/raid1/www/Hosts/bankrupt/TCRLA

/raid1/www/Hosts/bankrupt/TCRLA_Public/091001.mbx T R O U B L E D C O M P A N Y R E P O R T E R L A T I N A M E R I C A Thursday, October 1, 2009, Vol. 10, No. 194 Headlines A R G E N T I N A ENCAJAS SA: Creditors' Proofs of Debt Due on December 10 FOOD & BEVERAGE: Creditors' Proofs of Debt Due on November 6 VOLGRANDE SA: Creditors' Proofs of Debt Due on December 3 * ARGENTINA: To Resume Debt Talks With Paris Club B A R B A D O S AIC BARBADOS LTD: Bondholders Will Get Paid in November B E R M U D A EFG SELECT: Creditors and Contributories to Meet on October 14 EMERALD STRATEGIC: Creditors and Contributories to Meet on Oct. 14 B R A Z I L BANCO NACIONAL: Sees More Power Distribution Mergers BANCO SOCIETE: Fitch Assigns Individual Rating at 'C/D' COMPANHIA ENERGETICA: Waits for Gov't OK to Renew Concession Deal COMPANHIA ENERGETICA: Transfer of Control of Terna SPA Okayed COMPANHIA SIDERURGICA: Examining Steel and Logistics Assets Split C A Y M A N I S L A N D S ASIAN INFRASTRUCTURE: Members to Receive Wind-Up Report on Oct. 6 BUCKEYE INDEMNITY: Placed Under Voluntary Liquidation BLUE EAGLE: Placed Under Voluntary Liquidation CIC ALTERNATIVE: Final Meeting Set for October 5 CONSTELLATION PARTNERS: Creditors' Proofs of Debt Due on October 7 DAUM ASIA: Creditors' Proofs of Debt Due on October 5 GEM IAM: Shareholders to Receive Wind-Up Report on October 13 ILEX EUROPEAN: Shareholders to Receive Wind-Up Report on October 2 JOY IAM: Shareholders to Receive Wind-Up Report on October 13 KAPPA IAM: Shareholders to Receive Wind-Up Report on October 13 LEO IAM: Shareholders to Receive Wind-Up Report on October 13 ORION REINSURANCE: Placed Under Voluntary Liquidation ORTUS CAPITAL: Creditors' Proofs of Debt Due on October 5 ORTUS CAPITAL: Shareholders to Receive Wind-Up Report on October 6 RECAP LIMITED: Shareholder to Receive Wind-Up Report on October 5 RECAP LIMITED: Creditors' Proofs of Debt Due on October 4 SKY IAM: Shareholders to Receive Wind-Up Report on October 13 SPHERE RE: Placed Under Voluntary Liquidation TYPHOON IAM: Shareholders to Receive Wind-Up Report on October 13 WFM (CAYMAN): Creditors' Proofs of Debt Due on October 9 J A M A I C A AIR JAMAICA: National Workers Union Opposesss Layoffs in Sale PLan AIR JAMAICA: Could Go to Local Consortium M E X I C O MULTICAT MEXICO: Mexico Buys Cat Bond for Storm, Earthquake Cover * MEXICO: Buys Cat Bond for Storm, Earthquake Cover P E R U DOE RUN PERU: Delays La Oroya Restart by "A Few Weeks" * PERU: Moody's Reviews 'Ba1' Foreign-Currency Gov't Bond Rating P U E R T O R I C O FIRSTBANK PUERTO: Leadership Change Won't Affect S&P's 'B' Rating T U R K S & C A I C O S I S L A N D S OLINT CORP: Former Head and Wife Jailed for Fraud V E N E Z U E L A CITGO PETROLEUM: Shuts Down Unicracker at Lake Charles Refinery CITGO PETROLEUM: Moody's Cuts Corporate Family Rating to 'Ba2' PETROLEOS DE VENEZUELA: Moody's Cuts Unit's Family Rating to 'Ba2' PETROLEOS DE VENEZUELA: JV With Petrobras Faces Difficulties * VENEZUELA: May Supply Kenya With Cheap Oil X X X X X X X X * Upcoming Meetings, Conferences and Seminars - - - - - ================= A R G E N T I N A ================= ENCAJAS SA: Creditors' Proofs of Debt Due on December 10 -------------------------------------------------------- The court-appointed trustee for Encajas S.A.'s reorganization proceedings will be verifying creditors' proofs of claim until December 10, 2009. The trustee will present the validated claims in court as individual reports on February 24, 2010. 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 the company and its creditors. Inadmissible claims may be subject to appeal in a separate proceeding known as an appeal for reversal. A general report that contains an audit of the company's accounting and banking records will be submitted in court on April 14, 2010. Creditors will vote to ratify the completed settlement plan during the assembly on September 20, 2010. FOOD & BEVERAGE: Creditors' Proofs of Debt Due on November 6 ------------------------------------------------------------ The court-appointed trustee for Food & Beverage, Investments S.A.'s reorganization proceedings, will be verifying creditors' proofs of claim until November 6, 2009. The trustee will present the validated claims in court as individual reports on December 21, 2009. 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 the company and its creditors. Inadmissible claims may be subject to appeal in a separate proceeding known as an appeal for reversal. A general report that contains an audit of the company's accounting and banking records will be submitted in court on March 8, 2010. Creditors will vote to ratify the completed settlement plan during the assembly on September 2, 2010. VOLGRANDE SA: Creditors' Proofs of Debt Due on December 3 --------------------------------------------------------- The court-appointed trustee for Volgrande S.A.'s bankruptcy proceedings will be verifying creditors' proofs of claim until December 3, 2009. The trustee will present the validated claims in court as individual reports on February 18, 2010. 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 the company and its creditors. Inadmissible claims may be subject to appeal in a separate proceeding known as an appeal for reversal. A general report that contains an audit of the company's accounting and banking records will be submitted in court on April 5, 2010. * ARGENTINA: To Resume Debt Talks With Paris Club ------------------------------------------------- Oliver Balch at The Financial Times reports that Argentina will restart negotiations with its creditor nations, the so-called Paris Club of rich nations, this week as part of a renewed drive to settle its international debts and regain access to global capital markets. The report relates that the announcement came after an intense discussion between Argentina Economy Minister Amado Boudou and the representatives of Paris Club. The FT recalls that Argentina's economy has in effect been blocked from international credit markets since defaulting on US$93 billion (EUR63 billion, GBP58 billion) of its debt in December 2001. The report notes that as well as resolving its US$6.7 billion debt with the 19-member Paris Club, any return to global markets will require Argentina to restructure the US$29 billion that it owes holders of its defaulted bonds. According to FT, Argentina has signaled it would pay its debt to Paris Club last year, but pulled out due to the credit crunch. Likewise, the report relates no advances have been made with "holdouts" -- those bondholders who did not sign on to an agreement in 2005, when former Argentine president Nestor Kirchner, cut a deal with 75% of the holders of the defaulted bonds. The report notes that hurdles to renegotiation still exist. However, Daniel Ker-ner, an analyst at research firm Eurasia Group the report relates, said that a return to capital markets would en-able Argentina to issue new debt, easing escalating budgetary and monetary problems. "This [a debt restructuring] would give the government more flexibility and reduces the likelihood of default, nor would the government need to run down all its central bank reserves to meet its repayments," the report quoted Mr. Ker- ner as saying. A deal with foreign creditors would mean an end to most creditor- led litigation, The FT notes. Moreover, the report says, a resettlement would also lift investment sanctions against governments and banks in the Paris Club; and the country's creditworthiness would also see a significant improvement. * * * As reported in the Troubled Company Reporter-Latin America on August 27, 2009, Standard & Poor's Ratings Services affirmed its 'B-' long-term and 'C' short-term sovereign credit ratings on the Republic of Argentina. The outlook remains stable. =============== B A R B A D O S =============== AIC BARBADOS LTD: Bondholders Will Get Paid in November ------------------------------------------------------- AIC Barbados Limited Chairman Michael Lee Chin said he is confident that the company will meet the November deadline to repay its bondholders, RadioJamaica reports. According to the report, Mr. Chin said the company's liquidity position has improved and the company is in a better position to fulfill its obligations. The November 27 deadline to make payments is definitely on, he added. "My reputation is what is paramount so, we'll do everything to make sure that it happens without a further extension. What happened with the extensions wouldn't have happened any where else in the world and for that, I'm happy that this situation happened to me in Jamaica, the report quoted Mr. Chin as saying. "Note holders had a lot of trust in us because of the reputation that we have in Jamaica. The note holders are well collateralized and they're getting premium interest so, it's been a win, win situation," said Mr. Lee Chin added. As reported in the Troubled Company Reporter-Latin America on June 8, 2009, RadioJamica said AIC Barbados asked its creditors for another extension to make payments on maturing instruments as divestment of the sale of assets in its portfolio is taking longer than expected. The Jamaica Gleaner related Mr. Lee-Chin is selling his Pan Caribbean fibre optic cable business, Columbus Communications, to pay off the debt. According to Jamaica Gleaner, Mr. Chin failed to come up with the US$155 million (J$13.8 billion) that AIC Barbados owes bond holders. The Gleaner related that based on an internal document, about US$108 million of the debt is owed to Jamaican investors, of which US$47 million is due this year. Mr. Lee Chin, The Gleaner said, was already granted one extension to June 11 to repay the bonds, however, he asked investors again to extend the wait to November. About AIC Barbados AIC Barbados Limited, which is valued at more than US$1 billion, comprises several Caribbean holdings including Jamaica's largest deposit taking institution the National Commercial Bank. ============= B E R M U D A ============= EFG SELECT: Creditors and Contributories to Meet on October 14 -------------------------------------------------------------- The creditors and contributories of EFG Select Funds Limited will hold their meeting on October 14, 2009, at 11:30 a.m. and 12:00 noon, respectively, at Liberty Theatre, 49 Union Square, in Hamilton HM 12, Bermuda. At the meeting, the creditors and contributories will be asked to appoint a permanent liquidator in place of the provisional liquidator, and appoint a committee of inspection. EMERALD STRATEGIC: Creditors and Contributories to Meet on Oct. 14 ------------------------------------------------------------------ The creditors and contributories of Emerald Strategic Focus Funds Limited will hold their meeting on October 14, 2009, at 10:00 a.m. and 10:30 a.m., respectively, at Liberty Theatre, 49 Union Square, in Hamilton HM 12, Bermuda. At the meeting, the creditors and contributories will be asked to appoint a permanent liquidator in place of the provisional liquidator, and appoint a committee of inspection. =========== B R A Z I L =========== BANCO NACIONAL: Sees More Power Distribution Mergers ---------------------------------------------------- Heloiza Canassa and Diana Kinch at Bloomberg News report that Banco Nacional de Desenvolvimento Economico e Social SA expects power distribution companies to accelerate mergers and acquisition talks in coming months and said it’s ready to help finance any deals. “Consolidation is on the agenda and it should intensify in the next few months,” the report quoted Wagner Bittencourt, head of energy and infrastructure at the bank, as saying. “The bank can make that viable since companies will need capital,” Mr. Bittencourt added. According to the report, local electricity distributors, such as Cia. Energetica de Minas Gerais and CPFL Energia SA, are seeking to buy rivals to cut costs and boost profitability. The report relates that CPFL may sell new shares or borrow to fund investments as it seeks to almost triple its generating capacity, and may also consider cutting dividends to pay for the expansion. Bloomberg News says BNDES boosted lending to the energy industry by 71% to BRL6.49 billion (US$3.6 billion) in the seven months through July, compared with a year earlier. The report notes that the industry received 9% of BNDES’s BRL92 billion in financing last year. About BNDES 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 continues to carry a Ba2 foreign long-term bank deposit rating from Moody's Investors Service. BANCO SOCIETE: Fitch Assigns Individual Rating at 'C/D' ------------------------------------------------------- Fitch Ratings has assigned ratings to Banco Societe Generale Brasil S.A., Banco Cacique S.A., and Banco Pecunia S.A. and affirmed others: SGBr -- Long-term Foreign Currency Issuer Default rating assigned at 'BBB' with Stable Outlook -- Short-term Foreign Currency IDR assigned at 'F3' -- Long-term Local Currency IDR assigned at 'BBB+' with Stable Outlook -- Short-term Local Currency IDR assigned at 'F2' -- Individual Rating assigned at 'C/D' -- Support Rating assigned at '2' -- National Long-term Rating assigned at 'AAA(bra)' with Stable Outlook -- National Short-term Rating assigned at 'F1+(bra)' Cacique -- Long-term Foreign Currency IDR assigned at 'BBB' with Stable Outlook -- Short-term Foreign Currency IDR assigned at 'F3' -- Long-term Local Currency IDR assigned at 'BBB+ with Stable Outlook -- Short-term Local Currency IDR assigned at 'F2' -- Individual Rating assigned at 'C/D' -- Support Rating affirmed at '2' -- National Long-term Rating affirmed at 'AAA(bra)', Stable Outlook -- National Short-term Rating affirmed at 'F1+(bra)' Pecunia -- Long-term Foreign Currency IDR assigned at 'BBB' with Stable Outlook -- Short-term Foreign Currency IDR assigned at 'F3' -- Long-term Local Currency IDR assigned at 'BBB+' with Stable Outlook -- Short-term Local Currency IDR assigned at 'F2' -- Individual Rating assigned at 'D' -- Support Rating affirmed at '2' -- National Long-term Rating affirmed at 'AAA(bra)', Stable Outlook -- National Short-term Rating affirmed at 'F1+(bra)' The Foreign Currency and Local Currency IDRs of SGBr and its National Ratings reflect the high probability of support from its parent bank, Societe Generale (IDR 'A+'/Stable), and the importance to SG of the Brazilian operation, which has been growing in recent years. SGBr's Individual Rating considers its good asset-quality track record, attributable to prudent management, SG supervision and diversified activities. However, it also takes into account the bank's modest size, the high proportion of intangible assets in its capital structure and the challenge of improving its profitability in an environment under pressure from the growth in delinquency and expenses generated by goodwill amortization. The Individual Rating would benefit from a consistent improvement in profitability, coupled with a capital structure that is no longer burdened by intangible assets. However, deterioration in asset quality, together with the impact of growing provisioning on profitability, could negatively affect its rating. The Foreign Currency and Local Currency IDRs of both Cacique and Pecunia and their National Ratings reflect the support of its parent bank, SGBr, and the importance to SG of the Brazilian retail operation. The ratings also consider their ample access to funding lines primarily from the parent, which maintains a close supervision on both banks as shown by their centralized treasury. The Individual Rating of Cacique reflects its modest size, high delinquency ratios, and the challenge to reverse its weak results in a recessionary environment, while provisioning should continue to weaken results. While Fitch considers that these factors also impact Pecunia, the bank has a lower Individual Rating as it is