/raid1/www/Hosts/bankrupt/TCRLA_Public/080627.mbx
T R O U B L E D C O M P A N Y R E P O R T E R
L A T I N A M E R I C A
Thursday, June 27, 2008, Vol. 9, No. 127
Headlines
A N T I G U A & B A R B U D A
BETONSPORTS: U.S. Gov't Interest Deter Bettors to Submit Claim
A R G E N T I N A
AMMADIS SRL: Proofs of Claim Verification Deadline Is Oct. 9
CONSTRUCTORA CABILDO: Files for Reorganization in Court
DON NITO: Trustee Verifies Proofs of Claim Until Aug. 12
SOL Y VALLES: Trustee Verifies Proofs of Claim Until July 1
SUPERTODO ENSENADA: Settlement Plan Voting Is on July 8
URAWA SA: Proofs of Claim Verification Deadline Is July 15
VISTEON CORPORATION: Moody's Junks New Senior Unsecured Notes
B E R M U D A
BALANCED ALTERNATIVE: Proofs of Claim Filing Is Until July 9
BALANCED ALTERNATIVE: Final Shareholders Meeting Is on July 30
INTELSAT LTD: S&P Puts BB- Issue-Level Rating on 8.50% Sr. Notes
SCOTIA PRINCE: Court to Hear Wind-Up Petition on July 11
SIROCCO HOLDINGS: Proofs of Claim Filing Deadline Is July 9
SIROCCO HOLDINGS: Sets Final Shareholders Meeting for July 30
SIROCCO REINSURANCE: Proofs of Claim Filing Is Until July 9
SIROCCO REINSURANCE: Sets Final Shareholders Meeting for July 30
XL CAPITAL: Joint Venture With Itau Becomes Petrobras' Insurer
B R A Z I L
AMERICAN AIRLINES: Unveils More Details on 4th Qtr Capacity Cuts
BANCO ITAU: Joint Venture With XL Becomes Petrobras' Insurer
BANCO NACIONAL: Lends BRL23.2 Mil. to Textile Firm Poltex Polido
BRASIL TELECOM: Upgrades Unico Fixed Mobile Convergence Product
ENERGISA SA: S&P Puts BB- Corp. Credit Rating, Outlook Stable
FERRO CORP: Mulls Public Offering of US$200 Million Senior Notes
GOL LINHAS: Brazilian Board Approves GTI's Acquisition of VRG
MARFRIG FRIGORIFICOS: OSI Deal Cues Moody's to Review B1 Rating
RBS COMUNICACOES: S&P Ups Corporate Credit Rating to BB From BB-
UAL CORP: Union Coalition Demands Say on Executive Pay
UAL CORP: Mulls Elimination of 950 Pilots Amid Oil Price Woes
UNIAO DE BANCOS: Unibanco AIG Loses Petrobras Insurance Contract
C A Y M A N I S L A N D S
AEI: Fitch Puts BB Rating to US$250 Million Sr. Unsecured Notes
LEVIN EQUITY 360: To Hold Final Shareholders Meeting on June 30
OLD MUTUAL: Will Hold Final Shareholders Meeting on June 30
OLD MUTUAL GLOBAL: Sets Final Shareholders Meeting on June 30
PARMALAT SPA: Can Seek Damages in Parma Case, Judge Rules
POWERASE TECHNOLOGY: Holds Final Shareholders Meeting on June 30
QUANTEK SPC: To Hold Final Shareholders Meeting on June 30
RCL CAPITAL: Will Hold Final Shareholders Meeting on June 30
RITCHIE CONVERTIBLE: Holds Final Shareholders Meeting on June 30
RITCHIE LONG/SHORT: Sets Final Shareholders Meeting on June 30
RITCHIE MAPLE: Will Hold Final Shareholders Meeting on June 30
RITCHIE MM CENT: To Hold Final Shareholders Meeting on June 30
RITCHIE REAL ESTATE: Sets Final Shareholders Meeting on June 30
RITCHIE RML CAPITAL: Final Shareholders Meeting Is on June 30
RITCHIE RML HOLDINGS: Sets Final Shareholders Meeting on June 30
SIR LAN INVESTMENTS: Final Shareholders Meeting Is on June 30
C H I L E
COMPANIA SUD: S&P's Negative Outlook Reflects Market Challenges
G U A T E M A L A
BRITISH AIRWAYS: Selling Air Mauritius Stake for GBP3.2 Million
H A I T I
DYNCORP INTERNATIONAL: Moody's Affirms CFR at B1
DYNCORP INTERNATIONAL: S&P Rates Proposed US$450MM Facility BB+
J A M A I C A
AIR JAMAICA: Will Change Its Entire Board
AIR JAMAICA: Gov't to Stop Shouldering Airline's Burden
DIGICEL GROUP: Reports 39% Subscriber Increase in FY 2008
DIGICEL GROUP: Confirms Interest in Costa Rican Mobile Market
M E X I C O
DURA AUTOMOTIVE: Judge Rejects James Korth's Request
FRONTIER AIRLINES: Cuts Fleet, Jobs & Capacity Due to Fuel Costs
GENERAL MOTORS: Taps Citibank to Review Hummer Brand Options
GRAFTECH INTERNATIONAL: S&P Revises Outlook to Positive
HIPOTECARIA SU: S&P Keeps L-T Counterparty Credit Rating at BB
INDUSTRIAS UNIDAS: S&P Holds B Corp. Credit Rating, Outlook Neg.
LIBBEY INC: S&P Puts 'CCC+' Preliminary Rating on Rule 415 Shelf
P A N A M A
AES EL SALVADOR: Fitch Cuts US$300MM Bonds ID Rating to BB+
P U E R T O R I C O
ORIENTAL FINANCIAL: Opens Financial Center in Bayamon, San Juan
SAN JUAN CABLE: Moody's Affirms Corporate Family Rating at B3
V E N E Z U E L A
PETROLEOS DE VENEZUELA: Must Shelve Joint Venture With Petrobras
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A N T I G U A & B A R B U D A
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BETONSPORTS: U.S. Gov't Interest Deter Bettors to Submit Claim
--------------------------------------------------------------
BetOnSports plc's owed bettors are reluctant to submit claims
against the online gaming company with the U.S. government's
interest in the firm's case.
As previously reported in the Troubled Company Reporter-Latin
America, Vantis Business Recovery Services, a division of
Vantis plc, has placed BetonSports into creditors' voluntary
liquidation on May 16, 2007. BetonSports ceased trading as a
result of an indictment and permanent injunction issued by the
U.S. Department of Justice against the company and certain of
its subsidiaries. The suspension of trading of the company's
shares at the London Stock Exchange was confirmed on July 19,
2006, with de-listing taking effect on Jan. 19, 2007.
On Nov. 22, 2006, the Financial Services Regulatory Commission
sought and obtained an order from the High Court in Antigua
freezing BetonSports' assets and disallowing trading or
distribution of assets.
TCR-LA, citing a report posted at Online-Casinos.com, noted that
the company's balance sheet as of February 2007, showed
US$10 million in total assets and US$26.9 million in total
debts. Total assets, however, includes US$8 million of accounts
receivable.
Aside from the huge possibility of getting only so little of the
amount BetOnSports owes them, customers are discouraged to file
claims against the gaming company because of the U.S.
authorities' interest in the case, Hartley Henderson of
MajorWager.com writes.
Mr. Henderson pointed out that Vantis, in an e-mail to the owed
customers, said that the U.S. authorities have taken an active
interest in the case, particularly in the actions of some of the
Betonsports group directors. "So it shouldn't be surprising
that many customers are reluctant to submit claims for
compensation if they are going to be on some U.S. government
watch list, and if they can only expect pennies on the dollar
back," he stated.
Vantis, however, assured bettors that the U.S. government is not
interested in them but only in the company directors and in U.S.
businesses that may have dealt with BetonSports. Vantis
encourages owed players who have not yet submitted a claim are
to file at https://betonsports.vantisplc.com/
An unnamed bettor told Mr. Henderson he is not willing to risk
an IRS audit or the police showing up on his doorstep just to
get a dime or two back.
BetonSports plc is an online gaming company publicly trading on
the London Stock Exchange, but has no operations in the United
Kingdom. Around 80% of the company's business operates in the
United States, where sports betting is illegal except in the
State of Nevada. The group also has operations in China,
Argentina, and Mexico. BetonSports was ordered last year by a
U.S. federal court to stop operating in Antigua and Costa Rica
-- from where it accepted bets from thousands of American
customers.
=================
A R G E N T I N A
=================
AMMADIS SRL: Proofs of Claim Verification Deadline Is Oct. 9
------------------------------------------------------------
The court-appointed trustee for Ammadis S.R.L.'s bankruptcy
proceeding verifies creditors' proofs of claim until
Oct. 9, 2008.
The trustee will present the validated claims in court as
individual reports on Nov. 24, 2008. The National Commercial
Court of First Instance in Buenos Aires will determine if the
verified claims are admissible, taking into account the
trustee's opinion, and the objections and challenges that will
be raised by Ammadis 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 Ammadis' accounting
and banking records will be submitted in court on Feb. 11, 2009.
The debtor can be reached at:
Ammadis S.R.L.
Primera Junta 3438
Buenos Aires, Argentina
Web site: http://www.ammadis.com.ar
CONSTRUCTORA CABILDO: Files for Reorganization in Court
-------------------------------------------------------
Constructora Cabildo SA has requested for reorganization
approval after failing to pay its liabilities.
The reorganization petition, once approved by the court, will
allow Constructora Cabildo to negotiate a settlement with its
creditors in order to avoid a straight liquidation.
The case is pending in the National Commercial Court of First
Instance No. 9 in Buenos Aires. Clerk No. 17 assists the court
in this case.
The debtor can be reached at:
Constructora Cabildo SA
Montevideo 536
Buenos Aires, Argentina
DON NITO: Trustee Verifies Proofs of Claim Until Aug. 12
--------------------------------------------------------
The court-appointed trustee for Don Nito S.R.L.'s reorganization
proceeding, will be verifying creditors' proofs of claim until
Aug. 12, 2008.
The trustee will present the validated claims in court as
individual reports on Sept. 25, 2008. The National Commercial
Court of First Instance in Pergamino, 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 Don Nito 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 Don Nito's accounting
and banking records will be submitted in court on Nov. 6, 2008.
SOL Y VALLES: Trustee Verifies Proofs of Claim Until July 1
-----------------------------------------------------------
The court-appointed trustee for Sol y Valles S.A.'s
reorganization proceeding, will be verifying creditors' proofs
of claim until July 1, 2008.
The trustee will present the validated claims in court as
individual reports on Aug. 26, 2008. The National Commercial
Court of First Instance in Salta 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 Sol y Valles 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 Sol y Valles'
accounting and banking records will be submitted in court on
Oct. 9, 2008.
Creditors will vote to ratify the completed settlement plan
during the assembly on March 26, 2009.
The debtor can be reached at:
Sol y Valles S.A.
Sarmiento 544, San Fernando Del Valle de Catamarca
Catamarca, Argentina
SUPERTODO ENSENADA: Settlement Plan Voting Is on July 8
-------------------------------------------------------
Supertodo Ensenada S.R.L.'s creditors will vote to ratify the
firm's settlement plan during an informative assembly on
July 8, 2008.
The court-appointed trustee for Supertodo Ensenada's
reorganization proceeding verified creditors' proofs of claim
and presented the validated claims in court as individual
reports. The trustee also submitted to court a general report
containing an audit of Supertodo Ensenada's accounting and
banking records.
URAWA SA: Proofs of Claim Verification Deadline Is July 15
----------------------------------------------------------
The court-appointed trustee for Urawa S.A.'s bankruptcy
proceeding verifies creditors' proofs of claim until
July 15, 2008.
The trustee will present the validated claims in court as
individual reports on Sept. 16, 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 Urawa 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 Urawa's accounting
and banking records will be submitted in court on Oct. 28, 2008.
VISTEON CORPORATION: Moody's Junks New Senior Unsecured Notes
-------------------------------------------------------------
Moody's Investors Service has assigned a Caa1 (LGD4, 66%) rating
to Visteon Corporation's new senior unsecured notes maturing in
2016. The new senior unsecured notes have been issued
consistent with the structure and terms that were in place when
the securities were initially proposed and assigned a
prospective rating on May 22, 2008.
In a related action, Moody's affirmed Visteon's Corporate Family
Rating of B3, Probability of Default of B3, senior secured term
loan rating of Ba3, senior unsecured notes of Caa2, and
Speculative Grade Liquidity rating of SGL-3. The Outlook
remains negative. Please the Moody's Press release dated May 22,
2008.
The B3 Corporate Family Rating and negative Outlook continue to
incorporate automotive industry pressures including general
economic conditions which have weakened consumer demand, high
fuel costs, and decreasing market share of Visteon's largest
customers in North America. The severity of the North American
shift in consumer demand is evidenced by recent announcements
within the industry lowering production forecasts for 2008 and
delaying the launch of new SUV and light truck models.
These pressures may be somewhat mitigated by Visteon's book of
new business awards (which includes customer growth outside of
North America), and continuing the trend of reduced dependency
to Ford North America to 12% of revenues in first quarter of
2008 from 15% at year-end 2007. Nevertheless, pricing pressures
in the industry remain significant, and continued cost
reductions are necessary to ensure adequate returns are
achieved.
Visteon maintains adequate liquidity with US$1.6 billion of cash
at March 31, 2008, about 85% of this cash located in North
America. Negative free cash flow is expected in 2008 while
Visteon executes its restructuring program, but Moody's
anticipates that the company's cash balances will be sufficient
to cover the expected cash flow burn over the next twelve
months.
Visteon had approximately US$177 million available under its
US$350 million ABL revolver, after LC usage. In addition the
company maintained US$162 million of availability under its
European Securitization. A fixed charge coverage covenant
becomes effective when availability under the revolving credit
facility falls below US$75 million, which is not expected.
Ratings Assigned:
-- New senior unsecured notes due 2016 -- privately place
without registration rights, Caa1 (LGD4, 66%);
Ratings Affirmed:
Visteon Corporation
-- Corporate Family Rating, B3
-- Probability of default, B3
-- Secured bank term loan, Ba3 (LGD2, 19%);
-- Existing unsecured notes, Caa2 (LGD6, 94%);
-- Shelf filings for unsecured, subordinated, and preferred,
(P)Caa2 (LGD6, 94%), (P)Caa2 (LGD6, 97%), and (P)Caa2 (LGD6,
97%),respectively;
-- Speculative Grade Liquidity rating, SGL-3
Visteon Capital Trust I
-- Shelf filing trust preferred, (P)Caa2 (LGD6, 97%)
The last rating action was on May 22, 2008 when prospective
ratings were assigned.
Visteon's US$350 million revolving credit facility is not rated
by Moody's.
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. Annual product revenues were
US$11.3 billion in 2007.
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.
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B E R M U D A
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BALANCED ALTERNATIVE: Proofs of Claim Filing Is Until July 9
------------------------------------------------------------
Balanced Alternative Strategies Limited's creditors are given
until July 9, 2008, to prove their claims to Robin J. Mayor, the
company's liquidator, or be excluded from receiving any
distribution or payment.
In their proofs of claim, creditors must indicate their full
names, addresses, the full particulars of their debts or claims,
and the names and addresses of their lawyers, if any.
Balanced Alternative's shareholders agreed on June 17, 2008, to
place the company into voluntary liquidation under Bermuda's
Companies Act 1981.
The liquidator can be reached at:
Robin J. Mayor
Messrs. Conyers Dill & Pearman
Clarendon House, 2 Church Street
Hamilton, HM 11, Bermuda
BALANCED ALTERNATIVE: Final Shareholders Meeting Is on July 30
--------------------------------------------------------------
Balanced Alternative Strategies Limited will hold its final
general meeting on July 30, 2008, at 9:30 a.m. at Messrs.
Conyers Dill & Pearman, Clarendon House, Church Street,
Hamilton, Bermuda.
These matters will be taken up during the meeting:
-- receiving an account showing the manner in which the
winding-up of the company has been conducted and its
property disposed of and hearing any explanation that may
be given by the liquidator;
-- determination by resolution the manner in which the books,
accounts and documents of the company and of the
liquidator shall be disposed; and
-- passing of a resolution dissolving the company.
Balanced Alternative's shareholders agreed on June 17, 2008, to
place the company into voluntary liquidation under Bermuda's
Companies Act 1981.
