/raid1/www/Hosts/bankrupt/TCRLA

/raid1/www/Hosts/bankrupt/TCRLA_Public/120809.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, August 9, 2012, Vol. 13, No. 158 Headlines A R G E N T I N A GPAT COMPANIA: Moody's Rates ARS50-Mil. Debt Issuance 'B1' JM SEOANE CONSTRUCCIONES: Creditors' Proofs of Debt Due Sept. 17 MAXIM SA: Creditors' Proofs of Debt Due Sept. 5 PEPI SA: Creditors' Proofs of Debt Due Sept. 27 B R A Z I L INDUSTRIAS METALURGICAS: Trend Cues Fitch to Hold Ratings WPE INT'L: Fitch Affirms 'B+' Rating on $360MM Sr. Unsec. Notes C A Y M A N I S L A N D S BELMONT LATIN MAERICA: Creditors' Proofs of Debt Due Sept. 10 BLUEFIN HOLDINGS: Creditors' Proofs of Debt Due Aug. 30 CAPRICORN INVESTMENT: Creditors' Proofs of Debt Due Sept. 10 DB SEDANKA: Creditors' Proofs of Debt Due Aug. 31 DB TWEED: Creditors' Proofs of Debt Due Aug. 31 IRONBOUND ASIA: Creditors' Proofs of Debt Due Aug. 30 IRONBOUND PARTNERS: Creditors' Proofs of Debt Due Aug. 30 IRONBOUND PARTNERS BRAZIL: Creditors' Proofs of Debt Due Aug. 30 IRONBOUND PARTNERS OVERSEAS: Proofs of Debt Due Aug. 30 UNIFORTUNE MARKET: Creditors' Proofs of Debt Due Aug. 30 C H I L E EMBLEM FINANCE 2: S&P Cuts Rating on Chilean Peso Notes to 'BB+' M E X I C O AXTEL SAB: Moody's Downgrades Corporate Family Rating to 'Caa2' P U E R T O R I C O PICHI'S INC: Court Grants Dismissal of Chapter 11 Case T R I N I D A D & T O B A G O CARIBBEAN CEMENT: Trinidad Protest Boosts Sales X X X X X X X X * Upcoming Meetings, Conferences and Seminars - - - - - ================= A R G E N T I N A ================= GPAT COMPANIA: Moody's Rates ARS50-Mil. Debt Issuance 'B1' ---------------------------------------------------------- Moody's Investors Service assigned a B1 global local-currency debt rating to the expected ninth issuance of GPAT Compania Financiera (GPAT) Class A, up to the amount of AR$50 million which will be due in 270 days, and Class B, up to the amount of AR$150 million which will be due in 18 months. At the same time, Moody's Latin America assigned Aa2.ar national scale local currency debt rating to GPAT's issuances. The following ratings were assigned to GPAT Compania Financiera S.A.'s issuances: Class A: AR$50 million senior unsecured debt issuance: B1 Global Local Currency Debt Rating Aa2.ar Argentina National Scale Local Currency Debt Rating Class B: AR$150 million senior unsecured debt issuance: B1 Global Local Currency Debt Rating Aa2.ar Argentina National Scale Local Currency Debt Rating Ratings Rationale Moody's explained that the local currency senior unsecured debt rating derives from GPAT's B1 global local currency issuer rating. Moody's also noted that seniority was taken into consideration in the assignment of the debt ratings. Moody's National Scale Ratings (NSRs) are intended as relative measures of creditworthiness among debt issues and issuers within a country, enabling market participants to better differentiate relative risks. NSRs differ from Moody's global scale ratings in that they are not globally comparable with the full universe of Moody's rated entities, but only with NSRs for other rated debt issues and issuers within the same country. NSRs are designated by a ".nn" country modifier signifying the relevant country, as in ".mx" for Mexico. GPAT Compania Financiera S.A. is headquartered in Buenos Aires, Argentina, and reported Ar$ 1.136 million of total assets and Ar$ 249 million of shareholders' equity as of March 31, 2012. JM SEOANE CONSTRUCCIONES: Creditors' Proofs of Debt Due Sept. 17 ---------------------------------------------------------------- Fernando Agustin Delavault, the court-appointed trustee for JM Seoane Construcciones Instalaciones SRL's reorganization proceedings, will be verifying creditors' proofs of claim until Sept. 17, 2012. Mr. Delavault will present the validated claims in court as individual reports. The National Commercial Court of First Instance No. 1 in Buenos Aires, with the assistance of Clerk No. 2, 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. The Trustee can be reached at: Fernando Agustin Delavault Av. Belgrano 845 Argentina MAXIM SA: Creditors' Proofs of Debt Due Sept. 5 ----------------------------------------------- Maria Cristina Rodriguez, the court-appointed trustee for Maxim SA's bankruptcy proceedings, will be verifying creditors' proofs of claim until Sept. 5, 2012. Ms. Rodriguez will present the validated claims in court as individual reports. The National Commercial Court of First Instance No. 24 in Buenos Aires, with the assistance of Clerk No. 47, 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. The Trustee can be reached at: Maria Cristina Rodriguez