/raid1/www/Hosts/bankrupt/TCRLA

/raid1/www/Hosts/bankrupt/TCRLA_Public/011130.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, November 30, 2001, Vol. 2, Issue 234 Headlines A N T I G U A & B A R B U D A LIAT LTD: Expects UK Market Increase For Holidays A R G E N T I N A AEROLINEAS ARGENTINAS: New Owners' Restructuring Plans Working CORMINE: Authorities Meet To Discuss How To Effect Sell Off ENRON: Argentine Asset May Make An Attractive Buy For Sempra FARGO S.A.: Misses $2M Principal Payment Due November 1 B R A Z I L CVRD: Forms Strategic Alliance With Codelco ELETROPAULO METROPOLITANA: Sells Debt Abroad For Better Rates ENRON: Teeters On Bankruptcy After Breakdown In Dynegy Deal TELEMAR: Mixed Reviews From Analysts On Pauletti's Appointment C H I L E AERO CONTINENTE: Court Orders Staff Cuts, Flight Reductions EDELNOR: Bankruptcy Looms Ahead As Bond Payment Imminent LAN CHILE: Inks New Working Contract With Pilots C O L O M B I A AVIANCA: Issuing New Shares To Head-Off Collapse SEVEN SEAS: Abandons Tres Pasos 16 Exploration Well H O N D U R A S GEOMAQUE EXPLORATIONS: 3Q01 Results Down Sharply J A M A I C A AIR JAMAICA: Growing Losses May Delay Break Even Beyond 02 M E X I C O AEROMEXICO/MEXICANA: Small Airline Executives Blast Airline Bill SATMEX: Revenues Expected To Suffer Next Year SATMEX: Demands Equal Treatment For Other Satellite Companies STARMEDIA NETWORK: Nasdaq Decides To Delist, Hearings Requested STARMEDIA NETWORK: Levy and Levy, P.C. Files Class Action Suit P A R A G U A Y ANTELCO: Government Unveils New Proposal For Workers P E R U INDUSEL: To Start Paying US$14.7M Of Debts Next Year T R I N I D A D & T O B A G O BWIA: Profits May Not Come This Year Due To September 11 Attacks V E N E Z U E L A SIDOR: Looks To Restructure $1.4B In Bank Loans - - - - - - - - - - - ================================= A N T I G U A & B A R B U D A ================================= LIAT LTD: Expects UK Market Increase For Holidays ------------------------------------------------- The United Kingdom (UK) market to Antigua and Barbuda and other parts of the Caribbean remains unperturbed amidst the fall off in traffic to many tourism destinations as a result of the September 11 terrorist attacks, says the Caribbean Week. According to David Stuart, the Director of Marketing at the Caribbean Airline LIAT, Antigua along with other Caribbean countries stand to benefit from positive economic indicators coming out of the UK market. Stuart noted that the UK pound is stable, and that the British view the Caribbean as a safe haven. And since there is no immediate recovery of business to and from the United States in site, UK clients are opting for a holiday in the Caribbean. The director revealed that in line with the Carrier's Twin Strategy, LIAT is focused on ensuring that there is adequate airlift to the smaller territories, which do not have a jet port, operating a series of shuttles out of their hubs to meet these demands along with servicing their indigenous intra-Caribbean travelers. He further stated that the Spanish Caribbean with its low attractive prices will also stand to benefit from the UK increases, but the English speaking Caribbean is viewed as providing better value for money. Ailing airline LIAT recently obtained a much-needed capital boost from the governments of Antigua & Barbuda and St. Vincent & the Grenadines. ================= A R G E N T I N A ================= AEROLINEAS ARGENTINAS: New Owners' Restructuring Plans Working -------------------------------------------------------------- The group of investors consisting of Spanair, the Marsans travel and leisure group and Air Plus, which recently took over Aerolineas Argentinas (AA), said they are pleased with the progress made in restructuring the troubled Argentine airline, reports EFE. "Our negotiations with the unions are going very well, and our viability plan has been well received by employees and contractors," said Spanair Chairman Gonzalo Pascual. "We are working on refloating the company, looking at new routes, and negotiating with unions to come up with an accord that will serve as the basis for AA's future expansion," Pascual revealed. The plan calls for employees to accept salary cuts of between 15 and 20 percent in exchange for job protection guarantees and stock options that can be cashed in after a three year holding period. As for routes, Pascual said "the idea is to build up our internal market and what we see as regional flights, with the major cities of South America, particularly those in Chile and Brazil". However, the Spanair head said that the long distance market remains a key part of AA's strategy. Next month its planes will fly from Buenos Aires to Milan and Rome and, next year, if all goes well, the company plans to fly routes to Sydney and Miami as well. CORMINE: Authorities Meet To Discuss How To Effect Sell Off ----------------------------------------------------------- Mining authorities from Argentina's Neuquen province were scheduled to meet Thursday with advisers from federal government's Mines Department to present proposals to sell off the province's Cormine minerals company, reports Business News Americas. Cormine liquidator Martin Palacios noted that the proposals drawn up by the Consultants Mabromata y