T R O U B L E D C O M P A N Y R E P O R T E R L A T I N A M E R I C A Friday, April 18, 2008, Vol. 9, No. 77 Headlines A R G E N T I N A CORDOBA COMPUTACION: Proofs of Claim Filing Deadline is June 12 CRATEC SRL: Proofs of Claim Filing is Until July 10 DELTA AIR: Northwest Merger Cues S&P to Put Ratings on Watch DELTA AIR: Northwest Merger Cues Moody's Ratings Under Review DELTA AIR: Northwest Merger Prompts Fitch to Affirm 'B' ID Rtg. GOODYEAR TIRE: Sets June 30 as Conversion Period for US$4M Notes POLYVEL SRL: Files for Reorganization in Buenos Aires Court SUBTIL SA: Proofs of Claim Filing Deadline is June 9 B E R M U D A ACES INTERNATIONAL: Losses & Debts Raise Going Concern Doubt BRUNSWICK SPV: Will Hold Final Shareholders Meeting on May 16 FOSTER WHEELER: UK Subsidiary Bags Contract from Santos Ltd. GP INVESTMENTS: Receives US$200 Mil. Financing from Banco Itau OPTIMA ALTERNATIVE: Proofs of Claim Filing Deadline is April 30 OPTIMA ALTERNATIVE: Final Shareholders Meeting is on May 21 TYCO INT'NL: Inks Purchase Pact with FirsService for US$187 Mil. TYCO INT'L: Reaches Agreement to Sell U.K. Business to CRH Plc VULCAN OIL: Proofs of Claim Filing Deadline is May 7 VULCAN OIL: Sets Final Shareholders Meeting for May 30 B R A Z I L AMR CORP: Posts US$328 Million Net Loss in First Quarter of 2008 AMR CORP: Selling Asset-Management Subsidiary for US$480 Million BANCO INDUSTRIAL: Moody's Rates Cayman Unit's US$130MM Notes Ba1 BANCO ITAU BBA: Fitch Affirms Issuer Default Rating at BB- BANCO PINE: Fitch Holds B+/B ID Ratings With Positive Outlook DELPHI CORP: Wants Exclusivity Moved Beyond Plan Effective Date DELPHI CORP: Mulls Suing Plan Investors for Reneging on New EPCA GENERAL MOTORS: Brazilian Unit to Invest US$200MM for New Plant GENERAL MOTORS: LatAm, et al. Unit Quarterly Sales Up 20% JAPAN AIRLINES: Fitch Holds 'BB-' IDR; Revises Outlook to Stable VALERO ENERGY: Petrobras to Continue Talks to Buy Aruba Plant TAM SA: Renames Freight Unit From TAM Express to TAM CARGO UAL CORP: Fitch to Hold 'B-' ID Ratings Due to Fuel Costs, Etc. C A Y M A N I S L A N D S BANCREDIT CAYMAN: Tricom Wants Claim Pegged at US$120,000 BANCREDIT CAYMAN: Hearing for Tricom Case Examiner Adjourned CAYMAN YACHT: Proofs of Claim Filing is Until April 21 CHINA MAGNESIUM: Proofs of Claim Filing Deadline is April 21 CL BRAZIL: Proofs of Claim Filing Deadline is April 21 CL BRAZIL HIGH: Proofs of Claim Filing is Until April 21 GLOBAL CHALLENGE: To Hold Final Shareholders Meeting on April 21 HONEYWELL INDUSTRIAL: Final Shareholders Meeting is on April 21 MYVATN INVESTMENT: Proofs of Claim Filing is Until April 21 MYVATN INVESTMENT: Final Shareholders Meeting is on April 21 SALAMANCA SA: To Hold Final Shareholders Meeting on April 21 SPRINGFLEET INT'L: Final Shareholders Meeting is on April 21 C O L O M B I A BANCOLOMBIA SA: Earns COP332 Billion in First Quarter 2008 GRAN TIERRA: Closes Costayaco-3 Testing With 2,543 Barrels/Day C O S T A R I C A US AIRWAYS: Fitch Affirms 'CCC/RR6' Senior Unsecured Debt Rating D O M I N I C A N R E P U B L I C PRC LLC: Seeks May 8 Hearing to Consider Disclosure Statement TRICOM SA: Hearing for Case Examiner Adjourned Sine Die TRICOM SA: Wants Bancredit Claim Pegged at US$120,000 TRICOM SA: Gets Permission to Hire Chapter 11 Professionals J A M A I C A CASH PLUS: Carlos Hill May be Hiding US$4.6 Billion Abroad CASH PLUS: Garwin Davies Denies Involvement in Possible Fraud M E X I C O BLOCKBUSTER INC: Fitch Won't Take Rating Actions on Circuit Deal GREAT PANTHER: Net Loss Rises to C$19MM in Year ended Dec. 31 SOLO CUP: Turnaround Cues S&P to Lift Ratings by One Notch SHARPER IMAGE: Levin Resigns from Board, Wants to Acquire Assets SHARPER IMAGE: Asks Court to Extend Schedules Filing to May 2 * GUADALAJARA MUNICIPALITY: Moody's Puts Ba1 Global Curr. Rating * MEXICO: S&P Says RBMS Market Stable Despite Global Volatility P U E R T O R I C O MAXXAM INC: Posts US$47 Million Net Loss in Year ended Dec. 31 NUTRITIONAL SOURCING: Wants Until July 31 to File Ch. 11 Plan PIER 1 IMPORTS: Earns US$13.7 Million in Quarter Ended March 1 SPANISH BROADCASTING: To Hold 1Q 2008 Conference Call on May 8 U R U G U A Y NUEVO BANCO: Fitch Lifts Foreign Currency ID Rating to BB- V E N E Z U E L A NORTHWEST AIRLINES: Delta Merger Prompts S&P's Negative Watch NORTHWEST AIRLINES: Moody's Places Ratings Under Review NORTHWEST AIRLINES: Merger Prompts Fitch to Affirm Delta Rating X X X X X X * LatAM, Middle East & Africa Have More Moody's Upgrade Reviews * Beard Presents "Understanding CDS Contract Risks" Seminar * April 17 Webinar Virtual Discussion Focuses on Distress Retail - - - - - ================= A R G E N T I N A ================= CORDOBA COMPUTACION: Proofs of Claim Filing Deadline is June 12 --------------------------------------------------------------- Julio Salaberry, the court-appointed trustee for Cordoba Computacion SA's bankruptcy proceeding, will be verifying creditors' proofs of claim until June 12, 2008. Mr. Salaberry will present the validated claims in court as individual reports. The National Commercial Court of First Instance No. 26 in Buenos Aires, with the assistance of Clerk No. 51, 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 Cordoba Computacion 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 Cordoba Computacion's accounting and banking records will be submitted in court. La Nacion didn't state the submission deadlines for the reports. Mr. Salaberry is also in charge of administering Cordoba Computacion's assets under court supervision and will take part in their disposal to the extent established by law. The debtor can be reached at: Cordoba Computacion SA Cordoba 3485 Buenos Aires, Argentina The trustee can be reached at: Julio Salaberry Uruguay 766 Buenos Aires, Argentina CRATEC SRL: Proofs of Claim Filing is Until July 10 --------------------------------------------------- Ricardo Bertoglis, the court-appointed trustee for Cratec SRL's bankruptcy proceeding, will be verifying creditors' proofs of claim until July 10, 2008. Mr. Bertoglis will present the validated claims in court as individual reports. The National Commercial Court of First Instance No. 12 in Buenos Aires, with the assistance of Clerk No. 24, 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 Cratec 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 Cratec's accounting and banking records will be submitted in court. La Nacion didn't state the submission deadlines for the reports. Mr. Bertoglis is also in charge of administering Cratec's assets under court supervision and will take part in their disposal to the extent established by law. The debtor can be reached at: Cratec SRL General Hornos 254 Buenos Aires, Argentina The trustee can be reached at: Ricardo Bertoglis Lavalle 1537 Buenos Aires, Argentina DELTA AIR: Northwest Merger Cues S&P to Put Ratings on Watch ------------------------------------------------------------ Standard & Poor's Ratings Services placed its ratings, including the 'B' long-term corporate credit rating, on Delta Air Lines Inc. on CreditWatch with positive implications, following announcement of a merger agreement with Northwest Airlines Corp. (B+/Watch Neg/--). The CreditWatch listing affects enhanced equipment trust certificates with various ratings, excepting those that are insured by a bond insurer. S&P's listing of Delta ratings on CreditWatch with positive implications and those of Northwest Airlines Corp. on CreditWatch with negative implications implies that we foresee a corporate credit rating of either 'B' or 'B+' for the combined entity. The proposed merger is subject to approval by Delta and Northwest shareholders, and will be subject to antitrust review by the U.S. Department of Justice and approval by various other regulators. Atlanta-based Delta has about US$16 billion of debt and leases outstanding. "The proposed merger of Delta and Northwest would create a more comprehensive route network, with opportunities for revenue and cost synergies, but entails risks in integrating employee groups and information systems, and will result in higher labor costs as labor contracts are reopened to secure employee support and capture the benefits of operating as a single airline," said Standard & Poor's credit analyst Philip Baggaley. The managements of both airlines suggest that cost and revenue synergies of the combination should total at least US$1 billion annually by 2012. The proposed merger would be structured as an exchange of shares, removing the need for additional debt to finance a cash offer. However, the companies anticipate one-time integration costs of US$1 billion. Despite statements earlier by the chief executive of Air France Group that his company would consider an equity investment in a merged Delta/Northwest, no such investment is currently contemplated. Standard & Poor's will evaluate the potential benefits and risks of the transaction in resolving S&P's CreditWatch review. S&P will also consider overall airline industry prospects, as S&P were already in the process of reviewing the rating outlooks on both airlines, as well as on other U.S. airlines. Ratings on enhanced equipment trust certificates could change based on an upgrade of our corporate credit rating on Delta and, in addition, on S&P's review of how the merger could affect incentives to affirm aircraft obligations in any future bankruptcy of the combined airline. Thus, a merged Delta/Northwest may have a greater or reduced incentive to keep certain aircraft within the context of the combined fleet. There is relatively limited overlap in aircraft models between the two airlines, with Delta operating an all- Boeing fleet, while Northwest uses a combination of Airbus and Boeing planes. Each airline currently uses certain aircraft that could perform capably missions handled by a different model in the other airline's fleet if the combined airline needed to shrink its fleet. Even if the merged airline preferred to keep all of these models in bankruptcy, its ability to use alternative planes would strengthen its bargaining position versus creditors. S&P will resolve its CreditWatch review when all or substantially all preconditions to concluding a merger are completed, and will indicate a likely outcome earlier than that, if S&P have sufficient information and certainty to do so. Based in Atlanta, Georgia, Delta Air Lines Inc. (NYSE:DAL) -- http://www.delta.com/-- is the world's second-largest airline in terms of passengers carried and the leading U.S. carrier across the Atlantic, offering daily flights to 328 destinations in 56 countries on Delta, Song, Delta Shuttle, the Delta Connection carriers and its worldwide partners. Delta flies to Argentina, Australia and the United Kingdom, among others. The company and 18 affiliates filed for chapter 11 protection on Sept. 14, 2005 (Bankr. S.D.N.Y. Lead Case No. 05-17923). Marshall S. Huebner, Esq., at Davis Polk & Wardwell, represents the Debtors in their restructuring efforts. Timothy R. Coleman at The Blackstone Group L.P. provides the Debtors with financial advice. Daniel H. Golden, Esq., and Lisa G. Beckerman, Esq., at Akin Gump Strauss Hauer & Feld LLP, provide the Official Committee of Unsecured Creditors with legal advice. John McKenna, Jr., at Houlihan Lokey Howard & Zukin Capital and James S. Feltman at Mesirow Financial Consulting, LLC, serve as the Committee's financial advisors. The Debtors filed a chapter 11 plan of reorganization and disclosure statement explaining that plan on Dec. 19, 2007. On Jan. 19, 2007, they filed revisions to the plan and disclosure statement, and submitted further revisions to the plan on Feb. 2, 2007. On Feb. 7, 2007, the Court approved the Debtors' disclosure statement. In April 25, 2007, the Court confirmed the Debtors' plan. That plan became effective on April 30, 2007. The Court entered a final decree closing 17 cases on Sept. 26, 2007. DELTA AIR: Northwest Merger Cues Moody's Ratings Under Review ------------------------------------------------------------- Moody's Investors Service placed the debt ratings of Delta Air Lines, Inc. ("Delta", corporate family at B2) and Northwest Airlines Corporation ("Northwest", corporate family rating at B1) on review for possible downgrade. The review was prompted by the announcement that the two airlines have agreed to combine in an all-stock transaction with a combined enterprise value of approximately US$18 