/raid1/www/Hosts/bankrupt/TCRLA_Public/020212.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
Tuesday, February 12, 2002, Vol. 3, Issue 30
Headlines
A R G E N T I N A
BLADEX: 4Q, FY01 Results Dismal; Argentina Primary Concern
GLOBOPAR SA/TV GLOBO: S&P Cuts Currency, Debt Ratings
MADECO: Argentine Currency Devaluation Leads To Plant Closures
REPSOL YPF: Moody's Cuts Ratings, Argentine Recession Worsens
B E R M U D A
GLOBAL CROSSING: Five More Firms Jump On Class Action Bandwagon
GLOBAL CROSSING: KRAUSE & KALFAYAN Files Bondholder Class Action
GLOBAL CROSSING: Reports It Is Subject Of SEC Investigation
B R A Z I L
BNB: Govt. Takes Legal Action Over Falsified Financial Results
ELETROPAULO METROPOLITANA: Analysts Expect Shares To Bounce
TRANBRASIL: Infraero, Other Airlines Scramble For Hangar Space
C H I L E
WACKENHUT CORPORATION: 4Q01, YE Results Suffer From Int'l Woes
M E X I C O
EMPRESAS ICA: Increased Investments May Boost Shares
EVAMEX: To Go On The Block Before June 2002
GRUPO BITAL: Signs Collaboration Agreement With Nafin
HYLSAMEX: Parent's Stock Up On Likely Increase In Steel Tariff
MEXLUB: Authorities To Investigate Former Alliance With Pemex
PROTEXA: Market Sources Predict Bond Payment Will Be Missed
- - - - - - - - - -
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A R G E N T I N A
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BLADEX: 4Q, FY01 Results Dismal; Argentina Primary Concern
----------------------------------------------------------
Banco Latinoamericano de Exportaciones, S.A. (NYSE: BLX)
("BLADEX" or the "Bank"), a specialized multinational bank
established to finance trade in the Latin American and the
Caribbean region, reported Friday results for the fourth quarter
and year ended December 31, 2001. Net loss for the fourth quarter
was $76.7 million, compared with net income of $22.9 million
reported in the fourth quarter of 2000. Net loss per common share
after preferred dividends was $4.43 for the fourth quarter of
2001, compared with net earnings per share of $1.16 reported for
the fourth quarter of 2000. The Bank's results in the fourth
quarter were affected by a $106 million increase in the Bank's
allowance for credit losses and impairment of securities related
to the situation in Argentina.
The average number of common shares outstanding for the fourth
quarter of 2001 was 17,372,047 shares compared to 19,429,213
shares for the fourth quarter of 2000.
For the year ended December 31, 2001, the Bank reported net
income of $2.5 million, compared with $97.1 million for the year
ended December 31, 2000. Earnings per common share after
preferred dividends were $0.06 per common share, compared to
$4.84 for 2000.
The average number of common shares outstanding for the year
ended December 31, 2001 was 18,101,751 shares compared to
19,782,871 shares for the year ended 2000.
Commenting on the Bank's performance, Jose Castaneda, chief
executive officer said, "As we have been advising shareholders
and investors in our communications over the last several
quarters, the operating environment in the Latin American region
deteriorated throughout 2001. This has increased the risk
perception of the region and has contributed directly to a less
successful performance by the Bank than we had hoped. The
overriding issue in recent months has been the rapidly worsening
situation in Argentina and its impact on the Bank's Argentine
portfolio. A year ago this portfolio totaled approximately $1.5
billion but through pro-active management we have reduced this
exposure by nearly one-third to approximately $1.1 billion
today."
The Bank does not hold Argentine sovereign debt.
"The current situation in Argentina is extraordinarily fluid and
uncertain. The government is issuing new policies and regulations
almost daily in an attempt to deal with financial turmoil and an
economy which has endured four years of recession. In the absence
of any clarity about the timing or nature of resolving the myriad
of issues facing the country, BLADEX management and Board are
taking a conservative position relative to the Bank's credit
portfolio in Argentina. The deterioration of the economy may
ultimately affect the financial condition of the Bank's obligors
in the private sector, including banks and corporations.
Therefore, a decision has been made to increase our allowance for
credit losses and impairment of securities by $106 million to a
total of $235 million."
"In addition, the Board has suspended dividends on common shares,
believing that it is in the best interests of shareholders to
conserve the Bank's capital resources until the probable outcome
of the Bank's exposure to Argentina is clear."
"In light of the considerable progress which the Bank has made in
recent years, these actions have been particularly painful. And
while the near-term outlook is uncertain, BLADEX management and
Board have a clear strategy to achieve profitable growth in the
future. Until economic stability returns to the region, which we
believe it inevitably will, investors should take comfort in the
Bank's strong capitalization with a Tier 1 capital adequacy ratio
at December 31, 2001 which is three times the minimum required by
the Federal Reserve Board and the Basle Accord. Further
deterioration in the Bank's loan portfolio may reduce this ratio.
