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, May 9, 2008, Vol. 9, No. 92 Headlines A R G E N T I N A ALITALIA SPA: AirOne Links With Berlusconi Adviser on Stake Sale ALITALIA SPA: Unicredit Denies Possible Bid With Lufthansa AUTOMOVILES GONZALEZ: Claims Verification Deadline Is July 8 COOPERATIVA DE TRABAJO: Files for Reorganization in Court GEOMED SRL: Proofs of Claim Verification Is Until June 10 MAPFRE ARGENTINA ART: Moody's Ups IFS Rating to Ba3 After Review MAPFRE ARGENTINA: Moody's Ups IFS Rating to Ba3 Following Review REDLEY ARGENTINA: Proofs of Claim Verification Is Until May 12 B E R M U D A ADG II: Proofs of Claim Filing Deadline Is May 21 ADG II: Sets Final Shareholders Meeting for June 9 AHL DIVERSIFIED: Proofs of Claim Filing Is Until May 21 AHL DIVERSIFIED: Sets Final Shareholders Meeting for June 10 BLUMONT MAN: Proofs of Claim Filing Is Until May 21 BLUMONT MAN: Sets Final Shareholders Meeting for June 11 COMET FINANCE: Proofs of Claim Filing Is Until May 21 COMET FINANCE: Sets Final Shareholders Meeting for June 11 FOSTER WHEELER: Earns US$138.1 Million in Quarter Ended March 31 LIBERTY ERMITAGE: Proofs of Claim Filing Deadline Is May 21 LIBERTY ERMITAGE: Sets Final Shareholders Meeting for June 11 MAKENA LTD: Liquidators Released, Company Dissolved NORTH AMERICAN: Sets Final Shareholders Meeting for June 26 PANTHER RE: S&P Withdraws Term B Loan's BB+ Rating on Request STEAMBOAT RE: Proofs of Claim Filing Is Until May 21 STEAMBOAT RE: Sets Final Shareholders Meeting for June 11 TWENTY FIRST: Court Appoints Liquidators for Firm B R A Z I L BANCO BMG: To Sell US$150 Million of Three-Year Bonds Next Week BANCO INDUSTRIAL: Earns BRL91.9 Million in First Quarter 2008 BANCO ITAU: Eyes US$90 Mln. Net Profit in South American Units BRASKEM SA: Net Profit Up 204% to BRL83 Million in 1st Qtr. 2008 COMPANHIA SIDERURGICA: 1Q 2008 Net Debt Drops to BRL4.8 Billion COMPANHIA SIDERURGICA: Plans Terminal Expansion & New Facilities ENERGIAS DO BRASIL: Net Income Up 28.3% to BRL164.2MM in 1Q 2008 FIAT SPA: Iveco Division Defers Entry Into the United States FORD MOTOR: Fitch Says Ratings Outlook Remains Negative GENERAL MOTORS: Fitch Says Ratings Could Face Likely Downgrade INDEPENDENCIA SA: Moody's Rates Proposed US$250 Mil. Notes at B2 INDEPENDENCIA SA: S&P Gives B Rating to Unit's US$250 Mil. Notes NET SERVICOS: Launches Digital TV High Definition Transmission PROPEX INC: Can Exercise Business Judgment for Idle Assets PROPEX INC: Wants Court to Reject Two Chattanooga Office Leases TELE NORTE: Will Invest BRL100 Million on System Upgrade C A Y M A N I S L A N D S BENTEN LIMITED: Proofs of Claim Filing Deadline Is Until May 15 DAIKOKUTEN LIMITED: Proofs of Claim Filing Deadline Is May 15 EOC CORP I: Deadline for Proofs of Claim Filing Is Until May 15 GOLD FORREST: Deadline for Proofs of Claim Filing Is May 15 KHAKIS CAPITAL: Proofs of Claim Filing Deadline Is Until May 15 WESTPORT FINANCE: Deadline for Proofs of Claim Filing Is May 15 C H I L E AES GENER: Pulls Out Alto Maipo Project From Evaluation System CHEMTURA CORP: S&P Cuts Ratings to BB; Still on Watch Developing CORPORACION NACIONAL: Some Suppliers Refuse Bonus Payments C O L O M B I A BANCOLOMBIA SA: Net Income is COP253.9BB in Qtr. Ended March 31 C O S T A R I C A SIRVA INC: First Amended Plan Gets 100% Vote from Class 1 SIRVA INC: Court Approves Pre-Packaged Plan of Reorganization D O M I N I C A N R E P U B L I C PRC LLC: Court Extends Action Removal Period to July 21 PRC LLC: Court Extends Lease Decision Period to August 20 PRC LLC: ACE American et al. Oppose Disclosure Statement E C U A D O R DOLE FOOD: Posts US$28.9 Million Net Loss in Qtr. Ended March 22 DOLE FOOD: Fitch Says Credit Protection Measures Still Weak G U A T E M A L A IMAX CORP: Amends Facility; Sells US$18 Mil. in Common Shares IMAX CORPORATION: Shareholders' Meeting Scheduled for June 18 M E X I C O BLUE WATER: Wants Lease Decision Period Moved to September 9 BLUE WATER: Incentive Payments to Critical Employees Challenged FEDERAL-MOGUL: Posts US$32 Million Net Loss in 2008 1st Quarter FEDERAL-MOGUL: PepsiAmericas Seeks Okay on US$6MM Claims Payment FAIRCHILD SEMICONDUCTOR: Debt Refinancing Cues S&P to Up Ratings MBIA INC: Has No Reason to Deploy US$1.1 Bil. Offering Proceeds PRIMUS TELECOM: Posts US$3 Mil. Net Loss in Qtr. Ended March 31 SHARPER IMAGE: Asks Court to Approve Asset Sale Procedures P A N A M A DIGICEL GROUP: Wins Concession License in Panama P U E R T O R I C O DIRECTV GROUP: To Raise Up to US$2.5 Billion in Debt DIRECTV GROUP: Moody's Rates Unit's US$1.35 Billion Notes at Ba3 DIRECTV GROUP: S&P Places BB Rating on Unit's US$1.35 Bil. Notes T R I N I D A D & T O B A G O HILTON HOTELS: To Terminate Lease Pact for Tobago Unit on May 15 V E N E Z U E L A CHRYSLER LLC: Fitch Cuts Issuer Default Rating to B from B+ PETROLEOS DE VENEZUELA: Unit Restarts at Amuay After Maintenance * VENEZUELA: Fitch Puts BB- Rating on Two US$2 Billion Eurobonds - - - - - ================= A R G E N T I N A ================= ALITALIA SPA: AirOne Links With Berlusconi Adviser on Stake Sale ---------------------------------------------------------------- AirOne S.p.A. is in contact with Bruno Ermolli, an adviser to Italy's Prime Minister-elect Silvio Berlusconi in charge of finding a local buyer for the government's 49.9% stake in Alitalia S.p.A., various reports say, citing AirOne board member Giovanni Malago. As reported in the TCR-Europe on April 23, 2008, AirOne S.p.A., banks led by Intesa Sanpaolo S.p.A. and Italian businessmen led by Mr. Ermolli may form a consortium to bid for Alitalia. AirOne will own 40% of the bidding vehicle, the banks will control 40% and Mr. Bruno's group will hold 20%. Mr. Berluconi has been insisting that an Italian consortium will present a binding offer for Italy's 49.9% stake in Alitalia. About Alitalia Headquartered in Rome, Italy, Alitalia S.p.A. -- http://www.alitalia.it/-- provides air travel services for passengers and air transport of cargo on national, international and inter-continental routes, including United States, Canada, Japan and Argentina. The Italian government owns 49.9% of Alitalia. Despite a EUR1.4 billion state-backed restructuring in 1997, Alitalia posted net losses of EUR256 million and EUR907 million in 2000 and 2001 respectively. Alitalia posted EUR93 million in net profits in 2002 after a EUR1.4 billion capital injection. The carrier booked annual net losses of EUR520 million in 2003, EUR813 million in 2004, EUR168 million in 2005, and EUR625.6 million in 2006. Italian Finance Minister Tommaso Padoa-Schioppa had said that if the sale to Air France fails, Alitalia may seek protection from creditors and the government would appoint a special commissioner to initiate bankruptcy proceedings. ALITALIA SPA: Unicredit Denies Possible Bid With Lufthansa ---------------------------------------------------------- UniCredit S.p.A. has denied a report that it had contacts with Deutsche Lufthansa AG over a possible bid for the Italian government's 49.9% stake in Alitalia S.p.A. An Il Messaggero report said that UniCredit chief executive Alessandro Profumo had met with Lufthansa executive to discuss the German carrier's possible role in re-launching Alitalia. The report added that Lufthansa might acquire a stake in Alitalia if conditions are right. As reported in the TCR-Europe on March 12, 2008, Lufthansa Chief Executive Wolfgang Mayrhuber said the carriuer is not interested in acquiring Alitalia. Mr. Mayhuber stressed that though Lufthansa is planning to participate in mergers in Europe's airline industry, it is currently not eyeing Alitalia. About Alitalia Headquartered in Rome, Italy, Alitalia S.p.A. -- http://www.alitalia.it/-- provides air travel services for passengers and air transport of cargo on national, international and inter-continental routes, including United States, Canada, Japan and Argentina. The Italian government owns 49.9% of Alitalia. Despite a EUR1.4 billion state-backed restructuring in 1997, Alitalia posted net losses of EUR256 million and EUR907 million in 2000 and 2001 respectively. Alitalia posted EUR93 million in net profits in 2002 after a EUR1.4 billion capital injection. The carrier booked annual net losses of EUR520 million in 2003, EUR813 million in 2004, EUR168 million in 2005, and EUR625.6 million in 2006. Italian Finance Minister Tommaso Padoa-Schioppa had said that if the sale to Air France fails, Alitalia may seek protection from creditors and the government would appoint a special commissioner to initiate bankruptcy proceedings. AUTOMOVILES GONZALEZ: Claims Verification Deadline Is July 8 ------------------------------------------------------------ The court-appointed trustee for Automoviles Gonzalez S.A.'s bankruptcy proceeding, will be verifying creditors' proofs of claim until July 8, 2008. The trustee will present the validated claims in court as individual reports on Sept. 3, 2008. The National Commercial Court of First Instance in Buenos Aires will determine if the verified claims are admissible, taking into account the trustee's opinion, and the objections and challenges that will be raised by Redley Argentina and its creditors. Inadmissible claims may be subject for appeal in a separate proceeding known as an appeal for reversal. A general report that contains an audit of Automoviles Gonzalez's accounting and banking records will be submitted in court on Oct. 15, 2008. The trustee is also in charge of administering Automoviles Gonzalez's assets under court supervision and will take part in their disposal to the extent established by law. The debtor can be reached at: Automoviles Gonzalez S.A. Avenida Juan Bautista Alberdi 5930 Buenos Aires, Argentina COOPERATIVA DE TRABAJO: Files for Reorganization in Court --------------------------------------------------------- Cooperativa de Trabajo Servigraf Limitada has requested for reorganization approval after failing to pay its liabilities. The reorganization petition, once approved by the court, will allow Cooperativa de Trabajo to negotiate a settlement with its creditors in order to avoid a straight liquidation. The case is pending in the National Commercial Court of First Instance in Buenos Aires. GEOMED SRL: Proofs of Claim Verification Is Until June 10 --------------------------------------------------------- The court-appointed trustee for Geomed S.R.L.'s bankruptcy proceeding, will be verifying creditors' proofs of claim until June 10, 2008. The trustee will present the validated claims in court as individual reports on July 24, 2008. The National Commercial Court of First Instance in Buenos Aires will determine if the verified claims are admissible, taking into account the trustee's opinion, and the objections and challenges that will be raised by Geomed 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 Geomed's accounting and banking records will be submitted in court on Sept. 18, 2008. The trustee is also in charge of administering Geomed's assets under court supervision and will take part in their disposal to the extent established by law. MAPFRE ARGENTINA ART: Moody's Ups IFS Rating to Ba3 After Review ---------------------------------------------------------------- Moody's Latin America has upgraded MAPFRE Argentina ART SA's and MAPFRE Argentina Seguros de Vida SA's global local currency insurance financial strength ratings to Ba3 from B1 and their national scale rating to Aa2.ar from Aa3.ar. The outlook for all ratings is now stable. This concludes the review for possible upgrade initiated on Dec. 12, 2007. According to Moody's, MAPFRE Argentina Seguros de Vida's ratings upgrade reflects its strong profitability, with a five-year return on equity average of 19.3% (and over 43% over the last three years), its improving capitalization, and its relatively low product risk with little interest rate and liquidity exposure. Moody's also noted that MAPFRE Argentina Seguros de Vida's ratings benefit from the support of its ultimate parent, MAPFRE S.A. (based in Madrid, Spain), through the sharing of the brand