo, namely
the lack of adequate critical mass in the important US market
and the lack of a comparably strong presence in the high growth
vodka category, the high and fully debt-funded acquisition price
takes the group's leverage to the 'BB' rating category," says
Giulio Lombardi, Senior Director in Fitch's Retail and Consumer
Products Group.
Following the V&S acquisition, leverage (as calculated on a
lease and pension adjusted basis) will increase to above 6.0x.
Excluding any exceptional cash charges, Pernod, together with
V&S, should be able to generate an annual Free Cash Flow of
approximately EUR300-400m, which Fitch assumes would be mostly
applied to debt reduction.
However, Fitch calculates that it could take at least three
years for Pernod to reach credit metrics consistent with an
investment grade rating, a timeframe that makes it difficult to
justify affirming the ratings. During the next three years,
Pernod will also be faced with a slowing outlook for consumer
spending in western Europe and the US, as well as challenges to
implement budgeted synergies, as it will initially not fully
control the distribution channels for Absolut Vodka in the US
and internationally.
Additionally, the group's growth ambitions could potentially
prevail over any commitment to return to investment grade
ratings. Through this acquisition, Pernod strengthens its
number two position in the global western-style spirits
industry, reaching a market share of 18.6% in volume terms.
However, Diageo's advantage (24.2% global market share) remains
strong, thanks to net sales (in value terms) of approximately
1.5x Pernod's in each of the European and US markets and a less
fragmented product portfolio. Pernod's ambitions to further
close its gap with Diageo might require more acquisition
spending.
The combination of risks from the integration, payments to sever
ties with distribution partners, as well as possible acquisition
spending and slower EBITDA growth might even prejudice the
achievement of 'BB+' credit metrics, thus underpinning the
current Negative Outlook.
Headquartered in Paris, France, Pernod Ricard --
http://www.pernod-ricard.com/-- produces and distributes
spirits and wines. The Company operates in Europe, North
America, Central and South America, and the Asia-Pacific region.
In Latin America and South America, the company operates in
Argentina, Brazil, Chile, Colombia, Mexico, Uruguay and
Venezuela.
Pernod Ricard benefits from a portfolio comprising some of the
most prestigious brands in the sector: Ricard aniseed,
Ballantine’s, Chivas Regal and The Glenlivet Scotch whiskies,
Jameson Irish Whiskey, Martell cognac, Havana Club rum, ,
Beefeater gin, Kahlúa and Malibu liqueurs, Mumm and Perrier-
Jouët champagnes, as well as Jacob’s Creek and Montana wines.
The Group favours a decentralised organisation, with "Brand
Owners" and "Distribution" companies established in each key
market, and employs a workforce of around 18,000 in 70
countries.
In addition, Pernod Ricard is strongly committed to a policy of
Corporate Social Responsibility and encourages responsible
consumption in order to prevent alcohol misuse and abuse.
QUIKSILVER INC: S&P Puts BB- Credit Rating under Negative Watch
---------------------------------------------------------------
Standard & Poor's Ratings Services placed its ratings on
Quiksilver Inc., including its 'BB-' corporate credit rating, on
CreditWatch with negative implications. The Huntington Beach,
Calif.-based apparel company had about US$996 million in debt
outstanding at Jan. 31, 2008.
The CreditWatch placement reflects the much weaker-than-expected
credit measures reported for the first quarter ended January
2008. "While we expected that results would be lower due to the
company's current difficulties with its Rossignol hard-good
equipment business," said Standard & Poor's credit analyst
Susan Ding, "financial measures for the last 12 months came in
well below our expectations, despite the US$100 million debt
reduction from the sale of its Cleveland Golf business in
December 2007."
Standard & Poor's originally expected that leverage would be
about 4.7x at year end (adjusted for the sale of Cleveland
Golf). However, due to losses at the Rossignol business that
depressed the EBITDA base significantly, leverage climbed to
close to 6x for the 12 months ended January 2008 versus about
5.7x for the 12 months ended October 2007. Total debt also
increased as a result of increased capitalized operating leases,
due to the new retail stores opened during the year. Although
the company announced it will explore selling the Rossignol
business, it is uncertain when and if the company would be able
to effect a transaction, in light of the current economic
environment, and what the magnitude would be of any potential
debt reduction from the application of sale proceeds and ensuing
improvement in credit measures.
"We will meet with management to further discuss Quiksilver's
operating trends and forecasts in order to resolve the
CreditWatch," said Ms. Ding.
Quiksilver, Inc. -- http://www.quiksilver.com/-- is a globally
diversified company that designs, produces and distributes
branded apparel, wintersports equipment, footwear, accessories
and related products. Its products are sold in over 90 countries
in a range of distribution channels, including surf shops, ski
shops, skateboard shops, snowboard shops, its Boardriders Club
shops, other specialty stores and select department stores. The
Company has three operating segments, the Americas, Europe and
Asia/Pacific. The Americas segment includes revenues primarily
from the United States and Canada. The European segment includes
revenues primarily from Western Europe. The Asia/Pacific
segment includes revenues primarily from Australia, Japan, New
Zealand and Indonesia. In October 2007, the Company entered into
an agreement to sell its golf equipment business. This
transaction was completed in December 2007. The company has
operations in Argentina.
Standard & Poor's Ratings Services assigned a BB- rating on
Quiksilver Inc.
RADIO REMISE: Proofs of Claim Verification is Until June 27
-----------------------------------------------------------
Manuel Alberto Cibeira, the court-appointed trustee for Radio
Remise S.A.'s bankruptcy proceeding, will be verifying
creditors' proofs of claim until June 27, 2008.
Mr. Cibeira will present the validated claims in court as
individual reports on Aug. 27, 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 Radio Remise 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 Radio Remise's
accounting and banking records will be submitted in court on
Oct. 8, 2008.
Mr. Cibeira is also in charge of administering Radio Remise's
assets under court supervision and will take part in their
disposal to the extent established by law.
The trustee can be reached at:
Manuel Alberto Cibeira
Avenida Cordoba 1247
Buenos Aires, Argentina
TALLERES UNION: Proofs of Claim Verification Deadline is June 16
----------------------------------------------------------------
Mauricio Leon Zafran, the court-appointed trustee for Talleres
Union S.A. de Artes Graficas Industrial y Comercial's bankruptcy
proceeding, will be verifying creditors' proofs of claim until
June 16, 2008.
Mr. Zafran will present the validated claims in court as
individual reports on Aug. 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 Talleres Union 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 Talleres Union's
accounting and banking records will be submitted in court on
Oct. 1, 2008.
Mr. Zafran is also in charge of administering Talleres Union's
assets under court supervision and will take part in their
disposal to the extent established by law.
The debtor can be reached at:
Talleres Union S.A. de Artes Graficas Industrial y
Comercial
Patagones 2748
Buenos Aires, Argentina
The trustee can be reached at:
Mauricio Leon Zafran
Avenida Callao 420
Buenos Aires, Argentina
=============
B A H A M A S
=============
PINNACLE ENTERTAINMENT: Moody's Holds 'B2' Corp. Family Rating
--------------------------------------------------------------
Moodys Investors Service affirmed all ratings for Pinnacle
Entertainment Inc. and revised the rating outlook to stable from
positive.
This was in anticipation of a moderation in the company's
consolidated operating performance through 2008 as a result of
less favorable economic conditions along with the expectation
that Pinnacle intends to pursue new development opportunities in
Louisiana and Atlantic City, New Jersey. This makes it unlikely
that the company will achieve the credit metrics required for
higher rating.
Pinnacle's B2 corporate family, B2 probability of default, Ba2
(LGD-2, 17%) senior secured bank loan, and B3 (LGD-5, 76%)
senior subordinated note ratings were affirmed.
Pinnacle recently announced that it may delay new development in
Atlantic City, New Jersey and potentially other projects as
well, because of volatile capital markets and debt restrictions
included in two of its senior subordinated note indentures.
However, when market conditions improve, it's expected that
Pinnacle will pursue a refinancing of its existing capital
structure and raise additional debt to give it the flexibility
and funding necessary to proceed with these new development
projects. As a result, debt EBITDA is expected to peak at a
level greater that the company's fiscal 2007 debt EBITDA of 5.5
times.
Pinnacle's ratings reflect the company's high leverage, the
competition its Belterra casino faces from two new Indiana
racinos that are scheduled to open relatively soon, and intense
competition in Bossier City. Ratings are supported by the good
initial ramp-up results at the recently opened Lumiere casino in
St. Louis, Missourri and strong results from Pinnacle's
L'Auberge casino in Lake Charles, Lousiana. L'Auberge has been
operating for two full years and has exceeded original
expectations in terms of revenue and EBITDA. Also considered
are Pinnacle's good liquidity position and delayed development
timeline which will allow the company to accumulate surplus cash
flow that can be used for future development.
Pinnacle owns and operates casinos in Nevada, Louisiana,
Indiana, Missouri, Argentina and The Bahamas. Reported net
revenues for the fiscal year ended Dec. 31, 2007 were
US$924 million.
=============
B E R M U D A
=============
ELAN CORP: Court Dismisses Tysabri Investor Lawsuit
----------------------------------------------------
U.S. District Judge Richard Holwell has thrown out a class
action lawsuit brought by investors against Elan Corp PLC and
its executives over its multiple sclerosis drug Tysabri, Reuters
reports.
Reuters recounts that the plaintiffs accused Elan and its
executives of misrepresentations and omissions regarding the
safety, commercial viability and projected market share of
Tysabri, causing the company's stock price to be artificially
inflated.
In an opinion posted on March 28, 2008, Judge Holwell, who sits
in Federal court in Manhattan, said that the plaintiffs had
failed to adequately show that Elan and its executives had
motive and opportunity to commit fraud.
Judge Holwell said that the plaintiffs could file a motion for
permission to amend their complaint.
Reuters explains that Tysabri, which is made by Biogen Idec Inc
and Elan, was temporarily suspended from the market in 2005
after some patients developed a potentially deadly brain
infection. The drug was allowed back on the market in 2006 with
certain restrictions after U.S. regulators decided multiple
sclerosis patients were willing to accept the risks in return
for the potential benefits.
About the Company
Headquartered in Ireland, Elan Corporation plc (NYSE: ELN) --
http://www.elan.com/-- is a neuroscience-based biotechnology
company. Elan shares trade on the New York, London and Dublin
Stock Exchanges. The company has locations in Bermuda and
Japan.
* * *
As of April 1, 2008, Elan Corp. plc carries Moody's long-term
corporate family rating of B3, probability of default rating of
B2 with positive outlook.
Standard & Poors gave the company B rating on long-term foreign
issuer credit and B rating on long-term local issuer credit with
positive outlook.
GLOBAL PARTNERS: Proofs of Claim Filing Deadline is April 18
------------------------------------------------------------
Global Partners Ltd.'s creditors are given until April 18, 2008,
to prove their claims to Christopher C. Morris, the company's
liquidator, or be excluded from receiving any distribution or
payment.
In their proofs of claim, creditors must indicate their full
names, addresses, the full particulars of their debts or claims,
and the names and addresses of their lawyers, if any.
Global Partners' shareholders agreed on March 25, 2008, to place
the company into voluntary liquidation under Bermuda's Companies
Act 1981.
The liquidator can be reached at:
Christopher C. Morris
Century House
16 Par-la-Ville Road, Hamilton
Bermuda
GLOBAL PARTNERS: Final Shareholders Meeting Set for April 30
------------------------------------------------------------
Global Partners Ltd. will hold its final general meeting on
April 30, 2008, at 3:00 p.m. at Arthur Morris, Christensen &
Co., Century House, 16 Par-la-Ville Road, Hamilton, Bermuda.
These matters will be taken during the meeting:
1) accounting of the liquidation process showing how the
winding up has been conducted during the preceding year,
and
2) authorizing the liquidator to retain the records
of the company for a period of three years from
the dissolution of the company, after which they
may be destroyed.
Global Partners' shareholders agreed on March 25, 2008, to place
the company into voluntary liquidation under Bermuda's Companies
Act 1981.
The liquidator can be reached at:
Christopher C. Morris
Century House
16 Par-la-Ville Road, Hamilton
Bermuda
SECURITY CAPITAL: Unit Files Counterclaims Against Merrill Lynch
----------------------------------------------------------------
Security Capital Assurance Ltd.'s financial guarantee subsidiary
XL Capital Assurance Inc. has filed its answer and counterclaims
in the United States District Court for the Southern District of
New York against Merrill Lynch International and Merrill Lynch &
Co. Inc., in response to Merrill Lynch International's March 19,
2008 lawsuit against XL Capital.
In its filing, XL Capital disputes the legal claims filed by
Merrill Lynch International and defends the terminations of the
seven credit default swaps entered into between XL Capital and
Merrill Lynch International. As noted in the counterclaim, "In
attempting to offload subprime mortgage and other liabilities
related to troubled collateralized debt obligations (CDOs),
Merrill Lynch & Co. agreed to provide third parties with control
rights over seven of its CDOs, even though those same control
rights had already been exclusively committed to XLCA." XL
Capital required sole control rights under the seven CDOs at
issue as a "fundamental condition" to entering into the credit
default swaps with Merrill Lynch International. However, during
its 2007 third quarter in which it would write down
approximately US$7.9 billion in its CDO and subprime mortgage
businesses, "Merrill Lynch undertook a rushed campaign to find
parties willing to hedge or provide protection on its remaining
CDO positions. Determined to get these CDO risks off its books
at all costs before the third quarter of 2007 closed, Merrill
Lynch made the decision to blatantly ignore its prior
commitments to XLCA."
XL Capital's counterclaims ask the court to declare that its
terminations are effective and that it has no additional
obligations under the credit default swaps. The notional amount
of the terminated credit default swaps at Dec. 31, 2007,
aggregated US$3.1 billion before reinsurance. For the year
ended Dec. 31, 2007, Security Capital Assurance Ltd. recorded a
charge of US$632.3 million relating to these credit default
swaps, of which US$215 million represents a net unrealized,
mark-to-market loss and US$417.3 million represents the
provision of case basis reserves for losses and loss adjustment
expenses.
In addition, XL Capital seeks damages estimated to be at least
US$28 million for amounts that Merrill Lynch International is
obligated to pay XL Capital under the terms of the credit
default swaps as a result of the terminations.
Security Capital stated, "Despite whatever claims Merrill Lynch
may make regarding our decision to enforce these contract
terminations, we believe Merrill Lynch gave away our control
rights on seven CDOs in direct violation of our agreements. On
behalf of our policy holders and shareholders, we intend to
defend the terminations vigorously and look forward to
presenting our case to the court soon."
About Security Capital
Security Capital Assurance Ltd. (NYSE: SCA) --
http://www.scafg.com-- is a Bermuda-domiciled holding company
whose primary operating subsidiaries, XL Capital Assurance Inc.
and XL Financial Assurance Ltd, provide credit enhancement and
protection products to the public finance and structured finance
markets throughout the United States and internationally.
* * *
As reported in the Troubled Company Reporter-Latin America
March 25, 2008, Standard & Poor's Ratings Services lowered its
rating on Security Capital Assurance Ltd.'s series A perpetual
noncumulative preference shares to 'C' from 'BB-'. The shares
remain on CreditWatch with negative implications.
At the same time, S&P withdrew its 'BB+' preliminary senior
secured debt rating and 'BB-' preliminary preferred stock rating
on SCA's Rule 415 shelf registration. These actions follow the
company's recent announcement that its board of directors
elected not to declare a semiannual dividend payable on
March 31, 2008.
TYCO INTERNATIONAL: To Report 2nd Qtr. 2008 Results on May 1
------------------------------------------------------------
Tyco International Ltd. will report its results for the second
quarter of fiscal 2008 before trading begins on May 1, 2008.
The company will hold a conference call for investors at 8:30
a.m. EDT. The call can be accessed in these ways:
-- At the company's website: http://investors.tyco.com.
-- By telephone: For both "listen-only" participants and
those participants who wish to take part in the question-
and-answer portion of the call, the telephone dial-in
number in the United States is (800) 398-9402. The
telephone dial-in number for participants outside the
U.S. is (612) 332-1214.
-- An audio replay of the conference call will be available
beginning at 10:30 a.m. on May 1, 2008 and ending on May
8, 2008. The dial-in number for participants in the
U.S. is (800) 475-6701. For participants outside the
U.S., the replay dial-in number is (320) 365-3844. The
replay access code for all callers is 918069.