In the months and years ahead, as the governments of the region
seek to accelerate their domestic economies through trade, the
Bank will be in a unique position to consolidate its market
leading position in trade finance, our core competency, which
should be in great demand. In addition top tier corporate
business will continue as a major element in the Bank's growth
strategy," he concluded.
The political and economic situation of Argentina, over which the
Bank has no control, could have a material adverse effect on the
Bank's business, financial condition, results of operations and
prospects. Allowances for credit losses plus equity funds
amounted to $821 million at December 31, 2001 which, based upon
known and available information, the Bank believes should be
adequate to absorb any material adverse effect on the financial
condition of the Bank. The Bank will continue to monitor
developments in Argentina closely and intends to take appropriate
steps as more information and clarity on the government's action
regarding external debt and their effects on the Bank become
available.
The following table sets forth the condensed profit and loss
statements for the fourth and third quarters of 2001 and the
fourth quarter of 2000:
(In $ millions, except percentages)
IVQ00 IIIQ01 IVQ01
Operating net interest income 14.2 17.0 18.6
Effect of interest rate gap 1.1 3.7 5.7
Interest income on available
capital funds 13.8 8.0 5.4
One-time interest income and
adjustments 0.0 0.0 -1.7
Net interest income 29.2 28.6 28.0
Net commission and other income 4.7 5.0 3.7
Derivatives and hedging activities 0.0 -3.7 5.5
Net revenues 33.9 29.9 37.2
Operating expenses
Core operating expenses 5.0 5.2 3.2
Other operating expenses * 1.1 1.8 4.7
Operating expenses 6.1 7.0 7.9
Operating income 27.7 22.9 29.3
Provision for credit losses and
impairment of securities 4.8 4.0 106.0
Net income 22.9 18.9 -76.7
(*) Other operating expenses include continuing investments in
technology, strategic additions to personnel, and strategic
initiatives as well as expenses associated with the structured
transaction unit in New York.
Compared with the fourth quarter of 2000, net revenue in the
latest quarter, net of interest income on available capital and
one-time items, increased by 40%.
The following table sets forth the condensed profit and loss
statements for the year ended December 31, 2001 and 2000:
(In $ millions, except percentages)
2000 2001
Operating net interest income 60.3 66.8
Effect of interest rate gap 0.9 18.8
Interest income on available capital funds 51.2 34.0
One-time interest income and adjustments 2.1 -0.8
Net interest income 114.5 118.8
Net commission and other income 22.7 16.1
Derivatives and hedging activities 0.0 7.4
One-time commission income 0.3 3.1
Net revenues 137.5 145.3
Operating expenses
Core operating expenses 18.6 18.5
Other operating expenses * 2.6 7.9
Operating expenses 21.2 26.4
Operating income 116.3 118.9
Provision for credit losses and impairment of
securities 19.2 117.5
Cumulative effect of accounting changes (SFAS 133) -- 1.1
Net income 97.1 2.5
(*) Other operating expenses include continuing investments in
technology, strategic additions to personnel, and expenses
associated strategic initiatives as well as the structured
transaction unit in
New York.
BLADEX, with $5.9 billion in assets, is a specialized
multinational bank established to finance trade in the Latin
American and Caribbean region. Its shareholders include central
banks from 23 countries in the region and 159 commercial banks
(from the region, as well as international banks) and private
investors. Its mission is to channel funds for the development of
Latin America and the Caribbean, and to provide integrated
solutions for the promotion of the region's exports. BLADEX is
listed on the New York Stock Exchange. Further investor
information can be found at www.blx.com .
A LONGER VERSION OF THIS PRESS RELEASE WITH DETAILED INFORMATION
HAS BEEN FILED WITH THE UNITED STATES SECURITIES AND EXCHANGE
COMMISSION, AND CAN BE OBTAINED FROM BLADEX AT:
BLADEX, Head Office
Calle 50 y Aquilino de la Guardia
Panama City, Panama
Attention:
Carlos Yap, Vice President, Finance & Performance Management
Tel. No. (507) 210-8581, e-mail: cyap@blx.com
-or-
The Galvin Partnership
67 Mason Street, Greenwich , CT 06830
Attention: William W. Galvin
Tel. No. (203) 618-9800, e-mail: wwg@galvinpartners.com
GLOBOPAR SA/TV GLOBO: S&P Cuts Currency, Debt Ratings
-----------------------------------------------------
Standard & Poor's lowered its foreign currency corporate credit
and senior unsecured ratings on Globopar S.A. and TV Globo Ltda.
to single-'B'-plus from double-'B'-minus. At the same time,
Standard & Poor's lowered its local currency corporate credit
ratings on Globopar and TV Globo to single-'B'-plus from double-
'B'. The foreign currency ratings were placed on CreditWatch with
negative implications, while the local currency rating remain on
CreditWatch with negative implications since May 21, 2001.
The downgrade reflects the company's diminished financial
flexibility and Standard & Poor's expectations that credit
measures will continue to be under pressure over the intermediate
term.
