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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, May 8, 2015, Vol. 16, No. 090
Headlines
A N T I G U A & B A R B U D A
LIAT: Offers Redundancy Packages to Workers
A R G E N T I N A
GENERACION INDEPENDENCIA: Moody's Affirms Caa1 Global Scale CFR
GENNEIA SA: Moody's Affirms Caa1 Global Scale CFR & Debt Ratings
B A H A M A S
COLUMBUS INTERNATIONAL: C&W to Operate Under New FLOW Brand
B O L I V I A
BANCO ECONOMICO: Moody's Assigns B2 Global LC Debt Rating
B R A Z I L
ENERGISA MATO: Moody's Upgrades Issuer Ratings to 'Ba2'
ENERGISA S.A.: Moody's Upgrades Global Scale CFR to Ba1
ENERGISA TOCANTINS: Moody's Lifts Issuer Ratings to Ba1
FIBRIA CELULOSE: Moody's Says Klabin Agreement is Credit Positive
FIBRIA CELULOSE: Moody's Affirms 'Ba1' Global Scale CFR
FIBRIA OVERSEAS: Moody's Affirms 'Ba1' Rating on $600MM Notes
C A Y M A N I S L A N D S
CONOCOPHILLIPS ABU: Shareholders' Final Meeting Set for May 28
CONOCOPHILLIPS GAMBIA: Shareholders' Final Meeting Set for May 29
CONOCOPHILLIPS TANZANIA: Shareholders' Meeting Set for May 29
MERIDIAN DIVERSIFIED: Shareholders Receive Wind-Up Report
STEEP ROCK: Shareholders' Final Meeting Set for May 22
STEEP ROCK FUND II: Shareholders' Final Meeting Set for May 22
STEEP ROCK II: Shareholders' Final Meeting Set for May 22
VISION WEALTH: Sole Member to Hear Wind-Up Report on May 22
C O L O M B I A
PACIFIC RUBIALES: Fitch Sees Potential Acquisition as Neutral
D O M I N I C A N R E P U B L I C
DOMINICAN REPUBLIC: US Closer to Lifting Ban on Agro
PERAVIA BANK: Bank Customers Can Withdraw up to RD$500,000
M E X I C O
METALSA S.A.: S&P Affirms 'BB+' CCR; Outlook Remains Stable
PETROLEOS MEXICANOS: To Eliminate 3,000 Jobs as Workers Retire
P U E R T O R I C O
PUERTO RICO: Fights to Restore Law Allowing Public Debt Revamp
T R I N I D A D & T O B A G O
CONSTRUTORA OAS: Workers Back to Work Following Negotiations
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A N T I G U A & B A R B U D A
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LIAT: Offers Redundancy Packages to Workers
-------------------------------------------
The Daily Observer reports that LIAT, operating as Leeward Islands
Air Transport, is attempting to lose excess baggage as part of
measures to make the carrier "a smaller airline in 2015."
In a document, signed by Director of Human Resources Ilean Ramsey,
eligible employees were asked to opt to apply for voluntary
separation or early retirement packages to avoid being made
redundant, according to The Daily Observer.
"In consideration of this change and in order to restore our
business to financial stability, we must remove the costs that we
were carrying as a larger entity," the communique said, the report
notes. "The company wishes to avoid having to impose compulsory
redundancies in order to achieve this," the communique added.
Since 2014, talks of job cuts at LIAT have been looming,
ultimately leading to a call from Prime Minister Gaston Browne for
the airline to put a hold on plans to axe 180 workers, the report
relates.
While PM Browne opposed the move minister responsible for Civil
Aviation, Robin Yearwood supported the measure, calling it a sound
business decision, the report discloses.
The report notes that full-time, permanent employees, who have no
disciplinary action pending against them and have been employed in
excess of six years, are being asked to submit their applications
on or before 4:00 p.m. on Tuesday, May 19.
The company warned that insufficient volunteers for voluntary
separation or early retirement packages will lead to compulsory
redundancies as downsizing is the only way the carrier "can ensure
our survival," the report relays.
The report notes that the document read, "Our operating schedule
for the year will be based on eight ATRs flying with a ninth
providing back up and support. The entire Dash 8 fleet is
expected to be removed by the end of 2015."
Meantime, veteran trade unionist Stafford Joseph is advising
workers to negotiate for added benefits outside of what has been
stipulated in the Labor Code, since a new job may be difficult to
find, the report relays.
"Things are hard now and work is hard to get, (they) can easily
negotiate a six month or year's salary in addition to what is
yours legally," Mr. Joseph said, the report notes.
The report adds that Mr. Joseph said workers would have to
approach the negotiating table soon to avoid being made
compulsorily redundant.
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
Dec. 2, 2014, Caribbean360.com said that chairman of the
shareholder governments of the financially troubled regional
airline, LIAT, operating as Leeward Islands Air Transport, Dr.
Ralph Gonsalves said while he is unaware of the details regarding
any possible retrenchment of employees, the airline needs to deal
with its high cost of operations.
The TCR-LA on March 10, 2014, citing Caribbean360.com, reported
that LIAT said it will take "decisive action" to deal with
unprofitable routes as the Antigua-based airline seeks to make its
operations financially viable.
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, David Evans
replaced Mr. Brunton as chief executive officer.
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A R G E N T I N A
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GENERACION INDEPENDENCIA: Moody's Affirms Caa1 Global Scale CFR
---------------------------------------------------------------
Moody's Latin America upgraded to Baa2.ar from Baa3.ar Generacion
Independencia SA's (GISA) national scale ratings and affirmed its
Caa1 global scale corporate family rating (CFR) and senior debt
ratings. The rating outlook continues to be negative.
The upgrade of the national scale rating (NSR) to Baa2.ar is
prompted by GISA's improved liquidity and debt maturity profile
and declining leverage.
The issuance of almost ARS 70 million notes earlier this year
coupled with the refinancing of the UBS loan last March -taking
its final maturity to 2017 from 2016 have been two significant
steps for the company to readjust debt maturities to its
established cash flow. In addition, the high availability levels
achieved in 2014 of its power plant that are likely to be
sustained in 2015, have also supported the rating upgrade.
GISA operates a 120 MW dual fuel power plant (natural gas and fuel
oil) and receives capacity payments under a long term (10 years)
supply contract (Resolution 220 framework). More than 90% of its
revenues are tied to this supply contract and as long as the plant
is available for dispatch, it receives the contractual price for
its contracted capacity, providing stability and predictability to
its revenues and cash flows. The plant has been running since its
revamping in 2011 and has shown adequate performance since then,
with availability levels of over 95%. In 2013, operating
performance was lower than average due to a temporary interruption
of operations which was quickly resolved.
A constraining rating consideration is the fact that the company
is a single-asset operation and is therefore exposed to
concentration and event risks. In addition, most of the project's
capacity is contracted under a sole contract with CAMMESA, the
federal government agency that manages the wholesale electricity
market and is in charge of managing the system's collections and
payments for all electricity brought and sold. Since the
electricity price paid by consumers is only a fraction of the
actual energy production costs, the system as a whole is in a
deficit operating position and thus relies on the periodic
transfer of funds from the federal government to make payments to
the generating companies. Therefore, Moody's believe that is
appropriate that the ratings and outlook reflect the direct
linkage the company has with the sovereign government (Argentina,
Caa1, negative).
GISA's liquidity profile has improved after the issuance of almost
ARS 70 million local notes earlier this year in addition to the
maturity extension of the UBS loan. While the notes issuance
contributed to fund the company's cash needs for this year, the
re-scheduling of the loan reduced 2015's principal payments and
extended the loan's final maturity by 1 year, to the second
quarter of 2017.
