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/raid1/www/Hosts/bankrupt/TCRLA_Public/190219.mbx T R O U B L E D C O M P A N Y R E P O R T E R L A T I N A M E R I C A Tuesday, February 19, 2019, Vol. 20, No. 36 Headlines B R A Z I L BRAZIL: Economic Activity Expands 1.15% in 2018 CORNERSTONE VALVE: Case Summary & 20 Largest Unsecured Creditors C A Y M A N I S L A N D S PINNACLE GROUP: Taps FTI Consulting as Liquidators SIMARGL CAPITAL: Creditors' Proofs of Debt Due Feb. 22 M E X I C O PETROLEOS MEXICANOS: To Get $5.5BB Support Package from Gov't. P U E R T O R I C O STONEMOR PARTNERS: Incurs $17.2 Million Net Loss in Third Quarter STONEMOR PARTNERS: Sacks VP of Operations as Part of Restructuring V E N E Z U E L A PETROLEOS DE VENEZUELA: Gazprombank Freezes Accounts of Firm VENEZUELA: Maduro Regime Speaks of Meetings with Trump Envoy - - - - - =========== B R A Z I L =========== BRAZIL: Economic Activity Expands 1.15% in 2018 ----------------------------------------------- The Latin American Herald reports that Brazil's economic activity expanded 1.15 percent last year with respect to 2017, a sign that the South American giant is continuing to slowly emerge from the deep recession of 2015 and 2016, the Central Bank said. The figure comes from the bank's Index of Economic Activity (IBC-Br), which is used as a preview of the gross domestic product (GDP) number released quarterly, according to The Latin American Herald. The report notes that the 2018 result came in below forecasts by financial markets and the government for expansion of around 1.4 percent. Economic activity rose by 0.21 percent in December 2018 relative to November and 0.18 percent compared to the final month of 2017, the report relays. In the fourth quarter of 2018, the IBC-Br index climbed by 0.20 percent with respect to the previous quarter and was 1.53 percent higher than in October-December 2017, the report says. The results indicate Brazil is continuing a slow recovery that began in 2017, when the economy grew 1.1 percent after two years of recession, the report discloses. The country's GDP contracted by 3.5 percent in 2015 and 3.3 percent in 2016 due to a series of factors including a drop in commodity prices stemming from China's economic slowdown and corruption scandals, the report notes. The report discloses that the recession was the deepest Brazil had experienced in several decades. Considered a preview of GDP, the IBC-Br measures the performance of Brazil's industry, trade, services and agricultural sectors, the report relays. It is used by the Central Bank in analyzing the evolution of economic activity and making policy decisions such as determining interest rates, the report notes. At present, the Central Bank's benchmark Selic rate is at a record low of 6.5 percent, although the monetary authority considers that level high enough to keep consumer prices in check and meet inflation targets of 3.9 percent for 2019 and 3.8 percent for 2020, the report relays. Brazil's GDP numbers for 2018 are to be released on Feb. 28 by the Brazilian Institute of Geography and Statistics (IBGE), the report notes. In BBVA's Latin America Economic Outlook for the first quarter of 2019, the Bilbao, Spain-based multinational banking group said it had revised its Brazil growth forecast slightly downward due to a less supportive global environment, notes the report. "Recent data support the outlook for a gradual recovery in growth, in line with expectations, but a less favorable global environment will result in lower growth ahead," the report released this month said, the Latin American Herald discloses. The bank currently expects Brazil's economy to grow 2.2 percent in 2019 and 1.8 percent in 2020, adds the report. As reported on the Troubled Company Reporter-Latin America on Feb. 11, 2019, S&P Global Ratings affirmed its 'BB-/B' long- and short-term foreign and local currency sovereign credit ratings on Brazil. The outlook on the long-term ratings remains stable. At the same time, S&P affirmed its transfer and convertibility assessment of 'BB+'. S&P also affirmed its 'brAAA' national scale rating, and the outlook remains stable. CORNERSTONE VALVE: Case Summary & 20 Largest Unsecured Creditors ---------------------------------------------------------------- Two affiliates that have filed voluntary petitions seeking relief under Chapter 11 of the Bankruptcy Code: Debtor Case No. ------ -------- Cornerstone Valve LLC 19-30869 4000 Greenbriar, Ste 100 Stafford, TX 77477 Well Head Component Inc 19-30870 4000 Greenbriar, Ste 100 Stafford, TX 77477 Business