/raid1/www/Hosts/bankrupt/TCRLA

/raid1/www/Hosts/bankrupt/TCRLA_Public/020116.mbx T R O U B L E D C O M P A N Y R E P O R T E R L A T I N A M E R I C A Wednesday, January 16, 2002, Vol. 3, Issue 11 Headlines BANCO HIPOTECARIO: Reestablishing Credit Line Main Priority BANCO RIO: Argentine Instability Affecting Santander's Plans BBVA/SANTANDER: Moody's Confirms Ratings, Stable Outlook SCOTIABANK QUILMES: Commitment High Despite Cloudy Outcome STOCK EXCHANGE: Solicits Trade Advice From CB, Economy Ministry B R A Z I L CVRD: No Date Set For Government's Stake Sale CVRD: Iron Ore Exports Set a New Record in 2001 EDITORA CAMELOT: Hunts For Investor As Closure Imminent EMBRAER: Avibras-Rosoboronexport Deal May Upset Air Force Bid MASTER SA: Ends Operations Amid Shareholders' Dispute TRANSBRASIL: February 3 Deadline Approaches, License At Stake VARIG: Report On Financial Situation Ready For BNDES VARIG/VASP: Feud Erupts Between Airlines C H I L E MADECO: Temporarily Reduces Argentine Operations C O L O M B I A ELECTROLIMA: Superservicios To Intervene Before January 18 M E X I C O AHMSA: Executive Post 2001 Results, 2002 Investment Plans GRUPO DESC: Analyst Predicts Shares May Rise Another 15% In 2002 N I C A R A G U A SANSA: Faces Definitive Suspension If Unable To Fix Problems P E R U AEROCONTINENTE: Escapes Bankruptcy, Continues To Fly COBRELSA: Restructuring Plan Gets Nod From Creditors SIDERPERU: Proposed Debt Refinancing Agreement Delayed V E N E Z U E L A AVENSA: Likely To Get Cash Injection On Government's Plan - - - - - - - - - - ================= A R G E N T I N A ================= BANCO HIPOTECARIO: Reestablishing Credit Line Main Priority ------------------------------------------------------------ The Banco Hipotecario Argentino, one of the country's largest mortgage banks, lost some $400 million in its absorption of the "cost" of devaluing the peso in its outstanding dollar- denominated loans, reveals EFE. According to Banco Hipotecario Argentino President, Julio Macchi, the bank is waiting to see how the government will compensate for the losses it took when forced to convert the dollar-denominated loans into peso-denominated loans. "For the Banco Hipotecario, approximately 98 percent of its loan portfolio is in dollars," he said. The bank hopes property sales will aid an attempt to put together $70-$80 million to reestablish a line of credit. That option, however, depends on whether the government eases the tight financial restrictions it has applied in order to stop capital flight at a time when banks lack funds, said Macchi. BANCO RIO: Argentine Instability Affecting Santander's Plans ------------------------------------------------------------ Investors and analysts predict that Santander Central Hispano SA, Spain and Latin America's largest bank, will scrap its $350 million plan to boost its stake in its Argentine banking unit because of that country's unstable financial system, says Bloomberg. According to the report, Santander has stock options expiring January 15 that let it increase its stake by 18.5 percent to almost 100 percent in Banco Rio de la Plata SA, Argentina's fourth-biggest bank, paying with Santander shares. "Argentina's financial system looks like a time bomb," said Francisco Hurtado, who helps manage 180 million euros ($160 million) at BCH Finances in Barcelona. "It would be very risky to invest more money where you're already losing so much." The stock options are with Merrill Lynch & Co., an intermediary between the seller, Argentina's Perez Companc family, and Santander. Aside from the options, Santander may have to boost capital by as much as 1 billion euros just to avoid a possible collapse of Rio, which employs about 5,000 workers, investors have said. Ten months ago, Santander shareholders voted to create as many as 30.2 million new shares, increasing outstanding shares by 0.7 percent, to swap for the stake in Rio. Rio shares have fallen about 75 percent since the move was approved March 10. "Santander and other Spanish companies must first agree with the Argentine government and international authorities on a rescue plan before considering investing any more money," said Francisco Hurtado, who helps manage 180 million euros ($160 million) at BCH Finances in Barcelona. Top executives from Santander and other Spanish companies are negotiating with the Argentine government to curb their potential losses. The options allow Santander to buy the Rio shares at an average price per share of $5.41. Rio shares last traded Jan. 4 and closed at 1.75 pesos ($1.09). CONTACTS: BANCO RIO Ana Patricia B. S. de Sautuola y O'Shea, Chairman Jose