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/raid1/www/Hosts/bankrupt/TCRLA_Public/140328.mbx T R O U B L E D C O M P A N Y R E P O R T E R L A T I N A M E R I C A Friday, March 28, 2014, Vol. 15, No. 62 Headlines A N T I G U A & B A R B U D A LIAT: British Aviation Executive to Take Up CEO Position A R G E N T I N A ARGENTINA: Elliott Takes Debt Battle to Space ARGENTINA: Cuts Utility Subsidies as Fiscal Deficit Swells COLUMBUS INT'L: Moody's Upgrades CFR to 'B2'; Outlook Stable B R A Z I L BRAZIL: To Sell First Euro Bonds Since 2005 With 7-Year Offering C A Y M A N I S L A N D S ALAMO LTD: Shareholder to Receive Wind-Up Report on April 15 CAPITAL S A/B FUND: Shareholders Receive Wind-Up Report DUXTON WINE: Shareholder to Hear Wind-Up Report on April 24 EMBASSY CROSSING: Shareholders' Final Meeting Set for April 21 GPI LDC: Shareholders' Final Meeting Set for April 25 GRAHAM PARTNERS: Shareholder to Receive Wind-Up Report on April 10 HAMILTON CAPITAL: Shareholder to Hear Wind-Up Report on April 17 LINQI ASSET: Shareholder to Receive Wind-Up Report on April 14 LINQI SELECT: Shareholder to Receive Wind-Up Report on April 14 SAPPORO CENTRAL: Shareholder to Receive Wind-Up Report on April 15 - - - - - =============================== A N T I G U A & B A R B U D A =============================== LIAT: British Aviation Executive to Take Up CEO Position -------------------------------------------------------- Caribbean360.com reports that the board of directors of the Antigua-based regional airline, Leeward Islands Air Transport, known as LIAT, has selected a British aviation executive, David Evans, to become its next chief executive, informed sources have told the Caribbean Media Corporation. Several sources independently confirmed that Mr. Evans was approved following "internal checks" but the leaders of the four shareholder governments of LIAT are expected to ratify their choice, according to Caribbean360.com. The report notes that Mr. Evans, from Knutsford in northwest English county of Cheshire, has worked with British Airways and two fledgling carriers in the Middle East, Nile Air Airlines in Egypt and Kuwait's Wataniya Airways. Mr. Evans's selection comes six months after Captain Ian Brunton resigned at the height of a series of setbacks as the island- hopping carrier sought to bring a replacement fleet of French-made ATR-71 aircraft for their aging Canadian-made DeHavilland Dash-8 and Bombardier Q-400 aircraft, the report notes. LIAT Board Chairman Jean Holder has so far declined to confirm or deny Mr. Evans's appointment, add the report. As reported in the Troubled Company Reporter-Latin America on Jan. 3, 2012, Antigua Caribarena related that former Antigua Aviation Minister Robin Yearwood wants to see a merger between Leeward Islands Air Transport (LIAT) and the Trinidad and Tobago- owned Caribbean Airlines Limited, as he believes this is the only way the Antigua-based regional carrier can survive. Mr. Yearwood's call came against the background of media reports out of Port of Spain that suggested CAL's management may be eyeing expansion into the OECS territories, according to Antigua Caribarena. About LIAT Headquartered in V. C. Bird International Airport in Saint George Parish, Antigua, Leeward Islands Air Transport, known as LIAT, operates high-frequency interisland scheduled services serving 22 destinations in the Caribbean. The airline's main base is VC Bird International Airport, Antigua and Barbuda, with bases at Grantley Adams International Airport, Barbados and Piarco International Airport, Trinidad and Tobago. ================= A R G E N T I N A ================= ARGENTINA: Elliott Takes Debt Battle to Space --------------------------------------------- Shane Romig at Daily Bankruptcy Review reports that a hedge fund suing Argentina over the country's 2001 bond default has launched a new salvo in its legal battle with the country -- filing suit in California to block Argentina from launching a pair of satellites into space. NML Capital Ltd, a unit of Elliott Management Corp., has sued Argentina and satellite-launch company Space Exploration Technologies Corp ., claiming it is entitled to seize two launch contracts purchased by Argentina to satisfy court awards, according to Daily Bankruptcy Review. ARGENTINA: Cuts Utility Subsidies as Fiscal Deficit Swells ---------------------------------------------------------- Daniel Cancel and Pablo Gonzalez at Bloomberg News report that Argentina reduced government subsidies on natural gas and water by an average 20 percent in a bid to narrow the largest fiscal deficit in more than a decade. The cuts won't apply to industrial users. The government could save as much as ARS13 billion (US$1.6 billion) and will use proceeds to cover utility company costs and finance social spending, Economy Minister Axel Kicillof and Planning Minister Julio De Vido said at a press conference in Buenos Aires, according to Bloomberg News. Bloomberg News notes that President Cristina Fernandez de Kirchner has boosted social spending since taking office in 2007 and left utility rates largely unchanged amid average annual inflation of about 25 percent, straining the finances of power distribution