/raid1/www/Hosts/bankrupt/TCRLA_Public/011213.mbx
T R O U B L E D C O M P A N Y R E P O R T E R
L A T I N A M E R I C A
Thursday, December 13, 2001, Vol. 2, Issue 243
Headlines
A R G E N T I N A
BHN: Fitch Lowers BHN III Mortgage Trust Bonds to `CCC'
FIAT SPA: To Reduce Manufacturing Presence in Argentina
FIAT: Restructuring News Sends Shares Lower
IMPSA: S&P Cuts Ratings After November Note Payment Missed
B R A Z I L
CELESC: Documentation Problems Delay Casan Sale To December 13
COPENE: Issues Full Year-End Projections FY01, Near Breakeven
CVRD: Government Yet To Announce Program For Its 32% Stake
ELETROPAULO METROPOLITANA: Sells US$200M 5-yr Bonds To Pay Debts
EMBRATEL: Unit Signs $70M Outsourcing Contract
TRANSBRASIL: Presents Restructuring Plan To Government
C H I L E
AERO CONTINENTE: Court Attaches Revs To Pay Workers' Severance
TELEFONICA CTC: Comptroller Shuns Rate Modification Petition
M E X I C O
AEROMEXICO/MEXICANA: Baggage Problems Drastically Reduced in 01
BITAL: Looking To Sell Minority Stake To Foreign Investors
CINTRA: House Approves US$180M Aid For Airline Industry
HYLSAMEX: Creditors Reschedule Payment on US$627 Million Debt
MINERA AUTLAN: Debt-restructuring Only Way Out Say Analysts
SANLUIS CORPORACION: Bondholder Pressure May Weigh On Shares
- - - - - - - - - - - -
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A R G E N T I N A
=================
BHN: Fitch Lowers BHN III Mortgage Trust Bonds to `CCC'
-------------------------------------------------------
Fitch has downgraded the BHN III Mortgage Trust series 1997-2
class A1 and A2 bonds to `CCC' from `B'. The rating remains on
Rating Watch Negative.
The rating revision follows Fitch's downgrade on Dec. 3, 2001 of
Argentina's issuer rating to `DDD' from `C' and the lowering of
Argentina's country ceiling to `CC' from `CCC+'. The Argentine
government recently instituted a series of controls designed to
halt capital flows out of Argentina. According to the government
decree, usage of local bank deposits for private sector external
debt service will henceforth require authorization from
Argentina's central bank. Furthermore, the government placed
limitations on cash withdrawals from Argentine financial
institutions.
Fitch has previously commented that the imposition of controls
raises doubts about the ability of institutions to make foreign
currency payments abroad. The BHN III transaction has a three-
month liquidity reserve available to cover transfer and
convertibility controls. Fitch has received notice that the
master servicer, Banco Hipotecario, has begun authorization
procedures with the Argentine central bank in order to continue
making timely payments. Fitch will monitor the transaction on an
ongoing basis and provide comment as the situation in Argentina
develops.
CONTACT: Fitch
Mia Koo, New York, 212/908-0651,
or
Eduardo D'Orazio, Buenos Aires, 5411 4327 2444
FIAT SPA: To Reduce Manufacturing Presence in Argentina
-------------------------------------------------------
In a company press release, the Board of Directors of Fiat S.p.A.
announced results from their recent meeting under the
Chairmanship of Paolo Fresco. The meeting was designed to review
the Group's 2002 outlook as well as a program of business and
financial initiatives aimed at strengthening the Group.
The following initiatives were announced:
- A broad industrial restructuring plan, resulting in
extraordinary charges of approximately Euro 800 million in 2001
and the consequent negative impact on the year's financial
statements;
- The reorganization of Fiat Auto into four Business Units
(FIAT/Lancia, Alfa Romeo, International Development, Services),
with each unit acting as a full-fledged entity responsible for
its individual economic and financial performance, featuring
separate product development, production, marketing and
commercial organizations. The aim of this reorganization is to
maximize brand valuation;
- A redefined program of disposals and divestitures totaling Euro
2 billion in 2002;
- Two securities offerings which are the subject of separate
press releases that are also being issued this day.
The global economic crisis, already apparent at the end of the
first half of 2001 and which has intensified following the
terrorist attacks of September 11, negatively impacted the
Group's profitability in 2001, delaying the effects on its
financial results of steps already taken to improve operating
profitability and reduce debt.
