/raid1/www/Hosts/bankrupt/TCRLA

/raid1/www/Hosts/bankrupt/TCRLA_Public/010831.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, August 31, 2001, Vol. 2, Issue 171 Headlines B R A Z I L CVRD: Announces Delisting of SIBRA and CPFL CVRD: Calls Off Celmar Sale Due To Lack Of Interested Bidders EMBRATEL PARTICIPACOES: Announces Buyback Of Preferred Shares EMBRATEL PARTICIPACOES: Consortium Wins R$144M Contract EMBRATEL: To Focus On Current Corp. Clients Base GLOBO CABO: Hiring New CEO In Pursuit Of Profitability TRANSBRASIL: Shaking Off Troubles To Polish Its Public Image C H I L E INVERRAZ: SQM To Complete Cosayach Takeover In Two Months M E X I C O AEROMEXICO: Grupo Angeles Expresses Interest In Privatization CYDSA: Trying To Raise Cash To Stave Off Default GRUPO DINA: Consultants Say Situation Hopeless, No Plan `B' PEMEX: Experts Push For Cost-Cutting Measures XEROX: Shareholders Remain Apprehensive Despite Good Performance P E R U PESQUERA SAN ANTONIO: Creditors Approve Diamante, Copeinca Bid SERBANCO: Regulator To Release Name Of Liquidator Sep. 24 - - - - - - - - - - - =========== B R A Z I L =========== CVRD: Announces Delisting of SIBRA and CPFL ------------------------------------------- In a company press release, Companhia Vale do Rio Doce (CVRD) disclosed August 29, 2001 that the delisting of its subsidiaries SIBRA - Eletrosiderψgica Brasileira S.A. (SIBRA) and Companhia Paulista de Ferro Ligas (CPFL), was approved by the Extraordinary General Shareholders' Meetings held yesterday. The public notification for acquisition of minority interest will be released soon. The buyback price for SIBRA PNC will be R$ 5.26 per share, 38% above the average price of the last 30 trading sessions (R$3.82) and 28% above its book value per share as of June 30, 2001 (R$ 4.10). The buyback price for CPFL PN will be R$ 12.02 per share, 31% above the average price of the last 30 trading sessions (R$ 9.15) and 7% above its book value per share as of June 30, 2001 (R$ 12.21). The public offer to buy SIBRA and CPFL shares grant liquidity to minority shareholders, and allows them to realize immediately gains derived from an eventual better performance of the companies, which may not materialize. For further information, contact: Roberto Castello Branco: castello@cvrd.com.br +55-21-3814-4540 Andreia Reis: andreis@cvrd.com.br +55-21-3814-4643 Barbara Geluda: geluda@cvrd.com.br +55-21-3814-4557 Daniela Tinoco: daniela@cvrd.com.br +55-21-3814-4946 CVRD: Calls Off Celmar Sale Due To Lack Of Interested Bidders ------------------------------------------------------------- Cia. Vale do Rio Doce (CVRD), the world's largest iron ore exporter, is canceling plans to sell Celmar SA Industria de Celulose e Papel eight months after its first attempt to sell the pulp and paper unit, Bloomberg said Wednesday in a report. Lack of interested potential buyers prompted CVRD to cancel the sale. Now, the company is mulling over the possibility of using the asset to produce charcoal. CVRD is trying to get out of the pulp and paper industry and concentrate on its principal businesses of iron ore mining and transportation. In June, the company sold its stake in Celulose Nipo-Brasileira SA, or Cenibra, for $670.1 million. CVRD sold Bahia Sul Celulose for $320 million in February. The company had forecast that the two remaining pulp and paper assets, Celmar and Floresta Rio Doce, would be sold by the end of August. CVRD is no longer setting a date for the sale of Floresta Rio Doce, but is studying offers for it. EMBRATEL PARTICIPACOES: Announces Buyback Of Preferred Shares ------------------------------------------------------------- Embratel Participacoes SA, Brazil's largest long-distance telephone company, informed in a statement published by the Sao Paulo Stock Exchange that it may buy back up to 5 percent of its non-voting shares, Bloomberg disclosed Wednesday. The company will buy back up to 10.43 billion preferred shares out of a total of 208.56 billion shares in the market over the next three months, taking advantage of their recent price plunge to acquire them cheaply. Embratel's shares have plunged this year as investors worry about increased competition and debts and the possible impact of back taxes, analysts say. "I'm not surprised about this because the shares are very cheap but it doesn't mean that Embratel will do the whole buyback," said Mirela Rappaport, an analyst at ABN Amro Bank in Sao Paulo. "The stock may rise a little on this news." For more information on the company's financial statements see: http://www.bankrupt.com/misc/Embratel.doc EMBRATEL PARTICIPACOES: Consortium Wins R$144M Contract ------------------------------------------------------- Embratel SA, revealed that the consortium it has formed together with Telefonica SA and Prolan won the tender to provide the national post and telegraph company with a nationwide telecom system and operate it, according to a report in AFX-Europe. The consortium will install a network, which will provide data, voice and image services, and link 12,000 points of presence (POP), Embratel said. The R$144-million contract is for 30 months and is renewable once under its current terms. EMBRATEL: To Focus On Current Corp. Clients Base ------------------------------------------------ Following the opening of the domestic market next year, Brazilian telecoms carrier Embratel will concentrate in its current corporate clients base, according to a report Wednesday in O Estado de Sao Paulo. Furthermore, the company plans to offer local phone services for the clients that already count on data services and international connections. Embratel may operate the local phone services as of 2002 