GISA will only need new financing in relation to the scheduled
maturities in 2016. As a result, the company aims to issue new
local notes for ARS 120 million in the 2nd quarter of 2016. In
addition to the company's access to the local market bond and bank
markets, the parent holding company (Albanesi S.A.) and the hold-
co sister company (RGA S.A.) have in several occasions provided
GISA with financial support (accounted for as "loans to
affiliated" but more like equity contributions). In 2014, RGA
supported GISA with ARS 23 million (ARS 10 million in loans and
ARS 13 million in equity contributions). The existence of cross
default provisions between Albanesi S.A. & affiliated companies
reinforces the expectation of continued Albanesi's support in case
of need.
While the UBS loan is denominated in US Dollars, all of GISA's
revenues and cash flows are denominated in US dollars as well;
therefore, the company is theoretically hedged.
The negative outlook for GISA reflects Moody's negative outlook
for Argentina's Caa1 government bond rating due to the company's
significant exposure to CAMMESA.
What Could Change the Rating - Down:
Moody's notes that the creditworthiness of the company is highly
dependent on the credit quality of the Argentine government.
Therefore, a further rating downgrade of the sovereign would
likely result in a negative rating action for this company.
Additional pressure for a rating downgrade could occur if CFO pre-
WC to debt were to decline below 15% and interest coverage fell
below 1.5 times for an extended period. Unexpected changes to the
Res. 220 or Energia Plus market could also have negative
implications for the ratings. A significant delay on the payments
it receives from CAMMESA could also add pressure for a rating
downgrade.
What Could Change the Rating -- Up:
Given the still negative outlook and current constraining factors,
a rating upgrade is not likely in the short term.
GISA' Caa1 global local currency rating is constrained by
Argentina's Caa1 foreign currency bond ceiling with a negative
outlook; therefore, for an upgrade of GISA's Caa1 rating an
upgrade of the foreign currency bond ceiling of Argentina would be
required.
However, if GISA is able to continue reducing debt and (debt to
EBITDA below 1.5 times) generate stable cash flows, the NSR could
be further upgraded. Quantitatively, an upgrade of GISA's NSR
would require cash from operations - CFO pre WC to debt to
consistently be above 30% and interest coverage (FFO+ Interest to
Interest) of more than 3.5 times on a sustained basis.
Generacion Independencia S.A. (GISA) owns and operates a 120 MW
thermal power plant located in the Tucuman Province in the North-
West of Argentina. GISA is controlled by Albanesi S.A. (not
rated), an Argentine holding company that owns and operates
through several plants approximately 900 MW of power capacity
within the country. In 2014, Albanesi's consolidated revenues in
the electricity market reached USD 150 million. Rafael G. Albanesi
S.A. (RGA), the biggest gas marketing company in Argentina (2014
revenues of USD 500 million) and Albanesi Inversora S.A. are also
key components of the "Albanesi Group".
GENNEIA SA: Moody's Affirms Caa1 Global Scale CFR & Debt Ratings
----------------------------------------------------------------
Moody's Latin America upgraded to Baa2.ar from Baa3.ar Genneia's
national scale ratings and affirmed its Caa1 global scale
corporate family rating and senior debt ratings. The rating
outlook continues to be negative.
The upgrade of the national scale rating to Baa2.ar is prompted by
Genneia's improved liquidity profile and lower leverage amid solid
operations from its generation business. The company has
consolidated its business profile while reducing leverage which
will allow the pursuit of future organic growth opportunities from
a more supportable financial position.
Genneia's leverage ratio (total debt to EBITDA) declined to 2.9
times at year-end 2014 from 4.2 times at the previous year-end
while negative Free Cash Flow (FCF) turned positive after the
company completed its current investment program. The probable
capitalization of the USD 50 million subordinated notes later in
the year will also be an important step to further strengthen the
company's capital structure.
The Caa1/Baa2.ar ratings continued to be supported by Genneia's
stable cash flows arising primarily from its wind and thermal
energy operations. The 77.4 MW Rawson wind farm that entered into
commercial operations in early 2012 is producing energy in line
with expectations showing capacity factors above 40% (3 years of
operations have shown an average capacity factor of 43%), and
producing stable revenues under a long term (15 years) fixed-price
contract. In addition, Genneia's thermal plants operating under
the 220 contract framework are also generating stable and
predictable revenues of approximately USD 100 million per year
under long term contracts (7 years).
Nevertheless, the ratings remain mainly constrained by the
concentration of its operations in the Argentinean market, which
has been highly unpredictable in recent years. Furthermore, most
of Genneia's cash flows arise from contracts where the off-taker
is Cammesa, the agency that not only administers the wholesale
electricity market in Argentina but also manages all of its
collections and payments. Since the current price paid for
electricity by most consumers in Argentina is not enough to cover
electricity production costs, Cammesa faces an ongoing operating
deficit that is currently financed with federal government
resources to facilitate payments to the producers. This represents
a high degree of exposure to Argentine government credit risk
(Caa1, Negative), which caps the ratings.
Liquidity & Debt Profile:
In 2014, Genneia's free cash flow generation turned positive
thanks to improved cash generation coupled with considerably lower
capital investments after the acquisitions the company carried out
in 2013 to improve the thermal energy business' operating
efficiency (4 GE turbines). Genneia's investment program has been
funded so far by a combination of debt and equity, but
significantly more reliant on debt.
Looking forward to December 2015, Moody's expect lower debt levels
due to the gradual amortization of the notes outstanding coming
due and the capitalization of the USD 50 million Class 5 notes
(subordinated debt). Upon maturity, if not fully repaid, the Class
5 notes are convertible, at the holders' option, into Class A
preferred stock of Genneia. Bondholders of Class 5 notes and
current shareholders are in negotiations in relation to the
potential capitalization of the notes. In December 2015, after the
capitalization, debt levels should stand at USD 185 million,
almost USD 100 million lower than the previous year's level.
During the first half of 2016 the company will need to fund around
USD 15/20 million of maturing debt. Like most other Latam
companies, Genneia does not have access to committed credit
facilities; however, it has shown over recent years ample access
to the local capital markets as well as to the bank market. For
example, in April 2015, Genneia obtained a ARS 160 million
syndicated loan (approximately USD 18 million), expandable by
additional ARS 80 million, from local banks to fund the current
year's financing and working capital needs. Before that, in
October 2014, the company issued USD 25 million Class 14 local
notes with final maturity in October 2018. Genneia's remaining
debt is mainly comprised by different series of local notes and
bank loans, most of them amortizing, which gives the company some
flexibility in terms of liquidity. Additionally, the company has
uncommitted lines from local banks for approximately $ 70 million
to cover short-term working capital needs.
The negative rating outlook for Genneia is in line with Moody's
negative outlook for the Argentine government's Caa1 rating. The
negative outlook for Genneia reflects the company's exposure to
government credit risk and Moody's view that the creditworthiness
of the company cannot be completely de-linked from the credit
quality of the government.
What Could Change the Rating - Up:
Genneia' Caa1 rating is constrained by Argentina's foreign
currency bond ceiling, which carries a negative outlook;
therefore, Genneia' ratings would be upgraded if Argentina's
foreign currency bond ceiling is upgraded.
A further upgrade of the ratings on a national scale basis will
require Genneia to continue to generate stable cash flows from its
thermal energy business and from its wind generation farm for
which Moody's would expect capacity realizations over 40%.