more exposed to financial upheavals than Cacique considering its small size. SGBr has entered the retail market, notably in consumer lending and financing durable goods. It acquired 70% of Pecunia in March 2007 and 100% of Cacique in November 2007. As a result, SGBr significantly increased its local balance sheet, with assets growing to BRL6.5bn at FYE08 (BRL1.1bn at FYE06). Although each unit is administered independently, the three banks are consolidated into SGBr. SGBr began to report an increase in the impaired loan categories after the acquisitions of Cacique and Pecunia, but it has adequate coverage (estimated around 79% at H109 and 81% at FYE08 and 64.3% FYE07). Fitch believes that the growing delinquency pressure will be an additional obstacle to the bank improving profitability, despite its positive asset diversification. SGBr's funding comes mainly from SG lines at competitive prices. This policy gave the bank ample liquidity at the most acute times of the global financial crisis. The growing importance of the Brazilian operations to SG contrasts with the drastic reduction in activities of other foreign banks in Brazil, and has enabled SGBr to gain market share in the wholesale and retail segments. The acquisitions of Cacique and Pecunia, however, have increased the proportion of intangible assets in its capital structure. Their reduction will be gradual and will affect the bank's earnings in the medium- to long-term. SGBr has operated in Brazil since 1967, focusing on wholesale business. It entered retail lending through the acquisitions of Cacique, which conducts consignment lending, consumer finance, and, on a minor scale, personal lending, and Pecunia which finances the purchase of used automobiles and provides consumer credit through stores. COMPANHIA ENERGETICA: Waits for Gov't OK to Renew Concession Deal ----------------------------------------------------------------- Companhia Energetica de Sao Paulo is waiting on the government's decision to renew its concession deal on at least two hydroelectric power stations, Kenneth Rapoza at Dow Jones Newswires reports. According to the report, citing Estado Newswire, energy companies whose contracts to operate hydroelectric dams end in 2015 will be told whether their concession deal was renewed or not by early next year. The report relates that Energy Minister Edison Lobao said the National Energy Policy Committee has yet to meet to discuss the matter. Dow Jones Newswires says that existing concessions can be renewed at the exclusive criterion of the granting authority. Companhia Energetica de Sao Paulo is the fourth largest electricity generation company in Brazil, operating six hydro power plants in the state of Sao Paulo with an installed capacity of 7,456 MW and 3,916 MW of assured energy. The government of the state of Sao Paulo is CESP's major shareholder with 94.08% of its voting capital and 35.98% of its total capital. In the last twelve months ended on June 30, 2009, CESP posted Net Revenues of BRL2,616 million and a Net Loss of BRL1,652 million. * * * As reported in the Troubled Company Reporter-Latin America on September 30, 2009, Moody's upgraded Companhia Energetica de Sao Paulo's Baseline Credit Assessment to 13 (mapping to Ba3) from 14 (mapping to B1) and affirmed its Ba2 corporate family rating. The outlook is stable. The BCA upgrade reflects the steady improvement in CESP's credit measures over the last year and a half. COMPANHIA ENERGETICA: Transfer of Control of Terna SPA Okayed ------------------------------------------------------------- Brazilian power industry watchdog Aneel authorized the transfer of control held by Italian grip Terna SpA in Terna Participacoes SA (TRNA4.BR) to the Brazilian electric utility Companhia Energetica de Minas Gerais (Cemig), Rogerio Jelmayer at Dow Jones Newswires reports. According to the report, earlier this year, the company announced the acquisition of a 66% stake in Brazilian power distributor Terna Participacoes, a local subsidiary of Terna SpA, for US$1.05 billion. Terna is one of the largest electricity transmission companies in Brazil, with some 3,300 kilometers of high voltage lines. Companhia Energetica de Minas Gerais a.k.a. Cemig -- http://www.cemig.com.br/-- is an electric energy utility in Brazil. Cemig's concession area extends throughout nearly 96.7% of Minas Gerais. Cemig owns and operates 52 power plants, of which six are in partnership with private enterprises, relying on a predominantly hydroelectric energy matrix. Electric energy is produced to supply more than 17 million people living in the state's 774 municipalities. In addition to those 52 plants, another three are currently under construction. Cemig is also active in several other states, through ventures for the generation or the commercialization of energy in these Brazilian states: in Santa Catarina (generation), Rio de Janeiro (commercialization and generation), Espirito Santo (generation) and Rio Grande do Sul (commercialization). * * * Companhia Energetica de Minas Gerais aka CEMIG continues to carry corporate family ratings of Ba2 from Moody's Investors Service on the rating agency's global scale. COMPANHIA SIDERURGICA: Examining Steel and Logistics Assets Split ----------------------------------------------------------------- Companhia Siderurgica Nacional S.A. is examining the separation of its steel and logistics assets into two subsidiaries, John Kolodziejski at Dow Jones Newswires reports, citing a company statement. The report relates that CSN said it could eventually involve a public offering of shares or "the combination of these businesses with third parties." According to the report, CSN told the CVM studies involving such a plan were at a preliminary stage, and no decision had been taken yet. Dow Jones Newswires notes that the largest of the two railroad companies is MRS Logistica, which carries over 120 million tons of freight a year, mainly iron ore. The report relates that the other railroad, the Transnordestina, is under construction and aims to bisect Brazil's northeastern corner and connect Recife with Fortaleza. About CSN 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+. ========================== C A Y M A N I S L A N D S ========================== ASIAN INFRASTRUCTURE: Members to Receive Wind-Up Report on Oct. 6 ----------------------------------------------------------------- The members of Asian Infrastructure Development Co., Ltd. will receive, on October 6, 2009, at 11:00 a.m., the liquidators' report on the company's wind-up proceedings and property disposal. The company's liquidators are: Tay Swee Sze Wong Joo Wan Lim Siew Soo 10 Anson Road #19-01 International Plaza Singapore 079903 Telephone: (65) 6534 7088 Facsimile: (65) 6534 7022 BUCKEYE INDEMNITY: Placed Under Voluntary Liquidation ----------------------------------------------------- On August 19, 2009, the sole shareholder of Buckeye Indemnity Company, SPC resolved to voluntarily liquidate the company's business. Only creditors who were able to file their proofs of debt by September 30, 2009, will be included in the company's dividend distribution. The company's liquidator is: Dugald Macleod Caledonian House 69 Dr Roy's Drive, PO Box 1043 George Town, Grand Cayman KY1-1102 Telephone: 345-914-0050 Facsimile: 345-814-4875 BLUE EAGLE: Placed Under Voluntary Liquidation ---------------------------------------------- On August 24, 2009, the sole shareholder of Blue Eagle Re resolved to voluntarily liquidate the company's business. Only creditors who were able to file their proofs of debt by September 30, 2009, will be included in the company's dividend distribution. The company's liquidator is: Dugald Macleod Caledonian House 69 Dr Roy's Drive, PO Box 1043 George Town, Grand Cayman KY1-1102 Telephone: 345-914-0050 Facsimile: 345-814-4875 CIC ALTERNATIVE: Final Meeting Set for October 5 ------------------------------------------------ The members of