Description: Cornerstone Valve LLC -- www.cornerstonevalue.com -- is a manufacturer of fabricated metal products. Well Head Component, Inc., doing business as Avsco, provides supply chain and project management services. The Company offers engineering, designing, and manufacturing services, as well as modification and logistics services. Avsco is an international OEM representative and distributor of industrial products for the most requested brands used by energy markets. Headquartered in Houston, Texas USA, Avsco has an in-country presence in Nigeria, Libya, UAE and most recently in Brazil and Italy. For more information, visit http://www.avsco.com/ Chapter 11 Petition Date: February 15, 2019 Court: United States Bankruptcy Court Southern District of Texas (Houston) Judges: Hon. David R. Jones (19-30869) Hon. Eduardo V. Rodriguez (19-30870) Debtors' Counsel: Sartaj Singh Bal, Esq. SARTAJ BAL PC 5315 Cypress Creek Parkway, #B295 Houston, TX 77069 Tel: 713-885-6395 E-mail: ssb6509@me.com ssb@880mail.com Cornerstone Valve's Estimated Assets: $1 million to $10 million Cornerstone Valve's Estimated Liabilities: $1 million to $10 million Well Head's Estimated Assets: $1 million to $10 million Well Head's Estimated Liabilities: $500,000 to $1 million The petitions were signed by Nitesh Gupta, president and CEO. The full-text copies of the petitions containing, among other items, lists of the Debtors' 20 largest unsecured creditors are available for free at: http://bankrupt.com/misc/txsb19-30869.pdf http://bankrupt.com/misc/txsb19-30870.pdf =========================== C A Y M A N I S L A N D S =========================== PINNACLE GROUP: Taps FTI Consulting as Liquidators -------------------------------------------------- Pinnacle Global Partners, which is in liquidation, tapped Andrew Morrison and David Griffin of FTI Consulting (Cayman)Ltd. as liquidators. The deadline for creditors to submit their proofs of debt to be included in the company's dividend distribution was scheduled Feb. 17, 2019. The liquidators can be reached at: Andrew Morrison David Griffin FTI Consulting (Cayman)Ltd. Suite 3212, Market Street, Cayman Bay Grand Cayman, KYI-1203 SIMARGL CAPITAL: Creditors' Proofs of Debt Due Feb. 22 ------------------------------------------------------ The creditors of Simargl Capital Partners Limited are required to file their proofs of debt by Feb. 22, 2019, to be included in the company's dividend distribution. The company commenced liquidation proceedings on June 6, 2017. The liquidators can be reached at: Andrew Morrison David Griffin FTI Consulting (Cayman)Ltd. Suite 3212, Market Street, Cayman Bay Grand Cayman, KYI-1203 =========== M E X I C O =========== PETROLEOS MEXICANOS: To Get $5.5BB Support Package from Gov't. -------------------------------------------------------------- The Latin American Herald reports that Mexico's government unveiled a MXN107-billion ($5.5-billion) aid package in 2019 for state oil company Petroleos Mexicanos (Pemex), which is struggling with sky-high debt and has seen its output plummet over the past 15 years. "We'll be presenting what will be the first injection of funds to support Pemex," President Andres Manuel Lopez Obrador said at his morning press conference, according to The Latin American Herald. "If more is needed, we'll allocate more funds." Speaking at the same press conference, Pemex Chief Financial Officer Alberto Velazquez said that the first action would be a MXN25 billion injection of funds from this year's federal budget, the report relays. The second measure is an advance MXN35 billion transfer payment from the Finance Secretariat to Pemex to assist the company in covering its pension liabilities, the report notes. "Next, and this is the most relevant announcement for us, the federal government will increase Pemex's tax relief through a greater allowance for deductions. For us, this tax relief will represent a reduction in our fiscal burden of at least MXN15 billion" in 2019, Mr. Velazquez said, the report relays. The amount of tax relief will reach MXN30 billion at the end of 2020 and continue to accumulate over the course of Lopez Obrador's six-year term, he added, the report says. For 2019, the injection of funds will amount to MXN75 billion, the CFO said, the report relays. Additionally, a crackdown on fuel theft by Lopez Obrador's leftist administration will enable Pemex to recover some MXN32 billion in revenues that would otherwise have been lost, Mr. Velazquez said. "To summarize, this set of supporting actions and measures will provide us additional funds totaling