L. E. Cristofani, Executive Vice Chairman and CEO Pablo Caride, Corporate Finance Bartolome Mitre 480 1036 Buenos Aires, Argentina Phone: +54-(0)14-341-1081-1580 Fax: +54-(0)14-341-1074-1084 BANCO RIO LEGAL ADVISOR: Shearman & Sterling 599 Lexington Avenue New York, NY 10022-6069, USA Tel: (+1 212) 848-4000 Fax: (+1 212) 848-7179 Firm Managing Partner: Robert C. Treuhold BBVA/SANTANDER: Moody's Confirms Ratings, Stable Outlook -------------------------------------------------------- Moody's Investors Service has confirmed the Aa2/P-1/B+ ratings of Banco Bilbao Vizcaya Argentaria (BBVA) and the Aa3/P-1/B ratings of Santander Central Hispano (SCH) at the backdrop of the present Argentine crisis. These ratings continue to have stable outlooks. Moody's confirmed the ratings after concluding an assessment that a complete write-off of these two banks' investment in their Argentine bank subsidiaries -- Banco Frances, and Banco Rio, respectively -- should not materially deteriorate the creditworthiness of BBVA or SCH. According to the ratings agency, the Argentine exposure is relatively limited compared to these two groups' consolidated assets, capital, and earnings. However, Moody's cautioned that any existing provisions may have to be topped up in a capital write-off scenario. The ratings confirmation is also based on the assumption that the Argentine crisis will not have a direct material impact on BBVA's and SCH's other Latin American operations. Moody's noted that, as opposed to other scenarios of massive cross-border credit exposures to emerging markets by large financial groups in developed markets, the two Spanish banks' involvement in Argentina -- and elsewhere in Latin America -- is primarily through their direct investment in and control of local banks. That said, these direct investments are very significant compared to the two groups' capital base, and the inherent risk of the Latin American business has already been incorporated in BBVA's and SCH's ratings for some time, added Moody's. At the same time, Moody's also cautioned that the possibility for new capital injections by BBVA or SCH into their subsidiaries in Argentina could represent a rating event if a credible crisis- removal and risk-protection scenario will not accompany such further investments. CONTACTS: MOODY'S INVESTORS SERVICE (London) Samuel S. Theodore Managing Director Financial Institutions Group Tel. 44 20 7772 5454 MOODY'S INVESTORS SERVICE ESPANA, S.A. (Madrid) Maria Cabanyes Senior Vice President Financial Institutions Group Tel. (34-91-310-1454) SANTANDER (SCH) Emilio Botin-sanz De Sautuola Y Garcia De Los Rios - Chairman, OR Angel Corcostegui Guraya - First Deputy Chairman, OR Jaime Botin-sanz De Sautuola Y Garcia De Los Rios - Second Deputy Chairman, OR Matias Rodriguez Inciarte - Deputy Chairman, OR Angel Corcostegui Guraya - Deputy Chairman & Chief Executive Their Address: Paseo De Pereda, Numeros 9 AL 12 Santander, Spain Phone +34 94 2206100 http://www.santandercentralhispano.es/ BANCO FRANCES Gervasio Collar Zabaleta, Chairman Antonio Martinez Jorquera, CEO Jorge Bledel, Head of Treasury and Wholesale Banking Their address: Reconquista 199 1003 Buenos Aires, Argentina Phone: +54-11-4346-4000 Fax: +54-11-4346-4320 SCOTIABANK QUILMES: Commitment High Despite Cloudy Outcome ---------------------------------------------------------- Canada's largest investor in Argentina, Bank of Nova Scotia, said that its "worst-case scenario" remains taking a loss equivalent to about one quarter's earnings, but added that it could not predict if that would happen, reports Reuters. "We sincerely hope that the worst case does not occur for the sake of the Argentine people and our shareholders. However, no one can predict whether or not this will materialize," Canada's No. 4 bank said. Meanwhile, the bank said it would work with Argentine authorities to help resolve the "liquidity challenges faced by all the banks in Argentina." Scotiabank said that "while it is extremely volatile," it would continue to work with the government. "Scotiabank Quilmes, our subsidiary in Argentina, is a good bank and well run with a great team of people. As well, it was profitable in fiscal 2001," it said. Several analysts have suggested that Scotiabank withdraw from the Latin American nation altogether. However, Scotiabank Quilmes denied rumors that it might close its retail operations in Argentina and stressed that it remained committed to defending its clients' interests. Richard Waugh, Scotiabank's Vice-President of International Banking, said: "We have one of the best balance sheets in Argentina. The rating agencies have