/raid1/www/Hosts/bankrupt/TCRLA

/raid1/www/Hosts/bankrupt/TCRLA_Public/080715.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 Tuesday, July 15, 2008, Vol. 9, No. 139 Headlines A R G E N T I N A BEST CARS: Proofs of Claim Verification Deadline Is Sept. 4 DELTA AIR: Workers Ask Congress to Limit Oil Speculation ENVASES PUBLICITARIOS: Claims Verification Deadline Is Aug. 25 HERCULES INC: Enters Merger Agreement with Ashland for US$3.3 BB HERCULES INC: Merger Agreement Cues Moody's Review of Ba2 Rating KONINKLIJKE AHOLD: Announces Several Executive Appointments MICOM GROUP: Trustee to File Individual Reports on Oct. 27 TEKNI-PLEX INC: Taps G. Schafer as Interim CFO; CEO Joins Board TEKNI-PLEX INC: Offers to Buy Back 10.875% Senior Secured Notes TRINTER REPUESTOS: Files for Reorganization in Court B E R M U D A SCOTTISH RE: Posts US$895.7 Mil. Net Loss in Year Ended Dec. 31 B R A Z I L AMR CORP: Moody's Puts Debt Ratings Under Review for Downgrade BANCO NACIONAL: Grants BRL1.5 Billion Investment Fund Program BRASKEM SA: Schedules Shareholders General Meeting to July 25 BRASKEM SA: Signs Deal for Resins Supply to Pequiven CAMARGO CORREA: Fitch Holds BB Rating, Outlook Now Positive GERDAU SA: Reports US$456.4MM Net Income in Qtr. Ended March 31 GOL LINHAS: To Release Second Quarter 2008 Earnings on August 12 SADIA SA: Baumhardt Deal Won't Require Shareholder Ratification SENSATA TECHNOLOGIES: Moody's Cuts Ratings, Junks Senior Notes SPECTRUM BRANDS: Bares Supplemental Info on Pet Biz Sale C A Y M A N I S L A N D S CCSA Finance: Fitch Affirms BB Rating on US$250 Mil. Sr. Bonds GRAND ISLAND: Court to Hear Petition for Liquidation on July 21 GRAND ISLAND MASTER: Wants Voluntary Liquidation FRANJEAN AT SEA: Deadline for Claims Filing Is Until July 20 LOWE ENTERPRISES: Deadline for Claims Filing Is July 20 ROBINSON CRUSOE: Proofs of Claim Filing Deadline Is July 19 SILVER EAGLE: Deadline for Proofs of Claim Filing Is July 21 WAFRA/RHH EQUITY: Holds Final Shareholders Meeting on July 21 WAFRA/RHH FINANCE: Sets Final Shareholders Meeting on July 21 WANT WANT INTERNATIONAL: Claims Filing Deadline Is July 21 C O L O M B I A BANCOLOMBIA SA: COP84.4BB Unconsolidated Earnings in June 2008 C O S T A R I C A ALCATEL-LUCENT SA: Appeals MP3 Patent Ruling vs. Microsoft Corp M E X I C O BOWNE & CO: Acquires Manhattan-Based Capital Systems for US$13MM CONTINENTAL AIRLINES: Posts US$58MM Pretax Charge in Second Qtr. DISTRIBUTED ENERGY: U.S. Trustee Forms 3-Member Creditors Panel DISTRIBUTED ENERGY: Files Schedules of Assets and Liabilities MASONITE INTERNATIONAL: May Breach Credit Facility Covenants PILGRIM'S PRIDE: Moody's Cuts Ratings to B1, Outlook is Stable QUEBECOR WORLD: Judge Peck Modifies Management Incentive Plan QUEBECOR WORLD: Wants Five More KPMG Retention Letters Approved QUEBECOR WORLD: Printing Agreement with Dex Extended to 2015 QUEBECOR WORLD: Receives Conversion Notices for Series 5 Shares P U E R T O R I C O ADELPHIA COMMS: Inks Stipulation Resolving US$18 Mil. ARH Claims ADELPHIA COMMS: Court OKs US$480MM in Professional Fees & Costs S U R I N A M E * SURINAME: Fitch Keeps Foreign and Local Currency IDRs at B/B+ U R U G U A Y * URUGUAY: Moody's Reports System Profile for Banking Industry * S&P Issues Industry Credit Outlook for LatAm Telecom Industry * Large Companies With Insolvent Balance Sheet - - - - - ================= A R G E N T I N A ================= BEST CARS: Proofs of Claim Verification Deadline Is Sept. 4 ----------------------------------------------------------- Lidia Albite, the court-appointed trustee for Best Cars SRL's bankruptcy proceeding, will be verifying creditors' proofs of claim until Sept. 4, 2008. Ms. Albite will present the validated claims in court as individual reports. The National Commercial Court of First Instance No. 3 in Buenos Aires, with the assistance of Clerk No. 5, 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 Best Cars 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 Best Cars' accounting and banking records will be submitted in court. La Nacion didn't state the submission dates for the reports. Ms. Albite is also in charge of administering Best Cars' assets under court supervision and will take part in their disposal to the extent established by law. The debtor can be reached at: Best Cars SRL Batalla de Pari 530 Buenos Aires, Argentina The trustee can be reached at: Lidia Albite Tacuari 119 Buenos Aires, Argentina DELTA AIR: Workers Ask Congress to Limit Oil Speculation -------------------------------------------------------- For the past two weeks, employees at Delta Air Lines Inc. and Northwest Airlines Corporation have together sent more than 20,000 messages to Congressional leaders, urging them to pass legislation that will limit rampant oil speculation. Northwest and Delta also joined 10 other airlines -- which are part of broad business, labor and consumer coalition -- in sending e-mail messages to frequent flier databases, asking customers to join them in fighting the high cost of fuel. Since the email campaign was launched yesterday, 300,000 emails have already been sent by customers to Members of Congress. The letter-writing campaign is at: http://www.StopOilSpeculationNow.com/ NWA Spurs Campaign to Lower Fuel Prices NWA president and CEO Doug Steenland criticized financial speculation in light of the rapid run-up in oil prices in the final hour of trading and said, "If anybody needed any further evidence that the oil markets are being directly influenced and affected by financial speculation, [the] result ends that debate." He added, "With no single event occurring that would cause supply to decrease or demand for oil to increase, the price in the last 20 minutes of trading went up about US$5 a barrel as a result of financial players, near the close of trading, coming into the market and driving up price." Mr. Steenland, who is also the Chairman of the Board of the Air Transport Association, recently testified in Congress on this issue, and added, "[The] result is the poster child of why Congress needs to take immediate action to change the law and stop these abuses from adversely affecting the U.S. economy and consumers." Over the last year, the price of crude oil has more than doubled. To help fix these unprecedented oil challenges, Mr. Steenland favors increasing domestic supply, further oil exploration in the United States, investing in alternative energy sources, and conservation. About Northwest Airlines Northwest Airlines Corp. (NYSE: NWA) -- http://www.nwa.com/-- is the world's fourth largest airline with hubs at Detroit, Minneapolis/St. Paul, Memphis, Tokyo and Amsterdam, and about 1,400 daily departures. Northwest is a member of SkyTeam, an airline alliance that offers customers one of the world's most extensive global networks. Northwest and its travel partners serve more than 1000 cities in excess of 160 countries on six continents. Northwest and its travel partners serve more than 1000 cities in excess of 160 countries on six continents, including Italy, Spain, Japan, China, Venezuela and Argentina. The company and 12 affiliates filed for chapter 11 protection on Sept. 14, 2005 (Bankr. S.D.N.Y. Lead Case No. 05-17930). Bruce R. Zirinsky, Esq., and Gregory M. Petrick, Esq., at Cadwalader, Wickersham & Taft LLP in New York, and Mark C. Ellenberg, Esq., at Cadwalader, Wickersham & Taft LLP in Washington represent the Debtors in their restructuring efforts. The Official Committee of Unsecured Creditors has retained Scott L. Hazan, Esq., at Otterbourg, Steindler, Houston & Rosen, P.C. as its bankruptcy counsel in the Debtors' chapter 11 cases. When the Debtors filed for bankruptcy, they listed US$14.4 billion in total assets and US$17.9 billion in total debts. On Jan. 12, 2007 the Debtors filed with the Court their Chapter 11 Plan. On Feb. 15, 2007, they Debtors filed an Amended Plan & Disclosure Statement. The Court approved the adequacy of the Debtors' Disclosure Statement on March 26, 2007. On May 21, 2007, the Court confirmed the Debtors' Plan. The Plan took effect May 31, 2007. (Northwest Airlines Bankruptcy News; Bankruptcy Creditors' Service, Inc., http://bankrupt.com/newsstand/or 215/945-7000) About Delta Air Based in Atlanta, Georgia, Delta Air Lines Inc. (NYSE:DAL) -- http://www.delta.com/-- is the world's second-largest airline in terms of passengers carried and the leading U.S. carrier across the Atlantic, offering daily flights to 328 destinations in 56 countries on Delta, Song, Delta Shuttle, the Delta Connection carriers and its worldwide partners. Delta flies to Argentina, Australia, and the United Kingdom. The company and 18 affiliates filed for chapter 11 protection on Sept. 14, 2005 (Bankr. S.D.N.Y. Lead Case No. 05-17923). Marshall S. Huebner, Esq., at Davis Polk & Wardwell, represents the Debtors in their restructuring efforts. Timothy R. Coleman at The Blackstone Group L.P. provides the Debtors with financial advice. Daniel H. Golden, Esq., and Lisa G. Beckerman, Esq., at Akin Gump Strauss Hauer & Feld LLP, provide the Official Committee of Unsecured Creditors with legal advice. John McKenna, Jr., at Houlihan Lokey Howard & Zukin Capital and James S. Feltman at Mesirow Financial Consulting, LLC, serve as the Committee's financial advisors. The Debtors filed a chapter 11 plan of reorganization and disclosure statement explaining that plan on Dec. 19, 2007. On Jan. 19, 2007, they filed revisions to the plan and disclosure statement, and submitted further revisions to the plan on Feb. 2, 2007. On Feb. 7, 2007, the Court approved the Debtors' disclosure statement. In April 25, 2007, the Court confirmed the Debtors' plan. That plan became effective on April 30, 2007. The Court entered a final decree closing 17 cases on Sept. 26, 2007. (Delta Air Lines Bankruptcy News; Bankruptcy Creditors' Service, Inc., http://bankrupt.com/newsstand/or 215/945-7000). ENVASES PUBLICITARIOS: Claims Verification Deadline Is Aug. 25 -------------------------------------------------------------- The court-appointed trustee for Envases Publicitarios S.R.L.'s bankruptcy proceeding, will be verifying creditors' proofs of claim until Aug. 25, 2008. The trustee will present the validated claims in court as individual reports on Oct. 6, 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 Envases Publicitarios 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 Envases Publicitarios' accounting and banking records will be submitted in court on Nov. 17, 2008. HERCULES INC: Enters Merger Agreement with Ashland for US$3.3 BB ---------------------------------------------------------------- Ashland Inc. and Hercules Inc. disclosed that they have entered into a definitive merger agreement under which Ashland would acquire all of the outstanding shares of Hercules for US$18.60 per share in cash and 0.093 of a share of Ashland common stock for each share of Hercules common stock. The total transaction value is approximately US$3.3 billion, or US$23.01 per Hercules share based on Ashland's July 10 closing stock price and including US$0.7 billion of net assumed debt. The transaction, which would create a major, global specialty chemicals company, is expected to close by the end of calendar 2008. With sales in more than 100 countries, Ashland is a manufacturer of specialty chemicals, a leading distributor of chemicals and plastics, and a provider of automotive lubricants, car-care products and quick-lube services. Hercules is a leader in specialty additives and ingredients that modify the physical properties of water-based systems and is one of the world's leading suppliers of specialty chemicals to the pulp and paper industry. Upon the transaction's close, Ashland will have pro forma combined revenue for the 12 months ended March 31, 2008, of more than US$10 billion, including approximately US$3.5 billion generated outside North America. For the same period, Ashland generated earnings before interest, taxes, depreciation and amortization of US$365 million excluding certain items, while Hercules reported ongoing EBITDA of US$392 million excluding certain items. Specialty chemicals, which on a pro forma basis represents approximately 75 percent of total EBITDA, will serve as Ashland's primary platform for future growth. "The acquisition of Hercules fulfills our objective to become a leading specialty chemicals company," Ashland Chairman and Chief Executive Officer James J. O'Brien said. It creates a defined core for Ashland composed of three specialty chemical businesses with strong market positions and promising global growth potential: specialty additives and ingredients, paper and water technologies, and specialty resins. In addition, we expect our financial profile to be enhanced significantly through reduced earnings volatility, improved profitability and stronger cash flow generation." "We are enthusiastic about the opportunity to combine Hercules with Ashland," Hercules President and Chief Executive Officer Craig A. Rogerson said. Our companies share proud and similar histories of nearly 100 years of innovation, dedication and service. Hercules shareholders will receive a significant premium over the current trading price for their shares and, through their ownership of Ashland shares, the opportunity to participate in the upside potential of the combined company. We look forward to working with Ashland to bring these two great companies together." In specialty additives and ingredients, Hercules' Aqualon business is one of the most recognized and admired specialty chemical brands in the world and brings Ashland a significant market position in rheology modifiers, which alter the physical properties of water-based systems. These additives are used across a wide range of industries to make everything from adhesives and paints to foods, pharmaceuticals and personal care products. Nearly all of Aqualon's additive products are water soluble polymers derived from renewable materials. The combined company generates, on a pro forma basis, approximately one-third of EBITDA from bio-based or renewable chemistries. "We will combine the paper and water businesses of each company to create one global paper and water technologies business with annual revenue of US$2 billion," said O'Brien. "In particular, Hercules' leadership position in pulp and paper technologies bolsters our participation in one of the world's largest water treatment markets. The combined businesses will provide the scale to leverage opportunities in other key water treatment markets including municipal, industrial and marine. "The third business within our new core – specialty resins – is one where Ashland has long enjoyed a strong reputation for innovation and service. A broader international footprint will offer the specialty resins business expanded global growth opportunities in key building and construction markets, including infrastructure and wind energy. In addition, our Distribution and Valvoline businesses provide complementary capabilities and share similar markets with the specialty chemical businesses," said O'Brien. Ashland expects to realize annualized run-rate cost savings of at least US$50 million by the third year following the transaction's close by eliminating redundancies and capturing operational efficiencies. In the first year following the transaction's close, while the combination is modestly dilutive to earnings per share on a reported basis, it is expected to be significantly accretive to Ashland's earnings per share excluding merger costs and noncash depreciation and amortization charges resulting from the transaction. O'Brien continued, "We are extremely impressed with the quality of the Hercules people and we look forward to welcoming them into the Ashland family. Our companies share a common desire to live up to our own high expectations, and those of our customers, shareholders and the communities in which we operate. We are also very pleased that John Panichella, president of Hercules' Aqualon Group, and Paul Raymond, president of Hercules' Paper Technologies and Ventures Group, have agreed to join Ashland after the close of the transaction, reporting directly to me. In addition, we expect to maintain a significant presence in Wilmington, Del., where Hercules is headquartered. "An integration team with members from both organizations will determine how best to utilize the strengths and scale of the combined company worldwide. We will work with the Hercules team to ensure a smooth transition," concluded O'Brien. About Hercules Inc Wilmington, Delaware-based Hercules Inc. -- http://www.herc.com/ -- (NYSE:HPC) manufactures and markets chemical specialties globally for making a variety of products for home, office and industrial markets. Outside the United States, the company has subsidiaries in Argentina, Bahamas, Belgium, Brazil, Hong Kong, India, Indonesia and France. * * * As reported in the Troubled Company Reporter-Latin America on April 14, 2008, Standard & Poor's Ratings Services raised its ratings on Hercules Inc., including the corporate credit rating to 'BB+' from 'BB'. The outlook is stable. HERCULES INC: Merger Agreement Cues Moody's Review of Ba2 Rating ---------------------------------------------------------------- Moody's Investors Service has placed the Ba1 corporate family rating and other debt ratings of Hercules, Inc. under review for possible downgrade. The reviews are prompted by the statement that the Boards of Ashland, Inc. and Hercules approved a definitive merger agreement under which Ashland would acquire all of the outstanding shares of Hercules in the form of US$18.60 per share in cash and 0.093 of a share of Ashland common stock for each share of Hercules stock. The total transaction value would be approximately US$3.3 billion, or US$23.01 per Hercules share based on Ashland's July 10 closing stock price and including US$0.7 billion of net assumed debt. Ashland will be the surviving entity in the merger. Hercules' LGD assessments are not under review and these assessments and point estimates are subject to change as a function of the new capital structure of the merged entities. Moody's expects all of the Hercules debt to be refinanced as a result of the merger with the exception of the 6.5% junior subordinated deferrable interest debentures due 2029. While Ashland has almost no debt currently, the acquisition will result in the merged companies taking on a material amount of debt that will put the current Ashland Ba1 corporate family rating under negative pressure and would likely result in a one notch downgrade in the corporate family rating to Ba2, provided there is no change in the purchase price and other deal and financing terms, as disclosed, and assuming no material changes to the outlook for the merged companies raw material costs and end markets. Upon the transaction's close, Ashland/Hercules will have pro forma combined revenue for the 12 months ended March 31, 2008, of more than US$10 billion and earnings before interest, taxes, depreciation and amortization of US$757 million excluding certain items. The merger is conditioned upon, among other things, the approval of Hercules' shareholders, the