Asociados involve several options. One option, Palacios cited, is to privatize Cormine via a trust fund. "This is what we must analyze with them [the federal government], to see which is the best way to go about it and how to press ahead with the process." The process will include studying all the Company's assets and liabilities, valuing each of its mineral properties and devising a way to auction them off, Palacios revealed. One part of the process that has already been completed is the relocation of Cormine staff to different provincial organizations, under a decree issued by the governor. The province aims to offload all the assets of the Company to the private sector, either by auction or direct sale, and to close Cormine down. ENRON: Argentine Asset May Make An Attractive Buy For Sempra ------------------------------------------------------------ A spokesman from Sempra Energy, owner of electric and natural-gas utilities, revealed that the Company is interested in buying some of Enron Corp.'s assets now that the energy trader's planned merger with Dynegy Inc. has failed, relates Bloomberg. "We are interested in some of Enron's hard assets and our interest would lie in those assets that would have synergies with our own operations," Sempra spokesman Doug Kline said. "Beyond that I couldn't give you more specifics." Houston-based Enron has an ownership interest in Argentina's 4,104-mile natural-gas pipeline system, the largest pipeline system in South America. Sempra Energy International owns a 43- percent stake in two natural-gas utility holding companies in Argentina. "We are looking at selling our global assets that are not core to our business, and so we'll be continuing with an asset-sale program," Enron spokeswoman Karen Denne said. "We are not going to comment on who we've had discussions with or what the status of those is." FARGO S.A.: Misses $2M Principal Payment Due November 1 ------------------------------------------------------- Cia. de Alimentos Fargo SA, a bakery unit of Exxel group, failed to make a principal payment of US$2.0 million due November 1 on a senior secured credit agreement dated March 19, 1999, says AFX- Europe. The default follows a non-payment of interest due on the same issue as of August 1. Fargo says it is now negotiating with the lender to find a solution to the non-payment status. =========== B R A Z I L =========== CVRD: Forms Strategic Alliance With Codelco ------------------------------------------- According to an official press release, Companhia Vale do Rio Doce (NYSE: RIOpr) (CVRD), the world's largest iron ore producer, and Corporacion Nacional del Cobre de Chile (CODELCO), the world's largest copper producer, signed Wednesday a Memorandum of Understanding (MOU). The MOU establishes the basis for the study and development of a strategic association aimed at the exploration of new opportunities to produce and process copper. The main points of the MOU are: (i) the intention to create a 50%/50% joint venture between CVRD and CODELCO to support the international expansion of the two companies in the global copper industry; (ii) once the joint venture is incorporated, it will be managed as an independent company according to the best world practices. CONTACTS: 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 ELETROPAULO METROPOLITANA: Sells Debt Abroad For Better Rates ------------------------------------------------------------- Brazil's largest power distributor Eletropaulo Metropolitana SA, which is controlled by AES Corp., has sold debt abroad to take advantage of falling borrowing costs, Bloomberg reveals. According to Eduardo Nascimento, assistant director for BB Securities, which managed the sale, Eletropaulo was able to place $50 million in one-year euro commercial paper that will pay 7.75 percent. ENRON: Teeters On Bankruptcy After Breakdown In Dynegy Deal ----------------------------------------------------------- Enron Corp is now a few steps away from bankruptcy after smaller rival Dynegy Inc. abandoned plans to buy the energy trader, the AP reports. Two rating agencies on Wednesday dropped Enron's credit rating to junk, obliging it to make good on billions of dollars of debt it probably can't pay. Dynegy Inc. immediately backed out of an $8.4 billion acquisition plan that was already being renegotiated. Investors went on a record one-day rush to unload shares -- 339 million of them -- and sent Enron stock down 85 percent to 61 cents. Enron's money-losing broadband unit and power operations in India and Brazil are now up for sale. "I'm not sure they have any other alternatives (to bankruptcy), unless banks are willing to siphon more money into a black hole," said Prudential Securities analyst Carol Coale. "Investors will not buy it." The credit rating downgrades by Standard & Poor's and Moody's Investors Service made $3.9 billion of Enron debt due immediately. Up to $16 billion in other debt originally due next year could come due earlier. Dynegy had agreed to buy Enron for at least $23 billion in stock and assumed debt this month. But Dynegy said the energy trader breached covenants in the acquisition agreement, triggering a "material adverse" clause that allowed it to call off the deal. Dynegy and ChevronTexaco Inc., which holds a 26 percent