confirmed we're one of the best-managed banks in Argentina. And we're profitable. So why should we leave?" CONTACTS: Alan Macdonald Chief Executive Officer Phone: (54-11) 4338-8000 Fax: (54-11) 4338-8033 Mail: 6th Floor Gral. J.D. Peron 564 (C1038AAL) Buenos Aires Roy D. Scott Vice-President and Managing Director, Latin America Phone: (54-11) 4394-8726 Fax: (54-11) 4328-1901 Mail: P.O. Box 3955 C1000WBN Correo Central Buenos Aires, Argentina E-mail: scotiarep@sinectis.com.ar AUDITORS: KPMG LLP Av. Leandro N. Alem 1050, Piso 2 C1001AAS-Buenos Aires, Argentina +54 (11) 4316 5700 PRICEWATERHOUSECOOPERS LLP Buenos Aires Office Cerrito 268 C1010AAF Buenos Aires Mail Address : Casilla de Correo Central 896 C1010AAF Buenos Aires Argentina Telephone: [54] (11) 4370 6000, 4370 6700, 4370 6900 Telecopier: [54] (11) 4370 6800, 4370 6339 COrdoba Office PricewaterhouseCoopers Boulevard Chacabuco 492 X5000IIR C�rdoba Telephone: [54] (351) 420 2300 Telecopier: [54] (351) 420 2332 STOCK EXCHANGE: Solicits Trade Advice From CB, Economy Ministry --------------------------------------------------------------- The Buenos Aires Stock Exchange, closed for almost a week now, soought guidance from the Central Bank and Economy Ministry regarding trading conduct since the government froze bank accounts and devalued the currency. According to a report released by Bloomberg, brokers such as Juan Napoli, Vice President of Napoli Sociedad de Bolsa, have spent the week tackling calls from clients who were afraid their funds may be confiscated. Napoli said he has no answer for questions concerning when the exchange may resume trading or at what rate it will clear $28 million in pending dollar transactions. "The whole financial market is trying to figure if it still has a role in Argentina," said Dario Lewkowicz, who manages about $35 million for Exprinter Administradora. "With the current restrictions, the market is reduced to its most minimal and primitive expression." President Eduardo Duhalde, who took office January 1, has frozen more than a third of Argentina's $67 billion in bank deposits, possibly for as long as 21 months, in a bid to prevent banks from failing. All U.S. dollar certificate of deposit accounts were effectively seized for at least a year. Funds above $3,000 in individuals' dollar savings accounts were frozen, along with deposits of more than $10,000 to checking accounts. Government officials said they could ease some of the restrictions this week to avoid deepening the nation's recession. The economy has contracted for the past three years. Meanwhile, Luis Alvarez, Secretary General of Mercado de Valores SA, which operates the Buenos Aires trading floor, said he doesn't know when trading will resume. Traders revealed that talks with the Central Bank and Economy Ministry center on the fact that many brokers, because they are legally registered as individuals, have had their checking accounts frozen at $10,000 by a last week's government order. Additionally, the exchange needs advice on how to clear dollar- denominated securities pending from Friday as well as other transactions that were paid with checks written on accounts that have since been frozen, they said. The exchange is currently negotiating with regulators to make it easier for investors to access their bank accounts for capital markets transactions, Napoli said. =========== B R A Z I L =========== CVRD: No Date Set For Government's Stake Sale --------------------------------------------- A spokesperson for state development bank, BNDES announced that the date of the Brazilian government's sale of its remaining 31.52 percent stake of Rio de Janeiro-based diversified mining company Companhia Vale do Rio Doce (CVRD) is yet to be set, reports Business News Americas. The announcement came in response to a report by local business daily, Valor Economico that the sale is scheduled to take place before April. Its report also mentioned BNDES' privatization council has yet to meet to set a date for the sale, which according to Banco Brascan's sector analyst, Luiz Caetano will greatly increase CVRD's liquidity internationally, raise its share price, make the Company more transparent and help it raise capital. "No decision has been made on when the sale will be and BNDES is making no comment on when that decision will be made," the spokesperson said. The government, Valor said, is expected to generate between $1.6 billion and $1.8 billion from the sale. The Sao Paulo paper reported one of the government's advisers, Merrill Lynch, is recommending an international float, yet the paper also said it is thought 30-40 percent of the 31.52 percent stake would be offered to the domestic market with some allocated to CVRD workers. 