receipt of regulatory approvals and other customary closing conditions. Assuming the satisfaction of these conditions, the transaction is expected to close by the end of calendar 2008. Moody's rating review will consider the nature and structure of the acquisition financing, as well as focus on the strategic benefits of the transaction, potential synergies, the cash flow anticipated from the combined businesses, the combined company's financial flexibility and liquidity and how management's long- term plans will impact the company's credit measures. Ratings placed on review for possible downgrade: Hercules, Inc. -- Corporate Family Rating, Ba1 -- Probability of Default Rating, Ba1 -- Senior Secured Bank Credit Facility, Baa2, 15% - LGD2 -- Senior Secured Regular Bond/Debenture, Baa2, 15% - LGD2 -- Senior Unsecured Regular Bond/Debenture, Ba1, 62% LGD4 -- Junior Subord. Regular Bond/Debenture, Ba2, 92% - LGD6 -- Subord. Conv./Exch. Bond/Debenture, Ba2, 92% - LGD6 Outlook Actions: -- Outlook, Changed To Rating Under Review From Positive Hercules Incorporated is a global supplier of specialty chemicals and related services for the paper, paint, consumer products, construction materials and energy markets. Wilmington, Delaware-based Hercules Inc. -- http://www.herc.com -- (NYSE:HPC) manufactures and markets chemical specialties globally for making a variety of products for home, office and industrial markets. Outside the United States, the company has subsidiaries in Argentina, Bahamas, Belgium, Brazil, Hong Kong, India, Indonesia and France. The company had revenues of US$2.2 billion for the LTM ended March 31, 2008. KONINKLIJKE AHOLD: Announces Several Executive Appointments ----------------------------------------------------------- Koninklijke Ahold N.V. disclosed a number of important changes to its corporate and operating company leadership. Lawrence Benjamin, Chief Operating Officer Ahold U.S.A., has been nominated by the Supervisory Board for appointment to the Ahold Corporate Executive Board. His appointment will be proposed at the next General Meeting of Shareholders. Carl Schlicker, current President and CEO of Giant-Carlisle, has been appointed President and CEO of Stop & Shop/Giant-Landover, succeeding Jose Alvarez. Sander van der Laan, current Executive Vice President Marketing and Merchandising for Albert Heijn, has been appointed President and CEO of Giant-Carlisle, succeeding Schlicker. Schlicker and van der Laan will report to Benjamin. Jose Alvarez, current President and CEO of Stop & Shop/Giant Landover, has been appointed Executive Vice President Global Business Development, reporting to Ahold CEO John Rishton. Albert Voogd, current Executive Vice President Sales and Services at Albert Heijn, has been appointed Executive Vice President Marketing and Merchandising at Albert Heijn, succeeding van der Laan. Cees van Vliet, currently responsible for Format Management at Albert Heijn, has been appointed Executive Vice President Sales and Services, succeeding Voogd. Messrs. Voogd and van Vliet will report to Dick Boer, Chief Operating Officer Ahold Europe. "I am very pleased to announce these changes," said John Rishton, CEO of Ahold. "Larry will strengthen the Corporate Executive Board and his nomination underscores the importance of the U.S. market to Ahold. These appointments will help accelerate the transfer of knowledge across our businesses. We have chosen to make these changes as the Value Improvement Program expands beyond price repositioning. At Ahold, our global strategic focus continues to be the transformation of all of our banners into powerful consumer brands." Headquartered in Amsterdam, Netherlands, Koninklijke Ahold N.V. -- http://www.ahold.com/-- retails food through supermarkets, hypermarkets and discount stores in North and South America, Europe. It has operations in Argentina. The company's chain stores include Stop & Shop, Giant, TOPS, Albert Heijn and Bompreco. Ahold also supplies food to restaurants, hotels, healthcare institutions, government facilities, universities, stadiums, and caterers. * * * Koninklijke Ahold carries a BB+ issuer default and senior unsecured ratings with positive outlook from Fitch. The company also carries a short-term rating of B from Fitch. MICOM GROUP: Trustee to File Individual Reports on Oct. 27 ---------------------------------------------------------- Hector Garcia, the court-appointed trustee for Micom Group S.R.L.'s bankruptcy proceeding, will present the validated claims as individual reports in the National Commercial Court of First Instance in Buenos Aires on Oct. 27, 2008. Mr. Garcia verifies creditors' proofs of claim until Sept. 12, 2008. He will submit to court a general report containing an audit of Micom Group's accounting and banking records on Dec. 11, 2008. La Nacion didn't state the submission dates for the reports. Mr. Garcia is also in charge of administering Micom Group's assets under court supervision and will take part in their disposal to the extent established by law. The debtor can be reached at: Micom Group S.R.L. Amenabar 2445 Buenos Aires, Argentina The trustee can be reached at: Hector Garcia Uruguay 572 Buenos Aires, Argentina TEKNI-PLEX INC: Taps G. Schafer as Interim CFO; CEO Joins Board ---------------------------------------------------------------- The board of directors of Tekni-Plex Inc. appointed Gary Schafer to serve as interim chief financial Officer of the company. Mr. Schafer is a Director at AlixPartners, LLP, and has been serving as interim controller for a division of the company since February 2008. AP Services, which provides consulting services to the company, is a subsidiary of AlixPartners. On June 30, 2008, Tekni-Plex entered into an amendment to a letter agreement with AP Services, LLC, dated Dec. 17, 2007. Mr. Schafer performed various services for the company pursuant to the Engagement Letter. Pursuant to the Amended Engagement Letter, Mr. Schafer will serve as interim CFO of the company, effective July 1, 2008. Under the terms of the Amended Engagement Letter, the company will continue to pay AP Services a monthly rate of US$133,300 for Mr. Schafer's services as interim CFO. CEO Employment Agreement On June 27, 2008, Paul Young was elected by written consent of the shareholders of the company to serve on the Board. No determination has been made at this time with respect to the committees of the Board to which Mr. Young may be named. The company entered into an employment agreement with Mr. Young, in connection with his services as the company's CEO and as a member of the company's Board of Directors. Mr. Young has served as the company's CEO, since June 1, 2008 and as a member of the Board since June 27, 2008. Under the terms of the Agreement, Mr. Young will be entitled to receive an annual base salary of US$500,000 and will be eligible to receive a performance-based annual bonus in a range of 50% to 100% based on achievement of targets set by the Board in consultation with Mr. Young. For the fiscal year ending June 30, 2009, Mr. Young is guaranteed a minimum bonus of US$200,000 provided he is not discharged for cause and does not voluntarily quit (except for good reason) during that period. In addition, Mr. Young will be granted stock options pursuant to an incentive stock option plan representing 3.5% of the company's Common Stock at various strike prices. About Tekni-Plex Inc. Based in Coppell, Texas, Tekni-Plex Inc. -- http://www.tekni- plex.com/ -- manufactures packaging, packaging products and materials as well as tubing products. The company primarily serves the food, healthcare and consumer markets. It has built leadership positions in its core markets, and focuses on vertically integrated production of highly specialized products. Tekni-Plex has operations in the United States, Europe, China, Argentina and Canada. Tekni-Plex Inc.'s consolidated balance sheet at March 28, 2008, showed US$620.1 million in total assets and US$1.05 billion in total liabilities, resulting in a US$427.0 million total stockholders' deficit. * * * In December 2007, Moody's Investors Service downgraded the Corporate Family Ratings of Tekni-Plex Inc. to Caa3 from Caa1. TEKNI-PLEX INC: Offers to Buy Back 10.875% Senior Secured Notes --------------------------------------------------------------- Tekni-Plex, Inc. commenced a change of control offer to purchase any or all of its 10.875% Senior Secured Notes due 2012 outstanding under the Indenture, dated June 10, 2005, by and among the company, the guarantors and HSBC Bank USA, National Association, as trustee. The company is offering to repurchase the notes at a purchase price in cash equal to 101% of the aggregate principal amount of the notes or portion of notes validly tendered for payment thereof, plus accrued and unpaid interest due through Aug. 22, 2008, upon the terms and subject to the conditions of the offer. The offer will expire at 5:00 p.m., New York City time on Aug. 19, 2008, unless extended by the company in its sole discretion. As of the date of the commencement of the Offer, US$150.0 million aggregate principal amount of Notes were outstanding. Recapitalization As of May 30, 2008, the company completed a recapitalization, pursuant to which investment funds managed by affiliates of Oaktree Capital Management L.P. and Avenue Capital Group obtained a controlling interest of over 80% of the outstanding common stock, par value US$0.01 per share, in exchange for the surrender of an aggregate principal amount of US$246,081,000 of the company's outstanding 12.75% Senior Subordinated Notes due 2010, which constituted a "change of control" under the Indenture. The company is currently engaged in discussions with certain of its stockholders to finance the consideration and its obligations under the Offer. The company also anticipates seeking financing proposals from third parties. If the company is not able to obtain financing, it will not be able to consummate the Offer. The company has provided recipients of the offer with certain unaudited pro forma condensed consolidated financial information regarding the company that gives effect to the recapitalization. A copy of the unaudited pro forma condensed consolidated financial information is available for free at: http://ResearchArchives.com/t/s?2f5a Colorite Inquiry On June 12, 2008, the Board of Directors of the company initiated an internal investigation into allegations raised by a current employee that, for the fiscal years ending 2000 to 2006, the company may have incorrectly recorded certain inventory and accounts receivables in the Colorite Plastics Company, a division of the company. The employee did not raise any allegations concerning the accuracy of Colorite's current inventory and accounts receivables. The Board has retained Paul, Weiss, Rifkind, Wharton & Garrison LLP as legal counsel to lead the investigation and to direct forensic accounting consultants retained to assist in the investigation. On June 26, 2008, the company placed the Chief Financial Officer and the Corporate Controller -- who have been in their respective roles during some or all of the period relevant to the investigation -- on paid leave pending the outcome of the investigation. Other members of management will continue to serve in their current roles, including Paul Young, who has been serving as Chief Executive Officer since June 1, 2008, and James A. Mesterharm of AP Services, LLC and a Managing Director at AlixPartners, LLP, who has been serving as Chief Restructuring Officer since Dec. 17, 2007. Gary E. Schafer, 56, a Director at Alix Partners, who has been serving as interim controller for a division of the company since February 2008, will serve as interim Chief Financial Officer. AP Services, LLC will be providing additional resources to perform the duties of corporate controller in the interim. The company has voluntarily reported these matters to the United States Attorney's Office for the Southern District of New York, and to the Staff of the Northeast Regional Office of the Securities and Exchange Commission. The board also has expanded the scope of the investigation beyond the Colorite division to determine whether any improper accounting practices occurred in other divisions of the company. The company cannot predict at this time whether the investigation will conclude that adjustments to prior periods' financial statements are necessary; to the extent that such adjustments are determined to be necessary, the adjustments could be material to the prior periods' financial statements. The investigation is ongoing and the company cannot estimate at this time when the investigation will conclude. About Tekni-Plex Inc. Based in Coppell, Texas, Tekni-Plex Inc. -- http://www.tekni- plex.com/ -- manufactures packaging, packaging products and materials as well as tubing products. The company primarily serves the food, healthcare and consumer markets. It has built leadership positions in its core markets, and focuses on vertically integrated production of highly specialized products. Tekni-Plex has operations in the United States, Europe, China, Argentina and Canada. Tekni-Plex Inc.'s consolidated balance sheet at March 28, 2008, showed US$620.1 million in total assets and US$1.05 billion in total liabilities, resulting in a US$427.0 million total stockholders' deficit. * * * In December 2007, Moody's Investors Service downgraded the Corporate Family Ratings of Tekni-Plex Inc. to Caa3 from Caa1. TRINTER REPUESTOS: Files for Reorganization in Court ---------------------------------------------------- Trinter Repuestos S.A. has requested for reorganization approval after failing to pay its liabilities since June 1, 2008. The reorganization petition, once approved by the court, will allow Trinter Repuestos 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. 3 in Buenos Aires. Clerk No. 5 assists the court in this case. The debtor can be reached at: Trinter Repuestos S.A. Lavalle 1675 Buenos Aires, Argentina ============= B E R M U D A ============= SCOTTISH RE: Posts US$895.7 Mil. Net Loss in Year Ended Dec. 31 --------------------------------------------------------------- Scottish Re Group Limited has filed with the U.S. Securities and Exchange Commission its Annual Report on Form 10-K for the year ended Dec. 31, 2007. The company incurred a net loss of US$895.7 million on US$1.5 billion of net revenues for the fiscal year ended Dec. 31, 2007, compared to a net loss of US$366.7 million on US$2.42 billion of net revenues in 2006. As of June 30, 2008, the company had 47 record holders of its ordinary shares. As a result of the delisting of the company's shares from the New York Stock Exchange and the fact that there are less than 300 holders of record of its shares, the company has no obligation to continue to file, and does not plan to file, periodic reports with the SEC for any periods after Jan. 1, 2008. Scottish Re Group Ltd. -- http://www.scottishre.com/-- is a global life reinsurance specialist. Scottish Re has operating businesses in Bermuda, Grand Cayman, Guernsey, Ireland, the United Kingdom, United States, and Singapore. Its flagship operating subsidiaries include Scottish Annuity & Life Insurance Company (Cayman) Ltd. and Scottish Re (US), Inc. Scottish Re Capital Markets, Inc., a member of Scottish Re Group Ltd., is a registered broker dealer that specializes in securitization of life insurance assets and liabilities. On Sept. 30, 2007, Scottish Re reported total assets of US$13.4 billion and shareholder's equity of US$869 million. As reported in the Troubled Company Reporter-Latin America on June 17, 2008, Moody's Investors Service placed on review with direction uncertain Scottish Re Group Ltd.'s senior unsecured shelf of (P)Caa1, subordinate shelf of (P)Caa2, junior subordinate shelf of (P)Caa2, preferred stock of Caa3, and preferred stock shelf of (P)Caa3. Moody's had previously placed the ratings on review for possible downgrade. =========== B R A Z I L =========== AMR CORP: Moody's Puts Debt Ratings Under Review for Downgrade -------------------------------------------------------------- Moody's Investors Service has placed the debt ratings of AMR Corp. (corporate family rating at B2) and its subsidiaries under review for possible downgrade. The review includes the ratings for certain equipment trust certificates and enhanced equipment Trust Certificates of American Airlines, Inc. During the review, Moody's will assess AMR's liquidity profile, and the adequacy of its funding sources in relation to its rate of operating cash burn and other calls on cash. Moody's will also consider AMR's business prospects in the face of persistently elevated fuel prices that are likely to result in sizeable negative cash flow at the airline for the foreseeable future. The review will consider the actions which AMR is taking to adapt to the challenging business environment, including capacity reductions, overhead cost cuts, and passenger fare increases, and the degree to which these actions could realistically be expected to moderate the company's rate of cash losses. Also Moody's will consider the collateral values and transaction structure of the ETC's and EETC's in light of any potential revision to the probability of default rating. Moody's notes that AMR's current liquidity profile offers important near term flexibility, yet its liquidity could be pressured over the next year. Cash and cash equivalents of approximately US$4.5 billion at March 31, 2008 is robust when compared to the absolute level of cash held by the other network carriers. The company also has potential to raise additional funds through the pending sale of AMR Beacon, and a material amount of unencumbered assets and a modest revolver credit. Nonetheless the company's ability to sustain its current liquidity profile will likely be pressured in light of a meaningful step-up in debt scheduled to mature during 2009 of about US$1.2 billion, along with ongoing pension obligations and scheduled aircraft deliveries. Moreover, in the absence of a near term turnaround in its financial performance, AMR could face a material, and increasing, amount of cash holdback under the terms of its credit card processing agreements, which could further erode liquidity. Downgrades: Issuer: AMR Corporation -- Speculative Grade Liquidity Rating, Downgraded to SGL-3 from SGL-2 On Review for Possible Downgrade: Issuer: AMR Corporation -- Probability of Default Rating, Placed on Review for Possible Downgrade, currently B2 -- Corporate Family Rating, Placed on Review for Possible Downgrade, currently B2 -- Senior Unsecured Conv./Exch. Bond/Debenture, Placed on Review for Possible Downgrade, currently 83 - LGD5 -- Senior Unsecured Medium-Term Note Program, Placed on Review for Possible Downgrade, currently 83 - LGD5 -- Senior Unsecured Regular Bond/Debenture, Placed on Review for Possible Downgrade, currently 83 - LGD5 -- Senior Unsecured Shelf, Placed on Review for Possible Downgrade, currently 83 - LGD5 Issuer: Alliance Airport Authority, Inc. -- Revenue Bonds, Placed on Review for Possible Downgrade, currently 83 - LGD5 Issuer: American Airlines 1988-A Grantor Trust -- Senior Secured Equipment Trust, Placed on Review for Possible Downgrade, currently B2 Issuer: American Airlines, Inc. -- Senior Secured Bank Credit Facility, Placed on Review for Possible Downgrade, currently 30 - LGD3 -- Series 1999-1 Pass Through Certificates, placed on Review for Possible Downgrade Class A1, currently Baa2 Class A2, currently Baa2 Class B, currently Ba3 -- Series 2001-1 Pass Through Certificates, placed on Review for Possible Downgrade Class A1, currently Ba1 Class A2, currently Ba1 Class B, curently B1 Class C, currently B3 -- Series 2001-2 Pass Through Certificates, placed on Review for Possible Downgrade Class A1, currently Baa2 Class B, currently Baa3 -- Secured Global Notes Class A, currently rated Ba1 -- Secured Notes Class B, currently rated B1 -- Series 2005-1 Pass Through Certificates, placed on Review for Possible Downgrade Class G, currently Baa1 Class B, currently Ba2 -- Senior Secured Equipment Trust, Placed on Review for Possible Downgrade, currently rated B1 to Caa1 -- Senior Secured Regular Bond/Debenture, Placed on Review for Possible Downgrade, currently B1 -- Senior Secured Shelf, Placed on Review for Possible Downgrade, currently (P)Ba3 Issuer: Chicago O'Hare International Airport, IL -- Revenue Bonds, Placed on Review for Possible Downgrade, currently 83 - LGD5 -- Senior Unsecured Revenue Bonds, Placed on Review for Possible Downgrade, currently 83 - LGD5 Issuer: Dallas-Fort Worth Intl. Airp. Fac. Imp. Corp. -- Revenue Bonds, Placed on Review for Possible Downgrade, currently 83 - LGD5 -- Senior Secured Revenue Bonds, Placed on Review for Possible Downgrade, currently 83 - LGD5 -- Senior Unsecured Revenue Bonds, Placed on Review for Possible Downgrade, currently 83 - LGD5 Issuer: Dallas-Fort Worth TX, Regional Airport -- Revenue Bonds, Placed on Review for Possible Downgrade, currently 83 - LGD5 Issuer: New Jersey Economic Development Authority -- Revenue Bonds, Placed on Review for Possible Downgrade, currently 83 - LGD5 Issuer: New York City Industrial Development Agcy, NY -- Revenue Bonds, Placed on Review for Possible Downgrade, currently 83 - LGD5 -- Senior Unsecured Revenue Bonds, Placed on Review for Possible Downgrade, currently 83 - LGD5 Issuer: Puerto Rico Ind Med&Env Poll Ctl Fac Fin Auth -- Revenue Bonds, Placed on Review for Possible Downgrade, currently 83 - LGD5 Issuer: Puerto Rico Ports Authority -- Senior Unsecured Revenue Bonds, Placed on Review for Possible Downgrade, currently 83 - LGD5 Issuer: Raleigh-Durham Airport Authority, NC -- Revenue Bonds, Placed on Review for Possible Downgrade, currently 83 - LGD5 Issuer: Regional Airports Improvement Corporation, CA -- Senior Unsecured Revenue Bonds, Placed on Review for Possible Downgrade, currently 83 - LGD5 Issuer: Tulsa OK, Municipal Airport Trust (Ttees of) -- Revenue Bonds, Placed on Review for Possible Downgrade, currently 83 - LGD5 -- Senior Secured Revenue Bonds, Placed on Review for Possible Downgrade, currently 83 - LGD5 -- Senior Unsecured Revenue Bonds, Placed on Review for Possible Downgrade, currently 83 - LGD5 Outlook Actions: Issuer: AMR Corporation -- Outlook, Changed To Rating Under Review From Stable Issuer: American Airlines 1988-A Grantor Trust -- Outlook, Changed To Rating Under Review From Stable Issuer: American Airlines, Inc. -- Outlook, Changed To Rating Under Review From Stable Headquartered in Forth Worth, Texas, AMR Corporation (NYSE: AMR) operates with its principal subsidiary, American Airlines Inc. -- http://www.aa.com/-- a worldwide scheduled passenger airline. At the end of 2006, American provided scheduled jet service to about 150 destinations throughout North America, the Caribbean, Latin America, including Brazil, Europe and Asia. American is also a scheduled airfreight carrier, providing freight and mail services to shippers throughout its system. Its wholly owned subsidiary, AMR Eagle Holding Corp., owns two regional airlines, American Eagle Airlines Inc. and Executive Airlines Inc., and does business as "American Eagle." American Beacon Advisors Inc., a wholly owned subsidiary of AMR, is responsible for the investment and oversight of assets of AMR's U.S. employee benefit plans, as well as AMR's short-term investments. BANCO NACIONAL: Grants BRL1.5 Billion Investment Fund Program ------------------------------------------------------------- Banco Nacional de Desenvolvimento Economico e Social SA has approved a new Investment Fund Program, with a BRL1.5 billion budget. It is intended to broaden the support to capitalization of companies of all sizes, spread out good governance practices and foster the risk capital culture in Brazil. The new program will be focused on businesses under the priorities of BNDES. The program will allow investments in shares of up to ten funds, eight of which will be private equity funds and two investment funds in emerging companies (venture capital). These funds will be selected by stages, based on the assessment of market opportunities and BNDES priorities. BNDESPAR's maximum share in the committed equity will be, respectively, up to 20% in private equity funds and a maximum of 25% in venture capital funds. This program will be in effect for 24 months, during which the funds will be selected. First call The first call of the program is in effect for the capitalization of three private equity funds, with the following investments policy: 1) one in agribusiness; 2) one for the production chain of ethanol and/or generation of energy through biomass (cogeneration with sugarcane waste, biodiesel etc); and 3) one for governance increment, with no sector focus. Proposals of businessmen wishing to take part in one or more first call funds must be prepared on an independent basis according to the selection and eligibility information disclosed on the company's web site. Proposals must be sent to BNDES up to August 11, 2008. They must be assessed as per eliminatory and qualification criteria, as set forth in the program and described on the website. The strategic importance of the new BNDES funds program is associated to the strengthening of the Brazilian capital market and to the reinforcement of the Bank's performance as an investment agent in Brazil. The program must allow capitalization of companies in strategic sectors, also allowing the consolidation in some segments, complementing financing sources and generating new jobs. BNDES currently takes part in 31 investment funds, seven of which under contracting phase. These funds account for a committed equity of nearly BRL7.4 billion, a 5-fold leveraging effect as compared to the funds invested by BNDES. Since BNDES started performing through funds, it provided direct investments in more than 110 companies of different sizes and sectors of the Brazilian economy. Selection Of Funds The selection of funds, following examples of previous programs, is intended to give transparency and reliability to the choices made by BNDES. The steps the process include: -- Internal definition, before each selection process, investment policies proposed for the funds, established according to BNDES performance priorities; -- call for the selection of funds through public disclosure; -- submission of proposals of businessmen pre-qualified by the BNDES Securities Committee, on a date yet to be defined; -- approval of the selection process and eligibility of winning proposals by the Eligibility and Credit Committee; -- assessment of regulations and due diligence of fund managers selected; and -- final approval by BNDESPAR management. 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. BRASKEM SA: Schedules Shareholders General Meeting to July 25 ------------------------------------------------------------- Braskem S.A. has informed its shareholders to attend the Extraordinary General Meeting on July 25, 2008, at 10 a.m., at the company's headquarters located at Rua Eteno, 1.561, Polo Petroquimico, in the Municipality of Camacari, State of Bahia. At the meeting, the shareholders will: -- elect members of the board of directors as arising from the resignations presented; and -- appoint president and vice-president of thecompany's board. Braskem S.A. (BOVESPA: BRKM5; NYSE: BAK; LATIBEX: XBRK) -- http://www.braskem.com.br/-- is a thermoplastic resins producer in Latin America, and is among the three largest Brazilian-owned private industrial companies. The company operates 13 manufacturing plants located throughout Brazil, and has an annual production capacity of 5.8 million tons of resins and other petrochemical products. The company reported consolidated net revenues of about US$9 billion in the trailing twelve months through Sept. 30, 2007. * * * As reported in the Troubled Company Reporter-Latin America on Jan. 17, 2008, Fitch Ratings affirmed the 'BB+' foreign and local currency issuer default ratings of Braskem S.A. Fitch also affirmed the 'BB+' ratings on the company's senior unsecured notes 2008, 2014, and senior unsecured notes 2017. TCR-LA reported on Dec. 10, 2007, that Standard & Poor's raised Braskem's long-term corporate credit to 'BB+' from 'BB'. On Nov. 28, 2007, Moody's Investors Service assigned the company a corporate family rating of Ba1 on the agency's global scale. BRASKEM SA: Signs Deal for Resins Supply to Pequiven ---------------------------------------------------- Braskem S.A. has signed a partnership agreement with Petroquimica de Venezuela, a.k.a. Pequiven, under which it will supply resins to that country in the pre-marketing phase, before the operational start-up of Propilsur and Polimerica, the mixed- capital companies constituted by the two companies. According to the deal, Braskem will supply the petrochemical company up to 5,000 tonnes of polyethylene and polypropylene resins every month to be sold exclusively in Venezuela. Braskem and Pequiven will own equal shareholding interest in both Propilsur and Polimerica, according to the shareholders' agreement signed at the end of 2007. Propilsur will be responsible for the integrated polypropylene project with production capacity of 450,000 tonnes a year, with investments estimated at US$880 million, and is expected to go operational at the end of 2010. The project's financing model, which envisages a 30/70 equity/debt structures, is already in progress. Polimerica, a company in which Pequiven and Braskem have equal interest and rights, will be responsible for investments, estimated at around US$2.6 billion, in the natural gas-based integrated polyethylene complex, with production capacity of more than 1.1 million tonnes/year and which is expected to start up in 2012. "Within Braskem's strategy of sourcing raw material at competitive terms, Venezuela has one of the largest oil and gas reserves in the world and hence was chosen as the initial platform for the Company's global operations," says Sergio Thiesen, Managing Director of Braskem Venezuela. "Together with Pequiven, we will build petrochemical projects here that are as competitive as those in the Middle East," he affirms. Braskem S.A. (BOVESPA: BRKM5; NYSE: BAK; LATIBEX: XBRK) -- http://www.braskem.com.br/-- is a thermoplastic resins producer in Latin America, and is among the three largest Brazilian-owned private industrial companies. The company operates 13 manufacturing plants located throughout Brazil, and has an annual production capacity of 5.8 million tons of resins and other petrochemical products. The company reported consolidated net revenues of about US$9 billion in the trailing twelve months through Sept. 30, 2007. * * * As reported in the Troubled Company Reporter-Latin America on Jan. 17, 2008, Fitch Ratings affirmed the 'BB+' foreign and local currency issuer default ratings of Braskem S.A. Fitch also affirmed the 'BB+' ratings on the company's senior unsecured notes 2008, 2014, and senior unsecured notes 2017. TCR-LA reported on Dec. 10, 2007, that Standard & Poor's raised Braskem's long-term corporate credit to 'BB+' from 'BB'. On Nov. 28, 2007, Moody's Investors Service assigned the company a corporate family rating of Ba1 on the agency's global scale. CAMARGO CORREA: Fitch Holds BB Rating, Outlook Now Positive ----------------------------------------------------------- Fitch Ratings has affirmed the Issuer Default Rating and outstanding debt ratings of Camargo Correa as follows: -- Foreign currency issuer default rating 'BB'; -- Local currency issuer default rating 'BB'; -- National Scale rating 'AA-(bra)'. CCSA Finance Limited: -- US$250 million senior unsecured bonds due 2016 'BB' CCSA Finance Limited is a special-purpose vehicle wholly-owned by Camargo Correa and incorporated in the Cayman Islands), unconditionally guaranteed by Camargo. Fitch has also revised Camargo Correa's rating outlook to positive from stable. The outlook revision to Positive reflects the improved Brazilian economic environment which has favorably affected much of Camargo Correa's businesses, particularly in its cement, engineering and construction businesses. Additionally, it reflects increased diversity of revenues and cash flows across industry and geography, lower leverage and better debt-service coverage ratios. The positive outlook also incorporate Fitch's expectation of considerable margin improvement in the next few years mostly reflecting new Engineering and Construction (E&C) projects to come on line at much better margins, and cost savings at its textile business. Nevertheless, the affect of its aggressive growth strategy on credit protection measures remains a concern and has been incorporated into the ratings. The company's ratings are supported by benefits from its diversified portfolio of operations, adequate market position in the industries in which it participates, and strong liquidity relative to leverage, which partially mitigates exposure to domestic economic risks. Camargo Correa's ratings incorporate the high correlation of its core businesses of cement, engineering and construction, textiles and footwear with general economic conditions of countries, in which it operates in, but especially Brazil and Argentina. The ratings take into consideration high leverage in some of its individual business segments and a very aggressive growth strategy. Camargo Correa is seeking to strengthen its growth over the next several years and further position itself among the top five industrial private conglomerates in Brazil, further strengthening its market position. Some of this growth will be organic, particularly in the footwear and engineering and construction segments, which are planning to expand their market base internationally. In the footwear segment, much of the growth is planned through acquisitions while the cement, textile and infrastructure business is expected to grow organically. The company does not expect to enter any new industries in the near future. In recent years, it has pursued a growth strategy targeted primarily to expand operations outside of Brazil, which has further diversified country risk. However, in the near future, the company is likely to look to capitalize on the strong economic performance in Brazil by focusing its investments in the domestic market. Export revenues and sales abroad, which accounted for approximately 19% of revenues in 2007, should grow to approximately 27% in 2008. Credit protection measures have been gradually improving since the company took an aggressive financial position to fund acquisitions which had caused credit protection measures to deteriorate in 2005. Leverage ratios are now in line for the rating category on a total-debt-to-EBITDA basis and solid on a net-debt basis. Camargo Correa has had a history of maintaining large cash balances on its balance sheet in order to facilitate acquisitions and mitigate market volatility in a scenario where access to debt markets becomes limited. Fitch expects the company to continue managing its balance sheet to a targeted ratio of net-debt-to-EBITDA in the 1.5 times to 2.0 range. At Dec. 31, 2007, the ratio of total-debt-to-EBITDA and net-debt-to-EBITDA was 3.3 and 1.6, respectively, versus 4.2 and 2.0 at the end of 2006. Meanwhile, EBITDA-to-interest expense was 2.5 at the end of 2007 versus 1.9 in 2006. Structural subordination risk associated with a holding company structure is mitigated by the company's financial performance, its industry and geographic diversification, as well as the robust dividend flow from core operating companies and minority equity stakes. At Dec. 31, 2007, Camargo Correa had BRL3 billion of consolidated cash and marketable securities of which about BRL1.9 billion was held at the HolCo. The Holding company consistently maintains a substantial amount of offshore cash, at the end of December that cash amounted to US$575 million. During the same period, the company had consolidated total debt of BRL5.8 billion of which approximately 38% was denominated in currencies other than the domestic currency. Consolidated short-term debt accounted for about 18.5% of total debt. Of the total debt approximately BRL800 million was at the Holding company (15% short-term). Camargo Correa SA -- http://www.camargocorrea.com.br/-- is one of the largest private industrial conglomerates in Brazil. The company is a holding company with interests in cement, engineering and construction, textiles, footwear and sportswear manufacturing. It also owns non- controlling equity interests in the energy, transportation (highway concessions) and steel businesses. During the last 12 months through June 2007, Camargo Correa had net sales of BRL9.2 billion and EBITDA of BRL1.4 billion. The company is controlled by the Camargo family through their direct holdings in Participacoes Morro Vermelho, which in turn owns 100% of Camargo. GERDAU SA: Reports US$456.4MM Net Income in Qtr. Ended March 31 --------------------------------------------------------------- Gerdau S.A. has earned US$456.4 million on US$5.11 billion of net sales for the three months ended March 31, 2008, compared to US$424.7 million of net income on US$3.49 million of net revenues for the same period of 2007, a regulatory filing disclosed. According to the disclosure, the company was committed to purchase an additional interest in Diaco S.A. This option was exceeded by the counterpart during the first quarter of 2008, resulting in a payment made by the company summing US$107.2 million on Jan. 10, 2008 and represented an ownership of 40.2% in the Diaco S.A.'s capital. Empresa Siderurgica del Peru S.A.A. - Siderperu - contracted swaps of interest rates, receiving a variable interest rate based on Libor and pays a fixed interest rate in US dollars. This agreement has a notional value of US$75,000 and maturity date on April 30, 2014. The fair value of these agreements is a net loss of US$4,118. Headquartered in Porto Alegre, Brazil, Gerdau S.A. -- http://www.gerdau.com.br/-- produces and distributes crude steel and related long rolled products, drawn products, and long specialty products. In addition to Brazil, Gerdau operates in Argentina, Canada, Chile, Colombia, Uruguay, India and the United States. * * * As reported in the Troubled Company Reporter-Latin America on Nov. 26, 2007, Moody's Investors Service affirmed Gerdau S.A.'s Ba1 corporate family rating and stable outlook. GOL LINHAS: To Release Second Quarter 2008 Earnings on August 12 ---------------------------------------------------------------- GOL Linhas Aereas Inteligentes S.A., the parent company of Brazilian airlines GOL Transportes Aereos S.A. and VRG Linhas Aereas S.A., will release its second quarter 2008 earnings results on Aug. 12, 2008, before the market open. The release will be available on the company's web site at: http://www.voegol.com.br/ir In accordance with fair disclosure and corporate governance best practices, GOL will respect a Quiet Period that will start on July 25, ending immediately after the conference calls on Aug. 12. 