/raid1/www/Hosts/bankrupt/TCRLA

/raid1/www/Hosts/bankrupt/TCRLA_Public/250221.mbx T R O U B L E D C O M P A N Y R E P O R T E R L A T I N A M E R I C A Friday, February 21, 2025, Vol. 26, No. 38 Headlines A R G E N T I N A GAUCHO GROUP: Taps Basile Law Firm as Special Litigation Counsel B R A Z I L SAMARCO MINERACAO: Fitch Alters Outlook on 'B-' IDR to Positive C A Y M A N I S L A N D S ATARA BIOTHERAPEUTICS: Panacea, 3 Others Report 9.5% Stake M E X I C O MEXICO: IDB's Salud Mesoamerica Benefits 1.8 Million People P A R A G U A Y FRIGORIFICO CONCEPCION: Moody's Alters Outlook on B2 CFR to Stable P E R U BL & MORE: Unsecureds Will Get 0.39% of Claim in Subchapter V Plan TELEFONICA DEL PERU: Moody's Cuts CFR to 'Caa3', Outlook Negative TELEFONICA DEL PERU: Starts Insolvency Procedure T R I N I D A D A N D T O B A G O CARIBBEAN AIRLINES: Operating Profit Declines 51% in 2024 TRINIDAD & TOBAGO: Turning to CAF in Crucial Times - - - - - ================= A R G E N T I N A ================= GAUCHO GROUP: Taps Basile Law Firm as Special Litigation Counsel ---------------------------------------------------------------- Gaucho Group Holdings, Inc. seeks approval from the U.S. Bankruptcy Court for the Southern District of Florida to employ The Basile Law Firm, P.C as special litigation counsel. The firm will render these services: (a) provide legal services and advice with respect to the Delaware Action; and (b) perform all other legal services and provide all other necessary legal advice to Gaucho in connection with this Chapter 11 case. The firm will be paid at these rates: Waleed Amer $700 per hour Eric Benzenberg $1,000 per hour Partners $1,000 to $1,250 per hour Associates $400 to $700 per hour Law Clerks $100 per hour Paralegals $75 per hour As disclosed in the court filings, The Basile Law Firm is a "disinterested person" as that term is defined in Bankruptcy Code Section 101(14). The firm can be reached through: Eric Benzenber, Esq. The Basile Law Firm P.C. 390 N. Broadway, Suite 140 Jericho, NY 11753 Phone: (516) 455-1500 About Gaucho Group Holdings, Inc. Gaucho Group Holdings Inc operates as a holding company. The Company, through its subsidiaries, provides luxury real estate and consumer marketplace with collection of wine, hospitality, fashion brands, and real estate holdings. Gaucho Group Holdings serves customers in the United States and Argentina. Gaucho Group Holdings Inc. sought relief under Chapter 11 of the U.S. Bankruptcy Code (Bankr. S.D. Fl. Case No. 24-bk-21852) on November 12, 2024. =========== B R A Z I L =========== SAMARCO MINERACAO: Fitch Alters Outlook on 'B-' IDR to Positive --------------------------------------------------------------- Fitch Ratings has revised Samarco Mineracao S.A. em Recuperação Judicial's (Samarco) Rating Outlook to Positive from Stable, while affirming its Long-Term Foreign and Local Currency Issuer Default Ratings (IDRs) at 'B-' and Long-Term National Scale rating at 'BB(bra)'. Fitch has also affirmed the rating of Samarco's senior unsecured notes due 2031 at 'B-' with a Recovery Rating of 'RR4'. The Positive Outlook reflects Fitch's expectation that Samarco's operational profile will improve as the Germano dam decommissioning progresses and the Fundao settlement is resolved, reducing environmental uncertainties and litigation risks. These developments, along with the pending exit from judicial recovery by August 2025, should strengthen Samarco's position within the 'B' rating category. Samarco's ratings reflect high leverage, limited financial flexibility, and operational ramp-up risks post-restructuring. The 2015 Mariana dam incident's financial impact is capped at USD1 billion and is incorporated into the ratings. Key Rating Drivers Operational Recovery Progress: Samarco's plans to resume capacity continue, with phase 2 expected to increase pellet production to 15.2 million tons by the end of 2025, reducing cash costs by USD5.5/ton. The early startup of pelletizing plant 3 early was completed in August 2024, and the startup of the filtering and beneficiation plants in late 2024 enabled a three-month acceleration. Phase 3, aiming to reach 26.4 million tons by 2028, is still under engineering studies, with licenses anticipated in early 2025. Dam Decommissioning Progress: The Germano dam decommissioning schedule is expected to be advanced to 2026 from 2029, reducing geotechnical stability risks. This acceleration is made possible by progress in using sandy tailings and the construction of the sterile and tailings disposal project, with 84% of the decommissioning completed by 3Q24. The Germano pit ceased operations in 2023. Research and development studies on dry stacking, aimed at processing ultrafine tailings and extending the mine's life by four years, are expected to conclude tests in 2025. FundaoFinal Settlement: The signing of binding terms for Samarco's Fundao tailings dam collapse reparations reduces uncertainties about remedial cash commitments. Total reparations amount to BRL 170 billion (USD32 billion), with BRL 38 billion (USD7.9 billion) already disbursed. BRL 100 billion (USD18 billion) are payment obligations over 20 years for compensatory programs under public policies, and BRL 32 billion (USD5.8 billion) are Samarco's performance obligations, including indemnification, resettlement, and environmental recovery, gradually transferred from the Renova Foundation. Cost and Business Profile: Samarco aims to re-establish itself as a low-cost, long-lived, significant pellet producer. Upon reaching full capacity by 2028, Samarco is projected to become the second or third largest pellet exporter globally, alongside Vale and LKAB, according to metals consultancy CRU. CRU places Samarco in the first quartile of iron ore seaborne business costs, supported by integrated operations and low-cost slurry pipelines for iron ore transportation. Operations resumed in December 2020 after a five-year suspension and are currently at 30% of pre-Fundao dam failure capacity. Scant FCF Generation: Samarco's EBITDA is projected to reach approximately USD1.2 