Based in Pembroke, Bermuda, Tyco International Ltd. (NYSE: TYC)
-- http://www.tyco.com/-- provides security, fire protection
and detection, valves and controls, and other industrial
products and services to customers in four business segments:
Electronics, Fire & Security, Healthcare, and Engineered
Products & Services. With 2007 revenue of US$18 billion, Tyco
employs approximately 118,000 people worldwide. In Latin
America, Tyco has presence in Argentina, Brazil, Chile, Costa
Rica, Ecuador, Honduras, and the Bahamas.
Effective June 29, 2007, Tyco International Ltd. completed the
spin-offs of Covidien and Tyco Electronics, formerly its
Healthcare and Electronics businesses, respectively, into
separate, publicly traded companies in the form of a
distribution to Tyco shareholders.
* * *
As reported in the Troubled Company Reporter on Dec. 21, 2007,
in its annual report for the year ended Sept. 28, 2007, Tyco
said that on Nov. 8, 2007, The Bank of New York delivered to the
company a notice of events of default. The notice claims that
the actions taken by the company in connection with its
separation into three public entities constitute events of
default under certain indentures.
=============
B O L I V I A
=============
ALCATEL-LUCENT SA: To Build Bolivia's 1st WiMAX System for Entel
----------------------------------------------------------------
Alcatel-Lucent S.A. has been awarded a contract by Entel S.A. to
deploy the first commercial WiMAX Rev-e (802.16e-2005 standard)
network in Bolivia. This new network will support voice over IP
(VoIP), high-speed Internet access, video and other data
services for Entel customers.
The new network will accommodate stationary and nomadic
applications, and will complement the carrier's existing fixed-
based broadband services. Entel plans to launch commercial
service of the network by the end of this quarter.
Alcatel-Lucent will provide its end-to-end WiMAX solution,
including base stations, wireless access controllers, software
and application platforms. It also will provide design and
planning for end-to-end network integration services, including
radio network planning, installation and commissioning, project
management and support services for Entel's network.
To ensure Entel's customers will benefit from early, state-of-
the-art WiMAX devices that comply with the IEEE 802.16e-2005
standard, Alcatel-Lucent has teamed up with ZyXEL, a pioneer in
this domain, to provide customer-premises equipment.
In addition to being able to offer new revenue-generating
services, Entel will benefit from additional operational
efficiencies because this solution offers one of the most
advanced technologies in terms of radio frequency management.
"In fast-growing economies such as Bolivia, our universal WiMAX
solution is the ideal means of rapidly and cost-effectively
increasing penetration of high-speed Internet access and basic
telephony services via VoIP, because the carrier can avoid the
costly and disruptive civil engineering work involved in
deploying copper or optical fiber cable," said Alcatel-Lucent's
President of Caribbean & Latin America activities, Victor
Agnellini. "This project underscores Alcatel-Lucent's
commitment to WiMAX as a key element of its universal broadband
access strategy, and expands the company's footprint in the
region."
With more than 70 pilots and deployments across the world and 22
commercial contracts signed since the beginning of 2007,
Alcatel-Lucent is No. 1 in the worldwide WiMAX market.
About Entel S.A.
Entel is the leading telecommunication operator of Bolivia
providing nationwide fixed and mobile communications as
well as value added services. The company has invested over
US$740 million in the country to serve the fast growing demand
of telecommunication services in the urban and rural communities
of Bolivia.
About Alcatel-Lucent
Headquartered in Paris, France, Alcatel-Lucent S.A. --
http://www.alcatel-lucent.com/-- provides solutions that
enable service providers, enterprises and governments worldwide
to deliver voice, data and video communication services to end
users.
Alcatel-Lucent maintains operations in 130 countries, including,
Austria, Germany, Hungary, Italy, Netherlands, Ireland, Canada,
United States, Costa Rica, Dominican Republic, El Salvador,
Guatemala, Peru, Venezuela, Indonesia, Australia, Brunei and
Cambodia.
* * *
As reported in the TCR-Europe Nov. 9, 2007, Moody's Investors
Service downgraded to Ba3 from Ba2 the Corporate Family Rating
of Alcatel-Lucent. The ratings for senior debt of the group
were equally lowered to Ba3 from Ba2 and the trust preferred
notes of Lucent Technologies Capital Trust I have been
downgraded to B2 from B1. At the same time, Moody's affirmed
its Not-Prime rating for short-term debt of Alcatel-Lucent.
Moody's said the outlook for the ratings is stable.
Alcatel-Lucent's Long-Term Corporate Credit rating and Senior
Unsecured Debt carry Standard & Poor's Ratings Services' BB
rating. Its Short-Term Corporate Credit rating stands at B.
COEUR D'ALENE: Begins Commissioning San Bartolome Silver Mine
-------------------------------------------------------------
Coeur d'Alene Mines Corp. has begun commissioning its San
Bartolome silver mine in Bolivia and expects the first dore pour
by the end of April.
Business News Americas relates that Coeur d'Alene started
crushing and stockpiling ore. It has become connected to the
Bolivian national power grid, allowing the firm to complete the
final commissioning of the grinding, leaching, and silver
recovery circuits.
Coeur d'Alene told BNamericas that San Bartolome will reach full
capacity in August. It will "churn out 6Moz of silver in 2008
at US$4.10/oz in cash costs, excluding royalties and production
taxes in the order of US$2.03/oz."
San Bartolome will produce 10Moz of silver in its first year
after the "ramp-up to full capacity." It has 153Moz of silver
reserves and some 34.2Moz of indicated resources that will make
it last for 14 years, BNamericas states.
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.
===========
B R A Z I L
===========
BANCO BMG: To Sell Up to BRL100MM/Month Payroll Loans to Nossa
--------------------------------------------------------------
Banco Nossa Caixa will buy up to BRL100 million per month in
payroll loans from Banco BMG over the next 12 months.
Business News Americas relates that according to the terms of
the accord between Banco Nossa and Banco BMG, the deal could be
worth as much as BRL1.20 billion in payroll loans.
According to BNamericas, Banco Nossa's Chief Executive Officer
Milton Luiz de Melo Santos said in March that the bank was
considering purchasing loans generated by other financial
institutions to expand its retail loan book up to 45% this year.
The report says that Banco Nossa increased loans to individuals
by 23.2% to BRL6.63 billion in 2007, compared to 2006, due to a
33.3% growth in payroll loans to Sao Paulo state workers. The
payroll loans totaled BRL3.49 billion.
BNamericas notes that Banco BMG's Chief Executive Officer
Ricardo Guimaraes said the bank was generating over
BRL600 million per month in new loans.
Banco BMG will increase lending at least 25% this year compared
to last year, which increased 44.5% to BRL12.5 billion,
BNamericas states.
Banco BMG is the banking arm of Grupo BMG, which also has real
estate, food manufacturing and agro industry holdings. The bank
is a niche player focused on loans to civil servants, with
repayments taken monthly from payrolls. BMG operates mainly
through in-house representatives in state companies. It also
offers leasing and asset management services.
* * *
As reported in the Troubled Company Reporter-Latin America on
June 26, 2007, Standard & Poor's Ratings Services raised its
long-term counterparty credit rating on Banco BMG S.A. to 'BB-'
from 'B+'. The rating was removed from CreditWatch Positive
where it was placed June 11, 2007. S&P said the outlook is
stable.
On March 10, 2008, Moody's Investors Rating gave Banco BMG's
US$250 million issue a Ba1 long-term foreign currency debt
rating with a stable outlook and the bank's US$1 billion note
program a Ba1 long-term foreign currency rating with a stable
outlook and a Not Prime short-term foreign currency rating.
BANCO ITAU: To Spend US$10 Mln. for Chilean Life Insurance Unit
---------------------------------------------------------------
Banco Itau Holding Financeira SA's Latin American Chief
Executive Officer Ricardo Marino told journalists that the bank
will spend US$10 million to launch a Chilean life insurance unit
later this year.
According to Business News Americas, Mr. Marino said that the
planned unit will concentrate on individual life insurance,
which is in line with Banco Itau's country strategy of focusing
on higher-income customers.
Mr. Marino denied that Banco Itau will enter Chile's mandatory
pension system because an enacted reform prevents banks from
offering these plans to the public, the news agency states.
Banco Itau entered the Chilean market in February 2007 when it
concluded the acquisition of BankBoston Chile and rebranded it
Itau Chile, BNamericas adds.
Banco Itau Holding Financeira SA -- http://www.itau.com.br/--
is a private bank in Brazil. The company has four principal
operations: banking -- including retail banking through its
wholly owned subsidiary, Banco Itau SA(Itau), corporate banking
through its wholly owned subsidiary, Banco Itau BBA SA (Itau
BBA) and consumer credit to non-account hold customers through
Itaucred -- credit cards, asset management and insurance,
private retirement plans and capitalization plans, a type of
savings plan. Itau Holding provides a variety of credit and
non-credit products and services directed towards individuals,
small and middle market companies and large corporations. The
bank has offices in Miami, New York, Hongkong, Lisbon,
Luxembourg, Bahamas, the Cayman Islands, Chile and Uruguay.
* * *
As reported in the Troubled Company Reporter-Latin America on
Feb. 12, 2007, Fitch changed the outlook of Banco Itau Holding
Financiera S.A.'s 'BB+' foreign currency IDR rating to positive
from stable.
BANCO NACIONAL: OKs BRL7.30 Bil. Credit Line for Companhia Vale
---------------------------------------------------------------
Banco Nacional de Desenvolvimento Economico e Social has
authorized a BRL7.30 billion credit line for Companhia Vale do
Rio Doce.
According to Banco Nacional, the funds will be used to advance
Companhia Vale's 2008-12 investment program and for projects in
Brazil. Part of the resources will go to Companhia Vale's
corporate social responsibility initiatives.
Banco Nacional told Business News Americas that Companhia Vale
will be able to access the funds for five years.
About Companhia Vale
Headquartered in Rio de Janeiro, Brazil, Companhia Vale do Rio
Doce -- http://www.cvrd.com.br/-- engages primarily in mining
and logistics businesses. It engages in iron ore mining, pellet
production, manganese ore mining, and ferroalloy production, as
well as in the production of nonferrous minerals, such as
kaolin, potash, copper, and gold.
About Banco Nacional
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 NOSSA: To Buy Up to BRL100MM/Month Payroll Loans from BMG
---------------------------------------------------------------
Banco Nossa Caixa will buy up to BRL100 million per month in
payroll loans Banco BMG over the next 12 months from.
Business News Americas relates that according to the terms of
the accord between Banco Nossa and Banco BMG, the deal could be
worth as much as BRL1.20 billion in payroll loans.
According to BNamericas, Banco Nossa's Chief Executive Officer
Milton Luiz de Melo Santos said in March that the bank was
considering purchasing loans generated by other financial
institutions to expand its retail loan book up to 45% this year.
The report says that Banco Nossa increased loans to individuals
by 23.2% to BRL6.63 billion in 2007, compared to 2006, due to a
33.3% growth in payroll loans to Sao Paulo state workers. The
payroll loans totaled BRL3.49 billion.
BNamericas notes that Banco BMG's Chief Executive Officer
Ricardo Guimaraes said the bank was generating over
BRL600 million per month in new loans.
Banco BMG will increase lending at least 25% this year compared
to last year, which increased 44.5% to BRL12.5 billion,
BNamericas states.
Headquartered in Sao Paulo, Brazil, Banco Nossa Caixa SA --
http://www.nossacaixa.com.br/-- operates as a multiple bank
offering banking and financial services through commercial and
loan portfolios, including real estate and foreign exchange, as
well as administering credit cards. Through its subsidiary, it
operates with private pensions. Nossa Caixa uses demand, saving
and time deposits, which include judicial deposits, to fund its
operations. The main focus of Nossa Caixa is to attend
individuals, especially public employees and small and medium-
sized companies in Sao Paulo, as well as state and municipal
government agencies. As the official bank for the government of
the State of Sao Paulo, it administers the state's resources and
state lotteries and takes care of the payroll of the indirect
state administration and part of the direct administration. As
of Dec. 31, 2005, the Bank's network consisted of 2,579
attendance points in its distribution network.
* * *
In October 2007, Moody's Investors Service assigned a Ba2
foreign currency deposit rating to Banco Nossa Caixa, which is
constrained by Brazil's foreign currency deposit ceiling.
NOVELL INC: Augments Operations With PlateSpin Buyout Completion
----------------------------------------------------------------
Novell Inc. completed its acquisition of PlateSpin Ltd. The
company related that PlateSpin allows the movement of workloads
between physical and virtual environments regardless of platform
or operating system. These capabilities, combined with Novell's
systems management solutions, enable customers to fully leverage
their virtualization investments and reduce both costs and
server
sprawl in their data centers.
As reported in the Troubled Company Reporter on Feb. 28, 2008,
Novell Inc. entered into a definitive agreement to acquire
PlateSpin Ltd. for $205 million.
"The addition of PlateSpin to Novell's existing enterprise IT
management and Linux solutions will give customers the
capabilities they need to build their next generation data
center," Joe Wagner, senior vice president and general manager
of Novell(R) Systems and Resource Management, said. "With
solutions for data center consolidation, virtualization,
relocation, disaster recovery and ongoing optimization,
customers now have powerhouse technology to reduce cost,
minimize risk and create value across heterogeneous environments
with flexibility, interoperability and agility."
"We are excited to be joining the Novell organization and a
global team of people committed to the vision of optimizing the
data center," Stephen Pollack, founder and CEO of PlateSpin,
said. "We will continue to focus on the development of the
PlateSpin product line and look forward to the new synergies our
combined offerings will bring to customers."
With the closing of the acquisition, PlateSpin will become part
of the Novell Systems and Resource Management business unit and
continue to develop and market its solutions to the customer
base. This is another key step in Novell's strategy to help
customers integrate their mixed IT environments, allowing people
and technology to work as one.
About PlateSpin Ltd.
PlateSpin offers extensive solutions for the management of
heterogeneous workloads that encapsulate data, applications and
operating systems residing on a physical or virtual host. These
solutions improve the speed and quality of server consolidation,
data center relocation and disaster recovery.
About Novell Inc.
Headquartered in Waltham, Massachusetts, Novell Inc. (Nasdaq:
NOVL) -- http://www.novell.com/-- delivers infrastructure
software for the Open Enterprise. Novell provides desktop to
data
center operating systems based on Linux and the software
required
to secure and manage mixed IT environments.
The company has offices in Australia, Argentina, Austria,
Belgium, Brazil, China, Czech Republic, Finland, Germany, Hong
Kong, Hungary, India, Ireland, Japan, Luxembourg, Malaysia,
Netherlands, New Zealand, Norway, Philippines, Poland,
Singapore, South Korea, Spain, Sweden, Switzerland, Taiwan,
Thailand and United Kingdom.
* * *
Novell Inc. continues to carry Moody's Investors Service's 'B1'
subordinated debt rating, which was placed in September 1988.
REALOGY CORP: CFO Hull Comments on S&P's March Outlook Action
-------------------------------------------------------------
Standard & Poor's Ratings Services, on March 27, 2008, affirmed
Realogy Corp.'s “B” corporate rating, but revised its outlook
from “Stable” to “Negative.”
According to S&P credit analyst Emile Courtney, "[t]he outlook
revision reflects a significantly lower expectation for EBITDA
generation in 2008 than we had previously anticipated, as well
as the resultant narrowing of the EBITDA cushion in the
company's senior secured credit facilities leverage covenant[.]"
CFO Anthony E. Hull, as disclosed in the company's website,
however said that the S&P report does not explicitly mention
three key factors that are important to reiterate:
-- Realogy's interest cost in 2008 will be significantly
less than previously expected and 2007 pro forma levels.
-- Realogy's proactive cost savings and cash maximization
initiatives that have been successfully implemented
(including exit from the government at-risk business
that will free up US$50 million of cash this year) will
continue to enhance our ability to tap into our bank
debt revolver.
-- Due to the seasonality of the real estate market, first
quarter of any year is historically our slowest quarter
(not just 2008). As we are only one-quarter into the
year, the company has 85% to 90% of its EBITDA
opportunity ahead of it.
While the revised outlook was based primarily upon the
continuing downturn in the residential real estate market, the
S&P report concluded with the following astute statement:
“Even though a return to growth in sides and price metrics in
the industry could be at least one year away (in early 2009),
our expectation remains that Realogy will benefit meaningfully
in terms of growth in EBITDA and cash flow generation when the
cycle turns upward, and that credit measures would improve.”
