/raid1/www/Hosts/bankrupt/TCRLA_Public/190423.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, April 23, 2019, Vol. 20, No. 81
Headlines
A R G E N T I N A
PETROQUIMICA COMODORO: Fitch Affirms 'B' LT IDRs, Outlook Negative
B E L I Z E
ATLANTIC INT'L: Fraud Case Trigger Loss of License to Operate
B R A Z I L
AVIANCA BRASIL: Azul No Longer Bidding for Firm's Routes
BRAZIL: Waves of Trash Expose Rio's Environmental Deterioration
USINA DE ACUCAR: Chapter 15 Case Summary
M E X I C O
GORE FREIGHT COMPANY: Hires Garza & Morales, L.C. as Accountant
GORE FREIGHT COMPANY: Taps Ballesteros Gonzalez as Special Counsel
P U E R T O R I C O
PUERTO RICO: Banks Ordered to Disclose Bondholder Info to Board
STONEMOR PARTNERS: Amends 2018 Long-Term Incentive Plan
STONEMOR PARTNERS: Names Garry Herdler as Chief Financial Officer
T R I N I D A D A N D T O B A G O
TRINIDAD & TOBAGO: Venezuelans Registration Set for May 31-June 14
V I R G I N I S L A N D S
ZHONGRONG INT'L: S&P Places 'BB-' ICR on Credit Watch Negative
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A R G E N T I N A
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PETROQUIMICA COMODORO: Fitch Affirms 'B' LT IDRs, Outlook Negative
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Fitch Ratings has affirmed Petroquimica Comodoro Rivadavia S.A.'s
Long-Term Foreign and Local Currency Issuer Default Ratings at 'B'.
The Rating Outlook is Negative.
PCR's 'B' LT FC IDR is constrained by the Republic of Argentina's
country ceiling of 'B', which limits the foreign currency rating of
most Argentine corporates. Fitch's Country Ceilings are designed to
reflect the risks associated with sovereigns placing restrictions
upon private sector corporates, which may prevent them from
converting local currency to any foreign currency under a stress
scenario, and/or may not allow the transfer of foreign currency
abroad to service foreign currency debt obligations.
PCR's ratings reflect the issuer's small oil and gas production
size and reserve concentration, small cement business concentrated
in the Patagonia region of Argentina and exposure to the Argentine
electricity industry's regulatory risk, which is has improved but
remains high. Fitch considers the company and its industry peers as
having heightened counterparty risk with Compania Administradora
del Mercado Mayorista Electrico (CAMMESA) as the main off-takers,
given CAMMESA is highly dependent on the Argentine government
subsidies in order to fulfil its obligations. Finally, the ratings
are constrained by the macro-economic environment, including high
inflation and steep currency devaluation.
The Negative Outlook, which mirrors that of the Argentina
sovereign, reflects sharply weaker economic activity and uncertain
prospects for multi-year fiscal consolidation and market financing
availability as IMF funds are used up, posing risks to sovereign
debt sustainability. Fitch assumes that in 2019 the Argentine
government will achieve the fiscal adjustment targeted in the
budget and that the recently renegotiated IMF program will help it
fully cover its financing needs but sees downside risks amid a
nascent economic recession and election cycle. After 2019,
prospects for further fiscal consolidation, economic recovery and
restoration of external market access are uncertain and are likely
to be sensitive to the election outcome.
Absent the constraint of Argentina's country ceiling for PCR's
ratings, Fitch believes the operating profile of PCR is consistent
with a 'B' rating level due to stable but small production size,
reserve life, solid credits metrics, adequate liquidity and a
diversified business model both geographically and
technologically.
KEY RATING DRIVERS
Small Production Profile: PCR's ratings reflect its small and
concentrated production profile, which is consistent the 'B' rating
category. Although the company has exploration and production
interest in nine blocks in Argentina (six), Ecuador (two) and
Colombia (one), its asset base as well as all of the company's
proved (1P) reserves and production is concentrated in Argentina
(81%), Ecuador (21%) and Colombia (4%). This limited
diversification exposes the company to operational and
macroeconomic risks associated with small-scale oil and gas
production. Fitch expects the company's production to be on average
20,000 boe per day (boed) from 2019 to 2022.
Adequate Hydrocarbon Reserves: Fitch believes PCR has an adequate
reserve life of 7.2 years 1P providing some flexibility to reduce
capex investments if needed. As of the end of fourth quarter 2018,
PCR reported Argentine reserves of 51.5 million boe, 10.7 million
boe in Ecuador and 2.0 million boe in Colombian 1P reserves and
41.7 mmboe in Argentina. The company has strong concession life
with the earliest material concession expiring in 2026. This
concession, El Medanito, currently accounts for approximately 60%
of production. Other concessions have longer expiration dates.
Fitch estimates PCR's corporate debt to 1P reserves is USD5.75
bbl.
Expansion into Renewables: Fitch believes PCR has demonstrated its
ability to successfully construct and operate wind farm projects,
after completing its 125MW Bicentenario (PEBSA I & II) projects
ahead of the COD of 1Q19, for an estimated USD147 million, or
USD1.2 million per MW, which is slightly below the industry average
range of USD1.2 million-USD1.5 million per MW. PCR financed the
expansion with a USD108 million, project finance loan (70% of the
cost). PCR is currently in phase II of its expansion with the
construction of an additional 200MW of wind farm projects (El
Mataco and San Jorge) for an estimated USD250 million. Fitch
expects that PCR will raise up to USD200 million of project finance
debt in a special purpose vehicle to complete the project. Fitch
views PCR, the corporate entity, as the guarantor of this debt and
therefore consolidates any financing expectations with its
corporate debt.