Av. Corrientes 3169 Argentina PEPI SA: Creditors' Proofs of Debt Due Sept. 27 ----------------------------------------------- Leonor Veiga, the court-appointed trustee for Pepi SA's bankruptcy proceedings, will be verifying creditors' proofs of claim until Sept. 27, 2012. Ms. Veiga will present the validated claims in court as individual reports. The National Commercial Court of First Instance No. 15 in Buenos Aires, with the assistance of Clerk No. 29, 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. The Trustee can be reached at: Leonor Veiga Bartolome Mitre 1711 Piso 1, Oficina 10 Argentina =========== B R A Z I L =========== INDUSTRIAS METALURGICAS: Trend Cues Fitch to Hold Ratings --------------------------------------------------------- Fitch Ratings has affirmed the following ratings of Industrias Metalurgicas Pescarmona S.A.I.C.y F. (IMPSA): -- Foreign currency Issuer Default Rating (IDR) at 'B+'; -- Local currency IDR at 'B+'; -- USD225 million senior unsecured notes due 2014, at 'B+/RR4'. Fitch has also affirmed the following ratings of IMPSA: -- National scale IDR at 'AA(arg)'; -- USD225 million senior unsecured notes due 2014 at 'AA(arg)'; -- Classes 4, 5, 6 and 7 senior unsecured notes at 'AA(arg)'. The Rating Outlook is Stable. IMPSA's 'B+' ratings reflect the positive trend for the company's long term business fundamentals due to sustained global demand for hydro and wind power generating equipment. They also incorporate the company's growing business presence in Brazil and its sizeable backlog, which provides some certainty to the company's cash generation over the medium term. Balanced against these strengths are the company's high leverage, aggressive capital expenditure program and its backlog concentration on a few large projects in developing countries. A sudden downturn in key markets would negatively impact IMPSA's ability to develop new projects. The company's operations have a significant concentration in Brazil. For the latest 11 months to March 2012, 53% of revenues and 37.5% of EBITDA came from Brazil. The growth of the company's business in Brazil has reduced IMPSA's exposure to more volatile markets such as Argentina and has increased its access to multiple funding sources. This has reduced concerns about IMPSA's need to finance its working capital needs in Argentina should trading conditions in that market deteriorate. Additionally, it has enabled the company's foreign currency rating to exceed the 'B' country ceiling of Argentina. Going forward, it is expected that above 50% of IMPSA's total revenues will be generated by its Brazilian production facilities. At March 2012, IMPSA's backlog was USD3.9 billion with 78% in wind manufacturing, 74% in projects with third parties and 45% in Brazil. The actual backlog shows an improvement from the USD3.16 billion during January 2011 and USD2.16 billion during January 2010. Given the long-term production cycle of IMPSA's developments (usually in the range of four years for hydro and 12- 18 months for wind farms), this backlog level provides some certainty to the company's cash generation in the medium term. Existing PPAs also contribute to the company's future revenue generating ability. By the second quarter of 2012 (2Q'12), IMPSA will finish building its second factory in Brazil that will double IMPSA's Hydro capacity. Next year, the Recife Wind Factory will increase its capacity to 500 from 400 generators per year. IMPSA's backlog concentration remains somewhat high, with five projects representing 55% of total backlog as of March 2012. The main project in the hydro equipment business unit is Belo Monte (Brazil), whereas main projects in the wind equipment unit are Arauco IV (Argentina) and Ceara III (Brazil). The company's free cash flow (FCF) is anticipated to remain negative during 2012 and 2013 due to capital expenditures and growing working capital needs. Investments in the construction of wind farms are estimated at approximately USD500 million for fiscal year end (FYE) 2012 and USD625 million for FYE 2013. Much of the cash deficit will be funded with non-recourse, project financing to develop wind farm projects in Brazil. Fitch expects IMPSA's total recourse debt to latest 12 months (LTM) EBITDA ratio to remain above 4.0x, and decrease in accordance with the successful execution of the project backlog and the cash flow generation of the new energy projects in operation. As of March 31, 2012, IMPSA had USD1.279 million of total debt, of which USD384 million was structured as project finance. The total recourse debt-to-EBITDA ratio, estimated annualizing EBITDA for the 1Q'12, was 4.5x at March 2012 (3.8x