companies and leading to periodic blackouts. The government wants to cut subsidies from about 5 percent of gross domestic product to 2 percent of GDP and make higher income earners pay more for their utilities, Cabinet Chief Jorge Capitanich said March 12, Bloomberg News discloses. Argentina has subsidized utilities for 11 years. "In 2003 the need for subsidies was clear," Mr. Kicillof said in reference to the period after the nation's $95 billion default and economic crisis, Bloomberg News notes. "Argentina isn't ending subsidies, just redistributing them," Mr. Kicillof added. Bloomberg News relays that the government spent ARS134 billion on subsidies in 2013, a 34 percent increase from a year earlier, La Nacion reported. Of that total, ARS81 billion pesos was for energy, the Buenos Aires-based newspaper said, Bloomberg News relates. Energy Deficit The cuts will be made in three stages in April, June and August. Some residential gas bills could rise as much as 80 percent, Mr. Kicillof said, Bloomberg News relays. The amount of reduction will depend on whether consumers reduce usage and in which neighborhoods they live, adds the report. The government didn't unveil subsidy cuts for power companies, notes Bloomberg. Argentina posted a record energy deficit last year of US$6.1 billion as domestic oil and gas output declines and imports of liquefied natural gas surge, Bloomberg News notes. Argentina posted its largest primary budget deficit in 21 years last year and the widest current account deficit since 2000 as debt payments and energy imports drained reserves by about US$12 billion to a seven-year low, Bloomberg News adds. =============== B A R B A D O S =============== COLUMBUS INT'L: Moody's Upgrades CFR to 'B2'; Outlook Stable ------------------------------------------------------------ Moody's Investors Service upgraded Columbus International Inc.'s ("Columbus") corporate family rating to B2 from B3. At the same time, Moody's upgraded the ratings on Columbus USD 640 million senior secured notes due November 2014 and assigned a B2 rating to its new USD1,250 million senior unsecured notes due in 2021. This action concludes the review for upgrade process started on March 19, 2014. The outlook on the ratings is stable. Upon the full redemption, the ratings on the existing notes will be withdrawn. Corporate Family Rating: upgraded to B2 from B3 under review for upgrade USD640 million guaranteed senior secured global notes due November 2014: upgraded to B2 from B3 under review for upgrade USD1,250 million guaranteed senior unsecured global notes due March 2021: B2 assigned Outlook: Stable from review for upgrade Ratings Rationale The upgrade was prompted by the placement of Columbus' proposed USD 1,250 million notes due in 2021, that will result in the elimination of the major liquidity concern caused by the company's aggressive management of its near-term debt maturities. Absent refinancing risk, Moody's considers that Columbus credit profile is in line with a B2 rating category. Supporting the B2 corporate family rating is Columbus high financial leverage and negative cash flow generation. The company's recent history of being active with acquisitions also limits the rating as it poses event and execution risk. As a small telecom operator in Central America and the Caribbean, the company also faces high business risk that is also entailed in the rating. These risks are mitigated by significant availability of capacity in Columbus' state-of-the-art sub-sea network, which offers room to grow revenues with limited competitive risk. Also supportive of Moody's view is the upside growth potential for its cable TV and telecom business in broadband and the company's solid market shares in its coverage areas. Proceeds of the USD1,250 million notes will be used to refinance existing USD850 million in notes maturing in 2014 and 2017, to fund a US145 million acquisition of a Colombian communications provider and to pay USD 100 million in dividends. The balance will be used to pay premiums and fees related with the transaction, and around USD70 million will be kept in cash balances for liquidity purposes. Moody's notes that the proposed transaction considers additional USD400 million debt, which coupled with extraordinary fees and dividends, will result in a weakened credit profile by the end of 2014. However, the B2 rating entails Moody's expectations that the company will be in a position to quickly de- lever as it stands to benefit from revenues and EBITDA generated from network upgrades and acquisitions made in recent years. For 2014, Moody's expects gross debt to EBITDA as adjusted to be at around 4.6x and even lower in following years. Columbus liquidity is now adequate with enough internal sources to fund cash needs while maintaining a modest liquidity buffer. For the year ended in 2013, Columbus had cash in hand of around USD 50 million. Pro forma for the USD 70 million proceeds from the notes that the company will keep in cash, balance is around USD 120 million. Moody's estimates that this cash position is enough to cover the company's cash needs including interests, cash taxes and capex. Since the company recently made some