if it advances the goals established by Anatel (Agencia Nacional de Telecomunicacoes). GLOBO CABO: Hiring New CEO In Pursuit Of Profitability ------------------------------------------------------ Brazil's No. 1 cable-television provider, Globo Cabo SA, will hire a new chief executive in the person of Luiz Antonio Viana, the president of Brazil's largest gasoline retailer Petrobras Distribuidora SA, Bloomberg reported Wednesday. The company's change in leadership, which is part of a broader plan to bring it closer to profitability, will be ratified at a shareholders meeting yet to be scheduled. Globo Cabo's shares are the second-worst performing in Brazil this year, down 57 percent compared with a 15 percent decline in the benchmark Bovespa index. The company reported two weeks ago its second-quarter loss nearly tripled to $91.2 million, from $34.9 million in the year-ago period. TRANSBRASIL: Shaking Off Troubles To Polish Its Public Image ------------------------------------------------------------ Brazilian airline Transbrasil is regaining its former image, which was damaged when GE Capital Corp. (GE) demanded airline be declared bankrupt in July. The public perception recovery is under way according to Transbrasil president Antonio Celso Cipriani in a report released Wednesday by Gazeta Mercantil. "This brought discredit to the company, which was followed by orders to return airplanes. But, we are managing to recover the confidence of our suppliers and convincing aircraft owners to do business with us," he stated. The executive released Transbrasil's economic and operational equilibrium plan, which concentrates all of the company's operations in the Congonhas airport, in Sao Paulo, as of September 11. The program was presented to the Civil Aviation Department (DAC), last week. "There has been verbal confirmation that the program implies no risk to operations at that airport, as there are sufficient slots. We only have to find a solution for the Brazilian cargo infrastructure company Infraero, regarding the question of our position in the Congonhas hangars," said Cipriano. ========= C H I L E ========= INVERRAZ: SQM To Complete Cosayach Takeover In Two Months --------------------------------------------------------- Two more months will pass before Chilean industrial minerals and chemicals producer SQM completes its takeover of rival iodine producer Cosayach, according to SQM CEO Patricio Contesse in a Business News Americas report Wednesday. The company, which agreed in March to pay US$140 million for Cosayach subject to due diligence, had hoped to finalize the deal by July. However, legal and financial aspects of due diligence have dragged on longer than expected. "It's on track but is much slower than we thought, and the final contract is going to be 5,000 pages long. My best guess is it will be ready in 60 days," Contesse disclosed. Cosayach and SQM have been involved in a series of long-drawn out legal conflicts since the latter, then known as Soquimich, was privatized in 1986. Cosayach controller and Chilean senator Francisco Javier Errazuriz said following the sell-off, several of his properties appeared registered as belonging to Soquimich. Since the letter of intent was signed in March, Errazuriz has faced a suit filed in a Santiago court last month by US creditor bank Chase Corp demanding that his Inverraz holding, which owns Cosayach, be declared bankrupt. =========== M E X I C O =========== AEROMEXICO: Grupo Angeles Expresses Interest In Privatization ------------------------------------------------------------- Grupo Angeles President Olegario Vazquez Rana disclosed the company's interest in the forthcoming privatization of Mexican carrier Aeromexico, Mexican financial daily El Economista said Wednesday. Aeromexico and its chief competitor Mexicana are controlled by government-owned holding company Cintra. Late last year, Mexican antitrust authorities ruled that Cintra should be broken up and sold. CYDSA: Trying To Raise Cash To Stave Off Default ------------------------------------------------ Cydsa SA, a chemical, textile and packaging-materials maker, is selling assets and slashing costs to raise cash to pay a $200- million bond coming due in June 2002, Bloomberg reported Wednesday. According to Jim Garvey, a research analyst with the special situations group at Bank of America Securities in New York, Cydsa is taking the right steps to head off default by selling assets. However, it has given scarce information on what's up for sale and how much it expects to gain from asset sales, which has hurt the bond price, he said. "Is there value there? Absolutely," Garvey said. "It's just hard to determine the value without a full due diligence." The bonds are trading at about 45 cents on the dollar, pointing to investor concern the company won't be able to raise enough capital to pay their debt and hinting that creditors may be unwilling to refinance the bond. "The bottom line is they have to deal with this Eurobond," said Garvey. "The market is saying they can't because the bonds are trading in the 40s." Meanwhile, Cydsa is also in debt talks with its banks, mainly Grupo Financiero BBVA Bancomer SA and Citigroup Inc., because it broke financial covenants, revealed Fernando Trevino, director of corporate financing. Analysts said the company is unlikely to get creditors to refinance the $200 million bond when it comes due because profits have been sinking for the past five years, which boosts its risk. Earnings before interest, taxes, depreciation and amortization -- known as Ebitda -- dropped to $81 million last year from $197 million in 1997. In the first six months of this year, Ebitda fell