CIC Alternative Strategies Fund will hold their final meeting on October 5, 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: Avalon Management Limited Landmark Square, 1st Floor 64 Earth Close, West Bay Beach P.O. Box 715, Grand Cayman KY1-1107 Cayman Islands Telephone: (+1) 345 769-4422 Facsimile: (+1) 345 769-9351 CONSTELLATION PARTNERS: Creditors' Proofs of Debt Due on October 7 ------------------------------------------------------------------ The creditors of Constellation Partners Fund SPC are required to file their proofs of debt by October 7, 2009, to be included in the company's dividend distribution. The company commenced wind-up proceedings on August 18, 2009. The company's liquidator is: Ogier c/o Bryant Terry Telephone: (345) 949-9876 Facsimile: (345) 949-1986 Ogier Queensgate House, South Church Street PO Box 1234, Grand Cayman KY1-1108 Cayman Islands DAUM ASIA: Creditors' Proofs of Debt Due on October 5 ----------------------------------------------------- The creditors of Daum Asia Holding Corporation are required to file their proofs of debt by October 5, 2009, to be included in the company's dividend distribution. The company commenced wind-up proceedings on August 28, 2009. The company's liquidator is: Kris Beighton PO Box 493, Grand Cayman KY1-1106 Cayman Islands Alex Watkins Telephone: 345-914-4421 Facsimile: 345-949-7164 P.O. Box 493, Grand Cayman KY1-1106 Cayman Islands Telephone: 345-949-4800 Facsimile: 345-949-7164 GEM IAM: Shareholders to Receive Wind-Up Report on October 13 ------------------------------------------------------------- The shareholders of Gem IAM Limited will receive on October 13, 2009, at 1:30 p.m., the liquidator's report on the company's wind- up proceedings and property disposal. The company's liquidator is: Bonnie Willkom P.O. Box 1111, Grand Cayman KY1-1102 Cayman Islands Telephone: (345)-949-5122 Facsimile: (345)-949-7920 ILEX EUROPEAN: Shareholders to Receive Wind-Up Report on October 2 ------------------------------------------------------------------ The shareholders of Ilex European Leveraged Loan Fund will receive, on October 2, 2009, at 11:00 a.m., the liquidator's report on the company's wind-up proceedings and property disposal. The company's liquidator is: Avalon Ltd. Landmark Square, 1st Floor 64 Earth Close, West Bay Beach P.O. Box 715, Grand Cayman KY1-1107 Cayman Islands Facsimile: 1 345 769-9351 JOY IAM: Shareholders to Receive Wind-Up Report on October 13 ------------------------------------------------------------- The shareholders of Joy IAM Limited will receive on October 13, 2009, at 1:45 p.m., the liquidator's report on the company's wind- up proceedings and property disposal. The company's liquidator is: Bonnie Willkom P.O. Box 1111, Grand Cayman KY1-1102 Cayman Islands Telephone: (345)-949-5122 Facsimile: (345)-949-7920 KAPPA IAM: Shareholders to Receive Wind-Up Report on October 13 --------------------------------------------------------------- The shareholders of Kappa IAM Limited will receive on October 13, 2009, at 1:00 p.m., the liquidator's report on the company's wind- up proceedings and property disposal. The company's liquidator is: Bonnie Willkom P.O. Box 1111, Grand Cayman KY1-1102 Cayman Islands Telephone: (345)-949-5122 Facsimile: (345)-949-7920 LEO IAM: Shareholders to Receive Wind-Up Report on October 13 ------------------------------------------------------------- The shareholders of Leo IAM Limited will receive on Oct. 13, 2009, at 3:30 p.m., the liquidator's report on the company's wind-up proceedings and property disposal. The company's liquidator is: Bonnie Willkom P.O. Box 1111, Grand Cayman KY1-1102 Cayman Islands Telephone: (345)-949-5122 Facsimile: (345)-949-7920 ORION REINSURANCE: Placed Under Voluntary Liquidation ----------------------------------------------------- On August 20, 2009, the shareholders of Orion Reinsurance, SPC resolved to voluntarily liquidate the company's business. Only creditors who were able to file their proofs of debt by September 30, 2009, will be included in the company's dividend distribution. The company's liquidator is: Dugald Macleod Caledonian House 69 Dr Roy's Drive, PO Box 1043 George Town, Grand Cayman KY1-1102 Telephone: 345-914-0050 Facsimile: 345-814-4875 ORTUS CAPITAL: Creditors' Proofs of Debt Due on October 5 --------------------------------------------------------- The creditors of Ortus Capital Management (Cayman) Limited are required to file their proofs of debt by October 5, 2009, to be included in the company's dividend distribution. The company commenced wind-up proceedings on September 4, 2009. The company's liquidator is: Ogier Joel Reid Telephone: (345) 815-1828 Facsimile: (345) 949-1986 c/o Ogier Queensgate House, South Church Street PO Box 1234, Grand Cayman KY1-1108 Cayman Islands ORTUS CAPITAL: Shareholders to Receive Wind-Up Report on October 6 ------------------------------------------------------------------ The shareholders of Ortus Capital Management (Cayman) Limited will receive, on October 6, 2009, at 10:00 a.m., the liquidator's report on the company's wind-up proceedings and property disposal. The company's liquidator is: Ogier c/o Joel Reid Telephone: (345) 815-1828 Facsimile: (345) 949-1986 RECAP LIMITED: Shareholder to Receive Wind-Up Report on October 5 ----------------------------------------------------------------- The shareholder of Recap Limited will receive, on October 5, 2009, at 10:45 a.m., the liquidators' report on the company's wind-up proceedings and property disposal. The company's liquidators are: Scott Aitken Connan Hill Bronwynne R. Arch Telephone: 949-7755 Facsimile: 949-7634 P.O. Box 1109, Grand Cayman KY1-1102 Cayman Islands RECAP LIMITED: Creditors' Proofs of Debt Due on October 4 --------------------------------------------------------- The creditors of Recap Limited are required to file their proofs of debt by October 4, 2009, to be included in the company's dividend distribution. The company commenced wind-up proceedings on August 26, 2009. The company's liquidators are: Scott Aitken Connan Hill c/o Bronwynne R. Arch P.O. Box 1109, Grand Cayman KY-1102 Cayman Islands Telephone: 949-7755 Facsimile: 949-7634 SKY IAM: Shareholders to Receive Wind-Up Report on October 13 ------------------------------------------------------------- The shareholders of Sky IAM Limited will receive on October 13, 2009, at 2:00 p.m., the liquidator's report on the company's wind- up proceedings and property disposal. The company's liquidator is: Bonnie Willkom P.O. Box 1111, Grand Cayman KY1-1102 Cayman Islands Telephone: (345)-949-5122 Facsimile: (345)-949-7920 SPHERE RE: Placed Under Voluntary Liquidation --------------------------------------------- On August 24, 2009, the sole shareholder of Sphere Re SPC resolved to voluntarily liquidate the company's business. Only creditors who were able to file their proofs of debt by September 30, 2009, will be included in the company's dividend distribution. The company's liquidator is: Dugald Macleod Caledonian House 69 Dr Roy's Drive, PO Box 1043 George Town, Grand Cayman KY1-1102 Telephone: 345-914-0050 Facsimile: 345-814-4875 TYPHOON IAM: Shareholders to Receive Wind-Up Report on October 13 ----------------------------------------------------------------- The shareholders of Typhoon IAM Limited will receive on Oct. 13, 2009, at 2:30 p.m., the liquidator's report on the company's wind- up proceedings and property disposal. The company's liquidator is: Bonnie Willkom P.O. Box 1111, Grand Cayman KY1-1102 Cayman Islands Telephone: (345)-949-5122 Facsimile: (345)-949-7920 WFM (CAYMAN): Creditors' Proofs of Debt Due on October 9 -------------------------------------------------------- The creditors of WFM (Cayman) Limited are required to file their proofs of debt by October 9, 2009, to be included in the company's dividend distribution. The company's liquidator is: Chris Johnson c/o Ashley L. Turner Telephone: +345 