About Realogy Corporation
Headquartered in Parsippany, New Jersey, Realogy Corporation
(NYSE: H)-- http://www.realogy.com/-- is a real estate
franchisor and a member of the S&P 500. The company has a
diversified business model that also includes real estate
brokerage, relocation, and title services. Realogy's world-
renowned brands and business units include CENTURY 21(R),
Coldwell Banker(R), Coldwell Banker Commercial(R), ERA(R),
Sotheby's International Realty(R), NRT Incorporated, Cartus, and
Title Resource Group. Realogy has more than 15,000 employees
worldwide. The company operates in Australia, Brazil and
France.
TAM: Sao Paulo/Milan Route Carries 131,000 Passengers in 1st Yr.
----------------------------------------------------------------
This week, TAM Linhas Aereas completes a year of operations to
Milan, Italy. The company's third direct destination in Europe,
this daily flight has carried more than 73.2 thousand passengers
on the Sao Paulo/Milan route and 58.6 thousand on the return
leg, with a 70% average load factor, in one year of operation.
"Our Milan flight has been integrated. It is a destination that
attracts tourism and business, as well as being an important
entry point into Europe," stated Vice-President of Planning and
Alliances, Paulo Castello Branco.
The flight uses MD-11 aircraft, with a carrying capacity of up
to 289 passengers in three classes (First, Business and
Economy).
One of the differences of this TAM flight is the in-flight
entertainment service for First and Business Classes. All video
and audio programming, as well as games, are available on a
small portable device known as a Personal Entertainment
Appliance (PEA). Programming includes 10 movies, three variety
channels, nine games, 100 music albums and various video clips.
Fares between Sao Paulo and Milan start at US$919 (round trip).
The flight leaves Guarulhos Airport -- SP for Milan at 7:10 p.m.
local time. The return flight leaves Malpensa Airport at 1:30
p.m. local time.
TAM S.A. -- http://www.tam.com.br/-- currently has business
agreements with the regional airlines Pantanal, Passaredo,
Total and Trip. As of Jan. 14, the daily flight on the Corumba
-- Campo Grande route in Mato Grosso do Sul began to be operated
by a partnership with Trip. With the expansion of the agreement
with NHT, TAM will now be serving 82 destinations in Brazil, 45
of which with its own flights. In addition, the company is
strengthening its presence in Rio Grande do Sul and Santa
Catarina.
* * *
On July 23, 2007, Fitch Ratings affirmed the 'BB' foreign
currency and local currency Issuer Default Ratings of TAM S.A.
Fitch has also affirmed the 'BB' rating of its US$300 million of
senior unsecured notes due 2017 as well as the company's
'A+(bra)' national scale rating and for its first debentures
issuance (BRL500 million). Fitch said the rating outlook is
stable.
UNIAO DE BANCOS: Will Establish Investment Bank
-----------------------------------------------
Uniao de Bancos Brasileiros SA will form investment bank
Unibanco Banco de Investimentos to make more money from initial
public offerings, Brazilian financial daily Valor Economico
reports.
According to Valor Economico notes that Unibanco Banco de
Investimentos will begin with BRL400 million in capital.
Business News Americas relates that Uniao de Bancos has hired
former BNDES Chief Eleazar de Carvalho Filho to be in charge of
distribution and former Credit Suisse employee Eduardo Gentil to
be responsible for business origination.
Headquartered in Sao Paulo, Brazil, Uniao de Bancos Brasileiros
SA -- http://www.unibanco.com/-- is a full-service financial
institution providing a range of financial products and services
to a diversified individual and corporate customer base
throughout Brazil. The company's businesses comprise segments:
Retail, Wholesale, Insurance and Pension Plans and Wealth
Management. Uniao de Bancos and its associated companies
FinInvest, LuizaCred, PontoCred and Tecban (Banco 24 Horas)
offer a network composed of 17,000 points of service. It also
counts on 7,580 automated teller machines and all 30 Hours'
products and services, including the telephone service and the
Internet banking. The company's international network consists
of branches in Nassau and the Cayman Islands; representatives
offices in New York; banking subsidiaries in Luxembourg, the
Cayman Islands and Paraguay; and a brokerage firm in New York --
Unibanco Securities Inc.
* * *
To date, Standard & Poor's Ratings Services rated Unibanco-Uniao
de Bancos Brasileiros SA's long-term foreign issuer credit
rating and local issuer credit rating at 'BB+'.
VALMONT INDUSTRIES: Revenue Growth Cues Moody's Rtng Lift to Ba1
----------------------------------------------------------------
Moody's upgraded the Corporate Family and Probability of Default
Ratings of Valmont Industries, Inc. to Ba1 from Ba2.
Concurrently, Moody's raised the senior unsecured credit
facility rating to Baa3 from Ba1 and raised the senior
subordinated notes rating to Ba2 from Ba3.
These rating actions acknowledge the solid organic revenue
growth and steady margin improvement achieved over several years
and since the ratings were placed on positive outlook, resulting
in operating performance that exceeded previous expectations.
The upgrade further reflects Moody's expectation that fiscal
policies will remain conservative and key credit metrics,
including leverage, will be maintained at levels appropriate for
the Ba1 rating category.
Further supporting the Ba1 Corporate Family Rating are Valmont's
leading market positions, low customer concentration and good
liquidity profile. Valmont's rating is constrained by a
relatively small revenue base for the rating category.
Additionally, approximately 75% of revenues is concentrated in
North America which, in Moody's opinion, together with size make
the business potentially vulnerable to macroeconomic and end-
market demand cyclicality in this region. Liquidity is expected
to be good over the next twelve months, as indicated by the
affirmation of the SGL-2 Speculative Grade Liquidity Rating.
Moody's took these rating actions:
-- US$150 million senior unsecured revolver due 2009, upgraded
to Baa3 (LGD3, 35%) from Ba1 (LGD3, 44%);
-- US$37 million senior unsecured term loan due 2009, upgraded
to Baa3 (LGD3, 35%) from Ba1 (LGD3, 44%);
-- US$150 million senior subordinated notes due 2014, upgraded
to Ba2 (LGD5, 81%) from Ba3 (LGD5, 82%);
-- Corporate Family Rating, upgraded to Ba1 from Ba2;
-- Probability of Default Rating, upgraded to Ba1 from Ba2;
-- Speculative Grade Liquidity Rating, affirmed SGL-2.
Valmont Industries, Inc. is a global producer of metal and
concrete pole and tower structures, mechanized irrigation
systems and coatings. Customers and end-users include state and
federal governments, contractors, utility and telecommunications
companies, manufacturers of commercial lighting fixtures and
large farms. Headquartered in Omaha, Nebraska, the company is
publicly held and reported revenues of US$1.5 billion for the
year ended Dec. 29, 2007. The company has operations in Brazil.
==========================
C A Y M A N I S L A N D S
==========================
AAM EMERGING: Sets Final Shareholders Meeting for April 4
---------------------------------------------------------
AAM Emerging Managers Offshore, Ltd., will hold its final
shareholders' meeting on April 4, 2008, at 11:30 a.m. at the
office of the company.
These matters will be taken up during the meeting:
1) accounting of the winding-up process; and
2) authorizing the liquidators to retain the records
of the company for a period of five years from
the dissolution of the company, after which they
may be destroyed.
AAM Emerging's shareholders agreed 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
CARBON TRADING: Will Hold Final Shareholders Meeting on April 4
---------------------------------------------------------------
Carbon Trading Fund Ltd. will hold its final shareholders'
meeting on April 4, 2008, at 10:30 a.m. at the registered office
of the company.
These matters will be taken up during the meeting:
1) accounting of the winding-up process; and
2) authorizing the liquidators to retain the records
of the company for a period of five years from
the dissolution of the company, after which they
may be destroyed.
Carbon Trading's shareholders agreed on Feb. 19, 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
CARBON TRADING MASTER: Final Shareholders Meeting is on April 4
---------------------------------------------------------------
Carbon Trading Master Fund Ltd. will hold its final
shareholders' meeting on April 4, 2008, at 10:00 a.m. at the
office of the company.
These matters will be taken up during the meeting:
1) accounting of the winding-up process; and
2) authorizing the liquidators to retain the records
of the company for a period of five years from
the dissolution of the company, after which they
may be destroyed.
Carbon Trading's shareholders agreed 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
CC CAYCO: Sets Final Shareholders Meeting for April 4
-----------------------------------------------------
CC Cayco Limited will hold its final shareholders' meeting on
April 4, 2008, at 9:00 a.m. at the office of the company.
These matters will be taken up during the meeting:
1) accounting of the winding-up process; and
2) authorizing the liquidators to retain the records
of the company for a period of six years from
the dissolution of the company, after which they
may be destroyed.
CC Cayco's shareholders agreed on Feb. 22, 2008, to place the
company into voluntary liquidation under The Companies Law (2004
Revision) of the Cayman Islands.
The liquidator can be reached at:
Richard L. Finlay
Attn: Krysten Lumsden
P.O. Box 2681, George Town
Grand Cayman, Cayman Islands
Telephone: (345) 945 3901
Fax: (345) 945 3902
CHEYNE GLOBAL: Sets Final Shareholders Meeting for April 4
----------------------------------------------------------
Cheyne Global Opportunities Fund Inc. will hold its final
shareholders' meeting on April 4, 2008, at 12:00 p.m. at the
office of the company.
These matters will be taken up during the meeting:
1) accounting of the winding-up process; and
2) authorizing the liquidators to retain the records
of the company for a period of five years from
the dissolution of the company, after which they
may be destroyed.
Cheyne Global's shareholders agreed 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
FINANCIAL RISK: Sets Final Shareholders Meeting for April 4
-----------------------------------------------------------
Financial Risk Management Water Fund Limited will hold its final
shareholders' meeting on April 4, 2008, at 11:00 a.m. at the
office of the company.
These matters will be taken up during the meeting:
1) accounting of the winding-up process; and
2) authorizing the liquidators to retain the records
of the company for a period of five years from
the dissolution of the company, after which they
may be destroyed.
Financial Risk's shareholders agreed 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
GLOBAL YACHT: Will Hold Final Shareholders Meeting on April 4
-------------------------------------------------------------
Global Yacht Ltd. will hold its final shareholders' meeting on
April 4, 2008, at 10:00 a.m. at 2306 SW 13th Street, 2nd Floor,
Gainesville, Florida 32608, U.S.A.
These matters will be taken up during the meeting:
1) accounting of the winding-up process; and
2) determining the manner in which the books,
accounts, and documentation of the company, and
of the liquidator should be disposed of.
Global Yacht's shareholders agreed on Feb. 22, 2008, to place
the company into voluntary liquidation under The Companies Law
(2004 Revision) of the Cayman Islands.
The liquidator can be reached at:
S. Clark Butler
2306 SW 13th Street
2nd Floor Gainesville, FL 32608
Florida, U.S.A
Telephone: (+352) 372 6060
Fax: (+352) 372 7028
HIGHLAND SPECIAL: Proofs of Claim Filing Deadline is Tomorrow
-------------------------------------------------------------
Highland Special Opportunity Master Fund, Limited's creditors
have until April 4, 2008, to prove their claims to Richard
Fogerty and G. James Cleaver, 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.
Highland Special's shareholders agreed on Feb. 15, 2008, to
place the company into voluntary liquidation under The Companies
Law (2004 Revision) of the Cayman Islands. The shareholders
also passed a resolution to replace Simon Whicker and Kristen
Beighton of KPMG as the company's joint voluntary liquidators.
The liquidators can be reached at:
Richard Fogerty and G. James Cleaver
Attn: Chris Sharpe
Kroll (Cayman) Limited
4th Floor Bermuda House, Dr. Roy’s Drive
Grand Cayman, Cayman Islands
Telephone: +1 (345) 946-4015
Fax: +1 (345) 946-0082
NEW ORIENTAL: Will Hold Final Shareholders Meeting on April 4
-------------------------------------------------------------
New Oriental Gas Limited will hold its final shareholders'
meeting on April 4, 2008, at 10:00 a.m. at Jin Bao Plaza, No. 89
Jin Bao Road, Dong Cheng Dong District, Beijing 100005, China.
These matters will be taken up during the meeting:
1) accounting of the winding-up process; and
2) giving explanation thereof.
New Oriental's shareholders agreed on Dec. 27, 2007, to
place the company into voluntary liquidation under The Companies
Law (2004 Revision) of the Cayman Islands.
The liquidator can be reached at:
Shen Jianwei
Corporate Filing Services Ltd.
P.O. Box 613, Grand Cayman KY1-1107
Cayman Islands
Telephone: (86-10) 8522 1133
Fax: (86-10) 8522 1313
PARMALAT SPA: Warrant Exercise Hikes Capital by EUR6.29 Million
--------------------------------------------------------------
Parmalat S.p.A. communicates that, following the allocation of
shares to creditors of the Parmalat Group, the subscribed and
fully paid up share capital has now been increased by
EUR6,289,038 to EUR1,667,496,728 from EUR1,661,207,690.
The share capital increase is due to the exercise of 6,289,038
warrants.
Share Allotment Status
Shares totaling 32,464,186 representing around 1.9% of the share
capital are still in a deposit account c/o Parmalat S.p.A., of
which:
* 13,369,205 or 0.8% of the share capital, registered in the
name of individually identified commercial creditors, are
still deposited in the intermediary account of Parmalat
S.p.A. centrally managed by Monte Titoli (compared with
13,388,617 shares as at Feb. 29, 2008); and
* 19,094,981 or 1.1% of the share capital registered in the
name of the Foundation, called Fondazione Creditori
Parmalat, of which:
-- 120,000 shares representing the initial share capital
of Parmalat S.p.A. (unchanged); and
-- 18,974,981 or 1.1% of the share capital that pertain to
currently undisclosed creditors (compared with
19,653,870 shares as at Feb. 29, 2008).
About Parmalat
Headquartered in Milan, Italy, Parmalat S.p.A.
-- http://www.parmalat.net/-- sells nameplate milk products
that can be stored at room temperature for months. It also has
about 40 brand product lines, which include yogurt, cheese,
butter, cakes and cookies, breads, pizza, snack foods and
vegetable sauces, soups and juices.
The company's U.S. operations filed for chapter 11 protection on
Feb. 24, 2004 (Bankr. S.D.N.Y. Case No. 04-11139). Gary
Holtzer, Esq., and Marcia L. Goldstein, Esq., at Weil Gotshal &
Manges LLP, represent the Debtors. When the U.S. Debtors filed
for bankruptcy protection, they reported more than US$200
million in assets and debts. The U.S. Debtors emerged from
bankruptcy on April 13, 2005.
Parmalat S.p.A. and its Italian affiliates filed separate
petitions for Extraordinary Administration before the Italian
Ministry of Productive Activities and the Civil and Criminal
District Court of the City of Parma, Italy on Dec. 24, 2003.
Dr. Enrico Bondi was appointed Extraordinary Commissioner in
each of the cases. The Parma Court has declared the units
insolvent.
On June 22, 2004, Dr. Bondi filed a Sec. 304 Petition, Case No.
04-14268, in the United States Bankruptcy Court for the Southern
District of New York.
Parmalat has three financing arms: Dairy Holdings Ltd., Parmalat
Capital Finance Ltd., and Food Holdings Ltd. Dairy Holdings and
Food Holdings are Cayman Island special-purpose vehicles
established by Parmalat S.p.A. The Finance Companies are under
separate winding up petitions before the Grand Court of the
Cayman Islands. Gordon I. MacRae and James Cleaver of Kroll
(Cayman) Ltd. serve as Joint Provisional Liquidators in the
cases. On Jan. 20, 2004, the Liquidators filed Sec. 304
petition, Case No. 04-10362, in the United States Bankruptcy
Court for the Southern District of New York. In May 2006, the
Cayman Island Court appointed Messrs. MacRae and Cleaver as
Joint Official Liquidators. Gregory M. Petrick, Esq., at
Cadwalader, Wickersham & Taft LLP, and Richard I. Janvey, Esq.,
at Janvey, Gordon, Herlands Randolph, represent the Finance
Companies in the Sec. 304 case.
The Honorable Robert D. Drain presides over the Parmalat
Debtors' U.S. cases. On June 21, 2007, the U.S. Court Granted
Parmalat Permanent Injunction.
