/raid1/www/Hosts/bankrupt/TCRLA

/raid1/www/Hosts/bankrupt/TCRLA_Public/190618.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, June 18, 2019, Vol. 20, No. 121 Headlines A R G E N T I N A [*] ARGENTINA: Recovers Electricity After Massive Blackout B R A Z I L AVIANCA BRASIL: Court Allows Carrier to Hold Bankruptcy Auction BRAZIL: General Strike Presents Mixed Picture GRAPHIC PACKAGING: Moody's Rates New $300MM Unsecured Notes 'Ba2' JBS SA: To Increase Capacity at Ituiutaba Site RUMO SA: Fitch Hikes LongTerm IDR to 'BB+', Outlook Stable SONAE SIERRA: Moody's Affirms Ba2 Global Scale CFR, Outlook Stable C A Y M A N I S L A N D S WHITE OAK: Chapter 15 Case Summary ZHENRO PROPERTIES: Moody's Rates Proposed USD Perpetual Notes 'B2' C O L O M B I A AVIANCA HOLDINGS: Fitch Lowers LT IDRs to 'B-', On Watch Negative J A M A I C A JAMAICA: Improved Economic Growth in FY2018/19, IMF Says V E N E Z U E L A PETROLEOS DE VENEUELA: Guaido Asks Jamaica Not To Seize Shares X X X X X X X X KIDOZ INC: Losses, Accumulated Deficit Cast Going Concern Doubt - - - - - ================= A R G E N T I N A ================= [*] ARGENTINA: Recovers Electricity After Massive Blackout ---------------------------------------------------------- EFE News reports that Argentines woke to a massive blackout on June 16 -- when the country was both celebrating Father's Day and four provinces were holding elections -- but electricity was gradually and almost fully restored during the course of the day and authorities have launched an investigation of the disruptive incident. A "collapse" in the Argentine Interconnection System (SADI) caused the "massive outage in electric energy" across Argentina and Uruguay, the Energy Secretariat said, according to EFE News. As reported in the Troubled Company Reporter-Latin America, S&P Global Ratings in June 2018 affirmed its 'B+' long-term sovereign credit ratings on the Republic of Argentina. S&P's long-term sovereign credit ratings on Argentina was raise to 'B+' from 'B' in October 2017. The outlook on the long-term ratings remains stable. In May 2018, Fitch Ratings affirmed Argentina's Long-Term Foreign-Currency Issuer Default Rating (IDR) at 'B' and revised the Outlook to Stable from Positive. In December 2017, Moody's Investors Service upgraded the Government of Argentina's local and foreign currency issuer and senior unsecured ratings to B2 from B3. The senior unsecured shelves were upgraded to (P)B2 from (P)B3. The outlook on the ratings is stable. At the same time, Argentina's short-term rating was affirmed at Not Prime (NP). The senior unsecured ratings for unrestructured debt were affirmed at Ca and the unrestructured senior unsecured shelf affirmed at (P)Ca. Moody's said the key drivers of the upgrade of the rating to B2 are: (1) a record of macro-economic reforms that are beginning to address long existing distortions in Argentina's economy; and (2) the likelihood that reforms will continue and in turn sustain the recent return to positive economic growth. The stable outlook on Argentina's B2 ratings balances Argentina's credit strengths of its large, diverse economy and moderate income levels against the credit challenges posed by still high fiscal deficits and a reliance on external financing, which increases its vulnerability to external event risk, said Moody's. Back in July 2014, Argentina defaulted on some of its debt, after expiration of a 30-day grace period on a US$539 million interest payment. Earlier that day, talks with a court-appointed mediator ended without resolving a standoff between the country and a group of hedge funds seeking full payment on bonds that the country had defaulted on in 2001. A U.S. judge had ruled that the interest payment couldn't be made unless the hedge funds led by Elliott Management Corp., got the US$1.5 billion they claimed. The country hasn't been able to access international credit markets since its US$95 billion default 13 years ago. On March 30, 2016, Argentina's Congress passed a bill that will allow the government to repay holders of debt that the South American country defaulted on in 2001, including a group of litigating hedge funds that won judgments in a New York court. The bill passed by a vote of 54-16. =========== B R A Z I L =========== AVIANCA BRASIL: Court Allows Carrier to Hold Bankruptcy Auction --------------------------------------------------------------- Marcelo Rochabrun at Reuters reports that a Brazilian appeals court ruled that airline Avianca Brasil should be allowed to hold a bankruptcy auction in which it is expected to sell its most coveted airport landing and departure rights. The bankruptcy auction had been originally scheduled for early May, but was suspended at the last minute after an injunction was issued, according to Reuters. Avianca Brasil filed for bankruptcy protection in December after falling behind on lease payments for its fleet and fell victim to high oil prices and a weak local currency, the report relays. Avianca Brasil has been reducing its operations and lost nearly all of its Airbus planes by April, the report notes. Brazil's civil aviation regulator ANAC suspended all remaining activity in late May. The airline has not flown since, the report says. Avianca Brasil's largest creditor is U.S. hedge fund Elliott Management, with claims of around $500 million, the report relays. The carrier is controlled by the Efromovich family, whose aviation businesses have been battered recently. German Efromovich was ousted as chairman of Colombia-based Avianca Holdings SA in a boardroom shakeup led by United Airlines, which has lent millions to Efromovich's companies, the report discloses. 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: General Strike Presents Mixed Picture --------------------------------------------- Latinx Today reports that events took place in each of Brazil's 27 states as a part of a general strike called by unions against right-wing President Jair Bolsonaro's plan to cut pensions, but the material impact of the mobilization varied widely by location and economic sector. Roughly 45 million workers heeded the call to walk off the job, the unions said, according to Latinx Today. While many businesses were unaffected, most teachers joined the strike and public transportation was sharply curtailed in hundreds of municipalities in 19 states, the report relays. The morning hours saw isolated incidents surrounding protests. The report notes that in Niteroi, a suburb of Rio de Janeiro, a motorist drove his vehicle into a group of demonstrators, while militants in Sao Paulo set a car on fire to block a street, prompting police to respond with stun grenades. As evening approached, thousands of people gathered in Sao Paulo's financial district for a peaceful protest that addressed not only the proposed pension reforms but other grievances, including the 2018 assassination of leftist Rio city councilor Marielle Franco, amid a general rejection of Bolsonaro, the report says. The crowd in Sao Paulo also demanded the release from prison of former two-term President Luiz Inacio Lula da Silva, whose 2017 conviction for corruption has been called into question with the publication of messages showing bias on the part of Judge Sergio Moro, who is now justice minister, the report relays. The biggest concentration of protesters was around the Candelaria Church in Rio de Janeiro, the report notes. The event unfolded peacefully when police used stun grenades to disperse a large group of protesters, the report says. June 14 marked the unions' first direct challenge to Bolsonaro, whose tenure, which began Jan. 1, has been shaped by scandals and a