at December 2011). In 2010, IMPSA underwent a liability management program that included the creation of WPE International Coorperatief (WPEI). Between September 2010 and March 2011, WPEI issued USD390 million notes due in 2020 which comprised 43% of IMPSA's recourse debt at March 2012. These notes are irrevocably and unconditionally guaranteed by IMPSA and WPE (IMPSA's Brazilian subsidiary) on a senior unsecured basis. Through these issuances, IMPSA extended its debt average life to seven years from 2.4 years, as part of the proceeds were used to repurchase USD188 million out of the USD225 million notes maturing 2014. Proceeds were also used to cancel short term loans and finance CAPEX. As of March 2012, IMPSA had USD48.4 million of cash and marketable securities, covering short-term recourse debt by 19%. The company is expected to meet its upcoming debt obligations with a mix of cash from operations and the rollover of existing debt. IMPSA has increased Brazilian short term credit lines up to USD200 million and has issued USD30 million notes in the local capital market in June 2012. In December 2011, Santa Catarina Wind Farm (222 MW) started operations so IMPSA would improve its cash flow coming from energy revenues or a possible sale of its participation in this project. Potential Rating and Outlook Drivers: The company's ratings could be downgraded or a Negative Outlook could be assigned if non-recourse financing increases above levels anticipated by Fitch. Additionally, any material performance problems that threaten future projects and cash flow, or a failure to comply with the terms for the operation of the wind farms (for which long term PPAs have been signed with Eletrobras and the CCEE and are financed by BNDES) could also result in a Negative Outlook or downgrade. WPE INT'L: Fitch Affirms 'B+' Rating on $360MM Sr. Unsec. Notes --------------------------------------------------------------- Fitch Ratings has affirmed the following ratings of WPE International Coorperatief (WPEI): -- Foreign Currency Issuer Default Rating (IDR) at 'B+'; -- Local Currency IDR at 'B+'; -- US$390 million Senior Unsecured Notes due 2020, at 'B+/RR4'. The Rating Outlook is Stable. WPE International Coorperatief (WPEI) is a direct subsidiary of WPE, which in turn is wholly owned by Industrias Metalurgicas Pescarmona (IMPSA). WPEI notes are irrevocably and unconditionally guaranteed by IMPSA and WPE (IMPSA's Brazilian subsidiary) on a senior unsecured basis. The ratings reflect the creditworthiness of the guarantors. Fitch rates IMPSA at 'B+', while WPE is a fully owned subsidiary of IMPSA with strong operating, strategic and financial ties to its parent company. The 'B+' IDR assumes all WPEI's future debt issuances would be fully and unconditionally guaranteed by IMPSA, and will rank pari passu with IMPSA's senior unsecured debt. IMPSA's 'B+' ratings reflect the positive trend for the company's long-term business fundamentals due to sustained global demand for hydro and wind power generating equipment. They also incorporate the company's growing business presence in Brazil and its sizeable backlog, which provides some certainty to the company's cash generation over the medium term. Balanced against these strengths are the company's high leverage, aggressive capital expenditure program and its backlog concentration on a few large projects in developing countries. A sudden downturn in key markets would negatively impact IMPSA's ability to develop new projects. IMPSA's operations have a significant concentration in Brazil. For the latest 11 months to March 2012, 53% of revenues and 37.5% of EBITDA came from Brazil. The growth of the company's business in Brazil has reduced IMPSA's exposure to more volatile markets such as Argentina and has increased its access to multiple funding sources. This has reduced concerns about IMPSA's need to finance its working capital needs in Argentina should trading conditions in that market deteriorate. Additionally, it has enabled the company's foreign currency rating to exceed Fitch's 'B' country ceiling rating for Argentina. Going forward, it is expected that over 50% of IMPSA's total revenues will be generated by its Brazilian production facilities. At March 2012, IMPSA's backlog was USD3.9 billion, with 78% in wind manufacturing, 74% in projects with third parties, and 45% in Brazil. The actual backlog shows an improvement from the USD3.16 billion during January 2011 and USD2.16 billion during January 2010. Given the long-term production cycle of IMPSA's developments (usually in the range of four years for hydro and 12- 18 months for wind farms), this backlog level