SNOWBALL MULTI: Final Shareholders Meeting is on April 4
--------------------------------------------------------
Snowball Multi Manager FX Fund SPC will hold its final
shareholders' meeting on April 4, 2008, at 11:00 a.m. at Kroll
(Cayman) Limited, 4th Floor, Bermuda House, Dr. Roy’s Drive,
Grand Cayman, Cayman Islands, to lay accounts before the
meeting, showing how the winding up has been conducted and how
the property has been disposed of.
Snowball Multi's shareholders agreed on Feb. 22, 2008, to place
the company into voluntary liquidation under The Companies Law
(2004 Revision) of the Cayman Islands.
The liquidator can be reached at:
Gordon I. Macrae
Attn: Hadley Chilton
Kroll (Cayman) Limited, 4th Floor
Bermuda House, P.O. Box 1102
Dr. Roy’s Drive, Grand Cayman KY1-1102
Cayman Islands
Telephone: (345) 946-0081
Fax: (345) 946-0082
TGM CURRENCY: Sets Final Shareholders Meeting for April 4
---------------------------------------------------------
TGM Currency Fund will hold its final shareholders'
meeting on April 4, 2008, at 9:00 a.m. at the registered office
of the company.
These matters will be taken up during the meeting:
1) accounting of the winding-up process; and
2) authorizing the liquidators to retain the records
of the company for a period of five years from
the dissolution of the company, after which they
may be destroyed.
TGM Currency's shareholders agreed on Feb. 19, 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
=========
C H I L E
=========
QUEBECOR WORLD: Jefferies & Co. as Committee Bankers Approved
-------------------------------------------------------------
The U.S. Bankruptcy Court for the Southern District of New York
authorized the Official Committee of Unsecured Creditors in
Qubebecor World Inc.'s cases to retain Jefferies & Company,
Inc., as its investment bankers, on an interim basis, nunc pro
tunc to Feb. 5, 2008.
Further objections must be filed by April 10, 2008. Absent
timely filed objections, the application will be approved on a
final basis, without further hearing. The Court will consider
all objections, if any, at a hearing scheduled for
April 17, 2008.
The Office of the United States Trustee retains the right to
object to any interim or final fee application filed by
Jefferies on any grounds provided for under the Bankruptcy Code,
the Bankruptcy Rules, or any Local Rules or orders of the Court.
The Debtors and their estates will be bound by the
indemnification, contribution and exculpations provisions of the
engagement letter dated February 5, 2008, between Jefferies and
the Creditors Committee. The Debtors will indemnify, defend and
hold harmless Jefferies and its affiliates, and its members,
provided that in no event will the firm be indemnified or
receive contribution in the case of bad-faith, self-dealing,
breach of fiduciary duty, if any, gross negligence or willful
misconduct.
About Quebecor World
Based in Montreal, Quebec, Quebecor World Inc. (TSX: IQW) (NYSE:
IQW), -- http://www.quebecorworldinc.com/-- provides market
solutions, including marketing and advertising activities, well
as print solutions to retailers, branded goods companies,
catalogers and to publishers of magazines, books and other
printed media. It has 127 printing and related facilities
located in North America, Europe, Latin America and Asia. In
the United States, it has 82 facilities in 30 states, and is
engaged in the printing of books, magazines, directories, retail
inserts, catalogs and direct mail. In Canada it has 17
facilities in five provinces, through which it offers a mix of
printed products and related value-added services to the
Canadian market and internationally.
The company has operations in Mexico, Brazil, Colombia, Chile,
Peru, Argentina and the British Virgin Islands.
Quebecor World and 53 of its subsidiaries, including those in
Canada, filed a petition under the Companies' Creditors
Arrangement Act before the Superior Court of Quebec, Commercial
Division, in Montreal, Canada, on Jan. 20, 2008. The Honorable
Justice Robert Mongeon oversees the CCAA case. Francois-David
Pare, Esq., at Ogilvy Renault, LLP, represents the Company in
the CCAA case. Ernst & Young Inc. was appointed as Monitor.
On Jan. 21, 2008, Quebecor World (USA) Inc., its U.S.
subsidiary, along with other U.S. affiliates, filed for chapter
11 bankruptcy on Jan. 21, 2008 (Bankr. S.D.N.Y Lead Case No. 08-
10152). Anthony D. Boccanfuso, Esq., at Arnold & Porter LLP
represents the Debtors in their restructuring efforts. The
Official Committee of Unsecured Creditors is represented by Akin
Gump Strauss Hauer & Feld LLP.
Based in Corby, Northamptonshire, Quebecor World PLC --
http://www.quebecorworldplc.com/-- is the U.K. subsidiary of
Quebecor World Inc. that specializes in web offset magazines,
catalogues and specialty print products for marketing and
advertising campaigns. The company employs around 290 people.
Quebecor PLC was placed into administration with Ian Best and
David Duggins of Ernst & Young LLP appointed as joint
administrators effective Jan. 28, 2008.
As of Sept. 30, 2007, Quebecor World's unaudited consolidated
balance sheet showed total assets of US$5,554,900,000, total
liabilities of US$3,964,800,000, preferred shares of
US$175,900,000, and total shareholders' equity of
US$1,414,200,000.
The company has until May 20, 2008, to file a plan of
reorganization in the Chapter 11 case. The Debtors' CCAA stay
has been extended to May 12, 2008. (Quebecor World Bankruptcy
News, Issue No. 10; Bankruptcy Creditors' Service, Inc.,
http://bankrupt.com/newsstand/or 215/945-7000)
* * *
As reported in the Troubled Company Reporter on Feb. 13, 2008,
Moody's Investors Service assigned a Ba2 rating to the
US$400 million super priority senior secured revolving term loan
facility of Quebecor World Inc. as a Debtor-in-Possession. The
related US$600 million super priority senior secured term loan
was rated Ba3 (together, the DIP facilities). The RTL's better
asset value coverage relative to the TL accounts for the
ratings' differential.
QUEBECOR WORLD: Kurtzman Carson Hiring as Committee Agent Okayed
----------------------------------------------------------------
The Official Committee of Unsecured Creditors of Quebecor World
Inc. and its affiliates obtained the U.S. Bankruptcy Court for
the Southern District of New York's authority to retain Kurtzman
Carson Consultants, LLC, as its communications agent, nunc pro
tunc to Feb. 21, 2008.
As reported in the Troubled Company Reporter on March 28, 2008,
according to Madeleine Fequeire, director of Abitibi-
Consolidated Sales Corp. and co-chairperson of the Committee,
the Committee seeks to employ Kurtman Carson in compliance to
its obligation under Section 1102(b)(3) of the Bankruptcy Code.
About Quebecor World
Based in Montreal, Quebec, Quebecor World Inc. (TSX: IQW) (NYSE:
IQW), -- http://www.quebecorworldinc.com/-- provides market
solutions, including marketing and advertising activities, well
as print solutions to retailers, branded goods companies,
catalogers and to publishers of magazines, books and other
printed media. It has 127 printing and related facilities
located in North America, Europe, Latin America and Asia. In
the United States, it has 82 facilities in 30 states, and is
engaged in the printing of books, magazines, directories, retail
inserts, catalogs and direct mail. In Canada it has 17
facilities in five provinces, through which it offers a mix of
printed products and related value-added services to the
Canadian market and internationally.
The company has operations in Mexico, Brazil, Colombia, Chile,
Peru, Argentina and the British Virgin Islands.
Quebecor World and 53 of its subsidiaries, including those in
Canada, filed a petition under the Companies' Creditors
Arrangement Act before the Superior Court of Quebec, Commercial
Division, in Montreal, Canada, on Jan. 20, 2008. The Honorable
Justice Robert Mongeon oversees the CCAA case. Francois-David
Pare, Esq., at Ogilvy Renault, LLP, represents the Company in
the CCAA case. Ernst & Young Inc. was appointed as Monitor.
On Jan. 21, 2008, Quebecor World (USA) Inc., its U.S.
subsidiary, along with other U.S. affiliates, filed for chapter
11 bankruptcy on Jan. 21, 2008 (Bankr. S.D.N.Y Lead Case No. 08-
10152). Anthony D. Boccanfuso, Esq., at Arnold & Porter LLP
represents the Debtors in their restructuring efforts. The
Official Committee of Unsecured Creditors is represented by Akin
Gump Strauss Hauer & Feld LLP.
Based in Corby, Northamptonshire, Quebecor World PLC --
http://www.quebecorworldplc.com/-- is the U.K. subsidiary of
Quebecor World Inc. that specializes in web offset magazines,
catalogues and specialty print products for marketing and
advertising campaigns. The company employs around 290 people.
Quebecor PLC was placed into administration with Ian Best and
David Duggins of Ernst & Young LLP appointed as joint
administrators effective Jan. 28, 2008.
As of Sept. 30, 2007, Quebecor World's unaudited consolidated
balance sheet showed total assets of US$5,554,900,000, total
liabilities of US$3,964,800,000, preferred shares of
US$175,900,000, and total shareholders' equity of
US$1,414,200,000.
The company has until May 20, 2008, to file a plan of
reorganization in the Chapter 11 case. The Debtors' CCAA stay
has been extended to May 12, 2008. (Quebecor World Bankruptcy
News, Issue No. 10; Bankruptcy Creditors' Service, Inc.,
http://bankrupt.com/newsstand/or 215/945-7000)
* * *
As reported in the Troubled Company Reporter on Feb. 13, 2008,
Moody's Investors Service assigned a Ba2 rating to the
US$400 million super priority senior secured revolving term loan
facility of Quebecor World Inc. as a Debtor-in-Possession. The
related US$600 million super priority senior secured term loan
was rated Ba3 (together, the DIP facilities). The RTL's better
asset value coverage relative to the TL accounts for the
ratings' differential.
QUEBECOR WORLD: Mesirow Hiring as Panel Financial Advisor Okayed
----------------------------------------------------------------
The U.S. Bankruptcy Court for the Southern District of New York
authorized the Official Committee of Unsecured Creditors in
Qubebecor World Inc.'s cases to retain Mesirow Financial
Consulting, LLC, as its financial advisors, on an interim basis,
effective Feb. 1, 2008.
Objections to Mesirow's retention are due April 10, 2008.
Absent timely filed objections, or if all objections are
resolved, the application will be approved on a final basis,
without further hearing. The Court will consider all unresolved
objections at a hearing scheduled for April 17, 2008.
On a final basis, the Court authorized Mesirow to receive
compensation and reimbursement of expenses, which in will not be
subject to challenge except under the standard of review set
forth in Section 328(a) of the Bankruptcy Code.
The Office of the United States Trustee retains the right to
object to any interim or final fee application filed by Mesirow
on any grounds provided for under the Bankruptcy Code, the
Bankruptcy Rules, or any Local Rules or orders of the Court.
The Debtors and their estates will not indemnify Mesirow or its
members for any acts of bad-faith, self-dealing, breach of
fiduciary duty, if any, gross negligence or willful misconduct.
About Quebecor World
Based in Montreal, Quebec, Quebecor World Inc. (TSX: IQW) (NYSE:
IQW), -- http://www.quebecorworldinc.com/-- provides market
solutions, including marketing and advertising activities, well
as print solutions to retailers, branded goods companies,
catalogers and to publishers of magazines, books and other
printed media. It has 127 printing and related facilities
located in North America, Europe, Latin America and Asia. In
the United States, it has 82 facilities in 30 states, and is
engaged in the printing of books, magazines, directories, retail
inserts, catalogs and direct mail. In Canada it has 17
facilities in five provinces, through which it offers a mix of
printed products and related value-added services to the
Canadian market and internationally.
The company has operations in Mexico, Brazil, Colombia, Chile,
Peru, Argentina and the British Virgin Islands.
Quebecor World and 53 of its subsidiaries, including those in
Canada, filed a petition under the Companies' Creditors
Arrangement Act before the Superior Court of Quebec, Commercial
Division, in Montreal, Canada, on Jan. 20, 2008. The Honorable
Justice Robert Mongeon oversees the CCAA case. Francois-David
Pare, Esq., at Ogilvy Renault, LLP, represents the Company in
the CCAA case. Ernst & Young Inc. was appointed as Monitor.
On Jan. 21, 2008, Quebecor World (USA) Inc., its U.S.
subsidiary, along with other U.S. affiliates, filed for chapter
11 bankruptcy on Jan. 21, 2008 (Bankr. S.D.N.Y Lead Case No. 08-
10152). Anthony D. Boccanfuso, Esq., at Arnold & Porter LLP
represents the Debtors in their restructuring efforts. The
Official Committee of Unsecured Creditors is represented by Akin
Gump Strauss Hauer & Feld LLP.
Based in Corby, Northamptonshire, Quebecor World PLC --
http://www.quebecorworldplc.com/-- is the U.K. subsidiary of
Quebecor World Inc. that specializes in web offset magazines,
catalogues and specialty print products for marketing and
advertising campaigns. The company employs around 290 people.
Quebecor PLC was placed into administration with Ian Best and
David Duggins of Ernst & Young LLP appointed as joint
administrators effective Jan. 28, 2008.
As of Sept. 30, 2007, Quebecor World's unaudited consolidated
balance sheet showed total assets of US$5,554,900,000, total
liabilities of US$3,964,800,000, preferred shares of
US$175,900,000, and total shareholders' equity of
US$1,414,200,000.
The company has until May 20, 2008, to file a plan of
reorganization in the Chapter 11 case. The Debtors' CCAA stay
has been extended to May 12, 2008. (Quebecor World Bankruptcy
News, Issue No. 10; Bankruptcy Creditors' Service, Inc.,
http://bankrupt.com/newsstand/or 215/945-7000)
* * *
As reported in the Troubled Company Reporter on Feb. 13, 2008,
Moody's Investors Service assigned a Ba2 rating to the
US$400 million super priority senior secured revolving term loan
facility of Quebecor World Inc. as a Debtor-in-Possession. The
related US$600 million super priority senior secured term loan
was rated Ba3 (together, the DIP facilities). The RTL's better
asset value coverage relative to the TL accounts for the
ratings' differential.
==================
C O S T A R I C A
==================
CINEMARK HOLDINGS: Elects Steven P. Rosenberg to Board
------------------------------------------------------
Cinemark Holdings, Inc. has elected Steven P. Rosenberg to the
company's Board effective as of April 1, 2008, thereby
increasing the size of the Board to ten members. Mr. Rosenberg
has also been appointed to the Audit Committee, which
appointment is effective April 15, 2008.
Mr. Rosenberg is the President of SPR Ventures Inc., a private
investment firm he founded in 1997, and President of SPR
Packaging LLC, a manufacturer of flexible packaging. From 1992
until 1997, Mr. Rosenberg was the President of the Arrow
division of ConAgra, Inc., a leading manufacturer of grocery
products. Mr. Rosenberg was also a founding investor of
Packaged Ice, a leading manufacturer of industrial and consumer
ice in 1992. Mr. Rosenberg currently serves on the board of
directors of Texas Capital Bancshares, Inc. and PRG Schultz
International, Inc.
"We are very pleased that Steven has joined our Board," said
Cinemark’s Chief Executive Officer, Alan Stock. "We are certain
that he will be a strong addition to the Board and the Audit
Committee, and that his background and broad experience will be
an asset to Cinemark."
Cinemark Holdings, Inc. -- http://www.cinemark.com/-- a leader
in the theatre exhibition industry, operates 395 theaters and
4,479 screens in 37 states in the United States and
internationally in 13 countries, including Argentina, Brazil,
Chile, Colombia, Costa Rica, Ecuador, El Salvador, Honduras,
Mexico, Nicaragua, Panama, Peru and Taiwan.
* * *
As reported in the Troubled Company Reporter-Latin America on
Dec. 14, 2007, Standard & Poor's Rating Services affirmed its
'B' corporate credit rating on Cinemark Holdings Inc. and
subsidiary Cinemark Inc., which S&P analyzed on a consolidated
basis. At the same time, S&P removed the ratings from
CreditWatch with positive implications, where they were placed
on May 17, 2007. S&P said the outlook is positive.
US AIRWAYS: Court of Appeals Upholds Ruling on R. Bosiger's Suit
----------------------------------------------------------------
The United States Court of Appeals for the Fourth Circuit
affirmed the ruling of the United States District Court for the
Eastern District of Virginia, at Alexandria, dismissing Edwin
Perrow Bosiger, Jr.'s complaint that he was not notified of the
claims bar date in US Airways Group Inc.'s case. Mr. Bosiger
previously asserted he was not able to file a timely claim
asserting his pension benefits due to the non-notification.