billion. Moody's review period may be lengthy, given the time for the necessary regulatory and shareholder approvals to effect the corporate merger. Moreover, there could be a considerable additional time period to effect actual integration of the airlines, which is the basis for achieving the expected operating synergies. The all-stock nature of the transaction is viewed favorably as it precludes the need for incremental debt that would need to be serviced by the combined airline operation. Nevertheless, the extended timeframe over which cost and revenue synergies might be achieved, and the significant hurdles that will need to be overcome to realize these synergies are critical concerns that will be assessed in the review. Separately, both carriers are facing material near-term operating pressures from high fuel and maintenance costs and weakening passenger traffic that impair their ability to realize adequate yields on ticket prices. Even with the benefits of the bankruptcy restructurings recently completed by both airlines, the current industry conditions will likely make it difficult for either carrier to earn an adequate profit. Successful implementation of the merger and realization of all expected synergies could help the combined carriers deal with these challenging conditions. Yet the synergies will only be realized over an extended period of time, and with the expectation of near term net losses, combined with the still substantial debt load (Delta at US$17.6 billion; Northwest at US$15.3 billion, using Moody's standard adjustments), Moody's could take interim downward rating actions on either carrier's debt prior to completing the review. Moody's will examine the timing and the magnitude of the various cost and revenue synergies anticipated, and the degree to which these incremental gains will affect credit metrics and enable the new company to realize adequate returns. Particularly important will be the ability to effectively integrate the workforces of Delta and Northwest, and combine the seniority list in a way satisfactory to the work force, especially the pilots. The review will also consider the degree to which each airline can preserve its liquidity during the challenging near term operating conditions, prior to effecting the merger. The merger does not contemplate additional debt, which is helpful. In addition, the four way anti-trust immunity (Delta, Northwest, KLM, AirFrance) is also helpful as the airlines operate with broader code-share arrangements. There is limited overlap in the domestic network, and Northwest's strength in Pacific routes (particularly the Fifth Freedom rights in Japan) complement Delta's service in Europe and elsewhere. However, Moody's is skeptical that simply joining the route networks will create the revenue synergies needed to generate an adequate return. Cost savings, anticipated to reach a run-rate of about US$1 billion by 2012, could be challenging in light of unresolved labor negotiations, and the negative pressures from fuel and maintenance costs. Both airlines have aging fleets that are less efficient to operate in the current high fuel cost environment. The airlines have a limited number of new aircraft on order and will need to consider the considerable capital costs associated with refleeting. The secured debt ratings of Delta and Northwest, including Enhanced Equipment Trust Certificates, but excluding ratings supported by monoline insurance policies, will be reviewed in relation to the review of the underlying implied rating as well as to the asset values of aircraft equipment that provide collateral support for the transactions. The potential ratings actions for these transactions may be of greater or less magnitude than a change in the underlying airline rating, if any. On Review for Possible Downgrade: Issuer: Delta Air Lines, Inc. -- Probability of Default Rating, Placed on Review for Possible Downgrade, currently B2 -- Speculative Grade Liquidity Rating, Placed on Review for Possible Downgrade, currently SGL-2 -- Corporate Family Rating, Placed on Review for Possible Downgrade, currently B2 -- Senior Secured Bank Credit Facility, Placed on Review for Possible Downgrade, currently Ba2 (19% - LGD2) -- Senior Secured Bank Credit Facility, Placed on Review for Possible Downgrade, currently Ba2 (19% - LGD2) -- Second Lien Term Loan, Placed on Review for Possible Downgrade, currently B2 (46% - LGD3) -- Series 2007-1 Pass Through Certificates, Placed on Review for Possible Downgrade: -- Class A, currently Baa1 -- Class B, currently Ba2 -- Class C, currently B1 Issuer: Northwest Airlines Corporation -- Probability of Default Rating, Placed on Review for Possible Downgrade, currently B1 -- Speculative Grade Liquidity Rating, Placed on Review for Possible Downgrade, currently SGL-2 -- Corporate Family Rating, Placed on Review for Possible Downgrade, currently B1 Issuer: Northwest Airlines, Inc. -- Senior Secured Bank Credit Facility, Placed on Review for Possible Downgrade, currently Ba3 (41% - LGD3) -- Senior Secured Bank Credit Facility, Placed on Review for Possible Downgrade, currently Ba3 (41% - LGD3) -- Series 2007-1 Pass Through Certificates, Placed on Review for Possible Downgrade: -- Class A, currently A3 -- Class B, currently Ba1 Outlook Actions: Issuer: Delta Air Lines, Inc. -- Outlook, Changed To Rating Under Review From Stable Issuer: Northwest Airlines Corporation -- Outlook, Changed To Rating Under Review From Stable Issuer: Northwest Airlines, Inc. -- Outlook, Changed To Rating Under Review From Stable Delta Air Lines, Inc. is headquartered in Atlanta, Georgia. Northwest Airlines Corp. is headquartered in Eagan, Minnesota. Based in Atlanta, Georgia, Delta Air Lines Inc. (NYSE:DAL) -- http://www.delta.com/-- is the world's second-largest airline in terms of passengers carried and the leading U.S. carrier across the Atlantic, offering daily flights to 328 destinations in 56 countries on Delta, Song, Delta Shuttle, the Delta Connection carriers and its worldwide partners. Delta flies to Argentina, Australia and the United Kingdom, among others. The company and 18 affiliates filed for chapter 11 protection on Sept. 14, 2005 (Bankr. S.D.N.Y. Lead Case No. 05-17923). Marshall S. Huebner, Esq., at Davis Polk & Wardwell, represents the Debtors in their restructuring efforts. Timothy R. Coleman at The Blackstone Group L.P. provides the Debtors with financial advice. Daniel H. Golden, Esq., and Lisa G. Beckerman, Esq., at Akin Gump Strauss Hauer & Feld LLP, provide the Official Committee of Unsecured Creditors with legal advice. John McKenna, Jr., at Houlihan Lokey Howard & Zukin Capital and James S. Feltman at Mesirow Financial Consulting, LLC, serve as the Committee's financial advisors. The Debtors filed a chapter 11 plan of reorganization and disclosure statement explaining that plan on Dec. 19, 2007. On Jan. 19, 2007, they filed revisions to the plan and disclosure statement, and submitted further revisions to the plan on Feb. 2, 2007. On Feb. 7, 2007, the Court approved the Debtors' disclosure statement. In April 25, 2007, the Court confirmed the Debtors' plan. That plan became effective on April 30, 2007. The Court entered a final decree closing 17 cases on Sept. 26, 2007. DELTA AIR: Northwest Merger Prompts Fitch to Affirm 'B' ID Rtg. --------------------------------------------------------------- Fitch Ratings has affirmed the debt ratings of Delta Air Lines, Inc. following the announcement that Delta has agreed to merge with Northwest Airlines Corp., subject to approval by the two airlines' shareholders and the U.S. Department of Justice. Delta's ratings were affirmed as: -- Issuer Default Rating at 'B'; -- First-lien senior secured credit facilities at 'BB/RR1'; -- Second-lien secured credit facility (Term Loan B) at 'B/RR4'. The issue ratings apply to US$2.5 billion of committed credit facilities. The Rating Outlook for Delta has been revised to Negative from Stable. The affirmation reflects Fitch's view that the proposed transaction is likely to drive a combined post-merger credit profile that is similar to that of a stand-alone Delta. However, a successful completion of the merger is by no means a certainty in light of potential opposition from organized labor and Congress. This uncertainty, together with potential concerns raised by the DOJ in a lengthy antitrust review, increases execution risk and diverts management attention at a time of increasing stress in the U.S. airline operating environment. The Negative Outlook reflects Fitch's opinion that extreme fuel cost pressure and slower unit revenue growth rates in a U.S. recession will materially weaken Delta's credit profile over the next year-whether or not the Delta-Northwest merger is ultimately closed. The merged carrier will face substantial fixed financing obligations over the next several years in an industry operating environment that will remain difficult as the U.S. economy heads into recession. However, should the merger receive regulatory approval, the Delta-Northwest combination would likely drive some material revenue synergies related primarily to fleet optimization and greater revenue per available seat mile premiums linked to the creation of a broadly diversified and deep global route network. Notably, the realization of full revenue synergies would not be complete until 2012 as fleet and schedule optimization benefits are pursued largely in the absence of broad-based available seat mile capacity reduction. Importantly, Delta management noted on this morning's investor call that no hub closures are contemplated in connection with the merger, raising the question of how much domestic capacity could actually be removed post-closing. Delta and Northwest have each announced plans to pull back 2008 domestic capacity (10% reduction at Delta and 5% at Northwest) in response to accelerating jet fuel cost pressure since the start of the year. If no significant domestic capacity rationalization is envisioned beyond 2008, it may be very difficult for the combined Delta-Northwest to drive the type of RASM improvements necessary to offset intensifying fuel cost pressure. No material pull-backs in energy prices are assumed by Delta management in its merger plan. This fact, together with Delta's revenue synergy target (US$700 million run rate) would appear to limit any opportunities to drive substantially positive free cash flow beyond 2008. With large numbers of firm aircraft deliveries keeping capital spending high, and with significant scheduled debt maturities at both carriers, an extended industry downturn could drive combined Delta-Northwest operating losses and negative free cash flow in 2009. This in turn could force the merged carrier to seek new sources of capital next year if current combined liquidity levels (approximately US$7 billion) are to be maintained. Given the currently constrained nature of debt capital markets, there is little certainty about the availability of external capital post-closing. On the cost side, increasing pay rates linked to the tentative agreement with Delta pilots will pressure non-fuel unit operating costs. Delta management, however, does see an opportunity to realize US$300 million to US$400 million in cost synergies net of new labor contract changes. Savings linked to the elimination of redundant operations appear to be broadly attainable. Still these savings could be offset in large part by higher unit labor rates and productivity penalties if integrated contracts are not finalized at the time of the merger. Delta has identified as much as US$1 billion of cash merger transition costs, which will likely be front-loaded in the 2008-2009 time period. If a quick agreement with Northwest pilots is to be reached, moreover, labor cost pressures could increase beyond planned levels. The current 'B' IDR for a stand-alone Delta reflects the high levels of debt that remain on Delta's balance sheet even after the Chapter 11 restructuring, reduced but still heavy cash obligations over the next several years and the company's exposure to demand and fuel price shocks in an industry that remains highly vulnerable to changes in the macroeconomic environment. With domestic unit revenue growth expected to slow throughout 2008 and jet fuel prices at record levels, intense margin pressure will persist. The airline's March plan to cut domestic capacity and 2,000 jobs this year is unlikely