/raid1/www/Hosts/bankrupt/TCRLA

/raid1/www/Hosts/bankrupt/TCRLA_Public/011022.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 Monday, October 22, 2001, Vol. 2, Issue 206 Headlines A R G E N T I N A AEROLINEAS ARGENTINAS: Fargosi Named New President EL SITIO: Claxson Sells Decompras.com Assets To Terra Lycos B O L I V I A LAB: Two US Firms Want 50 Percent Stake of VASP B R A Z I L BANCO ECONOMICO: Ciquini Stake To Be Liquidated In Auction EMBRAER: Delegating Foreign Firms To Do ISS Work EMBRATEL: Shares Drop On Earnings Concern Over Doubtful Accounts GLOBO CABO: Shares Fall On Lower Earnings Forecast MOULINEX: Court Suspends Decision Until Monday C H I L E COMPANIA MINERA: Reiterates 'All or nothing' Stand on Asset Sale TELEFONICA CTC: Inks Option to Sell Stake in Sonda Until 2005 H O N D U R A S GEOMAQUE EXPLORATIONS: Advancing Loan Restructuring J A M A I C A AIR JAMAICA: Implements Insurance Surcharge M E X I C O ABC-NACO: Mexican Subsidiary Not Included In Chapter 11 Filing CINTRA: In Talks With Fed Govt. Over Loan Guarantee Request GRUPO BITAL: May Be Forced To Submit New Audits P E R U EDELNOR SA: Sells 100M Soles Of 5-Yr. Bonds To Refinance Debt T R I N I D A D & T O B A G O BWIA: Official Makes Clarifications On Fees Charged - - - - - - - - - - - ================= A R G E N T I N A ================= AEROLINEAS ARGENTINAS: Fargosi Named New President ------------------------------------------------------------- Argentine lawyer Horacio Fargosi, a former member of Aerolineas Argentinas' board of directors, was named the new president of the Argentine airline, EFE reported Thursday. The decision was made at a board of directors meeting held Wednesday subsequent to the completion of Spanish consortium Air Comet's deal to purchase the Argentine airline from Spanish state-owned holding company SEPI. Antonio Mata, who is also president of Air Comet, heads an executive committee that manages the airline. Air Comet is a partner with the tourism group Marsans, as well as the Spanair and Air Plus airlines. The president of Air Plus, Argentine Luis Lupori, is vice president of Aerolineas Argentinas' executive committee, led by Mata. EL SITIO: Claxson Sells Decompras.com Assets To Terra Lycos ----------------------------------------------------------- Claxson (Nasdaq: XSON) announced Thursday it has sold certain assets of DeCompras.com, an e-commerce business targeting Mexico and Mexican-Americans in the United States, to Terra Lycos (Nasdaq: TRLY). The terms of the transaction were not disclosed. El Sitio, Inc., the Internet company that merged to become part of Claxson last month, had previously determined not to devote the financial and other resources required to further develop DeCompras.com. Accordingly, El Sitio discontinued the operations of DeCompras.com in the second quarter of 2001. Claxson stated that the divestiture of DeCompras.com will free up capital resources for deployment into growth initiatives for its media businesses. Claxson, through its El Sitio network of Web sites, will continue to offer users a shopping guide which provides links to other websites for online sales by local and U.S.-based e-merchants. The El Sitio network also provides a shopping help center dedicated to assisting users as they navigate the online buying process. About Claxson Claxson (Nasdaq: XSON) is an integrated provider of branded entertainment content targeted to Spanish and Portuguese speakers around the world. The company has a portfolio of popular entertainment brands that are distributed over multiple platforms through Claxson's combined assets in pay television, broadcast television, radio and the Internet. Claxson was formed through the merger of El Sitio and assets contributed by the Cisneros Group and funds affiliated with Hicks, Muse, Tate & Furst Inc. Headquartered in Buenos Aires, Argentina, and Miami Beach, Florida, Claxson has a presence in all key Ibero American countries and in the United States. To see company's latest financial statement: http://www.bankrupt.com/misc/El_Sitio.pdf CONTACT: Press & Media - Alfredo Richard of Claxson, +1-305-894-3588 or Jennifer Gery of Brainerd Communicators Inc., +1-212-986-6667, gery@braincomm.com; or Investors, Jeff Majtyka, majtyka@braincomm.com, or Lenny Santiago, santiago@braincomm.com both of Brainerd Communicators Inc., +1-212-986-6667 ============= B O L I V I A ============= LAB: Two US