Quantitatively, a rating upgrade would require Genneia to generate
CFO (pre WC) to debt of above 25% and positive levels of FCF on a
sustainable basis. A material reduction of its leverage, such as a
debt to EBITDA ratio below 2.0 times on a sustainable basis could
also lead to an upgrade.
What Could Change the Rating - Down:
Moody's notes that the creditworthiness of the company is highly
dependent on the credit quality of the Argentine government, whose
ratings currently carry a negative outlook. Therefore, a rating
downgrade of the sovereign would likely result in negative rating
actions for this company. The ratings could also come under
downward pressure if payments from Cammesa begin to experience
significant delays.
Additional negative pressure on the ratings could occur if
Genneia's financial policy becomes more aggressive than expected.
Specifically, Moody's would become concerned should debt to EBITDA
consistently exceed 4.0x times; interest coverage (CFO pre WC +
Interest/Interest) falls below 1.5x or RCF to Debt stays lower
than 10%.
Genneia S.A., based in the province of Buenos Aires, is a power
generating company with an installed capacity of around 360 MW
(78% thermal, 22% wind) operating in Argentina. Genneia initiated
operations in 1991 in the gas distribution and transportation
business under its previous denomination "Emgasud". Since 2008,
power generation has been its main business. For the fiscal year
2014 Genneia reported revenues of approximately USD 160 million.
The principal methodology used in these ratings was Unregulated
Utilities and Unregulated Power Companies published in October
2014.
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B A H A M A S
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COLUMBUS INTERNATIONAL: C&W to Operate Under New FLOW Brand
-----------------------------------------------------------
RJR News reports that Cable & Wireless disclosed that its merger
with Columbus Communications will result in the LIME brand name
being dropped and the combined businesses operating under a
refreshed FLOW brand.
The company said the new FLOW will be introduced in the coming
months, in markets where the necessary regulatory approvals have
been obtained, according to RJR News.
The report notes that it has already redesigned the FLOW logo.
Otherwise, it said the corporate name of the merged entities will
be C&W Communications while its various other businesses will
operate under the C&W brand, the report relays.
About Columbus International
Columbus International Inc. is a privately held diversified
telecommunications company based in Bahamas. The Company provides
digital cable television, broadband Internet and digital landline
telephony in Trinidad, Jamaica, Barbados, Grenada, St. Vincent &
the Grenadines, St. Lucia and Curacao under the brand name Flow
and in Antigua under the brand name Karib Cable.
* * *
As reported in the Troubled Company Reporter-Latin America on
April 13, 2015, Moody's Investors Service upgraded to Ba3 from B2
the rating of Columbus International Inc. ("Columbus")'s USD 1.25
billion senior unsecured notes due in 2021. At the same time,
Moody's has withdrawn the B2 corporate family rating (CFR) of
Columbus. The actions follow the announcement made on March 31,
2015 by Cable & Wireless Communications Plc. (CWC, Ba2 negative)
that it completed the acquisition of the entire issued share
capital of Columbus.
This concludes the review for upgrade initiated by Moody's on
November 6, 2014. The outlook on the rating is negative.
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B O L I V I A
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BANCO ECONOMICO: Moody's Assigns B2 Global LC Debt Rating
---------------------------------------------------------
Moody's Latin America Agente de Calificacion de Riesgo assigned a
global local currency debt rating of B2 and a national scale debt
rating of Aa3.bo to Banco Economico S.A (Bolivia)'s (Economico)
Bs.38.4 million subordinated debt issuance. This is the third
issuance under the bank's US$20 million multicurrency program.
The outlook on all ratings is stable.
The following ratings were assigned to Banco Economico S.A.'s Bs.
38.4 million subordinated debt issuance:
-- Global Local Currency Subordinated Debt Rating: B2
-- Bolivia National Scale Local Currency Subordinated Debt
Rating: Aa3.bo
Moody's explained that the B2 local currency subordinated debt
rating derives from Economico's b1 baseline credit assessment and
reflects the subordination of the notes.
Moody's ratings reflect the bank's established position as a
lender to small and medium size companies (SME) and its growing
diversification into microfinance over past two years, which
reduces the borrower concentration of the bank's loan book and
improves its access to stable funding. However, the ratings also
incorporate the generally riskier nature of SME and microfinance
customers, which are highly sensitive to economic cycles, as well
as Economico's continued geographical concentration in Santa Cruz
de la Sierra, despite efforts to expand to other provinces of the
country.
Economico has seen its microfinance loans grow to represent 24.5%
of the total portfolio, with another 37.1% lent to SMEs, a mix
that supports its long-term strategy and business prospects. This
change has led to higher interest margins, but operating costs to
serve the labor-intensive microfinance segment have also grown.
While the bank's expansion has required Economico to grow its
workforce and branches, additional lending growth will allow for
better use of the current capacity, with further efficiency
improvements. However, Moody's analyst Fernando Albano noted that
"regulation under the new financial law that imposes lending rates
caps and minimum deposit rates will pinch the bank's margins and
profitability in the coming years."
Moody's said that Economico's asset quality remains good and in
line with that of its peers. Delinquency remains manageable in
light of the secured nature of the loan book and strong reserve
coverage at 186% of total non-performing loans. While the bank's
current Tier 1 capitalization ratio remains adequate at 8.5%,
Albano commented that "the bank's business expansion will put
pressure on its capital levels, particularly in light of narrower
projected earnings."
The bank benefits from a favorable deposit mix, with core
deposits -- mainly time deposits - comprising nearly 90% of the
bank's total liabilities as of March 2015. In addition, the bank
has access to multilateral funding and to the domestic capital
markets, where it has issued subordinated debt.
Banco Economico S.A. is located in Santa Cruz de la Sierra,
Bolivia, and has Bs 7.45 billion in assets, Bs 6.05 billion in
deposits and Bs 436 million in equity as of March 2015.
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B R A Z I L
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ENERGISA MATO: Moody's Upgrades Issuer Ratings to 'Ba2'
-------------------------------------------------------
Moody's America Latina Ltda upgraded Energisa Mato Grosso
Distribuidora de Energia S.A.'s issuer ratings to Ba2 from B2 on
the global scale and to Aa3.br from Ba2.br on the Brazilian
national scale. At the same time, Moody's changed the outlook to
stable from positive for all Energisa Mato Grosso's ratings.
The Ba2/Aa3.br issuer rating reflects the financial and
operational turn around which came from the restructuring process
implemented by Energisa after its acquisition from the Rede Group.
The rating upgrade also reflects the perspectives the company
presents in terms of increasing and predictable cash flow from the
regulated distribution business, improving credit metrics and its
good access to the local banking and capital markets which has
come with its new shareholder.
The ratings are constrained by the company's still high debt (CFO
pre-WC to Debt of 1.2%), relatively sizeable capital expenditures
and the evolving regulatory environment in Brazil. It additionally
takes into consideration the potential negative effects that the
current drought period and continued exposure to the higher cost
spot market that may impact the company's operating revenues, cash
flow and liquidity.
The stable rating outlook reflects our belief that Energisa will
continue to be successful in improving Energisa Mato Grosso's
operational performance which includes the reduction of energy
losses and the improvement of the ratios for duration and
frequency of energy interruptions. The stable outlook also
incorporates our forecast that cash generation will improve over
the years and will allow the company to reduce leverage and
improve its liquidity position.
Energisa Mato Grosso has a capital expenditure program in the
range of BRL1.5 billion or an average of approximately BRL500
million per year over the next three years to continue to improve
the quality of service, reduce energy losses, and expand service
while also meeting maintenance requirements.