to offset the heavy cost pressure linked to US$110-plus per barrel crude oil in 2008. With some weakeninng of air travel demand and RASM trends likely to appear by summer, therefore, Fitch expects full year 2008 cash flow and liquidity results to fall well short of bankruptcy exit plan assumptions for the stand-alone Delta. Delta's post-reorganization capital structure was streamlined as a result of pre-petition debt and lease rejection in Chapter 11. Recovery expectations for the first-lien revolver and term loan are superior to those of the second lien term loan. Recovery expectations for first-lien lenders are excellent, reflecting a deep collateral pool consisting of aircraft, engines, spare parts and other assets, as well as a tight covenant package protecting lenders via fixed charge coverage, minimum liquidity and collateral coverage tests. Taking into account the credit facilities, aircraft-backed EETC obligations and private mortgage agreements, Delta has virtually no unencumbered assets remaining to support additional borrowing if liquidity conditions tighten further. Secured financing for firm aircraft deliveries (including Boeing 777-200s, Boeing 737 NGs and CRJ-900 regional jets) will need to be secured if Delta's international growth strategy and fleet overhaul are to be completed. Similarly, on the Northwest side, future mainline and regional jet deliveries must be financed, since aircraft capital spending won't be funded from operating cash flow in either a stand-alone or post-merger case. A downgrade to 'B-' for the IDR could follow later in the year if operating trends in the industry continue to worsen in response to rising jet fuel costs and a fragile demand environment. With respect to the merger transition process, Fitch will remain focused primarily on the risks related to labor opposition at Northwest, where ALPA-represented pilots have made it clear that a quick intergration of pilot contracts is not likely. Labor opposition at Northwest, if prolonged, could complicate the task of realizing full merger synergies if the deal gains necessary regulatory approvals. 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. GOODYEAR TIRE: Sets June 30 as Conversion Period for US$4M Notes ---------------------------------------------------------------- The Goodyear Tire & Rubber Company's remaining 4.00% convertible senior notes due June 15, 2034, are now convertible at the option of the holders and will be convertible through June 30, 2008, the last business day of the current fiscal quarter. The notes became convertible because the last reported sale price of the company's common stock for at least 20 trading days during the 30 consecutive trading-day period ending on April 15, 2008, was greater than 120% of the conversion price in effect on such day. The notes have been convertible in previous fiscal quarters. The company will deliver shares of its common stock or pay cash upon conversion of any notes surrendered on or prior to June 30, 2008. If shares are delivered, cash will be paid in lieu of fractional shares only. Issued in July 2004, the notes are currently convertible at a rate of 83.0703 shares of common stock per US$1,000 principal amount of notes, which is equal to a conversion price of US$12.04 per share. During the fourth quarter of 2007, Goodyear completed an exchange offer for outstanding notes for a cash payment and shares of common stock. Approximately 99% of the outstanding notes were exchanged. As a result, less than US$4 million in aggregate principal amount of notes remain outstanding. If all remaining outstanding notes are surrendered for conversion, the aggregate number of shares of common stock issued would be approximately 0.3 million. The notes could be convertible after June 30, 2008, if the sale price condition is met in any future fiscal quarter or if any of the other conditions to conversion set forth in the indenture governing the notes are met. About Goodyear Tire Headquartered in Akron, Ohio, The Goodyear Tire & Rubber Company (NYSE: GT) -- http://www.goodyear.com/-- is the world's largest tire company. The company manufactures tires, engineered rubber products and chemicals in more than 90 facilities in 28 countries. Goodyear's operations are located in Argentina, Austria, Chile, Colombia, France, Italy, Guatemala, Jamaica, Peru, Russia, among others. Goodyear employs more than 80,000 people worldwide. * * * As reported by the Troubled Company Reporter-Latin America on March 7, 2008, Fitch Ratings upgraded The Goodyear Tire & Rubber Company's Issuer Default Rating to 'BB-' from 'B+' and senior unsecured debt rating to 'B+' from 'B-/RR6'. POLYVEL SRL: Files for Reorganization in Buenos Aires Court ----------------------------------------------------------- Polyvel SRL has requested for reorganization approval after failing to pay its liabilities since December 2007. The reorganization petition, once approved by the court, will allow Polyvel 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. 6 in Buenos Aires. Clerk No. 12 assists the court in this case. The debtor can be reached at: Polyvel SRL Juan Bautista Alberdi 1035 Buenos Aires, Argentina SUBTIL SA: Proofs of Claim Filing Deadline is June 9 ---------------------------------------------------- Angel Miragaya, the court-appointed trustee for Subtil SA's bankruptcy proceeding, will be verifying creditors' proofs of claim until June 9, 2008. Ms. Miragaya will present the validated claims in court as individual reports. The National Commercial Court of First Instance No. 10 in Buenos Aires, with the assistance of Clerk No. 20, 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 Subtil 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 Subtil's accounting and banking records will be submitted in court. La Nacion didn't state the submission deadlines for the reports. Ms. Miragaya is also in charge of administering Subtil's assets under court supervision and will take part in their disposal to the extent established by law. The debtor can be reached at: Subtil SA Rivadavia 5748 Buenos Aires, Argentina The trustee can be reached at: Angel Miragaya Lavalle 1718 Buenos Aires, Argentina ============= B E R M U D A ============= ACES INTERNATIONAL: Losses & Debts Raise Going Concern Doubt ------------------------------------------------------------ ACeS International Limited's recurring significant operating losses, negative operating cash flows, and significant levels of debt has raised substantial doubt about its ability to continue as a going concern, a filing with the U.S. Securities and Exchange Commision by Philippine Long Distance Telephone Company discloses. As of Dec. 31, 2007, ACeS Philippines Cellular Satellite Corporation, PLDT's wholly-owned subsidiary, had a 36.99% investment in ACes International. According to the SEC filing, ACes International's financial condition was partly due to the National Service Providers' inability to generate the amount of revenues originally expected as the growth in subscriber numbers has been significantly lower than budgeted. ACes International aims to develop and implement a satellite- based communications system to provide services to users in the Asia-Pacific region through the Garuda I satellite, or ACeS System and ACeS Service. The company has entered into interconnection agreements and roaming service agreements with PLDT and other major telecommunications operators that will allow ACeS service subscribers to access GSM terrestrial cellular systems in addition to the ACeS system. In addition, the company has an amended Air Time Purchase Agreement with National Service Providers in Asia, including PLDT. ACes International owns the Garuda I Satellite and the related system control equipment in Batam, Indonesia. ACeS International Limited -- http://www.acesinternational.com/ -- is a mobile phone satellite operator. The company is incorporated under the laws of Bermuda. BRUNSWICK SPV: Will Hold Final Shareholders Meeting on May 16 ------------------------------------------------------------- Brunswick SPV Limited will hold its final shareholders' meeting on May 16, 2008, at Leman Mangement Limited, Wessex House, 2nd floor, 45 Reid Street, Hamilton HM 12, Bermuda, on May 16, 2008. These matters will be taken up during the meeting: -- receiving an account showing the manner in which the winding-up of the company has been conducted and its property disposed of and hearing any explanation that may be given by the liquidator; -- determination by resolution the manner in which the books, accounts and documents of the company and of the liquidator shall be disposed; and -- passing of a resolution dissolving the company. Brunswick SPV's shareholders agreed on April 15, 2008, to place the company into voluntary liquidation under The Companies Law (2004 Revision) of the Cayman Islands. The liquidator can be reached at: Edward Allanby Leman Mangement Limited Wessex House, 2nd floor 45 Reid Street, Hamilton HM 12 Bermuda FOSTER WHEELER: UK Subsidiary Bags Contract from Santos Ltd. ------------------------------------------------------------ Foster Wheeler Ltd.'s UK-headquartered subsidiary, Foster Wheeler Energy Limited, part of its Global Engineering and Construction Group, has been awarded a contract to undertake a six-month study for the pre-front-end engineering design (pre- FEED) for Santos Ltd.�s planned Gladstone LNG(TM) project in Queensland, Australia. The proposed project is for a 3-4 million tonnes per annum liquefied natural gas processing facility and associated infrastructure. The GLNG(TM) facility would be one of the first LNG facilities in the world to use coal-bed methane as a feedstock for LNG production. The Foster Wheeler contract value, which was not disclosed, will be included in the company�s second-quarter 2008 bookings. Foster Wheeler is one of two contractors appointed to undertake pre-FEED studies to enable Santos to consider the optimum technical design for, and cost and schedule implications of, two different LNG process technologies for GLNG(TM). Santos has announced that it anticipates making a decision to move towards a formal FEED process by the end of 2008 or early 2009, a final investment decision by the end of 2009, and first LNG cargoes early in 2014. �This latest LNG award, which is our fourth LNG award in Australia, reflects the depth of our liquefaction expertise, our detailed knowledge of the Australian market, and the added value and objectivity our Reading-based Midstream LNG Group is able to bring to the early stages of LNG project development,� said Michael J. Beaumont, chairman and chief executive officer, Foster Wheeler Energy Limited. �This is clearly a significant milestone, and further demonstrates the momentum which is building around GLNG(TM). The dual pre-FEED contract awards have been achieved in line with the project schedule and it is pleasing to have such experienced, world-class contractors appointed to the project,� commented David Knox, acting chief executive officer, Santos Ltd. Foster Wheeler Ltd. (Nasdaq: FWLT) -- http://www.fwc.com/-- offers a broad range of engineering, procurement, construction, manufacturing, project development and management, research and plant operation services. Foster Wheeler serves the refining, upstream oil and gas, LNG and gas-to-liquids, petrochemical, chemicals, power, pharmaceuticals, biotechnology and healthcare industries. The corporation is based in Hamilton, Bermuda, and its operational headquarters are in Clinton, New Jersey. * * * As reported in the Troubled Company Reporter-Latin America on Feb. 5, 2008, Standard & Poor's Ratings Services revised its outlook on Foster Wheeler Ltd. to positive from stable. At the same time, S&P affirmed its 'BB' corporate credit rating on the company. The company reported total debt of approximately US$150 million at Sept. 30, 2007. GP INVESTMENTS: Receives US$200 Mil. Financing from Banco Itau -------------------------------------------------------------- GP Investments Ltd. has obtained a 10-year US$200 million loan from Nassau branch of Banco Itau BBA SA, the Bloomberg News reports. The company said in a regulatory filing that the money will be used to boost its private-equity investments. The loan will be denominated in reais. According to Bloomberg, the company has agreed to purchase dairy producer Leitbom for BRL308 million (US$183 million). Based in