MXN107 billion this year," the report quoted Mr. Velazquez as saying. Lopez Obrador said at the press conference that the measures reflect his government's commitment to "strengthening Pemex as a strategic company," the report relays. The company, which holds around $106 billion in financial debt, is in a precarious situation due to, among other reasons, a steep drop in production to an average of just 1.71 million barrels per day in December (down from 3.38 million bpd in 2004), the report relays. The report notes it also suffers from aging infrastructure, while budget cuts by the previous government slashed funds needed for oil exploration. Pemex's difficult financial situation led Fitch Ratings to lower its debt by two notches from BBB+ to BBB- (with a negative outlook), meaning the company is now just one step above junk status, according to the report. "I'm convinced Pemex's main problem, which led Pemex to this extreme weakness, was corruption. If we do away with corruption, Pemex will be reborn, and this applies to the country" as a whole, Lopez Obrador said, the report adds. * * * As reported in the Troubled Company Reporter on Oct. 05, 2016, Mexican Petroleum filed its report on form 6-K, disclosing a net loss of MXN145.47 billion on MXN480.70 billion of total sales for the six-month period ended June 30, 2016, compared to a net loss of MXN185.18 billion on MXN588.36 billion of total sales for the same period in the prior year. As of June 30, 2016, the Company had MXN2.05 trillion in total assets, MXN3.50 trillion in total liabilities and a total stockholders' deficit of MXN1.44 trillion. The Company has experienced recurring losses from its operations and have negative working capital and negative equity, which raises substantial doubt regarding its ability to continue as a going concern. ===================== P U E R T O R I C O ===================== STONEMOR PARTNERS: Incurs $17.2 Million Net Loss in Third Quarter ----------------------------------------------------------------- StoneMor Partners L.P. has filed with the Securities and Exchange Commission its Quarterly Report on Form 10-Q reporting a net loss of $17.22 million on $73.18 million of total revenues for the three months ended Sept. 30, 2018, compared to a net loss of $9.57 million on $84.03 million of total revenues for the three months ended Sept. 30, 2017. For the nine months ended Sept. 30, 2018, the Partnership reported a net loss of $52.16 million on $232.7 million of total revenues compared to a net loss of $29.71 million on $252.9 million of total revenues for the same period in 2017. As of Sept. 30, 2018, StoneMor had $1.72 billion in total assets, $1.71 billion in total liabilities, and $13.46 million in total partners' capital. During 2017 and to date in 2018, the Partnership has implemented (and will continue to implement) various actions to improve profitability and cash flows to fund operations. A summary of these actions is as follows: * Continue to manage recurring operating expenses and seek to limit non-recurring operating expenses over the next twelve- month period, which includes the January 2019 Restructuring actions; * Complete sales of certain assets and businesses to provide supplemental liquidity; and * The Partnership was not in compliance with certain of its amended credit facility covenants as of Dec. 31, 2017, March 31, 2018, June 30, 2018, Sept. 30, 2018 and Dec. 31, 2018. These failures constituted defaults that the lenders agreed to waive pursuant to the Sixth Amendment and Waiver, the Seventh Amendment and Waiver and the Eighth Amendment and Waiver to the Partnership's credit facility on June 12, 2018, July 13, 2018 and Feb. 4, 2019, respectively. Moreover, based on the Partnership's forecasted operating performance, cash flows and projected plans to file financial statements on a timely basis consistent with the debt covenants, the Partnership does not believe it is probable that the Partnership will further breach the covenants under its amended credit facility for the next twelve-month period. However, there is no certainty that the Partnership's actual operating performance and cash flows will not be substantially different from forecasted results, and no certainty the Partnership will not need further amendments to its credit facility in the future. Factors that could impact the significant assumptions used by the Partnership in assessing its ability to satisfy its financial covenants include the following: - operating performance not meeting reasonably expected forecasts; - failing to generate profitable