Approximately 20% of the CAPEX will be financed with debt in 2015,
with the balance through cash and marketable securities from long
term transactions raised in 2014 added to the BRL 408.7 million
equity which was injected by Energisa in 2014. During the
following years, according to the company, approximately 50% of
the CAPEX will be financed with debt.
Our projections indicate a slight improvement in the company's CFO
Pre-WC to Debt and Debt Service Coverage Ratio, mainly as a result
of the improvement in margins as a result of lower energy losses
and continued high growth of consumption. According to our
forecast, CFO Pre-WC to Debt and Debt Service Coverage Ratio will
reach an average of 8.8% and 1.9x for the period 2015 -- 2017 on
the assumption that Energisa will be successful in continuing to
reduce energy losses and improve overall operational performance.
Moody's will continue to closely monitor Energisa Mato Grosso's
financial and operating performance over the short to medium
horizon to evaluate its cash flow generation and liquidity
position, as well as Energisa's ability to continue to improve the
company's financial position.
The ratings could be upgraded if the restructuring plan continues
to show positive results and there is additional improvement in
the company's financial and operational performance resulting in
the ratios CFO pre WC + Interest / Interest and CFO pre WC / Debt
achieving levels above 2.5x and 10%, respectively, on a
sustainable basis.
The ratings could be downgraded as a result of continuing adverse
hydrology conditions beyond 2015, which would exert significant
downward pressure on Energisa Mato Grosso's credit metrics. A
rating downgrade could also be triggered by a deterioration of the
Company's liquidity position as well as by a breach in the
debenture's financial covenants. Quantitatively, a downgrade in
our ratings could be triggered if Energisa Mato Grosso's CFO pre
WC to Debt ratio fell below 2.5%, and interest coverage fell below
1.0 time for an extended period of time. A negative change in the
perceived supportiveness of the Brazilian regulatory environment
could also trigger a rating action.
Energisa Mato Grosso Distribuidora de Energia S.A., headquartered
in the city of Cuiaba, has a 30-year concession contract that
expires in 2027 to distribute electricity to 141 cities in the
state of Mato Grosso. On April 08, 2014, Energisa S.A. concluded
the acquisition of the control of Energisa Mato Grosso. In 2014,
Energisa Mato Grosso sold 6.7 GWh to approximately 1.3 million
consumers with net revenues of BRL 2.6 billion which excludes
BRL180 million of construction revenues and net income of BRL105
million.
Energisa Mato Grosso is controlled by Rede Energia S.A. which in
turn is controlled by Energisa S.A. since April 08, 2014. Energisa
S.A. is listed on the Brazilian stock exchange (BM&FBOVESPA) and
is controlled by the Botelho family.
ENERGISA S.A.: Moody's Upgrades Global Scale CFR to Ba1
-------------------------------------------------------
Moody's America Latina Ltda affirmed Energisa S.A.'s ratings of
Ba2 on the global scale and Aa3.br on the Brazilian national scale
of the BRL400 million senior unsecured amortizing debentures
issued in July 2012 in two tranches, one of 5 and the other 7
years. At the same time, Moody's changed the outlook to stable
from negative and upgraded the corporate family rating to Ba1 from
Ba2 on the global scale and Aa2.br from Aa3.br on the Brazilian
national scale. Moody's also upgraded the ratings of the two
former Rede distribution subsidiaries: Energisa Mato Grosso
Distribuidora de Energia S.A. and Energisa Tocantins Distribuidora
de Energia S.A. Please refer to a separate press release
describing those rating actions.
The Ba1/Aa2.br corporate family ratings primarily reflect the
positive effects on the liquidity and leverage from the sale of
Energisa's power plants leaving the company's remaining operations
primarily in the regulated distribution sector. The sale of the
power generation assets was concluded on March 31, 2015 for
approximately BRL1.3 billion in cash along with the transference
of BRL620 million in debt. This divestiture also allowed the
company to avoid BRL174 million of additional investment in the
more risky generation sector. Energisa will receive an additional
BRL150 million during the next two months from the sale of the
power generation assets as price adjustment.
In order to improve the capital structure of the holding company
and the relatively weak metrics for the Ba1/Aa2.br corporate
family rating, Energisa will use all the proceeds raised with the
sale of power generation assets to significantly reduce the BRL1.5
billion debenture raised at the level of the holding company last
year to acquire Rede Group (about BRL900 million was paid off on
March 31, 2015 and BRL280 million paid on May 04, 2015). In
addition, the company plans to structuring a capital increase
amounting to BRL500 million to further reduce debt along with a
long term transaction to be structured to lengthen and reduce the
overall cost of its debt.
The stable outlook reflects our belief that Energisa will continue
to be successful in improving the financial and operational
performance of the acquired energy distribution companies from the
Rede Group which includes the reduction of energy losses and the
improvement of the ratios for the duration and frequency of energy
interruptions. The stable outlook also incorporates our forecast
that cash generation will improve over the years that will allow
the company to further reduce leverage and improve its liquidity
position.
Moody's also factored that ENERGISA will be able to continue to
secure adequate funds in terms of tenor and cost to finance
planned CAPEX and refinance its current debt maturities, and that
debt will reduce an additional BRL450 million from the sale of
Tangara Energia which is scheduled to conclude on May 18, 2015
wherein Energisa will receive BRL200 million in cash and will
transfer BRL250 million in debt.
Moody's will keep monitoring Energisa's financial and operational
performance over the short to medium horizon to evaluate its cash
flow generation and liquidity position, as well as its ability to
continue improving the performance of the distribution assets
acquired from the Rede Group.
The ratings could be upgraded if the restructuring plan continues
to show positive results and there is an additional degree of
change in the company's financial and operational performance
resulting in the ratios CFO pre WC + Interest / Interest and CFO
pre WC / Debt achieving levels above 3.5x and 15%, respectively,
on a sustainable basis.
There would be pressure for a downgrade rating action should
ENERGISA fail to raise timely and adequate funding to refinance
its short debt and meet the required investments for the energy
distribution companies that results in the distribution utilities
presenting a weaker liquidity position. Quantitatively, a
downgrade could be triggered by a fall in the consolidated
retained cash flow (RCF) over debt ratio below 10% and interest
coverage declining below 2.0x for a prolonged period.
Headquartered in the city of Cataguases in the State of Minas
Gerais, Energisa S.A. is a holding company that controls thirteen
electricity distribution utilities in nine Brazilian states
(Paraiba, Sergipe, Tocantins, Mato Grosso, Mato Grosso do Sul,
Minas Gerais, Rio de Janeiro, Sao Paulo and Parana) approximately
6.2 million customers in the regulated market (mostly residential)
and 235 free-market customers (mostly industrial). Additionally,
the Company controls an energy trading company and two service
companies.
In 2014, Energisa posted net sales (excluding IFRS construction
revenues) of BRL7,427 million, EBITDA of BRL2,038 million (as per
Moody's standard adjustments), and net income of BRL280 million.
Energisa is listed on the Brazilian stock exchange (BM&FBOVESPA)
and is controlled by the Botelho family.
ENERGISA TOCANTINS: Moody's Lifts Issuer Ratings to Ba1
-------------------------------------------------------
Moody's America Latina Ltda upgraded Energisa Tocantins
Distribuidora de Energia S.A.'s issuer ratings to Ba1 from B2 on
the global scale and to Aa2.br from Ba2.br on the Brazilian
national scale. At the same time, Moody's changed the outlook to
stable from positive.