acquisitions and launched new services, we anticipate that capex will remain high in the next couple of years, resulting in negative free cash flow and modest liquidity cushion. Going forward, capex should gradually reduce resulting in flat to positive free cash flow. Moreover, we note that liquidity will be further enhanced by the USD 100 million senior secured revolver due in 2018, in which the company is currently working at. Since Columbus capital structure is comprised solely by debt denominated in US dollar, it is exposed to foreign exchange risk. However, Moody's considers this risk to be partially mitigated by the fact that around 80% of Columbus consolidated revenue is either billed in US dollars or in currencies with fixed exchange rates to the US dollar, creating a natural hedge for most of this exposure. In accordance with the terms of the indenture for the 2014 senior secured notes, the notes will be redeemed 30 days after the placement of the new notes. Therefore, we expect that the 2014 notes will cease to exist. Once the redemption is done, Moody's will withdraw the rating of the notes. The B2 rating assigned to the 2021 notes is in line with the CFR assuming that if the current capital structure is maintained, potential subordination of the notes will not be material. The notes are senior unsecured claims to Columbus guaranteed by subsidiaries representing around 72% of consolidated assets and revenues. Moreover, the indenture allows the company to incur in certain liens. However, under the company's current capital structure, the only secured debt will be the USD 100 million under the revolver facility that accounts for less than 8%, reducing the structural subordination risk for the rated notes. Should this dynamics change, resulting in a material increase in the structural subordination of the notes, a notching down on the notes could be considered. The ratings' stable outlook is based on Moody's expectations that Columbus will successfully execute its business plan, that includes consolidation of recently acquired telecom companies and launched services. Specifically, the outlook entails our expectations that profitability will remain strong allowing the company to delever to around 4.6x Debt to EBITDA as adjusted by Moody's. High profitability coupled with lower capex needs resulting from consolidation of new businesses should also result in improved cash generation. The ratings are unlikely to be upgraded in the near term because of the company's rapid growth phase that has resulted in negative free cash flow and evolving business and corporate profile. However, over the longer term, an upgrade could result from evidence that the company has reached a stabilization phase. Particularly with track record of operating under current configuration, generating positive free cash flow and with leverage below 3.5x. Negative pressure on Columbus' ratings can arise in case of an extended period of negative free cash flow and weaker interest coverage, measured by EBITDA minus capex to interest expense. Also, an underperformance of the company's business or a major acquisition that drive adjusted debt/EBITDA to well above 4 times with limited prospects for a rapid reduction would put negative pressure on Columbus' ratings. The principal methodology used in this rating was Global Communications Infrastructure Rating Methodology published in June 2011. Columbus International Inc. is a privately held telecommunications and cable TV company based in Barbados. Columbus provides digital cable television, broadband Internet, digital landline telephony and corporate data services in Trinidad, Jamaica, Grenada, Curacao and Barbados. During 2013, Columbus' revenues and adjusted EBITDA margin amounted to USD 504 million and 45%, respectively. =========== B R A Z I L =========== BRAZIL: To Sell First Euro Bonds Since 2005 With 7-Year Offering ---------------------------------------------------------------- Lyubov Pronina at Bloomberg News reports that Brazil is planning to sell seven-year euro-denominated bonds, the first sale in the currency in almost a decade, after Standard & Poor's cut the country's rating to the lowest investment-grade this week. The benchmark-sized securities may price at 165 basis points to 170 basis points above similar-maturity midswaps, a person familiar with the plan said, asking not to be identified because details are private, according to Bloomberg News. The government is seeking to raise as much as 1 billion euros ($1.4 billion), two people familiar with the plan said on March 13, Bloomberg News notes. S&P downgraded Brazil by one step to BBB- on March 24, citing the nation's sluggish economic growth and President Dilma Rousseff's expansionary fiscal policies, which have increased the government's debt load. "The timing is not the best for them following the downgrade and the crisis in Ukraine," Jean-Philippe Donge, a money manager who helps oversee EUR8 billion in assets at Banque de Luxembourg Investments, including about $400 million in emerging-market debt, said by e-mail, Bloomberg News discloses. "But there is still demand in the low-yield environment and because Brazil remains a strong