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. SADIA SA: Baumhardt Deal Won't Require Shareholder Ratification --------------------------------------------------------------- Sadia S.A.'s acquisition of 73.9% of the capital of Baumhardt Comercio e Participacoes Ltda. does not require a ratification by the general meeting of shareholders nor gives the right to withdraw, Welson Teixeira, Junior, Sadia Investor Relations Director, explains in a regulatory filing with the U.S. Securities and Exchange Commission. Mr. Teixeira's made the statement in answer to a query by the Sao Paulo Stock Exchange regarding the transaction. In view of the internal economic appraisal prepared to guide the transaction, which was based on discounted cash flow, the company has concluded that the basis for the acquisition does not fall within the conditions established by Law 6404/76, Article 256, and therefore does not require a ratification by the general meeting of shareholders nor gives the right to withdraw, Mr. Teixeira explains. Headquartered in Sao Paulo, Brazil, Sadia S.A. -- http://www.sadia.com-- operates in the agro industrial and food processing sectors in Brazil and primarily produces a range of processed products, poultry, and pork. The company distributes around 1,000 different products through distribution and sales centers located in Brazil, China, Japan and Italy. * * * As reported by the Troubled Company Reporter-Latin America on JunE 23, 2008, Standard & Poor's Ratings Services raised its long-term corporate credit rating on Sadia S.A. to 'BB+' from 'BB'. The rating on the company's US$250 million notes was also raised to 'BB+'. The outlook is stable. SENSATA TECHNOLOGIES: Moody's Cuts Ratings, Junks Senior Notes -------------------------------------------------------------- Moody's Investors Service lowered the ratings of Sensata Technologies B.V. corporate family rating to B3 from B2; probability of default to B3 from B2; senior secured credit facility to B1 from Ba3; senior unsecured notes to Caa1 from B3; and senior subordinated notes to Caa2 from Caa1. These rating actions reflect the company's sustained high leverage levels and modest debt service metrics, and the potential for weaker economic trends to further pressure the company's operating performance over the coming year. The company's speculative grade liquidity rating remains at SGL-2. The outlook is changed to stable from negative. The downgrade of the company's corporate family rating to B3 from B2 reflects the lack of deleveraging as the company continues to face challenging economic environments. Key leverage metrics through the 12 months of March 31, 2008 were: debt/EBITDA near 9.0x times and EBITA/interest of 1.2 times. The high leverage results from the initial acquisition of Sensata by Bain Capital, LLC in April 2006 augmented by a series of debt-financed acquisitions since then. Moody's had expected some level of debt repayment beyond mandatory term loan amortization, which would have partially offset some of the negative impact from foreign exchange translation on the company's euro-denominated debt. The strong euro relative to the U.S. dollar is resulting in higher debt balances on Sensata's consolidated balance sheet adding to the high leverage. This leveraged capital structure could hinder the company's financial flexibility as some of the company's end markets face increasing economic pressures. Additionally, the slowing U.S. economy is negatively impacting the domestic housing market, a key source of revenue for its controls business. While a significant portion of Sensata's business is derived from sensors used on automobiles, the company is less affected by declining auto sales than traditional auto parts suppliers because of the increasing content of electronics on vehicles. These weaknesses are balanced against the company's good liquidity, global presence, and growing exposure to several other end markets including aerospace and telecommunications. The stable outlook reflects Sensata's good liquidity and ability to generate free cash flow as it faces a slowing U.S. economy, which is negatively impacting some of its key end markets. These ratings/assessments were affected by this action: -- Corporate family rating lowered to B3 from B2; -- Probability of default rating lowered to B3 from B2; -- Senior secured credit facility downgraded to B1 (LGD2, 28%) from Ba3 (LGD2, 29%); -- US$450 million senior unsecured notes due 2014 downgraded to Caa1 (LGD5, 73%) from B3 (LGD5, 75%); and, -- EUR245 million senior subordinate notes due 2016 downgraded to Caa2 (LGD6, 90%) from Caa1 (LGD6, 91%). -- The company's speculative grade liquidity rating of SGL-2 is unchanged. Headquartered in Attleboro, Massachusetts and incorporated under the laws of The Netherlands, Sensata Technologies B.V. -- http://www.sensata.com/-- designs and manufactures sensors and electronic controls. Sensata is a global designer, manufacturer, and marketer of customized and engineered sensors and control products. The company has manufacturing locations in Brazil, Mexico, China, Japan and the Netherlands. Revenues for the 12 months ended March 31, 2008 totaled about US$1.5 billion. SPECTRUM BRANDS: Bares Supplemental Info on Pet Biz Sale -------------------------------------------------------- In connection with the sale of its global pet business to Salton Inc., Spectrum Brands Inc. is disclosing certain information concerning the pet business. As disclosed in the Troubled Company Reporter on May 22, 2008, Spectrum Brands signed a definitive agreement with Salton and its subsidiary, Applica Pet Products LLC, for the sale of its global pet business for US$692.5 million in cash and an aggregate principal amount of the company's subordinated debt securities equal to US$222.5 million less an amount equal to accrued and unpaid interest on such subordinated debt securities since the dates of the last interest payments thereon, which, depending on when the closing occurs, could be an amount of up to approximately US$6.5 million. A full-text copy of the Supplemental Regulation FD Disclosure of Spectrum Brands, Inc., dated July 1, 2008, is available for free at http://ResearchArchives.com/t/s?2f61 The Troubled Company Reporter reported on July 1, 2008, that Spectrum Brands has not been successful in its attempt to secure the consent of its senior lenders necessary to complete the sale of its pet supply business. The company continues to believe that the sale of its global pet business to Salton Inc. and its subsidiary, Applica Pet, upon the negotiated terms is in the best interests of the company and its shareholders, well as its other constituencies. The definitive purchase agreement continues in full force and effect, and the company intends to comply with its obligations thereunder in order to satisfy the conditions necessary to consummate the sale of its global pet supply business. About Salton Inc. Headquartered in Lake Forest, Illinois, Salton Inc. (NYSE:SFP) -- http://www.saltoninc.com/-- designs, markets and distributes branded, high-quality small appliances, home decor and personal care products. Its product mix includes a range of small kitchen and home appliances, electronics for the home, time products, lighting products, picture frames and personal care and wellness products. About Spectrum Brands Headquartered in Atlanta, Georgia, Spectrum Brands Inc. (NYSE: SPC) -- http://www.spectrumbrands.com/-- is a supplier of consumer batteries, lawn and garden care products, specialty pet supplies, shaving and grooming products, household insect control products, personal care products and portable lighting. The company's European unit, Rayovac Europe GmbH, is headquartered in Sulzbach, Germany. Outside the United States, the company also has manufacturing facilities in Brazil, Columbia and China. * * * As disclosed in the Troubled Company Reporter-Latin America on May 26, 2008, Moody's Investors Service placed the Caa1 corporate family rating and Caa1 probability of default rating of Spectrum Brands under review following the announcement that Spectrum has entered into a definitive agreement to sell its Global Pet business to Applica Pet Products, a subsidiary of Salton, Inc., for over US$900 million. As reported in the TCR-LA on May 26, 2008, following the announcement that Spectrum Brands has signed a definitive agreement with Salton, Inc. for the sale of its Global Pet Business for approximately US$692.5 million in cash and an aggregate principal amount of Spectrum's subordinated debt securities equal to US$222.5 million, Fitch affirms Spectrum Brands, Inc. ratings as Issuer Default Rating at 'CCC'; US$1 billion term loan B at 'B/RR1'; US$225 million ABL at 'B/RR1'; EUR350 million term loan at 'B/RR1'; US$700 million 7.4% senior sub note at 'CCC-/RR5'; US$2.9 million 8.5% senior sub note at 'CCC-/RR5'; and US$347 million 11.25% variable rate toggle senior sub note at 'CCC-/RR5'. The Rating Outlook is Negative. Standard & Poor's Ratings Services placed its ratings on Atlanta-based Spectrum Brands Inc., including the 'CCC+' long- term corporate credit rating, on CreditWatch with positive implications. The CreditWatch status indicates that S&P could either raise or affirm the ratings following the completion of its review. Approximately US$2.6 billion of debt was outstanding as of March 30, 2008. ========================== C A Y M A N I S L A N D S ========================== CCSA Finance: Fitch Affirms BB Rating on US$250 Mil. Sr. Bonds -------------------------------------------------------------- Fitch Ratings has affirmed the Issuer Default Rating and outstanding debt ratings of Camargo Correa as follows: -- Foreign currency issuer default rating 'BB'; -- Local currency issuer default rating 'BB'; -- National Scale rating 'AA-(bra)'. CCSA Finance Limited: -- US$250 million senior unsecured bonds due 2016 'BB' Fitch has also revised Camargo Correa's rating outlook to positive from stable. The outlook revision to Positive reflects the improved Brazilian economic environment which has favorably affected much of Camargo Correa's businesses, particularly in its cement, engineering and construction businesses. Additionally, it reflects increased diversity of revenues and cash flows across industry and geography, lower leverage and better debt-service coverage ratios. The positive outlook also incorporate Fitch's expectation of considerable margin improvement in the next few years mostly reflecting new Engineering and Construction (E&C) projects to come on line at much better margins, and cost savings at its textile business. Nevertheless, the affect of its aggressive growth strategy on credit protection measures remains a concern and has been incorporated into the ratings. The company's ratings are supported by benefits from its diversified portfolio of operations, adequate market position in the industries in which it participates, and strong liquidity relative to leverage, which partially mitigates exposure to domestic economic risks. Camargo Correa's ratings incorporate the high correlation of its core businesses of cement, engineering and construction, textiles and footwear with general economic conditions of countries, in which it operates in, but especially Brazil and Argentina. The ratings take into consideration high leverage in some of its individual business segments and a very aggressive growth strategy. Camargo Correa is seeking to strengthen its growth over the next several years and further position itself among the top five industrial private conglomerates in Brazil, further strengthening its market position. Some of this growth will be organic, particularly in the footwear and engineering and construction segments, which are planning to expand their market base internationally. In the footwear segment, much of the growth is planned through acquisitions while the cement, textile and infrastructure business is expected to grow organically. The company does not expect to enter any new industries in the near future. In recent years, it has pursued a growth strategy targeted primarily to expand operations outside of Brazil, which has further diversified country risk. However, in the near future, the company is likely to look to capitalize on the strong economic performance in Brazil by focusing its investments in the domestic market. Export revenues and sales abroad, which accounted for approximately 19% of revenues in 2007, should grow to approximately 27% in 2008. Credit protection measures have been gradually improving since the company took an aggressive financial position to fund acquisitions which had caused credit protection measures to deteriorate in 2005. Leverage ratios are now in line for the rating category on a total-debt-to-EBITDA basis and solid on a net-debt basis. Camargo Correa has had a history of maintaining large cash balances on its balance sheet in order to facilitate acquisitions and mitigate market volatility in a scenario where access to debt markets becomes limited. Fitch expects the company to continue managing its balance sheet to a targeted ratio of net-debt-to-EBITDA in the 1.5 times to 2.0 range. At Dec. 31, 2007, the ratio of total-debt-to-EBITDA and net-debt-to-EBITDA was 3.3 and 1.6, respectively, versus 4.2 and 2.0 at the end of 2006. Meanwhile, EBITDA-to-interest expense was 2.5 at the end of 2007 versus 1.9 in 2006. Structural subordination risk associated with a holding company structure is mitigated by the company's financial performance, its industry and geographic diversification, as well as the robust dividend flow from core operating companies and minority equity stakes. At Dec. 31, 2007, Camargo Correa had BRL3 billion of consolidated cash and marketable securities of which about BRL1.9 billion was held at the HolCo. The Holding company consistently maintains a substantial amount of offshore cash, at the end of December that cash amounted to US$575 million. During the same period, the company had consolidated total debt of BRL5.8 billion of which approximately 38% was denominated in currencies other than the domestic currency. Consolidated short-term debt accounted for about 18.5% of total debt. Of the total debt approximately BRL800 million was at the Holding company (15% short-term). CCSA Finance Limited is a special-purpose vehicle wholly-owned by Camargo Correa and incorporated in the Cayman Islands), unconditionally guaranteed by Camargo Correa. GRAND ISLAND: Court to Hear Petition for Liquidation on July 21 --------------------------------------------------------------- Grand Island Commodity Trading Fund II's petition for voluntary liquidation will be heard before the Grand Court at the Law Courts, George Town, Grand Cayman, Cayman Islands on July 21, 2008, at 10:00 a.m. Grand Island Commodity's petition was filed with the Court on June 27, 2008. The liquidators can be reached at: David A.K. Walker and Nicholas Freeland Attn: Nigel Meeson, Q.C. �� PricewaterhouseCoopers �� P.O. Box 258 Strathvale House, 90 North Church Street �� Grand Cayman, Cayman Islands GRAND ISLAND MASTER: Wants Voluntary Liquidation ------------------------------------------------ Grand Island Master Fund's petition for a voluntary liquidation will be heard before the Grand Court at the Law Courts, George Town, Grand Cayman, Cayman Islands on July 21, 2008, at 10:00 a.m. Grand Island Commodity's petition was presented to the Court on June 27, 2008. The liquidators can be reached at: David A.K. Walker and Nicholas Freeland Attn: Nigel Meeson, Q.C. �� PricewaterhouseCoopers �� P.O. Box 258 Strathvale House, 90 North Church Street �� Grand Cayman, Cayman Islands FRANJEAN AT SEA: Deadline for Claims Filing Is Until July 20 ------------------------------------------------------------ Franjean At Sea Ltd.'s creditors have until July 20, 2008, to prove their claims to Walkers SPV Limited, 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. Franjean At Sea's shareholder decided on June 20, 2008, to place the company into voluntary liquidation under The Companies Law (2004 Revision) of the Cayman Islands. The liquidator can be reached at: Walkers SPV Limited Walker House, 87 Mary Street George Town Grand Cayman Cayman Islands Contact for inquiries: Anthony Johnson Telephone: (345) 914-6314 LOWE ENTERPRISES: Deadline for Claims Filing Is July 20 ------------------------------------------------------- Lowe Enterprises (Cayman) Ltd.'s creditors have until July 20, 2008, to prove their claims to Walkers SPV Limited, 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. Lowe Enterprises' shareholder decided on June 20, 2008, to place the company into voluntary liquidation under The Companies Law (2004 Revision) of the Cayman Islands. The liquidator can be reached at: Walkers SPV Limited Walker House 87 Mary Street George Town, Grand Cayman Cayman Islands Contact for inquiries: Anthony Johnson Telephone: (345) 914-6314 ROBINSON CRUSOE: Proofs of Claim Filing Deadline Is July 19 ----------------------------------------------------------- Robinson Crusoe Landing Ltd.'s creditors have until July 19, 2008, to prove their claims to RTB Secretaries Limited, 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. Robinson Crusoe's shareholder decided on June 19, 2008, to place the company into voluntary liquidation under The Companies Law (2004 Revision) of the Cayman Islands. The liquidator can be reached at: RTB Secretaries Limited c/o Rothschild Trust Cayman Limited PO Box 10129 APO 5th Floor Citrus Grove, George Town Grand Cayman, Cayman Islands Telephone: (345) 946-7033 Fax: (345) 946-7043 SILVER EAGLE: Deadline for Proofs of Claim Filing Is July 21 ------------------------------------------------------------ Silver Eagle Holdings Ltd.'s creditors have until July 21, 2008, to prove their claims to CDL Company Ltd., 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. Silver Eagle's shareholder decided on June 5, 2008, to place the company into voluntary liquidation under The Companies Law (2004 Revision) of the Cayman Islands. The liquidator can be reached at: CDL Company Ltd. P.O. Box 31106 Grand Cayman, Cayman Islands WAFRA/RHH EQUITY: Holds Final Shareholders Meeting on July 21 ------------------------------------------------------------- Wafra/RHH Equity Co. Ltd. will hold its final shareholders meeting on July 21, 2008, at 10:00 a.m., at 345 Park Avenue, 