These steps, as already communicated, encompass: further
evolution of the Group's portfolio of businesses, notably through
the disposal of non-core activities; growth in profitability
through development of new products, brands and services; cost
containment through manufacturing synergies and process
reengineering; and debt reduction in order to improve the Group's
financial profile and credit ratings.
However, the deterioration in the worldwide economic conditions
has resulted in:
- A significant reduction in the sales volumes recorded by
certain business units and the adoption of increasingly
aggressive pricing policies by major competitors, to offset the
expected sales declines in other sectors;
- A significant slowdown in the planned divestiture of Magneti
Marelli's activities, and the consequent impact on debt-reduction
objectives.
During the course of the year, the Group has proactively
responded to this increasingly negative environment.
- The Fiat Stilo, introduced on the major European markets in
October, has achieved significant success: just two months after
its introduction, 80,000 orders have already been received from
European dealers. This result has been achieved without changes
in the planned price positioning of the new model.
- Fiat Auto's strategy of maximizing the valuation of its brands
has already shown significant results on the Fiat brand and, to
an even greater degree, on the Alfa Romeo brand. The Lancia
brand, through the planned launch of the new Thesis in Spring
2002, should also strongly benefit.
- In Brazil, the Fiasa has strengthened its leading position in
terms of sales in the past several months.
- Synergies resulting from the Group's industrial alliance with
General Motors are continuing to grow and exceed expectations
(Euro 230 million in 2001), while synergies from the integration
between New Holland and Case are expected to exceed Euro 150
million in 2001.
- The reduction in dealer inventory compared to 2000 year-end
levels is accelerating. This process, already well underway at
Fiat Auto (the decrease is expected to be around 30% by year end,
representing 100,000 units), is implemented in other Sectors as
well: during the year, CNH, whose dealer inventory levels are
already below industry averages, will reduce inventory levels by
7% for the year.
- Toro Assicurazioni, which is a strategic asset of the Group,
further improved its performance and is achieving positive
operating results.
- The implementation of the Group's new core process
reengineering program ("Next") has been accelerated. This project
is expected to achieve cumulative savings of Euro 1.5 billion
over the next three years, with a significant impact on the
Group's 2002 results.
Recent widespread declines in consumer and business confidence,
which are likely to have negative consequences for growth in the
major economies, as well as experience from previous
international economic downturns over the past three decades, are
leading the Group to take a conservative view of its outlook for
2002 in all businesses in which it operates.
To meet these challenges, the Group has decided to implement a
far-reaching restructuring and industrial reorganization plan, as
well as to launch two major securities offerings that are the
subject of separate press releases.
Restructuring Plans
In the 2002-2004 period, the Group intends to implement a
rationalization program that will comprise restructurings and
closures in 18 manufacturing plants, two in Italy and 16 in the
rest of the world. Ten of these sites, including the two located
in Italy, were already included in the Group's previously
announced restructuring program, which is being accelerated. As a
result of this acceleration, 15 manufacturing sites will be
restructured or closed by the end of 2003.
These actions - which will be conducted in such a way as to
minimize their social impact - will lead to a headcount reduction
of approximately 6,000 people outside of Italy. In addition,
measures to curtail headcount in Italy are continuing and the
Group is carrying out these measures with all available tools,
from the utilization of temporary unemployment compensation funds
to the reduced use of temporary staff.
In particular:
- At Fiat Auto, the plan includes further reductions in
manufacturing presence in Argentina, to a minimum level of
production capacity in order to enable a significant recovery of
operations when the Mercosur area returns to growth. In Europe,
following workforce reductions in Poland in 2001 of around 1,000
people, automobile production operations currently carried out at
the Rivalta factory will be transferred to the Mirafiori plant
during 2002. Additional rationalization measures will be taken in
other plants with the objective of reducing further manufacturing
capacity in order to attain capacity utilization level of 90% by
2003.
- At CNH, the current restructuring program, which has already
resulted in a reduction of manufacturing facilities from 60 to
46, will be accelerated and extended. The program, which
initially called for reducing the number of CNH's plants around
the world to 39, has been expanded to include three additional
production sites (two in the US and one in Europe), for a total
of 36 facilities. Most of this restructuring will be carried out
in 2002.
