/raid1/www/Hosts/bankrupt/TCRLA

/raid1/www/Hosts/bankrupt/TCRLA_Public/100420.mbx T R O U B L E D C O M P A N Y R E P O R T E R L A T I N A M E R I C A Tuesday, April 20, 2010, Vol. 11, No. 076 Headlines B E R M U D A HOME ZONE: Liquidates; To Close Doors on April 30 J A M A I C A AIR JAMAICA: Observers Say Deal Should Be Shelved Before Elections AIR JAMAICA: U.S. Transportation Department Grants 60-Day Waiver AIR JAMAICA: 2009 Annual Revenue Drops 26.7% to US$257 Million * JAMAICA: Most Insurance Companies Fail Stress Test T R I N I D A D & T O B A G O CL FINANCIAL: Ex-CEO Duprey Denies Knowledge of Share Swap Deal CL FINANCIAL: Marlon Holder Appointed as Chairman & CEO CLICO INVESTMENT BANK: Wind-Up Petition Filed T U R K S & C A I C O S I S L A N D S CABLE & WIRELESS: London Court Dismisses Digicel Claims - - - - - ============= B E R M U D A ============= HOME ZONE: Liquidates; To Close Doors on April 30 ------------------------------------------------- Home Zone will close its doors April 30, 2010. According to a press statement dated April 9, all stock items of major home appliances at Home Zone are to be sold at some of the lowest prices Bermuda will have seen, in a liquidation sale that will end on the day Home Zone closes its doors, April 30, 2010. Home Zone stocks some of the world's top home appliance manufacturers such as GE, Whirlpool, KitchenAid and Faber. Tom Nelmes, vice president, Electrical Division at HWP Group, said: "Whilst we are obviously saddened that the economic situation has meant that we are having to close, we are now putting all our efforts into clearing items that we have in stock. There are some truly amazing deals, and we are encouraging everyone to come and take a look at what we have on offer. "Many of the items are being sold at less than cost price, but we need to sell everything by 30th April, so we are urging people to come and help us clear out. Developers and landlords might be particularly interested in some of the items we have." Home Zone is no longer taking any orders for appliances and all items are sold as seen. Deliveries must be arranged by the buyer. For those who are concerned about appliances already purchased with warranties, Home Zone is in the process of finalizing the details of how these warranties will be taken over. It will make a further announcements about contact information for after sales enquiries from May 1 onwards. Jonathan Brewin, CEO of HWP Group, commented: "Our two main priorities right now are to sign on the dotted line with a partner who can honor the after sales service provided by Home Zone. We will contact all customers who have products under warranty with this information and make a further announcement to the media as soon as the deal is signed. "Secondly we need to focus on selling as much stock as we can before 30th April. There has already been a lot of interest, so customers need to come down to Bakery Lane to support the team as soon as possible, before that item you need is sold!" Home Zone is the electrical and appliance division of The HWP Group. The HWP Group -- http://www.hwponline.com/-- is a retailer featuring Automotive, Motorcycle, and Major Appliance Retail Locations. The HWP Group was founded in 1945. ============= J A M A I C A ============= AIR JAMAICA: Observers Say Deal Should Be Shelved Before Elections ------------------------------------------------------------------ Vernon Khelawan at Trinidad & Tobago's Newsday says persons in the aviation industry both in Jamaica and in Trinidad and Tobago think that, since general elections in Trinidad and Tobago are imminent, any deal between Air Jamaica and Caribbean Airlines, should be put on hold until after the election exercise is completed and a new government has been installed. Mr. Khelawan writes, "Should the Trinidad and Tobago government, through State-owned Caribbean Airlines, continue negotiations to take over prescribed routes now being operated by a cash-strapped Air Jamaica? This is a question now engaging the attention of persons in the aviation industry both in Kingston and Port-of- Spain since Prime Minister Patrick Manning advised President George Maxwell Richards to dissolve Parliament a week ago." Trinidad & Tobago's Newsday reports that Conrad Aleong, former president and chief executive officer of the now defunct BWIA -- speaking to Business Day last week -- said "it would be unfair for a possible outgoing administration to complete a deal which, under objective analysis and scrutiny by a newly elected government may not be considered in the nation's best interest." Newsday says Mr. Aleong believes, since the entire deal has been clouded in secrecy for its duration, the citizenry "have expressed serious reservations in this lack of transparency. The people will have to live with this for a very long time and may even have to pay dearly, who knows." Newsday also relates Jamaica's Finance Minister Audley Shaw said in Kingston he didn't think the political situation in Trinidad and Tobago would affect the deal. According to the report, Mr. Shaw said "certain decisions had already been made" and that everything was on track so far. Newsday recalls the April 12 start-date given for the hand over of the routes had now been pushed back to April 30. Newsday also says a request for a waiver of the U.S. control policy had not yet been granted by the U.S. Department of Transportation, necessitating a push back in the start up date. 