/raid1/www/Hosts/bankrupt/TCRLA

/raid1/www/Hosts/bankrupt/TCRLA_Public/141031.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, October 31, 2014, Vol. 15, No. 216 Headlines A N T I G U A & B A R B U D A LIAT: Plans to Retrench Staff Amid Financial Struggle B R A Z I L MENDES JUNIOR: Fitch Lowers IDR to 'B' & Puts Rating on Watch Neg. OGX PETROLEO: Restructuring Should be Complete by April C A Y M A N I S L A N D S ARCO HOLDINGS: Placed Under Voluntarily Wind-Up CAPULA INVESTMENTS: Placed Under Voluntarily Wind-Up CRIS82 LIMITED: Placed Under Voluntarily Wind-Up DYMON ASIA: Commences Liquidation Proceedings EDGEWATER RE: Placed Under Voluntarily Wind-Up FORTUNE CREATION: Creditors' Proofs of Debt Due Nov. 17 FR BRAND: Commences Liquidation Proceedings FR BRAND MANAGEMENT: Commences Liquidation Proceedings INTERNATIONAL AVIATION: Commences Liquidation Proceedings JUMP START: Members Receive Wind-Up Report E L S A L V A D O R EL SALVADOR: IMF Expects 2 to 2.25% Growth Increase in 2014, 2015 J A M A I C A NATIONAL COMMERCIAL BANK: IDT Awards Clerical Workers 17% Pay Rise * JAMAICA: Big Jump for Country on "Ease of Doing Business" List P U E R T O R I C O PUERTO RICO: May Raise Petroleum Tax to Back US$2.9BB of Debt T R I N I D A D & T O B A G O COLONIAL LIFE: Barbados Gov't. Plans Bailout TRINIDAD AND TOBAGO: Gas Output Declines - - - - - =============================== A N T I G U A & B A R B U D A =============================== LIAT: Plans to Retrench Staff Amid Financial Struggle ----------------------------------------------------- The Daily Observer reports that twenty per cent of the 600 to 800 workers employed by LIAT, operating as Leeward Islands Air Transport, could lose their jobs, if the airline goes ahead with a plan aimed at pulling the struggling company out of the financial doldrums. Last week, LIAT Chief Executive Officer David Evans conferenced with the labor unions representing LIAT workers to lay out the airline's plan, according to The Daily Observer. The report notes that during the call, the airline suggested it would retrench the workers. It was not made clear, however, which departments would be affected or what employees would be let go, the report relates In a release, LIAT explained that it was about to put together its operational plan for the New Year, the report says. "As a result of the airline's fleet transition program, LIAT will be a smaller airline in 2015 than in 2014, operating a fleet of nine aircraft as opposed to 11 in 2014," the release stated, the report discloses. The airline's public statement quotes Mr. Evans saying, as a responsible business, LIAT had to "examine our cost base" and that if it flew fewer aircraft in 2015, it would have to reduce cost, notes the report. However, the airline did not directly address the lay-off claims, the report says. The release only stated that LIAT had been mandated by its board of directors to ensure that its costs reflect the level of activity carried out, the report discloses. "It is too early to say what impact there may be on jobs as a result of this and the company will consult with its staff and their representatives over its plans before making any announcement," the statement read, the report relays. President of the Leeward Islands Airline Pilots Association (LIALPA) Patterson Thompson said if LIAT's plan was to reduce the number of aircraft, it suggested to him that pilots would be laid off, the report notes. "I can't speak as to the number of pilots going home yet," Mr. Thompson said told Observer. "I don't think the company has a stringent timeline as to when these things are to happen." About LIAT LIAT, operating as Leeward Islands Air Transport, is an airline headquartered on the grounds of V. C. Bird International Airport in Antigua. It operates high-frequency inter-island scheduled services serving 21 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. * * * As reported in the Troubled Company Reporter-Latin America on March 10, 2014, Caribbean360.com said that Leeward Islands Air Transport (LIAT) said it will take "decisive action" to deal with unprofitable routes as the Antigua-based airline seeks to make its operations financially variable. On Sept. 23, 2013, the TCRLA, citing Trinidad and Tobago Newsday, reported that there's much upheaval at the highest levels of LIAT -- the Board and the Executive. Following the sudden resignation of Chief Executive Officer Captain Ian Brunton, comes the news from highly reliable sources that long time chairman Jean Holder is