- Iveco will close several plants outside of Italy, and will
transfer all of its Argentine production to Brazil.
These measures will result in restructuring and other charges to
the Group's 2001 financial esults in an aggregate amount that
will be determined in the course of finalizing the Group's
accounts, and that should amount to approximately Euro 800
million. Of this amount, approximately Euro 150 million is
expected to have a cash impact.
As a consequence, Fiat expects to post a consolidated net loss
for 2001. A portion of these restructuring charges will also
impact 2001 operating income, which is expected to be
approximately Euro 300 million.
Fiat Auto Reorganization
The Board also approved a plan to reorganize Fiat Auto. This
reorganization will be implemented in early 2002.
The main objectives of this reorganization are to enable the
Group to more effectively develop and strengthen its brands over
time, improve the management of its manufacturing and marketing
functions in light of the globalization initiatives that are
already underway, and accelerate the development of its financial
and mobility services, whose contribution to the profitability of
Fiat Auto is expected to grow significantly.
Four business units will be created - Fiat/Lancia, Alfa Romeo,
International Development, and Services - each one a full-fledged
autonomous entity responsible for its own operating and financial
results, and with its individual production, manufacturing and
marketing organizations.
This reorganization is intended to streamline decision-making
processes, bring responsibility for the business closer to the
customer, and lead to increased focus on customer satisfaction,
which remains Fiat Auto's primary objective.
Traditional staff functions and responsibility for activities
connected with the industrial alliance with General Motors, and
other existing industrial collaborations, will be maintained at
the central level.
A primary focus of this new organizational structure will be to
enhance the value of Fiat Auto's portfolio of brand names. The
"Fiat" brand will continue to be aimed at the general public and
known for its highly innovative products. Lancia will strengthen
its position as an elite and exclusive brand, through the launch
of new models such as the Thesis, which from the spring of 2002
will be the flagship car of Fiat Auto, and the future Y
(Upsilon), which from 2003 will be positioned at the high end of
the subcompact market. The Alfa Romeo brand, which is well known
internationally, will be reintroduced to the North American
market, and will benefit from significant investments intended to
consolidate its place in the top tier of stylish sportscar
brands.
Divestiture Program
The Group announced in 2001 a divestiture program for Magneti
Marelli. Given the changing international economic environment,
this program has only been partially implemented.
While confirming its commitment to debt reduction, the Group in
2002 is aiming to complete disposals and divestitures of at least
Euro 2 billion.
To this end, the divestiture program for next year has been
expanded and re-defined to encompass the possible disposals of a
wider range of sometimes lesser known non-core industrial,
financial, real estate and service activities.
Reflecting the larger number and greater diversification of the
assets involved in this divestiture program, the Group believes
that its execution risk is lower than that associated with the
original plan.
Conclusion
The actions approved represent a vigorous response to the
challenges facing the Group in the near future.
These measures will improve the flexibility and competitiveness
of the Group's manufacturing infrastructure. In addition, by
lowering the Group's break-even point, these measures will enable
the Group to face with confidence the difficult market conditions
expected during 2002, leaving it posed to capitalize on improving
market conditions whenever they occur, while the new
organizational structure of Fiat Auto will give new momentum to
the development of this sector's activities.
As a result of these initiatives, the Group expects to show
improvements in its operating and net income, a significant
reduction in net indebtedness, and an improved balance between
operating income and financial expenses in 2002.
The Group reconfirms its goal of reestablishing its former
Single-A credit rating.
CONTACT: Fiat Group Investor Relations
Giovanni Maggiora
Tel: +39 011 686 3290
or
Taylor Rafferty London
Bernard Compagnon
Tel: +44 (0)20 7936 0400
FIAT: Restructuring News Sends Shares Lower
-------------------------------------------
Shares of Fiat fell nearly 7 percent Tuesday in the wake of the
struggling Italian auto giant's announcement of a major
restructuring, the departure of its top executive, an earnings
warning and plans to raise money by issuing about $3 billion in
new stock and bonds, reports AP.
Greg Melich, an analyst with Morgan Stanley, said the Fiat news
reflects increasingly difficult times for the automotive industry
and the balance-sheet pressure car companies are feeling.
"Fiat, with its weaker position, is experiencing that sooner
rather than later," he said.
