/raid1/www/Hosts/bankrupt/TCRLA

/raid1/www/Hosts/bankrupt/TCRLA_Public/020327.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, March 27, 2002, Vol. 3, Issue 61 Headlines A R G E N T I N A ARGENTINE FIRMS: Default Warnings Escalate as Problems Worsen CENTRAL PUERTO: Unable To Purchase Fuel Oil For Coming Winter METROGAS: Suspends Payments on $420M Debt B E R M U D A GLOBAL CROSSING: Bidders Applaud `Buyer Protection' Approval GLOBAL CROSSING: Dave Carey Named Exec. VP Of Enterprise Sales B R A Z I L CEMIG: Expectations Improve, 4Q01 Numbers May Reward Shareholders GLOBO CABO: Shares Up Following Release Of New Presidential Poll TELEMAR: Analysts May Revise Estimates On Slow Earnings Growth C H I L E MADECO SA: 4Q01 Results Disappoint, Hires SSB to Restructure M E X I C O AHMSA: Reaches Wage Accord With Workers; Avoids Strike EMPRESAS ICA: 2001 Operating Loss Widens To US$97.9 Mln EMPRESAS ICA: S&P Cuts Outlook Due To Disappointing 2001 Results HYLSA: Launches Debt $300M Exchange Offer, Seeks Waivers HYLSA: 4Q01 Preliminary Earnings Flat to Negative PEMEX: Union Strongly Opposes Labor Cuts in Restructuring Plan PEMEX: `02 Export Earnings Down 31% Through February PEMEX: Senator Proposes Administrative Board Overhaul P A R A G U A Y CORPOSANA: Privatization Sale Documents Deadline Extended V E N E Z U E L A BANCO PROVINCIAL: S&P Affirms Ratings; Off CreditWatch - - - - - - - - - - ================= A R G E N T I N A ================= ARGENTINE FIRMS: Default Warnings Escalate as Problems Worsen ------------------------------------------------------------- The Capital Foundation, a private group, released a report Monday concerning the future of the Argentine firms that sold bonds in foreign markets during the past decade. In its report, the group warned that these firms face "enormous financial problems" and are "at imminent risk of generalized default." The devaluation of the peso in January as well as "the unprecedented depression that has been punishing the Argentine economy for more than four years," have led to "the extensive deterioration in the corporate debt rating" of these companies, the report said. According to the foundation, some US$1.95 billion in bonds were scheduled to mature during the first quarter of this year. Aside from the devaluation, which ended more than a decade when the national currency was pegged to the dollar, and the conversion of the economy to pesos, the Argentine administration also last December suspended payment of the government debt. The report also noted the restrictions that the Central Bank has imposed on transferring funds abroad and the delay in negotiations for a new agreement with the International Monetary Fund that could channel financial aid to Argentina. Although private firms were able to pay US$2.881 billion, or 84 percent, of their US$3.422 billion expired capital and interest debt from December 2001 to March 2002, there were 18 large firms that defaulted on the remaining 16 percent or US$541 million in corporate debt and were placed on selective default rating. "The important firms that defaulted are still a minority, and they correspond principally to the service and communications sector where many companies depend almost exclusively on the domestic market and invoice in pesos but have dollar debts," the Capital Foundation said. Among these firms are Telefonica de Argentina telephony company, Edenor power firm, Metrogas gas distributor, Acindar steel mill, the Disco supermarket chain and food firms Mastellone and Fargo. These firms "were caught unawares by the measures and economic situation during the first quarter" of the year. There are also several media communication firms such as CableVision, Multicanal, CTI Holding and Impsat, as well as Agea which prints Clarin, Argentina's largest newspaper, in this group of beleaguered firms. CONTACTS: TELEFONICA DE ARGENTINA Tucuman 1, 18th Floor, 1049 Buenos Aires, Argentina Phone: (212) 688-6840 Home Page: http://www.telefonica.com.ar Contacts: Carlos Fernandez-Prida Mendez Nunez, Chairman Paul Burton Savoldelli, Vice Chairman Fernando Raul Borio, Secretary METROGAS S.A. Gregorio Araoz de Lamadrid 1360 Buenos Aires, Argentina Phone: +54-11-4309-1010 Fax: +54-11-4309-1025 E-mail: info@metrogas.com.ar Home Page: http://www.metrogas.com.ar/english/ Contacts: Luis Domenech CFO Phone: (54-11) 4309-1434 Fax: (54-11) 4309-1277 Eugenia Gatti, Investor Relations Phone: (54-11) 4309-1381 Fax: (54-11) 4309-1477 DISCO S.A. Larrea 847, Piso 1 1117 Buenos Aires, Argentina Phone: +54-11-4964-8000 Fax: +54-11-4964-8039 Home Page: http://www.disco.com.ar Contacts: Eduardo