41st Floor, New York, New York. These matters will be taken up during the meeting: 1) accounting of the wind-up process, and 2) authorizing the liquidators of the company to retain the records of the company for a period of three years from the dissolution of the company, after which they may be destroyed. Wafra/RHH Equity's shareholder(s) agreed on June 3, 2008, to place the company into voluntary liquidation under The Companies Law (2004 Revision) of the Cayman Islands. The liquidator can be reached at: Anthony G. Barbuto c/o Kuwait Real Estate Investment Consortium P.O. Box 23411 Safat, Kuwait WAFRA/RHH FINANCE: Sets Final Shareholders Meeting on July 21 ------------------------------------------------------------- Wafra/RHH Finance Co. Ltd. will hold its final shareholders meeting on July 21, 2008, at 10:00 a.m., at 345 Park Avenue, 41st Floor, New York, New York. These matters will be taken up during the meeting: 1) accounting of the wind-up process, and 2) authorizing the liquidators of the company to retain the records of the company for a period of three years from the dissolution of the company, after which they may be destroyed. Wafra/RHH Finance's shareholder(s) agreed on June 3, 2008, to place the company into voluntary liquidation under The Companies Law (2004 Revision) of the Cayman Islands. The liquidator can be reached at: Anthony G. Barbuto c/o Kuwait Real Estate Investment Consortium P.O. Box 23411 Safat, Kuwait WANT WANT INTERNATIONAL: Claims Filing Deadline Is July 21 ---------------------------------------------------------- Want Want International Ltd.'s creditors have until July 21, 2008, to prove their claims to Tsai Shao-Chung, 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. Want Want International's shareholders decided on June 10, 2008, to place the company into voluntary liquidation under The Companies Law (2004 Revision) of the Cayman Islands. The liquidator can be reached at: Tsai Shao-Chung P.O. Box 268 GT Grand Cayman, Cayman Islands Contact for inquiries: Rhonda Laws Tel: (345) 949-2648 Fax: (345) 949-8613 =============== C O L O M B I A =============== BANCOLOMBIA SA: COP84.4BB Unconsolidated Earnings in June 2008 -------------------------------------------------------------- Bancolombia S.A. has reported unconsolidated net income of COP84.4 billion in June 2008. Net income for Bancolombia on an unconsolidated basis totaled COP584.9 billion for the first six months of 2008, increasing 63.7% as compared to the same period of 2007. -- Net interest income, including investment securities, totaled COP204.5 billion in June 2008. For the six-month period ended June 30, 2008, net interest income totaled COP1,209.4 billion, increasing 37.8% as compared to the same period last year. -- Net fees and income from services in June 2008 totaled COP65.8 billion. For the six-month period ended June 30, 2008, net fees and income from services totaled COP374 billion, which represents an increase of 18.7% as compared to the same period of 2007. -- Other operating income totaled COP59.3 billion in June 2008. For the six-month period ended June 30, 2008, other operating income totaled COP387.5 billion, increasing 142.4% as compared to the same period last year. Bancolombia notes that a considerable part of this revenue comes from dividend income received from subsidiaries, which is eliminated in the consolidated results as it is an intercompany transaction. As a result, this dividend income is only recorded in Bancolombia's unconsolidated results. -- Net provisions totaled COP58.9 billion in June 2008. Net provisions totaled COP263.6 billion for the six-month period ended June 30, 2008, which represents an increase of 127% as compared to the same period of 2007. -- Operating expenses totaled COP148.4 billion in June 2008. For the six-month period ended June 30, 2008, operating expenses totaled COP849.8 billion, increasing 9.4% as compared to the same period of 2007. Total assets (unconsolidated) amounted to COP34.6 trillion, loans amounted to COP24.3 trillion, deposits totaled COP21.2 trillion and Bancolombia's total shareholders' equity amounted to COP5.06 trillion. Bancolombia's (unconsolidated) level of past due loans as a percentage of total loans amounted to 3.18% as of June 30, 2008, and the level of allowance for past due loans amounted to 132.14% as of the same date. Market Share According to Colombia's national banking association (ASOBANCARIA), BANCOLOMBIA's market share of the Colombian financial system as of June 2008 was as follows: 18.5% of total deposits, 20.9% of total net loans, 19.2% of total savings accounts, 21.1% of total checking accounts and 15.6% of total time deposits. About Bancolombia Bancolombia S.A. is Colombia's largest full-service financial institution, formed by a merger of three leading Colombian financial institutions. Bancolombia's market capitalization is over US$5.5 billion, with US$13.8 billion asset base and US$1.4 billion in shareholders' equity as of Sept. 30, 2006. Bancolombia is the only Colombian company with an ADR level III program in the New York S0tock Exchange. * * * As reported in the Troubled Company Reporter-Latin America on June 23, 2008, Moody's Investors Service upgraded Bancolombia's foreign currency subordinated bond rating to Baa3 from Ba1. Moody's said the outlook is stable. ================== C O S T A R I C A ================== ALCATEL-LUCENT SA: Appeals MP3 Patent Ruling vs. Microsoft Corp --------------------------------------------------------------- Alcatel-Lucent S.A. has reiterated at the U.S. Court of Appeals for the Federal Circuit that Microsoft Corp. infringed technology patents, Reuters reports. Alcatel-Lucent is appealing a decision of Judge Rudi Brewster of the U.S. District Court for the District of California that reversed in August 2007 a jury's decision ordering Microsoft to pay around US$1.52 billion in patent infringement damages to the company. The conflict centers on an MP3 development project between Fraunhofer Gesellschaft and AT&T, of which Lucent Technologies was formerly pat of. Alcetel-Lucent maintains that patent was based on work by Lucent's research arm, and could not legally be licensed by Fraunhofer to Microsoft. In April 2008, a U.S. federal jury has also ordered Microsoft to pay around US$367.4 million in infringement damages to Alcatel- Lucent. The jury ruled that Microsoft infringed two technology patents: one which allows users to enter dates into calendars, and another one that allows tablet computers to recognize handwriting patterns. About Alcatel-Lucent Headquartered in Paris, France, Alcatel-Lucent S.A. -- http://www.alcatel-lucent.com/-- provides solutions that enable service providers, enterprises and governments worldwide to deliver voice, data and video communication services to end users. Alcatel-Lucent maintains operations in 130 countries, including, Austria, Germany, Hungary, Italy, Netherlands, Ireland, Canada, United States, Costa Rica, Dominican Republic, El Salvador, Guatemala, Peru, Venezuela, Indonesia, Australia, Brunei and Cambodia. * * * Alcatel-Lucent continues to carry Ba3 Corporate Family and Senior Debt ratings, Not-Prime for short term debt, as well as B2 ratings for subordinated debt with negative outlook from Moody's Investors Service. The ratings were were affirmed in April 2008. Alcatel-Lucent's Long-Term Corporate Credit rating and Senior Unsecured Debt still carry Standard & Poor's Ratings Services' BB rating. Its Short-Term Corporate Credit rating stands at B. =========== M E X I C O =========== BOWNE & CO: Acquires Manhattan-Based Capital Systems for US$13MM ---------------------------------------------------------------- Bowne & Co., Inc., a shareholder and marketing communications service, completed the acquisition of the U.S.-based assets and operating business of Capital Systems, Inc., a provider of financial communications based in midtown Manhattan. Bowne & Co. acquired Capital Systems for approximately US$13 million. This transaction, which was originally disclosed on June 26, 2008, is expected to be accretive to the company's 2008 results. As a result of this transaction, Bowne & Co. is gaining an office in midtown Manhattan in addition to its current facility in lower Manhattan, and expects to expand its leadership position in the New York market. Capital Systems, Inc. specializes in the creation, filing and distribution of time-sensitive financial communications by providing document production services, including composition, filing, printing, distribution and electronic access. With 2007 revenue of approximately US$48 million, Capital Systems enables Bowne & Co to further extend its reach into its key existing verticals: investment management, compliance reporting and capital markets services. Capital Systems provides mutual fund quarterly and annual reporting and disclosure documents, such as SEC filings, proxies and 10-Ks, as well as capital markets services for equity offerings, debt deals, securitizations, and mergers and acquisitions. Acquisitions History In April 2008, Bowne & Co acquired the digital print business of Rapid Solutions Group, a subsidiary of Janus Capital Group Inc. In February 2008, the company acquired GCom2 Solutions, Inc., a provider of software products addressing reporting and shareholder communication needs of Bowne & Co. About Bowne & Co., Inc Headquartered in New York City, Bowne & Co. Inc. (NYSE: BNE) -- http://www.bowne.com/ -- provides financial, marketing and business communications services around the world. The company has 3,200 employees and 60 offices worldwide. The company's Latin American offices are located in Argentina, Brazil and Mexico. Its annual revenue is approximately US$850 million. As reported by the Trouble Company Reporter-Latin America on July 14, 2008, Standard & Poor's Ratings Services raised its corporate credit and issue-level ratings on Bowne & Co. Inc. The corporate credit rating was raised to 'BB-' from 'B+'. The rating outlook is stable. "The ratings upgrade reflects a reassessment of Bowne[ and Co]'s business profile, taking into account recent acquisitions[...]" Michael Listner, Standard & Poor's credit analyst, said. CONTINENTAL AIRLINES: Posts US$58MM Pretax Charge in Second Qtr. ---------------------------------------------------------------- Continental Airlines, Inc. recorded a number of special items during the second quarter of 2008. The special gains (losses) are: (in millions) Operating special charge (pretax) US$(58) Non-operating items (pretax): Gain on sale of COPA stock 78 Write down of student loan-related auction rate securities (29) Total non-operating gains 49 Income taxes: Special tax credit 28 Tax effect of special items 3 Total special items (after tax) US$22 The Wall Street Journal's Kathy Shwiff reports that the pretax charge is in relation to the airline company's capacity reductions slated for September this year. As disclosed in the Troubled Company Reporter on June 6, 2008, Continental disclosed, in a letter and employee bulletin, significant reductions in flying and staffing that are necessary for the company to further adjust to today's extremely high cost of fuel. These actions are among many steps Continental is taking to respond to record-high fuel prices as the industry faces its worst crisis since 9/11. The price of Gulf Coast jet fuel closed on June 4 at US$151.26 -- about 75% higher than what it was a year ago. At that price and at its current capacity, its fuel expense this year would be US$2.3 billion more than it was last year. That increase alone amounts to about US$50,000 per employee. Starting in September, at the conclusion of the peak summer season, Continental will reduce its flights, with fourth quarter domestic mainline departures to be down 16% year-over-year. This will result in a reduction of domestic mainline capacity (available seat miles, or ASMs) by 11% in the fourth quarter, compared to the same period last year. As a result of the capacity reductions, Continental will need fewer co-workers worldwide to support the reduced flight schedule. About 3,000 positions, including management positions, will be eliminated through voluntary and involuntary separations, with the majority expected to be through voluntary programs. The company will offer voluntary programs in an effort to reduce the number of co-workers who will be furloughed or involuntarily terminated due to the capacity cuts. Continental Airlines Inc. (NYSE: CAL) -- http://continental.com/ -- is the world's fifth largest airline. Continental, together with Continental Express and Continental Connection, has more than 2,900 daily departures throughout the Americas, including Belize and Mexico, Europe and Asia, serving 144 domestic and 139 international destinations. More than 500 additional points are served via SkyTeam alliance airlines. With more than 45,000 employees, Continental has hubs serving New York, Houston, Cleveland and Guam, and together with Continental Express, carries approximately 69 million passengers per year. * * * As reported in the Troubled Company Reporter-Latin America on May 22, 2008, that Moody's Investors Service affirmed the B2 Corporate Family Rating of Continental Airlines, Inc. as well as the ratings of its outstanding corporate debt instruments and selected classes of Continental's Enhanced Equipment Trust Certificates. The Speculative Grade Liquidity rating was lowered to SGL-3 from SGL-2. The outlook has been changed to negative from stable. As reported by the Troubled Company Reporter-Latin America on April 23, 2008, Standard & Poor's Ratings Services revised its rating outlook on Continental Airlines Inc. (B/Negative/B-3) to negative from stable. S&P also placed its ratings on selected enhanced equipment trust certificates that are secured by regional jets on CreditWatch with negative implications. In December 2007, Fitch Ratings affirmed Continental Airlines 'B-' issuer default rating with a stable outlook. DISTRIBUTED ENERGY: U.S. Trustee Forms 3-Member Creditors Panel --------------------------------------------------------------- Roberta A. DeAngelis, the U.S. Trustee for Region 3, appointed three creditors to serve on the Official Committee of Unsecured Creditors for Distributed Energy Systems Corp. and Northern Power Systems, Inc. The creditors committee members are: 1) Delstar Energie Inc. Attn: Sebastian Callegher 12885 Jean Grou Montreal, Quebec, H1A 3N6 Tel: (514) 642-8220 Fax: (514) 498-9559 2) Chloride France SA Attn: Frederic Chara 30 Avenue Montgocfier Chassieu, France Tel: 33-4-78-40-1356 Fax: 33-78-90-3791 3) Valley Power Systems, Inc. Attn: Jonathan Trott 425 S. Hacienda Boulevard City of Industry, CA 91745 Tel: (626) 934-6211 Fax: (626) 934-6200 Official creditors' committees have the right to employ legal and accounting professionals and financial advisors, at the Debtors' expense. They may investigate the Debtors' business and financial affairs. Importantly, official committees serve as fiduciaries to the general population of creditors they represent. Those committees will also attempt to negotiate the terms of a consensual Chapter 11 plan -- almost always subject to the terms of strict confidentiality agreements with the Debtors and other core parties-in-interest. If negotiations break down, the Committee may ask the Bankruptcy Court to replace management with an independent trustee. If the Committee concludes reorganization of the Debtor is impossible, the Committee will urge the Bankruptcy Court to convert the Chapter 11 cases to a liquidation proceeding. About Distributed Energy Based in Wallingford, Connecticut, Distributed Energy Systems (Nasdaq: DESC) -- http://www.distributed-energy.com/-- through its subsidiaries, engages in the design, development, manufacture, and sale of on-site hydrogen gas delivery systems worldwide. It has operations in Mexico. Distributed Energy Systems Corp. and its wholly owned subsidiary, Northern Power systems Inc., filed for Chapter 11 bankruptcy protection on May 4, 2008 (Bankr. D. Del. Lead Case No. 08-11101). Robert S. Brady, Esq. and Robert F. Poppiti, Jr., at Young, Conaway, Stargatt & Taylor represent the Debtors in their restructuring efforts. The Debtors selected Epiq Bankruptcy Solutions LLC as their claims agent. DISTRIBUTED ENERGY: Files Schedules of Assets and Liabilities ------------------------------------------------------------- Distributed Energy Systems Corp. and Northern Power Systems, Inc., delivered to the United States Bankruptcy Court for the District of Delaware their schedules of assets and liabilities disclosing: Name of Schedule Assets Liabilities ---------------- ----------- ----------- A. Real Property US$1,737,150 B. Personal Property 17,856,237 C. Property Claimed as Exempt D. Creditors Holding US$38,957,087 Secured Claims E. Creditors Holding 438,434 Unsecured Priority Claims F. Creditors Holding 4,163,192 Unsecured Nonpriority Claims ----------- ----------- TOTAL US$19,593,387 US$43,558,713 About Distributed Energy Based in Wallingford, Connecticut, Distributed Energy Systems (Nasdaq: DESC) -- http://www.distributed-energy.com/-- through its subsidiaries, engages in the design, development, manufacture, and sale of on-site hydrogen gas delivery systems worldwide. It has operations in Mexico. Distributed Energy Systems Corp. and its wholly owned subsidiary, Northern Power systems Inc., filed for Chapter 11 bankruptcy protection on May 4, 2008 (Bankr. D. Del. Lead Case No. 08-11101). Robert S. Brady, Esq. and Robert F. Poppiti, Jr., at Young, Conaway, Stargatt & Taylor represent the Debtors in their restructuring efforts. The Debtors selected Epiq Bankruptcy Solutions LLC as their claims agent. MASONITE INTERNATIONAL: May Breach Credit Facility Covenants ------------------------------------------------------------ Masonite International Inc. has indicated that, based on a preliminary evaluation of its financial performance for the quarter ended June 30, 2008, it would likely not be in compliance as of such date with the financial covenants contained in the Company's credit facility. Such non-compliance would constitute an event of default under the credit facility. Both financial covenants relate to EBITDA metrics and reflect the challenging conditions in the U.S. housing industry. The company currently is engaged in negotiations with lenders that are party to the credit facility regarding a potential amendment to the terms of the credit facility, including a waiver of Masonite's non-compliance. There is no assurance that the negotiations with lenders will result in an amendment acceptable to Masonite and to its lenders. The company said it is not cash constrained, with approximately US$240 million of cash on hand as of June 30, 2008, and with ample liquidity to fund operations for the foreseeable future. The US$240 million of cash on hand reflects the full repayment of the US$66.4 million that was outstanding under the Company's accounts receivable sales facility at March 31, 2008, as well as the completion of the acquisition of 25% of Sacopan Inc. for consideration of approximately US$17.0 million. "While we have