economy, particularly in Latin America," Bloomberg News notes. Rates on government debt sold last year and maturing in 2025 were little changed at 4.54 percent, 53 basis points below this year's high on Jan. 9, Bloomberg News adds. ========================== C A Y M A N I S L A N D S ========================== ALAMO LTD: Shareholder to Receive Wind-Up Report on April 15 ------------------------------------------------------------ The sole shareholder of Alamo, Ltd will receive on April 15, 2014, at 8:45 a.m., the liquidator's report on the company's wind-up proceedings and property disposal. The company's liquidator is: Intertrust SPV (Cayman) Limited 190 Elgin Avenue, George Town Grand Cayman KY1-9005 Cayman Islands c/o Kim Charaman/Jennifer Chailler Telephone: (345) 943-3100 CAPITAL S A/B FUND: Shareholders Receive Wind-Up Report ------------------------------------------------------- The shareholders of Capital S A/B Fund received on March 24, 2014, the liquidator's report on the company's wind-up proceedings and property disposal. The company's liquidator is: Fides Limited c/o Clive Gibbons Michelle McLaughlin P.O. Box 10338 Grand Cayman KY1-1003 Cayman Islands Telephone: 345-949-7232 DUXTON WINE: Shareholder to Hear Wind-Up Report on April 24 ----------------------------------------------------------- The sole shareholder of Duxton Wine Fund SPC will receive on April 24, 2014, at 4:00 p.m., the liquidator's report on the company's wind-up proceedings and property disposal. The company's liquidator is: DMS Corporate Services Ltd. c/o Nicola Cowan Telephone: (345) 946 7665 Facsimile: (345) 949 2877 dms House, 2nd Floor P.O. Box 1344 Grand Cayman KY1-1108 Cayman Islands EMBASSY CROSSING: Shareholders' Final Meeting Set for April 21 -------------------------------------------------------------- The shareholders of Embassy Crossing Limited will hold their final meeting on April 21, 2014, 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: Westport Services Ltd. c/o Evania Ebanks Telephone: (345) 949 5122 Facsimile: (345) 949 7920 P.O. Box 1111 Grand Cayman KY1-1102 Cayman Islands GPI LDC: Shareholders' Final Meeting Set for April 25 ----------------------------------------------------- The shareholders of GPI LDC will hold their final meeting on April 25, 2014, at 8:30 a.m., to receive the liquidator's report on the company's wind-up proceedings and property disposal. The company's liquidator is: Intertrust SPV (Cayman) Limited 190 Elgin Avenue, George Town Grand Cayman KY1-9005 Cayman Islands c/o Kim Charaman/Jennifer Chailler Telephone: (345) 943-3100 GRAHAM PARTNERS: Shareholder to Receive Wind-Up Report on April 10 ------------------------------------------------------------------ The sole shareholder of Graham Partners Offshore Fund, Ltd. will receive on April 10, 2014, at 11:30 a.m., the liquidator's report on the company's wind-up proceedings and property disposal. The company's liquidator is: Ogier c/o Kellian Hutchinson Telephone: (345) 815-1418 Facsimile: (345) 949-9877 HAMILTON CAPITAL: Shareholder to Hear Wind-Up Report on April 17 ---------------------------------------------------------------- The sole shareholder of Hamilton Capital Group Limited will receive on April 17, 2014, at 11:00 a.m., the liquidator's report on the company's wind-up proceedings and property disposal. The company's liquidator is: Maricorp Services Ltd. J. Andrew Murray Telephone: 345-949-9710 P.O. Box 2075 Grand Cayman KY1-1105 Cayman Islands LINQI ASSET: Shareholder to Receive Wind-Up Report on April 14 -------------------------------------------------------------- The sole shareholder of Linqi Asset Management (Cayman) will receive on April 14, 2014, 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 Name: Shirley Choi / Phoebe Chan Telephone: (852) 3656 6066 / (852) 3656 6063 Facsimile: (345) 949-9877 LINQI SELECT: Shareholder to Receive Wind-Up Report on April 14 --------------------------------------------------------------- The sole shareholder of Linqi Select Fund will receive on April 14, 2014, 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 Name: Shirley Choi / Phoebe Chan Telephone: (852) 3656 6066 / (852) 3656 6063 Facsimile: (345) 949-9877 SAPPORO CENTRAL: Shareholder to Receive Wind-Up Report on April 15 ------------------------------------------------------------------ The sole shareholder of Sapporo Central Holdings Inc. will receive on April 15, 2014, at 9:00 a.m., the liquidator's report on the company's wind-up proceedings and property disposal. The company's liquidator is: Intertrust SPV (Cayman) Limited 190 Elgin Avenue, George Town Grand Cayman KY1-9005 Cayman Islands c/o Kim Charaman/Jennifer Chailler Telephone: (345) 943-3100 *********** 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. 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., Washington, D.C., USA, Marites O. Claro, Joy A. Agravante, Rousel Elaine T. Fernandez, Valerie U. Pascual, Julie Anne L. Toledo, and Peter A. Chapman, Editors. Copyright 2014. 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$775 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 A. Chapman at 215-945-7000 or Nina Novak at 202-241-8200. * * * End of Transmission * * *