Hamilton, Bermuda, GP Investments Ltd. - http://www.gpinvestments.com/-- is a leading private equity player in Brazil. The GP Investments' activities consist of its core private equity business and its asset management business, and its mission is to generate higher than average long-term return to its investors and shareholders. Since its inception in 1993, GP Investments raised more than US$1.5 billion from Brazilian and international investors, and acquired more than thirty-five companies in ten different sectors. On May 2006, GP Investments concluded its Initial Public Offering -- IPO, becoming the first listed private equity company in Brazil. * * * In October 2007, Fitch Ratings assigned a 'B/RR4' rating to GP Investments Ltd's extension of its 2007 senior perpetual notes program for US$40 million. Fitch said the Rating Outlook is Positive. OPTIMA ALTERNATIVE: Proofs of Claim Filing Deadline is April 30 --------------------------------------------------------------- The Optima Alternative Strategies Fund Limited's creditors have until April 30, 2008, to prove their claims to Robin J. Mayor, 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. The Optima Alternative's shareholders agreed on April 11, 2008, to place the company into voluntary liquidation under The Companies Law (2004 Revision) of the Cayman Islands. The liquidator can be reached at: Robin J. Mayor Messrs. Conyers Dill & Pearman Clarendon House, 2 Church Street Hamilton, HM 11, Bermuda OPTIMA ALTERNATIVE: Final Shareholders Meeting is on May 21 ----------------------------------------------------------- The Optima Alternative Strategies Fund Limited will hold its final shareholders' meeting on May 21, 2008, at 9:30 a.m. at Messrs. Conyers Dill & Pearman, Clarendon House, Church Street, Hamilton, Bermuda. These matters will be taken up during the meeting: -- receiving an account showing the manner in which the winding-up of the company has been conducted and its property disposed of and hearing any explanation that may be given by the liquidator; -- determination by resolution the manner in which the books, accounts and documents of the company and of the liquidator shall be disposed; and -- passing of a resolution dissolving the company. The Optima Alternative's shareholders agreed on April 11, 2008, to place the company into voluntary liquidation under The Companies Law (2004 Revision) of the Cayman Islands. The liquidator can be reached at: Robin J. Mayor Messrs. Conyers Dill & Pearman Clarendon House, 2 Church Street Hamilton, HM 11, Bermuda TYCO INT'NL: Inks Purchase Pact with FirsService for US$187 Mil. ---------------------------------------------------------------- The Bloomberg News reports that Tyco International Ltd. will buy the security unit of Toronto-based FirstService Corp. for about US$187 million to increase sales in the banking and energy markets. Tyco said in a statement that FirstService Security, with 2,400 employees and 17 offices in the U.S. and Canada, had more than US$200 million in revenue for the past 12 months. According to Tyco, the ADT security systems unit has higher sales when it raised its 2008 revenue and profitability forecasts in January. The ADT unit has shared more than 40 percent of the Tyco's revenue in 2007 fiscal year, Bloomberg states. The report shows that ADT has reported US$7.65 billion in sales in the year ended in September and has 60,000 employees worldwide, with 22,000 in North America. FirstService disclosed that it will focus on its real estate servoce operatioms by selling the unit. 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. TYCO INT'L: Reaches Agreement to Sell U.K. Business to CRH Plc -------------------------------------------------------------- Tyco International Ltd. has entered into a definitive agreement to sell its Ancon Building Products business to CRH plc for approximately GBP88 million (US$174 million). Ancon Building Products designs and manufactures a range of building products for the construction industry. The business had revenue of US$107 million in 2007, operating profit of US$23 million and employs 370 people. Ancon Building Products is headquartered in Sheffield, United Kingdom and also has operations in continental Europe, the Middle East and Australia. The sale of Ancon Building Products is a further step in Tyco's ongoing refinement of its portfolio and is consistent with the company's strategy to divest certain non-core businesses. Completion of the Ancon transaction is subject to customary closing conditions and regulatory approvals. In connection with this sale, the financial results of this business, which have previously been reported as part of Corporate and Other, will be classified as discontinued operations when Tyco reports its second quarter results on May 1, 2008. Based in Pembroke, Bermuda, Tyco International Ltd. (NYSE: TYC) -- http://www.tyco.com/-- provides security, fire protection and detection, valves and controls, and other industrial products and services to customers in four business segments: Electronics, Fire & Security, Healthcare, and Engineered Products & Services. With 2007 revenue of US$18 billion, Tyco employs approximately 118,000 people worldwide. In Latin America, Tyco has presence in Argentina, Brazil, Chile, Costa Rica, Ecuador, Honduras, and the Bahamas. Effective June 29, 2007, Tyco International Ltd. completed the spin-offs of Covidien and Tyco Electronics, formerly its Healthcare and Electronics businesses, respectively, into separate, publicly traded companies in the form of a distribution to Tyco shareholders. * * * As reported in the Troubled Company Reporter on Dec. 21, 2007, in its annual report for the year ended Sept. 28, 2007, Tyco said that on Nov. 8, 2007, The Bank of New York delivered to the company a notice of events of default. The notice claims that the actions taken by the company in connection with its separation into three public entities constitute events of default under certain indentures. VULCAN OIL: Proofs of Claim Filing Deadline is May 7 ---------------------------------------------------- Vulcan Oil Limited's creditors have until May 7, 2008, to prove their claims to Jennifer M. Kelly, 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. Vulcan Oil's shareholders agreed on April 15, 2008, to place the company into voluntary liquidation under The Companies Law (2004 Revision) of the Cayman Islands. The liquidator can be reached at: Jennifer M. Kelly 3rd Floor, Par La Ville Place 14 Par La Ville Road, Hamilton Bermuda VULCAN OIL: Sets Final Shareholders Meeting for May 30 ------------------------------------------------------ Vulcan Oil Limited will hold its final shareholders' meeting on May 30, 2008, at 3rd Floor, Par La Ville Place, 14 Par La Ville Road, Hamilton, Bermuda. These matters will be taken up during the meeting: -- receiving an account showing the manner in which the winding-up of the company has been conducted and its property disposed of and hearing any explanation that may be given by the liquidator; -- determination by resolution the manner in which the books, accounts and documents of the company and of the liquidator shall be disposed; and -- passing of a resolution dissolving the company. Vulcan Oil's shareholders agreed on April 15, 2008, to place the company into voluntary liquidation under The Companies Law (2004 Revision) of the Cayman Islands. The liquidator can be reached at: Jennifer M. Kelly 3rd Floor, Par La Ville Place 14 Par La Ville Road, Hamilton Bermuda =========== B R A Z I L =========== AMR CORP: Posts US$328 Million Net Loss in First Quarter of 2008 ---------------------------------------------------------------- AMR Corporation, the parent company of American Airlines, Inc., reported net loss of US$328 million for the first quarter of 2008. The current quarter results compare to a net profit of US$81 million for the first quarter of 2007. Record jet fuel prices contributed significantly to the company's loss in the first quarter of 2008. The company paid US$665 million more for fuel in the first quarter of 2008 than it would have paid at prevailing prices from the prior-year period. AMR paid US$2.74 per gallon for jet fuel in the first quarter compared to US$1.85 a gallon in the first quarter of 2007, a 48% increase. "The first quarter proved yet again that fuel prices remain one of the biggest threats to our industry and our company, and we also can't ignore the ongoing concerns about the U.S. economy and the potential impact on travel demand," AMR Chairman and CEO Gerard Arpey said. "Clearly, it has been a challenging start to 2008, and I want to take this time to again apologize to our customers who were inconvenienced by our recent cancellations and also thank all of our employees who worked tirelessly through difficult weather and maintenance challenges to take care of our customers. While our first quarter financial results were disappointing, through our hard work in recent years to contain costs and strengthen our balance sheet and liquidity we are better positioned to withstand today's uncertainty. However, we also recognize that we have a lot more hard work ahead of us and that our efforts must be ongoing," he said. Mr. Arpey noted that the company is taking numerous steps to address the challenging circumstances that it faces, including its recent hiring freeze for management and support staff and the announcements that AMR is making additional reductions to its 2008 capacity plan and is accelerating the replacement of its MD-80 fleet with more efficient Boeing 737-800s. Mr. Arpey also reiterated AMR's commitment to continue to work with the FAA to demonstrate the company's ongoing commitment to safety and compliance with the FAA's directives. AMR's planned divestiture of its regional carrier, American Eagle, also continues to move forward, Mr. Arpey said. Operational Performance AMR reported first quarter consolidated revenues of approximately US$5.7 billion, an increase of 5.0% year over year. AMR estimates that weather and maintenance cancellations reduced first quarter consolidated revenue by approximately US$75 million to US$80 million. American's mainline passenger revenue per available seat mile (unit revenue) increased by 6.5% in the first quarter compared to the year-ago quarter. Mainline capacity, or total available seat miles, in the first quarter decreased by 1.5% compared to the same period in 2007. The year-over-year decrease in capacity was largely the result of higher-than-anticipated weather cancellations, pilot early retirements, and maintenance cancellations. American's mainline load factor -� or the percentage of total seats filled -� was a record 79.1% during the first quarter, compared to 78.1% in the first quarter of 2007. American's first-quarter yield, which represents average fares paid, increased 5.1% compared to the first quarter of 2007, its 12th consecutive quarter of year-over-year yield increases. American's mainline cost per available seat mile (unit cost) in the first quarter increased 15.8% year over year. The largest contributor to the year-over-year increase in unit costs in the first quarter of 2008 was fuel. Excluding fuel, mainline unit costs in the first quarter of 2008 increased by 3.3% year over year. As part of its efforts to improve the cost and fuel efficiency of its fleet, as well as lessen the company's impact on the environment, AMR provided an update on its plans to replace MD- 80 aircraft with 737-800s. The company expects to take delivery of a total of 34 737-800 aircraft in 2009 and 36 737s in 2010. Of these, the company has firm commitments in place for 27 737s to be delivered in 2009 and three 737s to be delivered in 2010. This compares to the company's fleet renewal update in January, when it said that it had firm commitments to take delivery of 23 737s in 2009. Balance Sheet Update Mr. Arpey noted that the company's efforts to strengthen its balance sheet in recent years have better positioned AMR to face the current industry challenges. AMR ended the first quarter with US$4.9 billion in cash and short-term investments, including a restricted balance of US$426 million, compared to a balance of US$5.9 billion in cash and short-term investments, including a restricted balance of US$471 million, at the end of the first quarter of 2007. The year- over-year decrease in the company's cash and short-term investment