/raid1/www/Hosts/bankrupt/TCRLA

/raid1/www/Hosts/bankrupt/TCRLA_Public/011010.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 Wednesday, October 10, 2001, Vol. 2, Issue 198 Headlines A R G E N T I N A ANDRE & CIE: Bunge To Acquire La Plata Cereal B R A Z I L BANCO ECONOMICO: CB To Sell Acominas Interest To Pay Debts CELESC: To Sell Casan Stake To Pay-Off Debt GLOBO CABO: Parent Encounters Hurtle In Planned Stake Sale LIGHT: EDF Injects $550M Cash To Aid Debt Repayments M E X I C O BANRURAL: Feds To Initiate "Complete" Restructuring CREMI-UNION: Cabal Denies Responsibility For Its Collapse GRUPO ALFA: Shares Fall On Subsidiary's Likely Default GRUPO MEXICO: Fitch Downgrades GMM To `BB'; Outlook Stable GRUPO MEXICO: JP Morgan Lowers Recommendations GRUPO SIDEK: Asset Sales Report September 1 through 30, 2001 MCMS INC.: Mexican Assets Included In Court Approved Auction SAVIA: ING Launches Bid To Buy Remaining SCA Stake P E R U PESQUERA COLONIAL: Over Half Of Creditors Approve Plan - - - - - - - - - - ================= A R G E N T I N A ================= ANDRE & CIE: Bunge To Acquire La Plata Cereal --------------------------------------------- In a company press release, Bunge Limited announced Monday that it has signed an agreement to acquire La Plata Cereal S.A. (La Plata), a leading Argentine agribusiness company, for a maximum enterprise value of US$70 million in cash and assumed debt. The final purchase price will be subject to adjustments related to La Plata's financial condition and other contingencies. The acquisition is in line with Bunge's stated strategy of pursuing selective acquisitions to expand its core businesses in key growth markets. Bunge expects the acquisition to be accretive to earnings in the first full quarter of combined operations. Bunge has agreed to acquire La Plata from Andre & Cie S.A., the Swiss agribusiness company, which has been shedding assets since filing for protection from creditors March 8 after losing almost half a billion dollars in two years. Bunge expects the transaction to close in the first quarter of 2002. Upon completion, Bunge will become the largest soybean crusher and second largest exporter of any kind in Argentina. The acquisition will also expand Bunge's fertilizer business, already the largest in South America, into Argentina. "Argentina is among the most competitive agricultural producers and exporters in the world," stated Alberto Weisser, chief executive officer of Bunge Limited. "The acquisition of La Plata strengthens Bunge's leading position in the global grain and oilseed trade." "La Plata's businesses and asset mix are highly complementary to our existing infrastructure," stated Raul Padilla, chief executive officer of Bunge Argentina. "The integration of Bunge Argentina and La Plata will produce a powerful grain origination, soy processing and export platform, and establish Bunge as a leader in the Argentine fertilizer market." Similar to Bunge's existing business in Argentina, La Plata is primarily an export company, shipping grains and oilseed products to Europe and Asia. La Plata's export revenues in fiscal year 2000 exceeded 81% of total revenues. Domestic economic conditions in Argentina have had a limited impact on the Argentine grain and oilseed industry, which is highly export-oriented. Bunge has operated continuously in Argentina since 1884. About La Plata Cereal La Plata Cereal, one of the largest agribusiness companies in Argentina, operates in four distinct lines of business: grain origination (soybeans, corn and wheat), soybean processing, fertilizer and ports and logistics. The company was founded in 1927. La Plata's facilities include six interior grain elevators, one soybean processing plant with two lines, a wholly owned port facility in Puerto San Martin and a branded fertilizer business with a 10% market share in Argentina and over 4,000 farmer customers. About Bunge Bunge is an integrated, global agribusiness and food company operating in the farm-to-consumer food chain with primary operations in North and South America and worldwide distribution capabilities. CONTACT: Edelman Public Relations Stewart Lindsay, 212/704-4435 =========== B R A Z I L =========== BANCO ECONOMICO: CB To Sell Acominas Interest To Pay Debts ---------------------------------------------------------- The Brazilian Central Bank announced plans to sell off Banco Economico's interest in Acominas and disclosed that notice of the sale will be published on the 11th of this month, O Estado de Sao Paulo said in a report. Economico's stake in Acominas reportedly represented 17.67 percent of the company's voting capital. The Central Bank predicted that the minimum price would be proportional to the company's net worth, which is estimated at between US$900 million and US$1 billion. Therefore, the imputed price should be fixed between US$170 million and US$190 million. Proceeds of the sale will be used to settle the liabilities of Economico (currently in an out-of-court process), which amount to R$12.5 billion. Other Acominas' shareholders, Gerdau, NatSteel and Acominas' employees association, will have the first refuse right. CELESC: To Sell Casan Stake To Pay-Off Debt ------------------------------------------- State power distributor Celesc expects the sale of its 19.3- percent stake in state waterworks