Moderate Leverage; Adequate Interest Coverage: Fitch views PCR's
expected leverage as moderate and not a factor that currently
constrains the ratings. Fitch's forecasts assume the issuer's
leverage levels (defined as total adjusted debt/EBITDA) will peak
at 3.1x in 2019 with EBITDA expected to be approximately USD170
million and remain flat at around 2.1x from 2020 and 2022, with an
average EBITDA of USD250 million, once all wind farm projects are
in operation. The gross leverage figure assumes the company will
raise an additional USD200 million of project finance debt for the
construction of the wind farms, and the company will continuously
roll over its short-term bank debt through the rating horizon.
Fitch estimates FFO fixed charge coverage will average 3.5x between
2019 and 2022, consistent with a 'B' rating category, per Fitch
Ratings Oil & Gas producers Rating Navigator. The company's debt
service coverage benefits from its 20-year PPAs with CAMMESA
contributing to a stable source of cash flow.
Heightened Counterparty Exposure: PCR now depends on payments from
CAMMESA, which acts as an agent on behalf of an association
representing agents of electricity generators, transmission,
distribution and large consumers or the wholesale market
participants (Mercado Mayorista Electrico; MEM). Although over the
past 24 months CAMMESA's payment track record has been consistent
and on time, historically, payments have been volatile given that
the agency depends partially on the Argentine government for funds
to make payments. The notable exceptions were a delay in September
and December 2018 in the FX portion of CAMMESA's payment to market
participants due to Argentina's currency crisis. This risk is
slightly mitigated in the RenovAR program with the presence of the
FODER trust fund, which is prefunded, and is designed to be a
payment guarantee to cover, ongoing PPA payments and termination
payment obligation arising from the rights of IPP to sell their
project to the FODER in specific macroeconomic or sector risk
occur. The Banco de Inversion y Comercio Exterior (BICE) is the
administrator of the FODER and the Federal Government of Argentina
is required to fund the FODER, to assure it meets its obligations.
Lack of Operational History: Fitch believes there are limited
operational risks associated with PCR being a new participant in
the electricity sector, as the company has entered into at least 15
years, with the ability to extend an additional five years, active
output management service agreement with Vestas that ensures the
highest energy output (availability of 98%) for the life of PEBSA's
PPA. The service agreement mitigates somewhat the risk associated
with PCR not having an operational track record.
DERIVATION SUMMARY
PCR is a small oil and gas producer with operation in Argentina,
Ecuador and Colombia. Argentina represents 61% of 2018 production
while Ecuador contributed 34% and Colombia 4.6%. Production is
expected to stay at an average of 20,000 boe/d through 2022, which
is comparable to its 'B' rated peers, GeoPark Ltd (B+/Stable),
Frontera Energy (B+/Negative), Gran Tierra Energy (B/Positive) and
Compania General de Combustibles (CGC; B/Negative). Over the rated
horizon, Fitch expects that PCR production will be less than
GeoPark, who will reach nearly 50,000 boed by 2020-21, Gran Tierra
and CGC, both expected to be nearly 40,000 boed and Frontera Energy
70,000 boed. Further, PCR's reported 51.5 million boe of 1P
reserves at the end of 2018 equating to a reserve life of 7.2
years, which is strong, and in line with GeoPark at 8.7 years and
higher than Frontera Energy's 4.3 years, Gran Tierra's 5.9 years
and CGC's 5.3 years. PCR has a strong reserve base, and Fitch
estimates the company will be able to maintain its reserve life of
at seven years or greater as it continues to increase production
size.
PCR's cement segment is small and geographically focused and does
not compare well to some of its peers in the region. PCR has a
capacity of producing 750,000 tons a years compared to Cementos
Pacasmayo (BBB-/Stable) with capacity: 4.9 million metric tons a
year, Cementos Progreso (BB+/Stable) with 5.0 million metric tons,
and Cementos de Chihuahua (BB+/Stable) with 5.1 million metric
tons. PCR's cement business is focused in the Patagonia region and
has a strong market share due to its geographic location and
production efficiencies caused by the lower freight and energy
costs. PCR's cement margins historically have averaged 14% from
2014 through 2018, which is less than its peer's median of
approximately 30%.
PCR's gross leverage is expected to peak at 3.1x in 2019, as the
company increases indebtedness to finance its wind farm projects.
PCR's gross leverage compares favorably to oil and gas peer CGC
(4.0x), but its leverage is higher than Gran Tierra's 1.7x and
Geopark's 1.2x. Unlike its oil and gas peers, PCR does have a more
diversified business model with its cement segment and the entry
into renewable energy sector, so once its wind farms are fully in
operations, the company's power business compares to Pampa Energia
(B/Negative), MSU Energy (B-/Stable), Capex S.A. (B/Negative) and
Genneia (B/Negative). Similar to PCR, Pampa Energia and Capex both
have oil nd gas and energy business segments, taking into
consideration that Capex is a closer peer by scale compared to the
much larger Pampa Energia.
KEY ASSUMPTIONS
Fitch's Key Assumptions Within Its Rating Case for the Issuer
-- Average production to be 20,000 boed in from 2019 until 2022;
-- Fitch's price deck per barrel of Brent oil of USD65.50 in
2019, USD62.50 in 2020, USD60.00 in 2021 and USD57.50 thereafter;
-- Cement sales growth linked to real GDP growth of Argentina;
-- Capex between 2019-2022 of USD840 million with an average
capex of USD210 million;
-- Average dividends of USD7 million paid each year from 2019
through 2022;
-- Additional debt of USD 200 million to be raised between
2019-2020;
-- PEBSA I & II completed in March 2019, and PEBSA I has an
awarded price per MWh of USD49.50 with an availability factor of
98% and average load factor of 55%;
-- San Jorge/Mataco starts operations in 2Q20 with an
availability factor of 98% and average load factor of 55%.