The liquidator can be reached at:
Robin J. Mayor
Messrs. Conyers Dill & Pearman
Clarendon House, 2 Church Street
Hamilton, HM 11, Bermuda
INTELSAT LTD: S&P Puts BB- Issue-Level Rating on 8.50% Sr. Notes
----------------------------------------------------------------
Standard & Poor's Ratings Services has assigned ratings on an
aggregate US$7.1 billion in proposed new debt instruments issued
by various subsidiaries of Bermuda-based Intelsat Ltd. Proceeds
from the new debt will be used to replace existing credit
agreements and bridge facilities. The credit agreements were
put in place to finance the change of control provisions under
three separate debt issues that were triggered by the Feb. 4,
2008, acquisition of the company by an investor group led by BC
Partners. At the same time, S&P affirmed the 'B' corporate
credit rating on Intelsat, as these proposed debt issuances were
already incorporated into S&P's rating. The outlook is stable.
S&P are assigning a 'BB-' issue-level rating and a '1' recovery
rating on Intelsat Subsidiary Holding Co. Ltd.'s 8.50% senior
notes due 2013 and 8.875% senior notes due 2015. The '1'
recovery rating indicates the expectation for very high (90% to
100%) recovery in the event of a payment default. S&P are
assigning a 'B-' issue-level rating and a '5' recovery rating on
Intelsat Intermediate Holding Co. Ltd.'s 9.50% senior discount
notes due 2015. The '5' recovery rating indicates the
expectation for modest (10% to 30%) recovery in the event of a
payment default. We're also assigning a 'CCC+' issue-level
rating and a '6' recovery rating on Intelsat Bermuda Ltd.'s
11.25% senior notes due 2017 and 11.50% senior paid-in-kind
election notes due 2017. The '6' recovery rating indicates the
expectation for negligible (0% to 10%) recovery in the event of
a payment default. The ratings are based on preliminary terms
and conditions and are subject to review of final documentation.
"The ratings on Intelsat reflect a highly leveraged financial
profile that allows for limited financial flexibility in the
medium term and overwhelms very attractive business
characteristics," said Standard & Poor's credit analyst Naveen
Sarma. "A strong business risk profile reflects the company's
global scale, strong geographic diversification, and strong
revenue backlog that provides for significant cash flow
visibility."
This fundamentally sound business profile enables the company to
support such high levels of leverage at this rating.
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.
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.
SCOTIA PRINCE: Court to Hear Wind-Up Petition on July 11
--------------------------------------------------------
The Supreme Court of Bermuda will hear a petition to wind-up
Scotia Prince Cruises Limited on July 11, 2008, at 9:30 a.m.
Scotia Prince filed for its wind-up before the court on
June 13, 2008.
Any creditor or contributory who wants to support or oppose the
making of an order on the company's wind-up petition may attend
the hearing. He or she may be represented by a counsel during
the hearing. A copy of the petition is available on payment of
the regulated charge for the document at the attorneys for the
petitioner:
Conyers Dill & Pearman
Clarendon House, 2 Church Street
Hamilton HM11, Bermuda
Anyone who wants to attend the hearing must write to Conyers
Dill & Pearman, stating the name and address of the person or
the name and address of the firm, and must be signed by the
person or firm, or his or their attorneys by July 10, 2008, no
later than 4:00 p.m., Bermuda Time.
SIROCCO HOLDINGS: Proofs of Claim Filing Deadline Is July 9
-----------------------------------------------------------
Sirocco Holdings Limited's creditors are given until
July 9, 2008, to prove their claims to Robin J. Mayor, the
company's liquidator, or be excluded from receiving any
distribution or payment.
In their proofs of claim, creditors must indicate their full
names, addresses, the full particulars of their debts or claims,
and the names and addresses of their lawyers, if any.
Sirocco Holdings' shareholders agreed on June 23, 2008, to place
the company into voluntary liquidation under Bermuda's Companies
Act 1981.
The liquidator can be reached at:
Robin J. Mayor
Messrs. Conyers Dill & Pearman
Clarendon House, 2 Church Street
Hamilton, HM 11, Bermuda
SIROCCO HOLDINGS: Sets Final Shareholders Meeting for July 30
-------------------------------------------------------------
Sirocco Holdings Limited will hold its final general meeting
on July 30, 2008, at 9:30 a.m. at Messrs. Conyers Dill &
Pearman, Clarendon House, Church Street, Hamilton, Bermuda.
These matters will be taken up during the meeting:
-- receiving an account showing the manner in which the
winding-up of the company has been conducted and its
property disposed of and hearing any explanation that may
be given by the liquidator;
-- determination by resolution the manner in which the books,
accounts and documents of the company and of the
liquidator shall be disposed; and
-- passing of a resolution dissolving the company.
Sirocco Holdings' shareholders agreed on June 23, 2008, to place
the company into voluntary liquidation under Bermuda's Companies
Act 1981.
The liquidator can be reached at:
Robin J. Mayor
Messrs. Conyers Dill & Pearman
Clarendon House, 2 Church Street
Hamilton, HM 11, Bermuda
SIROCCO REINSURANCE: Proofs of Claim Filing Is Until July 9
-----------------------------------------------------------
Sirocco Reinsurance Limited's creditors are given until
July 9, 2008, to prove their claims to Robin J. Mayor, the
company's liquidator, or be excluded from receiving any
distribution or payment.
In their proofs of claim, creditors must indicate their full
names, addresses, the full particulars of their debts or claims,
and the names and addresses of their lawyers, if any.
Sirocco Reinsurance's shareholders agreed on June 23, 2008, to
place the company into voluntary liquidation under Bermuda's
Companies Act 1981.
The liquidator can be reached at:
Robin J. Mayor
Messrs. Conyers Dill & Pearman
Clarendon House, 2 Church Street
Hamilton, HM 11, Bermuda
SIROCCO REINSURANCE: Sets Final Shareholders Meeting for July 30
----------------------------------------------------------------
Sirocco Reinsurance Limited will hold its final general meeting
on July 30, 2008, at 9:30 a.m. at Messrs. Conyers Dill &
Pearman, Clarendon House, Church Street, Hamilton, Bermuda.
These matters will be taken up during the meeting:
-- receiving an account showing the manner in which the
winding-up of the company has been conducted and its
property disposed of and hearing any explanation that may
be given by the liquidator;
-- determination by resolution the manner in which the books,
accounts and documents of the company and of the
liquidator shall be disposed; and
-- passing of a resolution dissolving the company.
Sirocco Reinsurance's shareholders agreed on June 23, 2008, to
place the company into voluntary liquidation under Bermuda's
Companies Act 1981.
The liquidator can be reached at:
Robin J. Mayor
Messrs. Conyers Dill & Pearman
Clarendon House, 2 Church Street
Hamilton, HM 11, Bermuda
XL CAPITAL: Joint Venture With Itau Becomes Petrobras' Insurer
--------------------------------------------------------------
Itau XL Seguros Corporativos SA, XL Capital Ltd.'s joint venture
with Banco Itau Holding Financeira SA, has taken the place of
Unibanco AIG Seguros SA as the main insurer of Petroleo
Brasilieo SA, a.k.a. Petrobras, Brazilian news daily Valor
Economico reports.
According to Valor Economico, Petrobras said that Itau XL won
the bidding to become its main insurer. The insurance contract
is put up for bid yearly. For the past two years, the contract
was held by Unibanco AIG, a venture of Uniao de Bancos
Brasileiros SA and American International Group Inc.
Valor Economico relates that Itau XL offered to charge a yearly
premium of US$26 million, almost 50% less than Unibanco AIG
charged in the past years. Itau XL faced difficulties securing
support from reinsurers at that price. The report notes that it
is possible Itau XL may have raised the premium.
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.
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B R A Z I L
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AMERICAN AIRLINES: Unveils More Details on 4th Qtr Capacity Cuts
----------------------------------------------------------------
American Airlines Inc. and its regional affiliate, American
Eagle, unveiled additional details of their capacity reductions
for the fourth quarter of 2008. The reductions are in line with
American's initial plans -- announced May 21 -- of cutting
fourth quarter domestic capacity by 11 to 12 percent and
regional affiliate capacity by 10 to 11 percent versus fourth
quarter 2007 levels. The changes are being instituted to reduce
costs and create a more sustainable supply-and-demand balance in
today's high fuel-cost environment.
The reductions involve additional schedule changes taking effect
in November. Reductions announced May 27 will take effect in
September.
American is reducing flights at most of its principal
operations. This announcement, combined with the previously
announced round of schedule reductions, means American will
close its operations entirely at three of its airports, while
Eagle will close five of its airports, out of a combined total
of 250 airports for both.
The airports/cities being closed are:
* American -- Oakland, Calif. (previously announced); London
Stansted (previously announced); and Barranquilla, Colombia
* American Eagle -- Albany, N.Y.; Providence, R.I.;
Harrisburg, Pa.; Samana, Dominican Republic (previously
announced); and San Luis Obispo, Calif. American Eagle will
also close its maintenance base in San Luis Obispo.
American plans to reduce its departures in Chicago by 28 flights
with American Eagle reducing 34 departures. In St. Louis,
American will reduce departures by 8 flights with American Eagle
and AmericanConnection reducing 35 departures. American will
reduce 19 departures at Dallas/Fort Worth along with 23 American
Eagle flight reductions.
The company also has decided to eliminate five AA flights and 37
American Eagle jet departures at LaGuardia Airport. In addition
to the expected cost savings, these changes, coupled with
appropriate government action, could allow the airport to
operate with less chronic disruption and improve customer
experience at one of the nation's most congested airports.
"Today, the dependability and delay issues that exist at
LaGuardia have reached a crisis point and have a daily negative
impact on the overall customer service and performance for every
airline with flights at LaGuardia," said Bob Reding, American's
Executive Vice President -- Operations.
Historical data from the Bureau of Transportation Statistics on
operational performance at LaGuardia highlights the issues.
During the last five years, for example, delays at LaGuardia
have increased 50 percent and now occur on one out of every four
departures, with these delays averaging more than one hour. In
large part, these delays are attributable to Air Traffic
Control's inability to handle the scheduled service levels.
Likewise, inbound delays have increased by 55 percent and occur
on four out of every 10 arrivals, on average delaying arrivals
by 60 minutes. In addition, cancellations at the airport now
average over 5 percent, an increase of more than 50 percent.
American has called for the FAA and the Department of
Transportation to reduce the number of operations allowed at
LaGuardia by 20 percent -- or approximately 15 operations per
hour until FAA airspace redesign efforts, ATC modernization, and
other steps increase the level at which LaGuardia can operate
reliably.
"As airport utilization increases, on-time arrival performance
at any airport declines," Reding said. "The decline is
particularly evident as airport utilization exceeds 80 percent.
LaGuardia is scheduled at over 100 percent and has the worst
dependability in the nation. With the retirement of American's
five operations per hour at LaGuardia, the DOT will be able to
achieve more than one-third of the objective, and will be well
on its way to providing a real solution to the operational
problems plaguing LaGuardia today."
American and American Eagle regret the potential impact these
schedule changes will have on its people. The company is in the
process of determining the overall impact on its employees, and
it is the company's intent to offer voluntary programs before
moving to involuntary separations.
About American Airlines
Based in Fort Worth, Texas, American Airlines Inc., a wholly
owned subsidiary of AMR Corp., operates the largest scheduled
passenger airline in the world with service throughout North
America, the Caribbean, Latin America, Europe and Asia. The
airline flies to Belgium, Brazil, and Japan.
* * *
As reported in the Troubled Company Reporter-Latin America on
April 17, 2008, Fitch Ratings has affirmed AMR Corp.'s Issuer
default rating at 'B-' and Senior unsecured debt at 'CCC/RR6' as
well as its principal operating subsidiary, American Airlines,
Inc.'s Issuer default rating at 'B-' and Secured bank credit
facility at 'BB-/RR1'. Fitch's rating outlook for both AMR
Corp. and American Airlines has been revised to stable from
positive.
As reported in the Troubled Company Reporter-Latin America on
March 26, 2008, Standard & Poor's Ratings Services revised its
outlook on the long-term ratings on AMR Corp. (B/Negative/B-3)
and subsidiary American Airlines Inc. (B/Negative/--) to
negative from positive. S&P also lowered its short-term rating
on AMR to 'B- 3' from 'B-2' and affirmed all other ratings on
AMR and American.
BANCO ITAU: Joint Venture With XL Becomes Petrobras' Insurer
------------------------------------------------------------
Itau XL Seguros Corporativos SA, Banco Itau Holding Financeira
SA's joint venture with XL Capital Ltd., has taken the place of
Unibanco AIG Seguros SA as the main insurer of Petroleo
Brasilieo SA, a.k.a. Petrobras, Brazilian news daily Valor
Economico reports.
According to Valor Economico, Petrobras said that Itau XL won
the bidding to become its main insurer. The insurance contract
is put up for bid yearly. For the past two years, the contract
was held by Unibanco AIG, a venture of Uniao de Bancos
Brasileiros SA and American International Group Inc.
Valor Economico relates that Itau XL offered to charge a yearly
premium of US$26 million, almost 50% less than Unibanco AIG
charged in the past years. Itau XL faced difficulties securing
support from reinsurers at that price. The report notes that it
is possible Itau XL may have raised the premium.
Banco Itau Holding Financeira SA -- http://www.itau.com.br/--
is a private bank in Brazil. The company has four principal
operations: banking -- including retail banking through its
wholly owned subsidiary, Banco Itau SA(Itau), corporate banking
through its wholly owned subsidiary, Banco Itau BBA SA (Itau
BBA) and consumer credit to non-account hold customers through
Itaucred -- credit cards, asset management and insurance,
private retirement plans and capitalization plans, a type of
savings plan. Itau Holding provides a variety of credit and
non-credit products and services directed towards individuals,
small and middle market companies and large corporations. The
bank has offices in Miami, New York, Hongkong, Lisbon,
Luxembourg, Bahamas, the Cayman Islands, Chile and Uruguay.
* * *
As reported in the Troubled Company Reporter-Latin America on
Feb. 12, 2007, Fitch changed the outlook of Banco Itau Holding
Financiera S.A.'s 'BB+' foreign currency IDR rating to positive
from stable.
BANCO NACIONAL: Lends BRL23.2 Mil. to Textile Firm Poltex Polido
----------------------------------------------------------------
Banco Nacional de Desenvolvimento Economico e Social SA has
signed off BRL23.2 million loan for technology upgrade in Poltex
Polido Textil S.A. The money will also help to increase
production capacity and implement a new waste treatment station.
The project will generate 127 direct jobs.
Funds will be transferred by Banco do Estado do Espirito Santo
S/A (BANESTES), under the Program Revitaliza – Investimento (New
Life – Investment), intended to promote the financial
strengthening of companies belonging to some industries,
including the textile industry.
The goal is to expand the fabric production capacity, also
renewing the line of products, which will include items of
higher added value due to the incorporation of new technological
processes. Additionally a new waste treatment station capable
of processing 250 m3/h using physical, chemical and biological
processes will be built. This new station will substitute the
existing one, capable of processing 150 m3/h, using a small part
of existing equipment and buildings.
Poltex Polido Textil S/A is located in the city of Serra/ES and
was built in 1990. The company was primarily focused on the
production of fabric and clothing. The clothing sector of the
plant currently employs 411 people.
Poltex is part of Polido Group, with more than 27 years of
activity and it is composed of 14 companies, including four
plants and eight commercial units related to the textile and
clothing sector, one foreign trade unit and a real estate
development company. The group now has more than 1,500 direct
employees and generates 1,000 indirect jobs.
Banco Nacional de Desenvolvimento Economico e Social SA is
Brazil's national development bank. It provides financing for
projects within Brazil and plays a major role in the
privatization programs undertaken by the federal government.
* * *
Banco Nacional currently carries a Ba2 foreign long-term bank
deposit rating from Moody's Investors Service, and a BB+ long-
term foreign issuer credit rating from Standards and Poor's
Ratings Services. The ratings were assigned in August and May
2007.
BRASIL TELECOM: Upgrades Unico Fixed Mobile Convergence Product
---------------------------------------------------------------
Tariana Brocardo at Business News Americas reports that Brasil
Telecom Participacoes S.A. has upgraded its Unico fixed mobile
convergence product.
According to BNamericas, Unico will now include Wi-Fi-compatible
mobile devices. Brasil Telecom's Marketing Director Dalton
Hayakawa said, "We were the first operator to launch a converged
product with Bluetooth technology, so we saw a natural evolution
to migrate to Wi-Fi SIP as this technology can increase
penetration. Users are no longer limited to Bluetooth access
points." Clients can include up to three mobile devices in the
Telefone Unico account, "all of which are billed at the fixed
line rate when calls are routed via a Wi-Fi hotspot". Brasil
Telecom won't make additional charges for national or
international roaming when the handsets are linked to a Wi-Fi
network.