The local currency rating was placed on CreditWatch with negative
implications in May 2001, reflecting the group's weak performance
in the previous two quarters (fourth quarter 2000 and first
quarter 2001), together with its inability to meet Standard &
Poor's expectations of continuous improvement in Globopar's
financial profile through significant leverage reduction and
sustainable cash flow generation.
While Standard & Poor's had originally expected only a one-notch
downgrade of the local currency rating, the economic environment,
as well as its impact on Globopar's financial performance, have
been worse than originally anticipated. The foreign currency
ratings, which were already one notch lower that the local
currency ratings, were lowered by one notch.
Lower advertising revenues and weak performance at smaller
subsidiaries have depressed cash generation and resulted in
deterioration in the group's financial profile. The devaluation
of the real in the past few months has put substantial stress on
the group's financials, because revenues and cash are generated
in reais, while debt service is mostly U.S. dollar-denominated.
As a consequence, the group's cash position, which was important
to offsetting considerable refinancing risk, was significantly
reduced.
After the conclusion of Globo Cabo's recapitalization plan in
1999, and the significant excess liquidity brought by the sale of
30% of Globo.com to Telecom Italia, Standard & Poor's expected
the group to reduce debt. However, capital requirements at
subsidiaries, for investments and financial support, the
devaluation of the currency and sharp decrease in advertising
revenues in 2001, have reduced the group's cash position and
consequently its financial flexibility.
The EBITDA margin of TV Globo, the group's main generator of free
cash flow, fell by 50% due to significant decline in business
confidence and advertising spending brought about by the 2001
Argentine crisis and the energy rationing. As a result, TV Globo
experienced a decrease in revenues of some 13% but was unable to
reduce costs proportionally. Profitability and cash flow measures
in the last 12 months (LTM) ended September 2001 were very weak,
with the EBITDA margin for the period reaching a low 10%, pushing
interest coverage ratios (EBITDA to interest) down to 0.5x,
compared to 0.7x in the same period in 2000. The group's capital
structure also deteriorated with the real devaluation and low
free cash flow: debt to capital reached 63% and debt to EBITDA
soared to 15.2x in the LTM ended September 2001, compared to 48%
and 9.2x, respectively in 2000. As of September 2001, net debt
position has increased by $340 million from December 2000.
Standard & Poor's understands that TV Globo's capacity to
generate cash will improve in 2002 since the Soccer World Cup and
presidential elections should improve advertising revenues.
Appreciation of the local currency should have a positive impact
on results also. At the same time, Standard & Poor's expects
management will take appropriate steps to reduce debt and improve
financial ratios.
The CreditWatch will be resolved as soon as management determines
and communicates a timely plan to improve its financial profile.
Globopar is a holding company for units involved in cable-TV
production and distribution, DTH satellite, publishing, and
Internet-related services. Globopar is analyzed on a consolidated
basis with its subsidiaries including TV Globo, the principal
units of which guarantee Globopar's rated debt. In its analysis,
Standard & Poor's makes certain adjustments to Globopar's
consolidated numbers, one of them being the incorporation of debt
of non-consolidated affiliated and subsidiary companies
guaranteed by Globopar.
MADECO: Argentine Currency Devaluation Leads To Plant Closures
--------------------------------------------------------------
Chilean copper products manufacturer Madeco SA expects more
losses as it plans to close four cable plants in Argentina due to
slumping demand since the currency devaluation.
Madeco's Argentine unit, Decker Indelqui SA unit, will shutter
factories working at less than a third of capacity, leading to
the dismissal of most of its workers there.
"No factory is sustainable working at 30 percent," said Decker
Indelqui finance manager Sadi Herrera. "Prospects for the market
aren't good."
The closure of Decker's factories comes after sales slumped to
customers like energy distributor Edesur SA and telephone company
Telefonica de Argentina SA, said Herrera.
Sales at Decker Indelqui slumped to US$50 million last year from
about US$100 million annually before Argentina's economy began to
contract, when the unit employed 900 people, Herrera said.
Madeco, which has been in the red since 1999, has seen its shares
drop 29.4 percent this year. The Company's stock is the worst
performer on Chile's benchmark IPSA index this year.
Madeco's units in Argentina generated 12 percent of the Company's
sales in 2000 of CLP302.9 billion. The Company has yet to report
charges tied to a decline in the value of its Argentine assets.
Madeco lost CLP22.4 billion in the third quarter. The Company
will report fourth quarter earnings by early March.
REPSOL YPF: Moody's Cuts Ratings, Argentine Recession Worsens
-------------------------------------------------------------
Moody's Investors Service downgraded the ratings of Repsol YPF
S.A for the second time in six weeks.
Ratings affected:
- Long-term senior unsecured credit rating from `Baa1' to `Baa2;'
- Peferred stock from `Baa3' to `Ba1;'
- YPF S.A.'s local currency issuer rating and Repsol YPF's
unguaranteed subsidiary from `Baa2' to `Baa3'
- Foreign currency bond rating of YPF and its guaranteed
subsidiaries from `Ba3' to `B1'
- Structured export notes (SENS) from `Baa1' to `Baa2'
All the ratings have been taken off review but their outlook
remains negative. Repsol YPF's Prime-2 short-term rating is
affirmed.