company Casan to be completed this quarter, Business News Americas reported Monday. According to a Celesc spokesperson, the process will be carried out by Bescval, the brokerage arm of Brazil's Santa Catarina state-owned bank Besc. Celesc anticipates raising some US$39.6 million (110 million reais) from the transaction and will use these proceeds to pay US$61 million in euro commercial papers that matured July 14. Among the companies that have already expressed an interest in the shares are French firms Suez and Saur, and Argentina's Sagua. The sale is part of Celesc's administrative restructuring program being carried out by international consultant Accenture. The transaction had been scheduled for last month, but has been delayed due to continuing technical and legal studies. GLOBO CABO: Parent Encounters Hurtle In Planned Stake Sale ---------------------------------------------------------- Investors and analysts see Globo Cabo's debt of $749 million as a hurdle to Organizacoes Globo's attempts to find a buyer for a stake in the cable television operator, Bloomberg reported Monday. Globo Cabo has about $242 million in debt coming due in 2002, two-thirds of which is denominated in U.S. dollars. With Brazil's real down 29 percent since the beginning of the year and capital markets virtually non-existant for emerging market companies, investors said they don't expect a sustained rally in Globo Cabo shares. "No one knows if this stake sale will really happen or not," said Debora Morsch, who manages 180 million reais in equities at Solidus Brokerage in Porto Alegre. "Globo Cabo has a lot of debt and it needs a lot of investments, while returns on the investments are very low." Companies such as AT&T Latin America Corp., Embratel Participacoes SA and Tele Norte Leste Participacoes SA, or Telemar, may be among the buyers interested in Globo Cabo, analysts and investors said. CONTACT: Globo Cabo Investor Relations: Luis Martinez +5511-5186-2684 lmartinez@globocabo.com.br or Marcio Minoru +5511-5186-2811 minoru@globocabo.com.br LIGHT: EDF Injects $550M Cash To Aid Debt Repayments ---------------------------------------------------- Financially-battered Light, which operates in the state of Rio de Janeiro, has just received a cash infusion of $550 million from its French controller, Electricite de France (EDF), in order to help it fulfill its debt obligations, Les Echos reported Monday. E DF recently announced a reduction of its investments in Brazil for 2002 from $R450 million to $R400 million. Light has recently withdrawn from the competition for control of Companhia Paraense de Electricidade (Copel), the auction of which is planned for the end of the month. These precautionary measures are the result of a difficult economic environment. =========== M E X I C O =========== BANRURAL: Feds To Initiate "Complete" Restructuring --------------------------------------------------- The federal government will begin a "complete" restructuring of Banrural, the rural development bank, which a few days ago has been reported to be on the verge of technical bankruptcy, according to a report Monday in Mexico City daily El Universal. Banrural Director Carlos Ruiz Galindo revealed that restructuring would include an injection of resources. "We are undertaking a process that I would call deep drainage, which is to say, we will put debts and assets in order," Ruiz said. According to him, Banrural has a bad-loan portfolio of 4.5 billion pesos, and book value of only 200 million pesos. Months ago, the bank began a process to reduce costs, which will eventually reduce spending by 40 percent, he related. Ruiz recognized that people equate Banrural with corruption and inefficiency, "and there's a lot of truth in that," he said. "But if we put the bank's story behind us, we are left with an important asset," he added. CREMI-UNION: Cabal Denies Responsibility For Its Collapse --------------------------------------------------------- Facing charges for misappropriating $700 million during his tenure with Grupo Financiero Cremi-Union, former Mexican banker Carlos Cabal on Wednesday admitted that he had contributed to the electoral campaign of former Institutional Revolutionary Party (PRI) presidential candidate Luis Donaldo Colosio, who was assassinated on March 23, 1994. However, according to a report in EFE News Service, Cabal denied responsibility for Banco Cremi- Union's demise. Cabal claims that the bank's financial problems began when the government changed hands and insisted that he had nothing to do with the bankruptcy of Banco Cremi-Union, whose irrecoverable debts were transferred to the Banking Protection Institute (IPAB) and covered with public funds. GRUPO ALFA: Shares Fall On Subsidiary's Likely Default ------------------------------------------------------ Alfa SA, an industrial group with subsidiaries in auto parts, mining and petrochemicals, on Monday saw its shares fell 1.3 percent to 6.85 pesos, reported Bloomberg. Alfa's steelmaker subsidiary Hylsa SA last week had its credit rating lowered by Moody's Investors Service due to falling steel demand and higher costs that may force the company to default on $115 million debt due by the end of January. Moody's lowered its rating for Hylsa three notches to ``Caa3'' from ``B2.'' GRUPO MEXICO: Fitch Downgrades GMM To `BB'; Outlook