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/raid1/www/Hosts/bankrupt/TCRLA_Public/020207.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, February 07, 2002, Vol. 3, Issue 27 Headlines A R G E N T I N A CORMINE: Winding Up, Asset Sale Process To Begin This Week B E R M U D A GLOBAL CROSSING: Wolf Haldenstein Commences Class Action Suit GLOBAL CROSSING: Shareholder Files Class Action in Federal Court GLOBAL CROSSING: Wolf Popper LLP Announces Class Action Suit B R A Z I L BAMERINDUS: Banco Central To Decide Fate In A Month COPEL: Standing By 2002 Investment Program EMBRATEL PARTICIPACOES: Bad Debt Provisions Overshadow 4Q01 EMBRATEL: Intelig Charges May Hinder Procurement Of License GLOBO CABO: Shares Recover After Five-Day Losses TRANSBRASIL: CVM Slapped With Fine For Sale Ambiguities M E X I C O TRI-NATIONAL DEV.: Announces Housing Agreement With VivaHomes P A R A G U A Y BANCOPLUS: Regulator To Pass Bill To Modify Liquidation Process V E N E Z U E L A CADAFE: Minister Calls For Restructuring To Avoid Bankruptcy ENRON: PDVSA Looks To Buy Two Venezuelan Plants - - - - - - - - - - ================= A R G E N T I N A ================= CORMINE: Winding Up, Asset Sale Process To Begin This Week ---------------------------------------------------------- The winding up process of state mining company Cormine is expected to kick off this week when the governor of the Argentine province of Neuquen signs a decree allowing the operation, reports Business News Americas Subsequent to the official signing, Cormine liquidator, Martin Palacios will have a month to present a plan to sell off the Company's assets. "We hope to have outlined the action plan at the end of February so that in three months at the most we can wind everything up," Palacios said. Provincial authorities will have to evaluate Cormine's properties and decide which areas to auction off, which to put out to tender and which to sell via direct negotiations. "We're going to look at all the options from both a technical and political perspective," said Palacios, adding the analysis will also cover Cormine's debts and how to pay these off. Cormine has 107 mineral properties, containing both metallic and non-metallic or industrial minerals. The province wants to transfer all the assets to the private sector. The company's staff have already been relocated to other provincial bodies. CONTACTS: Corporaci¢n Minera del Neuqu‚n Dr. Miguel Angel Bruna, President LuisMonti339 (8340)Zapala - Neuqu‚n Argentina Tel. 54-299-430063 ============= B E R M U D A ============= GLOBAL CROSSING: Wolf Haldenstein Commences Class Action Suit ------------------------------------------------------------- Wolf Haldenstein Adler Freeman & Herz LLP has commenced a class action lawsuit in the United States District Court for the Southern District of New York on behalf of holders of Global Crossing, Ltd. ("Global Crossing" or the "Company") (NYSE:GX) common stock between August 13, 1998 and January 28, 2002 (the "Class Period"), inclusive, against individual directors and officers of Global Crossing as well as Global Crossing's auditors, Arthur Andersen, LLP ("Arthur Andersen"). The case name and index number are Manson v. Winnick, et al., 02 Cv.910. A copy of the complaint filed in this action is available from the Court, or can be viewed on the Wolf Haldenstein Adler Freeman & Herz LLP website at www.whafh.com. The Complaint alleges that defendants violated sections 10(b) and 20(a) of the Securities Exchange Act of 1934 and SEC Rule 10b-5 promulgated thereunder, by improper recognition of revenue which improperly inflated reported revenue and earnings. In particular, the Individual Defendants caused Global Crossing to book as revenue the future receipts from contracts to sell rights to use its fiber optic cable network to Internet and other telecommunication companies, known as indefeasible rights of use ("IRU"), while entering into similar agreements with those same parties to purchase capacity from them in a different area. In essence, there was a barter arrangement which was improperly treated as if there were separate sale and purchase transactions. Moreover, Global Crossing's purchase transactions were treated as a capital expense, thus inflating Global Crossing's assets on its balance sheet. Global Crossing's statement of its revenue and earnings, therefore, were inflated, and its financial statements were thus materially misleading in violation of the federal securities laws. Defendant Arthur Andersen violated federal securities laws by issuing unqualified opinions on Global Crossing's materially misleading financial statements and allowing those opinions to be published. Plaintiffs seek to recover damages on behalf of all those who purchased shares of Global Crossing common stock during the Class Period. A lead plaintiff is a representative party that acts on behalf of other class members in directing the litigation. In order to be appointed lead plaintiff, the Court must determine that the class member's claim is typical of the claims of other class members, and that the class member will adequately represent