The agency cited a worsening outlook for the Argentine business
after the recession-plagued country devalued its currency and
proposed a tax on oil exports. That could affect Repsol's ability
to finance its debt starting in 2003, Moody's said.
At the same time, Morgan Stanley has changed its stance on Repsol
YPF from 'neutral' to 'underweight' due to the uncertainty over
the feared Argentine tax on oil exports. Morgan Stanley believes
the Company's share should fall 12.12 percent to EUR11.6. Shares
in Repsol fell by 2.29 percent Wednesday to EUR13.2 euros and the
Company is approaching the dangerous level of EUR12.75.
Repsol spent US$15 billion to buy YPF in 1999, and has struggled
to slash debt and meet production targets ever since. On Jan. 31,
Chairman Alfonso Cortina said that the turmoil in Argentina will
prompt it to take a charge against reserves and possibly against
earnings, and cut back investment.
Repsol YPF S.A., headquartered in Madrid, Spain, is one of the
world's largest publicly-owned oil and gas companies in terms of
reserves and production. YPF S.A., headquartered in Buenos Aires,
Argentina, is an integrated oil company and a wholly owned
subsidiary of Repsol YPF.
CONTACTS: MOODY'S (London)
Stuart Lawton
Managing Director
Corporate Finance Group
Moody's Investors Service Ltd.
Tel. 44 20 7772 5454
London
Jeremy Hawes
Senior Vice President
Corporate Finance Group
Moody's Investors Service Ltd.
Tel. 44 20 7772 5454
REPSOL YPF/YPF
Alfonso Cortina De Alcocer, Chairman & CEO
Ramon Blanco Balin, Vice Chairman
Carmelo De Las Morenas Lopez, CFO
Their Address:
Paseo de la Castellana 278
28046 Madrid, Spain
Phone +34 91 348 81 00
Home Page: http://www.repsol.com
or
Av. Roque S enz Pe a, 777.
C.P 1364. Buenos Aires
Argentina
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B E R M U D A
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GLOBAL CROSSING: Five More Firms Jump On Class Action Bandwagon
---------------------------------------------------------------
Class action complaints have been filed in the United States
District Court for the Southern District of New York on behalf of
certain persons or entities who purchased Global Crossing, Ltd.
("Global Crossing" or the "Company") common stock (NYSE: GX)
during various "class periods" by five unrelated firms. The firms
include:
Rabin & Peckel Llp
Eric Belfi
Maurice Pesso
(800) 497-8076
(212) 682-1818
Fax: (212) 682-1892
email@rabinlaw.com
Susan Gross, Esq.
Law Offices Bernard M. Gross, P.C.
800-849-3120
Deborah R. Gross, Esq.
Law Offices Bernard M. Gross, P.C.
866-561-3600
URL: www.bernardmgross.com
Law Offices Of Charles J. Piven, P.A., Baltimore
Charles J. Piven
(410) 986-0036
piven@pivenlaw.com
Robert M. Roseman of Spector, Roseman & Kodroff,
+1-888-844-5862, or e-mail, classaction@srk-law.com
Law Offices of Marc S. Henzel
Marc S. Henzel, Esq.
Tels. +1-888-643-6735, or +1-610-660-8000
Fax: +1-610-660-8080
Email: Mhenzel182@aol.com
URL: http://members.aol.com/mhenzel182
GLOBAL CROSSING: KRAUSE & KALFAYAN Files Bondholder Class Action
----------------------------------------------------------------
Notice is hereby given that a class action has been commenced in
the United States District Court for the Central District of
California, Western Division entitled, Samuel Dawson v. Gary
Winnick, et al, on behalf of all investors who purchased Senior
Unsecured Notes of Global Crossing, Ltd. ("Notes") during the
Class Period of January 2, 2001 and October 4, 2001. The Notes
include the following:
9.625% Senior Notes due on May 15, 2008 (issued May 18, 1998)
9.5% Senior Notes due on November 15, 2009 (issued November 12,
1999)
9.125% Senior Notes due on November 15, 2006 (issued November 12,
1999)
8.7% Senior Notes due in August of 2007 (issued January 23, 2001)
Plaintiff Samuel Dawson brings this action on behalf of himself
and a class (the "Class") alleging violations of securities laws,
including Sections 10(b) and 20 of the federal securities laws.
The complaint alleges that defendants issued false and misleading
press releases regarding Global Crossing's financial statements.
In particular, the complaint alleges that, among other things,
defendants engaged in an accounting practice known as
"roundtripping" which artificially inflated Global Crossing's
revenues and operating performance. On January 28, 2002, Global
Crossing commenced Chapter 11 bankruptcy proceedings.
Plaintiff seeks to recover damages on behalf of himself and all
investors in the Notes during the Class Period. Excluded from the
class are, Global Crossing, Ltd., the defendants, members of
defendants' immediate families, and any entity which is a parent
or subsidiary of or controlled by defendants or Global Crossing,
Ltd.