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 CVRD: Iron Ore Exports Set a New Record in 2001 ------------------------------------------------ On January 8, CVRD revealed that its iron ore and pellets exports reached an all time high in 2001. Despite the global recession, CVRD group exports, computed as the external sales of the parent company, Socoimex, Samitri, the pelletizing joint ventures Nibrasco, Itabrasco, Hispanobras and Kobrasco and Urucum, totaled 103.2 million tons last year, compared to 101.6 million tons in 2000, a 1.6% increase. Socoimex was consolidated into CVRD on August 2000. Samitri was added in October 2001. CVRD asserts the result reflects its ability to weather the downcycle, thanks to its diversified portfolio of high quality products and to the effectiveness of its client-oriented policy. EDITORA CAMELOT: Hunts For Investor As Closure Imminent ------------------------------------------------------- Brazilian publisher, Editora Camelot is now on the lookout for another investor to ensure the survival of the Brazilian version of the Forbes periodical, reports Jornal do Brasil. The search began after the publisher's controller, the Patrimonio bank, left the enterprise. Failure to find a new investor will bring the publisher's operations to an end. Editora Camelot received investments of R$35 million from Patrimonio, R$4 million of which went into Forbes. The publisher has seen its portfolio of products gradually diminish as journals were discontinued. EMBRAER: Avibras-Rosoboronexport Deal May Upset Air Force Bid ------------------------------------------------------------- Brazilian rocket and missile maker, Avibras Aerospacial SA announced it signed a conditional deal with Russian arms exporter, Rosoboronexport to produce Sukhoi fighter jets in Brazil. The deal hinges on Rosoboronexport's ability to garner a contract from the Brazilian air force, reports Reuters. The deal is likely to upset Brazil's Embraer, one of the world's largest civil aircraft manufacturer and Brazil's top exporter. Embraer, so far, has been the only company that has offered to make planes locally if it wins the air force contract. Embraer and five other groups are competing for a contract from Brazil's air force to revamp its aging fleet of fighter jets with the purchase of 24 new planes for up to $700 million. Embraer, together with France's Dassault Aviation SA, which has a stake in Embraer, have offered to build Dassault's Mirage fighter jets at Embraer's factories in Brazil if they win the contract. The government is likely to favor Embraer and Dassault's offer because it wants to support the country's flagship company and keep jobs in the country. Brazil's Air Force is expected to choose its top candidate by March this year. CONTACTS: EMBRAER Bob Sharp, Press office mgr. bob.sharp@embraer.com.br OR Wagner Gonzalez, Press officer wagner.gonzalez@embraer.com.br Phone +55 12 3945 1311 Fax + 55 12 3945 2411 MASTER SA: Ends Operations Amid Shareholders' Dispute ----------------------------------------------------- Master S.A. Tecidos Plasticos Brazilian producer of raffia bags, shut down its four factories and fired its 725 employees, reports Jornal do Comercio. The action was a result of a dispute between the Company's majority shareholder, Portus, a pension fund for employees of thirteen port companies, and Master Incosa Engenharia. The government ordered an intervention into Master last year, investigating alleged irregularities regarding the management of Master by the former directors of Portus. Other issues included outside-exchange shares trading, buying property without the correct documentation and retaining 31 percent of the shares in Master, which exceeds the legal limit of 20 percent for an institution of this type. The legal proceedings related to the dispute will continue in the courts in Ceara. Master was the Brazilian leader in the production of raffia bags in the early nineties, with a turnover of $50 million. TRANSBRASIL: February 3 Deadline Approaches, License At Stake ------------------------------------------------------------- Brazilian airline Transbrasil must present a plan which explains how it will resume operations, states which routes it intends to operate, and provides information on the condition of its aircraft, to the DAC (Departamento de Aviancao) by February 3, 2002, or lose its operating license, reports O Globo. The DAC said that it has extended the deadline for the company to present its plan from Jan. 3 to Feb. 3 due to low demand