the class. Under certain circumstances, one or more class members may together serve as "lead plaintiffs." Your ability to share in any recovery is not, however, affected by the decision whether or not to serve as a lead plaintiff. You may retain Wolf Haldenstein, or other counsel of your choice, to serve as your counsel in this action. Wolf Haldenstein claims to have extensive experience in the prosecution of securities class actions and derivative litigation in state and federal trial and appellate courts across the country. The firm has approximately 60 attorneys in various practice areas; and offices in Chicago, New Jersey, New York, San Diego and West Palm Beach. The reputation and expertise of this firm in shareholder and other class litigation has been repeatedly recognized by the courts, which have appointed it to major positions in complex securities multi-district and consolidated litigation. CONTACT: Wolf Haldenstein Adler Freeman & Herz LLP, New York Fred T. Isquith, Michael Miske, George Peters or Derek Behnke 800/575-0735 E-mail: classmember@whafh.com Global Crossing Press Contact Becky Yeamans +1 973-410-5857 rebecca.yeamans@globalcrossing.com Analysts/Investors Contact Ken Simril +1 310-385-5200 investors@globalcrossing.com GLOBAL CROSSING: Shareholder Files Class Action in Federal Court ---------------------------------------------------------------- A shareholder of Global Crossing (NYSE: GX) has filed a securities class action lawsuit in the United States District Court for the Central District of California, Case No. CV-02-1074 R (PJWx), on behalf of all persons who acquired Global Crossing common stock between January 2, 2001 and October 4, 2001, inclusive. The complaint charges that certain officers and directors of Global Crossing violated Sections 10(b) and 20(a) of the Securities Exchange Act of 1934 and Rule 10-b(5) by, among other things: violating Generally Accepted Accounting Principles to artificially inflate the Company's revenues and earnings and issuing false and misleading statements releases regarding the Company's past financial performance, the global market for bandwidth on its fiber optic network and the Company's anticipated future revenues. According to the complaint, the full extent of Global Crossing's cash flow crisis, and its failure to compete in the market for customized communications services, began to emerge on October 4, 2001 with a string of stunning announcements. As a result of these announcements, the price of Global Crossing stock plunged almost 50%. Due to its recent bankruptcy filing, Global Crossing is not named as a defendant in the action. Plaintiffs seek to recover damages on behalf of class members and is represented by the law firm of Weiss & Yourman which has significant experience and expertise in prosecuting class actions on behalf of investors and shareholders. If you are a member of the class described above, you may, no later than April 5, 2002, move the court to be appointed lead plaintiff, if you so choose. In order to serve as lead plaintiff, however, you must meet certain legal requirements. CONTACTS: Weiss & Yourman (New York) Telephone: (888) 593-4771 Weiss & Yourman (Los Angeles) Telephone: (800) 437-7918 Internet: www.wyca.com E-mail: info@wyca.com GLOBAL CROSSING: Wolf Popper LLP Announces Class Action Suit ------------------------------------------------------------ Wolf Popper LLP announced Tuesday that a class action has been commenced in the United States District Court for the Southern District of New York on behalf of purchasers of Global Crossing Ltd. ("Global Crossing") common stock (OTCBB: GBLXQ (formerly NYSE:GX)) during the period February 14, 2001 through January 28, 2002 (the "Class Period"). The Complaint charges Gary Winnick, John J. Legere, Thomas J. Casey and Dan J. Cohrs, present and former Global Crossing senior officers and directors, with violations of the federal securities laws. Global Crossing filed for protection under Chapter 11 in the United States Bankruptcy Court for the Southern District of New York on January 28, 2002, and therefore cannot be named as a defendant. Plaintiff alleges that during the Class Period defendants caused the Company to issue materially false and misleading statements concerning Global Crossing's financial condition, publicly portraying the Company as financially healthy and growing. Contrary to the positive impressions created by these false and misleading representations, Global Crossing's financial results were materially inflated and the Company's financial condition was rapidly deteriorating, culminating in the Company's bankruptcy filing. For example, defendants caused the Company to misleadingly include in "Cash Revenue" and "Adjusted EBITDA" (earnings before interest, taxes, depreciation and amortization) amounts for which cash was not received or where there had been non-monetary exchanges of capacity. This was accomplished through the use of instruments called "indefeasible rights of use" or "IRUs." IRUs are 20 year contracts used to sell network bandwidth on Global Crossing's fiber optic network. Using