Key Recovery Rating (RR) Assumptions:
-- The recovery analysis assumes that PCR would be liquidated in
bankruptcy, and Fitch has assumed a 10% administrative claim.
-- Liquidation Approach: The liquidation estimate reflects
Fitch's view of the value of inventory and other assets excluding
its oil and gas assets that can be realized in a reorganization and
distributed to creditors;
-- The 50% advance rate is typical of inventory liquidations for
the oil and gas industry;.
-- The USD10 per barrel estimate reflects the typical valuation
of recent reorganizations in the oil and gas industry. The
waterfall results in a 100% recovery corresponding to an 'RR1' for
total gross debt of USD404 million.
RATING SENSITIVITIES
Developments That May, Individually or Collectively, Lead to
Positive Rating Action
- An upgrade to the ratings of Argentina's sovereign rating could
result in a positive rating action;
- Diversification of operations outside of Argentina with cash
flows from Colombia covering 12 months of hard currency debt
service;
- Net production rising consistently to 75,000 boed on a
sustained basis while maintaining a total debt to 1P reserves of
$8bbl or below;
- Reserve life is unaffected as a result of production increase
at approximately 10 years;
- Sustained conservative capitals structure and investment
discipline.
Developments That May, Individually or Collectively, Lead to
Negative Rating Action
- Sustainable production size decreased to below 20,000 boed;
- Reserve life decreased to below seven years on a sustained
basis;
- Material delay or cancellation of Mataco/San Jorge projects or
cancellation leading to significant penalty associated with RenoVar
programs;
- A significant deterioration of credit metrics to total
debt/EBITDA of 5.5x or more.
LIQUIDITY
Adequate Liquidity: As of YE 2018, PCR reported a cash balance of
USD185 million, which covers nearly four years of interest expense.
Fitch believes with a strong cash balance and cash flow from
operations, the company will adequately cover its interest expense
and upcoming maturities, but Fitch believes the company will likely
refinance maturing debt during 2019-2020. Fitch's base case assumes
PCR will be able to rollover these banks loans with local and
international banks. In the event, PCR cannot refinance debt, Fitch
estimates its FFO will average approximately USD140 million between
2019-2022, which covers expected interest expense and maturities on
average 1.1x between 2019 to 2022.
FULL LIST OF RATING ACTIONS
Fitch has affirmed the following ratings:
Petroquimica Comodoro Rivadavia S.A
-- Foreign Currency Long-Term IDR at 'B'; Outlook Negative;
-- Local Currency Long-Term IDR at 'B'; Outlook Negative.
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B E L I Z E
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ATLANTIC INT'L: Fraud Case Trigger Loss of License to Operate
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Caribbean360.com reports that the Belize government has revoked the
license of Atlantic International Bank Limited (AIBL), an
international bank which is embroiled in a fraud case in the United
States involving property in the Caribbean Community (CARICOM)
nation.
The decision to revoke the banking license of Atlantic
International Bank Limited (AIBL) was taken on the recommendation
of the Central Bank of Belize, five months after the US Federal
Trade Commission (FTC) named the bank as a defendant in a case
involving alleged fraud related to certain transactions for the
sale of land in a property development known as Sanctuary Belize,
according to Caribbean360.com. That legal situation unfolded on
November 8, 2018 and the FTC sought and obtained a temporary
restraining order against certain of the bank's liquid assets in
the United States, the report notes.
The Central Bank said AIBL has experienced challenges meeting its
liquidity requirements, due, it appears, to the reputational damage
caused by being named in the FTC proceedings, the report relays.
It experienced an unusual and increasing level of withdrawal
requests, which led to customers facing extended delays in
accessing their funds, which in turn led to a worsening of the
bank's liquidity position, the report discloses.
In response to those challenges, the Central Bank placed AIBL under
enhanced supervision on November 13, 2018, and subsequently issued
two sets of remedial actions aimed at preserving the bank's
capital, the report discloses. The Central Bank said it closely
monitored the execution of these actions through increased
reporting requirements and continuous dialogue, the report notes.
Then last month, AIBL's Board of Directors informed the Central
Bank of a worsening liquidity position and the resignation of its
Chief Executive Officer, Ricardo Pelayo, and expressed the view
that Central Bank's intervention was required, the report recalls.
To safeguard the interest of depositors, customers, and other
stakeholders, the Central Bank said it immediately escalated its
oversight regime and undertook a special on-site examination to
assess AIBL's financial position, the report says. The assessment
revealed that the bank's liquidity position continued to worsen,
the report notes.
"The Central Bank determined that Atlantic International Bank
Limited was no longer viable and continues to work diligently
towards timely winding up of Atlantic International Bank Limited in
accordance with the statues provided under Part XI of the Domestic
Banks and Financial Institutions Act," it said, the report
discloses.
"The Central Bank has appointed a liquidator, Mr. Julian Murillo.
He will have full power and authority over the operations of
Atlantic International Bank Limited as prescribed under the Laws of
Belize . . . . After the liquidation of the bank's assets, Murillo
will move to distribute these assets in a fair and equitable manner
in accordance with the legal priorities," the report notes.
This is the second bank in the international banking sector to have
its license revoked in the last ten months, the report says. In
both cases, albeit for different reasons, the situations were made
untenable due to actions that originated outside of Belize, the
report discloses.