The Ba1/Aa2.br issuer rating reflects the financial and
operational turn around which came from the restructuring process
implemented by Energisa. The rating upgrade also reflects the
prospects the company presents in terms of increasing and
predictable cash flow from the regulated distribution business,
improving credit metrics and its good access to the local banking
and capital markets which has come with its new shareholder. The
ratings are constrained by the company's relatively sizeable
capital expenditures and the evolving regulatory environment in
Brazil. It additionally takes into consideration the potential
negative effects that the current drought period and continued
exposure to higher thermo-energy costs may impact the company's
operating revenues, cash flow and liquidity.
The stable rating outlook reflects our belief that Energisa will
continue to be successful in improving Energisa Tocantins'
operational performance which includes the reduction of energy
losses and the improvement of the ratios for duration and
frequency of energy interruptions. The stable outlook also
incorporates our forecast that cash generation will improve over
the years and will allow the company to reduce leverage and
improve its liquidity position.
Energisa Tocantins has a capital expenditure program in the range
of BRL700 million or an average of approximately BRL230 million
per year over the next three years to continue to improve the
quality of service, reduce energy losses, and expand service while
also meeting maintenance requirements. Significant part of the
CAPEX will be financed with debt in 2015 (BNDES and by a 5-year
BRL 200 million loan, with a 2-year grace period, raised with
Ita£/BBA) and additional equity which was injected by Energisa in
2014 (BRL148.6 million). During the following years, according to
the company, approximately 50% of the CAPEX will be financed with
debt with the balance from internal cash generation.
Our projections indicate an improvement in the company's CFO Pre-
WC to Debt and Debt Service Coverage Ratio, due mainly to an
improvement in margins as a result of lower energy losses and
significant growth of volume of energy sold along the years.
According to our forecast, CFO Pre-WC to Debt and Debt Service
Coverage Ratio will reach an average of 19.9% and 2.8x for the
period 2015 - 2017 as Moody's believe Energisa will be successful
in continuing to reduce energy losses and improve operational
performance.
The ratings could be upgraded if the restructuring plan continues
to show positive results and there is additional improvement in
the company's financial and operational performance and the ratios
CFO pre WC + Interest / Interest and CFO pre WC / Debt achieve
levels above 2.5x and 10%, respectively, on a sustainable basis.
The ratings could be downgraded as a result of continuing adverse
hydrology conditions beyond 2015, which would exert significant
downward pressure on ENERGISA TOCANTINS' credit metrics. A rating
downgrade could also be triggered by a deterioration of the
Company's liquidity as well as by a breach in the debenture's
financial covenants. Quantitatively, a downgrade in our ratings
could be triggered if ENERGISA TOCANTINS' CFO pre WC to Debt ratio
fell below 1.5%, and interest coverage fell below 1.0 time for an
extended period of time. A negative change in the perceived
supportiveness of the Brazilian regulatory environment could also
trigger a rating action.
Energisa Tocantins Distribuidora de Energia S.A. (Energisa
Tocantins), headquartered in the city of Palmas, in the Brazilian
state of Tocantins, has a 20-year concession contract that expires
in January 2020 to distribute electricity to 139 cities in the
state of Tocantins. In 2014, ENERGISA TOCANTINS sold 1,969 GWh to
546.4 thousand consumers, with net revenues of BRL726 million,
which excludes BRL32 million of construction revenues, and BRL67
million of net income.
Celtins is controlled by Rede Energia S.A. which in turn is
controlled by Energisa S.A. since April 08, 2014. Energisa S.A. is
listed on the Brazilian stock exchange (BM&FBOVESPA) and is
controlled by the Botelho family.
FIBRIA CELULOSE: Moody's Says Klabin Agreement is Credit Positive
-----------------------------------------------------------------
Moody's Investors Service commented that the agreement with Klabin
that Fibria Celulose S.A. announced on May 4, 2015 to acquire
900.000 tons of hardwood pulp from Klabin's new plant is credit
positive for Fibria. The agreement will expand Fibria's scale in
the global hardwood pulp market without requiring additional
capital expenditures, and allow the company to obtain commercial
and logistics synergies.
FIBRIA CELULOSE: Moody's Affirms 'Ba1' Global Scale CFR
-------------------------------------------------------
Moody's America Latina affirmed Fibria Celulose S.A. Ba1 (global
scale) and Aa2.br (national scale) corporate family ratings. The
outlook for the ratings is positive.
Ratings affirmed as follows:
Issuer: Fibria Celulose S.A.
-- Corporate Family Ratings: Ba1 (global scale) / Aa2.br
(national scale)
-- The outlook for all ratings is positive.
The Aa2.br national scale rating reflects the standing of the
company's credit quality relative to its domestic peers.
The Ba1 ratings reflect Fibria's leading position as the largest
producer of market pulp in the world, the existence of long-term
supply agreements that support stable sales volume with good
geographic diversification, the company's conservative approach to
liquidity and risk management and the benefit from the ownership
by and expected support from Votorantim Participacoes S.A. (Baa3
stable). Also, our view of Fibria's strong ownership considers the
fact that BNDES is currently its largest individual shareholder
through its subsidiary BNDES Participacoes S.A. (Baa2 negative)
holding 30.4% of its voting and total shares, and a major lender
to the company.
Since its creation, Fibria managed to reduce leverage to 4.4 times
in the 1Q15, from a peak of 6.3x times in 2011, maintain healthy
EBITDA margins in the 35%-40% range and generate free cash flow
even during industry downturns. This reflects the company's low
cost position within the pulp industry due to structural and
sustainable advantages on forestry formation and backwards
integration on industrial production, including large self-
sufficiency in wood fiber and electricity and efficient logistics.
The export-oriented nature of Fibria's cash flows and its little
exposure to the Brazilian domestic market insulates the company
from the slowing macroeconomic environment in the country, while a
depreciated local currency is a net positive over the mid-term.
Fibria's low product diversity given its full exposure to hardwood
pulp and its relative high leverage when compared with global
industry peers as measured by adjusted debt to EBITDA are
constraining factors for its rating. Furthermore a potential
expansion at Trˆs Lagoas production unit to add 1.75 million
tonnes of hardwood capacity for an estimated USD 2.5 billion will
pressure credit metrics in the near term. Still, Moody's believe
Fibria's will focus on maintaining leverage at a maximum level of
3.5x (net debt to EBITDA), as established in the company's
financial policies and shareholders agreement, and that the
company will be able to return leverage to pre-expansion levels
within a relatively short time frame if it decides to go ahead
with this project.
The positive outlook reflects the company's ongoing improvement in
operational performance, reduction in debt levels, and Moody's
expectations that the depreciation of the Brazilian Real will
support a continued deleverage of Fibria's balance sheet. Our
belief that Fibria will continue to manage capital expenditures
and dividends distribution to support its improving credit profile
also support the positive outlook.
The ratings could be upgraded if Fibria's leverage (as measured by
Total Adjusted Debt to EBITDA) approaches 3.0x and interest
coverage (as measured by Adjusted EBITDA to Interest Expense)
remains above 4.5x. Finally, an upgrade would require the
maintenance of a solid liquidity profile, strong operating
performance and sustainable cash flow generation.
The ratings could be downgraded if Fibria's leverage remains above
4.5x or if interest coverage declines to below 3.0x without
prospects of improvement. Furthermore, a deterioration in the
company's liquidity profile and operational performance would
result in a downgrade of the ratings.
Fibria Celulose S.A. is the world's largest producer of market
pulp with annual production capacity of 5.3 million metric tons.
In the last twelve months ended March 2015 Fibria reported
consolidated net revenues of BRL 7.4 billion (USD 3.0 billion
converted by the average foreign exchange rate for the period),
coming mostly from Europe (42% of total sales volumes in the
period), Asia (25%), North America (23%) and Latin America (10%).