for landing slots from other airlines. In a related report, Transbrasil is negotiating the entrance of a new Company capital partner as part of an attempt to resume operations. The government decided not to fund it. The deal details are being kept secret, but the Company said it is not dealing with TAM and Gol, who offered to transport Transbrasil's passengers in exchange for the use of its hangars. CONTACT: Antonio Celso Cipriani, CFO Rua Geral Pantaleao Telles, No. 4, Jardim Aeroporto 04355-040 Sao Paulo, Brazil Phone: +55-11-533-7111 Fax: +55-11-543-9083 VARIG: Report On Financial Situation Ready For BNDES ---------------------------------------------------- Brazilian air transportation company, Varig completed a report detailing its critical situation, reports Gazeta Mercantil. The report, which was compiled in order to comply with Minister Sergio Amaral's request, will be sent to the Brazilian development bank BNDES (Banco Nacional de Desenvolvimento Social). Next BNDES will develop a study on air transportation sector to be used as parameter for its restructuring program. Meanwhile, Varig continues to look for partners. Reports suggest that the Company is ready to sell 20 percent of its capital, which is the limit imposed by Brazilian law. Company President, Ozires Silva, said the move is necessary to reduce the Company's problems, particularly its debt situation. The company has not commented on the possibility that it has contracted a bank to undertake an evaluation of its financial state, stating that it does not want to create speculation in its shares. VARIG CONTACTS: VARIG Brazilian Airlines, Miami Jeff Kriendler, 305/866-2115 email: jkriendler@aol.com Legal Department: Rua 18 de Novembro nr. 800 Navegantes Zip : 90240-040 City : Porto Alegre / RS - Brazil Telephone numbers: (51) 358-7039/7040 (51) 358-7010/7042 INDEPENDENT ACCOUNTANTS Arthur Andersen S/C Rua Alexandre Dumas 1981 Cep: 04.717-906 - Centro / Sao Paulo / S P- Brazil Tels.: (11) 5504-8200 Fax: (11) 5504-8373 INVESTOR RELATIONS MANAGER/STOCKHOLDER SERVICES Leir s Stortti E-mail: leir.stortti@varig.com.br Av. Almte. Silvio de Noronha, n 365 - Bloco "A" - s/416 Centro - Rio de Janeiro - RJ Cep.: 20021-010 Tels.: (21) 3814-5401/5402/5403/5415 Fax: (21) 3814-5543 VARIG/VASP: Feud Erupts Between Airlines ---------------------------------------- The war between Varig and Vasp in the Brazilian cargo transportation market heated up, following the appointment of Jose Carlos Rocha Lima as Chairman of Varig Log. Lima left Vasp's office, where he had been for three years, to accept the position at Varig Log, the logistics company created by Varig. Varig Log reported an income of $493 million in 2000 and $608 million in 2001. Meanwhile, Vasp announced it intends to expand operations in the cargo sector. It will open 17 Vaspex franchises in the country with a total of 252 units. Vasp intends to reach 350 stores until late 2002, a growth of 38 percent. Varig and VASP are two of Brazil's biggest airlines, which have dropped several routes over the past few months. CONTACTS: VASP (For Investors) Cesis Canhedo, Chief Financial Officer Pra�a Comandante Lineugomes, s/n 04626-910 Sao Paulo, Brazil Phone: +55-11-532-3000 Fax: +55-11-533-0444 ========= C H I L E ========= MADECO: Temporarily Reduces Argentine Operations ------------------------------------------------ Copper products manufacturer, Madeco informed Chile's securities regulator that it would "significantly" reduce its operations in Argentina on a temporary basis, reports Reuters. The Chilean company, which has assets in Argentina worth $145 million, didn't provide more details. Madeco also said it would restructure its debt to counter the negative impact of Argentina's economic troubles and a regional downturn. The comapany hired Salomon Smith Barney to assist it in devising a financial restructuring plan, "taking into account the effects of a deep recession in Argentina, where the Company has significant investments, as well as the lower pace of growth in the region," Madeco said. The plan includes reorganizing its financial debt, increasing operating efficiency and studying a possible capital increase, the firm said. Madeco is the first Chilean company with interests in Argentina to cut back operations there. CONTACTS: Investor Relations Ureta Cox 930, Santiago-Chile Voice: 56-2 5201380 Fax: 56-2 5201545 e-mail: ir@madeco.cl OR Oscar Ruiz-tagle Humeres, Chairman Albert Cussen Mackenna, CEO Santiago Edwards Morice, CFO Enrique S. Arangua, General Counsel Their Address: Ureta Cox 930 Santiago Chile Phone +56 2 520 1000 Home Page http://www.madeco.cl =============== C O L O M B I A =============== ELECTROLIMA: Superservicios To Intervene Before January 18 ---------------------------------------------------------- Colombia's Superservicios is expected to take part in the administration of Electrificadora del Tolima (Electrolima) before January 18, 2002, reports Portafolio. The announcement, which was made by Diego Humberto Caicedo of Superservicios, came after it was discovered that the Company is in a critical situation, and is close to having to carry out daily one-hour electricity cuts. Electrolima provides services to 269,000 local users, but has one of the highest energy loss percentages nationally since it lacks the money to carry out repairs. =========== M E X I C O =========== AHMSA: Executive Post 2001 Results, 2002 Investment Plans --------------------------------------------------------- Ahmsa, in 2001, produced a little more than 3Mt of crude liquid steel, or primary production, in line with its annual operational plan and the market, Alonso Ancira Elizondo, Vice President and CEO of Ahmsa, revealed in an interview with Business News Americas. As a result of transforming the liquid steel into finished flat and long products, the Company sold a total of 2.67Mt, the Ahmsa executive said. Ahmsa expects at least in the first half of this year, for the figures to be proportionately similar to last year, in terms of both crude steel and finished products. "But we're forecasting an increase from the second half onward, when the global steel market is expected to stabilize and prices pick up," said Elizondo. For this year, the Company still hasn't finished deciding on the amount, or where investments will be made this year. But according to Elizondo, investments, basically, will be in maintenance programs at all units, such as blast furnaces. It also intends to keep developing coal and iron ore mines. "Given that the company is in the process of emerging from bankruptcy protection, we don't have access to bank loans so investments depend on our own resources," said Elizondo. Ahmsa has two plants in Monclova, in the northern Mexican state of Coahuila, and is Mexico's largest steelmaker in terms of production and sale of flat products such as hot and cold rolled steel, plates, sheets and chrome-plated products. It also makes long products such as profiles, structurals and wire rod. The company is controlled by Mexican industrial holding GAN (Grupo Acereros del Norte). CONTACTS: Alonso Ancira Elizondo, CEO, Vice Chairman, Pres.&CEO Jorge Ancira Elizondo, Chief Financial Officer Manuel Ancira Elizondo, Chief Operating Officer Their Address: Prolongacion B. Juarez s/n, Monclova , Coahuila 25770 Mexico http://www.ahmsa.com Phone: +52 86 33 81 72 Fax: +52 86 33 65 66 GRUPO DESC: Analyst Predicts Shares May Rise Another 15% In 2002 ---------------------------------------------------------------- Desc SA (DESCB MM), an industrial group with subsidiaries in auto parts, petrochemicals, food and real estate, saw its shares drop 20 centavos, or 3.9 percent, to 5 pesos, reports Bloomberg. Salomon Smith Barney Inc. analyst, Laura Forte recommended investors buy shares in Desc on the expectation the stock might rise another 15 percent this year. Several analysts believe that Mexican industrial groups may be the first companies to benefit from an economic recovery in the U.S., which buys almost 90 percent of Mexican exports. CONTACTS: DESC, S. A. DE C. V. Paseo de los Tamarindos # 400-B Mexico, D.F. 05120 Phone: (5255) 261-80-00 Fax: (5255) 261-80-96 desc@mail.desc.com.mx Arturo D'Acosta Ru�z, Chief Financial Officer Tel: (5255) 261 8000 Alejandro de la Barreda, Investor Relations Tel: (5255) 261 8000 ext 2806 abarredag@mail.desc.com.mx Adriana Estrada Vergara, Investor Relations Tel: (5255) 261 8000 ext 2846 aestradav@mail.desc.com.mx ================= N I C A R A G U A ================= SANSA: Faces Definitive Suspension If Unable To Fix Problems ------------------------------------------------------------ Nicaraguan Transportation Minister Pedro Solorzano warned that he will "definitively suspend" the operations of national airline Servicios Aereos Nicaraguenses S.A. (SANSA), if it does not resolve problems affecting hundreds of passengers, reports EFE. "If this company does not meet the requirements of the law and international agreements, and does not serve its passengers, its operations could be suspended definitively," Solorzano said. SANSA, which started operations four months ago, was repeatedly having up to ten-hour delays in flights. Passengers also complained about poor baggage handling. On Friday, Solorzano spoke with