sales; - investments in the Partnership's trust funds experiencing significant declines due to factors outside its control; - being unable to compete successfully with other cemeteries and funeral homes in the Partnership's markets; - the number of deaths in the Partnership's markets declining; and - the mix of funeral and cemetery revenues between burials and cremations. "If the Partnership's planned and implemented actions are not realized and the Partnership fails to improve its operating performance and cash flows, or the Partnership is not able to comply with the covenants under its amended credit facility, the Partnership may be forced to limit its business activities, implement further modifications to its operations, further amend its credit facility and/or seek other sources of capital, and the Partnership may be unable to continue as a going concern. Additionally, a failure to generate additional liquidity could negatively impact the Partnership's access to inventory or services that are important to the operation of the Partnership's business. Given the Partnership's level of cash and cash equivalents, to preserve capital resources and liquidity, the Board of Directors of the General Partner concluded that it was not in the best interest of unitholders to pay distributions to unitholders after the first quarter of 2017. In addition, the Partnership's revolving credit facility prohibits the Partnership from making distributions to unitholders. Any of these events may have a material adverse effect on the Partnership's results of operations and financial condition," the Partnership said in the Quarterly Report. A full-text copy of the Form 10-Q is available for free at: https://is.gd/IeCzKu About StoneMor Partners StoneMor Partners L.P., headquartered in Trevose, Pennsylvania -- http://www.stonemor.com/-- is an owner and operator of cemeteries and funeral homes in the United States, with 322 cemeteries and 90 funeral homes in 27 states and Puerto Rico. StoneMor's cemetery products and services, which are sold on both a pre-need (before death) and at-need (at death) basis, include: burial lots, lawn and mausoleum crypts, burial vaults, caskets, memorials, and all services which provide for the installation of this merchandise. Stonemor reported a net loss of $75.15 million on $338.2 million of total revenues for the year ended Dec. 31, 2017, compared to a net loss of $30.48 million on $326.2 million of total revenues for the year ended Dec. 31, 2016. * * * As reported by the TCR on Feb. 13, 2019, Moody's Investors Service downgraded StoneMor Partners L.P.'s Corporate Family rating to Caa2 from Caa1 and Probability of Default rating to Caa3-PD from Caa1-PD. The Caa2 CFR reflects Moody's concern that if pre-need cemetery selling and liquidity pressures do not abate while the senior secured credit facility is being refinanced, a distressed exchange or other default event could become more likely. In April 2018, S&P Global Ratings affirmed its 'CCC+' corporate credit rating on StoneMor Partners L.P. S&P said, "The rating affirmation reflects our expectation that the company can generate operating cash flow of approximately $25 million in 2018 to support operating needs for at least another year." STONEMOR PARTNERS: Sacks VP of Operations as Part of Restructuring ------------------------------------------------------------------ As part of a restructuring that included a reduction of approximately 45 positions, StoneMor GP LLC, the general partner of StoneMor Partners L.P., terminated the employment of Ken Lee, its national vice president of operations, effective Feb. 1, 2019. In connection with his termination, StoneMor GP and Mr. Lee entered into a Confidential Separation Agreement and General Release pursuant to which, in consideration for a customary release, he was entitled to continue receiving his base salary for a period of twelve months and certain career outplacement services. About StoneMor Partners StoneMor Partners L.P., headquartered in Trevose, Pennsylvania -- http://www.stonemor.com/-- is an owner and operator of cemeteries and funeral homes in the United States, with 322 cemeteries and 90 funeral homes in 27 states and Puerto Rico. StoneMor's cemetery products and services, which are sold on both a pre-need (before death) and at-need (at death) basis, include: burial lots, lawn and mausoleum crypts, burial vaults, caskets, memorials, and all services which provide for the installation of this merchandise. Stonemor reported a net loss of $75.15 million on $338.2 million of total revenues for the year