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Some Relief for U.S. Telecoms, But Risks Remain
A welcoming U.S. junk bond market has helped many weak
telecommunications companies refinance debt and shore up liquidity, yet
some investors may be downplaying risks, Standard & Poor's said in a
report on Thursday, Reuters reported. Although the refinancing wave has
helped, rating erosion continues to plague the sector, with 10 companies
suffering downgrades over the past three months and just two winning
upgrades, S&P said. 'Credit quality is still under pressure, but I
think perhaps the magnitude of negative pressure has backed off
somewhat,' S&P analyst Richard Siderman said in an interview. 'A lot
of the companies that were in trouble are now gone, so they're not there
to get worse any more. And we've seen there was an opening up (in the
high-yield market), though perhaps fleeting,' reported the newswire.
Fleming Wins Approval to Sell Grocery-distribution
Business
Fleming Cos. won a judge's permission to sell its main business to
closely held C&S Wholesale Grocers Inc. for about $400 million,
Bloomberg News reported. U.S. Bankruptcy Judge Mary Walrath in
Wilmington, Del., agreed to approve the sale at a hearing yesterday.
Fleming is selling the grocery-distribution business to focus on its
remaining Core-Mark convenience-store supply operation. The company also
has said it's considering sale of that unit, which would lead to
liquidation.
Jones Apparel's $204 Million Bid for Kasper Approved by
Court
Jones Apparel Group Inc.'s agreement to buy bankrupt Kasper A.S.L. Ltd.
for $204 million in cash was approved by Judge Allan Gropper of the U.S.
Bankruptcy
Court for the Southern District of New York, Bloomberg News reported.
The purchase also includes assumption of about $12.6 million in
Secaucus, N.J.-based Kasper's prepaid royalties. Jones is trying to make
up for lost sales at department stores after it gave back a Lauren
clothing license to Polo Ralph Lauren Corp. Jones is suing Polo for at
least $550 million for the loss of the Lauren line, which generated $548
million, or 13 percent, of its sales last year. Kasper, which filed for
chapter 11 bankruptcy protection in February 2002 after losing money in
the previous two years, had sales last year of about $350 million. The
company also owns the Albert Nipon and Le Suit brands, reported the
newswire.
NorthWestern Posts Loss, Issues Bankruptcy Warning
Power company NorthWestern Corp. said on Thursday it may have to file
for bankruptcy as it posted a higher quarterly loss amid steep operating
costs, Reuters reported. The Sioux Falls, S.D.-based supplier of natural
gas and electricity posted a net loss in the second quarter of $57.8
million, or $1.55 per share, versus a loss of $21.4 million, or 79 cents
a year ago. The second-quarter loss includes a charge for investment in
a generation project and increases in operating expenses. Blaming recent
credit rating downgrades and worsening credit terms, NorthWestern warned
it may be unable to generate cash to meet interest payments and that it
may be forced to file for bankruptcy, reported the newswire.
Kaiser Aluminum Q2 Loss Widens
Bankrupt Kaiser Aluminum Corp. on Thursday said its second-quarter loss
widened on lower aluminum shipments and higher energy and pension costs,
Reuters reported. The company said its net loss for the quarter was
$61.4 million, or 76 cents a share, compared with a loss of $50.4
million, or 63 cents a share, last year. Revenue fell 7.2 percent from
last year to $358.4 million. Houston-based Kaiser said it had realized
about $130 million in yearly cost savings since 2001, and had liquidity
of about $200 million throughout the quarter. Kaiser, grappling with
heavy debt and low aluminum prices, filed for bankruptcy in February
2002. Asbestos litigation and increasing health-care and pension costs
also led to a credit crunch, reported the newswire.
WorldCom Says June Sales Increased to $2.08 Billion From
May
WorldCom Inc. said its sales rose to $2.08 billion in June from $2.03
billion in May, Bloomberg News reported. Operating income was $146
million, Ashburn, Va.-based
WorldCom said in a statement distributed by PR Newswire.
