/raid1/www/Hosts/bankrupt/TCRLA

/raid1/www/Hosts/bankrupt/TCRLA_Public/090821.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 Friday, August 21, 2009, Vol. 10, No. 165 Headlines A R G E N T I N A BANCO MACRO: Stocks Raised to “Overweight” at JPMorgan B E R M U D A KRM FUNDING: Creditors' Proofs of Debt Due on September 2 KRM FUNDING: Members to Receive Wind-Up Report on Sept. 23 KRM LEASING: Creditors' Proofs of Debt Due on September 2 KRM LEASING: Members to Receive Wind-Up Report on Sept. 23 NUTRA MANUFACTURING: Creditors' Proofs of Debt Due on September 3 NUTRA MANUFACTURING: Members to Receive Wind-Up Report on Sept. 23 SMALL HOLDINGS: Creditors' Proofs of Debt Due on September 3 SMALL HOLDINGS: Members to Receive Wind-Up Report on September 23 B R A Z I L BANCO DO BRASIL: May Sell Tier 1 Perpetual Bond-IFR COMPANHIA SIDERURGICA: Obtains BRR2-Billion Loan From Federal Bank COSAN SA: Sees World Sugar Prices to Remain Firm INDEPENDENCIA SA: Working on Final Terms of BRL330MM DIP Financing * BRAZIL: Plans U.S. WTO Complaint Over Orange Juice Shipment C A Y M A N I S L A N D S ASPECT ADASTRA: Members to Receive Wind-Up Report on August 25 ASPECT EQUITY: Members to Receive Wind-Up Report on August 25 ASPECT EUROPEAN: Members to Receive Wind-Up Report on August 25 ASPECT GLOBAL: Members to Receive Wind-Up Report on August 25 ASPECT JAPANESE: Members to Receive Wind-Up Report on August 25 BRAZILIAN EQUITY: Members to Receive Wind-Up Report on August 25 CDC MOBILE: Members to Receive Wind-Up Report on August 25 FORT DENISON: Members to Receive Wind-Up Report on August 25 GSA SMERALDA: Creditors' Proofs of Debt Due on September 3 KEMPEN PROPERTY: Creditors' Proofs of Debt Due on September 3 KEMPEN PROPERTY: Creditors' Proofs of Debt Due on September 3 KEPCO CAYMAN: Members to Receive Wind-Up Report on August 25 MEMORIAL FUND: Members to Receive Wind-Up Report on August 25 ORIENT FUNDING: Members to Receive Wind-Up Report on August 25 R-ONE HOLDING: Members to Receive Wind-Up Report on August 25 D O M I N I C A N R E P U B L I C DOMINICAN REPUBLIC: TO Seek Loan to Cover Deficit E C U A D O R PERENCO ECUADOR: Ecuador Sets Deadline for Frim to Agree to Terms * ECUADOR: Sets Deadline for Perenco Ecuador to Agree to Terms G U A T E M A L A * GUATEMALA: IMF Reviews Stand-By Arrangement Approved in April J A M A I C A KES DEV COMPANY: Went Into Voluntary Liquidation With JM$1BB Debt SUGAR COMPANY: Minister to Provide Update on Italian Sugar Deal * JAMAICA: Government Gets Support Not to Restructure Debt * JAMAICA: Fitch Says IMF Agreement Critical for Credit Outlook M E X I C O ASARCO LLC: Sterlite Matches Grupo's 100 Cents-on-Dollar Offer GRUPO MEXICO: Sterlite Matches Grupo's 100 Cents-on-Dollar Offer CEMEX SAB: Rating Upgraded to "Outperform" at BBVA CEMEX SAB: Cemex Inc. Plans to Layoff 50 Fairborn Workers P U E R T O R I C O FIRST BANCORP HOLDING: FirstBank Florida Posts US$4.5MM Loss in 2Q V E N E Z U E L A BANCO DE VENEZUELA: Fitch Affirms Issuer Default Ratings at 'B+' * VENEZUELA: GDP Shrinks 2.4% in Second Quarter - - - - - ================= A R G E N T I N A ================= BANCO MACRO: Stocks Raised to “Overweight” at JPMorgan ------------------------------------------------------ James Attwood at Bloomberg News reports that Banco Macro SA's stocks were raised to “overweight”, on August 20, from “neutral.” Banco Macro’s “excellent” financial performance probably will continue while concerns over the country’s economy and politics have eased, JPMorgan analyst Saul Martinez wrote in a note obtained by the news agency. According to the report, Economy Minister Amado Boudou said the government plans to carry out a debt exchange in the next few weeks and restart talks with the International Monetary Fund. “Economic growth conditions should stabilize in the second of half of 2009 and the government’s debt payment capacity should remain intact in the coming years,” the report quoted Mr. Martinez as saying. About Banco Macro Headquartered in Buenos Aires, Argentina, Banco Macro SA -- http://www.macro.com.ar/-- offers traditional commercial banking products and services to small and medium-sized companies, companies operating in regional economies, and to low and middle- income individuals. It offers savings and checking accounts, credit and debit cards, consumer finance loans, other credit- related products and transactional services to its individual customers, and small and medium-sized businesses through its branch network. The bank also offers Plan Sueldo payroll services, lending, corporate credit cards, mortgage finance, transaction processing and foreign exchange. In March 2007, it merged with Nuevo Banco Suquia S.A (Nuevo Banco Suquia). * * * As of August 7, 2009, the company continues to carry Moody's B2 Foreign Currency LT Debt rating; Caa1 Foreign LT Bank Deposits ratings; Ba1 Local LT Bank Deposits ratings; B2 Subordinate Debt rating; and D Bank Financial Strength rating. The company also continues to carry Fitch ratings' B LT Issuer Default Ratings;B Senior Unsecured Debt rating; CCC+ Subordinate Debt rating; B ST Issuer Default Ratings; and D Individual rating. ============= B E R M U D A ============= KRM FUNDING: Creditors' Proofs of Debt Due on September 2 --------------------------------------------------------- The creditors of KRM Funding, Ltd. are required to file their proofs of debt by September 2, 2009, to be included in the company's dividend distribution. The company commenced wind-up proceedings on August 14, 2009. The company's liquidator is: Robin J. Mayor Clarendon House, Church Street Hamilton, Bermuda KRM FUNDING: Members to Receive Wind-Up Report on Sept. 23 ---------------------------------------------------------- The members of KRM Funding, Ltd. will hold their meeting on September 23, 2009, at 9:30 a.m., to receive the liquidator's report on the company's wind-up proceedings and property disposal. The company commenced wind-up proceedings on August 14, 2009. The company's liquidator is: Robin J. Mayor Clarendon House, Church Street Hamilton, Bermuda KRM LEASING: Creditors' Proofs of Debt Due on September 2 --------------------------------------------------------- The creditors of KRM Leasing, Ltd. are required to file their proofs of debt by September 2, 2009, to be included in the company's dividend distribution. The company commenced wind-up proceedings on August 14, 2009. The company's liquidator is: Robin J. Mayor Clarendon House, Church Street Hamilton, Bermuda KRM LEASING: Members to Receive Wind-Up Report on Sept. 23 ---------------------------------------------------------- The members of KRM Leasing, Ltd. will hold their meeting on September 23, 2009, at 9:30 a.m., to receive the liquidator's report on the company's wind-up proceedings and property disposal. The company commenced wind-up proceedings on August 14, 2009. The company's liquidator is: Robin J. Mayor Clarendon House, Church Street Hamilton, Bermuda NUTRA MANUFACTURING: Creditors' Proofs of Debt Due on September 3 ----------------------------------------------------------------- The creditors of Nutra Manufacturing Limited are required to file their proofs of debt by September 3, 2009, to be included in the company's dividend distribution. The company commenced wind-up proceedings on August 17, 2009. The company's liquidator is: Jennifer Y. Fraser Canon's Court 22 Victoria Street, Hamilton Bermuda NUTRA MANUFACTURING: Members to Receive Wind-Up Report on Sept. 23 ------------------------------------------------------------------ The members of Nutra Manufacturing Limited will hold their meeting on September 23, 2009, at 10:00 a.m., to receive the liquidator's report on the company's wind-up proceedings and property disposal. The company commenced wind-up proceedings on August 17, 2009. The company's liquidator is: Jennifer Y. Fraser Canon's Court 22 Victoria Street, Hamilton Bermuda SMALL HOLDINGS: Creditors' Proofs of Debt Due on September 3 ------------------------------------------------------------ The creditors of Small Holdings Limited are required to file their proofs of debt by September 3, 2009, to be included in the company's dividend distribution. The company commenced wind-up proceedings on August 17, 2009. The company's liquidator is: Jennifer Y. Fraser Canon's Court 22 Victoria Street, Hamilton Bermuda SMALL HOLDINGS: Members to Receive Wind-Up Report on September 23 ----------------------------------------------------------------- The members of Small Holdings Limited will hold their meeting on September 23, 2009, at 9:00 a.m., to receive the liquidator's report on the company's wind-up proceedings and property disposal. The company commenced wind-up proceedings on August 17, 2009. The company's liquidator is: Jennifer Y. Fraser Canon's Court 22 Victoria Street, Hamilton Bermuda =========== B R A Z I L =========== BANCO DO BRASIL: May Sell Tier 1 Perpetual Bond-IFR --------------------------------------------------- Banco do Brasil SA is considering the sale of perpetual bonds as borrowing conditions in capital markets improve, Guillermo Parra- Bernal at Reuters