Stable ---------------------------------------------------------- Fitch has downgraded the senior secured local currency corporate credit rating for Grupo Minero Mexico, S.A. de C.V. (GMM) from `BBB-' Rating Watch Negative to `BB' Rating Outlook Stable. The company's secured export notes (SENs) were also downgraded to `BB' Rating Outlook Stable from `BBB-' Rating Watch Negative. In addition, GMM's guaranteed notes due 2008 and 2028, were also downgraded from `BB+' Rating Watch Negative to `BB-' Rating Outlook Stable. GMM's senior secured foreign currency rating has been lowered from `BB+' to `BB' Rating Outlook Stable. Fitch maintains the `AAA' foreign currency rating on GMM's Series E SENs which are guaranteed by MBIA Insurance Corporation. The rating actions affect approximately $1.0 billion of debt securities. The rating actions are the result of the continuing negative trend in GMM's credit quality since the company upstreamed $250 million to its parent company, Grupo Mexico, in 1999 for its acquisition of Asarco, Inc (Asarco). During 2000 and the first half of 2001, the company's EBITDA-to-interest expense (U.S. GAAP) ratios were 1.7 times(x) and 1.6x, respectively, and its total debt-to-EBITDA ratios were 6.0x and 7.1x, respectively. While copper prices were relatively weak during this time period (averaging $0.82 per pound in 2000 and $0.77 per pound in 1H01), these ratios were below those expected by Fitch for the then existing rating category during that stage in the price cycle. Since July 2001, copper prices have remained near $0.65 per pound. Due to the negative economic outlook in the U.S. next year, prices are expected to remain depressed. Should copper prices average in the low 70-cents-per-pound range, GMM would not generate sufficient cash flow to cover production costs, financing costs and even to a lesser extent discretionary capital expenditures. In addition to the declining trend in copper prices, a strong Mexican peso relative to the U.S. dollar as well as high energy costs continue to pressure GMM's earnings. As a result, it is unlikely that GMM's credit protection measures will improve in a material manner in the near term. Fitch's ratings also consider the indirect burden of higher cost and higher-levered affiliate company Asarco. In addition, refinancing risk has increased as a result of heightened risk aversion. Approximately $850 million of GMM's total debt of $1.3 billion comes due between 2001 and 2004. To meet these amortizations, GMM expects to use its free cash flow and proceeds from new bank facilities, including an extension of a secured export note guaranteed by MBIA. GMM's ratings are supported by the company's favorable cost structure and attractive mining assets. GMM's principal copper mining facilities -- Mexicana de Cobre and Mexicana de Cananea -- are located in northern Mexico and include two open-pit copper mines with a cash cost of production of about $0.55 per pound at June 30, 2001. Copper sales of about 390,000 tons (860 million pounds) account for approximately two-thirds of GMM's revenues. GMM's copper mining assets and competitive cost structure should produce healthy cash flows at copper prices in the mid-80-cents- per-pound range. GMM's assets also consist of Industrial Minera Mexico (IMMSA), which operates several underground polymetallic mines throughout Mexico that produce mainly zinc, as well as gold, silver and other metals. GMM is a wholly owned subsidiary of Grupo Mexico, Mexico's largest mining company. In order to maximize efficiencies, Grupo Mexico recently aggregated its principal mining operations GMM and Asarco, by uniting them under a new holding company called Americas Mining Corporation (AMC). A key asset of the Asarco operations is a 54%-ownership stake in Southern Peru Copper Corporation (SPCC), one of the world's largest, low-cost private sector copper producers, which is located in Peru. AMC's primarily U.S. dollar-denominated sales accounted for 84% of Grupo Mexico's total sales in 2000. Serving the export market through operating entities in three countries, Grupo Mexico benefits from geographically diverse cash flow generation. In addition, Grupo Mexico owns 74% of Grupo Ferroviario Mexicano, S.A. de C.V. (GFM), which operates Mexico's largest railway system. This profitable and low-leveraged subsidiary generated approximately 25% of Grupo Mexico's consolidated EBITDA in 2000 and has become an important source of cash flows for Grupo Mexico from outside the copper/mining industry. Grupo Mexico also has the ability to monetize part of its investment in GFM without losing operating control. CONTACT: Fitch, Chicago Anita Saha, 312/368-3179 Joe Bormann, 312/368-3349 GRUPO MEXICO: JP Morgan Lowers Recommendations ---------------------------------------------- JP Morgan has lowered its recommendations for Mexican mining group Grupo Mexico to `market-perform' from `long-term buy,' Excelsior reported October 5. JP Morgan based its recommendations on the firm's `tenuous' financial position and the slump in the price of copper (representing 64 percent of Grupo Mexico's total sales). Now, it expects the group's EBITDA for this year to stand at US$0.67 per share rather than US$0.7. For next year, original expectations of US$0.93 have shrunk dramatically to US$0.62 as the firm's ability to reduce