"The Central Bank reminds the public that it has a mandate to
protect depositors and it is taking steps to do so. Further, the
Central Bank continues to be extremely vigilant in its oversight
responsibilities to ensure that Belize's financial sector remains
vibrant," the Central Bank statement said, the report adds.
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B R A Z I L
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AVIANCA BRASIL: Azul No Longer Bidding for Firm's Routes
--------------------------------------------------------
Aluisio Alves at Reuters reports that John Rodgerson, chief
executive of Brazilian carrier Azul SA, told a news conference that
the airline is no longer bidding for routes operated by Avianca
Brasil, which filed for bankruptcy protection in December.
In March, Azul unveiled a non-binding agreement worth $105 million
to buy certain assets of Avianca, according to Reuters.
Since then, Azul's competitors LATAM Airlines Group SA and Gol
Linhas Aereas Inteligentes SA have presented rival offers after
both were approached by hedge fund Elliott Management, Avianca
Brasil's largest creditor, soliciting bids, the report adds.
About Avianca Brasil
Avianca Brazil, officially Oceanair Linhas Aereas S/A, is a
Brazilian airline based in Sao Paulo, Brazil. It operates passenger
services from more than 20 destinations. It is hailed as the
fourth largest airline in Brazil. Synergy Group is the parent
company of Avianca Brazil.
On December 10, 2018, Avianca Brazil filed for bankruptcy when
three lessors took a move to gain possession of 30% of the
airline's 50 all-Airbus fleet. The airline further blamed high
fuel prices and a strong dollar for its troubles. The airline
noted at that time that flights won't be affected.
BRAZIL: Waves of Trash Expose Rio's Environmental Deterioration
---------------------------------------------------------------
EFE News reports that in Rio de Janeiro, one of the most
spectacular cities on the planet, the soundtrack has changed. It
has gone from samba rhythms to the clash of glass and plastic
objects carried by the waves, the result of an alarming level of
pollution, according to EFE News.
When visiting Guanabara Bay, one hears a melody that recalls the
ringing of bells, the report notes. However, what at first may
seem like a pleasant sound becomes hair-raising upon discovering
that the music comes from a vast amount of pollution that
eventually piles up on the shore, the report adds.
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.
USINA DE ACUCAR: Chapter 15 Case Summary
----------------------------------------
Two affiliates that filed voluntary petitions seeking relief under
Chapter 15 of the Bankruptcy Code:
Chapter 15 Debtor Case No.
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Usina De Acucar Santa Terezinha Ltda. 19-11199
Avenida Pioneiro Victrio Marcon, 693
Parque Industrial II
Maringa, PR 87065-120
Brazil
USACIGA - Acucar, Alcool e 19-11200
Energia Eletrica Ltda.
Avenida Pioneiro Victrio Marcon, 693
Parque Industrial II
Maring, PR 87065-120
Business Description: Usina De Acucar Santa Terezinha Ltda.
manufactures and markets sugar and
ethanol products. Usina de Acucar
Santa Terezinha, a limited society,
was constituted in the early 60's.
Visit https://www.usacucar.com.br for
more information.
Chapter 15 Petition Date: April 18, 2019
Court: United States Bankruptcy Court
Southern District of New York
(Manhattan)
Judge: Hon. Michael E. Wiles
Chapter 15 Petitioner: Andrew B. Janszky
Rua Nova Cidade, 147, atp. 171
Vila Olimpia, SP, 04547-070
Foreign Proceeding in
Which Appointment of
the Foreign Representatives
Occurred: Recuperacao Judicial ("RJ"), Pending
in the 4th Civil Court of the
Judicial District of Maringa, State
of Parana, Brazil
Chapter 15 Petitioner's
Counsel: Lauren C. Doyle, Esq.
Abhilash M. Raval, Esq.
Dennis C. O'Donnell, Esq.
MILBANK LLP
55 Hudson Yards
New York, NY 10001
Tel: 212-530-5053
212-530-5000
E-mail: ldoyle@milbank.com
araval@milbank.com
dodonnell@milbank.com
- and -
Fabiana Y. Sakai, Esq.
MILBANK LLP
Rua Colombia, 325
CEP 01438-000
Sao Paulo, SP
Brazil
Tel: +55 11.3927.7781
E-mail: fsakai@milbank.com
Estimated Assets: Unknown
Estimated Debts: Unknown
The full-text copies of the petitions are available for free at:
http://bankrupt.com/misc/nysb19-11199.pdf
http://bankrupt.com/misc/nysb19-11200.pdf
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M E X I C O
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GORE FREIGHT COMPANY: Hires Garza & Morales, L.C. as Accountant
---------------------------------------------------------------
Gore Freight Company, LLC, seeks authority from the U.S. Bankruptcy
Court for the Southern District of Texas to employ Arnoldo Diaz,
CPA, of Garza & Morales, L.C., utilized in the Ordinary Course of
Business, as accountant.
The OCP has agreed to charge Debtor approximately $370.00 monthly
for the accounting services related to:
(i) the quarterly reports prepared and filed with the IRS;
(ii) the quarterly reports prepared and filed with the Texas
Workforce Commission;
(iii) preparation of the IRS forms 1099; and,
(iv) annual tax returns for the IRS and the Texas Comptroller.
The fee for the annual tax return generally totals $3,350.00.
Arnoldo Diaz, CPA, assures the court the he does not have any
interests that are materially adverse to the Debtor, its creditors,
or other parties in interest.
The firm can be reached at:
Arnoldo Diaz, CPA
Garza & Morales, L.C.