provides some certainty to the company's cash generation in the medium term. Existing power purchase agreements (PPAs) also contribute to the company's future revenue generating ability. By 2Q'12, IMPSA will finish building its second factory in Brazil which will double IMPSA's hydro capacity. Next year, the Recife Wind Factory will increase its capacity to 500 from 400 generators per year . IMPSA's backlog concentration remains somewhat high, with five projects representing 55% of total backlog as of March 2012. The main project in the hydro equipment business unit is Belo Monte (Brazil), while main projects in the wind equipment unit are Arauco IV (Argentina) and Ceara III (Brazil). The company's free cash flow (FCF) is anticipated to remain negative during 2012 and 2013 due to capital expenditures and growing working capital needs. Investments in the construction of wind farms are estimated at approximately USD500 million for FYE 2012 and USD625 million for FYE 2013. Much of the cash deficit will be funded with non-recourse, project financing to develop wind farm projects in Brazil. Fitch expects IMPSA's total recourse debt to latest 12-month EBITDA ratio to remain above 4.0x, and decrease in accordance with the successful execution of the project backlog and the cash flow generation of the new energy projects in operation. As of March 31, 2012, IMPSA had USD1.279 million of total debt, of which USD384 million was structured as project finance. The total recourse debt-to-EBITDA ratio, estimated annualizing EBITDA for the 1Q'12, was 4.5x at March 2012 (3.8x at December 2011). In 2010, IMPSA undertook a liability management program that included the creation of WPEI. Between September 2010 and March 2011, WPEI issued USD390 million notes due in 2020, which made up 43% of IMPSA's recourse debt at March 2012. These notes are irrevocably and unconditionally guaranteed by IMPSA and WPE on a senior unsecured basis. Through these issuances, IMPSA extended its debt average life to seven years from 2.4 years, as part of the proceeds were used to repurchase USD188 million out of the USD225 million in notes maturing 2014. Proceeds were also used to cancel short-term loans and finance CAPEX. As of March 2012, IMPSA had USD48.4 million of cash and marketable securities, covering short-term recourse debt by 19%. The company is expected to meet its upcoming debt obligations with a mix of cash from operations and the rollover of existing debt. IMPSA has increased its Brazilian short-term credit lines up to USD200 million and has issued USD30 million in notes in the local capital market in June 2012. In December 2011, Santa Catarina Wind Farm (222 MW) started operations so IMPSA would improve its cash flow from either energy revenues or a possible sale of its participation in this project. Potential Rating and Outlook Drivers: The company's ratings could be downgraded or a Negative Outlook could be assigned if non-recourse financing increases above levels anticipated by Fitch. Additionally, any material performance problems that threaten future projects and cash flow, or a failure to comply with the terms for the operation of the wind farms (for which long-term PPAs have been signed with Eletrobras and the CCEE and are financed by BNDES) could also result in a Negative Outlook or downgrade. =========================== C A Y M A N I S L A N D S =========================== BELMONT LATIN MAERICA: Creditors' Proofs of Debt Due Sept. 10 ------------------------------------------------------------- The creditors of Belmont Latin Maerica Ltd. are required to file their proofs of debt by Sept. 10, 2012, to be included in the company's dividend distribution. The company commenced liquidation proceedings on July 6, 2012. The company's liquidator is: Alternative Investment Solutions Ltd. P.O. Box 30841 SMB Grand Cayman KY1-1204 Cayman Islands BLUEFIN HOLDINGS: Creditors' Proofs of Debt Due Aug. 30 ------------------------------------------------------- The creditors of Bluefin Holdings Limited are required to file their proofs of debt by Aug. 30, 2012, to be included in the company's dividend distribution. The company commenced liquidation proceedings on July 16, 2012. The company's liquidator is: Walkers Corporate Services Limited Walker House, 87 Mary Street, George Town Grand Cayman KY1-9005 Cayman Islands c/o Jennifer Chailler Telephone: (345) 814 6847 CAPRICORN INVESTMENT: Creditors' Proofs of Debt Due Sept. 10 ------------------------------------------------------------ The creditors of Capricorn Investment Advisors (Cayman) Ltd. are required to file their proofs of debt by Sept. 10, 2012, to be included in the