and past capital contributions, as well as though intra- group reinsurance arrangements, whereby the company transfers risk to the group's reinsurer, MAPFRE Re. MAPFRE Argentina Seguros de Vida's ratings are constrained by the company's relatively high concentration of investments in speculative- grade assets, its relatively modest size in the local life insurance market -- although improving -- and Argentina's sovereign risk and poor operating environment. Commenting on the rating upgrade of MAPFRE Argentina ART's, Moody's noted that the company's credit profile benefits from the support of its parent company and affiliates, by the company's relatively strong franchise in the local workers' compensation market -- ranked third with 10.7% share -- and by its solid earnings, with a five-year average return on equity of 16.2%. These strengths are mitigated by the company's considerably high gross underwriting leverage, by the relative concentration of its investment portfolio in high-risk assets (e.g. Argentina government bonds, rated B3) and by the country's high sovereign risk and poor operating environment. Moody's added that the regulatory risk associated with the workers compensation segment in Argentina is also a negative factor for MAPFRE Argentina ART's ratings. The rating agency added that MAPFRE's significant presence in Latin America -- as one of the largest property and casualty and life insurers in the region -- and Argentina's strategic importance to the major Spanish insurance conglomerate are also important considerations to the group's local workers compensation and life insurance operations. Moody's most recent rating action on MAPFRE Argentina's operations took place on Dec. 12, 2007, when the agency affirmed MAPFRE Argentina Seguros' Ba3/Aa2.ar IFS ratings and placed the B1/Aa3.ar IFS ratings of MAPFRE Argentina Seguros de Vida and MAPFRE Argentina ART on review for a possible upgrade. These ratings were upgraded with a stable outlook: MAPFRE Argentina ART SA: -- Global local currency insurance financial strength rating to Ba3 from B1 and national scale to Aa2.ar from Aa3.ar MAPFRE Argentina Seguros de Vida SA: -- Global local currency insurance financial strength rating to Ba3 from B1 and national scale to Aa2.ar from Aa3.ar Based in Buenos Aires, MAPFRE Argentina ART SA and MAPFRE Argentina Seguros de Vida SA are wholly-owned subsidiaries of MAPFRE S.A., headquartered in Madrid, Spain. For the first six months of 2008 fiscal year, beginning on July 1, MAPFRE Argentina ART and MAPFRE Argentina Seguros de Vida reported total gross premium of ARS195.4 million and ARS39.6 million, respectively, and net income of ARS7.9 million and ARS5.3 million respectively. On Dec. 31, 2007, MAPFRE Argentina ART posted total assets of ARS277.2 million and shareholders' equity of ARS63.3 million, while MAPFRE Argentina Seguros de Vida posted total assets of ARS85.9 million and shareholders' equity of ARS29.2 million. MAPFRE ARGENTINA: Moody's Ups IFS Rating to Ba3 Following Review ---------------------------------------------------------------- Moody's Latin America has upgraded MAPFRE Argentina ART SA's and MAPFRE Argentina Seguros de Vida SA's global local currency insurance financial strength ratings to Ba3 from B1 and their national scale rating to Aa2.ar from Aa3.ar. The outlook for all ratings is now stable. This concludes the review for possible upgrade initiated on Dec. 12, 2007. According to Moody's, MAPFRE Argentina Seguros de Vida's ratings upgrade reflects its strong profitability, with a five-year return on equity average of 19.3% (and over 43% over the last three years), its improving capitalization, and its relatively low product risk with little interest rate and liquidity exposure. Moody's also noted that MAPFRE Argentina Seguros de Vida's ratings benefit from the support of its ultimate parent, MAPFRE S.A. (based in Madrid, Spain), through the sharing of the brand and past capital contributions, as well as though intra- group reinsurance arrangements, whereby the company transfers risk to the group's reinsurer, MAPFRE Re. MAPFRE Argentina Seguros de Vida's ratings are constrained by the company's relatively high concentration of investments in speculative- grade assets, its relatively modest size in the local life insurance market -- although improving -- and Argentina's sovereign risk and poor operating environment. Commenting on the rating upgrade of MAPFRE Argentina ART's, Moody's noted that the company's credit profile benefits from the support of its parent company and affiliates, by the company's relatively strong franchise in the local workers' compensation market -- ranked third with 10.7% share -- and by its solid earnings, with a five-year average return on equity of 16.2%. These strengths are mitigated by the company's considerably high gross underwriting leverage, by the relative concentration of its investment portfolio in high-risk assets (e.g. Argentina government bonds, rated B3) and by the country's high sovereign risk and poor operating environment. Moody's added that the regulatory risk associated with the workers compensation segment in Argentina is also a negative factor for MAPFRE Argentina ART's ratings. The rating agency added that MAPFRE's significant presence in Latin America -- as one of the largest property and casualty and life insurers in the region -- and Argentina's strategic importance to the major Spanish insurance conglomerate are also important considerations to the group's local workers compensation and life insurance operations. Moody's most recent rating action on MAPFRE Argentina's operations took place on Dec. 12, 2007, when the agency affirmed MAPFRE Argentina Seguros' Ba3/Aa2.ar IFS ratings and placed the B1/Aa3.ar IFS ratings of MAPFRE Argentina Seguros de Vida and MAPFRE Argentina ART on review for a possible upgrade. These ratings were upgraded with a stable outlook: MAPFRE Argentina ART SA: -- Global local currency insurance financial strength rating to Ba3 from B1 and national scale to Aa2.ar from Aa3.ar MAPFRE Argentina Seguros de Vida SA: -- Global local currency insurance financial strength rating to Ba3 from B1 and national scale to Aa2.ar from Aa3.ar Based in Buenos Aires, MAPFRE Argentina ART SA and MAPFRE Argentina Seguros de Vida SA are wholly-owned subsidiaries of MAPFRE S.A., headquartered in Madrid, Spain. For the first six months of 2008 fiscal year, beginning on July 1, MAPFRE Argentina ART and MAPFRE Argentina Seguros de Vida reported total gross premium of ARS195.4 million and ARS39.6 million, respectively, and net income of ARS7.9 million and ARS5.3 million respectively. On Dec. 31, 2007, MAPFRE Argentina ART posted total assets of ARS277.2 million and shareholders' equity of ARS63.3 million, while MAPFRE Argentina Seguros de Vida posted total assets of ARS85.9 million and shareholders' equity of ARS29.2 million. REDLEY ARGENTINA: Proofs of Claim Verification Is Until May 12 -------------------------------------------------------------- Tito Gargaglione, the court-appointed trustee for Redley Argentina SA's bankruptcy proceeding, will be verifying creditors' proofs of claim until May 12, 2008. Mr. Gargaglione will present the validated claims in court as individual reports. The National Commercial Court of First Instance No. 9 in Buenos Aires, with the assistance of Clerk No. 18, 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 Redley Argentina and its creditors. Inadmissible claims may be subject for appeal in a separate proceeding known as an appeal for reversal. A general report that contains an audit of Redley Argentina's accounting and banking records will be submitted in court. La Nacion didn't state the submission dates for the reports. Mr. Gargaglione is also in charge of administering Redley Argentina's assets under court supervision and will take part in their disposal to the extent established by law. The debtor can be reached at: Redley Argentina SA Cullen 5399 Buenos Aires, Argentina The trustee can be reached at: Tito Gargaglione Medrano 833 Buenos Aires, Argentina ============= B E R M U D A ============= ADG II: Proofs of Claim Filing Deadline Is May 21 ------------------------------------------------- ADG II Trading Limited's creditors are given until May 21, 2008, to prove their claims to Beverly Mathias, 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. ADG II's shareholders agreed on May 2, 2008, to place the company into voluntary liquidation under Bermuda's Companies Act 1981. The liquidator can be reached at: Beverly Mathias c/o Argonaut Limited Argonaut House, 5 Park Road Hamilton HM O9, Bermuda ADG II: Sets Final Shareholders Meeting for June 9 -------------------------------------------------- ADG II Trading Limited will hold its final general meeting on June 9, 2008, at 9:30 a.m. at Argonaut Limited, Argonaut House, 5 Park Road, Hamilton HM O9, 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. ADG II's shareholders agreed on May 2, 2008, to place the company into voluntary liquidation under Bermuda's Companies Act 1981. The liquidator can be reached at: Beverly Mathias c/o Argonaut Limited Argonaut House, 5 Park Road Hamilton HM O9, Bermuda AHL DIVERSIFIED: Proofs of Claim Filing Is Until May 21 ------------------------------------------------------- AHL Diversified Guaranteed Limited's creditors are given until May 21, 2008, to prove their claims to Beverly Mathias, 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. AHL Diversified's shareholders agreed on May 2, 2008, to place the company into voluntary liquidation under Bermuda's Companies Act 1981. The liquidator can be reached at: Beverly Mathias c/o Argonaut Limited Argonaut House, 5 Park Road Hamilton HM O9, Bermuda AHL DIVERSIFIED: Sets Final Shareholders Meeting for June 10 ------------------------------------------------------------ AHL Diversified Guaranteed II Limited will hold its final general meeting on June 10, 2008, at 9:30 a.m. at Argonaut Limited, Argonaut House, 5 Park Road, Hamilton HM O9, 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. AHL Diversified's shareholders agreed on May 2, 2008, to place the company into voluntary liquidation under Bermuda's Companies Act 1981. The liquidator can be reached at: Beverly Mathias c/o Argonaut Limited Argonaut House, 5 Park Road Hamilton HM O9, Bermuda BLUMONT MAN: Proofs of Claim Filing Is Until May 21 --------------------------------------------------- Blumont Man Yield Fund Ltd.'s creditors are given until May 21, 2008, to prove their claims to Beverly Mathias, 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. Blumont Man's shareholders agreed on May 5, 2008, to place the company into voluntary liquidation under Bermuda's Companies Act 1981. The liquidator can be reached at: Beverly Mathias c/o Argonaut Limited Argonaut House, 5 Park Road Hamilton HM O9, Bermuda BLUMONT MAN: Sets Final Shareholders Meeting for June 11 -------------------------------------------------------- Blumont Man Yield Fund Ltd. will hold its final general meeting on June 11, 2008, at 9:30 a.m. at Argonaut Limited, Argonaut House, 5 Park Road, Hamilton HM O9, 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. Blumont Man's shareholders agreed on May 5, 2008, to place the company into voluntary liquidation under Bermuda's Companies Act 1981. The liquidator can be reached at: Beverly Mathias c/o Argonaut Limited Argonaut House, 5 Park Road Hamilton HM O9, Bermuda COMET FINANCE: Proofs of Claim Filing Is Until May 21 ----------------------------------------------------- Comet Finance Ltd's creditors are given until May 21, 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. Comet Finance's shareholders agreed on May 1, 2008, to place the company into voluntary liquidation under Bermuda's Companies Act 1981. The liquidator can be reached at: Robin J. Mayor Messrs. Conyers Dill & Pearman Clarendon House, Church Street Hamilton, HM DX, Bermuda COMET FINANCE: Sets Final Shareholders Meeting for June 11 ---------------------------------------------------------- Comet