reports, citing International Financing Review. According to the report, IFR said that the bank may sell at least US$500 million of so-called hybrid Tier 1 securities, which are equity-styled bonds that often get a preferential capital treatment. The report relates that the structure was frequently used by global banks to raise capital at the height of the financial turmoil that led to more than US$1.5 trillion of credit- related losses and writedowns last year. Reuters notes that IFR said Banco do Brasil is approaching several investment banks for the transaction, with the favorites to land the deal being JPMorgan Chase & Co. and Citigroup. Under the plan, the Tier 1 securities could be redeemed only after 10 years, IFR said, the report adds. About Banco do Brasil Banco do Brasil SA is Brazil's federal bank and is the largest in Latin America with some 20 million clients and more than 7,000 points of sale (3,200 branches) in Brazil, and 34 offices and partnerships in 26 other countries. In addition to its traditional retail banking services, Banco do Brasil underwrites and sells bonds, conducts asset trading, offers investors portfolio management services, conducts financial securities advising, and provides market analysis and research. * * * As reported by the Troubled Company Reporter-Latin America on Jan. 20, 2009, Fitch Ratings affirmed Banco do Brasil S.A.'s Individual Rating at 'C/D'. COMPANHIA SIDERURGICA: Obtains BRR2-Billion Loan From Federal Bank ------------------------------------------------------------------ Companhia Siderurgica Nacional S.A. has obtained a loan for BRR2 billion from the government's Federal Savings Bank, Dow Jones Newswires reports. The report relates that CSN did not reveal the purpose of the loan or specify the interest rate but said the loan will carry a term of three years. According to the report, a financial market source said that CSN was preparing an overseas bond issue worth US$750 million. The report relates the source said proceeds from the issue would be used to pay off short term debt and improve CSN's cash position. Headquartered Sao Paolo, Brazil, Companhia Siderurgica Nacional S.A. (NYSE: SID) -- http://www.csn.com.br/-- produces, sells, exports and distributes steel products, like hot-dip galvanized sheets, tin mill products and tinplate. The company also runs its own iron ore, manganese, limestone and dolomite mines and has strategic investments in railroad companies and power supply projects. The group also operates in Brazil, Portugal, and the U.S. * * * As of July 1, 2009, the company continues to carry Moody's Currency LT Debt ratings at Ba1. The company also continues to carry Standard and Poor's Issuer credit ratings at BB+. COSAN SA: Sees World Sugar Prices to Remain Firm ------------------------------------------------ Cosan SA Industria e Comercio expects world sugar prices to remain firm for at least another cane crop, Inae Riveras at Reuters reports, citing Finance Director Marcelo Martins. According to the report, Mr. Martins said smaller-than-expected cane crops in India and Brazil were important price-forming factors. The report relates raw sugar futures have rallied to a 28-year high, mainly due to prospects for huge imports by India after a weak monsoon hurt the country's cane crop development; while excess rains in the center-south in June and July reduced Brazil's pace of crushing and the content of sucrose in cane. Tight sugar stocks in the United States and the possibility of Mexico raising imports have also contributed to the rise in prices, which was bigger than forecast, Mr. Martins said, the report adds. Mr. Martins, the report notes, said more than 50% of the company's expected sugar production this season is hedged in the futures market. The volume is 30% lower than it was a year ago, Mr. Martins added. The report relates that the company has been hedging sugar for the 2010/11 crop. "As sugar prices rose, we reduced our hedging for this crop, which has proven to be a right decision, but this doesn't mean we'll not accelerate hedging again if we sense prices are close to their peak," the report qouted Mr. Martins as saying. "When the market starts to overshoot it's hard to foresee how much further it can go up. Some say prices could reach over 30 (cents per lb) but this is a hypothesis which we haven't worked with," Mr. Martins added. Reuters says Cosan expects to direct 54% of its crush to sugar production this year, with the remainder going to ethanol. The report relates sugar output is forecast to reach 4.2 million tonnes, with 80% going to the international market, while Ethanol production is expected to total 2.1 billion liters. Ethanol exports will be lower than in 2008/09 but above initial forecasts, as demand is rising in Asia and Europe, the report adds. About Cosan SA Headquartered in Brazil, Cosan SA Industria e Comercio -- http://www.cosan.com.br/-- is a Brazil-based company active in the research and production of sugar, ethanol and derivatives. The company cultivates harvests and processes sugarcane - the main raw material used to produce sugar and ethanol. In addition, it is engaged in the production of sustained energy from renewable sources. It operates 18 production units located in the state of Sao Paulo. The Company also operates port terminals. As of March 31, 2009, Cosan was the parent company of a number of controlled entities, such as TEAS - Terminal Exportador de Alcool de Santos SA, Cosan SA Bioenergia, Radar Propriedades Agricolas SA and Cosanpar Participacoes SA, among others. Cosan SA is a subsidiary of Bermuda-based Cosan Limited. * * * As reported in the Troubled Company July 27, 2009, Fitch Ratings has assigned 'BB-' local and foreign currency Issuer Default Ratings and a 'A-(bra)' National Scale Rating to Cosan S.A. Industria e Comercio and its subsidiary Cosan Combustiveis e Lubrificantes Ltda. Fitch has also assigned a 'BB-' rating to CCL's proposed US$300 million senior unsecured notes due 2014 issued through its wholly owned subsidiary, CCL Finance Ltd. The notes will be unconditionally and irrevocably guaranteed by CCL. The Rating Outlook for Cosan and CCL is Stable. INDEPENDENCIA SA: Working on Final Terms of BRL330MM DIP Financing ------------------------------------------------------------------ Independencia SA, which is some 15 days away from resubmitting a proposal to restructure its debt, is working on final terms of a senior secured DIP financing worth up to BRL330 million, LatinFrance reports. The report relates company investors and advisors see the facility as a key component to the restructuring because it will enable resumption of operations. According to the report, about 35% of the facility will be used to repay cattle suppliers, who have halted shipments because Independencia has not paid down lines with them, says an executive close to the company, while the rest will be used for working capital. LatinFrance notes that a term of 5-years at a rate of 15%-20% is being considered for the facility, which will be senior to all other debt and secured by the company’s assets, estimated to be worth BRL1.1 billion. An unnamed executive involved in the process, the report relates, said some assets are backing a portion of Independencia's local debt; while the remainder would be used for the DIP, resulting in a collateralization of around 1.5x-2.0x. The report also relates that as for the rest of the restructuring, Independencia advisors said they are studying ways to redesign the proposal to account for bondholder feedback. About Independencia SA Independencia SA -- http://www.independencia.com.br/-- is Brazil's fourth largest meat exporter. It filed for bankruptcy protection earlier this year after the global economic crisis caused exports to slump. Independencia S.A. filed its Chapter 15 petition on March 27, 2009 (Bankr. S.D. N.Y., Case No. 09-10903). Paul R. DeFilippo, Esq., at Wollmuth Maher & Deutsch LLP, is the Debtor's counsel. * * * As of August 20, 2009, the company continues to carry Moody's Ca LT Corp Family rating and Standard and Poor's D LT Issuer Credit ratings. * BRAZIL: Plans U.S. WTO Complaint Over Orange Juice Shipment ------------------------------------------------------------- Brazil will file a complaint against the U.S. before the World Trade Organization over its anti-dumping methodology on orange juice shipments, Iuri Dantas at Bloomberg News reports, citing Brazil’s Foreign Affairs Ministry. According to the report, Brazil disputes the use of a methodology known as “zeroing,” whereby countries can inflate anti-dumping duties. The report relates the method considers the difference between the price of a product in its home country and in the U.S., except when the product is sold at a higher price in the U.S. Bloomberg News notes that the ministry said the practice is used by U.S. Department of Commerce and hurts Brazil exports. WTO condemned the practice on “several” occasions, the minsitry added. Brazil, the report relates, will request a panel of the WTO’s dispute settlement panel on Aug. 31, and expects the probe to start by Sept. 