Judges James Harvie Wilkinson III, Diana Gribbon Motz and Kathy
M. Flanagan comprised the panel reviewing the Appeal.
Mr. Bosiger brought a suit in the District Court six months
after USAir II's emergence from bankruptcy, contending that US
Airways Inc. had improperly terminated his pension during USAir
I's Bankruptcy.
US Airways sought and obtained the Bankruptcy Court's authority
to restructure its pilot pension obligations so that it can meet
conditions in securing the financing it needed to emerge from
Chapter 11.
The retired pilots asked the District Court to restore their old
pension benefits. But since the retired pilots had neglected to
have the termination and reorganization orders stayed, and since
the orders had been implemented and relied on by third parties,
the District Court held that the suit was equitably moot.
Mr. Bosiger was provided with the general bar date and certain
administrative and rejection damage claims bar date notices, but
did not file a claim during USAir II's Bankruptcy. Mr. Bosiger
instead chose to bring a suit against US Airways in the United
States District Court for the Eastern District of Virginia. The
District Court dismissed the suit on the grounds that US Airways
had properly terminated a Non-Qualified Plan Top Hat Retirement
Plan, and that Mr. Bosiger failed to file a proof of claim in
USAir II's Bankruptcy Cases.
Judge Wilkinson, among others, says:
-- the principal purpose of bankruptcy is straightforward: to
grant a fresh start to the honest but unfortunate debtor;
-- unwinding the finality of bankruptcy upsets not only the
expectations of the creditors who actually do participate
in the bankruptcy proceedings, but also the reliance
interests of the creditors who have advanced funds based on
the new capital structure laid out in the reorganization
plan; and
-- Mr. Bosiger's general denial of receiving bar dates notices
does not constitute the strong evidence needed to overcome
the presumption of receipt.
"If we were to hold that [Mr.] Bosiger's general denial was
sufficient, it would make it discernibly more difficult for any
court to grant summary judgment in any case where proper notice
is required. The result would be to prolong and undercut the
bankruptcy process by civil actions on the part of creditors who
failed to pursue their claims when it was timely and appropriate
for them to do so. The District Court was right to recognize
this danger, and its decision is affirmed. . . . Given the
tentative nature of the claims put forward by Bosiger's counsel,
we accord little weight to the argument that Bosiger's notice
was mailed to the wrong address. At the very least, the
speculative nature of the claims demonstrate that they do not
offer sufficient evidence that Bosiger did not receive his
notice letters," Judge Wilkinson says.
A full-text copy of Judge Wilkinson III, et al.'s Opinion is
available for free at:
http://bankrupt.com/misc/USAirCourtofAppealsOpinion.pdf
About US Airways
Based in Tempe, Arizona, US Airways Group Inc.'s (NYSE: LCC) -
http://www.usairways.com/-- primary business activity is the
ownership of the common stock of US Airways, Inc., Allegheny
Airlines, Inc., Piedmont Airlines, Inc., PSA Airlines, Inc.,
MidAtlantic Airways, Inc., US Airways Leasing and Sales, Inc.,
Material Services Company, Inc., and Airways Assurance Limited,
LLC.
US Airways has operations in Japan, Australia, China, Costa
Rica, Philippines, and Spain, among others.
Under a Chapter 11 plan declared effective on March 31, 2003,
USAir emerged from bankruptcy with the Retirement Systems of
Alabama taking a 40% equity stake in the deleveraged carrier in
exchange for US$240 million infusion of new capital.
US Airways and its subsidiaries filed another chapter 11
petition on Sept. 12, 2004 (Bankr. E.D. Va. Case No. 04-13820).
Brian P. Leitch, Esq., Daniel M. Lewis, Esq., and Michael J.
Canning, Esq., at Arnold & Porter LLP, and Lawrence E. Rifken,
Esq., and Douglas M. Foley, Esq., at McGuireWoods LLP, represent
the Debtors in their restructuring efforts. In the Company's
second bankruptcy filing, it lists US$8,805,972,000 in total
assets and US$8,702,437,000 in total debts.
The Debtors' Chapter 11 plan for its second bankruptcy filing
became effective on Sept. 27, 2005. The Debtors completed their
merger with America West on the same date. (US Airways
Bankruptcy News, Issue No. 157; Bankruptcy Creditors' Service,
Inc., http://bankrupt.com/newsstand/or 215/945-7000).
* * *
As reported in the Troubled Company Reporter on March 26, 2008,
Standard & Poor's Ratings Services revised its outlook on US
Airways Group Inc. to stable from positive. S&P has affirmed
all ratings, including the 'B-' long-term corporate credit
rating.
US AIRWAYS: To Settle MD Aviation Claim by Paying US$11,500,000
---------------------------------------------------------------
US Airways Group Inc. and The Maryland Aviation Administration
filed with the U.S. Bankruptcy Court for the Eastern District of
Virginia:
Status Amount
Claim No. Debtor Asserted Asserted
--------- ------ -------- --------
5063 US Airways, Inc. unsecured US$413,046
priority 23,343,868
----------
total 23,756,914
5064 Piedmont Airlines, Inc. unsecured 98,462
priority 23,343,868
----------
total 24,442,330
The Maryland Department of the Environment filed:
Status Amount
Claim No. Debtor Asserted Asserted
--------- ------ -------- --------
5066 US Airways, Inc. unsecured US$23,343,868
5083 Piedmont Airlines, Inc. unsecured 23,343,868
The Debtors have established a reserve under Claim No. 5083, to
be used for distributions for any of the MAA environmental
claims that are allowed.
MDE transferred Claim Nos. 5066 and 5083 to MAA.
To resolve their dispute, the parties agreed that:
1. Claim Nos. 5064, 5066 and 5083 are disallowed in their
entirety;
2. Claim No. 5063 is reclassified, reduced and allowed as a
Class USAI-9 or General Unsecured Claim under the Debtors'
Joint Plan of Reorganization in the compromised amount of
$11,500,000, in full satisfaction of MAA's environmental
claims against the Debtors;
3. The Stipulation is without prejudice to any claims or
causes of action that MAA or its assignor, MDE, may have
against any third parties; and
4. The Stipulation resolves all remaining claims of MDE and
MAA against the Debtors.
The Stipulation is deemed effective without further Court order.
About US Airways
Based in Tempe, Arizona, US Airways Group Inc.'s (NYSE: LCC) -
http://www.usairways.com/-- primary business activity is the
ownership of the common stock of US Airways, Inc., Allegheny
Airlines, Inc., Piedmont Airlines, Inc., PSA Airlines, Inc.,
MidAtlantic Airways, Inc., US Airways Leasing and Sales, Inc.,
Material Services Company, Inc., and Airways Assurance Limited,
LLC.
US Airways has operations in Japan, Australia, China, Costa
Rica, Philippines, and Spain, among others.
Under a Chapter 11 plan declared effective on March 31, 2003,
USAir emerged from bankruptcy with the Retirement Systems of
Alabama taking a 40% equity stake in the deleveraged carrier in
exchange for US$240 million infusion of new capital.
US Airways and its subsidiaries filed another chapter 11
petition on Sept. 12, 2004 (Bankr. E.D. Va. Case No. 04-13820).
Brian P. Leitch, Esq., Daniel M. Lewis, Esq., and Michael J.
Canning, Esq., at Arnold & Porter LLP, and Lawrence E. Rifken,
Esq., and Douglas M. Foley, Esq., at McGuireWoods LLP, represent
the Debtors in their restructuring efforts. In the Company's
second bankruptcy filing, it lists US$8,805,972,000 in total
assets and US$8,702,437,000 in total debts.
The Debtors' Chapter 11 plan for its second bankruptcy filing
became effective on Sept. 27, 2005. The Debtors completed their
merger with America West on the same date. (US Airways
Bankruptcy News, Issue No. 157; Bankruptcy Creditors' Service,
Inc., http://bankrupt.com/newsstand/or 215/945-7000).
* * *
As reported in the Troubled Company Reporter on March 26, 2008,
Standard & Poor's Ratings Services revised its outlook on US
Airways Group Inc. to stable from positive. S&P has affirmed
all ratings, including the 'B-' long-term corporate credit
rating.
US AIRWAYS: R. Thomas Demands Retirement Benefits Continued
-----------------------------------------------------------
Roger N. Thomas asks the U.S. Bankruptcy Court for the Eastern
District of Virginia to:
-- deny US Airways Group Inc.' request to disallow his claim;
-- grant his previously vested retirement benefits; and
-- direct all the Debtors and their affiliates to continuously
pay him the benefits.
Mr. Thomas asserts that he was a known creditor of Piedmont
Airlines, Inc. He wrote Piedmont's in-house retirement
administrator on Aug. 12, 2002, to ask for documents so he may
begin estimating his options in the pension plan, and convey his
expectations for travel and social security supplement benefits.
He says US Airways, Inc.'s Benefits Coordinator Dianne Green
answered his letter on August 20, and acknowledged his pension
fund claim but disagreed he had rights to any other benefit. He
further says that he, to his knowledge and belief, is the first
and only person to have been awarded cash settlement and
retirement benefits in any grievance procedure with Henson
Aviation, Inc., or Piedmont.
Piedmont assured that the retirement benefits would not be
affected in any way by the Debtors' first bankruptcy cases, Mr.
Thomas relates. Ms. Green reassured him this; that is why,
according to Mr. Thomas, he felt he did not need to initiate a
filing as a creditor.
Mr. Thomas asserts that the USAir I Bankruptcy Cases and its bar
date should not reduce his vested retirement interest. He
contends that the retired Piedmont pilots have received their
full retirement package including travel, retirement plan and
insurance -- without break and without reduction -- since he
left the company, until now. According to him, the retirement
plan contractually includes both the pension benefit and the
social security supplement benefit. In his case, Mr. Thomas
says the Debtors define "Retirement Plan" as a monthly pension
only, further eroding his retirement interest.
The Debtors are using their own tardiness as a means to reduce
his pension, Mr. Thomas says. He also adds that the grievance
settlement states that his release of Piedmont from claims
arising from his employment or cessation of employment from the
company is "made without out prejudice to and does not serve to
bar any claims arising from his previously vested retirement
interest." Mr. Thomas asserts he is 100% vested and, thus, is
entitled to all retirement benefits listed in the pilot
contract.
R. Thomas' Request
Mr. Thomas asks the Court to direct the Debtors to grant all
his vested retirement benefits including all the contractual
obligations for retirement contained in the General, Retirement,
and Insurance headings of the agreement between Henson Aviation,
Inc., and its pilots as represented by the Airline Pilots
Association, signed Nov. 30, 1989, and side letters.
Mr. Thomas also asks the Court to direct the Debtors to use, in
defining and calculating retirement benefits for his pension,
certain contract and side letters in effect when his employment
was involuntarily terminated on April 5, 1995, and Grievance
Settlement signed on March 21, 1996, between him and Piedmont.
According to him, these includes a normal retirement age of 60
and a calculation of his final average earnings as stated in the
agreement between Piedmont Airlines, Inc., and its pilots as
represented by the ALPA, signed May 16, 1994, with its
Retirement Plan for Pilots and side letters, then current.
Mr. Thomas asserts that according to the Settlement, he is
entitled to his "previously vested retirement interest." This
is the retirement interest he says is the one he claims. He
further asserts that his claim does not "significantly exceed,"
as the Debtors argue, that to which he is entitled. His claim
is entirely supported in writing in contracts that apply to him,
he says.
According to Mr. Thomas, the Debtors have added the words
"accrued" and "in the Retirement Plan" which narrows the meaning
of the Settlement to only the pension portion of the retirement
benefits. He contends the Debtors have mixed disputed with
undisputed items in their response and cross-motion for summary
judgment against his claim. The Debtors base their statements
on the wrong contract, specifically the 2001 Piedmont contract
including an amendment signed only in December 2007, he says.
Neither the contract nor tis amendment applies to him, he adds.
The contracts that have bearing on the matter, according to Mr.
Thomas, are:
1. the Agreement between Henson Aviation, Inc., and its pilots
as represented by the Air Line Pilots Association, signed
November 30, 1989, and side letters; and
2. the Agreement between Piedmont Airlines, Inc., and its
pilots as represented by the Air Line Pilots Association,
signed May 16, 1994, with its Retirement Plan for Pilots
and side letters.
Mr. Thomas asserts that the Grievance Settlement acknowledges
his involuntary termination before the age of 60 and by
affirming his right to his "vested retirement interest," the
Settlement implicitly treats him as a person who worked until
the age of 60. He further asserts this is the point of the
Settlement and it entirely does not indicate otherwise.
The Contracts do not require him to "formally request" his
pension to begin, Mr. Thomas contends. Instead, the Contracts
make it clear that the responsibility lies with the Debtors to
begin payments on the normal retirement date, he says.
Mr. Thomas further notes that the United States Postal Service
has acknowledged that he did not know of the existence of a
package of payment option materials. According to him, the
Debtors say they are not delinquent because the package was
returned to them by the USPS.
Debtors Answer Back
The Debtors argue that the only benefits and claims that Mr.
Thomas would be entitled to receive were those under the
Retirement Plan, not from the Reorganized Debtors. The Debtors
add that they were "under no obligation to treat every
discharged or furloughed employee as a potential creditor on the
off chance that the employee might assert the claim."
Douglas M. Foley, Esq., at McGuirewoods LLP, in Norfolk,
Virginia, contends that notice by publication was
constitutionally sufficient as to Mr. Thomas because he was not
a "known" creditor.
Mr. Foley asserts that whether Mr. Thomas was entitled to
receive actual notice of the November 4, 2002 bar date for
filing non-governmental claims in the Debtors' first Chapter 11
Cases or the notice of the commencement of the Debtors' first
Chapter 11 Cases is only relevant if he held any "claims"
against the Debtors. However, Mr. Thomas "forever and finally
released, settled, waived, discharged, acquitted and reached
full accord and satisfaction of all claims, demands, causes of
action, and actions arising or existing up to the date of
execution of the Settlement Agreement, except any claims arising
from his previously vested retirement interest." Accordingly,
Mr. Foley adds, Mr. Thomas is not entitled to any other and
further relief except those that were previously vested in the
Retirement Plan -- nothing more and nothing less.
The Debtors, thus, ask the Court to enter an order disallowing
Mr. Thomas' claim.
About US Airways
Based in Tempe, Arizona, US Airways Group Inc.'s (NYSE: LCC) -
http://www.usairways.com/-- primary business activity is the
ownership of the common stock of US Airways, Inc., Allegheny
Airlines, Inc., Piedmont Airlines, Inc., PSA Airlines, Inc.,
MidAtlantic Airways, Inc., US Airways Leasing and Sales, Inc.,
Material Services Company, Inc., and Airways Assurance Limited,
LLC.
US Airways has operations in Japan, Australia, China, Costa
Rica, Philippines, and Spain, among others.
Under a Chapter 11 plan declared effective on March 31, 2003,
USAir emerged from bankruptcy with the Retirement Systems of
Alabama taking a 40% equity stake in the deleveraged carrier in
exchange for US$240 million infusion of new capital.
US Airways and its subsidiaries filed another chapter 11
petition on Sept. 12, 2004 (Bankr. E.D. Va. Case No. 04-13820).
Brian P. Leitch, Esq., Daniel M. Lewis, Esq., and Michael J.
Canning, Esq., at Arnold & Porter LLP, and Lawrence E. Rifken,
Esq., and Douglas M. Foley, Esq., at McGuireWoods LLP, represent
the Debtors in their restructuring efforts. In the Company's
second bankruptcy filing, it lists US$8,805,972,000 in total
assets and US$8,702,437,000 in total debts.
The Debtors' Chapter 11 plan for its second bankruptcy filing
became effective on Sept. 27, 2005. The Debtors completed their
merger with America West on the same date. (US Airways
Bankruptcy News, Issue No. 157; Bankruptcy Creditors' Service,
Inc., http://bankrupt.com/newsstand/or 215/945-7000).
* * *
As reported in the Troubled Company Reporter on March 26, 2008,
Standard & Poor's Ratings Services revised its outlook on US
Airways Group Inc. to stable from positive. S&P has affirmed
all ratings, including the 'B-' long-term corporate credit
rating.