Finance Ltd will hold its final general meeting on June 11, 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. Comet Finance's shareholders agreed on May 1, 2008, to place the company into voluntary liquidation under Bermuda's Companies Act 1981. The liquidator can be reached at: Robin J. Mayor Messrs. Conyers Dill & Pearman Clarendon House, Church Street Hamilton, HM DX, Bermuda FOSTER WHEELER: Earns US$138.1 Million in Quarter Ended March 31 ---------------------------------------------------------------- Foster Wheeler Ltd. reported net income for the first quarter of 2008 of US$138.1 million compared with US$114.8 million for the same period in 2007. Net income in the first quarter of 2008 was aided by a net asbestos-related gain of US$14.2 million. Excluding the gain, net income in the first quarter of 2008 was a record US$123.9 million. First-quarter 2008 consolidated EBITDA (earnings before interest expense, income taxes, depreciation and amortization) was a record US$195.3 million, compared with US$162.3 million in the first quarter of 2007. Excluding the net asbestos-related gain noted above, consolidated EBITDA in the first quarter of 2008 was a record US$181.1 million. Commenting on the company's quarterly results, Foster Wheeler's Chairman and Chief Executive Officer, Raymond J. Milchovich, said, "Our net income, as adjusted, in the first quarter of 2008 was a record and was up markedly from the average quarter of 2007. The results were largely attributable to the sharply improved performance of our Global Power Group and continued operational and commercial excellence in our Global Engineering and Construction Group." Mr. Milchovich noted, "Our businesses witnessed very strong market demand during the quarter, and we expect both groups to have a very good year. In our E&C business, the market segments we serve continue to be very robust. Demand in the refining and petrochemical sectors is very strong. And in the LNG market, where demand continues to grow strongly and where we have a strong presence, we signed pre-FEED contracts in the first quarter for two significant planned LNG liquefaction investments. Our Global Power Group had a terrific quarter and, overall, the markets we serve remain strong. However, of late we have noticed a change in the tone of the solid-fuel boiler market, primarily in North America. We are beginning to see instances of delays in certain projects that we view as prospects. Environmental considerations have imposed restraints on clients regarding the progress of some projects. In addition, and to varying degrees, clients have expressed concerns regarding cost inflation and slower economic growth in the North American market." 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 April 28, 2008, Moody's Investors Service upgraded Foster Wheeler LLC's corporate family rating to Ba2 from Ba3, and raised its probability of default Rating to Ba2 from Ba3. The outlook continues to be positive. 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. LIBERTY ERMITAGE: Proofs of Claim Filing Deadline Is May 21 ----------------------------------------------------------- Liberty Ermitage Cash Funds Limited's creditors are given until May 21, 2008, to prove their claims to David Morrissey, 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. Liberty Ermitage's shareholders agreed on May 6, 2008, to place the company into voluntary liquidation under Bermuda's Companies Act 1981. The liquidator can be reached at: David Morrissey Conyers Dill & Pearman, Liquidation Department Clarendon House, Church Street Hamilton, HM DX, Bermuda LIBERTY ERMITAGE: Sets Final Shareholders Meeting for June 11 ------------------------------------------------------------- Liberty Ermitage Cash Funds Limited will hold its final general meeting on June 11, 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. Liberty Ermitage's shareholders agreed on May 6, 2008, to place the company into voluntary liquidation under Bermuda's Companies Act 1981. The liquidator can be reached at: David Morrissey Conyers Dill & Pearman, Liquidation Department Clarendon House, Church Street Hamilton, HM DX, Bermuda MAKENA LTD: Liquidators Released, Company Dissolved --------------------------------------------------- Makena Ltd.'s liquidators Peter C.B. Mitchell and Nigel Chatterjee have been released as ordered by the Supreme Court of Bermuda on May 1, 2008. The company has been dissolved. As reported in the Troubled Company Reporter-Latin America on April 2, 2008, Messrs. Mitchell and Chatterjee applied to the Supreme Court of Bermuda for their release. NORTH AMERICAN: Sets Final Shareholders Meeting for June 26 ----------------------------------------------------------- North American Manufacturers Insurance Company Limited will hold its final general meeting on June 26, 2008, at 10:00 a.m. at Sofia House, 1st Floor, 48 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. North American's shareholders agreed to place the company into voluntary liquidation under Bermuda's Companies Act 1981. On May 5, 2008, the shareholders accepted Marco Montarsolo's resignation as the firm's liquidator and approved the appointment of Heidi Daniels-Roque as the new liquidator. The liquidator can be reached at: Heidi Daniels-Roque Sofia House, 1st Floor 48 Church Street Hamilton, Bermuda PANTHER RE: S&P Withdraws Term B Loan's BB+ Rating on Request ------------------------------------------------------------- Standard & Poor's Ratings Services has withdrawn its 'BBB+' counterparty credit rating on Panther Re Bermuda Ltd.'s senior secured Term A loan and its 'BB+' rating on the Panther Re's subordinated Term B loan at the issuer's request. The rating withdrawal follows early repayment of the obligations in full, which in turn follows the early termination of the reinsurance agreement between Panther Re and Hiscox-Syndicate 0033. The early termination of this agreement reflects changes in the prevailing market conditions for property catastrophe excess-of- loss reinsurance. Panther Re Bermuda Limited, based in Bermuda, is a licensed Class 3 reinsurer that has entered into a collateralized quota share reinsurance treaty with its sole client, Lloyd's Syndicate 33, as managed and underwritten by Hiscox Syndicates Limited. STEAMBOAT RE: Proofs of Claim Filing Is Until May 21 ---------------------------------------------------- Steamboat Re Ltd.'s creditors are given until May 21, 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. Steamboat Re's shareholders agreed on May 1, 2008, to place the company into voluntary liquidation under Bermuda's Companies Act 1981. The liquidator can be reached at: Robin J. Mayor Messrs. Conyers Dill & Pearman Clarendon House, Church Street Hamilton, HM DX, Bermuda STEAMBOAT RE: Sets Final Shareholders Meeting for June 11 --------------------------------------------------------- Steamboat Re Ltd. will hold its final general meeting on June 11, 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. Steamboat Re's shareholders agreed on May 1, 2008, to place the company into voluntary liquidation under Bermuda's Companies Act 1981. The liquidator can be reached at: Robin J. Mayor Messrs. Conyers Dill & Pearman Clarendon House, Church Street Hamilton, HM DX, Bermuda TWENTY FIRST: Court Appoints Liquidators for Firm ------------------------------------------------- The Supreme Court of Bermuda has appointed Charles Thresh and Kevin Mawer as liquidators of Twenty First Century Holdings Ltd. The liquidators can be reached at: Charles Thresh KPMG Advisory Limited P.O. Box HM 906 Hamilton, HM DX Bermuda Kevin Mawer KPMG LLP 8 Salisbury Square London EC4Y 8BB United Kingdom Telephone: (020) 7311 1000 Fax: (020) 7311 3311 =========== B R A Z I L =========== BANCO BMG: To Sell US$150 Million of Three-Year Bonds Next Week --------------------------------------------------------------- Banco BMG SA will offer US$150 million of three-year bonds to global investors next week, Guillermo Parra-Bernal of Bloomberg News reports, citing a person familiar with the matter. The person, who refused to be identified, told Bloomberg that the bank will pay interest of about 7.375 percent, adding that the notes will be listed under the short-term note program for Reg S in Luxembourg. The sale will be handled by BCP Securities LLC of Greenwich, Connecticut, UBS AG, and BES Investimento, Bloomberg cites the unnamed source as saying. According to the report, the bank sold US$250 million of two- year notes in the past two months at a discount to yield 7 percent. Banco BMG is the Brazilian banking arm of Grupo BMG, which also has real estate, food manufacturing and agro industry holdings. The bank is a niche player focused on loans to civil servants, with repayments taken monthly from payrolls. BMG operates mainly through in-house representatives in state companies. It also offers leasing and asset management services. * * * As reported in the Troubled Company Reporter-Latin America on June 26, 2007, Standard & Poor's Ratings Services raised its long-term counterparty credit rating on Banco BMG S.A. to 'BB-' from 'B+'. The rating was removed from CreditWatch Positive where it was placed June 11, 2007. S&P said the outlook is stable. On March 10, 2008, Moody's Investors Rating gave Banco BMG's US$250 million issue a Ba1 long-term foreign currency debt rating with a stable outlook and the bank's US$1 billion note program a Ba1 long-term foreign currency rating with a stable outlook and a Not Prime short-term foreign currency rating. BOMBARDIER INC: Moody's Holds Ba2 Ratings on Improved Operations ---------------------------------------------------------------- Moody's Investors Service changed the rating outlook for Bombardier Inc. to positive from stable and affirmed the company's Ba2 corporate family, Ba2 senior unsecured and SGL-2 liquidity ratings. The outlook change reflects Moody's belief that Bombardier's record backlog levels and strong demand from international end- markets positions the company for continued revenue growth, profitability improvements and cash flow generation into the medium term. Coupled with the meaningful reduction in debt levels that occurred towards the end of the company's last fiscal year, the balance of the company's key credit metrics are likely to evidence continuing improvement, bolstering support for upwards rating momentum. These ratings have been affirmed: -- Corporate family rating at Ba2 -- Probability of default rating at Ba2 -- Senior unsecured debt rating at Ba2 (to LGD4, 52% from LGD4, 54%) -- Speculative grade liquidity rating at SGL-2 Outlook Actions: -- Outlook, Changed To Positive From Stable "Bombardier's sizeable backlog in each of its two business segments positions the company for further growth and margin improvement beyond the gains achieved in fiscal 2008", Darren Kirk, lead analyst with Moody's said. Bombardier's fiscal 2008 operating results evidenced continued improvement driven by strong demand for business jets, turboprops and Transportation segment products and services. A prolonged period of declining demand for regional jet products appears to have stabilized, which also contributed to the good results. Despite the poor financial condition of the airline industry and challenging economic backdrop in the U.S., reducing dependence on the U.S. market for cyclical aerospace activity and record backlog levels in each of Bombardier's business segments, provide the basis for continued operating momentum. Targeted operating margins of 8% in the Aerospace segment have essentially been attained while Transportation segment margins continue to improve toward the company's goal of 6% by fiscal 2010. The company's ability to further enhance current coverage and cash flow metrics through sustained margin improvement remains a key factor influencing the rating. Lower interest costs associated with recent debt reductions should amplify improvement to key credit metrics through fiscal 2009 from levels that have in recent history constrained the Ba2 rating. Bombardier's