/raid1/www/Hosts/bankrupt/TCRLA_Public/080519.mbx
T R O U B L E D C O M P A N Y R E P O R T E R
L A T I N A M E R I C A
Monday, May 19, 2008, Vol. 9, No. 98
Headlines
A R G E N T I N A
AGROPECUARIA MONTECARLO: Files for Reorganization in Court
ALITALIA SPA: Posts EUR21483 Mln in Pretax Loss for Q1 2008
ALITALIA SPA: Berlusconi Vows to Save Firm Sans Nationalization
ALITALIA SPA: Giovanni Sabatini Quits from Board
CHRYSLER LLC: Reaches Tentative Settlements With CAW Officials
MERCADEO SA: Files for Reorganization in Buenos Aires Court
NORGAS Y AMERICAN: Proofs of Claim Verification Is Until July 7
PETROBRAS ENERGIA: Earns ARS261 Mln in First Qtr. Ended March 31
SABATINO TONELO: Trustee Verifies Proofs of Claim Until June 24
SERTEX SRL: Trustee Verifies Proofs of Claim Until June 11
SDCOM SA: Proofs of Claim Verification Deadline Is June 4
TALLER GOWSIL: Proofs of Claim Verification Is Until June 23
TELECOM ARGENTINA: Telecom Italia To Keep Local Partner for Firm
VISTEON CORP: Names Donald Stebbins as Chief Executive Officer
A R U B A
VALERO ENERGY: El Paso Note Assumption Cues S&P to Cut Rating
VALERO ENERGY: Petrobras Postpones Acquisition of Firm's Plant
B A H A M A S
GLOBAL ENVIRONMENTAL: Will Supply Chinese Coking Coal to WASP
B E R M U D A
ARCH CAPITAL: M. Lyons Replaces R. Jones as CEO for U.S. Unit
INTELSAT LTD: March 31 Balance Sheet Upside-Down by US$722 Mil.
XL CAPITAL: Executive to Present at Lehman Brothers Conference
B R A Z I L
ACXIOM CORP: Posts US$58.2 Mil. Net Loss in First Quarter 2008
AES CORP: Fitch Rates Senior Unsecured Notes 'BB/RR1'
BANCO DAYCOVAL: Improved Capital Triggers S&P's Positive Outlook
BANCO DO BRASIL: Will Incorporate Banco Popular do Brasil
CAIXA ECONOMICA: Buys 9,600 Diebold ATMs for Brazilian Banks
CAIXA ECONOMICA: Ties Up With Tecnisa S.A. in Providing Loans
COMPANHIA SIDERURGICA: IRB-Brasil Must Provide Reinsurance
COMPANHIA ENERGETICA: Suspends Privatization
FERRO CORP: To Increase Price of Advanced Polymer Alloys
FERRO CORP: Sales Up 15% to US$607.2 Million in First Quarter
GENERAL MOTORS: Reaches Tentative Settlements With CAW Officials
GENERAL MOTORS: CAW Balks at Notice of Windsor Plant Closure
HEXION SPECIALTY: March 31 Balance Sheet Upside Down by US$1.3BB
GRAFTECH INT'L: Good Performance Cues S&P to Lift Rating to BB-
JABIL CIRCUIT: Moody's Rtg. Unmoved by US$150 Mil. Notes Add-On
JBS SA: May Pare Beef Output & Fire Argentine Workers
POLYPORE INTERNATIONAL: To Buy Yurie-Wide Shares for US$23 Mil.
SHARPER IMAGE: Hilco Joint Venture Named Stalking Horse Bidder
SUN MICROSYSTEMS: Will Launch Sun Equity in Latin America
UAL CORP: Sets Pricing Alliance With Continental Airlines
UAL CORP: Name & Chicago HG Likely to Remain After USAir Merger
C A Y M A N I S L A N D S
GREENFORD LTD: Deadline for Proofs of Claim Filing Is May 21
PARMALAT SPA: 1st Qtr Profit Down on Lesser Legal Settlements
PARMALAT SPA: Gives Updates on Legal Actions Against Citigroup
PEQUOT GLOBAL: Deadline for Proofs of Claim Filing Is May 22
PEQUOT GLOBAL: Proofs of Claim Filing Deadline Is Until May 22
QI CAPITAL: Will Hold Final Shareholders Meeting on May 22
C O L O M B I A
BANCOLOMBIA SA: S.C. Labor Chamber Revokes Civil Chamber Ruling
ECOPETROL SA: Will Boost Petrochemical Sales to 2.7 Million Tons
C O S T A R I C A
TERADYNE INC: Annual Shareholders Meeting set for May 22
D O M I N I C A N R E P U B L I C
AES DOMINICANA: S&P Affirms B- Rating on US$160 Million Notes
BASIC ENERGY: To Install 50 Megawatts of Wind Generation Project
EMPRESA GENERADORA: S&P Affirms B Long-Term Corp. Credit Rating
EMPRESA GENERADORA: S&P Holds Long-Term Corp. Credit Rating at B
E C U A D O R
BANCO PICHINCHA: Secures US$50MM Loan from Inter-American Dev't
J A M A I C A
CABLE & WIRELESS: To Take Down Illegally Constructed Towers
CASH PLUS: Lawyers Challenge Takeover by Authorities in Court
DIGICEL GROUP: To Take Down Illegally Constructed Towers
M E X I C O
BERRY PLASTICS: Posts US$29.3MM Net Loss in Qtr. Ended March 29
BLOCKBUSTER INC: Comments on Circuit City Due Diligence Pact
BLUE WATER: Files Liquidation Analysis Under Chapter 11 Plan
BLUE WATER: Gets Permission to Pay Incentives to Employees
CLEAR CHANNEL: Inks Settlement Pact With CC Media and Lenders
CONTINENTAL AIR: Sets Alliance With UAL After Failed Merger
GAP INC: April Sales Up 1% to US$1.10 Billion
INTERTAPE POLYMER: Posts US$2MM Net Loss in Qtr. ended March 31
JETBLUE AIRWAYS: Fitch Cuts Sr. Unsec. Notes' Rating to CCC-/RR6
PILGRIM'S PRIDE: Equity Issuance Won't Affect Moody's Ratings
V E N E Z U E L A
AUDIOVOX CORP: Books US$1.8 Mil. Net Loss in Qtr. Ended Feb. 29
NORTHWEST AIRLINES: EVP Neal Cohen to Leave June 16
PETROLEOS DE VENEZUELA: Says JV With PetroChina to Cost US$12BB
PETROLEOS DE VENEZUELA: Refinery Uses Tech to Boost Production
PETROLEOS DE VENEZUELA: Starts Drilling on Boyaca 6 Block
* BOND PRICING: For the Week May 12 - May 16, 2008
- - - - -
=================
A R G E N T I N A
=================
AGROPECUARIA MONTECARLO: Files for Reorganization in Court
----------------------------------------------------------
Agropecuaria Montecarlo S.A. has requested for reorganization
approval after failing to pay its liabilities.
The reorganization petition, once approved by the court, will
allow Agropecuaria Montecarlo to negotiate a settlement with its
creditors in order to avoid a straight liquidation.
The case is pending in the National Commercial Court of First
Instance No. 17 in Buenos Aires. Clerk No. 34 assists the court
in this case.
The debtor can be reached at:
Agropecuaria Montecarlo SA
Esmeralda 736
Buenos Aires, Argentina
ALITALIA SPA: Posts EUR21483 Mln in Pretax Loss for Q1 2008
-----------------------------------------------------------
Alitalia S.p.A. posted EUR214.83 million in pretax losses on
EUR1.057 billion in net revenues for the first quarter ended
March 31, 2008, compared with EUR152.34 million in pretax losses
on EUR1.06 billion in net revenues for the same period in 2007.
Alitalia notes that period in review is low season, leading to
typically negative results.
The results for first quarter 2008 was mainly influenced by
several factors:
* the sharp increase in fuel costs;
* a reduction in activities coupled with the effects of the
new marketing strategy, which focuses on improving route
performance in terms of unit revenues (yield) rather than
encouraging increases in traffic volumes;
* the continuing erosion of the Company's commercial
credibility with marked effect on sales growth;
* the reduction in traffic caused by the announcement of
changes in the network, carried out on March 30, 2008.
As of March 31, 2008, the level of the Group's net equity
amounted to about EUR96 million -- EUR169 million for the parent
company Alitalia -- before taxes which should bear on the
period.
Regarding the financial year 2007, it should be noted that the
main changes, with respect to the economic situation shown in
the fourth quarter report 2007, regard the expected devaluation,
referring to the balance sheet on Dec. 31, 2007, of fleet
aircraft for about EUR97 million, as well as tax commitments.
As of March 31, 2008, the net debt amounted to EUR1.351 billion
showing a worsening of EUR191 million compared to Dec. 31, 2007.
The Group's workforce on March 31, 2008, was 10,952 people
showing a decrease of 226 compared to March 31, 2007.
The Group's operating fleet on March 31, 2008, consisted of 173
aircraft, of which:
* 145 for short/medium-haul; and
* 28 for long-haul.
Regarding the evolution of traffic and the network in the
passenger sector, during the first quarter 2008 there was an
overall reduction in capacity offered of 5.2% -- 1.184 billion
ton kilometers compared to 1.248 billion in 2007 -- with the aim
of improving route performance.
The overall reduction in the capacity offered was matched by a
more than proportional traffic reduction, amounting to -10% --
786 million ton kilometers carried compared to 873 million in
2007.
In overall terms, the load factor reached 66.4%, down by 3.5
percentage points compared to the previous period.
This traffic performance led to an upswing in unit revenue
(yield) of 4.6%. The absolute value of revenues from passenger
traffic -- including those relating to the subsidiary Volare --
showed a downturn of 4.8% from EUR825 million to EUR785 million.
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.
ALITALIA SPA: Berlusconi Vows to Save Firm Sans Nationalization
---------------------------------------------------------------
Italian Prime Minister Silvio Berlusconi vowed to prevent the
financial collapse of Alitalia S.p.A. without nationalizing it,
Steve Scherer writes for Bloomberg News.
Mr. Berlusconi said Italy will resolve Alitalia's situation
positively while balancing national interest with market rules,
Bloomberg News relates. He added that Alitalia's future relies
on contribution from local business and banks.
As reported in the TCR-Europe on April 30, 2008, Mr. Berlusconi
threatened to nationalize Alitalia if the European Commission
starts "harassing him" over the EUR300-million loan to the
national carrier.
The Commission reacted that though it is not concerned whether
Italy nationalize Alitalia, since in the process itself there is
a transfer of state resources to the company.
The Commission gave the Italian government until May 30, 2008,
to explain the details of the loan. Italy needs to prove that
the loan was offered on commercial terms to gain approval from
the Commission.
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: Giovanni Sabatini Quits from Board
------------------------------------------------
Giovanni Sabatini has resigned from his post on the Board of
Directors of Alitalia S.p.A. with immediate effect, following
the request to return to service presented to the National
Commission for Companies and the Stock Exchange.
According to the provisions set out in the Stock Exchange
Regulations, "Istruzioni al Regolamento dei Mercati Organizzati
e Gestiti da Borsa Italiana S.p.A.," it should be pointed out
that Mr. Sabatini, also a member of the Internal Control
Committee, was a non-executive and non-independent director.
On the basis of all available information, there is no
indication that he held shares in the Company capital.
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.
CHRYSLER LLC: Reaches Tentative Settlements With CAW Officials
--------------------------------------------------------------
The Canadian Auto Workers union reached tentative settlements
with both General Motors Corp. and Chrysler LLC that meet the
pattern established with Ford Motor Co. The CAW represents
close to 13,000 GM workers and 8,000 Chrysler workers in Canada.
TCR reported on May 7, 2008, that for the first time in its
history, Ford Motor Company of Canada, Limited reached a
collective bargaining agreement with CAW more than four months
before the current contract expires. Ford employees represented
by the CAW ratified the new deal in a vote held May 4, 2008.
The early settlement brings stability to Ford's operations as it
prepares to launch the new Ford Flex crossover vehicle at the
Oakville Assembly Complex, which also builds the Ford Edge and
Lincoln MKX. Ford disclosed plans to add 500 positions to
increase production at the Oakville plant due to high demand for
the Ford Edge and Lincoln MKX, and to prepare for the start of
production of the Ford Flex.
According to a CAW press statement, both settlements were
unanimously endorsed by the CAW/GM and CAW/Chrysler Master
Bargaining committees, respectively and later overwhelmingly
supported by local union leadership.
The three-year agreements resist two-tier wages and provide
productivity and quality bonuses, improved restructuring
incentives, benefit improvements, COLA increases in both second
and third years and improved language on health and safety
issues among other gains.
The union negotiated new product commitments for both Oshawa car
and St. Catharines facilities as well as a strong close-out
agreement for members at the GM Windsor Transmission plant.
During bargaining the company announced that the Windsor plant
will close in 2010.
The union also extended the operating life of the Chrysler
Casting plant in Etobicoke, Ontario, at least until 2011.
The tentative settlements are subject to ratification by CAW
members. Ratification meetings will be held at various GM and
Chrysler locations on Friday, May 16 and Saturday, May 17, 2008.
CAW media advisories will be issued after the ratification votes
are counted at each company providing details of the results.
Ratification meeting dates, times and locations are:
* CAW General Motors units
-- Friday, May 16
1) Local 1973
Ciociaro Club, Salons A,B,C
3745 N. Talbot Road
Windsor, ON
9:00am
2) Local 199
Brock University
Bob Davis Gym
500 Glenridge Ave
St. Catharines, ON
12:00 noon
3) Local 222
General Motors Centre
99 Athol Street E.,
Oshawa, ON
3:00pm
-- Saturday, May 17
1) Local 636
Local 636 Union Hall
126 Beale Street
Woodstock, ON
9:30am
* CAW Chrysler units
-- Saturday, May 17
1) Local 195
CAW Local 195 Hall
3400 Somme Avenue
Windsor, ON
7:00am, 1:00pm, 3:00pm
2) Local 1459
SCA Oplenac
895 Rangeview Road
Mississauga, ON
(S. of Lakeshore, between Cawthra & Dixie)
8:00am
3) Local 1498
CAW Local 444 union hall
1855 Turner Road
Windsor, ON
10:00am
4) Local 1285
International Centre, Hall #1
6900 Airport Road
(Airport & Derry Road)
Mississauga, ON
10:30am
5) Local 444
University of Windsor
401 Sunset Avenue
St. Denis Hall
Windsor, ON
2:00pm
About Ford
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.
About GM
Headquartered in Detroit, Michigan, General Motors Corp. (NYSE:
GM) -- http://www.gm.com/-- was founded in 1908. GM employs
about 266,000 people around the world and manufactures cars and
trucks in 35 countries. In 2007, nearly 9.37 million GM cars
and trucks were sold globally under the following brands: Buick,
Cadillac, Chevrolet, GMC, GM Daewoo, Holden, HUMMER, Opel,
Pontiac, Saab, Saturn, Vauxhall and Wuling. GM's OnStar
subsidiary is the industry leader in vehicle safety, security
and information services.
About Chrysler
Headquartered in Auburn Hills, Michigan, Chrysler LLC --
http://www.chrysler.com/-- a unit of Cerberus Capital
Management LP, produces Chrysler, Jeep(R), Dodge and Mopar(R)
brand vehicles and products. The company has dealers worldwide,
including Canada, Mexico, U.S., Germany, France, U.K.,
Argentina, Brazil, Venezuela, China, Japan and Australia.
* * *
As reported in the Troubled Company Reporter on May 9, 2008,
Fitch Ratings downgraded the Issuer Default Rating of Chrysler
LLC to 'B' from 'B+', with a Negative Rating Outlook. Fitch has
also downgraded the senior secured bank facilities, including
senior secured first-lien bank loan to 'BB/RR1' from 'BB+/RR1';
and senior secured second-lien bank loan to 'CCC+/RR6' from
'BB+/RR1'. The recovery rating on the second lien was also
downgraded from 'BB+/RR1' to 'CCC+/RR6' based on lower asset
value assumptions and associated recoveries in the event of a
stress scenario.
MERCADEO SA: Files for Reorganization in Buenos Aires Court
-----------------------------------------------------------
Mercadeo S.A. has requested for reorganization approval after
failing to pay its liabilities.
The reorganization petition, once approved by the court, will
allow Mercadeo to negotiate a settlement with its creditors in
order to avoid a straight liquidation.
The case is pending in the National Commercial Court of First
Instance No. 11 in Buenos Aires. Clerk No. 22 assists the court
in this case.
NORGAS Y AMERICAN: Proofs of Claim Verification Is Until July 7
---------------------------------------------------------------
Juan Flores, the court-appointed trustee for Norgas y American
Gas SRL's bankruptcy proceeding, will be verifying creditors'
proofs of claim until July 7, 2008.
Mr. Flores will present the validated claims in court as
individual reports. The National Commercial Court of First
Instance No. 17 in Buenos Aires, with the assistance of Clerk
No. 34, 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 Norgas y American 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 Norgas y American's
accounting and banking records will be submitted in court.
La Nacion didn't state the submission dates for the reports.
Mr. Flores is also in charge of administering Norgas y
American's assets under court supervision and will take part in
their disposal to the extent established by law.
The debtor can be reached at:
Norgas y American Gas SRL
Hidalgo 1512
Buenos Aires, Argentina
The trustee can be reached at:
Juan Flores
Junin 55
Buenos Aires, Argentina
PETROBRAS ENERGIA: Earns ARS261 Mln in First Qtr. Ended March 31
----------------------------------------------------------------
Petrobras Energia S.A. has reported the financial results for
the first quarter ended March 31, 2008. Net income for 2008
first quarter was ARS261 million, accounting for a 7.4% increase
compared to ARS243 million in 2007 first quarter.
For the three months ended March 31, 2008, the company's net
sales decreased ARS39 million to ARS985 million, basically due
to a decline in oil sales volumes.
Sales volumes of oil equivalent dropped 19.2% to 104.2 thousand
barrels, mainly as a result of reduced sales in Ecuador and, to
a lesser extent, lower production volumes in fields located in
Argentina and Bolivia. In addition, operations in Peru also
recorded lower volumes in line with the sale of the 40% interest
in Lote X in December 2007, which interest accounted for an
average of 5.5 thousand barrels of oil equivalent in 2007
quarter. The reduction in volumes in Ecuador is attributable to
the postponement of crude oil shipments, with opposing effects
in both quarters.
Crude oil sales decreased 6.6% to ARS811 million in 2008 as a
consequence of a 31.3% reduction in sales volumes, partially
offset by a 36% increase in average sales prices, mainly in
Ecuador and Peru, in line with international reference prices.
Reduced sales volumes in 2008 quarter are primarily attributable
to:
(i) postponement of crude oil shipments in Ecuador,
(ii) lower production in Argentina,
(iii) higher sales as a result of the reduction in crude oil
stock levels in 2007 quarter in Argentina and
(iv) sale of a 40% interest in Lote X in Peru.
Gas sales rose 8.6% to ARS165 million in 2008 quarter, as a
result of a 9% increase in average sales prices, mainly in
Argentina, due to a change in the sales mix and the
renegotiation of agreements with industrial clients and, to a
lesser extent, in Bolivia, due to the rise in the price for fuel
oil which is included in the formula for calculation of the
sales price.
Gross profit decreased ARS9 million to ARS516 million in 2008
quarter. Margin on sales was similar in both quarters, 52.4% in
2008 quarter and 51.3% in 2007 quarter.
Administrative and selling expenses decreased to ARS67 million
in 2008 quarter from ARS82 million in 2007 quarter, mainly due
to reduced selling expenses in 2008 quarter as a result of
changes in the allocation of sales of crude oil produced in
Argentina which, as from the year 2008, is sold to third parties
by the Refining and Distribution segment.
Other operating income (expense), net accounted for
ARS34 million and ARS75 million losses in 2008 and 2007
quarters, respectively.
Petrobras Energia, S.A. is headquartered in Buenos Aires,
Argentina. Its majority owner, Petrobras, is based in Rio de
Janeiro, Brazil.
* * *
As reported in the Troubled Company Reporter-Latin America on
May 12, 2008, Fitch Ratings affirmed both the foreign currency
and local currency issuer default ratings of Petrobras Energia
S.A. at 'BB.' Fitch said the rating outlook for all issuer
default ratings is stable. These issuances, senior unsecured
notes due 2009; senior unsecured notes due 2010; senior
unsecured notes due 2011; and senior unsecured notes due 2013,
were affirmed at 'BB'.
On October 2007, Moody's Investors Service assigned
a Ba1 global local currency issuer rating to Petrobras Energia
S.A., and affirmed its Ba2 foreign currency rating for bonds
issued under the US$2.5 billion Obligaciones Negociables
program, and the Baa1 FCBR for the Series S bonds based on a
Petrobras standby purchase agreement.
SABATINO TONELO: Trustee Verifies Proofs of Claim Until June 24
---------------------------------------------------------------
The court-appointed trustee for Sabatino Tonelo S.A.'s
reorganization proceeding will be verifying creditors' proofs of
claim until June 24, 2008.
The trustee will present the validated claims in court as
individual reports on Aug. 20, 2008. The National Commercial
Court of First Instance in Mendoza 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 Sabatino Tonelo 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 Sabatino Tonelo's
accounting and banking records will be submitted in court on
Oct. 1, 2008.
Creditors will vote to ratify the completed settlement plan
during the assembly on April 6, 2009.
The debtor can be reached at:
Sabatino Tonelo S.A.
Av. Eden 379, La Falda
Cordoba, Argentina
SERTEX SRL: Trustee Verifies Proofs of Claim Until June 11
----------------------------------------------------------
The court-appointed trustee for Sertex S.R.L.'s reorganization
proceeding will be verifying creditors' proofs of claim until
June 11, 2008.
The trustee will present the validated claims in court as
individual reports on Aug. 13, 2008. The National Commercial
Court of First Instance in Rosario, Santa Fe, 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 Sertex 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 Sertex's accounting
and banking records will be submitted in court on Oct. 1, 2008.
Creditors will vote to ratify the completed settlement plan
during the assembly on Dec. 3, 2008.
The debtor can be reached at:
Sertex S.R.L.
Jujuy 2727, Rosario
Santa Fe, Argentina
Phone: (0341) 430-4519
SDCOM SA: Proofs of Claim Verification Deadline Is June 4
---------------------------------------------------------
The court-appointed trustee for Sdcom S.A.'s bankruptcy
proceeding, will be verifying creditors' proofs of claim until
June 4, 2008.
The trustee will present the validated claims in court as
individual reports on Sept. 8, 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 Sdcom 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 Sdcom's accounting
and banking records will be submitted in court on Oct. 20, 2008.
TALLER GOWSIL: Proofs of Claim Verification Is Until June 23
------------------------------------------------------------
The court-appointed trustee for Taller Gowsil S.R.L.'s
bankruptcy proceeding, will be verifying creditors' proofs of
claim until June 23, 2008.
The trustee will present the validated claims in court as
individual reports on Aug. 13, 2008. The National Commercial
Court of First Instance in Mercedes, 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 Taller Gowsil 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 Taller Gowsil's
accounting and banking records will be submitted in court on
Sept. 25, 2008.
TELECOM ARGENTINA: Telecom Italia To Keep Local Partner for Firm
----------------------------------------------------------------
Telecom Italia SpA's President Gabriele Galateri di Genola told
Argentine news daily La Nacion that the firm would continue
having a local partner in the control of Telecom Argentina SA.
Mr. Galateri di Genola confirmed to Business News Americas that
Telecom Italia will exercise a call option right next year for
control of Sofora Telecomunicaciones, which controls Telecom
Argentina and Telecom Personal through its 68% stake in Nortel
Inversora SA. BNamericas notes that Telecom Italia already
holds a 50% stake in Sofora Telecomunicaciones and the remainder
is controlled by Argentine investment group Grupo Werthein.
Telecom Italia wants to continue having a local partner after
its exercises the call option in 2009, BNamericas says, citing
Mr. Galateri di Genola. "We are open to local partners,
including Grupo Werthein," Mr. Galateri di Genola commented to
La Nacion.
Headquartered in Buenos Aires, Telecom Argentina S.A. --
http://www.telecom.com.ar/index-flash.html-- provides
telephone-related services, such as international long-distance
service and data transmission and Internet services, and through
its subsidiaries, wireless telecommunications services,
international wholesale services and telephone directory
publishing. As of Dec. 31, 2006, its telephone system included
approximately 4.09 million lines in service.
As of 2007, current approximate ownership of Telecom Argentina
is: * 54.74% by Nortel Inversora S.A., itself a consortium made
up of: -- Werthein Group (48%) -- Telecom Italia -- France
Telecom group (2%); * 41.5% publicly traded; and * 4.21%
employee stock ownership program France Telecom sold its part of
Telecom Argentina to the WertheinGroup, an Argentine
agricultural concern owned in part by vice chairman Gerardo
Werthein. As of 2007, current approximate ownership of Telecom
Argentina is: * 54.74% by Nortel Inversora S.A., itself a
consortium made up of: -- Werthein Group (48%) -- Telecom Italia
group (50%) -- France Telecom group (2%); * 41.5% publicly
traded; and * 4.21% employee stock ownership program.
* * *
As reported in the Troubled Company Reporter-Latin America on
Feb. 21, 2008, Fitch Ratings upgraded Telecom Argentina's
foreign and local currency issuer default ratings to 'B+' from
'B'. Fitch said the outlook is positive.
VISTEON CORP: Names Donald Stebbins as Chief Executive Officer
--------------------------------------------------------------
The board of directors of Visteon Corporation elected Donald J.
Stebbins as president and chief executive officer, effective
June 1, 2008. Mr. Stebbins, who was president and chief
operating officer, succeeds Michael F. Johnston in the CEO role.
Mr. Johnston will continue as executive chairman of the global
automotive supplier.
Mr. Stebbins, 50, has been president and COO since joining
Visteon in 2005, following 13 years in senior leadership
positions with Lear Corp. Expanding Mr. Stebbins' leadership
role is a timely and logical step in Visteon's long-term
executive succession planning process, according to Mr.
Johnston.
"The three-year plan that we launched in 2006 is successfully
positioning Visteon for sustainable success," Mr. Johnston said.
"As we approach the conclusion of this phase of our
transformation, it's a logical time for Don to assume a greater
role in steering the organization into the future."
As CEO, Mr. Stebbins will lead the development and execution of
Visteon's long-term strategy while continuing to oversee the
company's global operations, sales, manufacturing, product
development, research and development, and customer relations.
Mr. Stebbins has more than 20 years of leadership experience and
a solid history of performance in managing a global
manufacturing business. He has served on Visteon's board of
directors since December 2006.
Mr. Johnston, 60, has been chairman and CEO since June 1, 2005.
He joined Visteon in September 2000 as chief operating officer
and president, and has held the CEO post since June 2004. Mr.
Johnston has guided Visteon from a North America-focused parts
supplier that was heavily dependent on one automaker, to a
global engineering and manufacturing company with a focused
product portfolio and a diversified customer and geographic
base. As executive chairman, Mr. Johnston will concentrate on
ensuring company policies and investments align with corporate
strategy, interfacing with the board of directors, and fostering
relationships with key customers and financial stakeholders.
In expanding Mr. Stebbins' responsibilities, Visteon's board
cited his global and financial experience and his success
restructuring, improving and growing Visteon's operations in a
challenging market environment. "Don's appointment as CEO
underscores his proven leadership and core strengths in global
operations and finance, which have resulted in a more
competitive cost structure and expanded capabilities in fast-
growing markets such as the Asia Pacific region," Mr. Johnston
said.
Along with leading Visteon's long-term strategy, Stebbins said
his immediate priorities include successfully completing the
remaining restructuring actions identified in Visteon's three-
year plan; continuing to improve quality, employee safety and
efficiency; and generating profitable new business wins in
Visteon's core product areas.
"We have a tremendously talented and experienced leadership
team," Mr. Stebbins said. "Their abilities and energy, coupled
with the strong working relationship that Mike and I have
developed, give me every confidence that Visteon will continue
taking positive steps and delivering on our commitments."
Reporting to Mr. Stebbins will be William G. Quigley III,
executive vice president and chief financial officer; John
Donofrio, senior vice president and general counsel; Robert
Pallash, senior vice president and president, global customer
group; Dorothy L. Stephenson, senior vice president, human
resources; the vice presidents of the three major product
groups: Joy Greenway climate, Terry Gohl interiors and lighting,
and Steve Meszaros electronics; Asaf Farashuddin, vice
president, strategy; Jim Sistek, vice president, information
technology; and Julie Fream, vice president, North American
customer group and global communications.