Direct questions concerning this notice or rights or interests
with respect to these matters, to attorneys James C. Krause, Eric
J. Benink or Vincent D. Slavens, at KRAUSE & KALFAYAN, 1010
Second Avenue, Suite 1750 San Diego, CA 92101, Tel: (619) 232-
0331 or visit www.krausekalfayan.com .
CONTACT: KRAUSE & KALFAYAN
James C. Krause
Eric J. Benink
Vincent D. Slavens, all of
Tel. +1-619-232-0331
GLOBAL CROSSING: Reports It Is Subject Of SEC Investigation
-----------------------------------------------------------
Global Crossing announced Friday it has received notification
that the company is the subject of an investigation by the U.S.
Securities and Exchange Commission (SEC).
As previously announced on February 4, 2002, Global Crossing
received an inquiry from the SEC for the voluntary production of
certain information in connection with issues raised in a letter
from a former employee. This investigation is related to the
SEC's previous inquiry.
The company continues to cooperate fully with the SEC in
providing the requested information.
Global Crossing provides telecommunications solutions over the
world's first integrated global IP-based network, which reaches
27 countries and more than 200 major cities around the
globe. Global Crossing serves many of the world's largest
corporations, providing a full range of managed data and voice
products and services. Global Crossing operates throughout the
Americas and Europe, and provides services in Asia through its
subsidiary, Asia Global Crossing (NYSE: AX).
On January 28, 2002, Global Crossing and certain of its
affiliates (excluding Asia Global Crossing and its subsidiaries)
commenced Chapter 11 cases in the United States Bankruptcy Court
for the Southern District of New York and coordinated proceedings
in the Supreme Court of Bermuda.
For more info about the Company's bankruptcy filing:
http://bankrupt.com/misc/Global_Crossing1.txt
CONTACT: GLOBAL CROSSING
PRESS:
Dan Coulter
+1-973-410-5810
daniel.coulter@globalcrossing.com
Becky Yeamans
+1-973-410-5857
rebecca.yeamans@globalcrossing.com
ANALYSTS/INVESTORS:
Ken Simril
+1-310-385-5200
investors@globalcrossing.com
===========
B R A Z I L
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BNB: Govt. Takes Legal Action Over Falsified Financial Results
--------------------------------------------------------------
The Brazilian government has sued BNB (Banco do Nordeste do
Brasil) for allegedly publishing false financial figures for the
purpose of hiding losses and to distribute dividends based on
fictitious profits, reports South American Business Information.
The government claimed that the bank falsified three reports, one
in 2000 and two in 2001, in order to hide the debts and to avoid
the possible liquidation of the bank as a result.
The suit is seeking for the abdication of various executives of
the bank and the republishing of the institution's figures to
show debts of BRL2.1 billion, which is twice as much as the
bank's net worth.
ELETROPAULO METROPOLITANA: Analysts Expect Shares To Bounce
-----------------------------------------------------------
Eletropaulo Metropolitana SA preferred shares are expected to
gain after declining 3.6 percent in seven days, reports
Bloomberg.
The Brazilian utility received Thursday BRL277 million from
national development bank BNDES to compensate losses from power
rationing, the company said. The tranche is the first of a series
that may total BRL700 million to BRL800 million, Eletropaulo
added.
The amount is more than the BRL622 million forecast by Lehman
Brothers' analyst Charles Barnett.
"We believe improving fundamentals in coming months will outweigh
current credit concerns, which we believe are already reflected
in the share price," the analyst said in a report.
Eletropaulo shares fell 2.5 percent Thursday to close at BRL67.
CONTACTS: ELETROPAULO METROPOLITANA
Luiz D. Travesso, Chairman and President
Orestes GonĜalves Jr., VP Finance/Investor Relations
THEIR ADDRESS:
Avenida Alfredo Egidio de Souza Aranha 100-B,
13 andar 04726-270 San Paulo
Brazil
Phone: +55-11-548-9461, +55 11 5696 3595
Fax: +55-11-546-1933
URL: http://www.eletropaulo.com.br
TRANBRASIL: Infraero, Other Airlines Scramble For Hangar Space
--------------------------------------------------------------
Transbrasil lost its license to fly after Winthrop Group
Investment failed to fulfill its promise to grant US$25 million
to the Brazilian businessman Dilson Prado da Fonseca for the
acquisition of air transportation company Transbrasil.
As a result, Infraero, the federal company managing Brazil's
airports, is now preparing to repossess 270,000 square meters of
hangar space used by Transbrasil in various airports.
The legal process connected with this may be aided by the fact
that Transbrasil owes BRL112 million in operational taxes.
Other airlines are interested in occupying the spaces.
Recently, Michael Tuma Ness stepped down as chairman of
Transbrasil siting the fact that the Company failed to fulfill
its promise made to pay back salaries to 1,200 employees.
Transbrasil still owes employees between BRL8 million and BRL10
million.
Ness had also said he had not been informed of the source of the
US$25 million in capital, which was supposed to be injected into
the Company.