817 Chicago Avenue
Mcallen, TX 78501
Phone: (956) 687-6216
Web: www.garzamorales.com
About Gore Freight Company
Gore Freight Company, LLC is a general freight trucking company
specializing in the delivery and shipments between Mexico, the
United States, and Canada. The Company offers door-to-door
delivery, cross-border shipping, fleet service, trans-loading,
bonded freight services, and cross-docking.
http://www.gorefreight.com/
Gore Freight Company, LLC, based in San Juan, TX, filed a Chapter
11 petition (Bankr. S.D. Tex. Case No. 19-70090) on March 20,
2019.
In the petition signed by Eduardo Castano, member, the Debtor
disclosed $2,241,213 in assets and $1,917,084 in liabilities. The
Hon. Eduardo V. Rodriguez oversees the case. Jana Smith Whitworth,
Esq., at JS Whitworth Law Firm, serves as bankruptcy counsel.
GORE FREIGHT COMPANY: Taps Ballesteros Gonzalez as Special Counsel
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Gore Freight Company, LLC, seeks authority from the U.S. Bankruptcy
Court for the Southern District of Texas to employ Ballesteros
Gonzalez Law as special litigation counsel.
Ballesteros Gonzalez will represent the Debtor in three pending
state court lawsuits:
(i) Cause C-0966-18-H, styled Volvo Financial Services,
A Division of VFS US LLC v. Gore Freight Company, LLC and
Manuel Gomez, In the 389th District Court for Hidalgo
County, Texas;
(ii) Cause C-0308-18-J styled Transportation Alliance Bank,
Inc. v. Gore Freight Company, LLC and Manuel Gomez in the
430th Judicial District Court for Hidalgo County, Texas);
and
(iii) Cause CL-18-1481-F styled Jose I. Bugarin v. Gore Freight
Company, LLC , In County Court No. 6 for Hidalgo County,
Texas.
Professional services to be rendered by the counsel are:
-- prepare and file such pleadings as are necessary to defend
Debtor in the State Court Lawsuits: in both (i) the
underlying state court actions and, if removed to bankruptcy
court, (ii) the continued litigation in bankruptcy court;
-- assist the Debtor in analyzing/prosecuting/etc.
counter-claims owned by the estate against third parties;
-- prepare and file such pleadings as are necessary to pursue
the estate's claims against third parties (including
counter-claims);
-- conduct appropriate examinations of witnesses, claimants and
other parties in interest in connection with such litigation
and any claims arising from the State Court Lawsuits;
-- represent the Debtor in any proceedings before the Court and
in any other judicial or administrative proceeding in which
the claims asserted in the State Court Lawsuits may be
affected;
-- collect any judgment that may be entered in the contemplated
litigation;
-- handle any appeals that may result from the contemplated
litigation;
-- perform any other legal services that may be appropriate in
connection with the Debtor's defense and/or counter-claims
in the State Court Lawsuits.
The counsel's standard hourly charges are:
Alejandro Ballesteros $300.00
Andres Ramos $300.00
Legal Assistants $100.00
Alejandro Ballesteros, principal of Ballesteros Gonzalez Law Firm,
attests that he and his firm are "disinterested persons" within the
definition of Section 101(14) of the Bankruptcy Code on the matters
for which it is to be engaged as special counsel.
The counsel can be reached at:
Alejandro Ballesteros Gonzalez, Esq.
Ballesteros Gonzalez Law
3900 N 10th St #980
McAllen, TX 78501
Phone: +1 956-800-4418
About Gore Freight Company
Gore Freight Company, LLC is a general freight trucking company
specializing in the delivery and shipments between Mexico, the
United States, and Canada. The Company offers door-to-door
delivery, cross-border shipping, fleet service, trans-loading,
bonded freight services, and cross-docking.
http://www.gorefreight.com/
Gore Freight Company, LLC, based in San Juan, TX, filed a Chapter
11 petition (Bankr. S.D. Tex. Case No. 19-70090) on March 20,
2019.
In the petition signed by Eduardo Castano, member, the Debtor
disclosed $2,241,213 in assets and $1,917,084 in liabilities. The
Hon. Eduardo V. Rodriguez oversees the case. Jana Smith Whitworth,
Esq., at JS Whitworth Law Firm, serves as bankruptcy counsel.
=====================
P U E R T O R I C O
=====================
PUERTO RICO: Banks Ordered to Disclose Bondholder Info to Board
---------------------------------------------------------------
Luis Valentin Ortiz at Reuters reports that a judge ordered banks
to comply with a request from Puerto Rico's federally created
financial oversight board to disclose customer information related
to certain debt issued by the bankrupt U.S. commonwealth.
The ruling boosts a potential effort by the board to recover
billions of dollars in payments made to bondholders should a
federal court hearing Puerto Rico's bankruptcy cases choose to
invalidate disputed debt issued by the government and its agencies,
according to Reuters.
U.S. Magistrate Judge Judith Gail Dein's order said "good cause
exists" to grant the board's motion, which seeks to compel banks to
submit bondholder names and addresses along with Puerto Rico debt
payments the bondholders received between 2013 and 2017, the report
notes.
The report relays that the Bank of New York Mellon, Bank of America
Corp, JP Morgan Chase Bank, and U.S. Bank objected to the board's
request, citing concerns over disclosing confidential customer
information, as well as the cost and ability to produce a large
amount of information by the April 19 deadline set by the board.
The judge ordered the banks and the board to submit a proposed
confidentiality agreement by April 23 and set rolling deadlines of
April 25, April 30 and May 8 for the banks to submit bondholder
information, the report says. She rejected requests by the banks
to be reimbursed for their costs and for indemnity for claims that
could result from compliance with the order, the report discloses.
It was unclear whether the banks will appeal. Attorneys for the
banks either declined to comment or could not immediately be
reached.