stake in Dynegy, already had pumped $1.5 billion into the ailing Enron. Dynegy said it would exercise a right to purchase Enron's Northern Natural Gas pipeline that it received in return for the infusion. Enron said it is reviewing Dynegy's decision to exercise the option and analysts are anticipating a battle over Enron's assets in bankruptcy court. TELEMAR: Mixed Reviews From Analysts On Pauletti's Appointment -------------------------------------------------------------- Jose Fernandes Pauletti was recently named president of Brazil's largest fixed-line telephone operator Telemar, informs Reuters. Pauletti, who is serving as the Company's interim president, will be in charge of navigating Telemar through a new opening of competition in Brazil's telecommunications sector next year. The decision, which awaits approval from the Company's board, spurred mixed reactions from analysts. Pauletti had already been tapped to head the company in July in the interim after former president Manoel Horacio da Silva quit abruptly. He had before served as its vice president of operations since 1999. Industry analysts were not sure if Pauletti was up for it alone. "Telemar's initial excuse was that it wanted someone more in touch with the convergence of services in the telecommunications sector for the company's new phase," said Carolina Gava at BES Securities. "They didn't find that person so a transitory situation is going to become permanent." Analysts reckoned Pauletti may have to share power with two vice presidents, one for finance and another in the key strategy and regulations post. The first is most likely to be held by Telemar's current financial director Alvaro dos Santos. The other, said analysts, is still up for grabs. "They'll be able to monitor events more closely with the division of power," said Suzana Salaru, an analyst at Brascan bank. ========= C H I L E ========= AERO CONTINENTE: Court Orders Staff Cuts, Flight Reductions ----------------------------------------------------------- AeroContinente Chile takes another beating after the 28th Civil Court in Santiago ordered the airline to reduce its number of flights and fire some of its employees. The measures are being enforced by the court due to the Company's difficult situation and the need to reprogram its US$17-million debt, according to the agreement signed with the main creditors, gasoline distributing company Shell and various insurance companies. EDELNOR: Bankruptcy Looms Ahead As Bond Payment Imminent -------------------------------------------------------- Edelnor, which posted losses of $44.890 million in the first three quarters of 2001, may eventually have to file for bankruptcy, reports South American Business Information. Market analysts believe the Company doesn't have the means to pay US$4.5 million to bondholders on December 14. Several electricity companies are beginning to take an interest in purchasing Edelnor's assets. GasAtacama, controlled by CMS Energy and Endesa, said it would like to buy Edelnor's natural gas combined cycle generating plant close to Mejillones. Electroandina could be interested in purchasing Edelnor's stake in Gasoducto Norandino to become the sole owner of that Company. Additionally, AESGener would like to buy Edelnor's turbines to use them somewhere else. LAN CHILE: Inks New Working Contract With Pilots ------------------------------------------------ Lan Chile S.A., announced Wednesday that it has signed a new four-year contract with the 111 pilots who form the LanChile Pilot Union. The new contract, scheduled to expire on November 30, 2005, comprises a 2-percent annual real increase in salaries with other adjustments in variable bonuses linked to productivity and company profitability. Included in the contract are some "quality of life" adjustments such as short-term roster changes and pilot travel benefits. The Company estimates the annual cost of the new agreement will be approximately $0.4 million. Luis Ernesto Videla, LanChile's Chief Operating Officer, stated, "The Company and the LanChile pilot union were able to reach this new long-term agreement due to their mutual commitment to LanChile's long-term growth plans." "We are optimistic that with this agreement we can start working together with the Company to improve the situation, but there's still a lot of work to do," said Carlos Gonzalez, a union leader who helped negotiate the contract. The pilots group has shrunk by more than three-fourths to 111 in the past year from resignations and firings that the union says were due to anti-union practices and layoffs as the airline struggles with a decline in air travel following the Sept. 11 terrorist attacks. Lan Chile has denied the accusations, and a spokeswoman said the airline hasn't received any formal complaints by workers alleging anti-union activities. Lan Chile lost $4.8 million in the third quarter, suffering with airlines worldwide from a drop in air travel after the September 11 terrorist attacks on the U.S. The company's shares are down 15 percent since the attacks. CONTACT: Lan Chile S.A, Santiago Alejandro de la Fuente - Chief Financial Officer Daniel Jones - djones@lanchile.cl Andres Bianchi - abianchi@lanchile.cl Tel: (562) 565-2538 / 6812 =============== C O L O M B I A =============== AVIANCA: Issuing New Shares To Head-Off Collapse ------------------------------------------------- Shareholders of Colombia's flagship-airline Avianca approved Wednesday a plan to sell 10 billion pesos ($4.2 million) in new equity to the public in a bid to raise cash and avoid collapse, reports Reuters. "What we are doing is taking the necessary measures to avoid collapse," said Vitys Didziulis, company president. According to Didziulis, Avianca will issue the shares on a date and at a market price still to be determined. Avianca, whose assets total negative $216 million, is struggling to stay in business amid widening losses. In the first nine months of this year, the Company's losses grew to 259 billion pesos from 202 billion pesos in the same period a year ago. In October, shareholders agreed to buy an unspecified number of shares and assume $68.5 million in debt to help the company avoid bankruptcy. Executives of Valores Bavaria SA, the majority-owner of the world's third largest airline, have said that Avianca needs between $50 million and $80 million in additional cash before the end of the year, mostly to help cope with a drop in air traffic following the September 11 terrorist attacks in the U.S. Avianca awaits government approval on its request to merge with fellow Colombian airline, Aerolineas Centrales de Colombia SA (Aces). SEVEN SEAS: Abandons Tres Pasos 16 Exploration Well --------------------------------------------------- Seven Seas Petroleum Inc. (Amex: SEV) announced that the Tres Pasos 16 exploration well was drilled to a total measured depth of 6,831 feet and has been temporarily abandoned. Information obtained from drilling and electric logs indicated that the well did not encounter the productive portion of the Cimarrona formation of the Guaduas Oil Field. The Company will continue to review the well results to determine if additional work on the well is merited. The Company also announced that it has begun the mobilization of the drilling rig for the Escuela 2 subthrust exploration well. The drilling of this well should commence within two weeks provided there are no weather delays. The Company's previously announced rights offering to shareholders is currently underway and will end on Friday, December 7, 2001. Shareholders who do not hold their shares through a broker may exercise their rights by completing the subscription documents previously sent to them and submitting those documents directly to the subscription agent to ensure receipt by 5 p.m., Eastern Standard Time, on December 7, 2001. Shareholders who hold their shares through a broker must provide instructions to their broker who will then take measures to notify the subscription agent. These shareholders will need to check with their brokers to determine the date by which their broker must receive instructions to exercise rights. Some brokers will need to receive instructions as early as Tuesday, December 4, 2001 to guarantee that the subscription agent is notified prior to the December 7, 2001 deadline. Seven Seas Petroleum Inc. is an independent oil and gas exploration and production company operating in Colombia, South America. The Company's primary emphasis is on further exploration, development and production of the Guaduas Oil Field, located in Colombia's prolific Magdalena Basin. CONTACT: Bryan Sanchez Investor Relations of Seven Seas Petroleum Inc. +1-713-622-8218 =============== H O N D U R A S =============== GEOMAQUE EXPLORATIONS: 3Q01 Results Down Sharply ------------------------------------------------ Geomaque Explorations Ltd. announced on Nov 27, 2001 consolidated financial and operating results for the third quarter, ended September 30, 2001. The Company reported a consolidated net loss during the third quarter of $1.75 million, or $0.03 per share, compared with a loss of $110,000 or $0.00 per share, in the third quarter of 2000. The loss was due, largely, to a $650,000 inventory adjustment related to the wind-down of the San Francisco operation, $300,000 in exploration at Marathon and $100,000 in head office staff terminations to reduce overhead going forward. In the third quarter of 2001, the Company realized an average gold price of $272 per ounce. This compares with $302 per ounce realised in the third quarter of 2000 and $260 per ounce in the second quarter of 2001. San Francisco Mine The San Francisco Mine in Mexico has been in leach-only mode since November 2000 and heap rinsing commenced in August 2001. This mine produced 3,054 ounces of gold in the third quarter of 2001 and 16,420 ounces for the nine months then ended. It is anticipated that gold production associated with the rinsing of the pad will continue into the first quarter of 2002. Vueltas del Rio Mine The Vueltas del Rio Mine in Honduras produced 10,020 ounces of gold during the third quarter for a total of 20,232 ounces since production commenced in March 2001. The cash cost per ounce totalled $251 during the third quarter. All costs net of revenues at Vueltas were deferred and charged to mining properties until June 30, 2001, when the mine was considered to have achieved commercial production. Marathon Palladium Project The Company can earn a 50% interest in the Marathon Palladium Project near Marathon, Ontario by spending a total