company's dividend distribution. The company commenced liquidation proceedings on July 11, 2012. The company's liquidator is: Mikkel Thorup c/o SH Corporate Services P.O. Box 61 GT Harbour Centre, 4th Floor, George Town Grand Cayman KY1-1102 Cayman Islands DB SEDANKA: Creditors' Proofs of Debt Due Aug. 31 ------------------------------------------------- The creditors of DB Sedanka Limited are required to file their proofs of debt by Aug. 31, 2012, to be included in the company's dividend distribution. The company commenced liquidation proceedings on July 2, 2012. The company's liquidator is: Jeremy Simon Spratt KPMG LLP 8 Salisbury Square London EC4Y 8BB United Kingdom c/o Jacqueline Edwards Telephone: +44 (0) 20 7311 8563 Facsimile: +44 (0) 20 7694 3533 P.O. Box 493 Grand Cayman KY1-1106 Cayman Islands FAO: David Thacker Telephone: 345-949-4800 Facsimile: 345-949-7164 DB TWEED: Creditors' Proofs of Debt Due Aug. 31 ----------------------------------------------- The creditors of DB Tweed Limited are required to file their proofs of debt by Aug. 31, 2012, to be included in the company's dividend distribution. The company commenced liquidation proceedings on July 2, 2012. The company's liquidator is: Jeremy Simon Spratt KPMG LLP 8 Salisbury Square London EC4Y 8BB United Kingdom c/o Jacqueline Edwards Telephone: +44 (0) 20 7311 8563 Facsimile: +44 (0) 20 7694 3533 P.O. Box 493 Grand Cayman KY1-1106 Cayman Islands FAO: David Thacker Telephone: 345-949-4800 Facsimile: 345-949-7164 IRONBOUND ASIA: Creditors' Proofs of Debt Due Aug. 30 ----------------------------------------------------- The creditors of Ironbound Asia Overseas Ltd. are required to file their proofs of debt by Aug. 30, 2012, to be included in the company's dividend distribution. The company commenced liquidation proceedings on July 16, 2012. The company's liquidator is: DMS Corporate Services Ltd. c/o Bernadette Bailey-Lewis Telephone: (345) 946 7665 Facsimile: (345) 946 7666 dms House, 2nd Floor P.O. Box 1344 Grand Cayman KY1-1108 Cayman Islands IRONBOUND PARTNERS: Creditors' Proofs of Debt Due Aug. 30 --------------------------------------------------------- The creditors of Ironbound Partners Brazil Overseas Ltd. are required to file their proofs of debt by Aug. 30, 2012, to be included in the company's dividend distribution. The company commenced liquidation proceedings on July 16, 2012. The company's liquidator is: DMS Corporate Services Ltd. c/o Bernadette Bailey-Lewis Telephone: (345) 946 7665 Facsimile: (345) 946 7666 dms House, 2nd Floor P.O. Box 1344 Grand Cayman KY1-1108 Cayman Islands IRONBOUND PARTNERS BRAZIL: Creditors' Proofs of Debt Due Aug. 30 ---------------------------------------------------------------- The creditors of Ironbound Partners Brazil Onshore Ltd. are required to file their proofs of debt by Aug. 30, 2012, to be included in the company's dividend distribution. The company commenced liquidation proceedings on July 16, 2012. The company's liquidator is: DMS Corporate Services Ltd. c/o Bernadette Bailey-Lewis Telephone: (345) 946 7665 Facsimile: (345) 946 7666 dms House, 2nd Floor P.O. Box 1344 Grand Cayman KY1-1108 Cayman Islands IRONBOUND PARTNERS OVERSEAS: Proofs of Debt Due Aug. 30 ------------------------------------------------------- The creditors of Ironbound Partners Overseas Ltd. are required to file their proofs of debt by Aug. 30, 2012, to be included in the company's dividend distribution. The company commenced liquidation proceedings on July 16, 2012. The company's liquidator is: DMS Corporate Services Ltd. c/o Bernadette Bailey-Lewis Telephone: (345) 946 7665 Facsimile: (345) 946 7666 dms House, 2nd Floor P.O. Box 1344 Grand Cayman KY1-1108 Cayman Islands UNIFORTUNE MARKET: Creditors' Proofs of Debt Due Aug. 30 -------------------------------------------------------- The creditors of Unifortune Market Neutral Fund Ltd. are required to file their proofs of debt by Aug. 30, 2012, to be included in the company's dividend distribution. The company commenced liquidation proceedings on July 13, 2012. The company's liquidator is: DMS Corporate Services Ltd. c/o Bernadette Bailey-Lewis Telephone: (345) 946 7665 Facsimile: (345) 946 7666 dms House, 2nd Floor P.O. Box 1344 Grand Cayman KY1-1108 Cayman Islands ========= C H I L E ========= EMBLEM FINANCE 2: S&P Cuts Rating on Chilean Peso Notes to 'BB+' ---------------------------------------------------------------- Standard & Poor's Ratings Services lowered its rating on Emblem Finance Co. No. 2 Ltd.'s Chilean peso 5,660,085,600 inflation- adjusted notes series 5 to 'BB+ (sf)' from 'BBB- (sf)' and removed the rating from CreditWatch with negative