BNamericas relates that Telefone Unico uses Internet connection
to integrate several services derived from fixed and mobile
handset features. Unanswered calls to a landline are
transferred automatically after the fifth ring to the Telefone
Unico handsets. Calls answered on one of the three handsets can
be transferred to other two cell phones for free. The three
handsets can also make calls at the same time over the home Wi-
Fi connection.
Headquartered in Brasilia, Brasil Telecom S.A. --
http://www.brasiltelecom.com.br-- is an integrated
telecommunications company operating in nine states in the
southern, mid-western and northern regions of Brazil. In 2007,
the company reported consolidated net revenues of
BRL11.1 billion.
* * *
In April 2008, Moody's Investors Service continues to review
Brasil Telecom SA's Ba1 rating for possible upgrade after the
announced acquisition of Brasil Telecom Participacoes SA by Tele
Norte Leste Participacoes SA.
ENERGISA SA: S&P Puts BB- Corp. Credit Rating, Outlook Stable
-------------------------------------------------------------
Standard & Poor's Ratings Services has assigned its 'BB-'
corporate credit rating to the Brazilian electric utility
holding company Energisa S.A. The outlook is stable.
The rating reflects the consolidated credit quality of its
subsidiaries, basically five electric power distribution
utilities:
1. Energisa Paraiba - Distribuidora de Energia S.A. (Saelpa; BB-
/Positive/--),
2. Energisa Sergipe Distribuidora de Energia S.A. (Energipe; BB-
/Stable/--),
3. Energisa Minas Gerais – Distribuidora de Energia S.A. (not
rated),
4. Energisa Nova Friburgo – Distribuidora de Energia S.A. (not
rated), and
5. Energisa Borborema – Distribuidora de Energia S.A. (not
rated).
Of these companies, Energipe and Saelpa currently account for
about 70% of the group's cash generation. S&P expects that
Energisa benefits from a forecast stable level of dividends
received from its subsidiaries, it received BRL189.5 million in
2007.
The rating also reflects these risks:
-- Weak operating statistics at Saelpa, although they have
been improving.
-- Some exposure to foreign currency-denominated debt (20% of
total debt on a consolidated basis as of March 2008), even
though the company makes use of currency swaps to reduce
this risk.
-- As an electric power distribution group, Energisa is
exposed to the Brazilian electric sector's regulatory
framework, although it has showed a positive track record
over the past four years.
These strengths partially offset the risks:
-- Low debt amortization requirements for Energisa on a
nonconsolidated basis through 2011.
-- Improving debt amortization profile and cash flow
protection measures on its subsidiaries.
-- Strong economic growth in Energisa's concession areas.
-- Exclusive concession to distribute electricity in all of
Sergipe and Paraiba states, through three of its
subsidiaries.
Energisa is a nonoperating holding company, controlling several
electric utility companies in Brazil, mainly in the distribution
segment. The company also has several generation projects still
under development, amounting to 232 megawatts.
"The stable outlook on Energisa reflects our expectation that
the group will maintain a significant liability management, with
efforts to reduce debt costs and improve its amortization
profile," said S&P's credit analyst Luisa Vilhena.
Also, S&P expects all subsidiaries to continue posting
improvements in their operating performance and cash generation
to be able to provide a stable dividend flow to Energisa. In
this scenario, S&P expects the group to keep showing important
level of cash holdings, while posting strong EBITDA margin above
30%, FFO to total debt above 20% and total debt to EBITDA around
2.5. The outlook could be revised to positive if the group
surpasses these metrics, while maintaining a prudent dividend
policy. Conversely, the rating could be negatively affected if
the group adopts a more aggressive policy towards debt or if its
current financial performance deteriorates.
Energisa SA -- http://www.energisa.com.br/-- is a holding
company that controls the electric energy distributors Sociedade
Anonima de Eletrificacao da Paraiba (Saelpa), Empresa Energetica
de Sergipe (Energipe), Companhia Forca e Luz Cataguazes-
Leopoldina, Companhia Energetica da Borborema, and Companhia de
Eletricidade de Nova Friburgo. The group serves approximately
two million clients and has distributed 7,278 gigawatt hours in
2007 in the states of Paraiba, Sergipe, Minas Gerais, and Rio de
Janeiro. The group's energy generation installed capacity is
insignificant. The group's controlling shareholder is the
Botelho family.
FERRO CORP: Mulls Public Offering of US$200 Million Senior Notes
----------------------------------------------------------------
Ferro Corporation has proposed a public offering of
US$200 million in aggregate principal amount of Senior Notes due
2016.
The company intends to use the net proceeds from the offering
and available cash, including borrowings under its revolving
credit facility, to purchase or redeem all of its outstanding 9-
1/8% Senior Notes due 2009, to pay accrued and unpaid interest
on all such indebtedness, to pay all premiums and transactions
expenses associated therewith, and for general corporate
purposes.
The exact terms and timing of the offering will depend upon
market conditions and other factors.
Credit Suisse Securities (USA) LLC, Citigroup Global Markets
Inc. and J.P. Morgan Securities Inc. are acting as joint
bookrunning managers for the offering.
A copy of the prospectus supplement and related base prospectus
for the offering may be obtained from:
Credit Suisse Securities (USA) LLC
Attn: Prospectus Department
One Madison Avenue
New York, NY 10010
Tel +1 (800) 221-1037
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.
GOL LINHAS: Brazilian Board Approves GTI's Acquisition of VRG
-------------------------------------------------------------
GOL Linhas Aereas Inteligentes S.A., parent company of GOL
Transportes Aereos S.A. and VRG Linhas Aereas S.A., said that
the Brazilian Administrative Board for Economic Defense (Cade)
approved the completion of the VRG acquisition by GTI S.A., a
subsidiary of GOL Linhas Aereas Inteligentes S.A. with no
restrictions, allowing the company to consolidate its passenger
and cargo transportation.
"We are very happy to have received Cade approval, which will
allow us to consolidate our investments and improve synergies
between the airlines' operations. The addition of VRG will
increase our network capacity and allow us to offer more
convenient flight schedules, launch new routes and add service
to new destinations, which will have a positive effect on the
dynamics of the Brazilian aviation industry as a whole. Most
importantly, the acquisition will benefit our customers, who
will now have access to more options in the market," GOL's
President and Chief Executive Officer, Constantino de Oliveira
Junior says.
Additionally, integrating GTA and VRG's operations will allow
the company to optimize revenues and costs as well as maximize
the consolidated operational, financial and ancillary revenue
capabilities. The company will continue to invest in IT,
quality passenger service, and expanding GTA and VRG's route
networks through organic growth and operational agreements with
other airlines.
Cade determined that the acquisition will have no effect on
market competition or consumer options in the Brazilian aviation
industry. The acquisition of VRG, which was announced on March
28, 2007, and approved by the National Civil Aviation Agency on
April 3, 2007, had already received favorable rulings from the
Ministry of Justice's Secretary of Economical Law, the Ministry
of Finance's Secretary of Economical Monitoring and Cade's
Public Attorney.
About GOL
Based in Sao Paulo, Brazil, GOL Intelligent Airlines aka GOL
Linhas Areas Inteligentes S.A. (NYSE: GOL and Bovespa: GOLL4) --
http://www.voegol.com.br-- through its subsidiary, GOL
Transportes Aereos S.A., provides airline services in Brazil,
Argentina, Bolivia, Uruguay, and Paraguay. The company's
services include passenger, cargo, and charter services. As of
March 20, 2006, Gol Linhas provided 440 daily flights to 49
destinations and operated a fleet of 45 Boeing 737 aircraft.
The company was founded in 2001.
* * *
As reported in the Troubled Company Reporter-Latin America on
June 23, 2008, Fitch Ratings has downgraded these credit ratings
of Gol Linhas Aereas Inteligentes SA:
-- Foreign and Local Currency long-term Issuer Default Ratings
to 'BB' from 'BB+';
-- US$200 million of perpetual notes to 'BB' from 'BB+;
-- US$200 million seniors note due to 2017 to 'BB' from 'BB+;
-- Long-term National rating to 'A+(bra)' from 'AA-(bra).
Fitch has revised the rating outlook to negative.
TCR-Latin America reported on May 29, 2008 that Moody's
Investors Service has downgraded all debt ratings of Gol Linhas
Aereas Inteligentes S.A. including corporate family rating to
Ba3 from Ba2 and downgraded the senior unsecured debt of Gol
Finance to Ba3 from Ba2. The outlook has been changed to
negative from stable.
MARFRIG FRIGORIFICOS: OSI Deal Cues Moody's to Review B1 Rating
---------------------------------------------------------------
Moody's Investors Service has placed Marfrig Frigorificos e
Comercio de Alimentos S.A.'s B1 ratings on review for possible
downgrade, following the company's announcement that it has
signed a definitive agreement to acquire OSI Group's businesses
in Brazil and in several European countries for a total initial
consideration of US$680 million (approximately BRL1.1 billion).
Closing of the transaction is expected to take place in the
third quarter of 2008.
These ratings were placed under review for possible downgrade:
-- US$375 million of 9.625% senior guaranteed unsecured notes
due in 2016 at B1
-- Local currency corporate family rating at B1
Marfrig's B1 ratings were placed on review for possible
downgrade based on the rapid pace of recent acquisitions and on
lower than expected funds from operations in 2007 and the first
quarter of 2008. The acquisitions create operating and
execution challenges to integrate and continue to run all
operations without major disruptions, such as recent challenges
faced in Argentina (20 % of first quarter 2008 revenues).
Marfrig's cash flow metrics are weaker than those of rated peers
in the Brazilian meat processing industry. During the last
twelve months ending on March 31, 2008, Marfrig's funds from
operations to Net Debt was -4 %, compared with an average of 19%
for the Brazilian rated peers (Bertin: Ba3, JBS: B1,
Independencia: B2, and Arantes: B2).
During the last twelve months, prior to the OSI deal, Marfrig
has acquired 10 different companies that have operations in
pork, poultry and beef processing in Argentina, Chile, Uruguay
and Brazil. The company's stated strategy of increasing its
operations in non-beef animal proteins and outside of Brazil is
positive in terms of product and geographic sales mix and raw
material sourcing, which are important factors in Moody's
natural product processors rating methodology. The OSI deal
would also have a positive impact on size and scale factors in
the methodology. However, the pace of acquisitions will test
management's capacity to efficiently operate and integrate all
the new companies and deliver credit metrics commensurate with
the B1 rating category and more in line with rated peers.
"To the extent that Marfrig finances the transaction entirely
with equity and demonstrates its ability to show sustainable FFO
(cash flow from operations before working capital changes) to
Net Debt of above 10%, the ratings are likely to be confirmed at
the B1 level", Moody's Vice-President Senior Analyst, Soummo
Mukherjee explained.
Moody's review will focus on gaining a better understanding of
the risks and benefits of the acquisition of the OSI assets in
Brazil and Europe and the future growth strategy of the company.
A second important focus of the review will be on projected cash
flow metrics, in light of the large number of recent
acquisitions, even before the OSI deal, and the challenging
environment for cattle sourcing in Brazil.
The initial amount of the transaction is US$680 million with the
possibility of an additional payment of up to US$220 million
based on the future performance of the European businesses. The
US$680 million payment will involve a combination of cash
(US$400 million) and Marfrig's common shares (US$280 million
following the completion the transaction), with the possibility
of additional equity being raised. All transactions are
undergoing due diligence and are expected to be concluded by the
second half of this year.
Marfrig has reached an agreement to acquire three companies in
Brazil: Braslo Produtos de Carne Ltda., produces meat products
and is an important supplier for fast food chains in beef and
poultry value added products; Penasul Alimentos Ltda., a
vertically integrated poultry processor and manufacturer of pork
and poultry industrialized products/owns the Pena Branca brand
in the Southern region of Brazil; and Agrofrango Industria e
Comercio de Alimentos Ltda., an integrated poultry processor.
In Europe, Marfrig will acquire Moy Park Group, Kitchen Range
Foods Limited and Albert Van Zoonen BV. Moy Park, based in the
United Kingdom, has facilities in Northern Ireland, where it is
the fourth largest company in this country, England, France and
the Netherlands and is the largest vertically integrated poultry
processor and supplier of processed and value-added chicken
products in the U.K. Kitchen Range Foods produces and
distributes food products including frozen, processed
vegetables, non-meat meal substitutes and bakery products in the
U.K. Lastly, Albert Van Zoonen produces and distributes frozen
processed food products in the Netherlands.
Headquartered in Sao Paulo, Brazil, Marfrig Frigorificos e
Comercio de Alimentos S.A. (Bovespa's Novo Mercado: MRFG3) --
http://www.marfrig.com.br/ir-- is one of the largest beef
processing companies in Brazil. With processing plants in
Brazil, Argentina, Uruguay and Chile, Marfrig processes,
prepares packages and delivers fresh, chilled and processed beef
products to customers in Brazil and abroad, with approximately
50% of its sales derived from exports. Along with its beef
products, the company also delivers additional food products
that it imports or acquires in the local market.
RBS COMUNICACOES: S&P Ups Corporate Credit Rating to BB From BB-
----------------------------------------------------------------
Standard & Poor's Ratings Services has raised its long-term
corporate credit rating on Brazil-based media concern RBS
Comunicacoes S.A. e empresas combinadas to 'BB' from 'BB-'. The
outlook is stable.
"The upgrade reflects the strong fundamentals for advertising
growth in Brazil," said S&P's credit analyst Milena Zaniboni.
"It also incorporates the significant improvement in the
company's credit metrics on positive market conditions in the
media industry and the company's consistent use of discretionary
cash flow to reduce net leverage in the past three years."
S&P expects advertising spending to be resilient in the next two
to three years, sustaining some stability in credit metrics even
with upward cost pressures.
The rating on RBS reflects risks associated with the group's
operations in the cyclical media industry and the dependence of
its revenues on a rather volatile advertising environment. It
also reflects the challenges in maintaining cash flow margins as
competition for talent and events remains strong and inflation
picks up overall.
These negative factors are partially offset by the group's
dominant share of audience and advertising in its service area,
the southern states of Brazil; the benefits of distributing
high-quality content from Globo Comunicacao e Participacoes
S.A.; and the commitment of shareholders and management to a
more moderate financial profile.
RBS Comunicacoes S.A. is part of the Brazilian RBS Group of
companies (http://www.rbs.com.br)
UAL CORP: Union Coalition Demands Say on Executive Pay
------------------------------------------------------
Airline workers' unions claim that as United Airlines executives
continue filling their pockets to overflowing proportions, the
employees, passengers and shareholders continue footing the bill
resulting from management's failed decision making. Passengers
have expressed dissatisfaction with United Airlines,
shareholders face devalued stock and employees are outraged at
ill-advised schemes the current executives of the airline
continue to perpetrate. United Airlines management is utterly
failing everyone.
United Airlines Union Coalition leaders released these
statements by Captain Steve Wallach of the Air Line Pilots
Association (ALPA), Randy Canale of the International
Association of Machinists & Aerospace Workers (IAM), David
Bourne of the International Brotherhood of Teamsters (IBT), Greg
Davidowitch of the Association of Flight Attendants (AFA-CWA),
Craig Symons of the Professional Airline Flight Control
Association (PAFCA) and Lou Lucivero of the International
Federation of Professional and Technical Engineers (IFPTE):
"When UAL executives continue to be rewarded for lack of
performance, the system is clearly broken. There is a clear and
reasonable answer to why 'Say on Pay' proposals are commonplace
in Europe, there are more than 90 similar proposals filed at
U.S. corporations and the concept is currently being considered
for legislation in Congress.
"Say on Pay is appropriate at UAL. In 2006, UAL's CEO
compensation alone exceeded US$39.7 million in a year the
company emerged from bankruptcy and employees were forced to
accept painful cuts. In 2007 Glenn Tilton was rewarded with
US$10.3 million and UAL has schemed up an additional plan called
the "2008 Incentive Compensation Plan" to again lavishly reward
failed decision making. These compensation schemes are
excessive in light of company performance and the impact of
extreme inequity on the morale of the workforce.
"It is not unreasonable to demand that shareholders be provided
a meaningful way to voice their opinion on executive performance
and compensation at the annual shareholder meeting. Standing
together and speaking with one voice, United Airlines' unionized
employees are working aggressively to give shareholders a say on
executive pay. We stand shoulder to shoulder to rein in
management greed and hold them accountable for their failures.
"United executives must turn their attention inward and address
the myriad of problems and issues identified by passengers,
employees and shareholders resulting from their single-minded
focus on exploiting consolidation and other actions for their
personal gain."
The Union Coalition at United Represents more than 48,900 United
employees.