all set to follow. David Evans replaced Mr. Brunton as chief executive officer. =========== B R A Z I L =========== MENDES JUNIOR: Fitch Lowers IDR to 'B' & Puts Rating on Watch Neg. ----------------------------------------------------------------- Fitch Ratings has downgraded Mendes Junior Trading e Engenharia S.A.'s (MJTE) foreign and local currency Issuer Default Ratings (IDR) to 'B' from 'B+' and its national scale rating to 'BBB(bra)' from 'BBB+(bra)'. Fitch also placed the ratings on Negative Watch. KEY RATING DRIVERS The downgrade reflects the weaker than expected performance of MJTE in the first half of 2014, with no expectation of a recovery in line with Fitch's initial projections for year end. MJTE is facing a deterioration of its business margins and operational cash flow generation due to high volumes of claims that are still under discussion with clients. Claims are potential revenues the company asks for the client after providing project amendments. This scenario exacerbated the company's historical low liquidity position and adds to refinancing risks as debt maturity remains concentrated in the short-term. MJTE accounts all the costs related to claims when they occurred but recognizes revenues only when the client signs an agreement. As discussions on the value owed takes time, claims tend to be erratic in time and magnitude, besides pressuring cash flow. The Rating Watch Negative embraces the challenge that MJTE has over the next three months in reducing refinancing risks through lengthening of its short-term debt, collecting pending claims and improving its operational performance. Fitch believes MJTE's liquidity is tight to support the ongoing operations and the current debt. In its favor, MJTE has a long expertise in executing complex projects on time and two years of operations sustained by the backlog. Additionally, the urgent demand for infrastructure in Brazil should help the company to replace backlog through the next years. Higher Refinancing Risk Refinancing risks have increased in the first half of 2014 above Fitch's expectations. As of the LTM ended June 30, 2014, the company's cash balance of BRL50 million was equivalent to 27% of its short term debt of BRL189 million, under Fitch's metrics. This unfavorably compares to the already tight 50% cash coverage of Dec. 2013 and 2012. The company has the challenge to refinance its short term debt, while it develops its operations. MJTE's financial flexibility is further reduced as the company has BRL32 million of restricted cash and its ability of accessing capital market is uncertain. Deteriorated Credit Metrics Fitch expects MJTE net leverage to be around 2.5x in 2014. As per June 2014, the company's total leverage, measured by total debt over EBITDA increased to 5.9x from 1.8x in Dec. 2013, under Fitch's metrics. As for the net leverage, the indicator increased to 4.8x from 1.2x in the same period. On top of the net debt increase to BRL220 million from BRL205 million, LTM EBITDA plunged to BRL46 million from BRL167 million in 2013. Negative FCF Free cash flow (FCF) should remain negative in the next years. As of the LTM ended June 30, 2014, the company's FFO was negative in BRL58 million pressured by non-received claims. CFFO over the LTM reached a positive BRL75 million, aided by working capital inflows of BRL133 million. CFFO was not enough to cover capex of BRL40 million and dividends of BRL45 million, leading to a negative FCF of BRL11 million. Margins Expected to Partially Recover Fitch expects MJTE's EBITDA margins of 6.5% in 2014 and 8% in 2015. The company reported an EBITDA margin of 2.5% over the LTM ended on June 2014, which unfavorably compares to 9.5% in 2013 and 8.8% in 2012. The EBITDA margin has been pressured by a slowdown in the work volume and non-received claims. Going forward, the agency understands the company will receive some of its claims and reaccelerate operating results with the works on the Sao Paulo subway project. Concentrated Backlog MJTE's backlog was moderate, totaling BRL3.4 billion, equivalent to 1.7 years of operations in June 2014. It has recovered to BRL5.4 billion in September 2014 after the company signed a BRL2.1 billion contract with the Sao Paulo subway. As a comparison, the backlog was BRL5 billion in Dec. 2013. As of June 2014, the backlog was composed of 89% of governmental clients and stated- owned companies, while the 10 largest projects represented 80% of the firmed contract portfolio. Fitch expects the company to moderately improve its backlog