The report notes that the quest for bondholder information is
related to an attempt by the board and some creditor groups in the
bankruptcy to have the federal court void more than $6 billion of
defaulted general obligation (GO) bonds sold in 2012 and 2014, as
well as debt issued by Puerto Rico's Public Buildings Authority and
bonds sold for the island's Employees Retirement System.
The board filed bankruptcy for the island in May 2017 to
restructure about $120 billion of debt and pension obligations, the
report says. But it did not seek to void the GO bonds on the basis
they were issued in violation of debt limits in the Puerto Rico
Constitution until January 2019, just months before the statute of
limitations on bringing such actions runs out in early May, the
report relays.
U.S. District Court Judge Laura Taylor Swain is scheduled to take
up the board's motion to extend that deadline at an April 24
hearing, the report adds.
About Puerto Rico
Puerto Rico is a self-governing commonwealth in association with
the United States that's facing a massive bond debt of $70 billion,
a 68% debt-to-GDP ratio and negative economic growth in nine of the
last 10 years.
The Commonwealth of Puerto Rico has sought bankruptcy protection,
aiming to restructure its massive $74 billion debt-load and $49
billion in pension obligations.
The debt restructuring petition was filed by Puerto Rico's
financial oversight board in U.S. District Court in Puerto Rico
(Case No. 17-01578) on May 3, 2017, and was made under Title III of
2016's U.S. Congressional rescue law known as the Puerto Rico
Oversight, Management, and Economic Stability Act ('PROMESA').
The Financial Oversight and Management Board later commenced Title
III cases for the Puerto Rico Sales Tax Financing Corporation
(COFINA) on May 5, 2017, and the Employees Retirement System (ERS)
and the Puerto Rico Highways and Transportation Authority (HTA) on
May 21, 2017. On July 2, 2017, a Title III case was commenced for
the Puerto Rico Electric Power Authority ("PREPA").
U.S. Chief Justice John Roberts has appointed U.S. District Judge
Laura Taylor Swain to oversee the Title III cases. The Honorable
Judith Dein, a United States Magistrate Judge for the District of
Massachusetts, has been designated to preside over matters that may
be referred to her by Judge Swain, including discovery disputes,
and management of other pretrial proceedings.
Joint administration of the Title III cases, under Lead Case No.
17-3283, was granted on June 29, 2017.
The Oversight Board has hired as advisors, Proskauer Rose LLP and
O'Neill & Borges LLC as legal counsel, McKinsey & Co. as strategic
consultant, Citigroup Global Markets, as municipal investment
banker, and Ernst & Young, as financial advisor.
Martin J. Bienenstock, Esq., Scott K. Rutsky, Esq., and Philip M.
Abelson, Esq., of Proskauer Rose; and Hermann D. Bauer, Esq., at
O'Neill & Borges are on-board as attorneys.
McKinsey & Co. is the Board's strategic consultant, Ernst & Young
is the Board's financial advisor, and Citigroup Global Markets Inc.
is the Board's municipal investment banker.
Prime Clerk LLC is the claims and noticing agent. Prime Clerk
maintains a case web site at
https://cases.primeclerk.com/puertorico
Epiq Bankruptcy Solutions LLC is the service agent for ERS, HTA,
and PREPA.
O'Melveny & Myers LLP is counsel to the Commonwealth's Puerto Rico
Fiscal Agency and Financial Advisory Authority (AAFAF), the agency
responsible for negotiations with bondholders.
The Oversight Board named Professor Nancy B. Rapoport as fee
examiner and to chair a committee to review professionals' fees.
Bondholders' Attorneys
Kramer Levin Naftalis & Frankel LLP and Toro, Colon, Mullet, Rivera
& Sifre, P.S.C. and serve as counsel to the Mutual Fund Group,
comprised of mutual funds managed by Oppenheimer Funds, Inc., and
the First Puerto Rico Family of Funds, which collectively hold over
$4.4 billion of GO Bonds, COFINA Bonds, and other bonds issued by
Puerto Rico and other instrumentalities.
White & Case LLP and Lopez Sanchez & Pirillo LLC represent the UBS
Family of Funds and the Puerto Rico Family of Funds, which hold
$613.3 million in COFINA bonds.
Paul, Weiss, Rifkind, Wharton & Garrison LLP, Robbins, Russell,
Englert, Orseck, Untereiner & Sauber LLP, and Jimenez, Graffam &
Lausell are co-counsel to the ad hoc group of General Obligation
Bondholders, comprised of Aurelius Capital Management, LP, Autonomy
Capital (Jersey) LP, FCO Advisors LP, and Monarch Alternative
Capital LP.
Quinn Emanuel Urquhart & Sullivan, LLP and Reichard & Escalera are
co-counsel to the ad hoc coalition of holders of senior bonds
issued by COFINA, comprised of at least 30 institutional holders,
including Canyon Capital Advisors LLC and Varde Investment
Partners, L.P.
Correa Acevedo & Abesada Law Offices, P.S.C., is counsel to Canyon
Capital Advisors, LLC, River Canyon Fund Management, LLC, Davidson
Kempner Capital Management LP, OZ Management, LP, and OZ Management
II LP (the QTCB Noteholder Group).
Committees
The U.S. Trustee formed an official committee of retirees and an
official committee of unsecured creditors of the Commonwealth. The
Retiree Committee tapped Jenner & Block LLP and Bennazar, Garcia &
Milian, C.S.P., as its attorneys. The Creditors Committee tapped
Paul Hastings LLP and O'Neill & Gilmore LLC as counsel.