Mr. Stebbins joined Visteon from Lear Corp., where he was
president and chief operating officer of Lear's operations in
Europe, Asia and Africa. Previously, he was president and COO
of Lear's operations in the Americas. Mr. Stebbins joined Lear
in 1992 as vice president and treasurer. He held various
financial positions of increasing responsibility with Lear,
including a 1997 promotion to senior vice president and chief
financial officer. Previously, he held positions at Bankers
Trust Company and Citibank.
Mr. Stebbins holds a bachelor's degree in finance from Miami
University in Oxford, Ohio, where he is also a member of its
Business Advisory Council. He holds a master's degree in
business administration from the University of Michigan. He has
served on Visteon's board of directors since December 2006.
Additionally, he is a member of the board of directors of WABCO
Holdings Inc.
Based in Van Buren Township, Michigan, Visteon Corp. (NYSE: VC)
-- http://www.visteon.com/-- is a global automotive supplier
that designs, engineers and manufactures innovative climate,
interior, electronic, and lighting products for vehicle
manufacturers, and also provides a range of products and
services to aftermarket customers. The company's other
corporate offices are in Shanghai, China; and Kerpen, Germany.
The company has Latin America offices in Argentina, Brazil and
Mexico. The company has facilities in 26 countries and employs
approximately 43,000 people.
Visteon Corporation's balance sheet at March 31, 2008, showed
total assets of US$7.2 billion and total liabilities of
US$7.3 billion resulting in a total shareholders' deficit of
about US$136 million.
* * *
Visteon Corp. holds Moody's Investors Service's Caa2
senior unsecured debt rating, and Fitch Ratings Services' CC
senior unsecured debt rating and CCC long-term issuer default
rating.
=========
A R U B A
=========
VALERO ENERGY: El Paso Note Assumption Cues S&P to Cut Rating
-------------------------------------------------------------
Standard & Poor's Ratings Services lowered its rating on the
US$15 million unsecured notes due 2012 of Valero Energy Corp.
(BBB/Stable/--) to 'BB-' from 'BBB', reflecting the assumption
of
the notes by El Paso Corp. (BB/Positive/--).
Ratings List
Rating Lowered
To From
-- ----
Valero Energy Corp.
Senior unsecured
USUS$15 mil due 2012 BB- BBB
Headquartered in San Antonio, Texas, Valero Energy Corporation
is North America's largest independent refining and marketing
company, currently owning 16 oil refineries with nameplate crude
oil distillation capacity of 2.6 barrels per day (bpd) and,
including intermediate feedstock, 3.1 million bpd. VLO has one
of the largest deep conversion capacities in North America. Its
current portfolio of refineries displays a somewhat above
average Nelson Complexity Index of 11.1. Valero Energy
is evaluating strategic alternatives for one to three refineries
and each of the potential pro-forma scenarios would increase its
current Nelson index. The pending major capital spending
programs would further increase Valero Energy Corporation value
adding capacity and complexity downstream from crude oil
distillation. The company has operated an oil refinery in
Aruba.
VALERO ENERGY: Petrobras Postpones Acquisition of Firm's Plant
--------------------------------------------------------------
Joe Carroll at Bloomberg News reports that Petroleo Brasileiro
SA aka Petrobras has suspended a decision on whether to acquire
a Valero Energy Corp. plant in Aruba.
Bloomberg News relates that acquisition of the Aruban plant
would increase Petrobras' refining capacity by 14%.
Petrobras' Chief Executive Officer for U.S. Operations Alberto
Guimaraes told Bloomberg that the firm's directors adjourned
their meeting last week without making a decision on the
proposed acquisition. No new date has been set for the board to
consider the transaction, Mr. Guimaraes added.
Valero Energy's Aruba plant can process some 275,000 barrels of
oil per day. It includes two delayed coking units, which handle
heavy crude similar to the grades in Brazil's offshore deposits,
Bloomberg states.
About Petrobras
Headquartered in Rio de Janeiro, Brazil, Petroleo Brasileiro SA
aka Petrobras -- http://www2.petrobras.com.br/ingles/index.asp-
- was founded in 1953. The company explores, produces,
refines, transports, markets, distributes oil and natural gas
and power to various wholesale customers and retail distributors
in Brazil. Petrobras has operations in China, India, Japan, and
Singapore.
About Valero Energy
Headquartered in San Antonio, Texas, Valero Energy Corporation
is North America's largest independent refining and marketing
company, currently owning 16 oil refineries with nameplate crude
oil distillation capacity of 2.6 barrels per day and, including
intermediate feedstock, 3.1 million bpd. VLO has one of the
largest deep conversion capacities in North America. Its
current portfolio of refineries displays a somewhat above
average Nelson Complexity Index of 11.1 . Valero Energy
Corporation is evaluating strategic alternatives for one to
three refineries and each of the potential pro-forma scenarios
would increase its current Nelson index. The pending major
capital spending programs would further increase Valero Energy
Corporation value adding capacity and complexity downstream from
crude oil distillation. The company has operated an oil
refinery in Aruba.
* * *
As reported in the Troubled Company Reporter-Latin America on
Feb. 13, 2008, Moody's Investors Service placed Valero Energy
Corporation's ratings on review for upgrade. Moody's previously
confirmed Valero Energy Corporation's Ba1 rated subordinated
debentures and Ba2 rated mandatory convertible preferred stock.
The ratings still hold to date, subject to the conclusion of
Moody's rating review for possible upgrade. Moody's said the
outlook is still positive.
=============
B A H A M A S
=============
GLOBAL ENVIRONMENTAL: Will Supply Chinese Coking Coal to WASP
-------------------------------------------------------------
Global Environmental Energy Corp. has received a Letter of
Intent from U.S.-based WASP Energy LLC. for Global to supply
WASP with 2-3 million tons of Chinese metallurgical coal (coking
coal) per year on a multiyear contract.
Global is a joint venture partner with the Yankuang Group of
companies, engaged in the business of mining, processing and
selling Chinese Coal. Yankuang and Global jointly own the
Shenzhen YanFeng Coal Company Limited, which is owned (60%) by
Yankuang Group Holding Co., Ltd., and (40%) Global.
Yankuang Group of Companies (NYSE: YZC) is engaged in coal
mining, coal chemistry, electrolytic aluminium, real estate
development, electricity generation, construction materials,
mechanical process, environmental remediation, trading etc.
Yangzhou Coal Mining Company Limited, a subsidiary of Yankuang
Group Holding Co., Ltd. is listed on New York Stock Exchange,
Hong Kong Stock Exchange (Code number 1171) and Shanghai Stock
Exchange (Code number 600188).
WASP Energy LLC. -- http://www.waspenergy.com-- is a Khanjee
company -- http://www.khanjeeholding.com-- and is licensed by
the Federal Energy Regulatory Commission of the United States to
trade in electric power and other energy commodities. The
company will pre finance its ongoing coal purchase from Global
through credit facilities acceptable to Global.
Headquartered in Nassau, Bahamas, Global Environmental Energy
Corp. (Deutsche Borse: GLI; OTC Bulletin Board: GEECF) --
http://www.geecf.ru-- is engaged in traditional oil and gas
exploration and production, alternative energy sources,
environmental infrastructure and electrical micro-power
generation through its subsidiaries, Sahara Petroleum
Exploration Corp. and Biosphere Development Corp.
* * *
As of May 31, 2007, Global Environmental Energy Corp. reported a
total stockholders' deficit of US$71,549,591 compared to
US$55,609,865 total stockholders' deficit on May 31, 2006.
=============
B E R M U D A
=============
ARCH CAPITAL: M. Lyons Replaces R. Jones as CEO for U.S. Unit
-------------------------------------------------------------
Arch Capital Group Ltd. said that Mark Lyons has been promoted
to the position of Chairman and Chief Executive Officer of Arch
Worldwide Insurance Group, effective July 2, 2008. Mr. Lyons,
who joined Arch in 2002 and currently serves as President and
Chief Operating Officer of Arch's U.S.-based insurance group,
will succeed Ralph Jones, who will be retiring at the end of his
five-year employment term on July 1, 2008.
Dinos Iordanou, President and Chief Executive Officer of Arch
Capital Group Ltd., said, "With Ralph's guidance over the past
five years, our insurance business has continued to establish
itself as a significant participant in the worldwide insurance
marketplace. We are very appreciative and thankful for Ralph's
contributions and wish him well in his retirement. We are also
confident that Mark will continue to provide the strong
leadership necessary to sustain our insurance group's success.
Our ability to promote from within Arch is another indication of
the depth and strength of our management team. Under the
continuing senior team led by Mark, the strategic direction of
Arch Insurance will not change."
Mr. Jones added, "It has been a pleasure to be part of the Arch
success story during the past five years. After 30 years in the
industry, it will be nice to hand over the reigns to my very
capable successor, Mark Lyons."
Mr. Lyons, age 51, has served as President and Chief Operating
Officer of Arch Insurance Group since June 2006. Prior thereto,
he served in various senior executive positions for Arch
Insurance Group, including Senior Vice President of group
operations and Chief Actuary. Prior to joining Arch, Mr. Lyons
was Executive Vice President of product services at Zurich U.S.
and Vice President and Actuary at Berkshire Hathaway Insurance
Group. Mr. Lyons holds a B.S. degree from Elizabethtown
College. He is also an Associate of the Casualty Actuarial
Society and a member of the American Academy of Actuaries.
Headquartered in Bermuda, Arch Capital Group Ltd. (NASDAQ: ACGL)
-- http://www.archcapgroup.bm-- is a public limited liability
company, which provides insurance and reinsurance on a worldwide
basis through operations in Bermuda, the United States, Europe
and Canada. It provides a range of property and casualty
insurance and reinsurance lines, and focus on writing specialty
lines of insurance and reinsurance. Arch Capital classifies its
business into two underwriting segments: reinsurance and
insurance. The company's reinsurance operations are conducted
on a worldwide basis through its reinsurance subsidiaries, Arch
Reinsurance Ltd. and Arch Reinsurance Company. The company's
insurance operations in Bermuda are conducted through Arch
Insurance (Bermuda), a division of Arch Re Bermuda, which has an
office in Hamilton, Bermuda.
* * *
In December 2006, A.M. Best assigned these ratings on to Arch
Capital's debts:
-- "bb+" from "bb" on US$200 million 8% non-cumulative
Series A preferred shares; and
-- "bb+" from "bb" on US$125 million 7.875% non-cumulative
Series B preferred shares.
INTELSAT LTD: March 31 Balance Sheet Upside-Down by US$722 Mil.
---------------------------------------------------------------
Intelsat Ltd.'s balance sheet showed total assets of
US$12.05 billion, total debts of US$12.77 billion and
stockholders' deficit of US$722.3 million as of March 31, 2008.
The company reported revenue of US$572.7 million and a net loss
of US$412.7 million for the three months ended March 31, 2008,
which included US$313.1 million in restructuring and transaction
costs incurred in connection with the February 4, 2008
acquisition of all of the equity ownership of its parent,
Intelsat Holdings, Ltd., by Intelsat Global, Ltd. (formerly
known as Serafina Holdings Limited), an entity controlled by
funds advised by BC Partners Holdings Ltd., Silver Lake Partners
and certain other equity investors.
Intelsat CEO Dave McGlade commented, "Intelsat delivered a
strong first quarter. We achieved broad-based revenue growth,
with increases reported by each of our three primary customer
sectors, Media, Network Services and Government. The powerful
forces of globalization, technology – including mobility, IP
networks and high definition television – and deregulation
continue to drive demand for our global communications
infrastructure, as illustrated by our record contract backlog at
quarter end of $8.3 billion."
"Operationally, we are performing to our plan. Costs are in
line with our objectives and margins are expanding, even as we
invest in new service introductions to capitalize on mobility
and broadband opportunities. We are building value through
disciplined management of our fleet, optimizing existing
transponder capacity and strategically replacing satellites. We
are pleased with our first quarter results, and remain focused
on the continued successful execution of our business strategy."
The company's revenue has increased by US$54.4 million, or 11
percent, for the three months ended March 31, 2008 as compared
to US$518.2 million for the three months ended March 31, 2007.
Growth trends included increased sales of transponder services
and managed services to network services customers and customers
of our Intelsat General government business. Favorable revenue
trends also included strong renewals, expansions of existing
contracts, new business and improved contract terms. All
regions reported revenue increases, with North America, Europe,
and Africa and the Middle East delivering the strongest gains.
Free Cash Flow & Capital Expenditures
Intelsat generated free cash flow from operationsii of
US$119.7 million during the three months ended March 31, 2008.
Free cash flow from operations is defined as net cash provided
by operating activities, less payments for satellites and other
property and equipment and associated capitalized interest.
Payments for satellites and other property and equipment during
the three months ended March 31, 2008 totaled US$106.5 million.
In 2008, the company expects to launch two satellites, Galaxy 18
and Galaxy 19, in May 2008 and the third quarter of 2008,
respectively. Its remaining three satellites on order are
expected to be launched in 2009. The company expects its 2008
total capital expenditures to range from approximately US$460
million to US$500 million.
Headquartered in Pembroke, Bermuda, Intelsat, Ltd. --
http://www.intelsat.com/-- is the largest fixed satellite
service operator in the world and is owned by Apollo Management,
Apax Partners, Madison Dearborn, and Permira. The company has a
sales office in Brazil.
* * *
As reported in the Troubled Company Reporter-Latin America on
Feb. 19, 2008, Standard & Poor's Ratings Services lowered its
corporate credit rating on Bermuda-based Intelsat Ltd. to 'B'
from 'B+' and removed the ratings from CreditWatch. S&P said
the outlook is stable.
XL CAPITAL: Executive to Present at Lehman Brothers Conference
--------------------------------------------------------------
XL Capital Ltd. Chief Executive of Insurance Operations, David
Duclos is scheduled to present at the Lehman Brothers Financial
Services conference to be held at the Lehman Brothers European
Headquarters, 25 Bank Street, Canary Wharf, London, England at
3:30 p.m. BST, on May 20, 2008.
A live webcast of Mr. Duclos' presentation will be available at
http://cc.talkpoint.com/LEHM002/052008a_jw/default.asp?entity=XL
A replay of the presentation and accompanying slides will be
available in the Investor Relations section of the company's
website following the live webcast and will be archived there
for approximately 21 days following the presentation date.
Headquartered in Bermuda, XL Capital Ltd. --
http://www.xlcapital.com/-- writes liability insurance and
reinsurance worldwide, specializing in low-frequency, high-
severity risks from riots to natural disasters. The company
writes policies through numerous subsidiaries, many of them
offshore, and also manages a Lloyd's of London syndicate. XL's
coverage includes general and executive liability, property, and
political risk insurance. Its reinsurance covers property,
aviation, energy, nuclear accident, and professional indemnity.
* * *
As reported in the Troubled Company Reporter-Latin America on
April 3, 2008, Fitch Ratings downgraded XL Capital Ltd.'s Class
A1 to 'BB' from 'A' and Class A2 to 'BB' from 'A' and removed it
from Rating Watch Negative. Fitch also downgraded XLCA's
Insurer Financial strength rating to 'BB' and removed the IFS
from Rating Watch Negative.
===========
B R A Z I L
===========
ACXIOM CORP: Posts US$58.2 Mil. Net Loss in First Quarter 2008
--------------------------------------------------------------
Acxiom Corporation reported its financial results for the fourth
quarter and fiscal year end ended March 31, 2008. The company
will host an investor day June 17 in New York. Details will be
made available on the Acxiom Web site.
Revenue for the fourth quarter was US$349.8 million compared to
US$356.4 million in the fourth quarter of fiscal 2007.
Operating loss for the quarter was US$76.0 million and loss per
diluted share was US$0.76. The results for the quarter include
the impact of US$107.2 million of restructuring and other items
(of which US$104.5 million are included in the loss from
operations, with the remainder included in other expense), which
contributed to the loss by the equivalent of US$0.91 per diluted
share.
For the 12-month period ended March 31, 2008, revenue totaled
US$1.384 billion compared to US$1.391 billion in the prior year.
Income from operations for the 12 month period was
US$40.2 million compared to US$154.1 million a year ago. Loss
per diluted share was US$0.10 compared to earnings per diluted
share of US$0.80 in the prior year. The loss per diluted share
includes the impact of US$84.2 million, or the equivalent of
US$0.70 per diluted share, of expense from unusual items.
For the first quarter of 2008, the company reported a net loss
of US$58.2 million, compared with net income of US$5.7 million
in the same period in 2007. As of March 31, 2008, the company's
total stockholders' equity was US$500.5 million.
According to John Meyer, Acxiom Corp. CEO and President, "During
my first 90 days I have focused on meeting our customers and our
people, rationalizing costs and gaining a deeper understanding
of our offerings and value propositions. I have also made a
number of leadership and role changes.
"We are working to develop strategic and operational plans to
help overcome the current challenges we are facing in some
industry sectors and to provide a springboard for growth in
future years. The initial focus will be on our customers and
potential customers, leveraging our capabilities and assets
across all industries we serve, and creating a winning market-
facing culture. We already have a very strong foundation to do
that. I believe in this opportunity now even more than when I
was evaluating coming on board."
Restatement, Restructuring and Other Items
The Company is restating its financial statements for 2007,
2006, and prior years to correct its accounting related to
accrued service revenue. The impact of this restatement will be
a reduction in net income of US$2.4 million in 2006 and
US$2.9 million in 2007. Accrued revenue, which is reflected in
accounts receivable, will be reduced by a total of
US$52.2 million.
Fourth-quarter loss per diluted share of US$.76 includes
US$107.2 million or the equivalent of US$0.91 per share in
unusual expenses.
The major components of the restructuring and other items are:
* Gains, losses and other - US$74.5 million composed of:
-- Restructuring charges - US$42.9 million related to
headcount reduction, real estate closure, contract
termination;
-- Closing operations - US$13.5 million related to
previously acquired operations and the flight department;
-- Asset disposal/impairment - US$15.0 million, primarily
software;
-- Other US$3.1 million related to legal, international and
other;
* IT contract restructuring - US$34.0 million reflected as
increase in cost of services;
* Loss on investment - US$2.7 million reflected in Other, net;
* Accrued revenue restatement - US$.4.0 million increase in
revenue.
Of the US$107.2 million in restructuring and other items,
approximately US$59.2 million represents balance sheet assets
written down that do not require cash outlays. Approximately
US$48.0 million represents estimated cash payments to be made on
obligations primarily related to headcount reductions, real
estate and facilities lease terminations and an aircraft lease
termination. The US$48 million includes obligations of
approximately US$34 million to be paid in fiscal 2009, with the
remainder in future periods.
Details of Acxiom's fourth-quarter results include:
* Revenue of US$349.8 million compared to US$356.4 million in
the fourth quarter a year ago;
* Loss from operations of US$76.0 million compared to income
from operations of US$28.4 million in the fourth quarter
last year;
* Loss from operations this quarter included US$107.2 million
of restructuring and other items;
* Loss per diluted share of US$0.76 compared to earnings per
share of US$0.07 in the fourth quarter of fiscal 2008;
included in the loss per share of US$0.76 is the negative
impact of restructuring and other items which was the
equivalent of US$.91 per diluted share;
* Operating cash flow of US$90.5 million compared to
US$76.5 million in the fourth quarter a year ago;
* Free cash flow available to equity of US$14.7 million
compared to US$15.4 million a year ago; free cash flow
available to equity is a non-GAAP financial measure.
Details of Acxiom's fiscal year results include:
* Revenue of US$1.38 billion compared to US$1.39 billion in
the prior year;
* Income from operations of US$40.2 million in 2008 compared
to US$154.1 million in fiscal 2007;
* Loss per diluted share of US$0.10 compared to earnings per
diluted share of US$0.80 in fiscal 2007; net restructuring
and other items for the year were US$84.2 million, or the
equivalent of US$0.70 per diluted share; In addition to the
restructuring and other items in the fourth quarter, the
company had a benefit of a net gain of US$22.9 million
comprised of:
-- Gains from a merger termination payment and sale of
assets of US$68.2 million;
-- Restructuring costs, transaction costs, retirement and
loss on sale of assets of US$30.0 million;
-- Additional contract impairment in cost of services of
US$10.0 million;
-- Reduction in revenue related to accrued revenue
restatement to previous quarters of US$5.2 million;
* Operating cash flow of US$300.3 million compared to US$260.0
million in the prior year;
* Free cash flow available to equity of US$77.5 million
compared to US$55.2 million a year ago; free cash flow
available to equity is a non-GAAP financial measure.
Segment information:
* Information Services Division: The division develops, sells
and delivers industry-tailored solutions globally through
the integration of products, services and consulting.
Revenue for the quarter was US$189.7 million, up 0.8 percent
from the fourth quarter of the previous year. For the 12
months ended March 31, 2008, revenue was US$741.3 million,
up 1.8 percent from the previous year. Operating income for
the quarter was US$24.1 million, down 7.7 percent from the
third quarter of the previous year. For the 12 months just
ended, operating income was US$97.2 million, down 22.0
percent from the previous 12-month period.
* Information Products Division: The division develops and
sells all global data products, including InfoBase-X and
PersonicX, as well as fraud and risk mitigation products
sold in the U.S., including InsightIdentify. It focuses on
product development, product lifecycle management, data
content management and innovation. Revenue for the quarter
was US$115.2 million, up 5.2 percent from the fourth quarter
of the previous year. For the 12 months ended March 31,
2008, revenue was US$431.3 million, up 3.8 percent from the
previous year. Operating income for the quarter was US$13.1
million, up 45.9 percent from the fourth quarter of the
previous year. For the 12 months just ended, operating
income was US$23.8 million, up 25.7 percent from the
previous 12-month period.
* Infrastructure Management Division: The division develops
and delivers information technology products and services
that improve a company's ability to manage its information
technology delivery platform with lower costs and higher
efficiencies. Such offerings include traditional IT
outsourcing and transformational solutions such as the
Acxiom data factory. Revenue for the quarter was US$108.2
million, down 8.8 percent from the fourth quarter of the
previous year. For the 12 months ended March 31, 2008,
revenue was US$447.5 million, down 6.1 percent from the
previous year. Operating income for the quarter was US$8.3
million, down 16.1 percent from the fourth quarter of the
previous year. For the 12 months just ended, operating
income was US$44.3 million, down 10.3 percent from the
previous 12-month period.
Investor Day
The company will be hosting an investor day on June 17 and
providing a forecast for fiscal 2009 at that time. Company
management will also discuss operations and prospects at the
investor day. The event will be held at the NASDAQ facilities in
New York and will be web cast. Further information will be made
available at http://www.acxiom.com/
Web Link to Financials
http://www.acxiom.com/FY08_Q4_Financialsis a link to the
detailed financial information.
About Acxiom Corporation
Headquartered in Little Rock, Arkansas, Acxiom Corporation,
(Nasdaq: ACXM) -- http://www.acxiom.com/-- integrates data,
services and technology to create and deliver customer and
information management solutions for many of the largest, most
respected companies in the world. The core components of
Acxiom's innovative solutions are Customer Data Integration
technology, data, database services, IT outsourcing, consulting
and analytics, and privacy leadership. Acxiom has a team of
specialists with sales and business development associates based
in the largest Latin American markets: Brazil, Argentina and
Mexico.
* * *
As reported in the Troubled Company Reporter-Latin America on
Dec. 18, 2007, Moody's Investors Service confirmed Acxiom's Ba2
corporate family rating and assigned a negative rating outlook,
concluding a review for possible downgrade initiated on May 17,
2007, following the company's announcement that it had entered
into a definitive agreement to be acquired by Silver Lake and
ValueAct Capital for US$3 billion.
AES CORP: Fitch Rates Senior Unsecured Notes 'BB/RR1'
-----------------------------------------------------
Fitch Ratings has assigned a 'BB/RR1' rating to AES
Corporation's (AES) US$600 million issuance of senior unsecured
notes maturing 2020. AES' long-term Issuer Default Rating (IDR)
is rated 'B+'. Fitch's rating is based on its expectation that
AES will use the proceeds to pay down higher-cost debt. The
Rating Outlook is Stable.
The ratings of AES reflect the large amount of parent-company
recourse debt, the structural subordination of that debt to
subsidiary debt, and the reliance on distributions from its
subsidiaries for parent company debt service. Offsetting, in
part, the company's financial risk is the solid base of cash
flow from utility businesses and contracted generation as well
as the diversity of cash flow sources. The current Stable
Rating Outlook reflects Fitch's expectation that credit metrics
will stay within parameters for the current rating.
AES Corp. (NYSE:AES) -- http://www.aes.com/-- is a global power
company, with 2007 revenues of US$13.6 billion. The company has
operations in 29 countries on five continents and has a
workforce of 28,000 people. The company's 13 regulated
utilities amass annual sales of over 78,000 GWh and its 123
generation facilities have the capacity to generate more than
43,000 megawatts. Its consolidated revenues totaled
US$13.6 billion during fiscal year 2007.
In Europe, the company has operations in Ukraine, Ireland,
Spain, Kazakhstan and Bulgaria, among others. The company also
has subsidiaries in Europe that includes the Netherlands and
United Kingdom. Aside from China, AES also has operations in
India and the Philippines. Latin America operations include
Brazil, Argentina and Chile.
BANCO DAYCOVAL: Improved Capital Triggers S&P's Positive Outlook
----------------------------------------------------------------
Standard & Poor's Ratings Services has revised its outlook on
Banco Daycoval S.A. to positive from stable. At the same time,
S&P affirmed its 'BB-/B' counterparty credit and senior-
unsecured bond ratings on the bank. S&P also affirmed its
'brA/brA-2' national scale rating.
"The outlook revision reflects our opinion that Daycoval will
continue to post solid results, while taking advantage of the
potential for growth in Brazil's credit market," said S&P's
credit analyst Marcelo Peixoto. Improved capitalization and a
focused strategy have allowed the bank to increase its market
share in the middle-market segment and diversify its product
base, while improving its business and financial profiles
gradually.
The ratings on Banco Daycoval reflect the challenges the bank
faces to further diversify its funding base and to continue
growing its credit portfolio under adequate risk management
procedures in a very competitive environment. The bank's
positive track record in lending to small and midsize
enterprises, strong profitability, and commitment to maintain
adequate liquidity and capital levels offset those risks.
S&P could raise the rating if the bank continues to expand its
loan portfolio rapidly while maintaining previous financial
performance. An upgrade would depend on the Banco Daycoval's
ability to improve its market position, maintain adequate credit
risk management, and keep the nonperforming assets-to-total
loans ratio lower than 3% and profitability close to 4%. S&P
also expects the bank to grow and diversify its funding base
further while maintaining strong liquidity. On the other hand,
S&P could revise the outlook to stable if the its asset quality
ratios deteriorate -- reporting ratios closer to 5% of
nonperforming loans to total loans -- indicating that the
bank has lowered its risk management standards and financial
targets, or if profitability or liquidity deteriorate
significantly.
Headquartered in Sao Paulo, Brazil, Banco Daycoval SA started
its activities in 1968, with the creation of Daycoval DTVM and
Valco Corretora de Valores. Brothers Ibrahim and Sasson Dayan
control the bank. It is the core business of its shareholders
and specializes in financing small- and medium-sized companies,
backed by receivables. It also operates with consignment
lending for payroll deduction and consumer financing. Since
June 2007, the bank has had 29% of its shares traded at Bovespa
on the New Brazilian Stock Market. These shares enjoy a tag-
along privilege, giving minority shareholders 100% of the value
of the block of controlling shares in the event of the sale of
the institution.
BANCO DO BRASIL: Will Incorporate Banco Popular do Brasil
---------------------------------------------------------
Banco do Brasil SA will incorporate its microcredit unit Banco
Popular do Brasil to create a low-income division for clients
earning the national minimum wage of BRL415 per month.
Business News Americas relates that Banco Popular was formed in
2004 to provide loans to low-income earners. It had
BRL27.3 million in its loan portfolio in March 2008, about 37.1%
lesser than March 2007.
BNamericas notes that Banco do Brasil has about 8.30 million
low-income account holders. Banco Popular has some 1.40 million
low-income account holders. According to Banco do Brasil, about
15 million non-account holders who deal with Banco do Brasil
earn up to the minimum wage.
Banco do Brasil's Investor Relations Officer Marco Geovanne
commented to the press, "We use BPB [Banco Popular] for the
things that are difficult to do at BB [Banco do Brasil], such as
reach the low-income bracket."