billion in 2025, marking a 40% increase from 2024 levels as phase 2 progresses. These projections assume an average iron ore price of about USD90 per ton and a pellet premium of USD46 per ton in 2025. The forecast also considers minimal working capital requirements and an increase in capital expenditures to USD470 million from USD400 million in 2024, maintaining capex intensity (as a percentage of revenue) above 24%. Free cash flow (FCF) is expected to be negative in 2025 and 2026. Gradual Deleveraging: Average gross debt between 2025 and 2026 is projected to be USD5.2 billion, consisting of the Judicial Reorganization's resulting senior debt of USD4.2 billion and additional payment-in-kind (PIK) accumulation. The period of intense investment and substantial remediation outflows constrains cash accumulation. As a result, gross and net leverage ratios are expected to average 4.3x and 4.2x, respectively, in 2025-2026. Upon resuming full capacity post-2028, leverage metrics are anticipated to trend below 3.0x, potentially triggering the use of excess cash sweep mechanisms. Derivation Summary Samarco's (B-/Stable) pellet production business profile is similar to that of CAP SA (BB+/Stable) and Vale SA (BBB/Positive). Chile-based CAP has a production capacity of approximately 4 million tons of iron ore pellets, supplemented by sales of 12.5 million tons of high-grade iron ore pellet and sinter feed. While positioned in the less favorable third quartile of cost, CAP benefits from a long reserve life and enhanced financial flexibility. Vale, the global leader in low-cost iron ore production and one of the top three global mining companies, derives about 90% of its EBITDA from iron ore and pellets. The company also has significant contributions from copper, nickel, and other minerals. Vale faces a more challenging operating environment in Brazil (BB/Stable) due to increased scrutiny of mining companies' governance practices following the Mariana and Brumadinho dam disasters. Despite these challenges, Vale's financial outlook remains strong, with expected EBITDA gross leverage below 1.0x and EBITDA net leverage below 0.6x over the medium term. Key Assumptions - Total iron ore pellet, pellet feed and pellet screening sales volumes of around 14.1 million tons in 2025, 15.3 million tons in 2026 and 15.4 million tons in 2027; - Iron ore pellet premium average USD52 per ton between 2025 and 2027; - Benchmark 62% iron ore prices average USD90/ton in 2025, USD85/ton in 2026, USD75/ton in 2027; - Capex of USD469 million in 2025, USD451 million in 2026 and USD582 million in 2027; - No dividend distributions; - Foreign exchange BRL/USD rates of 5.80 in 2025, 5.80 in 2026, and 5.80 in 2027. Recovery Analysis The recovery analysis assumes Samarco would be reorganized as a going concern in bankruptcy rather than liquidated. Fitch assumed a 10% administrative claim. Samarco's going-concern EBITDA assumption is based on no further ramp-up of the phase 2. The going-concern EBITDA estimate reflects Fitch's view of a sustainable, post-reorganization EBITDA level upon which Fitch bases the enterprise valuation in a low iron ore price environment. An enterprise valuation multiple of 5x EBITDA is applied to the going-concern EBITDA to calculate a post-reorganization enterprise value (EV). The choice of this multiple considered the following: the historical bankruptcy case study exit multiples for peer companies were 4.0x-6.0x. Fitch applies a waterfall analysis to the post-default EV based on the relative claims of the debt in the capital structure. The debt waterfall assumptions consider the company's total debt. These assumptions result in a recovery rate for the unsecured debt within the 'RR2' range, but due to the soft cap of Brazil at 'RR4', Samarco's senior unsecured notes are rated at 'B-'/'RR4'. RATING SENSITIVITIES Factors that Could, Individually or Collectively, Lead to Negative Rating Action/Downgrade: - Significant delays in increasing production; - Indications of weaker shareholder commitment to meet remediation payments when Samarco's cash flow is insufficient; - Additional legal remediation charges stemming from unfavorable litigation outcomes, after the cap ends in 2030; - Any further delay of the judicial recovery process after the limited dated of August 2025; - Net debt/EBITDA above 6.0x on a sustained basis. Factors that Could, Individually or Collectively, Lead to Positive Rating Action/Upgrade: - Successful exit of the judicial recovery process in Brazil; - Operations reach at least 50% capacity during the ramp-up phase; - Significant progress in dam decommissioning; - Consistent net debt/EBITDA ratio moving below 4.0x. Liquidity and Debt Structure Samarco ended Sept. 30, 2024 with USD224 million of cash and marketable securities and no short-term debt. As a result of the JR, total debt was restructured to USD7.7 billion from USD11.4 billion. USD3.7 billion of new notes due in 2031 were exchanged for the past non-performing indebtedness (due in 2022, 2023 and 2024) of USD4.9 billion in December 2023. The unsecured debt has PIK features that decrease significantly in 2026 and end by 2028. Moreover, USD260 million in 9% senior unsecured notes owed to shareholders was issued at the end of 2023. In addition, some USD3.85 billion of indebtedness with shareholders was converted into a subordinated instrument with no cash or PIK interest obligation and a 2036 maturity. In addition, about USD27 million of out of court debt remains, along with USD40 million of BRL-denominated debentures. Issuer Profile Samarco Mineracao is a leading iron ore pellet producer based in Minas Gerais and Espirito Santo, Brazil. It resumed operations in 2020 after a tailings dam incident disrupted operations for five years and sent the company into bankruptcy protection. MACROECONOMIC ASSUMPTIONS AND SECTOR FORECASTS Fitch's latest quarterly Global Corporates Macro and Sector Forecasts data file which aggregates key data points used in its credit analysis. Fitch's macroeconomic forecasts, commodity price assumptions, default rate