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 January 27, 2010, Moody's Investors Service changed the ratings outlook of Air Jamaica Limited to stable. The Corporate Family and senior unsecured ratings of Air Jamaica are affirmed at Caa1. The change in outlook mirrors the change of the outlook of the foreign currency bond rating of The Government of Jamaica to stable, which occurred on January 22, 2010. The ratings reflect Jamaica's unconditional and irrevocable guarantee of the rated debt obligations of Air Jamaica. The foreign currency bond rating of Jamaica remains Caa1, notwithstanding the January 22, 2010 downgrade of Jamaica's local currency bond rating by Moody's to Caa2. As reported in the TCR-LA on November 5, 2009, Standard & Poor's Ratings Services said that it lowered its long-term corporate credit rating on Air Jamaica Ltd. to 'CCC' from 'CCC+'. The outlook is negative. AIR JAMAICA: U.S. Transportation Department Grants 60-Day Waiver ---------------------------------------------------------------- Jamaica Observer reports that Air Jamaica's deal with Caribbean Airlines seems set to take off again after the United States Department of Transportation granted a 60-day waiver allowing the Lovebird to fly to that country when the Transitional Services Agreement between both carriers comes into effect on April 30. "Amidst all the concerns and negative projections which were raised in some quarters recently, I can now confirm that the matter has been resolved and there should be no difficulty for Air Jamaica to access the US going forward, and for Caribbean Airlines to do so, as required, thereafter," said Jamaica's Transport Minister Mike Henry, the Observer reports. The Observer recalls that Air Jamaica on March 24 wrote to the U.S. DOT asking for permission to continue to operate on the terms of its existing authority during the six- to 12-month transition period expected under the divestment agreement with Caribbean Airlines. Failing that permission, the airline asked the DOT for an urgent waiver of the agency's standard ownership and control policy, for the airline to maintain services for the one-year period under its TSA with Caribbean Airlines. The Observer says the waiver became effective April 15. "Business As Usual" When TSA Takes Effect Jamaica Observer reports that Air Jamaica's president and chief executive officer Bruce Nobles has sought to reassure passengers that operations will continue as usual as the airline prepares for its transition to Caribbean Airlines. He also reiterated that come April 30 the transition arrangement should be fully in place. According to the Observer, Mr. Nobles said all reservations made and tickets purchased will be honored and Air Jamaica will continue to use the "JM" code, its current regulatory authorizations, the current fleet of aircraft, and maintain many of its current employees. The report further relates that Mr. Nobles said: -- Air Jamaica still offers the most flights between Jamaica and Fort Lauderdale, New York, Philadelphia, Baltimore and Toronto as its spring schedule goes into effect on April 12 with 161 weekly flights; and -- freighter service will continue between Miami and Kingston three times each week. 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 January 27, 2010, Moody's Investors Service changed the ratings outlook of Air Jamaica Limited to stable. The Corporate Family and senior unsecured ratings of Air Jamaica are affirmed at Caa1. The change in outlook mirrors the change of the outlook of the foreign currency bond rating of The Government of Jamaica to stable, which occurred on January 22, 2010. The ratings reflect Jamaica's unconditional and irrevocable guarantee of the rated debt obligations of Air Jamaica. The foreign currency bond rating of Jamaica remains Caa1, notwithstanding the January 22, 2010 downgrade of Jamaica's local currency bond rating by Moody's to Caa2. As reported in the TCR-LA on November 5, 2009, Standard & Poor's Ratings Services said that it lowered its long-term corporate credit rating on Air Jamaica Ltd. to 'CCC' from 'CCC+'. The outlook is negative. AIR JAMAICA: 2009 Annual Revenue Drops 26.7% to US$257 Million -------------------------------------------------------------- Jamaica Observer