seeming lack of coordination on the policy front, the report relays. To make matters worse, Brazil's economy seems on the verge of falling into recession. Brazilian gross domestic product (GDP) plunged nearly 7 percent in 2015-2016, but growth resumed in 2017, albeit at a modest annual rate of 1 percent, the report discloses. After gaining 1 percent again last year, GDP inched up 0.5 percent in the first quarter of 2019 and more than 13 million Brazilians are unemployed, the report adds. As reported in the Troubled Company Reporter-Latin America on May 27, 2019, Fitch Ratings has affirmed Brazil's Long-Term Foreign-Currency Issuer Default Rating (IDR) at 'BB-' with a Stable Outlook. GRAPHIC PACKAGING: Moody's Rates New $300MM Unsecured Notes 'Ba2' ----------------------------------------------------------------- Moody's Investors Service assigned a Ba2 rating to Graphic Packaging International, LLC's new $300 million senior unsecured notes due in 2027. The proceeds of the note offering will be used to repay a portion of the revolver borrowings and fund transaction related fees and expenses. At the same time, Moody's affirmed the company's existing ratings, including the Ba1 Corporate Family Rating, Ba1-PD Probability of Default Rating, Baa3 senior secured bank credit facility rating, Ba2 senior unsecured rating and the SGL-2 Speculative Grade Liquidity Rating. The outlook remains stable. Assignments: Issuer: Graphic Packaging International, LLC Senior Unsecured Regular Bond/Debenture, Assigned Ba2 (LGD5) Outlook Actions: Issuer: Graphic Packaging International, LLC Outlook, Remains Stable Affirmations: Issuer: Graphic Packaging International, LLC Probability of Default Rating, Affirmed Ba1-PD Speculative Grade Liquidity Rating, Affirmed SGL-2 Corporate Family Rating, Affirmed Ba1 Senior Secured Revolving Credit Facility, Affirmed Baa3 (LGD2 from LGD3) Senior Secured Term Loan A, Affirmed Baa3 (LGD2 from LGD3) Gtd. Senior Unsecured Regular Bond/Debenture, Affirmed Ba2 (LGD5) RATINGS RATIONALE The Ba1 CFR is supported by Graphic Packaging's scale, its leading market position in a consolidated industry, modest leverage (Debt/EBITDA of 3.4x in the twelve months ended March 31, 2019 on a Moody's adjusted basis) and strong cash flow generation (RCF/Debt above 21%). Graphic Packaging is the largest North American producer of coated unbleached kraft (CUK) paperboard and coated recycled paperboard (CRB) and the second largest producer of solid bleached sulfate (SBS) board. The company has the largest network of converting plants among North American paperboard producers, converts 71% of the board it produces and passes through cost increases on a contractual basis, albeit with a lag. The rating is constrained by exposure to volatile recycled fiber costs and low organic volume growth. The rating reflects Moody's expectations that Graphic Packaging will continue to increase vertical integration in the SBS consumer packaging business through acquisitions or use free cash flow to buy back shares rather than further reducing debt. The rating also reflects its expectations that leverage metrics will remain near current levels if International Paper Company (IP, Baa2 stable) decides to start monetizing its shares in the combined company in 2020.Under the terms of the current agreement, IP can monetize up to $250 million worth of its holding at a time and has to wait six months between each request to monetize its stake. IP can receive the proceeds in either cash or stock at Graphic Packaging's option. Assuming an all cash payment, Graphic Packaging's leverage could increase half a turn if IP exercises its right twice in one year. The rating reflects expectations that the company would slow down share repurchases to return metrics within its own stated net leverage target of 2.5-3.0x if leverage increases as a result of the IP transaction. Graphic Packaging's SGL-2 speculative grade liquidity rating indicates good liquidity. The company maintains low cash balances and relies on internally generated cash and a large revolver for its liquidity. Graphic Packaging had approximately $62 million of cash on hand as of March 2019, which was mostly located in foreign jurisdictions. Internal cash generation is supported by a significant amount of NOLs (approximately $168 million as of December 31, 2018). Graphic Packaging is not expected to become a meaningful federal cash taxpayer until 2021. The company had over $880 million of availability under its $1.45 billion U.S. senior secured revolving credit facility. The company intends to use the proceeds from the proposed $300 million note offering to repay a portion of its revolver borrowings. The revolver and a $800 million term loan mature in 2023 along with assumed $660 million term loan from IP. The nearest maturity is $425 million of notes due in 2021. The company's amended and extended senior credit agreement has a total leverage ratio covenant of 4.25 times as well as an interest coverage covenant of 3 times. Moody's expects the company will remain in compliance with its debt covenants over the next 12 months. The senior secured revolver and the senior secured term loans are rated Baa3 (one notch above the Ba1 CFR), reflecting their preferential position in the capital structure and the loss absorption cushion provided by the unsecured notes and other unsecured obligations. The secured facilities are secured and guaranteed by all significant domestic operating subsidiaries. The company's unsecured notes are rated Ba2, one notch below the Ba1 CFR, due to the effective subordination to the sizable senior secured debt. The new senior unsecured notes will be guaranteed by Graphic Packaging International Partners, LLC, a holding company that owns the obligor and operating subsidiaries. The existing senior unsecured notes are guaranteed by Graphic Packaging Holding Company, another holding company. Moody's views guarantees as similar and rates both new and existing unsecured notes the same. The stable outlook reflects expectations that Graphic Packaging will benefit from implemented price increases and maintain strong credit metrics over the next 12 to 18 months. For the ratings to be upgraded to the investment grade level, the company's management would need to publicly commit to maintaining investment-grade financial policies and achieve an unsecured capital structure. The company would also need to maintain debt/EBITDA below 3 times (3.4x as of March 31, 2019), maintain EBITDA margin above 16% (16.8% as of March 31, 2019) and retained cash flow to debt above 20% (21.2% as of March 31, 2019).The ratings could be downgraded if operating performance and credit metrics deteriorate such as debt/EBITDA rises to 4 times and retained cash flow to debt falls below 15%. The ratings could also be downgraded if the company undertakes a large debt-financed acquisition or shareholder-friendly actions that significantly increases its leverage. The principal methodology used in these ratings was Paper and Forest Products Industry published in October 2018. Headquartered in Atlanta, GA, Graphic Packaging is one of North America's leading manufacturers of CUK, CRB and SBS paperboard packaging for food, food service, beverages and consumer goods. Graphic Packaging operates 8 paperboard mills that produce 3.8 million tons of boxboard, including approximately 1.5 million tons of CUK, roughly 1 million tons of CRB, 1.2 million tons of SBS and roughly 100,000 tons of corrugated medium. The company has over 65 converting plants in North America, Brazil, Europe, Australia and New Zealand. Graphic Packaging Holding Company owns 78.8% of Graphic Packaging