forecasts, sector key performance indicators and sector-level forecasts are among the data items included. ESG Considerations Samarco Mineracao S.A. em Recuperacao Judicial has an ESG Relevance Score of '4' for Employee Wellbeing due to the remaining work required to improve dam monitoring and upstream dams' de-characterization. Dry tailings piling will be used without the operation of dams, while heightening attention to the safety of geotechnical structures and to the de-characterization of the Germano mining dam will continue along with the capacity utilization resumption efforts under way. This has a negative impact on the credit profile, and is relevant to the rating[s] in conjunction with other factors. The highest level of ESG credit relevance is a score of '3', unless otherwise disclosed in this section. A score of '3' means ESG issues are credit-neutral or have only a minimal credit impact on the entity, either due to their nature or the way in which they are being managed by the entity. Fitch's ESG Relevance Scores are not inputs in the rating process; they are an observation on the relevance and materiality of ESG factors in the rating decision. Entity/Debt Rating Recovery Prior ----------- ------ -------- ----- Samarco Mineracao S.A. em Recuperacao Judicial LT IDR B- Affirmed B- LC LT IDR B- Affirmed B- Natl LT BB(bra)Affirmed BB(bra) senior unsecured LT B- Affirmed RR4 B- =========================== C A Y M A N I S L A N D S =========================== ATARA BIOTHERAPEUTICS: Panacea, 3 Others Report 9.5% Stake ---------------------------------------------------------- Panacea Innovation Ltd disclosed in a Schedule 13G filed with the U.S. Securities and Exchange Commission that as of February 6, 2025, it and its affiliated entities -- Panacea Venture Healthcare Fund II, L.P., Panacea Venture Healthcare Fund II GP Company, Ltd., and sole owner James Huang -- beneficially own 550,000 shares of Atara Biotherapeutics, Inc. common stock, representing 9.5% of the 5,759,750 shares of Common Stock outstanding as of November 6, 2024, as reported in the Company's Quarterly Report on Form 10-Q. Panacea Innovation may be reached at: Panacea Innovation Ltd c/o Maples Corporate Services Limited BOX 309 Ugland House Grand Cayman E9 KY1-1104 86 21 60252100 A full-text copy of Panacea Innovation's SEC Report is available at: https://tinyurl.com/5a3vvwsx About Atara Biotherapeutics Atara Biotherapeutics -- atarabio.com -- is a biotechnology company focused on developing off-the-shelf cell therapies that harness the power of the immune system to treat difficult-to-treat cancers and autoimmune conditions. With cutting-edge science and differentiated approach, Atara is the first company in the world to receive regulatory approval of an allogeneic T-cell immunotherapy. The Company's advanced and versatile T-cell platform does not require T-cell receptor or HLA gene editing and forms the basis of a diverse portfolio of investigational therapies that target EBV, the root cause of certain diseases, in addition to next-generation AlloCAR-Ts designed for best-in-class opportunities across a broad range of hematological malignancies and B-cell driven autoimmune diseases. Atara is headquartered in Southern California. Headquartered in San Francisco, California, Deloitte & Touche LLP, the Company's auditor since 2013, issued a "going goncern" qualification in its report dated March 28, 2024. The report highlights that the Company's recurring losses from operations raises substantial doubt about its ability to continue as a going concern. Atara posted a net loss of $276.13 million for the year ended Dec. 31, 2023, following a net loss of $228.30 million for the year ended Dec. 31, 2022. As of Sept. 30, 2024, the Company had $142.71 million in total assets, $233.25 million in total liabilities, and a total stockholders' deficit of $90.54 million. The Company has incurred operating losses since inception and it expects that existing cash, cash equivalents and short-term investments as of Sept. 30, 2024, will not be sufficient to fund its planned operations for at least 12 months from Nov. 12, 2024, the date of issuance of its condensed consolidated financial statements contained in its Quarterly Report for the period ended Sept. 30, 2024. =========== M E X I C O =========== MEXICO: IDB's Salud Mesoamerica Benefits 1.8 Million People ----------------------------------------------------------- A regional health initiative administered by the Inter-American Development Bank (IDB) significantly improved maternal-neonatal and childcare for lower-income women, children, and adolescents across seven Central American countries and one Mexican state, according to an independent study released. The Salud Mesoamerica Initiative (SMI) was launched in 2011 and is an alliance between the IDB, the national governments of Mesoamerica, and private and public donors including the Carlos Slim Foundation, the Gates Foundation, and the Spanish and Canadian governments. It focuses on improving maternal and child healthcare in Central America and the Mexican state of Chiapas. Across the region, the initiative helped increase the share of newborns receiving quality care by a factor of nearly five and boosted comprehensive emergency neonatal care – such as vital sign monitoring, oxygen administration, and antibiotics – by 14 percentage points, according to an independent impact evaluation by NORC at the University of Chicago. SMI also helped increase the quality of prenatal care and contributed to substantial improvements in services associated with pregnancy, childbirth, and newborn care. These are critical steps toward reducing maternal and infant mortality. The initiative was able to achieve impressive results among the target populations, including: -- In Belize, the proportion of mothers and newborns receiving quality care for obstetric and neonatal complications more than doubled. -- In Chiapas, Mexico, the proportion of women giving birth in health facilities increased from 37% to 48%, with significant improvements in antenatal and postpartum care. -- El Salvador saw institutional deliveries by qualified personnel rise to 98%, and quality care for newborns with complications increased from 6% to 40%. -- Costa Rica reduced teen pregnancies in its poorest cantons, achieving an 11.3% decline in adolescent fertility rates – surpassing wealthier areas in lowering these rates. "The Salud Mesoamerica Initiative not only improved access to healthcare, but also the quality of healthcare delivered to some of the most vulnerable in Central America," said IDB President Ilan Goldfajn. "That has included not just improving maternal and neonatal care but doing it at twice the typical pace of improvement in low- and middle-income countries."   "The development of positive incentives and the measurement of results have been fundamental to ensure that this model not only achieves its goals, but that it is sustainable and replicable," said Marco Antonio Slim Domit, from the Carlos Slim Foundation. "In fact, Salud Mesoamerica has inspired other successful initiatives, such as the Malaria Elimination Initiative." "Mesoamerica reminds us that development gains are fragile, unless they are intentional, equity-focused, and sustained," said Christopher J. Elias, president of Global Development at the Gates Foundation. "And the Salud Mesoamerica Initiative has demonstrated a different path forward." SMI helped to foster systematic healthcare data collection that provided countries with their first comprehensive health care indicators in poor areas. Data supported the program's results-based financing model in which a performance award was achieved when agreed-upon targets were met. This approach ensured that Ministries of Health focused on results and accelerated improvements through their healthcare networks. SMI has created a blueprint for impactful, scalable health programs worldwide. By addressing multiple barriers simultaneously, SMI accelerated change and significantly improved health outcomes for mothers and their babies. =============== P A R A G U A Y =============== FRIGORIFICO CONCEPCION: Moody's Alters Outlook on B2 CFR to Stable ------------------------------------------------------------------ Moody's Ratings has confirmed Frigorifico Concepcion S.A. (FriCon)'s B2 corporate family rating and the outlook was changed to stable from rating under review. This action concludes the review for downgrade that was initiated on October 25, 2024. The confirmation of the rating is based on the company's good operating performance over the second half of 2024, which presents a significant reduction in the company's cash burn, and strategic liability management initiatives that contribute to strengthen its liquidity. RATINGS RATIONALE The confirmation of FriCon's B2 corporate family rating with a stable outlook is based on the company's reduction of cash outflow through strong operating performance in the second half of 2024 that Moody's expect will continue to improve through 2025; and liability management efforts performed recently and planned for the next few months to extend short-term debt maturities. Additionally, the decision considered the company's business strategy and alternatives to raise debt in the domestic markets to fund its 2025 production expansion while maintaining leverage and liquidity in check. FriCon's good operating margins through the end of 2024 have contributed to a reduction in cash outflows and leverage. The company's robust profitability, maintaining an EBITDA margin (Moody's adjusted) at approximately 11%, coupled with continuous revenue growth, enabled the company to lower gross leverage to around 4.0x by year-end 2024 (as reported in its December 2024 Operational Update report), from 4.9x for the last twelve months (LTM) through September 2024. The company presented positive cash flow from operations in Q3 2024 due to an increase in funds from operations and reduced growth, which lowered working capital requirements. As FriCon continues to optimize its operations, it is likely to achieve neutral-to-slightly negative Free Cash Flow (FCF) by 2025, supported by further top-line growth resulting from the ramp-up of new beef and pork slaughtering capacity during that year. These milestones are crucial for enhancing its financial stability. FriCon recorded $184 million in negative FCF in 2023, and Moody's expect approximately $160 million in negative FCF for the fiscal year 2024, primarily due to $117 million negative FCF in the first half of the year. Additionally, as EBITDA increases through 2025, the company plans to raise new debt and improve its cash position by the end of 2025 to enhance liquidity, while maintaining gross leverage levels in line with the company's 4.0x target and current rating. FriCon's short-term debt liability management will help reduce liquidity pressures by mitigating refinancing risks and managing working capital, especially as rising production demands more resources to optimize cattle and pork processing. Regaining access to international long-term cross-border capital markets remains key for improving the company's long-term liquidity, however. A key element of the company's debt liability management strategy is the extension of its debt maturities due in 2025. FriCon intends to convert a portion of its short-term facilities in Bolivia, Paraguay, and USA into longer-term financings. This initiative includes the BFC USA Private lending facilities worth $161 million, with $69 million maturing in 2025, as well as certain short-term debts in Bolivia ($59 million due in 2025) and in Paraguay ($41 million due in 2025). By securing extensions and expanding credit facilities, FriCon will further reduce liquidity pressures. Also, the company's good track record in collecting accounts receivable and maintaining inventory value, as demonstrated by very low bad debt ratio and minimal inventory write-downs, ensures that working capital financing remains readily available when needed. Currently, the company does not engage in factoring or reverse factoring. Rising production will continue to require additional