IRUs, Global Crossing would sell bandwidth on its fiber optic network to a carrier, and record a portion of the 20-year revenue up-front as a lump sum. Simultaneously, the Company would purchase or "swap" similar bandwidth in another area from the same carrier, and book the costs as capital expenses, which would be spread over a number of future years. This technique allowed Global Crossing to show false and misleadingly large and impressive "Cash Revenue" increases with little or no operating expenses. In addition, defendants knowingly or recklessly ignored that based on the Company's projected level of operations, the Company's cash flows from operations would not be adequate to meet the Company's requirements for working capital, capital expenditures, acquisitions and other discretionary investments, interest payments and scheduled principal payments for the foreseeable future. Wolf Popper has extensive experience representing shareholders in class actions and has successfully recovered billions of dollars for defrauded investors and shareholders. The reputation and expertise of the firm in shareholder and other class action litigation has been repeatedly recognized by the courts, which have appointed the firm to major positions in complex multi- district and consolidated litigations. Any member of the proposed Class who desires to be appointed lead plaintiff in this action must file a motion with the Court no later than April 5, 2002. Class members must meet certain legal requirements to serve as a lead plaintiff. For questions or information regarding this action call or write: Michael A. Schwartz, Esq., Ken Chang, Esq. WOLF POPPER LLP 845 Third Avenue New York, NY 10022-6689. Email: mschwartz@wolfpopper.com Telephone: 212/451-9668 or 212/451-9667 Toll Free: 877/370-7703 Facsimile: 212/486-2093 or 877/370-7704 E-Mail: IRRep@wolfpopper.com Website: http://www.wolfpopper.com =========== B R A Z I L =========== BAMERINDUS: Banco Central To Decide Fate In A Month --------------------------------------------------- The future disposition of the Bamerindus bank will be determined within the next 30 days. According to a report released by South American Business Information, the Banco Central will receive the definitive figures for the liquidation of the Bamerindus bank within a month. Following the upcoming figures, the bank will then decide whether to maintain the current liquidation status or declare the Bamerindus completely bankrupt. The provisional balance for the bank, prepared by the current liquidator, shows that BRL5.7 billion is missing. The evaluation of the bank's assets is being contested by the ex-controllers and by minority shareholders, as is its sale to HSBC. The bank's former minority shareholders have advanced in their efforts to find proof of their allegations that the bank was undervalued in the sale. The 42,500 shareholders recently gained access to documents they believe will help analyze the intervention of the Banco Central in Bamerindus before its sale. Shareholders have also alleged that HSBC received privileged information from the Banco Central before the sale. CONTACTS: HSBC Bank Brasil S.A. - Banco M£ltiplo Head office Travessa Oliveira Belo, 11-B Centro, Curitiba State of Paran , Brazil Telephone: [55] (41) 321 6161 Facsimile: [55] (41) 321 6075 Web site: www.hsbc.com.br COPEL: Standing By 2002 Investment Program ------------------------------------------ Brazilian electricity utility Companhia Paranaense de Energia (Copel) will maintain its investments for this year, with BRL333.5 million to be allotted to energy generation, transmission, distribution and other projects. Market analysts believe Copel ended 2001 with a profit of BRL148 million against the BRL430 million reported in 2000. The Company's debts still stand at BRL1.6 billion, BRL1 billion of which is denominated in foreign currency. Copel has 17 hydroelectric plants and one thermoelectric plant with a total capacity of over 4,500 megawatts. The Company accounts for about 7 percent of Brazil's power generation capacity. Brazil's southern Parana state government recently dropped plans to privatize Copel after potential investors balked at the process. Potential investors pointed to changes in government energy policy and default in Argentina as reasons for their sudden disinterest. CONTACTS: Ingo Henrique Hobert, Chief Executive Officer Deni Lineu Schwartz, Chief Government Relatins Officer Ferdinando schauenburg, CFO THEIR ADDRESS: Companhia Paranaense de Energia (COPEL) Dulcidio, 800 Batel 80420-170 Curitiba - PR Brazil Phone +55 41 322-3535 Home Page http://www.copel.com INVESTOR RELATIONS Ricardo Portugal Alves Email: Ricardo.portugal@copel.com AND Othon M,der Ribas Email: othon@copel.com EMBRATEL PARTICIPACOES: Bad Debt Provisions Overshadow 4Q01 ----------------------------------------------------------- Embratel Participacoes S.A. (Embratel Participacoes or the "Company") (NYSE: EMT; BOVESPA: EBTP3, EBTP4), the Company that holds 98.8 percent of Empresa Brasileira de Telecomunicacoes S.A. ("Embratel"), today announced results for the quarter and year ending