liquidity profile is good summarized by significant balance sheet cash with no near term debt maturities, and a positive free cash flow profile. Lack of committed bank operating lines for funded borrowing constrains the liquidity rating at SGL-2. The Company's good liquidity profile and favorable cash flow trends may eventually be counterbalanced by incremental financial and operating risks associated with the potential investment in the CSeries mainline aircraft. "The company's improving credit profile should nonetheless provide the capacity to absorb these risks within context of its rating and outlook", Kirk added. Headquartered in Canada, Bombardier Inc. -- http://www.bombardier.com/-- (TSE:BBD.B) manufactures innovative transportation solutions, from regional aircraft and business jets to rail transportation equipment, systems and services. The company manufactures rail equipment through its Bombardier Transportation unit. Bombardier Transport's Europe management office is located in Germany. The company also has production facilities in France, Spain, Switzerland, Belgium, Italy, Austria, Hungary, Czech Republic, Poland, Denmark, Sweden, Norway an the United Kingdom. Other production facilities are located at Brazil, China, India and Australia. BANCO INDUSTRIAL: Earns BRL91.9 Million in First Quarter 2008 ------------------------------------------------------------- Banco Industrial e Comercial S.A. a.k.a. BicBanco's net profit increased 90.5% to BRL91.9 million in the first quarter 2008, from the first quarter 2007. Business News Americas relates that BicBanco's return on equity decreased to 25.1% in the first quarter 2008, from 39.3% in the same period last year. Its shareholders' equity rose 177% to BRL1.63 billion. Its net interest income grew 71.4% to BRL185 million. According to BNamericas, BicBanco expanded its loan book by 54.7% to BRL7.77 billion in the first quarter of this year, compared to the same quarter last year. The bank specializes in middle-market lending. Its working capital loans increased 109% to BRL4.25 billion. Its trade financing rose 16.4% to BRL1.47 billion. Its guaranteed accounts increased 41.8% to BRL1.07 billion. BicBanco's Vice President and Investor Relations Officer Milton Bardini said, "The demand for corporate credit remained high." BNamericas notes that BicBanco's payroll loans in the consumer loan segment declined 3% to BRL443 million in March 2008, from March 2007. Its personal loans stayed flat at BRL137 million. Its loan-loss provisions rose 42.9% to BRL147 million. Mr. Bardini told BNamericas that BicBanco "stuck with its projections of 50% lending growth" and 25% return on equity for 2008. According to the report, BicBanco had BRL7.68 billion in funding in the first quarter 2008, about 49.3% greater than the same period last year, with BRL5.05 billion from the domestic market, BRL1.52 billion from trade finance funding, and BRL1.11 billion from international markets. BicBanco's assets increased 38.0% to BRL10.9 billion in the first quarter 2008, compared to the first quarter 2007, BNamericas states. Banco Industrial e Comercial S.A. is headquartered in Sao Paulo, Brazil with BRL$11 billion (US$6.2 billion) in total assets and BRL$1.6 billion (US$882.6 million) in equity as of Dec. 31, 2007. * * * As reported in the Troubled Company Reporter-Latin America on March 1, 2007, Standard & Poor's Ratings Services assigned its 'B+' counter party credit rating to Banco Industrial e Comercial SA. S&P said the outlook is stable. BANCO ITAU: Eyes US$90 Mln. Net Profit in South American Units -------------------------------------------------------------- Banco Itau Holding Financeira SA's Latin American Chief Executive Officer Ricardo Marino said in a conference call that the bank expects a US$90 million net profit from its units in Argentina, Chile, and Uruguay this year, Business News Americas reports. According to BNamericas, Banco Itau's Argentine, Chilean, and Uruguayan units reported a combined BRL28 million in recurring net income in the first quarter 2008. Each of the unit performed "very differently." BNamericas notes that Mr. Marino said Banco Itau's projections "are based purely on organic growth." Banco Itau is open to further acquisitions in Argentina, Chile, and Uruguay, Mr. Marino added. BNamericas says that Chile, Banco Itau's largest foreign operation, represents 70% of its total foreign assets, or BRL9.94 billion. Mr. Marino told BNamericas that the bank's Chilean assets rose 20.9% in March 2008, compared to March 2007, due to increased demand for real estate and foreign trade financing. The Chilean unit's first quarter BRL30 million net profit was mainly due to a 14.2% increase in the bank's credit portfolio. The bank would launch a local stock brokerage unit in July, Mr. Marino added. BNamericas relates that "Itau Argentina's net income was flat in the first quarter, as BRL27 million of net interest income was offset by a BRL46 million charge in non-interest expenses arising from increased personnel expenses under a union agreement and bonus payments." Consolidated assets in Argentina rose 7.5% to BRL2.08 billion in the first quarter 2008, compared to the same quarter last year, as corporate customers increased their demand for credit transactions and time deposits. Mr. Marino told BNamericas that Banco Itau's expansion plan in Argentina through 2010 involves launching new branches in the provinces. The bank may also purchase assets in the country, Mr. Marino added. Banco Itau's units in Argentina, Chile, and Uruguay increased their combined lending by 52.2% to BRL10.4 billion in the year ended March 31, 2008, compared to the previous period, driven by loans to businesses, BNamericas relates. The report says that Mr. Marino criticized a recent measure disclosed by the Uruguayan central bank that ordered local banks to hike deposit reserves called "encajes" to curb rising inflation and a stronger peso. Beginning June 1, banks will have to allot 25% of "30-day peso-denominated deposits compared to 17% today, and 35% instead of 25% in the case of foreign currency deposits. The central bank will also stop remunerating those deposit reserves." Mr. Marino told BNamericas that "the loss cannot be recovered in the short term" and Banco Itau is studying with private banking association Abpru if banks should pass on the cost of the measures to customers through loan rate increases. Mr. Marino said that he expected that private banks will lose US$50 million, or almost as much as they earned in 2007, because of the measures. BNamericas notes that Uruguay's 13 banks reported a combined UYU1.39 billion profit in 2007. Banco Itau Holding Financeira SA -- http://www.itau.com.br/-- is a private bank in Brazil. The company has four principal operations: banking -- including retail banking through its wholly owned subsidiary, Banco Itau SA(Itau), corporate banking through its wholly owned subsidiary, Banco Itau BBA SA (Itau BBA) and consumer credit to non-account hold customers through Itaucred -- credit cards, asset management and insurance, private retirement plans and capitalization plans, a type of savings plan. Itau Holding provides a variety of credit and non-credit products and services directed towards individuals, small and middle market companies and large corporations. The bank has offices in Miami, New York, Hongkong, Lisbon, Luxembourg, Bahamas, the Cayman Islands, Chile and Uruguay. * * * As reported in the Troubled Company Reporter-Latin America on Feb. 12, 2007, Fitch changed the outlook of Banco Itau Holding Financiera S.A.'s 'BB+' foreign currency IDR rating to positive from stable. BRASKEM SA: Net Profit Up 204% to BRL83 Million in 1st Qtr. 2008 ---------------------------------------------------------------- Braskem SA recorded strong growth in sales to the domestic market in the first quarter of 2008, driven by the 7% expansion in thermoplastic resin (polyethylene, polypropylene and PVC) sales volume, especially PVC, whose sales grew 13%, reflecting the heating up of the civil construction market. The acceleration in demand contributed to the 21% growth in net revenues in dollars, the currency of reference for the petrochemical sector, compared to the same period of 2007, totaling US$2.5 billion, equivalent to BRL4.4 billion. "Braskem maintained its level of operational excellence, together with important advances in our growth agenda with the creation of value, where it is necessary to underscore the inauguration of the Paulinia Unit and conclusion of the acquisition of Politeno and the Ipiranga Group petrochemical assets," said Braskem president, Jose Carlos Grubisich. "This performance allows us to continue responding to the sustained growth of the Brazilian economy and to quickly approach the goal to position the company among the ten most important petrochemical industries in the world." The good performance of its industrial units permitted Braskem to sustain production at high levels. In this context, it is worth underscoring the historical production record achieved in the first quarter by the PVC units with 130 thousand tons manufactured during the period, incorporating productivity and operational reliability gains. As a result of stoppages for scheduled maintenance for the second quarter at the Copesul and Camacari Units, Braskem further focused its attention on the domestic market. Due to this strategy, exported resin volume was lower with a 38% reduction for polyethylene and polypropylene. The increase in resin prices in the international market compensated the drop in volume, permitting revenues of US$509 million exports, with a 1% growth compared to the first quarter of 2007, equivalent to 20% of net revenue. Braskem's consolidated EBITDA for the first quarter was BRL583 million compared to the BRL853 million for the same period last year. This drop reflects the negative impact from the strong increase in raw material and energy prices. For comparison purposes, the average price for naphtha increased 55% over this period, jumping from US$555 per ton to US$842, with an additional impact of a cost greater than US$550 million. In dollars, consolidated EBITDA reached US$336 million. The EBITDA margin grew nearly 13.2%, in line with the profitability verified in 4T07. Braskem's net profits in the first quarter reached BRL83 million, which represented a 204% increase in relation to the BRL27 million in profits verified in the fourth quarter of 2007. Compared to the first quarter of last year, net profits fell BRL45 million. About Braskem Braskem S.A. (BOVESPA: BRKM5; NYSE: BAK; LATIBEX: XBRK) -- http://www.braskem.com.br/-- is a thermoplastic resins producer in Latin America, and is among the three largest Brazilian-owned private industrial companies. The company operates 13 manufacturing plants located throughout Brazil, and has an annual production capacity of 5.8 million tons of resins and other petrochemical products. The company reported consolidated net revenues of about US$9 billion in the trailing twelve months through Sept. 30, 2007. * * * As reported in the Troubled Company Reporter-Latin America on Jan. 17, 2008, Fitch Ratings affirmed the 'BB+' foreign and local currency issuer default ratings of Braskem S.A. Fitch also affirmed the 'BB+' ratings on the company's senior unsecured notes 2008, 2014, and senior unsecured notes 2017. COMPANHIA SIDERURGICA: 1Q 2008 Net Debt Drops to BRL4.8 Billion --------------------------------------------------------------- Companhia Siderurgica Nacional S.A. released its results for the first quarter of 2008: -- Companhia Siderurgica Nacional reported a first quarter 2008 net income of BRL767 million, 51% up on the previous quarter and flat over the first quarter 2007, when the company recognized non-recurring gains of BRL255 million (net) from the transaction involving the offer for all the shares of the UK-based Corus group; -- Steel product sales volume totaled 1.4 million tones in first quarter 2008, a new first quarter record, 17% up on the first quarter of 2007 