25. “Brazil’s decision to request the panel reflects the perception that zeroing, besides bring incompatible with multilateral trade rules, causes great uncertainties and serious damage to exporters,” Brazil said in a statement obtained by the news agency. * * * The country continues to carry Moody's Rating Agency's "Ba1" local and foreign currency ratings. ========================== C A Y M A N I S L A N D S ========================== ASPECT ADASTRA: Members to Receive Wind-Up Report on August 25 -------------------------------------------------------------- The members of Aspect Adastra Diversified Fund will hold their final meeting on August 25, 2009, at 9:30 a.m., to receive the liquidator's report on the company's wind-up proceedings and property disposal. The company's liquidator is: Jess Shakespeare c/o Maples Finance Limited PO Box 1093, Boundary Hall Grand Cayman KY1-1102, Cayman Islands ASPECT EQUITY: Members to Receive Wind-Up Report on August 25 ------------------------------------------------------------- The members of Aspect Equity Long Short Fund will hold their final meeting on August 25, 2009, at 9:30 a.m., to receive the liquidator's report on the company's wind-up proceedings and property disposal. The company's liquidator is: Jess Shakespeare c/o Maples Finance Limited PO Box 1093, Boundary Hall Grand Cayman KY1-1102, Cayman Islands ASPECT EUROPEAN: Members to Receive Wind-Up Report on August 25 --------------------------------------------------------------- The members of Aspect European Equity Fund will hold their final meeting on August 25, 2009, at 9:30 a.m., to receive the liquidator's report on the company's wind-up proceedings and property disposal. The company's liquidator is: Jess Shakespeare c/o Maples Finance Limited PO Box 1093, Boundary Hall Grand Cayman KY1-1102, Cayman Islands ASPECT GLOBAL: Members to Receive Wind-Up Report on August 25 ------------------------------------------------------------- The members of Aspect Global Equity Fund will hold their final meeting on August 25, 2009, at 9:30 a.m., to receive the liquidator's report on the company's wind-up proceedings and property disposal. The company's liquidator is: Jess Shakespeare c/o Maples Finance Limited PO Box 1093, Boundary Hall Grand Cayman KY1-1102, Cayman Islands ASPECT JAPANESE: Members to Receive Wind-Up Report on August 25 --------------------------------------------------------------- The members of Aspect Japanese Equity Fund will hold their final meeting on August 25, 2009, at 9:30 a.m., to receive the liquidator's report on the company's wind-up proceedings and property disposal. The company's liquidator is: Jess Shakespeare c/o Maples Finance Limited PO Box 1093, Boundary Hall Grand Cayman KY1-1102, Cayman Islands BRAZILIAN EQUITY: Members to Receive Wind-Up Report on August 25 ---------------------------------------------------------------- The members of Brazilian Equity Ltd. will hold their final meeting on August 25, 2009, to receive the liquidators' report on the company's wind-up proceedings and property disposal. The company's liquidators are: Victor Murray Jess Shakespeare c/o Maples Finance Limited PO Box 1093, Boundary Hall Grand Cayman KY1-1102, Cayman Islands CDC MOBILE: Members to Receive Wind-Up Report on August 25 ---------------------------------------------------------- The members of CDC Mobile Holdings Limited will hold their final meeting on August 25, 2009, at 10:00 a.m., to receive the liquidator's report on the company's wind-up proceedings and property disposal. The company's liquidator is: Jess Shakespeare c/o Maples Finance Limited PO Box 1093, Boundary Hall Grand Cayman KY1-1102, Cayman Islands FORT DENISON: Members to Receive Wind-Up Report on August 25 ------------------------------------------------------------ The members of Fort Denison Funding, Limited will hold their final meeting on August 25, 2009, at 10:00 a.m., to receive the liquidator's report on the company's wind-up proceedings and property disposal. The company's liquidator is: Jess Shakespeare c/o Maples Finance Limited PO Box 1093, Boundary Hall Grand Cayman KY1-1102, Cayman Islands GSA SMERALDA: Creditors' Proofs of Debt Due on September 3 ---------------------------------------------------------- The creditors of GSA Smeralda Fund Limited are required to file their proofs of debt by September 3, 2009, to be included in the company's dividend distribution. The company commenced wind-up proceedings on June 12, 2009. The company's liquidator is: Stuart Sybersma c/o Jessica Turnbull Deloitte & Touche P.O. Box 1787, Grand Cayman KY1-1109 Cayman Islands Telephone: (345) 949 7500 Facsimile: (345) 949 8258 e-mail: jturnbull@deloitte.com KEMPEN PROPERTY: Creditors' Proofs of Debt Due on September 3 ------------------------------------------------------------- The creditors of Kempen Property Master Hedge Fund Limited are required to file their proofs of debt by September 3, 2009, to be included in the company's dividend distribution. The company commenced wind-up proceedings on July 9, 2009. The company's liquidator is: Stuart Sybersma c/o Jessica Turnbull Deloitte & Touche P.O. Box 1787, Grand Cayman KY1-1109 Cayman Islands Telephone: (345) 949 7500 Facsimile: (345) 949 8258 e-mail: jturnbull@deloitte.com KEMPEN PROPERTY: Creditors' Proofs of Debt Due on September 3 ------------------------------------------------------------- The creditors of Kempen Property Hedge Fund Limited are required to file their proofs of debt by September 3, 2009, to be included in the company's dividend distribution. The company commenced wind-up proceedings on July 13, 2009. The company's liquidator is: Stuart Sybersma c/o Jessica Turnbull Deloitte & Touche P.O. Box 1787, Grand Cayman KY1-1109 Cayman Islands Telephone: (345) 949 7500 Facsimile: (345) 949 8258 e-mail: jturnbull@deloitte.com KEPCO CAYMAN: Members to Receive Wind-Up Report on August 25 ------------------------------------------------------------ The members of Kepco Cayman Company Limited will hold their final meeting on August 25, 2009, at 9:20 a.m., to receive the liquidator's report on the company's wind-up proceedings and property disposal. The company's liquidator is: Victor Murray c/o Maples Finance Limited PO Box 1093, Boundary Hall Grand Cayman KY1-1102, Cayman Islands MEMORIAL FUND: Members to Receive Wind-Up Report on August 25 ------------------------------------------------------------- The members of Memorial Fund Limited will hold their final meeting on August 25, 2009, to receive the liquidators' report on the company's wind-up proceedings and property disposal. The company's liquidators are: Victor Murray Jess Shakespeare c/o Maples Finance Limited PO Box 1093, Boundary Hall Grand Cayman KY1-1102, Cayman Islands ORIENT FUNDING: Members to Receive Wind-Up Report on August 25 -------------------------------------------------------------- The members of Orient Funding II Company Limited will hold their final meeting on August 25, 2009, at 9:10 a.m., to receive the liquidator's report on the company's wind-up proceedings and property disposal. The company's liquidator is: Victor Murray c/o Maples Finance Limited PO Box 1093, Boundary Hall Grand Cayman KY1-1102, Cayman Islands R-ONE HOLDING: Members to Receive Wind-Up Report on August 25 ------------------------------------------------------------- The members of R-One Holding Ltd. will hold their final meeting on August 25, 2009, at 9:00 a.m., to receive the liquidator's report on the company's wind-up proceedings and property disposal. The company's liquidator is: Victor Murray c/o Maples Finance Limited PO Box 1093, Boundary Hall Grand Cayman KY1-1102, Cayman Islands =================================== D O M I N I C A N R E P U B L I C =================================== DOMINICAN REPUBLIC: TO Seek Loan to Cover Deficit ------------------------------------------------- The Dominican Republic will seek a fresh loan from the World Bank or Inter-American Development Bank to help finance a fiscal deficit triggered by a severe economic downturn, Manuel Jimenez of Reuters reports, citing Finance Minister Vicente Bengoa. The report relates Mr. Bengoa said the government had flatly ruled out tax increases to cover the deficit, which is currently estimated at just US$25 million. According to the report, like other Caribbean island states, the Dominican Republic has been hard hit by the global financial crisis and recent declines in tourism, weak export earnings and remittances. The report notes economic analysts say the deficit is widely expected to total more than 2% of gross domestic product in 2009, as a result of a sharp decline in revenues, but spending cuts should keep it from increasing further. Mr. Bengoa, the report relates, said that a heavier tax burden would erode consumer spending and worsen the situation in the country. "The biggest mistake a government can make in the current situation of world recession is to hike taxes because all that does is cut people's spending capacity," the report quoted Mr. Bengoa as saying. * * * The country continues to carry Moody's B2 currency