===================================
D O M I N I C A N R E P U B L I C
===================================
CAP CANA: Land Court Judges Issue Arrest Warrant for R. Hazoury
---------------------------------------------------------------
Judges Rafael Ciprian, Marino Alvarez and Luz Ubinas at the
Superior Land Court of the Dominican Republic have issued an
arrest warrant against Cap Cana President Ricardo Hazoury for
contempt of court, Diario Digital reports.
According to Diario Digital, Mr. Hazoury didn't attend a court
hearing last Monday on alleged real estate fraud charges filed
by the proprietor of several improvements. The case involves
the "unauthorized mortgage of a property" of US$40 million.
The judges placed an "impediment exit" against Mr. Hazoury,
Diario Digital states.
Cap Cana is located on the easternmost tip of the Dominican
Republic, and is a few minutes drive from Punta Cana
International Airport, which receives nonstop flights from large
metropolitan centers in Europe, Canada and the USA. When fully
developed, Cap Cana is expected to have six championship golf
courses (three of which will be Nicklaus Signature courses, one
of which was recently completed); one of the largest inland
marinas in the Caribbean; several luxury hotels; over 10,000
housing units, including estate homes, villas and condominiums;
numerous sports facilities, including golf, beach and yacht
clubs; and a variety of high-end shops, restaurants, spas and
entertainment complexes. Plans also include the development of
a large ecological preserve.
* * *
As reported in the Troubled Company Reporter-Latin America on
Nov. 6, 2007, Fitch Ratings affirmed the 'B' rating on Cap Cana,
S.A.'s US$250 million senior secured notes. In addition, Fitch
assigned a preliminary rating of 'B-' to the expected issuance
of US$500 million in additional senior secured notes.
DELTA AIR: Launches Food-for-Purchase Program in Caribbean
----------------------------------------------------------
Delta Air Lines Inc. has launched its food-for-purchase program
in select flights between the U.S. and beach destinations in the
Caribbean and Latin America, Dominican Today reports.
Dominican Today relates that Delta Air started the food-for-
purchase menu in September 2007 "on coast-to-coast mainline
flights between New York John F. Kennedy International Airport
and Los Angeles, San Diego, San Francisco and Seattle."
Delta Air Lines told Dominican Today it will have its food-for-
purchase program on all flights within the U.S. of 750 miles or
more. As part of its plan to try reaping more revenue from
added services, Delta Air will offer more "designer US$7 and
US$8 meals," Dominican Today notes.
Based in Atlanta, Georgia, Delta Air Lines Inc. (NYSE:DAL) --
http://www.delta.com/-- is the world's second-largest airline
in terms of passengers carried and the leading U.S. carrier
across the Atlantic, offering daily flights to 328 destinations
in 56 countries on Delta, Song, Delta Shuttle, the Delta
Connection carriers and its worldwide partners. Delta flies to
Argentina, Australia and the United Kingdom, among others.
The company and 18 affiliates filed for chapter 11 protection on
Sept. 14, 2005 (Bankr. S.D.N.Y. Lead Case No. 05-17923).
Marshall S. Huebner, Esq., at Davis Polk & Wardwell, represents
the Debtors in their restructuring efforts. Timothy R. Coleman
at The Blackstone Group L.P. provides the Debtors with financial
advice. Daniel H. Golden, Esq., and Lisa G. Beckerman, Esq., at
Akin Gump Strauss Hauer & Feld LLP, provide the Official
Committee of Unsecured Creditors with legal advice. John
McKenna, Jr., at Houlihan Lokey Howard & Zukin Capital and James
S. Feltman at Mesirow Financial Consulting, LLC, serve as the
Committee's financial advisors.
The Debtors filed a chapter 11 plan of reorganization and
disclosure statement explaining that plan on Dec. 19, 2007. On
Jan. 19, 2007, they filed revisions to the plan and disclosure
statement, and submitted further revisions to the plan on
Feb. 2, 2007. On Feb. 7, 2007, the Court approved the Debtors'
disclosure statement. In April 25, 2007, the Court confirmed
the Debtors' plan. That plan became effective on April 30,
2007. The Court entered a final decree closing 17 cases on
Sept. 26, 2007.
* * *
As 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.
====================
E L S A L V A D O R
====================
AES CORP: Unit Gets Regulator Nod to Acquire Bioenergia Assets
--------------------------------------------------------------
AES Corp.'s El Salvador unit AES Nejapa Gas has secured
antitrust regulator Superintendencia de Competencia approval to
acquire assets and rights from Bioenergia for a waste-to-energy
project, Business News Americas reports.
According to the regulator, AES Nejapa's project to deploy a
biogas capture and burn system at the Nejapa landfill to
generate power won't significantly limit competition.
AES has been in Eastern Europe for over ten years, since it
acquired three power plants in Hungary in 1996. Currently, AES
has two distribution companies in Ukraine, which serve 1.2
million customers and generation plants in the Czech Republic
and Hungary. AES is also the leading company in biomass
conversion in Hungary, generating 37% of the nation's total
renewable generation in 2004. The company has Latin America
operations in Argentina, Brazil, Chile, Dominican Republic, El
Salvador and Panama.
* * *
The AES Corporation still carries Moody's Investors Service's
Corporate Family Rating and the senior unsecured rating assigned
at B1. The company also carries Fitch Ratings' 'BB/RR1' rating
on US$500 million issue of senior unsecured notes due 2017.
As reported in the Troubled Company Reporter-Latin America on
March 7, 2008, AES Corporation is in default under its senior
secured credit facility and its senior unsecured credit facility
due to a breach of representation related to its financial
statements as set forth in the credit agreements. As a result,
US$200 million of the debt under the company's senior secured
credit facility will be classified as current on the balance
sheet as of Dec. 31, 2007. There are no outstanding borrowings
under the senior unsecured facility.
=================
G U A T E M A L A
=================
BRITISH AIRWAYS: Facing GBP20Mln Costs Over Flight Cancellations
----------------------------------------------------------------
British Airways plc could face costs of more than GBP20 million
over flight cancellations during the opening weekend of
Heathrow's GBP4.3 billion Terminal 5, the Daily Telegraph
reports, citing analysts.
Howard Wheeldon of BGC Partners told the Daily Telegraph "BA's
got the cost of the cancellations, compensation, as well as
hotels for stranded passengers," who according to a lawyer, may
take legal action against BA, particularly Americans.
BA, the Daily Telegraph relates, canceled more than 200 flights
since Thursday's opening after the new terminal's baggage system
failed, affecting more than 20,000 passengers.
FT says the situation compelled BA to transfer large numbers of
bags to a contractor in Milan, Italy, for re-sorting and onward
shipment by road or air.
British Airways Statement
"Since Thursday, when Terminal 5 opened, we have made clear that
the service we have provided has not been good enough. We
apologize sincerely to our customers.
"The baggage system is now generally working better. From time
to time problems have developed that were not encountered during
the extensive trials. These issues are being addressed as they
arise by a team of engineers and IT specialists from BAA and BA.
"A backlog of undelivered bags has built up. This backlog is
not affecting the day-to-day operation of the baggage system,
and we are making every effort to reunite delayed bags with
their owners.
"We have more than 400 volunteers from across the airline
supporting this effort.
"This work takes time as delayed bags must undergo enhanced
levels of security screening. Much of this process has to be
done manually because we have been unable to use the Terminal 5
baggage system to process these bags automatically.
"We are sorry for the disruption and inconvenience caused to
customers whose flights have been canceled or whose bags have
been delayed. We will not rest until our service has been
restored to the high standard customers rightly expect.
"We continue to work towards increasing the number of services
in the days ahead.
"Both British Airways and BAA have invested an enormous amount
of time and effort to create Terminal 5. We remain confident
that these early difficulties can be overcome, and that the
terminal will be highly valued by customers and our staff in the
near future and for many years to come."
Today, April 2, 2008, the airline plans to operate 342 out of
392 flights to and from Terminal 5.
About British Airways
Headquartered in West Drayton, United Kingdom, British Airways
Plc -- http://www.ba.com/-- operates of international and
domestic scheduled and charter air services for the carriage of
passengers, freight and mail, and provides of ancillary
services. The British Airways group consists of British Airways
plc and a number of subsidiary companies including in particular
British Airways Holidays Ltd. and British Airways Travel
Shops Ltd. BA has offices in India and Guatemala.
* * *
As of Jan. 2, 2008, British Airways Plc carries a senior
unsecured debt rating of Ba1 from Moody's Investors' Service
with a stable outlook.
=========
H A I T I
=========
DYNCORP INT'L: Realigns Business, Adds Third Reporting Segment
--------------------------------------------------------------
DynCorp International has realigned its organization by
establishing a third business segment. The company had been
operating with two business segments, Government Services and
Maintenance and Technical Support Services.
Under the new alignment, the company will have three reporting
segments, International Security Services, Logistics and
Construction Management and Maintenance and Technical Support
Services. Robert B. Rosenkranz, who had led the Government
Services segment, will be president of International Security
Services, which will include the company’s operations in police
training, translation services, security, specialty aviation,
counter-drug operations, and firefighting.
Rory Fisher has been named president of Logistics and
Construction Management. Previously Mr. Fisher was vice
president and general manager of the company’s Operation,
Maintenance, and Construction Management unit. Logistics and
Construction Management will be responsible for all the
company’s logistics, contingency, and construction operations,
including any work awarded under the LOGCAP IV contract.
The Maintenance and Technical Support Services business segment
is unchanged, except for the addition of the company’s DynMarine
business group, formerly part of Government Services.
DynCorp International Inc. -- http://www.dyn-intl.com/-- (NYSE:
DCP) through its operating company DynCorp International LLC, is
a provider of specialized mission-critical technical services,
mostly to civilian and military government agencies. It
operates major programs in law enforcement training and support,
security services, base operations, aviation services and
operations, and logistics support worldwide. Headquartered in
Falls Church, Virginia, DynCorp International LLC has
approximately 15,000 employees worldwide including Haiti.
* * *
DynCorp still carried Standard and Poor's BB- rating assigned on
June 15, 2006. S&P said the outlook is stable.
===============
H O N D U R A S
===============
CHIQUITA BRANDS: Recalling Cantaloupes from Honduras
----------------------------------------------------
Chiquita Brands International told Thomson Financial that it is
recalling cantaloupes from Honduran grower Agropecuaria
Montelibano for possible contamination of Salmonella.
The product was distributed to clients throughout the U.S. and
Canada in cardboard cartons with the brands Mike's Melons, Mayan
Pride, and Chiquita, Thomson Financial states, citing Chiquita
Brands.
Headquartered in Cincinnati, Ohio, Chiquita Brands International
Inc. (NYSE:CQB) -- http://www.chiquita.com/-- operates as an
international marketer and distributor of bananas and other
fresh produce sold under the Chiquita and other brand names in
over 80 countries. It sells packaged salads under the Fresh
Express brand name primarily in the United States. The company
also distributes and markets fresh-cut fruit and other branded,
value-added fruit products. Chiquita operates its business
through three segments: the banana segment includes the
sourcing, transportation, marketing and distribution of bananas;
the fresh select segment includes the sourcing, marketing and
distribution of whole fresh fruits and vegetables other than
bananas, and the fresh cut segment includes value-added salads,
foodservice and fresh-cut fruit operations. Remaining
operations, reported in other, primarily consist of processed
fruit ingredient products, which are produced in Latin America
and sold in other parts of the world, and other consumer
packaged goods.
Chiquita, with revenues of approximately $4.7 billion for the
fiscal year ended Dec. 31, 2007, employs approximately 25,000
people operating in more than 70 countries worldwide, including
Belgium, Columbia, Germany, Panama, Philippines, among others.
* * *
As reported in the Troubled Company Reporter-Latin America on
Feb. 28, 2008, Standard & Poor's Ratings Services assigned its
'CCC' senior unsecured rating to Chiquita Brands International
Inc.'s US$200 million convertible senior notes due 2016. Net
proceeds from the issuance were used to repay a portion of the
US$375 million term loan C (US$132 million outstanding at
Dec. 31, 2007, pro forma for this notes offering) of its senior
secured credit facility.
=============
J A M A I C A
=============
AIR JAMAICA: Will Suspend Three Weekly Flights to St. Lucia
-----------------------------------------------------------
Air Jamaica will suspend its three weekly flights to St. Lucia
as part of its restructuring efforts, Radio Jamaica reports.
Radio Jamaica relates that Air Jamaica admitted in March it was
forced to make the decision due to streamlining and route
rationalization.
St. Lucia's Tourism Minister Allen Chastanet told Radio Jamaica
that St. Lucians are prepared to welcome Air Jamaica back
anytime.
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.
CABLE & WIRELESS: Jamaican Unit Raises Line Rental Fee
------------------------------------------------------
Cable and Wireless Plc's Jamaican unit said it will increase
line rental fee due to inflationary pressures and increasing
operational costs, Radio Jamaica reports.
Radio Jamaica relates that residential clients will begin paying
J$700 per month, compared to the current J$500 per month.
According to Radio Jamaica, business line rental -- PBX trunk
lines, national and international toll free lines, and direct
inward dialing lines -- will increase to J$1,600 from J$1,250
per month.
Headquartered in London, Cable & Wireless Plc
-- http://www.cw.com/new/-- operates through two standalone
business units -- International and Europe, Asia & US. The
International business unit operates integrated
telecommunications companies in 33 countries offering mobile,
broadband, domestic and international fixed line services to
residential and business customers, with principal operations in
the Caribbean, Panama, Macau, Monaco and the Channel Islands.
The Europe, Asia & U.S. business unit provides enterprise and
carrier solutions to the largest users of telecoms services
across the U.K., U.S., continental Europe and Asia -- and
wholesale broadband services in the U.K.
* * *
As of Feb. 12, 2008, Cable & Wireless Plc carried a Ba3 long-
term corporate family rating, a B1 senior unsecured debt rating
and a Ba3 probability of default rating from Moody's Investors
Service, which said the outlook is stable.
The company also carries a BB- long-term local and foreign
issuer credit ratings from Standard & Poor's Ratings Services,
which said the outlook is stable. S&P rates its short-term
local and foreign issuer credit at B.
CASH PLUS: Debt Exceeds Income; Goes Into Receivership
------------------------------------------------------
Cash Plus Limited is in receivership, Barbara Gayle and Gareth
Manning at The Jamaica Gleaner reports.
According to The Gleaner, a firm goes into receivership when its
debt exceeds its income.
The report says that Cash Plus admitted that it wouldn't be able
to pay its lenders until April 14. The firm has 40,000 lenders
with loans totaling J$4 billion.
As reported in the Troubled Company Reporter-Latin America on
April 1, 2008, Cash Plus was unable to repay its investors on
March 31. The Financial Services Commission said it was
informed by the attorney acting on behalf of Cash Plus that the
investment club lacked the funds to start the repayment of the
principal and interest owing to its investors.
The Gleaner relates that one of Cash Plus' managers secured
approval from Senior Puisne Judge Marva McIntosh at the Jamaican
Supreme Court for the appointment of a temporary manager.
Justice McIntosh granted the approval after hearing an
application from attorneys-at-law Gordon Robinson and Minette
Palmer.
PricewaterhouseCoopers' accountant Kevin Bandoian was appointed
as joint receiver-manager for Cash Plus, The Gleaner notes.
According to Pricewaterhouse Coopers, Mr. Bandoian will start
work immediately from the offices of Cash Plus and its
affiliates under the supervision of the court. He will advise
creditors of the progress of the process.
The Gleaner notes that the appointment of the receiver-manager
allows for supervision of the operations of Cash Plus and the
determination of assets belonging to the firm so that a report
may be made to the court on the assets available for
distribution to creditors.
The court has prohibited Cash Plus and its affiliates from
selling, transferring, and dealing with or dissipating the
assets of the company, The Gleaner states.
Cash Plus Ltd is an investment club in Jamaica . It collapsed
in 2007 after the Financial Services Commission moved to
regulate its operations. The company is a financial arm of the
Cash Plus Group of Companies, a business conglomerate
established in 2002 by mortgage banker Carlos Hill. The company
offers its participants the opportunity to participate in the
group's ventures which include mergers and numerous
acquisitions.
===========
M E X I C O
===========
CONSTELLATION COPPER: Defaults in CN$69 Million Debentures
----------------------------------------------------------
Constellation Copper Corporation said that approximately
CN$1.9 million of interest due on March 31, 2008, on its
CN$69 million convertible unsecured senior debentures has not
been paid, resulting in a default under the terms of the
convertible debentures.