Banco do Brasil SA is Brazil's federal bank and is the largest
in Latin America with some 20 million clients and more than
7,000 points of sale (3,200 branches) in Brazil, and 34 offices
and partnerships in 26 other countries. In addition to its
traditional retail banking services, Banco do Brasil underwrites
and sells bonds, conducts asset trading, offers investors
portfolio management services, conducts financial securities
advising, and provides market analysis and research.
* * *
On Feb. 29, 2008, Moody's Investors Rating Service assigned a
Ba2 foreign currency deposit rating to Banco do Brasil.
CAIXA ECONOMICA: Buys 9,600 Diebold ATMs for Brazilian Banks
------------------------------------------------------------
Diebold Inc. has partnered with Caixa Economica Federal in one
of the largest automated teller machine sales agreements in
history. Caixa Economica purchased the ATMs to help support its
strategic self-service network expansion effort.
To better serve its wide-spread customer-base in Brazil's
current climate of rapid growth, Caixa will integrate more than
9,600 Diebold full-function ATMs into its existing fleet at its
branches across the country. The new units will be powered by
Diebold's reliable basic software platform, which increases the
units' flexibility.
Diebold's full-function model ATM 4500 units, designed for the
Brazilian market, are expected to be well-received by Caixa
Economica's customers, as Brazil's economic expansion is helping
drive the integration of automated processes in many of the
country's markets. Diebold's skilled engineers custom-designed
the new units to feature biometric identification for customers
as well as biometric identification with smart card capabilities
for identification of ATM operators and service technicians.
The ATMs also include such security features as anti-skimming
technology with monitoring sensors for dip card reader, keyboard
and LCD display, as well as electronic access control to open
the upper cabinet door of the ATMs.
Keeping pace with the country's growth, Caixa Economica's total
ATM transactions have increased as well. Expanding its self-
service fleet will help broaden the company's geographic
presence to provide enhanced convenience and increased self-
service functionality for new and existing customers.
"By offering customers greater convenience and accessibility
through Diebold's advanced-function ATMs, Caixa is strengthening
its position as one of Brazil's financial industry leaders,"
said Caixa Economica Federal's director of market relations,
Delfino Natal de Souza. "This partnership with Diebold is an
important aspect of a well-planned strategy to grow our fleet to
increase customer satisfaction and to continually provide new
features and functionality as they become available."
With a long history of providing turnkey financial services for
the general public, business customers and institution's older
models, and will offer many new customer-pleasing features.
Additionally, Caixa Economica will be positioned to benefit from
greater operational efficiencies and profitability while
reducing the overall costs associated with owning and operating
an ATM channel.
"The Brazilian economic climate is ideal for Caixa to boost its
self-service fleet through Diebold's advanced function ATMs,"
said Diebold Brazil president, Joao Abud, Jr. "As Brazil's
economy and population continue to grow, this type of technology
will play a key role in helping financial institutions keep pace
with the population's needs, while offering reliability,
convenience and high-level functionality, which ultimately
strengthen customer loyalty."
Caixa Economica currently operates 19,000 ATMs in Brazil and is
taking part in a country-wide initiative to replace ATMs 10
years or older with models offering enhanced functionality and
additional security and accessibility features. The new Diebold
ATMs are fully compliant with Brazil's newest accessibility
standards.
About Diebold
Headquartered in Canton, Ohio, Diebold Inc. (NYSE: DBD) --
http://www.diebold.com-- provides integrated self-service
delivery and security systems and services. The company employs
more than 17,000 associates with representation in nearly 90
countries worldwide.
About Caixa Economica Federal
Headquartered in Brasilia, Caixa Economica Federal --
http://www.caixa.gov.br-- is a Brazilian bank and one of the
largest government-owned financial institutions in Latin
America. Founded in Jan. 12, 1861, Caixa Economica is the
second biggest Brazilian bank, second only to Banco do Brasil,
and offers services in thousands of Brazilian towns, ranking
third in Brazil in number of branches. The company has more
than 32 million accounts and controls more than US$170 billion.
It is responsible for executing policies in the areas of housing
and basic sanitation, the administration of social funds and
programs and federal lotteries.
* * *
In November 2007, Moody's Investors Service assigned a Ba2
foreign currency deposit rating to Caixa Economica Federal.
CAIXA ECONOMICA: Ties Up With Tecnisa S.A. in Providing Loans
-------------------------------------------------------------
Tecnisa S.A. has entered into a partnership with Caixa Economica
Federal to provide working capital loans and mortgage loans for
buyers of residential properties, with total sales of around
BRL1.5 billion.
This financing option will cover all the income segments for
projects launched by Tecnisa in any state in Brazil.
With this agreement, Tecnisa has signed loan agreements totaling
BRL2.7billion in 2008, which will substantially boost its growth
capacity.
In keeping with its policy of transparency, Tecnisa will always
keep the market informed of further developments.
About Tecnisa
Tecnisa S.A. is one of the largest real estate companies in
Brazil and among the five largest in the city of Sao Paulo. It
is active in every segment of the business, from development
through construction to sales, and its many distinguishing
features include strong reputation, focus on exemplary client
service and product quality, online sales and consistent
profitability. Tecnisa is listed on the Bovespa's Novo Mercado
segment under the ticker "TCSA3."
About Caixa Economica Federal
Headquartered in Brasilia, Caixa Economica Federal --
http://www.caixa.gov.br-- is a Brazilian bank and one of the
largest government-owned financial institutions in Latin
America. Founded in Jan. 12, 1861, Caixa Economica is the
second biggest Brazilian bank, second only to Banco do Brasil,
and offers services in thousands of Brazilian towns, ranking
third in Brazil in number of branches. The company has more
than 32 million accounts and controls more than US$170 billion.
It is responsible for executing policies in the areas of housing
and basic sanitation, the administration of social funds and
programs and federal lotteries.
* * *
In November 2007, Moody's Investors Service assigned a Ba2
foreign currency deposit rating to Caixa Economica Federal.
COMPANHIA SIDERURGICA: IRB-Brasil Must Provide Reinsurance
----------------------------------------------------------
Brazilian financial daily Valor Economico reports that a civil
court in Rio de Janeiro has ordered IRB-Brasil Re to provide
reinsurance for a policy for Companhia Siderurgica Nacional SA
from the local unit of Spain's Mapfre.
Business News Americas relates that Companhia Siderurgica has
been without insurance since Feb. 21, 2008. According to Valor
Economico, IRB-Brasil Re and Companhia Siderurgica have gone
back and forth in eight court rulings in less than a month.
Valor Economico notes that Mapfre has arranged for several
international reinsurers to back the Companhia Siderurgica
policy. The reinsurers are led by Gen Re of Berkshire Hathaway.
According to BNamericas, Mapfre will keep US$250 million, one-
third of the US$750 million in maximum damages covered by the
policy.
BNamericas states that an accident at Companhia Siderurgica's
blast furnace caused US$600 million in damages in January 2006.
It shut down the furnace until June 2006. The furnace returned
to full capacity in August 2006. Unibanco AIG provided coverage
for Companhia Siderurgica at that time. It cost Unibanco
BRL15 million in claims paid. IRB-Brasil reportedly paid nearly
US$360 million in claims.
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 ENERGETICA: Suspends Privatization
--------------------------------------------
Companhia Energetica de Sao Paulo's Chief Executive Officer
Guilherme Cirne de Toledo said in a Web cast that the firm's
privatization process won't proceed this year, Business News
Americas reports.
Mr. Toledo commented to BNamericas, "We don't know if or when
the privatization process will be resumed."
BNamericas relates that the Sao Paulo government controls
Companhia Energetica. It called off the March 26 auction to
privatize the firm. The state wanted to sell 7.0 million of its
preferred and 85.9 million ordinary shares in Companhia
Energetica.
Sao Paulo Governor Jose Serra told the press that the auction
failed because firms had trouble securing loans to bid for
Companhia Energetica. According to BNamericas, power companies
were concerned that there was no guarantee Companhia
Energetica's Jupia and Ilha Solteira plants would secure
concession renewals. The two have combined capacity of five
gigawatts.
The firms are trying to convince the Brazilian government to
renew concessions earlier, BNamericas states, citing Mr. Toledo.
Headquartered in Sao Paulo, Brazil, Companhia Energetica de Sao
Paulo (BOVESPA: CESP3, CESP5 and CESP6) is the country's third
largest power generator, majority owned by the State of Sao
Paulo. CESP operates 6 hydroelectric plants with total
installed capacity of 7,456 MW and reported net revenues of
BRL1,983 million in the last twelve months through Sept. 30,
2006.
* * *
As reported in the Troubled Company Reporter-Latin America on
Oct. 10, 2007, Standard & Poor's Ratings Services raised its
ratings on electricity generator Companhia Energetica de Sao
Paulo, including its corporate credit rating to 'B' from 'B-'.
At the same time, S&P raised its Brazil national scale ratings
on CESP to 'brBBB-' from 'brBB'. S&P said the outlook remains
positive on both scales.
FERRO CORP: To Increase Price of Advanced Polymer Alloys
--------------------------------------------------------
Ferro Corporation's Engineered Polymer Products business is
increasing prices for advanced polymer alloys and plastic
colorants products, effective June 1 and June 15, 2008,
respectively.
Prices for advanced polymer alloy products, including Alcryn(R)
and DuraGrip(TM), will increase by US$0.10 per pound. Price
increases for plastic colorant products will be US$0.11 per
pound for natural resin and additive compounds; US$0.15 per
pound for specialty pre-color compounds and salt-and-pepper
blends; and up to US$0.20 per pound for specialty color
concentrates.
James Kolenc, Business Director, Engineered Polymer Products,
cited continuing escalation of costs for polymers and other raw
materials, transportation, and energy. "We have worked
diligently to mitigate these cost increases and minimize the
impact on our customers, but are unable to absorb these
increases any further," said Kolenc. "This pricing action
supports our ability to continue to provide competitive, high-
value products and services to our customers."
Engineered Polymer Products manufactures engineered plastics
composites, plastic color concentrates and advanced polymer
alloys, and offers manufacturing of custom alloys. Its products
are available globally from manufacturing facilities in the U.S.
and Europe.
About Ferro Corporation
Ferro Corporation (NYSE: FOE) -- http://www.ferro.com/-- is a
supplier of technology-based performance materials for
manufacturers. Ferro materials enhance the performance of
products in a variety of end markets, including electronics,
solar energy, telecommunications, pharmaceuticals, building and
renovation, appliances, automotive, household furnishings, and
industrial products. Headquartered in Cleveland, Ohio, the
company has approximately 6,300 employees globally and reported
2007 sales of US$2.2 billion.
The company has subsidiaries in Argentina, Australia, France,
Germany, Brazil, China, Spain , Hong Kong and Korea, among
others.
* * *
Ferro Corp. carries Moody's corporate family rating of B1 with a
positive outlook. This rating was assigned on May 2007.
FERRO CORP: Sales Up 15% to US$607.2 Million in First Quarter
-------------------------------------------------------------
Ferro Corporation reported that sales for the three months ended
March 31, 2008, were a record US$607.2 million, up 15% from the
first quarter of 2007.
Income from continuing operations for the first quarter of 2008
was US$9.2 million, or US$0.21 per diluted share, compared with
income of US$6.2 million, or US$0.14 per share, in 2007. In the
first three months of 2008, operating income included net pre-
tax charges of US$4.0 million. These charges were primarily
related to restructuring and other manufacturing rationalization
activities. In 2007, operating income was reduced by pre-tax
expenses of US$4.3 million primarily related to manufacturing
rationalization activities and a write-off of unamortized fees
associated with an unused portion of the Company's term loan
arrangements.
"We are pleased to see evidence that our profitability
initiatives are gaining traction. Our improved performance is
the result of hard work by the people of Ferro who are focused
on executing our restructuring programs, improving our business
processes and cutting costs across our worldwide operations,"
said James F. Kirsch, Chairman, President and Chief Executive
Officer. "Our businesses delivered results better than we
previously estimated in our fourth-quarter 2007 earnings
release, and the improvements were achieved despite difficult
economic conditions in many of the markets we serve,
particularly in the United States. While we are pleased with
our first-quarter results, we will continue to aggressively
pursue our programs to achieve sustainable profitability
improvements."
Net sales increased in the Electronic Materials, Color and Glass
Performance Materials, Performance Coatings, and Polymer
Additives segments, compared with sales in the first three
months of 2007. Sales declined in the Specialty Plastics and
Other Businesses segments. Sales to customers outside the
United States grew by 22% while sales within the United States
increased by 6%.
Increased product prices, including pass-throughs for precious
metals, and favorable changes in foreign currency exchange rates
were the primary drivers of the increased sales. Increased
volume was a positive contributor to sales growth in the
Performance Coatings and the Color and Glass Performance
Materials segments. Lower volume in Specialty Plastics,
porcelain enamel products in Performance Coatings, and Polymer
Additives partially offset the sales increases. The volume
declines in these businesses were largely the result of weak
demand from U.S. automobile, appliance and residential housing
industries.
Gross margins were 18.7% of sales in the first quarter of 2008,
compared with 20.2% of sales in the prior-year period. Gross
profit during the 2008 first quarter was negatively impacted by
higher raw material costs, including precious metals. While the
Company was generally able to increase prices to offset higher
raw material costs, it was not able to increase prices
sufficiently to maintain gross margin as a percent of sales.
Gross profit was also reduced by manufacturing costs during the
2008 first quarter that were consequences of a temporary
production interruption at the Company's Bridgeport, New Jersey,
facility beginning in December 2007. Total pre-tax costs of the
interruption during the first quarter were approximately US$3.3
million. Charges related to the company's ongoing manufacturing
rationalization programs reduced gross profit by US$0.2 million
in the first quarter of 2008, compared with charges of US$2.2
million during the first quarter of 2007.
Selling, general and administrative expense was US$78.7 million
in the first quarter, or 13.0% of sales. Included in SG&A
expense during the first three months of 2008 was a net benefit
of US$0.4 million, primarily related to favorable litigation
developments, partially offset by expenses related to corporate
development activities. SG&A expense in the first quarter of
2007 was US$78.8 million, or 14.9% of sales, including charges
of US$0.3 million primarily related to corporate development
activities.
Total segment income for the first three months of 2008 was
US$41.7 million, flat with the prior-year level of US$41.8
million. The total segment income reflected higher income from
the Electronic Materials segment, which benefited from strong
demand for the company's metal pastes and powders that are used
in applications such as solar cells and plasma displays. Income
was also slightly higher in the Color and Glass Performance
Materials and Other Businesses segments. Income declined in the
Company's Specialty Plastics segment, primarily reflecting weak
demand from U.S.-based customers in the automotive parts and
residential construction markets, and in the Performance
Coatings segment, due to the effects of weak customer demand for
porcelain enamel products. Income declined slightly in the
Polymer Additives segment as the positive effects of product
price increases were more than offset by raw material cost
increases and the cost associated with the December 2007
manufacturing interruption in Bridgeport, New Jersey.
Restructuring charges of US$4.2 million were recorded in the
first quarter, primarily resulting from rationalization programs
in the company's European inorganic materials manufacturing
facilities. Restructuring charges of US$1.5 million were
recorded in the first quarter of 2007.
Interest expense declined to US$14.0 million in the first three
months of 2008 from US$17.4 million in 2007, as a result of
lower borrowing levels and reduced interest rates on funds
borrowed. Interest expense in the 2007 first quarter included a
US$2.0 million write-off of unamortized fees and discounts
associated with an unused portion of the company's term loans.
Total debt on March 31, 2008 was US$537.8 million, an increase
of US$11.7 million from the end of 2007. The increase in debt
during the first quarter was due primarily to higher working
capital requirements associated with increased sales. In
addition, the company had net proceeds of US$67.3 million from
its U.S. accounts receivable securitization program at the end
of March, compared with US$54.6 million at the end of 2007. The
company also had US$42.5 million in net proceeds from similar
programs outside the U.S. at the end of the quarter compared
with US$42.1 million at the end of 2007. Ferro generated
US$10.9 million of net cash from operating activities during the
first quarter of 2008.
2008 Second-Quarter Estimates
Sales for the second quarter, ending June 30, 2008, are expected
to be approximately US$600 million to US$625 million compared
with sales of US$554 million in the second quarter of 2007,
reflecting an ongoing mix of business conditions in different
regions. Business conditions in the U.S. are expected to be
difficult due to continued weak demand from customers in
housing, appliance and automotive industries.
Income from continuing operations for the second quarter is
expected to be in the range of US$0.11 to US$0.16 per diluted
share. This estimate includes anticipated charges of
approximately US$0.17 per share, primarily from the continuation
of manufacturing rationalization activities. The company
reported income from continuing operations of US$0.10 per share
in the second quarter of 2007, including charges of
approximately US$0.16 per share.
About Ferro Corporation
Ferro Corporation (NYSE: FOE) -- http://www.ferro.com/-- is a
supplier of technology-based performance materials for
manufacturers. Ferro materials enhance the performance of
products in a variety of end markets, including electronics,
solar energy, telecommunications, pharmaceuticals, building and
renovation, appliances, automotive, household furnishings, and
industrial products. Headquartered in Cleveland, Ohio, the
company has approximately 6,300 employees globally and reported
2007 sales of US$2.2 billion.
The company has subsidiaries in Argentina, Australia, France,
Germany, Brazil, China, Spain , Hong Kong and Korea, among
others.
* * *
Ferro Corp. carries Moody's corporate family rating of B1 with a
positive outlook. This rating was assigned on May 2007.
GENERAL MOTORS: Reaches Tentative Settlements With CAW Officials
----------------------------------------------------------------
The Canadian Auto Workers union reached tentative settlements
with both General Motors Corp. and Chrysler LLC that meet the
pattern established with Ford Motor Co. The CAW represents
close to 13,000 GM workers and 8,000 Chrysler workers in Canada.
As reported in the Troubled Company Reporter on May 7, 2008, for
the first time in its history, Ford Motor Company of Canada,
Limited reached a collective bargaining agreement with CAW more
than four months before the current contract expires. Ford
employees represented by the CAW ratified the new deal in a vote
held May 4, 2008. The early settlement brings stability to
Ford's operations as it prepares to launch the new Ford Flex
crossover vehicle at the Oakville Assembly Complex, which also
builds the Ford Edge and Lincoln MKX. Ford disclosed plans to
add 500 positions to increase production at the Oakville plant
due to high demand for the Ford Edge and Lincoln MKX, and to
prepare for the start of production of the Ford Flex.
According to a CAW press statement, both settlements were
unanimously endorsed by the CAW/GM and CAW/Chrysler Master
Bargaining committees, respectively and later overwhelmingly
supported by local union leadership.
The three-year agreements resist two-tier wages and provide
productivity and quality bonuses, improved restructuring
incentives, benefit improvements, COLA increases in both second
and third years and improved language on health and safety
issues among other gains.
The union negotiated new product commitments for both Oshawa car
and St. Catharines facilities as well as a strong close-out
agreement for members at the GM Windsor Transmission plant.
During bargaining the company announced that the Windsor plant
will close in 2010.
The union also extended the operating life of the Chrysler
Casting plant in Etobicoke, Ontario, at least until 2011.
The tentative settlements are subject to ratification by CAW
members. Ratification meetings will be held at various GM and
Chrysler locations on Friday, May 16 and Saturday, May 17, 2008.
CAW media advisories will be issued after the ratification votes
are counted at each company providing details of the results.
Ratification meeting dates, times and locations are:
* CAW General Motors units
-- Friday, May 16
1) Local 1973
Ciociaro Club, Salons A,B,C
3745 N. Talbot Road
Windsor, ON
9:00am
2) Local 199
Brock University
Bob Davis Gym
500 Glenridge Ave
St. Catharines, ON
12:00 noon
3) Local 222
General Motors Centre
99 Athol Street E.,
Oshawa, ON
3:00pm
-- Saturday, May 17
1) Local 636
Local 636 Union Hall
126 Beale Street
Woodstock, ON
9:30am
* CAW Chrysler units
-- Saturday, May 17
1) Local 195
CAW Local 195 Hall
3400 Somme Avenue
Windsor, ON
7:00am, 1:00pm, 3:00pm
2) Local 1459
SCA Oplenac
895 Rangeview Road
Mississauga, ON
(S. of Lakeshore, between Cawthra & Dixie)
8:00am
3) Local 1498
CAW Local 444 union hall
1855 Turner Road
Windsor, ON
10:00am
4) Local 1285
International Centre, Hall #1
6900 Airport Road
(Airport & Derry Road)
Mississauga, ON
10:30am
5) Local 444
University of Windsor
401 Sunset Avenue
St. Denis Hall
Windsor, ON
2:00pm
About Ford
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.
About Chrysler
Headquartered in Auburn Hills, Michigan, Chrysler LLC --
http://www.chrysler.com/-- a unit of Cerberus Capital
Management LP, produces Chrysler, Jeep(R), Dodge and Mopar(R)
brand vehicles and products. The company has dealers worldwide,
including Canada, Mexico, U.S., Germany, France, U.K.,
Argentina, Brazil, Venezuela, China, Japan and Australia.
About GM
Headquartered in Detroit, Michigan, General Motors Corp. (NYSE:
GM) -- http://www.gm.com/-- was founded in 1908. GM employs
about 266,000 people around the world and manufactures cars and
trucks in 35 countries, including the United Kingdom, Germany,
France, Russia, Brazil and India. In 2007, nearly 9.37 million
GM cars and trucks were sold globally under the following
brands: Buick, Cadillac, Chevrolet, GMC, GM Daewoo, Holden,
HUMMER, Opel,Pontiac, Saab, Saturn, Vauxhall and Wuling. GM's
OnStar subsidiary is the industry leader in vehicle safety,
security and information services.
* * *
As reported in the Troubled Company Reporter-Latin America on
May 7, 2008, Standard & Poor's Ratings Services said its 'B'
long-term and 'B-3' short-term corporate credit ratings on
General Motors Corp. remain on CreditWatch with negative
implications, where they were placed March 17, 2008. The update
follows the announcement by Residential Capital LLC (CC/Watch
Neg/C) that it is launching an exchange offer for unsecured
bonds, which S&P interpret to be a distressed debt exchange.
(Residential Capital is a unit of 49%-owned unit GMAC LLC
[B/Negative/C].
GENERAL MOTORS: CAW Balks at Notice of Windsor Plant Closure
------------------------------------------------------------
After General Motors Corp. disclosed that it will close its
Windsor Transmission plant in 2010, eliminating 1,400 jobs,
Canadian Auto Workers President Buzz Hargrove said he is both
frustrated and angered by the news.
"This decision came as an incredible shock," Mr. Hargrove said.
"It will be devastating to our members, their families and the
community of Windsor."
The Windsor Transmission plant, which manufactures front-wheel-
drive, automatic transmissions and transmission components, is
the last of General Motors' operations in Windsor. The closure
will mark the first time in decades that the company has not had
a presence in the community.
Mr. Hargrove said provincial politicians have expressed their
concern, but he also blasted the federal government for having
written off the auto industry, particularly Prime Minister
Stephen Harper, Industry Minister Jim Prentice and Finance
Minister Jim Flaherty.
"Until the federal Conservative government addresses the issues
of unfair trade, the ongoing loss of Big Three market share, the
high dollar and provides new investment supports, there will be
more layoffs and more plant closures," Mr. Hargrove said.
The CAW is currently in negotiations with General Motors, with a
final settlement depending largely on the company's commitment
to new products as well as improved pensions and severance
packages for the Windsor workforce.
"Our members have done everything they possibly can to ensure
the survival of the facility," plant chairperson Ken Bruner
said. "It's up to our federal government to step in and support
this industry and stop unfair trade before it's too late."
Mr. Hargrove says that GM has an obligation to its Windsor
Transmission plant workers, citing consistently high levels of
quality and productivity.
"You simply can't negotiate your way out of scarcity," Mr.
Hargrove added.
This news comes just weeks after GM announced it will drop the
second production shift from the truck plant in Oshawa, Ontario,
eliminating close to 1,000 jobs, as reported in the Troubled
Company Reporter on April 30, 2008.
Headquartered in Detroit, Michigan, General Motors Corp. (NYSE:
GM) -- http://www.gm.com/-- was founded in 1908. GM employs
about 266,000 people around the world and manufactures cars and
trucks in 35 countries, including the United Kingdom, Germany,
France, Russia, Brazil and India. In 2007, nearly 9.37 million
GM cars and trucks were sold globally under the following
brands: Buick, Cadillac, Chevrolet, GMC, GM Daewoo, Holden,
HUMMER, Opel,Pontiac, Saab, Saturn, Vauxhall and Wuling. GM's
OnStar subsidiary is the industry leader in vehicle safety,
security and information services.
* * *
As reported in the Troubled Company Reporter-Latin America on
May 7, 2008, Standard & Poor's Ratings Services said its 'B'
long-term and 'B-3' short-term corporate credit ratings on
General Motors Corp. remain on CreditWatch with negative
implications, where they were placed March 17, 2008. The update
follows the announcement by Residential Capital LLC (CC/Watch
Neg/C) that it is launching an exchange offer for unsecured
bonds, which S&P interpret to be a distressed debt exchange.
(Residential Capital is a unit of 49%-owned unit GMAC LLC
[B/Negative/C].
HEXION SPECIALTY: March 31 Balance Sheet Upside Down by US$1.3BB
----------------------------------------------------------------
Hexion Specialty Chemicals, Inc. reported its results for the
first quarter ended March 31, 2008. Highlights for the first
quarter of 2008 include:
* Revenues of US$1.64 billion in 2008 compared to
US$1.44 billion during the prior year period, an increase of
14 percent.
* Operating income of US$82 million for the first quarter of
2008 versus US$104 million for the comparable prior year
period. First quarter 2008 operating income was negatively
impacted by US$17 million in increased raw materials costs
and US$6 million from a Versatic Acids force majeure.
* Net loss of US$6 million for the 2008 quarter versus net
income of US$4 million in the first quarter of 2007.
* Segment EBITDA (earnings before interest, taxes,
depreciation and amortization) totaled US$154 million in the
first quarter of 2008 compared to US$170 million during the
prior year period, a 9 percent decrease.
* Adjusted EBITDA was US$678 million for the Last Twelve Month
(LTM) period ended March 31, 2008.
"Demand for many of our key specialty products increased
compared to 2007 levels," said Craig O. Morrison, Chairman,
President and CEO. "Our strong quarterly sales gains reflect an
ongoing focus on pricing actions to offset rising raw material
costs, continued growth from international markets and our broad
product portfolio. In addition, the forest products business of
Arkema GmbH, our most recent acquisition, also performed well in
its first full quarter of operations within Hexion.
"We are focused on driving year-over-year sales and EBITDA
gains. Our first quarter 2008 Segment EBITDA, however, was
negatively impacted by US$17 million in increased raw materials
and US$6 million from a Versatic Acids force majeure. We are
working diligently to recover these raw material cost increases.
We will continue to address the challenging North American
market conditions through cost controls, synergy achievement and
productivity initiatives, as well as growing our international
business, which represents approximately 60 percent of our
overall sales."
As of March 31, 2008, the company had total assets of
US$4.2 billion and total liabilities of US$5.5 billion,
resulting in a shareholders' deficit of US$1.3 billion.
Synergy Update
As part of its synergy program from the Hexion formation, the
Company achieved US$6 million in synergies during the first
quarter of 2008. As of March 31, 2008, Hexion has achieved
US$126 million in synergies from its synergy program targeting
US$175 million in savings. The Company continues to expect to
take all actions for its synergy program by the end of 2008.
Transaction Update
Hexion previously announced in the first quarter of 2008 that
both it and Huntsman Corporation agreed to allow additional time
for the Federal Trade Commission to review the proposed merger
of the two companies. On April 5, 2008, Hexion exercised its
option to extend the Termination Date under the Merger Agreement
until July 4, 2008.
"We continue to fully cooperate with regulatory agencies and are
working closely with Huntsman and the agencies in order to
obtain the regulatory approvals required to complete the
merger," Mr. Morrison said.
On July 12, 2007, Hexion entered into a definitive agreement to
acquire Huntsman Corporation in an all-cash transaction valued
at approximately US$10.6 billion, including the assumption of
debt. Under the terms of the Merger Agreement, the cash price
per share to be paid by Hexion increases each day from April 5,
2008 through consummation of the merger at the equivalent of
approximately 8% per annum (less any dividends or distributions
declared or made). The transaction was approved by Huntsman
shareholders on October 16, 2007 and is subject to customary
closing conditions, including regulatory approval in the U.S.,
European Union and several other countries.