ended Dec. 31, 2017, compared to a net loss of $30.48 million on $326.2 million of total revenues for the year ended Dec. 31, 2016. As of Sept. 30, 2018. StoneMor had $1.72 billion in total assets, $1.71 billion in total liabilities, and $13.46 million in ttoal partners' capital. * * * As reported by the TCR on Feb. 13, 2019, Moody's Investors Service downgraded StoneMor Partners L.P.'s Corporate Family rating to Caa2 from Caa1 and Probability of Default rating to Caa3-PD from Caa1-PD. The Caa2 CFR reflects Moody's concern that if pre-need cemetery selling and liquidity pressures do not abate while the senior secured credit facility is being refinanced, a distressed exchange or other default event could become more likely. In April 2018, S&P Global Ratings affirmed its 'CCC+' corporate credit rating on StoneMor Partners L.P. S&P said, "The rating affirmation reflects our expectation that the company can generate operating cash flow of approximately $25 million in 2018 to support operating needs for at least another year." ================= V E N E Z U E L A ================= PETROLEOS DE VENEZUELA: Gazprombank Freezes Accounts of Firm ------------------------------------------------------------ RJR News reports that Russian lender Gazprombank has decided to freeze the accounts of Venezuela's state oil company Petroleos de Venezuela S.A. (PDVSA) whose subsidiary, PDV Caribe, controls 49 per cent of Petrojam. It has also halted transactions with the firm to reduce the risk of the bank falling under U.S. sanctions, according to RJR News. A Gazprombank source confirmed the move in an interview with Reuters, the report notes. RJR News, citing Reuters, says that while many foreign firms have been cutting their exposure to PDVSA since the sanctions were imposed, the fact that a lender closely aligned with the Russian state is following suit is significant because the Kremlin has been among Venezuelan President Nicolas Maduro's staunchest supporters. PDVSA brandished the story as fake news on its Twitter account in capital red letters, but did not reply to a request for comment. Reuters reported this month that PDVSA was telling customers of its joint ventures to deposit oil sales proceeds in its Gazprombank accounts in a move to try to sideline fresh U.S. sanctions on the Venezuelan oil firm, the report says. Washington says the sanctions, imposed on January 28, are aimed at blocking Maduro's access to the country's oil revenue after opposition leader Juan Guaido proclaimed himself interim president and received widespread Western support, the report notes. Gazprombank is Russia's third biggest lender by assets. The bank has held PDVSA accounts for several years. As reported in the Troubled Company Reporter-Latin America on Aug. 24, 2018, S&P Global Ratings affirmed its 'SD' global scale issuer credit rating and 'D' issue-level ratings on Petroleos de Venezuela S.A. (PDVSA). VENEZUELA: Maduro Regime Speaks of Meetings with Trump Envoy ------------------------------------------------------------ The Latin American Herald reports that the Nicolas Maduro regime said that it has had at least two meetings with Elliot Abrams, designated by US President Donald Trump as a special United States envoy to Venezuela, though no further details have been offered about those meetings. "We have had two meetings, about which I cannot give you further details because I must respect their confidentiality, but they have been meetings in which we listened to each other," Maduro's Foreign Minister Jorge Arreaza said in a statement on state television channel TeleSur, according to The Latin American Herald. "There were moments of tension, we had very great differences, but at the same time there were concerns that we shared," he said, and demonstrated, by showing his passport and diplomatic visa, that he had been at those meetings, the report notes. "If we have to meet with the devil himself, if we have to go to the center of the earth to speak with the devil and defend Venezuelan sovereignty and demand respect . . . from a government that represents the empire and the giant corporations . . . we will do it." The report notes that these meetings occurred amid rising diplomatic tensions between the two countries, and after Maduro cut off diplomatic ties with the United States, which does not accept his presidency and on several occasions has asked him to step down from the office he has held since 2013. Mr. Arreaza also said that those meetings imply a binational dialogue that cannot be denied by the US government and that Maduro is "up to date on