Weirton Steel Plans To Lay Off More Than 10 Percent Of Management
In 3Q
Weirton Steel Corp. said it has initiated a planned layoff of more than
10 percent of its management during the third quarter, according to a
filing Thursday with the Securities and Exchange Commission. The company
didn't provide further details about the impending layoffs in the
second-quarter report. The U.S. Bankruptcy Court in Wheeling, W.Va.,
last Friday approved a $2.5 million retention plan to keep Weirton
Steel's senior management on board during the company's chapter 11
process.
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Copyright (c) 2003 Dow Jones & Company, Inc. All Rights Reserved
NRG Energy Reports Second Quarter Loss of $608.4 Million
NRG Energy Inc. reported a net loss of $608.4 million for the quarter
ended June 30, with the power company taking substantial charges for
asset impairments and restructuring charges. For the same period a year
ago, NRG had a net loss of $41.4 million, according to its quarterly
report to the Securities and Exchange Commission filed on Thursday. NRG,
which is in chapter 11 bankruptcy protection, posted $535.5 million in
revenue for the most recent quarter, down from $582.4 million for the
year-ago period, the filing said.
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Copyright (c) 2003 Dow Jones & Company, Inc. All Rights Reserved
Court OKs Financing for U-Haul Parent
Amerco Inc., parent of truck renter U-Haul International Inc., on Friday
said a Nevada bankruptcy judge has approved a $300 million financing
package from Wells Fargo & Co.'s Foothill Capital Corp., Reuters
reported. The debtor-in-possession financing, approved by Judge Gregg
Zive, will help Amerco run its business while it works through the
bankruptcy process. Amerco sought chapter 11 protection from creditors
on June 20.
Judge OKs Malden Mills Reorganization Plan
A U.S. judge on Thursday approved a plan for Malden Mills Industries
Inc. to emerge from bankruptcy protection, Reuters reported. U.S.
Bankruptcy Judge Joel Rosenthal confirmed a reorganization plan that
cedes control of Malden Mills to a board of directors overseen by a
creditor group that includes GE Capital, the finance arm of General
Electric Co. The reorganization plan, which takes effect Aug. 26,
stipulates that Chairman Aaron Feuerstein would no longer have
day-to-day control of the company. But Feuerstein has an exclusive
option to retake control if he can raise an estimated $92 million by
Aug. 26 to buy back a 90 percent stake in the company that has been in
his family for nearly a century, reported the newswire.
The company filed for bankruptcy protection in November 2001 as higher
debt and a sales shortfall choked cash flow. After the 1995 fire,
insurance did not cover the entire cost of building a new plant in
Lawrence, leaving the company with about 25 percent of the bill.
Conseco To Exit Bankruptcy in September
Conseco Inc. on Thursday said it has resolved a dispute with former
Chief Executive and current Chairman Gary Wendt over financial
obligation releases in its bankruptcy exit plan and now expects to seek
court approval of the plan in early September, Reuters reported. Conseco
in December filed the third largest bankruptcy in U.S. history after
years of aggressive expansion into high-risk loans saddled it with too
much debt.
The company initially looked to emerge from chapter 11 as an
insurance-only operation in June, but has seen plans delayed in disputes
with some creditors. Conseco's plan would cut debt and preferred
securities obligations from more than $6 billion to about $1.3 billion.
Carmel, Ind.-based Conseco will ask Bankruptcy Judge Carol Doyle today
to set an early September date to confirm the latest version of the exit
plan, said Anup Sathy, a Kirkland & Ellis lawyer representing
Conseco, reported the newswire.
Some 3DO Assets Sold in Bankruptcy Auction
Some of the assets of bankrupt video game publisher 3DO Co. were sold at
auction on Thursday, with Ubi Soft Entertainment and the U.S. arm of
Namco Ltd. among the winning bidders, Reuters reported. Howard Gould, an
attorney for British game developer Eutechnyx, said the assets of the
game 'Street Racing Syndicate,' being developed by his client for 3DO,
were sold to Namco Hometek for just over $1.5 million in a hearing at
the U.S. Bankruptcy Court in San Francisco. 3DO filed for bankruptcy on
May 28 after struggling with weak sales.
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