balance is primarily related to AMR's total debt payments of approximately US$2.3 billion in 2007, including prepayment of approximately US$1 billion. AMR's Total Debt, which it defines as the aggregate of its long- term debt, capital lease obligations, the principal amount of airport facility tax-exempt bonds, and the present value of aircraft operating lease obligations, was US$15.2 billion at the end of the first quarter of 2008, compared to US$17.5 billion at the end of the first quarter of 2007. AMR's Net Debt, which it defines as Total Debt less unrestricted cash and short-term investments, was US$10.7 billion at the end of the first quarter of 2008, compared to US$12.2 billion at the end of the first quarter of 2007. As a result of scheduled principal payments as well as prepayments, refinancings and other efforts to strengthen its balance sheet, AMR's net interest expense in the first quarter of 2008 was US$23 million lower than in the year-ago period, a 14% reduction. AMR contributed US$25 million to its employees' defined benefit pension plans in the first quarter and made an additional contribution of US$50 million on April 15. AMR has contributed more than US$2 billion to its employee defined benefit pension plans since the beginning of 2002. About AMR Corp. Headquartered in Forth Worth, Texas, AMR Corporation (NYSE: AMR) operates with its principal subsidiary, American Airlines Inc. -- http://www.aa.com/-- a worldwide scheduled passenger airline. At the end of 2006, American provided scheduled jet service to about 150 destinations throughout North America, the Caribbean, Latin America, including Brazil, Europe and Asia. American is also a scheduled airfreight carrier, providing freight and mail services to shippers throughout its system. Its wholly owned subsidiary, AMR Eagle Holding Corp., owns two regional airlines, American Eagle Airlines Inc. and Executive Airlines Inc., and does business as "American Eagle." American Beacon Advisors Inc., a wholly owned subsidiary of AMR, is responsible for the investment and oversight of assets of AMR's U.S. employee benefit plans, as well as AMR's short-term investments. * * * As reported in the Troubled Company Reporter-Latin America on March 26, 2008, Standard & Poor's Ratings Services revised its outlook on the long-term ratings on AMR Corp. (B/Negative/B-3) and subsidiary American Airlines Inc. (B/Negative/--) to negative from positive. S&P also lowered its short-term rating on AMR to 'B-3' from 'B-2' and affirmed all other ratings on AMR and American. AMR CORP: Selling Asset-Management Subsidiary for US$480 Million ---------------------------------------------------------------- AMR Corporation, the parent company of American Airlines, Inc., reached a definitive agreement to sell American Beacon Advisors, Inc., its wholly owned asset-management subsidiary, to Lighthouse Holdings, Inc., which is owned by investment funds affiliated with Pharos Capital Group, LLC and TPG Capital, two private equity firms. AMR will receive total consideration of approximately US$480 million. While primarily a cash transaction, AMR will retain a minority equity stake in the business. AMR expects to close the sale this summer subject to satisfactory completion of customary closing conditions as well as the approval of the Board of Trustees of the American Beacon family of mutual funds, shareholders of the American Beacon family of mutual funds, and consents from other American Beacon clients. AMR, which has been engaged in an ongoing strategic value review process related to certain businesses under the AMR umbrella, believes that the sale is in the best interests of AMR and its shareholders and will benefit American Beacon, its employees, customers and other stakeholders. The sale is intended to allow AMR and its shareholders to recognize the full value of American Beacon while allowing AMR to focus on its core airline business. American Beacon currently provides a number of services for AMR and its affiliates, including cash management for AMR and investment advisory services and investment management services for American's pension, 401(k) and other health and welfare plans. AMR anticipates that it will continue its relationships with American Beacon after the closing. However, to ensure that continuing relationships between American Beacon and American's pension, 401(k) and other health and welfare plans after closing satisfy the fiduciary duties and other rules that apply to these plans, an independent third party has been engaged to review and approve any such continuing relationships. In addition to currently providing these investment management services and asset oversight services to AMR, American Beacon currently serves as the investment manager of the American Beacon Funds, a family of mutual funds with both institutional and retail shareholders, and provides customized fixed income portfolio management services. Subject to the approval of the shareholders of the American Beacon family of mutual funds, it is anticipated that American Beacon will continue to be investment manager for the mutual funds. American Beacon Advisors has consistently grown since its creation in 1987, adding new products and growing average assets under management to $65 billion in 2007. For 2007, on a separate company basis, American Beacon's gross revenue was $101 million and income before income taxes was approximately $48 million, both of which increased approximately 40% over 2006. "The decision comes after a careful evaluation of the strategy that we believe will deliver the most value to our shareholders and create the ownership structure that makes the most sense for American Beacon," AMR Chairman and CEO Gerard Arpey said. "What started out more than 20 years ago as a smart way to manage AMR's benefit plans and cash has evolved and grown significantly into a successful financial management and advisory firm that is fully capable of standing on its own and is well positioned to pursue further growth opportunities outside of AMR." Mr. Arpey added that AMR is looking forward to engaging American Beacon for cash management services after the transaction closes and will remain actively engaged with American Beacon through a 10% ownership interest. "Pharos and TPG believe that the asset management business is a robust sector, in which American Beacon is a strong leader, with an outstanding, 20-year track record of performance in multiple asset classes across a variety of investment cycles," Kneeland Youngblood, co-founder and managing partner of Pharos Capital, said. "We look forward to working with the American Beacon team and TPG to fully leverage its strengths into industry-leading growth as well as continuing its superior customer service and performance. And, we welcome the opportunity to work with AMR not only as a significant client, but also as a long-term partner." "Having significantly grown our third-party revenue over the past several years, we believe the timing of the divestiture is just right for our company, our customers and our employees," American Beacon Advisors Chairman William F. Quinn said. "We're looking forward to focusing on growing our core business, while continuing to serve the needs of our customers and building on our successful history under a new ownership structure. Our management team and employees are excited about the many opportunities that this transaction will present to American Beacon, and our customers can rest assured that we intend to provide the same high level of service and expertise that they have come to expect from American Beacon in the past." Credit Suisse advised AMR on the transaction and Rothschild Inc. continues to advise AMR in its ongoing strategic value review. Merrill Lynch & Co. acted as exclusive financial advisor to Pharos Capital and TPG Capital. About AMR Corp. Headquartered in Forth Worth, Texas, AMR Corporation (NYSE: AMR) operates with its principal subsidiary, American Airlines Inc. -- http://www.aa.com/-- a worldwide scheduled passenger airline. At the end of 2006, American provided scheduled jet service to about 150 destinations throughout North America, the Caribbean, Latin America, including Brazil, Europe and Asia. American is also a scheduled airfreight carrier, providing freight and mail services to shippers throughout its system. Its wholly owned subsidiary, AMR Eagle Holding Corp., owns two regional airlines, American Eagle Airlines Inc. and Executive Airlines Inc., and does business as "American Eagle." American Beacon Advisors Inc., a wholly owned subsidiary of AMR, is responsible for the investment and oversight of assets of AMR's U.S. employee benefit plans, as well as AMR's short-term investments. * * * As reported in the Troubled Company Reporter-Latin America on March 26, 2008, Standard & Poor's Ratings Services revised its outlook on the long-term ratings on AMR Corp. (B/Negative/B-3) and subsidiary American Airlines Inc. (B/Negative/--) to negative from positive. S&P also lowered its short-term rating on AMR to 'B-3' from 'B-2' and affirmed all other ratings on AMR and American. BANCO INDUSTRIAL: Moody's Rates Cayman Unit's US$130MM Notes Ba1 ---------------------------------------------------------------- Moody's Investors Service has assigned a Ba1 foreign currency rating to Banco Industrial e Comercial S.A. (Cayman Islands)' US$130 million senior unsecured notes due April 2010 being issued under the bank's existing US$1 billion Global Euro Medium-term Note Program. The rating outlook is stable. Moody's noted that Banco Industrial's foreign currency debt ratings remain unconstrained by Brazil's foreign currency country ceiling for bonds and notes. These rating was assigned to Banco Industrial (Cayman Islands)' US$130 million senior notes due 2010: -- Ba1 long-term foreign currency debt, with a stable outlook. Banco Industrial e Comercial S.A. is headquartered in Sao Paulo, Brazil with BRL11 billion in total assets and BRL1.6 billion in equity as of Dec. 31, 2007. BANCO ITAU BBA: Fitch Affirms Issuer Default Rating at BB- ---------------------------------------------------------- Fitch Ratings has affirmed Banco Itau BBA (Uruguay)'s ratings as: -- Long-term foreign and local currency issuer default rating at 'BB-', with a positive outlook; -- Support rating at '4'; -- National long-term rating at 'AA(uy)', with a stable outlook. The bank's long-term ratings reflect its status as a branch of Banco Itau BBA and the quality of its parent, Banco Itau Holding Financiera, which has a Fitch long-term foreign currency IDR of 'BBB-', restricted by the country ceiling, and a national rating of 'AAA(bra)' for the long-term national rating. In addition, the ratings reflect Banco Itau BBA's upcoming closure of its Uruguayan branch, following the acquisition of Bank Boston N.A. (Uruguay) by the group, which is pending only the authorization of the Banco Central de Uruguay. The bank has had limited operations in Uruguay. Its assets consist mainly of Uruguayan treasury bonds totalling US$11 million and its equity represented over 99% of total assets at end-2007. Banco Itau BBA (Uruguay) is a branch of Banco Itau BBA S.A., one of the largest banks operating in Brazil. Banco Itau Holding Financiera holds a 95.75% stake in Banco Itau BBA S.A. and a 100% stake in Banco Itau S.A. Banco Itau Holding Financiera reported total assets of US$132.7 billion and total equity of US$14.8 billion at end-2007. BANCO PINE: Fitch Holds B+/B ID Ratings With Positive Outlook ------------------------------------------------------------- Fitch Ratings has affirmed Banco Pine S.A.'s ratings as: -- Long-term foreign and local currency issuer default rating: affirmed at 'B+' -- Short-term foreign and local currency issuer default rating: affirmed at 'B' -- Individual rating: affirmed at 'D' -- Support rating: affirmed at '5' -- Support rating floor: affirmed at 'No Floor' -- National long-term rating: affirmed at 'A-(A minus)(bra)' -- National short-term rating: affirmed at 'F2(bra)' The outlooks for the long-term IDRs and national long-term rating remain positive Banco Pine's ratings reflect its track record of good profitability levels with a history of satisfactory asset quality, adequate liquidity and capitalisation ratios, and proven capacity to originate secured consignment (payroll discount) and receivables-based lending. On the other hand, they also take