and flat when compared to fourth quarter 2007, a period when sales are traditionally higher prior to the end-of-year holidays; -- The domestic market accounted for 80% of quarterly sales volume and the exports for 20%. In March 2008, the ratio of sales on the domestic market, where margins are traditionally higher, over total sales volume reached the record level of 84%; -- First quarter net revenue totaled BRL3 billion, a quarterly record, 22% up year-on-year and slightly more than the fourth quarter 2007, when sales are traditionally higher; -- The company recorded a 38% share of the domestic flat steel market, led by tin plate, galvanized, hot-rolled and cold-rolled which posted respective growth of 1%, 4%, 3% and 6% over fourth quarter 2007; -- First quarter 2008 EBITDA came to BRL1.3 billion, 26% more than in the first quarter 2007 and 1% higher than in fourth quarter 2007, while the EBITDA margin stood at 42%, 1.5 p.p. wider year-on-year and flat in quarter-over- quarter terms. In the last seven years, Companhia Siderurgica Nacional's EBITDA margin has never fallen below 40%; -- Net debt closed the quarter at BRL4.8 billion, BRL1.3 billion down on the first quarter 2007 and stable in relation to the previous quarter, even after the dividend payment and investments of BRL800 million and BRL400 million, respectively. The LTM net debt/EBITDA ratio stood at 0.93 and the debt-to-equity ratio at 2.17. Headquartered Sao Paolo, Brazil, Companhia Siderurgica Nacional S.A. -- http://www.csn.com.br/-- produces, sells, exports and distributes steel products, like hot-dip galvanized sheets, tin mill products and tinplate. The company also runs its own iron ore, manganese, limestone and dolomite mines and has strategic investments in railroad companies and power supply projects. The group also operates in Brazil, Portugal and the U.S. * * * As reported in the Troubled Company Reporter-Latin America on Dec. 27, 2007, Standard & Poor's Ratings Services revised its outlook on Brazil-based steel maker Companhia Siderurgica Nacional and related entity National Steel S.A. to positive from stable. At the same time, Standard & Poor's affirmed its 'BB' corporate credit rating on CSN and its 'B+' rating on NatSteel. COMPANHIA SIDERURGICA: Plans Terminal Expansion & New Facilities ---------------------------------------------------------------- Companhia Siderurgica Nacional SA will expand two cargo terminals and construct two new facilities in Sepetiba, Rio de Janeiro, for the next five years for almost US$2.3 billion, Business News Americas reports. BNamericas relates that Sepetiba Tecom, one of the terminals, should increase its capacity to 1.3 million twenty-foot equivalent units per year, from the current 600,000 twenty-foot equivalent units per year. It will be able to handle six million tons per year. Companhia Siderurgica told BNamericas that Works for Sepetiba Tecom will be completed in 2011. The report says that Sepetiba Tecar, the other terminal, will receive investments of US$790 million through 2012. The terminal already received received US$236 million. Expansion on the terminal will allow Companhia Siderurgica to export an additional 100 million tons per year in iron ore. Works for the terminal will be completed by 2013. BNamericas notes that the Logistics Support Center and the Lago da Pedra private port, the two new terminals Companhia Siderurgica is planning to construct, will increase iron ore export capacity. Logistics Support will receive US$202 million investments over the next five years. It is designed to handle 900,000, 20-foot equivalent units per year. Meanwhile, the Lago de Pedra port is receiving US$791 million to be invested in piers and in a retro area in the port. The port will handle 60 million tons per year of iron ore, 11 million tons per year of steel products, 12 million tons per year of coal, and 1,000 twenty-foot equivalent units yearly. The two terminals will start operations by 2013. They will have an administrative building, a distribution center, and warehouses for empty and full containers, the news agency adds. Companhia Siderurgica's Logistics Director Davi Cade believes ports in Brazil and around the world are congested and there is a need for larger areas for maneuvering. Headquartered Sao Paolo, Brazil, Companhia Siderurgica Nacional S.A. -- http://www.csn.com.br/-- produces, sells, exports and distributes steel products, like hot-dip galvanized sheets, tin mill products and tinplate. The company also runs its own iron ore, manganese, limestone and dolomite mines and has strategic investments in railroad companies and power supply projects. The group also operates in Brazil, Portugal and the U.S. * * * As reported in the Troubled Company Reporter-Latin America on Dec. 27, 2007, Standard & Poor's Ratings Services revised its outlook on Brazil-based steel maker Companhia Siderurgica Nacional and related entity National Steel S.A. to positive from stable. At the same time, Standard & Poor's affirmed its 'BB' corporate credit rating on CSN and its 'B+' rating on NatSteel. ENERGIAS DO BRASIL: Net Income Up 28.3% to BRL164.2MM in 1Q 2008 ---------------------------------------------------------------- Energias do Brasil SA released its results for the first quarter of 2008. The information is presented on a consolidated basis in accordance with Brazilian Corporate Law and is based on reviewed financial information. The independent auditors did not review the operating information. Amounts are expressed in thousands of Reais, except where otherwise stated. Highlights: -- Energy volumes distributed in 2007 totaled 25,029 GWh, 4.5% more than recorded in 2006. Volumes were Energy volumes distributed in first quarter 2008 totaled 6,286 GWh, 2.3% more than recorded in first quarter 2007. -- Enertrade's volumes grew 5.2% in first quarter 2008 compared with first quarter 2007, totaling 1,789 GWh. -- Energy volumes sold by the generation business in first quarter 2008 amounted to 1,538 GWh, a year-over-year increase of 13.7%. -- Net operating revenue was BRL1,285.5 million in first quarter 2008, 15.4% more than first quarter 2007, mainly due to the growth in sold and commercialized energy volumes, and the increase in average prices. -- Manageable costs, excluding depreciation and amortization, remained stable in relation to first quarter 2007, the main highlight here being the reduction in the Provisions and Others accounts. -- EBITDA for first quarter 2008 reached BRL383.4 million, a year-over-year increase of 13.2%. Particularly notable was the growth of 86% in the generation segment's EBITDA, which amounted to BRL176.1 million. -- Net income amounted to BRL164.2 million, 28.3% up from first quarter 2007. -- Capital expenditures were BRL155.8 million in first quarter 2008, a rise of 69.7% against first quarter 2007, largely due to repowering projects at the Mascarenhas, Suica and Rio Bonito hydroelectric power plants and the construction of the Santa Fe small hydroelectric power plant. -- Energias do Brasil has opted to invest in the development of two natural gas-fired thermoelectric power plants, the Resende and Norte Capixaba plants, each with an installed capacity of 500 MW. This reflects the company's recognition of the need to expand the share of thermal capacity in the Brazilian energy matrix. The implementation of these plants is contingent on the appropriate commercial and financial conditions for the sale of energy and, in the case of the Norte Capixaba plant, on environmental licensing. Energias do Brasil S.A. is an integrated utility group controlled by Energias de Portugal, with activities in generation, distribution and commercialization of electricity. Its power distribution subsdiaries Bandeirante, Escelsa and Enersul represent altogether some 64% of consolidated total assets, while the power generation assets represent some 31%. * * * In May 2007, Moody's Investors Service placed a Ba2 long-term corporate family rating on Energias do Brasil. FIAT SPA: Iveco Division Defers Entry Into the United States ------------------------------------------------------------ Iveco, a division of Fiat SpA, has deferred its possible entry into the U.S. market, Reuters reports citing Iveco CEO Mr. Paolo Monferino. Reuters relates Mr. Monferino as saying that the move to the United States is currently "on stand-by." Fiat CEO Sergio Marchionne however expressed that the issue would likely be decided by the end of the first quarter, Reuters adds. About Iveco Iveco designs, manufactures, and markets a broad range of light, medium and heavy commercial vehicles, off-road trucks, city and intercity buses and coaches as well as special vehicles for applications such as fire fighting, off-road missions, defence and civil protection. Iveco employs over 24,500 people and runs 28 production units in 16 Countries in the world using excellent technologies developed in 5 research centres. Besides Europe, the company operates in China, Russia, Australia, Argentina, Brazil, and South Africa. More than 4,600 service outlets in over 100 Countries guarantee technical support wherever in the world an Iveco vehicle is at work. About Fiat S.p.A. Based in Turin, Italy, Fiat SpA -- http://www.fiatgroup.com/-- designs, manufactures, and sells automobiles, trucks, wheel loaders, excavators, telehandlers, tractors and combine harvesters. Outside Europe, the company has subsidiaries in the United States, Japan, India, China, Mexico, Brazil and Argentina. * * * As of March 13, 2008, Fiat S.p.A. and its subsidiaries carries Ba3 Corporate Family and Senior Unsecured ratings from Moody's Investors Service, which said the outlook is positive. The company carries Standard & Poor's Ratings Services' BB long- term corporate credit rating. The company also carries B short- term rating. S&P said the outlook is stable. FORD MOTOR: Fitch Says Ratings Outlook Remains Negative ------------------------------------------------------- Fitch Ratings has published these comments regarding its Outlooks for Ford and General Motors following their first quarter earnings. As economic conditions and high gas prices continue to erode North American unit sales at Ford and GM, the companies remain in the middle stages of their lengthy restructuring efforts. Although both companies have achieved substantial reductions in fixed costs, primarily through headcount reductions, Ford and GM will continue to experience heavy cash drains in 2008 and reduced liquidity. In the absence of a rebound in economic conditions and industry sales through 2009, both companies are likely to remain cash flow negative during this period. Fitch currently has an Issuer Default Rating (IDR) of 'B' with a Negative Outlook for both Ford and GM, and both ratings are expected to remain on negative outlook until a clearer path toward positive cash flow is established. Given progress on its restructuring program and its product profile, Ford may achieve this during 2008, while liquidity drains in 2008 at GM pose a risk of a further downgrade in the rating. FORD: Ford has demonstrated considerable progress in its restructuring efforts - to its fixed costs, manufacturing footprint, and product profile -- which could result in a Stable rating at some point in 2008 if cost efforts and product competitiveness continue along the same trendline. Ford's reported financial results over the next several quarters will continue to reflect the benefits of the company's restructuring efforts, particularly resulting from its hourly buyout programs. (Please see Fitch's press release of Feb. 14, 2008). Ford has also benefited from having numerous local operating agreements in place prior to negotiation of the national contract, resulting in better integration and smoother implementation of the downsizing efforts. Capacity and headcount reductions are proceeding on plan. Ford's consolidated results will remain dependent on the critical North American pickup market, and the company is unlikely to return to positive free cash flow until the pickup market rebounds along with