December 31, 2001. All financial figures are in Reais and based on consolidated financial statements in "Legislacao Societaria". -- 2001 Net revenues rose 11.1 percent to R$7.5 billion. Fourth quarter net revenues were R$1.8 billion. In a very competitive environment, Embratel grew revenues, solidified its leadership in the data market, increased sales volumes and prepared itself for additional opportunities and challenges. In addition, in the fourth quarter of 2001, Embratel implemented the first phase of a comprehensive call management system with enhanced call blocking to improve voice revenue quality. While improving voice revenue quality in future quarters, this call control system did result in the previously disclosed equipment write-down (R$85 million) and adjustment to the bad debt provision (R$520 million). -- 2001 EBITDA was R$ 1.0 billion. Fourth quarter EBITDA loss was R$199 million. The fourth quarter included extraordinary R$520 million provision for bad debt. -- 2001 Net result was a loss of R$554 million. Fourth quarter net losses were R$286 million. The fourth quarter of 2001 loss reflects the bad debt provision and the R$85 million write-down of switching equipment associated with the call management implementation and other assets. -- Data communications revenue grew 13 percent in 2001. Core data services grew 21.7 percent and market share was maintained despite heightened competition, steep price declines and migration of services. Embratel's quality and reliability coupled with responsive pricing should assure continued leadership. -- The company was successful in obtaining favorable local market entry conditions. With local services Embratel can complete the suite of services that can be delivered to selected customers. The company already has connectivity to thousands of key business locations and existing customers. -- Capital expenditures were R$ 1.5 billion. With 3 year CAPEX investment of nearly R$5 billion, Embratel is poised to capitalize on opportunities in emerging local and data markets. Data Communication Services Market share stable despite strong competition Data communications revenues rose 13.0 percent to R$1.8 billion compared to 2000. This growth resulted from increases in data services revenues outpacing the anticipated decline in wholesale data revenues. In the fourth quarter of 2001, data revenues rose 4.0 percent compared to the equivalent quarter of 2000. The data services revenues, which include corporate networks, frame relay services and Internet grew 21.7 percent when compared to 2000. Internet revenues rose more than 60.0 percent in the year. Internet revenues currently account for almost 30.0 percent of Embratel's data revenues compared to 20.3 percent a year ago. Embratel's core data services experienced strong volume growth in 2001. The number of billed frame relay ports rose more than 100.0 percent. Volumes expressed in 2 Mbits equivalents of dedicated services for corporate networks rose 60.0 percent. In addition, during 2001, Embratel grew its internet capacity by 153.0 percent in response to continued demand for nationwide quality services. Despite the strong price competition in 2001, Embratel maintained its core data market share. "We expect to maintain our share over the foreseeable future based upon our position as the only true national data network with a complete differentiated suite of products" said President and CEO Jorge Rodriguez. In the fourth quarter of 2001, core data revenues rose 8.3 percent to R$437 million year-over-year. Compared to the third quarter of 2001 core data revenues grew 1.5 percent. In preparing for continued aggressive competition and to maintain leadership in the internet space, the company reduced, in December, certain product prices to drive further growth and insulate itself from competitors. While the company expects internet revenues to decrease slightly in the first quarter, growth in 2002 overall should be positive. As expected, the wholesale market continued to decline. On an annual basis, wholesale revenues dropped 42.7 percent to R$124 million. These revenues now represent only 6.8 percent of total data communications revenues. Voice Services Quality of revenue improves through active call management The implementation of our basic call management system enabled the company to eliminate the possibility of fraudulent or non- cash producing calls from almost 2 million lines. The tools that were put in place include significant fraud detection and call management capabilities, a comprehensive customer database, complete billing operation, customer service centers and a state of the art collection system. "This system has a favorable impact on the quality of long distance revenue as the company is now able to better serve paying customers while filtering out the non-performing traffic, improving our cash collection and reducing the future risk of bad debt" said Jose Maria Zubiria, CFO and Finance Vice President. Domestic Long Distance Domestic long distance revenues rose to R$4.6 billion in 2001 compared to R$3.9 billion in 2000, representing a 16.2 percent growth