taken strong steps to right size our business and improve our manufacturing efficiencies, continued volume weakness resulting from the ongoing downturn in the U.S. housing market has compromised our ability to maintain compliance with our financial covenants," said Fred Lynch, President and Chief Executive Officer of Masonite. "We remain focused on delivering the highest value door products to our customers around the world without disruption while navigating a tough environment industry wide." About Masonite International Inc. Headquartered in Tampa, Florida, Masonite International Inc., -- http://www.masonite.com/-- is a leading global manufacturer of residential and commercial doors, committed to providing the highest value door products to customers in more than 70 countries around the world. The company has regional headquarters in Hungary, U.K., Mexico, Chile and China. * * * As of July 11, 2008, Masonite International carries B3 Corporate Family and Probability-of-Default, B2 Sr. Secured Debt and SGL-4 rating with negative outlook from Moody's Investors Service The company also carries Standard & Poor's Ratings Services' B long-term corporate credit and 'BB-' senior secured debt ratings, which has been placed on CreditWatch with negative implications. PILGRIM'S PRIDE: Moody's Cuts Ratings to B1, Outlook is Stable -------------------------------------------------------------- Moody's Investors Service has downgraded the ratings of Pilgrim's Pride Corporation, including the company's corporate family rating and probability of default rating to B1 from Ba3. The rating outlook is stable. This rating action concludes the review for possible downgrade begun on April 16, 2008. Ratings downgraded: -- Corporate family rating to B1 from Ba3 -- Probability of default rating to B1 from Ba3 -- US$400 million 7.625% senior notes due 2015 to B3 (LGD5,84%) from B1 (LGD5,76%) -- US$250 million senior subordinated notes due in 2017 and US$5.1 million (original US$100 million) senior subordinated notes due 2013 to B3 (LGD6,94%) from B2 (LGD6,94%) The downgrade is based on Moody's expectation that margins, cash flow and credit metrics will significantly erode in fiscal 2008 due to high feed grain prices. Before the June run-up in corn prices, Pilgrim's Pride had anticipated that its fiscal 2008 feed grain costs would rise by more than US$800 million over the prior fiscal year. This was in addition to 2007's feed grain cost increase of approximately US$600 million. In response to this inflationary economic environment, the company announced a 5% reduction in weekly chicken processing during the second half of fiscal 2008 and the closure of 6 of its 13 U.S. distribution centers. Pilgrim's Pride has also achieved synergies of US$210 million through March 2008 from the Gold Kist acquisition. These efforts, however, are unlikely to prevent a material reduction in near term operating profitability and cash flow, which combined render key credit metrics for the company to levels more consistent with revised ratings. The downgrades in the debt instruments incorporate the generally larger balance of priority trade payables--which are senior to the senior unsecured debt--now that the company includes the operations of Gold Kist, and Moody's expectation for potentially higher average balances under the company's revolving credit facilities. Liquidity management has been a credit positive. In May 2008, the company sold 7.5 million common shares for net proceeds of approximately US$177 million, which was applied to debt reduction, and in April 2008 amended financial covenants through the end of fiscal 2009. Committed multi-year domestic credit facilities include a US$550 million revolving credit facility expiring in September 2011, a US$300 million revolving credit facility expiring in 2013 and a US$300 million receivables securitization facility expiring in 2012. The largest annual long-term debt repayment obligation over the next five years is a manageable US$54.7 million in fiscal 2013. Headquartered in Pittsburgh, Texas, Pilgrim's Pride Corporation (NYSE: PPC) -- http://www.pilgrimspride.com/-- produces, distributes and markets poultry processed products through retailers, foodservice distributors and restaurants in the U.S., Mexico and in Puerto Rico. Pilgrim's Pride employs about 40,000 people and has major operations in Texas, Alabama, Arkansas, Georgia, Kentucky, Louisiana, North Carolina, Pennsylvania, Tennessee, Virginia, West Virginia, Mexico and Puerto Rico, with other facilities in Arizona, Florida, Iowa, Mississippi and Utah. Sales for the twelve months ended Dec. 29, 2007 exceeded US$8.3 billion. QUEBECOR WORLD: Judge Peck Modifies Management Incentive Plan ------------------------------------------------------------- Judge James M. Peck of the U.S. Bankruptcy Court for the Southern District of New York authorized Quebecor World Inc. and its debtor-affiliates to implement and continue the Management Incentive Compensation Plan and the Plant Based Incentive Plan. Judge Peck, however, modified the MICP to provide that: (a) With respect to the payment of 50% of the enhanced portion of the MICP for 2008 otherwise payable upon meeting the criteria provided in a report by Towers Perrin, which was filed under seal. The amount will only be payable to the participants in the event that Quebecor World, Inc., files its annual financial report for the fiscal year ending Dec. 31, 2008, with the Canadian Securities Regulatory Authorities on March 31, 2009; (b) The 2009 EBITDA targets to be used to determine a participant's award under the 2009 MICP will remain subject to the review and approval of the Official Committee of Unsecured Creditors on July 31, 2008; provided, that, in the event, the Committee fails to approve the 2009 EBITDA targets before July 31, 2008, the targets will be determined by the Court upon subsequent request by the Debtors; and (c) With respect to the payment of the enhanced portion of the MICP for 2009 payable to the participants provided in the Towers Perrin Report, the payment will be made upon the later of (i) Sept 30, 2009, and (ii) the filing of the Debtors' plan of reorganization. "This is an incentive plan construct that has historical resonance in the company. The people to be benefited have expected this in pre-bankruptcy years and have even more of a need to be ensured these incentives will be in place now," Bloomberg News quoted Judge Peck as saying. Judge Peck, according to Bloomberg, determined that the payments proposed by "wouldn't violate a 2005 change in the Bankruptcy Code that was meant to discourage high bonuses to managers who oversaw companies before they filed for bankruptcy." The Debtors estimate that the MICP will cost between US$14,000,000 and US$41,900,000, and will benefit 250 employees. The PBIP, on the other hand, is estimated to cost US$9,600,000, and will affect 340 participants. The Honorable Justice Robert Mongeon of the Quebec Superior Court of Justice, the judge overseeing Quebecor Worlds' reorganization proceedings under the Canadian Companies' Creditors Arrangement Act, also authorized the CCAA Applicants to implement and continue the Incentive Plans. Judge Mongeon rules that tax authorities are not prevented from obtaining information regarding the exact content of the Incentive Plans, the names of the eligible employees, and the payment amount to be made to each employee. Ernst & Young, Inc., the Court-appointed monitor of the CCAA Applicants' proceedings, told Judge Mongeon that it has reviewed the details of the Incentive Plans and believes that the Plans provide reasonable compensation in the Applicants' current situation. Accordingly, the Monitor said it supports the Applicants' request to adopt the Incentive Plans. Motion to Pay US$203,403 in Bonuses The Court previously authorized the Debtors to pay their employees for wages and salaries they earned prepetition, and honor other prepetition employee-related obligation, which does not exceed US$10,950 per employee. The Debtors have determined that they owe 23 employees bonuses aggregating US$203,403, pursuant to the terms and conditions of each of the employees' prepetition employment contracts. Thee payments are owed to the employees as prepetition signing bonuses offered to certain new hires or to employees asked to relocate, Michael J. Canning, Esq., at Arnold & Porter LLP, New York, relates. Accordingly, the Debtors seek the Court's authority to pay the bonuses. Mr. Canning says the Debtors need to pay the bonuses to minimize the personal hardship that the affected employees will suffer if they are not paid when due, and to maintain the morale of the Debtors' workforce by adhering to the payment terms provided for under employment contracts entered into prepetition with the affected employees. About Quebecor World Based in Montreal, Quebec, Quebecor World Inc. (TSX: IQW) (NYSE: IQW), -- http://www.quebecorworldinc.com/-- provides market solutions, including marketing and advertising activities, well as print solutions to retailers, branded goods companies, catalogers and to publishers of magazines, books and other printed media. It has 127 printing and related facilities located in North America, Europe, Latin America and Asia. In the United States, it has 82 facilities in 30 states, and is engaged in the printing of books, magazines, directories, retail inserts, catalogs and direct mail. The company has operations in Mexico, Brazil, Colombia, Chile, Peru, Argentina and the British Virgin Islands. Quebecor World and 53 of its subsidiaries, including those in Canada, filed a petition under the Companies' Creditors Arrangement Act before the Superior Court of Quebec, Commercial Division, in Montreal, Canada, on Jan. 20, 2008. The Honorable Justice Robert Mongeon oversees the CCAA case. Francois-David Pare, Esq., at Ogilvy Renault, LLP, represents the Company in the CCAA case. Ernst & Young Inc. was appointed as Monitor. On Jan. 21, 2008, Quebecor World (USA) Inc., its U.S. subsidiary, along with other U.S. affiliates, filed for chapter 11 bankruptcy on Jan. 21, 2008 (Bankr. S.D.N.Y Lead Case No. 08- 10152). Anthony D. Boccanfuso, Esq., at Arnold & Porter LLP represents the Debtors in their restructuring efforts. The Official Committee of Unsecured Creditors is represented by Akin Gump Strauss Hauer & Feld LLP. Based in Corby, Northamptonshire, Quebecor World PLC -- http://www.quebecorworldplc.com/-- is the U.K. subsidiary of Quebecor World Inc. that specializes in web offset magazines, catalogues and specialty print products for marketing and advertising campaigns. The company employs around 290 people. Quebecor PLC was placed into administration with Ian Best and David Duggins of Ernst & Young LLP appointed as joint administrators effective Jan. 28, 2008. As of Sept. 30, 2007, Quebecor World's unaudited consolidated balance sheet showed total assets of US$5,554,900,000, total liabilities of US$3,964,800,000, preferred shares of US$175,900,000, and total shareholders' equity of US$1,414,200,000. The Debtors have until Sept. 30, 2008, to file a plan of reorganization in the chapter 11 case. The Debtors' CCAA stay has been extended to July 25, 2008. (Quebecor World Bankruptcy News, Issue No. 20; Bankruptcy Creditors' Service, Inc., http://bankrupt.com/newsstand/or 215/945-7000) QUEBECOR WORLD: Wants Five More KPMG Retention Letters Approved --------------------------------------------------------------- Quebecor World Inc. and its debtor-affiliates notified the U.S. Bankruptcy Court for the Southern District of New York that they have recently entered into five additional engagement letters with KPMG LLP (U.S.). The Debtors sought the Court's approval of the additional engagement letters, nunc pro tunc to May 22, 2008. The letters contemplate that, in addition to the tax compliance and consulting services, KPMG US will also provide these services: (a) preparation of a tax opinion letter concerning the deductibility of interest on outstanding indebtedness for U.S. federal income tax purposes taking into account certain refinancing and recapitalization transactions in 2007; (b) preparation of a tax opinion letter concerning the U.S. federal income tax implications with respect to a cross border leasing arrangement; (c) preparation of a tax opinion letter with respect to the 2007 reorganization of the Debtors' "reverse hybrid" financing structure; (d) providing tax advice with respect to the U.S. federal income tax consequences of alternative potential reorganizations of the Debtors' Mexican affiliates; and (e) providing tax consulting services with respect to the U.S. federal income tax consequences of the Debtors' restructuring of a portion of their debts. The Debtors will pay KPMG US based on these hourly rates: Washington National Tax Partner US$730 International Corporate Services Partner US$715 ICS Tax Managing Director US$670 WNT Senior Manager US$655 ICS Senior Manager US$610 ICS Manager US$490 ICS Senior Associate US$325 ICS Associate US$245 ICS Intern US$145 Michael Lawler, a partner at KPMG (US), maintained that his firm is a "disinterested person" as the term is defined in Section 101(14) of the Bankruptcy Code, and that it does not represent any interest adverse to the Debtors or their estates. About Quebecor World Based in Montreal, Quebec, Quebecor World Inc. (TSX: IQW) (NYSE: IQW), -- http://www.quebecorworldinc.com/-- provides market solutions, including marketing and advertising activities, well as print solutions to retailers, branded goods companies, catalogers and to publishers of magazines, books and other printed media. It has 127 printing and related facilities located in North America, Europe, Latin America and Asia. In the United States, it has 82 facilities in 30 states, and is engaged in the printing of books, magazines, directories, retail inserts, catalogs and direct mail. The company has operations in Mexico, Brazil, Colombia, Chile, Peru, Argentina and the British Virgin Islands. Quebecor World and 53 of its subsidiaries, including those in Canada, filed a petition under the Companies' Creditors Arrangement Act before the Superior Court of Quebec, Commercial Division, in Montreal, Canada, on Jan. 20, 2008. The Honorable Justice Robert Mongeon oversees the CCAA case. Francois-David Pare, Esq., at Ogilvy Renault, LLP, represents the Company in the CCAA case. Ernst & Young Inc. was appointed as Monitor. On Jan. 21, 2008, Quebecor World (USA) Inc., its U.S. subsidiary, along with other U.S. affiliates, filed for chapter 11 bankruptcy on Jan. 21, 2008 (Bankr. S.D.N.Y Lead Case No. 08- 10152). Anthony D. Boccanfuso, Esq., at Arnold & Porter LLP represents the Debtors in their restructuring efforts. The Official Committee of Unsecured Creditors is represented by Akin Gump Strauss Hauer & Feld LLP. Based in Corby, Northamptonshire, Quebecor World PLC -- http://www.quebecorworldplc.com/-- is the U.K. subsidiary of Quebecor World Inc. that specializes in web offset magazines, catalogues and specialty print products for marketing and advertising campaigns. The company employs around 290 people. Quebecor PLC was placed into administration with Ian Best and David Duggins of Ernst & Young LLP appointed as joint administrators effective Jan. 28, 2008. As of Sept. 30, 2007, Quebecor World's unaudited consolidated balance sheet showed total assets of US$5,554,900,000, total liabilities of US$3,964,800,000, preferred shares of US$175,900,000, and total shareholders' equity of US$1,414,200,000. The Debtors have until Sept. 30, 2008, to file a plan of reorganization in the chapter 11 case. The Debtors' CCAA stay has been extended to July 25, 2008. (Quebecor World Bankruptcy News, Issue No. 20; Bankruptcy Creditors' Service, Inc., http://bankrupt.com/newsstand/or 215/945-7000) QUEBECOR WORLD: Printing Agreement with Dex Extended to 2015 ------------------------------------------------------------ Quebecor World Inc. signed an extended and expanded multi-year agreement with Dex Media Inc. Under this expanded agreement Quebecor World will extend by one year to 2015 its existing directory printing agreement covering Dex directories in fourteen Western and Central states. In addition, the contract expands the products to be manufactured by Quebecor World for Dex Media. These value added products offer advertisers creative, nontraditional ways of addressing the end consumer. Incremental sales are forecast at more than US$25 million over the term of the agreement. Quebecor World will supply Dex Media from its Loveland, CO. plant and from its network of North American directory facilities. "Dex Media is one of America's leading directory publishers," said Jacques Mallette, President and CEO Quebecor World. "Quebecor World is pleased to expand our relationship with them." Kevin J. Clarke, President of Quebecor World's Publishing Services Group commented, "Dex Media and Quebecor World have worked together successfully for many years. This agreement to produce more of their valued added products is a true win-win opportunity. We are delighted to work together to support such new innovation in the directory marketplace." Assumption of Amended Printing Deal with Dex As reported in The Troubled Company Reporter on July 2, 2008, the Debtors obtained permission from the U.S. Bankruptcy Court for the Southern District of New York to amend and assume an agreement it entered with Dex Media Inc. The TCR on June 24, 2008, said that Debtor Quebecor World (USA) Inc., and Dex Media are parties to a master agreement for printing services, dated March 31, 2005. The printing agreement provides for QWUSA to print telephone directories for Dex through Dec. 31, 2014. Sales volume of the printing agreement was estimated at about US$200,000,000, Michael J. Canning, Esq., at Arnold & Porter LLP, in New York, related. About Quebecor World Based in Montreal, Quebec, Quebecor World Inc. (TSX: IQW) (NYSE: IQW), -- http://www.quebecorworldinc.com/-- provides market solutions, including marketing and advertising activities, well as print solutions to retailers, branded goods companies, catalogers and to publishers of magazines, books and other printed media. It has 127 printing and related facilities located in North America, Europe, Latin America and Asia. In the United States, it has 82 facilities in 30 states, and is engaged in the printing of books, magazines, directories, retail inserts, catalogs and direct mail. The company has operations in Mexico, Brazil, Colombia, Chile, Peru, Argentina and the British Virgin Islands. Quebecor World and 53 of its subsidiaries, including those in Canada, filed a petition under the Companies' Creditors Arrangement Act before the Superior Court of Quebec, Commercial Division, in Montreal, Canada, on Jan. 20, 2008. The Honorable Justice Robert Mongeon oversees the CCAA case. Francois-David Pare, Esq., at Ogilvy Renault, LLP, represents the Company in the CCAA case. Ernst & Young Inc. was appointed as Monitor. On Jan. 21, 2008, Quebecor World (USA) Inc., its U.S. subsidiary, along with other U.S. affiliates, filed for chapter 11 bankruptcy on Jan. 21, 2008 (Bankr. S.D.N.Y