R. Orteu, Chief Executive Officer Jose Sanchez, Chief Financial Officer ACINDAR INDUSTRIA ARGENTINA DE ACEROS SA 1609 Boulogne, San Isidro E. Zeballos Esq. Uruguay Buenos Aires Argentina Phone: +54 11 47198500 Fax: +54 11 47198501 Home Page: http://www.acindar.com.ar/ir/eng/default.htm Contacts: Lic. Jos‚ I. Giraudo, Investor Relations Manager Phone: (54-11) 4 719-8674 Fax: (54-11) 4 719-8501 Int. 8674 Lic. Andrea Dala, Investor Relations Officer Phone: (54-11) 4 719-8672 Fax: (54-11) 4 719-8501 Int. 8672 MULTICANAL S.A. Avalos 2057 C1431DPM Buenos Aires, Argentina Tel: 54 11 4524-4700 Fax: 54 11 4370-5162 Contact: Fabian Melnitzky E-mail: fmelnitz@redarg.com.ar CABLEVISION Bondpland 1773 1414 Buenos Aires Argentina Tel: 54 11 47786060 Fax: 54 11 47741016 Home Page: www.cablevision.com.ar Contacts: Fabian To de Paul, President Investor relations E-mail: spena@cablevision.com.ar mpigretti@cablevision.com.ar IMPSAT ARGENTINA Alferez Pareja 256 c1107bjd Buenos Aires Phone: +54-11-5170-0000 Fax: +54-11-5170-6500 Home Page: http://www.impsat.com/ Contact: Sr Gonzalo Alende Serra Vice President Investor Relations Phone: +54-11-5170-3700 ARTE GRA'FICO EDITORIAL ARGENTINO S.A.. (AGEA) Daily Bugler - Daily Sport Ol‚ Tacuar¡ 1846 C1139AAN Buenos Aires, Argentina Tel: 54 11 4309-7500 Fax: 54 11 4309-7200 Contact: Jimena Olazar E-mail: jolazar@agea.com.ar MASTELLONE HNOS. S.A. Av. Leandro N. Alem 720 (1001) - Buenos Aires Argentina Phone: 54 1 318-5000 Fax: 54 1 313-6822 E-mail: Contacts: laserenisima@mastellone.com.ar Pascual Mastellone, President Marcelo Markous, Vicepresident and General Manager COMPANIA DE ALIMENTOS FARGO S.A. Panamericana Y Marcos Sastre 1617 General Pacheco Buenos Aires, Argentina Phone: 541-14-736-6500 Fax: 541-14-736-6540 Contacts: Carlos Barbero E-mail: vbullrich@fargo.com.ar EDENOR S.A. Azopardo Building Azopardo 1025 (1107) Capital Federal Phone: (54-11) 4346-5000 Fax: (54-11) 4346-5300 E-mai: to ofitel@edenor.com.ar Home Page: http://www.edenor.com.ar Contact: Riuttort Marc, Treasurer Fax: (54 1) 348-2149 CENTRAL PUERTO: Unable To Purchase Fuel Oil For Coming Winter ------------------------------------------------------------- Argentine generator Central Puerto Sociedad Anonima asked the energy department to implement measures that would allow it to buy fuel oil, to restore the wholesale market to a competitive, transparent market in which generators can cover costs. Central Puerto expects to have to buy US$15 million of fuel oil (136,000 tonnes) for the coming winter. However, the Company does not have the financial resources to purchase fuel oil, the Company's chairman Jacques Chambert-Loir confirmed in an open letter to energy secretary Alieto Guadagni. The lack of financing arises because spot market prices have fallen to levels below production costs as a result of the government ending the peso-dollar parity. As a result, Puerto cannot access financial markets because it is in default. Central Puerto currently sells 75 percent of its output on the spot market, where it is sustaining significant losses because of what it claims is the "illegal" action of wholesale market administrator Cammesa in how it has interpreted energy department rules. In a letter, Central Puerto asked the energy department to meet with the Company to discuss the situation in greater detail. Central Puerto suspended payments on all financial obligations in February as a result of the economic downturn in Argentina. The Company's debts total US$300 million, including US$120 million with French bank Sofax, 100-percent owned by Central Puerto's majority owner TotalfinaElf; US$110 million with the Bank of America with guarantees from US-based Exim Bank; US$11.5 million with Bankboston; and US$60 million with a syndicate of banks. Of the smallest loan, US$50 million is in dollars and US$10 million is a peso-denominated loan from Banco de la Provincia de Buenos Aires. Central Puerto Sociedad Anonima is in the generation, transportation, distribution, production, marketing, commercialization, import and in block sale of electric energy and provision of technical and consultancy services. CONTACTS: CENTRAL PUERTO Jacques Chambert Loir, CEO 2701 Avenida Tomas A Edison Buenos Aires, Argentina Phone +54 1 317 5074 Home Page http://www.centralpuerto.com CREDITORS: BANCO DE LA PROVINCIA DE BUENOS AIRES San Martin 137 (C1004AAC) Buenos Aires, Repœblica Argentina Tel. 054 (011) 4347-0000 BANK OF AMERICA - Corporate Headquarters Bank of America Corporate Center 100 North Tryon Street Charlotte, North Carolina 28255 www.BankofAmerica.com Contacts: Ken Lewis, Chairman & CEO METROGAS: Suspends Payments on $420M Debt ----------------------------------------- Metrogas SA, the Argentinean gas distribution company, announced a freeze on principle and interest payments due on liabilities totaling nearly US$420 million. The natural gas distributor blamed the move on "adverse changes" in the local economy that's beginning to crumble under the burden of a grinding four-year recession. "It is time to pay debt maturities, and the Company does not have the money to meet them," said a company spokesman. "(Utility) rates were frozen by the government making life hell for those operating in the sector." Metrogas is said to be in talks to revise contracts with the Argentine government. The Company plans to restructure all its debt after renegotiating contracts with Argentina. It has hired JP Morgan Securities Inc and legal advisers to help develop a plan. Argentina's financial woes forced British Gas (BG) to write down the book value of its 46-percent stake in Metrogas to GBP10 million in February. BG invested GBP130 million in the Company but has adjusted the book value to take account of the effect of the collapse in the Argentine currency. CONTACTS: METROGAS Alberto Alfredo Alvarez, President William Harvey Adamson, First VP Gen. Director Enrique Barruti, HR Director Fernando Aceiro New Bus. Director Luis Domenech Admin. and Fin. Director Their Address: G. Araoz de Lamadrid 1360 1267 Buenos Aires, Argentina Phone: (800) 422-2066 Fax: (201) 262-2541 Email: info@metrogas.com.ar MORGAN STANLEY, DEAN WITTER & COMPANY 1585 Broadway New York, New York 10036 United States Phone: +1 212 761-4000 Home Page http://www.msdw.com ============= B E R M U D A ============= GLOBAL CROSSING: Bidders Applaud `Buyer Protection' Approval ------------------------------------------------------------ Hutchison Whampoa Ltd. and Singapore Technologies Telemedia Pte. Ltd. issued the following statement in response to the United States Bankruptcy Court's approval of the Buyer Protection Motion relating to the letter of intent to acquire Global Crossing: "We are pleased to have received Court approval on a buyer protection motion that was supported by Global Crossing and its creditors. "While this is the first step in the process, it provides the necessary framework to work towards a definitive agreement with Global Crossing that provides value for its creditors, customers and employees. It is our goal to work with the company's management and creditors to facilitate a reorganization of the business as quickly as possible in order to ensure continued service to Global Crossing's customers." Hutchison Whampoa Hutchison Whampoa is a Hong Kong-based multinational conglomerate with origins dating back to the 1800s. Hutchison is also part of the Li Ka-shing group of companies, which together represent about 15% of the total market capitalization of the Hong Kong stock market. In 2000, consolidated turnover (including associates) was over US$10 billion, and consolidated net profit was approximately US$4.4 billion. With approximately 100,000 employees worldwide, Hutchison operates five core businesses in 34 countries: ports and related services; telecommunications and e-commerce; property and hotels; retail and manufacturing; and energy and infrastructure. Singapore Technologies Telemedia Singapore Technologies Telemedia (ST Telemedia) is a leading Info- communications group that provides voice, data and video services. It focuses on three core businesses: Data & Voice, Broadband, and e-services. ST Telemedia aims to be a market leader in data and IP communications, seamlessly connecting businesses, individuals and information in any media and with innovative and reliable information communication technologies. Through its subsidiaries and associate companies, ST Telemedia provides fixed and mobile telecom services, wireless data communications services, Internet mobile services, global IP network services, managed hosting services, satellite services, broadband cable and e-business software development services. ST Telemedia is a wholly-owned subsidiary of the Singapore Technologies group. CONTACT: Brunswick Group Steve Lipin or Michael Buckley +1-212-333-3810 HUTCHISON WHAMPOA Laura Cheung, +852-2128-1289, Email: laurac@hwl.com.hk Singapore Technologies Telemedia Melinda Tan, +65-6723-8690 Email: tanmelinda@stt.st.com.sg GLOBAL CROSSING: Dave Carey Named Exec. VP Of Enterprise Sales -------------------------------------------------------------- Global Crossing announced Monday the appointment of Dave Carey as executive vice president of enterprise sales. Effective immediately, Carey will