of $1.8 on exploration and development of the property by November 2004. A total of $714,000 has been spent to September 30, 2001. A new resource estimate,completed in October 2001, shows a measured and indicated resource of 21.3 million tonnes grading 1.32 g/t palladium, at a 0.8 g/t palladium cut off, 0.34 g/t platinum and 0.4% copper, contains 1.1 million ounces of palladium and platinum. Loan Restructuring The Company has entered into a series of amendments to the Credit Agreement dated June 9, 2000 with Resource Capital Fund II L.P. ("RCF"), which provided the financing for the Vueltas del Rio Mine. As at September 30, 2001 the Company paid RCF $575,000 against a fee due on that date of $825,000. RCF waived, until October 18, 2001, all requirements to make sinking fund payments and other amounts payable under the terms of the Credit Agreement including the balance of the fees due. Subsequent to September 30, 2001 RCF agree to further extensions of the waiver to December 17, 2001 and, to negotiate, by that date, terms to restructure the Credit Agreement, including, extensions of the current repayments terms. Financial Update The Company's cash position at September 30, 2001 amounted to $0.6 million, a decrease of $1.3 million from December 31, 2000. The working capital deficit increased to $6.3 million at September 30, 2001 from $0.1 million at December 31, 2000. However, subsequent to the end of the quarter an amount of $2.9 million owing to certain creditors was eliminated as described in the subsequent event note, Note 8, to the financial statements. Also at September 30, 2001, the entire $3.5 million payable under the terms of the Credit Agreement with RCF was reported as due within one year and therefore accounted for as current. As noted above terms of this loan are being renegotiated. Such renegotiation would include extensions of the repayment terms. Since start-up on March 9, 2001, the Company has experienced difficulty attaining the production targets set out in the Vueltas de Rio Mine feasibility study. This has resulted in the deferral of payments to a number of the Company's creditors. These creditors have continued to work with the Company in an effort to bring the Vueltas de Rio Mine into line with the feasibility plan. A second leach pad is under construction and is expected to be ready for loading early in 2002. Restructuring of the Credit Agreement with RCF is ongoing and, while there is no assurance of it's success, the final terms of a new term sheet are being negotiated. Geomaque Explorations Ltd. is an international mining company that is producing gold from its Vueltas del Rio Mine in Honduras, and exploring for precious metals in the Americas. Geomaque Explorations Ltd. Management Discussion and Analysis For the Period ending September 30, 2001 (all figures in United States dollars) Overview The Company's principal operation is the Vueltas del Rio Mine in Honduras. After the first gold pour in March 2001, commercial production was achieved by the end of June. The quarter ended September 30, 2001, is the first quarter to include the operating results for this property. The San Francisco Mine in Mexico has been in leach only mode since November 2000. Heap rinsing commenced in August, 2001. Gold production will continue at declining rates into the first quarter of 2002. The Company can earn a 50% interest in the Marathon Palladium Project near Marathon, Ontario by spending a total of $1.8 on exploration and development of the property by November 2004. A total of $714,000 has been spent to September 30, 2001. A resource estimate shows the measured and indicated resource of 21.3 million tonnes containing 1.32 g/t palladium and 0.34 g/t platinum that at a 0.8 g/t palladium cut off contains 1.1 million ounces of palladium and platinum. Results of Operations and Cash Flows The loss for the third quarter of 2001 was $1.75 million, or $0.03 per share, versus loss of $110,000, or $0.0 per share for the third quarter of 2000. The year to date loss totals $4.62 million or $0.08 per share versus a profit of $853,000 or $0.02 per share for the nine months ended September 30, 2000. The Vueltas de Rio Mine produced 10,020 ounces of gold in the third quarter of 2001 and 20,232 ounces since the first pour in March, 2001. The price realized from gold sales was $272 per ounce and the cash costs were $251 per ounce during the third quarter. All costs net of revenues at Vueltas were deferred and charged to mining properties until June 30, 2001, when the mine was considered to have achieved commercial production. A total of $858,000 was spent on mine development, procurement and pre- production costs in the nine months ended September 30, 2001. This figure is net of $2.7 million of gold revenue from the 10,212 ounces of gold produced from development ore mined prior to June 30, 2001 The San Francisco Mine in Mexico has been in leach only mode since November of 2000 and heap rinsing commended in August of 2001. Gold production for the three months ended September 30, 2001 amounted to 3,054 ounces and 16,420 ounces for the nine months then ended. During the nine months ended September 30, 2001, the Company incurred exploration expenditures of $917,000, of which $652,000 was incurred on the Marathon