into consideration its modest size that makes it more vulnerable to a financial crisis, evident in concentrations in its loan portfolio and funding, as well as the efforts to expand funding at lower costs and manage the strong loan origination without compromising asset quality and capitalisation ratios. The positive outlook for Banco Pine's ratings reflect Fitch's expectations that, over the next year, the bank can adequately manage sustained and rapid loan growth, while maintaining its track record of good asset quality and the profitability needed to sustain an adequate level of capitalization, whilend further diversifying its funding base. Fitch will closely monitor the bank's growth goals to ensure they do not deteriorate asset quality and/or squeeze capitalisation levels. Fitch believes that Banco Pine's regulatory capital ratios, like those of several of its local peers, have overstated the bank's effective capitalisation to date, given the significant volume of loans sold to other banks with recourse. Regulatory changes expected to be implemented shortly will require banks to fully include loan sales with any form of recourse in regulatory capital calculations. Banco Pine is a medium-sized bank with commercial and investment portfolios] primarily focused on lending to medium-sized companies and specialises in consignment loans to civil servants. At fiscal year ended 2007, it had BRL5.7 billion in assets and BRL800 million in equity. Headquartered in Sao Paulo, Banco Pine was established in 1997 by the brothers Nelson and Noberto Pinheiro after the sale in 1996 of their participation in another family institution. A comprehensive corporate and operational restructuring was implemented and in the first half of 2005 Noberto Pinheiro became the bank's majority shareholder. In April 2007, Banco Pine went public by placing non-voting preferred shares at the Bovespa Level 1 on the New Brazilian Stock Market. These shares enjoy a tag-along privilege, giving minority shareholders 100% of the value of the block of controlling shares in the event of the sale of the institution. DELPHI CORP: Wants Exclusivity Moved Beyond Plan Effective Date ---------------------------------------------------------------- Delphi Corp. and its debtor-affiliates ask the U.S. Bankruptcy Court for the Southern District of New York to extend their exclusive periods to: (a) file a plan of reorganization until 30 days after substantial consummation of the confirmed First Amended Joint Plan of Reorganization or any modified Plan; and (b) solicit acceptances of that Plan until 90 days after substantial consummation of the First Amended Plan or modified Plan. Out of an abundance of caution and to ensure clarity with their stakeholders, including their customers and supplies, the Debtors seek an extension of the Exclusive Periods to prevent any lapse in exclusivity, John Wm. Butler, Jr., Esq., at Skadden, Arps, Slate, Meagher & Flom LLP, in Chicago, Illinois, clarifies. A further extension of the Exclusive Periods, Mr. Butler says, is justified by the significant progress the Debtors have made toward emerging from Chapter 11. After obtaining confirmation of the First Amended Plan, the Debtors secured exit financing and met all other conditions to the effectiveness of the Plan and Investment Agreement and were prepared to emerge from Chapter 11. The Debtors' efforts to emerge from Chapter 11, however, were affected by severe dislocations in the capital markets that began late in the second quarter of 2007 and that have continued through the present, according to Mr. Butler. Although the Debtors eventually obtained the exit financing required by the First Amended Plan, the turbulence in the capital markets was a principal cause of the delay in the Debtors' emergence from Chapter 11 before the end of 2007, he maintains. Moreover, the decision by Appaloosa Management L.P. and the other Plan Investors to not honor their commitments in the parties' New Equity Purchase and Commitment Agreement prevented the Debtors from emerging on April 4, 2008. Nevertheless, the Debtors have accomplished numerous other tasks related to many different aspects of the cases to emerge from Chapter 11 protection, including: -- obtaining Court approval to perform under modified pension funding waivers issued by the Internal Revenue Service; -- reducing the aggregate amount of Trade and Other Unsecured Claims below the US$1,450,000,000 amount set by the Plan; -- obtaining the Court's permission to sell their bearings business; -- completing the sale of their interiors and closures business to Inteva Products, LLC; and -- commencing the offering of rights to purchase shares of Reorganized Delphi Corp. common stock, which closed March 31, 2008. The unresolved contingencies relating to emergence notwithstanding the Plan Investors' failure to perform, and the size and complexity of the Debtors' cases, also justify a further extension of the Exclusive Periods, Mr. Butler relates. Under Section 1129(c) the Bankruptcy Code, the Court may confirm only one plan of reorganization. The Court confirmed the First Amended Plan on Jan. 25, 2008. Since the Plan Confirmation Order cannot be revoked unless "procured by fraud," in accordance with Section 1144, no other plan of reorganization may now be filed or solicited in the Debtors' bankruptcy cases, Mr. Butler asserts. As a result, the Exclusivity Periods will inevitably extend until the Debtors consummate the First Amended Plan or any modified plan, he notes. The Debtors are paying their bills as they come due, including the statutory fees paid quarterly to the U.S. Trustee, Mr. Butler assures Judge Drain. The Debtors have also extended the maturity date of their US$4,500,000,000 debtor-in-possession financing facility to July 1, 2008, and anticipate negotiating financing through Dec. 31, 2008, to provide additional comfort to creditors and other stakeholders that they will continue to meet their obligations as they come due. Although the Debtors are seeking a further extension of the Exclusivity Periods, they nonetheless anticipate emerging from Chapter 11 "as soon as reasonably practicable." The Court will convene a hearing to consider the Debtors' request on April 30. Objections are due April 23. Headquartered in Troy, Michigan, Delphi Corporation (PINKSHEETS: DPHIQ) -- http://www.delphi.com/-- is the single supplier of vehicle electronics, transportation components, integrated systems and modules, and other electronic technology. The company's technology and products are present in more than 75 million vehicles on the road worldwide. Delphi has regional headquarters in Japan, Brazil and France. The company filed for chapter 11 protection on Oct. 8, 2005 (Bankr. S.D.N.Y. Lead Case No. 05-44481). John Wm. Butler Jr., Esq., John K. Lyons, Esq., and Ron E. Meisler, Esq., at Skadden, Arps, Slate, Meagher & Flom LLP, represent the Debtors in their restructuring efforts. Robert J. Rosenberg, Esq., Mitchell A. Seider, Esq., and Mark A. Broude, Esq., at Latham & Watkins LLP, represents the Official Committee of Unsecured Creditors. As of March 31, 2007, the Debtors' balance sheet showed US$11,446,000,000 in total assets and US$23,851,000,000 in total debts. The Court approved Delphi's First Amended Joint Disclosure Statement and related solicitation procedures for the solicitation of votes on the First Amended Plan on Dec. 20, 2007. The Court confirmed the Debtors' First Amended Plan on Jan. 25, 2008. (Delphi Bankruptcy News, Issue No. 123; Bankruptcy Creditors' Service Inc., http://bankrupt.com/newsstand/or 215/945-7000) * * * As reported in the Troubled Company Reporter-Latin America on March 18, 2008, Standard & Poor's Ratings Services still expects to assign a 'B' corporate credit rating to Delphi Corp. if the company emerges from bankruptcy in early April. S&P has revised its expected issue-level ratings because changes to the structure of the proposed financings have affected relative recovery prospects among the various term loans. S&P's expected ratings are: a) The US$1.7 billion "first out" first-lien term loan B-1 is expected to be rated 'BB-', with a '1' recovery rating, indicating the expectation of very high recovery in the event of payment default. b) The US$2 billion "second out" first-lien term loan B-2 is expected to be rated 'B', with a '4' recovery rating, indicating the expectation of average recovery in the event of payment default. c) The US$825 million second-lien term loan is expected to be rated 'B-', with a '5' recovery rating, indicating the expectation of modest recovery in the event of payment default. DELPHI CORP: Mulls Suing Plan Investors for Reneging on New EPCA ---------------------------------------------------------------- Delphi Corp. and its debtor-affiliates believes that Plan Investors A-D Acquisition Holdings, LLC, Harbinger Del-Auto Investment Company, Ltd., Merrill Lynch, Pierce, Fenner & Smith Inc., UBS Securities LLC, Goldman, Sachs & Co., and Pardus DPH Holding LLC wrongfully terminated the New Equity Purchase and Commitment Agreement and disputes the allegations that it breached the New EPCA or failed to satisfy any condition to the Plan Investors' obligations. At the time ADAH delivered its April 4 Termination Notice, the representatives of Delphi's exit financing lenders, General Motors Corp., the Official Committee of Unsecured Creditors, the Official Committee of Equity Security Holders, and all other parties needed for the Debtors' successful closing and emergence from Chapter 11, other than the Plan Investors, were present and were prepared to move forward. Moreover, all actions necessary to consummate the Plan, including obtaining US$6,100,000,000 of exit financing, were taken other than the concurrent closing and funding of the New EPCA. Delphi Corp. Vice President and Chief Restructuring Officer John D. Sheehan relates in a regulatory filing with the Securities and Exchange Commission that Delphi's Board of Directors has: (a) formed a special litigation committee; and (b) engaged independent legal counsel to consider and pursue any and all available equitable and legal remedies, including the commencement of legal action in the U.S. Bankruptcy Court for the Southern District of New York to seek all appropriate relief, including the Plan Investors' specific performance of their obligations under the New EPCA. Pursuant to the New EPCA, the Plan Investors committed to purchase US$800,000,000 of convertible preferred stock and approximately US$175,000,000 of common stock in the reorganized company. In addition, the Plan Investors committed to purchase any unsubscribed shares of common stock in connection with an approximately US$1,600,000,000 rights offering that was made available to unsecured creditors subject to satisfaction of other terms and conditions. As of April 4, 2008, the Plan Investors collectively own 125,739,448 shares of Delphi common stock, representing 22.31% of the 563,477,461 shares of Delphi Common Stock outstanding as of Jan. 31, 2008. Delphi shares traded at US$0.11 per share at the close of business on April 11. ADAH Delivers Supplemental Termination Letter As reported in the Troubled Company Reporter on April 7, 2008, Delphi Corp.'s Plan Investors terminated the parties' New Equity Purchase and Commitment Agreement on April 4, 2008, interrupting Delphi's efforts to close its Plan of Reorganization. The closing had been scheduled to occur on April 4 pursuant to the New EPCA between Delphi and Plan Investors A-D Acquisition Holdings, LLC, Harbinger Del-Auto Investment Company, Ltd., Merrill Lynch, Pierce, Fenner & Smith Inc., UBS Securities LLC, Goldman, Sachs & Co., and Pardus DPH Holding LLC. Several hours prior to the April 4 scheduled closing, ADAH, affiliate of lead Plan Investor Appaloosa Management L.P., delivered to Delphi a letter, stating that that letter "constitutes a notice of immediate termination" of the New EPCA. The April 4 Termination Notice alleges that: (1) Delphi has breached certain provisions of the New EPCA; (2) ADAH is entitled to terminate the New EPCA; and (3) the Plan Investors are entitled to a US$82,500,000 fee plus certain expenses and other amounts. ADAH subsequently delivered to Delphi a supplement to the April 4 Termination Notice on April 5, 2008, stating that that supplemental letter constitutes a "notice of an additional ground for termination" of