946-0820 Facsimile: +345 946-0864 P.O. Box 24499, Elizabethan Square George Town, Grand Cayman KY1-1104 Cayman Islands ============= J A M A I C A ============= AIR JAMAICA: National Workers Union Opposesss Layoffs in Sale PLan ------------------------------------------------------------------ The National Workers Union is raising several concerns relating to the divestment of Air Jamaica Limited, Gleaner/Power 106 News reports. According to the report, the union's primary concerns are the impending layoff of more than 300 workers; and the updates and the deadline of airline's sale. The report relates NWU Vice President Granville Valentine said that he is still unaware of the deadline for the sale of Air Jamaica even after meeting with the company’s management. As reported in the Troubled Company Reporter-Latin America on September 22, 2009, RadioJamaica said that Air Jamaica will start to lay off several categories of workers by September 30, which will affect various groups of employees the airline, but the exact number of persons to be affected has not been finalized. The report relates that the lay-offs will be carried out as part of cost cutting measures as efforts continue to find a buyer for Air Jamaica. TCR-LA report on June 10, citing Jamaica Observer, related that Trinidad and Tobago-owned Caribbean Airlines and Thomas Cook have both expressed an interest in acquiring Air Jamaica. Radio Jamaica said the airline has been hemorrhaging over US$150 million per annum and the government has had to foot the massive bill. Moreover, Radio Jamaica said, Air Jamaica currently has over US$600 million in loans outstanding. About Air Jamaica Headquartered in Kingston, Jamaica, Air Jamaica Limited -- http://www.airjamaica.com/-- was founded in 1969. It flies passengers and cargo to almost 30 destinations in the Caribbean, Europe, and North America. Air Jamaica offers vacation packages through Air Jamaica Vacations. The company closed its intra- island services unit, Air Jamaica Express, in October 2005. The Jamaican government owned 25% of the company after it went private in 1994. However, in late 2004, the government assumed full ownership of the airline after an investor group turned over its 75% stake. The Jamaican government does not plan to own Air Jamaica permanently. * * * As reported in the Troubled Company Reporter-Latin America on August 10, 2009, Standard & Poor's Ratings Services said that it lowered its foreign currency corporate credit rating on Air Jamaica Ltd. to 'CCC+' from 'B-'. The outlook is negative. The rating action followed S&P's recent lowering of the long-term sovereign credit rating on Jamaica (CCC+/Negative/C). AIR JAMAICA: Could Go to Local Consortium ----------------------------------------- Air Jamaica Limited could end up in the hands of a consortium comprising a major player in the tourism and entertainment sectors and a group of investors has expressed an interest in the defunct airline, RadioJamaica reports. According to the report, no updates were given regarding the possible sale of the airline to regional carrier Caribbean Airlines and United Stares based Spirit Airlines. The report notes that in the meantime, unions representing Air Jamaica workers say staff cuts at the airline have been progressing smoothly. The report relates Kavan Gayle President- General of the Bustmanate Industrial Union said that the process should be completed soon. As reported in the Troubled Company Reporter-Latin America on September 30, 2009, Jamaica Observer said that Air Jamaica has began laying off 300 workers in a move to reduce its staff complement by 15%. The report related that the move affected ground staff and pilots at the two international airports in Kingston and Montego Bay, as well as airline's head office in downtown Kingston. According to the report, Mr. Gayle said that the affected workers will be sent on leave without pay, and after a maximum 120 days will be offered a redundancy payment or re- employment. A TCRLA report on June 29, 2009, citing RadioJamaica News, related that the Jamaican government indicated it will name a buyer for cash-strapped Air Jamaica. Radio Jamaica said the airline has been hemorrhaging over US$150 million per annum and the government has had to foot the massive bill. In addition, Radio Jamaica said, Air Jamaica currently has over US$600 million in loans outstanding. About Air Jamaica Headquartered in Kingston, Jamaica, Air Jamaica Limited -- http://www.airjamaica.com/-- was founded in 1969. It flies passengers and cargo to almost 30 destinations in the Caribbean, Europe, and North America. Air Jamaica offers vacation packages through Air Jamaica Vacations. The company closed its intra- island services unit, Air Jamaica Express, in October 2005. The Jamaican government owned 25% of the company after it went private in 1994. However, in late 2004, the government assumed full ownership of the airline after an investor group turned over its 75% stake. The Jamaican government does not plan to own Air Jamaica permanently. * * * As reported in the Troubled Company Reporter-Latin America on August 10, 2009, Standard & Poor's Ratings Services said that it lowered its foreign currency corporate credit rating on Air Jamaica Ltd. to 'CCC+' from 'B-'. The outlook is negative. The rating action followed S&P's recent lowering of the long-term sovereign credit rating on Jamaica (CCC+/Negative/C). =========== M E X I C O =========== MULTICAT MEXICO: Mexico Buys Cat Bond for Storm, Earthquake Cover ---------------------------------------------------------------- Mexico plans to buy a US$250 million catastrophe bond backed by Swiss Reinsurance Co. to cover its natural catastrophe fund, Colleen McCarthy at Business Insurance reports, citing Standard & Poor’s Corp. According to the report, the bond, issued by Cayman Islands-based special-purpose vehicle MultiCat Mexico 2009 Ltd. was sponsored by the Fund for Natural Disasters. The report relates that under the terms of the deal, FONDEN will enter into an insurance contract with Mexican-owned state insurer Agroasamex S.A. and Swiss Re will reinsure Agroasamex. Using a parametric trigger structure, the report says, MultiCat Mexico 2009 will provide cover to Swiss Re against losses from certain size earthquakes as well as Pacific and Atlantic hurricanes through October 2012. The report says that the issue has been divided into four tranches and the transaction is scheduled to close in October. * * * As reported in the Troubled Company Reporter-Latin America on September 29, 2009, Standard & Poor's Ratings Services has assigned its preliminary credit ratings to the class A, B, C, and D series 2009-1 notes to be issued under the principal-at-risk variable-rate note program, MultiCat Mexico 2009 Ltd. * MEXICO: Buys Cat Bond for Storm, Earthquake Cover --------------------------------------------------- Mexico plans to buy a US$250 million catastrophe bond backed by Swiss Reinsurance Co. to cover its natural catastrophe fund, Colleen McCarthy at Business Insurance reports, citing Standard & Poor’s Corp. According to the report, the bond, issued by Cayman Islands-based special-purpose vehicle MultiCat Mexico 2009 Ltd. was sponsored by the Fund for Natural Disasters. The report relates that under the terms of the deal, FONDEN will enter into an insurance contract with Mexican-owned state insurer Agroasamex S.A. and Swiss Re will reinsure Agroasamex. Using a parametric trigger structure, the report says, MultiCat Mexico 2009 will provide cover to Swiss Re against losses from certain size earthquakes as well as Pacific and Atlantic hurricanes through October 2012. The report says that the issue has been divided into four tranches and the transaction is scheduled to close in October. * * * As reported in the Troubled Company Reporter-Latin America on September 29, 2009, Standard & Poor's Ratings Services has assigned its preliminary credit ratings to the