year-over-year. Growth in traffic, fixed-to-cellular calls, traffic mix and advanced voice services drove this increase. Revenues from enhanced voice services, which are sold exclusively to businesses, rose in excess of 70.0 percent in 2001 further strengthening our competitive position in the key business arena. "In 2001 we lost none, in fact we gained new 0800 clients" said Eduardo Levy Vice President of Sales and Marketing. "This is a recognition by our clients of the superior quality of our service." In the fourth quarter of 2001, domestic long distance revenues were R$1.1 billion, a 2.8 percent increase compared to the same 2000 quarter. Compared to the third quarter of 2001, long distance revenues dropped by 2.9 percent. This reflects the seasonal reduction of workdays and Embratel's improved "customer selection" associated with the improvements in call management. Collectability of revenues of the fourth quarter will improve. International Long Distance International long distance revenues were R$857 million in 2001 representing a decline of 11.8 percent when compared to the previous year. As mentioned in previous communications, the company expected the decrease in international long distance prices that materialized in 2001. In the fourth quarter of 2001, international long distance revenues were R$183 million representing a decline of 22.6 percent from the same quarter of the previous year and a 16.3 percent decrease from the previous quarter. Lower prices combined with increased competition, improved fraud control, and call management contributed to the reduction. Embratel expects continued decline in revenues from this segment. Local Services Local rules were established in the quarter by Anatel which will significantly accelerate the introduction of full competition in this sector. Specifically, they are enabling Embratel to introduce new local services as a complement to its current suite of products. With the new rules, Embratel has acquired the right to provide local service without picking up any new service obligations/requirements. Embratel fulfilled its social commitments to Brazil twelve months early, thus permitting early entry into this new market and enabling us to better serve the full needs of our customers. Embratel is now poised to become the first full service telecom provider since the privatization of the Telebras system. During the past three years, Embratel has invested nearly R$ 1 billion in local access to provide data and long distance voice services and to prepare for this service extension. Embratel has direct connections to tens of thousands of business locations. In addition billing systems, customer service and order entry systems are already available completing the steps to introduce quality local services as soon as authorization is received from Anatel. "The local rules will allow us to implement our local strategy without restrictions and tackle the local market without requiring substantial capital investments" said Purificacion Carpinteyro, Vice President for Local Services. "It is a natural extension of our services, like swimming downstream." Embratel will offer local services to business clients who are already linked to its network. In the first phase of the project, Embratel will offer local services in Brazil's 9 largest cities. The plan is to invest less than R$100 million in the first year of operations. Embratel has already conducted operational tests and is negotiating interconnection contracts. Embratel's customers are eagerly awaiting the provision of these services. EBITDA EBITDA was R$1.0 billion compared to R$1.7 billion in 2000. During 2001, Embratel provisioned R$1.2 billion for doubtful accounts, including an extraordinary provision of R$520 million announced in our release dated December 4, 2001. In the fourth quarter 2001, EBITDA was negative at R$199 million. The total amount provisioned for doubtful receivables in the fourth quarter of 2001 was R$665 million. An additional charge of R$27 million related to the R$85 million asset write-down was recorded in SG&A and other operating expenses in the fourth quarter of 2001. The transformation of Embratel to a retail voice market service provider in a "per call" environment represented a major challenge. As stated earlier, the new call management environment positions the Company for ongoing EBITDA and cash improvements. The Company's cost structure was also impacted by the new Fust and Funttel universal service taxes imposed in 2001 which represent 1.5 percent of net revenues. Net Income The net loss for 2001 was R$554 million. The loss includes the impact of both increased provisions as well as the devaluation of the Real vis-a-vis the US dollar (18.7 percent in the year) on the Company's foreign currency debt. In 2000 the Company's net income was R$577 million. In the fourth quarter, the Company's net loss was R$286 million arising mainly from the provision of doubtful receivables. During the fourth quarter, the Company also booked previously mentioned asset write-downs of R$85 million of which R$58 million were recorded in non-operating