International, LLC and International Paper owns the rest of the company. Graphic Packaging generated sales of approximately $6 billion for the twelve months ended March 31, 2019. JBS SA: To Increase Capacity at Ituiutaba Site ---------------------------------------------- Aidan Fortune at Global Meat News reports that Brazilian processor JBS SA has invested BRL45 million in the expansion of its plant in Ituiutaba in Minas Gerais to help create 700 new jobs. The investment will enable the business to increase the production capacity of its Friboi unit by 50%, according to Global Meat News. JBS said it hoped the increased capacity would help the business to serve its main export markets, such as Europe, the Middle East, China and Chile, as well as the domestic market. The report notes that as part of the expansion, the business plans to modernize equipment and implement a project that allows a better flow to increase production, the report discloses. Due to the expansion, JBS will start a second shift of the work in the unit and, during the second half, will open 700 new jobs in the city, the report relays. In May, JBS USA announced it was to invest US$95 million in its Grand Island beef production facility in Nebraska, the report relays. In the same month, it outlined sustainability progress made over the past year, the report adds. As reported in the Troubled Company Reporter-Latin America on May 1, 2019, S&P Global Ratings affirmed its 'BB' global scale corporate credit ratings on JBS S.A. and JBS USA Lux S.A. and S&P's 'brAA-' national scale corporate credit rating on JBS. S&P also affirmed its 'BB' senior unsecured ratings on JBS and JBS USA. In addition, S&P raised senior secured debt ratings on JBS USA to 'BBB-' from 'BB'. S&P revised the recovery rating on this debt to '1', reflecting a very high (90%-100%) recovery, from '3'. Moreover, S&P revised its recovery rating on JBS USA's unsecured debt to '3', reflecting a meaningful (50%-70%; the lower band of the range) recovery, from '4'. Finally, S&P kept its recovery rating on JBS's unsecured debt at '4', reflecting an average (30%-50%; now in the lower band of the range) recovery, unchanged. RUMO SA: Fitch Hikes LongTerm IDR to 'BB+', Outlook Stable ---------------------------------------------------------- Fitch Ratings has upgraded Rumo S.A.'s Long-Term Local-Currency Issuer Default Rating to 'BB+' from 'BB'. In addition, Fitch has upgraded Rumo's National Long-Term Ratings, and its subsidiaries' and respective unsecured debentures ratings to 'AAA(bra)' from 'AA(bra)'. The Rating Outlook for the Local-Currency IDR and the National Long-Term Ratings has been revised to Stable from Positive. The Long-Term Foreign-Currency IDR and Rumo's unsecured bonds due in 2024 and 2025, which were issued by Rumo Luxembourg S.a.r.l., were affirmed at 'BB'. The Rating Outlook for the Long-Term Foreign-Currency IDR remains Stable. The rating upgrades are supported by Rumo's consistent scale gains, which have resulted in solid operating margins expansion and boosted operating cash flow generation. These factors led to a strong capital structure that, combined with the robust liquidity position and consistent access to long-term credit lines, positively prepared the company to face the challenges of financing the new cycle of important investments, while maintaining its robust financial profile. The upgrades also factor Fitch's forecast that the investments into Ferrovia Norte Sul (FNS) are likely to benefit Rumo's business profile starting in 2022. This includes the stronger penetration of its rail net and the consolidation of the company's presence in the mid-western region of the country, with solid long-term growth perspectives, leading to important opportunities to capturing increasing volumes of transportation. Rumo's Foreign-Currency IDR is constrained by Brazil's 'BB' Country Ceiling. Rumo's ratings are also supported by its solid business position as one of the largest railroad operators in Brazil, with competitive advantages compared with alternative transportation options, relatively high and stable operating profitability and strong cash flow generation capacity. In addition, the ratings consider the solid fundamentals of the industry, which include stable demand over the cycles. Factored into the rating is Fitch's expectation that Rumo will preserve its robust liquidity position during the challenging investment period, derived from the company's sound access to local and international debt and capital markets. Fitch sees Rumo's affiliation with Cosan Limited (BB/Stable) as credit positive, as it provides the company reasonable financial flexibility, illustrated by capital injections. The Stable Outlook for the Local-Currency IDR and the National Long-Term Rating is based on the expectations that Rumo will be able to manage its net debt/EBITDA consistent with its ratings, peaking at 2.5x-3.0x in 2021 and 2022, when capex is at the highest level. In addition, Fitch does not foresee constraints on Rumo's financial flexibility to support the expected negative free cash flow (FCF) in coming years. The Stable Outlook for the Foreign-Currency IDR mirrors the Outlook for the sovereign IDR. KEY RATING DRIVERS Business Profile Remains Strong: Fitch believes that the railroad sector's risk is low. Within this sector, Rumo enjoys a robust business position as the sole railroad transportation company in the south and mid-western regions of Brazil, with four concessions to operate railway lines extending more than 12,000km within Brazil, with access to three main Brazilian ports. Due to its lower cost structure, Rumo's businesses enjoy solid competitive advantages over truck services, which enhance consistent demand and limits volume volatilities over cycles. Fitch sees as credit positive Rumo's successful bid to operate the central stretch of FNS, which is linked with its rail network in Sao Paulo (Malha Paulista). The new stretch, when operational, is likely to increase the company's penetration in the central region of Brazil, which brings vast opportunities to capture large volumes of grains to be transported from Brazil's mid-western region to Santos Port. Business Environment is Solid: Rumo's operations benefit from the solid agricultural international trade flow in Brazil, which presents high growth potential. This fact reduces the risks of operating solely in one region, protecting the company's cash flow against the country's economic downturns. Rumo's strong demand is driven by consistent cargo volume, as demonstrated by the 56 billion revenue per ton kilometers (RTK), in 2018, which compares favorably versus 50 billion RTK in 2017. Fitch forecasted volumes to increase by 9%-11% from 2019 onwards, benefited by increased capacity provided by the recent investments. FCF Negative Should Persist: Fitch expects Rumo's EBITDA margins to slightly decline to about 47% in 2019 and 2020, after consistent improvements up to 49.7% in 2018, as pre-operational expenses of the newest concession contract start to kick in, thus offsetting the impact of solid gains of scale on its margins. Supported by volume expansion, Fitch projects Rumo's EBITDA and funds from operations (FFO) will reach BRL3.4 billion and BRL2.3 billion, respectively, in 2019. Nevertheless, pressures on the company's cash flow are expected to come from the new cycle of investments that will result from the addition of the FNS stretch to Rumo's portfolio, which will become fully operational only in 2022. The company's FCF is not expected to become positive before 2022, after capex of about BRL15 billion in the period, with a total of BRL5.0 