The principal methodology used in this rating was the Global Paper
and Forest Products Industry published in October 2013.
FIBRIA OVERSEAS: Moody's Affirms 'Ba1' Rating on $600MM Notes
-------------------------------------------------------------
Moody's Investors Service affirmed the Ba1 ratings of the notes
issued by Fibria Overseas Finance Ltd and guaranteed by Fibria
Celulose S.A.. The outlook for the ratings is positive.
At the same time, Moody's America Latina affirmed Fibria Celulose
S.A. Ba1 (global scale) and Aa2.br (national scale) corporate
family ratings. The outlook for the ratings is positive.
Issuer: Fibria Overseas Finance Limited
-- US$600 million in senior unsecured notes due 2024: Ba1
-- The outlook for all ratings is positive.
The Ba1 ratings reflect Fibria's leading position as the largest
producer of market pulp in the world, the existence of long-term
supply agreements that support stable sales volume with good
geographic diversification, the company's conservative approach to
liquidity and risk management and the benefit from the ownership
by and expected support from Votorantim Participacoes S.A. (Baa3
stable). Also, our view of Fibria's strong ownership considers the
fact that BNDES is currently its largest individual shareholder
through its subsidiary BNDES Participacoes S.A. (Baa2 negative)
holding 30.4% of its voting and total shares, and a major lender
to the company.
Since its creation, Fibria managed to reduce leverage to 4.4 times
in the 1Q15, from a peak of 6.3x times in 2011, maintain healthy
EBITDA margins in the 35%-40% range and generate free cash flow
even during industry downturns. This reflects the company's low
cost position within the pulp industry due to structural and
sustainable advantages on forestry formation and backwards
integration on industrial production, including large self-
sufficiency in wood fiber and electricity and efficient logistics.
The export-oriented nature of Fibria's cash flows and its little
exposure to the Brazilian domestic market insulates the company
from the slowing macroeconomic environment in the country, while a
depreciated local currency is a net positive over the mid-term.
Fibria's low product diversity given its full exposure to hardwood
pulp and its relative high leverage when compared with global
industry peers as measured by adjusted debt to EBITDA are
constraining factors for its rating. Furthermore a potential
expansion at Trˆs Lagoas production unit to add 1.75 million
tonnes of hardwood capacity for an estimated USD 2.5 billion will
pressure credit metrics in the near term. Still, Moody's believe
Fibria's will focus on maintaining leverage at a maximum level of
3.5x (net debt to EBITDA), as established in the company's
financial policies and shareholders agreement, and that the
company will be able to return leverage to pre-expansion levels
within a relatively short time frame if it decides to go ahead
with this project.
The positive outlook reflects the company's ongoing improvement in
operational performance, reduction in debt levels, and Moody's
expectations that the depreciation of the Brazilian Real will
support a continued deleverage of Fibria's balance sheet. Our
belief that Fibria will continue to manage capital expenditures
and dividends distribution to support its improving credit profile
also support the positive outlook.
The ratings could be upgraded if Fibria's leverage (as measured by
Total Adjusted Debt to EBITDA) approaches 3.0x and interest
coverage (as measured by Adjusted EBITDA to Interest Expense)
remains above 4.5x. Finally, an upgrade would require the
maintenance of a solid liquidity profile, strong operating
performance and sustainable cash flow generation.
The ratings could be downgraded if Fibria's leverage remains above
4.5x or if interest coverage declines to below 3.0x without
prospects of improvement. Furthermore, a deterioration in the
company's liquidity profile and operational performance would
result in a downgrade of the ratings.
Fibria Celulose S.A. is the world's largest producer of market
pulp with annual production capacity of 5.3 million metric tons.
In the last twelve months ended March 2015 Fibria reported
consolidated net revenues of BRL 7.4 billion (USD 3.0 billion
converted by the average foreign exchange rate for the period),
coming mostly from Europe (42% of total sales volumes in the
period), Asia (25%), North America (23%) and Latin America (10%).
==========================
C A Y M A N I S L A N D S
==========================
CONOCOPHILLIPS ABU: Shareholders' Final Meeting Set for May 28
--------------------------------------------------------------
The shareholders of Conocophillips Abu Dhabi Ltd. will hold their
final meeting on May 28, 2015, at 11:00 a.m., to receive the
liquidator's report on the company's wind-up proceedings and
property disposal.
The company's liquidator is:
Trident Liquidators (Cayman) Ltd.
c/o Lisa Thoppil
Telephone: (345) 949 0880
Facsimile: (345) 949 0881
One Capital Place, 4th Floor
P.O. Box 847, George Town
Grand Cayman, KY1-1103
Cayman Islands
CONOCOPHILLIPS GAMBIA: Shareholders' Final Meeting Set for May 29
-----------------------------------------------------------------
The shareholders of Conocophillips Gambia Ventures Ltd. will hold
their final meeting on May 29, 2015, at 11:00 a.m., to receive the
liquidator's report on the company's wind-up proceedings and
property disposal.
The company's liquidator is:
Trident Liquidators (Cayman) Ltd.
c/o Lisa Thoppil
Telephone: (345) 949 0880
Facsimile: (345) 949 0881
One Capital Place, 4th Floor
P.O. Box 847, George Town
Grand Cayman, KY1-1103
Cayman Islands
CONOCOPHILLIPS TANZANIA: Shareholders' Meeting Set for May 29
-------------------------------------------------------------
The shareholders of Conocophillips Tanzania Ventures Ltd. will
hold their meeting on May 29, 2015, at 10:30 a.m., to receive the
liquidator's report on the company's wind-up proceedings and
property disposal.
The company's liquidator is:
Trident Liquidators (Cayman) Ltd.
c/o Lisa Thoppil
Telephone: (345) 949 0880
Facsimile: (345) 949 0881
One Capital Place, 4th Floor
P.O. Box 847, George Town
Grand Cayman, KY1-1103
Cayman Islands
MERIDIAN DIVERSIFIED: Shareholders Receive Wind-Up Report
---------------------------------------------------------
The shareholders of Meridian Diversified Compass Fund, Ltd.
received on April 19, 2015, the liquidator's report on the
company's wind-up proceedings and property disposal.
The company's liquidator is:
Timothy M. Hickey
20 Corporate Woods Boulevard, 4th Floor
Albany, NY 12211
United States of America
c/o Niall Hanna
Walkers
190 Elgin Avenue, George Town
Grand Cayman KY1-9001
Cayman Islands
Telephone: +1 (345) 914 4201
STEEP ROCK: Shareholders' Final Meeting Set for May 22
------------------------------------------------------
The shareholders of Steep Rock Russia, Ltd. will hold their final
meeting on May 22, 2015, at 10:15 a.m., to receive the
liquidator's report on the company's wind-up proceedings and
property disposal.
The company's liquidator is:
Steep Rock Russia General Partner, Ltd.
c/o Kevin Hurley
Steep Rock Limited
104/3 Nizhegorodskaya UI
Moscow 109052
Russia
Telephone: +7 (495) 671 5968
STEEP ROCK FUND II: Shareholders' Final Meeting Set for May 22
--------------------------------------------------------------
The shareholders of Steep Rock Russia Fund II will hold their
final meeting on May 22, 2015, at 10:30 a.m., to receive the
liquidator's report on the company's wind-up proceedings and
property disposal.