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, Issue No. 158; Bankruptcy
Creditors' Service Inc., http://bankrupt.com/newsstand/or
215/945-7000)
* * *
As reported in the Troubled Company Reporter-Latin America on
June 3, 2008, Fitch Ratings has affirmed the Issuer Default
Ratings of UAL Corp. and its principal operating subsidiary
United Airlines Inc. at B-.
UAL CORP: Mulls Elimination of 950 Pilots Amid Oil Price Woes
-------------------------------------------------------------
United Airlines Inc. plans to lay off 950 pilots, or about 14%
of the airline's total pilot population, as part of its plan to
cope with rising fuel prices, Mary Schlangenstein of Bloomberg
News reports.
Affected pilots would be notified of the layoffs in mid-July,
according to reports. The first 100 furloughs will be effective
September and will extend into 2009, airline spokeswoman Megan
McCarthy said in an interview with Bloomberg.
Bloomberg notes that prior to the pilot cutbacks, United offered
buyouts to 600 senior flight attendants and eliminated 1,600
salaried jobs.
"We must take the difficult but necessary step to reduce the
number of people we have to run our operation," Ms. McCarthy
told Bloomberg. United has already held a briefing on its
chapter of the Air Line Pilots Association, Ms. McCarthy further
disclosed.
According to USA Today, United's fleet will shrink from 460 to
360 by the end of 2009 with the retirement of 96 Boeing 737s and
six Boeing 747s. No new planes are scheduled for delivery.
Ms. McCarthy said United's overall mainline capacity in the
fourth quarter of 2008 will be down between 9.5% and 10.5% from
the fourth quarter of 2007, reports USA Today.
"That large of a cutback will require significantly fewer
workers at United," McCarthy said, "but managers have yet to
determine how many jobs will be eliminated among other unionized
work groups such as flight attendants, mechanics, agents and
ground crew," says the report.
"United hasn't determined the extent of cuts needed among other
labor groups and is working with unions to limit involuntary
furloughs," Bloomberg quotes Ms. McCarthy, as saying. Pilot
union spokesman Dave Kelly declined to comment, in deference to
ongoing talks with United, Bloomberg said.
Domestic Capacity Reduction in 2008-2009
The Troubled Company Reporter on June 6, 2008, said that United
Airlines had disclosed significant fleet, capacity and personnel
changes to enable the company to build a stronger, more
competitive business and withstand record oil prices and a
softening economy.
United will remove a total of 100 aircraft from its mainline
fleet, including the 30 previously announced Boeing 737s, and
reduce its mainline domestic capacity in the fourth quarter 2008
by 14% year over year. The company expects to retire all of its
94 B737s, provided it can work out terms with certain lessors,
and six Boeing 747s. Over the 2008 and 2009 period, cumulative
mainline domestic capacity will be reduced between 17% and 18%
and cumulative consolidated capacity between 9% and 10%.
United expects to reduce the number of its salaried and
management employees and contractors by 1,400 to 1,600,
including the previously announced 500 employee reduction by
year-end. The company said it will determine the number of
front-line employee furloughs as it finalizes the schedule over
July 2008.
About UAL Corporation
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, Issue No. 158; Bankruptcy
Creditors' Service Inc., http://bankrupt.com/newsstand/or
215/945-7000)
* * *
As reported in the Troubled Company Reporter-Latin America on
June 3, 2008, Fitch Ratings has affirmed the Issuer Default
Ratings of UAL Corp. and its principal operating subsidiary
United Airlines Inc. at B-.
UNIAO DE BANCOS: Unibanco AIG Loses Petrobras Insurance Contract
----------------------------------------------------------------
Unibanco AIG Seguros SA, Uniao de Bancos Brasileiros SA's joint
venture with American International Group Inc., has lost an
insurance contract with Petroleos Brasileiro SA, a.k.a.
Petrobras, to Itau XL Seguros Corporativos SA, Brazilian news
daily Valor Economico reports.
Valor Economico relates that Itau XL is a joint venture of XL
Capital Ltd. and Banco Itau Holding Financeira SA. According to
Petrobras, Itau XL won the bidding to be its main insurer. The
insurance contract is put up for bid yearly. For the past two
years, the contract was held by Unibanco AIG, a venture of Uniao
de Bancos Brasileiros SA and American International Group Inc.
Valor Economico relates that Itau XL offered to charge a yearly
premium of US$26 million, almost 50% less than Unibanco AIG
charged in the past years. Itau XL faced difficulties securing
support from reinsurers at that price. The report notes that it
is possible Itau XL may have raised the premium.
Headquartered in Sao Paulo, Brazil, Uniao de Bancos Brasileiros
SA -- http://www.unibanco.com/-- is a full-service financial
institution providing a range of financial products and services
to a diversified individual and corporate customer base
throughout Brazil. The company's businesses comprise segments:
Retail, Wholesale, Insurance and Pension Plans and Wealth
Management. Uniao de Bancos and its associated companies
FinInvest, LuizaCred, PontoCred and Tecban (Banco 24 Horas)
offer a network composed of 17,000 points of service. It also
counts on 7,580 automated teller machines and all 30 Hours'
products and services, including the telephone service and the
Internet banking. The company's international network consists
of branches in Nassau and the Cayman Islands; representatives
offices in New York; banking subsidiaries in Luxembourg, the
Cayman Islands and Paraguay; and a brokerage firm in New York
-- Unibanco Securities Inc.
* * *
In April 2008, Moody's Investors Service assigned a Ba2 foreign
currency deposit rating to Uniao de Bancos Brasileiros SA.
==========================
C A Y M A N I S L A N D S
==========================
AEI: Fitch Puts BB Rating to US$250 Million Sr. Unsecured Notes
---------------------------------------------------------------
Fitch Ratings has assigned a rating of 'BB' to AEI's (formerly
Ashmore Energy International) proposed US$250 million senior
unsecured notes due 2018. The proceeds are expected to be used
for term-out outstanding draws under the senior secured
revolver. The rating outlook is stable.
The ratings reflect the underlying credit strength and cash
flows from AEI's diversified portfolio of energy companies
including: power distribution, power generation, natural gas
transportation and distribution, and retail fuel. Virtually all
of the assets are operating and generally performing well.
AEI's operating assets have a relatively stable base of revenues
and cash flows as more than 90% of its revenues are either from
contracted Power Purchase Agreements or from regulated energy
businesses. Contract and regulated revenues and cash flows tend
to be more stable and have lower business risk. Contracted
revenues from long-term Power Purchase Agreements are primarily
with government-owned off-takers.
The rating also incorporates the leveraging impact of the late
2007 acquisition of Chilquinta, Luz del Sur, and other
investments on AEI. These transactions were funded with a
combination of balance sheet cash and debt which increased
leverage on a consolidated basis. Subsequent to the first
quarter of 2008, AEI received an equity investment of US$200
million from the Government of Singapore Investment Corporation.
The proceeds were used for debt repayment. The total equity
investment from the Singaporean company of approximately US$400
million represented approximately 11% of AEI. Other completed
acquisitions in 2007 included the acquisition of Calidda, Del
Sur as well as the purchase of incremental ownership interests
in existing investments including San Felipe, Puerto Quetzal
Power, Corinto and SIE -- the retail fuel business under
Promigas.
The combination of the aforementioned transactions when taking
into consideration their impact on consolidated debt, cash
position and pro forma EBITDA (latest 12 months March 31, 2008),
Fitch calculates total debt to pro forma EBITDA of approximately
3.9 times and net debt to pro forma EBITDA of 3.2, which is high
for the rating category. Following the closing of the bond
issuance and after taking into account the equity proceeds, pro
forma consolidated debt will be approximately US$3.8 billion
with US$2.2 billion of debt at the project and operating company
level. Holding company debt, including the PIK sub-debt, is
expected to be approximately US$1.5 billion. As of LTM
March 31, 2008, consolidated debt and pro forma EBITDA were
US$3.9 billion and US$1 billion, respectively, with actual LTM
March 31, 2008 EBITDA at US$764 million. In 2007, cash upstream
to AEI from its subsidiaries was approximately US$798 million
including asset sale proceeds of US$115 million.
At March 31, 2008, parent-only leverage, including PIK sub-debt,
decreased to 2.2 and will decrease further on a proforma basis
to approximately 2.0. Parent-level free cash flow is sufficient
to service debt. Parent company debt service is expected to be
approximately US$125 million. Fitch expects that the company
will continue to maintain sufficient cash on the balance sheet
and undrawn revolver capacity to provide adequate liquidity in
the business. Additional debt funded or balance sheet cash
transactions will pressure credit quality over the near term.
Cash flows from subsidiaries to the parent are geographically
concentrated in Brazil (rated 'BBB-' by Fitch) and more
generally in Latin America. From a portfolio standpoint, as of
fiscal 2007, 89% of subsidiary cash flows to the parent can be
attributed to companies located in Latin America and 62% of cash
flows to the parent are derived from Brazilian assets. Cash
flow from subsidiaries are concentrated in countries generally
rated in the 'BB-' to 'BBB-' range. Additionally, AEI's cash
flow is concentrated in five key assets: Elektro (Brazil),
Cuiaba (Brazil), Promigas (Colombia), Trakya (Turkey), and
Puerto Quetzal Power (Guatemala).
The largest cash flow contributor is expected to be Brazilian
power distribution company, Elektro, which at the end of fiscal
2007 represented approximately 54% of consolidated EBITDA and
approximately 58% of cash flows from subsidiaries to AEI. While
Elektro is a very solid, well-managed, moderately low-risk
electric distribution company, Elektro incurred a tariff
decrease in the 2007 tariff review as a result of outperforming
the regulatory returns since the previous tariff review in 2003.
As a result of this tariff reduction and further diversification
of AEI's businesses, Elektro is expected to contribute less cash
flow to AEI in 2008 onwards. As of fiscal year end 2007,
Elektro's credit metrics were strong with low leverage of total
debt to EBITDA of 0.9.
AEI owns and operates energy infrastructure businesses in power
generation, power distribution, natural gas transportation and
services, natural gas distribution and retail fuel. AEI's
portfolio, directly or indirectly, consists of 37 companies in
19 countries, most of which are located in Latin America. As of
fiscal 2007, AEI's largest asset is Brazilian electric
distribution company, Elektro, which represents approximately
54% of consolidated EBITDA, and 58% of cash flows from
subsidiaries to parent company AEI.
Incorporated in the Cayman Islands, AEI is an international
holding company of investment interests in a globally
diversified portfolio of 37 companies that engage in natural gas
distribution, transportation, and services; power generation and
distribution, and retail fuel. AEI's businesses are located
within 19 countries, which are primarily speculative grade
emerging market economies. In aggregate, the group's power
infrastructure serves the power needs of approximately 6 million
customers worldwide. A wholly owned subsidiary of AEI, AEI
Services LLC has offices in Houston, Texas.
LEVIN EQUITY 360: To Hold Final Shareholders Meeting on June 30
---------------------------------------------------------------
Levin Equity 360 Offshore Fund Ltd. will hold its final
shareholders meeting on June 30, 2008, at 10:00 a.m., at the
offices of Walkers SPV Limited, Walker House, 87 Mary Street,
George Town, Grand Cayman, Cayman Islands.
These matters will be taken up during the meeting:
1) accounting of the wind-up process, and
2) authorizing the liquidator of the company to retain the
records of the company for a period of five years from the
dissolution of the company, after which they may be
destroyed.
Levin Equity's shareholder agreed on May 15, 2008, to place the
company into voluntary liquidation under The Companies Law (2004
Revision) of the Cayman Islands.
The liquidator can be reached at:
Clarke Gray
BKF Asset Management, Inc.
One Rockefeller Plaza, Suite 300
New York, NY, 10020, USA
Contact for inquiries:
Virginia Czarnocki
Walkers
Walker House, 87 Mary Street
George Town, Grand Cayman KY1-9001
Cayman Islands
Telephone: (345) 814 4649
E-mail: Virginia.czarnocki@walkersglobal.com
OLD MUTUAL: Will Hold Final Shareholders Meeting on June 30
-----------------------------------------------------------
Old Mutual Global Sector Opportunities Fund Ltd. will hold its
final shareholders meeting on June 30, 2008, at 9:30 a.m., at
the offices of Close Brothers (Cayman) Limited, 4th Floor
Harbour Place, George Town, Grand Cayman.
These matters will be taken up during the meeting:
1) accounting of the wind-up process, and
2) authorizing the liquidator of the company to retain the
records of the company for a period of five years from the
dissolution of the company, after which they may be
destroyed.
Old Mutual's shareholder agreed on May 2, 2008, to place the
company into voluntary liquidation under The Companies Law (2004
Revision) of the Cayman Islands.
The liquidators can be reached at:
John Sutlic and Warren Keens
c/o Close Brothers (Cayman) Limited
Fourth Floor, Harbour Place
P.O. Box 1034, Grand Cayman,
Cayman Islands
Contact for inquiries:
Kim Charaman
Telephone: (345) 949 8455
Fax: (345) 949 8499
OLD MUTUAL GLOBAL: Sets Final Shareholders Meeting on June 30
-------------------------------------------------------------
Old Mutual Global Sector Opportunities Master Fund Ltd. will
hold its final shareholders meeting on June 30, 2008, at
9:00 a.m., at the offices of Close Brothers (Cayman) Limited,
4th Floor Harbour Place, George Town, Grand Cayman.
These matters will be taken up during the meeting:
1) accounting of the wind-up process, and
2) authorizing the liquidator of the company to retain the
records of the company for a period of five years from the
dissolution of the company, after which they may be
destroyed.
Old Mutual's shareholder agreed on May 2, 2008, to place the
company into voluntary liquidation under The Companies Law (2004
Revision) of the Cayman Islands.
The liquidators can be reached at:
John Sutlic and Warren Keens
c/o Close Brothers (Cayman) Limited
Fourth Floor, Harbour Place
P.O. Box 1034, Grand Cayman,
Cayman Islands
Contact for inquiries:
Kim Charaman
Telephone: (345) 949 8455
Fax: (345) 949 8499
PARMALAT SPA: Can Seek Damages in Parma Case, Judge Rules
---------------------------------------------------------
Judge Eleonora Fiengo of a court in Parma, Italy, has issued a
ruling granting Parmalat S.p.A. and around 30,000 individual
investors the right to seek compensation in a criminal trial
over the company's collapse in December 2003, Sara Gay Forden
writes for Bloomberg News.
Parmalat founder Calisto Tanzi and 23 others are charged with
fraudulent bankruptcy and criminal association that carry a
maximum 15 years in prison.
As previously reported in the TCR-Europe, Parmalat chief
executive Enrico Bondi will seek EUR14 billion in damages.
Marco De Luca, a lawyer for Mr. Bondi, justified the amount to
the "exceptional seriousness and causal effect that these
matters had on the entire Parmalat fraud."
About Parmalat
Headquartered in Milan, Italy, Parmalat S.p.A.
-- http://www.parmalat.net/-- sells nameplate milk products
that can be stored at room temperature for months. It also has
about 40 brand product lines, which include yogurt, cheese,
butter, cakes and cookies, breads, pizza, snack foods and
vegetable sauces, soups and juices.
The company's U.S. operations filed for chapter 11 protection on
Feb. 24, 2004 (Bankr. S.D.N.Y. Case No. 04-11139). Gary
Holtzer, Esq., and Marcia L. Goldstein, Esq., at Weil Gotshal &
Manges LLP, represent the Debtors. When the U.S. Debtors filed
for bankruptcy protection, they reported more than US$200
million in assets and debts. The U.S. Debtors emerged from
bankruptcy on April 13, 2005.
Parmalat S.p.A. and its Italian affiliates filed separate
petitions for Extraordinary Administration before the Italian
Ministry of Productive Activities and the Civil and Criminal
District Court of the City of Parma, Italy on Dec. 24, 2003.
Dr. Enrico Bondi was appointed Extraordinary Commissioner in
each of the cases. The Parma Court has declared the units
insolvent.
On June 22, 2004, Dr. Bondi filed a Sec. 304 Petition, Case No.
04-14268, in the United States Bankruptcy Court for the Southern
District of New York.
Parmalat has three financing arms: Dairy Holdings Ltd., Parmalat
Capital Finance Ltd., and Food Holdings Ltd. Dairy Holdings and
Food Holdings are Cayman Island special-purpose vehicles
established by Parmalat S.p.A. The Finance Companies are under
separate winding up petitions before the Grand Court of the
Cayman Islands. Gordon I. MacRae and James Cleaver of Kroll
(Cayman) Ltd. serve as Joint Provisional Liquidators in the
cases. On Jan. 20, 2004, the Liquidators filed Sec. 304
petition, Case No. 04-10362, in the United States Bankruptcy
Court for the Southern District of New York. In May 2006, the
Cayman Island Court appointed Messrs. MacRae and Cleaver as
Joint Official Liquidators. Gregory M. Petrick, Esq., at
Cadwalader, Wickersham & Taft LLP, and Richard I. Janvey, Esq.,
at Janvey, Gordon, Herlands Randolph, represent the Finance
Companies in the Sec. 304 case.