every detail" that was discussed, the report says. "It's obvious. Even Mr. Bolton, the national security adviser to the White House, the man of war has acknowledged it (the dialogue with the US)," he said, the report discloses. Mr. Arreaza also slammed the US State Department for restricting the Venezuelan diplomat to the Organization of American States (OAS), Samuel Moncada, from moving freely in the 25 miles around its headquarters in Washington, the report relays. "They're afraid of what Venezuela will say, they're afraid of hearing the truth about Venezuela," the foreign minister said, the report notes. In that regard, he said the Venezuelan government is "evaluating" what actions to take to keep "the voice of Venezuela in the OAS" from being silenced before April 27, when it is pulling out of the organization of its own volition, the report relays. "The day we leave, no one is going to be kicking us out," he added. Meanwhile, the first of three Boeing C-17 Globemaster cargo planes of the US Air Force brought humanitarian aid for Venezuela to the Colombian border city of Cucuta from an air base in Florida, the report notes. The aircraft, which left Homestead Air Reserve Base south of Miami, landed at Cucuta's Camilo Daza International Airport with nutritional supplements for close to 3,500 children suffering malnutrition, along with hygiene kits for at least 25,000 people, the report says. According to US diplomatic sources, a total of three C-17 military aircraft should reach Cucuta, the main border crossing between Colombia and Venezuela, where tons of humanitarian aid for the latter country are being stored, the report relays. The Latin American Herald discloses that the US Embassy in Colombia also said in a statement that additional military flights will be arriving in the next few days to deliver humanitarian aid for the most vulnerable sectors of the population. The aid flown in will be received at Camilo Daza Airport by representatives of the US State Department, the US Agency for International Development (USAID), members of the Colombian government, and representatives of the speaker of the Venezuelan National Assembly, Juan Guaido, interim president of his country since last January, the report notes. The shipment, with which the US and Colombia seek to ease the crisis in Venezuela "caused by the bad management of the illegitimate Nicolas Maduro regime," comes on top of the first load flown into Cucuta last week to help a least 5,000 Venezuelans, the report notes. Additionally, medical emergency packages that contain medical supplies and pharmaceuticals that can save lives, for use in hospitals and community medical centers, will arrive early next week," the US Embassy statement said, the report says. Cucuta, together with Curacao and the Brazilian state of Roraima are supply centers for the humanitarian aid that will be sent into Venezuela next Feb. 23, as Guaido disclosed, the report relays. Nonetheless, the Maduro regime has warned more than once that he will stop any humanitarian aid from entering the country, the report notes. Guaido announced on Twitter the creation in Miami of a new humanitarian aid center, the report relays. The US Embassy said that USAID is readying additional supplies in its Miami and Houston warehouses to be distributed immediately in the South American region, the report notes. By the same token, it said that in the last two years, the US government has allocated more than $140 million in aid for the hemisphere and the people of Venezuela, the report notes. Venezuela has lived in a situation of political instability since last Jan. 10, when Maduro began another term in office after supposedly winning the presidential election last May, though many Venezuelans and members of the international community believe that election was rigged, the report adds. As reported in the Troubled Company Reporter-Latin America, S&P Global Ratings in May 2018 removed its long- and short-term local currency sovereign credit ratings on Venezuela from CreditWatch with negative implications and affirmed them at 'CCC-/C'. The outlook on the long-term local currency rating is negative. At the same time, S&P affirmed its 'SD/D' long- and short-term foreign currency sovereign credit ratings on Venezuela. S&P's transfer and convertibility assessment remains at 'CC'. ********* 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, Julie Anne L. Toledo, Ivy B. Magdadaro, and Peter A. Chapman, Editors. Copyright 2019. 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. . * * * End of Transmission * * *