ratings. ============= E C U A D O R ============= PERENCO ECUADOR: Ecuador Sets Deadline for Frim to Agree to Terms ----------------------------------------------------------------- Ecuador gave French oil company Perenco a 10-day deadline on August 19, to agree to pay contested back taxes and return to its oil field concession, taking what was widely considered a step toward formally voiding the firm's contracts, Associated Press reports. The report relates Oil Minister Germanico Pinto said that Perenco had 10 days to resume its operations and "comply with its legal and contractual obligations." According to the report, Mr. Pinto acknowledged that Perenco has "no workers" in Ecuador to send back to its oil fields after state-owned Petroamazonas hired 247 of the former employees to six-month contracts to ensure the Perenco fields' 20,000 barrels in daily crude production. Mr. Pinto, the report relates, declined to say what measures the government would take if the dispute was not resolved by the deadline. "There is a legal proceeding under way. The actions we are taking in Perenco's case are completely in line with Ecuador's laws," the report quoted Mr. Pinto as saying. As reported in the Troubled Company Reporter-Latin America on July 30, 2009, Dow Jones Newswires said that Perenco said it has taken the first steps towards terminating the contracts of its 250 workers in the country. "The government and Petroecuador continue to insist on disobeying court orders and want us to continue to work under conditions that clearly violate our rights and contracts," the report quoted Mr. Marquez as saying. According to a TCRLA report on July 16, Perenco Ecuador and its consortium partner, Burlington Resources Oriente Limited, disclosed that suspension of their participation contracts with Ecuador is imminent unless the Government of Ecuador complies with orders of two international arbitration tribunals that prohibit the government from seizing oil produced by the consortium. Perenco Ecuador is the operator of Blocks 7 and 21 in Ecuador. The report related that the dispute between Perenco and Ecuador stems from the government's charge that the company owes approximately US$338 million, excluding late-payment fees, from overdue windfall oil taxes. About Perenco Perenco -- http://www.perenco.com/-- is an exploration and production company dedicated to developing oil and natural gas potential. Perenco Ecuador Limited is part of a privately held upstream oil and gas company and is the operator of Blocks 7 and 21 in Ecuador. * ECUADOR: Sets Deadline for Perenco Ecuador to Agree to Terms -------------------------------------------------------------- Ecuador gave French oil company Perenco a 10-day deadline on August 19, to agree to pay contested back taxes and return to its oil field concession, taking what was widely considered a step toward formally voiding the firm's contracts, Associated Press reports. The report relates Oil Minister Germanico Pinto said that Perenco had 10 days to resume its operations and "comply with its legal and contractual obligations." According to the report, Mr. Pinto acknowledged that Perenco has "no workers" in Ecuador to send back to its oil fields after state-owned Petroamazonas hired 247 of the former employees to six-month contracts to ensure the Perenco fields' 20,000 barrels in daily crude production. Mr. Pinto, the report relates, declined to say what measures the government would take if the dispute was not resolved by the deadline. "There is a legal proceeding under way. The actions we are taking in Perenco's case are completely in line with Ecuador's laws," the report quoted Mr. Pinto as saying. As reported in the Troubled Company Reporter-Latin America on July 30, 2009, Dow Jones Newswires said that Perenco said it has taken the first steps towards terminating the contracts of its 250 workers in the country. "The government and Petroecuador continue to insist on disobeying court orders and want us to continue to work under conditions that clearly violate our rights and contracts," the report quoted Mr. Marquez as saying. According to a TCRLA report on July 16, Perenco Ecuador and its consortium partner, Burlington Resources Oriente Limited, disclosed that suspension of their participation contracts with Ecuador is imminent unless the Government of Ecuador complies with orders of two international arbitration tribunals that prohibit the government from seizing oil produced by the consortium. Perenco Ecuador is the operator of Blocks 7 and 21 in Ecuador. The report related that the dispute between Perenco and Ecuador stems from the government's charge that the company owes approximately US$338 million, excluding late-payment fees, from overdue windfall oil taxes. ================= G U A T E M A L A ================= * GUATEMALA: IMF Reviews Stand-By Arrangement Approved in April --------------------------------------------------------------- Chief of the International Monetary Fund mission to Guatemala, Alejandro Lopez-Mejia, issued a statement in Guatemala City. “An International Monetary Fund staff mission visited Guatemala on August 3-14, 2009 to conduct the first review of the Stand-By Arrangement approved last April. The mission met with President Alvaro Colom; Minister of Finance Juan Alberto Fuentes Knight; Central Bank President Maria Antonieta de Bonilla; Superintendent of Banks Edgar Barquin; other members of the economic cabinet, and representatives of the private sector. “The mission commended the authorities for meeting all the end- June 2009 quantitative performance criteria. In addition, the mission observed that the inflation rate decreased below 1% as a result of the fall in commodity prices and weak domestic demand. With the rebound of those prices in the second semester, inflation is expected to reach about 1.5% by end-2009. The mission noted that the external position had evolved favorably; the exchange rate has remained broadly stable and international reserves have increased. The mission underscored the importance of the amendments to the Banking Law sent to Congress on June 25, 2009, which are necessary to further strengthen the financial system. “The global financial crisis has had a negative impact on Guatemala and the region. Output growth is projected at around 0.4 percent in 2009, with some downside risks. The fall in exports, tourism receipts, and remittances has been more than offset by the decrease in imports. As a result, the external current account deficit is projected at 1.6% of GDP in 2009, significantly below the deficit of 4.8% observed in 2008. Lower credit demand also reduced debt-creating flows. “The authorities have adequately balanced the benefits of adopting a countercyclical fiscal policy with the importance of maintaining public debt at sustainable levels. Tax revenue decreased due to the economic slowdown and the fall in imports, and public capital spending would increase to avoid a more severe economic slowdown. As a result, the fiscal deficit of the central government could reach 3.4% of GDP in 2009 and 3.0% of GDP in 2010. In turn, the deficit of the consolidated public sector would reach 3% of GDP in 2009, and 2.6% of GDP in 2010. To ensure that public debt is on a sustainable path, the authorities are strengthening their efforts to increase the tax base. These efforts include the approval of the tax reform, currently being discussed in Congress. “The gradual relaxation of monetary policy has been adequate. The central bank has reduced its interest rate by 250 basis points since end-2008. The mission acknowledged that real interest rates should remain positive, thus recommending that monetary policy continues to be adjusted gradually in line with developments in domestic demand and medium-term inflation projections. The flexible exchange rate has helped mitigate the negative impact of the global economic crisis and has enhanced the effectiveness of monetary policy. The discretionary interventions in the foreign exchange market will continue, with the goal of avoiding excessive volatility of the exchange rate. “The Guatemalan authorities reiterated their intention to continue treating the Stand-By Arrangement with the IMF as precautionary. The IMF mission expects that the IMF Executive Board will conclude the first review of the Stand-By Arrangement by end-September 2009.” ============= J A M A I C A ============= KES DEV COMPANY: Went Into Voluntary Liquidation With JM$1BB Debt ----------------------------------------------------------------- KES Development Limited went into voluntary liquidation with more than JM$1 billion in liabilities, Jamaica Gleaner reports. The report relates that Kenneth Tomlinson was appointed as the liquidator. According to the report, the company, which was founded by husband-and-wife team Hugh and Elesa Scott, is indebted to an estimated 40-50 creditors -- with Capital and Credit Merchant Bank said to be holding a debenture over some of the debt and CCMB and Jamaica Mortgage Bank together are owed JM$5 million. The report recalls that Mr. and Mrs. Scotts was advised to placed their