implications, where it was placed May 3, 2012. "The certificate issuance is an emerging market synthetic structured financing with a first-to-default structure that is credit-linked to Caja de Ahorros y Pensiones de Barcelona S.A. (La Caixa; BB+/Negative/B), the reference entity. In addition, the transaction includes collateral in the form of peso-denominated and inflation-adjusted Chilean sovereign bonds (the underlying collateral; 'AA') and a swap guaranteed by JPMorgan Chase Bank N.A. (A+/Negative/A-1). The rating on the underlying collateral is commensurate with the 'AA' local currency issuer credit rating on the Republic of Chile," S&P said. "The rating action follows the Aug. 3, 2012, downgrade of La Caixa to 'BB+' from 'BBB-', and our removal of the rating from CreditWatch negative," S&P said. "If a credit event occurs regarding La Caixa, investors will receive a cash settlement amount in U.S. dollars, which will be calculated according to the reference obligation's market value adjusted by the amount of liquidation proceeds realized from the collateral," S&P said. "The notes do not represent La Caixa's direct or contingent financial obligations. This transaction is linked only to La Caixa's credit risk. La Caixa did not issue the notes, and has no obligation toward the parties involved in this deal," S&P said. "We will continue to surveil the rating on this asset-backed transaction and revise the rating as necessary to reflect any changes in the transaction's underlying credit quality," S&P said. =========== M E X I C O =========== AXTEL SAB: Moody's Downgrades Corporate Family Rating to 'Caa2' --------------------------------------------------------------- Moody's Investors Service downgraded Axtel, S.A.B. de C.V. (Axtel)'s corporate family rating to Caa2 from Caa1 given the company's higher probability of default due to its tight liquidity position and weak operating performance. Simultaneously, Moody's affirmed Axtel's global notes at Caa2. The ratings outlook remains negative. Ratings affected: - Axtel's corporate family rating: Downgraded to Caa2 from Caa1 - US$275 million of 7.625% Guaranteed Senior Unsecured Global Notes due 2017: Affirmed at Caa2 - US$490 million of 9% Guaranteed Senior Unsecured Global Notes due 2019: Affirmed at Caa2 - Outlook: Negative Ratings Rationale Moody's downgrade of Axtel's corporate family rating to Caa2 from Caa1 reflects the company's higher probability of default given its tight liquidity position and weak operating performance. The low level of cash on hand as of June 30, 2012 at MXN694 million casts doubt on the company's ability face upcoming cash outflows, consisting mainly of working capital needs as well as about MXN450 million of semiannual interest payments, due on August/September and February/March on the rated notes. While earnings and cash flow have been impacted by declining revenues from long distance services, working capital needs have been above trend mostly due to slow collection of receivables from certain government entities. The US$40 million in available committed revolving credit facilities provide limited cushion to fund an eventual larger level of working capital. Also, access to US$20 million of the total committed facility is restricted to Axtel keeping debt/EBITDA lower than 3.25 times, which may prove difficult to comply with given the negative pressures on margins and FX risk. The company has recently renegotiated the financial covenants related to its credit facilities to allow for higher leverage. Sale of certain assets and equity infusion could be external sources of cash, as pointed by management in its 2Q12 earnings call. Axtel's debt maturity profile is comfortable as 88% of the company debt matures in 2017 or thereafter. However, cross-default clause in the notes indentures allow for acceleration of payment if Axtel fails to pay any owed amount over US$20 million. The ratings on the notes were maintained at Caa2 given the absence of structural subordination in the company's different types of debt. According to the Mexican bankruptcy law, suppliers credit have no particular priority vis-a-vis other creditors. In addition, while the syndicated facility is secured by collection right on selected accounts receivable, this type of debt represents only 7% of Axtel's total debt. Uncertainty remains about Axtel's ability to significantly and sustainably revert past weak operating results. Moody's believes that, in the medium to long term, continued negative pressure on revenues and margins due to tough competitive environment in all of the company's business segments mostly from wireless service providers and