Traders said the restructuring plan, though expected to generate
positive effects in the medium term, isn't enough to boost the
share price for now and compensate for the negative impact of the
capital increase and possible dilution.
Investors pushed Fiat shares down as much as 11 percent on
Tuesday. The shares ended the day with a decline of 1.26 euros,
or 6.8 percent, at 17.79 euros ($15.83) a share.
The restructuring announcement comes just a month after Fiat said
it would miss its profit forecasts and debt reduction targets for
2001.
IMPSA: S&P Cuts Ratings After November Note Payment Missed
----------------------------------------------------------
Standard & Poor's downgraded the senior unsecured debt ratings on
mechanical engineering and public works contractor Industrias
Metalurgicas Pescarmona SA (Impsa) to D from CC, including $150
million in notes issue maturing May 2002, according to a report
by AFX.
The cut on Impsa's ratings came after it failed to make an
interest payment due November 30 after a stringent government
ruling limited its ability to transfer money overseas.
The downgrade to D reflects Impsa's "failure to pay the interest
on its $150-million notes after the grace period established in
the indenture of the notes expired Dec 10," S&P said.
Approval by the Argentine central bank, which is "required for
all remittances of funds outside of Argentina since Dec 1, 2001
is still pending and the filing for the request of the
authorization has not been finalized," it added
The ratings agency also cut the Company's corporate credit rating
to a selective default SD from CC. According to S&P, the rating
indicates that the missed payment does not imply general
insolvency.
Impsa's ratings "are based on the Company's limited financial
flexibility and higher refinancing risk, derived from the high
concentration of short-term debt and weak financial profile; the
correlation of the Company's businesses with the level of
activity in the countries where it operates; and the
concentration of its backlog," the ratings agency said.
Financial flexibility is constrained by current capital market
conditions, the concentration of financial debt due in the short
term, and by the fact that the Company is not expected to
internally generate enough cash to cover the $150 million senior
notes maturing in May, of which $137.6 million are outstanding.
This makes "repayment on the bonds more dependent on the
possibility of selling assets or other alternatives," S&P
concluded.
===========
B R A Z I L
===========
CELESC: Documentation Problems Delay Casan Sale To December 13
--------------------------------------------------------------
Documentation delivery problems prompted Brazil's Santa Catarina
state power distributor Celesc to delay the sale of its stake in
state waterworks company Casan to Thursday from Tuesday, says
Business News Americas.
Celesc will auction on the Sao Paulo Stock Exchange 110.7 million
shares, or 19.3 percent in Casan. Bescval, the brokerage arm of
Santa Catarina's state-owned bank Besc, will be handling the
sale.
Celesc expects to raise some US$43.5 million (110 million reais)
from the sell-off, which will be used to pay US$61 million in
commercial papers that matured July 14.
The sale is part of Celesc's activity and administrative
restructuring program, which international consultancy Accenture
is carrying out.
Meanwhile, Fabio Alperowitch, an analyst at Fama Investimentos,
raised the utility's shares to "buy" from "hold."
COPENE: Issues Full Year-End Projections FY01, Near Breakeven
-------------------------------------------------------------
COPENE - Petroquimica do Nordeste S.A. (NYSE: PNE; BOVESPA:
CPNE5) announced Tuesday that the following projections for year-
end results for fiscal year 2001 were made in presentations to
investors in connection with the upcoming issuance of a maximum
of R$625 million in debentures non-convertible into shares.
The tables below show select financial data in million of
Brazilian Reais (R$). All figures discussed in this announcement
are based on Brazilian Corporate Law.
1. Consolidated Income Statement. Select financial data for the
year to end December 31, 2001. In million of Brazilian Reais (R$)
Net sales 3,698
Cost of goods sold (3,117)
Variable costs (2,834)
Fixed costs (146)
Depreciation (137)
General and administrative expenses (192)
Disbursable Expenses (175)
Depreciation/ Amortization (17)
Operating income / (Loss) (4)
2. Consolidated Balance Sheet. Select financial data for the year
to end December 31, 2001. in million of Brazilian Reais (R$)
Total Current Assets 5,838
Cash and Marketable Securities
Account Receivables 299
Inventories 297
Property, Plant and Equipment 2,368
Deferred 1,490
Others 798
Total Liabilities and S&E 5,838
Current and Long Term 3,266
Suppliers 119
Short-term Financing 546
Long-term Financing 2382
Others 219
Shareholders' Equity 2,572
3. Other financial data for the year to end December 31, 2001. In
million of Brazilian Reais (R$)
EBITDA 540
EBITDA/Net sales (%) 15
EBITDA (CVM-247) 571
Net debt 2,342
Net debt (CVM-247) 2,342
CONTACT: COPENE Petroquimica do Nordeste S.A.