oversee all sales and marketing activities relating to Global Crossing's enterprise customers. "Dave Carey knows telecom, he knows Global Crossing and he knows sales and marketing," said John Legere, chief executive officer of Global Crossing. "Dave has an impressive background in sales and the proven ability to make tough, smart decisions. He's also earned the trust and respect of the teams he supports and of colleagues across the company." Carey previously served in two senior vice president positions at Global Crossing -- in global network development and in network and business development. His accomplishments include leading development of a fundamental network planning process for Global Crossing's worldwide, multi-layer protocol network. When Global Crossing merged with Frontier Communications in 1999, Carey was serving as Frontier's senior vice-president of marketing and chief marketing officer. Carey previously served as president and CEO of LG&E Natural, Inc., a subsidiary of LG&E Energy Corporation of Louisville, Kentucky and held a number of increasingly responsible marketing and sales positions during 14 years with AT&T, including serving as director of marketing for AT&T's General Business Systems unit. Carey holds an M.S. degree in management science from MIT, and a B.S. degree in industrial distribution from Clarkson University in Potsdam, N.Y. He also was appointed to a Sloan Fellowship by MIT. Carey is succeeding Peg Lockwood, who is leaving Global Crossing to pursue other opportunities. 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. CONTACT GLOBAL CROSSING: Press Contacts Rebecca Yeamans + 1 973-410-8421 Rebecca.Yeamans@globalcrossing.com Tisha Kresler + 1 973-410-8666 Tisha.Kresler@globalcrossing.com Analysts/Investors Contact Ken Simril + 1 310-385-5200 investors@globalcrossing.com =========== B R A Z I L =========== CEMIG: Expectations Improve, 4Q01 Numbers May Reward Shareholders ----------------------------------------------------------------- Analysts are predicting Shares of Cia. Energetica de Minas Gerais may gain before Tuesday's release of its fourth- quarter results, according to Bloomberg. Generating, transmiting and distributing electricity, CEMIG is Brazil's largest utility. The company is expected to report improved results after receiving compensation for a decline in sales during the power rationing. The utility's results are also likely to benefit from a 16 percent currency appreciation in the period, as about 76 percent of its BRL2.9- billion ($1.2 billion) debt is dollar denominated. On Friday, Cemig shares fell 4.7 percent to BRL34.01. CONTACTS: CEMIG Avenida Barbacena, 1200 Sto Agostinho 30123-970 Belo Horizonte - MG Brazil Phone +55 31 299 4900 Home Page http://www.cemig.com.br Contacts: Djalma Bastos De Morais, Chairman Geraldo De Oliveira Faria, Vice Chairman Cristiano Correa De Barros, Finance Director GLOBO CABO: Shares Up Following Release Of New Presidential Poll ---------------------------------------------------------------- Globo Cabo SA, Brazil's biggest cable television company, saw its shares climb 4 percent to BRL0.52 on optimism that gains by Jose Serra, the likely candidate for Brazilian President Fernando Henrique Cardoso's party, suggest business-friendly policies will continue after the election, says Bloomberg. The Company's stock was off 21 percent last week and 13 percent the week before after the announcing the sale of BRL1 billion ($420 million) in additional equity, raising concern over dilution issues. "The new presidential poll that came out was better than expected for the government's candidate and put a positive sentiment on the market," said Fabio Gheilerman, head of Latin America trading with J.P. Morgan Securities in New York. To see financial statements: http://bankrupt.com/misc/globo_cabo.pdf CONTACT: GLOBO CABO Investor Relations: Luis Henrique Martinez, +5511-5186-2684, lmartinez@globocabo.com.br Marcio Minoru, +5511-5186-2811, minoru@globocabo.com.br BNDES Main Office Av. Republica do Chile, 100 Rio de Janeiro - RJ Phone: (021) 2277-7447/6978 Home Page: http://www.bndes.gov.br/english/welcome.htm TELEMAR: Analysts May Revise Estimates On Slow Earnings Growth -------------------------------------------------------------- Shares of Brazil's biggest fixed-line phone company Telemar fell for 2.5 percent to BRL29.74, while the Company's U.S.