working capital to optimize cattle and pork processing at existing facilities in 2025. But production expansion will yield a close to 25% growth in EBITDA, to around $250 million for 2025, from around $200 million in 2024. Moody's expect gross debt to EBITDA will remain around 3.8x-4.0x in 2025, similar to the 4.0x reported for year-end 2024, as debt rises to around $900 million by year-end 2025 from $816 million the year before. However, Moody's expect net leverage to decrease because the company intends to increase its cash balance to improve liquidity over the next few quarters. Regarding the company's growth plans, by mid-2025 FriCon expects to finalize its beef slaughtering capacity expansion in Bolivia to 2,100 heads/day from 1,450 as of December 2024. In Brazil, beef capacity will grow from 4,000 to 4,800 heads/day, and pork capacity from 2,200 to 3,200 heads/day in the same period. Paraguay's new Inka plant will add 1,200 heads/day for pork by mid-year, reaching 2,500 heads/day by 2026. As a result, Moody's expect FriCon's beef slaughtering activity to rise from around 1.5 million heads/year in 2024 to around 2 million by 2025, and pork slaughtering from around 480 thousand to close to 600 thousand heads/year. The rating of FriCon continues to be supported by its leading position in the production and sale of fresh beef and pork, with regional diversification of production through facilities located in Paraguay, Bolivia and Brazil, which in turn supports the company's access to a diversified pool of export markets. The rating also incorporates the company's ability to significantly increase revenues through expansion of processing capacity and strategic acquisitions since 2020, while at the same time maintaining strong profitability. FriCon's ratings are mainly constrained by its small scale relative to LatAm based peers with global operations. This risk is partially offset by the diversification provided by the company's export revenue. In this regard, FriCon's credit profile would benefit from a longer track-record as it continues to ramp up new beef and pork operations in 2025-2026. Also constraining the rating is the company's exposure to the cyclical nature of the protein industry and overall volatility of protein prices, particularly because of the concentration in beef, which is the company's main protein in terms of revenue, because EBITDA and working capital requirements may suffer significantly in response to a sudden rise in cattle costs. The stable outlook reflects Moody's expectation that FriCon's strong profitability and liability management efforts will continue to strengthen the company's liquidity over the next 12-18 months. At the same time, the stable outlook reflects Moody's view that FriCon will continue to execute its growth strategy while maintaining its leverage metrics in check. FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATING An upgrade of the rating would require the company to demonstrate more resilience regardless of the operating environment in the countries where it operates, with an improvement in its liquidity profile based on liability management that combines an extension of its debt maturity profile and positive free cash flow generation. Quantitively, a rating upgrade would require the company to maintain a gross debt to EBITDA (Moody's adjusted) ratio below 4.0x, EBITDA/interest expense around 4.0x, and retained cash flow to net debt around 15%, on a sustained basis. The ratings could be downgraded if there is a deterioration in the company's liquidity due to restrictions on refinancing its short-term debt at a reasonable cost; if the company is unable to effectively extend its debt maturity profile; or if the company fails to reverse the outflow of funds in the next 12 months. Quantitively, Moody's would downgrade the rating if the company's gross debt to EBITDA ratio were to rise above 5.0x, EBITDA/interest expense below 3.0x, and retained cash flow to net debt below 10%, on a sustained basis. The principal methodology used in this rating was Protein and Agriculture published in August 2024. Founded in 1997 and headquartered in Asunción, Paraguay, FriCon has a leading position in the production and sale of fresh beef and pork in Paraguay, Bolivia and Brazil, with a diversified portfolio of clients around the world. Since 2017, FriCon has also incorporated industrialized product lines such as burgers, premium burgers, meatballs and sausages. As of the nine months through September 2024, around 49% of revenues were derived from exports to 37 countries, and the remaining balance were sales to the local markets. ======= P E R U ======= BL & MORE: Unsecureds Will Get 0.39% of Claim in Subchapter V Plan ------------------------------------------------------------------ BL & More, Inc. filed with the U.S. Bankruptcy Court for the District of Puerto Rico a Plan of Reorganization for Small Business under Subchapter V dated February 3, 2025. BL & More, Inc. is a for profit corporation organized and existing pursuant to the laws of the Commonwealth of Puerto Rico, created with the purpose of operating a restaurant, which opened on October, 2021. Its main business is the operation of a restaurant open for breakfast, lunch and dinner. Because of its location, Debtor is also involved in the tourism industry, as it receives a large tourist clientele, besides local clients. The Debtor has all of the required governmental permits to operate its business. The Debtor's operation is managed by its President, Maitte M. Mendez Santos, who, is the sole stockholder of Debtor. Currently Debtor operates with 9 employees and 3 contractors. Prior to the filing for relief the IRS seized deposits in Debtor's bank account, funds which were necessary to continue operations. Although the Debtor paid the IRS more $60,000.00 to enter into a payment plan, the IRS demanded additional lump sum payments which the Debtor could not make, nor could it incur in additional debt. To avoid continued attachment of funds by the IRS, and propose a plan of reorganization pursuant