If the interest is not paid within 30 days, by April 30, 2008,
the default will become an event of default as defined in the
indenture, after which the terms of the convertible debentures
provide the debenture holders with certain rights and remedies
during the continuance of a default, including the right to
accelerate all of the debt due under the convertible debentures.
The company continues to pursue various near term financing
alternatives, including bank financing, equity investment,
mergers, and sale of certain assets or sale of the entire
company. The company may consider filing for legal protection
from its creditors in both Canada and the United States if cash
liquidity problems can not be resolved.
Going Concern
As reported in the Troubled Company Reporter on Jan. 15, 2008,
the company related that there is significant doubt about the
its ability to continue as a going concern. The cash balance of
US$10.87 million at Sept. 30, has been reduced further to
approximately US$3.20 million at Dec. 31, 2007, and in order to
provide liquidity, the company is pursuing various near term
financing alternatives, including bank financing, equity
investment, mergers, and sale of certain assets or sale of the
entire company.
In late November 2007, as a result of a comprehensive management
evaluation of Lisbon Valley operations, the company disclosed
its decision to cease mining and crushing activities and convert
the Lisbon Valley mine to a leach only operation in early 2008.
The evaluation included analyses of various mining plans, waste
stripping requirements, contract mining arrangements, available
mining equipment, projected copper prices and extensive
operating cost and cash flow projections. In connection with
the evaluation and conversion to a leach only operation, the
company recorded an asset impairment of US$92,918,000.
At Sept. 30, 2007, the company's balance sheet showed total
assets of US$72.68 million and total liabilities of
US$90.40 million, resulting to a total shareholders' deficit of
US$17.72 million.
About Constellation Copper
Headquartered in Lakewood, Colorado, Constellation Copper
Corporation (CCU: TSX) -- http://www.constellationcopper.com/--
evaluates and develops mineral properties in the United States
and Mexico. The company holds its properties primarily through
three of its wholly owned subsidiaries, Lisbon Valley Mining Co.
LLC, Minera Terrazas S.A. de C.V. and San Javier del Cobre S.A.
de C.V. LVMC operates the Lisbon Valley copper mine, which
comprises three main deposits: Sentinel, Centennial and GTO,
plus the Cashin satellite deposit, with reserves and resources
totalling +50 million tons and grading an average 0.48% copper.
Minera Terrazas holds the company's interest in the Terrazas
zinc-copper project located in north- central Mexico. The
property has a total resource of 90 million tonnes grading 1.37%
zinc and 0.32% copper in two adjacent deposits. San Javier del
Cobre S.A. de C.V. holds the company's interest in the San
Javier copper property located in northwestern Mexico.
COREL CORP: Gets Proposal from Shareholder Corel Holdings
---------------------------------------------------------
Corel Corporation received an unsolicited proposal from Corel
Holdings L.P., which is controlled by an affiliate of Vector
Capital Corporation, the holder of 69% of Corel's outstanding
common shares.
CHLP is proposing to make an offer to acquire all of Corel's
outstanding common shares not currently held by CHLP at a price
of US$11.00 cash per share. CHLP has indicated that any such
offer would be conditional upon, among other things,
satisfactory confirmatory due diligence and Corel's existing
credit facility remaining in place after the consummation of any
transaction.
The board of directors of Corel has formed a special committee
of independent members of the board consisting of Ian Giffen,
Steven Cohen and Daniel Ciporin to assist it in evaluating and
responding to the CHLP proposal and other related strategic
considerations. Corel will not be providing further comment at
this time but will provide updates as further information
becomes available. There can be no assurance that any
transaction will be completed or, if completed, of its terms,
price or timing.
About Corel Corporation
Ottawa, Ontario-based Corel Corporation (NASDAQ: CREL) (TSX:
CRE) -- http://www.corel.com/-- is a packaged software company
with an estimated installed base of over 40 million users. The
company provides productivity, graphics and digital imaging
software. Its products are sold in over 75 countries through a
scalable distribution platform comprised of original equipment
manufacturers, Corel's international websites, and a global
network of resellers and retailers. The company's product
portfolio features CorelDRAW(R) Graphics Suite, Corel(R)
WordPerfect(R) Office, WinZip(R), Corel(R) Paint Shop(R) Pro,
and Corel Painter(TM).
The company has operations in Germany, Italy, the United
Kingdom, Australia, Japan, Korea, Brazil, and Mexico, among
others.
DURA AUTOMOTIVE: Further Amends First Revised Chapter 11 Plan
-------------------------------------------------------------
DURA Automotive Systems, Inc., and its debtor affiliates
delivered to the U.S. Bankruptcy Court for the District of
Delaware on March 31, 2008, a second amendment of their Revised
Joint Plan of Reorganization and a disclosure statement
explaining
the Plan.
The Revised Plan contemplates providing the $228,100,000 second
lien facility claims with convertible preferred stock and
distributing 100% of the new common stock to general unsecured
creditors. The Original Plan had contemplated providing cash in
satisfaction of the Second Lien Facility Claims.
In addition, instead of a backstopped US$160,000,000 rights
offering, the contemplated Second Amended Revised Plan
transactions are to be funded by US$80,000,000 in cash proceeds
from New Money Investors that will take the form of a second
lien term loan with a US$100,000,000 face amount. The New Money
Investors will comprise certain existing Second Lien Lenders,
Senior Noteholders and other investors.
The Revised Plan contemplates that a new entity, New Dura Opco,
will acquire the assets of Dura Operating Corporation in a
taxable transaction through these steps:
(a) On or before the Effective Date, certain Dura creditors,
or a nominee on behalf of them, will form New Dura, with
nominal capitalization;
(b) New Dura will then form New Dura Holdings;
(c) New Dura Holdings will then form New Dura Opco;
(d) New Dura will make a capital contribution of Convertible
Preferred Stock and Common Stock to New Dura Holdings,
which shares will then be contributed to New Dura Opco;
(e) On the Effective Date, Dura Operating Corporation will
transfer certain assets and the stock of its subsidiaries
to New Dura Opco in exchange for the Convertible Preferred
Stock and the New Common Stock;
(f) On the Effective Date, one or more of the U.S. Debtors
will distribute the New Common Stock and the Convertible
Preferred Stock to its creditors; and
(g) Dura Operating Corporation will remain in existence and
will retain certain assets, which will be leased to New
Dura Opco.
A full-text copy of the blacklined version of the Revised Plan
is available for free at:
http://bankrupt.com/misc/dura_blacklinemarch31plan.pdf
A full-text copy of the blacklined version of the Disclosure
Statement is available for free at:
http://bankrupt.com/misc/dura_blacklinemarch31ds.pdf
Issuance of New Securities
On the Effective Date, New Dura will issue or reserve for
issuance all securities required to be issued pursuant to the
Revised Plan. New Dura will make a capital contribution of
Convertible Preferred Stock and Common Stock to New Dura
Holdings, which shares will then be contributed to New Dura
Opco. After being exchanged for substantially all of the assets
of Dura Operating Corporation, the New Common Stock and
Convertible Preferred Stock will be held through The Depository
Trust Company and not distributed in the form or certificated
stock to the extent possible.
Settlements Embodied in the Revised Plan
Lawrence A. Denton, chairman, president, and chief executive
officer of DURA, relates that the Second Amended Revised Plan
contains a number of new settlement terms and conditions that
either replace, modify or complement, the settlements embodied
in the Plan of Reorganization filed Aug. 22, 2007. The
settlements are:
1. Certain existing Second Lien Lenders, Senior Noteholders
and other investors, including, but not limited to, any
holders of Subordinated Notes or Convertible Preferred
Securities willing to invest, will contribute new capital
of US$80,000,000, in exchange for secured debt, which will
have a second lien secured position with a face amount of
up to US$100,000,000.
2. The Revised Plan contemplates converting the Second Lien
Facility Claims, which totals about US$228,100,000, into
Convertible Preferred Stock with these terms:
* Liquidation preference as of the Effective Date equal
to Second Lien Allowed Claim amount;
* 20% paid-in-kind dividend;
* Beginning on the third anniversary of the Effective
Date, holders of the Convertible Preferred Stock
shares into their pro rata share of 92.5% of the New
Common Stock, and thereafter, into New Common Stock
based on a percentage reflecting any accrued PIK
Dividends through the conversion date since the third
anniversary, if the Convertible Preferred Stock were
to be converted at its full amount including any
accrued PIK Dividends and with no prior redemptions.
The percentage will be proportionately reduced to
reflect the actual amounts of the unredeemed
Convertible Preferred Stock outstanding, including any
accrued PIK Dividends as of the conversion date;
* Beginning on the fourth anniversary of the Effective
Date, the holders of New Common Stock may call the
conversion of all outstanding Convertible Preferred
Stock; provided that either (i) the Convertible
Preferred Stock must be trading at a level equal to or
exceeding 115% of the liquidation preference of the
Convertible Preferred Stock on the date on which the
conversion is called, or (ii) the number of shares of
New Common Stock into which the Convertible Preferred
Stock is then convertible, in the aggregate, is
trading at a similar valuation;
* Beginning on the 10th anniversary of the Effective
Date, to the extent that the Convertible Preferred
Stock remains outstanding, holders representing more
than a majority of the Convertible Preferred Stock
will have the right to appoint a majority of the New
Board's directors;
* At any time before the third anniversary of the
Effective Date, New DURA may ratably redeem up to 100%
of the Convertible Preferred Stock plus accrued PIK
Dividends then outstanding; provided that on the date
of any redemption, holders may elect to convert a
proportion of their Convertible Preferred Stock shares
into New Common Stock shares;
* The Special Transactions Committee may effectuate 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; provided
that a majority of the entire Board of Directors must
approve 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.
3. The Revised Plan contemplates paying in full and in cash
all DIP Facility Claims. The Plan also contemplates
converting Senior Note Claims into approximately 95% of the
New Common Stock and the other U.S. General Unsecured
Claims into approximately 5% of the New Common Stock. The
Plan intends to pay in cash on a pro rata basis all
Canadian General Unsecured Claims. The Plan also intends
to discharge all other Claims, including Claims arising
from the Subordinated Notes and the Convertible
Subordinated Debentures, without recovery, and canceling
all Equity Interests in the Debtors.
4. The Second Lien Group, the Creditors Committee, and the
Commitment Parties will choose six independent board
members. The chief executive officer of New DURA will be a
member of the New DURA Board.
5. The Plan contemplates a special subcommittee of the New
DURA Board that is responsible, if ever, to redeem the
Convertible Preferred Stock.
Canadian Unsecured Claims Recovery
The Second Amended Revised Plan includes a liquidation analysis
as of May 13, 2008, prepared by RSM Richter, Inc., the
information officer appointed in the proceedings commenced by
the Debtors' affiliates under the Canadian Companies' Creditors
Arrangement Act pending before the Ontario Superior Court of
Justice:
Dura Automotive Systems (Canada), Ltd.
Projected Liquidation Analysis
As of May 13, 2008
(Unaudited)
(In Thousands)
Estimated Recovery
------------------
Book Value Low High
---------- ------- -------
Property, plant and equipment US$15,842 US$7,349 US$9,153
Intercompany receivables 16,509 - 531
Trade accounts receivables 873 - 87
Other assets 7,759 3,082 6,597
Equity value, non-debtors - - -
---------- ------- -------
Total assets 40,983 10,431 16,368
---------- ------- -------
Less:
Professional fees 500 1,000
Net assets for creditor distribution 9,931 15,368
======= =======
A full-text copy of the Canadian Liquidation Analysis is
available for free at:
http://bankrupt.com/misc/dura_canadianliquidationanalysis.pdf
The Canadian Liquidation Analysis concludes that creditors of
the Dura Automotive Systems (Canada), Ltd., would receive a
median recovery of approximately 12.5% in a liquidation. The
estimated recovery rate pursuant to the Canadian Liquidation
Analysis is equivalent to the projected cash distribution to the
Canadian General Unsecured Claim holders under the Revised Plan.
The Canadian Information Officer relates that creditors' claims
against DAS Canada total US$102,399,000:
Prepetition trade creditors US$2,490,000
Employee pension claims 7,164,000
Severance obligation claims 1,238,000
Intercompany debt owing to Dura Canada LP 91,507,000
------------
Total unsecured liabilities US$102,399,000
============
The Revised Plan contemplates that New Dura will assume and
satisfy all amounts owing in respect of severance, the majority
of which is payable to former employees of the Bracebridge
facility. The New Dura will also assume and fully satisfy DAS
Canada's pension obligation, which relates to the estimated
wind-up deficiency in DAS Canada's pension plans. The Financial
Services Commission of Ontario has filed a claim for
US$7,164,000, against the U.S. Debtors in respect of a wind-up
deficiency.
The Canadian Liquidation Analysis projects that DAS Canada's
remaining assets by May 2008 will comprise an asset pool as was
available at November 30, 2007, primarily consisting of the land
and buildings of the Stratford and Bracebridge Facilities, the
mortgage receivable associated with the sale of the Brantford
Facility, which is CN$800,000, and the Transferred Assets. In
addition, DAS Canada has tax refunds due to it, with a book
value of about US$7,300,000.
New Schedule
Counsel to DURA, Daniel J. DeFranceschi, Esq., at Richards,
Layton & Finger, P.A., in Wilmington, Delaware, related, in a
status report filing with the Court, that the Debtors' DIP
Financing arrangements include a series of plan confirmation
milestones:
April 15, 2008 -- DURA will procure a commitment from a person
or a group of persons to provide equity
exit financing to the company and the
Guarantors, whether in the form of a rights
offering, new equity, or otherwise, on the
effectiveness of the Revised Joint Plan of
Reorganization, in an amount and on terms
and conditions acceptable to the DIP
Administrative Agent and Lenders.
May 8, 2008 -- DURA will procure a commitment from a person
or a group of persons to provide debt exit
financing to the company and the Guarantors
on the effectiveness of the Revised Plan, in
an amount and on terms and conditions
acceptable to the Administrative Agent and
Lenders.
May 15, 2008 -- The Court must have approved the Disclosure
Statement explaining the Revised Plan.
June 9, 2008 -- The Court must have confirmed the Revised
Plan.
June 20, 2008 -- The Effective Date of the Revised Plan will
have occurred and transactions contemplated
as part of the Revised Plan will have
closed.
Creditors Committee Supports Plan
In a filing with the Court, the Official Committee of Unsecured
Creditors believes that the Debtors' Revised Plan, as amended,
provides the best recovery for unsecured creditors and presents
the Debtors with the greatest opportunity to achieve a
successful reorganization. The Creditors Committee says the
Disclosure Statement explaining the Revised Plan contains
adequate information that would enable claim holders in the
Chapter 11 cases to make an informed judgment about the Revised
Plan, including information regarding the Debtors' estimated
enterprise value, financial projections and liquidation
analysis.
Accordingly, the Creditors Committee recommends approval of the
Disclosure Statement.
Counsel for the Creditors Committee, Erin Edwards, Esq., at
Young Conaway Stargatt and Taylor LLP, in Wilmington, Delaware,
notes that, to avoid having to raise the amount of exit
financing, the Revised Plan contemplates providing the second
lien facility claims with convertible preferred stock and
distributing 100% of the new common stock to general unsecured
creditors. The range of value for the New Common Stock to be
distributed to general unsecured creditors is estimated to be
between approximately US$29,000,000, and US$139,000,000, with a
mid-point of about US$84,000,000.
The Creditors Committee tells the Court that while its financial
advisor, Chanin Capital Partners, believes that one could argue
that the value of the New Common Stock is greater than the value
assigned to it by the Debtors in the Disclosure Statement,
Chanin is confident that the value of the New Common Stock does
not approach the level necessary to provide a distribution to
holders of the Subordinated Notes Claims.
J.W. Korth Objects to Disclosure Statement
James W. Korth, managing partner of J.W. Korth & Company, on
behalf of an ad hoc committee of holders of more than
$100,000,000, of 8-5/8% Senior Bonds and 9% Subordinated Bonds
issued by DURA Automotive Systems, Inc., argues that the
Disclosure Statement explaining the Debtors' Revised Joint Plan
of Reorganization does not give claim holders the ability to
make informed decisions about the Reorganization Plan and
decision on whether the liquidation value of the Debtors is
higher than the amounts to be received by the Plan.