Palladium Project near Marathon, Ontario. The Company has entered into a series of amendments to the Credit Agreement dated June 9, 2000 with Resource Capital Fund II L.P. ("RCF"). As at September 30, 2001 the Company paid RCF $575,000 against a fee due on that date of $825,000. RCF waived, until October 18, 2001, all requirements to make sinking fund payments and other amount payable under the terms of the Credit Agreement including the balance of the fees. Subsequent to September 30, 2001 RCF agreed to further extensions of the waiver to December 17, 2001 and to negotiate, by that date, terms to restructure the credit agreement, including extensions of the current repayments terms. Financial Condition The Company's cash position at September 30, 2001 amounted to $0.6 million, a decrease of $1.3 million from December 31, 2000. The working capital deficit increased to $6.3 million at September 30, 2001 from $0.1 million at December 31, 2000. However, subsequent to the end of the quarter an amount of $2.9 million owing to certain creditors was eliminated as described in the subsequent event note, Note 8, to the financial statements. Also at September 30, 2001 the entire $3.5 million payable under the terms of the Credit Agreement with RCF was reported as due within one year. As noted above terms of this loan are being renegotiated. Such renegotiation would include extensions of the repayment terms. Since start-up on March 9, 2001, the Company has experienced difficulty attaining the production targets set out in the Vueltas del Rio feasibility study. This has resulted in the deferral of payments to a number of the Company's creditors. These creditors have continued to work with the Company in an effort to bring the Vueltas del Rio Mine into line with the feasibility plan. A second leach pad is under construction and it is expected to be ready for loading early in 2002. Restructuring of the Credit Agreement with RCF is ongoing. There is no assurance that RCF will agree to restructure the terms of the loan facility, nor that the Company's other creditors will remain supportive of the Company's efforts to achieve profitable production at the Vueltas del Rio Mine. To see company's financial statements: http://www.bankrupt.com/misc/Geomaque_Explorations.pdf CONTACT: John Paterson, President and CEO Geomaque Explorations Ltd (416)956-7470 ============= J A M A I C A ============= AIR JAMAICA: Growing Losses May Delay Break Even Beyond 02 ---------------------------------------------------------- Air Jamaica had been looking to break even next year despite projecting an US$18-million loss for this year, The Jamaica Gleaner reports. However, just recently, the airline told an investment forum that the projected amount have been recast to US$45 million, throwing out its other projections, which had been on target up to June. Air Jamaica is "setting sails for recovery," said William Rodgers, senior vice president for Industry Affairs, referring to plans by the airline to regain ground. The plan, according to Rodgers, also included a cut in the number of flights on some routes. This strategy is expected to lower operational costs relating to expenses like fuel and landing fees. Savings in this area, Mr. Rodgers said, are projected at US$12 million during October to December this year. "We have been holding costs pretty much on target." Gross revenues for the year are about US$380 million, or little below that, he said. The airline's other strategies, aimed at carving out share in a now jittery market, involves: taking its current flights back to full capacity by the end of this month, having reduced operation by 15 per cent post-September 11; and taking an aggressive sales and marketing pitch to the ethnic market. Also, it is seeking to hone in on and exploit expected changes within the market. =========== M E X I C O =========== AEROMEXICO/MEXICANA: Small Airline Executives Blast Airline Bill ---------------------------------------------------------------- The decision to support Mexico's airlines was criticized by the executives of small airlines, says Mexico City daily Reforma. According to them, the aid only considered Aeromexico and Mexicana, ignoring the position of smaller airlines in the national market. "When they talk about initiatives or support from the federal government for aviation, they are only thinking about Aeromexico and Mexicana. That's the reality," said Aviacsa Director Jordi Centellas. "The small companies are only used in order to say that competition exists in the market," he added. His company will have to analyze whether the billion pesos to be made available to the nation's airline industry through loans from the Development Bank is cheap or expensive, said Centellas. CONTACT: AEROMEXICO Mayte Sera Weitzman of AeroMexico, +1-713-744-8446, or mweitzman@aeromexico.com MEXICANA DE AVIACION Jenny Jenks, Marketing Director, International Division of Mexicana Airlines, +1-210-491-9764, or ennyjenks@mexicana.com SATMEX: Revenues Expected To Suffer Next Year --------------------------------------------- Satelites Mexicanos (Satmex) sees a difficult 2002 on expectations that the Company's revenues will decline as a result of the loss of one of its main clients, SKY, Company President Lauro Gonzalez