geographic diversification over the next two to three years, considering the company's strategy to operate abroad. RATING SENSITIVITIES In the short-term, a negative rating action should occur if the company fails to reduce refinancing risks. In the medium-term, a downgrade may be driven by a deterioration in operating performance evidenced by prolonged margin reduction, increased net leverage to ratios higher than 2.5x with the debt maturity profile concentrated in the short term, or further support to affiliates, may lead to a negative rating action. A positive rating action is not likely in the short term. In the medium term, it will depend on the company' capacity to achieve EBITDA margins around 9%, sustainably and consistent with its peers, coupled with significant improvements on liquidity levels, diversification of its backlog, and implementation of a robust structure for ring-fencing the transfer of resources to affiliates. OGX PETROLEO: Restructuring Should be Complete by April ------------------------------------------------------- Jeb Blount and Marta Nogueira at Reuters report that the restructuring of OGX Petroleo e Gas Participacoes S.A., now known as Oleo e Gas, should be complete by April, the company's chief executive told reporters in a wide-ranging interview. Oleo e Gas should be folded into a new OGX within six months, Chief Executive Officer Paulo Narcelio told reporters at company headquarters in Rio de Janeiro, according to Reuters. The report notes that the company is in the process of registering the new OGX to trade in New York as American Depository Receipts. The report relates that current shareholders and creditors of Oleo e Gas and creditors will fold their holdings into that company which will be controlled by investors who put up new money after the filing, the so-called DIP lenders, to keep Oleo e Gas operating. The DIP lenders will own 65 percent of the new OGX, pre-bankruptcy creditors 25 percent and pre-bankruptcy shareholders 10 percent, with about 5 percent, or half the original shareholders amount, belonging to Brazilian tycoon Eike Batista, the report discloses. "We will emerge from this as one of the biggest independent oil companies in Brazil," the report quoted Mr. Narcelio as saying. "It will be almost debt free and will be a producing oil company." Final emergence from bankruptcy protection and the supervision of a judge will likely take until September, Mr. Narcelio added, the report relays. During part of the next six months, both the new OGX and Oleo e Gas shares will likely trade side by side, Reuters notes. The report discloses that Mr. Narcelio also said he expects the company to restart oil output at the company's Tubarao Azul oil field by April and that it should be capable of producing 2,900 to 3,000 barrels of oil a day. Peak production of 25,000 to 30,000 barrels of oil a day at the company's other producing oil field, Tubarao Martelo should happen some time in 2016 after the company drills 6 more production wells and three injection wells, Mr. Narcelio added, the report notes. Securing the budget of US$200 million to US$500 million to drill those wells and other activities in the company's expansion plans will have to await the completion of the restructuring and the appointment of a new board and executives, Mr. Narcelio said, the report adds. About OGX Petroleo Based in Rio de Janeiro, Brazil, OGX Petroleo e Gas Participacoes S.A., now known as Oleo e Gas, is an independent exploration and production company with operations in Latin America. OGX filed for bankruptcy in a business tribunal in Rio de Janeiro on Oct. 30, 2013, case number 0377620-56.2013.8.19.0001. The bankruptcy filing puts US$3.6 billion of dollar bonds into default in the largest corporate debt debacle on record in Latin America. The filing by the oil company that transformed Eike Batista into Brazil's richest man followed a 16-month decline that wiped out more than US$30 billion of his personal fortune. The filing, which in Brazil is called a judicial recovery, follows months of negotiations to restructure the dollar bonds, in which OGX sought to convert debt to equity and secure as much as US$500 million in new funds. OGX said Oct. 29, 2013 that the talks concluded without an agreement. ========================== C A Y M A N I S L A N D S ========================== ARCO HOLDINGS: Placed Under Voluntarily Wind-Up ----------------------------------------------- On Sept. 18, 2014, the members of Arco Holdings Fund Ltd. resolved to voluntarily