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
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C H I L E
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WACKENHUT CORPORATION: 4Q01, YE Results Suffer From Int'l Woes
--------------------------------------------------------------
* Annual Revenues Up 12.1 Percent; Quarterly Revenues Up 14.9
percent;
* Income Adversely Affected by International Restructuring
The Wackenhut Corporation (NYSE: WAK WAKB) reported Friday record
high annual revenues for fiscal year 2001 of $2.8 billion, a 12.1
percent increase over its 2000 revenues of $2.5 billion. The
Company's revenues for the fourth quarter of 2001 were $753
million, a 14.9 percent increase from $656 million in the 2000
fourth quarter.
The Company also reported 2001 net income of $3.7 million or 23
cents per diluted share, compared to $16.8 million or $1.10 per
diluted share in fiscal 2000. Net income for the year 2001
includes a charge of $26.6 million after tax, or $1.73 per share
on a fully diluted basis connected with the Company's ongoing
efforts to realign its international security management, and
integrate its global security operations. This includes a $17.9
million after tax charge connected with the affiliate in Chile.
In addition, net income was reduced in the fourth quarter 2001 by
a $1.0 million charge (after tax and minority interest) related
to a deactivated correctional facility in Jena, Louisiana.
Net income for the fourth quarter was $3.3 million or 21 cents
diluted earnings per share, versus $5.6 million or 37 cents
diluted earnings per share in the fourth quarter, 2000. Net
income for the fourth quarter 2001 includes a charge of $7.8
million after tax, or $0.50 per share on a fully diluted basis,
connected with the Company's ongoing efforts to realign its
international security management, and integrate its global
security operations. This includes a $5.5 million after tax
charge connected with the affiliate in Chile.
EBITDA (earnings before interest, taxes, depreciation and
amortization) for 2001 was $73 million, an increase of 20.1
percent compared to $60.8 million in fiscal 2000. EBITDA in the
fourth quarter of 2001 was $21.7 million, an increase of 11.8
percent compared to EBITDA of $19.4 million in the fourth
quarter, 2000.
Richard R. Wackenhut, vice chairman, president and chief
executive officer of The Wackenhut Corporation, said, "The
Company achieved a number of milestones in 2001 despite the
losses from our Chilean affiliate and charges related to the
repositioning of other international security operations. The
Company attained record high revenues for the year, and it is a
pleasure to also note that we have maintained a consistent double
digit rate of revenue growth for the past seven fiscal years. In
addition, operating income increased over the previous year in
all three of our principal business units: global security,
correctional services, and flexible staffing."
He added, "The North American security operations had a very
strong quarter and year with a margin increase of 20 basis points
for the fourth quarter, and a margin increase of 80 basis points
for the year. The restructuring of our global security
organization is an on-going process, and we have disposed of
several unprofitable operations. We continue to explore options
for restructuring the operations of our Chilean affiliate. This
restructuring will likely include attaining majority ownership of
the affiliate and selling certain non-core businesses in Chile."
Year-end results for the three separate business units are as
follows:
SECURITY-RELATED BUSINESS SERVICES
2001 pro forma* revenues: $1.23 billion; UP 11.9 percent from
2000.
2001 pro forma* operating income: $37.6 million; UP 10.6 percent
from 2000.
* All periods: without food service division, which was sold in
first quarter, 2001.
The demand for security related services expanded significantly
in the fourth quarter after the terrorist attacks of September
11, and the Company went to a great deal of effort to respond to
the great increase in requests for service while maintaining the
Company's high quality and standards. Numerous contracts for
security services were expanded in light of the increased
security needs at both commercial and government sites.
During the fourth quarter, the Company responded to requests and
established new security services contracts with such major
corporations as Convergys and Proctor & Gamble; and secured new
federal contracts, to include the Federal Aviation Administration
for security at multiple control towers throughout the U.S., and
the Federal Reserve Board in Washington, D.C.
In addition, Capital One contracted with the Company for a 20
percent increase compared to its previous annual costs for
security; and the U.S. Department of Energy, NASA, and other
federal agencies connected with national defense and homeland
security missions also increased their expenditures with the
Company for contract security during the quarter.
The Company's commitment to quality service and high standards
remains a strategic focus in providing service to its
customers. This commitment is evidenced by the Company's
industry leadership in earning certifications from the
International Organization of Standards. Wackenhut is the only
security services provider to have earned ISO 9001 certification
at a commercial nuclear power plant, having achieved this
distinction at two separate locations. The Company continues to
increase its list of area and regional offices in the U.S. and
the international market that are ISO 9001 certified; and has won
numerous distinctive quality awards from U.S. federal agencies
and leading corporations.
CORRECTIONAL SERVICES
2001 Revenues: $562.1 million; UP 4.9 percent from 2000.
2001 Operating Income: $24.2 million; UP 28 percent from 2000.
The Company's correctional services subsidiary, Wackenhut
Corrections (NYSE: WHC), had a strong financial performance in
the quarter and year despite a $3.0 million write down (pretax)
related to the deactivated correctional facility in Louisiana in
the fourth quarter, 2001. The corrections subsidiary developed
and activated four new facilities during fiscal 2001, two in the
United States, one in England, and one in Scotland, with a total
of nearly 3,000 beds. Wackenhut Corrections anticipates continued
growth with expectations to compete for approximately 18,000 new
beds over the next 12 to 18 months. The company's operation in
South Africa recently completed the development of a 3,024-bed
maximum-security facility that will start to accept prisoners
later this month. It is one of the world's largest privatized
correctional facilities.