SANSA General Manager Uriel Lanzas, and demanded that he be accountable to his clients, and at least issue a press release explaining the crisis. Solorzano said he has contacted other airlines in an effort to resolve SANSA-ticketed passengers' problems. ======= P E R U ======= AEROCONTINENTE: Escapes Bankruptcy, Continues To Fly ---------------------------------------------------- The Peruvian airline AeroContinente, which operates in Chile through the subsidiary AeroContinente Chile, managed to escape bankruptcy. According to a report by El Diario, AeroContinente reached an agreement with creditors involving debts of $17.1 million, of which $4.5 million is owed to the Chilean Treasury and $1.1 million with Shell. The airline also retained its flying license after it paid 30 million pesos to the Chilean aeronautics authority. AeroContinente operates with 150 on-land employees and 80 on- board employees. It has two aircraft Boeing 767-200 and three aircraft Boeing 737. COBRELSA: Restructuring Plan Gets Nod From Creditors ---------------------------------------------------- Insolvent Peruvian copper products manufacturer, Cobres Laminados (Cobrelsa) obtained the go-ahead from its creditors and will implement a restructuring plan aimed at paying $15.3 million in debts over a 10-year term, reports Gestion. Cobrelsa plans to invest $400,000 next year to double its production capacity to 600 tons per month. It will also search for strategic partners in the US and Mexico and take out a $500,000-loan. The company forecasts sales of $5 million for this year, although its restructuring plan is aimed at generating $3.5 million in the first year. Cobrelsa's goal is to sell 150 tons per month by the end of this year, exporting 50 percent to countries like Chile, Ecuador, Colombia, Venezuela, Mexico and Bolivia, besides the US. Cobrelsa was declared insolvent for the second time in February 2001. But in July of the same year, creditors decided not to liquidate the Company after it won a $2.5-million contract to supply the Peruvian Central Bank with copper coins. SIDERPERU: Proposed Debt Refinancing Agreement Delayed ------------------------------------------------------ Agreement to the proposed debt refinancing of Siderperu has been set back by a month because the Peruvian integrated steelmaker still lacks the adjustments required by the creditors to the draft refinancing as proposed by the Company's current management, says Business News Americas. In December last year, shareholders and creditors agreed on a formula, the terms of which include establishing a repayment program with fixed and variable payments, based on the Company's cash flow, to the various groups and subgroups of creditors. Financial creditors would be subject to guarantees, while the Company will have access to limited credit for working capital and investments. No figures were given, but a report released by Lima business daily Gestion suggested that the preliminary plan was for Siderperu to pay off the $100-million debt during seven years and renew revolving credit facilities of up to $10 million to maintain the Company's development. Siderperu went into a form of bankruptcy protection to completely refinance itself in August, blaming the global steel crisis and market "confusion" about the Company's solidity. ================= V E N E Z U E L A ================= AVENSA: Likely To Get Cash Injection On Government's Plan --------------------------------------------------------- Venezuela's virtual national carrier, Avensa is likely to get a cash injection if the Government pushes through with its plan to have an airline running flights to Caribbean islands (to bring tourists to Margarita mainly), reports El Nacional. Avensa believes flights to places, such as Barbados and Trinidad & Tobago are risky due to reduced passenger numbers. However, the airline said it is willing to take on the plan if President Chavez turns it into a definitive national carrier. Meanwhile, the government has talked to military aviation groups regarding the plan. The Venezuelan air force finances could also be co-opted since Avensa believes $36 million would be needed in acquiring three small planes. Avensa would also like to take on 'social' flights currently run at a loss by the Servicio Autonomo de la Fuerza Aerea to El Vigia, Tucupita, La Fria, Barinas, Guasdualito, Caicara and San Fernando de Apure. Avensa is 20-percent government-owned *********** 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, Edem Psamathe P. Alfeche and Fe Ong Va�o, Editors. Copyright 2002. 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 * * *