to the provisions of the Bankruptcy Code, the Debtor filed for relief on September 30, 2024. After the filing for relief, Debtor continued to operate its business without the need of credit lines. The Debtor, thru its principal, made a complete evaluation of the operations and was able to restructure its work force to operate more efficiently during peak hours of operation. Debtor, thru its counsel, has also held good faith negotiations with its largest secured creditors, Oriental Bank in order to propose a consensual plan for the treatment of their claims. All of Debtor's projected disposable income will be devoted to payment of Oriental's secured claim and full payment of priority claims as listed in summary of distribution included with this plan. Non-priority unsecured creditors holding allowed claims will receive distribution, which the Proponent of this Plan has valued at 0.39% of their claim, and will receive a one-time payment of $1,000.00 to be prorated amongst all general unsecured creditors. This Plan also provides for the payment of administrative within the first year of the confirmation of the plan, and priority claims will receive full distribution plus a 3.50% interest on their priority claims. Class 2 is composed of general unsecured non-priority creditors, with allowed claims which will receive distribution, which the Proponent of this Plan has valued at 0.39% of their claim. This distribution will be made thru a one-time payment of $1,000.00 on the effective date of the plan. Non-priority unsecured creditors with allowed claims total $252,767.38. Principal and President of BL & More Inc., Maitte M. Mendez Santos, has continued to direct the operations of the Debtor. Under her direction, sales have been constant at approximately $44,000.00 per month, while monthly expenses with cost saving measures have decreased expenses of operation to approximately $37,000.00, which allows the Debtor a margin to ensure compliance with payments as proposed in the Plan, while staying current with payment of all operational expenses. All payments under the plan including administrative, priority, secured and general unsecured claims shall be paid directly by the Debtor to each creditor to the postal address set forth in the proof of claim or in the application for compensation. Payment of administrative expenses, priority claims, secured claim and payment to Class 2, general unsecured creditors will be made from Debtor's disposable income, derived from the operation of his business and main source of income. A full-text copy of the Plan of Reorganization dated February 3, 2025 is available at https://urlcurt.com/u?l=tWaNTy from PacerMonitor.com at no charge. Counsel to the Debtor: Noemi Landrau Rivera, Esq. Landrau Rivera & Assoc. P.O. Box 270219 San Juan, PR 00928 Telephone: (787) 774-0224 Facsimile: (787) 919-7713 Email: nlandrau@landraulaw.com About BL & More BL & More, Inc. is a for profit corporation which operates a restaurant open for breakfast, lunch and dinner. The Debtor sought relief under Chapter 11 of the U.S. Bankruptcy Code (Bankr. D.P.R. Case No. 24-04130) on Sept. 27, 2024, listing under $1 million in both assets and liabilities. Noemi Landrau Rivera, Esq., at Landrau Rivera & Assoc. serves as the Debtor's counsel. TELEFONICA DEL PERU: Moody's Cuts CFR to 'Caa3', Outlook Negative ----------------------------------------------------------------- Moody's Ratings downgraded Telefonica del Peru S.A.A.'s ("Telefonica del Peru") Corporate Family Rating and senior unsecured rating to Caa3 from Caa1, with a negative outlook. Previously, the ratings were on review for downgrade. This concludes the review initiated on December 11, 2024. RATINGS RATIONALE The downgrade to Caa3 reflects the high likelihood of a debt restructuring over the next few months following Telefonica del Peru's announcement on February 14 that it intends to submit a request to Peru's National Institute for the Defense of Competition and the Protection of Intellectual Property (Indecopi) to initiate an Ordinary Bankruptcy Procedure (PCO) aimed at restructuring its financial obligations. Although its parent company, Telefonica Hispanoamerica, simultaneously approved a new intercompany loan of up to PEN1.55 billion with a maturity of 18 months to support its operational cash requirements and disbursed PEN230 million that was still outstanding from the 2024 loan commitments, liquidity remains under pressure. There is no clarity about how Telefonica del Peru will address the PEN672 million ($180 million) in obligations due in April 2025, comprising of a PEN567 million installment of its outstanding PEN1.7 billion ($460 million) 2027 Notes and a PEN105 million local bond maturity, given its limited liquidity, weak operating performance, and uncertain financial support from its ultimate shareholder, Telefonica S.A. (Baa3 stable). Under Peruvian bankruptcy law, the PCO petition does not immediately suspend the company's debt obligations. The stay will only apply once Indecopi approves the request. Until then, the company will continue to operate as usual and be required to continue to fulfill its financial obligations. There is also no certainty at this time about when the plan will be formally presented to Indecopi, how long the entity will take to approve or deny the plan, and what the reorganization package will entail. Telefonica del Peru's liquidity position has deteriorated significantly over the past years resulting from the combination of the company's persistently weak operating performance and the sizable tax liability currently in the process of being settled with the Peruvian tax authority, the SUNAT. Moody's estimates Telefonica del Peru's free cash flow (FCF) generation to remain negative at least until 2026, further pressuring liquidity. The negative outlook reflects the high likelihood of either a debt restructuring or a distressed debt exchange in the near term. Although Telefonica del Peru benefits from its scale as the largest telecommunications operator in Peru, the company faces significant competitive