Lead Case No. 08- 10152). Anthony D. Boccanfuso, Esq., at Arnold & Porter LLP represents the Debtors in their restructuring efforts. The Official Committee of Unsecured Creditors is represented by Akin Gump Strauss Hauer & Feld LLP. Based in Corby, Northamptonshire, Quebecor World PLC -- http://www.quebecorworldplc.com/-- is the U.K. subsidiary of Quebecor World Inc. that specializes in web offset magazines, catalogues and specialty print products for marketing and advertising campaigns. The company employs around 290 people. Quebecor PLC was placed into administration with Ian Best and David Duggins of Ernst & Young LLP appointed as joint administrators effective Jan. 28, 2008. As of Sept. 30, 2007, Quebecor World's unaudited consolidated balance sheet showed total assets of US$5,554,900,000, total liabilities of US$3,964,800,000, preferred shares of US$175,900,000, and total shareholders' equity of US$1,414,200,000. The Debtors have until Sept. 30, 2008, to file a plan of reorganization in the chapter 11 case. The Debtors' CCAA stay has been extended to July 25, 2008. (Quebecor World Bankruptcy News, Issue No. 20; Bankruptcy Creditors' Service, Inc., http://bankrupt.com/newsstand/or 215/945-7000) QUEBECOR WORLD: Receives Conversion Notices for Series 5 Shares --------------------------------------------------------------- Quebecor World Inc. received notices in respect of 744,124 of its remaining 2,507,153 issued and outstanding Series 5 Cumulative Redeemable First Preferred Shares (TSX: IQW.PR.C) requesting conversion into the company's Subordinate Voting Shares (TSX: IQW). In accordance with the provisions governing the Series 5 Preferred Shares, registered holders of the shares are entitled to convert all or any number of their Series 5 Preferred Shares into a number of Subordinate Voting Shares effective as of Sept. 1, 2008, provided the holders gave notice of their intention to convert at least 65 days prior to the Conversion Date. The Series 5 Preferred Shares are convertible into that number of the company's Subordinate Voting Shares determined by dividing C$25.00 together with all accrued and unpaid dividends on the shares up to Aug. 31, 2008 by the greater of (i) C$2.00 and (ii) 95% of the weighted average trading price of the Series 5 Preferred Shares on the Toronto Stock Exchange during the period of 20 trading days ending on Aug. 28, 2008. The next conversion date on which registered holders of the Series 5 Preferred Shares will be entitled to convert all or any number of such shares into Subordinate Voting Shares is Dec. 1, 2008, and notices of conversion in respect thereof must be deposited with the company's transfer agent, Computershare Investor Services Inc., on or before Sept. 26, 2008. About Quebecor World Based in Montreal, Quebec, Quebecor World Inc. (TSX: IQW) (NYSE: IQW), -- http://www.quebecorworldinc.com/-- provides market solutions, including marketing and advertising activities, well as print solutions to retailers, branded goods companies, catalogers and to publishers of magazines, books and other printed media. It has 127 printing and related facilities located in North America, Europe, Latin America and Asia. In the United States, it has 82 facilities in 30 states, and is engaged in the printing of books, magazines, directories, retail inserts, catalogs and direct mail. The company has operations in Mexico, Brazil, Colombia, Chile, Peru, Argentina and the British Virgin Islands. Quebecor World and 53 of its subsidiaries, including those in Canada, filed a petition under the Companies' Creditors Arrangement Act before the Superior Court of Quebec, Commercial Division, in Montreal, Canada, on Jan. 20, 2008. The Honorable Justice Robert Mongeon oversees the CCAA case. Francois-David Pare, Esq., at Ogilvy Renault, LLP, represents the Company in the CCAA case. Ernst & Young Inc. was appointed as Monitor. On Jan. 21, 2008, Quebecor World (USA) Inc., its U.S. subsidiary, along with other U.S. affiliates, filed for chapter 11 bankruptcy on Jan. 21, 2008 (Bankr. S.D.N.Y Lead Case No. 08- 10152). Anthony D. Boccanfuso, Esq., at Arnold & Porter LLP represents the Debtors in their restructuring efforts. The Official Committee of Unsecured Creditors is represented by Akin Gump Strauss Hauer & Feld LLP. Based in Corby, Northamptonshire, Quebecor World PLC -- http://www.quebecorworldplc.com/-- is the U.K. subsidiary of Quebecor World Inc. that specializes in web offset magazines, catalogues and specialty print products for marketing and advertising campaigns. The company employs around 290 people. Quebecor PLC was placed into administration with Ian Best and David Duggins of Ernst & Young LLP appointed as joint administrators effective Jan. 28, 2008. As of Sept. 30, 2007, Quebecor World's unaudited consolidated balance sheet showed total assets of US$5,554,900,000, total liabilities of US$3,964,800,000, preferred shares of US$175,900,000, and total shareholders' equity of US$1,414,200,000. The Debtors have until Sept. 30, 2008, to file a plan of reorganization in the chapter 11 case. The Debtors' CCAA stay has been extended to July 25, 2008. (Quebecor World Bankruptcy News, Issue No. 20; Bankruptcy Creditors' Service, Inc., http://bankrupt.com/newsstand/or 215/945-7000) ==================== P U E R T O R I C O ==================== ADELPHIA COMMS: Inks Stipulation Resolving US$18 Mil. ARH Claims ---------------------------------------------------------------- Affiliate Relations Holdings, Inc., filed these claims against Adelphia Communications Corporation and its debtor-affiliates: Claim No. Basis for the Claim Claim Amount --------- ------------------- ------------ 19581 Arising out of the rejection US$18,812,086, of an affiliation agreement plus between Adelphia Communications unliquidated Corp. and ARH's predecessor amounts from -in-interest, Affiliate Sales ACC as alleged and Marketing, Inc. dated contract rejection damages 19830 Alleging that ARH paid Unliquidated commissions to ACC in excess of the amount earned by ACC under the Affiliation Agreement ACOM, meanwhile, asserted a claim against ARH for the non- payment of commissions allegedly due for July 2006 pursuant to the Affiliation Agreement. The Debtors subsequently objected to the ARH Claims. To resolve their claim dispute, the Debtors and ARH entered into a stipulation, approved by the U.S. Bankruptcy Court for the Southern District of New York, which provides that: a) The ARH Rejection Claim will be reduced to US$10,250,000 as an allowed ACOM Other Secured Claim. b) The ARH Administrative Claim will be allowed for US$400,000 as an administrative priority claim against ACOM. c) The ACOM Commission Claim will be allowed for US$900,000. d) The ARH Administrative Claim will be paid by offsetting it against the ACOM Commission Claim, resulting to US$500,000 as the net ACOM Commission Claim. e) The Net Commission Claim will be paid by reducing the initial cash distribution otherwise due to ARH with respect to the Allowed Rejection Claim by US$500,000. f) The Claim Objections will be withdrawn with prejudice and the ARH Administrative and the ACOM Commission Claims will be deemed satisfied as a result of the offsets. g) ARH will receive a distribution on its Rejection Claim in: (i) cash; (ii) registered, unrestricted shares of Time Warner Cable Class A Common Stock; and (iii) CVV units from the Adelphia Recovery Trust, all free and clear of liens, claims and encumbrances upon the Court's final approval of the Stipulation. h) In no event will the initial distribution of cash and instructions by ACOM to its transfer agent to issue the TWC Stock be made no later than five days from the Final Approval Order. The CVV units will be distributed on the next available subsequent distribution date. i) The parties will exchange mutual releases. About Adelphia Comms Based in Coudersport, Pennsylvania, Adelphia Communications Corporation (OTC: ADELQ) -- http://www.adelphia.com/-- is a cable television company. Adelphia serves customers in 30 states and Puerto Rico, and offers analog and digital video services, Internet access and other advanced services over its broadband networks. The company and its more than 200 affiliates filed for Chapter 11 protection in the Southern District of New York on June 25, 2002. Those cases are jointly administered under case number 02-41729. Willkie Farr & Gallagher represents the Debtors in their restructuring efforts. PricewaterhouseCoopers serves as the Debtors' financial advisor. Kasowitz, Benson, Torres & Friedman, LLP, and Klee, Tuchin, Bogdanoff & Stern LLP represent the Official Committee of Unsecured Creditors. Adelphia Cablevision Associates of Radnor, L.P., and 20 of its affiliates, collectively known as Rigas Manged Entities, are entities that were previously held or controlled by members of the Rigas family. In March 2006, the rights and titles to these entities were transferred to certain subsidiaries of Adelphia Cablevision LLC. The RME Debtors filed for chapter 11 protection on March 31, 2006 (Bankr. S.D.N.Y. Case Nos. 06-10622 through 06-10642). Their cases are jointly administered under Adelphia Communications and its debtor-affiliates' chapter 11 cases. The Bankruptcy Court confirmed the Debtors' Modified Fifth Amended Joint Chapter 11 Plan of Reorganization on Jan. 5, 2007. That plan became effective on Feb. 13, 2007. (Adelphia Bankruptcy News, Issue No. 188; Bankruptcy Creditors' Service, Inc., http://bankrupt.com/newsstand/or 215/945-7000) ADELPHIA COMMS: Court OKs US$480MM in Professional Fees & Costs --------------------------------------------------------------- The U.S. Bankruptcy Court for the Southern District of New York directs Adelphia Communications Corp. and its debtor-affiliates to pay US$480,786,953 in final fees and expenses to these professionals for services rendered during the Debtors' bankruptcy cases: A. Debtors' Professionals Allowed Professional Fee Period Allowed Fees Expenses ------------ ---------- ------------ -------- Pricewaterhouse- 06/26/2002- US$138,243,790 US$7,696,607 Coopers LLC 02/13/2007 Wilkie Farr & 06/25/2002- 96,621,892 6,929,839 Gallagher LLP 02/12/2007 Kasowitz Benson 06/25/2002- 51,115,151 2,881,699 Torres Friedman 07/10/2002 LLP Bragar Wexler & 08/20/2002- 23,737,554 584,046 Morgenstern LLP 02/13/2007 LEGC, LLC 08/01/2003- 21,305,247 784,341 02/13/2007 Lazard Freres & 06/25/2002- 19,437,167 1,233,593 Co. LLP 02/13/2007 Sullivan & 06/11/2004- 12,300,554 123,890 Cromwell LLP 02/13/2007 Covington & 06/10/2002 11,874,338 492,236 Burling 02/13/2007 Jefferson 01/01/2004- 11,440,035 1,425,034 Wells Int'l. Inc. 02/13/2007 Cole Raywid & 05/01/2003- 7,018,474 311,370 Braverman LLP 12/31/2006 Klehr Harrison 07/19/2004- 5,910,863 651,786 Harvey Branzburg 02/13/2007 & Ellers LLP Munger Tolles 04/27/2004- 4,120,374 134,596 & Olson LLP 02/12/2007 Holme Roberts 05/01/2004- 3,902,750 70,602 & Owen LLP 02/13/2007 Sherman & Howard 02/01/2004- 2,668,010 106,481 02/12/2007 Genetelli 12/01/2003- 2,620,608 6,743 Consulting Grp. 02/13/2007 Davis Wright & 06/01/2003- 2,537,605 90,540 Tremaine 02/13/2007 Chicago 07/24/2006- 2,249,995 144,257 Partners 02/13/2007 Duff & Phelps LLC 01/11/2003- 2,099,259 11,647 02/13/2007 Holland & 11/01/2004- 1,993,304 247,220 Knight LLP 02/13/2007 Tauber & 07/01/2005- 1,888,565 36,747 Balser P.C. 02/12/2007 Focused 03/01/2004- 1,746,562 0 Business 02/13/2007 Solutions, Inc. Bond & Pecaro, 08/01/2003- 1,575,039 12,135 Inc. 02/13/2007 BDO Seidman LLP 07/14/2003- 1,454,430 28,724 02/13/2007 Collective 11/04/2002- 1,086,643 112,356 Infrastructure 10/31/2004 Technology, Inc. TMNG Strategy 07/19/2004- 888,722 19,677 08/25/2006 Fisher Sweetbaum 10/01/2005- 744,363 17,458 Levin & Sands 02/13/2007 Grubb & Ellis 02/04/2003- 424,860 104,101 02/13/2007 Spencer Stuart 03/01/2003- 312,000 14,782 02/13/2007 Dow Lohnes & 08/01/2002- 239,767 239,767 Albertson PLLC 02/28/2006 Bird Marella 09/01/2003- 236,491 5,670 Boxer Wolpert 02/13/2007 Nessim Drooks & Lincenberg, APC Kasowitz Benson 06/10/2002- 159,606 14,596 Torres Friedman 07/10/2002 LLP Heidrick & 11/10/2003- 77,095 21,875 Struggles 05/19/2004 Ernst & Young 11/01/2003- 88,000 4,408 LLP 02/29/2004 Jon Flinker 08/01/2003- 67,826 2,992 09/01/2004 Dreier LLP 09/01/2006- 30,581 404 02/31/2007 James Martin 09/01/2006- 19,200 1,049 02/13/2007 B. Official Committee of Unsecured Creditors' professionals Allowed Professional Fee Period Allowed Fees Expenses ------------ ---------- ------------ -------- Greenhill & 07/16/2002- US$14,485,714 US$101,563 Co., LLC 02/13/2007 Klee Tuchin 06/25/2002- 2,578,525 166,792 Bogdanoff & 02/13/2007 Stern LLP Weiser LLP 03/01/2005- 2,431,144 10,850 02/13/2007 Neilson Elggren 08/01/2002- 1,990,795 144,404 LLP 10/31/2005 Quest Turnaround 08/22/2003- 466,363 643,295 Advisors LLC 02/13/2007 Fisher & Phillips 06/01/2006- 134,355 8,907 02/13/2007 Hogan & Hartson LLP 07/01/2006- 60,362 625 02/13/2007 LECG, LLC 11/01/2005- 24,962 821 02/13/2007 C. Equity Committee's Professionals Allowed Professional Fee Period Allowed Fees Expenses ------------ ---------- ------------ -------- Hewitt & 06/10/2002- US$327,310 US$4,680 Associates, 02/13/2007 LLC Geoffrey P. 02/01/2003- 56,133 0 Miller 02/12/2007 D. Counsel to certain employees of the Debtors Allowed Professional Fee Period Allowed Fees Expenses ------------ ---------- ----------- -------- O'Melveny & 06/25/2002- US$336,846 US$12,519 Myers 02/13/2007 The Court also authorized the Reorganized Debtors to pay US$383,354 in the aggregate to these professionals as the amounts not previously paid of the fees and expenses pursuant to the holdback payment list: Professional Amount ------------ --------- BDO Seidman US$11,293 Bird Marella 3,586 Bond & Pecaro 8,588 Chicago Partners 47,223 Cole Raywid 41,795 Collective Infrastructure 11,545 Davis Wright - Dow Lohnes 235 Dreier 566 Ernst & Young - Genetelli Consulting 31,065 Greenhill 139,714 Grubb & Ellis - James Martin 384 John Flinker 1,962 Lazard 3,837 LECG 789 Neilson Elggren 1,928 Sullivan & Cromwell 79,362 About Adelphia Comms Based in Coudersport, Pennsylvania, Adelphia Communications Corporation (OTC: ADELQ) -- http://www.adelphia.com/-- is a cable television company. Adelphia serves customers in 30 states and Puerto Rico, and offers analog and digital video services, Internet access and other advanced services over its broadband networks. The company and its more than 200 affiliates filed for Chapter 11 protection in the Southern District of New York on June 25, 2002. Those cases are jointly administered under case number 02-41729. Willkie Farr & Gallagher represents the Debtors in their restructuring efforts. PricewaterhouseCoopers serves as the Debtors' financial advisor. Kasowitz, Benson, Torres & Friedman, LLP, and Klee, Tuchin, Bogdanoff & Stern LLP represent the Official Committee of Unsecured Creditors. Adelphia Cablevision Associates of Radnor, L.P., and 20 of its affiliates, collectively known as Rigas Manged Entities, are entities that were previously held or controlled by members of the Rigas family. In March 2006, the rights and titles to these entities were transferred to certain subsidiaries of Adelphia Cablevision LLC. The RME Debtors filed for chapter 11 protection on March 31, 2006 (Bankr. S.D.N.Y. Case Nos. 06-10622 through 06-10642). Their cases are jointly administered under Adelphia Communications and its debtor-affiliates' chapter 11 cases. The Bankruptcy Court confirmed the Debtors' Modified Fifth Amended Joint Chapter 11 Plan of Reorganization on Jan. 5, 2007. That plan became effective on Feb. 13, 2007. (Adelphia Bankruptcy News, Issue No. 188; Bankruptcy Creditors' Service, Inc., http://bankrupt.com/newsstand/or 215/945-7000) =============== S U R I N A M E =============== * SURINAME: Fitch Keeps Foreign and Local Currency IDRs at B/B+ --------------------------------------------------------------- Fitch Ratings has affirmed the Issuer Default Ratings and other outstanding ratings for Suriname as: -- Foreign currency issuer default rating at 'B'; -- Local currency issuer default rating at 'B+'; -- Country ceiling at 'B'. The rating outlook is stable for both ratings. Comparatively low external and public debt ratios as well as manageable debt service requirements support Suriname's ratings. Nevertheless, Suriname's vulnerability to international commodity price shocks, a weak macroeconomic policy framework and slow progress in the implementation of structural reforms remain as credit weaknesses. Furthermore, the foreign currency rating continues to be constrained by material outstanding arrears with Brazil and the United States, which account for 45.6% of total public external debt. Fiscal consolidation combined with sustained moderate growth underpinned the steady decline of Suriname's government debt-to- GDP ratio since 2000, which reached 24.1% in 2007 below the 'B' category median of 33.4%. "Nevertheless, Suriname's public finances and debt dynamics are sensitive to shocks that could arise from a relaxation in the fiscal stance, perhaps related to wage pressures, or a decline in revenues due to a lower commodity prices," said Associate Director in Fitch's Sovereign Group, Erich Arispe. With its external position considerably strengthened, Suriname has turned into a net public external creditor. Net public external debt as a proportion of export receipts declined to -7.3% in 2007 from 9.2% in 2006. This year, Suriname's liquidity ratio is more than double the 'B' median as a result of strong reserve accumulation in 2007 and comparatively lower debt service. However, this ratio is less than 100% when adjusted to account for the high level of foreign currency in the financial system. Rising international food and oil prices have put upward pressure on domestic inflation. Consumer prices rose to 16.1% on a yearly basis last April, accumulating 7.5% in the first four months of 2008. In spite of the external nature of this shock, 'authorities still need to adjust monetary and fiscal policies to avoid jeopardizing the sustainability of the current growth cycle, hard earned macroeconomic stability, and, hence, current positive debt dynamics,' said Ms. Arispe. The government's recognition of external debt obligations on behalf of Surinamese private sector companies, combined with poor public finance management led to the accumulation of arrears with a variety of bilateral creditors. In spite of progress in recent years, the arrears situation with the U.S. and Brazil has yet to be resolved and remains a key constraint on Suriname's sovereign ratings. Nevertheless, total arrears declined to 5.8% of GDP in 2007 from 7% in 2006 mostly reflecting GDP growth. Suriname's creditworthiness would benefit from the settlement of arrears with bilateral creditors. Similarly, progress on structural reforms which result in a strengthening of the macroeconomic policy framework and an improved private sector business environment could also be positive for creditworthiness. By contrast, a poor policy response to an eventual decline in commodity prices or rising inflationary pressures could negatively affect the sovereign's credit standing. ============= U R