billion in the next couple of years. Fitch anticipates that the early renewal of Rumo Malha Paulista S.A.'s concession contract, which will mature in 2028, does not have rating implications, as it is unlikely to result in material capex increases. Conservative Leverage for the Industry: Rumo's net debt/EBITDA ratio should remain below 3.0x in the coming years, despite of the higher capex, which is a low metric for the industry. The base case scenario considers gross and net leverage of 3.4x and 2.2x, respectively, in 2019. The peak should occur in 2021 and 2022, when large amounts of rolling assets will be financed under the FNS project. In the LTM ended March 31, 2019, total debt/EBITDA was 3.1 x and net debt/EBITDA was 2.3 x. Credit Linkage Incorporated: The ratings of Rumo and the subsidiaries are equalized, due to strong operational, financial and legal ties among them. The strong operating synergies, the centralized cash management and the cross guarantees on their debt permit the credit profile to be analyzed on a consolidated basis along with the ratings. DERIVATION SUMMARY Rumo's ratings reflect its strong business profile in the logistics infrastructure industry in Brazil, which enjoys positive perspectives. The railroad's low cost structure and Rumo's position as the sole railroad provider in its covered region provides important competitive advantages, allowing it to report consistent volume improvements and increasing operating cash flow generation while its operational capacity expands. A rating constrain is its business concentration in one country, as it only serves Brazil's agribusiness and industrial regions, like most of its Brazilian peers, but different from other railroads worldwide, which enjoy a more diversified covered region. The company's track record on generating strong cash generation and its ability to improve its credit metrics over the last three years are important credit factors that support Rumo's ratings. Rumo's ratings are positioned below Brazil's MRS S.A., rated 'BBB-'/Stable, which is the best-positioned railroad in the country, due to its consistent operating cash flow generation, flat operating margins, track record of positive FCF, low leverage and sound liquidity. Rumo's rating is constrained by the negative FCF expectation, derived from its large investment programs. Rumo's and MRS's ratings are below those of other mature, more geographically diversified and less leveraged rail companies in Mexico, the U.S. and Canada, like Kansas City Southern, which are generally rated in the mid 'BBB' to low 'A' range. Rumo's operating margins are in line with Brazilian peers but below levels achieved by railroads in the Northern hemisphere. Rumo's 'BB+' Local-Currency IDR is above that of Hidrovias do Brasil S.A. (HdB, BB/Stable), due to the railroad's ability to generate more stable operating cash flow and to finance the large investment to increase volumes. HdB's net leverage is higher than Rumo's, consistent with its still immature profile, based on predictable cash flow generation within the low competition cabotage business in Brazil, in the midterm. KEY ASSUMPTIONS Fitch's Key Assumptions Within Its Rating Case For The Issuer Include: -- Annual volume increases of 9% to 11% from 2019 and 2021; -- Additional 5 million RTK coming from FNS in 2022; -- Tariff increases in line with inflation rate expected for 2019 and 2020; -- Capex of BRL5.0 billion in the 2019-2022 period. RATING SENSITIVITIES Developments That May, Individually or Collectively, Lead to Positive Rating Action -- Net adjusted leverage trending below 2.5x, on a sustainable basis; -- Maintenance of strong liquidity and positive debt refinancing schedule; -- Consistent Positive FCF trends; -- Positive actions toward the sovereign rating may lead to positive actions regarding Rumo's Foreign-Currency IDR and the rating of its unsecured bonds, currently limited by the Brazilian Country Celling. Developments That May, Individually or Collectively, Lead to Negative Rating Action -- Inability to finance capex with long-term and low cost debt, putting pressure on debt amortization schedule; -- Substantial weakening of current EBITDA margin; -- Net adjusted leverage trends above 3.5x, on a sustainable basis. LIQUIDITY Sound Liquidity: Fitch understands Rumo's liquidity will remain strong and sustainable in the long-term, considering the financial flexibility the company has presented to finance its past capex plan. The agency anticipates Rumo's ability to raise funds with Banco Nacional de Desenvolvimento Economico e Social (BNDES) and other Brazilian foment entities, as well as national and international capital markets, should lead cash-to-short term debt to remain above 1.0x in the medium term, while the company presents negative FCF. The company has presented cash on hand above BRL2.5 billion and the liquidity coverage ratio has been above 1.5x since 2017. At the end of March 2019, Rumo's consolidated debt was BRL10.4 billion, mainly comprised of senior notes (BRL5.1 billion), BNDES debt (BRL3.6 billion) and debentures (BRL1.0 billion), with BRL1.2 billion on short-term debt covered by cash and equivalents of BRL2.7 billion by 2.3 x. FULL LIST OF RATING ACTIONS Rumo S.A. -- Long-Term Local-Currency IDR upgraded to 'BB+', from 'BB'; -- Long-Term Foreign-Currency IDR affirmed at 'BB'; -- National Scale Long-Term Rating upgraded to 'AAA(bra)' from 'AA(bra)'. Rumo Luxembourg S.a.r.l.: -- Senior unsecured notes due 2024 and 2025 affirmed at 'BB'. Rumo Malha Norte S.A. -- National Scale Rating upgraded to 'AAA(bra)' from 'AA(bra)'; -- BRL160 million 8th debentures issuance maturing in 2020 upgraded to 'AAA(bra)' from 'AA(bra)'. Rumo Malha Sul S.A. -- National Scale Rating upgraded to 'AAA(bra)' from 'AA(bra)'. Rumo Malha Paulista S.A. -- National Scale Rating upgraded to 'AAA(bra)', from 'AA(bra)'. The Outlook for the Local-Currency IDR and the National Scale ratings were revised to Stable from Positive. The Outlook of the Foreign-Currency IDR remains Stable, as Fitch expects the Foreign-Currency IDR to continue to be constrained by Brazil's 'BB' Country Ceiling. SONAE SIERRA: Moody's Affirms Ba2 Global Scale CFR, Outlook Stable ------------------------------------------------------------------ Moody's America Latina Ltda. placed Sonae Sierra Brasil S.A.'s Aa2.br national scale, corporate family rating under review for upgrade, following the June 7, 2019 announcement of the company entering into an agreement for a stock for stock merger (no cash or extraordinary dividend distribution) with Aliansce Shopping Center S.A, a local mall operator, to form Brazil's largest mall company, in terms of total gross leasable area (GLA) under management. In the same action, Moody's affirmed Sonae Sierra's Ba2 global scale, corporate family rating. The outlook remains stable. Sonae Sierra would benefit from the merger with increased scale, revenue and earnings diversification, and greater financial flexibility from higher operating cash flows. Additionally, there is potential revenue benefit from new development and redevelopment opportunities in the combined portfolio. Aliansce Sonae's portfolio will comprise 40 malls (29 owned and 11 managed) with approximately 7,000 stores and 1.44 million square meters (m2) of total GLA under management across 12 states and the Federal District. In aggregate, gross assets will almost double to approximately R$10 billion, compared to Sonae's reported R$5.56 billion, as of the first quarter of 2019. However, pro forma debt to gross assets and net debt to EBITDA are expected to increase to 25% and 2.7x, respectively, based on the last twelve