FLEXIBLE STAFFING
2001 Revenues: $ 1.0 billion; UP 25.3 percent from 2001.
2001 Operating Income: $3.9 million; UP 5.4 percent from 2001.
Despite the negative industry-wide trends of the past year, the
Company's flexible staffing units, Oasis Outsourcing and Oasis
Staffing, increased the number of worksite employees served as a
Professional Employer Organization (PEO) by 17.5 percent at the
end of 2001 compared to the end of the previous year. The number
rose from 35,916 employees at the end of 2000 to 42,212 employees
at the end of 2001.
Oasis experienced a decline in temporary hours of 4.4 percent for
the year 2001 after having an increase of 9 percent in the year
2000. The company had 3.47 million staffing hours in 2001 versus
3.63 million hours in year 2000.
The Wackenhut Corporation (www.wackenhut.com) is a leading
provider of integrated business services to major corporations,
government agencies, and a wide range of industrial and
commercial customers. Its principal business lines include
security-related services; correctional services; and flexible
staffing. Security-related services include physical security,
alarms, cash- in-transit, cargo tracking, fire fighting and
prevention, background checks and emergency
protection. Correctional services include development and
management of correctional facilities of all types, mental health
facilities and services, rehabilitation programs, prisoner
transportation, and electronic monitoring of home
detainees. Flexible staffing services encompass human resources
management and payroll administration as a professional employer
organization (PEO), as well as temporary staffing, recruitment
and training. The Company is a leader in the privatization of
public services for municipal, state and federal agencies, and
has operations throughout the United States and on six
continents.
The Wackenhut Corporation trades on the New York Stock Exchange
under two symbols: WAK, the Series A Common Stock; and WAKB, the
Series B Common Stock. The Series B Stock has no voting rights,
but in all other respects is the same as the Series A Stock. The
Wackenhut Corporation is the majority shareholder in Wackenhut
Corrections Corporation, which has the NYSE symbol, WHC.
To see financial statements:
http://bankrupt.com/misc/Wackenhut.doc
CONTACT: Patrick Cannan, Corporate Relations
+1-561-691-6643
Philip Maslowe, Chief Financial Officer
+1-561-622-5656
INVESTOR RELATIONS:
Patrick F. Cannan, Director, Corporation Relations
The Wackenhut Corporation
4200 Wackenhut Drive, #100
Palm Beach Gardens, FL 33410
Phone: (561) 691-6643
Fax: (561) 691-6738
Email: mailto://pcannan@wackenhut.com
ACCOUNTANT/AUDITOR:
Arthur Andersen LLP
777 South Flagler Drive
Suite 1700 West
West Palm Beach, Florida 33401
Tel: 1 561 832 8100
Fax: 1 561 655 1450
E-mail: west.palm.beach@andersen.com
===========
M E X I C O
===========
EMPRESAS ICA: Increased Investments May Boost Shares
----------------------------------------------------
Shares of Mexico's leading construction company, Empresas ICA
Sociedad Controladora SA, may rise after investment in
manufacturing, construction and other industries rose 1.2 percent
in November from October in seasonally adjusted terms, reports
Bloomberg.
In addition, ICA may also benefit from lower borrowing costs
resulting from Standard & Poor's recent upgrade of Mexico's
credit rating to investment grade.
ICA has formed a consortium with Mexican cement giant Cemex and
four other local construction companies to bid for a US$2.8-
billion new Mexico City international airport at Texcoco.
Fitch analyst Roberto Guerra believes that ICA is in a good
position to bid for the project and may convince the government
to offer breaks for Mexican companies to be awarded the
construction work.
The Texcoco airport concession and state oil company Pemex's
plans to invest US$14 billion in new projects will be key for
ICA, said Guerra.
CONTACTS: EMPRESAS ICA SOCIEDAD CONTROLADORA S.A. DE C.V.
Bernardo Quintana Isaac, Chairman/Pres/CEO
Jos, L. Guerrero Alvarez, EVP Finance and CFO
THEIR ADDRESS:
Mineria No. 145, Colonia Escand>n
11800 M,xico, D.F., Mexico
Phone: +52-55-5272-9991
Fax: +52-55-5227-5012
URL: http://www.ica.com.mx
EVAMEX: To Go On The Block Before June 2002
-------------------------------------------
The sale of Evamex, a Mexican dairy company headed by Andres
Casco, will take place during the first half of this year,
reports Mexico City daily Reforma.
The assets to be sold include the Company's processing plants. Of
the nine plants, only the five in Naranjos, Tizayuca,
Aguascalientes, Gomez Palacio and Veracruz are currently in
operation.