revealed in a Mexico City daily Reforma report. In addition to that, Satmex's revenues next year may further suffer since the Company is likely to continue operating with only two thirds of its assets following the loss of Satmex V, making it all the more urgent to put Satmex VI in orbit, Gonzalez said. However, the Satmex VI launch is not expected to happen until the first quarter of 2003. Satmex is hoping that getting the new satellite in orbit will bring in more revenues, returning the company to turnover levels of previous years. SATMEX: Demands Equal Treatment For Other Satellite Companies ------------------------------------------------------------- Satelites Mexicanos (Satmex) will continue to urge the Communications and Transport ministry (SCT) to treat equally all investors in the Mexican satellite market "until they put restrictions on everyone, or take them away from Satmex", said company President Lauro Gonzalez, with reference to the authorities, reports Mexico City daily Reforma. Satmex is required to provide a portion of its satellite capacity for the use of the federal government, while the company's new competitors have no similar requirement, Gonzalez revealed. "For that reason we have said to the authorities that we want equality in competition, and they not put restrictions on Satmex," said Gonzalez. STARMEDIA NETWORK: Nasdaq Decides To Delist, Hearings Requested ---------------------------------------------------------------- StarMedia Network (www.starmedianetwork.net), a struggling Latin American Internet company, announced Wednesday that it received a Nasdaq Staff Determination on November 21, 2001, indicating that, due to its failure to file its Form 10-Q for the period ended September 30, 2001, StarMedia is not in compliance with the requirement for continued listing set forth in Nasdaq's Marketplace Rule 4310(c)(14), and that its securities are, therefore, subject to delisting from The Nasdaq National Market. StarMedia has requested a hearing before a Nasdaq Listing Qualifications Panel to review the Staff Determination. Pending the outcome of this review, the delisting of the Company's securities will be stayed. There can be no assurance the Panel will grant StarMedia's request for continued listing. If the Company is unsuccessful in its appeal, it will evaluate other available alternatives. As previously announced, the Company intends to file its Quarterly Report on Form 10-Q for the quarter ended September 30, 2001 promptly after completion of its investigation of accounting issues with respect to revenue recognition by two of the company's Mexican subsidiaries, as well as any required restatement of its prior financial statements. StarMedia Network is the leading integrated Internet media and solutions company for Spanish- and Portuguese-speaking audiences, providing technology and services that enable consumers and businesses to take full advantage of the Internet. The company has operations in Argentina, Brazil, Chile, Colombia, Mexico, Puerto Rico, Spain, Uruguay, Venezuela, and throughout the United States. CONTACT: Press and Investors - Romi Schutzer, Senior Vice President, Communications of StarMedia Network, +1-212-905-8269 or romi.schutzer@starmedia.net STARMEDIA NETWORK: Levy and Levy, P.C. Files Class Action Suit -------------------------------------------------------------- A class action has been commenced in the United States District Court for the Southern District of New York on behalf of all purchasers of StarMedia Network, Inc. (Nasdaq: STRM, STRME) ("StarMedia" or the "Company") securities between April 11, 2000 and November 19, 2001, inclusive (the "Class Period"), against StarMedia, Fernando J. Espuelas (co-founder of the Company, former Chief Executive Officer, and former Chairman of the Board of Directors), and Steven J. Heller (former Chief Financial Officer). The complaint charges that defendants violated Sections 10(b) and 20(a) of the Securities Exchange Act of 1934, and Rule 10b-5 promulgated thereunder, by issuing a series of material misrepresentations to the market during the Class Period concerning the Company's financial performance. The complaint alleges that StarMedia reported artificially inflated financial results in press releases and filings made with the SEC by improperly recognizing revenue in violation of Generally Accepted Accounting Principles ("GAAP"). Specifically, the complaint alleges that two of the Company's primary subsidiaries, AdNet S.A. de C.V. and StarMedia Mexico, S.A. de C.V., had engaged in improper accounting practices which had the effect of materially overstating StarMedia's reported revenues and earnings by at least $10 million. On November 19, 2001, as alleged in the complaint, StarMedia issued a press release announcing that based on the "preliminary" results of an internal investigation into its accounting practices, it expects to restate its financial statements for fiscal year 2000 and the first two quarters of 2001 and that those financial statements should not be relied upon. The Company further reported that its Chief Financial Officer had "resigned." Immediately following the announcement of the restatement, the NASDAQ Stock Market halted trading in StarMedia stock, pending the receipt of additional information