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/raid1/www/Hosts/bankrupt/TCRLA_Public/010308.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 Thursday, March 8, 2001, Vol. 2, Issue 47 Headlines B R A Z I L CVRD: To Sell Off Interest In Docenave GLOBO CABO: 4Q00 Losses Up 126 Percent Compared To Last Year iG: Shareholders Complaining About Telemar Acquisition C H I L E ENAMI: Issuing New US$150M Debt To Cover Short-Term Liabilities GENER: AES Completes 2nd IPO GENER: Concludes Deal With TotalFinaElf C O L O M B I A BANCAFE: To Be Put Up For Sale In June M E X I C O GRUPO DINA: Former Chairman Dies After Suffering From Illness GRUPO SIDEK: Announces Asset Sales Report For February 2001 ICA: Joint Venture With Fluor Daniel Wins Construction Contract PEMEX: Controversy Over Appointment Continues XEROX CORPORATION: To Sell $1.3 Billion Stake To Fujifilm XEROX: Experts Remain Doubtful Despite Recent Asset Sale XEROX CORPORATION: Subject Of Another Shareholder Lawsuit - - - - - - - - - - =========== B R A Z I L =========== CVRD: To Sell Off Interest In Docenave -------------------------------------- CVRD (Companhia Vale do Rio Doce) is to sell off its interest in transportation and logistics companies which do not have any business synergy with mining activities, South American Business Information reported Tuesday. One of the companies on the chopping block is the shipping firm Docenave. CVRD, in an effort to increase its shipping operations, invested in general cargo transportation in 1999. Unfortunately, it ended 2000 with losses of R$16 million. CVRD is also selling off its woodpulp and papers assets. GLOBO CABO: 4Q00 Losses Up 126 Percent Compared To Last Year ------------------------------------------------------------ Globo Cabo SA, Brazil's No. 1 cable television operator, announced that net losses for the fourth-quarter of 2000 rose to 161.8 million reais from a loss of 71.6 million reais in the fourth quarter of 1999, according to documents filed with Brazil's securities and exchange commission, or CVM. In a Bloomberg report, the company attributed these losses to the setbacks it suffered in converting its network for Internet and other interactive uses. "The slower than anticipated build-out of its bi-directional cable network has delayed the broadband service subscriber growth," said Ricardo Fernandez, media and telephone analyst with Credit Lyonnais in Sao Paulo before results were released. "The company was not able to deliver. This is poor planning or bad luck." Fernandez has a ``sell'' recommendation on the stock. Full year losses fell to 366.6 million reais from 526.3 million reais a year ago. Full year sales rose by more than a third to 43.3 million reais from 26 million reais a year ago. iG: Shareholders Complaining About Telemar Acquisition ------------------------------------------------------ The special shareholders' meeting of Tele Norte Leste (Telemar) which would see the approval for the acquisition of iG was postponed until mid-March, South American Business Information reported Tuesday. Word on the street says the Brazilian Securities and Exchange Commission will prevent the shareholders of Telemar, which are also shareholders of iG as Garantia Partners and Opportunity, from voting in the meeting due to conflict of interests. Telemar minority shareholder Luiz Roberto Demerco went against the proposed transaction, questioning the company's interest in acquiring iG access infrastructure. He accused the company of not being clear with its shareholders. ========= C H I L E ========= ENAMI: Issuing New US$150M Debt To Cover Short-Term Liabilities --------------------------------------------------------------- State minerals processing company Enami announced it will issue bonds this month worth US$150 million in order to reduce current liabilities. Total liabilities currently stand at an estimated US$500 million, according to a South American Business Information report Tuesday. Last year, the company posted losses of up to US$25 million. At present, ENAMI is in talks with Codelco over a partnership aimed at lifting the Ventanas refinery's capacity from 400,000 to 800,000 tons of copper concentrates per year. GENER: AES Completes 2nd IPO --------------------------- AES finished early this week the 2nd IPO for Gener's outstanding equity, South American Business Information reported Tuesday. AES acquired an additional 2.9 percent stake in the power company bringing its stake of 95.67 percent, which it purchased in December, to a total of 98.57 percent. AES originally intended to buyout the entire remaining 4.33 percent stake in the company. GENER: Concludes Deal With TotalFinaElf --------------------------------------- French oil company TotalFinaElf announced it has finalized an agreement with Chilean generator Gener to buy all of its power generation and transmission assets in Argentina for a total of $612 million, Reuters said Tuesday. According to the agreement, the French company will acquire a 63.9 percent interest in Central Puerto, 100 percent of the TermoAndes power plant and its associated electric power line InterAndes, 70 percent of Hidroneuquen which holds a 59 percent interest in the Piedra de Aguila power plant, and an Argentine/Brazil electric interconnection project. The assets represent about 42,000 megawatts