Segment Results
Following are net sales and Segment EBITDA by reportable segment
for the first quarter of 2008. Segment EBITDA is defined as
EBITDA adjusted to exclude certain non-cash and non-recurring
expenses. Segment EBITDA is the primary performance measure
used by the Company to evaluate operating results and allocate
resources among segments. Segment EBITDA is also the
profitability measure used in management and executive incentive
compensation programs. Corporate and Other primarily represents
certain corporate, general and administrative expenses that are
not allocated to the segments.
(U.S. Dollars in Millions) (Unaudited)
Three months ended March 31,
2008 2007
----------------------------
Net Sales to Unaffiliated Customers
Epoxy and Phenolic Resins US$639 US$567
Formaldehyde and Forest Product Resins 554 428
Coatings and Inks 332 343
Performance Products 111 100
----------------------------
US$1,636 US$1,438
Segment EBITDA:
Epoxy and Phenolic Resins US$74 US$95
Formaldehyde and Forest Product Resins 53 44
Coatings and Inks 19 25
Performance Products 21 18
Corporate and Other (13) (12)
Earnings Call
Hexion Specialty Chemicals, Inc. hosted a teleconference to
discuss First Quarter 2008 results on May 14, 2008. A replay of
the call will be available for three weeks beginning at 12 p.m.
Eastern Time on May 14, 2008. The playback can be accessed by
dialing 888-286-8010 (U.S.) and 617-801-6888 (International).
The passcode is 67271444. A replay also will be available
through the Investor Relations Section of the Company's Web
site.
About Hexion Specialty
Based in Columbus, Ohio, Hexion Specialty Chemicals Inc. --
http://www.hexionchem.com/-- is a producer of thermosetting
resins, or thermosets. Thermosets are a critical ingredient in
virtually all paints, coatings, glues and other adhesives
produced for consumer or industrial uses. Hexion Specialty
Chemicals is controlled by an affiliate of Apollo Management
L.P. The company has locations in Singapore, China, Australia,
Netherlands, and Brazil.
GRAFTECH INT'L: Good Performance Cues S&P to Lift Rating to BB-
---------------------------------------------------------------
Standard & Poor's Ratings Services has raised its ratings on
Parma, Ohio-based GrafTech International Ltd. The corporate
credit rating was raised to 'BB-' from 'B+'. The outlook is
stable.
"The upgrade reflects GrafTech's strengthening financial profile
following significant debt reduction, good operational
performance, and enhanced cash flow generation supported by
currently favorable market conditions," said Standard & Poor's
credit analyst Anna Alemani. "These improvements, combined with
management's commitment to preserve a conservative balance sheet
and adequate liquidity, should enable GrafTech to maintain a
financial profile commensurate with the higher rating if market
conditions were to weaken."
GrafTech manufactures carbon-based materials for use in various
applications. Its primary product, graphite electrodes, accounts
for about 80% of sales.
"We expect the company to be able to offset higher needle coke
costs in 2008 to maintain its financial measures consistent with
the rating," Ms. Alemani said. "We could revise to outlook the
negative if market conditions weaken or the company adopts a
more aggressive financial policy, including debt-financed
acquisitions or share repurchases, resulting in a deterioration
of the financial profile. We could possibly revise the outlook
to positive if GrafTech can improve its business risk profile by
increasing the diversity of its product mix and of its needle-
coke supplier base."
Based Parma, Ohio, in GrafTech International Ltd. (NYSE: GTI) --
http://www.graftech.com-- manufactures graphite electrodes,
products essential to the production of electric arc furnace
steel, and various other ferrous and non-ferrous metals. The
company manufactures natural graphite products enabling thermal
management solutions for the electronics industry, and fuel cell
solutions for the transportation and power generation
industries. GTI also manufactures and provides graphite and
carbon products, as well as related technical services,
including graphite and carbon materials for the semiconductor,
transportation, petrochemical and other metals markets. GTI has
four major product categories: graphite electrodes, advanced
graphite materials, and carbon refractories and natural
graphite. On Dec. 5, 2006, GTI completed the sale of its
cathode business, including its 70% equity interest in Carbone
Savoie S.A.S. to Alcan France. The company has operations in
China, France and Brazil.
JABIL CIRCUIT: Moody's Rtg. Unmoved by US$150 Mil. Notes Add-On
---------------------------------------------------------------
Moody's Investors Service commented that Jabil Circuit, Inc.'s
Ba1 corporate family and senior unsecured debt ratings, SGL-1
speculative grade liquidity rating and negative outlook would
not be affected by the company's recent announcement that it
intends to offer up to US$150 million of add-on 10-year senior
notes. The terms of the proposed issue will be identical to the
company's US$250 million 8.25% senior unsecured notes due 2018
(rated Ba1).
Jabil plans to issue up to US$150 million senior unsecured notes
as an add-on to its US$250 million senior note issue that was
placed in January 2008. Jabil expects to use the net add-on
proceeds to replenish cash balances, which were used in
conjunction with proceeds from the US$250 million note issue to
repay short-term debt incurred in connection with the purchase
of Taiwan Green Point (Green Point).
While the add-on note issue modestly increases the company's
overall leverage profile, Moody's believes Jabil has capacity at
the current rating level to incur the additional debt. On a pro
forma basis, Moody's estimates Jabil's debt to EBITDA has
increased to 3.2x from 2.8x as of the twelve months ended
February 2008. The incremental debt combined with expectations
of diminished free cash flow limits financial flexibility and
weakly positions the company in the Ba1 rating category.
Jabil's Ba1 corporate family rating reflects the highly
competitive pricing pressures and inherent volatility that
currently plague the EMS industry, as well as rising capex and
working capital requirements associated with Jabil's transition
to a more vertically integrated business model to compete more
effectively against its competitors. The rating also reflects
the company's mid-single digit gross margins, ongoing large-
scale restructuring program, exposure to the currently weak
consumer segment, unfavorable product mix and the winding down
of legacy OEM programs, ahead of full ramp-up of higher margin
vertical programs, which are expected to pressure revenue growth
rates and margins.
At the same time, Jabil's CFR is supported by its Tier 1
industry leadership status and solid market position, benefiting
from the secular OEM outsourcing trend, its global manufacturing
footprint with facilities located near OEM customer sites and
its focus on end-to-end solutions, mechanical engineering,
vertical component production and emerging EMS segments with
higher margin/low volume characteristics. Consideration is also
given to the company's manufacturing facilities in low labor
cost regions as well as its strong liquidity profile.
The negative outlook reflects Jabil's lower revenue and
profitability outlook stemming from a weaker than expected
demand environment, particularly in the company's consumer
electronics (roughly one-third of revenues) and automotive
segments, reduced cash flow generation prospects over the next
several quarters, as well as continued challenges in the overall
EMS space, which has been impacted by excess capacity,
increasing competition, customer attrition and execution
missteps. The negative outlook also considers a weaker margin
profile in the near-to-intermediate term led by gross margin
decline in the company's consumer division coupled with the
possibility of further restructuring actions that will depress
already thin operating margins; expectations of capex above
historical levels; and integration risks associated with
Green Point.
Finally, the negative outlook considers the possibility of
further debt-funded acquisitions as the company seeks to advance
its market position against competitors in the EMS space.
Moody's will monitor closely the company's market position,
operating margin trends, working capital metrics and free cash
flow generation and notes that ratings could be downgraded over
the next 6 -- 9 months if the company experiences: (i) material
customer/program losses without offsetting increases in new
customer wins/program ramps; (ii) a continued decline in
operating margins (excluding restructuring/impairment costs and
amortization of intangibles) below 2% over the next 2 - 3
quarters; (iii) extended weakness in its consumer electronics
business resulting in continued revenue contraction, operating
losses or operating margins below 1% for this segment; (iv) a
significant deterioration in the company's cash position from
current levels; (v) higher than expected restructuring charges;
(vi) an inability to internally fund capex and working capital,
resulting in sustained negative free cash flow; or (vii) a
notable increase in financial leverage, as measured by debt to
EBITDA (Moody's adjusted) above 3.8x.
Jabil's SGL-1 rating reflects its very good liquidity position.
As of Feb. 29, 2008, Jabil maintained roughly US$531 million of
cash. Although free cash flow was negative US$228 million for
fiscal 2007, the company generated US$328 million of positive
free cash flow in the recent LTM. Jabil is expected to produce
moderate levels free cash flow in the near term, albeit at lower
than expected levels due to weaker revenue and profitability,
and higher capex. The company currently has access to an
undrawn US$800 million revolver. Including the incremental debt
associated with the add-on note issue, Moody's expects the
company to remain in compliance with its financial covenants.
Headquartered in St. Petersburg, Florida, Jabil Circuit Inc.,
(NYSE: JBL) -- http://www.jabil.com/-- is an electronic product
solutions company providing comprehensive electronics design,
manufacturing and product management services to global
electronics and technology companies. Jabil Circuit has more
than 50,000 employees and facilities in 20 countries, including
Brazil, Mexico, United Kingdom and Japan.
JBS SA: May Pare Beef Output & Fire Argentine Workers
-----------------------------------------------------
JBS SA would likely cut production and fire employees in
Argentina following a third-straight quarterly loss due to
government limits on exports, Carlos Caminada and Jessica Brice
of Bloomberg News report.
According to Bloomberg, the company's two most profitable
operations in Argentina and Brazil incurred losses after a
European Union ban on Brazilian beef and the Argentine curb on
exports.
As reported in the Troubled Company Reporter-Latin America on
May 16, 2008, the company posted a net loss of BRL6.6 million on
net revenues of BRL1.10 billion for the three months ended
March 31, 2008, compared to net income of BRL10.6 million on net
revenues of BRL1.02 billion for the same period in 2007.
Citing Chief Executive Officer Joesley Mondonca Batista during a
press conference in Sao Paulo, Bloomberg relates that the
company, which shares fell to a five-week low, would begin to
slash Argentine production by 30 percent and fire 1,500 of its
4,000 workers in the country unless export restrictions are
lifted.
In addition, JBS may shift 1,000 positions from processed meat,
which isn't in high demand in the Argentine market, to
production of fresh beef.
About JBS
Headquartered in Sao Paulo, Brazil, JBS SA --
http://www.jbs.com.br/ir/-- is a public company with its shares
listed on Bovespa's Novo Mercado under the symbol JBSS3. The
company operates 23 plants in Brazil and six plants in Argentina
in addition to its operations in Australia and the United States
resulting from last year's purchase of Swift & Company. In the
12 months ending September 2007, JBS generated pro forma net
revenue of US$11.9 billion and processed nine million head of
cattle.
* * *
As reported in the Troubled Company Reporter-Latin America on
March 7, 2008, Moody's Investors Service's ratings for JBS S.A.,
including its B1 local currency corporate family rating and B1
senior unsecured bond rating, remained under review for possible
downgrade following the company's announced agreement to acquire
National Beef Packing Company, LLC; Smithfield Beef Group Inc.,
including full ownership of its subsidiary, Five Rivers Ranch
Cattle Feeding; and Tasman Group for a total consideration of
approximately US$1.8 billion.
POLYPORE INTERNATIONAL: To Buy Yurie-Wide Shares for US$23 Mil.
---------------------------------------------------------------
Polypore International, Inc., through its wholly owned
subsidiary, Celgard, LLC, has signed a definitive purchase
agreement with the shareholders of Yurie-Wide Corporation, a
South Korean company to purchase 100% of the outstanding capital
stock of Yurie-Wide. The purchase price, including acquisition-
related costs, will be approximately US$23 million in cash. The
company expects to complete the acquisition in May 2008. The
acquisition will be funded with a combination of cash and
borrowings under Polypore's existing revolving credit facility.
Polypore, through its Celgard business, is the world's leading
manufacturer of mono-layer polypropylene and multi-layer
polypropylene/polyethylene separators used in rechargeable
lithium-ion batteries for personal electronic devices such
as notebook computers, mobile telephones and digital cameras and
other high performance applications such as power tools and
emerging applications such as hybrid-electric vehicles (HEVs)
and electric vehicles (EVs).
Yurie-Wide has developed technology for the manufacture of
polyethylene separators for lithium-ion batteries. The
acquisition of Yurie-Wide will bring this membrane process
technology to Polypore's expanding lithium-ion product portfolio
-- already the broadest in the industry -- as well as a
manufacturing base in Asia. This acquisition will strengthen
the company's ability to continue supplying the major Asian
battery manufacturers, enhance its ability to service its
worldwide customer base and provide opportunities to serve new
customers. Polypore expects the acquisition to be accretive
beginning in late 2009.
2008 Guidance
Polypore is revising its guidance for fiscal 2008 to reflect
solid performance in its current business, the aforementioned
Yurie-Wide acquisition, and its anticipated primary share
offering. For the year ending Jan. 3, 2009, Polypore now
expects to achieve net sales of US$595 million to
US$615 million.
These estimates include the effects of the following items:
-- improved business performance relative to initial guidance
for the full year;
-- approximately US$2 million of additional research and
development expenses associated with the planned
acquisition of Yurie-Wide process technology; and
-- the completion of an expected follow-on offering of
7.5 million shares in the second quarter, which will
increase the full-year weighted average fully diluted
share count to approximately 42.8 million shares (fully
diluted share count post offering will be approximately
44.4 million shares), diluting 2008 EPS by a net amount of
US$0.03 per fully diluted share after giving effect to
reduced interest expense.
Total anticipated capital expenditures are approximately
US$52 million, unchanged from previous guidance.
Polypore International Inc., headquartered in Charlotte, North
Carolina, is a leading worldwide developer, manufacturer and
marketer of specialized polymer-based membranes used in
separation and filtration processes. The company is managed
under two business segments. The energy storage segment, which
currently represents approximately two-thirds of total revenues,
produces separators for lead-acid and lithium batteries. These
products have applications in transportation, electronics, and
general industrial applications. The separations media segment,
which currently represents approximately one-third of total
revenues, produces membranes used in various healthcare and
industrial applications. The company has operations in
Australia, Germany and Brazil. For the twelve months ending
March 31, 2008, Polypore's net sales approximated
US$553 million.
* * *
As reported in the Troubled Company Reporter-Latin America on
May 7, 2008, Moody's Investors Service raised the ratings of
Polypore International, Inc., Corporate of Family to B2 from B3
and Probability of Default to B2 from B3.
Moody's also raised the ratings of Polypore's bank credit
facility to Ba2 from Ba3, and senior subordinated notes to B3
from Caa1. Moody's said the outlook is changed to stable.
SHARPER IMAGE: Hilco Joint Venture Named Stalking Horse Bidder
--------------------------------------------------------------
A joint venture led by Hilco Consumer Capital, L.P., and GB
Brands, LLC, in partnership with Windsong Brands, LLC and
Crystal Capital, was approved by the U.S. Bankruptcy Court for
the District of Delaware as the stalking horse bidder for
certain assets of The Sharper Image Corporation.
HCC and GBB have developed a global licensing strategy for
wholesale, retail, direct-to-retail, e-commerce and catalog
businesses which will exploit The Sharper Image's heritage of
quality, excitement, innovation and fun.
During its 32-year history, The Sharper Image has developed one
of America's most widely recognized and positively perceived
consumer brands. HCC and GBB recognize The Sharper Image's
blend of upscale specialty positioning, iconic stature,
outstanding consumer recognition and appeal across a wide
demographic.
Jamie Salter, CEO of HCC, commented, "The Sharper Image's brand
versatility encompasses a vast array of products which
demonstrates the powerful and consistent brand attributes of
quality, excitement, innovation and fun." He added, "Whether it
is electronics, housewares, health and fitness or unique gifts
in personal care or travel, The Sharper Image brand delivers on
all of the brand's attributes."
Stephen Miller of GBB continued, "GBB envisions this to be a
terrific opportunity to transform a tier-one, iconic American
brand into a global, multi-channel platform of diverse and
unique consumer products using leading technologies and trend-
setting innovations. This reflects the core transformational
competencies of the joint venture partners and we look forward
to working with new licensees to grow the brand worldwide and in
multiple categories."
The joint venture will partner with a number of global
institutions in the ongoing development of The Sharper Image
brand.
About Hilco Consumer Capital
Hilco Consumer Capital -- http://www.hilcocc.com/-- is a
private equity firm that makes strategic investments in consumer
lifestyle brands through acquisitions of North American
manufacturers, wholesalers, intellectual property and retailers.
HCC investments range from US$25 million to US$250 million.
Current portfolio brands and companies include Caribbean Joe(R:
75.02, +0.71, +0.95%), Ellen Tracy, Halston(R: 75.02, +0.71,
+0.95%), Tommy Armour Golf(R: 75.02, +0.71, +0.95%), RAM Golf(R:
75.02, +0.71, +0.95%), and Bombay Brands, LLC. HCC is a unit of
The Hilco Organization, a Chicago-based, international provider
of diversified financial and operational services, including
business asset valuations, asset acquisition and disposition
services, M&A services and retail consulting.
About GB Brands, LLC
GB Brands, LLC is a member of the Gordon Brothers Group family
of companies. GB Brands LLC purchases, sells, and licenses
brands and other intellectual property. Founded in 1903, Gordon
Brothers Group -- http://www.GordonBrothers.com/-- is a global
advisory, restructuring and investment firm specializing in
retail and consumer products, industrial and real estate
sectors. Gordon Brothers Group maximizes value for both healthy
and distressed companies by purchasing or selling all categories
of assets, appraising assets, providing debt financing, making
private equity investments, and operating businesses for
extended periods. Gordon Brothers Group conducts over US$40
billion in annual transactions and appraisals.
Its private equity fund, 1903 Equity Fund, holds majority or
minority positions in a portfolio of companies including Como
Fred David, Clair de Lune, Deb Shops, Dollarama, Grafton-Fraser,
Laura Secord, Things Remembered and Toys R Us.
About Windsong Brands LLC
Windsong Brands, LLC -- http://www.windsongbrands.com/-- is a
private equity firm that focuses on investments in leading
middle market consumer companies that own strong recognizable
brands. The team has a diverse background of consumer expertise
that assists and guides company management to unlock the true
potential of their brand. Windsong Brands makes majority and
minority investments in both public and private companies.
Investments and portfolio brand companies include Ellen Tracy,
Caribbean Joe, Joe's Jeans, Field & Stream, Como Sport, and
Alerion Aviation.
About Crystal Capital
Established by a team of experienced financial professionals,
Crystal Capital is an investment firm that provides capital for
middle market companies across all industries. The founding
principals each have over 25 years of experience and have
provided in excess of US$15 billion in creative capital
commitments for buyouts, recapitalizations, refinancings and
growth opportunities.
About Sharper Image
Based in San Francisco, California, Sharper Image Corp. --
http://www.sharperimage.com/-- is a multi-channel specialty
retailer. It operates in three principal selling channels: the
Sharper Image specialty stores throughout the U.S., the Sharper
Image catalog and the Internet. The company has operations in
Australia, Brazil and Mexico. In addition, through its Brand
Licensing Division, it is also licensing the Sharper Image brand
to select third parties to allow them to sell Sharper Image
branded products in other channels of distribution.
The company filed for Chapter 11 protection on Feb. 19, 2008
(Bankr. D.D., Case No. 08-10322). Steven K. Kortanek, Esq. at
Womble, Carlyle, Sandridge & Rice, P.L.L.C. represents the
Debtor in its restructuring efforts. An Official Committee of
Unsecured Creditors has been appointed in the case. When the
Debtor filed for bankruptcy, it listed total assets of
USUS$251,500,000 and total debts of USUS$199,000,000. (Sharper
Image Bankruptcy News; Bankruptcy Creditors' Service, Inc.,
http://bankrupt.com/newsstand/or 215/945-7000)
SUN MICROSYSTEMS: Will Launch Sun Equity in Latin America
---------------------------------------------------------
Sun Microsystems Inc.'s Executive Vice President and Americas
Region Chairperson Crawford Beveridge told Business News
Americas that the firm will launch Sun Equity Partner model in
Latin America during its fiscal year 2009.
BNamericas notes that Sun Microsystem's fiscal year 2009 starts
in July 2008.
According to BNamericas, Mr. Beveridge said that Sun
Microsystems will use Sun Equity to purchase a minority share in
a local partner that concentrates on promoting the firm's
softwares in a country. The launching of the new model is part
of Sun Microsystems' strategy to focus investment in emerging
markets like Latin America, mainly in response to declining
sales in the past two quarters in its main source of revenues,
the U.S.
Mr. Beveridge commented to BNamericas, "In Latin America you
will see three business models: one direct, one through
partners, and the Sun Equity Partners model. We have already
been operating [the latter model] for the past 1.5 years in
Indonesia, and it works extremely well."
With Sun Equity, the partner will have stronger commitment to
Sun Microsystems in the Latin American market, BNamericas says,
citing Mr. Beveridge. It will generate more business
opportunities for the firm, Mr. Beveridge added.
Sun Microsystems' Latin American Sales Vice President Miguel
Martinez told BNamerica that Sun Equity is ideal for Latin
American nations where Sun Microsystems doesn't have operatons.
"In places where we do not have offices and typically work
through partners, this joint venture model reinforces our
presence and we have plans for Latin America during the next
fiscal year," Mr. Martinez added. BNamericas notes that the
firm has presence in Brazil, Mexico, Chile, Argentina, Colombia,
and Venezuela. According to Mr. Martinez, Sun Microsystems is
determining where to launch Sun Equity.
Sun Microsystems is looking for information technology firms
with a strong presence in the nations where they operate,
Messrs. Martinez and Beveridge told BNamericas. The two
officials said that the companies must also be able to integrate
complex projects aligned with those that Sun Microsystems
develops in the countries where it has direct presence. "We are
looking for this type of expertise, strong companies in the IT
[information technology] market that have the capability to use
our technology and integrate all we develop, including software,
storage and systems, and even some of the know-how we have in
specific services," Mr. Martinez said.
Headquartered in Santa Clara, California, Sun Microsystems Inc.
(NASDAQ: JAVA) -- http://sun.com/-- provides network computing
infrastructure product and service solutions worldwide. Sun
Microsystems conducts business in 100 countries around the
globe, including Brazil, Argentina, India, Hungary, and the
United Kingdom.
* * *
Moody's Investors Service placed Sun Microsystems Inc.'s
corporate family and unsecured debt rating at 'Ba1' in September
2005. The ratings still hold to date with a stable outlook.
UAL CORP: Sets Pricing Alliance With Continental Airlines
---------------------------------------------------------
United Airlines and Continental Airlines Inc. are holding talks
to form an alliance that would set pricing and schedules, Mary
Schlangenstein and John Hughes of Bloomberg News says. The
alliance discussions went underway shortly after the failed
merger talks between the two airlines, Bloomberg said.
An alliance with U.S. antitrust immunity to collaborate on fares
would provide most of the benefits of a merger, at the same time
avoiding regulatory challenges as well as the need to combine
workforces, Bloomberg notes.
"Antitrust immunity is a kind of quasi-merger," James M.
Higgins, analyst at Soleil Securities Corp., told Bloomberg.
"It doesn't put you through the actual integration, which is
where the cost savings ultimately can come, but which is also
risky, especially now."
"As we've said over the last few weeks, we are examining our
alliance relationships as we think it's important that we be a
major player in one of the three major global airline
alliances," Bloomberg quotes Mary Clark, a spokeswoman for
Continental, as saying.
The alliance talks are reportedly separate from United's merger
talks with US Airways.
Continental Says "No" to Merger
As reported by the Troubled Company Reporter on April 28, 2008,
Continental Airlines Inc.'s Chairman and CEO Larry Kellner and
President Jeff Smisek disclosed to more than 45,000 employees
that the company's Board of Directors unanimously supported the
management's recommendation that, in the current industry
environment, the best course for Continental is not to merge
with another airline at this time.
According to the two executives, the Board very carefully
considered all the risks and benefits of a merger with another
airline, and determined that the risks of a merger at this time
outweigh the potential rewards, as compared to Continental's
prospects on a standalone basis. The management will, however,
continue to review potential alliances and its membership in
SkyTeam. Continental is considering alternatives to SkyTeam as
its carefully evaluates which major global alliance will be best
for Continental over the long term.
About Continental Airlines
Continental Airlines Inc. (NYSE: CAL) -- http://continental.com/
-- is the world's fifth largest airline. Continental, together
with Continental Express and Continental Connection, has more
than 2,900 daily departures throughout the Americas, Europe and
Asia, serving 144 domestic and 139 international destinations.
More than 500 additional points are served via SkyTeam alliance
airlines. With more than 45,000 employees, Continental has hubs
serving New York, Houston, Cleveland and Guam, and together with
Continental Express, carries approximately 69 million passengers
per year.
* * *
As reported in the Troubled Company Reporter on April 22, 2008,
Standard & Poor's Ratings Services revised its rating outlook on
Continental Airlines Inc. (B/Negative/B-3) to negative from
stable. S&P also placed its ratings on selected enhanced
equipment trust certificates that are secured by regional jets
on CreditWatch with negative implications.
As reported in the Troubled Company Reporter on Dec. 27, 2007,
Fitch Ratings affirmed Continental Airlines 'B-' issuer default
rating with a stable outlook.
About UAL Corp.
Based in Chicago, Illinois, UAL Corporation (NASDAQ: UAUA)
-- http://www.united.com/-- is the holding company for United
Airlines, Inc. United Airlines is the world's second largest
air carrier. The airline flies to Brazil, Korea and Germany.
The company filed for chapter 11 protection on Dec. 9, 2002
(Bankr. N.D. Ill. Case No. 02-48191). James H.M. Sprayregen,
Esq., Marc Kieselstein, Esq., David R. Seligman, Esq., and
Steven R. Kotarba, Esq., at Kirkland & Ellis, represented the
Debtors in their restructuring efforts. Fruman Jacobson, Esq.,
at Sonnenschein Nath & Rosenthal LLP represented the Official
Committee of Unsecured Creditors before the Committee was
dissolved when the Debtors emerged from bankruptcy.
Judge Eugene R. Wedoff confirmed the Debtors' Second Amended
Plan on Jan. 20, 2006. The company emerged from bankruptcy
protection on Feb. 1, 2006.
(United Airlines Bankruptcy News; Bankruptcy Creditors' Service
Inc., http://bankrupt.com/newsstand/or 215/945-7000)
* * *
As reported in the Troubled Company Reporter-Latin America on
April 23, 2008, Standard & Poor's Ratings Services said that its
ratings and outlook on UAL Corp., parent of United Air Lines
Inc. (both rated B/Negative/--) are not affected by UAL's report
of a heavy first-quarter loss. UAL reported a first-quarter
US$542 million pretax loss, as much higher fuel prices more than
offset increased revenues. S&P had revised its rating outlook
on both entities to negative from stable on April 16, 2008. In
that outlook revision, S&P cited very high fuel prices and the
expected effect on UAL revenues of a weak U.S. economy.
UAL CORP: Name & Chicago HG Likely to Remain After USAir Merger
---------------------------------------------------------------
United Airlines Inc., and US Airways Group, Inc. are about to
consolidate, Julie Johnsson of the Chicago Tribune reports.
The paper, citing a person familiar with the deal, discloses
that the merged company will likely be headquartered in Chicago,
United's base. However, United's executives are expected to
step aside and let US Airways' CEO Doug Parker and president
Scott Kirby lead the combined carrier, Ms. Johnsson says.
If the merger goes through, public relations and branding
experts believe that United's name would most likely be retained
since it is more established and has a better reputation, Mike
Sunnucks of the Phoenix Business Journal reports.
"United Airlines is larger, and its brand is older and more
established. It carries longevity and credibility that may
resonate more broadly, particularly in hub markets like
Washington, and Chicago," said Steve Carr, a principal of
Phoenix-based public relations firm, Kur Carr Group Inc.,
reports Mr. Sunnucks.
Several parties made statements regarding the merger talks,
including Captain Steve Wallach, Chairman of the United Master
Executive Council of the Air Line Pilots Association, and the
Association of Flight Attendants-CWA Master Executive Council
presidents at America West, US Airways and United.
ALPA Says Merger Should be Last Resort
"We are aware of continued speculation in the media of a
possible merger between United Airlines and US Airways and have
serious concerns that the highly-touted financial benefits to be
derived from such a merger are unlikely to be achieved because
these benefits are based on assumptions that have no basis in
reality," Mr. Wallach said. "We therefore believe that a merger
with US Airways should be a last resort and not a first choice
for United."