STONEMOR PARTNERS: Amends 2018 Long-Term Incentive Plan
-------------------------------------------------------
StoneMor GP LLC, the general partner of StoneMor Partners L.P.,
approved on March 27, 2019, the amendment and restatement of the
StoneMor Amended and Restated 2018 Long-Term Incentive Plan, which
was also renamed the StoneMor Amended and Restated 2019 Long-Term
Incentive Plan, in order to (i) increase the number of common units
of the Partnership reserved for delivery under the Restated Plan
and (ii) make certain other clarifying changes and updates to the
Restated Plan.
The Restated Plan provides for the grant, from time to time, at the
discretion of the board of directors of the General Partner or the
Compensation, Nominating and Governance, and Compliance Committee
of the Board, of equity-based incentive compensation awards.
Subject to adjustment in the event of certain transactions or
changes of capitalization in accordance with the Restated Plan,
4,000,000 common units of the Partnership have been reserved for
delivery pursuant to awards under the Restated Plan. Common units
subject to an award that is forfeited, cancelled, exercised,
settled in cash, or otherwise terminates or expires without
delivery of common units and common units withheld to satisfy the
withholding obligations with respect to an award will again be
available for delivery pursuant to other awards under the Restated
Plan.
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 $72.69 million for the year ended
Dec. 31, 2018, compared to a net loss of $75.15 million for the
year ended Dec. 31, 2017. As of Dec. 31, 2018, the Partnership had
$1.66 billion in total assets, $1.67 billion in total liabilities,
and a total partners' deficit of $6.57 million.
* * *
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 February 2019, S&P affirmed its 'CCC+' issuer credit rating on
StoneMor Partners LP. S&P said "The rating affirmation reflects
our view that StoneMor's capital structure is unsustainable and
reflects our expectation that the company will produce cash flow
deficits in 2019. However, we affirmed the rating because we
believe the company has sufficient liquidity over the next 12
months given the new bridge loan."
STONEMOR PARTNERS: Names Garry Herdler as Chief Financial Officer
-----------------------------------------------------------------
Garry P. Herdler has been appointed senior vice-president and chief
financial officer of StoneMor Partners L.P., effective April 15,
2019. Mr. Herdler will succeed Mark Miller, who is retiring from
the Partnership.
Mr. Herdler joins StoneMor with more than 25 years combined
experience as CFO, private equity management consultant, investment
banker, and as a KPMG CPA/CA and tax advisor. He has been a CFO of
six private equity owned firms, a global real estate firm, and a
NYSE-listed firm. He has a broad background as CFO in many
situations and sectors, including multi-channel retail, consumer
and health services, homebuilding, real estate, manufacturing, and
media. Most recently, Mr. Herdler was the chief financial officer
of QuadReal Property Group, a real estate investment, development
and management company headquartered in Vancouver, Canada, where he
led the financial integration of four firms with a C$27 billion
portfolio across 17 countries. Prior to his CFO role at QuadReal,
Mr. Herdler was a senior director in the Private Equity Performance
Improvement Group of Alvarez & Marsal Consultants in New York.
Previously, Mr. Herdler acted as a financial consultant and CFO for
various private equity-owned companies, responsible for operational
improvements, business integration and turnarounds. He also has
nearly ten years of investment banking experience in leveraged
finance and equities with Deutsche Bank Securities/Bankers Trust
and CIBC World Markets, primarily in New York, where he completed
transactions in several industries, including deathcare.
"Our company is very fortunate to have someone of Garry's caliber
and operational experience join our team," said Joe Redling,
StoneMor's president and chief executive officer. "We look forward
to utilizing his broad experience assisting companies through
periods of high change, operational improvement, integration and
turnaround. His experience in leveraged debt capital markets and
equities, as well as his previous deathcare experience with the
$850 million credit facility and notes offering to refinance
Stewart Enterprises, will be especially valuable as we navigate the
refinancing of our own credit facility," added Redling. "We are
also grateful to outgoing CFO, Mark Miller, for his efforts during
his time at StoneMor, and we wish him all the best in his
retirement," said Redling.
"I am looking forward to partner with Joe, the StoneMor team, and
the Board to achieve the Partnership's objectives," said Mr.
Herdler. "Our goal is to focus on capital structure, strategic
balance sheet/portfolio review, and performance improvements from
cost reduction and revenue enhancements. Most importantly, I
respect the sensitive and important nature of the care StoneMor
provides, and ultimately this is also about improving the services
we bring to the families and people that we serve."
"I'm very pleased with the management team we now have in place,"
Redling said. "In combination with the recent actions we've taken
to drive efficiencies and improve profitability, I'm confident that
we are putting in place the necessary foundation to better position
StoneMor for future opportunities."
In connection with Mr. Herdler's appointment, StoneMor GP and Mr.
Herdler entered into an employment agreement on April 10, 2019.
The Employment Agreement provides that Mr. Herdler's employment
with StoneMor GP as senior vice president and chief financial
officer commenced on the Effective Date and will continue unless
terminated by either party. The Employment Agreement also provides
that Mr. Herdler will have such duties and authority as are
customarily associated with such position in similarly sized
companies, and such other duties, authority and responsibilities as
otherwise determined from time to time by StoneMor GP's chief
executive officer or Board of Directors that are not inconsistent
with his position with StoneMor GP. Mr. Herdler will report
directly to the CEO.
Mr. Herdler's initial base salary under the Employment Agreement is
$450,000 per year, which base salary will be subject to annual
review by the Board. Any decrease in base salary will be made only
to the extent StoneMor GP contemporaneously and proportionately
decreases the base salaries of all of its senior executives.