expenses. Write-downs were partially offset by the 13.1 percent appreciation of the Brazilian currency in fourth quarter of 2001 on the un-hedged debt. In the same quarter of the previous year the Company's net income was R$159 million. Financial Position Embratel Participacoes ended the quarter with a cash position of R$652 million. Total debt outstanding as of December 31, 2001 was R$3.7 billion (net debt of R$3.1 billion). R$1.1 billion corresponded to short term debt and current portion of long term debt. Net debt fell by R$180 million to R$3.1 billion benefiting from improved collections, in the fourth quarter. While Embratel's debt profile continues to be primarily denominated in foreign currencies, portions of this debt have been swapped to the Real according to Exhibit 15 below. The Company has established a policy to hedge all new debt with maturity of less than three years. This policy is designed to achieve a balance between preserving cash and protecting the balance sheet. Accounts Receivables The Company's net receivable position on December 31, 2001 was R$1.9 billion, representing a R$702 million decrease from the third quarter of 2001. The reduction of the net receivables position resulted from the increase in the provision for doubtful accounts and a slight improvement in collections. Embratel wrote off R$188 million from the provision of doubtful receivables and at year-end 2001, the balance of this provision was R$1.5 billion. Gross receivables fell to R$3.4 billion in the fourth quarter of 2001 from R$3.6 billion in the third quarter of 2001. During the fourth quarter of 2001, Embratel initiated the implementation of a new collections system developed by America Management Systems (AMS). This system greatly enhances the Company's ability to act more effectively on receivables. It allows different collection strategies to be matched against the delinquency patterns of various subscriber groups and it greatly reduces the time to implement changes in strategies. This system will equip Embratel with state-of-the art collection capabilities. An additional development in progress is a second phase of call management. The implementation will start at the end of the first quarter of 2002. This enhancement will allow Embratel to more selectively handle call attempts associated with customers who have been identified as non-paying or whose billable information is unavailable. This continues the improvement of revenue quality. Capital Expenditures During 2001, capital expenditures were R$1.5 billion. The breakout of these expenditures are: local infrastructure and access - 27.0 percent; data and Internet services - 19.8 percent; network infrastructure - 17.3 percent and others - 35.9 percent. Capex in the fourth quarter of 2001 was R$508 million. Current Financial Guidance (full-year 2002 growth compared to 2001) -- The company expects to solidify its position with business customers by enhancing products in both data and voice markets; -- 100+ major customers using Embratel local (assuming license by mid-year); -- Operating performance is focused on cash generation; -- We expect continuous improvements in collections; -- Capex will be reduced to R$1.1 billion; -- 2002 EBITDA is expected to increase more than 70% Embratel is the premier communications provider in Brazil offering a wide array of advanced communications services over its own state of the art network. It is the leading provider of data and Internet services in the country. Service offerings include: advanced voice, high-speed data communication services, Internet, satellite data communications and corporate networks. Embratel is uniquely positioned to be the all-distance telecommunications network of South America. The Company's network is has countrywide coverage with 28,868 km of fiber cables comprising 1,068,657 km of optic fibers. To see financial statements: http://bankrupt.com/misc/Embratel.doc CONTACT: Embratel Participacoes S.A. Silvia M.R. Pereira Investor Relations tel: (55 21) 2519-9662 fax: (55 21) 2519-6388 email: silvia.pereira@embratel.com.br or invest@embratel.com.br or Helena Duncan/Mariana Palmeira Press Relations tel: (55 21) 2519-3653/3654 fax: (55 21) 2519-8010 email: hduncan@embratel.com.br or mpalm@embratel.com.br EMBRATEL: Intelig Charges May Hinder Procurement Of License ----------------------------------------------------------- Embratel may have a hard time getting the licenses it needs from the Brazilian telecommunication regulator Anatel (Agencia Nacional de Telecomunicacoes) to operate in new markets if the accusations made by competitor Intelig Telecomunicacoes Ltda. against it will be proven. Intelig has complained to Anatel that some of the public telephones installed by Embratel as part of its requirements to enter new areas of service ban users from access the long distance services of Intelig. According to Intelig, these phones only allow access with the Embratel code number and not that of Intelig. Intelig bases its accusation on the fact that it has not received any response to its requests for interconnection agreements between the two