class A, B, C, and D series 2009-1 notes to be issued under the principal-at-risk variable-rate note program, MultiCat Mexico 2009 Ltd. ======= P E R U ======= DOE RUN PERU: Delays La Oroya Restart by "A Few Weeks" ------------------------------------------------------ AMM News reports that a company spokesman of Doe Run Peru SRL said it has delayed the restart of operations at its La Oroya smelter by "a few weeks." The report relates that the announcement came days after Luis Castillo, general secretary of the Peruvian mining workers federation, said the company might resume production this week after it was given an extension to its environmental program at La Oroya. "It won't be possible this week. We estimate that it will take a few weeks because we first need to close contracts with ore suppliers," the report quoted the spokesman as saying. "The company will communicate with its workers in advance, to give them notice to return," the spokesman added. According to AMM, Peru's congress voted to give Doe Run Peru smelter a 30-month extension on its environmental cleanup deadline. The current deadline had been set to expire in October. As reported in the Troubled Company Reporter-Latin America on September 1, 2009, Reuters estimated that more than 3,000 direct jobs and 16,000 indirect jobs are at stake at the smelter and in the town of La Oroya. According to a TCRLA report on August 6, 2009, citing Reuters, Doe Run Peru filed for a government- monitored financial restructuring because it was worried creditors might try to freeze its assets or operations. A TCRLA report on August 5, 2009, citing Reuters, related that Doe Run Peru owes some US$100 million to its suppliers and needs to spend another US$150 million to clean up La Oroya. Bloomberg News recalled the company shut all its smelter operations after failing to reach an agreement with banks and mining suppliers. Bloomberg News related that Doe Run Peru's zinc and lead smelter received a three-month extension to complete planned environmental cleanup projects. About Doe Run Doe Run Peru operates an integrated primary lead operation and a recycling operation located in Missouri, referred to as Buick Resource Recycling. Fabricated Products operates a lead fabrication operation located in Arizona and a lead oxide business located in Washington. * * * As of May 21, 2009, the company continues to carry Moody's bank financial strength at D- and Fitch Ratings individual rating at D. * PERU: Moody's Reviews 'Ba1' Foreign-Currency Gov't Bond Rating ---------------------------------------------------------------- Moody's Investors Service has placed Peru's Ba1 foreign-currency government bond rating on review for possible upgrade, reflecting the country's track record of stable economic policymaking and reduced risks from the economy's relatively high degree of dollarization. "The review reflects signs of increased shock-absorption capacity in the face of adverse external conditions," said Mauro Leos, Moody's regional credit officer for Latin America. "The government's enhanced policy flexibility is also evidenced by its successfully steering of the economy towards a 'soft-landing' after a period of above-trend growth." Moody's said its ratings review will examine the implementation of the government's new multi-annual policy framework, which appears generally consistent with an improving sovereign credit profile. Particular emphasis will be placed on the prospects for further reductions in the government's foreign currency exposure, which together with progressive de-dollarization of the banking system has lowered susceptibility to financial event risk. "Another focus of the review will be to evaluate how quickly the economy can return to faster growth," said Leos. "A recovery of economic momentum would facilitate a swift correction in the fiscal position consistent with the guidelines defined by the country's fiscal responsibility law." The analyst said that Moody's concerns related to the possibility of electing less predictable political leaders, such as arose during the last presidential election, had abated. Still, an exploration of such risks would be another element of the review. "Ultimately, the review is meant to determine if the country's relative performance during the global economic and financial crisis, following several years of incremental progress, qualifies Peru as an 'ordinal winner,' thereby warranting repositioning its foreign currency sovereign ratings into investment grade territory," said Leos. Peru's Baa3/P-3 country ceilings for long- and short-term foreign currency debt and its Ba2 country ceiling for foreign currency deposits were also placed on review for possible upgrade. No change is proposed for the Baa3 rating on the government's local currency bonds nor the A3 country ceiling for local currency bonds and Baa1 country ceiling for local currency deposits. The last change in the government of Peru's ratings was implemented on August 19, 2008, when Moody's upgraded the government's foreign-currency bond ratings to Ba1 from Ba2. On the same day, Peru's country ceilings for foreign-currency bonds and deposits were also upgraded to Baa3 and Ba2 from Ba1 and Ba3, respectively. ==================== P U E R T O R I C O ==================== FIRSTBANK PUERTO: Leadership Change Won't Affect S&P's 'B' Rating ----------------------------------------------------------------- Standard & Poor's Ratings Services said its ratings on FirstBank Puerto Rico (B/Negative/--) are unaffected after the bank's recent announcement of a change in leadership. According to senior management, this development will have no impact on the corporation's financial profile and results. FirstBank recently announced the appointment of Aurelio Aleman, currently Senior Executive Vice-President and Chief Operating Officer, as President and Chief Executive Officer of the corporation. Mr. Aleman succeeds Luis Beauchamp, who led the corporation from 2005 until now. ======================================== T U R K S & C A I C O S I S L A N D S ======================================== OLINT CORP: Former Head and Wife Jailed for Fraud ------------------------------------------------- David Smith, former boss of Turks and Caicos Islands-based Overseas Locket International Corporation (OLINT) Corp. Limited is now in jail in the Turks and Caicos Islands, after being arrested on September 28 in the neighboring Caribbean territory, RadioJamaica reports. According to the report, Mr. Smith was arrested together with his pregnant wife, who has been granted bail. The report relates that the pair is facing some 30 charges. As reported in the Troubled Company Reporter-Latin America on June 16, 2009, Caribbean Net News said Florida resident Christopher Walker sued the several parties for their involvement in (OLINT)'s operations. The report related Mr. Walker, who is claiming that he was defrauded in the company's “get-rich-quick scheme”, is seeking US$2.4 million in damages. According to the report, Mr. Walker's complaint involved these defendants: -- Hallmark Bank & Trust Ltd; -- Hallmark CEO and Chairman Attorney Brian Trowbridge; -- Overseas Locket International Corporation; -- OLINT Principal David Smith; -- Wayne Smith, David Smith's brother and an employee of OLINT; -- Turks and Caicos Islands Premier Michael Misick -- The Turks and Caicos Islands Investment Agency, which "encourages foreign investment in the Turks & Caicos Islands"; and -- MasterCard Worldwide and MasterCard International LLC, which provide card services to Hallmark Bank. About Olint Corp Olint Corp. Limited is an investment scheme based in Jamaica. It has operations in Turks and Caicos and the U.S. It has been facing legal problems since 2006 when the Financial Services Commission served a cease-and-desist order on the firm. On Dec. 24, 2007, the court ruled that the operations of Olint breached provisions of the Securities Act. The