debt will come under pressure. GRUPO SIDEK: Asset Sales Report September 1 through 30, 2001 ------------------------------------------------------------ Grupo Sidek, S.A. de C.V. announced Monday a report regarding assets sales from September 1, 2001, to September 30, 2001, pursuant to its obligations under the restructuring agreements entered into with Sidek Creditor Trust: ASSETS SALES REPORT FROM SEPTEMBER 1, 2001 TO SEPTEMBER 30, 2001 (Figures in US$ 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) 771 N.A. Total 771 N.A. NA/Not available. CONTACT: Alejandro Giordano Trejo of Grupo Sidek, S.A. de C.V., in Mexico, 011-523-678-5911 MCMS INC.: Mexican Assets Included In Court Approved Auction ------------------------------------------------------------ MCMS, Inc., announced Monday that the U.S. Bankruptcy Court for the District of Delaware granted final approval of a $49 million Debtor-in-Possession (DIP) financing facility provided to it by a consortium of banks led by PNC Bank. The DIP facility will be used to fund the ongoing business operations of MCMS. The Court also approved bidding procedures regarding the sale of substantially all of the assets of MCMS to Manufacturers' Services Limited (MSL). The sale to MSL is subject to higher and better offers through the Court supervised competitive sale process. The order approving the bidding procedures provides that competing bids must be submitted by November 19, 2001. An auction involving MSL and those parties that have timely submitted bids will be held on November 27, 2001. A hearing on the sale is scheduled for November 29, 2001, in Wilmington, Delaware. Rick Rowe, Chief Executive Officer of MCMS, said, "MCMS is very pleased with the approval by the Court of the final DIP facility, which we believe will provide customers and vendors assurance that we will meet normal business obligations and operate without interruption. We are grateful for the continued support of the banks, customers and vendors and the dedication of our employees. MCMS is also pleased that the Court set the bid deadline for November 19th. This timeframe provides assurance to customers, vendors and employees as to the conclusion of the auction process and will provide potential bidders ample time to conduct due diligence and formulate bids" As previously announced, on September 18, 2001, MCMS and its two U.S. subsidiaries filed voluntary petitions for relief under Chapter 11 of the U.S. Bankruptcy Code in the United States Bankruptcy Court for the District of Delaware in Wilmington to implement a sale of substantially all of its assets to MSL. About MCMS, Inc. MCMS, Inc. is a global leading provider of advanced electronics manufacturing services to original equipment manufacturers who primarily serve the data communications, telecommunications, and computer/memory module industries. MCMS targets customers that are technology leaders in rapidly growing markets, such as Internet infrastructure, wireless communications and optical networking, that have complex manufacturing service requirements and that seek to form long-term relationships with their electronics manufacturing service providers. The company offers a broad range of electronics manufacturing services, including pre- production engineering and product design support, prototyping, supply chain management, manufacturing and testing of printed circuit board assemblies, full system assembly, end-order fulfillment and after-sales product support. MCMS delivers its range of services through operations in Nampa, Idaho; Durham, North Carolina; Penang, Malaysia; Monterrey, Mexico; and San Jose, California. To see company's latest financial balance sheet: http://www.bankrupt.com/misc/MCMS.pdf CONTACT: MCMS, Inc. Chris Anton, 208/898-2600 cjanton@mcms.com SAVIA: ING Launches Bid To Buy Remaining SCA Stake -------------------------------------------------- Dutch Financial Services group ING launched October 4 a public offer for the 13 percent it does not already hold in Mexico's largest insurer, Seguros Comercial America (SCA), Reuters said in a report. Accordingly, ING is offering private investors 34.63 pesos for up to 48,274,066 ordinary shares in the insurer. The offer would amount to approximately $175 million at current exchange rates for the stake. The offer for the shares would hold through Oct. 17, ING said. Last year, ING paid $809 million to Mexico's Savia SA for a 41.5- percent stake in Comercial America, and in June this year, paid another $791 million to the holding company for an additional 45 percent to take control of the insurer. ======= P E R U ======= PESQUERA COLONIAL: Over Half Of Creditors Approve Plan ------------------------------------------------------ About 69.3 percent of the creditors of Pesquera Colonial approved the fishing company's restructuring plan, allowing it to refinance US$17.74 million of debts, South American Business Information reported October 2. The company needs US$3.5 million in working capital. Pesquera plans to produce 7,000 tons of fish meal during the last quarter of the current year. The company forecasts an overall production of 15,000 tons for the whole of the year and aims to produce 20,000 tons of fish meal during next year. 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 240/629-3300. * * * End of Transmission * * *