The company's liquidator is:
Steep Rock Russia General Partner, Ltd.
c/o Kevin Hurley
Steep Rock Limited
104/3 Nizhegorodskaya UI
Moscow 109052
Russia
Telephone: +7 (495) 671 5968
STEEP ROCK II: Shareholders' Final Meeting Set for May 22
---------------------------------------------------------
The shareholders of Steep Rock Russia II Limited will hold their
final meeting on May 22, 2015, at 10:45 a.m., to receive the
liquidator's report on the company's wind-up proceedings and
property disposal.
The company's liquidator is:
Steep Rock Russia General Partner, Ltd.
c/o Kevin Hurley
Steep Rock Limited
104/3 Nizhegorodskaya UI
Moscow 109052
Russia
Telephone: +7 (495) 671 5968
VISION WEALTH: Sole Member to Hear Wind-Up Report on May 22
-----------------------------------------------------------
The sole member of Vision Wealth Management (Cayman) Limited will
hear on May 22, 2015, at 10:00 a.m., the liquidator's report on
the company's wind-up proceedings and property disposal.
The company's liquidator is:
Paul Kevin Webb
H&J Corporate Services Ltd
Willow House, 2nd Floor
Cricket Square
P.O. Box 866, Grand Cayman KY1-1103
Cayman Islands
Telephone: +44 (0) 7746 531926
===============
C O L O M B I A
===============
PACIFIC RUBIALES: Fitch Sees Potential Acquisition as Neutral
-------------------------------------------------------------
Fitch Ratings sees Alfa, S.A.B. de C.V. (Alfa; IDR 'BBB-', Outlook
Stable) and Harbour Energy Ltd.'s (Harbour Energy) potential
acquisition of Pacific Rubiales Energy Corp. (Pacific Rubiales;
IDR 'BB', Outlook Negative) as a credit-neutral to marginally
positive event for Pacific Rubiales.
Alfa and Harbour Energy's acquisition of Pacific Rubiales would be
positive for the company's credit quality if the company receives
a capital injection aimed at improving its capital structure
following the acquisition, which could help stabilize the rating.
The new shareholder group could also help Pacific Rubiales lower
its business risk by facilitating its entrance into Mexico.
Pacific Rubiales' credit quality will continue to be pressured in
the near term absent a capital injection; the recent reduction in
capex due to low prices may impair the company's ability to
replace production from the Piriri-Ruibiales field with new
fields. The Piriri-Rubiales field, which accounted for 35% of the
company's 2014 production, reverts back to Ecopetrol in the middle
of 2016.
The acquisition could prove negative for Pacific Rubiales'
creditors if the new owners are not able to retain current
management. This could prove challenging for the new owners, as
they may not be able to maintain the highly variable management
compensation strategy that existed after the company is taken
private. Management's recognized expertise in heavy oil
exploration and production has allowed it to grow output rapidly
in recent years. Pacific Rubiales has reported in excess of
USD200 million of stock-based compensation expenses over the past
five years.
On May 5, 2015, Pacific Rubiales announced it entered into an
exclusive discussion with Alfa and Harbour Energy in which the two
would acquire the company for approximately USD1.7 billion. Alfa
currently owns approximately 19% of Pacific Rubiales equity. This
transaction is still subject to Pacific Rubiales' board of
directors' approval.
===================================
D O M I N I C A N R E P U B L I C
===================================
DOMINICAN REPUBLIC: US Closer to Lifting Ban on Agro
----------------------------------------------------
Dominican Today reports that United States authorities
acknowledged Dominican Republic's progress to eradicate the
Mediterranean fruit fly in Punta Cana (east) and requested
additional information to speed up the evaluation ahead of lifting
the ban on fruits and vegetables.
In a statement by Dominican Republic's Agriculture Ministry, the
US Animal and Plant Health Inspection Service (APHIS) notes the
great progress in eradicating the outbreak detected in Punta Cana,
according to Dominican Today.
The report notes that Alan K. Dowdy, APHIS Phytosanitary Affairs
deputy assistant Administrator in Washington said as recognition
of the effort, APHIS requested further information on the
situation of fruit and vegetables from the rest of the country to,
as quickly as possible, assess the possibility of lifting the ban
to other products listed in federal order APHIS DA-2015-14, of
March 18, 2015.
"To date and in just several weeks of work we've reduced the
Medfly population by 93% in the area in Punta Cana and we have
maintained a very low area the incidence of this insect," says
Agriculture, the report relays.
It also reported spraying by air over wooded areas, the biological
agent GF-120, to effectively control the fruit fly by attracting
the insect and prompting it to eat highly lethal amounts, but
notes that the product doesn't affect other insects, the report
relates.
Agriculture adds that the helicopter used in the operation has a
GPS which sprays over specific areas determined by its technical
team, "which allows greater efficiency in the application of the
product and results to reduce the presence of the insect in the
outbreak to a minimum," the report notes.
PERAVIA BANK: Bank Customers Can Withdraw up to RD$500,000
----------------------------------------------------------
Dominican Today reports that Banks Superintendent Luis Armando
Asuncion called on customers of the failed Peravia bank with
deposits exceeding RD$500,000 to withdraw their guarantee payment
at the State-owned Reservas bank.
In the second stage 320 depositors or 4.54% of the unrelated total
will be reimbursed with payment, in compliance with bankruptcy
regulations, according to Dominican Today.
Mr. Asuncion said to get the funds, depositors must submit to the
Reservas Bank an identification and the original deposit
Validation Form issued by the Banks Superintendence, the report
relays.
Mr. Asuncion said to withdraw the funds depositors must sign a
receipt and the forms certifying having received the RD$500,000
from the Banks Superintendence and Peravia, the report says.
Headquartered in Bani, Dominican Republic, Banco Peravia is a
financial intermediary regulated by the Monetary Board and
supervised by the Superintendency of Banks whose mission is to
provide the best financial solutions and services in the framework
of compliance with the Laws, Regulations and Standards.
===========
M E X I C O
===========
METALSA S.A.: S&P Affirms 'BB+' CCR; Outlook Remains Stable
-----------------------------------------------------------
Standard & Poor's Ratings Services affirmed its 'BB+' long-term
corporate credit rating on Metalsa S.A. de C.V. S&P also affirmed
its 'BB+' long-term issue-level rating on the company's $300
million senior unsecured notes due 2023 with a recovery rating of
'3', indicating S&P's expectation of meaningful (50% to 70%)
recovery in the event of a payment default. The outlook on the
corporate credit rating remains stable.
Metalsa's "fair" business risk profile continues to reflect the
"moderately high" industry risk, "intermediate" country risk, and
the company's "fair" competitive position. The business risk
profile reflects the company's average and stable operating
margins mainly due to its low and variable cost structure and its
strong market shares in North America and South America thanks to
long-term relationships with its main customers. The offsetting
factors are Metalsa's relatively small size; the concentration of
about 70% of its revenues in North America, of about 55% in its
top three customers (Toyota Motor Corp., Ford Motor Co., and
Chrysler Group LLC), of about 65% in the production of chassis
structures for light vehicles; and the cyclical nature of the auto
industry.
S&P's assessment of Metalsa's "intermediate" financial risk
profile reflects the company's solid financial metrics, low
financial leverage despite its growth strategy through partly
debt-financed acquisitions.
PETROLEOS MEXICANOS: To Eliminate 3,000 Jobs as Workers Retire
--------------------------------------------------------------
EFE News reports that Petroleos Mexicanos, or Pemex, plans to not
replace between 2,000 and 3,000 retiring workers in an effort to
cut costs amid low oil prices, the state-owned energy company's
chief financial officer, Mario Beauregard, said.
The workers have met the requirements to retire -- age 55 and 25
years of service -- and will be leaving the company over the next
few months, the CFO told Radio Formula, according to EFE News.