Mr. Korth points out that:
(1) The Debtors' management is believed to have a conflict of
interest. Majority of the two highest classes of debt
under the DIP Financing is held by two hedge funds,
Pacificor LLC and The Blackstone Group, who incidentally
may also be insiders in control of the Ad Hoc Committee of
Second Lien Holders and the Official Committee of
Unsecured Creditors. Under the Revised Plan, Pacificor
and Blackstone will receive 100% of the equity in the New
DURA, which will wipe out all other debt holders and leave
a possible enormous profit in the hands of the management
and the Debtors' investors.
(2) The valuation and liquidation analysis does not present
values of the 94 separate debtor entities as going
concerns with associated goodwill, patents and trademarks.
(3) DURA's management and their advisors did not account for
$900,159,000, stated book value of the non-debtor
subsidiaries in the Liquidation Analysis.
(4) There is a stark difference in net worth values between
the Debtors' monthly operating reports and the balance
sheet provided in the Liquidation Analysis.
(5) The Debtors' management and its advisors did not evaluate
more than 60 patents and trademarks that are owned by the
Debtors.
(6) In November 2006, DURA's management and advisors wrote off
more than US$637,000,000, in good will, and the write-off
was not explained in the Disclosure Statement or filings
at the Securities and Exchange Commission at the time the
write-off was executed.
(7) The Debtors are not cooperating on the information request
to inspect their books and records and is not providing
the information the claims holders deserve.
Moreover, Mr. Korth asserts that claims holders do not have
sufficient information to evaluate the Plan because Pacificor
and Blackstone are reported in control of the planned
Reorganization and the trustees for the bondholders are
receiving guaranteed payments from the Debtors. He adds that
there is no disclosure as to why the trustee for senior
subordinated notes ceased activities in support of the claim
holders, and what the guaranteed payments are for.
Mr. Korth further notes that the Disclosure Statement does not
provide the details of who owns the majority of the second lien
notes and the 8-5/8% senior notes and how the holders are
organized. Hence, claim holders would not have sufficient
information to decide whether possible insiders have influenced
the development of the Plan. He says that there appears to be
about US$1,100,000,000, in value, that was on the balance sheet
on the Petition Date, and is not in the predecessor books shown
in the Disclosure Statement.
Accordingly, Mr. Korth asks the Court to deny the Disclosure
Statement until the matters are addressed. He also asks the
Court to allow him to complete a new Liquidation Analysis with
the assistance of a qualified independent third party that
evaluates the sales price of each of the 94 separately operating
subsidiaries, with their goodwill patents and trademarks. To
assist him in the preparation of a new Liquidation Analysis, Mr.
Korth further seeks the Court's permission to examine the
Debtors' books and records, including:
* the monthly income statements and balance sheets of each
subsidiary of DURA for the past two years until the end of
February 2008;
* the analysis of the goodwill of each subsidiary whereby the
Debtor last certified that goodwill and then wrote off that
goodwill in November 2006;
* a specific written statement line by line from the Debtor on
how the planned Fresh Start balance sheet will differ from
the balance sheet included in the Monthly Operating Reports
and justification for the differences;
* the contracts and any amendments with the Debtors and Alix
Partners and Miller Buckfire and Kirkland & Ellis LLP;
* copies of the presentation to potential lenders for the
failed Exit Financing in December 2007;
* the original underwriting files for the bonds including all
notes regarding the creation of each issue's indenture and
the original proposals by the underwriters for those issues
along with the underwriting agreements;
* detailed analysis behind the income projections for the next
three years as stated in the Disclosure Statement; and
* invoices and notes from the trustees for the senior or
subordinated bonds.
Debtors Ask Court to Overrule Korth Objection
The Debtors ask the Court to overrule Mr. Korth's Disclosure
Statement Objection because the issues raised therein have
either (i) been adequately addressed by the Revised Disclosure
Statement filed March 13 as supplemented by the March 31
Disclosure Statement; (ii) asserted confirmation issues that
should be adjudicated at the confirmation hearing; or (iii) are
otherwise without merit.
Mr. DeFranceschi relates that J.W. Korth was part of the ad hoc
group of Subordinated Noteholders represented by Ballard Spahr
Andrews & Ingersoll, LLP, which initiated the X-Clause Adversary
Proceeding. In litigating that Adversary Proceeding, the
Subordinated Noteholders asked, and received, extensive
discovery materials from the Debtors, he says.
Mr. DeFranceschi asserts that Mr. Korth misapprehends the
distinctive nature and differing purposes of the monthly
operating reports on the one hand and the Revised Disclosure
Statement's liquidation analysis and valuation analysis on the
other. "Mr. Korth's real objection is thus not the scope or
quality of the Revised Disclosure Statement's disclosure. He is
really objecting to the Debtors' conclusions regarding
enterprise value and liquidation and to the economic deal set
forth in the Revised Plan that rests on those conclusions," Mr.
DeFranceschi points out.
The Debtors tell the Court that modifying the liquidation and
valuation analysis contained in the Revised Disclosure Statement
to address Mr. Korth's particular concerns would do nothing to
enhance the Revised Disclosure Statement in providing adequate
information to hypothetical creditors in the three voting
classes -- Class 2 Second Lien Facility Claims, Class 3 Senior
Notes Claims, and Class 5 Other General Unsecured Claims.
The Debtors also ask the Court to deny Mr. Korth's requests for
irrelevant information concerning the identify of creditors.
The Debtors assert that Mr. Korth seeks disclosure regarding a
number of matters irrelevant to determining whether the
Disclosure Statement meets the standard under Section 1125 of
the Bankruptcy Code.
About DURA
Rochester Hills, Mich.-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). Marc Kieselstein, P.C.,
Esq., Roger James Higgins, Esq., and Ryan Blaine Bennett, Esq.,
at Kirkland & Ellis LLP are lead counsel for the Debtors'
bankruptcy proceedings. Daniel J. DeFranseschi, Esq., and Jason
M. Madron, Esq., at 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 Jan. 31, 2008, the Debtor had US$1,503,682, 000 in total
assets and US$1,623,632,000 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. 50; Bankruptcy
Creditors' Service Inc., http://bankrupt.com/newsstand/or
215/945-7000).
DURA AUTOMOTIVE: Court Extends Exclusivity Deadline to April 30
---------------------------------------------------------------
The Hon. Kevin J. Carey of the U.S. Bankruptcy Court for the
District of Delaware extended the period within which Dura
Automotive Systems Inc. and its debtor-affiliates may file any
plan of reorganization until April 30, 2008, and the period
within which they may solicit acceptances of the plan until
June 30, 2008.
As reported in the Troubled Company Reporter on March 19, 2008,
the Debtors 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 tomorrow,
April 3, 2008, to determine whether the Disclosure Statement
contains adequate information.
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.
Rochester Hills, Mich.-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). Marc Kieselstein, P.C.,
Esq., Roger James Higgins, Esq., and Ryan Blaine Bennett, Esq.,
at Kirkland & Ellis LLP are lead counsel for the Debtors'
bankruptcy proceedings. Daniel J. DeFranseschi, Esq., and Jason
M. Madron, Esq., at 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 Jan. 31, 2008, the Debtor had US$1,503,682, 000 in total
assets and US$1,623,632,000 in total liabilities. (Dura
Automotive Bankruptcy News, Issue No. 50; Bankruptcy Creditors'
Service Inc., http://bankrupt.com/newsstand/or 215/945-7000).
* MEXICO: 2008 Outlook for Major Banks is Adequate, Fitch Says
--------------------------------------------------------------
The Mexican banking system has maintained sound performance, and
the outlook remains adequate for the foreseeable future,
according to a Fitch Special Report, titled "Major Mexican
Banks: Semi-Annual Review and Outlook". However, challenges are
increasing as strong loan growth has affected delinquency ratios
and credit costs and the worsening global environment in the
capital markets pressures liquidity and funding costs.
The report includes a system-wide overview and an assessment of
the six largest Mexican banks rated by Fitch.
According to Fitch's Latin America Financial Institutions Group
Senior Director, Alejandro Garcia, "While Fitch believes that
most Mexican banks will perform adequately going forward,
profitability will likely decline from the historically high and
unsustainable levels it has reached recently."
Fitch expects that loan growth will remain solid for the
foreseeable future, reaching double-digit rates in 2008-2009.
Offsetting factors against the aforementioned risks are the
banks' sound financial condition, low reliance on wholesale
funding, adequate risk-adjusted profitability in most lending
segments, as well as the relatively higher resilience of the
Mexican economy to the United States economic slowdown.
Fitch does not anticipate downward pressure on the major banks'
individual ratings under current market conditions. However,
negative ratings actions cannot be ruled out for specific
institutions should asset quality problems become exacerbated
without the increased ability to absorb losses.
The full report is available on the Fitch Ratings Web site, at
http://www.fitchratings.com
====================
P U E R T O R I C O
====================
DORAL FINANCIAL: S&P Lifts LT Counterparty Credit Rating to B+
--------------------------------------------------------------
Standard & Poor's Ratings Services raised its long-term
counterparty credit rating on Doral Financial Corp. to 'B+'
from 'B' and removed it from CreditWatch Positive, where it had
been placed July 20, 2007. The outlook is stable.
"The rating action follows a review of Doral's credit quality,
including its capital, liquidity, operating performance,
business strategy, and various accounting and regulatory
issues," said S&P's credit analyst Robert Hansen. The
CreditWatch placement followed Doral's sale of its common stock
to Doral Holdings Delaware LLC and repayment in full of
US$625 million in senior notes.
S&P thinks the company's liquidity and capital position have
improved due to the completion of its recapitalization in 2007.
Furthermore, the rating agency expects the recapitalization to
have a positive effect on the company's reputation among
depositors and borrowers, which the agency believes had been
tarnished by previous accounting and liquidity issues. However,
the rating agency remains very concerned by the significant
spike in nonperforming assets within the company's loan
portfolio, notably within its construction portfolio. S&P is
also concerned about Doral's weaknesses in internal financial
reporting controls, as mentioned in its 2007 10-K, which it
views negatively in the rating assessment.
The counterparty credit rating on Doral Financial reflects its
strengthened capital ratios, adequate liquidity, and experienced
management team. However, the ratings also incorporate
significant credit quality deterioration, low profitability,
formidable competition, deficiencies in enterprise risk
management, and a challenging economic environment.
Specifically, the company reported a net loss of nearly
US$171 million in 2007 versus a loss of nearly US$224 million in
2006. Financial results were hurt by a significant increase in
its nonperforming assets and an increase in loan-loss
provisions. S&P thinks the company is being relatively
conservative with its nonperforming loans, which include a
significant amount of loans classified as substandard, but not
more than 90 days in arrears.
While net credit losses to date have been low and manageable,
there remains a high degree of uncertainty regarding future loss
severities of the nonperforming assets given the weakened local
economy. S&P expects operating performance to remain challenged
in the near term.
The company maintains a weak competitive position in Puerto
Rico, despite its long history on the island. The company has a
small footprint of branches and has only experienced modest
deposit growth in recent years. The business mix is not well
diversified, with business lines that focus on commercial and
retail banking. In addition, intense competition in Puerto Rico
among several formidable competitors has negatively affected
margins.
Doral Financial has adequate liquidity and is not facing any
near-term funding obligations. Specifically, the banks' ratio
of loans to deposits declined significantly in recent years as
did the bank's reliance on repurchase agreements as a funding
source. However, the company remains heavily dependent on
brokered deposits.
The company has several accounting deficiencies, which S&P views
negatively in its rating assessment. Specifically, the company
has noted several material weaknesses, including not maintaining
effective controls over the reporting process. However, S&P
thinks that the company is working hard to remediate these
deficiencies and expect substantial progress to be made during
the next several quarters.
The stable outlook includes S&P's expectation that credit
quality will deteriorate further given credit deterioration in
its loan portfolio and the weak economic environment. However,
the rating agency thinks the bank has sufficient shareholders'
capital to absorb a significant increase in loan losses, which
the agency expects given the precipitous rise in nonperforming
loans. The ratings or outlook could be revised downward if
credit quality deteriorates beyond S&P's expectations, a
significant amount of loans are purchased, or capital is
returned to equity shareholders. Conversely, the ratings or
outlook could be revised upward if loan losses prove manageable
and if the company is successful in curing accounting
deficiencies.
Based in New York City, Doral Financial Corp. (NYSE: DRL) --
http://www.doralfinancial.com/-- is a diversified financial
services company engaged in mortgage banking, banking,
investment banking activities, institutional securities and
insurance agency operations. Its activities are principally
conducted in Puerto Rico and in the New York City metropolitan
area. Doral is the parent company of Doral Bank, a Puerto Rico
based commercial bank; Doral Securities, a Puerto Rico based
investment banking and institutional brokerage firm; Doral
Insurance Agency Inc. and Doral Bank FSB, a federal savings bank
based in New York City.
=================
V E N E Z U E L A
=================
PETROLEOS DE VENEZUELA: Debt Up 449% in 2007, 28.5% of Assets
-------------------------------------------------------------
El Universal relates that Petroleos de Venezuela SA's debt
increased 449% to US$13.09 billion in 2007, 28.5% of the
companany's assets.
According to El Universal, Petroleos de Venezuela's "sharpening
indebtedness over the last 12 months drastically changed the
company's accounts to the extent that its debt to net worth
ratio at the end of 2007 was 28.5%, the highest in the last
decade."
El Universal notes that Petroleos de Venezuela's consolidated
debt was US$16 billion last year, comprising:
-- US$13.12 billion in long-term debt, and
-- US$2.87 billion in current debt.
The report says that most of the long-term debt "was contracted"
by Petroleos de Venezuela in Venezuela, where it issued
US$7.5 billion in debt bonds in April 2007.
Petroleos de Venezuela's President and Venezuelan Oil Minister
Rafael Ramirez emphasized that the firm's net worth increased
5.5% to US$56.06 billion in 2007, compared to US$53.10 billion
in 2006. However, the increase was "significantly below the
expansion of debt in the same period," El Universal states.
Petroleos de Venezuela SA -- http://www.pdv.com/-- is
Venezuela's state oil company in charge of the development of
the petroleum, petrochemical and coal industry, as well as
planning, coordinating, supervising and controlling the
operational activities of its divisions, both in Venezuela and
abroad. The company has a commercial office in China.
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 is negative.
===========
X X X X X X
===========
* Moody's Sees Neg. Outlook for Global Paper & Forest Products
--------------------------------------------------------------
The credit conditions of the paper and forest products industry
are expected to worsen as demand for most paper and forest
products will continue to decline amid rising costs and general
economic weakness, says Moody's Investors Service in its new
report. The rating agency's report examined the credit
implications of trends and developments in the key segments of
the paper and forest products industry globally. The overall
global credit outlook is negative, based primarily on the
sector's twin problems of declining demand and increasing costs.
"These problems are most pronounced in the mature markets of
North America and Europe where the appetite for most paper and
forest products is lessening and companies face increasing
energy, chemical, transportation and fiber costs," says Moody's
lead paper and forest products analyst and co-author of the
report, Ed Sustar.
While most global market pulp producers should perform
reasonably well over the next 12 to 18 months, many companies
in the printing and writing paper, paper packaging and wood-
based building products sectors are expected to experience
negative rating pressure, says Moody's.
According to Moody's, reduced sawmill activity will continue to
pressure fiber availability and cost as the United States
housing markets remain depressed, further dampening the need for
building products. "To offset weak demand and escalating costs,
supply will need to be significantly curtailed to improve
product pricing," says Mr. Sustar. Longer term, the increasing
cost of fiber will continue to shift production capacity to
regions that can supply and process it at the lowest cost.
"In addition to declining demand and escalating input costs,
liquidity concerns, foreign exchange impact and mergers &
acquisitions will continue to fuel negative rating actions,"
says Mr. Sustar. The ongoing credit-market turmoil is expected
to increase refinancing risk, especially for companies with
near-term debt maturities or minimal financial covenant
flexibility, says Moody's.
The strong Canadian dollar, Brazilian real and Chilean peso
create negative rating pressure for regional producers based in
those countries. While the consolidation trend in the paper and
forest products sector is expected to continue, the pace of
corporate transformations through both private-equity
transactions and merger and acquisition activity may moderate as
financing costs escalate.
Despite the changing dynamics in the paper and forest products
sector, the most important determinants of a company's
profitability and credit worthiness are demand, pricing and cost
position. Over the past year, approximately 75% of rating
actions in the paper and forest products industry have been
negative, constituting either outright downgrades or negative
outlook changes.
***********
S U B S C R I P T I O N I N F O R M A T I O N
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Copyright 2008. All rights reserved. ISSN 1529-2746.
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