from the Company. StarMedia stock last traded at $0.38 per share, which is 98.5% less than the Class Period high of $25.50, reached on April 11, 2000. No class has yet been certified in this action, and until a class is certified an investor is not represented. If you purchased StarMedia Network securities during the Class Period, you have the right to be represented by counsel and to participate in this action as a plaintiff. CONTACT: Levy and Levy, P.C. Stephen G. Levy, Esq. One Stamford Plaza, 263 Tresser Blvd., 9th Floor, Stamford, CT 06901 866-338-3674 (toll free), 203-564-1920 =============== P A R A G U A Y =============== ANTELCO: Government Unveils New Proposal For Workers ----------------------------------------------------- The Paraguayan government unveiled a new proposal for workers of Antelco, the state-owned telecommunications company, which is slated to be passed on to private hands in March, reports EFE. The proposal would grant workers severance payments equal to 1.5 months of pay for each year of employment, plus a 0.50-percent stake in the future privatized company. "Labor-related liabilities will be amortized during privatization ... we have eliminated the guarantee clauses from the tender bases, and we are requesting that every firm interested in taking part in the round deposit a certified check equal to the total amount of labor-related liabilities," said Reform Minister Juan Ernesto Villamayor. The minister explained that the labor-liability checks would be deposited in a trust fund until the privatization process concluded. This, the official said, was President Luis Gonzalez Macchi's main proposal to the unions. Gustavo Vargas, leader of the National Telecommunications Workers Union (Sinattel), however, related that what unions wanted is "a dignified withdrawal, and to mitigate the social impact of the layoffs." Workers planned to discuss the offer during a meeting Thursday, Vargas said, adding that Sinattel should review the appeals it has filed - most with the Supreme Court - including a request for the office of the Comptroller of the Currency to bar Antelco from becoming a corporation prior to privatization. ======= P E R U ======= INDUSEL: To Start Paying US$14.7M Of Debts Next Year ---------------------------------------------------- Peruvian company Indusel (Industrial Selva), whose restructuring plan was approved on March 8, 2000, plans to pay US$14.7 million in debts (plus applicable interest) between 2002 and 2014, reports South American Business Information. Accordingly, the company is to create an alliance with Agroindustrial Santa Maria (ASM) in order to provide production outsourcing services to ASM's clients. Indusel is expected to produce and sell 4,800 refrigerators and 1,900 freezers during 2001. The Company projects sales to grow by 4 percent annually. ================================= T R I N I D A D & T O B A G O ================================= BWIA: Profits May Not Come This Year Due To September 11 Attacks ---------------------------------------------------------------- National airline BWIA is projecting a much smaller profit, if at all, for its upcoming financial year-end due to the recent fallout caused by the September 11 terrorist attacks in the US, says The Trinidad Express. BWIA had posted excellent net profits for the first half of the year, according to the airline's CEO, Conrad Aleong. But now, with higher war risk insurance premiums, increased security costs and a decline in passenger travel, BWIA's profit would be smaller, "if at all," the executive admitted. The airline has rebounded since the attacks, largely through a series of cost-cutting measures. These included cutting back flights to New York, Miami and Washington by 10 percent, asking staff to take vacations now and a wage increase freeze. BWIA has also "put spending on hold" and has introduced a US$10 war-risk insurance surcharge on international flights and a similar US$5 surcharge on regional flights. Aleong has told shareholders a year-end profit is still possible. He also maintained that the situation was not so grave as to warrant lay-offs and this option would be used only if there was no other. ================= V E N E Z U E L A ================= SIDOR: Looks To Restructure $1.4B In Bank Loans ----------------------------------------------- Venezuelan steelmaker Siderurgica del Orinoco (Sidor) began talks earlier this week toward restructuring $1.4 billion in bank loans, reports Bloomberg. The move follows a refinancing, which took place in February last year. During that time, Sidor managed to strike a deal with 23 banks led by Spain's Banco Santander Centro Hispano, Citigroup's Citibank NA, Venezuela's Banco Provincial SA and Banco Industrial de Venezuela to extend repayment of $449 million in loans over six and a half years. >From then on, the steelmaker's ability to service its debt has been hampered by falling demand and weak steel prices. Sidor is 70 percent-owned by the Amazonia Consortium, which comprises Argentina's Siderar SA, Hylsamex SA, Tubos de Acero de Mexico SA, Brazil's Usinas Siderurgica de Minas Gerais and Venezuela's Siderurgica Venezolana Sivensa SA. Venezuela owns the remaining 30 percent. 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 * * *