"First, much of the financial benefit of a merger occurs because
the merged carrier takes traffic away from other carriers. . . .
Second, much of the anticipated costs savings from a merger are
expected to come from an 'optimization of the fleet' and the
integration of operations. . . . Third, the transaction is
touted
as providing significant cash to the merged carrier. However,
we are concerned that continued high fuel costs and the
significant integration costs incurred in a merger could deplete
cash reserves before the benefits of the transaction are
realized sometime in the future."
"We continue to believe that the 'execution risks' are far
greater than assumed. America West and US Airways have been
unable to integrate after two and a half years, and there is no
solution in sight. In fact, labor conditions at US Airways have
worsened. If United and US Airways were to merge, there could
not be any integration of operations until ALPA is recertified
following a new election, and this could take at least a year.
Once recertified, integration of the pilot seniority lists and
negotiation of a new agreement will take at a minimum one and a
half to two years and conceivably as long as four. Following
integration, full fleet optimization likely will take an
additional one to two years. In other words, the merger could
take as long as six to seven years, and under the best of
circumstances, at least four years to complete. During this
interim period there would be minimal, if any, cost savings and
financial benefits to the merged entity.
"We also believe that it is unrealistic to assume that the
merger will receive Department of Justice approval. . . .
Moreover, we believe there [is] a number of operational issues
at United that need to be addressed, and that it is a mistake to
sit idly by waiting for a merger to bail us out. . . . We also
find it difficult to understand why United is the only carrier
in the industry with no aircraft on order or on option. All
these issues require immediate attention.
". . . . We are proud to be United pilots and want to do all
that we can to help our airline retain its stature and
leadership position in the industry."
AFA Says Flight Attendants Should be Supported
Representing more than 21,000 flight attendants, the Association
of Flight Attendants-CWA Master Executive Council presidents --
Greg Davidowitch at United, Mike Flores at US Airways, and Gary
Richardson at America West -- had this to say regarding the
"failed actions of the current management at each airline and
the dangers of multiplying those failures by forcing them under
one roof":
"Labor relations at our carriers is at an all-time low. US
Airways CEO Doug Parker has failed for almost three years to
negotiate a combined contract with the flight attendants at
America West and US Airways. While executives have repeatedly
awarded themselves millions in salary and bonuses, America West
and US Airways flight attendants have not received raises or
improvements in working conditions for nearly five years."
"The track record of United Airlines executives is no better.
. . . These staffing cuts and scheduling practices provide no
benefit and only wreak havoc on passengers' travel experience."
"In order for such an inherently risky and complex business
transaction to be successful, there must be an underlying
rationale and an accord with flight attendants. To date there
is no evidence of either. If current management at these
companies expects cooperation in any consolidation scenario,
they must address the needs of flight attendants.
"The problems at our airlines can and should be fixed. Flight
attendants continue to struggle under the draconian cuts of
bankruptcy and deserve decent wages and work conditions. Only
when the needs of the employees are met will US Airways and
United Airlines have a chance at being airlines where people
want to work and passengers want to fly.
"In order for any merger to be successful, it will need to have
the support of flight attendants. We encourage our respective
management teams to first address the problems that have created
this adversarial labor environment before contemplating any kind
of consolidation scenario. Unless immediate focus is placed on
the outstanding road blocks to success at each of our airlines,
flight attendant issues will become real and significant
obstacles in the path of any merger."
About US Airways
Based in Tempe, Arizona, US Airways Group Inc.'s (NYSE: LCC) -
http://www.usairways.com/-- primary business activity is the
ownership of the common stock of US Airways, Inc., Allegheny
Airlines, Inc., Piedmont Airlines, Inc., PSA Airlines, Inc.,
MidAtlantic Airways, Inc., US Airways Leasing and Sales, Inc.,
Material Services Company, Inc., and Airways Assurance Limited,
LLC.
Under a Chapter 11 plan declared effective on March 31, 2003,
USAir emerged from bankruptcy with the Retirement Systems of
Alabama taking a 40% equity stake in the deleveraged carrier in
exchange for US$240 million infusion of new capital.
US Airways and its subsidiaries filed another chapter 11
petition on Sept. 12, 2004 (Bankr. E.D. Va. Case No. 04-13820).
Brian P. Leitch, Esq., Daniel M. Lewis, Esq., and Michael J.
Canning, Esq., at Arnold & Porter LLP, and Lawrence E. Rifken,
Esq., and Douglas M. Foley, Esq., at McGuireWoods LLP, represent
the Debtors in their restructuring efforts. In the Company's
second bankruptcy filing, it lists US$8,805,972,000 in total
assets and US$8,702,437,000 in total debts.
The Debtors' Chapter 11 plan for its second bankruptcy filing
became effective on Sept. 27, 2005. The Debtors completed their
merger with America West on the same date. (US Airways
Bankruptcy News, Issue No. 158; Bankruptcy Creditors' Service,
Inc., http://bankrupt.com/newsstand/or 215/945-7000).
About UAL Corp.
Based in Chicago, Illinois, UAL Corporation (NASDAQ: UAUA)
-- http://www.united.com/-- is the holding company for United
Airlines, Inc. United Airlines is the world's second largest
air carrier. The airline flies to Brazil, Korea and Germany.
The company filed for chapter 11 protection on Dec. 9, 2002
(Bankr. N.D. Ill. Case No. 02-48191). James H.M. Sprayregen,
Esq., Marc Kieselstein, Esq., David R. Seligman, Esq., and
Steven R. Kotarba, Esq., at Kirkland & Ellis, represented the
Debtors in their restructuring efforts. Fruman Jacobson, Esq.,
at Sonnenschein Nath & Rosenthal LLP represented the Official
Committee of Unsecured Creditors before the Committee was
dissolved when the Debtors emerged from bankruptcy.
Judge Eugene R. Wedoff confirmed the Debtors' Second Amended
Plan on Jan. 20, 2006. The company emerged from bankruptcy
protection on Feb. 1, 2006.
(United Airlines Bankruptcy News; Bankruptcy Creditors' Service
Inc., http://bankrupt.com/newsstand/or 215/945-7000)
* * *
As reported in the Troubled Company Reporter-Latin America on
April 23, 2008, Standard & Poor's Ratings Services said that its
ratings and outlook on UAL Corp., parent of United Air Lines
Inc. (both rated B/Negative/--) are not affected by UAL's report
of a heavy first-quarter loss. UAL reported a first-quarter
US$542 million pretax loss, as much higher fuel prices more than
offset increased revenues. S&P had revised its rating outlook
on both entities to negative from stable on April 16, 2008. In
that outlook revision, S&P cited very high fuel prices and the
expected effect on UAL revenues of a weak U.S. economy.
==========================
C A Y M A N I S L A N D S
==========================
GREENFORD LTD: Deadline for Proofs of Claim Filing Is May 21
------------------------------------------------------------
Greenford Ltd.'s creditors have until May 21, 2008, to prove
their claims to Walkers SPV Limited, 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.
Greenford Ltd.'s shareholder decided on April 23, 2008, to place
the company into voluntary liquidation under The Companies Law
(2004 Revision) of the Cayman Islands.
The liquidator can be reached at:
Edward Allanby
c/o Maples and Calder, Attorneys-at-law
P.O. Box 309GT, Ugland House
South Church Street, George Town
Grand Cayman, Cayman Islands
PARMALAT SPA: 1st Qtr Profit Down on Lesser Legal Settlements
-------------------------------------------------------------
Parmalat S.p.A. said its net profit fell to EUR90,200,000, or
US$140,000,000, in the first quarter of 2008 from a restated
EUR110,300,000, a year earlier.
The figure missed the EUR103,900,000 median estimate of three
analysts surveyed by Bloomberg News.
Parmalat attributed its first quarter profit decline to lesser
collections from legal settlements, as well as higher milk
costs.
The settlements with the banks and auditors, in connection with
its bankruptcy, dropped by about a third from a year earlier,
Sara Gay Forden of Bloomberg News notes.
"The first quarter is typically weak, but the first few months
of
this year were particularly weak due to the increase in the cost
of raw materials," Enrico Bondi, Parmalat's chief executive
officer, said in a conference call, according to the report.
Parmalat executives plan to spend more on marketing and product
innovation, in order to reach the low end of the range forecast.
Citing turbulent market conditions, they said they expect the
company's EBITDA to increase 7 percent this year, to
EUR390,000,000. Parmalat also cited "strong competitive
pressure" from retailers who are pushing their house brands and
currency fluctuations.
Parmalat shares held a closing price of EUR1.9225 on May 14 at
the Milan Online Stock Market. As of March 28, 2008, about
1,667,496,728 shares of Parmalat were issued and outstanding.
Shareholders of Parmalat who hold more than 2% of ordinary
capital as of February 29 are:
No. of Shares Stake
------------- -----
JP Morgan Chase & Co. Corporation 49,997,275 3.010%
Societe Generale Asset Mgt. UK Ltd 48,540,624 2.922%
Capital Research and Management 46,641,900 2.808%
Fir Tree, Inc. 43,753,261 2.634%
Intesa San Paolo Group 40,274,358 2.424%
Deutsche Bank AG 33,924,745 2.042%
----------- -------
Total 263,132,163 15.840%
Parmalat's shares have slid 18 percent this year, cutting
Parmalat's market value to EUR3,640,000,000, Bloomberg notes.
About Parmalat
Headquartered in Milan, Italy, Parmalat S.p.A.
-- http://www.parmalat.net/-- sells nameplate milk products
that can be stored at room temperature for months. It also has
about 40 brand product lines, which include yogurt, cheese,
butter, cakes and cookies, breads, pizza, snack foods and
vegetable sauces, soups and juices.
The company's U.S. operations filed for chapter 11 protection on
Feb. 24, 2004 (Bankr. S.D.N.Y. Case No. 04-11139). Gary
Holtzer, Esq., and Marcia L. Goldstein, Esq., at Weil Gotshal &
Manges LLP, represent the Debtors. When the U.S. Debtors filed
for bankruptcy protection, they reported more than
US$200 million in assets and debts. The U.S. Debtors emerged
from bankruptcy on April 13, 2005.
Parmalat S.p.A. and its Italian affiliates filed separate
petitions for Extraordinary Administration before the Italian
Ministry of Productive Activities and the Civil and Criminal
District Court of the City of Parma, Italy on Dec. 24, 2003.
Dr. Enrico Bondi was appointed Extraordinary Commissioner in
each of the cases.
On June 22, 2004, Dr. Bondi filed a Sec. 304 Petition, Case No.
04-14268, in the United States Bankruptcy Court for the Southern
District of New York.
Three Cayman Islands-based special-purpose vehicles created by
Parmalat were placed under separate winding up petitions before
the Grand Court of the Cayman Islands in January 2004. Gordon
I. MacRae and James Cleaver of Kroll (Cayman) Ltd. serve as
liquidators in the cases of Dairy Holdings Ltd., Parmalat
Capital Finance Ltd., and Food Holdings Ltd. On Jan. 20, 2004,
the Liquidators filed Sec. 304 petitions, Case No. 04-10362, in
the United States Bankruptcy Court for the Southern District of
New York on behalf of Parmalat Finance, et al. Gregory M.
Petrick, Esq., at Cadwalader, Wickersham & Taft LLP, and Richard
I. Janvey, Esq., at Janvey, Gordon, Herlands Randolph, represent
the Finance Companies in the Sec. 304 case.
The Honorable Robert D. Drain presides over the Parmalat
Debtors' U.S. cases. On June 21, 2007, the U.S. Court granted
Parmalat permanent injunction.
PARMALAT SPA: Gives Updates on Legal Actions Against Citigroup
--------------------------------------------------------------
Parmalat S.p.A. has said its actions against Citigroup Inc. are
underway. In view of the ongoing proceedings, Parmalat believes
any comment to be inappropriate.
Parmalat SpA noted that Citigroup is currently involved in three
proceedings:
(1) a committal to trial in Parma, Italy, for its alleged
co-liability in the fraudulent bankruptcy at Parmalat;
(2) another criminal proceeding in Milan, Italy, for alleged
market rigging; and
(3) in a further trial for damages before the New Jersey
Court.
According to Nicola Palmieri, Esq., Parmalat legal counsel, the
trial against Citigroup at the Bergen County Superior Court in
New Jersey might last five or six weeks, Sara Gay Forden of
Bloomberg News reported. The length of the trial will mean a
significant increase in legal costs, Mr. Palmieri had said
without elaborating.
No settlement talks are under way with Citigroup, Mr. Palmieri
told Bloomberg News, and lawsuits are progressing against Bank
of America Corp., Grant Thornton LLP, and Italian banks who were
Parmalat's former lenders.
Sources close to Citigroup also told Thomson Financial News
reports that the bank is not holding talks with Parmalat to
settle its U.S. civil case or with Italian investigators for
plea-bargain agreements. According to Thomson Financial News,
analysts have speculated that Parmalat and Citigroup could reach
a settlement during a civil trial in New Jersey.
Citigroup is facing a USUS$2.2 billion in damages in New Jersey
and has counter-sued Parmalat for USUS$699 million. Citigroup
executives, meanwhile, are facing criminal charges in Milan and
Parma, Italy.
The bank has been denying the charges.
Separately, Judge Eleonora Fiengo of a court in Parma, Italy,
denied a request by Parmalat founder Calisto Tanzi's lawyers to
unite all trials connected to the financial collapse of Parmalat
S.p.A., Colleen Barry writes for The Associated Press.
Giampiero Biancolella, counsel for Mr. Tanzi, argued that
combining the Parma trials will allow an efficient defense of
his client, noting that many strands in the cases overlap, AP
reports.
Judge Fiengo refused the request, ruling that keeping the trials
separate would hasten smaller cases without hindering the
defense, AP relates.
The judge however combined two of the trials -- the main trial
accusing Mr. Tanzi and 22 others of fraudulent bankruptcy will
now include the founder's former lawyer Michele Ributti, who is
charged of misappropriating Parmalat funds.
Judge Fiengo kept these trials separate:
* relating to the failure of the Parmatour travel firm;
* relating to Parmalat's purchase of mineral water-firm
Ciappazzi; and
* relating funds availed from Emilia Romagna Factoring.
The court will resume trials June 4, 2008, AP relates. The
court will decide the same day whether to combine to the main
proceedings the trial relating to Parmalat's acquisition of
Eurolat.
Paola Cagossi, a lawyer representing more than 1,000 Parmalat
investors, told AP that maintain several trials would give small
shareholders a better chance of winning damages.
About Parmalat
Headquartered in Milan, Italy, Parmalat S.p.A.
-- http://www.parmalat.net/-- sells nameplate milk products
that can be stored at room temperature for months. It also has
about 40 brand product lines, which include yogurt, cheese,
butter, cakes and cookies, breads, pizza, snack foods and
vegetable sauces, soups and juices.
The company's U.S. operations filed for chapter 11 protection on
Feb. 24, 2004 (Bankr. S.D.N.Y. Case No. 04-11139). Gary
Holtzer, Esq., and Marcia L. Goldstein, Esq., at Weil Gotshal &
Manges LLP, represent the Debtors. When the U.S. Debtors filed
for bankruptcy protection, they reported more than
US$200 million in assets and debts. The U.S. Debtors emerged
from bankruptcy on April 13, 2005.
Parmalat S.p.A. and its Italian affiliates filed separate
petitions for Extraordinary Administration before the Italian
Ministry of Productive Activities and the Civil and Criminal
District Court of the City of Parma, Italy on Dec. 24, 2003.
Dr. Enrico Bondi was appointed Extraordinary Commissioner in
each of the cases.
On June 22, 2004, Dr. Bondi filed a Sec. 304 Petition, Case No.
04-14268, in the United States Bankruptcy Court for the Southern
District of New York.
Three Cayman Islands-based special-purpose vehicles created by
Parmalat were placed under separate winding up petitions before
the Grand Court of the Cayman Islands in January 2004. Gordon
I. MacRae and James Cleaver of Kroll (Cayman) Ltd. serve as
liquidators in the cases of Dairy Holdings Ltd., Parmalat
Capital Finance Ltd., and Food Holdings Ltd. On Jan. 20, 2004,
the Liquidators filed Sec. 304 petitions, Case No. 04-10362, in
the United States Bankruptcy Court for the Southern District of
New York on behalf of Parmalat Finance, et al. Gregory M.
Petrick, Esq., at Cadwalader, Wickersham & Taft LLP, and Richard
I. Janvey, Esq., at Janvey, Gordon, Herlands Randolph, represent
the Finance Companies in the Sec. 304 case.
The Honorable Robert D. Drain presides over the Parmalat
Debtors' U.S. cases. On June 21, 2007, the U.S. Court granted
Parmalat permanent injunction.
PEQUOT GLOBAL: Deadline for Proofs of Claim Filing Is May 22
------------------------------------------------------------
Pequot Global Market Neutral Master Fund Ltd.'s creditors have
until May 22, 2008, to prove their claims to John Cullinane and
Derrie Boggess, the company's liquidators, or be excluded from
receiving any distribution or payment.
In their proofs of claim, creditors must indicate their full
names, addresses, the full particulars of their debts or claims,
and the names and addresses of their lawyers, if any.
Pequot Global's shareholders decided on April 22, 2008, to place
the company into voluntary liquidation under The Companies Law
(2004 Revision) of the Cayman Islands.
The liquidators can be reached at:
John Cullinane and Derrie Boggess
c/o Walkers SPV Limited
Walker House, 87 Mary Street
George Town, Grand Cayman,
Cayman Islands
PEQUOT GLOBAL: Proofs of Claim Filing Deadline Is Until May 22
--------------------------------------------------------------
Pequot Global Market Neutral Offshore Fund Ltd.'s creditors have
until May 22, 2008, to prove their claims to John Cullinane and
Derrie Boggess, the company's liquidators, or be excluded from
receiving any distribution or payment.
In their proofs of claim, creditors must indicate their full
names, addresses, the full particulars of their debts or claims,
and the names and addresses of their lawyers, if any.
Pequot Global's shareholders decided on April 22, 2008, to place
the company into voluntary liquidation under The Companies Law
(2004 Revision) of the Cayman Islands.
The liquidators can be reached at:
John Cullinane and Derrie Boggess
c/o Walkers SPV Limited
Walker House, 87 Mary Street
George Town, Grand Cayman,
Cayman Islands
QI CAPITAL: Will Hold Final Shareholders Meeting on May 22
----------------------------------------------------------
QI Capital Inc. will hold its final shareholders meeting on May
22, 2008, at 10:00 a.m. at the representative office, 7A
Branksome Grande, 3 Tregunter Path, Mid-Levels, Hong Kong.
These matters will be taken up during the meeting:
1) accounting of the wind-up process, and
2) determining the manner in which the books,
accounts and documentation of the company,
and of the liquidator should be disposed of.
QI Capital Inc.'s shareholders agreed on April 1, 2008, to place
the company into voluntary liquidation under The Companies Law
(2004 Revision) of the Cayman Islands.
The liquidator can be reached at:
Terence Khoo
Attn: Rhonda Laws
P.O. Box 268GT,
Grand Cayman, Cayman Islands
Tel: (345) 949 2648
Fax: (345) 949 8613
===============
C O L O M B I A
===============
BANCOLOMBIA SA: S.C. Labor Chamber Revokes Civil Chamber Ruling
---------------------------------------------------------------
The Labor Chamber of the Supreme Court of Justice revoked the
temporary order granted by the Civil Chamber of the Supreme
Court of Justice on March 28, 2008, which suspended the decision
of the Tribunal Superior de Bogota (Superior Court) while the
appeal filed by Bancolombia S.A. remained pending.
This decision relates to the constitutional action filed by
Bancolombia opposing the decision of the Superior Court that
annulled an award granted by an arbitral tribunal on March 30,
2006, requiring Jaime Gilinski to pay approximately COP63,000
million to Bancolombia relating to certain contingencies and
liabilities, arising in the context of the merger between Banco
de Colombia S.A. and Banco Industrial Colombiano.
The Troubled Company Reporter-Latin America previously reported
that on March 28, 2008, the Civil Chamber temporarily suspended
the decision of the Tribunal Superior de Bogota dated Feb. 26,
2008, that annulled an award granted by an arbitral tribunal in
March 30, 2006 (Arbitral Award) requiring Mr. Gilinski to pay
COP63,216,447,152 to Bancolombia. This amount included accrued
interest and adjustments for inflation.
In its decision, the Labor Chamber also ruled that the guaranty
would remain in effect.
This new decision does not resolve the substantive controversy
arising from the merger with Banco de Colombia S.A.
Bancolombia and its attorneys will analyze the decision of the
Labor Chamber upon official notification of such decision from
the Labor Chamber. Bancolombia will continue to enforce its
rights and those of its shareholders before the competent
forums.
Bancolombia S.A. is Colombia's largest full-service financial
institution, formed by a merger of three leading Colombian
financial institutions. Bancolombia's market capitalization is
over US$5.5 billion, with US$13.8 billion asset base and US$1.4
billion in shareholders' equity as of Sept. 30, 2006.
Bancolombia is the only Colombian company with an ADR level III
program in the New York Stock Exchange.
* * *
As reported in the Troubled Company Reporter-Latin America on
June 27, 2007, Moody's Investors Service changed the outlook to
positive from stable on its Ba3 long-term foreign currency
deposit ratings and Ba1 long-term foreign currency subordinated
bond rating for Bancolombia, S.A.
ECOPETROL SA: Will Boost Petrochemical Sales to 2.7 Million Tons
----------------------------------------------------------------
Ecopetrol SA's President Javier Gutierrez said in a presentation
at the Institute of the Americas' XVII Latin America energy
conference in La Jolla, California, that the firm will increase
its sales of petrochemicals to 2.7 million tons in 2015,
compared to 169,000 tons last year, Business News Americas
reports.
Mr. Gutierrez told BNamericas that the increased petrochemical
output will need an investment of US$4 billion in the period.
BNamericas relates that polyethylene output will be increased to
900,000 tons per year, from its current 50,000 tons per year
level. Polypropylene production will rise to 720,000 tons per
year.
According to BNamericas, Ecopetrol spent some US$690 million to
acquire Colombian petrochemical firm Propilco, which produces
380,000 tons per year of polypropylene.
Ecopetrol's butadiene and styrene butadiene output will
represent 685,000 tons per year of the total production in 2015,
BNamericas says, citing Mr. Gutierrez. Production of aromatics
will increase to 395,000 tons per year, compared to the current
129,000 tons per year, Mr. Gutierrez added.
Ecopetrol wants its petrochemical sales to increase to 825,000
tons per year by 2011, BNamericas states.
Ecopetrol SA is an integrated-oil company that is wholly owned
by the Colombian government. The company's activities include
exploration for and production of crude oil and natural gas, as
well as refining, transportation, and marketing of crude oil,
natural gas and refined products. Ecopetrol is Latin America's
fourth-largest integrated-oil concern. Operations are organized
into Exploration & Production, Refining & Marketing,
Transportation, and International Commerce & Gas. Ecopetrol
produced 385,000 barrels a day of oil and gas in 2006 and has
330,000 barrels a day of refining capacity, according to the
company's Web site. In 2005 it produced about 60 percent of
Colombia 's daily output.
* * *
As reported in the Troubled Company Reporter-Latin America on
Nov. 6, 2007, Fitch Ratings affirmed Ecopetrol S.A. 's foreign
and currency issuer default rating at 'BB+'.
==================
C O S T A R I C A
==================
TERADYNE INC: Annual Shareholders Meeting set for May 22
--------------------------------------------------------
Teradyne Inc. disclosed in a filing with the U.S. Securities and
Exchange Commission that its Annual Meeting of Shareholders will
be held on May 22, 2008, at 10:00 A.M. Eastern Time.
The meeting will be held at the Conference Center at Waltham
Woods, 860 Winter Street in Waltham, Massachusetts.
At the meeting, shareholders will be asked to:
1. elect all members of the Board of Directors to serve as
directors for a one-year term.
2. approve an amendment to the 2006 Equity and Cash
Compensation Incentive Plan to establish a US$3 million
per fiscal year maximum amount of variable cash
compensation awards that can be received by a
participant.
3. ratify the selection of the firm of
PricewaterhouseCoopers LLP as independent auditors for
the fiscal year ending Dec. 31, 2008.
4. transact such other business as may properly come before
the meeting and any postponements or adjournments
thereof.
Only shareholders who are on record as of the close of business
on April 2, 2008 will be allowed to vote.
Teradyne Inc. (NYSE:TER) -- http://www.teradyne.com/-- is a
supplier of Automatic Test Equipment used to test complex
electronics used in the consumer electronics, automotive,
computing, telecommunications, and aerospace and defense
industries. In 2007, Teradyne had sales of US$1.1 billion and
currently employs about 3,700 people worldwide. The company has
direct subsidiaries in these countries, Costa Rica, the United
Kingdom, Mexico, Korea, France and China.
* * *
Teradyne Inc. still carries S&P's "B+" long term foreign issuer
credit and long term local issuer credit ratings which was
placed on Dec. 13, 2002.
===================================
D O M I N I C A N R E P U B L I C
===================================
AES DOMINICANA: S&P Affirms B- Rating on US$160 Million Notes
-------------------------------------------------------------
Standard & Poor's Ratings Services has affirmed its 'B-' rating
on AES Dominicana Energia Finance S.A.'s US$160 million notes.
"The ratings on AES Dominicana reflect the challenges of
operating in the electric sector in the Dominican Republic,
which is characterized by a highly subsidized distribution
sector whose long-term operational and financial sustainability
remains uncertain," said S&P's credit analyst Marcela Duenas.
The ratings consider AES Dominicana's high off-taker risk, as
demonstrated by the company's failure to fully meet its payment
obligations to the generators during the country's latest
economic crisis. Furthermore, the payment obligations from the
distributors to AES Dominicana depend largely on the subsidy
that the government grants to the distribution companies. This
subsidy has been growing substantially, and S&P expects this
trend to continue as fuel prices continue to rise.
In S&P's opinion, the subsidy will remain in place for 2008,
causing a greater government deficit. The rating takes into
consideration the historically weak regulatory framework in the
Dominican Republic. The rating also considers the power
sector's dependence on a developing economy, which may be
affected in an economic stress scenario. Finally, the rating
incorporates a legacy liquefied natural gas (LNG) contract and
an intercompany loan that could be burdensome.
These challenges are partially offset by a diversified portfolio
of U.S. dollar-denominated long-term energy sales contracts,
which limit the company's exposure to spot-market volatility and
allow a pass-through of fuel costs. The ratings also consider
AES Dominicana's ownership of the only LNG import point in the
Dominican Republic. This could lead to the development of a
natural gas marketing business and to further diversity in its
customer base, by entering into power-purchase agreements with
nonregulated users.
AES Dominicana is an energy group operating in the Dominican
Republic, which manages two of AES Corp.'s wholly owned
generation assets, Andres and DPP. AES Dominicana, through an
AES Corp subsidiary, also has a management agreement to operate
EDE-Este, one of the three distribution companies in the
country. Andres is a power plant with a 304MW combined cycle
generation facility with duel fuel capability (gas and diesel)
but with natural gas supplied through the LNG import facility
serving as the primary fuel while DPP is a 236MW power plant
comprising two simple cycle combustion turbines that can burn
both natural gas and fuel oil Number 2. Both plants together
have PPA contracts with EDE-Este for 260MW that increase over
time, but Andres is currently servicing all contracts given its
greater efficiency. Andres LNG terminal includes a large tanker
berth and jetty, an LNG refueling pier, and a one million
barrel (160,000 cubic meters, m3) LNG storage tank, as well as
regasification and handling facilities for both LNG and diesel.
BASIC ENERGY: To Install 50 Megawatts of Wind Generation Project
----------------------------------------------------------------
Basic Energy Services Inc.'s President and Chief Executive
Officer Rolando Gonzalez Bunster said in a presentation that the
firm will install 50 megawatts of its 120-megawatt wind
generation project by January 2009, Business News Americas
reports.
BNamericas relates that Basic Energy will install the remaining
70 megawatts of capacity within 2009.
According to BNamericas, the project will help diversify a
generation park in the Dominican Republic. The park lacks wind
generation. It is dominated by fuel oil and gas. Hydro
represents 15% of total capacity and "combined cycle 25%".
Basic Energy wants Danish engineering company Vestas to supply
the turbines, Mr. Gonzalez told BNamericas.
Headquartered in Midland, Texas, Basic Energy Services Inc.