The Honorable Robert D. Drain presides over the Parmalat
Debtors' U.S. cases. On June 21, 2007, the U.S. Court granted
Parmalat permanent injunction.
POWERASE TECHNOLOGY: Holds Final Shareholders Meeting on June 30
----------------------------------------------------------------
Powerase Technology Holding Ltd. will hold its final
shareholders meeting on June 30, 2008, at the offices of Walkers
SPV Limited, Walker House, 87 Mary Street, George Town, Grand
Cayman, Cayman Islands.
These matters will be taken up during the meeting:
1) accounting of the wind-up process, and
2) hearing any explanation that may be given by the
Liquidator.
Powerase Technology's shareholder agreed on May 16, 2008, to
place the company into voluntary liquidation under The Companies
Law (2004 Revision) of the Cayman Islands.
The liquidator can be reached at:
Tung Hung-Szu
c/o Walkers SPV Limited
Walkers House, 87 Mary Street
P.O. Box 265, George Town,
Grand Cayman, Cayman Islands
Contact for inquiries:
Michael Makridakis
Telephone: 914 4205
QUANTEK SPC: To Hold Final Shareholders Meeting on June 30
----------------------------------------------------------
Quantek SPC will hold its final shareholders meeting on June 30,
2008, at 10:00 a.m., at the offices of Bodden & Bodden,
Attorneys-at-law, 802 Pavillion Commercial Centre, P.O. Box
10335 Grand Cayman KY1-1108, Cayman Islands.
These matters will be taken up during the meeting:
1) accounting of the wind-up process,
2) hearing any explanation that may be given by the
Liquidator, and
3) manner in which the books, accounts and documentation of
the company and of the Liquidator should be maintained and
subsequently disposed.
Quantek's shareholder agreed on May 16, 2008, to place the
company into voluntary liquidation under The Companies Law (2004
Revision) of the Cayman Islands.
The liquidator can be reached at:
Angelyn Hernandez
c/o Bodden & Bodden
802 Pavillion Commercial Centre
P.O. Box 10335, Grand Cayman,
Cayman Islands
RCL CAPITAL: Will Hold Final Shareholders Meeting on June 30
------------------------------------------------------------
RCL Capital Offshore Fund Ltd. will hold its final shareholders
meeting on June 30, 2008, at 10:00 a.m., at the offices of
Walkers SPV Limited, Walker House, 87 Mary Street, George Town,
Grand Cayman, Cayman Islands.
These matters will be taken up during the meeting:
1) accounting of the wind-up process, and
2) authorizing the liquidator of the company to retain the
records of the company for a period of five years from the
dissolution of the company, after which they may be
destroyed.
RCL Capital's shareholder agreed on May 15, 2008, to place the
company into voluntary liquidation under The Companies Law (2004
Revision) of the Cayman Islands.
The liquidator can be reached at:
Clarke Gray
BKF Asset Management, Inc.
One Rockefeller Plaza, Suite 300
New York, NY, 10020, USA
Contact for inquiries:
Virginia Czarnocki
Walkers
Walker House, 87 Mary Street
George Town, Grand Cayman KY1-9001
Cayman Islands
Telephone: (345) 814 4649
E-mail: Virginia.czarnocki@walkersglobal.com
RITCHIE CONVERTIBLE: Holds Final Shareholders Meeting on June 30
----------------------------------------------------------------
Ritchie Convertible Arbitrage Trading Ltd. will hold its final
shareholders meeting on June 30, 2008, at 2:45 p.m., at the
offices of Avalon Management Limited, Third Floor, Zephyr House,
Mary Street, P.O. Box 715, Grand Cayman KY1-1107, Cayman
Islands.
These matters will be taken up during the meeting:
1) accounting of the wind-up process,
2) hearing any explanation that may be given by the
Liquidator, and
3) manner in which the books, accounts and documentation of
the company and of the Liquidator should be maintained and
subsequently disposed.
Ritchie Convertible's shareholder agreed on May 15, 2008, to
place the company into voluntary liquidation under The Companies
Law (2004 Revision) of the Cayman Islands.
The liquidator can be reached at:
Avalon Management Limited
Third Floor, Zephyr House
Mary Street, P.O. Box 715,
Grand Cayman, Cayman Islands
RITCHIE LONG/SHORT: Sets Final Shareholders Meeting on June 30
--------------------------------------------------------------
Ritchie Long/Short Global Trading Ltd. will hold its final
shareholders meeting on June 30, 2008, at 2:45 p.m., at the
offices of Avalon Management Limited, Third Floor, Zephyr House,
Mary Street, P.O. Box 715, Grand Cayman KY1-1107, Cayman
Islands.
These matters will be taken up during the meeting:
1) accounting of the wind-up process,
2) hearing any explanation that may be given by the
Liquidator, and
3) manner in which the books, accounts and documentation of
the company and of the Liquidator should be maintained and
subsequently disposed.
Ritchie Long/Short's shareholder agreed on May 12, 2008, to
place the company into voluntary liquidation under The Companies
Law (2004 Revision) of the Cayman Islands.
The liquidator can be reached at:
Avalon Management Limited
Third Floor, Zephyr House
Mary Street, P.O. Box 715,
Grand Cayman, Cayman Islands
RITCHIE MAPLE: Will Hold Final Shareholders Meeting on June 30
--------------------------------------------------------------
Ritchie Maple Trading Ltd. will hold its final shareholders
meeting on June 30, 2008, at 2:45 p.m., at the offices of Avalon
Management Limited, Third Floor, Zephyr House, Mary Street, P.O.
Box 715, Grand Cayman KY1-1107, Cayman Islands.
These matters will be taken up during the meeting:
1) accounting of the wind-up process,
2) hearing any explanation that may be given by the
Liquidator, and
3) manner in which the books, accounts and documentation of
the company and of the Liquidator should be maintained and
subsequently disposed.
Ritchie Maple's shareholder agreed on May 12, 2008, to place the
company into voluntary liquidation under The Companies Law (2004
Revision) of the Cayman Islands.
The liquidator can be reached at:
Avalon Management Limited
Third Floor, Zephyr House
Mary Street, P.O. Box 715,
Grand Cayman, Cayman Islands
RITCHIE MM CENT: To Hold Final Shareholders Meeting on June 30
--------------------------------------------------------------
Ritchie MM Cent Holdings Ltd. will hold its final shareholders
meeting on June 30, 2008, at 2:45 p.m., at the offices of Avalon
Management Limited, Third Floor, Zephyr House, Mary Street, P.O.
Box 715, Grand Cayman KY1-1107, Cayman Islands.
These matters will be taken up during the meeting:
1) accounting of the wind-up process,
2) hearing any explanation that may be given by the
Liquidator, and
3) manner in which the books, accounts and documentation of
the company and of the Liquidator should be maintained and
subsequently disposed.
Ritchie MM Cent's shareholder agreed on May 15, 2008, to place
the company into voluntary liquidation under The Companies Law
(2004 Revision) of the Cayman Islands.
The liquidator can be reached at:
Avalon Management Limited
Third Floor, Zephyr House
Mary Street, P.O. Box 715,
Grand Cayman, Cayman Islands
RITCHIE REAL ESTATE: Sets Final Shareholders Meeting on June 30
---------------------------------------------------------------
Ritchie Real Estate Financing Ltd. will hold its final
shareholders meeting on June 30, 2008, at 2:45 p.m., at the
offices of Avalon Management Limited, Third Floor, Zephyr House,
Mary Street, P.O. Box 715, Grand Cayman KY1-1107, Cayman
Islands.
These matters will be taken up during the meeting:
1) accounting of the wind-up process,
2) hearing any explanation that may be given by the
Liquidator, and
3) manner in which the books, accounts and documentation of
the company and of the Liquidator should be maintained and
subsequently disposed.
Ritchie Real Estate's shareholder agreed on May 15, 2008, to
place the company into voluntary liquidation under The Companies
Law (2004 Revision) of the Cayman Islands.
The liquidator can be reached at:
Avalon Management Limited
Third Floor, Zephyr House
Mary Street, P.O. Box 715,
Grand Cayman, Cayman Islands
RITCHIE RML CAPITAL: Final Shareholders Meeting Is on June 30
-------------------------------------------------------------
Ritchie RML Capital Ltd. will hold its final shareholders
meeting on June 30, 2008, at 2:45 p.m., at the offices of Avalon
Management Limited, Third Floor, Zephyr House, Mary Street, P.O.
Box 715, Grand Cayman KY1-1107, Cayman Islands.
These matters will be taken up during the meeting:
1) accounting of the wind-up process,
2) hearing any explanation that may be given by the
Liquidator, and
3) manner in which the books, accounts and documentation of
the company and of the Liquidator should be maintained and
subsequently disposed.
Ritchie RML Capital's shareholder agreed on May 12, 2008, to
place the company into voluntary liquidation under The Companies
Law (2004 Revision) of the Cayman Islands.
The liquidator can be reached at:
Avalon Management Limited
Third Floor, Zephyr House
Mary Street, P.O. Box 715,
Grand Cayman, Cayman Islands
RITCHIE RML HOLDINGS: Sets Final Shareholders Meeting on June 30
----------------------------------------------------------------
Ritchie RML Holdings Ltd. will hold its final shareholders
meeting on June 30, 2008, at 2:45 p.m., at the offices of Avalon
Management Limited, Third Floor, Zephyr House, Mary Street, P.O.
Box 715, Grand Cayman KY1-1107, Cayman Islands.
These matters will be taken up during the meeting:
1) accounting of the wind-up process,
2) hearing any explanation that may be given by the
Liquidator, and
3) manner in which the books, accounts and documentation of
the company and of the Liquidator should be maintained and
subsequently disposed.
Ritchie RML Holdings' shareholder agreed on May 12, 2008, to
place the company into voluntary liquidation under The Companies
Law (2004 Revision) of the Cayman Islands.
The liquidator can be reached at:
Avalon Management Limited
Third Floor, Zephyr House
Mary Street, P.O. Box 715,
Grand Cayman, Cayman Islands
SIR LAN INVESTMENTS: Final Shareholders Meeting Is on June 30
-------------------------------------------------------------
Sir Lan Investments Ldc. will hold its final shareholders
meeting on June 30, 2008, at 2:45 p.m., at the offices of Avalon
Management Limited, Third Floor, Zephyr House, Mary Street, P.O.
Box 715, Grand Cayman KY1-1107, Cayman Islands.
These matters will be taken up during the meeting:
1) accounting of the wind-up process,
2) hearing any explanation that may be given by the
Liquidator, and
3) manner in which the books, accounts and documentation of
the company and of the Liquidator should be maintained and
subsequently disposed.
Sir Lan Investments' shareholder agreed on May 15, 2008, to
place the company into voluntary liquidation under The Companies
Law (2004 Revision) of the Cayman Islands.
The liquidator can be reached at:
Avalon Management Limited
Third Floor, Zephyr House
Mary Street, P.O. Box 715,
Grand Cayman, Cayman Islands
=========
C H I L E
=========
COMPANIA SUD: S&P's Negative Outlook Reflects Market Challenges
---------------------------------------------------------------
Standard & Poor's Ratings Services' rating on shipping company,
Compania Sud Americana de Vapores reflects its exposure to the
highly cyclical nature of the containership industry, the
company's aggressive fleet composition, and the weaker-than-
peers credit measures on a lease-adjusted basis. These factors
are partially offset by Compania Sud's strong market position in
the Americas, its smooth debt profile, and strong liquidity.
Compania Sud Americana is the largest containership company in
Latin America, with services covering east-west, intra-America,
and Asian routes. With more than 60% of its revenues coming
from the containership business segment and given the share of
its fleet under long-term charter contracts, the company's
profit margins are more exposed to sudden market downturns than
are competitors with larger weights of owned fleet.
Since second-quarter 2007, the containership market has partly
recovered from 2006's adverse conditions, when tariff levels
sharply decreased mainly as a result of the imbalance between
supply and demand. Conditions for 2008 and 2009 in the industry
are still uncertain and remain a source of concern. In
particular, S&P sees overcapacity in supply, the sharp increase
in bunker costs, and lower growth rates in trade in certain
routes as the key negatives for the medium term.
During the 12 months ended March 2008, the combination of tariff
recovery and the cost reduction plan the company put in place
resulted in a slight improve in operating lease-adjusted EBITDA
margin, reaching 5.7% compared to 5.5% in 2007. S&P expects the
company to maintain its current, prudent cost-management program
while partly replacing its chartered fleet with a larger share
of owned vessels, achieving a better fleet balance.
Consequently, S&P expects Compania Sud's profitability--measured
by operating lease-adjusted EBITDA margin--to remain in the 5%-
7% range in the medium term.
The company's key credit measures are likely to continue being
exposed to pressure in the short term due to the challenges of
the containership market. Compania Sud's operating lease-
adjusted funds from operations (FFO) accounted for US$435
million during the 12 months ended March 31, 2008, compared with
US$398 million in 2007 and US$190 million in 2006. In contrast,
the operating lease-adjusted FFO-to-debt ratio remains at 2007
levels. Operating lease-adjusted debt increased mainly due to
higher charting costs, reaching 26.4% for the 12 months ended
March 2008, compared to 26.8% in 2007 and 14.7% in 2006.
During first-quarter 2008, the company's capital expenditure
(capex) plan amounted to more than US$270 million, which was
partially funded with cash holdings for approximately US$150
million. S&P will continue to monitor capex and their
financing. In this sense, rating stability will be conditioned
by S&P's perception of financial flexibility, which could be
affected by further reduction in the cash position. The bulk of
Compania Sud's capex program involves four vessels of 12,000 20-
foot equivalent units (TEUs) each and three vessels of 6,300
TEUs each. This represents a significant addition to its
currently owned fleet capacity and gives the company the
flexibility to better adjust its fleet composition using the
larger and more efficient vessels on the most competitive
routes. The funding for the new vessels is already in place.
Compania Sud Americana's financial policy is moderate, given
that the company maintains very low on-balance-sheet debt and
strong liquidity levels. As the company increases owned vessels
relative to chartered ones, its on-balance-sheet debt should
increase in the medium term, partially compensated by a
reduction in charter expenses.
Liquidity
Compania Sud's liquidity is strong, mainly due to its
still-significant cash position, the availability of US$700
million in revolving bank lines, and a smooth debt profile. The
company has traditionally maintained a strong liquidity profile
that S&P considers a cornerstone for container shipping
companies, especially considering the large charted portion of
the company's fleet.
Although as of March 31, 2008, the company's cash holdings
accounted for US$387 million (a significant decrease from the
US$600 million average in 2005-2007), S&P expects reported cash
balances to consistently recover in the short term, as the
company's board has approved a US$200 million equity infusion to
be completed from 2008 to 2010.
Outlook
The negative outlook reflects Compania Sud Americana's market
challenges during the next quarters to continue improving its
profitability and to reverse its weak performance of the past
two years. S&P considers the company's profitability recovery
during the second half of 2007 and first-quarter 2008 as a key
factor in maintaining the current ratings. Nevertheless, if the
company fails to achieve operating lease-adjusted EBITDA margins
of at least 4% in fiscal 2008, operating lease-adjusted FFO-to-
net debt ratios higher than 40%, or its currently strong
liquidity profile deteriorates considerably including additional
decreases in current cash position, S&P could lower the ratings.
The outlook could return to stable if the company improves
operating lease-adjusted EBITDA margins to more than 6% while
maintaining its strong liquidity stance.
Headquartered in Valparaiso, Chile, Compania Sud Americana De
Vapores SA -- http://www.csav.cl-- features a comprehensive
service for general cargo, bulk cargo, fresh and frozen products
and vehicles, using both owned and chartered vessels. The
company owns vessels specially designed for frozen cargo, cars,
bulk cargo and forest products. It provides these services in
conjunction with its subsidiaries: Sudamericana Agencias Aereas
y Maritimas S.A., as a maritime forwarding agency, and COSAN, a
container terminal in Santiago.
=================
G U A T E M A L A
=================
BRITISH AIRWAYS: Selling Air Mauritius Stake for GBP3.2 Million
---------------------------------------------------------------
British Airways Plc has reached an agreement to sell its 10.5%
share in Air Mauritius for GBP3.2 million.