Zimma Consulting, headed by Arseny Lepiavka, is the agent in
charge of the sale process. Interested potential buyers include
Parmalat, under Hugo Lara, Sigma Aliminetos, led by Dionisio
Garza Medina, Alpura, headed by Victor Gavito, and Grupo Lala,
managed by Ralph Wigandt.
Evamex has debts of close to US$200 million, owed mainly to
Fideliq, headed by Luis Miguel Alvarez; Banorte, Cremi, headed by
Gustavo Vergara, and Citigroup's (NYSE:C) Banamex-Citibank. The
dairy company is currently under the control of bank bailout
agency IPAB.
GRUPO BITAL: Signs Collaboration Agreement With Nafin
-----------------------------------------------------
Mexican financial group Bital signed a collaboration agreement
with Nacional Financiera (Nafin), under which Bital will assign a
budget of MXN4 billion to support 10,000 small Mexican companies,
reports Mexico City daily El Universal.
The agreement establishes the creation of a distribution channel
for Nafin's products and services within Bital, which will create
a national network.
The resources will be provided mainly through the Modernization
and Equipment Financing Program, says Mexico City daily Reforma.
According to the agreement, Bital will take steps to speed up the
process of analyzing credit requests from small businesses.
The agreement is aimed at providing better access to credit for
small and medium companies in the industrial sales and service
sectors to modernize.
HYLSAMEX: Parent's Stock Up On Likely Increase In Steel Tariff
--------------------------------------------------------------
Shares of Mexican industrial conglomerate Alfa SA on Thursday
rose MXN0.21, or 1.5 percent, to MXN13.85.
The Company's shares, according to a report by Bloomberg, may
rise even further after Economy Minister Luis Derbez said the
government will likely place a 35-percent tariff on steel product
imports to protect producers like Alfa's ailing subsidiary
Hylsamex SA from unfair competition.
A U.S. trade plan recently recommended imposing tariffs as high
as 40-percent on some steel product imports, raising concern
Asian and Latin American steel could flood the Mexican market.
Hylsamex SA is close to an agreement with its bank creditors to
restructure US$627 million in debt.
Hylsamex had previously announced that its cash flow, or earnings
before interest, taxes, depreciation and amortization (EBITDA),
fell 3 percent to US$34 million in the fourth quarter from US$35
million in the third quarter. Total sales volume was 615,700 tons
of steel, or 3 percent more than the same quarter last year.
"They might work this out, but there won't be another bank that's
going to want to lend to them in the future," said Inigo Ugarte,
who helps to manage about US$20 million in Mexican equities at
Casa de Bolsa Bital SA.
Alfa is looking for a "strategic investor" for Hylsamex and may
also offload some of Hylsamex's non-core assets.
CONTACT: Dionisio Garza Medina, CEO
Raul Gonzalez Casas, Investor Relations
TEL. 52 8748-1177 FAX. 52 8748-2544
rgonzale@alfa.com.mx
MEXLUB: Authorities To Investigate Former Alliance With Pemex
-------------------------------------------------------------
The Chamber of Deputies Energy Commission will probe into
possible irregularities in the alliance between state-owned oil
giant Pemex and lubricant maker Mexlub, according to Congressman
Noe Navarrete.
Last week, Pemex announced the end of its relationship with
Impulsora Jalisciense, the company it became associated with for
the creation of MexLub, and cancelled contracts allowing the
company to use the MexLub brands or manufacture and supply oil
for Pemex.
Pemex explained its move saying it wanted to end an unproductive
relationship, avoid further deterioration of the company's brands
and promote competition in the market for oil and lubricants.
But even if Pemex has ended its relationship with Mexlub,
Navarrete explained that "certain financial maneuvers in the 1992
agreement... arouse suspicion."
Navarrete said it was suspicious that a business with a captive
audience and no competition could have failed, referring to
Mexlub.
In 1992, the Chemical Compounds Industrial Group won the bid to
create the Mexlub company through its affiliate Impulsora
Jalisciense.
The Federal Competition Commission ruled in January that Pemex
had resorted to monopolistic practices in the lubricant market by
preventing the sale of other brands at service stations.
CONTACT: Octavio S nchez Mejorada, Manager
Av. 8 de Julio N 2270, Z.I.
Guadalajara, Jal. 44940
Phone: 31-34-05-00
Fax: 31-34-05-00
E-mail: export@mexlub.com.mx
URL: http://www.mexlub.com.mx
PROTEXA: Market Sources Predict Bond Payment Will Be Missed
-----------------------------------------------------------
Grupo Protexa, headed by Humberto Lobo, is likely to have trouble
paying a bond due on July 24 due to financial difficulties,
according to market sources.
Mexico City daily Reforma reveals that the Company hasn't made
any interest payments for some time now.
Protexa is in the business of industrial, construction, tourism,
real estate, and environmental services in Mexico.
CONTACTS: Corporacion Protexa, S.A. De C.V.
Carr. Monterrey-Saltillo Km.339
Santa Catarina, N.L.
Mexico C.P. 663450
Tel. (52)83992626/83992727/83992828
***********
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
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Information contained herein is obtained from sources believed to
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