(NYSE:BAS) -- http://www.basicenergyservices.com/-- operates in
the major oil and gas producing markets in the US including
South Texas, the Texas Gulf Coast, the Ark-La-Tex region, North
Texas, the Permian Basin of West Texas, the Mid Continent,
Louisiana Inland Waters and the Rocky Mountains. Founded in
1992, Basic Energy has more than 4,600 employees in 11 states.
In the Dominican Republic, Basic Energy controls power companies
Cepm, Cespm and Ege Haina.
As reported on May 1, 2007, Basic Energy head Rolando Gonzalez
Bunster told Business News Americas that the company and its
Dominican Republic affiliates will construct a 35-megawatt
thermo plant in Haiti.
* * *
As reported in the Troubled Company Reporter-Latin America on
April 25, 2008, Standard & Poor's Ratings Services placed the
ratings on Basic Energy Services Inc., including the 'BB-'
corporate credit rating, on CreditWatch with positive
implications.
EMPRESA GENERADORA: S&P Affirms B Long-Term Corp. Credit Rating
---------------------------------------------------------------
Standard & Poor's Ratings Services has affirmed its 'B' long-
term corporate credit rating on Empresa Generadora de
Electricidad Haina S.A. and its 'B' rating on special-purpose
financing entity Haina Finance S.A.'s US$170 million senior
notes due 2017. The outlook is stable.
"The 'B' rating reflects the challenges of operating in the
Dominican Republic's electric industry, which is characterized
by an inefficient and highly subsidized distribution sector
whose long-term operational and financial sustainability is
highly uncertain," said S&P's credit analyst Marcela Duenas.
The rating also incorporates the company's high off-taker risk,
evidenced by Dominican distribution companies' failure to fully
meet their payment obligations to the generators during the
country's latest economic crisis. Furthermore, the payment
obligations from the distributors to Haina depend largely on the
subsidy that the government grants to the distribution
companies. The subsidy has been growing substantially, and S&P
expects this trend to continue as fuel price continue to
increase. In S&P's opinion, the subsidy will remain in place
for 2008, increasing the government's deficit. The rating
considers the historically weak regulatory framework in the
Dominican Republic. Finally, the rating takes into account the
sector's dependence on a developing economy, which may be
affected in an economic stress scenario.
These challenges are partially offset by a diversified portfolio
of U.S. dollar-denominated, long-term energy sales contracts
that limit the company's exposure to spot-market volatility, as
well as the efficiency of the company's plants, which have 97%
availability as of Dec. 31, 2007.
The stable outlook reflects S&P's expectation that the company
will continue to post satisfactory financial indicators. The
ratings could be lowered if the government is not able to
sustain the increasing subsidies granted to the distribution
companies. This could significantly deteriorate the company's
operating margins, reduce cash flow generation, and increase
off-taker risk. Also, the government's failure to support the
sector's development could negatively affect the ratings.
Haina Finance SA is a special-purpose financing entity that
issued the bonds and lent the funds to Empresa Generadora de
Electricidad Haina SA to repay outstanding debt obligations and
for corporate purposes. The notes are structured as a 10-year
bullet maturity, and the company supports them. Security
consists of the issuer's shares and a debt-service reserve
account.
Empresa Generadora de Electricidad Haina SA is the largest
thermoelectric generator in the Dominican Republic as measured
by installed capacity and electricity generation. The company
has a total installed thermoelectric capacity of 667MW and
generated a total of 1,758 GWh during 2006. It is 50% owned by
Haina Investment Company, Ltd. and 49.97% by the government of
the DR, with the balance owned by former employees of
Corporacion Dominicana de Electricidad.
EMPRESA GENERADORA: S&P Holds Long-Term Corp. Credit Rating at B
----------------------------------------------------------------
Standard & Poor's Ratings Services has affirmed its 'B' long-
term corporate credit rating on Empresa Generadora de
Electricidad Itabo S.A. and revised its outlook to negative from
stable. At the same time, S&P affirmed its 'B' long-term rating
on Itabo Finance S.A.'s US$125 million notes.
"The outlook revision reflects the company's weak financial
performance (particularly its margins). This was due to higher-
than-expected energy prices in the spot market and the
uncertainty regarding the impact of increasing fuel prices,"
said S&P's credit analyst Marcela Duenas. Consequently, the
company's debt-to-EBITDA ratio rose above of its expectations.
S&P believes the company's margins will remain constrained,
since the rating agency believes that the company will continue
to purchase energy in the spot market, though to a lesser exent,
to meet its contractual energy delivery obligations.
Nevertheless, the affirmation of the corporate credit rating
reflects the group's adequate liquidity to meet its financial
obligations.
The ratings on the company reflect the challenges of operating
in the electric sector in the Dominican Republic, which is
characterized by a highly subsidized distribution sector whose
long-term operational and financial sustainability remains
uncertain.
The rating also incorporates Itabo's high off-taker risk, as
demonstrated by Dominican distribution companies' failure to
fully meet their payment obligations to the generators during
the country's latest economic crisis. Furthermore, the payment
obligations from the distributors to the company depend largely
on the subsidy that the government grants to the distribution
companies. The subsidy has been growing, and S&P expects this
to continue as fuel prices continue to increase. In S&P's
opinion, the subsidy will remain in place for 2008, causing a
greater government deficit. The rating considers the
historically weak regulatory framework in the Dominican
Republic. It also considers the power sector's dependence on a
developing economy, which may be hurt in an economic stress
scenario.
These challenges are partially offset by Itabo's ownership of
the country's lowest-cost thermal power plant, whose energy is
the first to be sold after that from hydro generators. Itabo
has a diversified portfolio of U.S. dollar-denominated long-term
energy sales contracts that limits the company's exposure to
spot-market volatility and allows a pass-through of fuel costs.
In addition, Itabo benefits from a public-private ownership
structure that provides AES Corp.'s technical, managerial, and
operating expertise, and aligns the company's strategy with the
sector's long-term sustainability objectives.
The negative outlook reflects the risk of continued weakness in
the company's financial performance, particularly from higher
purchases in the spot market and an increase in international
fuel prices. Increased off-taker risk coupled with a failure by
the government to provide requisite support to the electric
sector could also lead to a downgrade. An improvement in the
issuer's key financial ratios, particularly a total debt-to-
EBITDA ratio of less than 3.0 could lead to a stable outlook.
Empresa Generadora de Electricidad Itabo, S.A. is a
thermoelectric generation company based in the Dominican
Republic. The company consists of 5 thermal power stations,
three of them stationed in Santo Domingo (Santo Domingo,
Timbeque and Los Mina), Itabo 20 km. (the largest) and Higuamo,
with a total nominal capacity of 586MW. It is currently owned
50% by AES Corp.'s subsidiaries and 49.97% and 0.03% by former
state employees by the Dominican Republic government. The
balance is owned by former employees of Corporacion Dominicana
de Electricidad (CDE). As previously noted, AES Dominicana
manages the company under a management contract, for a fee of
2.95% of Itabo's sales, while AES Corp. indirectly controls
Itabo's management board.
=============
E C U A D O R
=============
BANCO PICHINCHA: Secures US$50MM Loan from Inter-American Dev't
---------------------------------------------------------------
Banco Pichincha has secured a a six-year US$50 million loan from
the Inter-American Development Bank.
According to the Inter-American Development, Banco Pichincha
will use the loan to expand funding for housing.
Banco Pichincha's Chief Executive Officer Fernando Pozo told
BNamericas that loan is part of the bank's strategy to diversify
its funding sources. The loan will help increase lending to key
segments like microcredit, Mr. Pozo added.
Banco Pichincha is Ecuador's largest bank with about 26% of
deposits and 28% of loans at March 2007. Incorporated in 1906,
the group offers a wide array of services to corporate, middle
market and consumer customers. The bank is tightly controlled
by Mr. Fidel Egas Grijalva who holds over 65% of the company's
stock.
* * *
As reported in the Troubled Company Reporter-Latin America on
Aug. 16, 2007, Fitch Ratings affirmed Banco Pichincha C.A. y
Subsidiarias' 'B-' foreign currency long-term issuer default
rating. Fitch said the rating outlook is negative.
=============
J A M A I C A
=============
CABLE & WIRELESS: To Take Down Illegally Constructed Towers
-----------------------------------------------------------
Cable & Wireless PLC has agreed with the Jamaican government to
voluntarily take down cell phone towers that may be deemed as
having been constructed without the required approvals, Radio
Jamaica reports.
Radio Jamaica relates that Cable & Wireless, along with Digicel
and MiPhone, held on Wednesday pre-emptive talks with Robert
Montague, Minister of State in the Office of the Prime Minister
with responsibility for Local Government. Minister Montague
explained that the meeting was called in response to reports of
a high number of illegal cell sites being constructed across
Jamaica. No "stop-orders or enforcement notices" have been
issued to force compliance among the firms, the minister added.
Minister Montague told Radio Jamaica that teams from the
Department of Local Government have been out since Wednesday to
check that Digicel, Cable & Wireless, and MiPhone fulfilled
their promise. So far the firms were true to their word,
Minister Montague said.
Headquartered in London, Cable & Wireless Plc
-- http://www.cw.com/new/-- operates through two standalone
business units -- International and Europe, Asia & US. The
International business unit operates integrated
telecommunications companies in 33 countries offering mobile,
broadband, domestic and international fixed line services to
residential and business customers, with principal operations in
the Caribbean, Panama, Macau, Monaco and the Channel Islands.
The Europe, Asia & U.S. business unit provides enterprise and
carrier solutions to the largest users of telecoms services
across the U.K., U.S., continental Europe and Asia -- and
wholesale broadband services in the U.K.
Specifically, the company's operations are in the United
Kingdom, India, China, the Cayman Islands and the Middle East.
* * *
As of Feb. 12, 2008, Cable & Wireless Plc carries a Ba3 long-
term corporate family rating, a B1 senior unsecured debt rating
and a Ba3 probability of default rating from Moody's Investors
Service, which said the outlook is stable.
The company also carries a BB- long-term local and foreign
issuer credit ratings from Standard & Poor's Ratings Services,
which said the outlook is stable. S&P rates its short-term
local and foreign issuer credit at B.
CASH PLUS: Lawyers Challenge Takeover by Authorities in Court
-------------------------------------------------------------
Radio Jamaica reports that lawyers representing Cash Plus
Limited are challenging authorities' takeover of the company.
According to Radio Jamaica, Cash Plus' lawyers raised objections
to the takeover on Thursday during a hearing between High Court
Judge Marva McIntosh and the Co-Interim Receiver/Manager Keven
Bandoian.
As reported in the Troubled Company Reporter-Latin America on
May 15, 2008, Mr. Bandoian submitted a status report on Cash
Plus to Justice McIntosh. Mr. Bandoian was given the mandate of
determining the status of the assets and liabilities of Cash
Plus and its affiliates, which status will determine if pay outs
can be made to lenders and creditors.
Radio Jamaica relates that Mr. Bandoian's report indicated that
Cash Plus has no money to refund its investors.
Radio Jamaica relates that Cash Plus' lead attorney Paul Beswick
raised a preliminary objection to the proceedings. Justice
McIntosh then gave the Cash Plus attorneys until June 12, 2008,
to file affidavits stating their objections.
Mr. Beswick told the RJR News Center that his clients are
opposed to the appointment of a receiver/manager for Cash Plus.
The attorneys will challenge the fact that Cash Plus was placed
into receivership based on a lawsuit filed by worker in the
firm, Radio Jamaica says, citing sources close to the case.
Under the law a worker can't file for liquidation of a firm, the
source added. Radio Jamaica notes that Cash Plus' lawyers will
argue that only shareholders or directors can file for the
firm's liquidation.
Mr. Bandoian will be seeking to recover money invested by Cash
Plus in the Hilton Hotel and Drax Hall property in St. Ann and
other companies, sources told RJR News. Radio Jamaica relates
that those investments won't cover the over J$4 billion owed to
Cash Plus' investors.
Cash Plus Limited is an investment club in Jamaica. It
collapsed in 2007 after the Financial Services Commission moved
to regulate its operations. The company is a financial arm of
the Cash Plus Group of Companies, a business conglomerate
established in 2002 by mortgage banker Carlos Hill. The company
offers its participants the opportunity to participate in the
group's ventures which include mergers and numerous
acquisitions.
In April this year, the Supreme Court of Jamaica placed Cash
Plus into receivership. Cash Plus admitted that it wouldn't be
able to pay its lenders until April 14. The firm has 40,000
lenders with loans totaling J$4 billion. Cash Plus was unable
to repay its investors. The Financial Services Commission said
it was informed by the attorney acting on behalf of Cash Plus
that the investment club lacked the funds to start the repayment
of the principal and interest owing to its investors.
PricewaterhouseCoopers' accountant Kevin Bandoian was appointed
as joint receiver-manager for Cash Plus.
DIGICEL GROUP: To Take Down Illegally Constructed Towers
--------------------------------------------------------
Digicel Group has agreed with the Jamaican government to
voluntarily take down cell phone towers that may be deemed as
having been constructed without the required approvals, Radio
Jamaica reports.
Radio Jamaica relates that Digicel, along with Cable & Wireless
and MiPhone, held on Wednesday pre-emptive talks with Robert
Montague, Minister of State in the Office of the Prime Minister
with responsibility for Local Government. Minister Montague
explained that the meeting was called in response to reports of
a high number of illegal cell sites being constructed across
Jamaica. No "stop-orders or enforcement notices" have been
issued to force compliance among the firms, the minister added.
Minister Montague told Radio Jamaica that teams from the
Department of Local Government have been out since Wednesday to
check that Digicel, Cable & Wireless, and MiPhone fulfilled
their promise. So far the firms were true to their word,
Minister Montague said.
Digicel Ltd. is a wireless services provider in the Caribbean
region founded in 2000, and controlled by Denis O'Brien. The
company started operations in Jamaica in April 2001 and now
offers GSM mobile services in Caribbean countries including
Jamaica, St. Lucia, St. Vincent, Aruba, Grenada, Barbados,
Bermuda, Cayman, and Curacao. Digicel finished FY2005 with
1.722 million total subscribers -- 97% pre-paid -- estimated
market share of 67% and revenues and EBITDA of US$478 million
and US$155 million, respectively.
* * *
As reported in the Troubled Company Reporter-Latin America on
Feb. 20, 2007, Fitch Ratings Service assigned 'CCC+/RR5' rating
on Digicel Group Ltd.'s proposed US$1.4 billion senior
subordinated notes due 2015.
Digicel Ltd. is a wireless services provider in the Caribbean
region founded in 2000, and controlled by Denis O'Brien. The
company started operations in Jamaica in April 2001 and now
offers GSM mobile services in Caribbean countries including
Jamaica, St. Lucia, St. Vincent, Aruba, Grenada, Barbados,
Bermuda, Cayman, and Curacao. Digicel finished FY2005 with
1.722 million total subscribers -- 97% pre-paid -- estimated
market share of 67% and revenues and EBITDA of US$478 million
and US$155 million, respectively.
* * *
In February 2007, Moody's Investors Service affirmed Caa2 senior
unsecured rating to Digicel Group Limited's US$1.4 billion
senior unsecured notes offering.
===========
M E X I C O
===========
BERRY PLASTICS: Posts US$29.3MM Net Loss in Qtr. Ended March 29
---------------------------------------------------------------
Berry Plastics Corp. reported a net loss of US$29.3 million for
the second quarter ended March 29, 2008, compared with a net
loss of US$13.6 million in the corresponding period ended
March 31, 2007.
Net sales increased 14.0% to US$844.3 million for the quarter
from US$741.6 million for the prior quarter. This
US$102.7 million increase includes acquisition volume growth of
9.0%.
Net sales in the rigid open top business increased from
US$219.5 million in the prior quarter to US$247.9 million in the
quarter. Base volume growth in the rigid open top business,
excluding net selling price increases, was 5.0% driven primarily
by growth in the company's various container product lines and
thermoformed drink cups.
Net sales in the rigid closed top business increased from
US$155.2 million in the prior quarter to US$211.2 million in the
quarter primarily as a result of acquisition volume growth
attributed to Captive and MAC totaling US$51.0 million for the
quarter.
The flexible film business net sales increased from
US$229.2 million in the prior quarter to US$257.8 million in the
quarter. Acquisition volume growth attributed to Rollpak was
US$14.3 million for the quarter. Base volume declined,
excluding net selling price increases, by 11.0% for the quarter
primarily due to softness in the housing market and the
company's decision to discontinue historically lower margin
business.
Net sales in the tapes/coatings business decreased from
US$137.7 million in the prior quarter to US$127.4 million in the
quarter primarily driven by softness in the new home
construction and automotive markets partially offset by strong
volume growth in the corrosion protection business.
Gross profit decreased by US$9.3 million to US$112.4 million for
the quarter from US$121.7 million for the prior quarter. This
decrease is primarily attributed to the timing lag of passing
through increased raw material costs to customers as well as
US$2.4 million of purchase accounting inventory adjustments
related to the acquisitions of Captive and MAC partially offset
by additional sales volume and productivity improvements in the
flexible films and tapes/coatings segments as a result of
realizing synergies from the Berry Covalence merger.
Total operating expenses increased to US$91.2 million, from
US$84.1 million in the prior quarter, primarily as a results of
increases in selling, general and administrative expenses.
Net interest expense increased US$8.1 million to US$67.2 million
for the quarter from US$59.1 million in the prior quarter
primarily as a result of increased borrowings to finance the
Captive acquisition.
For the quarter, the company recorded an income tax benefit of
US$16.7 million or an effective tax rate of 36.3%, which is a
change of US$9.4 million from the income tax benefit of
US$7.3 million or an effective tax rate of 34.1% in the prior
quarter.
26 Weeks Ended March 29, 2008
Net sales increased 11.0% to US$1.6 billion billion for the 26
weeks ended March 29, 2008, from US$1.4 billion for the same
period ended March 31, 2007. This US$161.8 million increase
includes 6.0% acquisition related volume growth.
Gross profit increased by US$13.1 million to US$221.2 million
from US$208.1 million for the 26 weeks ended March 31, 2007.
This increase is primarily the result of the additional sales
volume and productivity improvements in the flexible films and
tapes/coatings segments as a result of realizing synergies from
the Berry Covalence Merger.
Selling, general and administrative expenses increased by
US$14.0 million to US$165.4 million for the 26 weeks ended
March 29, 2008, from US$151.4 million during the same period of
fiscal 2007.
Restructuring and impairment charges were US$5.2 million
primarily as a result of costs incurred associated with the
plant consolidations within the flexible films and
tapes/coatings segments. Other expenses increased from US$7.5
million during the 26 weeks ended March 31, 2007, to US$18.9
million for the 26 weeks ended March 29, 2008, primarily as a
result of expenses associated with the integration of Old
Covalence and the corresponding achievement of synergies.
Net interest expense increased US$9.7 million to
US$128.7 million for from US$119.0 million in the prior 26 week
period primarily as a result of increased borrowings to finance
the Captive acquisition.
The company recorded an income tax benefit of US$36.4 million or
an effective tax rate of 37.5%, which is a change of
US$9.6 million from the income tax benefit of US$26.8 million or
an effective tax rate of 36.3% in the prior 26-week period.
Net loss was US$60.6 million for the 26 weeks ended March 29,
2008, compared to a net loss of US$44.4 million for the 26 weeks
ended March 31, 2007.
Liquidity and Capital Resources
The company's senior secured credit facilities consist of a
US$1.2 billion term loan and a US$400.0 million asset based
revolving line of credit. The term loan matures on April 3,
2015, and the revolving line of credit matures on April 3, 2013.
At March 29, 2008, the company had unused borrowing capacity of
US$243.8 million under the revolving line of credit. The
company was in compliance with all covenants at March 29, 2008.
At March 29, 2008, the company had outstanding long-term debt of
US$3.3 billion, compared to US$2.7 billion at Sept. 29, 2007.
Balance Sheet
At March 29, 2008, the company's consolidated balance sheet
showed US$4.5 billion in total assets, US$4.1 billion in total
liabilities, and US$380.4 million in total stockholders' equity.
Full-text copies of the company's consolidated financial
statements for the thirteen weeks ended March 29, 2008, are
available for free at http://researcharchives.com/t/s?2c00
About Berry Plastics
Headquartered in Evansville, Ind., Berry Plastics Corporation
-- http://www.berryplastics.com/-- is a manufacturer and
marketer of plastic packaging products. Berry Plastics products
include open-top and closed top packaging, polyethylene-based
plastic films, industrial tapes, medical specialties, packaging,
heat-shrinkable coatings and specialty laminates. Aside from
the U.S., the company also has locations in Mexico, Canada,
Italy, Belgium, and China.
* * *
As reported in the Troubled Company Reporter-Latin America on
April 16, 2008, Moody's Investors Service affirmed its Caa1 (LGD
4, 63%) rating on each of the company's US$225.0 million senior
secured second lien FRN due 2014 and US$525.0 million senior
secured lien notes due 2014, and its Caa2 (LGD 5, 85%) rating on
the company's US$265.0 million senior subordinated notes due
2016.
As reported in the Troubled Company Reporter-Latin America on
April 17, 2008, Standard & Poor's Ratings Services assigned a
'BB-' and '1' recovery rating to Berry Plastics Corp.'s
US$530.6 million first-priority floating-rate senior secured
notes due 2015. The 'BB-' and '1' recovery rating indicate the
expectation of very high (90%-100%) recovery in the event of a
payment default. Proceeds from the proposed notes will be used
to refinance the company's existing US$520 million first-lien
bridge loan, which was issued to fund the acquisition of Captive
Plastics Inc. in February 2008.
BLOCKBUSTER INC: Comments on Circuit City Due Diligence Pact
------------------------------------------------------------
Blockbuster Inc. issued a statement in response to the
announcement by Circuit City Stores, Inc., that it has agreed to
allow Blockbuster to conduct due diligence in preparation for a
possible bid for the company. Blockbuster had previously
offered to acquire Circuit City for at least US$6.00 per share
in cash, subject to due diligence.
"We are pleased to have reached an agreement with Circuit City
to conduct due diligence and further explore a possible merger
between our two companies. We continue to believe this
combination would create significant cost and operating
synergies therefore unlocking substantial value for our
shareholders. While it is our hope that the due diligence
process will reinforce both the strategic and financial
rationale behind the deal, we are committed to only doing a
transaction that provides substantial benefits for our
shareholders."
About Blockbuster
Blockbuster Inc. -- http://www.blockbuster.com/-- (NYSE: BBI,
BBI.B) is a global provider of in-home movie and game
entertainment, with over 7,800 stores throughout the Americas,
Europe, Asia and Australia. The company maintains operations in
Brazil, Mexico, Denmark, Italy, Taiwan, Thailand, Australia,
among others.
* * *
Blockbuster Inc. carries Fitch Ratings' 'CCC' long-term Issuer
Default Rating. The company's senior subordinated notes is
rated 'CC/RR6' by Fitch. The rating outlook is stable.
BLUE WATER: Files Liquidation Analysis Under Chapter 11 Plan
------------------------------------------------------------
Blue Water Automotive Systems, Inc., and its debtor affiliates
delivered to the U.S. Bankruptcy Court for the Eastern District
of Michigan a liquidation analysis to assist holders of claims
and interests in determining whether they will recover at least
as much in the going concern Chapter 11 sale as they would
recover in a forced liquidation sale by a Chapter 7 trustee, and
subsequently assist them in determining whether to accept or
reject their Joint Plan of Liquidation.
As reported by the Troubled Company Reporter-Latin America on
May 15, the Debtors' Liquidation Plan provides for the sale of
substantially all of their assets in a going concern sale
pursuant to Chapter 11 rather than liquidating under Chapter 7
of the Bankruptcy Code.
According to John A. Simon, Esq., at Foley & Lardner LLP, in
Wilmington, Delaware, the Debtors' going concern sale under
their Chapter 11 Plan will provide at least as much of a
recovery to holders of Claims or Equity Interests as the holders
would receive in a Chapter 7. The Chapter 11 sale will be of
substantially all of the Debtors' assets. The Debtors have
engaged an investment banker to conduct a sale process, in which
the Debtors have invested a substantial amount of time, effort
and resources in extensively marketing substantially all of the
Debtors' assets for a sale. A sale is expected to close by
June 30, 2008. The Sale will preserve the goodwill embedded in
the Debtors as a going concern, he says.
In contrast, Mr. Simon says a Chapter 7 liquidation would be a
forced sale, after the Debtors' operations have ceased.
Goodwill would not be preserved in a Chapter 7 liquidation.
Moreover, it is unlikely that the assets being sold in the
Debtors' current Chapter 11 sale process would be available to
be liquidated by a Chapter 7 trustee. Because the Debtors have
no equity in their assets in a forced liquidation, in a Chapter
7 liquidation, the Debtors' secured creditors would be entitled
to lift the automatic stay to foreclose on their collateral.
Therefore, in a Chapter 7, the only assets likely to be subject
to administration by the Trustee for the benefit of holders of
Claims and Equity Interests would be the Causes of Action, which
will otherwise become Creditors Trust assets under the Plan. In
addition, in a Chapter 7 proceeding, the trustee is entitled to
a percentage of the distributions made by the trustee. The
distribution is in addition to the costs and expenses associated
with pursuing the Causes of Action. Furthermore, the Chapter 7
trustee's professionals are entitled to be paid ahead of the
Allowed Claims and Equity Interests against the Debtors.
Mr. Simon says that the analysis of the Best Interests Test
under Section 1129(a)(7) is based on a number of assumptions,
which are subject to significant business, economic, and
competitive uncertainties and contingencies beyond the control
of the Debtors and their management. For the purposes of the
Liquidation Analysis, assumptions are based on the forced
liquidation value of the fixed assets as determined by recent
appraisals of the assets.
As to current assets, the Liquidation Analysis assumes estimated
and unaudited book values of the Debtors assets on April 30,
2008. The analysis is subject to any changes due to the
Debtors' continued operation. The book values used were
obtained from the Debtors' draft financial statements and
accounting records. The values have not been subject to review
or audit by an independent accounting firm, Mr. Simon says.
Inventories consist primarily of raw materials, work-in-process,
and finished goods of Blue Water's products. Inventories do not
include tooling inventory. Current inventory is estimated to be
approximately US$6.5 million. Inventory aged greater than 90
days is estimated to be one-third of total inventory and is
estimated to total approximately US$2.9 million. Prepaid items,
consisting of prepaid maintenance contracts and prepaid finance
charges related to prior financings, are estimated to be
approximately US$1,800,000. Prepaid expenses are estimated to
be approximately US$3,900,000. The DIP Credit Facility, as of
May 9, 2008, totaled US$28,700,000.
A full-text copy of the Liquidation Analysis is available for
free at http://bankrupt.com/misc/bw_liquidationanalysis.pdf
Blue Water Automotive Systems, Inc.