reports that Air Jamaica's annual revenue dipped 26.7% to US$257 million (JM$23 billion) in 2009 due to a reduction in its fleet which impacted positively on its efficiency, according to just-published data. "The decline was reflective of lower revenues intake from all revenue categories with revenues from passengers down by US$92 million to US$207 million," stated the Economic and Social Survey Jamaica 2009 released last week by the Planning Institute of Jamaica, the Observer reports. The report notes that the survey did not post profit or loss data but the company has had an accumulated debt of some US$1 billion (JM$89.5 billion). According to the report, Air Jamaica's revenue decline was expected as it cut its fleet from 14 to nine whilst slashing six routes in 2009. The fleet reduction was a cost- cutting measure in preparation for acquisition by Trinidadian carrier Caribbean Airlines by month end. The Observer also reports that Air Jamaica's passenger load factor or filled seats increased to 74% versus 68% in 2008. According to the Observer, this was the airline's highest passenger load factor in at least five years. The report also notes the airline's operated 1.35 billion available seats miles in the year which was 34.3% lower than 2008, its revenue passenger miles fell by 27.6% to 1.3 billion while revenue passengers declined by 23.9% to 1.13 million persons. "The reduced numbers reflect the continued negative impact of the global recession," the Observer quotes the survey. 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 January 27, 2010, Moody's Investors Service changed the ratings outlook of Air Jamaica Limited to stable. The Corporate Family and senior unsecured ratings of Air Jamaica are affirmed at Caa1. The change in outlook mirrors the change of the outlook of the foreign currency bond rating of The Government of Jamaica to stable, which occurred on January 22, 2010. The ratings reflect Jamaica's unconditional and irrevocable guarantee of the rated debt obligations of Air Jamaica. The foreign currency bond rating of Jamaica remains Caa1, notwithstanding the January 22, 2010 downgrade of Jamaica's local currency bond rating by Moody's to Caa2. As reported in the TCR-LA on November 5, 2009, Standard & Poor's Ratings Services said that it lowered its long-term corporate credit rating on Air Jamaica Ltd. to 'CCC' from 'CCC+'. The outlook is negative. * JAMAICA: Most Insurance Companies Fail Stress Test ---------------------------------------------------- Al Edwards at Jamaica Observer reports that most of Jamaica's general insurance companies would be unable to pay out claims if a major natural disaster happens, according to the latest financial reports filed by the firms. The Observer reports that according to industry regulator Financial Services Commission, the Minimum Asset Test is set at 135%. Of those reporting results to date, the Observer says Key Insurance leads the way at 149.64%, followed by Lascelles DeMercado's Globe Insurance at 149%. Jamaica International Insurance Company passes the test at 143%. The Observer says those coming in below the minimum requirement are British Caribbean, 134%; West Indies Alliance, 132.07%; Victoria Mutual, 130.69%; ICWI, 130%; General Accident, 128%; Advantage General, 115%. The Observer says NEM and American Home are still to file. =============================== T R I N I D A D & T O B A G O =============================== CL FINANCIAL: Ex-CEO Duprey Denies Knowledge of Share Swap Deal --------------------------------------------------------------- Trinidad Express Newspaper reports that deposed business magnate Lawrence Duprey says documents bearing his signature and used by his former top lieutenant Andre Monteil to push through a CL Financial share swap transaction in exchange for bank borrowings in excess of US$100 million were materially misleading and done without his knowledge or consent. Trinidad Express says the former executive chairman of CL Financial made the claim in a telephone interview with the Sunday Express late last week and follows hard on the heels of a Central Bank-mounted lawsuit filed against his former second in command and group financial director Mr. Monteil and Richard Trotman, former president and CEO of his failed investment bank, CIB, among others. Trinidad Express recalls the Central Bank action relates primarily to Mr. Monteil's controversial acquisition of a Clico-held block of shares in the Home Mortgage Bank in February 2007 for $110 million in what court papers say was an act of "self-dealing" for his personal enrichment. Trinidad Express relates the Monteil-engineered deal cut across several companies in which he was chairman, including the CL Financial-owned and managed Clico Investment Bank, which is facing liquidation. Mr. Monteil was a former treasurer of the ruling People's National Movement