wind up the company's operations. Only creditors who were able to file their proofs of debt by Oct. 27, 2014, will be included in the company's dividend distribution. The company's liquidator is: Appleby Trust (Cayman) Ltd c/o Richard Gordon Telephone: +1 (345) 949 4900 75 Fort Street, PO Box 1350 Grand Cayman KY1-1108 Cayman Islands CAPULA INVESTMENTS: Placed Under Voluntarily Wind-Up ---------------------------------------------------- On Sept. 4, 2014, the shareholder of Capula Investments Limited (2010) resolved to voluntarily wind up the company's operations. Only creditors who were able to file their proofs of debt by Oct. 27, 2014, will be included in the company's dividend distribution. The company's liquidator is: Ogier Fiduciary Services (Cayman) Limited c/o Jonathan Roney Telephone: (345) 949 9876 Facsimile: (345) 949-9877 89 Nexus Way, Camana Bay Grand Cayman KY1-9007 Cayman Islands CRIS82 LIMITED: Placed Under Voluntarily Wind-Up ------------------------------------------------ On Sept. 23, 2014, the shareholders of CRIS82 Limited resolved to voluntarily wind up the company's operations. Only creditors who were able to file their proofs of debt by Oct. 29, 2014, will be included in the company's dividend distribution. The company's liquidator is: Buchanan Limited c/o Allison Kelly Telephone: (345) 949-0355 Facsimile: (345)949-0360 P.O. Box 1170, George Town Grand Cayman KY1-1102 Cayman Islands DYMON ASIA: Commences Liquidation Proceedings --------------------------------------------- On Sept. 22, 2014, the shareholders of Dymon Asia Special Opportunities Fund resolved to voluntarily liquidate the company's business. Creditors are required to file their proofs of debt to be included in the company's dividend distribution. The company's liquidator is: Keng Soon Tan 48 Bodmin Drive Singapore 559647 EDGEWATER RE: Placed Under Voluntarily Wind-Up ---------------------------------------------- On Aug. 22, 2014, the shareholder of Edgewater RE, SPC resolved to voluntarily wind up the company's operations. Creditors are required to file their proofs of debt to be included in the company's dividend distribution. The company's liquidator is: RSM Cayman Ltd. c/o Ian Lomas Harbour Place, 2nd Floor George Town PO Box 10311 Grand Cayman KY1-1003 Cayman Islands Telephone: (345) 743 3016 FORTUNE CREATION: Creditors' Proofs of Debt Due Nov. 17 ------------------------------------------------------- The creditors of Fortune Creation Limited are required to file their proofs of debt by Nov. 17, 2014, to be included in the company's dividend distribution. The company commenced liquidation proceedings on Sept. 19, 2014. The company's liquidator is: Lion International Management Limited Craigmuir Chambers P.O. Box 71 Road Town Tortola VG 1110 British Virgin Islands c/o Mr. Philip C Pedro HSBC International Trustee Limited Compass Point 9 Bermudiana Road Hamilton HM 11 Bermuda Telephone: (441) 299-6482 Facsimile: (441) 299-6526 FR BRAND: Commences Liquidation Proceedings ------------------------------------------- On Sept. 22, 2014, the shareholder of FR Brand Limited resolved to voluntarily liquidate the company's business. Creditors are required to file their proofs of debt to be included in the company's dividend distribution. The company's liquidator is: Alan G. Schwartz c/o First Reserve Corporation One Lafayette Place, Third Floor Greenwich, Connecticut 06830 USA Telephone: +1 (345) 914 6365 FR BRAND MANAGEMENT: Commences Liquidation Proceedings ------------------------------------------------------ On Sept. 22, 2014, the shareholder of FR Brand Management GP, Ltd. resolved to voluntarily liquidate the company's business. Creditors are required to file their proofs of debt to be included in the company's dividend distribution. The company's liquidator is: Alan G. Schwartz c/o First Reserve Corporation One Lafayette Place, Third Floor Greenwich, Connecticut 06830 USA Telephone: +1 (345) 914 6365 INTERNATIONAL AVIATION: Commences Liquidation Proceedings --------------------------------------------------------- On Sept. 17, 2014, the sole shareholder of International Aviation Management (CI) Ltd resolved to voluntarily liquidate the company's business. Creditors are required to file their proofs of debt to be included in the company's dividend distribution. The company's liquidators are: Edel Andersen Roger Priaulx Telephone: (345) 815 8532 Facsimile: (345) 945 3470 c/o Genesis Trust & Corporate Services Ltd. P.O. Box 448 Midtown Plaza Elgin Avenue, George Town Grand Cayman