economic conditions. In any scenario, 2009 results should benefit from the introduction of the new F-Series. Unit sales in the smaller end of its lineup (Fusion, Escape, Focus) have recently held up well, providing a modest level of support for consolidated results. The company's Edge crossover, and two new product introductions this year, the Flex and the Lincoln MKS sedan, are also expected to provide support for volumes. Ford's quality performance could also have a growing impact on longer-term operating results. International operations have demonstrated improvement, providing a modest positive to the company's consolidated profile. Heavy cash drains are projected through 2008 and into 2009, but liquidity is adequate and sufficient to weather moderating operating losses, restructuring costs, and weak economic conditions through 2009. Ford has also undertaken a number of equity-for-debt swaps over the past year in an effort to moderate the leverage and financial impact of the restructuring efforts, an effort that Fitch expects will continue. The recent share purchases by Kirk Kerkorian are not a factor in the rating. Although Mr. Kerkorian has historically been an activist investor across his investments, including actions that have not been bondholder-friendly, in the case of Ford, the interest of bondholders and equity holders are currently very much aligned. GENERAL MOTORS: At GM, North American operating losses and restructuring costs are likely to further erode liquidity in 2008 and 2009. Liquidity has been supported by numerous asset sales, but the lack of further asset sales is likely to mean an accelerated decline in the short term and could result in a downgrade of GM in 2008. Additional debt financings could boost liquidity, but high debt levels and financing costs, coupled with lower interest income, will take a toll on operating cash flows. Fitch believes that inadequate contribution margins across a number of the company's products and production facilities will require further restructuring efforts and the closure of 2-4 assembly plants in addition to what has been announced to date. In addition, the continuing American Axle strike, GM's difficulty in negotiating local operating agreements (that have resulted in further labor actions), and the lack of resolution to the Delphi situation will delay GM's ability to realize fixed cost reductions and other purchasing, materials and production efficiencies in the near term. This will most likely prevent GM from reversing negative cash flows through 2009. GM's international operations continue to be a growing strength for the company's credit profile. Rating factors that could trigger a downgrade include: -- Consolidated 2008 cash drains in excess of US$8 billion, which results in liquidity dropping below US$20 billion; -- Lack of progress in reducing fixed costs, combined with a reduction in international profitability; -- Double-digit production cuts in North America throughout 2008 resulting from a more severe decline in economic conditions or deterioration in GM's product competitiveness. -- Material capital infusion into GMAC. The ratings are unaffected by the pending debt exchange at ResCap or any associated impact on GMAC. Given GM's focus on maintaining liquidity to finance North American operating losses, restructuring expenditures and the recent VEBA agreement, Fitch views it as unlikely that GM would inject any additional capital into GMAC, and any material assistance is not incorporated in the rating. Fitch's most recent recovery analysis had severely discounted asset values of GM's ResCap and GMAC holdings, and did not incorporate expectations of any dividends or capital contributions. Fitch does not believe that the challenges at GMAC and ResCap would measurably impact sales or production at GM. Headquartered in Dearborn, Michigan, Ford Motor Co. (NYSE: F) -- http://www.ford.com/-- manufactures or distributes automobiles in 200 markets across six continents. With about 260,000 employees and about 100 plants worldwide, the company's core and affiliated automotive brands include Ford, Jaguar, Land Rover, Lincoln, Mercury, Volvo, Aston Martin, and Mazda. The company provides financial services through Ford Motor Credit Company. The company has operations in Japan in the Asia Pacific region. In Europe, the company maintains a presence in Sweden, and the United Kingdom. The company also distributes its brands in various Latin American regions, including Argentina and Brazil. GENERAL MOTORS: Fitch Says Ratings Could Face Likely Downgrade -------------------------------------------------------------- Fitch Ratings has published these comments regarding its Outlooks for Ford and General Motors following their first quarter earnings. As economic conditions and high gas prices continue to erode North American unit sales at Ford and GM, the companies remain in the middle stages of their lengthy restructuring efforts. Although both companies have achieved substantial reductions in fixed costs, primarily through headcount reductions, Ford and GM will continue to experience heavy cash drains in 2008 and reduced liquidity. In the absence of a rebound in economic conditions and industry sales through 2009, both companies are likely to remain cash flow negative during this period. Fitch currently has an Issuer Default Rating (IDR) of 'B' with a Negative Outlook for both Ford and GM, and both ratings are expected to remain on negative outlook until a clearer path toward positive cash flow is established. Given progress on its restructuring program and its product profile, Ford may achieve this during 2008, while liquidity drains in 2008 at GM pose a risk of a further downgrade in the rating. FORD: Ford has demonstrated considerable progress in its restructuring efforts - to its fixed costs, manufacturing footprint, and product profile -- which could result in a Stable rating at some point in 2008 if cost efforts and product competitiveness continue along the same trendline. Ford's reported financial results over the next several quarters will continue to reflect the benefits of the company's restructuring efforts, particularly resulting from its hourly buyout programs. (Please see Fitch's press release of Feb. 14, 2008). Ford has also benefited from having numerous local operating agreements in place prior to negotiation of the national contract, resulting in better integration and smoother implementation of the downsizing efforts. Capacity and headcount reductions are proceeding on plan. Ford's consolidated results will remain dependent on the critical North American pickup market, and the company is unlikely to return to positive free cash flow until the pickup market rebounds along with economic conditions. In any scenario, 2009 results should benefit from the introduction of the new F-Series. Unit sales in the smaller end of its lineup (Fusion, Escape, Focus) have recently held up well, providing a modest level of support for consolidated results. The company's Edge crossover, and two new product introductions this year, the Flex and the Lincoln MKS sedan, are also expected to provide support for volumes. Ford's quality performance could also have a growing impact on longer-term operating results. International operations have demonstrated improvement, providing a modest positive to the company's consolidated profile. Heavy cash drains are projected through 2008 and into 2009, but liquidity is adequate and sufficient to weather moderating operating losses, restructuring costs, and weak economic conditions through 2009. Ford has also undertaken a number of equity-for-debt swaps over the past year in an effort to moderate the leverage and financial impact of the restructuring efforts, an effort that Fitch expects will continue. The recent share purchases by Kirk Kerkorian are not a factor in the rating. Although Mr. Kerkorian has historically been an activist investor across his investments, including actions that have not been bondholder-friendly, in the case of Ford, the interest of bondholders and equity holders are currently very much aligned. GENERAL MOTORS: At GM, North American operating losses and restructuring costs are likely to further erode liquidity in 2008 and 2009. Liquidity has been supported by numerous asset sales, but the lack of further asset sales is likely to mean an accelerated decline in the short term and could result in a downgrade of GM in 2008. Additional debt financings could boost liquidity, but high debt levels and financing costs, coupled with lower interest income, will take a toll on operating cash flows. Fitch believes that inadequate contribution margins across a number of the company's products and production facilities will require further restructuring efforts and the closure of 2-4 assembly plants in addition to what has been announced to date. In addition, the continuing American Axle strike, GM's difficulty in negotiating local operating agreements (that have resulted in further labor actions), and the lack of resolution to the Delphi situation will delay GM's ability to realize fixed cost reductions and other purchasing, materials and production efficiencies in the near term. This will most likely prevent GM from reversing negative cash flows through 2009. GM's international operations continue to be a growing strength for the company's credit profile. Rating factors that could trigger a downgrade include: -- Consolidated 2008 cash drains in excess of US$8 billion, which results in liquidity dropping below US$20 billion; -- Lack of progress in reducing fixed costs, combined with a reduction in international profitability; -- Double-digit production cuts in North America throughout 2008 resulting from a more severe decline in economic conditions or deterioration in GM's product competitiveness. -- Material capital infusion into GMAC. The ratings are unaffected by the pending debt exchange at ResCap or any associated impact on GMAC. Given GM's focus on maintaining liquidity to finance North American operating losses, restructuring expenditures and the recent VEBA agreement, Fitch views it as unlikely that GM would inject any additional capital into GMAC, and any material assistance is not incorporated in the rating. Fitch's most recent recovery analysis had severely discounted asset values of GM's ResCap and GMAC holdings, and did not incorporate expectations of any dividends or capital contributions. Fitch does not believe that the challenges at GMAC and ResCap would measurably impact sales or production at GM. Headquartered in Detroit, Michigan, General Motors Corp. (NYSE: GM) -- http://www.gm.com/-- was founded in 1908. GM employs about 266,000 people around the world and manufactures cars and trucks in 35 countries, including the United Kingdom, Germany, France, Russia, Brazil and India. In 2007, nearly 9.37 million GM cars and trucks were sold globally under the following brands: Buick, Cadillac, Chevrolet, GMC, GM Daewoo, Holden, HUMMER, Opel, Pontiac, Saab, Saturn, Vauxhall and Wuling. GM's OnStar subsidiary is the industry leader in vehicle safety, security and information services. INDEPENDENCIA SA: Moody's Rates Proposed US$250 Mil. Notes at B2 ---------------------------------------------------------------- Moody's upgraded Independencia SA's local currency corporate family rating and senior unsecured rating to B2 from B3 and assigned a B2 rating to its proposed guaranteed senior unsecured notes of approximately US$250 million due in 2015 to be issued by Independencia International Ltd. and unconditionally guaranteed by Independencia, subject to closing. The rating outlook is stable. This rating action concludes the review initiated on March 31, 2008. "The upgrade of Independencia's rating reflects the company's successful growth over the past years in terms of revenues, slaughterhouses and geographic diversification in terms of number of states, reducing significantly the company's vulnerability to trade embargos from importing countries," said Moody's Vice-President Senior