firm had been dealing in securities and engaging in the participation of a profit-sharing agreement, issuing investment contracts, and providing advice to potential investors without licenses and registration. Olint appealed the ruling and was granted a stay of execution of the cease-and-desist order until the appeal was heard in February 2008. ================= V E N E Z U E L A ================= CITGO PETROLEUM: Shuts Down Unicracker at Lake Charles Refinery --------------------------------------------------------------- Citgo Petroleum Corp shut a unicracker at its 429,500 barrel per day (bpd) refinery in Lake Charles, Louisiana, for emergency maintenance, Erwin Seba at Reuters reports, citing unnamed sources. According to the report, the sources said that it was unclear how long the unit would be shut. Reuters notes that the unicracker is a hydrocracking unit that uses hydrogen under high pressure to yield more motor fuel from a barrel of oil. Headquartered in Houston, Texas, Citgo Petroleum Corp. -- http://www.citgo.com/-- is owned by PDV America, an indirect, wholly owned subsidiary of Petroleos de Venezuela S.A., the state-owned oil company of Venezuela. * * * As reported in the Troubled Company Reporter on June 5, 2009, Fitch Ratings affirmed the current ratings of CITGO Petroleum Corporation but revised the company's Outlook to Negative from Stable. Fitch affirmed these ratings for CITGO: -- Issuer Default Rating at 'BB-'; -- Senior Secured Credit Facility at 'BBB-'; -- Secured Term Loan at 'BBB-'; -- Fixed-Rate Industrial Revenue Bonds at 'BBB-'. CITGO PETROLEUM: Moody's Cuts Corporate Family Rating to 'Ba2' -------------------------------------------------------------- Moody's Investors Service downgraded CITGO Petroleum Corporation's Corporate Family Rating to Ba2 from Ba1. Moody's also downgraded the company's Senior Secured Term Loan and Term Loan B ratings to Ba1 (LGD 2, 21%) from Baa3 (LGD 2, 25%), its pollution control bonds to Ba1 (LGD 2, 21%) from Baa3 (LGD 3, 31%), and its PDR rating to Ba3 from Ba2. The rating outlook is stable. The downgrades are in response to weaker refining fundamentals, the company's increased capital needs in the medium-term, and Moody's view that its parent, Petroleos de Venezuela, S.A. (rated B1 Global Local Currency Issuer Rating) will continue to pose greater risk for the company's leverage, capital reinvestment and liquidity. CITGO sustained a net loss of $105 million in the first half of 2009, reflecting lower product sales revenues and narrowing light/ heavy crude oil differentials, which resulted in significantly reduced refining margins. Results were also affected by expenses related to its social responsibility program, including discounted heating oil sales. While the company's net loss is expected to ease somewhat for the full year, cash flow will be significantly lower in 2009, and earnings and cash flow will remain under pressure in 2010. In addition, capital spending will remain elevated for investments to manufacture ultra low sulfur diesel. Moody's notes that under a potential scenario of negative free cash flow, the company is taking steps to defer some capital and turnaround expenditures and to enhance working capital management and maintain financial flexibility. However, with capital requirements expected to remain elevated into 2011, prospects for leverage reduction are limited. Liquidity concerns about CITGO, including restricted access to its accounts receivable facility and a tight financial leverage covenant, have been alleviated. CITGO renewed its $450 million Accounts Receivable facility and has approximately $500 million of unused capacity under its $1.15 billion secured revolving credit facility, a portion of which backstops certain industrial revenue bonds. As of June 30, 2009, the borrowing covenant of a maximum 55% total debt/capital had eased to approximately 49%, and is expected to remain in compliance through 2009 and into 2010. The revolver expires in November 2010, so renewal of the facility will be key to CITGO's future liquidity position. CITGO's covenant tightness primarily arose as a result of a debt- funded $1 billion intercompany loan made to PDVSA in 2007. PDVSA has agreed to repay approximately $300 million of the loan in 2009, $100 million in early 2010, and via scheduled amortization at market rates of the remaining balance through 2020. The repayment in 2009 and future amortization should enable CITGO to gradually improve its leverage position. However, CITGO's operations have been restructured over the past few years by selling assets and PDVSA has aggressively managed the subsidiary's financial leverage via large dividends, with capital spending limited to minimum levels required for maintenance, safety and mandated environmental expenditures. Consequently, the downgrade also reflects Moody's view that CITGO's ability to reinvest and manage its financial leverage could continue to be adversely affected by the parent's capital strategies and cash needs. Moody's notes that underlying the Ba2 CFR is a reduction in CITGO's baseline credit assessment to 13 (corresponding to Ba3). CITGO, as a wholly-owned subsidiary of PDVSA, is subject to joint default analysis as a government-related issuer. Moody's last rating action affecting CITGO occurred on June 2, 2009, when the ratings were placed on review for downgrade. CITGO Petroleum Corporation is headquartered in Houston, Texas. Petroleos de Venezuela is located in Caracas, Venezuela. PETROLEOS DE VENEZUELA: Moody's Cuts Unit's Family Rating to 'Ba2' ------------------------------------------------------------------ Moody's Investors Service downgraded CITGO Petroleum Corporation's Corporate Family Rating to Ba2 from Ba1. Moody's also downgraded the company's Senior Secured Term Loan and Term Loan B ratings to Ba1 (LGD 2, 21%) from Baa3 (LGD 2, 25%), its pollution control bonds to Ba1 (LGD 2, 21%) from Baa3 (LGD 3, 31%), and its PDR rating to Ba3 from Ba2. The rating outlook is stable. The downgrades are in response to weaker refining fundamentals, the company's increased capital needs in the medium-term, and Moody's view that its parent, Petroleos de Venezuela, S.A. (rated B1 Global Local Currency Issuer Rating) will continue to pose greater risk for the company's leverage, capital reinvestment and liquidity. CITGO sustained a net loss of $105 million in the first half of 2009, reflecting lower product sales revenues and narrowing light/ heavy crude oil differentials, which resulted in significantly reduced refining margins. Results were also affected by expenses related to its social responsibility program, including discounted heating oil sales. While the company's net loss is expected to ease somewhat for the full year, cash flow will be significantly lower in 2009, and earnings and cash flow will remain under pressure in 2010. In addition, capital spending will remain elevated for investments to manufacture ultra low sulfur diesel. Moody's notes that under a potential scenario of negative free cash flow, the company is taking steps to defer some capital and turnaround expenditures and to enhance working capital management and maintain financial flexibility. However, with capital requirements expected to remain elevated into 2011, prospects for leverage reduction are limited. Liquidity concerns about CITGO, including restricted access to its accounts receivable facility and a tight financial leverage covenant, have been alleviated. CITGO renewed its $450 million Accounts Receivable facility and has approximately $500 million of unused capacity under its $1.15 billion secured revolving credit facility, a portion of which backstops certain industrial revenue bonds. As of June 30, 2009, the borrowing covenant of a maximum 55% total debt/capital had eased to approximately 49%, and is expected to remain in compliance through 2009 and into 2010. The revolver expires in November 2010, so renewal