KY1-1106 Cayman Islands JUMP START: Members Receive Wind-Up Report ------------------------------------------ The members of Jump Start Limited received on Oct. 29, 2014, the liquidator's report on the company's wind-up proceedings and property disposal. The company's liquidator is: Buchanan Limited P.O. Box 1170 George Town Grand Cayman Cayman Islands KY1-1102 ===================== E L S A L V A D O R ===================== EL SALVADOR: IMF Expects 2 to 2.25% Growth Increase in 2014, 2015 ----------------------------------------------------------------- An International Monetary Fund (IMF) mission, headed by Uma Ramakrishnan, visited San Salvador during October 14-28 to conduct the country's 2014 Article IV consultation. At the end of the discussions, which included talks with senior officials from the government's economic team, members of congress and representatives of the private sector, Ms. Ramakrishnan issued the following statement in San Salvador: "A broad social and political consensus has emerged in El Salvador to strengthen economic growth, address fiscal imbalances, and deepen efforts to support the poor. To achieve these goals and build on the progress made by the government, the authorities agree that policy priorities are to: (i) address the growing macroeconomic vulnerabilities; (ii) create an environment for higher private-sector led growth; (iii) restore fiscal and debt sustainability while protecting social spending; and (iv) improve the financial sector's institutional framework. "El Salvador's GDP growth has been sluggish for the last 15 years due to structural weaknesses. The weak external environment since the 2008/09 global crisis has exacerbated the problem. The current account deficit widened in recent years and the fiscal deficit has remained at around 4 percent of GDP since 2010, with pension-related spending accounting for about 2 percent of GDP. Public debt rose to 58 percent of GDP in 2013, largely due to the increase in pension-related debt which amounted to 11 percent of GDP. "Reflecting the expected private and public investment projects, including Fomilenio II, the mission expects growth to increase to about 2 to 2.25 percent in 2014 and 2015 and average about 2.4 percent in the medium term. The mission also projects the budget deficit to be 4 and 4.4 percent of GDP in 2014 and 2015, respectively. In the absence of additional fiscal measures, the deficit could increase to almost 5.5 percent of GDP by 2019, with public debt reaching 70 percent of GDP. There are significant downside risks to the outlook as global economic uncertainties interact with domestic vulnerabilities. Specifically, the external environment could be affected by the expected normalization of U.S. monetary policy and weaker growth in other large economies. Domestic risks include the fiscal and external current account imbalances, weak implementation of investment projects, and continued political fragmentation. "The authorities' goal of reaching 3 percent growth on a sustained basis and reducing inequality is achievable if supported by additional far-reaching structural reforms. The draft 2014-19 Plan Quinquenal seeks to promote job creation, education, and security. The government also envisages further steps to bolster public investment, and promote economic transformation through diversifying the energy matrix, strengthening the manufacturing industry, and tradable service sectors. Reforms to reduce red- tape and bureaucracy, increase access to finance for SMEs, lower the access and costs of energy, and improve security are essential to attract private investment. Fomilenio II offers an opportunity to accelerate these structural reforms to help raise productivity, competitiveness, and growth. In addition, better targeting of subsidies and reallocating savings to well-targeted and high priority social programs are also important to lower inequality. "The authorities rightly recognize that higher growth alone will not be enough to address the fiscal imbalances. To this end, the government has recently adopted tax measures, and is taking steps to lower tax evasion, and restrain spending, aiming to limit the deficit for 2015 to 4 percent of GDP. The government's intention in the draft fiscal responsibility law to pursue a cumulative fiscal adjustment of 1.5 percent of GDP in 3 years and reduce non- pension related debt to 42 percent of GDP in 10 years is a step in the right direction. However, the mission considers a cumulative adjustment of 3.5 percent of GDP over a 