Analyst, Soummo Mukherjee. "At the same time, the upgrade also recognizes the company's continued progress in terms of improved corporate governance and financial disclosure standards." Independencia increased its number of slaughterhouses from five to twelve and slaughter operations from three to seven states since Moody's first assigned a rating in January, 2007. With the acquisition of Goias Carne in July 2007 and the construction and leasing of four additional facilities, Independencia's daily slaughter capacity is expected to approach 11,000 heads per day in 2008 from 6,900 heads per day at the end of 2007, which will significantly boost its revenues and EBITDA in 2008 and reduce leverage to levels comfortably below 4.0 times on a Net Debt to EBITDA basis. Moody's expects the net proceeds of the proposed issuance to be used to repay existing short-term debt, thus allowing the company to maintain a comfortable cushion with regard to its Net Debt/EBITDA financial covenant in its existing senior unsecured bonds that steps-down from 4.25 times to 4.0 times at the end of 2008, with additional step downs in 2009 and 2010. Moody's has reviewed preliminary legal documentation for the transaction. The rating assumes there will be no material variation from the drafts reviewed and that all legal agreements are legally valid, binding and enforceable. Although Independencia's operating margins may be pressured by rising cattle purchase costs, margins should remain above the industry average because of the company's ability to customize specific production requests in terms of packaging, cuts and serving sizes. Upgrades: Independencia International Ltd.: -- Senior Unsecured Regular Bond/Debenture, Upgraded to B2 from B3 Independencia SA: -- Corporate Family Rating, Upgraded to B2 from B3 Assignments: Independencia International Ltd.: -- Senior Unsecured Regular Bond/Debenture, Assigned B2 Outlook Actions: Independencia International Ltd.: -- Outlook, Changed To Stable From Rating Under Review Independencia SA: -- Outlook, Changed To Stable From Rating Under Review The stable outlook is based on the expectation that Independencia will be able to offset higher cattle prices and impacts from trade embargos and maintain relatively stable EBITDA margins and implement its plans to significantly increase its sales volume. Independencia's rating could come under downward pressure if sufficient cushion on its financial covenants for its bonds is not maintained or if liquidity becomes constrained due to the loss of key export markets, since the company relies on continued access to pre-export bank credit. Quantitatively, ratings could also be downgraded if Debt/EBITDA increases to above 4.5 times. The rating or outlook could be upgraded if the company increases its size, scale and diversification, improves its financial reporting and corporate governance standards, and reduces Debt/EBITDA to below 3.5 times on a sustainable basis. Headquartered in Cajamar, Sao Paulo, Brazil, Independencia SA is Brazil's fourth largest producer of fresh and frozen beef and the second largest producer of wet blue leather with twelve beef slaughtering and deboning facilities, two jerked beef plants and four storage facilities located in the seven Brazilian States: Goias, Mato Grosso do Sul, Mato Grosso, Minas Gerais, Sao Paulo, Rondonia and Tocantins. INDEPENDENCIA SA: S&P Gives B Rating to Unit's US$250 Mil. Notes ---------------------------------------------------------------- Standard & Poor's Ratings Services has affirmed its 'B' long- term corporate credit rating on meat processing company, Independencia S.A. The outlook is positive. At the same time, S&P affirmed its 'B' rating on the company's US$225 million, long-term international bonds due in 2017. S&P also assigned its 'B' rating to Independencia International Ltd.'s approximately US$250 million, seven-year senior unsecured bond. The company is a wholly owned subsidiary of Independencia Alimentos Ltda., based in the Cayman Islands. Independencia SA will unconditionally and irrevocably guarantee the notes. The proceeds will be used to refinance existing short-term maturities due in 2008-2009. At Dec. 31, 2007, the company's outstanding pro forma debt was US$576 million, while cash and market securities totaled US$46 million. "The ratings on Independencia reflect our opinion that company's consistently higher-than-market average operational efficiency, measured by its EBITDA margin, will allow it to maintain adequate credit metrics, despite higher total debt in the current and next fiscal year," said S&'s credit analyst Vivian Zietemann. In addition, S&P expects the company to implement its growth strategy at a slower pace, so that its leverage ratios will not deteriorate aggressively. Moreover, Independencia has improved its geographic distribution of assets; the acquisition of Goias Carne and the rental of assets have lessened the company's asset concentration in restricted areas. S&P also expects Independencia's short-term debt maturities, which are due in mid-2008, to be refinanced with the proposed debt issue. On the other hand, S&P believes the ratings on the company remain constrained by the company's exposure to the volatile and highly competitive global fresh- meat industry; its high dependence on a commoditized product portfolio, with a concentration in the fresh-beef business; its highly leveraged financial risk profile; and its comparatively weaker cash flow protection measures due to additional debt from the acquisition of Goias Carne. The positive outlook reflects S&P's view that Independencia will continue reporting stronger-than-market average EBITDA margins in the 14%-16% range. The outlook also assumes that the company's credit metrics in the medium-to-long term could improve because of increasing scale and stronger cash flows. If Independencia consistently reports improving credit metrics, such as an FFO-to-total debt ratio of about 15% and a total debt-to-EBITDA ratio below 4.0, and sustains higher EBITDA margins than those of peers, S&P could raise the rating. The outlook could be revised to stable if local or international market conditions worsen, leading to margin deterioration and an FFO-to-total debt ratio consistently below 10%. Also, if the company's debt increases beyond S&P's initial expectations, the rating agency could revise the outlook to stable. Headquartered in Cajamar, Sao Paulo, Brazil, Independencia SA is Brazil's fourth largest producer of fresh and frozen beef and the second largest producer of wet blue leather with twelve beef slaughtering and deboning facilities, two jerked beef plants and four storage facilities located in the seven Brazilian States: Goias, Mato Grosso do Sul, Mato Grosso, Minas Gerais, Sao Paulo, Rondonia and Tocantins. SPANSION INC: Fitch Affirms Issuer Default Rating at B- ------------------------------------------------------- Fitch Ratings has affirmed these ratings on Spansion Inc.: -- Issuer Default Rating at 'B-'; -- US$175 million senior secured revolving credit facility due 2010 at 'B/RR3'; -- US$625 million senior secured floating rate notes due 2013 at 'B/RR3'; -- US$225 million of 11.25% senior unsecured notes due 2016 at 'CCC/RR6'; and -- US$207 million of 2.25% convertible senior subordinated debentures due 2016 at 'CCC-/RR6'. The Rating Outlook remains Negative. Approximately US$1.2 billion of debt securities are affected. Ratings concerns and the Negative Outlook center on: i) Fitch's primary credit concern centers on Spansion's weak liquidity position and limited financial flexibility, which worsened during the first fiscal quarter ended March 30, 2008 due to ongoing cash usage. Nonetheless, Fitch believes the company's plans for meaningfully lower capital spending in the second half of 2008 and, likely, for 2009, should enable modestly positive free cash flow over this time-frame. In the first quarter ended March 30, 2008, free cash flow was negative US$171 million, as Spansion continued facilitizing its leading edge manufacturing facility (SP1), which it funded with increased borrowings by under revolving credit facilities, reducing available borrowing capacity to just over US$100 million. ii) Ongoing operating losses, despite the company's increased market share and richer sales mix. After consistently improving profitability in 2007, Spansion's operating margins declined meaningfully to a Fitch-estimated negative 17.8% for the first quarter ended March 31, 2008 versus negative 10.7% for the comparable prior year quarter, driven by higher than anticipated operating expenses. Nonetheless, Fitch expects the company's profitability will gradually improve throughout 2008 as it ramps SP1 and continues marginally internalizing currently outsourced manufacturing. Fitch believes significant profitability expansion will be somewhat constrained by a weakening operating environment, particularly as the company continues to gain share with leading global handset OEMs, who are predicting lower than anticipated demand for 2008 and higher mix of low-cost devices being sold into developing markets. iii) reduced albeit still substantial ongoing capital spending and research and development (R&D) requirements, which should exceed 30% of sales in 2008; iv) Spansion's current limited diversification beyond NOR flash memory markets (although emerging products are expected to address certain NAND and DRAM markets), which Fitch believes reduces the company's tolerance for shortfalls in the commercial success of its technology roadmap or delays in transitioning to ever smaller circuitry nodes. Fitch believes Spansion's leading competitors, Numonyx B.V. and Samsung Electronics Co., benefit from greater financial flexibility and, therefore, are better able to withstand challenging operating environments. The ratings are supported by Fitch's expectations that: i) Spansion will continue to gain market share in the NOR flash memory market over the next few years, driven by ongoing industry consolidation, including an opportunity to become a second source supplier for customers of Intel Corp. and STMicroelectronics N.V., which recently formed a NOR flash memory joint venture (JV), Numonyx; ii) beyond the near-term, Spansion's significant recent investments in leading edge manufacturing technology and ongoing transition to smaller circuit geometries, as well as development of foundry partnerships, should enable the company to achieves sustainable operating profitability through a normalized cycle; iii) Spansion's technology roadmap, including its MirrorBit and ORNAND architectures, will expand the company's addressable market beyond NOR flash memory, potentially strengthening Spansion's longer-term unit growth and profitability prospects. Free cash flow for the second quarter of 2008 meaningfully below Fitch's expectations (negative US$150 million) could result in negative rating actions. Fitch also believes that negative rating actions could result from cash usage in the third or fourth quarters in the absence of additional committed funding. At the same time, Fitch believes the ratings could be stabilized by the company bolstering liquidity with positive free cash flow and/or proceeds from selling non-core assets. As of March 30, 2008, Spansion's liquidity was weak and supported by: i) approximately US$455 million of cash and cash equivalents, of which approximately US$120 million consisted of auction rates securities that Fitch believes, given current market conditions, remain illiquid; ii) approximately US$102 million of availability under the company's revolving credit facilities (subject to certain borrowing base limitations), including Spansion Inc's US$175 million senior secured revolving credit facility due September 2010 supporting liquidity in the U.S. and JPY 14 billion (approximately US$140 million as of Mar. 30, 2008) senior secured revolving credit facility due December 2009 supporting the company's wholly-owned subsidiary, Spansion Japan's, liquidity. Spansion's total debt as of Mar. 30, 2008 was