business in liquidation last December after its cash had virtually dried up with its projects unfinished. The Scotts, in their 14 years of business, have done developments in the capital and around the country, the report says. The Gleaner relates that one of KES's projects was confiscated by its bankers and placed in the market in March; while the partially done, and overgrown construction at Old Stony Hill Road, St Andrew, has been idle for several years, and is on the market forJM $124 million. About KES Dev't Company K.E.S. Development Company, Ltd. provides real estate development services in residential and commercial areas. It offers engineering, project management, and contracting services. The company was founded in 1995 and is based in Kingston, Jamaica. SUGAR COMPANY: Minister to Provide Update on Italian Sugar Deal --------------------------------------------------------------- Agriculture Minister Dr. Christopher Tufton will provide an update on the deal with Italian firm Eridania Suisse on Wednesday, August 26, RadioJamaica reports. According to the report, Dr. Tufton and officials of the Sugar Company of Jamaica will tour the Bernard Lodge and Monymusk Estates to assess preparations for the Crop. The report relates intensified field maintenance has been undertaken in order for Jamaica to deliver on its commitment to Eridania. As reported in the Troubled Company Reporter-Latin America on July 20, 2009, Caribbean Net News said the Jamaica government has negotiated an interim funding with Eridania Suisse to ensure the continued operation of Sugar Company of Jamaica's three sugar estates -- Frome in Westmoreland, Monymusk in Clarendon, and Bernard Lodge in St Catherine, Catibbean Net News reports. The report related the money will be used to undertake field maintenance work on the three estates, as well as preparatory works for the Frome and Monymusk factories. According to the report, Agriculture and Fisheries Minister Christopher Tufton said the Cabinet has approved the arrangement, which should “effectively ensure” the factories’ sugar production output for the 2009/10 crop year, while the process of divestment continues. Caribbean Net News noted Eridania and Energen Development Limited are the two short-listed entities with which the administration is pursuing negotiations toward the sale of the factories and Petrojam Ethanol Limited (PEL). Catibbean Net News said that Mr. Tufton advised that the fund will be used to undertake the necessary preparatory and field maintenance work at the properties for the upcoming crop year, inclusive of fertilization of the fields and installing the appropriate irrigation infrastructure. Mr. Tufton, the report related, said that, in return, the government will supply Eridania with some 79,000 tonnes of raw sugar for the 2009/10 crop year. Regarding the sale of the remaining estates Eridania will share, on a 50 to 50 basis with the government, any profit made on the final sale price, less agreed cost, Mr. Tufton added. About SCJ The Sugar Company of Jamaica Limited, a.k.a. SCJ, was formed in November 1993 by a consortium made up of J. Wray & Nephew Limited, Manufacturers Investments Limited and Booker Tate Limited. The three companies each held 17% equity in SCJ, with the remaining 49% being held by the government of Jamaica. In 1998, the government became the sole shareholder of SCJ by acquiring the interests of the members of the consortium. Its stated goal was to maximize efficiency, productivity and profitability of the three sugar factories, within three years. The principal activities of the company are the cultivation of cane and the manufacture and sale of sugar and molasses. * JAMAICA: Government Gets Support Not to Restructure Debt ---------------------------------------------------------- The Jamaican government is getting support for its decision not to accept a proposal from the private sector to restructure the country's debt, RadioJamaica reports. The report relates the private sector had presented the proposal to the Government for consideration. However, the report notes that Finance Minister Audley Shaw said during discussions in the market about the initiative, concerns were raised about the government's debt strategy. According to the report, Financial Analyst Orville Johnson said that if the government had proceeded on the recommended route it would have sent the wrong signal to the international financial market. "Former Finance Minister Dr. Omar Davies has always made the point that in the international financial circles any talk of restructuring initiatives by a government is interpreted as their inability to pay their debts and it is usually looked upon in a negative way. So you need to also look at the context in which we now operate with a global recession," the report quoted Mr. Johnson as saying. RadioJamaica says the country currently owes JM$1.2 trillion to local and international creditors. * * * According to Moody's Web site, the country continues to hold a B1 foreign currency rating and a Ba2 local currency rating. * JAMAICA: Fitch Says IMF Agreement Critical for Credit Outlook --------------------------------------------------------------- The Jamaican authorities are in the process of negotiating a US$1.2 billion IMF Stand-By Arrangement. Such an agreement gains importance in light of Jamaica's increased external vulnerabilities and a precarious fiscal situation. Fitch Ratings believes that such an agreement would strengthen the credibility of efforts to secure macroeconomic stabilization, fiscal consolidation and ease external liquidity pressures. Fitch cautions that the extremely weak fiscal profile amid a rising interest burden and recession is placing the government under financial stress and the risk of default is significant reflected in the current 'B' sovereign ratings with a Negative Outlook. Jamaica's external accounts have been hard hit by the global financial crisis, as reflected by the country's falling bauxite and alumina exports, tourism receipts, and overseas workers' remittances while external private capital inflows have decelerated sharply. 'An IMF program is critical for providing support to Jamaica's balance-of-payments, assuaging investor sentiment, allowing the central bank to navigate the unfavorable external environment and potentially opening up the door to additional multilateral funds' said Shelly Shetty, Senior Director at Fitch Ratings. The announcement of a potential IMF agreement has helped in promoting JMD stability and allowed the central bank to cut interest rates in recent weeks, a process that needs to continue in order to alleviate fiscal pressures and support the economy, especially as inflation is falling. 'A significant delay or a non-approval of an IMF agreement would seriously undermine Jamaica's creditworthiness' added Shetty. According to Fitch estimates, the fiscal deficit reached nearly 7% of GDP during the last fiscal year. Judging from the fiscal performance in the first quarter of FY 2009/10, it is likely that the deficit could overshoot the budgeted target of 5.5% of GDP. A sharp rise in interest payments -- as approximately 60% of domestic debt is on floating rates -- is further eroding fiscal maneuverability, especially in the context of declining revenues amid an economic recession. The central bank increased interest rates significantly last December to stabilize the domestic currency in the face of the sharp depreciating pressures. Jamaica's traditionally high level of commitment to debt service is being tested by its rising fiscal challenges as well as the unfavorable external and domestic economic environment. The Jamaican government was exploring a voluntary domestic debt management operation to obtain relief on near-term debt servicing costs. Fitch has been in active dialogue with the authorities to clarify their stance on the possible debt exchange. The authorities have assured Fitch directly and have recently made a public statement that they do not intend to pursue the domestic debt exchange operation at this stage. As such, the details on a potential IMF program will provide the road map on the pace and feasibility of the medium-term fiscal adjustment and will be considered by the agency in making future credit assessments about Jamaica. Fitch currently rates Jamaica's foreign currency and local currency Issuer Default Ratings at 'B'. The Rating Outlook on the ratings is Negative. =========== M E X I C O =========== ASARCO LLC: Sterlite Matches Grupo's 100 Cents-on-Dollar Offer -------------------------------------------------------------- Steven Church at Bloomberg reported that Sterlite Industries (India) Ltd., on August 19 raised its bid for ASARCO LLC, by pledging to pay all of the Company's unsecured debts in full, thus matching an offer from Grupo Mexico SAB. Under the plan, Sterlite would guarantee to pay unsecured debts of Asarco LLC that are ultimately considered legitimate by U.S. Bankruptcy Judge Richard Schmidt. Grupo Mexico SAB on August 18 beefed up its offer for ASARCO LLC to US$2.2 billion in cash. Grupo Mexico said this