Carlos Augusto de Oliveira Freitas
Tel: +55-71-632-5847
Fax: +55-71-632-5047
E-mail: caof@copene.com.br
or
Breakstone & Ruth International
Luca Biondolillo
Tel: 646/536-7018
Fax: 646/536-7100
E-mail: Lbiondolillo@breakstoneruth.com
CVRD: Government Yet To Announce Program For Its 32% Stake
----------------------------------------------------------
A spokesperson for state development bank BNDES denied a Gazeta
Mercantil report that the Brazilian government had started the
process to sell its remaining 32 percent stake in Rio de Janeiro-
based mining-transport giant CVRD.
In a report released by Business News Americas, the spokesperson
said that the government is yet to announce a program for the
operation pending an approval of the sale's timetable from the
government's privatization committee and state President Fernand
Henrique Cardoso.
"There's nothing precise, nothing official about the sale," he
said.
Gazeta Mercantil reported that financial markets have interpreted
government advertisements notifying the contracting of
Washington, D.C.-based attorneys Arnold & Porter as advisers for
BNDES as the first step on the road to the sell-off.
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
ELETROPAULO METROPOLITANA: Sells US$200M 5-yr Bonds To Pay Debts
----------------------------------------------------------------
Leading power distributor Eletropaulo Metropolitana SA is joining
the bandwagon of Brazilian companies looking for financing
abroad, says Bloomberg.
In a statement to the Sao Paulo Stock Exchange, the company said
its stockholders had approved Tuesday a plan to sell US$200
million in five-year bonds to refinance its debts.
According to the company, the transaction may be course through
Eletropaulo or its unit Metropolitana Overseas Ltda.
This recent move comes at the heels of a US$50 million issue of
one-year euro-commercial paper completed last month that will pay
7.75 percent.
In recent weeks, Brazilian companies have taken advantage of the
falling borrowing cost owing to the series of cuts made by the
U.S. Federal Reserve on its benchmark interest rate.
Over the past two weeks, Brazilian companies have sold US$2
billion worth of securities.
EMBRATEL: Unit Signs $70M Outsourcing Contract
----------------------------------------------
Embratel Participacoes SA said that its unit, Empresa Brasileira
de Telecomunicacoes SA, signed a two-year outsourcing contract
with the Credicard, Redecard, Orbitall group, reports AFX.
"The partnership aims to optimize the operations of the large
volume of transactions made daily and meet the needs of the three
companies with a sound, secure and quality network with high
access availability," Embratel said.
The contract, according to the Brazilian telephone company, was
valued at $70 million.
Embratel, which is controlled by WorldCom Inc., is currently
awaiting a response from market regulator Anatel to its request
for licenses to operate local fixed line services throughout
Brazil.
The Company has given Anatel 90 days to respond to its request.
Additionally, the Company is also waiting for Anatel to verify
that it has met universal service targets that will give it
authorization to operate local services next year.
To see company's financial statements:
http://www.bankrupt.com/misc/Embratel.pdf
CONTACT: Embratel Participacoes S.A.
Investor Relations
Silvia M.R. Pereira, (55 21) 2519-9662
fax: (55 21) 2519-6388
invest@embratel.com.br
or
Press Relations
Wallace Borges Grecco, (55 21) 2519-7282
fax: (55 21) 2519-8010
cmsocial@embratel.net.br
TRANSBRASIL: Presents Restructuring Plan To Government
------------------------------------------------------
Brazil's No. 4 airline Transbrasil was expected to present to the
government on Wednesday its new restructuring plan as part of an
effort to win fuel credits, thus enabling it to resume its
operations, says Reuters.
The plan calls for new staff cuts, as well as an additional drop
in flights. Already, Transbrasil is down to half of its flights
compared to last year, and its fleet has been grounded since last
week.
Company executives met with Minister for Trade, Industry and
Development Sergio Amaral on Tuesday, the ninth day after its
fleet was grounded for a lack of funds to pay for fuel.