Balance Sheet
As of April 30, 2008
ASSETS:
Working Capital and other assets
Cash and cash equivalents US$1,876,913
Accounts Receivable:
Trade 22,715,018
Participating Customers 9,066,573
Non-participating Customers 13,648,445
Tooling 15,178,243
-----------
Net Accounts Receivable US$37,893,261
Inventory 6,476,052
Inventory - Aged 2,911,202
Prepaid Items 1,801,760
Other Assets
Other current and long term assets 3,919,743
Other Assets -
-----------
Total Other Assets US$3,919,743
-----------
Total Working Capital Assets US$54,878,931
Equipment Surplus -
Available to Satisfy the DIP Facility Balance -
Less DIP Facility Balance -
Working Capital Assets Available for Liquidation
Equipment and Real Estate Assets Available
for Liquidation by the Chapter 7 Trustee
Other Items
Chapter 5 Causes of Action 2,337,987
Claims Against Sarnautomotive 1,250,000
Owned Tooling -
Estimated Proceeds Available for
Liquidation by the Chapter 7 Trustee:
Less costs associated with liquidation
Chapter 7 Trustee fees -
Administrative Expenses -
-----------
Total costs associated with liquidation -
Net Estimated Proceeds for Liquidation
by the Chapter 7 Trustee -
Liquidation Analysis
Estimated Recovery Rate and Liquidation Value
Recovery Value
----------- ---------------------
Low High Low High
--- ---- ---------- ----------
Working Capital and other assets
Cash and cash equivalents 100% 100% US$1,876,913
US$1,876,913
Accounts Receivable
Trade
Participating Customers 0% 35% - 3,173,300
Non-participating Customers 10% 45% 1,346,845 6,141,800
Tooling 0% 15% - 2,276,736
--------- ---------
Net Accounts Receivable 1,346,845 11,591,836
Inventory 62% 76% 4,036,199 4,907,228
Inventory Aged 5% 10% 145,560 291,120
Prepaid Items 0% 0% - -
Other Assets
Other current and long term 0% 17% - 665,050
Other Assets 0% 0% - -
--------- ----------
Total Other Assets - 665,050
--------- ----------
Total Working Capital Assets 7,423,517 19,332,149
Equipment Surplus 5,876,787 5,876,787
--------- ----------
Available to Satisfy DIP
Credit Facility Balance 13,300,304 25,208,935
Less, DIP Credit Facility Balance (28,690,568)(28,690,568)
---------- ----------
Working Capital Assets
Available for Liquidation - -
Equipment and Real Estate Assets
Available for Liquidation by the
Chapter 7 Trustee - -
Other Items
Chapter 5 Causes of Action 10% 50% 233,799 1,168,994
Claims Against Sarnautomotive 20% 100% 250,000 1,250,000
Owned Tooling 0% 0% - -
--------- ----------
Estimated Proceeds Available 483,799 2,418,994
for Liquidation by the Chap. 7 Trustee
Less costs associated with liquidation
Chapter 7 Trustee fees (14,514) (72,570)
Administrative Expenses (4,277,000)(3,207,750)
--------- ----------
Total costs associated with liquidation
(US$4,291,514)(US$3,280,320)
Net Estimated Proceeds for Liquidation by
the Chapter 7 Trustee - -
--------- ----------
0% 0%
Liquidation Analysis
Estimated Midpoint Value
Assets
Working Capital and other assets
Cash and cash equivalents US$1,876,913
Accounts Receivable
Trade
Participating Customers 1,586,650
Non-participating Customers 3,753,322
Tooling 1,138,368
----------
Net Accounts Receivable US$6,478,340
Inventory 4,471,714
Inventory Aged 218,340
Prepaid Items -
Other Assets
Other current and long term assets 332,525
Other Assets -
-----------
Total Other Assets US$332,525
-----------
Total Working Capital Assets US$13,377,833
Equipment Surplus 5,876,787
Available to Satisfy the DIP Facility Balance 19,254,620
Less, DIP Credit Facility Balance (28,690,568)
Working Capital Assets Available for Liquidation -
Equipment and Real Estate Assets Available
for Liquidation by the Chapter 7 Trustee -
Other Items
Chapter 5 Causes of Action 701,396
Claims Against Sarnautomotive 750,000
Owned Tooling -
Estimated Proceeds Available for
Liquidation by the Chap. 7 Trustee 1,451,396
Less costs associated with liquidation
Chapter 7 Trustee fees (43,542)
Administrative Expenses (3,742,375)
-----------
Total costs associated with liquidation -
-----------
Net Estimated Proceeds for Liquidation
by the Chapter 7 Trustee -
About Blue Water Automotive
Blue Water Automotive Systems, Inc. designs and manufactures
engineered thermoplastic components and assemblies for the
automotive industry. The company's product categories include
airflow management, full interior trim/sub-systems, functional
plastic components, and value-added assemblies. They are
supported by full-service design, program management,
manufacturing and tooling capabilities. With more than 1,400
employees, Blue Water operates eight manufacturing and product
development facilities and has annual revenues of approximately
USUS$200 million. The company's headquarters and technology
center is located in Marysville, Mich. The company has
operations in Mexico.
In 2005, KPS Special Situations Fund II, L.P., and KPS Special
Situations Fund II(A), L.P., acquired Blue Water Automotive
through a stock purchase transaction. In 2006, the company
acquired the automotive assets and operations of Injectronics,
Inc., a manufacturer of thermoplastic injection molded
components and assemblies. KPS then set about reorganizing the
company. The company implemented a program to improve operating
performance and address its liquidity issues. During 2007, the
company replaced senior management, closed two facilities, and
reduced overhead spending by one third.
Blue Water Automotive and four affiliates filed for chapter 11
bankruptcy protection Feb. 12, 2008, before the United States
Bankruptcy Court Eastern District of Michigan (Detroit) (Case
No. 08-43196). Judy O'Neill, Esq., and Frank DiCastri, Esq., at
Foley & Lardner, LLP, serves as the Debtors' bankruptcy counsel.
Administar Services Group LLC acts as the Debtors' claims,
noticing, and balloting agent. Blue Water's bankruptcy petition
lists assets and liabilities each in the range of US$100 million
to US$500 million.
The Debtors filed their Liquidation Plan on May 9, 2008. The
Court will convene a hearing May 23 to consider approval of the
Disclosure Statement explaining the Plan, for voting purposes.
The Court will hold a hearing June 18, 2008, to consider
confirmation of the Plan. (Blue Water Automotive Bankruptcy
News, Issue No. 14, Bankruptcy Creditors' Service Inc.,
http://bankrupt.com/newsstand/or 215/945-7000)
BLUE WATER: Gets Permission to Pay Incentives to Employees
----------------------------------------------------------
The U.S. Bankruptcy Court for the Eastern District of Michigan
authorizes Blue Water Automotive Systems, Inc., and its
affiliated debtors to pay incentives to certain critical
employees.
The Incentive Payments will be made upon the closing of the sale
of the Debtors' assets, the Critical Employees will be eligible
for US$323,577 in aggregate Incentive Payments if they:
(i) perform their duties in a manner in the judgment of upper
management of the Debtors; and
(ii) are in the employ of the Debtors upon the closing of the
sale.
The balance of Incentive Payments, aggregating US$174,234, will
be paid to the Critical Employees upon the closing of the sale
(a) if there are no defaults under the Accommodation Agreements
with the Major Customers that are not waived; and (b) in
proportion to the Debtors' collection, on a percentage basis, of
prepetition, non-participating customer accounts receivable aged
over 60 days. If the Non-Participating Customer AR is reduced
by 50% upon closing of the sale of the Debtors' assets, 50% of
the Reserve will be paid to the Employees.
A schedule delineating the methodology is set out by the Court:
Total NP Customers Receivables > 60 days at 5/5/08 US$4,078,868
Less cushion/reserve (20%) (815,774)
---------
Subtotal NP Customers Receivables US$3,263,094
=========
Collection Percentage of NP Customer Receivables> 60 days:
Percentage Amount Bonus
---------- ------ -----
33% US$1,076,821 US$57,497
66% 2,153,642 114,994
100% 3,263,094 174,234
As previously reported by the Troubled Company Reporter in
April, the Debtors proposed to make incentive payments totaling
US$497,812 to a limited number of critical, non-insider
employees. The Critical Employees are mid-level employees who
are critical to the day-to-day operations of the Debtors. The
Debtors argued that the Incentive Payments are necessary to
appropriately compensate the Critical Employees, given the
enormous additional burdens placed on them by these bankruptcy
proceedings, and to ensure that the Employees remain motivated
to perform the important tasks necessary to maintain the value
of the Debtors' businesses.
According to the Troubled Company Reporter on May 15, 2008, the
Debtors' counsel, Nicole Y. Lamb-Hale, Esq., at Foley & Lardner,
LLP, in Detroit, Michigan, clarified that the Incentive
Payments, if any, will be paid only upon consummation of a sale
of the Debtors' assets.
About Blue Water Automotive
Blue Water Automotive Systems, Inc. designs and manufactures
engineered thermoplastic components and assemblies for the
automotive industry. The company's product categories include
airflow management, full interior trim/sub-systems, functional
plastic components, and value-added assemblies. They are
supported by full-service design, program management,
manufacturing and tooling capabilities. With more than 1,400
employees, Blue Water operates eight manufacturing and product
development facilities and has annual revenues of approximately
USUS$200 million. The company's headquarters and technology
center is located in Marysville, Mich. The company has
operations in Mexico.
In 2005, KPS Special Situations Fund II, L.P., and KPS Special
Situations Fund II(A), L.P., acquired Blue Water Automotive
through a stock purchase transaction. In 2006, the company
acquired the automotive assets and operations of Injectronics,
Inc., a manufacturer of thermoplastic injection molded
components and assemblies. KPS then set about reorganizing the
company. The company implemented a program to improve operating
performance and address its liquidity issues. During 2007, the
company replaced senior management, closed two facilities, and
reduced overhead spending by one third.
Blue Water Automotive and four affiliates filed for chapter 11
bankruptcy protection Feb. 12, 2008, before the United States
Bankruptcy Court Eastern District of Michigan (Detroit) (Case
No. 08-43196). Judy O'Neill, Esq., and Frank DiCastri, Esq., at
Foley & Lardner, LLP, serves as the Debtors' bankruptcy counsel.
Administar Services Group LLC acts as the Debtors' claims,
noticing, and balloting agent. Blue Water's bankruptcy petition
lists assets and liabilities each in the range of US$100 million
to US$500 million.
The Debtors filed their Liquidation Plan on May 9, 2008. The
Court will convene a hearing May 23 to consider approval of the
Disclosure Statement explaining the Plan, for voting purposes.
The Court will hold a hearing June 18, 2008, to consider
confirmation of the Plan. (Blue Water Automotive Bankruptcy
News, Issue No. 14, Bankruptcy Creditors' Service Inc.,
http://bankrupt.com/newsstand/or 215/945-7000)
CLEAR CHANNEL: Inks Settlement Pact With CC Media and Lenders
-------------------------------------------------------------
Clear Channel Communications, Inc., entities sponsored by Bain
Capital Partners, LLC and Thomas H. Lee Partners, L.P., and a
bank syndicate consisting of Citigroup Inc., Deutsche Bank AG,
Morgan Stanley, Credit Suisse Group, Royal Bank of Scotland PLC
and Wachovia Corp., have entered into a settlement agreement in
connection with the lawsuits previously filed in the Supreme
Court of the State of New York and the State Court in Bexar
County, Texas.
Pursuant to the terms of the settlement agreement, the parties
have agreed to enter into a third amendment to the merger
agreement. Under the terms of the amended merger agreement, as
disclosed in the Troubled Company Reporter on May 14, 2008,
Clear Channel shareholders will receive US$36.00 in cash for
each share they own.
As an alternative to receiving the US$36.00 per share cash
consideration, Clear Channel's shareholders will again be
offered the opportunity on a purely voluntary basis to exchange
some or all of their shares of Clear Channel common stock on a
one-for-one basis for shares of Class A common stock in CC Media
Holdings, Inc., the new corporation sponsored by the private
equity group to acquire Clear Channel. In limited
circumstances, shareholders electing to receive some or all cash
consideration, on a pro rata basis, will be issued shares of CC
Media Holdings Class A common stock in exchange for some of
their shares of Clear Channel stock, up to a cap of US$1.00 per
share.
Shareholders who elected to receive the stock consideration
prior to the special meeting of shareholders held Sept. 25,
2007, will have their shares of Clear Channel stock returned to
them and will be required to make a new election prior to the
new special shareholders' meeting. While the merger is expected
to close by the end of the third quarter 2008 pending
shareholder approval, the parties to the settlement agreement
have agreed to extend the outside date for completion of the
merger to Dec. 31, 2008.
As part of the settlement agreement, the banks in the syndicate
supporting the transaction have entered into fully-negotiated
and documented definitive agreements to provide long-term
financing to Clear Channel. The banks, the private equity
investors, Clear Channel, certain shareholders, and Bank of New
York (serving as escrow agent) have entered into an Escrow
Agreement pursuant to which the private equity investors and the
banks have agreed to fund into escrow the total amount of their
respective equity and debt obligations, in a combination of cash
and letters of credit, within ten and seven business days,
respectively. Certain shareholders also have agreed to deposit
into escrow securities of Clear Channel that these parties have
agreed to exchange for Class A common stock of CC Media
Holdings. Following deposit of funds and other property into
escrow, each party to the merger related litigation pending in
New York and Texas will file all papers necessary to terminate
the litigation, with prejudice.
The board of directors of Clear Channel has unanimously approved
the amended merger agreement and recommends that the
shareholders approve the amended merger agreement and the
merger. The board of directors of Clear Channel makes no
recommendation with respect to the voluntary stock election or
the Class A common stock of the new corporation.
The total number of Clear Channel shares that may elect to
receive shares in the new corporation will make up 30% of the
new corporation's equity and is expected to be roughly
30 million. These shares would have a total value of about
US$1.1 billion (at the US$36.00 per share cash consideration)
and represent approximately 30% of the outstanding capital stock
of the new corporation immediately following the closing of the
merger. The terms of the merger agreement, as amended, provide
that no shareholder will be allocated more than 11,111,112
shares representing an estimated 11% of the outstanding capital
stock of the new corporation immediately following the closing
of the merger.
If Clear Channel shareholders elect to receive more than the
allocated number of shares of the Class A common stock of the
new corporation, then the shares will be allocated to
shareholders who elect to receive them on a pro-rata basis.
Those Clear Channel shareholders electing to receive shares of
the new corporation will receive US$36.00 per share for any such
Clear Channel shares that are not exchanged in this manner. The
election process will occur in connection with the shareholder
vote on the merger, and will be described fully in an updated
proxy statement and prospectus that will be mailed to Clear
Channel shareholders.
The merger agreement, as amended, which will require shareholder
approval, includes provisions limiting the fees payable to the
private equity group in the transaction, and requiring that the
board of directors of the new corporation at all times include
at least two independent directors.
The shares of CC Media Holdings to be issued to Clear Channel
shareholders who elect to receive them in exchange for their
existing shares will be registered with the Securities and
Exchange Commission, but will not be listed on any national
exchange.
Goldman Sachs & Co. served as financial advisor to Clear Channel
on the transaction, and Akin Gump Strauss Hauer & Feld LLP
served as legal advisor to the company.
"We are very pleased to have reached this accord with our
sponsors and the banks funding the transaction," Mark P. Mays,
the Chief Executive Officer of Clear Channel, said. "This
revised agreement is a win for our shareholders because it
provides them with substantial value and certainty while
avoiding the delay and inherent risks associated with complex
litigation. Our shareholders will receive a significant premium
over recent stock price levels and can elect to continue to
participate in our future upside. Importantly, this agreement
greatly increases the certainty that the merger will close
because all debt and equity funds will be deposited in escrow
until the transaction closes.
"Clear Channel's business prospects will be enhanced further
through an improved capital structure that includes a lower debt
load. We appreciate greatly the support of our shareholders as
well as the loyalty and hard work of our dedicated employees
over these many months. We are eager to begin working with THL
and Bain Capital, the stellar team that will help us to fulfill
our considerable promise."
"We have been extremely pleased by our partnership with the
Clear Channel management team. We believe this agreement, and
the definitive long-term financing package the banks have agreed
to provide, offers clarity and confidence to Clear Channel's
customers, employees and partners," John P. Connaughton, a
Managing Director at Bain Capital, stated. "We look forward to
supporting the continued global market leadership, growth and
success of the most innovative company in the radio broadcasting
and out-of-home media space."
"We are pleased to arrive at this resolution which enables us to
complete the acquisition of Clear Channel," Scott M. Sperling,
Co-President of THL Partners, said. "We appreciate that the
banks have provided the company with the robust, long-term
financing that will allow Clear Channel to achieve its
outstanding operational and growth potential. We would like to
thank all of the stakeholders who worked to achieve this
positive outcome, and we are looking forward to working closely
with our investment partners and with the entire Clear Channel
leadership team to execute on our plans to grow the company to
its full potential."
A representative of the bank group, Chad Leat, Chairman of the
Alternative Asset Group at Citi, said: "The Banks are very
pleased to have reached a constructive resolution of the matter.
We look forward to an expeditious closing of the revised
transaction and want to express our appreciation to all those
who contributed to the solution. We look forward to
participating with our partners in Clear Channel's continued
success."
In connection with its support of a settlement, Highfields
Capital Management LP, which manages funds that beneficially own
7.7% of Clear Channel's common stock, extended its Voting
Agreement with entities sponsored by the private equity group.
Under the Agreement, Highfields has agreed to vote in favor of
the transaction and to retain up to US$400 million in equity of
CC Media Holdings. Additionally, the Agreement includes
provisions assuring public shareholders who elect to receive
stock in the surviving entity that they will receive equal
treatment to the private equity investors in dividends and other
distributions, representation on the Board of Directors of the
surviving entity and have certain other rights following
completion of the merger.
"As the largest shareholder in Clear Channel, we saw an
opportunity to bring all parties together to remove the risk and
uncertainty of litigation and we are glad that a constructive
and mutually beneficial business solution could be reached,
Jonathon S. Jacobson, Senior Managing Director of Highfields,
said. "We fully support this revised transaction."
"Clear Channel can now accelerate the initiatives it has
underway to capitalize on the strength of its assets and drive
profitability," Richard L. Grubman, Senior Managing Director of
Highfields, added. "We look forward to continuing to play a
meaningful role in ensuring the company is positioned to create
substantial long-term value."
Clear Channel will set a record date, time and place for a new
special meeting of shareholders after filing an updated joint
proxy statement or prospectus with the Securities and Exchange
Commission.
Shareholders with questions about the merger or how to vote
their shares should call Clear Channel's proxy solicitor,
Innisfree M&A Incorporated, toll-free at (877) 456-3427.
A full-text copy of the Amended Agreement and Plan of Merger is
available for free at http://ResearchArchives.com/t/s?2c08
About Clear Channel
Based in San Antonio, Texas, Clear Channel Communications Inc.
(NYSE:CCU) -- http://www.clearchannel.com/-- is a media
and entertainment company specializing in "gone from home"
entertainment and information services for local communities and
premiere opportunities for advertisers. The company's
businesses include radio, television and outdoor displays.
Outside U.S., the company operates in 11 countries -- Norway,
Denmark, the United Kingdom, Singapore, China, the Czech
Republic, Switzerland, the Netherlands, Australia, Mexico and
New Zealand. As of Dec. 31, 2007, it owned 717 core radio
stations, 288 non-core radio stations which are being marketed
for sale and a leading national radio network operating in the
United States.
* * *
In March 2008, Standard & Poor's Ratings Services said its
ratings on Clear Channel Communications Inc., including the 'B+'
corporate credit rating, remain on CreditWatch with negative
implications.
Fitch Ratings stated that in line with previous guidance, Clear
Channel Communications' 'BB-' Issuer Default Rating and Senior
Unsecured Ratings would remain in place if the going-private
transaction is not completed.
Moody's stated that assuming the transaction is completed as
currently contemplated, Clear Channel will likely be assigned a
Corporate Family Rating of B2 and the rating on the existing
senior notes is likely to be notched down to Caa1 based on their
expected subordination to the new senior secured debt facilities
and the new senior notes.
CONTINENTAL AIR: Sets Alliance With UAL After Failed Merger
-----------------------------------------------------------
United Airlines and Continental Airlines Inc. are holding talks
to form an alliance that would set pricing and schedules, Mary
Schlangenstein and John Hughes of Bloomberg News says. The
alliance discussions went underway shortly after the failed
merger talks between the two airlines, Bloomberg said.
An alliance with U.S. antitrust immunity to collaborate on fares
would provide most of the benefits of a merger, at the same time
avoiding regulatory challenges as well as the need to combine
workforces, Bloomberg notes.
"Antitrust immunity is a kind of quasi-merger," James M.
Higgins, analyst at Soleil Securities Corp., told Bloomberg.
"It doesn't put you through the actual integration, which is
where the cost savings ultimately can come, but which is also
risky, especially now."
"As we've said over the last few weeks, we are examining our
alliance relationships as we think it's important that we be a
major player in one of the three major global airline
alliances," Bloomberg quotes Mary Clark, a spokeswoman for
Continental, as saying.
The alliance talks are reportedly separate from United's merger
talks with US Airways.
Continental Says "No" to Merger
As reported by the Troubled Company Reporter on April 28, 2008,
Continental Airlines Inc.'s Chairman and CEO Larry Kellner and
President Jeff Smisek disclosed to more than 45,000 employees
that the company's Board of Directors unanimously supported the
management's recommendation that, in the current industry
environment, the best course for Continental is not to merge
with another airline at this time.
According to the two executives, the Board very carefully
considered all the risks and benefits of a merger with another
airline, and determined that the risks of a merger at this time
outweigh the potential rewards, as compared to Continental's
prospects on a standalone basis. The management will, however,
continue to review potential alliances and its membership in
SkyTeam. Continental is considering alternatives to SkyTeam as
its carefully evaluates which major global alliance will be best
for Continental over the long term.
About UAL Corp.
Based in Chicago, Illinois, UAL Corporation (NASDAQ: UAUA)
-- http://www.united.com/-- is the holding company for United
Airlines, Inc. United Airlines is the world's second largest
air carrier. The airline flies to Brazil, Korea and Germany.
The company filed for chapter 11 protection on Dec. 9, 2002
(Bankr. N.D. Ill. Case No. 02-48191). James H.M. Sprayregen,
Esq., Marc Kieselstein, Esq., David R. Seligman, Esq., and
Steven R. Kotarba, Esq., at Kirkland & Ellis, represented the
Debtors in their restructuring efforts. Fruman Jacobson, Esq.,
at Sonnenschein Nath & Rosenthal LLP represented the Official
Committee of Unsecured Creditors before the Committee was
dissolved when the Debtors emerged from bankruptcy.
Judge Eugene R. Wedoff confirmed the Debtors' Second Amended
Plan on Jan. 20, 2006. The company emerged from bankruptcy
protection on Feb. 1, 2006.
(United Airlines Bankruptcy News; Bankruptcy Creditors' Service
Inc., http://bankrupt.com/newsstand/or 215/945-7000)
About Continental Airlines
Continental Airlines Inc. (NYSE: CAL) -- http://continental.com/
-- is the world's fifth largest airline. Continental, together
with Continental Express and Continental Connection, has more
than 2,900 daily departures throughout Belize, Mexico, Europe
and Asia, serving 144 domestic and 139 international
destinations. More than 500 additional points are served via
SkyTeam alliance airlines. With more than 45,000 employees,
Continental has hubs serving New York, Houston, Cleveland and
Guam, and together with Continental Express, carries
approximately 69 million passengers per year.
* * *
As reported in the Troubled Company Reporter-Latin America on
April 23, 2008, Standard & Poor's Ratings Services revised its
rating outlook on Continental Airlines Inc. (B/Negative/B-3) to
negative from stable. S&P also placed its ratings on selected
enhanced equipment trust certificates that are secured by
regional jets on CreditWatch with negative implications.
In December 2007, Fitch Ratings affirmed Continental Airlines
'B-' issuer default rating with a stable outlook.
GAP INC: April Sales Up 1% to US$1.10 Billion
---------------------------------------------
Gap Inc. reported net sales of US$1.10 billion for the four-week
period ended May 3, 2008, which is an increase of 1% as compared
with net sales of US$1.09 billion for the same period ended
May 5, 2007. The company's comparable store sales for April
2008 decreased 6% compared with a 16 percent decrease for April
2007.
Comparable store sales by division for April 2008 were:
-- Gap North America: flat versus negative 14% last year
-- Banana Republic North America: flat versus negative 13%
last year
-- Old Navy North America: negative 12% versus negative 20%
last year
-- International: negative 7% versus negative 5% last year.
"While April performance varied across each brand, we delivered
merchandise margins significantly above last year while
continuing to manage costs in a disciplined manner," said
Sabrina Simmons, chief financial officer of Gap Inc.
First Quarter Sales Results and Earnings Guidance
For the thirteen weeks ended May 3, 2008, total company net
sales were US$3.38 billion, which is a decrease of 5 percent as
compared with net sales of US$3.55 billion for the thirteen
weeks ended May 5, 2007. The company's first quarter comparable
store sales decreased 11% compared with a decrease of 4% in the
first quarter of the prior year.
Comparable store sales by division for the first quarter of
fiscal year 2008 were:
-- Gap North America: negative 7% versus negative 4% last
year
-- Banana Republic North America: negative 4% versus
negative 2% last year
-- Old Navy North America: negative 18% versus negative 5%
last year
-- International: negative 5% versus negative 3% last year.
The company expects diluted earnings per share on a GAAP basis
for the first quarter of fiscal year 2008 to be US$0.30 to
US$0.32. Included in the diluted earnings per share guidance
for the first quarter is a benefit of about US$15 million to
pre-tax earnings from a reduction of interest expense accruals
resulting primarily from foreign tax audit events occurring in
the quarter.
Simmons added, "We are pleased with our ability to achieve
bottom line earnings growth in the first quarter. However, our
traffic patterns and sales continue to be challenging, it is
still early in the year, and the economic environment remains
volatile. We are reaffirming our earnings outlook for the year
and continue to expect diluted earnings per share of US$1.20 to
US$1.27."
The company will report May sales on June 5, 2008.
About Gap
Headquartered in San Francisco, California, Gap Inc. (NYSE: GPS)
-- http://www.gapinc.com/-- is an international specialty
retailer offering clothing, accessories and personal care
products for men, women, children and babies under the Gap,
Banana Republic, Old Navy, Forth & Towne and Piperlime brand
names. Gap Inc. has subsidiaries in the United Kingdom, Canada,
France, Ireland, Japan, Hong Kong, Bermuda and Mexico, among
others. In addition, Gap Inc. is expanding its international
presence with franchise agreements for Gap and Banana Republic
in Southeast Asia and the Middle East.
* * *
In April 2008, Fitch affirmed its BB+ rating on The Gap, Inc.'s
Issuer Default Rating and Senior unsecured notes. Fitch however
revised the Rating Outlook to Stable from Negative.
INTERTAPE POLYMER: Posts US$2MM Net Loss in Qtr. ended March 31
----------------------------------------------------------------
Intertape Polymer Group Inc. reported net loss of US$1.9 million
for the first quarter compared to a net loss of US$600,000 for
the first quarter of 2007.
Non-recurring items in the first quarter were related to the
refinancing of the existing Senior Secured Credit Facility and
included both the noncash write-off of debt issue expenses of
US$3.1 million and the settlement of the interest rate swap
agreements at a cost of US$2.9 million.
Cash flow from operations before changes in non-cash working
capital items provided liquidity of US$9.5 million for the first
quarter of 2008 compared to US$7.8 million for the first quarter
of 2007. The improvement essentially reflects profit
improvement, despite a US$2.9 million charge for the settlement
of the interest rate swap agreements.
Changes in non-cash working capital items used US$12.3 million
for the first quarter of 2008 compared to using US$1.5 million
during the same period in 2007. The greater cash use in the
first quarter of 2008 results from increases in trade accounts
receivable and inventories and a reduction in accounts payable
and accrued liabilities from year-end levels.
As a result, operating activities used cash of US$2.8 million
for the first quarter of 2008 compared to providing liquidity of
US$6.3 million for the first quarter of 2007.
At March 31, 2008, the company's balance sheet showed total
assets of US$697.2 million, total liabilities of
US$342.7 million and total shareholders' equity of
US$354.5 million.
About Intertape Polymer Group
Based in Montreal, Quebec and Sarasota/Bradenton, Florida,
Intertape Polymer Group Inc. (NYSE,ITP; TSX: ITP.TO) --
http://www.intertapepolymer.com/-- develops and manufactures
specialized polyolefin plastic and paper-based packaging
products and complementary packaging systems for industrial and
retail use. The company employs approximately 2,100 employees
with operations in 17 locations, including 13 manufacturing
facilities in North America and one in Europe and in Mexico.
* * *
In December 2007, Standard & Poor's Ratings Services raised its
rating on Intertape's senior subordinated notes to 'CCC+' from
'CCC'.
JETBLUE AIRWAYS: Fitch Cuts Sr. Unsec. Notes' Rating to CCC-/RR6
----------------------------------------------------------------
Fitch Ratings has downgraded the debt ratings of JetBlue Airways
Corp. (JBLU):
-- Issuer Default Rating (IDR) to 'B-' from 'B';
-- Senior unsecured convertible notes to 'CCC-/RR6' from
'CCC/RR6'.
This action affects approximately US$425 million of outstanding
debt. The Rating Outlook for JetBlue is Negative.
Fitch's downgrade follows the dramatic run-up in jet fuel costs
and growing evidence of a softening revenue outlook that will
likely drive larger losses and weakened free cash flow during
the remainder of 2008. Although the US$300 million equity
investment by Germany's Deutsche Lufthansa AG helped boost
JBLU's liquidity position in the first quarter, Fitch expects
cash balances to remain under pressure over the next several
months as JBLU and the other U.S. airlines continue to trim
unprofitable capacity in the face of unsustainably high jet fuel
prices. While JBLU's fleet plan flexibility provides some
opportunity to manage capacity growth lower in 2008 and 2009,
additional cash-raising options are limited, and the carrier's
liquidity cushion will likely be eroded somewhat as operating
losses continue and debt maturities are met
without the benefit of positive free cash flow.