Firms Want 50 Percent Stake of VASP ----------------------------------------------- General Electric (GE) and International Leasing Financial Corporation (ILFC) are seriously pursuing the 50 percent stake at Lloyd Aereo Boliviano (LAB) that VASP intends to sell, reports EFE News Service. The two companies have reportedly tendered an offer to the Bolivian government, which owns 48 percent of the flagship carrier. According to the report, both companies plan to strengthen the airline by extending it new capital and increasing its fleet of airplanes. Estimates peg the 50 percent stake held by the Brazilian-owned VASP in LAB at approximately $30 million. LAB is currently buried under a $50 million debt load, having racked up losses totaling $18 million over the last two years. But despite the swelling liabilities, the company is still attractive to potential investors because of its annual turnover of $ 150 million. Accusations of mismanagement and corruption have been hurled against the company lately. The District Attorney's Office in Cochabamba, where the carrier is headquartered, has already initiated an investigation into the accusations. =========== B R A Z I L =========== BANCO ECONOMICO: Ciquini Stake To Be Liquidated In Auction ---------------------------------------------------------- Troubled Banco Economico of Brazil is set to lose its majority interest in petrochemicals company Ciquini this November, according to a report in Business News Americas. The liquidator of the bankrupt bank, Natalicio Pegorini, has scheduled an auction of the bank's Ciquini shares next month, but failed to specify the exact date. Banco Economico owns 67 percent of ordinary shares and 56 percent of the total shares in Ciquini, both valued approximately US$30 million. The company operates in the Camcari northeastern petrochemicals pole in Bahia State, and the Taubate pole in Sao Paulo State. EMBRAER: Delegating Foreign Firms To Do ISS Work ------------------------------------------------ A press release Wednesday by Espacial revealed that Brazil's contribution to the International Space Station (ISS) is running the risk of being reduced to the production of small parts, Gazeta Mercantil reported Thursday. Espacial stated that local aircraft manufacturer Embraer, which is responsible for Brazil's contribution to the space station, has delegated leading engineering and development projects for the Brazilian equipment to two foreign companies, Astrium and Goodrich. Espacial is a consortium of 10 Brazilian aerospace companies. To see company's latest financial statements: http://www.bankrupt.com/misc/Embraer.pdf CONTACT: Anna Cecilia Bettencourt +55 12 345 1106 acecilia@embraer.com.br Milene Petrelluzzi +55 12 345 3054 milene.petrelluzzi@embraer.com.br EMBRATEL: Shares Drop On Earnings Concern Over Doubtful Accounts ---------------------------------------------------------------- Brazil's largest long-distance provider Embratel lost 7.6 percent to 7.30 reais, according to a report Thursday in Bloomberg. Embratel has problems with customers not paying their bills, and parent WorldCom Inc. may be selling some of its stock, after deciding to exclude Embratel results on their balance sheet in the last few months. "I'd wait for something positive to happen before" buying Embratel stock again, said Daniel Barker, emerging markets portfolio manager with J&W Seligman & Co. in New York, who sold the stock two years ago. "Until there is some kind of catalyst, at best you'll tread water and you may lose." To see company's latest financial statements: http://www.bankrupt.com/misc/Embratel.pdf CONTACT: Embratel Participacoes S.A. Silvia M.R. Pereira Investor Relations TELEPHONE: (55 21) 2519-9662 FAX: (55 21) 2519-6388 EMAIL: invest@embratel.com.br or Wallace Borges Grecco Press Relations TEL: (55 21) 2519-7282 FAX: (55 21) 2519-8010 EMAIL: cmsocial@embratel.net.br GLOBO CABO: Shares Fall On Lower Earnings Forecast -------------------------------------------------- Shares of cable television provider Globo Cabo SA fell 4.6 percent to 62 Brazilian centavos on expectations of lower results in the third quarter, Bloomberg reported Thursday. "Subscribers could be in line or slightly lower than second quarter, but average revenue per user could continue decreasing as the economic slowdown affects consumer spending. As the company reports in dollar we should see a decrease in revenue