of installed capacity on a 100 percent basis, TotalFinaElf said. The operation is subject to an audit of Gener subsidiaries and installations in Argentina that is now underway, as well as requiring approval from the regulatory authorities. In November 2000, TotalFinaElf and AES agreed the French company would buy Gener's Argentine assets once AES' tender offer for Gener was complete. AES presently controls 98.5 percent of the Chilean generator. =============== C O L O M B I A =============== BANCAFE: To Be Put Up For Sale In June -------------------------------------- Directors at the Colombian state-run bank Bancafe announced that the bank would be sold in June this year, with the privatization process starting early this month, Business News Americas report Tuesday. Co-Advising the government on the sale process are French investment bank BNP-Paribas (www.bnpparibas.com/en/home/index.html)and local finance corporation Corfivalle (http://www.corfivalle.com.co/).A presentation is expected to take place at the Inter-American Development Bank's meeting on March 19 in Chilean capital Santiago to drum up investor interest. According to the bank's president Pedro Nel Ospina, the institution is in need of a US$120-million capital injection in order to bolster its equity. Bancafe had assets worth US$2.6 billion at the end of 2000, however, its equity amounts to only US$83.5 million, giving little room for large-scale loan operations. =========== M E X I C O =========== GRUPO DINA: Former Chairman Dies After Suffering From Illness ------------------------------------------------------------- Former Grupo Dina Chairman Rafael Gomez Flores died on Sunday after suffering from a gastro-intestinal illness, Reforma/Infolatina reported Tuesday. He was 43 years old. Gomez, last month, resigned from his post as chairman of the struggling heavy-vehicle maker. His duties were taken over by company senior executives Gamaliel Garcia, Guillermo Gomez Flores and Mauricio Mendoza. GRUPO SIDEK: Announces Asset Sales Report For February 2001 ------------------------------------------------------------ Grupo Sidek, S.A. de C.V. (OTC Bulletin Board: GPSAY GPSBY) today announced a report regarding assets sales from February 1, 2001 to February 28, 2001, pursuant to its obligations under the restructuring agreements entered into with Sidek Creditor Trust: ASSETS SALES REPORT FROM FEBRUARY 1, 2001 TO FEBRUARY 28, 2001 (Figures in US$ thousands) Assets with Reorganization Value higher than USD$ 5,000 Sales Value Reorganization Value I. Hotels 0 0 II. Real Estate 0 0 III. Marinas and Golfs 0 0 IV. Other 0 0 Subtotal 0 0 Assets with Reorganization Value Less than USD$ 5,000 Subtotal (transactions) 1,515 N.A. Total 1,515 N.A. ICA: Joint Venture With Fluor Daniel Wins Construction Contract --------------------------------------------------------------- AES Aurora, a subsidiary of AES Corporation, awarded ICA Fluor Daniel a 140-million-dollar engineering, procurement and construction contract for a power generation plant in the Dominican Republic, Infolatina said Tuesday. ICA Fluor Daniel is a joint venture composed of Ingenieros Civiles Asociados (ICA), Mexico's largest construction company, and Fluor Daniel. The power plant will be built 45 kilometers outside of Santa Domingo, the Dominican capital. According to ICA senior executive Jorge Borga Navarete, the completed plant will feature a high level of efficiency and low levels of air and noise pollution. A TCR-LA report published earlier this month stated that ICA posted a 1.55-billion-peso net loss in 2000, a slight drop from the previous year's 1.66 billion pesos. PEMEX: Controversy Over Appointment Continues --------------------------------------------- Mexican LP gas distributors and congressmen from President Vicente Fox's National Action Party (PAN) and the opposition Institutional Revolutionary Party (PRI) countered a recommendation approved by the opposition-controlled Congress last week, Reforma/Infolatina reported Tuesday. As previously reported, the opposition-controlled Congress approved a recommendation seeking the invalidation of Mexican President Vicente Fox's appointment of four prominent businessmen to the board of state-owned energy conglomerate Petroleos Mexicanos (Pemex). According to them, Fox should name a new board for Pemex, featuring energy sector experts who would not have any conflicts of interest in their performance as company directors. However, PAN and PRI argued the recommendation saying that the move by the president will help to improve productivity at Pemex. According to Monterrey National Chamber of Commerce leader Malaquias Aguirre Lopez, the presence of world-class businessmen such as Romo, Zambrano and Slim on Pemex's board is bound to benefit the company substantially. XEROX CORPORATION: To Sell $1.3 Billion Stake To Fujifilm --------------------------------------------------------- Xerox (NYSE: XRX), through its wholly owned European subsidiary, Xerox Limited, has agreed to sell half of its stake in Fuji Xerox Co. Ltd. to Fuji Photo Film Co., Ltd. for 160 billion Yen in cash, more than $1.3 billion dollars based on recent exchange rates. The transaction brings to nearly $2 billion dollars the amount Xerox has raised in asset dispositions since December 2000, representing a critical