offer guarantees full payment for creditors. Because the creditors are no longer impaired, voting in favor of the Parent Plan is no longer required as the creditors can be deemed to accept the Plan. ASARCO LLC and Grupo Mexico, through unit ASARCO Inc., have filed competing Plan's of reorganization for ASARCO LLC. Judge Richard Schmidt began on August 10 hearings to choose between the competing plans, which originally included a third plan, sponsored by investors led by Harbinger Capital Partners Master Fund I Ltd. Grupo Mexico previously offered to purchase ASARCO LLC, in exchange for US$1.72 billion in cash plus a note for US$280 million for unsecured creditors. ASARCO LLC's plan is built upon an agreement to sell assets to Vedanta unit Sterlite Industries Inc. Sterlite has agreed to provide a US$770 million promissory note, pay US$1.59 billion in cash and assume certain liabilities as part of its consideration in exchange for ASARCO's assets. ASARCO Inc. and AMC early this year lost a lawsuit filed against it for intentional fraudulent conveyance of ASARCO LLC's crown jewel -- its stock in Southern Peru Copper Company, now known as Southern Copper Corporation. The U.S. District Court for the Southern District of Texas concluded that AMC is the transferee of an avoidable transfer, and ordered AMC to return the SPCC Shares to ASARCO LLC and to pay ASARCO LLC US$1.38 billion in money damages. ASARCO Inc. and AMC, however, are appealing the ruling. The recovery by creditors from the SPCC Litigation may depend on the outcome of the litigation and which Chapter 11 plan is selected by the Bankruptcy Court. According to Bloomberg, under the ASARCO LLC Plan, creditors may collect money from the judgement against Grupo Mexico. The Parent Plan, however, would limit any payments related to the judgement. According to Bloomberg, Kenneth N. Klee, a professor at the University of California, Los Angeles, School of Law, testified before the Bankruptcy Court on August 17 that Grupo Mexico may be forced to pay as much as US$2.94 billion in connection with the SPCC Litigation. "There is a 51% chance of Asarco prevailing," said Mr. Klee, a lead author of the U.S. Bankruptcy Code when Congress overhauled the law in the late 1970s. Mr. Klee was hired by ASARCO LLC to determine how much its parent, Grupo Mexico, may have to pay creditors in connection with the SPCC Litigation -- the last major issue for Judge Schmidt to decide before he chooses between two competing plans, Bloomberg said. Judge Schmidt will make a final decision on August 31. About ASARCO LLC Based in Tucson, Arizona, ASARCO LLC -- http://www.asarco.com/-- is an integrated copper mining, smelting and refining company. Grupo Mexico S.A. de C.V. is ASARCO's ultimate parent. ASARCO LLC filed for Chapter 11 protection on August 9, 2005 (Bankr. S.D. Tex. Case No. 05-21207). James R. Prince, Esq., Jack L. Kinzie, Esq., and Eric A. Soderlund, Esq., at Baker Botts L.L.P., and Nathaniel Peter Holzer, Esq., Shelby A. Jordan, Esq., and Harlin C. Womble, Esq., at Jordan, Hyden, Womble & Culbreth, P.C., represent the Debtor in its restructuring efforts. Lehman Brothers Inc. provides the ASARCO with financial advisory services and investment banking services. Paul M. Singer, Esq., James C. McCarroll, Esq., and Derek J. Baker, Esq., at Reed Smith LLP give legal advice to the Official Committee of Unsecured Creditors and David J. Beckman at FTI Consulting, Inc., gives financial advisory services to the Committee. When ASARCO LLC filed for protection from its creditors, it listed US$600 million in total assets and US$1 billion in total debts. ASARCO LLC has five affiliates that filed for Chapter 11 protection on April 11, 2005 (Bankr. S.D. Tex. Case Nos. 05-20521 through 05-20525). They are Lac d'Amiante Du Quebec Ltee, CAPCO Pipe Company, Inc., Cement Asbestos Products Company, Lake Asbestos of Quebec, Ltd., and LAQ Canada, Ltd. Sander L. Esserman, Esq., at Stutzman, Bromberg, Esserman & Plifka, APC, in Dallas, Texas, represents the Official Committee of Unsecured Creditors for the Asbestos Debtors. Former judge Robert C. Pate has been appointed as the future claims representative. Details about their asbestos-driven Chapter 11 filings have appeared in the Troubled Company Reporter since April 18, 2005. Encycle/Texas, Inc. (Bankr. S.D. Tex. Case No. 05-21304), Encycle, Inc., and ASARCO Consulting, Inc. (Bankr. S.D. Tex. Case No. 05- 21346) also filed for Chapter 11 protection, and ASARCO has asked that the three subsidiary cases be jointly administered with its Chapter 11 case. On October 24, 2005, Encycle/Texas' case was converted to a Chapter 7 liquidation proceeding. The Court appointed Michael Boudloche as Encycle/Texas, Inc.'s Chapter 7 Trustee. Michael B. Schmidt, Esq., and John Vardeman, Esq., at Law Offices of Michael B. Schmidt represent the Chapter 7 Trustee. ASARCO's affiliates, AR Sacaton LLC, Southern Peru Holdings LLC, and ASARCO Exploration Company Inc., filed for Chapter 11 protection on December 12, 2006. (Bankr. S.D. Tex. Case No. 06-20774 to 06-20776). Six of ASARCO's affiliates, Wyoming Mining & Milling Co., Alta Mining & Development Co., Tulipan Co., Inc., Blackhawk Mining & Development Co., Ltd., Peru Mining Exploration & Development Co., and Green Hill Cleveland Mining Co. filed for Chapter 11 protection on April 21, 2008. (Bank. S.D. Tex. Case No. 08-20197 to 08-20202). Bankruptcy Creditors' Service, Inc., publishes ASARCO Bankruptcy News. The newsletter tracks the Chapter 11 proceeding undertaken by ASARCO LLC and its various affiliates. (http://bankrupt.com/newsstand/or 215/945-7000) GRUPO MEXICO: Sterlite Matches Grupo's 100 Cents-on-Dollar Offer ---------------------------------------------------------------- Steven Church at Bloomberg reported that Sterlite Industries (India) Ltd., on August 19 raised its bid for ASARCO LLC, by pledging to pay all of the Company's unsecured debts in full, thus matching an offer from Grupo Mexico SAB. Under the plan, Sterlite would guarantee to pay unsecured debts of Asarco LLC that are ultimately considered legitimate by U.S. Bankruptcy Judge Richard Schmidt. Grupo Mexico SAB on August 18 beefed up its offer for ASARCO LLC to US$2.2 billion in cash. Grupo Mexico said this offer guarantees full payment for creditors. Because the creditors are no longer impaired, voting in favor of the Parent Plan is no longer required as the creditors can be deemed to accept the Plan. ASARCO LLC and Grupo Mexico, through unit ASARCO Inc., have filed competing Plan's of reorganization for ASARCO LLC. Judge Richard Schmidt began on August 10 hearings to choose between the competing plans, which originally included a third plan, sponsored by investors led by Harbinger Capital Partners Master Fund I Ltd. Grupo Mexico previously offered to purchase ASARCO LLC, in exchange for US$1.72 billion in cash plus a note for US$280 million for unsecured creditors. ASARCO LLC's plan is built upon an agreement to sell assets to Vedanta unit Sterlite Industries Inc. Sterlite has agreed to provide a US$770 million promissory note, pay US$1.59 billion in cash and assume certain liabilities as part of its consideration in exchange for ASARCO's assets. ASARCO Inc. and AMC early this year lost a lawsuit filed against it for intentional fraudulent conveyance of ASARCO LLC's crown jewel -- its stock in Southern Peru Copper Company, now known as Southern Copper Corporation. The U.S. District Court for the Southern District of Texas concluded that AMC is the transferee of an avoidable transfer, and ordered AMC to return the SPCC Shares to ASARCO LLC and to pay ASARCO LLC US$1.38 billion in money damages. ASARCO Inc. and AMC, however, are appealing the ruling. The recovery by creditors from the SPCC Litigation may depend on the outcome of the litigation and which Chapter 11 plan is selected by the Bankruptcy Court. According to Bloomberg, under the ASARCO LLC Plan, creditors may collect money from the judgement against Grupo Mexico. The Parent Plan, however, would limit any payments related to the judgement. According to Bloomberg, Kenneth N. Klee, a professor at the University of California, Los Angeles, School of Law, testified before the Bankruptcy Court on August 17 that Grupo Mexico may be forced to pay as much as US$2.94 billion in connection with the SPCC Litigation. "There is a 51% chance of Asarco prevailing," said Mr. Klee, a lead author of the U.S. Bankruptcy Code when Congress overhauled the law in the late 1970s. Mr. Klee was hired by ASARCO LLC to determine how much its parent, Grupo Mexico, may have to pay creditors in connection with the SPCC Litigation -- the last major issue for Judge Schmidt to decide before he chooses between two competing plans, Bloomberg said. Judge Schmidt will make a final decision on August 31. About ASARCO LLC Based in Tucson, Arizona, ASARCO LLC -- http://www.asarco.com/-- is an integrated copper mining, smelting and refining company. Grupo Mexico S.A. de C.V. is ASARCO's ultimate parent. ASARCO LLC filed for Chapter 11 protection on August 9, 2005 (Bankr. S.D. Tex. Case No. 05-21207). James