in line with currency depreciation," UBS Warburg said in a report. INVESTOR RELATIONS CONTACTS: Augusto Rocha, or Marcio Minoru Miyakava, or Luis Henrique Martinez all of Globo Cabo S.A. Rua Verbo Divino, 1356 Sao Paulo - SP - 04719-002 - Brazil Phone: (5511) 5186-2681 MOULINEX: Court Suspends Decision Until Monday ---------------------------------------------- The commercial court of Nanterre put off a decision over the fate of ailing home appliance maker Moulinex Thursday, Reuters said in a report. According to the court's presiding judge, Jean-Claude Denis, none of the bids was acceptable as it stood, but added that that could change. "The tribunal has just heard that the conditions could be lifted in the short term so that one of the solutions could become acceptable," Denis said. Denis further disclosed that the court would reconvene at 1500 hours (1300 GMT) on Monday, October 22, to decide whether to accept one of the bids or wind up the firm for good. Moulinex's French rival SEB and property fund Fidei, a unit of US holding Leucadia, have both made partial offers for the ailing company. But neither bid extends to Moulinex's loss-making microwave ovens and vacuum cleaner businesses, and would only save a limited number of the group's 21,000 jobs worldwide. ========= C H I L E ========= COMPANIA MINERA: Reiterates 'All or nothing' Stand on Asset Sale ---------------------------------------------------------------- Chilean copper mine Disputada de las Condes is sticking to its "all or nothing" policy regarding the sale of its assets despite buyers' interest in only two of them, according to a report in Reuters. Spokesman Guillermo Garcia recently said that the policy stands even amidst talks that a potential buyer only wants its Los Bronces and El Soldado copper mines. "The answer is no. Disputada has a series of internal synergies so that the whole is greater than the sum of its parts," said Garcia when asked by Reuters if the company would be willing to sell its three main assets separately. Accordingly, Antofagasta Plc, which recently formalized its interest in the company, is not keen on acquiring Disputada's Chagres smelter. Garcia, however, says the Company is talking with several other interested buyers, although he declined to identify them due to a "confidentiality agreement." State-owned Codelco, the world's largest copper producer, is reportedly pursuing the Company as well because of the proximity of Los Bronces mine to Codelco's Andina mine. Garcia says the Company is not expecting a sale to be finalized until late this year or early next year. TELEFONICA CTC: Inks Option to Sell Stake in Sonda Until 2005 ------------------------------------------------------------- Chile's Telefonica CTC has signed an option that will allow it to sell its 60 percent stake in IT firm Sonda over the next four years, Reuters reported Wednesday. According to the report, the Company inked the deal with Sonda's Andres Navarro (40 percent owner), as part of a recent strategic move to give more focus on core telecom business holdings. "This is due to the interest of Telefonica CTC Chile of concentrating its investments in essential assets for the development of the telecommunications business," explained a statement released to Chile's securities regulators. The option signed Monday will expire on June 30, 2005 and provides for a minimum sale price of $94.4 million until the end of 2003 and $84 million until June 20, 2005. The Company claims the sale would have little impact on its financial results. =============== H O N D U R A S =============== GEOMAQUE EXPLORATIONS: Advancing Loan Restructuring --------------------------------------------------- Geomaque Explorations Ltd. announced Thursday that it is continuing to work with its principal lender, Resource Capital Fund II L.P. of Denver, Colorado ("RCF"), on the restructuring of its credit and security arrangements with RCF under the agreement dated June 9, 2000 (the "Credit Agreement") and, has reached agreement with RCF to further extend the time to finalize the terms of this restructuring to November 6, 2001. In the meantime, RCF has deferred all payments required under the Credit Agreement. Geomaque Explorations Ltd. is an international mining company that is producing gold from its Vueltas del Rio Mine in Honduras and San Francisco Mine in Mexico, and exploring for precious metals in the