The airline is selling its 3.84% share in Air Mauritius Ltd. to
the Mauritian government and its 13.24% share in Air Mauritius
Holding Company Limited to existing shareholders.
British Airways has held a 10.5% share in Air Mauritius since
1973.
"Our investment in Air Mauritius no longer forms a core part of
our business strategy," Robbie Baird, British Airways' area
general manager Asia Pacific and the airline's representative on
the Air Mauritius board, said. "We invested in the airline when
it was a start-up airline. It is now a successful carrier,
operating to the highest standards and no longer requires our
involvement and support."
"I'm pleased to say that this sale has been done with the full
co-operation of Air Mauritius and the Mauritian government,"
Mr. Baird added.
Completion of the sale is expected within July 2008.
About British Airways
Headquartered in West Drayton, United Kingdom, British Airways
Plc -- http://www.ba.com/-- operates of international and
domestic scheduled and charter air services for the carriage of
passengers, freight and mail, and provides of ancillary
services. The British Airways group consists of British Airways
plc and a number of subsidiary companies including in particular
British Airways Holidays Ltd. and British Airways Travel
Shops Ltd. BA has offices in India and Guatemala.
* * *
British Airways Plc carries a senior unsecured debt rating of
Ba1 from Moody's Investors' Service with a stable outlook.
Ratings apply to date.
=========
H A I T I
=========
DYNCORP INTERNATIONAL: Moody's Affirms CFR at B1
------------------------------------------------
Moody's Investors Service has affirmed DynCorp International,
LLC's Corporate Family and Probability of Default Ratings of B1,
but revised the outlook to positive. At the same time, the
rating agency assigned Ba2 ratings to US$450 million of new
secured bank credit facilities and affirmed the B3 rating on the
company's existing subordinated notes.
The company's liquidity rating of SGL-2 was also affirmed. The
actions follow DynCorp's plans to refinance its current secured
bank debt through a new US$200 million term loan and a US$250
million revolving credit facility. Proceeds from the new term
loan and approximately US$101 million of borrowings under the
new revolving credit will be used to prepay some US$301 million
outstanding under its current bank term loan.
The new bank facilities are being arranged on a best efforts
basis. Should the full amounts be obtained, DynCorp's existing
US$120 million revolving credit facility would be cancelled and
remaining outstandings under its bank term loan would be
prepaid. Upon closing of the transactions as contemplated,
ratings on the company's current bank facilities will be
withdrawn.
The financing will not result in any material increase in
indebtedness on a pro forma basis and is expected to have only a
minor impact on future interest expense and after-tax cash flows
given the assumed higher applicable margins compared to existing
pricing.
The new bank facilities will have expiry dates some 18 months
beyond the current maturity of DynCorp's bank debt. DynCorp's
existing term loan would otherwise begin to appreciably amortize
in July 2010. Unused amounts under a larger revolving credit
facility will increase slightly.
Consequently, the transactions are considered beneficial to the
firm's liquidity and debt maturity profile. As a result,
DynCorp's B1 Corporate Family and Probability of Default ratings
have been affirmed.
The positive outlook recognizes higher interest coverage metrics
and lower leverage which have developed over the last year or so
as well as expectations that these debt protection measures are
likely to strengthen over time given the increase in DynCorp's
award backlog.
The Ba2 ratings on the new secured bank credit facilities, two
notches above the underlying Corporate Family Rating, recognize
their senior status above approximately US$292 million of
continuing subordinated debt and other unsecured non-debt
liabilities. The B3 rating on the subordinated notes recognizes
this junior status in the current capital structure.
The SGL-2 Speculative Grade Liquidity rating designates good
liquidity over the coming twelve months. At the end of March
2008, the company had approximately US$85 million of balance
sheet cash and temporary investments and, on a pro forma basis
for the new financing, would have less than US$1 million of
current maturities and short-term debt.
Moody's anticipates that DynCorp will experience incremental
working capital requirements over the coming year in line with
higher revenues. After minimal levels of capital expenditures,
free cash flow should be roughly break-even but will vary
quarter-by-quarter driven by growth incurred and the timing and
receipt of award fees.
The company's external resources would marginally increase
should the refinancing close as proposed since roughly US$125
million of the new revolving credit facility will be available
after some US$101 million of borrowings at the time of closing
and assuming US$24 million of letters of credit would be issued
against its commitment.
Financial maintenance covenants are expected to continue with
maximum debt/EBITDA, minimum EBITDA/interest, maximum capital
expenditures and an asset coverage requirement. Sufficient
cushion at the outset is expected. Bank liens against
substantially all of the company's domestic material assets will
constrict the ability to arrange alternative liquidity.
Ratings affirmed with updated loss given default assessments
-- Corporate Family, B1
-- Probability of Default, B1
-- Subordinated notes, B3 (LGD-5, 77%)
-- Speculative Grade Liquidity rating, SGL-2
Ratings assigned:
-- US$250 million secured revolving credit, Ba2 (LGD-2, 20%)
-- US$200 million secured term loan, Ba2 (LGD-2, 20%)
Ratings affirmed but to be withdrawn upon closing of new
facilities:
-- US$120 million revolving credit facility, Ba2 (LGD-2, 19%)
-- US$301 million term loan, Ba2 (LGD-2, 19%)
The last rating action was on Sept. 25, 2006 at which time
ratings were adjusted to incorporate Moody's Loss Given Default
methodology.
DynCorp International Inc. -- http://www.dyn-intl.com/-- (NYSE:
DCP) through its operating company DynCorp International LLC, is
a provider of specialized mission-critical technical services,
mostly to civilian and military government agencies. It
operates major programs in law enforcement training and support,
security services, base operations, aviation services and
operations, and logistics support worldwide. Headquartered in
Falls Church, Virginia, DynCorp International LLC has
approximately 15,000 employees worldwide including Haiti.
DYNCORP INTERNATIONAL: S&P Rates Proposed US$450MM Facility BB+
---------------------------------------------------------------
Standard & Poor's Ratings Services has affirmed its 'BB-' long-
term corporate credit rating on government services provider
DynCorp International LLC. The outlook is revised to positive
from stable.
At the same time, S&P assigned issue-level and recovery ratings
to the company's proposed US$450 million secured credit
facility. The issue-level rating is 'BB+'. The recovery rating
on this debt is '1', indicating an expectation of a very high
(90%-100%) recovery in the event of payment default. The
proceeds from the new facility will be used to refinance the
existing credit facility, the ratings on which will be withdrawn
when the transaction closes.
"The outlook revision reflects expectations that a significant
increase in revenues and earnings following the award of two
large contracts with the U.S. Army will result in improving
credit protection measures in the next year," said Standard &
Poor's credit analyst Christopher DeNicolo. In February 2008, a
joint venture in which DynCorp International has a 51% stake
(Global Linguist Solutions) won a five-year contract (INSCOM)
that could be worth up to US$4.6 billion to provide translation
services for the U.S. Army in Iraq. In April 2008, DynCorp
International was one of three winners of a contract (LOGCAP) to
provide logistics services to the military in the Middle East.
While the 10-year contract has a US$5 billion-a-year ceiling,
S&P do not expect actual annual revenues to reach that level.
The new contracts will also improve DynCorp International's
program diversity, which is still somewhat limited.
The ratings on DynCorp International reflect limited contract
diversity; a weak, but improving, financial profile; the risky
nature of some of its operations, and possible changes in U.S.
foreign policy under a new President. The ratings benefit
somewhat from the firm's leading market positions, high demand
for its services, and a fairly stable revenue base. DynCorp
International is a leading provider of defense technical
services and government outsourced solutions.
The Falls Church, Virginia-based company operates in two
segments: Government Services (GS, about 65% of revenues) and
Maintenance and Technical Support Services (MTSS, 35%). Starting
April 1, 2008, GS was split into two segments: International
Security Services (ISS; about 51% of 2008 revenues) and
Logistics and Construction Management (LCM, 13%). ISS provides
international police, drug eradication, and peacekeeping support
services, as well as the new INSCOM contract. LCM provides
infrastructure engineering and construction management and
logistic support services, including LOGCAP. MTSS provides
aircraft maintenance, logistics support, and aircrew training.
The expected significant increase in revenues and earnings from
the INSCOM and LOGCAP contracts, as well as generally positive
prospects for key markets, is likely to result in improving
credit protection measures. S&P could raise the ratings if
DynCorp International's debt to EBITDA falls below 3x and funds
from operations to debt increases to about 25% in the next year.
S&P could revise the outlook to stable if funding for key
programs declines or leverage increases materially to fund new
contracts or acquisitions. S&P will evaluate the impact on
DynCorp from any changes in U.S. defense or foreign policy,
especially regarding Iraq, after the new Presidential
administration takes office in early 2009.
DynCorp International Inc. -- http://www.dyn-intl.com/-- (NYSE:
DCP) through its operating company DynCorp International LLC, is
a provider of specialized mission-critical technical services,
mostly to civilian and military government agencies. It
operates major programs in law enforcement training and support,
security services, base operations, aviation services and
operations, and logistics support worldwide. Headquartered in
Falls Church, Virginia, DynCorp International LLC has
approximately 15,000 employees worldwide including Haiti.
=============
J A M A I C A
=============
AIR JAMAICA: Will Change Its Entire Board
-----------------------------------------
The entire board at Air Jamaica will resign, The Jamaica
Observer reports, citing an unnamed source.
Radio Jamaica relates that Marcia Forbes, a member of Air
Jamaica's board, said she got a letter on Tuesday from Minister
Without Portfolio in the Finance Ministry Don Wehby, asking her
to submit her resignation by Monday next week. Ms. Forbes said
she has no problem resigning. According to Ms. Forbes, she
tried her best to resolve some of the internal and external
communications problems she found at Air Jamaica, and was keen
on changing "the culture of fear, mistrust and misinformation
that permeated the Lovebird's systems and affected the
management/staff relations and the airline's public image."
The Observer relates that its source said there were increasing
concerns within the Jamaican government that Air Jamaica is
being poorly managed. The source confirmed that a new board is
being put in place and the new members would be appointed in a
few weeks.
The government decided to change the board in preparation for
Air Jamaica's divestment, The Observer says, citing another
source who is close to developments at Air Jamaica. The
government wanted to turn Air Jamaica into a "lean operation in
preparation for divestment" in March 2009, the source added.
The Observer relates that the government has reportedly been
displeased with how Air Jamaica is being managed. The
government hasn't been impressed with the performance of Air
Jamaica's Chairperson Shirley Williams, sources inside the
airline said. On June 5, 2008, Ms. Williams ordered a flight to
return to board an Inter-American Development Bank official
after the plane's doors were closed, which displeased the
government, the sources added.
Noel Hylton's resignation from Air Jamaica's board was a sign of
the government's intention to make changes in the airline's
management, The Observer notes, citing the sources.
Paul Lalor and Richard Byles, who are current members of the
board, would likely be asked to serve again, The Observer
states. The government was impressed with their performance,
the report explained.
Radio Jamaica reports that Information Minister Olivia Grange
said at a post Cabinet media briefing that she was unaware of
board members being forced to resign. "As far as I know, the
board has not been disbanded," Minister Grange said. Minister
Wehby will make a statement on the issue, Minister Grange added.
Minister Wehby will meet with the board members this Friday,
Radio Jamaica notes. The minister left Jamaica last Tuesday for
meetings in Washington, U.S.A.
Headquartered in Kingston, Jamaica, Air Jamaica --
http://www.airjamaica.com/-- was founded in 1969. It flies
passengers and cargo to almost 30 destinations in the Caribbean,
Europe, and North America. Air Jamaica offers vacation packages
through Air Jamaica Vacations. The company closed its intra-
island services unit, Air Jamaica Express, in October 2005. The
Jamaican government assumed full ownership of the airline after
an investor group turned over its 75% stake in late 2004. The
government had owned 25% of the company after it went private in
1994. The Jamaican government does not plan to own Air Jamaica
permanently.
* * *
As reported in the Troubled Company Reporter-Latin America on
June 12, 2007, Moody's Investors Service assigned a rating of B1
to Air Jamaica Limited's guaranteed senior unsecured notes.
On July 21, 2006, Standard & Poor's Rating Services assigned a
"B" long-term foreign issuer credit rating on Air Jamaica Ltd.,
which is equal to the long-term foreign currency sovereign
credit rating on Jamaica, based on the government's
unconditional guarantee of both principal and interest payments.
AIR JAMAICA: Gov't to Stop Shouldering Airline's Burden
-------------------------------------------------------
The Jamaican government can no longer shoulder Air Jamaica's
burden, Ingrid Brown at The Jamaica Observer reports, citing
Prime Minister Bruce Golding.
The Observer relates that Prime Minister Golding at the Jamaica
Exporters Association launch of National Export Week at the
Hilton Kingston Hotel, "I know the importance of Air Jamaica to
the country and tourism, and the passion that people feel
towards the airline, but we are losing 10 billion Jamaican
dollars on it. You ask me now, would you spend J$10 billion to
keep the airline flying or would you use that J$10 billion to
strengthen our productive capacity and to move the economy
forward? That is a decision that wouldn't require three minutes
of consideration." Air Jamaica's losses this year are expected
to surpass its US$170 million losses in 2007.
According to The Observer, Prime Minister Golding said the
cabinet decided last Monday "to strengthen the approach" to
guarantee that Air Jamaica can be privatized by March 31, 2009.
The Prime Minister said that there are still some things to be
done in getting Air Jamaica privatized by 2009.
The Observer relates that consultants have been engaged and the
due diligence work done. "We are getting ready to invite
potential investors and we are doing everything possible to see
if we can complete that exercise between now and March 31,"
Prime Minister Golding said.
Minister Without Portfolio in the Ministry of Finance, Don
Wehby, said the high price of oil has had an impact on some
investors who would be interested in Air Jamaica's divestment,
The Observer notes. The minister assured that there are still
few airlines interested due to Jamaica's geographic location.
According to the minister, there have been ongoing talks with
the airlines through the International Finance Corporation. The
minister believes that an investor can be found by
March 31, 2009. "I met with the IFC team last Thursday and they
believe a partner can be found by that time... they have not
said otherwise to me," Minister Wehby added.
The Observer states that the Jamaican government has hired GRA
Incorporated, a consulting firm in the aviation business. GRA
would submit a full report to the government that would address:
-- short-term fixes to improve operations of the
airline,
-- reorganization of the company, and
-- the management support needed to ensure that the
airline can be privatized within the projected
time frame.
Headquartered in Kingston, Jamaica, Air Jamaica --
http://www.airjamaica.com/-- was founded in 1969. It flies
passengers and cargo to almost 30 destinations in the Caribbean,
Europe, and North America. Air Jamaica offers vacation packages
through Air Jamaica Vacations. The company closed its intra-
island services unit, Air Jamaica Express, in October 2005. The
Jamaican government assumed full ownership of the airline after
an investor group turned over its 75% stake in late 2004. The
government had owned 25% of the company after it went private in
1994. The Jamaican government does not plan to own Air Jamaica
permanently.
* * *
As reported in the Troubled Company Reporter-Latin America on
June 12, 2007, Moody's Investors Service assigned a rating of B1
to Air Jamaica Limited's guaranteed senior unsecured notes.
On July 21, 2006, Standard & Poor's Rating Services assigned a
"B" long-term foreign issuer credit rating on Air Jamaica Ltd.,
which is equal to the long-term foreign currency sovereign
credit rating on Jamaica, based on the government's
unconditional guarantee of both principal and interest payments.
DIGICEL GROUP: Reports 39% Subscriber Increase in FY 2008
---------------------------------------------------------
Digicel Group Ltd. has ended its fiscal year (March 31,2008)
with 6.54 million customers, representing a 39 percent increase
compared to the same quarter in the previous fiscal year.
Operating across 23 markets, Digicel Group continues to
experience organic growth in existing markets while increasing
mobile penetration growth rates in new markets.
In November 2007, Digicel successfully launched operations in
Suriname, offering superior customer care, better value and
wider coverage while helping to drive mobile penetration growth
from 55 percent to close to 70 percent. Digicel already has a
presence in South America through its operations in Guyana and
French Guiana. Its Caribbean and Latin American GSM networks
also extend across the British West Indies, the Dutch Caribbean,
the French West Indies, Bermuda and El Salvador.
Digicel plans to further expand later this year with a pending
launch in the British Virgin Islands, while Digicel Central
America Holdings, a sister company to Digicel Group, prepares to
launch in Honduras and Panama. These launches will expand
Digicel's GSM network to 26 markets.
"We're very excited about our ability to sustain growth
opportunities in existing markets while picking up momentum in
new ones, and we've had one of our most successful financial
years to date," said Colm Delves, Digicel Group CEO. "We will
continue to put our customers first by offering them better
value, world-class customer care, new technology innovations and
attractive offerings based on the strength of our network."