by a quarter to $30 million. According to Trevino, prices and demand on its products probably would not begin to recover until at least the first quarter of next year. GRUPO DINA: Consultants Say Situation Hopeless, No Plan `B' ----------------------------------------------------------- Mexican truck maker Consorcio G Grupo Dina SA is a company without solutions, analysts declared in a report Wednesday in Mexico City daily Reforma. According to experts tracking the situation, the company is making attempts to scale down the size of its business at the most inopportune time. "The problem was deep, having acquired badly planned debts, and all in light of 1994 and 1995," said Juan Jaime Petersen, consultant to the company. "Dina bet and lost," said Petersen. "Their error was not having a Plan B, and now they find themselves in this situation," he said. "The (financial) crisis hit them badly prepared, and now there is no way to finance Dina," he said. PEMEX: Experts Push For Cost-Cutting Measures --------------------------------------------- Experts suggest that state owned energy company Petroleos Mexicanos (Pemex) should take cost-cutting steps in order to better distribute its income while it waits for the government to pass fiscal reform for the company, Mexico City daily Reforma reported Wednesday. According to energy law specialist Rogelio Lopez Velarde and Colegio de Mexico researcher Miguel Garcia Reyes, Pemex's announcement that it would make greater use of service contracts to gain economies of scale, though limited, is a temporarily adequate step. Pemex's decision to sign broad service contracts, instead of limited contract, as it has done up until now, will permit the company to save significantly in projects that don't have high profitability, said Lopez. XEROX: Shareholders Remain Apprehensive Despite Good Performance ---------------------------------------------------------------- Xerox chief executive Anne M. Mulcahy announced during the company's recent annual shareholders meeting that the Stamford- based company expects to return to profitability in the fourth quarter, the Associated Press reported Wednesday. "So far, we've met our commitments," she said. "We're putting our operations on a sound and disciplined footing. And we're doing all this without mortgaging our future." According to Mulcahy, implementation of a turnaround plan announced last October was on schedule. Xerox has sold more than $2 billion in assets, reduced its debt by $700 million in the second quarter and cut 8,600 jobs. However, several shareholders expressed concern about the company's performance. Maurice Passy, one of the shareholders, noted that Mulcahy had thanked shareholders for their interest in the company. "I would change that word to concern," Passy said. When asked by Passy if she believed Xerox stock represented a speculative or a value investment, Mulcahy answered she believed Xerox stock is undervalued and noted that she had recently invested in the stock. Other shareholders raised concerns about Xerox's billions of dollars in debt and financial irregularities in Mexico that sparked an investigation by the U.S. Securities and Exchange Commission. Xerox officials said the company would continue to reduce debt by moving toward third-party financing for customers. Xerox officials said they cannot predict the outcome of the SEC probe, but said auditors hired by the company conducted a thorough review that led to a restatement of its finances. To see company's latest financial statements: http://www.bankrupt.com/misc/Xerox.pdf For additional information about the financial statements, contact: Leslie F. Varon Director, Investor Relations 06904 203-968-3110 800 Long Ridge Road Stamford, Connecticut Fax (203) 968-3944 ======= P E R U ======= PESQUERA SAN ANTONIO: Creditors Approve Diamante, Copeinca Bid -------------------------------------------------------------- Creditors of Pesquera San Antonio decided to accept the bid submitted by the consortium teamed by Pesquera Diamante and Copeinca (Corporacion Pesquera Inca), South American Business Information reported August 24. The consortium reportedly submitted the best bid, offering US$39.8 million, of which US$26.7 million in cash (with a starting payment of US$3.7 million) and the remainder over an 8-year term. The consortium will also pay US$13.1 million for 8 ships. Additionally, it plans to invest between US$3 million and US$5 million in Pesquera San Antonio over the next 2 years in order to make it operate as normal. SERBANCO: Regulator To Release Name Of Liquidator Sep. 24 --------------------------------------------------------- Peru's banking regulator, which intervened Serbanco last September 7 due to insufficient equity, will announce on September 24 the winner of a contract to handle the second phase of Serbanco's liquidation, Business News Americas revealed Wednesday. During the first phase of the liquidation, Peru's second largest bank Wiese Sudameris acquired Serbanco's loan portfolio, while the country's fourth largest bank Interbank bought its deposits. The second and final phase of the liquidation covers all other assets. Prospective second phase liquidators have until September 20 to submit offers, with the winner to be revealed four days later. However, Serbanco's controlling shareholder, Chilean finance company CB Capitales, has filed an administrative appeal with Peru's government to halt the process and has threatened to take the issue to an international tribunal if the appeal is unsuccessful. 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 and Edem Psamathe P. Alfeche, 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 * * *