party. The report says Mr. Monteil was sharply criticized by Prime Minister Patrick Manning and the institutional sector, including the Central Bank in 2007 amid government-issued threats to bring legislation to reverse the transaction. About CL Financial CL Financial Limited is the largest privately held conglomerate in Trinidad and Tobago and one of the largest privately held corporations in the entire Caribbean. Founded as an insurance company, Colonial Life Insurance Company (CLICO) by Cyril Duprey, it was expanded into a diversified company by his nephew, Lawrence Duprey. CL Financial is now one of the largest local conglomerates in the region, encompassing over 65 companies in 32 countries worldwide with total assets standing at roughly US$100 billion. * * * As reported in the Troubled Company Reporter-Latin America on Feb. 20, 2009, the Trinidad and Tobago Express said Central Bank Governor Ewart Williams disclosed that an examination of insurance company CLICO, dissolved finance house CLICO Investment Bank and other CL Financial companies showed a deficit between US$6 billion and US$8 billion. Tobago President George Maxwell Richards, The Express related, signed bailout bills for CL Financial, giving the government the authority to control the company's unit, Colonial Life Insurance Company, and giving the central bank extensive powers to treat with CL Financial's collapse and the consequent systemic crisis. CL FINANCIAL: Marlon Holder Appointed as Chairman & CEO ------------------------------------------------------- Trinidad & Tobago's Newsday reports that Marlon Holder will take up the position of Chairman of Colonial Life Insurance Company and the broader CL Financial Group. Mr. Holder has also been appointed Chief Executive Officer and Managing Director. The report says Mr. Holder has resigned as Executive Director of the Trinidad and Tobago Unit Trust Corporation. The report says Mr. Holder is one of Trinidad and Tobago's highly respected management personnel. According to the report, Mr. Holder is almost certain to lay stress on human resource development at the CL Financial Group. The report says Mr. Holder can do this through activating the Group's old policy of awarding scholarships to the University of the West Indies, the University of Trinidad and Tobago and other tertiary institutions to qualified CL Financial staff. This would be a continuation of the Group's well known course of action of building intellectual capital and by extension, building that base for the future succession planning for such positions as a CEO. About CL Financial CL Financial Limited is the largest privately held conglomerate in Trinidad and Tobago and one of the largest privately held corporations in the entire Caribbean. Founded as an insurance company, Colonial Life Insurance Company (CLICO) by Cyril Duprey, it was expanded into a diversified company by his nephew, Lawrence Duprey. CL Financial is now one of the largest local conglomerates in the region, encompassing over 65 companies in 32 countries worldwide with total assets standing at roughly US$100 billion. * * * As reported in the Troubled Company Reporter-Latin America on Feb. 20, 2009, the Trinidad and Tobago Express said Central Bank Governor Ewart Williams disclosed that an examination of insurance company CLICO, dissolved finance house CLICO Investment Bank and other CL Financial companies showed a deficit between US$6 billion and US$8 billion. Tobago President George Maxwell Richards, The Express related, signed bailout bills for CL Financial, giving the government the authority to control the company's unit, Colonial Life Insurance Company, and giving the central bank extensive powers to treat with CL Financial's collapse and the consequent systemic crisis. CLICO INVESTMENT BANK: Wind-Up Petition Filed --------------------------------------------- Trinidad Express Newspaper reports that the state-appointed manager Carl Hiralal of Clico Investment Bank on Friday filed a petition with the high court to wind up Clico Investment Bank on the grounds that the bank has a US$4.7 billion insolvency hole and is unable to pay its debts as they fall due. According to Trinidad Express Newspaper, Mr. Hiralal said high on the list of issues that led to the bank's failure are: -- weak financial record keeping; -- material inaccuracies in the management accounts; -- use of suspense accounts not properly reconciled which led to inaccurate ledger information; -- poor audit trails and absence of supporting paper trials on many inter-group and related party transactions; -- monthly financial statements that were not in compliance with generally accepted accounting principles; and -- a loan portfolio that comprised a significant percentage of high risk real estate projects, all over budget and behind schedule. The report says a state of affairs analysis