3-year period as necessary to achieve debt sustainability. This would entail lowering the public debt ratio (including pension-related debt) to below 50 percent of GDP in 10 years. Significant pension reform is also essential for long-term fiscal sustainability. The mission encourages a wide debate across Salvadoran society to achieve broad agreement on these reforms. "The banking system is highly liquid and reports strong capital positions. The mission welcomes steady progress in modernizing banking supervision and El Salvador's participation in several regional supervisory initiatives. The mission encouraged further building the financial safety net, as well as upgrading resolution and crisis management frameworks, in line with prior Financial Sector Assessment Program and technical assistance recommendations." During the visit, the mission met with Vice President Oscar Ortiz, Technical Secretary Roberto Lorenzana, Finance Minister Carlos C ceres, Central Bank President Oscar Cabrera, Economy Minister Tharsis Solomon Lopez, Minister of Public Works, Gerson Martinez, Minister of Justice and Security, Benito Lara, Minister of Agriculture Orestes Ortez, as well as other senior government officials, members of congress, and representatives of the private sector. The mission greatly appreciates the frank and productive discussions and the warm hospitality of our Salvadoran counterparts. ============= J A M A I C A ============= NATIONAL COMMERCIAL BANK: IDT Awards Clerical Workers 17% Pay Rise ------------------------------------------------------------------ Jamaica Observer reports that the Industrial Disputes Tribunal (IDT) awarded most of the clerical employees of National Commercial Bank Jamaica (NCB) Group a near-17 per cent salary increase. The commercial bank said that the award, which included an eight per cent salary increase for the current financial year and the year before, was higher than anticipated, according to Jamaica Observer. NCB had made provisions for the expected pay rise but the award "exceeds the amounts provided", according to the bank, the report notes. "The extent to which the retroactive payments for those two financial years exceed the provisions that had been made will be taken into account in the income statement for the financial year ended September 30, 2014," said a statement issued to the Jamaica Stock Exchange, the report discloses. The report relates that the Ministry of Labor and Social Security referred to the Industrial Disputes Tribunal a dispute between the Staff Association and the bank in respect of the association's claim for increased wages and improved conditions of employment, according to NCB's 2013 annual report. The IDT made the award on October 23, 2014. Headquartered in Kingston, Jamaica, National Commercial Bank Jamaica Limited -- http://www.jncb.com/-- together with its subsidiaries, provides various banking and financial products and services primarily in Jamaica. * * * As reported in the Troubled Company Reporter-Latin America on May 23, 2014, Fitch Ratings affirmed the long-term foreign currency and local currency IDRs for National Commercial Bank Jamaica Ltd. (NCBJ) at 'B-'. Fitch has also revised NCBJ's Rating Outlook to Stable from Negative. Additionally, Fitch has affirmed NCBJ's Viability Rating (VR) at 'b-' and revised its Support Rating Floor (SRF) to 'B-' from 'CCC.' * JAMAICA: Big Jump for Country on "Ease of Doing Business" List ---------------------------------------------------------------- RJR News reports that a new World Bank Group report shows that Jamaica has the Caribbean's highest ranking in the ease of doing business, being listed 58 out of 189 economies. World Bank Group shows that, over the last year, Jamaica implemented three reforms, the most in Latin America and the Caribbean, along with the Dominican Republic and Trinidad & Tobago, according to RJR News. The report notes that Jamaica streamlined the requirements for starting a business, reduced the cost of getting electricity connection, and established credit bureaus while adopting a secured transactions law that broadens the range of assets that can be used as collateral. The report discloses that Jamaica also appears closer than it was last year to global best practices in business regulation, as measured by its Distance to Frontier ranking. ====================== P U E R T O R I C O ====================== PUERTO RICO: May Raise Petroleum Tax to Back US$2.9BB of Debt ------------------------------------------------------------- Michelle