cable TV companies will keep placing pressure on revenues margins, working capital, and capex. In addition, since the end of 2011 Axtel operating performance has been negatively impacted by a decline in international long distance tariffs, and the consequence of increased competition from broadband services, a trend that is expected to continue in the future. The company posted adjusted EBITDA margin of 35.8% for the last twelve months ended June 30, 2012 compared to 38% as of December 31, 2011. Axtel's Caa2 ratings reflect the company's weak liquidity and operating performance, tight maintenance leverage covenant, small revenue size, negative free cash flow generation and deteriorated credit metrics. In addition, the ratings reflect the operating challenges arising from strong competition from incumbent Telmex (A3 stable) and rising availability of broadband and telecom services by cable TV operators as well as ongoing wireless substitution. Somewhat mitigating these credit negatives is Axtel's greater network investments over the last couple of years. The negative rating outlook reflects Moody's view that Axtel's liquidity will remain under pressure as its cash flow is impacted by the need to invest in its operations and network to at least maintain its market share. Should Axtel's liquidity position weaken further from modest operating results and continued negative free cash flow generation or should the FX rate of the Mexican peso against the U.S. dollar increase further, its ratings could undergo further negative rating actions. Moody's will continue to closely monitor the company's interest coverage ratio, as measured by EBITDA minus capex to interest expense, and debt/EBITDA ratio. An underperformance of Axtel's business that does not allow for an improvement in interest coverage from current low levels or that drive adjusted debt/EBITDA above 4 times for an extended period of time would also pressure the ratings. The ratings would also likely be downgraded in case of a covenant default which is not cured immediately or due to a rising probability of debt reduction or exchange, potentially under distressed terms, which could be deemed as a default by Moody's. Given the current situation, Moody's does not foresee positive rating action in the near term. However, a positive rating action would be possible if there is material improvement to the liquidity picture due to assets sale or equity injection or if there is a material improvement in the company's core operations leading to consistent positive free cash flow generation. The principal methodology used in rating Axtel was the Global Telecommunications Industry Methodology published in December 2010. Based in Monterrey, Nuevo Leon, Mexico, Axtel is a competitive local telephone company providing bundled products including voice, data and Internet services to business and residential users within Mexico. Axtel is the second largest fixed line telecom in Mexico. During the last twelve months ended in June 30, 2012, the company's revenues reached USD 808 million with a 35.8% adjusted EBITDA margin. ===================== P U E R T O R I C O ===================== PICHI'S INC: Court Grants Dismissal of Chapter 11 Case ------------------------------------------------------ The Hon. Edward A. Godoy of the U.S. Bankruptcy Court for the District of Puerto Rico has dismissed the Chapter 11 bankruptcy case of Pichi's Inc. On March 14, 2012, the Debtor asked the Court to dismiss its case, saying that it will be unable to reorganize under Chapter 11. Its assets are substantially encumbered in favor of Banco Popular de Puerto Rico, as reflected by the Debtor's schedules. The Debtor's monthly operating reports reveal that it is operating at a loss. The operation of the Debtor's casino is to be affected by different motions filed by the owners of the gaming machines directed to their recovery due to the Debtor's inability to pay amounts required by the leases. The Debtor attempted to obtain post-petition financing, as well as explored the selling of its assets to interested parties, in order to structure a plan, to no avail. On June 14, 2012, BPPR, the Puerto Rico Tourism Company, and Bally Gaming, Inc., joined the Debtor in its plea to dismiss the case. The Debtor and its guarantors have consented to BPPR foreclosing on all of collateral and the immediate appointment of an administrator to run the Debtor's operations. Bally agreed to transfer to the Debtor certain assets which include 52 slot machines and the marketing and operating system for the Debtor's casino. The purchase price for the assets will be $800,000, payable in equal monthly