U G U A Y ============= * URUGUAY: Moody's Reports System Profile for Banking Industry -------------------------------------------------------------- Moody's Investors Service has recently published its new Banking System Profile of Uruguay's bank industry -- the second report of this kind for a Latin American country. "The Profile is a detailed supplement to Uruguay's Banking System Outlook," explains the author, Analyst Felipe Carvallo. "Moody's Outlook is an annual publication, giving our opinion on the current and future rating status of a nation's banks, backed by a review of the latest industry financials." Uruguay's most recent was published in December of 2007. "Our Profile of the industry, however, is a step back in order to review the broader context in which a country's banks function," Mr. Carvallo says. The report highlights the profile of Uruguay's banking system and its dominance by large government-owned banks, as well as the high level of financial dollarization, which tends to limit the potential support the system may receive when under stress. Significant to Moody's analysis of a bank's creditworthiness is a judgment of the degree of systemic support available to it. "We believe that the Central Bank of Uruguay's (BCU) ability to act as a lender of last resort is curtailed by high dollarization," Mr. Carvallo explains, "and as such, Moody's assesses that the probability of systemic support would be restricted to government-owned banks." In the report, Moody's also explains how it assesses a banking system's operating environment, and its opinion of Uruguay as above average, relative to other Latin American countries. "Based on our methodology," explains the analyst, "we look at proxy factors that include an analysis of the legal system, the GDP growth rate over the past twenty years, as well as the rule of law, as measured by the World Bank's Control of Corruption indicator. "Moody's views the Uruguayan regulatory environment as maturing," Mr. Carvallo says, but adds that "since major legislation was established only recently, it has not yet been tested through a crisis." The analyst notes that the BCU's new supervisory framework is pro-active and risk based, but that "it has limited enforcement powers on a large percentage of the banking system (government-owned banks)." "The BCU has proven its independence, yet given the small size of the country and its strong social pact, third-party influence cannot be ruled out, especially during times of stress," the analyst adds. The report is called "Banking System Profile: Uruguay." * S&P Issues Industry Credit Outlook for LatAm Telecom Industry --------------------------------------------------------------- Most telecom and cable companies in Latin America continued to benefit from favorable business conditions and healthy cash generation through the first half of 2008. Further growth in Internet and mobile businesses supported this. Mobile penetration reached 70% in Brazil, 66% in Mexico, and more than 90% in Chile and Argentina. However, the mobile business grew at a decelerating rate as the industry matured. But margins have improved for mobile players in Brazil and Argentina as acquisition costs declined relative to total sales. For the rest of 2008, Standard & Poor's Ratings Services expects telecom and cable operators in the region to continue to exhibit healthy cash generation and financial metrics despite their still significant investment plans. Successes in selling value-added products in the mobile segment -- including mobile broadband, which is gaining significant acceptance -- and triple-play and product packages in the fixed segment are contributing to revenue growth. As of July 7, 2008, about 82% of rated telecom and cable companies had a stable outlook, and 14% had a positive outlook or were on CreditWatch with positive implications. Just one company in financial distress represented the remaining 4% with a negative outlook. Telecommunications Industry Argentina In first-quarter 2008, the Argentine telecom sector continued to benefit from continued growth in mobile service and broadband Internet connections. Mobile lines in service increased by 22% compared with first-quarter 2007, and broadband Internet connections grew by 54% from the year-ago period. Improving cash generation resulting from this business growth, and a decline in debt strengthened financial metrics and prompted us to raise all national scale ratings in the sector. Stronger financials confer flexibility to companies to weather a certain level of potential unfavorable changes in Argentina's economy, particularly relating to inflation and exchange rates, and even if regulatory risk continues and the fixed segment sees minimal or no tariff increases. For the rest of 2008, despite the still pending tariff issues and gradual erosion of fixed traffic, S&P expects the wireline segment to keep generating healthy cash. Larger offerings of product packages, additional upside in the broadband Internet segment, and cost containment actions to compensate for inflationary pressures should accomplish this. Over the short-to-medium term, S&P expects competition in the fixed segment to intensify as major cable companies implement their triple-play packages. Although the telecom industry also intends to offer such packages, some regulatory aspects need to be clarified because on principle the telecoms would not be able to offer live-broadcast video services. With the maturity that has been reached in the mobile segment, S&P expects growth to come from two sources. Margins should improve as acquisition costs decline relative to sales. And value-added services such as text messages, Internet, BlackBerry, and video should increase in market penetration. In 2007, the operators already started offering 3G services in the country's largest cities. Aside from fixed tariffs, other regulatory issues are pending. These include the possibility of telecom companies offering video services, the implementation of number portability in fixed telephony, and the unbundling of the fixed network. Brazil Through the first quarter of 2008, the telecom industry in Brazil benefited from a favorable economy, with higher GDP growth prospects and a gradual improvement in domestic incomes. However, fierce competition across diverse telecom services and rapid change in technologies are still challenging the sector. The mobile industry kept up its fast growth. In May 2008, the number of active cell phones in Brazil reached 131 million, an increase of 23% from a year earlier, with penetration close to 70%. Because penetration is close to its limit, operators are focusing on providing updated services and technologies such as 3G and reducing churn by retaining existing clients rather than acquiring first-time subscribers. In the first quarter of 2008, fixed-line penetration in the country remained stable, with modest, 2% growth in the number of lines in service since the same period of 2007. However, revenues improved more quickly as operators managed to compensate for stagnant fixed-line penetration by increasing sales of broadband, other data services, and bundled products. S&P believes significant room still exists for further growth in Internet broadband because its penetration is relatively low and about 50% of Internet users in the country -- 44.9 million in December 2007 -- still use dial-up connections. Acquisitions since the beginning of the year have signaled more convergence and consolidation of telecom services in Brazil. In August 2007, Vivo Participacoes S.A. reached an agreement to acquire the regional wireless operators Telemig Celular S.A. and Amazonia Celular S.A., the latter of which was later, in April 2008, sold to Telemar Norte Leste S.A. Telemar completed a series of acquisitions that consolidated its business position across several businesses. Acquired companies included a cable operator in Belo Horizonte in October 2007, and Amazonia Celular, serving the northern region of the country, in April 2008. Also in April, Telemar announced its acquisition of a controlling stake in Brasil Telecom S.A., the Region II (in the south and middle west of the country) incumbent, for R$5.9 billion. This last acquisition requires changes in regulation to go through and it likely will further accelerate the consolidation trend in the country. The incumbent for the State of Sao Paulo, a local subsidiary of Telefonica S.A., acquired a stake in TVA, the cable company owned by Grupo Abril (not rated). It started offering triple-play packages for its subscribers in the city of Sao Paulo, in direct response to the package already being offered by Net Servicos de Comunicacao S.A. and its parent company, Empresa Brasileira de Telecomunicacoes S.A. (Embratel; not rated). The auction of 3G licenses for nine areas of Brazil took place in December 2007, and S&P expects to see operators improving their revenues and margins by offering wireless broadband access inside their service areas. Meanwhile, S&P is concerned about the absence of a clear framework for the increasing convergence of communication platforms, including recent but growing services such as voice over Internet protocol (VoIP) and content distribution. Chile In 2007 and the first quarter of 2008, the mobile business contributed most of the momentum in the Chilean telecom industry. The client base was about 14 million total mobile lines in the country as of March 2008, exceeding 90% penetration. Demand for value-added services also grew. S&P expects penetration of value-added services including text, broadband Internet, and video to increase through the end of the year as 3G and 3.5G networks expand. This should help offset an anticipated decline in mobile access charges after the quinquennial revision of telecommunication tariffs in 2009. In the wireline segment, additional substitution with mobile, Internet, and VoIP services kept competition stiff. Flexible service packages, including triple-plays, have mitigated these effects by allowing operators to maintain healthy cash generation. Regulatory issues beyond tariff revisions include number portability, the possibility that virtual mobile players will start operating in the country, and the potential tariff freedom for the incumbent player in the country. Mexico Issuance of rules under the Convergence Agreement -- among the telecom companies and the regulator in the country -- in 2005 is still delayed, postponing the benefits of convergence for consumers. Although number portability should be launched this month, the necessary modifications to telecommunications platforms are still not finished. S&P believes that portability will increase competition among telecom companies but will also be an opportunity for some companies to capture market share and increase revenues. On the other hand, the Mexican antitrust agency, the Comision Federal de Competencia, is still investigating the Mexican mobile and fixed-lines services segment. If more stringent regulation emerges from this, it may constrain telecom companies' ability to implement their business strategies in Mexico. This is especially a concern for America Movil S.A.B. de C.V. and Telefonos de Mexico S.A.B. de C.V. (a.k.a. Telmex). The telecommunications market in Mexico has about 98 million subscribers, roughly 80% of them on mobile lines in service and the remaining 20% on fixed lines. During first-quarter 2008, growth in the market came mainly from the mobile business, with an increase of 18% in lines in service compared with first-quarter 2007 -- an addition of 10 million new subscribers between the end of 2007 and March 2008. As of March 2008, density of mobile customers in Mexico amounted to 66.4 lines per 100 inhabitants, compared with 60.8 lines per 100 inhabitants as of September 2007. Cable Industry Argentina The competitive landscape in the Argentine cable industry has changed with the 60% acquisition of CableVision S.A. by the Clarin Group, which also owns Multicanal S.A. (both not rated). In 2007 and first-quarter 2008, synergies derived from the acquisition, favorable business conditions, and increases in average prices -- partially on higher participation in value-added services -- strengthened CableVision's cash generation and financial metrics. For the rest of 2008, S&P expects capital expenditures to remain high as cable operators in Argentina seek to increase their penetration of digital services and launch triple-play packages incorporating voice services. Growth in the industry will remain linked to economic performance in the country. Brazil Net Servicos de Comunicacao S.A. retains approximately 48% of the pay-TV market in Brazil, followed by Sky Brasil Servicios Ltda., with about 30%. Even though the cable TV market is quite consolidated, pay-TV companies face fierce competition with other products, such as broadband and VoIP. Large telecom operators are entering the pay-TV market, and regulatory discussions are still underway. This is likely to make the market more competitive. Pay-TV operators are showing strong growth in subscribers and revenues with aggressive triple-play offers combining pay-TV, broadband, and VoIP services, either from their own platform or, in the case of direct-to-home operators, through agreements with large telecoms. Because of the saturation of the high-income market, the pay-TV and cable industry's growth prospects depend on whether disposable income levels in the country can keep increasing in the medium term. Mexico During the past two years, cable companies have been working to increase their market participation by offering telephone services. Currently, Cablemas S.A. de C.V. is offering TV, telephone, and Internet services and increasing its penetration in the triple-play market in Mexico. The Mexican market is highly fragmented, with about 140 cable operators. However, the three largest players -- Megacable Comunicaciones (not rated), CableVision, and Cablemas -- account for 52% of all cable TV subscribers nationwide. On the other hand, market penetration in Mexico for pay-TV is low, at 24% of households, when compared with that in the United States, at 90%. This suggests that cable companies could significantly absorb a further expansion in the subscriber base. Market penetration in Mexico is comparable with that in Venezuela (18%), Brazil (9%), and Colombia (5%). At the end of 2007, cable remained the predominant technology in Mexico, with 4.1 million subscribers, or 65% of pay-TV subscribers get cable in the country, followed by 1.4 million direct-to-home subscribers, or 23%, and 727,000 subscribers to multichannel multipoint distribution systems (MMDS technology 12%). * Large Companies With Insolvent Balance Sheet ---------------------------------------------- Total Shareholders Total Equity Assets Company Ticker (US$MM) (US$MM) ------- ------ ------------ ------- Arthur Lange ARLA3 (24.32) 34.09 Kuala ARTE3 (33.57) 11.86 Bombril BOBR3 (480.75) 423.86 Caf Brasilia CAFE3 (949.47) 40.58 Chiarelli SA CCHI3 (73.37) 44.84 Ceper-Inv CEP (7.77) 120.08 Ceper-B CEP/B (7.77) 120.08 Telefonica Hldg CITI (1,481.31) 307.89 Telefonica Hldg CITI5 (1,481.31) 307.89 SOC Comercial PL COME (751.50) 450.17 Marambaia CTPC3 (1.38) 79.73 DTCOM-DIR To Co DTCY3 (13.89) 13.03 Aco Altona ESTR (41.68) 144.91 Estrela SA ESTR3 (68.40) 112.36 Bombril Holding FPXE3 (1,064.31) 41.97 Fabrica Renaux FTRX3 (40.90) 127.74 Cimob Partic SA GAFP3 (56.35) 92.77 Gazola GAZ03 (43.13) 22.28 Haga HAGA3 (116.89) 20.31 Hercules HETA3 (245.33) 45.85 Doc Imbituba IMB13 (21.11) 215.55 IMPSAT Fiber Networks IMPTQ (17.17) 535.01 Minupar MNPR3 (27.58) 158.43 Wetzel SA MWET3 (15.02) 137.09 Nova America SA NOVA3 (300.97) 41.80 Paranapamema SA PMAM3 (105.13) 3,724.69 Paranapamema-PRF PMAM4 (105.13) 3,724.69 Recrusul RCSL3 (67.90) 27.89 Telebras-CM RCPT RCTB30 (171.66) 230.92 Rimet REEM3 (219.34) 93.47 Schlosser SCL03 (84.39) 44.57 Tecel S Jose SJ0S3 (26.86) 80.42 Sansuy SNSY3 (63.13) 235.18 Teka TEKA3 (347.07) 538.30 Telebras SA TELB3 (171.66) 230.92 Telebras-CM RCPT TELE31 (171.66) 230.92 Telebras SA TLBRON (171.66) 230.92 TECTOY TOYB3 (1.43) 39.50 TEC TOY SA-PREF TOYB5 (1.43) 39.50 TEC TOY SA-PF B TOYB6 (1.43) 39.50 TECTOY SA TOYBON (1.43) 39.50 Texteis Renaux TXRX3 (118.94) 84.92 Varig SA VAGV3 (8,194.58) 2,169.10 FER C Atlant VSPT3 (123.44) 2,012.29 Wiest WISA3 (140.97) 71.37 *********** Monday's edition of the TCR-LA delivers a list of indicative prices for bond issues that reportedly trade well below par. Prices are obtained by TCR-LA editors from a variety of outside sources during the prior week we think are reliable. Those sources may not, however, be complete or accurate. The Monday Bond Pricing table is compiled on the Friday prior to publication. Prices reported are not intended to reflect actual trades. Prices for actual trades are probably different. Our objective is to share information, not make markets in publicly traded securities. Nothing in the TCR-LA constitutes an offer or solicitation to buy or sell any security of any kind. It is likely that some entity affiliated with a TCR-LA editor holds some position in the issuers' public debt and equity securities about which we report. Tuesday's edition of the TCR-LA features a list of companies with insolvent balance sheets obtained by our editors based on the latest balance sheets publicly available a day prior to publication. At first glance, this list may look like the definitive compilation of stocks that are ideal to sell short. Don't be fooled. Assets, for example, reported at historical cost net of depreciation may understate the true value of a firm's assets. A company may establish reserves on its balance sheet for liabilities that may never materialize. The prices at which equity securities trade in public market are determined by more than a balance sheet solvency test. A list of Meetings, Conferences and Seminars appears in each Thursday's edition of the TCR-LA. Submissions about insolvency- related conferences are encouraged. Send announcements to conferences@bankrupt.com *********** S U B S C R I P T I O N I N F O R M A T I O N Troubled Company Reporter - Latin America is a daily newsletter co-published by Bankruptcy Creditors' Service, Inc., Fairless Hills, Pennsylvania, USA, and Beard Group, Inc., Frederick, Maryland USA. Tara Eliza E. Tecarro, Sheryl Joy P. Olano, Rizande de los Santos, and Pamella Ritah K. Jala, Editors. Copyright 2008. All rights reserved. ISSN 1529-2746. This material is copyrighted and any commercial use, resale or publication in any form (including e-mail forwarding, electronic re-mailing and photocopying) is strictly prohibited without prior written permission of the publishers. Information contained herein is obtained from sources believed to be reliable, but is not guaranteed. The TCR Latin America subscription rate is US$625 per half-year, delivered via e-mail. Additional e-mail subscriptions for members of the same firm for the term of the initial subscription or balance thereof are US$25 each. For subscription information, contact Christopher Beard at 240/629-3300. * * * End of Transmission * * *