The Employment Agreement provides that Mr. Herdler will be entitled
to receive an annual incentive cash bonus with respect to each
calendar year, provided that he will not be eligible to receive
such bonus if he is not employed on the last day of the fiscal year
to which such bonus relates. The amount of the cash bonus will be
targeted at 75% of his base salary with respect to the applicable
calendar year, will not be prorated for 2019 and will be based on
specific, individual and StoneMor GP goals set by the Compensation
Committee of the Board. Mr. Herdler will be entitled to a minimum
incentive cash bonus for 2019 of $202,500 (less any taxes and other
applicable withholdings) that will be payable in three equal
installments on July 1, September 1 and December 1, 2019 provided
he remains employed on the applicable payment date.
Pursuant to the Employment Agreement, Mr. Herdler was awarded a
grant of 275,000 restricted common units of the Partnership.
The Employment Agreement provides that StoneMor GP will reimburse
Mr. Herdler for the cost of a supplemental directors' and officers'
insurance policy for up to $5,000,000 in aggregate coverage and
will pay up to $10,000 in attorneys' fees incurred by Mr. Herdler
in connection with the review, negotiation and documentation of the
agreement, upon presentation of appropriate receipts for those
fees.
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 $72.69 million for the year ended
Dec. 31, 2018, compared to a net loss of $75.15 million for the
year ended Dec. 31, 2017. As of Dec. 31, 2018, the Partnership had
$1.66 billion in total assets, $1.67 billion in total liabilities,
and a total partners' deficit of $6.57 million.
* * *
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 February 2019, S&P affirmed its 'CCC+' issuer credit rating on
StoneMor Partners LP. S&P said "The rating affirmation reflects
our view that StoneMor's capital structure is unsustainable and
reflects our expectation that the company will produce cash flow
deficits in 2019. However, we affirmed the rating because we
believe the company has sufficient liquidity over the next 12
months given the new bridge loan."
=====================================
T R I N I D A D A N D T O B A G O
=====================================
TRINIDAD & TOBAGO: Venezuelans Registration Set for May 31-June 14
------------------------------------------------------------------
Asha Javeed at Trinidad Express reports that Trinidad and Tobago's
decision to register Venezuelan migrants from May 31 to June 14
will allow more Venezuelans to work legally in the country.
President of the Trinidad and Tobago Manufacturer's Association
(TTMA) Franka Costelloe has already indicated her organization's
willingness to employ people who want to work and, in her view, the
country can have a bilingual workforce, according to Trinidad
Express.
===========================
V I R G I N I S L A N D S
===========================
ZHONGRONG INT'L: S&P Places 'BB-' ICR on Credit Watch Negative
--------------------------------------------------------------
S&P Global Ratings said it has placed its 'BB-' long-term and 'B'
short-term issuer credit ratings on Zhongrong International
Holdings Ltd. (Zhongrong BVI) and the 'BB-' long-term issue rating
on its guaranteed notes on CreditWatch with negative implications.
At the same time, S&P withdraw the recovery rating on the
guaranteed notes.
S&P s aid, "We placed the ratings on CreditWatch following reduced
and slower capital injections by Zhongrong BVI's parent than we
expected. In our view, this indicates some pressure on the high
likelihood of parental support we factor into our ratings on the
company. We also see risks in the company's refinancing of its
guaranteed bonds due in June 2019."
Before the latest pending infusion, Zhongrong BVI has not received
any capital injections from its parent, Zhongrong International
Trust Co. Ltd. (Zhongrong Trust), in the past two years. Similar to
other parent companies in China, the size of capital injection into
overseas subsidiaries is subject to regulatory constraints.
S&P said, "We continue to see Zhongrong BVI as a highly strategic
subsidiary of Zhongrong Trust and rate the company only one notch
below the parent's unsupported group credit profile (GCP) of 'bb'.
We therefore believe Zhongrong Trust will support Zhongrong BVI's
timely repayment of debt under almost all foreseeable
circumstances.
"We expect Zhongrong BVI to refinance its guaranteed notes of
US$415 million due on June 21, 2019. In doing so, the company will
continue to benefit from Zhongrong Trust's franchise and investor
relations. However, the success of this refinancing is subject to
market conditions and investor appetite.
"Zhongrong BVI will need to rely on refinancing or parent support
to fully repay its outstanding liabilities, in our opinion. The
company maintains a substantial cash position, but it is
significantly less than the amount of guaranteed notes due in June.
Zhongrong BVI will also take time to turn over its receivables. In
our view, the company is highly leveraged and thinly capitalized.
The company reported a significant decline in profitability in 2018
and is vulnerable to investment losses and valuation changes on its
investment portfolio.
"We withdraw the recovery rating on the company's guaranteed notes
because we now view Zhongrong BVI as a nonbank financial
institution. The company mainly operates short-term financing,
investment, and securities businesses, rather than the asset
management business Zhongrong Trust engages in.
"We expect to resolve the CreditWatch placement within the next
three months after we see higher certainty of Zhongrong BVI's
refinancing and likelihood of parent group support. We will
consider the company's business and financial prospects after the
latest pending capital injection.
"We could lower the ratings on Zhongrong BVI by at least two
notches if the company fails to secure refinancing within a few
weeks and is unable to obtain sufficient liquidity support by other
means. However, this is not our base case.
"We could downgrade Zhongrong BVI by one notch if the company
secures sufficient refinancing for notes due in June, but we see
reduced likelihood of parent support and continuing liquidity
pressure from the next round of maturities of outstanding
obligations.
"We could affirm the ratings if Zhongrong BVI can refinance its
guaranteed notes and continues to demonstrate features of a highly
strategic subsidiary of Zhongrong Trust. The company's
profitability prospects and integration with the parent's business
strategy, and the presence of an effective mechanism of timely
parent support would indicate such improvement."
*********
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
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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.
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* * * End of Transmission * * *