Kaske at Bloomberg News reports that Puerto Rico lawmakers are working on a plan to allow the island's Infrastructure Financing Authority to sell as much as US$2.9 billion of bonds backed by petroleum taxes to repay loans from the Government Development Bank. The strategy involves boosting the junk-rated commonwealth's petroleum-tax rate to US$15.50 per barrel after lawmakers increased it to US$9.25 last year from US$3, General Assembly Representative Rafael "Tatito" Hernandez said in a telephone interview with Bloomberg News. Bloomberg News notes that the bill, which hasn't been filed, would transfer the new revenue to the Infrastructure agency, called Prifa, from the Highways & Transportation Authority. Prifa, which has sold bonds backed by rum-tax revenue, would issue debt secured by the petroleum-tax receipts, Mr. Hernandez said, according to Bloomberg News. Prifa, unlike the roads agency, isn't eligible to restructure its debt through a law the commonwealth passed in June. Bloomberg News relates that Prifa would take on loans the highway agency owes the GDB, and repay them with the bond proceeds. The Development Bank lends cash to the commonwealth and its agencies to help balance budgets, Bloomberg News relates. The plan would boost the GDB's funds and also raise revenue to support US$4.6 billion of highway debt and the new Prifa bonds, Mr. Hernandez said, Bloomberg News relays. "It's going to fix the cash flow for the GDB," Bloomberg News quoted Mr. Hernandez as saying. For bondholders, "their coverage is going to be better after we pass this bill," he added. Safeguard Move Bloomberg News notes that Puerto Rico is moving to safeguard its direct debt and strengthen the GDB's balance sheet after the three largest credit-rating companies cut the U.S. territory to speculative grade in February. The commonwealth and its agencies have US$73 billion of obligations, most of which are tax-free nationwide, Bloomberg News relates. The island's economy has struggled to grow since 2006. The GDB plans to hold a conference call with investors today, Oct. 31. The bank on Oct. 17 released financial documents that included a plan for Prifa to sell bonds to repay money the Highways Authority owes the GDB, Bloomberg News says. The development bank's net liquidity as of Sept. 30 was US$1.4 billion, or US$1.7 billion less than three months earlier, Ted Hampton, a Moody's Investors Service analyst, wrote in a report obtained by Bloomberg News. Without the planned Prifa sale, the GDB's available cash would fall to US$819 million, Moody's said, Bloomberg News relates. The depleted cash "could lead the commonwealth and GDB to resort to budgetary payment deferrals and other cash management tools in order to pay debt service, which would increase the risk of default and place negative pressure on the rating of the commonwealth and its related entities," according to Mr. Hampton, Bloomberg News adds. ================================ T R I N I D A D & T O B A G O ================================ COLONIAL LIFE: Barbados Gov't. Plans Bailout -------------------------------------------- The Jamaica Gleaner reports that Barbados Finance Minister Chris Sinckler said the government is contemplating a rescue package for cash-strapped CLICO International Life. Minister Sinckler told a news conference that the insurance com- pany, whose Trinidad-based parent company collapsed a few years ago, was in need of a "small" amount of funds to keep it operational, according to The Jamaica Gleaner. The report notes that Minister Sinckler said Cabinet had already agreed to a restructuring plan prepared by the company's judicial managers, Deloitte Consulting. "The restructuring plan will be approved by the High Court and will be executed jointly by the judicial manager and a new company that is being put in place that government has established to manage the assets of CLICO in the various trusts that are to be created for such assets," the report quoted Minister Sinckler as saying. Under the plan, it is envisaged that all policyholders with traditional insurance policies, such as life, health and pension plans, will receive the full value of their policies with the support of the government, the report notes. The report discloses that holders of individual Executive Premium Annuity (EFPA) policies will receive the value of their principal investment while investors with EFPA policies, other than individuals, will receive shares in the property-holding entities. The report relates that the plan also envisages