"It was a great start. The government showed that it was
sensitive to Transbrasil's situation if we show them a proposal
to slim down," said Transbrasil Vice President Flavio Carvalho.
According to Carvalho, Amaral promised to ask state oil firm
Petrobras to grant Transbrasil a 15-day credit for fuel supplies
if the company undertakes a new restructuring.
=========
C H I L E
=========
AERO CONTINENTE: Court Attaches Revs To Pay Workers' Severance
--------------------------------------------------------------
A Chilean labor court in Santiago took steps recently to
facilitate the payment of severance packages to 150 workers fired
by AeroContinente in July, reports Bloomberg.
The court ordered that the deposit of all revenues from sales of
passenger tickets and cargo fees be directed into a court-
controlled account to pay the US$600,000 severance package owed
to workers.
However, court-appointed administrator, Ramon Rojas Vivanco,
Esq., clarified that the court intervention does not involve the
day-to-day supervision of the company's operations.
Nevertheless, AeroContinente Executive Director Carlos Morales
questioned the intervention, claiming that it violates an earlier
court agreement that shielded the company from any claim from
creditors, presumably including its former employees.
He also said that an agreement with unions to pay the severance
package in four parts has already been reached, making the
intervention superfluous.
But Mr. Rojas insists his orders are to collect all the company's
revenue until the workers are paid.
"There will be no payment plan," Rojas said.
The company has fired all but 88 of its 660 employees because of
losses caused by the shutdown and a slump in air travel after the
September 11 terrorist attacks on the U.S.
TELEFONICA CTC: Comptroller Shuns Rate Modification Petition
------------------------------------------------------------
Chile's Comptroller General rejected a petition from the Economy
and Telecommunications Ministries to revise the decree governing
incumbent operator Telefonica CTC Chile's tariff system, reports
Business News Americas.
The Comptroller ruled that modifications to the five-year rate
decree that came into effect in May 1999 would overturn the
existing legal framework and cause unspecified damages to third
parties.
The only loophole left open to CTC was a short clause indicating
that the decree could be overturned if it were found to contain
grave errors that could be proven beyond a reasonable doubt.
"The vices or irregularities that it (the decree) might suffer,
should be of such a relevance or importance that they make
necessary the invalidation and corresponding rectification of the
decree," according to an extract from the ruling.
In November, Transport and Telecommunications Minister Carlos
Cruz and Economy Minister Jorge Rodriquez formally requested a
ruling to revise the decree governing CTC's tariff system until
May 2004 "in accordance with technical, economic and legal
considerations."
The move followed a presentation at the end of last month by CTC
general manger Claudio Munoz to Cruz and Rodriquez seeking a
series of amendments to fixed-rate charges, access fees to
Telefonica's network and taxes.
===========
M E X I C O
===========
AEROMEXICO/MEXICANA: Baggage Problems Drastically Reduced in 01
---------------------------------------------------------------
Mexicana's and Aeromexico's insurance companies will have to pay
4.5 million pesos in damages for lost, stolen and damaged luggage
this year, reports Mexican financial daily El Economista.
The damages payable, according to Independencia union head Tomas
del Torro, will decline by 67 percent compared to last year's
13.5 million pesos.
For 2001, Aeromexico will be responsible for 2.877 million pesos,
while Mexicana will be responsible for 1.569 million pesos worth
of lost or damaged luggage.
Both airlines are owned by holding company Cintra (BMV:CINTRA).
BITAL: Looking To Sell Minority Stake To Foreign Investors
----------------------------------------------------------
Grupo Financiero Bital SA, Mexico's No. 5 bank by assets, is
looking to raise money in order to help it fund the purchase of
Banco del Atlantico and shore up its finances, reports Bloomberg.
Bital said it would sell a minority stake next year to a group
that might include General Electric Capital Corp. and ING Barings
LLC for $300 million.
According to Bital Chairman Jose Luis Berrondo, the foreign
investors will own a 20 percent stake in the combined bank, which
will have assets totaling 164.98 billion pesos ($18.03 billion).
ING Barings refused to say a word on its interest in Bital. GE
Capital, on the other hand, is yet to make a comment.
The funds will also help Bital return to profitability after
running Atlantico for four years dried up its capital and left it
struggling to compete against competitors.