of the facility will be key to CITGO's future liquidity position. CITGO's covenant tightness primarily arose as a result of a debt- funded $1 billion intercompany loan made to PDVSA in 2007. PDVSA has agreed to repay approximately $300 million of the loan in 2009, $100 million in early 2010, and via scheduled amortization at market rates of the remaining balance through 2020. The repayment in 2009 and future amortization should enable CITGO to gradually improve its leverage position. However, CITGO's operations have been restructured over the past few years by selling assets and PDVSA has aggressively managed the subsidiary's financial leverage via large dividends, with capital spending limited to minimum levels required for maintenance, safety and mandated environmental expenditures. Consequently, the downgrade also reflects Moody's view that CITGO's ability to reinvest and manage its financial leverage could continue to be adversely affected by the parent's capital strategies and cash needs. Moody's notes that underlying the Ba2 CFR is a reduction in CITGO's baseline credit assessment to 13 (corresponding to Ba3). CITGO, as a wholly-owned subsidiary of PDVSA, is subject to joint default analysis as a government-related issuer. Moody's last rating action affecting CITGO occurred on June 2, 2009, when the ratings were placed on review for downgrade. CITGO Petroleum Corporation is headquartered in Houston, Texas. Petroleos de Venezuela is located in Caracas, Venezuela. PETROLEOS DE VENEZUELA: JV With Petrobras Faces Difficulties ------------------------------------------------------------ Petroleos de Venezuela and Brazilian state-run Petroleo Brasileiro SA continue to face difficulties in launching a troubled refinery joint venture, with a final agreement for the project once again delayed, Jeff Fick at Dow Jones Newswires reports. According to the report, Brazilian President Luiz Inacio Lula da Silva said a final deal for the Abreu e Lima refinery in Brazil's Pernambuco state in the Northeast would be delayed until October 16 to 17. The report relates that Brazilian President Luiz Inacio Lula da Silva and Venezuelan counterpart Hugo Chavez had been expected to sign the deal at bilateral talks over the weekend. However, the report says, the weekend failure was just another in a long line of delays, cost increases and controversies to weigh on the refinery. As reported in the Troubled Company Reporter-Latin America on August 27, 2009, Dow Jones Newswires said that Petrobras increased three-fold the costs to implement a joint venture refinery project with PDVSA as the 230,000 million-barrel-a-day refinery would require total investments of about US$12 billion, up from previous forecasts of US$4.06 billion. According to a TCRLA report on July 30, 2009, citing Dow Jones Newswires, PDVSA and Petrobras negotiations on the Abreu e Lima refinery project failed talks as it was unable to reach a deal on investment costs, sales and oil prices. According to Dow Jones Newswires, citing the Estado News Agency, Paulo Roberto Costa, Petrobras' Supply and Refining director, said there was an impasse in the proposed oil refinery joint-venture due to PdVSA's attempts to impose conditions on its participation in the project, and this may lead to its being excluded. Mr. Costa, Reuters related, told reporters that PDVSA's plan was not acceptable due to the pricing mechanism for the heavy crude that Venezuela would supply to the refinery and the plan for commercialization of the refined products. About PDVSA Petroleos de Venezuela -- http://www.pdvsa.com/-- is Venezuela's state oil company in charge of the development of the petroleum, petrochemical, and coal industry, as well as planning, coordinating, supervising, and controlling the operational activities of its divisions, both in Venezuela and abroad. * * * As reported in the Troubled Company Reporter-Latin America on July 3, 2009, Fitch Ratings assigned a 'B+/RR4' rating to Petroleos de Venezuela S.A.'s proposed US$3 billion zero coupon notes due in 2011. These notes will be registered at Euroclear or Clearstream. Proceeds from the issuance are expected to be used to fund capital expenditures and for other general corporate purposes. Fitch also has these ratings on PDVSA: -- Foreign currency Issuer Default Rating 'B+' -- Local currency IDR 'B+' -- US$3 billion outstanding senior notes (due 2017) 'B+/RR4' -- US$3.5 billion outstanding senior notes (due 2027) 'B+/RR4' -- US$1.5 billion outstanding senior notes (due 2037) 'B+/RR4' * VENEZUELA: May Supply Kenya With Cheap Oil -------------------------------------------- The government of Kenya said that Venezuela may supply the African nation with low cost oil and provide technical assistance as Kenya seeks to produce oil, The Associated Press reports. According to the report, Kenyan Vice President Kalonzo Musyoka said that under the agreement, Kenya will gain access to expertise from Venezuela to aid "its quest to strike oil of its own as well as the possibility of getting access to cheaper oil supply." The AP notes that Mr. Musyoka and Venezuelan Oil Minister Rafael Ramirez signed the deal on Sunday during a summit of Latin American and African leaders held in Venezuela. * * * According to Moody's Investors Service, Venezuela continues to carry a B2 foreign currency rating and a B1 local currency rating with stable outlook. =============== X X X X X X X X =============== * Upcoming Meetings, Conferences and Seminars --------------------------------------------- Oct. 2, 2009 AMERICAN BANKRUPTCY INSTITUTE ABI/GULC "Views from the Bench" Georgetown University Law Center, Washington, D.C. Contact: http://www.abiworld.org/ Oct. 5-9, 2009 TURNAROUND MANAGEMENT ASSOCIATION TMA Annual Convention Marriott Desert Ridge, Phoenix, Arizona Contact: 312-578-6900; http://www.turnaround.org/ Oct. 20, 2009 AMERICAN BANKRUPTCY INSTITUTE NCBJ/ABI Educational Program Paris Las Vegas, Las Vegas, Nev. Contact: http://www.abiworld.org/ Dec. 3-5, 2009 AMERICAN BANKRUPTCY INSTITUTE 21st Annual Winter Leadership Conference La Quinta Resort & Spa, La Quinta, California Contact: 1-703-739-0800; http://www.abiworld.org/ Apr. 29-May 2, 2010 AMERICAN BANKRUPTCY INSTITUTE Annual Spring Meeting Gaylord National Resort & Convention Center, Maryland Contact: 1-703-739-0800; http://www.abiworld.org/ June 17-20, 2010 AMERICAN BANKRUPTCY INSTITUTE Central States Bankruptcy Workshop Grand Traverse Resort and Spa, Traverse City, Michigan Contact: 1-703-739-0800; http://www.abiworld.org/ July 7-10, 2010 AMERICAN BANKRUPTCY INSTITUTE Northeast Bankruptcy Conference Ocean Edge Resort, Brewster, Massachusetts Contact: 1-703-739-0800; http://www.abiworld.org/ July 14-17, 2010 AMERICAN BANKRUPTCY INSTITUTE Southeast Bankruptcy Conference The Ritz-Carlton Amelia Island, Amelia, Fla. Contact: http://www.abiworld.org/ Aug. 5-7, 2010 AMERICAN BANKRUPTCY INSTITUTE Mid-Atlantic Bankruptcy Workshop Hyatt Regency Chesapeake Bay, Cambridge, Maryland Contact: 1-703-739-0800; http://www.abiworld.org/ Oct. 4-8, 2010 TURNAROUND MANAGEMENT ASSOCIATION TMA Annual Convention JW Marriott Grande Lakes, Orlando, Florida Contact: http://www.turnaround.org/ Dec. 2-4, 2010 AMERICAN BANKRUPTCY INSTITUTE 22nd Annual Winter Leadership Conference Camelback Inn, Scottsdale, Arizona Contact: 1-703-739-0800; http://www.abiworld.org/ Mar. 31-Apr. 3, 2011 AMERICAN BANKRUPTCY INSTITUTE Annual Spring Meeting Gaylord National Resort & Convention Center, Maryland Contact: 1-703-739-0800; http://www.abiworld.org/ June 9-12, 2011 AMERICAN BANKRUPTCY INSTITUTE Central States Bankruptcy Workshop Grand Traverse Resort and Spa Traverse City, Michigan Contact: http://www.abiworld.org/ Dec. 1-3, 2011 AMERICAN BANKRUPTCY INSTITUTE 23rd Annual Winter Leadership Conference La Quinta Resort & Spa, La Quinta, California Contact: 1-703-739-0800; http://www.abiworld.org/ *********** 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 * * *