payments during a period of 24 months by the Debtor, through BPPR's appointed administrator, and guaranteed by BPPR. With the second monthly payment, the Debtor, through BPPR's appointed administrator, will pay an additional $25,000 to Bally to be deducted from the agreed upon purchase price. The first payment will be due when the conditions precedent have occurred. BPPR will have the right to cure any default, at its discretion, of the Debtor under the agreement with Bally for the purchase of the assets. About Pichi's Inc. Pichi's Inc. owns and operates the Best Western Pichi's Hotel in Guayanilla, Puerto Rico. Pichi's filed for Chapter 11 bankruptcy (Bankr. D. P.R. Case No. 11-06583) on Aug. 3, 2011. Judge Mildred Caban Flores initially presided over the case, which has recently been reassigned to the Hon. Edward A. Godoy. Charles A. Cuprill, Esq., at Charles A. Cuprill, P.S.C., Law Offices, in San Juan, Puerto Rico, serves as the Debtor's bankruptcy counsel. CPA Luis R. Carrasquillo & Co., P.S.C., serves as financial consultants. The petition was signed by Luis A. Emmanuelli Gonzalez, president. In its schedules, the Debtor disclosed $31,402,359 in assets and $36,619,020 in liabilities. Luis C. Marini, Esq., and Ubaldo M. Fernandez, Esq., at O'Neill & Borges, in San Juan, Puerto Rico, represents Banco Popular de Puerto Rico as counsel. =============================== T R I N I D A D & T O B A G O =============================== CARIBBEAN CEMENT: Trinidad Protest Boosts Sales ----------------------------------------------- Jamaica Gleaner reports that directors of the Caribbean Cement Company described the outlook of the local cement operation as challenging, despite finalizing what they say was a relatively large contract and cutting its losses by some 40% to $578.1 million for its June second quarter 2012. "The directors consider that the outlook will remain challenging, despite some recent positive indicators of growth in the domestic market for cement and plans for expansion into more lucrative export markets," Brian Young, chairman, and Dr. Rollin Bertrand, group chief executive officer in a joint statement which accompanied the financials, according to Jamaica Gleaner. The report notes that the group revealed that it is currently negotiating the supply of a "relatively large" amount of cement to a new customer under a three-year contract. "That contract will make a significant contribution to the group's forecasted turnover and net cash flow over the contract period," said the directors, who added that the group was also pursuing a strategic initiative with a regional cement producer, which would provide an opportunity for increased sales, Jamaica Gleaner says. The report discloses that the company's management said that operationally some of the challenges were addressed and total sales jumped 22% over the review period to $2.4 billion. The increase in sales resulted from supplying its parent plant, Trinidad Cement Limited, with stock following a strike in that country, the report adds. About Caribbean Cement Caribbean Cement Company Limited manufactures and sells cement. * * * As reported in the Troubled Company Reporter-Latin America on Aug. 18, 2011, Caribbean Cement Company Limited has incurred a JM$608.08 million loss in the three months ended April to June 2011 from JM$217.95 million loss in the same period last year. The company incurred JM$857.56 million loss in the six months ended January to June 2011 from a JM$213.40 million in the same period 2010. Caribbean Cement posted a JM$1.58 billion loss in the year ended 2010. =============== X X X X X X X X =============== * Upcoming Meetings, Conferences and Seminars --------------------------------------------- November 1-3, 2012 TURNAROUND MANAGEMENT ASSOCIATION TMA Annual Convention Westin Copley Place, Boston, Mass. Contact: http://www.turnaround.org/ Nov. 29 - Dec. 2, 2012 AMERICAN BANKRUPTCY INSTITUTE Winter Leadership Conference JW Marriott Starr Pass Resort & Spa, Tucson, Ariz. Contact: 1-703-739-0800 http://www.abiworld.org/ April 10-12, 2013 TURNAROUND MANAGEMENT ASSOCIATION TMA Spring Conference JW Marriott Chicago, Chicago, Ill. Contact: http://www.turnaround.org/ October 3-5, 2013 TURNAROUND MANAGEMENT ASSOCIATION TMA Annual Convention Marriott Wardman Park, Washington, D.C. Contact: http://www.turnaround.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. Agravante, Rousel Elaine T. Fernandez, Valerie U. Pascual, Ivy B. Magdadaro, Frauline S. Abangan, and Peter A. Chapman, Editors. Copyright 2012. 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 Peter Chapman at 240/629-3300. * * * End of Transmission * * *