months ending on March 31, 2019, compared to Sonae's 14% and net debt 2.2x, for the same period. These pro forma leverage metrics would still be within the company's credit profile. To date, the management teams for both companies have established a proven record in retail and development as well as have aggregated or developed a good-quality, resilient mall portfolio. Additionally, the new company will receive strong sponsorship from the Canadian Pension Plan Investment Board ("CPPIB"), the Alexander Otto Group and Sonae Sierra SGPS. Subject to shareholder and regulatory approval, the formation of Aliansce Sonae is expected to be completed before the end of 2019. The following rating for Sonae Sierra was placed on review for upgrade: -- Corporate Family Rating (National scale) currently at Aa2.br, outlook Rating Under Review The following rating for Sonae Sierra was affirmed: -- Corporate Family Rating at Ba2 (Global scale) RATINGS RATIONALE Sonae Sierra Brasil's Ba2 (global scale) / Aa2.br (national scale) corporate family rating (on review for upgrade) reflects the company's position as one of the leading owners, managers and developers of good-quality shopping malls in Brazil, as well as its low leveraged balance sheet and good financial flexibility, supported by a large unencumbered asset pool. As Brazil's economy continues its recovery, driven by investments and private consumption, national retail sales growth continue to accelerate for the second consecutive year, benefitting SSBR and the broader shopping mall sector. These credit strengths, however, are partially counterbalanced by the firm's current small gross asset size, in comparison to some of its domestic peers, as well as its elevated near-term lease maturity risk. Moody's review of Sonae Sierra's ratings will focus on several factors, including 1) the successful integration of the two companies; 2) the new company's final capital structure, leverage levels and cash flow stream; 3) management's operational strategy and synergy realization and 4) corporate governance. Moody's notes that should the transaction close and be structured as currently contemplated, Sonae Sierra's national scale corporate family rating would likely be upgraded by one notch. =========================== C A Y M A N I S L A N D S =========================== WHITE OAK: Chapter 15 Case Summary ---------------------------------- Two affiliates that simultaneously filed voluntary petitions seeking relief under Chapter 15 of the Bankruptcy Code: Debtor Case No. ------ -------- White Oak Strategic Master Fund, L.P. 19-30635 Strathvale House, 3rd Floor 90 North Church Street PO Box 30847 Grand Cayman KY1-1204 Cayman Islands White Oak Strategic Fund, Ltd. 19-30639 3rd Floor, Strathvale House 90 North Church Street PO Box 30847 Grand Cayman KY1-1204 Cayman Islands Business Description: White Oak Strategic Master Fund, L.P., and White Oak Strategic Fund, Ltd. are part of a 'master-feeder' fund structure. The Feeder Funds invested all or substantially all of their investable assets into the Master Fund and, in turn, the Master Fund invested in the market. Foreign Proceeding: Fin. Servs. Div. of Grand Ct. of Cayman Is. (Cause No.14 of 2019 (CRJ)) Chapter 15 Petition Date: June 12, 2019 Court: United States Bankruptcy Court Northern District of California (San Francisco) Judge: Hon. Hannah L. Blumenstiel Foreign Representatives: Luke Oliver Almond BORRELLI WALSH (CAYMAN) LIMITED - and - Cosimo Borrelli BORRELLI WALSH LIMITED Strathvale House, 3rd Floor 90 North Church Street PO Box 30847 Grand Cayman KY1-1204 Cayman Islands Foreign Representatives' Counsel: Lisa S. Tsai, Esq. Marc Dworsky, Esq. REID COLLINS & TSAI LLP 7 W. Figueroa Street, Suite 300 Santa Barbara, California 93101 Tel: (512) 647-6100 (213) 429-4022 E-mail: ltsai@rctlegal.com mdworksy@rctlegal.com - and - Adam R. Swick, Esq. Craig A. Boneau, Esq. Leo Oppenheimer, Esq. REID COLLINS & TSAI LLP 1301 S. Capital of Texas Hwy Building C, Suite 300 Austin, Texas 78746 Tel: (512) 647-6100 Fax: (512) 647-6129 E-mail: aswick@rctlegal.com cboneau@rctlegal.com loppenheimer@rctlegal.com Estimated Assets: Unknown Estimated Debt: Unknown Full-text copies of the petitions are available for free at: http://bankrupt.com/misc/canb19-30635.pdf http://bankrupt.com/misc/canb19-30639.pdf ZHENRO PROPERTIES: Moody's Rates Proposed USD Perpetual Notes 'B2' ------------------------------------------------------------------ Moody's Investors Service has assigned a B2 senior unsecured rating to Zhenro Properties Group Limited's (B1 stable) proposed USD senior perpetual capital securities. The perpetual securities will be issued directly by Zhenro and rank pari passu with all of Zhenro's other present and future unsecured and unsubordinated obligations. Zhenro plans to use the proceeds from the proposed notes to refinance existing debt. RATINGS RATIONALE "The proposed bond issuance will not materially change Zhenro's credit metrics because the proceeds will mainly be used to refinance existing debt," says Cedric Lai, a Moody's Vice President and Senior Analyst. Zhenro's B1 corporate family rating reflects the company's (1) sizable scale, (2) strong sales execution, and (3) quality and geographically diversified land bank, with no one city representing more than 20% of its total land bank. Zhenro has also demonstrated improved assess to funding, especially in the debt capital markets. On the other hand, the CFR is constrained by Zhenro's moderate but improving financial metrics, because of its rapid debt-funded growth. In addition, the rating reflects Zhenro's increasing exposure to joint venture (JV) businesses; a situation which lowers the transparency of its credit metrics. Nevertheless, this risk is mitigated by the company's reputable JV partners. Moody's has taken into account the concentrated ownership of Zhenro's key shareholder, Mr. Ou Zongrong and his two sons, acting in concert, who together held a total 68.4% stake in the company at the end of 2018. The concentrated ownership is incorporated in the B1 CFR and is partly mitigated by: 1) the presence of three independent non-executive directors on the board, who also chair the audit and remuneration committees, 2) the low level of related-party transactions and dividend payout ratio of around 24% in 2018, and 3) the presence of other internal governance structures and standards as required under the Corporate Governance Code for companies listed on the Hong Kong Exchange. The B2 senior unsecured debt rating is one notch lower than the CFR due to structural subordination risk. This subordination risk refers to the fact that the majority of Zhenro's claims are at its operating subsidiaries and have priority over claims at the holding company in a bankruptcy scenario. In addition, the holding company lacks significant mitigating factors for structural subordination. Consequently, the expected recovery rate for claims at the holding company will be lower. The B2 senior unsecured rating for the proposed perpetual capital securities also considers the following factors: (1) Moody's treatment of the proposed perpetual securities as pure debt instruments. Moody's therefore does not apply any equity treatment to these securities. (2) The ranking of the securities, which will be pari passu with all of Zhenro's other present and future senior obligations. Moody's expects that Zhenro's debt leverage -- as measured by revenue/adjusted debt -- will trend towards 60%-65% over the next 12-18 months from 50% at the end of 2018. Its interest coverage -- as measured by adjusted EBIT/interest -- should also improve to around 2.3x-2.5x from 1.9x