"These positions will be eliminated, (they will) disappear and
that means cost savings for the company going forward in the area
of personnel expenses," the report quoted Mr. Beauregard as
saying.
The report notes that the management is talking with the workers
to get them to exercise their right to retire, the Pemex CFO said.
The elimination of the retiring workers' jobs is part of the
budget cuts of MXN62 billion ($4.04 billion) approved by Pemex's
board of directors in February, Mr. Beauregard said, the report
discloses.
The number of workers retiring in 2016 will be similar to this
year and half of Pemex's workforce will be eligible to retire over
the next decade, the report notes.
"This is an opportunity to very significantly slim down the
company without starting labor disputes, a social conflict," Mr.
Beauregard said, the report relays.
Pemex's spending cuts are affecting investment and management is
talking with contractors to get them to adjust "the executional
speed" in some areas, the CFO said, the report adds.
======================
P U E R T O R I C O
======================
PUERTO RICO: Fights to Restore Law Allowing Public Debt Revamp
--------------------------------------------------------------
Christie Smythe at Bloomberg News reports that Puerto Rico is
trying to revive a law allowing its public agencies and utilities
to restructure their mounting debt as Detroit and other U.S.
cities have done.
Creditors won the first fight in the case by persuading a federal
judge in San Juan to throw out bankruptcy protections similar to
those allotted municipal entities in the 50 U.S. states, according
to Bloomberg News.
Bloomberg News notes that Puerto Rico is asking the U.S. Court of
Appeals in Boston to reverse that ruling as the commonwealth
struggles with $73 billion in debt.
By blocking enforcement of the restructuring law, the lower court
relegated Puerto Rico "to an anomalous legislative no man's land,"
lawyers for Governor Alejandro Garcia Padilla and Secretary of
Justice Cesar R. Miranda Rodriguez said in a court filing,
Bloomberg News relays.
"If Congress had intended to leave utilities, and the people they
serve, at the mercy of their creditors, it surely could and would
have so indicated," the lawyers added, Bloomberg News discloses.
Franklin Resources Inc. and OppenheimerFunds Inc. investment funds
and BlueMountain Capital Management LLC won a ruling in February
from the judge in San Juan that the local restructuring law was in
"irreconcilable conflict" with federal statutes, Bloomberg News
relays.
Bloomberg News discloses that the firms, which at one time held
about $2 billion in bonds issued by the Puerto Rico Electric Power
Authority, alleged that the new law might force them to accept
unfavorable restructuring terms if the heavily indebted utility
sought to use it.
Congressional Intent
Bloomberg News relays that the dispute springs from the island's
status as a U.S. territory dependent on federal lawmakers to grant
it benefits provided states. Congress intended to exclude Puerto
Rico from Chapter 9 bankruptcy protections, the investment funds
argue.
Commonwealth officials "argue for a topsy-turvy world, where
Congress' expressed preemption of state-enacted municipal
bankruptcy laws becomes an option for states to enact such laws,"
lawyers for some of the investment funds said in court filings,
Bloomberg News notes.
The island's agencies may seek protection under those provisions
"only if the legislative body that exercises ultimate control over
them -- Congress -- determines to so authorize," lawyers for the
funds said, Bloomberg News relays.
After years of borrowing to balance budgets, Puerto Rico and its
agencies have racked up $73 billion of debt, more than any U.S.
state except California and New York, Bloomberg News says.
Because most of the debt is tax-exempt nationwide, it's held by
mutual funds and individual investors, Bloomberg News discloses.
Creditor Negotiations
The island has struggled to grow since 2006 and is losing
population, spurring speculation it will fail to repay the
obligations, Bloomberg News notes.
Puerto Rico's power utility has been negotiating with creditors
and may ask them to take a loss, which would be the biggest
restructuring ever in the municipal-bond market, Bloomberg News
relays.
Bloomberg News notes that the commonwealth's debt has been trading
at distressed levels since August 2013. Prices on Puerto Rico's
newest general obligations touched the weakest yet after the
governor's tax overhaul proposal was rejected by lawmakers,
Bloomberg News notes.
Bonds maturing in July 2035 traded May 1 at an average price of
77.57 cents on the dollar, the lowest since they were issued in
March 2014, according to data compiled by Bloomberg. The average
yield on the tax-exempt securities was 10.74 percent, Bloomberg
News notes.
The Puerto Rico Public Corporations Debt Enforcement and Recovery
Act was passed under threat of "fiscal emergency" last year, the
bondholders alleged, Bloomberg News says. Investors called the
law a "harsher copy" of federal bankruptcy provisions that allow
financially distressed municipal entities to seek protection from
creditors while negotiating changes to debt terms, Bloomberg News
notes.
The island's representative in Congress, Pedro Pierluisi, has been
advocating for a bill to amend the bankruptcy code to include
Puerto Rico, Bloomberg News discloses. The measure, which was a
subject of a House Judiciary Committee subcommittee hearing this
year, is supported by most of the island's creditors, Pierluisi
said in a statement in February, Bloomberg News adds.
The case is Franklin California Tax-Free Trust v. Commonwealth of
Puerto Rico, 15-1218, U.S. Court of Appeals for the First Circuit
(Boston).
================================
T R I N I D A D & T O B A G O
================================
CONSTRUTORA OAS: Workers Back to Work Following Negotiations
------------------------------------------------------------
Richardson Dhalai at Trinidad Newsday reports that a marathon
negotiation session which extended well into the night on May 5,
between the Oilfields Workers Trade Union (OWTU) and OAS
management officials successfully averted strike action at the
TT$7.5 billion Sir Solomon Hochoy Highway extension to Point
Fortin.
The high level discussions began at just after 12 noon on May 5
and concluded just before midnight and primarily focused on the
importation of foreign nationals to work on the project, according
to Trinidad Newsday.
Earlier in the day, scores of disgruntled workers, clad in yellow
coveralls and bearing the OAS logo, blocked the main entrance
leading to the company's Golconda administrative offices,
demanding that local workers should be given first preference
before the hiring of the expatriate workers, the report relates.
The union's negotiating team was led by president general Ancel
Roget and included chief education research officer Ozzi Warwick
and worker representative Roger Wharwood, the report relays.
Mr. Wharwood told Newsday an agreement had been reached regarding
the expatriate workers saying approximately 54 foreign nationals
who had arrived in the country on May 1 would be returning to
their respective countries later in the week.
While another 120 expatriate workers, who had arrived in April and
include motor grade operators, would be allowed to work until June
19 (Labor Day), the report relays.
The report notes that Mr. Wharwood said the company had also
promised to provide a complete list of all other expatriate
workers, from the level of management officers to ordinary
workers, to the union during the week.
The report relays that Mr. Wharwood said an agreement had also
been reached regarding wages and salaries saying OAS had agreed to
a 17 percent increase for a three year period-June 2014 to June
2016.
"Workers are back out to work this morning and we are looking for
a better working relationship with the company and I am satisfied
with what was agreed upon," the report quoted Mr. Wharwood as
saying.
According to NIDCO's website, the highway is being built to
international freeway standards and comprises 47 km of four-lane
dual carriageway and 2.5km of two-lane roadway and will connect
the city of San Fernando and the southern towns of Debe, Penal,
Siparia, Fyzabad, La Brea and Point Fortin, 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.
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for actual trades are probably different. Our objective is to
share information, not make markets in publicly traded securities.
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or sell any security of any kind. It is likely that some entity
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issuers' public debt and equity securities about which we report.
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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
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***********
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 2015. All rights reserved. ISSN 1529-2746.
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