Digicel's key milestones to date include:
Market Growth:
-- Digicel El Salvador reached its one-year anniversary
April 12, 2008, tripling its subscriber base and
increasing mobile penetration rates from approximately 30
to 61 percent in 12 months. Meanwhile, Digicel Central
America Holdings Ltd. won a competitive license bid to
operate a GSM mobile network in Panama in May 2008,
following its successful license bid in Honduras in
December 2007.
-- In November 2007, Digicel launched in the newly
liberalized market of Suriname and has since dramatically
gained market share of 30 percent in just seven months.
-- In May 2008, Digicel Haiti celebrated its second year of
operations becoming the leading brand in the country with
more than 2,000,000 customers. The Digicel Haiti
Foundation celebrated its one-year anniversary in March
2008, delivering on its initial commitment to build 20
primary schools across the country.
Interconnect:
-- In Trinidad & Tobago in May 2008, Digicel and TSTT signed
an interconnect agreement provisioning that they both pay
reciprocal and retroactive interconnect charges for
interconnection services provided since inception.This
agreement enables Trinidad and Tobago mobile users to send
and receive SMS and text messages from other mobile users
in the country. Both parties also signed an agreement in
relation to sharing space of their respective cellular
towers.
New Management:
-- Digicel continues to expand its senior management team
with several key appointments, hiring Jose Antonio
Rodriguez as Digicel El Salvador CEO in March 2008 and
promoting former CEO, Luis La Rocca, to Vice President of
Business Development for Digicel Central America. La Rocca
is responsible for spearheading expansion efforts across
the Central American region.
Digicel's investment in the Caribbean and the Central American
region exceeds US$2 billion. The company directly employs more
than 4,000 people across its 23 markets.
About Digicel Group
Launched in 2001, Digicel Group Ltd. -- www.digicelgroup.com --
says it has become the largest mobile telecommunications
operator in the Caribbean and a recent new entrant to the
Central American mobile market. Operations in 23 markets
include Anguilla, Antigua & Barbuda, Aruba, Barbados, Bermuda,
Bonaire, The Cayman Islands, Curacao, Dominica, El Salvador,
French Guiana, Grenada, Guadeloupe, Guyana, Haiti, Jamaica,
Martinique, St. Kitts & Nevis, St. Lucia, St. Vincent and the
Grenadines, Suriname, Turks and Caicos and Trinidad & Tobago.
Digicel directly employs more than 4,000 people.
* * *
As reported in the Troubled Company Reporter-Latin America on
June 4, 2008, Fitch Ratings affirmed its 'CCC+/RR5' ratings on
Digicel Group Limited's US$1 billion 8.875% senior subordinated
notes due 2015 and US$400 million 9.125/9.875% senior
subordinated toggle notes due 2015. Fitch said the rating
outlook is stable.
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.
DIGICEL GROUP: Confirms Interest in Costa Rican Mobile Market
-------------------------------------------------------------
Digicel Group Limited's spokesperson Maureen Rabbitt has
confirmed the firm's interest in launching operations in Costa
Rica, The Jamaica Gleaner reports.
As reported in the Troubled Company Reporter-Latin America on
June 20, 2008, Signals Telecom Consulting said that Digicel
Group is an important candidate for launching operations in
Costa Rica. The newly passed General Telecommunications Law
cleared the way for the entrance of new telecoms into the Costa
Rican mobile market. Signals Telecom said that Costa Rica is
attractive for telecoms due to:
-- low mobile teledensity (less than 40%);
-- high average revenue per unit levels (the highest in
Central America); and
-- absence of a prepaid market.
The Gleaner relates that Ms. Rabbitt said, "Digicel is
interested in entering the Costa Rica market as part of our
overall expansion across Central America. We see strong
opportunities for growth in the Central American market with
young populations, strong economies and low mobile penetration
rates."
Digicel Group -- www.digicelgroup.com -- was awarded a license
in Honduras in December 2007, making it Digicel's second market
in Central America following its launch in El Salvador in April
2007. The Caribbean Company operates in 23 markets across the
Caribbean. In May 2008 Digicel was awarded an additional
license in Panama and is committed to further expansion in the
Central America region.
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
June 4, 2008, Fitch Ratings affirmed its 'CCC+/RR5' ratings on
Digicel Group Limited's US$1 billion 8.875% senior subordinated
notes due 2015 and US$400 million 9.125/9.875% senior
subordinated toggle notes due 2015. Fitch said the rating
outlook is stable.
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
===========
DURA AUTOMOTIVE: Judge Rejects James Korth's Request
----------------------------------------------------
The Hon. Kevin J. Carey of the U.S. Bankruptcy Court for the
District of Delaware denies James W. Korth's request to keep
Dura Automotive Systems Inc. and its debtor-affiliates from
consummating the Revised Joint Plan of Reorganization pending
his appeal from the Bankruptcy Court's order confirming the
Plan.
The ruling came after the Court found that Mr. Korth failed to
prove any of the elements necessary to demonstrate entitlement
to a stay pending appeal.
Judge Carey ruled that Mr. Korth was unable to show (i) whether
he is likely to succeed on the merits, (ii) whether he will be
irreparably harmed absent a stay, (iii) whether the issuance of
astay will substantially injure the other parties-in-interest,
and (iv) where the public interest lies.
Judge Carey said during the June 5, 2008, hearing, that "public
interest requires Bankruptcy Courts to consider the good of the
case, as a whole, and not individual investment concerns. The
public interest cannot tolerate any scenario under which private
agendas can fort the maximization of value."
Accordingly, Judge Carey ruled that Mr. Korth is unlikely to
succeed in his Appeal and found that the public interest is
better served by allowing distributions under the Plan, and the
public interest, he said, outweighs any interest that Mr. Korth
might have individually in obtaining a stay of the confirmation
proceedings.
"Even if I were to determine that [Mr. Korth] were entitled to a
stay, I would require a bond," Judge Carey said during the
hearing. The Debtors, Judge Carey said, suggested that a
minimum of a US$380,000,000 bond be posted based on:
-- one year of professional fees and expenses at
US$72,000,000,
-- loss of senior lien claims at nearly US$80,000,000, and
-- the value of second lien claims at about US$228,000,000.
Judge Carey said Mr. Korth has not offered any evidence to the
contrary.
Before ruling on Mr. Korth's request for a stay, Judge Carey
considered arguments presented by the Debtors, the Official
Committee of Unsecured Creditors, the Informal Group of Second
Lien Lenders, and the Bank of New York Trust Company, N.A., who
opposed any stay of the confirmation proceedings, and Mr. Korth.
The Debtors told Judge Carey that Mr. Korth cannot plead
"irreparable harm" resulting from his own numerous months of
inaction since he has had more than ample opportunity to pursue
his investigation on the Debtors and their financial condition.
Moreover, the Debtors said there is no indication that
permitting the Revised Plan to be consummated will cause Mr.
Korth any harm, let alone irreparable harm.
"The Subordinated Notes are out of the money in any conceivable
scenario and the Senior Notes held by Mr. Korth will be helped,
not harmed, by the Court permitting the Revised Plan to become
effective," Jason M. Madron, Esq., at Richards, Layton & Finger,
P.A., in Wilmington, Delaware, on behalf of the Debtors, told
the Court.
Mr. Madron further told the Court that any failure by the
Debtors to promptly consummate the Revised Plan would damage
their future business prospects, which will also harm their
creditors, the vast majority of whom will receive their
recoveries in the form of equity in the Reorganized Debtors.
Any significant delay long enough to resolve an appeal would
almost certainly destroy the Debtors' exit financing
arrangements and lead to default under the Debtors' DIP
financing facilities, he said.
The Creditors Committee, the Second Lien Lenders, and BNY,
echoed the Debtors' arguments.
Mr. Korth, in defense of his stay request, maintained his Appeal
has merit since he did not receive any chance to put forth his
objections and respond to the Debtors' assertions and defenses
at the Confirmation Hearing. He also pointed out that the
Debtors refused to provide any information to answer his
interrogatory regarding the accountants and calculation of the
fixed charge coverage ratio. He also claimed that there may be
a problem concerning the proper issuance of the Senior Notes.
Mr. Korth told Judge Carey that he agrees with the Debtors that
a full stay may harm the Debtors' business. Thus, he told Judge
Carey to go ahead and allow the Debtors to emerge from
bankruptcy by mid-June 2008 in accordance with the Revised Plan.
However, Mr. Korth asked Judge Carey to direct the Debtors to
hold the new common stock in escrow pending the decision on his
appeal. He suggested that during the escrow period, each
stockholder will be allowed to vote his stock for board members
and other matters that will properly come before the board, but
that each stockholder may not sell his shares or receive any
cash distribution or dividend until a final determination is
made on his appeal.
The Debtors told the Court that not distributing the stock on or
about the effective date to the senior noteholders and to the
other general unsecured claims would result in a fundamentally
different economic result for those creditors than is
contemplated by the Plan of Reorganization.
The Creditors Committee said the restrictions suggested by
Mr. Korth on the equity would significantly decrease the value
of the equity going to unsecured creditors and would be a
fundamental change to the revised plan.
About DURA Automotive
Rochester Hills, Michigan-based DURA Automotive Systems Inc.
(Nasdaq: DRRA) -- http://www.DURAauto.com/-- is an independent
designer and manufacturer of driver control systems, seating
control systems, glass systems, engineered assemblies,
structural door modules and exterior trim systems for the global
automotive industry. The company is also a supplier of similar
products to the recreation vehicle and specialty vehicle
industries. DURA sells its automotive products to North
American, Japanese and European original equipment manufacturers
and other automotive suppliers.
The company has three locations in Asia -- China, Japan and
Korea. It has locations in Europe and Latin-America,
particularly in Mexico, Germany and the United Kingdom.
The Debtors filed for chapter 11 petition on Oct. 30, 2006,
(Bankr. D. Del. Case No. 06-11202). Marc Kieselstein, P.C.,
Esq., Roger James Higgins, Esq., and Ryan Blaine Bennett, Esq.,
at Kirkland & Ellis LLP are lead counsels for the Debtors'
bankruptcy proceedings. Daniel J. DeFranseschi, Esq., and Jason
M. Madron, Esq., at Richards Layton & Finger, P.A. Attorneys are
the Debtors' co-counsels. Baker & McKenzie acts as the Debtors'
special counsel. Togut, Segal & Segal LLP is the Debtors'
conflicts counsel. Miller Buckfire & Co., LLC is the Debtors'
investment banker. Glass & Associates Inc., gives financial
advice to the Debtor. Kurtzman Carson Consultants LLC handles
the notice, claims and balloting for the Debtors and Brunswick
Group LLC acts as their Corporate Communications Consultants for
the Debtors.
As of Jan. 31, 2008, the Debtor had US$1,503,682,000 in total
assets and US$1,623,632,000 in total liabilities.
On April 3, 2008, the Court approved the Debtors' revised
Disclosure Statement explaining their revised Chapter 11 plan of
reorganization.
(Dura Automotive Bankruptcy News, Issue No. 57; Bankruptcy
Creditors' Service Inc., http://bankrupt.com/newsstand/or
215/945-7000)
FRONTIER AIRLINES: Cuts Fleet, Jobs & Capacity Due to Fuel Costs
----------------------------------------------------------------
Frontier Airlines said it will trim capacity, planes and jobs to
deal with weakening economy and rising fuel costs, reports The
Associated Press.
Seat capacity will be reduced by 17 percent, beginning September
all the way through March. In mid-August, the airline will
phase out seven aircraft from its Airbus fleet, says Denver
Business Journal.
The airline, which has around 6,000 employees, further noted it
will cut an unspecified number of jobs in line with the capacity
reduction.
"These are very difficult but necessary moves to make, and we
put a lot of thought into them," Frontier President and CEO Sean
Menke said in a statement, according to reports. "We are
focused on weathering the significant storm that we and the rest
of the airline industry are facing with record fuel prices and a
slowing economy."
Frontier announced last week that starting Aug. 26, it will
permanently cut its two daily flights from Denver to Louisville,
Kentucky, says Denver Business Journal. The carrier also
disclosed seasonal reductions to four other destinations:
* One daily flight from Denver to LaGuardia Airport in New
York City starting Sept. 1.
* One daily flight from Denver to Philadelphia International
Airport starting Sept. 1.
* All flights from Denver to Anchorage International Airport
in Alaska starting Sept. 12.
* All flights from Denver to Vancouver International Airport
starting Sept. 14.
About Frontier Airlines Inc.
Headquartered in Denver, Colorado, Frontier Airlines Inc. --
http://www.frontierairlines.com/-- provide air transportation
for passengers and freight. They operate jet service carriers
linking their Denver, Colorado hub to 46 cities coast-to-coast,
8 cities in Mexico, and 1 city in Canada, well as provide
service from other non-hub cities, including service from 10
non-hub cities to Mexico. As of May 18, 2007 they operated 59
jets, including 49 Airbus A319s and 10 Airbus A318s.
The Debtor and its debtor-affiliates filed for Chapter 11
protection on April 10, 2008, (Bankr. S.D. N.Y. Case No.: 08-
11297 thru 08-11299.) Hugh R. McCullough, Esq., at Davis Polk &
Wardwell, represents the Debtors in their restructuring efforts.
Togul, Segal & Segal LLP is the Debtors' Conflicts Counsel,
Faegre & Benson LLP is the Debtors' Special Counsel, and Kekst
and Company is the Debtors' Communications Advisors. At Dec.
31, 2007, Frontier Airlines Holdings Inc. and its subsidiaries'
total assets was US$1,126,748,000 and total debts was
US$933,176,000.
GENERAL MOTORS: Taps Citibank to Review Hummer Brand Options
------------------------------------------------------------
General Motors Corp. hired Citibank to evaluate strategic
alternatives for the automaker's Hummer brand, including the
assessment of prospective buyers, Reuters reports, citing GM's
U.S. sales chief Mark LaNeve.
As related in the Troubled Company Reporter on June 5, 2008, GM
disclosed that it intended to undertake a strategic review of
the Hummer brand to determine its fit within the GM portfolio.
GM is considering all options, from a complete revamp of the
product lineup to a partial or complete sale of the brand. GM
CEO Rick Wagoner said the move is in response to the rapid rise
n oil prices and the resulting changes in the U.S., changes that
it believes are more structural than cyclical.
The Detroit Free Press disclosed that sales of the Hummer brand
dropped 62% in May, compared with May 2007 and sales of the
brand were off 36% January through May.
Separately, GM confirmed on Monday that it is offering 0%
financing for 72 months on most of its 2008 models or cash
rebates of up to US$7,000, The Wall Street Journal reports.
The offers should help dealers move some of the pickups and SUVs
they have in inventory, which have become hard to sell and are
rapidly falling in value, Mr. LaNeve was quoted by WSJ as
saying.
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.
General Motors Corporation offers products under the Chevrolet
brand in India through its wholly owned subsidiary, General
Motors India. GM India has 95 sales points and over 110 service
centers.
At March 31, 2008, GM's balance sheet showed total assets of
US$145,741,000,000 and total debts of US$186,784,000,000,
resulting in a stockholders' deficit of US$41,043,000,000.
Deficit, at Dec. 31, 2007, and March 31, 2007, was
US$37,094,000,000 and US$4,558,000,000, respectively.
* * *
As related in the Troubled Company Reporter on June 5, 2008,
Standard & Poor's Ratings Services said that its ratings on
General Motors Corp. (B/Negative/B-3) are not immediately
affected by the company's announcement that it will cease
production at four North American truck plants over the next two
years. These closures are in response to the re-energized shift
in consumer demand away from light trucks. GM previously said
only one shift was being eliminated at each of the four truck
plants. Production is being increased at plants producing small
and midsize cars, but the cash contribution margin from these
smaller vehicles is far less than that of light trucks.
GRAFTECH INTERNATIONAL: S&P Revises Outlook to Positive
-------------------------------------------------------
Standard & Poor's Ratings Services revised its outlook on
GrafTech International Ltd. to positive from stable.
At the same time, we raised the rating on the company's senior
unsecured notes to 'BB' from 'BB-' (one notch above the 'BB-'
corporate credit rating).
S&P revised the recovery rating to '2' from '4'. The new
ratings indicate the expectation of substantial (70% to 90%)
recovery in the event of a payment default. All other ratings,
including the company's 'BB-' corporate credit rating, were
affirmed.
The outlook revision reflects the company's strengthened
financial profile due to the combination of the recent
conversion into equity of its outstanding US$225 million notes
due 2024, good operational performance, and enhanced cash flow
generation supported by currently favorable market conditions.