and operational challenges. Despite significant efforts to improve profitability over the last three years, while experiencing a decrease in fixed line services due to competition against HFC, operating costs continue to increase, mainly due to the efforts to convert its copper and HFC network to fiber and have not been followed by improvement in revenues. Moody's-adjusted EBITDA margin dropped to about 7.6% as of year-end 2024, which negatively compares with the 25.6% achieved as of year-end 2023. Moody's adjusted leverage has increased to 7.4x as of December 2024 up from 2.3x at year-end 2023, mainly due to the significant EBITDA deterioration over the period. Since 2019, Telefonica del Peru's ultimate parent company, Telefonica S.A., has prioritized markets where it perceives long-term sustainable growth and has worked to reduce its exposure to businesses in Hispano America, including Telefonica del Peru. Given this context, the rating incorporates no financial support from the parent. The downgrade also reflects governance considerations as key drivers of the rating action including the company's operating track record, which has been impacted by loss of profitability and market share since 2014, resulting in high liquidity and refinancing risks. These factors are reflected in the company's Financial Strategy and Risk Management assessment of 5, and the overall exposure to governance risks (Issuer Profile Score or "IPS") of G-5. The ESG Credit Impact Score is CIS-5, since ESG considerations are a constraint for the rating. FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS An upgrade is unlikely at this point given the negative outlook. Nonetheless, Moody's might stabilize the rating if the company successfully secures financing to meet its forthcoming debt amortizations. On the other hand, failure to obtain financing for its imminent financial obligations or the inclusion of them in a debt restructuring program, could lead to further downgrade. Telefonica del Peru is the largest telecommunications company in Peru, with a mobile market share of around 27.5% and 32.3% in the fixed internet segment as of September 2024, according to the Peruvian telecommunications regulator — OSIPTEL. The company is an integrated telecommunications service provider offering mobile, fixed, pay-TV and business-to-business services through its Movistar brand. Telefonica del Peru is Peru's largest telecommunications company in terms of revenue, and a leader in all segments, with more than 12.6 million revenue-generating units (RGUs) in mobile and almost 3.3 million RGUs in fixed broadband and pay TV. For full year 2024, the company generated revenue of around PEN6.0 billion ($1.6 billion). Telefonica del Peru is controlled by Telefonica Hispanoamerica which indirectly holds 99% of its shares. The remaining are traded on the Lima Stock Exchange — Bolsa de Valores de Lima. The principal methodology used in these ratings was Telecommunications Service Providers published in November 2023. TELEFONICA DEL PERU: Starts Insolvency Procedure ------------------------------------------------ globalinsolvency.com, citing MarketWatch.com, reports that Telefonica decided to start insolvency proceedings for its Peruvian subsidiary, aiming to achieve its restructuring. The Spanish telecommunications company said that Telefonica Hispanoamerica -- the group's unit that includes assets and operations in Argentina, Chile, Colombia, Ecuador, Peru, Mexico, Uruguay and Venezuela -- has granted a credit facility of up to 1.55 billion Peruvian soles, equivalent to $403.8 million, and with a maturity of 18 months, to meet operational cash requirements of Telefonica del Peru, according to globalinsolvency.com. As reported in the Troubled Company Reporter – Latin America in December 2024, Fitch Ratings downgraded Telefonica del Peru S.A.A.'s (TdP) Long-Term Foreign and Local Currency Issuer Default Ratings (IDR) to 'B-' from 'B+' and senior unsecured notes to 'B-' with a Recovery Rating of 'RR4' from 'B+/RR4'. Fitch has placed these ratings on Rating Watch Negative (RWN) following the downgrades. ===================================== T R I N I D A D A N D T O B A G O ===================================== CARIBBEAN AIRLINES: Operating Profit Declines 51% in 2024 --------------------------------------------------------- Trinidad and Tobago Guardian reports that Minister of Finance, Colm Imbert, said that majority state-owned Caribbean Airlines Ltd (CAL) reported an operating profit of US$12.1 million in 2024. The profit, which excludes debt service, represented a decline of 51 per cent, compared to the operating profit of US$24.7 million in 2023. Speaking at a customer appreciation event at Queen's Hall, Imbert said CAL witnessed a remarkable turnaround in its performance in 2023, "moving from an operating loss of US$36.7 million in 2022 to an operating profit of US$24.7 million, excluding debt service," according to Trinidad and Tobago Guardian. He said the decline in the airline's operating profit in 2024 was due to the following factors – increase in maintenance costs, handling costs and security flight operations, the report notes. Imbert said the airline's total revenue grew from US$306.4 million in 2022 to US$430.9 million in 2023, an increase of 41 per cent, the report relays. "For 2024, the airline recorded revenue of US$444.6 million an increase of 5.2 per cent. This was despite a decline of US$15 per passenger on the international routes due to competition," said Imbert, adding that the rise in CAL's revenue "underscores the resilience and dedication of the entire Caribbean Airlines team, the report discloses. He said central to the airline's success is its approved strategic plan, which is guiding its actions through to 2027 and a key pillar of the plan is growth, which Caribbean Airlines continues to pursue with vigor and focus, the report says. "In alignment with this strategy, the airline has been exploring strategic collaborations, such as discussions with Saudi Arabia's Air Connectivity Program, aiming to enhance its