the New EPCA. The April 5 letter cited Section 12(d)(iii) of the Investment Agreement based on the Plan not having become effective on or before April 4, 2008. The New EPCA provided that if the closing date under the agreement has not occurred by April 4, 2008, ADAH may terminate the agreement from and after April 5, 2008. ADAH added that it would continue to actively engage in discussions to resolve outstanding issues with Delphi in a mutually acceptable manner, including considering mutually acceptable alternative transactions wherein it would participate in a capacity different than that envisioned by the New EPCA. A full-text copy of the April 4 Termination Notice is available for free at http://ResearchArchives.com/t/s?2ab1 A full-text copy of the April 5 Termination Notice is available for free at http://ResearchArchives.com/t/s?2ab2 Headquartered in Troy, Michigan, Delphi Corporation (PINKSHEETS: DPHIQ) -- http://www.delphi.com/-- is the single supplier of vehicle electronics, transportation components, integrated systems and modules, and other electronic technology. The company's technology and products are present in more than 75 million vehicles on the road worldwide. Delphi has regional headquarters in Japan, Brazil and France. The company filed for chapter 11 protection on Oct. 8, 2005 (Bankr. S.D.N.Y. Lead Case No. 05-44481). John Wm. Butler Jr., Esq., John K. Lyons, Esq., and Ron E. Meisler, Esq., at Skadden, Arps, Slate, Meagher & Flom LLP, represent the Debtors in their restructuring efforts. Robert J. Rosenberg, Esq., Mitchell A. Seider, Esq., and Mark A. Broude, Esq., at Latham & Watkins LLP, represents the Official Committee of Unsecured Creditors. As of March 31, 2007, the Debtors' balance sheet showed US$11,446,000,000 in total assets and US$23,851,000,000 in total debts. The Court approved Delphi's First Amended Joint Disclosure Statement and related solicitation procedures for the solicitation of votes on the First Amended Plan on Dec. 20, 2007. The Court confirmed the Debtors' First Amended Plan on Jan. 25, 2008. (Delphi Bankruptcy News, Issue No. 123; Bankruptcy Creditors' Service Inc., http://bankrupt.com/newsstand/or 215/945-7000) * * * As reported in the Troubled Company Reporter-Latin America on March 18, 2008, Standard & Poor's Ratings Services still expects to assign a 'B' corporate credit rating to Delphi Corp. if the company emerges from bankruptcy in early April. S&P has revised its expected issue-level ratings because changes to the structure of the proposed financings have affected relative recovery prospects among the various term loans. S&P's expected ratings are: a) The US$1.7 billion "first out" first-lien term loan B-1 is expected to be rated 'BB-', with a '1' recovery rating, indicating the expectation of very high recovery in the event of payment default. b) The US$2 billion "second out" first-lien term loan B-2 is expected to be rated 'B', with a '4' recovery rating, indicating the expectation of average recovery in the event of payment default. c) The US$825 million second-lien term loan is expected to be rated 'B-', with a '5' recovery rating, indicating the expectation of modest recovery in the event of payment default. GENERAL MOTORS: Brazilian Unit to Invest US$200MM for New Plant --------------------------------------------------------------- General Motors Brazil, along with officials from the Santa Catarina State and Joinville City, announced today the company's decision to build a new engine and automotive components plant in that city. The new plant will require investments of approximately US$200 million and is scheduled to begin production in the 4th quarter of 2009 -- only 19 months from the announcement. The plant will employ 500 people and is expected to generate 1,300 indirect jobs. "The decision to build a new engine plant in Brazil is essential to our ability to expand vehicle production capacity throughout the Mercosul Region," said Jaime Ardila, President of General Motors Brazil and Mercosul. Jose Carlos Pinheiro Neto, vice-president of GM Brazil, said, "The plant is part of GM Brazil's strategy to place facilities in the most advantageous locations and Joinville City provides a fantastic infrastructure and has highly skilled labor." The facility will be approximately 500,000 square meters with the plant itself comprising an area of approximately 60,000 square meters. The plant will have the capability to produce 120,000 engines and 50,000 cylinder heads per year and, when at full capacity, it will operate on 3 shifts. The plant will include some of the most advanced processes in the area of engine machining and assembly, and cylinder head manufacturing. The machining process incorporates flexible machines with control systems that provide for rapid production changes to volume, technical changes and product improvements. In addition, the sophisticated engine test system enables operators to test engines without using fuel (gasoline or ethanol). As a result, the electrically-powered system essentially eliminates the generation of contaminants inside the plant. Adhemar Nicolini, General Director of GM Powertrain for Latin America, Africa and Middle East, said, "An example of environmental responsibility at the plant is the closed looped system that uses water and oil, but does not create industrial waste -- meaning there is zero pollution in the production process." As with all GM facilities in Brazil, the new plant will be built in accordance with the company's global environmental policies. For example, approximately 180,000 square meters of land will be preserved as a natural habitat. Headquartered in Detroit, Michigan, General Motors Corp. (NYSE: GM) -- http://www.gm.com/-- was founded in 1908. GM employs about 266,000 people around the world and manufactures cars and trucks in 35 countries, including the United Kingdom, Germany, France, Russia, Brazil and India. In 2007, nearly 9.37 million GM cars and trucks were sold globally under the following brands: Buick, Cadillac, Chevrolet, GMC, GM Daewoo, Holden, HUMMER, Opel, Pontiac, Saab, Saturn, Vauxhall and Wuling. GM's OnStar subsidiary is the industry leader in vehicle safety, security and information services. * * * As reported in the Troubled Company Reporter-Latin America on March 20, 2008, Standard & Poor's Ratings Services placed the ratings on General Motors Corp., American Axle & Manufacturing Holdings Inc., Lear Corp., and Tenneco Inc. on CreditWatch with negative implications. The CreditWatch placement reflects S&P's decision to review the ratings in light of the extended American Axle (BB/Watch Neg/--) strike. The work stoppage that began Feb. 25 at American Axle's U.S. United Auto Workers plants has forced closure of many GM (B/Watch Neg/B-3) plants, as well as plants of certain GM suppliers. The strike began after the expiration of the four- year master labor agreement with American Axle. Although S&P still expects American Axle and the UAW to reach an agreement that will reflect more competitive labor costs, the timing is unknown. To resolve the CreditWatch listings, S&P's will assess the strike's impact on the companies' credit profiles, particularly liquidity, once production resumes. S&P could lower the ratings any time prior to a resolution of the Axle strike if the liquidity of the companies becomes compromised, although downgrades are not likely for another several weeks. As reported in the Troubled Company Reporter-Latin America on Feb. 28, 2008, Fitch Ratings has affirmed the Issuer Default Rating of General Motors at 'B', with a Rating Outlook Negative. As reported in the Troubled Company Reporter-Latin America on Nov. 9, 2007, Moody's Investors Service affirmed its rating for General Motors Corporation (B3 Corporate Family Rating, Ba3 senior secured, Caa1 senior unsecured and SGL-1 Speculative Grade Liquidity rating) but changed the outlook to Stable from Positive. In an environment of weakening prospects for US auto sales GM has announced that it will take a non-cash charge of US$39 billion for the third quarter of 2007 related to establishing a valuation allowance against its deferred tax assets in the US, Canada and Germany. As reported in the Troubled Company Reporter-Latin America on Oct. 23, 2007, Standard & Poor's Ratings Services affirmed its 'B' corporate credit rating and other ratings on General Motors Corp. and removed them from CreditWatch with positive implications, where they were placed Sept. 26, 2007, following agreement on the new labor contract. The outlook is stable. GENERAL MOTORS: LatAm, et al. Unit Quarterly Sales Up 20% --------------------------------------------------------- General Motors Latin America, Africa and Middle East region posted an all-time Q1 record in 2008, selling 323,400 vehicles, up 52,900 units over the same quarterly period in 2007. GM�s volume increase of 19.6 percent for the quarter outpaced the 11.7 percent industry growth rate for the region. In addition, LAAM�s market share increased to 17.9 percent for the quarter, up 1.2 share points year-over-year. In achieving the Q1 record sales level, GM LAAM sold an all-time March monthly high of 111,300 units. This equates to a 7.2 percent improvement year-over-year. Maureen Kempston Darkes, GM group vice president and president of GM LAAM said, �Our record first quarter sales illustrate GM�s strength in key emerging markets. Strong demand for Chevrolet products and strong economies continued in our markets through the first quarter.� All-time quarterly GM sales records were posted in the Argentina, Egypt and North Africa markets. First quarter GM sales records were set by Brazil, Chile, Ecuador, Venezuela, Middle East and Israel. Chevrolet Corsa, Celta and Aveo continued as the top three sellers across the region in Q1 2008, representing 38 percent of sales. Headquartered in Detroit, Michigan, General Motors Corp. (NYSE: GM) -- http://www.gm.com/-- was founded in 1908. GM employs about 266,000 people around the world and manufactures cars and trucks in 35 countries, including the United Kingdom, Germany, France, Russia, Brazil, Chile, Colombia, Ecuador, Venezuela and India. In 2007, nearly 9.37 million GM cars and trucks were sold globally under the following brands: Buick, Cadillac, Chevrolet, GMC, GM Daewoo, Holden, HUMMER, Opel, Pontiac, Saab, Saturn, Vauxhall and Wuling. GM's OnStar subsidiary is the industry leader in vehicle safety, security and information services. * * * As reported in the Troubled Company Reporter-Latin America on March 20, 2008, Standard & Poor's Ratings Services placed the ratings on General Motors Corp., American Axle & Manufacturing Holdings Inc., Lear Corp., and Tenneco Inc. on CreditWatch with negative implications. The CreditWatch placement reflects S&P's decision to review the ratings in light of the extended American Axle (BB/Watch Neg/--) strike. The work stoppage that began Feb. 25 at American Axle's U.S. United Auto Workers plants has forced closure of many GM (B/Watch Neg/B-3) plants, as well as plants of certain GM suppliers. The strike began after the expiration of the four- year master labor agreement with American Axle. Although S&P still expects American Axle and the UAW to reach an agreement that will reflect more competitive labor costs, the timing is unknown. To resolve the CreditWatch listings, S&P's will assess the strike's impact on the companies' credit profiles, particularly liquidity, once production resumes. S&P could lower the ratings any time prior to a resolution of the Axle strike if the liquidity of the companies becomes compromised, although downgrades are not likely for another several weeks. As reported in the Troubled Company Reporter-Latin America on Feb. 28, 2008, Fitch Ratings has affirmed the Issuer Default Rating of General Motors at 'B', with a Rating Outlook Negative. As reported in the Troubled Company Reporter-Latin America on Nov. 9, 2007, Moody's Investors Service affirmed its rating for General Motors Corporation (B3 Corporate Family Rating, Ba3 senior secured, Caa1 senior unsecured and SGL-1 Speculative Grade Liquidity rating) but changed the outlook to Stable from Positive. In an environment of weakening prospects for US auto sales GM has announced that it will take a non-cash charge of US$39 billion for the third quarter of 2007 related to establishing a valuation allowance against its deferred tax assets in the US, Canada