the creation of a new insurance company to take over the insurance business and the creation of separate entities that will own the real estate and other illiquid assets. Deloitte has said that these property-holding entities will issue bonds to the new insurance company, which will be guaranteed by the Barbados government, the report notes. The report recalls that CLICO and sister company British American Insurance Company collapsed in 2009. About CLICO International Colonial Life Insurance Company Ltd. (CLICO) is a member of the CL Financial Group. CL Financial Limited is a privately held conglomerate in Trinidad and Tobago. Founded as an insurance company by Cyril Duprey, Colonial Life Insurance Company 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 July 7, 2014, Trinidad Express said that the Central Bank has placed the responsibility of voluntary separation package (VSEP) negotiations for workers at insurance giant Colonial Life Insurance Company Ltd. (CLICO) with the company's board, after which it will review accordingly, the bank said in a statement. The bank's statement follows protest action by CLICO workers, supported by their union, the Banking, Insurance and General Workers' Union (BIGWU), outside the Central Bank in Port of Spain, according to Trinidad Express. In a separate TCRLA report on June 26, 2014, Caribbean360.com said that the Trinidad and Tobago government has welcomed an Appeal Court ruling that the Attorney General Anand Ramlogan said saves the country from paying out more than TT$1 billion (TT$1 = US$0.16 cents) to policyholders of the cash-strapped CLICO. The Appeal Court overturned the ruling of a High Court that ruled members of the United Policyholders Group (UPG) were entitled to be paid the full sums of their polices. CLICO financially caved in on itself at the end of 2008 after the investment instruments of major policyholders matured and they wanted hundreds of millions of dollars they were owed. On Aug. 6, 2013, the TCR-LA, citing Caribbean360.com, said that over TT$8 billion worth of CLICO's profitable business will be transferred to Atruis, a new company that will be owned by the state. The Trinidad Express said that the Cabinet approved the transfer as the Finance and General Purposes Committee continues to discuss a letter of intent hammered out by the Ministry of Finance and CL Financial's 400 shareholders, which envisions taxpayers will recover the more than TT$20 billion Government has injected since 2009 to keep CL subsidiary CLICO and other companies afloat. TRINIDAD AND TOBAGO: Gas Output Declines ---------------------------------------- Trinidad and Tobago Newsday reports that Trinidad and Tobago's natural gas output has declined. According to the latest issue of the Economic newsletter, which is published by Republic Bank, the country's energy sector recorded a mixed performance between April and June, the report notes. That performance saw gas output fall from an average of 4.3 billion cubic feet per day (Bcf/d) to 4 Bcf/d, according to Trinidad and Tobago Newsday. During this same period, oil production increased marginally from 79,528 barrels of oil per day (bopd) to 79,902 bopd, the report relates. The report notes that oil prices, at that time, increased to an average US$103.95 per barrel from US$98.75 per barrel. Gas prices slid from US$5.21 to US$4.61 per mmbtu. Exploration and production activity, increased, with rig days rising from 588 to 753, Depth drilling increased by 8.8 percent to 93,646 feet, the report adds. The report discloses that the 2013 Ryder Scott Report revealed that proven and probable gas reserves had fallen by seven percent and one percent respectively since 2012. Despite this, the energy sector received a much needed boost in July, when Spanish energy company Repsol announced an oil find, estimated at 40 million barrels, off Trinidad's south-east coast, the report notes. The report relays that with Government expected to remain focused on completing ongoing infrastructure and other construction projects, in the lead up to next year's general elections, activity in the construction sector is expected to remain upbeat. At the end of June, Trindad Cement Limited increased the price of cement by TT$5 per bag, the report notes. Economic activity is expected to accelerate in the fourth quarter of this year, based largely on seasonal factors and public sector spending, the report adds. *********** 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 202-362-8552. * * * End of Transmission * * *