US$1.7 billion and Fitch believes consisted of: i) approximately US$380 million outstanding under a JPY 48.8 billion (approximately US$484 million as of Mar. 30, 2008) Spansion Japan's senior secured credit facility expiring 2010; ii) approximately US$625 million of floating rate senior secured notes due 2013; iii) approximately US$225 million of 11.25% senior unsecured notes due 2016; iv) US$207 million of 2.25% exchangeable senior subordinated debentures due 2016; and v) approximately US$208 million of other debt, including the aforementioned borrowings under various credit facilities and capital leases. The Recovery Ratings and notching reflect Fitch's expectation that Spansion's enterprise value, and hence recovery rates for its creditors, will be maximized as a going concern rather than as in liquidation under a distressed scenario. The lower recovery ratings incorporate Spansion's meaningful decline in operating EBITDA and increased debt levels over the past several quarters, as well as a greater proportion of secured debt within the capital structure. Fitch's analysis assumes Spansion is not restricted by covenants or borrowing bases to fully draw down on its existing bank credit facilities. Given the erosion of Spansion's profitability to nearly distressed levels over the past several quarters, Fitch has reduced the discount to operating EBITDA (in estimating distressed operating EBITDA) for 2007 to 25% from the previous discount of 55%. Fitch believes of US$800 million of rated senior secured debt, including US$625 million of senior secured floating rate notes and a fully drawn US$175 million U.S. revolving bank credit facility, would recover 51%-70% in a reorganization scenario, resulting in a 'RR3' recovery rating. A waterfall analysis provides 0%-10% recovery for the approximately US$225 million of rated senior unsecured debt and US$207 million of senior subordinated notes, both resulting in a recovery rating of 'RR6'. Headquartered in Sunnyvale, California, Spansion Inc. (NASDAQ: SPSN) -- http://www.spansion.com/-- designs, develops, manufactures, markets and sells flash memory solutions for wireless, automotive, networking and consumer electronics applications. Spansion(R), the Spansion Logo(R), MirrorBit(R), MirrorBit(R) Eclipse(TM), ORNAND(TM), ORNAND2(TM), HD-SIM(TM) and combinations thereof, are trademarks of Spansion LLC. Spansion, the Spansion Logo and MirrorBit are registered in the US and other countries. The company's European unit, Spansion EMEA, is based is France. Spansion Japan Limited, is the company's unit and is headquartered in Japan. It has sales offices in Latin American countries including Brazil and Mexico. NET SERVICOS: Launches Digital TV High Definition Transmission -------------------------------------------------------------- Net Servicos de Comunicacao SA has launched Net Digital HD Max, a high definition transmission for digital TV in Rio de Janeiro. Business News Americas relates that Net Digital will allow viewers to watch shows in the wide screen format. The viewers will have the option of recording shows on the "set-top box, which have a hard disk similar to those inside computers." Subscription fee for the service is BRL799 while the monthly fee is at BRL19.90. The subscriber must select one of Net Servicos' packages of digital channels. Net Digital had already been launched in Belo Horizonte and Sao Paulo; Net Servicos intends to expand the service to 30 more cities in two months where it has transmission of digital signal, BNamericas states. Headquartered in Sao Paulo, Brazil, Net Servicos de Comunicacao SA -- http://nettv.globo.com/NETServ/us/empr/sobr_visao.jsp-- is the largest pay-television operator in Latin America. The company operates in 79 Brazilian cities, including Sao Paulo, Rio de Janeiro, Belo Horizonte and Porto Alegre. It is also the leading provider of high-speed cable modem Internet access through Net Virtua service. Its advanced network of coaxial and fiber-optic cable covers over 44,000 kilometers and passes approximately 9 million homes. * * * As reported in the Troubled Company Reporter-Latin America on Jan. 21, 2008, Moody's Investors Service assigned a Ba2 foreign currency rating to the proposed up to US$200 million guaranteed long term senior unsecured notes to be issued by Net Servicos de Comunicacao S.A. The rating outlook is stable. PROPEX INC: Can Exercise Business Judgment for Idle Assets ---------------------------------------------------------- The Hon. John Cook of the U.S. Bankruptcy Court for the Eastern District of Tennessee authorized Propex Inc. and its debtor- affiliates to exercise their business judgment in determining whether to sell, dispose of, or transfer certain miscellaneous property, up to an aggregate of US$500,000. Before disposition of any miscellaneous property, the Debtors will provide its Official Committee of Unsecured Creditors a notice of, and information about, the disposition, the Court held. The Creditors Committee then has seven business days to notify the Debtors, in writing, of any objection. The Debtors are authorized to complete the proposed transaction, if the Creditors Committee does not timely notify them of an objection, the Court stated. However, if the Creditors Committee timely objects, the Debtors will not close on the proposed transaction without receiving either the Creditor Committee's consent, or the Court's order. The Debtors will provide the Creditors Committee and the DIP Lenders with a report describing any sale, disposal or transfer of the Miscellaneous Property, on or before the 20th day of every month, beginning May 2008. The sale, disposal or transfer of the Miscellaneous Property will be deemed to have been made free and clear of any and all liens, claims and encumbrances. Headquartered in Chattanooga, Tennessee, Propex Inc. -- http://www.propexinc.com/-- produces geosynthetic, concrete, furnishing, and industrial fabrics and fiber. It is produces primary and secondary carpet backing. Propex operates in North America, Europe, and Brazil. The company and its debtor-affiliates filed for Chapter 11 protection on Jan. 18, 2008 (Bankr. E.D. Tenn. Case No. 08- 10249). The debtors' has selected Edward L. Ripley, Esq., Henry J. Kaim, Esq., and Mark W. Wege, Esq. at King & Spalding, in Houston, Texas, to represent them. As of Sept. 30, 2007, the debtors' balance sheet showed total assets of US$585,700,000 and total debts of US$527,400,000. The Debtors' exclusive period to file a plan of reorganization expires on May 17, 2008. (Propex Bankruptcy News, Issue No. 10; Bankruptcy Creditors' Service Inc., http://bankrupt.com/newsstand/or 215/945-7000) PROPEX INC: Wants Court to Reject Two Chattanooga Office Leases --------------------------------------------------------------- Propex Inc. and its debtor-affiliates seek authority from the U.S. Bankruptcy Court for the Eastern District of Tennessee to reject two office leases covering their location at 6025 Lee Highway, in Chattanooga that they no longer need. The Leases are: (a) a lease between the Debtors, as lessee, and The Raines Group, Inc., as managing agent for Chattanooga-Lee, LLC, dated February 14, 2006, as amended on October 5, and December 24, 2007; and (b) a lease between the Debtors and Raines Group, dated October 26, 2006, as amended on December 24, 2007. The Debtors vacated the leases on April 30, 2008, and will turn over full and complete access of the lease premises to the landlord on that date. According to Edward L. Ripley, Esq., at King & Spalding, LLP, in Houston, Texas, vacating and turning over the space provided under the Leases, along with the rejection of the leases, will save the Debtors approximately US$5,230 each month. "Immediate rejection of these leases is in the best interest of the Debtors' estates," he says. Headquartered in Chattanooga, Tennessee, Propex Inc. -- http://www.propexinc.com/-- produces geosynthetic, concrete, furnishing, and industrial fabrics and fiber. It is produces primary and secondary carpet backing. Propex operates in North America, Europe, and Brazil. The company and its debtor-affiliates filed for Chapter 11 protection on Jan. 18, 2008 (Bankr. E.D. Tenn. Case No. 08- 10249). The debtors' has selected Edward L. Ripley, Esq., Henry J. Kaim, Esq., and Mark W. Wege, Esq. at King & Spalding, in Houston, Texas, to represent them. As of Sept. 30, 2007, the debtors' balance sheet showed total assets of US$585,700,000 and total debts of US$527,400,000. The Debtors' exclusive period to file a plan of reorganization expires on May 17, 2008. (Propex Bankruptcy News, Issue No. 10; Bankruptcy Creditors' Service Inc., http://bankrupt.com/newsstand/or 215/945-7000) TELE NORTE: Will Invest BRL100 Million on System Upgrade -------------------------------------------------------- Brazilian news daily Folha de S Paulo reports that Tele Norte Leste Participacoes SA will invest BRL100 million for the upgrade of its network signaling system with a 100% locally developed software. Business News Americas relates that Tele Norte signed contracts for the first BRL50 million of the investment with government technology research institute Centro de Pesquisa e Desenvolvimento em Telecomunicacoes. According to BNamericas, the replacement system is based on "7IP" technology. It will "leave the network suitably adapted for the implementation of fixed line number portability." The report says that Tele Norte expects the fixed line number portability system to be ready in Espirito Santo in August 2008. Number portability will be available in 16 states by March 2009. The service will be deployed last in Sao Paulo, Rio de Janeiro, Minas Gerais, and Parana. National telecoms equipment manufacturers Tropico and AsGa are providing the number portability system. Headquartered in Rio de Janeiro, Brazil, Tele Norte Leste Participacoes SA -- http://www.telemar.com.br-- is a provider of fixed-line telecommunications services in South America. The company markets its services under its Telemar brand name. Tele Norte's subsidiaries include Telemar Norte Leste SA; TNL PCS SA; Telemar Internet Ltda.; and Companhia AIX Participacoes SA. * * * As reported on April 27, 2007, Standard & Poor's Ratings Services placed on CreditWatch with negative implications the 'BB+' corporate credit rating on Tele Norte Leste Participacoes S.A. The creditwatch resulted from TmarPart's decision to buy out its holding company's preferred shares. ========================== C A Y M A N I S L A N D S ========================== BENTEN LIMITED: Proofs of Claim Filing Deadline Is Until May 15 --------------------------------------------------------------- Benten Limited's creditors have until May 15, 2008, to prove their claims to Joshua Grant and Bobby Toor, the company's liquidators, or be excluded from receiving any distribution or payment. In their proofs of claim, creditors must indicate their full names, addresses, the full particulars of their debts or claims, and the names and addresses of their lawyers, if any. Benten Limited's shareholder decided on April 2, 2008, to place the company into voluntary liquidation under The Companies Law (2004 Revision) of the Cayman Islands. The liquidators can be reached at: Joshua Grant and Bobby Toor c/o Maples Finance Limited, P.O. Box 1093GT, Grand Cayman, Cayman Islands DAIKOKUTEN LIMITED: Proofs of Claim Filing Deadline Is May 15 ------------------------------------------------------------- Daikokuten Limited's creditors have until May 15, 2008, to prove their claims to Joshua Grant and Bobby Toor, the company's liquidators, or be excluded from receiving any distribution or payment. In their proofs of claim, creditors must indicate their full names, addresses, the full particulars of their debts or claims, and the names and addresses of their lawyers, if any. Daikokuten Limited's shareholder decided on April 2, 2008, to place the company into voluntary liquidation under The Companies Law (2004 Revision) of the Cayman Islands. The liquidators can be reached at: Joshua Grant and Bobby Toor &