over the same period. Zhenro's liquidity is good. The company's cash and cash equivalents/short-term debt improved to 119% at the end of 2018 from 86% at the end of 2017, largely driven by an increase in cash and deposits -- including restricted cash -- to RMB28.4 billion from RMB19.7 billion over the same period. The stable ratings outlook reflects Moody's expectation that over the next 12-18 months, Zhenro will be able to execute its sales plan, demonstrate its prudent financial management with sufficient liquidity. Moody's could upgrade Zhenro's ratings if the company (1) demonstrates sustained growth in its contracted sales and revenue through the economic cycles without sacrificing its profitability; (2) remains prudent in its land acquisitions and financial management; (3) improves its credit metrics, such that EBIT/interest registers at least 3.0x and revenue/adjusted debt rises to 75%-80% or above on a sustained basis; and (4) maintains adequate liquidity. On the other hand, the company's ratings could come under downward pressure if Zhenro: (1) generates weak contracted sales; (2) suffers from a material decline in its profit margins; (3) experiences an impairment of its liquidity position, such that cash/short-term debt falls below 1.0x; and/or (4) materially increases its debt leverage. Credit metrics indicative of a ratings downgrade include EBIT/interest coverage falling below 2.0x, and/or adjusted revenue/debt falling below 50%-55% on a sustained basis. Zhenro Properties Group Limited was incorporated in the Cayman Islands in 2014 and listed on the Hong Kong Stock Exchange in January 2018. At December 31, 2018, Zhenro had 145 projects in 28 cities across China. Its key operating cities include Shanghai, Nanjing, Fuzhou, Suzhou, Tianjin and Nanchang. The company was founded by Mr. Ou Zongrong, who indirectly owned 57.85% of Zhenro Properties at 31 December 2018. His sons, Mr. Ou Guowei and Mr. Ou Guoqiang, together owned 10.55% of the company as of the same date. =============== C O L O M B I A =============== AVIANCA HOLDINGS: Fitch Lowers LT IDRs to 'B-', On Watch Negative ----------------------------------------------------------------- Fitch Ratings has downgraded Avianca Holdings S.A.'s Long-Term Foreign and Local Currency Issuer Default Ratings to 'B-' from 'B' and its USD550 million senior unsecured notes to 'CCC+'/'RR5' from 'B-'/RR5'. Fitch has placed all of Avianca's ratings on Rating Watch Negative. The rating downgrade reflects deterioration of Avianca's credit profile as a result of persistently high leverage ratios, limited financial flexibility and high refinancing risks. The ongoing macroeconomic and FX volatilities in the region associated with increasing competition from LCCs are negative headwinds and challenge the company's ability to improve leverage levels during 2019. Fitch expects Avianca's total debt/EBITDAR to be around 6.7x at 2019 and 6.3x by 2020, which compares to 6.6x in 2018 and 7.5x in 2017. The ratings also consider the vulnerability of the company's cash flow generation to fuel price variations and the inherent risks of the airline industry. The Rating Watch Negative reflects the increasing refinancing risks the company faces with its USD550 million unsecured bonds due May 2020. As of March 31 2019, the company reported USD357 million of cash and USD626 million of short-term debt (excluding rental obligations). If the company is able to complete the bond refinancing, Fitch would consider removing the Rating Watch Negative. The recent changes at the controlling shareholder level may help support the company in its refinancing efforts, but the terms and time of execution remain uncertain. Fitch views as positive the announcement from United Airlines, Inc. (United, IDR 'BB'/Stable) that it had exercised certain rights under the Loan Agreement (USD456 million) with BRW Aviation LLC (BRW), Avianca's main shareholders (78.1% of voting rights). United had granted independent authority to Kingsland Holdings Limited (Kingsland, 21.9%) as well as the offer of USD150 million in loans to Avianca, after certain conditions are met. Kingsland would also add USD100 million in financing. It is not clear yet the terms of the financial support, but this new credit line could help Avianca to succeed in its refinancing plan and maintain the company's rating at 'B-'. KEY RATING DRIVERS Change in Shareholder Structure: If executed as planned, the new shareholder structure at Avianca could be supportive to its refinancing strategy as well as to support its transformational plan. Fitch assesses Avianca on stand-alone basis, with no link to United's ratings, but the presence of United as a strategic partner and the USD150 million loan are credit positive. Avianca needs to amend contracts and request waivers from several ECAs (Export Credit Agency) that are the creditors on around USD1.1 billion of Avianca's debt (total of USD4 billion as of Dec. 31 2018). The amendments and waivers refer to changes in the shareholder structure: add United as permitted holder of Avianca' shares and removal of Synergy Group from being a guarantor in the ECAs contracts. Strong Regional Market Position: Avianca's business model combines operations in Colombia, Central and South America, allowing it to rotate capacity according to market conditions. Its geographic diversification allows the company to maintain consistently solid average load factors of 82% during 2015-2018. The company's business diversification is viewed as adequate with international passengers, domestic passengers, cargo operations, and the loyalty program and other segments representing approximately 42%, 41%, 13%, and 4% of its total revenues. Avianca's dominant position in the Colombian market is positively incorporated into the ratings. The announcement of a joint business agreement with United and Copa Airlines (not rated) should only benefit Avianca's competitive business position in the medium to long term. Regulatory approval for this transaction is expected to take approximately 12 to 18 months. Challenge to Improve EBIT Margins: Fitch expects Avianca's EBIT margin decrease about 5.5%-7.0% during 2019 and 2020, driven primarily by rationalization of its route network and several costs cutting initiatives. This compares with the 6.0% adjusted EBIT margin of 2018. Avianca has announced the removal of E190 aircrafts and eliminations of unprofitable routes, mainly in Peru and in selected regional markets in Colombia, while focusing on its points of network strength. Higher fuel prices and currency devaluation(s) remain as ongoing concerns. The scenario of increasing competition from smaller players in Avianca's main markets is a concern and may pressure the company's solid load factor and yields levels, as observed during 1Q19. Fleet Management Key to Restore FCF: Avianca's strategy to rightsizing its fleet delivery plan is key to improving its cash flow generation. The high capex level of USD659 million in 2018 was a major driver for the negative FCF of USD248 million during 2018. The company announced the revision of its aircraft backlog, aiming to defer up to 35 narrow-body aircraft while cancelling the delivery of another 17. In its base case scenario, Fitch forecasts Avianca's FCF to be neutral to slightly negative during 2019 and 2020, up to USD50 million negative. Capex for 2019 and 2020 is expected to be USD441 million and USD500 million, respectively. Fitch also expects Avianca to remain disciplined on its dividends distributions, maintaining minimum level payouts to avoid further leverage deterioration. Leverage to Decline By 2020: Avianca's high leverage has