Americas. CONTACT: John Paterson President and Chief Executive Officer Geomaque Explorations Ltd. 1210-181 University Ave., Toronto, ON M5H 3M7, (416) 956-7470; ============= J A M A I C A ============= AIR JAMAICA: Implements Insurance Surcharge ------------------------------------------- National airline Air Jamaica has introduced its new insurance surcharge on all tickets issued for travel on or after October 15, according to a report in The St. Vincent Herald. The carrier was prompted to add the insurance tax on passenger tickets in the wake of last month's terrorist attacks in the US and the "dramatic increases" in insurance costs. The insurance surcharge applies to all domestic and international travelers on all Air Jamaica flights. It applies to all passengers, including children and infants, holding tickets issued on Air Jamaica or by other airlines for travel on Air Jamaica. The surcharge is in addition to all other charges that already apply and cannot be discounted, nor waived. The surcharge of US$2.50 or its equivalent for each domestic sector, and US$5 or its equivalent for each international sector, will be collected at the time of ticket pick up and is applicable to all fares. =========== M E X I C O =========== ABC-NACO: Mexican Subsidiary Not Included In Chapter 11 Filing -------------------------------------------------------------- ABC-NACO Inc. (ABCR) announced Thursday that the company and its U.S. subsidiaries have filed voluntary petitions to reorganize their businesses under Chapter 11 of the U.S. Bankruptcy Code. The filings, due primarily to the severe downturn in the rail supply industry and the company's large debt burden, were made in the United States Bankruptcy Court for the Northern District of Illinois, in Chicago. Operations around the world, including the United States, will remain open, operating to fulfill existing and future customer requirements. This filing does not include the company's subsidiaries or joint ventures in Canada, Mexico, Scotland, Sweden, Portugal, or China. Filing for reorganization became necessary due to a severe liquidity crisis caused primarily by the exceptionally weak market for ABC-NACO's products. Additional factors included the 80-day strike at the Sahagun, Hidalgo, Mexico facility and the roof collapse at the Cicero, Illinois facility, both of which occurred this past summer. To ensure continuation of operations, ABC-NACO received a commitment for a $20 million debtor-in-possession (DIP) financing facility from its existing senior secured bank group. The financing will become available for future operating obligations, once approved by the court. Together with the cash generated from operations going forward, this financing will provide the necessary liquidity for the company to fulfill future obligations to customers, suppliers and employees. "Despite our efforts to reduce costs and maximize cash flow, the continuing deterioration of the rail supply market significantly aggravated our liquidity situation. After careful review of the company's financial condition and all available alternatives, the Board of Directors and senior management concluded today's court filing by our U.S. operations was a necessity," said Vaughn Makary, President and Chief Executive Officer of ABC-NACO. The company has retained the management consulting firm of Morris-Anderson and Associates, Ltd. and the investment banking firm of Lincoln Partners L.L.C. to assist it in the evaluation of reorganization alternatives in order to maximize its business enterprise value. Makary added, "In the best interest of our constituencies, including our employees, the company's domestic and foreign operating units will continue to serve their customers during this process of maximizing business enterprise value." The company said it is filing first day motions to support its employees, customers and vendors, to obtain interim financing authority, to maintain existing cash management programs, to retain legal, financial, and other professionals relative to the company's reorganization cases, and for other relief. The company is retaining the law firm of D'Ancona & Pflaum L.L.C. to assist in the court proceedings. The company is one of the world's leading suppliers of technologically advanced products to the rail industry. With four technology centers around the world, the company holds pre- eminent market positions in