done by Maria Daniel, a director at Ernst & Young, found that 40% of the total loans were project financing and further, a lack of supporting documentation and or appropriate security for many of the files inspected. According to the report, the Daniel audit revealed there was little evidence to suggest that the loan portfolio was being properly administered by management and recovery efforts on delinquent loans were inadequate. Clico Investment Bank is owned and managed by CL Financial. About CL Financial CL Financial Limited is the largest privately held conglomerate in Trinidad and Tobago and one of the largest privately held corporations in the entire Caribbean. Founded as an insurance company, Colonial Life Insurance Company (CLICO) by Cyril Duprey, it was expanded into a diversified company by his nephew, Lawrence Duprey. CL Financial is now one of the largest local conglomerates in the region, encompassing over 65 companies in 32 countries worldwide with total assets standing at roughly US$100 billion. * * * As reported in the Troubled Company Reporter-Latin America on Feb. 20, 2009, the Trinidad and Tobago Express said Central Bank Governor Ewart Williams disclosed that an examination of insurance company CLICO, dissolved finance house CLICO Investment Bank and other CL Financial companies showed a deficit between US$6 billion and US$8 billion. Tobago President George Maxwell Richards, The Express related, signed bailout bills for CL Financial, giving the government the authority to control the company's unit, Colonial Life Insurance Company, and giving the central bank extensive powers to treat with CL Financial's collapse and the consequent systemic crisis. ======================================== T U R K S & C A I C O S I S L A N D S ======================================== CABLE & WIRELESS: London Court Dismisses Digicel Claims ------------------------------------------------------- Caribbean Net News and Cayman Net News report that Cable & Wireless Communications said Thursday a judge in the High Court in London had dismissed all the claims brought by rival Digicel that C&W had unlawfully delayed the entry of competitors into the Caribbean telecom market between 2002 and 2006. Cayman Net News says Mr. Justice Morgan handed down the judgment. Cayman Net News relates that, according to Cable & Wireless, the case involved claims that the Cable & Wireless Communications Group had breached the telecoms statutes in six Caribbean territories, including Barbados, Cayman, St. Lucia, St. Vincent & the Grenadines, Grenada and the Turk & Caicos, because Digicel was entering as a competitor to Cable & Wireless (now LIME) between 2002-06. According to Caribbean Net News, C&W said the High Court had found a minor breach of contract in the Turks & Caicos but said it had caused no delay to Digicel and therefore no loss. According to the reports, C&W said it would seek the reimbursement of its costs for defending the matter. About LIME Lime (formerly Cable & Wireless Jamaica) -- http://home.cwjamaica.com/-- provides national and international fixed line services. The company is owned 82% by Cable & Wireless plc. Cable & Wireless Jamaica also owns Jamaica Digiport International Limited, a company which provides high speed data and other telecommunications services exclusively to freezone and offshore companies. About Cable & Wireless Headquartered in London, England, Cable & Wireless plc -- http://www.cw.com/-- is an international telecommunications company. The Company offers mobile, broadband and domestic and international fixed line services to homes, small and medium-sized enterprises, corporate customers and governments. It operates in 39 countries through four major operations in the Caribbean, Panama, Macau and Monaco & Islands. It operates through two businesses: International and Europe, Asia & US. Its International business operates full service telecommunications companies through four major operations in the Caribbean, Panama, Macau and Monaco and Islands. Its Europe, Asia & US provides enterprise and carrier solutions to the largest users of telecom services across the United Kingdom, continental Europe, Asia and the United States. Its subsidiaries include Cable & Wireless UK, Cable & Wireless Jamaica Ltd, Cable & Wireless Panama, SA, Cable & Wireless (Barbados) Ltd and Monaco Telecom SAM. * * * According to Bloomberg data, Cable & Wireless plc continues to carry Moody's "Ba3"long-term corporate family rating, "B1" senior unsecured debt rating and "Ba3"probability of default rating with a stable outlook. The company continues to Standard & Poor's "BB-"long-term foreign and local issuer credit ratings and "B" short-term foreign and local issuer credit ratings. *********** 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 2010. 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 * * *