R. Prince, Esq., Jack L. Kinzie, Esq., and Eric A. Soderlund, Esq., at Baker Botts L.L.P., and Nathaniel Peter Holzer, Esq., Shelby A. Jordan, Esq., and Harlin C. Womble, Esq., at Jordan, Hyden, Womble & Culbreth, P.C., represent the Debtor in its restructuring efforts. Lehman Brothers Inc. provides the ASARCO with financial advisory services and investment banking services. Paul M. Singer, Esq., James C. McCarroll, Esq., and Derek J. Baker, Esq., at Reed Smith LLP give legal advice to the Official Committee of Unsecured Creditors and David J. Beckman at FTI Consulting, Inc., gives financial advisory services to the Committee. When ASARCO LLC filed for protection from its creditors, it listed US$600 million in total assets and US$1 billion in total debts. ASARCO LLC has five affiliates that filed for Chapter 11 protection on April 11, 2005 (Bankr. S.D. Tex. Case Nos. 05-20521 through 05-20525). They are Lac d'Amiante Du Quebec Ltee, CAPCO Pipe Company, Inc., Cement Asbestos Products Company, Lake Asbestos of Quebec, Ltd., and LAQ Canada, Ltd. Sander L. Esserman, Esq., at Stutzman, Bromberg, Esserman & Plifka, APC, in Dallas, Texas, represents the Official Committee of Unsecured Creditors for the Asbestos Debtors. Former judge Robert C. Pate has been appointed as the future claims representative. Details about their asbestos-driven Chapter 11 filings have appeared in the Troubled Company Reporter since April 18, 2005. Encycle/Texas, Inc. (Bankr. S.D. Tex. Case No. 05-21304), Encycle, Inc., and ASARCO Consulting, Inc. (Bankr. S.D. Tex. Case No. 05- 21346) also filed for Chapter 11 protection, and ASARCO has asked that the three subsidiary cases be jointly administered with its Chapter 11 case. On October 24, 2005, Encycle/Texas' case was converted to a Chapter 7 liquidation proceeding. The Court appointed Michael Boudloche as Encycle/Texas, Inc.'s Chapter 7 Trustee. Michael B. Schmidt, Esq., and John Vardeman, Esq., at Law Offices of Michael B. Schmidt represent the Chapter 7 Trustee. ASARCO's affiliates, AR Sacaton LLC, Southern Peru Holdings LLC, and ASARCO Exploration Company Inc., filed for Chapter 11 protection on December 12, 2006. (Bankr. S.D. Tex. Case No. 06-20774 to 06-20776). Six of ASARCO's affiliates, Wyoming Mining & Milling Co., Alta Mining & Development Co., Tulipan Co., Inc., Blackhawk Mining & Development Co., Ltd., Peru Mining Exploration & Development Co., and Green Hill Cleveland Mining Co. filed for Chapter 11 protection on April 21, 2008. (Bank. S.D. Tex. Case No. 08-20197 to 08-20202). Bankruptcy Creditors' Service, Inc., publishes ASARCO Bankruptcy News. The newsletter tracks the Chapter 11 proceeding undertaken by ASARCO LLC and its various affiliates. (http://bankrupt.com/newsstand/or 215/945-7000) CEMEX SAB: Rating Upgraded to "Outperform" at BBVA -------------------------------------------------- CEMEX, S.A.B. de C.V. rating was upgraded to "outperform" from "underperform" at BBVA, on August 20, Noel Randewich and Michael O'Boyle at Reuters report. The report relates the company recently completed a debt restructuring plan. As reported in the Troubled Company Reporter-Latin America on August 20, 2009, Bloomberg News said CEMEX S.A.B. agreed to issue US$1 billion in new shares by June, repay US$5 billion in debt by the end of 2011 and limit capital spending under a US$15 billion refinancing plan. The report related that Chief Executive Officer Lorenzo Zambrano said the company’s capital expenditures will be limited to US$700 million next year and US$800 million in each of the following three years as the company concentrates on repaying debt. "Cemex's refinancing of its bank debt eliminated liquidity risk and gives it more leeway to restore the operating side of the business," the report quoted BBVA analyst Francisco Chavez as saying. A US$1.7 billion share offer, which would dilute Cemex's equity by up to 9%, would be smaller than expected, Mr. Chavez added. A TCRLA March 11 report, citing Bloomberg News, related that at the end of December, Cemex had total debt of US$18.8 billion. According to Reuters, Cemex has been slammed by debt problems after its ambitious Rinker takeover in 2007, slumping sales, and losses on derivatives amid turmoil caused by the global credit crisis. About Cemex, S.A.B. CEMEX, S.A.B. de C.V. is a Mexican corporation, a holding company of entities which main activities are oriented to the construction industry, through the production, marketing, distribution and sale of cement, ready-mix concrete, aggregates and other construction materials. CEMEX is a public stock corporation with variable capital (S.A.B. de C.V.) organized under the laws of the United Mexican States, or Mexico. * * * As reported in the Troubled Company Reporter-Latin America on August 19, 2009, Fitch Ratings has affirmed these ratings of Cemex, S.A.B. de C.V.: -- Foreign currency Issuer Default Rating at 'B'; -- Local currency IDR at 'B'; -- Long-term national scale rating at 'BB-(mex)'; -- MXN5 billion Certificados Bursatiles program at 'BB- (mex)'; -- MXN30 billion Programa Dual Revolvente de Certificados Bursatiles program at 'BB-(mex)'; -- Senior unsecured debt obligations at 'B+/RR3'; -- Unsecured debt issued through the Certificados Bursatiles program at 'BB-(mex)'; -- Short-term national scale rating at 'B (mex)'; -- MXN2.5 billion short-term portion of Programa Dual Revolvente de Certificados Bursatiles program at 'B (mex)'. CEMEX SAB: Cemex Inc. Plans to Layoff 50 Fairborn Workers --------------------------------------------------------- Cemex Inc., a unit of Mexico-based Cemex S.A.B. De C.V., plans to lay off as many as 50 workers at it’s Fairborn facility, on October 17, Business Journal reports. The report relates a company spokesperson Jennifer Borge said that the move is a result of excess inventory because of reduced demand. According to the report, Ms. Borgen said production at the Fairborn plant will shut down temporarily but packaging operations will continue at the site. The report notes Ms. Borgen said about 50 workers will remain following the layoffs and the plant will still ship bagged and bulk cement orders. The report says it is still undetermined how long the layoffs will last. Based in Houston, Texas, Cemex Inc. is a unit of Mexico-based Cemex S.A.B. The company got a big boost -- especially in terms of ready-mix capacity -- when its parent acquired UK-based RMC Group in 2005 and Rinker in 2007. CEMEX Inc. now boasts that it's the largest cement company in the U.S., as well as the largest ready-mix company. In addition to cement and ready-mix, CEMEX Inc. also makes and sells concrete block and aggregates. It serves customers through around 370 ready-mix plants (up from 90 before the acquisitions), more than a dozen cement plants, around 50 distribution facilities, and more than 100 aggregate quarries. About Cemex, S.A.B. CEMEX, S.A.B. de C.V. is a Mexican corporation, a holding company of entities which main activities are oriented to the construction industry, through the production, marketing, distribution and sale of cement, ready-mix concrete, aggregates and other construction materials. CEMEX is a public stock corporation with variable capital (S.A.B. de C.V.) organized under the laws of the United Mexican States, or Mexico. * * * As reported in the Troubled Company Reporter-Latin America on August 19, 2009, Fitch Ratings has affirmed these ratings of Cemex, S.A.B. de C.V.: -- Foreign currency Issuer Default Rating at 'B'; -- Local currency IDR at 'B'; -- Long-term national scale rating at 'BB-(mex)'; -- MXN5 billion Certificados Bursatiles program at 'BB- (mex)'; -- MXN30 billion Programa Dual Revolvente de Certificados Bursatiles program at 'BB-(mex)'; -- Senior unsecured debt obligations at 'B+/RR3'; -- Unsecured debt issued through the Certificados Bursatiles program at 'BB-(mex)'; -- Short-term national scale rating at 'B (mex)'; -- MXN2.5 billion short-term portion of Programa Dual Revolvente de Certificados Bursatiles program at 'B (mex)'. ==================== P U E R T O R I C O ==================== FIRST BANCORP HOLDING: FirstBank Florida Posts US$4.5MM Loss in 2Q ------------------------------------------------------------------ Miami-based FirstBank Florida, a unit of Puerto Rico-based First BanCorp Holding Co., posted a US$4.5 million loss in the second quarter, an improvement from a US$8.6 million loss in the first quarter, South Florida Business Journal reports. According to the report, FirstBank Florida saw improvements in several areas during the quarter. The report relates its net interest income increased to US$5.4 million from US$5 million in the first quarter. The report notes the bank took a US$7.1 million expense to reserve for future loan losses, down from a US$9.2 million expense in the previous quarter. The Journal notes that FirstBank Florida held US$94 million in noncurrent loans, or 12.47% of its total loans, on June 30, which is up from US$69.5 million, or 8.81% of its total loans, on March 31. The report relates during the same period, its repossessed property increased by US$3.3 million to reach US$9.4 