pressured its ratings, and the challenging operating environment in 2019 should delay any deleveraging to 2020. Fitch expects Avianca's total adjusted leverage to improve to around 6.3x by 2020 from 6.7x in 2019. Avianca's total adjusted debt/EBITDAR was 6.6x during 2018 and 7.5x in 2017. Fitch base case does not incorporate any major non-core assets sales besides those already announced, including the Embraer's fleet. High Refinancing Risks: Avianca's ability to proceed with their refinancing plan is crucial to avoid an additional downgrade. As of March 31, 2019, the company had USD357 million in cash. USD626 million of debt will come due in the short term (excluding operating leases), and USD568 million of its unsecured notes are due in May 2020. Excluding the bonds, the majority of its obligations are aircraft related, which the company is expected to refinance with ongoing secured loans. Fitch considers that the company has some financial flexibility to raise additional cash using part of its unencumbered aircraft fleet. Nonetheless, ongoing discussion at the shareholder level has led to some uncertainties and concerns that the company's debt will be impacted by changes of control clauses. Credit Linkages and Notes' Guarantees Structure Incorporated: The ratings also reflect Avianca's corporate structure and credit linkage with its subsidiaries, Aerovias del Continente Americano S.A. (Avianca) and Grupo Taca. Combined, these two operating companies represent the main source of cash flow generation for the holding company. The significant legal and operational linkages between the two operating companies are reflected in the existence of cross-guarantee and cross-default clauses relating to the financing of aircraft acquisitions for both companies. DERIVATION SUMMARY Avianca is well positioned in the 'B' rating category relative to its regional peers based on its network, route diversification and important regional market position. Nevertheless, these factors are tempered by the company's higher gross adjusted leverage and refinancing risks, weaker liquidity and financial flexibility relative to peers. Avianca's 'B-' rating is below LATAM Airlines S.A. (LATAM, B+/Positive) and GOL Linhas Aereas Inteligentes S.A. (GOL, B/Stable), which have recently showed improvements in credit metrics. The ratings distinction among the three airlines reflects differences in the financial strategies, credit access, operational performance volatility and business diversification. Avianca's 2018 adjusted EBIT margin of 6% compares poorly to 9% and 7% for GOL and LATAM, respectively. Fitch expects Avianca to maintain operational margins in the 5.5% to 7.0% range during 2019-2020. These levels are below those expected for LATAM and GOL during the same period. Avianca's ratings are constrained by its high gross adjusted leverage (6.6x), which is at the high end of its peer group. LATAM and GOL ended 2018 with gross adjusted leverage metrics of 5.0x and 5.8x, respectively. Avianca has maintained a low cash position relative to its annual revenues. Given the company's limited financial flexibility at the moment, the percentage has declined to 7%. This level is below Fitch's previous expectation of 12% for 2019. This liquidity position is lower than those levels expected by LATAM (18%) and GOL (15%) during the same period. Due to its debt payment schedule and currently limited access to capital market, Fitch views Avianca Holdings' financial flexibility as weaker than LATAM and GOL. KEY ASSUMPTIONS Fitch's Key Assumptions Within Its Rating Case for the Issuer -- Neutral to low single-digit yield growth; -- Load factor in the 80%-82% range; -- 2019-2020 EBIT margin moving around 5.5%-7.0%; -- Capex of USD441 million in 2019 and USD500million in 2020 KEY RECOVERY RATING ASSUMPTIONS - The recovery analysis is based on a liquidation approach given the high value of its aircraft fleet, which positively compares to the going concern approach. - Fitch has assumed a 10% administrative claim. Liquidation Approach: - The liquidation estimate reflects Fitch's view of the value of aircraft and other assets that can be realized in advance rate of 70%, 75% account receivables due high percentage of credit card receivables and 50% inventories. - These assumptions result in a recovery rate for the unsecured bonds within the 'RR5' range, which generates a one-notch downgrade to the debt rating from the IDR. RATING SENSITIVITIES Developments That May, Individually or Collectively, Lead to Positive Rating Action Fitch would review the Rating Watch Negative if the company successfully completes the refinancing of its USD550 million senior unsecured notes. -- Adjusted gross leverage below 6.5x on sustainable basis; -- EBIT margin consistently above 6.5%; -- Coverage ratio, measured as total EBITDAR/(interest expense plus rents) ratio, consistently above 2x; -- Liquidity, cash/LTM revenues, consistently above 10%. Developments That May, Individually or Collectively, Lead to Negative Rating Action -- Failure to proceed with current refinancing strategies in order to reduce the high refinancing risks; -- Adjusted gross leverage above 7.5x; -- EBIT margin consistently below 5%; -- Coverage ratio, measured as the total EBITDAR/(interest expense + rents), consistently below 1.5x; -- Liquidity, cash/ LTM revenues, consistently below 8%. LIQUIDITY Limited Financial Flexibility: As of March 31, 2019, the company had USD357 million in cash. USD626 million of debt will come due in the short term (excluding operating leases), and USD568 million of its unsecured notes are due in May 2020. Total adjusted debt was USD5.9 billion at YE 2018. Debt consists primarily of USD4 billion of on-balance-sheet debt, most of which is secured, and an estimated USD1.9 billion of off-balance-sheet debt associated with lease obligations, per Fitch's criteria. Avianca's cash position in percentage of its last 12 months has deteriorated to 7.3% as March 31 2019 from 10.3% in December 2018. FULL LIST OF RATING ACTIONS Fitch has downgraded and placed the following ratings on Rating Watch Negative: Avianca Holdings S.A. -- Long-Term Issuer Default Rating (IDR) to 'B-' from 'B'; -- Long-Term Local Currency IDR to 'B-' from 'B'; -- USD550 million unsecured notes due in 2020 to 'CCC+'/'RR5' from 'B-'/'RR5'. Aerovias del Continente Americano S.A. -- Long-Term IDR to 'B-' from 'B'; -- Long-Term Local Currency IDR to 'B-' from 'B'. Grupo Taca Holdings Limited -- Long-Term IDR to 'B-' from 'B'. Avianca Holdings, Grupo Taca, and Avianca Leasing are co-issuers of the USD550 million unsecured notes. ============= J A M A I C A ============= JAMAICA: Improved Economic Growth in FY2018/19, IMF Says -------------------------------------------------------- An International Monetary Fund (IMF) staff team led by Uma Ramakrishnan visited Kingston from June 10 to 14, 2019, ahead of the sixth and final review under the SBA planned for September 2019. The team took stock of progress on Jamaica's economic reform program supported by the IMF's precautionary Stand-By Arrangement (SBA). At the end of the visit, Ms. Ramakrishnan issued the following statement: "Jamaica's improved economic growth in FY2018/19 was buoyed by construction and mining. Unemployment is now at an all-time low of 8 percent. The inflation outturn was 3.9 percent (y/y) in April, closer to the Bank of Jamaica's (BOJ) target range of 4-6 percent. The primary surplus was almost 7 1/2 percent of GDP in FY2018/19, with public debt falling to about 95 percent of GDP at end-March 2019 -- the lowest since FY2000/01. Non-borrowed reserves were US$430 million above target at end-March 