network and reflecting its dedication to connectivity between T&T, the Caribbean, and the global community, the report relays. Imbert said that as the majority shareholder of the airline, the Government of Trinidad and Tobago has steadfastly supported it, in a way that touches every traveler on the domestic airbridge, the report notes. He said that currently, each adult passenger traveling on the domestic airbridge pays $400 per return ticket and $300 for a return ticket for each child, the report relays. "Without Government subsidisation, each passenger, whether an adult or child, would be required to pay approximately $870 for return airfare, give or take market fuel prices and other charges, the report discloses. "Maintaining affordability on the domestic airbridge is a such a key transportation policy position of this Government that in 2019 a policy decision was taken to increase the ticket subsidy by $105.00 per adult airfare and $155.00 per child each way. In total, this subsidisation ranged between $40 million and $73 million per year, over the period July 2015 and July 2024, normalizing for the much-needed Government interventions over the COVID-19 epidemic," said Imbert, the report notes. He added that in the challenging COVID-19 period, the Government of T&T, as did many other Governments across the global landscape, assisted CAL with its obligations to its lessors amounting to approximately $285 million, as well as with payments to National Petroleum Marketing Limited for fuel, the report adds. About Caribbean Airlines Caribbean Airlines Limited - http://www.caribbean-airlines.com/providespassenger airline services in the Caribbean, South America, and North America. The company also offers freighter services for perishables, fish and seafood, live animals, human remains, and dangerous goods. In addition, it operates a duty free store in Trinidad. Caribbean Airlines Limited was founded in 2006 and is based in Piarco, Trinidad and Tobago. Caribbean Airlines is among many airlines whose business has been greatly affected in 2020 by the slowdown of international travel caused by the COVID-19 pandemic. The government of Trinidad & Tobago guaranteed a US$65 million loan for the airline, and that funding has helped with the airlines' cash flow shortfall since May 2020. In September 2020, the airline related it will be taking cost-cutting measures to help keep it afloat. The measures, which was to affect some 1,700 employees, included salary deductions, no-pay leaves and lay-offs. TRINIDAD & TOBAGO: Turning to CAF in Crucial Times -------------------------------------------------- Trinidad and Tobago Newsday reports that Finance Minister Colm Imbert's impending assumption of the chairmanship of the Development Bank of Latin America and the Caribbean (CAF) in March might be a routine appointment given his office, but the development nonetheless comes at a crucial moment for the country and Caricom as a whole. Economist Dr Terrence Farrell has stated the role will be "non-operational," according to Trinidad and Tobago Newsday. However, it can't be denied that this country [Trinidad and Tobago] has a direct stake in the activities of CAF as a Series A shareholder, the report notes. In June 2016, TT subscribed to US$36 million in callable capital in this regional development bank. In December 2018, TT further subscribed to US$190 million of paid-in capital to be paid in installments, the report relays. Financial disclosures by the bank reveal CAF disbursements to TT were US$200 million in 2019, US$301 million in 2020, US$160 million in 2021, US$101 million in 2022 and US$136 million in 2023, the report discloses. The areas covered related to the fulfilment of the UN's sustainable development goals. For example, in 2023 there was a US$35 million disbursal to support the Eximbank, the report says. TT is the only full member of CAF within Caricom. Barbados and Jamaica hold Series C shares, while countries like Dominica, Bahamas, Grenada, Haiti, Antigua and Barbuda, Suriname, St Lucia and St Vincent and the Grenadines have been knocking on the bank's door, the report relays. CAF is poised to become the largest development bank in the region, with its portfolio of more than US$34 billion and approvals in the billions, the report notes. It's important to keep an eye on and a foot within this institution particularly at a moment of global turbulence and amid the climate crisis, the report discloses. CAF has already begun to position itself as a potential financial lever through which crucial green funding might flow: it had a presence at the COP28 conference and is billing itself as "the green bank of Latin America and the Caribbean," the report says. In addition to offices in this country, it has also opened new bases in Barbados and the Dominican Republic. It's technical assistance facility for Caricom countries focuses on sectors such as clean energy, sustainable tourism, food security, management and protection of ecosystems and marine and coastal resources, the report relays. The possibility that Mr Imbert might not contest his seat in the upcoming general election and could make way for a new finance minister is not entirely unlikely, the report notes. Even if Stuart Young returns the PNM to power, assuming the Prime Minister's elevation of him goes forward, Mr Young may wish to have a clean slate within his cabinet, the report relays. But whoever occupies the seat, this country's relationship with CAF must be maintained and deepened. The uncertainty around the leadership of the Ministry of Finance in the coming year only underlines how accessing more regional financing is truly a non-partisan issue, the report discloses. At a time when foreign aid has been abruptly cut off by Donald Trump, Caricom must turn to other global institutions to fund the green transition, the report notes. With January being the hottest on record, the need to do so is urgent, the report adds. ********* 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 2025. 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 * * *