million. The bank, the report relates, filed US$13.7 million in foreclosures during the second quarter to put US$71.7 million of its loans in the foreclosure process. FirstBank Florida’s US$15.7 million reserve for future loan losses covered nearly 17% of its noncurrent loans on June 30, the report notes. The Journal discloses that FirstBank Florida had US$959.9 million in assets as of March 31, but by June 30, its assets slipped to US$936.4 million. The report relates over the same period, its total loans declined to US$754.1 million from US$781.2 million, and its deposits fell to US$524 million from $527.4 million. Meanwhile, the Journal relates that First BanCorp reported a net loss of US$78.7 million in the second quarter, with much of its losses came from its Florida operations, where it had US$1.44 billion in loans and US$474.2 million in nonperforming assets on June 30. The report notes the about half of its Florida loans were held by FirstBank Florida, while the rest are part of FirstBank Puerto Rico. About First BanCorp First BanCorp is a financial holding company located in San Juan, Puerto Rico, which offers a full range of financial services in Puerto Rico, US Virgin Islands, the British Virgin Islands, and in the State of Florida through its wholly-owned subsidiaries. Its main subsidiary, FirstBank, is a business and consumer financial services company offering banking services, trust and brokerage services, and various types of loans. First BanCorp also provides auto lease financing and insurance services through other specialized subsidiaries. Its headquarters are located at 1519 Ponce De Leon Ave, in the Golden Mile District of Hato Rey, San Juan. * * * As of August 20, 2009, the company continues to carry Standard and Poor's BB+ LT Issuer credit ratings. The company also continues to carry Fitch ratings BB LT Issuer Default rating, B Short term, and B ST Issuer Default rating ================= V E N E Z U E L A ================= BANCO DE VENEZUELA: Fitch Affirms Issuer Default Ratings at 'B+' ---------------------------------------------------------------- Fitch Ratings has affirmed Banco de Venezuela's long-term local and foreign currency Issuer Default Ratings at 'B+' and removed the ratings from Rating Watch Evolving. The Rating Outlook is Stable. Given its new ownership structure and strategic importance for the Venezuelan government, Fitch has upgraded BdV's Support Rating to '4' from '5', and long-term and short-term National Scale Ratings to 'AAA(ven)' from 'AA(ven)'and to 'F1+(ven)' from 'F1(ven)', respectively. Fitch has taken these actions: -- Long-term foreign and local currency IDRs affirmed at 'B+'; -- Short-term foreign and local currency rating affirmed at 'B'; -- Individual affirmed at 'D'; -- Support Rating upgraded to '4' from '5'; -- Support Floor Rating assigned 'B+'; -- Long-term National rating upgraded to 'AAA(ven)' from 'AA(ven)'; -- Short-term National rating upgraded to 'F1+(ven) from 'F1(ven)'. Fitch has removed the long-term foreign and local currency IDRs from Rating Watch Evolving. The Rating Outlook for the long-term ratings is Stable. The rating actions follow the acquisition by the Venezuelan government (Long-term IDR 'B+' with a Stable Outlook by Fitch) of over 95% of the capital of BdV. The government now has doubled its footprint in the local financial system, with government-owned banks holding 21% of total assets (11% prior to the acquisition) and expanding their combined branch networks by 74%. With this acquisition, the government-owned banks stand as the largest banking group in the country. BdV's IDRs reflect its strong franchise, adequate overall financial profile and the support from its new shareholder, the Venezuelan government. BdV's Individual Rating is driven by its adequate financial profile, good asset quality and above average profitability. The inception of a new business model driven by the development plans of the government -- not necessarily driven to maximize profits -- could hinder those strengths in the future. A new Board of Directors and a President, all presidents of other government-owned banks, were appointed. BdV's ownership and strategic importance result in a substantial willingness of the government to provide support should it be required. According to Fitch's methodology, Venezuela's sub- investment grade rating and the lack of a consistent policy regarding bank support in the past results in a limited probability of support. The Outlook for the long-term IDR is Stable, in line with the Outlook of the sovereign. Given its current level, BdV's IDR should be affected only by changes in Venezuela's sovereign rating. In turn, BdV's Individual Rating could be pressured by lower profitability or a deterioration of its asset quality ratios. Based on a solid credit risk and cost control policy from its previous shareholder (Banco Santander from Spain), BdV has been able not only to cope with the constant volatility of the operating environment in Venezuela, but also stand as a benchmark in terms of profitability and good asset quality by posting solid Return on Average Assets (ROAA) ratios above 3% in the last five years. Lower economic activity and the seasoning of a recently and rapidly built-up loan portfolio have slightly eroded BdV's asset quality ratios since 2008. At the end of June 2009 the past-due loans to total loans ratio increased to 1.4% (similar to the average for the largest banks in the country, but still below the 2.5% average of the system or the 12% posted by the government- owned banks), while loan loss reserve coverage decreased to a tight 123%. A possible expansion into economic sectors deemed as strategic by the government, but not necessarily with low risk, could hinder BdV asset quality if credit risk is not adequately controlled. BdV's capital ratios remain steady (equity to assets was 9.4% at the end of June 2009) and stronger than the market average given its almost unencumbered by fixed and foreclosed assets. Cash dividends could decrease in the future and benefit BdV's capital position, considering such policy in other government owned companies. Nevertheless, a possible downturn in its profitability could limit its internal capital generation capacity. * VENEZUELA: GDP Shrinks 2.4% in Second Quarter ----------------------------------------------- Daniel Cancel and Matthew Walter at Bloomberg News report that Venezuela's gross domestic product shrank 2.4% in the second quarter, the first time since 2003, after a plunge in oil prices led to restricted government and consumer spending, and manufacturing output collapsed. In the first half of the year, GDP fell 1 percent, the central bank said in an e-mailed statement obtained by the news agency. “While other economies are coming out of recessions, Venezuela is entering one,” Jose Guerra, a former central bank director, told Bloomberg News in a phone interview. “There’s been a complete destruction of the productive capacity of the country,” Mr. Guerra added. According to the report, the economy faltered under Venezuela’s rigid foreign exchange and price controls, as President Hugo Chavez responded to a collapse in oil prices at the beginning of the year by cutting spending and controlling the sale of dollars at the official exchange rate to try to hold on to reserves. “The manufacturing sector is going to have a negative performance, mostly because of the restriction in imports and dollars, which has caused a drop in the supply of primary materials,” the report quoted Miguel Carpio, an economist at Banco Federal CA in Caracas, as saying. “Add to that the drop in consumption, and this is going to be a very difficult year,” Mr. Carpio adds. Bloomberg News points out that the country's economic indicators contracted across the board in the second quarter, including investment, oil activity, manufacturing and consumer spending, as the economy reeled from the collapse in oil prices. President Chavez, the report notes, is pushing government borrowing to a record this year through bond sales in the local market to finance a deficit. The report relates Boris Segura, senior economist at RBS Securities Inc., said the government may be forced to adjust economic and foreign exchange policies. This could include a devaluation of the official exchange rate for the first time in four years, or the implementation of a dual exchange rate to boost the amount of local currency Chavez can spend from each dollar of oil sales, Mr. Segura added. “This is the first time since the crisis of 2002 and 2003 that non-oil activities contracted, which gives you an idea of the crisis in Venezuela,” the report quoted Mr. Segura as saying. * * * According to Moody's Investors Service, Venezuela continues to carry a B2 foreign currency rating and a B1 local currency rating with stable outlook. *********** 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, Marites O. Claro, Joy A. Agravente, Rousel Elaine C. Tumanda, Valerie C. Udtuhan, Frauline S. Abangan, and Peter A. Chapman, Editors. Copyright 2009. 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 * * *