the design, engineering and manufacture of high-performance freight car, locomotive and passenger suspension and coupling systems, wheels and mounted wheel sets. The company also supplies railroad and transit infrastructure products and services and technology-driven specialty track products. It has offices and facilities in the United States, Canada, Mexico, Scotland, Portugal and China. CONTACTS: For ABC-NACO Investors: Restructuring Hotline 800-793-7121 For U.S./International Media: Wendy Bennett Director Corporate Communications 630-792-2010 ABC-NACO Inc. Wayne R. Rockenbach 630/792-2010 CINTRA: In Talks With Fed Govt. Over Loan Guarantee Request ----------------------------------------------------------- Cintra, the holding company for Aeromexico and Mexicana, is seeking a government guarantee for a $50-million loan due this month in order to allow airlines pay premiums for insurance against accidents caused by terrorism, Mexico City daily El Universal reported Thursday. According to Senator Eric Rubio Barthell, the company is now in talks with the federal government regarding the matter. "Insurance for accidents caused by terrorism rose from 3 cents to 3.30 dollars per seat. That signifies, for the next year, close to $50 million in additional payments to insurance companies, but neither Aeromexico nor Mexicana have the money to pay this," related Rubio. The proposed guarantee would be in addition to the contingency plan announced by the Communications and Transport ministry. The loan could come from domestic or foreign banks, Rubio said. GRUPO BITAL: May Be Forced To Submit New Audits ----------------------------------------------- Bital, along with other banks such as BBVA-Bancomer, Banamex and Banorte, could be obliged to submit new audits once the National Action Party (PAN) faction in the Chamber of Deputies reaches an agreement with other legislators. According to a report Thursday in Mexico City daily Reforma, these audits could lead to the banks having to repay some of their 72 billion pesos in credit. "The PAN does not accept the explanation of the bankers and some authorities that report from auditor Michael Mackey was a complete audit that limits the ability of the Chamber of Deputies to complete other procedures," related Deputy Jaime Salazar Silva. The Bank Savings Protection Law establishes that the banks should submit to new audits, after which their old Fobaproa IOUs would be substituted for IPAB notes. ======= P E R U ======= EDELNOR SA: Sells 100M Soles Of 5-Yr. Bonds To Refinance Debt ------------------------------------------------------------- In an effort to help cover maturing debt and finance investments, Peruvian electricity distributor Edelnor SA sold 100 million soles ($29 million) of five-year bonds, Bloomberg disclosed Thursday. According to Alberto Carrera, capital markets head at Citicorp Peru SA, the bonds pay annual interest of 6.9 percent plus a variable rate to compensate for inflation. Demand totaled 269 million soles, Carrera said. Citicorp managed the sale along with BBVA Continental brokerage. ================================= T R I N I D A D & T O B A G O ================================= BWIA: Official Makes Clarifications On Fees Charged --------------------------------------------------- Officials of BWIA said that the Airport Improvement Fee (AIF) is a levy of the Airports Authority and that BWIA, like all airlines, is "merely a collector," The Trinidad Express revealed in a report. In a statement issued Tuesday, the airline's Corporate Communications director, Clint Williams, explained that the AIF is a "user fee" concept where the users of the airport support the maintenance of the facility they use. According to Williams, these fees are normal at airports world- wide and the International Air Transport Association (IATA) has an administrative process to help airport authorities collect this money though a charge on airline tickets. BWIA, being a national carrier, has to represent all airlines operating at Piarco, with IATA, Williams said. IATA then puts procedures in place so that all tickets issued world-wide have the AIF levy included and ensures that the collected fees are remitted to the Airports Authority. He said this process is being finalized and that passengers will be advised when the fee will be included in their tickets. 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 * * *