Thus, the company's debt levels are expected to have decreased
to about US$100 million, resulting in credit measures that we
would consider to be good for the current rating.
The ratings on GrafTech reflect the company's significant
exposure to the cyclical steel industry, limited supplier
diversity, and continued raw-material cost pressure. Still, the
company maintains a good market position in graphite electrodes,
possesses healthy margins driven by current favorable industry
conditions, and has a good liquidity position.
The outlook is positive. S&P can upgrade GrafTech if it
continues its good operating performance and maintains its
improved credit metrics or diversifies its supplier base to
reduce its operating risk. S&P may change the outlook to
stable if the company increases its debt levels significantly to
make a large acquisition.
Headquartered in Parma, Ohio, GrafTech International Ltd. -–
http://www.graftech.com/-- (NYSE:GTI) manufactures and provides
high quality synthetic and natural graphite and carbon based
products and technical and research and development services,
with customers in 80 countries engaged in the manufacture of
steel, automotive products and electronics. The company
manufactures graphite electrodes, products essential to the
production of electric arc furnace steel. The company also
manufactures thermal management, fuel cell and other specialty
graphite and carbon products for, and provide services to, the
electronics, power generation, solar, oil and gas,
transportation, petrochemical and other metals markets. The
company operates 11 manufacturing facilities strategically
located on four continents.
As of Feb. 28, 2008, the company has a subsidiary in
Switzerland, GrafTech Switzerland S.A. GrafTech Switzerland has
subsidiaries located in other parts of Europe as well as Mexico
and Brazil in Latin America.
HIPOTECARIA SU: S&P Keeps L-T Counterparty Credit Rating at BB
--------------------------------------------------------------
Standard & Poor's Ratings Services has affirmed its ratings,
including the 'BB' long-term counterparty credit rating, on
Hipotecaria Su Casita S.A. de C.V. At the same time, S&P
affirmed its long and short-term national scale ratings at 'mxA'
and 'mxA-2', respectively. The outlook is stable.
"The ratings on HSC are limited by the firm's aggressive growth
targets, moderate and pressured profitability, tight
capitalization, and exposure to Mexico's real estate sector,"
said S&P's credit analyst Francisco Suarez.
Offsetting these weaknesses are its sound market position and
geographic diversification, capitalizing on a strong franchise;
and better-than-average funding diversification despite being
limited to wholesale funding. Also, Hipotecaria Su's management
and ownership reflect "adequate" enterprise risk management
capabilities.
The indirect 40% stake in Hipotecaria Su Casita held by Caja de
Ahorros y Monte de Piedad de Madrid (Caja Madrid; AA-/Stable/A-
1+) is a positive rating factor. Nevertheless, S&P does not
take into account any direct or indirect support from Caja
Madrid.
Hipotecaria Su Casita, S.A. de C.V. (BMV: CASITA) is Mexico's
second largest specialized mortgage lending institution by
market share. Its main function is to extend mortgage loans to
low-income individuals under the auspices of Sociedad
Hipotecaria Federal financing programs, and to provide
construction financing to developers of low-income housing. It
controls approximately 18% of the mortgage market served by
Sofoles, based on total loan portfolio. It has 107 offices in
Mexico. Hipotecaria Su Casita was established in 1994.
INDUSTRIAS UNIDAS: S&P Holds B Corp. Credit Rating, Outlook Neg.
----------------------------------------------------------------
Standard & Poor's Ratings Services has affirmed its 'B'
corporate credit rating on Industrias Unidas S.A. de C.V. The
outlook is negative.
"The rating on IUSA reflects the inherent cyclicality of the
construction industry, commodity price volatility, competitive
pressure on core products and markets, low operating margins,
and high leverage relative to operating cash flow generation,"
said S&P's credit analyst Marcela Duenas.
These factors are partially offset by the company's leading
market positions in Mexico and the United States, its
diversified product mix, and some geographic diversification in
the manufacturing and distribution of copper tubing, copper
alloy products, valves, controls, watt-hour meters, wire and
cable, and electrical devices. The ratings also incorporate
S&P's expectation that Indurtrias Unidas will continue to follow
a disciplined commercial strategy and increase its offering of
value-added products, and to improve its access to liquidity.
Headquartered in Lomas Altas, Mexico, Industrias Unidas --
http://www.iusa.com/-- manufactures a wide range of copper-
based and electrical products for the housing and electrical
power sectors mainly in Mexico and the U.S. The company
processes over 220,000 of metric tons of copper per year. As of
September 2007, last twelve month revenues were in excess of
US$2.4 billion.
LIBBEY INC: S&P Puts 'CCC+' Preliminary Rating on Rule 415 Shelf
----------------------------------------------------------------
Standard & Poor's Ratings Services assigned its preliminary 'B-'
senior unsecured debt rating and preliminary 'CCC+' subordinated
debt rating to Libbey Inc.'s Rule 415 universal shelf
registration. The new shelf has a US$550 million maximum
aggregate offering amount and an indeterminate number of debt
securities. The corporate credit rating on Toledo, Ohio-based
Libbey is 'B'. The outlook is stable. As of March 31, 2008,
Libbey had about US$673 million of adjusted total debt.
The ratings on Libbey reflect the company's narrow business
focus, capital- and labor-intensive operations, vulnerability to
volatility in natural gas prices, sizable unfunded pension and
postretirement obligations, and leveraged financial profile.
Based in Toledo, Ohio, Libbey Inc. -- http://www.libbey.com/--
operates glass tableware manufacturing plants in the United
States in Louisiana and Ohio, as well as in Mexico, China,
Portugal and the Netherlands. Its Crisa subsidiary, located in
Monterrey, Mexico, is the leading producer of glass tableware in
Mexico and Latin America. Its Royal Leerdam subsidiary, located
in Leerdam, Netherlands, is among the world leaders in producing
and selling glass stemware to retail, foodservice and industrial
clients. Its Crisal subsidiary, located in Portugal, provides
an expanded presence in Europe. Its Syracuse China subsidiary
designs, manufactures and distributes an extensive line of high-
quality ceramic dinnerware, principally for foodservice
establishments in the United States. Its World Tableware
subsidiary imports and sells a full-line of metal flatware and
holloware and an assortment of ceramic dinnerware and other
tabletop items principally for foodservice establishments in the
United States. Its Traex subsidiary, located in Wisconsin,
designs, manufactures and distributes an extensive line of
plastic items for the foodservice industry. In 2006, Libbey
Inc.'s net sales totaled US$689.5 million.
===========
P A N A M A
===========
AES EL SALVADOR: Fitch Cuts US$300MM Bonds ID Rating to BB+
-----------------------------------------------------------
Fitch Ratings has downgraded AES El Salvador Trust's foreign and
local currency Issuer Default Ratings to 'BB+' from 'BBB-'. The
rating action applies to the US$300 million 6.75% Political Risk
Protected bond issuance due Feb. 1, 2016. Concurrently, Fitch
has downgraded the bond issuance's national scale rating to
'AA(slv)' from 'AAA(slv)'. The rating outlook is negative.
The rating action reflects the company's increased exposure to
political interference and regulatory uncertainty in the El
Salvadorian electricity sector, as well as the recently
implemented tariff reduction, which has increased leverage and
business risk. Price controls recently put in place by the
government to curb electricity price increases to end-users due
to rising fuel cost has resulted in large government subsidies
to the sector and increased dependency on the government.
In addition, the growing difference between currently controlled
prices and the higher actual cost of electricity holds the
potential to create large market imbalances and make adequate
rate increases in the future more difficult to accomplish should
government subsidies be reduced or eliminated following
presidential elections next year. Positively, the government
has transferred subsidies to distribution companies in a timely
manner.
The rating action also reflects the recently implemented tariff
decrease for the period Apr. 1, 2008 to Dec. 31, 2012, which
significantly lowers the company's revenue and cash flow
generation. In April 2008, a portion of the December 2007
tariff reduction was reversed by regulators and AES El Salvador
agreed to withdraw its tariff review appeal with the Supreme
Court. The revised tariff reduction will decrease the company's
cash flow generation by approximately 15% to 20%, increasing
leverage, as measured by total debt-to-EBITDA from the 3.5 times
reported at year-end 2007 to more than approximately 4x, which
is not consistent within the investment grade category. The
company has implemented an aggressive cost reduction plan that
should help offset some of the effects of the lower tariff.
AES El Salvador has established a program aimed to maximize
utilization of the company's own resources in order to reduce
outsourcing costs. At the beginning of 2008, El Salvadorian
president, Antonio Saca, announced that electricity tariffs for
consumers will remain unchanged for the remainder of his term in
office, which ends May 2009. The deficit created by the
difference between the true cost of electricity and the price
charged to end users is being subsidized, and will continue to
be subsidized through the government-owned hydroelectric
generation company. Subsidies for AES El Salvador are estimated
to be US$100 million in addition to the existing US$42 million
from the Subsidized Residential Tariff for users with
consumption below 99kwh.
Overall subsidies from government are expected to be
approximately 30% of revenue or the equivalent of twice the
company's expected EBITDA generation. Tariffs for end users
have remained unchanged since June 2006. By May 2009, El
Salvador could have difficulties increasing the tariff for end
users to match the true cost of electricity, which is expected
to remain high if not increase further should demand for
electricity continue to rise, high hydrocarbon prices prevail,
and no significant new generation added in the country.
AES El Salvador Trust's IDRs and issue ratings are based on the
combined credit strength of AES El Salvador's operating assets.
AES El Salvador is composed of four distribution companies in El
Salvador: Compania de Alumbrado Electrico de San Salvador, S.A.
de C.V., AES CLESA, Empresa Electrica del Oriente, S.A. de C.V.,
and Distribuidora Electrica de Usulutan S.E.M. These operating
companies are the guarantors of AES El Salvador's outstanding
debt issuance.
The company's PRP notes benefit from external liquidity
facilities totaling 12 months of interest payments. A six-month
debt-service reserve account, coupled with a six-month letter of
credit provided by Credit Suisse (acting through its Cayman
Islands branch), helps protect against a potential currency
inconvertibility/non-transfer event. The facilities will remain
available for the life of the notes as long as certain criteria
are met. While the stated maturity of the notes is 2016, the
notes can be extended by 12 months during an event of transfer
and convertibility restrictions.
AES El Salvador operates essentially as a natural monopoly. Its
low-risk business gives the company a stable customer base and a
predictable cash flow. Although distribution service
territories are not exclusive, and distributors are free to
compete for customers under the rules established by the
Electricity Law, the risk of new competition is minimal given
that distribution companies possess significant economies of
scale that make it inefficient for more than one company to
operate in any particular geographic area. AES El Salvador's
operations are relatively efficient compared with other
distribution companies in the region. The group, on a
consolidated basis, has reported losses of 9% for the third
quarter of 2007, which compares favorable with other companies
in the region. The group has improved efficiency in terms of
customers per employee by increasing the number of customers per
employee to more than 1,000 in 2007 from 639 in 1999.
AES El Salvador -- http://www.aeselsalvador.com-- is the
largest electric distributor utility group in El Salvador, with
a market share of 78.6%, reaching a total of approximately
1,000,000 customers. AES El Salvador Trust is a special-purpose
vehicle located in Panama and will be the debtor of the proposed
issuance on behalf of AES El Salvador.
====================
P U E R T O R I C O
====================
ORIENTAL FINANCIAL: Opens Financial Center in Bayamon, San Juan
---------------------------------------------------------------
Oriental Financial Group Inc. reported the opening of a new
Oriental Group financial center in the high traffic Plaza del
Sol mall in the Bayamon suburb southeast of San Juan.
Oriental's Executive Vice President of retail banking, lending
and financial service operations, Lidio V. Soriano said the new
Bayamon branch is part of the Group's strategy to increase its
reach to mid and high net worth customers interested in
Oriental's high touch delivery of banking and financial services
on an integrated basis.
Oriental acquired the lease on the center for a non-material
amount from Banco Popular, which had acquired the branch last
year from Citibank and later closed it. No loans or deposits
were involved in the transaction.
"Plaza del Sol is an ideal location," said Mr. Soriano, the
former head of Citibank's consumer mortgage operations in Puerto
Rico. "Within five miles of the shopping center nearly 471,000
people reside with an average household income in excess of
US$50,000."
Oriental has budgeted approximately US$2 million to open,
construct, remodel and consolidate branches in 2008 in order to
expand its network to a net 25 centers from the current 24 with
more of them in the populous and affluent San Juan metro area.
The group is also in final negotiations to assume another former
Citibank branch lease from Banco Popular.
In the city of San Juan, Oriental plans to open a branch in the
northern beachfront Santurce-Condado area, in a new building on
the corner of San Jorge Street and Baldorioty de Castro Avenue.
In addition, the Group is remodeling and expanding two anchor
branches on San Patricio and on Las Cumbres avenues, in the
central and southern parts of the city, respectively.
On the east end of the Island, the Group is closing two small
branches in Naguabo and Humacao (Pueblo) and consolidating their
business into nearby branches in Ceiba and Humacao (Oriental
Center).
Oriental Financial Group Inc. (NYSE: OFG) --
http://www.www.orientalfg.com/-- is a diversified financial
holding company operating under U.S. and Puerto Rico banking
laws and regulations. Oriental provides comprehensive financial
services to its clients throughout Puerto Rico and offers third
party pension plan administration through its wholly owned
subsidiary, Caribbean Pension Consultants, Inc. The group's
core businesses include a full range of mortgage, commercial and
consumer banking services offered through 25 financial centers
in Puerto Rico, as well as financial planning, trust, insurance,
investment brokerage and investment banking services.
* * *
As of April 2008, Oriental Financial Group Inc. continued to
carry Standard & Poor's Ratings Services BB+/Negative/ Local and
Foreign Currency credit ratings.
SAN JUAN CABLE: Moody's Affirms Corporate Family Rating at B3
-------------------------------------------------------------
Moody's Investors Service has affirmed the B3 corporate family
and B3 probability of default ratings for San Juan Cable LLC.
The ratings outlook remains stable, and Moody's affirmed these
ratings:
-- Affirmed B3 Corporate Family Rating
-- Affirmed B3 Probability of Default Rating
-- Affirmed B1 rating on Senior Secured First Lien Bank Credit
Facility, LGD2, 28%
-- Affirmed Caa1 rating on Senior Secured Second Lien Bank
Credit Facility, LGD5, 72%
-- Outlook: Stable
San Juan Cable's revenue and EBITDA both rose over 10% in 2007
compared to the prior year, and Moody's anticipates continued
growth. However, accretion on the payment-in-kind loan at the
holding company (MCNA Cable Holdings LLC) constrains the
company's ability to reduce leverage. San Juan Cable's B3
corporate family rating reflects high leverage of approximately
8.0 times debt-to-EBITDA, low fixed charge coverage, and minimal
free cash flow. Furthermore, San Juan remains a small,
geographically concentrated operator. Attractive asset value,
strong EBITDA margins, and reasonable growth prospects support
the rating.
Headquartered in San Juan, Puerto Rico, San Juan Cable LLC
serves approximately 133,000 basic video subscribers. Its
annual revenue is approximately US$150 million. San Juan Cable
is owned by MidOcean Partners LP, Crestview Partners LP and the
company's management.
=================
V E N E Z U E L A
=================
PETROLEOS DE VENEZUELA: Must Shelve Joint Venture With Petrobras
----------------------------------------------------------------
NoticiasFinancieras reports that Petroleos de Venezuela S.A.'s
joint venture with Petroleo Brasleiro S.A., a.k.a. Petrobras,
should be postponed.
As reported in the Troubled Company Reporter-Latin America on
March 31, 2008, Petroleos de Venezuela President Rafael Ramirez
signed an agreement with Petrobras' President Jose Sergio
Gabrielli de Azevedo. The accord sets the bases for the
partnership between the two companies for the Abreu e Lima
Refinery, in Pernambuco. The agreement lays out the terms for
the incorporation, including shareholding, set at 60% for
Petrobras and 40% for Petroleos de Venezuela. Abreu e Lima
would get an investment in the order of US$4.05 billion and
would be capable of processing 200,000 barrels of oil per day,
50% of which from Brazil (Marlim) and 50% from Venezuela. The
plant was set to be operational in the second half of 2010 and
to reach full capacity in 2011.
According to NoticiasFinancieras, the partnership has been
negotiated since 2005. The report didn't state the reason for
the suspension of the joint venture.
Marcelo Baumbach, a spokesperson for the Presidency of the
Republic of Brazil, said that the government wants to advance
the talks for the joint venture, NoticiasFinancieras states.
Petroleos de Venezuela S.A. -- http://www.pdvsa.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.
***********
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
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Information contained herein is obtained from sources believed
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