milestone in the company's turnaround plan. Under the agreement, Fujifilm's ownership interest in Fuji Xerox is increased from 50 percent to 75 percent. While Xerox's ownership interest is decreased to 25 percent, the company retains significant rights as a minority shareholder. All product and technology agreements between Xerox and Fuji Xerox will continue, ensuring that the two companies retain uninterrupted access to each other's portfolio of patents, technology and products. With its business scope focused on document processing, Fuji Xerox will continue to provide colour office product technology to Xerox and collaborate with Xerox on research and development. Xerox maintains its agreement with Fuji Xerox to provide high-end production publishing and solid ink products. "With this transaction, Xerox greatly enhances its liquidity and has made significant progress on its turnaround pledge to generate more than $2 billion dollars in asset sales," said Paul Allaire, Xerox chairman and chief executive officer. "The agreement also preserves the benefits of a model American- Japanese business partnership as Xerox and Fuji Xerox continue to collaborate on and exchange the most innovative technology in the document processing industry." In October of last year, Xerox announced a three-pronged turnaround plan that includes the sale of assets generating $2 billion dollars to $4 billion dollars; cost reductions exceeding $1 billion dollars, and a sharpened focus on its strategic core businesses - especially document services, high-end printing solutions and colour across the product line. In December, Xerox completed the sale of Xerox (China) Ltd. and Xerox (Hong Kong) Ltd. to Fuji Xerox for $550 million dollars cash. "Today we have not only delivered on a key element of our asset sale strategy but also reached a major milestone in restoring our financial strength. Our cost reduction efforts are being aggressively implemented and remain on target to achieve the desired results. The company's core product and service offerings continue to lead the industry in technology and quality," Allaire said. "In short, we are executing on each element of our turnaround plan." The agreement will result in an after-tax book gain of approximately $310 million dollars and is expected to close by the end of March, subject to the completion of Japanese regulatory requirements. Fuji Xerox, incorporated in 1962, is an $8 billion dollars corporation with more than 30,000 employees in the Asia Pacific and Pacific Rim regions. XEROX: Experts Remain Doubtful Despite Recent Asset Sale -------------------------------------------------------- Xerox Corp.'s recent $1.3 billion sale of a 50-percent stake in Japan's Fuji Xerox venture to Fuji Photo Film provides the struggling copier maker some breathing space to steer back toward profitability, Reuters said Tuesday. However, experts remain in doubt about the company's ability to fix its problems quickly. "The fundamentals within the core businesses, that's what really needs to be addressed, and that's not an easy solution," said Tim Ghriskey, a portfolio manager of the $4 billion Dreyfus Fund. Credit Suisse First Boston analyst Gibboney Huske said Xerox faces a challenging economy, where it may have to raise prices even as its customers are thinking twice about spending. "We believe that Xerox faces a daunting task in turning the company around during an economic downturn, as its primary competitors, Canon Inc. and Ricoh, shift into new product cycles," she said. XEROX CORPORATION: Subject Of Another Shareholder Lawsuit --------------------------------------------------------- Xerox Corporation is the subject of a pending shareholder lawsuit accusing the company of committing stock fraud, the law firm of Berman DeValerio & Pease LLP said Tuesday in an Internet Wire report. The lawsuit, filed February 15 in the United States District Court for the District of Connecticut, seeks damages for violations of federal securities laws on behalf of all investors who bought Xerox stock between February 15, 1998 and February 6, 2001 (the "Class Period"). The complaint says that Xerox and several of its top officers reported false financial results during the class period, failing to adhere to the standard accounting practices the company claimed to follow. Among other things, Xerox is charged with: Improperly recognizing revenues from its leasing operations by booking up front those lease payments attributable to future supplies and services. Boosting short-term results by overstating the value of future payments from leases originated in developing countries. Failing to write off mounting bad debts and improperly classifying transactions in its Mexico operations, which resulted in $119 million in charges in the second and third quarters of fiscal 2000. 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 American is a daily newsletter co-published by Bankruptcy Creditors' Service, Inc., Trenton, NJ, and Beard Group, Inc., Washington, DC. John D. Resnick, Edem Psamathe P. Alfeche and Janice Mendoza, Editors. Copyright 2001. 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 $575 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 $25 each. For subscription information, contact Christopher Beard at 301/951-6400. * * * End of Transmission * * *