"All of our revenue used to go toward increasing Atlantico's
reserves," said Berrondo, adding, "it's like a boulder has been
lifted from our shoulders."
CINTRA: House Approves US$180M Aid For Airline Industry
-------------------------------------------------------
Mexico's airline industry heaved a sigh of relief Tuesday after
the country's lower house approved a US$180 million government
aid to help carriers pay skyrocketing insurance premiums.
The package flew through the lower chamber bearing 381 ayes
against only 27 nays. The measure will now go to the Senate,
where it is also expected to be unanimously approved.
According to a report by EFE, the money will be sourced from
Mexico's development bank. Legislators expect the aid to help
stabilize the troubled industry.
Among the carriers set to benefit from the aid will be Cintra,
which is 85 percent owned by the government. Since September 11,
the airline has absorbed substantial losses, recording a 9.6
percent drop in third quarter revenues.
HYLSAMEX: Creditors Reschedule Payment on US$627 Million Debt
-------------------------------------------------------------
Cash-strapped Hylsa, S.A. de C.V., the primary subsidiary of
steel manufacturer Hylsamex, S.A. de C.V., successfully swayed
creditors to back its debt-restructuring plan during a
presentation in New York Tuesday.
In a press statement, the company said the approved plan involves
restructuring Hylsa's debts in two tranches.
The first, which amounts to approximately US$362 million, would
be repaid over seven years. The second, approximately US$265
million, would be repaid over eight years.
The proposal calls for grace periods of two and four years,
respectively. The Interest rate would be Libor plus 400 basis
points on both tranches.
The proposal seeks to defer a portion of the interest accrued
during the first two years on the first tranche. Similarly, all
of the interest related to the second tranche would be deferred
during the first three years of the credit.
As part of the proposal ALFA, the parent company of Hylsamex,
will continue to honor its commitment to give Hylsa financial
support up to US$78 million through a backstop credit facility
and a corporate guarantee on existing short-term debt.
Moreover, in order to strengthen the Hylsa's liquidity position
during 2002 and 2003, ALFA and the bank creditors will make
available new credit lines in the amount of US$25 million and
US$40 million, respectively.
Also, ALFA will use up to US$75 million to buy Hylsa's existing
bank debt at a discount, and subject to approval of its own bank
creditors, will pledge its Hylsamex shares in favor of Hylsa's
creditors.
Under the proposal, Hylsa will pay on December 17, 2001 all
interest accrued through December 14, 2001. Then, the Company
will temporarily suspend payments of principal and interest until
the refinancing transaction is closed, which is expected by the
end of February 2002.
Interest accrued from December 15, 2001 through the closing date
will be paid by Hylsa upon completion of the transaction.
The steering committee, composed of Banamex-Citibank, BBVA
Bancomer, Bayerische Hypo-VereinsBank and J.P. Morgan Chase,
approved the above plan.
MINERA AUTLAN: Debt-restructuring Only Way Out Say Analysts
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With most of its short-term debts now coming due, analysts
believe Minera Autlan has no other choice but restructure its
debts just like other companies in its industry sector.
According to a report by Mexico City daily Reforma, analysts are
pointing as example to AHMSA and Hylsamex, which have recently
gained headway in their debt-restructuring programs.
Just this Tuesday, Hylsamex got approval from creditor banks on a
two-tranche payment schedule for its US$627 million obligation.
So far, Minera Autlan's game plan is to sell off traditionally
unprofitable assets to help reduce its US$191 million mountain of
debt.
A slump in the steel industry beginning last year, coupled by the
surge in energy cost, triggered the company's woes.
SANLUIS CORPORACION: Bondholder Pressure May Weigh On Shares
------------------------------------------------------------
Shares of Sanluis Corporacion SA may fall after bondholders said
they may press the Mexican auto-parts maker to open negotiations
on payment of $200 million in fixed-income equities the company
defaulted on in September, reports Bloomberg.
Sanluis is holding talks with a group of creditors headed by J.P.
Morgan Chase & Co. in an effort to allow the company to keep
earning money and avoid a shutdown of operations until demand for
auto parts recovers.
The Company is betting on a turnaround in the U.S. auto-parts
market that some economists are predicting could come in the
first half of next year may help it pull out of a slump and pay
back its debt in full.
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.
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