companies for these phones. Embratel has not commented on the accusations. GLOBO CABO: Shares Recover After Five-Day Losses ------------------------------------------------ Brazil's biggest cable television operator Globo Cabo on Tuesday stood out among the gainers, with an 8.6 percent increase in its share price to BRL0.63. The move won back the previous five days' losses. "It's too cheap after so many drops," said Cleber Sbarofate, an analyst with Banco Brascan in Sao Paulo. Sbarofate's target price is BRL0.68, and he has a `sell' rating on the stock. Globo Cabo is the biggest decliner this year among the 57 stocks on the Bovespa index, losing 22 percent, compared to a 6.1 percent decline by the Bovespa. The drop in share value reflects the company's losses in cable TV and Internet subscribers, amplified by the general economic downturn affecting its bottom line. Due to a slowdown in Brazil's economic growth last year, the number of Globo Cabo's subscribers fell by 41,600 to 1.43 million. Meanwhile, a 16 percent slump in the real has also caused the Company's debt, most of which is denominated in U.S. dollars, to rise. By Sept. 30, 2001, debt had grown to BRL1.82 billion from BRL1.55 billion a year earlier. CONTACT: GLOBO CABO S.A. INVESTORS: Luis Henrique Martinez, 5511-5186-2684, lmartinez@globocabo.com.br, Marcio Minoru, 5511-5186-2811, minoru@globocabo.com.br, TRANSBRASIL: CVM Slapped With Fine For Sale Ambiguities ------------------------------------------------------- The board of directors of Transbrasil approved a proposal to revert the Brazilian air transportation company to a closely held status, according to a Jornal do Commercio report. At the same time, the Transbrasil board approved the appointment of Virgilio Carvalho as vice-chairman. The report also reveals that the country's Securities and Exchange Commission CVM (Comissao de Valores Mobiliarios) will slap Transbrasil with a fine of BRL1,000 per day for the non- publication of the relevant issue concerning the sale of the Company. According to the CVM, public companies have to inform the market and investors about the transaction. Details must include who is taking over the company, the source of the resources invested and the type of shares to be part of the business. Transbrasil so far has refused to disclose the investors who will inject US$25 million and US$200 million within 180 days. The lack of disclosure was also the reason why Dilson Prado da Fonseca was deposed leaving Michel Tuma Ness to take over the airlines. Fonseca was reportedly removed from the deal because he was unable to comply with necessary legal requirements to seal the acquisition. Fonseca failed to provide sufficient proof that he had the funds to help the grounded carrier take flight again and never told regulators about the sources of his investment. Since 1999, the country's fourth-largest carrier has posted losses of BRL365.5 million (US$155 million). The airline currently has liabilities of more than BRL1 billion (US$416.7 million). 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 =========== M E X I C O =========== TRI-NATIONAL DEV.: Announces Housing Agreement With VivaHomes ------------------------------------------------------------- Tri-National Development Corp. (OTCBB:TNAV) announced Tuesday that it has entered into an agreement with VivaHomes for the construction of single-family homes within its Vinas de Bajamar development. VivaHomes has been building homes in the Northern Baja California region, with a significant focus on the construction of villas within the Bajamar Ocean Front Hotel and Golf Resort, located directly across the highway from Vinas de Bajamar, for over 20 years. Michael A. Sunstein, president and CEO of Tri-National, said, "We are excited to be able to offer the quality of housing built by the experienced and reputable team at VivaHomes. We also anticipate that VivaHomes will be able to generate significant sales interest in Vinas lots and estates out of the steady flow of golfers and tourists who visit the world-renowned Bajamar Resort. This alliance with VivaHomes represents another powerful step forward in the realization of our plans for the Vinas de Bajamar development and the revitalization of our company through increased revenues from housing. This potential addition of cash inflow is anticipated as a method of accelerating our reorganization and the goal of repaying all of our legitimate creditors 100 percent." Vinas de Bajamar is a 1,250-acre master-planned golf and 1,400 home site residential development located approximately 50 miles south of San Diego on the Pacific Ocean in N. Baja California, Mexico. Tri-National is currently pre-selling lots in the development as an integral part of its reorganization plan starting at $20,000 each with a 10 percent down payment and no interest financing over 96 months. Tri-National recently revised the master plan to include approximately 40 estate ranchettes totaling some 85 acres, with a 20,000 square foot vineyard clubhouse that will also be used as an on-site sales office. The estates will range in size from 1.1 acres up