and Germany. As reported in the Troubled Company Reporter-Latin America on Oct. 23, 2007, Standard & Poor's Ratings Services affirmed its 'B' corporate credit rating and other ratings on General Motors Corp. and removed them from CreditWatch with positive implications, where they were placed Sept. 26, 2007, following agreement on the new labor contract. The outlook is stable. JAPAN AIRLINES: Fitch Holds 'BB-' IDR; Revises Outlook to Stable ---------------------------------------------------------------- Fitch Ratings revised the Outlook on Japan Airlines Corporation and its wholly-owned operating subsidiary, JAL International Co., Ltd.'s Long-term Issuer Default ratings to Stable from Negative. At the same time, Fitch has affirmed both companies' Long-term IDRs and ratings of outstanding bonds at 'BB-'. The Outlook revision follows JAL's operational turnaround and better liquidity. "JAL's accelerated restructuring efforts since FYE06, including an overhaul of flight networks, reduction of capacity, and cutting of personnel expenses - as well as a favourable domestic supply/demand balance and robust international demand - have supported a steady improvement in yield and unit revenue," says Satoru Aoyama, Director in Fitch's Asia-Pacific Corporate team. These improvements have enabled JAL to absorb high fuel costs while boosting earnings and operating cash flow. Moreover, the impact of a series of safety errors in the second half of FYE05 to FYE06 has subsided. These errors had caused a shift in passengers away from JAL, which prompted JAL to expand discount programs to gain passengers back, which resulted in a slow turnaround in operating results. The Outlook revision also reflects JAL's improved leverage and better liquidity. Disposals of non-core assets and a series of common share and preferred share issues (July-August 2006 and March 2008: JPY148 billion and JPY151.5 billion), combined with an improved cash flow generation, led to a constant reduction in debt and leverage. Total adjusted debt declined to JPY1,627.1 billion at end-H108 (including Fitch Ratings' estimate of off- balance sheet lease liabilities of JPY653 billion), from JPY1,876.2 billion at FYE06. Leverage also improved, to 5.8x in the last 12 months to end-H108, from 7.8x in FYE07 and 9.2x in FYE06. Much-needed capital - to support significant capex requirements - has also been provided by these new equity issues, combined with state-owned Japan Bank for International Cooperation's import programme which guarantees payments of an airline's borrowing for up to 80% of the purchase prices of aircraft and engines. Moreover, the most recent capital raising indicates better liquidity and solid relationships with its financiers, having been subscribed by its key relationship banks and various business counterparts. This point is particularly important since the previous rating action (Outlook revision to Negative in December 2006) was prompted partly by Fitch's concerns over JAL's ability to refinance maturing debt and fund its capex requirements amidst reports of the safety errors and weak earnings. As JAL plans for another year of very high jet fuel prices, a further increase in air fares is critically important to achieving its earnings targets. However, as concerns mount over the resilience of the Japanese consumer in the face of rising prices and stagnant wage trends, additional fare increases may threaten positive demand trends. Fitch is also concerned with the increasing competition in the domestic air passenger market, which has already weakened profitability of the domestic passenger business. Therefore, positive-rating trends depend largely on the resilience of travel demand, a further increase in yields and unit revenues, and reduction of non-fuel costs. "As the Japanese airline sector faces a possible cyclical downturn in the near future, it will become increasingly more difficult to rely on air fare increases and fuel surcharges to offset the impact of high jet fuel prices. JAL would probably need additional restructuring and efficiency improvement efforts in order to maintain the current momentum in its earnings and credit quality improvements," adds Mr. Aoyama. About Japan Airlines Tokyo-based Japan Airlines International Company, Limited -- http://www.jal.com/en/-- was created as a result of the merger of Japan Airlines and Japan Air Systems to boost domestic coverage. Japan Airlines flies to the United States, Brazil and France. VALERO ENERGY: Petrobras to Continue Talks to Buy Aruba Plant ------------------------------------------------------------- Jorge Luiz Zelada, international operations director of Petroleo Brasileiro SA, aka Petrobras, told Denise Luna at Reuters that the firm will resume negotiations this month to purchase Valero Energy Corp.'s plant in Aruba. Mr. Zelada commented to the press, "A decision (on whether to purchase the asset) is expected to be made by our directorate and board in April." Petrobras had agreed to purchase the plant for US$2.8 billion before the fire that occurred at the plant's vacuum distillation unit on Jan. 25, 2008, Reuters says, citing sources familiar with the negotiation between the two firms. According to Reuters, repairs at Valero Energy's plant in Aruba will be completed this month. Sources told Reuters that Petrobras won't take possession of the plant until the repairs are complete. Reuters notes that the plant lacks a catalytic cracking unit to make gasoline and that Valero Energy has used it as a producer of intermediate feedstocks that are shipped to other plants to make finished products. The company bought the plant from El Paso Corp. for US$465 million in 2004. According to Valero Energy, over US$640 million has been invested in upgrading the Aruba plant in past five years. A source commented to Reuters, "Whoever buys is buying a lot of headaches. Petrobras fortunately has a lot of money. They're going to have to spend a huge amount of money there." The Aruba plant also has difficulties with its electrical power supply, Reuters adds. Chi Chow at Tristone Capital Co. in Denver, Colorado, commented to Dow Jones, "It would sure be a good deal for Valero. Even if refinery assets have appreciated a lot recently, this would still be a decent return on investment." Valero Energy identified several underperforming plants it wants to sell and the Aruba plant is one of them, Dow Jones says, citing Mr. Chow. Valero Energy told Dow Jones that it wants to keep only its most profitable plants and will retain large refineries that can upgrade cheaper grades of crude into high- value products like gasoline and diesel. "Valero wants to improve returns and profitability," Mr. Chow told Dow Jones. About Petrobras Headquartered in Rio de Janeiro, Brazil, Petroleo Brasileiro SA aka Petrobras -- http://www2.petrobras.com.br/ingles/index.asp- - was founded in 1953. The company explores, produces, refines, transports, markets, distributes oil and natural gas and power to various wholesale customers and retail distributors in Brazil. Petrobras has operations in China, India, Japan, and Singapore. About Valero Energy Headquartered in San Antonio, Texas, Valero Energy Corporation is North America's largest independent refining and marketing company, currently owning 16 oil refineries with nameplate crude oil distillation capacity of 2.6 barrels per day (bpd) and, including intermediate feedstock, 3.1 million bpd. VLO has one of the largest deep conversion capacities in North America. Its current portfolio of refineries displays a somewhat above average Nelson Complexity Index of 11.1 . Valero Energy Corporation is evaluating strategic alternatives for one to three refineries and each of the potential pro-forma scenarios would increase its current Nelson index. The pending major capital spending programs would further increase Valero Energy Corporation value adding capacity and complexity downstream from crude oil distillation. The company has operated an oil refinery in Aruba. * * * As reported in the Troubled Company Reporter-Latin America on Feb. 13, 2008, Moody's Investors Service placed Valero Energy Corporation's ratings on review for upgrade. Moody's previously confirmed Valero Energy Corporation's Ba1 rated subordinated debentures and Ba2 rated mandatory convertible preferred stock. The ratings still hold to date, subject to the conclusion of Moody's rating review for possible upgrade. Moody's said the outlook is still positive. TAM SA: Renames Freight Unit From TAM Express to TAM CARGO ---------------------------------------------------------- TAM SA changed the name of its freight unit from TAM Express to TAM Cargo. "The change is part of the plan for restructuring the brand, and consequently, for a new definition of the company's business units. The freight division is growing in business importance for TAM," said Marketing director Manoela Amaro. In 2007, gross revenues of TAM CARGO totaled BRL776.8 million, a 60% increase over 2006. This accounted for 9.2% of the company's total billing of BRL8.5 billion. International freight receipts totaled BRL416.7 million last year, a 153% increase from the previous year, accounting for 54% of TAM CARGO billing, while in the domestic market, freight revenues climbed 11.9%, totaling BRL360.1 million. "The result was attained through sales efforts to strengthen customer loyalty, expansion of agreements with corporate customers, new customers and partnerships with airlines and ground transport companies that extend the coverage of our services," said TAM Cargo director, Marcelo Rodrigues. Structured as a business unit, TAM Linhas Aereas has been enjoying double digit growth in revenues since 2004, when it billed BRL307 million, which then shot up to nearly BRL777 million in 2007, more than tripling receipts of BRL239 million garnered in 2003. Another point emphasized by Mr. Rodrigues was the change in the sales model for freight services in Europe. "Previously, space in cargo holds was rented to other companies at fixed monthly rates. Our billing was satisfactory, but limited. With TAM's expansion in Europe, together with market knowledge gained over the years, the option of changing our sales strategy and entering into partnerships with General Sales Agents -- TAM's sales representatives -- has proven to be right on the money." In 2007, TAM began offering new flights to Milan, Madrid, Frankfurt, Montevideo and Caracas, and now has more than 700 daily domestic and international flights, on which TAM Cargo ships everything from small bags, documents and items, to huge amounts of all kinds of freight such as foodstuffs, footwear, pharmaceutical products, auto parts and electronic appliances. TAM CARGO uses the cargo holds of the TAM Linhas Aereas fleet, which currently consists of 110 aircraft. The current freight capacity for import and export by TAM CARGO in the international market is 440 tons per day (from Brazil to other countries and vice versa), broken down as follows: 228 tons to Europe; 160 tons to the United States and 52 tons to Mercosur countries. Investments in 2008 "In 2008, we plan to invest approximately BRL22 million in infrastructure for domestic freight terminals all over the country. We also expect to invest another BRL8 million in national and international freight systems. This will enable TAM CARGO to increase its ability to move freight and integrate operational, sales and financial management more fully," said Mr. Rodrigues. For 2008, in addition to acquiring more planes from the Airbus family, the arrival of four Boeing 777-300ER is scheduled, with greater capacity in the hold for shipping freight and will strengthen the international expansion envisioned by the company. The current fleet has 110 planes, and the company expects to end the year at 123. Projections for the close of 2012 are for 147 aircraft in operation. In the international market, three new destinations or routes -- still on the drawing board -- and new agreements with airlines and ground transportation companies should expand even further the range of options available to freight unit customers. For the domestic market, the installation of advance stations -- TAM Cargo outlets set up on site at customer facilities -- will be extended. These outlets will make it possible to strengthen still further the bond between TAM Cargo and its customers, offering more flexible and personalized service.