The 'B-' IDR reflects JBLU's highly leveraged capital structure,
its diminished cash flow generation capacity and its
vulnerability to ongoing fuel and revenue shocks in an industry
that remains unable to recover surging and largely
uncontrollable energy costs through higher fares. Importantly,
the rating also captures the fact that JBLU's current liquidity
position is adequate to meet 2008 fixed obligations, but intense
fuel cost pressure and worsening unit revenue comparisons
through the year will likely reduce cash balances by year-end.
In addition to scheduled aircraft-backed debt principal payments
this year, JBLU will fund US$175 million in convertible notes
that investors can put back to the company on July 15. Total
scheduled debt maturities for the final three quarters of 2008
are US$343 million. Besides the Lufthansa investment proceeds
booked in January, liquidity will be supplemented by the sale of
nine used Airbus A320 aircraft this year. These sales could
generate as much as US$100 million in cash after repayment of
associated aircraft debt. All A320 and Embraer E190 aircraft
deliveries for 2008 are financed, and JBLU may be able to defer
some upcoming scheduled deliveries in order to reduce debt-
financed aircraft capital spending while conserving cash tied to
pre-delivery deposits.
Including currently illiquid auction rate securities
(US$284 million on the March 31 balance sheet) which may be sold
in coming months if auctions for these securities are
successful, JBLU's total cash balance stood at US$1.0 billion at
the end of the first quarter. Supplemental sources of liquidity
are constrained, however, and JBLU has no revolving credit
facility in place. Looking ahead to 2009, JBLU faces a more
manageable level of scheduled debt maturities (US$159 million).
However, adverse fuel and revenue developments could force JBLU
to explore further capital-raising options-including the sale of
its LiveTV in-flight entertainment subsidiary, monetization of
equity in owned A320 aircraft or new equity capital beyond the
US$300 million already invested by Lufthansa.
During first quarter (Q1), JBLU paid US$118 million more for
fuel than it did a year ago, and the outlook for Q2 and Q3
(based on the current forward curve) is discouraging. For each
10-cent move in the price of jet fuel, JBLU faces approximately
US$45 million of annual cost pressure. Using the company's
latest guidance of US$3.05 per gallon for the full year 2008,
therefore, fuel costs alone would rise by approximately US$500
million in 2008 vs. 2007. Through April 17, JBLU had hedged 46%
of expected Q2 fuel consumption through a combination of heating
oil collars (11% of total consumption with upside protection at
US$2.19 per gallon) and heating oil swaps (35% of expected
consumption at an average price of US$2.56 per gallon).
Management has again signaled its willingness to slow growth and
trim unprofitable flying in an effort to stem cash outflows.
This follows two years in which capacity growth rates were
pulled back through the sale of used A320s and the deferral of
some new aircraft deliveries. The latest capacity guidance for
2008 calls for growth of 3% to 5%, down from 6% to 8% before the
most recent spike in fuel costs. To meet this capacity target,
JBLU plans to sell nine used A320 aircraft this year and another
one in 2009. In light of good secondary market demand and
positive net cash flow on each A320 sale, this remains a
workable safety valve to manage available seat mile (ASM)
capacity down in a worsening operating environment. These
aircraft sales, together with announced domestic schedule cuts
by other carriers, should support revenue per ASM performance
somewhat later in the year. However, sluggish U.S. economic
growth this year will likely erode air travel demand further-
limiting opportunities to fully cover rising jet fuel costs
through higher fares.
Despite the fact that JBLU has an almost entirely domestic route
network, unit revenue performance in Q1 topped that of the U.S.
legacy carriers by a significant margin. This was due in part
to very weak revenue per ASM performance in Q107 during the
storm-related operational break-down last year. For the
remainder of 2008, a continuation of solid unit revenue growth
will be required to offset an expected unit cost increase of 20%
to 22% for the full year (assuming 2008 jet fuel prices of
US$3.05 per gallon). Revenue per ASM growth will be supported
by industry-wide fare moves that are boosting yields as load
factors and traffic come under some pressure due to higher fares
and slowing U.S. economic growth. In its April traffic release,
JBLU reported a 5.2 point decline in its monthly load factor,
while RASM increased by 3% as average fares increased on 7%
growth in ASM capacity. While summer bookings appear strong,
JBLU and the rest of the industry can expect to feel intense
revenue pressure after August, as seasonal demand patterns
shift. Importantly, this is the point at which announced
domestic capacity reduction throughout the U.S. industry
will begin to take full effect.
A further downgrade into the 'CCC' category could follow if the
sharp deterioration of operating trends seen since the start of
the year continues over the next few months, and if an extension
of tight credit market conditions limits JBLU's ability to raise
capital as cash balances are reduced further in the face of
extreme fuel cost pressure.
Based in Forest Hills, New York, JetBlue Airways Corporation
(Nasdaq:JBLU) -- http://www.jetblue.com/-- is a passenger
airline that provides customer service on point-to-point routes.
As of Feb. 14, 2007, JetBlue operated approximately 502 daily
flights. The company serves 50 destinations in 21 states,
Puerto Rico, Mexico and the Caribbean.
PILGRIM'S PRIDE: Equity Issuance Won't Affect Moody's Ratings
-------------------------------------------------------------
Moody's Investors Service stated that Pilgrim's Pride
Corporation's recent common equity issuance, while positive for
the company's liquidity, has not at this point had an impact on
its ratings or on Moody's ongoing review of those ratings for
possible downgrade that began on April 16, 2008.
Pilgrim's Pride sold 7.5 million common shares for net proceeds
of approximately US$177 million. Net proceeds will be applied
to debt reduction and for general corporate purposes. Should
all net proceeds be allocated to debt reduction, outstanding
reported debt, over US$1.63 billion at March 29, 2008, would
fall by less than 11%. However, a potential debt reduction of
that magnitude would improve the company's financial
flexibility, especially if applied to outstandings under
Pilgrim's Pride's revolving credit facilities.
At May 2, 2008, prior to the equity issuance, the company had
unused availability of only US$328.5 million under three
revolving commitments aggregating US$902.1 million. Ample
committed availability is especially crucial when margins are
under pressure, as they are now for Pilgrim's Pride. For the
second fiscal quarter ended March 29, 2008, the company reported
an operating loss of US$143.6 million, after restructuring
charges of approximately US$5.7 million. Feed grain costs in
fiscal 2008, now expected to be US$800 million higher than in
the prior year, are unlikely to be fully offset by price
increases and/or cost cuts, in Moody's view.
Moody's notes that Pilgrim's Pride recently obtained an
amendment to its financial covenants through the end of fiscal
2009, another positive action in terms of financial flexibility.
Headquartered in Pittsburgh, Texas, Pilgrim's Pride Corporation
(NYSE: PPC) -- http://www.pilgrimspride.com/-- produces,
distributes and markets poultry processed products through
retailers, foodservice distributors and restaurants in the U.S.,
Mexico and in Puerto Rico. Pilgrim's Pride employs about 40,000
people and has major operations in Texas, Alabama, Arkansas,
Georgia, Kentucky, Louisiana, North Carolina, Pennsylvania,
Tennessee, Virginia, West Virginia, Mexico and Puerto Rico, with
other facilities in Arizona, Florida, Iowa, Mississippi and
Utah. Sales for the twelve months ended March 29, 2008 were
approximately US$8.47 billion
=================
V E N E Z U E L A
=================
AUDIOVOX CORP: Books US$1.8 Mil. Net Loss in Qtr. Ended Feb. 29
---------------------------------------------------------------
Audiovox Corporation reported results for its fiscal 2008 fourth
quarter and year-ended Feb. 29, 2008.
Fiscal Year Results
The company reported net sales for the fiscal year ended
Feb. 29, 2008, of US$591.4 million, an increase of 29.5%
compared to US$456.7 million reported in the comparable prior
year period.
Operating income for fiscal 2008 was US$4.4 million compared to
an operating loss of US$5.1 million in fiscal 2007. Pre-tax
income from continuing operations for fiscal 2008 was
US$10.6 million, an increase of US$8.4 million or 381.8% cmpared
to US$2.2 million in the comparable prior year. Net income from
continuing operations in fiscal 2008 was approximately
US$6.7 million compared to US$3.7 million in fiscal 2007.
Including discontinued operations, net income for fiscal 2008
was US$8.5 million compared to US$2.9 million in fiscal 2007.
On a pro forma basis, excluding the impact of non-recurring
charges, the company would have reported net income of US$10.5
million in fiscal 2008.
Electronics sales, which include both mobile and consumer
electronics were US$437 million in fiscal 2008, an increase of
US$4.1 million as compared to US$432.9 million in fiscal 2007.
This increase was due to an increase in mobile audio sales and
the company's International operations in Germany and Venezuela.
Accessories sales for fiscal 2008 were US$154.3 million compared
to sales of US$23.7 million in fiscal 2007. This increase was
due to the incremental sales generated from the acquired Thomson
Accessory, Oehlbach and Technuity operations.
As a percentage of net sales, Electronics represented 73.9% in
fiscal 2008 compared to 94.8% in the comparable fiscal 2007
period and Accessories represented 26.1% compared to 5.2% in the
same respective periods.
Gross margins increased by 140 basis points to 18.8% in fiscal
2008, as compared to 17.4% in the prior fiscal year. Gross
margins were favorably impacted by higher margins generated from
the recently acquired accessory companies, improved overall
margins in the company's core business and improved buying
programs and inventory management. Gross margins were adversely
impacted by increased warehouse and assembly costs as a result
of incremental transition costs necessary to facilitate the
acquisitions, as well as increased warranty and repair costs,
freight and shipping costs and inventory provisions as a result
of higher accessories sales.
Operating expenses were US$106.9 million in fiscal 2008, an
increase of 26.7% compared to US$84.4 million reported in the
comparable prior year period. As a percentage of net sales,
operating expenses decreased to 18.1% in fiscal 2008 from 18.5%
in fiscal 2007 due to higher sales and better controls of the
company's fixed costs. The increase in total operating expenses
is due to incremental costs related to the acquisitions of
Thomson's accessory business and audio/video operations,
Oehlbach, Incaar and Technuity, which contributed total
operating expenses of US$25.1 million in fiscal 2008 and US$1.2
million in fiscal 2007. Operating expenses for the company's
core business was US$81.8 million in fiscal 2008, down 1.7%
compared to the prior fiscal year.
President and Chief Executive Officer, Patrick Lavelle stated,
"Overall, I believe we could have reported a stronger increase
based on our programs and placement; however the macro economic
conditions we faced at the end of the year impacted sales across
the board. Despite these conditions, our strategy of leveraging
overhead with new business from acquisitions is working since we
have been able to expand sales, raise margins and lower our
operating expenses as a percentage of sales."
Fiscal Fourth Quarter Results
The company reported net sales for the fiscal 2008 fourth
quarter of US$131.3 million, an increase of 36.6% compared to
US$96.1 million reported in the comparable prior year quarter.
Operating loss for the three months ended Feb. 29, 2008, was
US$3.5 million compared to an operating loss of US$2.6 million
reported in the comparable prior year period. Pre-tax loss from
continuing operations for the fiscal 2008 fourth quarter was
US$1.6 million compared to a pre-tax loss of US$1.1 million in
the comparable period last year. Net loss for continuing
operations, after completion of a foreign tax audit, was
US$1.8 million compared to a net loss of US$0.3 million in the
fiscal 2007 fourth quarter.
On a pro forma basis for continuing operations, excluding the
impact of non-recurring fourth quarter charges, the company
would have reported a break even for the quarter. On a pro
forma basis for continuing and discontinued operations and
excluding the impact of non-recurring fourth quarter charges,
the company would have reported a net loss of US$0.4 million in
the fiscal 2008 fourth quarter.
Electronics sales, which include both mobile and consumer
electronics were US$95.8 million in the fiscal fourth quarter
ended Feb. 29, 2008, an increase of 15.3% compared to US$83.1
million reported in the three-month period ended Feb. 28, 2007.
Stronger sales in our consumer categories were largely
responsible for the increase. Accessories sales in the fiscal
2008 fourth quarter were US$35.5 million, an increase of 173.1%
compared to sales of US$13 million in the fiscal 2007 fourth
quarter. This increase was primarily due to sales generated by
the acquired operations of Thomson, Oehlbach and Technuity, the
latter two, which were not part of fiscal 2007 results.
As a percentage of net sales, Electronics represented 73% in the
fiscal 2008 fourth quarter compared to 86.5% in the comparable
fiscal 2007 quarter. In the period ended Feb. 29, 2008,
Accessories, as a percentage of net sales represented 27%
compared to 13.5% in the comparable year ago period.
Gross margins for both the fiscal 2008 and fiscal 2007 fourth
quarters were 18.8%. In fiscal 2008, gross margins were
favorably impacted by higher margins generated from the acquired
accessory companies, the impact of which was partially offset by
the company's acquisition of Thomson's audio/video operations in
December 2007. Fiscal 2007 gross profit margins included
approximately two months of results from Thomson's accessory
business and saw increases in the company's core electronics
business. During both periods, gross margins were adversely
impacted by increased warehouse and assembly costs as well as
increased warranty and repair costs and higher freight expenses
related to the acquisitions.
Operating expenses for the three months ended Feb. 29, 2008 were
US$28.2 million, an increase of US$7.5 million or 36.2%,
compared to US$20.7 million reported in the comparable prior
year period. As a percentage of net sales, operating expenses
were 21.5% in the fiscal 2008 and fiscal 2007 fourth quarters.
During the fiscal 2008 fourth quarter, operating expenses
related to acquisitions were approximately US$8 million compared
to US$1.2 million in the comparable period last year. Excluding
the impact of the acquisitions, overhead for the company's core
operations as a percentage of net sales was 15.2% in the fiscal
2008 fourth quarter compared to 20.3% in the fiscal 2007
comparable period.
Mr. Lavelle continued, "During the fourth quarter we assimilated
additional overhead for the Thomson audio video and Technuity
acquisitions during what is traditionally our weakest period.
In addition, the period was further impacted by the economic
conditions facing our customers and consumers, which affected
Holiday sales as well as automobile sales that continue to
suffer due to the state of the economy and rising fuel prices."
"The acquisitions we made last year provide us with the
strongest portfolio of brands we've ever had, give us added
leverage at the retail level domestically and enhance our
foundation internationally. Our focus this year is to fully
consolidate the five acquisitions we made in 2007 and generate
the types of returns this company is capable of achieving. We
enter fiscal 2009 on solid footing and I believe Audiovox will
show substantial improvements in both our top and bottom line
results over the coming year," Mr. Lavelle concluded.
About Audiovox Corp.
Headquartered in Hauppauge, New York, Audiovox Corp. (Nasdaq:
VOXX) -- http://www.audiovox.com/-- is a supplier and value
added service provider in the consumer electronics industry.
The company conducts its business through subsidiaries and
markets mobile and consumer electronics products both
domestically and internationally under several of its own
brands. It also functions as an original equipment manufacturer
supplier to a wide variety of customers, through several
distinct distribution channels. Audiovox Corp. has latin
operations in Mexico and Venezeula.
* * *
In October 1997, Moody's Investors Service placed Audiovox
Corp.'s long term corporate family and bank loan debt ratings at
'B1'. Both ratings still hold to date.
NORTHWEST AIRLINES: EVP Neal Cohen to Leave June 16
---------------------------------------------------
Northwest Airlines disclosed that Neal Cohen, executive vice
president - strategy, international and CEO regional airlines,
will leave the company effective June 16, 2008.
Cohen returned to Northwest in May 2005 as executive vice
president and chief financial officer. He played a vital role
in leading the Company's restructuring efforts and upon
Northwest's emergence from bankruptcy, in June 2007, Cohen was
promoted to his current position.
Northwest Airlines' President and Chief Executive Officer, Doug
Steenland, said, "Neal made tremendous contributions during a
critical time for Northwest Airlines. His leadership throughout
the restructuring process positioned the Company well during an
extremely tumultuous period in the industry. We're grateful
that Neal returned to the airline to help guide Northwest
through the restructuring process and we wish him the very best
in his future endeavors."
Discussing his departure, Cohen said, "Over the past three
years, we have worked collaboratively to reposition Northwest
and secure its future for the long-term. Having successfully
completed the restructuring process, and with the impending
merger with Delta, I'm excited about the opportunity to pursue
business interests outside of the airline industry that I put on
hold when I returned to Northwest. I'm confident that the
airline will continue to be an industry leader and am proud to
have been a part of its success."
Neal Cohen, 48, was executive vice president of finance and
chief financial officer for US Airways from April 2002 to April
2004. Prior to US Airways, Cohen served as chief financial
officer for various service and financial organizations. He
spent nine years with Northwest, from 1991 to 2000, where he
held a number of senior positions including senior vice
president and treasurer. Prior to joining Northwest, he spent
seven years at General Motors' Treasurer's office in New York.
About Northwest Airlines
Northwest Airlines Corp. (NYSE: NWA) -- http://www.nwa.com/--
is the world's fourth largest airline with hubs at Detroit,
Minneapolis/St. Paul, Memphis, Tokyo and Amsterdam, and about
1,400 daily departures. Northwest is a member of SkyTeam, an
airline alliance that offers customers one of the world's most
extensive global networks. Northwest and its travel partners
serve more than 1000 cities in excess of 160 countries on six
continents. Northwest and its travel partners serve more than
1000 cities in excess of 160 countries on six continents,
including Italy, Spain, Japan, China, Venezuela and Argentina.
The company and 12 affiliates filed for chapter 11 protection on
Sept. 14, 2005 (Bankr. S.D.N.Y. Lead Case No. 05-17930). Bruce
R. Zirinsky, Esq., and Gregory M. Petrick, Esq., at Cadwalader,
Wickersham & Taft LLP in New York, and Mark C. Ellenberg, Esq.,
at Cadwalader, Wickersham & Taft LLP in Washington represent the
Debtors in their restructuring efforts. The Official Committee
of Unsecured Creditors has retained Akin Gump Strauss Hauer &
Feld LLP as its bankruptcy counsel in the Debtors' chapter 11
cases.
When the Debtors filed for bankruptcy, they listed
US$14.4 billion in total assets and US$17.9 billion in total
debts. On Jan. 12, 2007 the Debtors filed with the Court their
Chapter 11 Plan. On Feb. 15, 2007, they Debtors filed an
Amended Plan & Disclosure Statement. The Court approved the
adequacy of the Debtors' Disclosure Statement on March 26, 2007.
On May 21, 2007, the Court confirmed the Debtors' Plan. The
Plan took effect May 31, 2007.
* * *
In April 2008, Moody's Investors Service placed the debt ratings
of Delta Air Lines, Inc. (corporate family at B2) and Northwest
Airlines Corporation corporate family rating at B1) on review
for possible downgrade. The review was prompted by the
announcement that the two airlines have agreed to combine in an
all-stock transaction with a combined enterprise value of
approximately US$18 billion.
Standard & Poor's Ratings Services also placed its ratings,
including the 'B+' long-term corporate credit rating, on
Northwest Airlines Corp. on CreditWatch with negative
implications.
PETROLEOS DE VENEZUELA: Says JV With PetroChina to Cost US$12BB
---------------------------------------------------------------
Petroleos de Venezuela SA's Senior Executive Ruben Figuera told
Reuters that an integrated heavy oil production and upgrading
joint venture with PetroChina Company, Limited, will cost at
least US$12 billion.
Reuters notes that Mr. Figuera said at an industry conference,
"If you look at the cost of drilling these wells and the cost of
the upgrader, it is around US$12 billion."
Petroleos de Venezuela signed on May 9, 2008, a deal with
PetroChina to develop the Junin 4 block in the Orinoco heavy oil
belt in Venezuela. Under the agreement, the two firms will
construct a 400,000 barrel per day heavy oil upgrader to process
the heavy crude produced from Junin 4, Reuters states.
Petroleos de Venezuela SA -- http://www.pdv.com/-- is
Venezuela's state oil company in charge of the development of
the petroleum, petrochemical and coal industry, as well as
planning, coordinating, supervising and controlling the
operational activities of its divisions, both in Venezuela and
abroad. The company has a commercial office in China.
* * *
In March 2007, Standard & Poor's Ratings Services assigned its
'BB-' senior unsecured long-term credit rating to Petroleos de
Venezuela S.A.'s US$2 billion notes due 2017, US$2 billion notes
due 2027, and US$1 billion notes due 2037.
Also in March 2007, Fitch Ratings gave a BB- rating to PdVSA's
Senior Unsecured debt.
On Feb. 7, 2007, Moody's Investors Service affirmed the
company's B1 global local currency rating.
PETROLEOS DE VENEZUELA: Refinery Uses Tech to Boost Production
--------------------------------------------------------------
Petroleos de Venezuela SA Refinacion Oriente, through the San
Roque Refinery, is using Disol technology to obtain
microcrystalline paraffin from gas and increase the plant's
production. This technology, patented by Intevep, will add 50
metric tons of food grade paraffin to the current production of
43 metric tons per day. It will also supply the total domestic
paraffin demand, thereby eliminating imports of this raw
material and generating important savings for the nation.
Another project of similar magnitude is also on the works,
namely the project to segregate paraffin crude jointly with
PDVSA Gas. Once both projects are completed, the San Roque
Refinery expects to raise its production capacity to 80 metric
tons per day.
This plan processes an average of 5,800 barrels of paraffin
crude per day, is the only plant to supply paraffin in Latin
America, and its current production is ranked fourth in the
world. Furthermore, this refinery covers 74% of the nation´s
paraffin demand and supplies roughly 76 clients, 98% of which
are devoted to the production of candles, and the remaining 2%
produces matches and wax polish.
San Roque's workers reaffirm their solid social commitment
through a community assistance program funded by their salaries.
This program aims at providing assistance to ill poor people who
live in the area. So far, this program has donated a total of
23,000 Strong Bolivars to different families within the
community.
The presence of Socialist Oil Sowing in Santa Ana is evidenced
by the implementation of different projects that have been
funded by PDVSA contractors under the social offer modality.
These projects include: repairing and equipping the schools
Eduardo Delfin Mendez, Pedro Emilio Coll, the Bolivariano
Pedro Granado Perez High School, schools in Pueblo Nuevo and La
Palencia; repairing the sewer system of the road Aragua de
Barcelona-Santa Ana, and donation of cribs, lingerie and thin
mattresses by the Committee of Ladies of San Roque.
Other social projects include the construction of the House for
Santa Ana´s Children. This house will have all amenities and
seeks to guarantee the comprehensive wellbeing of over 50
children whose parents work in this area.
Also, this population will very soon enjoy the positive effects
of the commissioning of a candle production plant. This factory
will utilize one of the area´s strengths to generate 25 direct
jobs and approximately 100 indirect jobs. The plant will
process about 2 tons of paraffin per day. This project is
extremely important for social development because it is the
first project related to hydrocarbon derivatives, our nation´s
main strength.
Petroleos de Venezuela SA -- http://www.pdv.com/-- is
Venezuela's state oil company in charge of the development of
the petroleum, petrochemical and coal industry, as well as
planning, coordinating, supervising and controlling the
operational activities of its divisions, both in Venezuela and
abroad. The company has a commercial office in China.
* * *
In March 2007, Standard & Poor's Ratings Services assigned its
'BB-' senior unsecured long-term credit rating to Petroleos de
Venezuela S.A.'s US$2 billion notes due 2017, US$2 billion notes
due 2027, and US$1 billion notes due 2037.
Also in March 2007, Fitch Ratings gave a BB- rating to PdVSA's
Senior Unsecured debt.
On Feb. 7, 2007, Moody's Investors Service affirmed the
company's B1 global local currency rating.
PETROLEOS DE VENEZUELA: Starts Drilling on Boyaca 6 Block
---------------------------------------------------------
Petroleos de Venezuela SA has started drilling on the Boyaca 6
block at the Orinoco heavy crude belt.
Business News Americas relates that the block has reserves of
80 million barrels, about 12 million of which can be extracted
using Venezuela's current recovery rate of 20%.
As reported in the Troubled Company Reporter-Latin America on
May 15, 2008, Petroleos de Venezuela and Portugal's Galp
Entergia, SGPS, S.A., signed five cooperation agreements related
to energy projects that included reserve certification at
Boyaca 6.
Petroleos de Venezuela told BNamericas that the certification
could ensure Portugal's oil supply for the next 30 years.
Portugal consumed about 344,000 barrels per day of oil in 2006,
BNamericas notes, citing the BP statistical review of world
energy that was published in June 2007.
Petroleos de Venezuela SA -- http://www.pdv.com/-- is
Venezuela's state oil company in charge of the development of
the petroleum, petrochemical and coal industry, as well as
planning, coordinating, supervising and controlling the
operational activities of its divisions, both in Venezuela and
abroad. The company has a commercial office in China.
* * *
In March 2007, Standard & Poor's Ratings Services assigned its
'BB-' senior unsecured long-term credit rating to Petroleos de
Venezuela S.A.'s US$2 billion notes due 2017, US$2 billion notes
due 2027, and US$1 billion notes due 2037.
Also in March 2007, Fitch Ratings gave a BB- rating to PdVSA's
Senior Unsecured debt.
On Feb. 7, 2007, Moody's Investors Service affirmed the
company's B1 global local currency rating.
* BOND PRICING: For the Week May 12 - May 16, 2008
--------------------------------------------------
Issuer Coupon Maturity Currency Price
------ ------ -------- -------- -----
ARGENTINA
---------
Alto Palermo SA 7.875 5/11/17 USD 74.67
Argnt-Bocon PR11 2.000 12/3/10 ARS 54.07
Argnt-Bocon PR13 2.000 3/15/24 ARS 47.69
Arg Boden 2.000 9/30/08 ARS 14.80
Bonar ARG $ V 10.500 6/12/12 ARS 69.98
Arg Boden 7.000 10/3/15 USD 70.88
Bonar X 7.000 4/17/17 USD 67.28
Argent-EURDIS 7.820 12/31/33 EUR 66.69
Argent-Par 0.630 12/31/38 ARS 30.48
Banco Macro SA 9.750 12/18/36 USD 73.97
Buenos Aire Prov 9.375 9/14/18 USD 73.70
Buenos Aire Prov 9.625 4/18/28 USD 71.25
BERMUDA
-------
XL Capital Ltd 6.500 12/31/49 USD 70.78
BRAZIL
------
CESP 9.750 1/15/15 BRL 65.64
CAYMAN ISLANDS
--------------
Shinsei Fin Caym 6.418 1/29/49 USD 68.91
Shinsei Fin Caym 6.418 1/29/49 USD 66.86
Shinsei Finance 7.160 7/29/49 USD 66.10
JAMAICA
-------
Jamaica Govt LRS 7.500 10/6/12 JMD 72.72
Jamaica Govt LRS 12.750 6/29/22 JMD 74.67
PUERTO RICO
-----------
Puerto Rico Cons. 5.900 4/15/34 USD 45.00
Puerto Rico Cons. 6.000 12/15/34 USD 34.25
Puerto Rico Cons. 6.250 5/1/22 USD 74.00
Puerto Rico Cons. 6.300 11/1/33 USD 47.00
VENEZUELA
---------
Petroleos de Ven 5.250 4/12/17 USD 65.25
Petroleos de Ven 5.375 4/12/27 USD 55.32
Petroleos de Ven 5.500 4/12/37 USD 54.25
Venezuela 6.000 12/9/20 USD 67.50
Venezuela 7.000 3/31/38 USD 65.12
Venezuela 7.650 4/21/25 USD 73.02
***********
S U B S C R I P T I O N I N F O R M A T I O N
Troubled Company Reporter - Latin America is a daily newsletter
co-published by Bankruptcy Creditors' Service, Inc., Fairless
Hills, Pennsylvania, USA, and Beard Group, Inc., Frederick,
Maryland USA. Tara Eliza E. Tecarro, Sheryl Joy P. Olano,
Rizande de los Santos, and Pamella Ritah K. Jala, Editors.
Copyright 2008. All rights reserved. ISSN 1529-2746.
This material is copyrighted and any commercial use, resale or
publication in any form (including e-mail forwarding, electronic
re-mailing and photocopying) is strictly prohibited without
prior written permission of the publishers.
Information contained herein is obtained from sources believed
to be reliable, but is not guaranteed.
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delivered via e-mail. Additional e-mail subscriptions for
members of the same firm for the term of the initial
subscription or balance thereof are US$25 each. For
subscription information, contact Christopher Beard at
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