to 2.95 acres and will range in price from the low $100,000s to the high $200,000s, yielding projected gross sales from the estates in excess of $9 million. In the Baja region, the estate concept has recently become a highly sought after form of land investment and Tri-National and its development consultants believe that the Vinas estates will be very well received in the current market. Tri-National Development Corp. is an international real estate development, sales and management company focused on providing up-scale affordable housing in the Baja region of Mexico and the Southwestern U.S. CONTACT: Tri-National Development Corp. Jason Sunstein, 619/718-6370, Fax: 619/718-6377 jason@tri-national.com www.tri-national.com or VivaHomes 011-52-646-155-4020, Fax: 011-52-646-155-0184 bajabuilder@hotmail.com =============== P A R A G U A Y =============== BANCOPLUS: Regulator To Pass Bill To Modify Liquidation Process --------------------------------------------------------------- A Paraguayan central bank spokesperson revealed that the banking regulator is due to submit this month a bill that will modify the procedure for liquidating the country's intervened banks, reports Business News Americas. As a result, the bill would give the consultancy in charge of the liquidation more room to decide what actions to take in order to speed up the process instead of being limited by the rigid norms that are in place today. According to the spokesperson, the current liquidation processes are "very long and costly" affairs and many times "not even the cost of the liquidation process is recovered." The spokesperson is optimistic that the legislation should face little resistance in Congress since the IMF is conditioning fresh loans on financial sector reforms. Local bank Bancoplus, which was intervened in July 2001 because of liquidity problems, is currently the only bank under liquidation in Paraguay. The liquidation of local banks Union and Orion last year cost the head banking regulator and Central Bank chairman their jobs as they were implicated in the theft of US$16 million from the banks. ================= V E N E Z U E L A ================= CADAFE: Minister Calls For Restructuring To Avoid Bankruptcy ------------------------------------------------------------ Venezuelan state-owned integrated power company Cadafe (Corporacion Anonima de Administracion y Fomento Electrico) may face bankruptcy if it does not implement restructuring measures soon, according to Mines and Energy Ministry (MEM) electricity director Nervis Villalobos. Cadafe currently only receives payment for 40 percent of the electricity it sells, just enough to cover costs of salaries and operations, said Villalobos. The MEM's restructuring plan aims to clean up the accounts with more efficient financial and organizational systems, Villalobos explained. The plan involves creating smaller, autonomous companies in which the local authorities participate as shareholders, he said. "With restructuring, Cadafe will be a viable company. As it is at the moment, it is difficult to attract domestic or foreign private investment for strategic alliances, or obtain external lines of credit for the modernization of plants and installations," Villalobos said. The Company, according to the minister has been losing revenues due to technical problems and massive debts owed by local and national government bodies. Cadafe has 3,755MW in installed capacity in 23 generating plants, of which 20 are thermoelectric plants. It has 2 million clients, 1,000km in distribution networks, 15,000km in transmission lines and 167 substations. CONTACT: CADAFE David Coiran, President Edificio Sede Av. Sanz el Marques 1010 Caracas Phone: (58 2) 25-247 Fax: (58 2) 21-4414 / 986-7161 URL: www.cadafe.com.ve ENRON: PDVSA Looks To Buy Two Venezuelan Plants ----------------------------------------------- Nelson Nava, president of the gas division of Petroleos de Venezuela (PDVSA), revealed that the state oil firm has taken an interest in purchasing Enron Corp.'s (ENRNG) holdings in two Venezuelan gas plants, reports Reuters. Nava valued each plant at $400 million. "If Enron leaves and puts them up for sale, then we would be interested in being partners in these plants," said Nava. Enron controls 49 percent of the two plants in Venezuela's eastern cryogenic expansion project, called ACROVEN. The Company's partners in the two plants are U.S. Williams with 49 percent and local firm Tecnoconsult with 2 percent. "This is a profitable business, it is a secure business. The production of liquids is part of PDVSA Gas' core business," Nava said. ACROVEN's two other plants are owned by PDVSA. CONTACTS: Enron headquarters are located at: 1400 Smith St. Houston, TX 77002 Tel. (713) 853-6161 For more information on Enron's activities worldwide: Enron Corp. Public Relations Dept. P.O. Box 1188, Suite 4712 Houston, TX 77251-1188 (713) 853-5670 For more information on earnings, financial: Enron Corp. Investor Relations Dept. P.O. Box 1188, Suite 4926B Houston, TX 77251-1188 (713) 853-3956 *********** 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 * * *