2019, providing critical buffer against unforeseen global economic shocks. "The IMF team welcomes the recent BOJ's accommodative policies aimed at restoring inflation to the target range. The reduction in the Cash Reserve Requirement by 5 ppts this year and the successive policy rate cuts to 0.75 percent should support private credit expansion as the government continues to deleverage. That said, enhanced central bank supervision and risk management practices at lending institutions will be critical to ensure careful assessment of risks to maintain financial stability. "Meanwhile, the FY2019/20 budget execution is underpinned by continued buoyant tax collections in April and above budget capital expenditure -- an encouraging new normal for Jamaica. "Consistent with the overall objective of reducing its footprint in the foreign exchange (FX) market and promoting interbank market development, the BOJ should limit its FX interventions to episodes of significant market dislocations. At the same time, continued swings in the currency highlight the urgency to adopt an FX trading platform (to enhance market transparency and price discovery), and develop FX hedging instruments. "Looking ahead, having strong institutions in place will be critical to entrench the hard-earned gains from the economic reforms. In this regard, the GOJ's commitments to (i) enacting amendments to the BOJ Act to adopt a full-fledged inflation targeting framework, (ii) creating a policy framework for natural disasters risk financing, and (iii) tabling legislation for the establishment of an independent Fiscal Council are important next steps. "Strengthening efforts to enhance the special resolution regime and consolidated supervision of financial conglomerates -- as recommended by the recent IMF Financial Sector Assessment Program (FSAP) -- are also critical. These actions require strong coordination among the BOJ and the Financial Services Commission (FSC). "The IMF team also reiterated the need to institute a new streamlined and performance-based compensation framework for government employees before the next round of wage negotiations. This reform will ultimately lead to a more cost-effective and efficient public sector. "The IMF team welcomes the open and transparent process for selection of the new Governor of the Bank of Jamaica. "During the visit, the IMF team met with the Minister of Finance and the Public Service Dr. Nigel Clarke, Minister of Health Christopher Tufton, Minister of Energy, Science and Technology Fayval Williams, Bank of Jamaica Governor Brian Wynter, Financial Secretary Darlene Morrison, Planning Institute Director General Dr. Wayne Henry, senior government officials, private sector representatives, the opposition, and held a townhall meeting with students at the University of the Commonwealth Caribbean. "We would like to thank the Jamaican authorities for their continued hospitality and frank discussions." As reported in the Troubled Company Reporter-Latin America on Sept. 27, 2018, S&P Global Ratings revised its outlook on Jamaica to positive from stable. At the same time, S&P affirmed its 'B' long-and short-term foreign and local currency sovereign credit ratings, and its 'B+' transfer and convertibility assessment on the country. ================= V E N E Z U E L A ================= PETROLEOS DE VENEUELA: Guaido Asks Jamaica Not To Seize Shares -------------------------------------------------------------- Luc Cohen at Reuters reports that the ad-hoc board of Venezuelan state-run oil company Petroleos de Venezuela, S.A. (PDVSA), appointed by opposition leader Juan Guaido, said it had asked Jamaica's government not to seize the company's shares in an oil refinery on the island. Jamaica's Senate in February passed legislation clearing the way for the government to acquire the 49 percent stake in the Petrojam refinery that PDVSA acquired in 2006, part of late leftist President Hugo Chavez's energy diplomacy efforts in the Caribbean, according to Reuters. The board, appointed by Guaido earlier this year in part to defend PDVSA's interests abroad, said it had also warned Jamaica's government that "it cannot maintain any arrangements" with the government of President Nicolas Maduro, a Chavez protege whose legitimacy as Venezuela's leader is disputed, the report relays. "We formally request the suspension of this expropriation process," the board said in a statement, adding that Guaido had made a similar request personally to Jamaican Prime Minister Andrew Holness, the report notes. The Caribbean nation's government owns the other 51% of shares in the refinery. Guaido, the leader of Venezuela's opposition-controlled National Assembly, in January invoked the constitution to assume an interim presidency, arguing Maduro's 2018 re-election was illegitimate, the report relays. He has been recognized as rightful leader by dozens of countries, including the United States, but Jamaica has not recognized him as president, the report discloses. His representatives abroad have fought efforts by creditors of Venezuela's highly-indebted government to seize foreign assets belonging to PDVSA, the report says. But Maduro retains control of the military and most state functions, including PDVSA's day-to-day operations within Venezuela, the report notes. He calls Guaido a U.S.-backed puppet seeking to oust him in a coup, the report discloses. The United States in January slapped sanctions on PDVSA as part of its bid to oust Maduro, which has contributed to a further drop in the OPEC nation's crude output following years of steady decline due to underinvestment and mismanagement, the report relays. Those sanctions paved the way for Guaido's allies to take control of U.S. refiner Citgo, PDVSA's most important overseas asset, the report adds. As reported in Troubled Company Reporter-Latin America on June 3, 2019, Moody's Investors Service has withdrawn all the ratings of Petroleos de Venezuela, S.A. including the senior unsecured and senior secured ratings due to insufficient information. At the time of withdrawal, the ratings were C and the outlook was stable. =============== X X X X X X X X =============== KIDOZ INC: Losses, Accumulated Deficit Cast Going Concern Doubt --------------------------------------------------------------- Kidoz Inc. filed its quarterly report on Form 10-Q, disclosing a comprehensive loss of $826,304 on $305,956 of total revenue for the quarterly period ended March 31, 2019, compared to a comprehensive loss of $835,368 on $24,351 of total revenue for the same period in 2018. At March 31, 2019, the Company had total assets of $23,022,015, total liabilities of $797,656, and $22,224,359 in total stockholders' equity. The Company has reported losses from operations for the quarters ended March 31, 2019 and 2018, and has an accumulated deficit of $26,724,524 as at March 31, 2019. These material uncertainties raise substantial doubt about the Company's ability to continue as a going concern. A copy of the Form 10-Q is available at: https://is.gd/fG1i0J Kidoz Inc. develops and sells consumer mobile software products and games in Anguilla and internationally. It focuses on the development and marketing of a platform of interactive games for families and children. The company's products include Rooplay, a platform of educational and entertainment games; Garfield's Bingo, a bingo game; and Trophy Bingo, live through mobile platforms. The company was formerly known as Shoal Games Ltd. and changed its name to Kidoz Inc. in April 2019. Kidoz Inc. was founded in 1987 and is based in The Valley, Anguilla. ********* 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 * * *