-traded American depositary receipt fell 2.3 percent to US$12.65, reports Bloomberg. Robert Berges, head Latin America equity strategist with Merrill Lynch & Co. in New York, downgraded Telemar to "underweight" the Morgan Stanley Capital International Latin America benchmark index, from "overweight" in a report. "Telemar isn't going to be growing earnings as fast, so there's a risk that analysts will revise their estimates downward," Berges said. Telemar reportedly plans to sell US$500 million Eurobonds. Telemar Norte Leste SA, the operating phone company for Brazil's eastern states, sank 4.6 percent to BRL51. Telemar said earlier this month that it would increase debt this year by about 30 percent. CONTACT: TELE NORTE LESTE PARTICIPA?OES S.A. (TELEMAR) Rua Lauro Miller 116/22 andar-Botafogo 22299-900 Rio de Janeiro, Brazil Phone: +55-61-327-5544 Fax: +55-61-617-7090 Home Page: http://www.telemar.com.br Contacts: Sergio Lins de Andrade, Chairman Jose Fernandes Pauletti, VP Operations and Interim President Alvaro A.C. dos Santos, VP Finance ========= C H I L E ========= MADECO SA: 4Q01 Results Disappoint, Hires SSB to Restructure ------------------------------------------------------------ Madeco S.A. ("Madeco") announced its consolidated financial results in Chilean GAAP for the quarter and fiscal year ended December 31st, 2001. All figures are expressed in Chilean pesos as of December 31st, 2001 (the year-over-year CPI variation totaled 3.1%) and US dollar conversions expressed in this report are based on the exchange rate effective on that same date (US$1.00 = Ch$654.79). Highlights The fourth quarter was a very difficult one for the Company. Subsequent to the pronounced decline of Brazil's demand for telecommunications cable beginning in August 2001, the Company confronted additional negative factors which significantly impacted its operations - the tragedy of September 11th, which affected economic growth rates and demand levels globally, and the economic and political crisis of Argentina. As a consequence of these factors, Madeco was required to implement drastic restructuring measures, which included the temporary cessation of activities in our wire and cable and brass mills operations in Argentina as well as significant reduction of personnel in Brazil. Given the varied investments that we have in our neighboring country, the Argentine crisis has been particularly negative for the Company. Firstly, we made the painful decision to temporarily close the five production facilities related to the production of wire and cable and/or brass mills products. In addition, it was necessary to make provisions for the potential valuation adjustments of our assets in that country, with the objective of registering our best estimate to date of the effects that could be derived from Argentina's turmoil. Moreover, the Company hired Salomon Smith Barney at the beginning of the year 2002; the investment bank has been hired to advise and coordinate a financial restructuring plan for Madeco. The plan contemplates the restructuring of the Company's financial liabilities, the optimization and rationalization of use of funds and working capital of Madeco and an analysis of a proposal to increase the equity of the Company. The Company continues to adjust its operations to the existing market conditions. To that end, we have recently taken the strategic decision to focus on the production of aluminum profiles, and exit the complementary curtain wall installation business. We believe that as a consequence of our efforts, the Company will be better positioned to exploit opportunities when Argentina resolves its current crisis and stronger economic growth rates return to the region. To see financial statements: http://bankrupt.com/misc/Madeco.doc CONTACT: MADECO Marisol Fernandez, Investor Relations Voice : (56 2) 520-1380 Fax : (56 2) 520-1545 E-mail : mfl@madeco.cl Web Site: www.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 =========== M E X I C O =========== AHMSA: Reaches Wage Accord With Workers; Avoids Strike ------------------------------------------------------ A threatening strike at Planta Uno of Altos Hornos de Mexico (AHMSA) was averted after workers accepted a 5.5-percent salary increase offered by the Company during negotiations with the union. Both parties also agreed to review the contracts of another three companies belonging to Grupo Acerero del Norte (GAN), which is the owner of AHMSA. AHMSA has been protected for more than two-and-a-half years by a suspension of payments order - a kind of bankruptcy protection - and has accrued debts of more than US$1.85 billion. Despite the Company's financial situation, it remains operative and is one of Mexico's largest steel producers, as well as operating coal and iron ore mines. 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 EMPRESAS ICA: 2001 Operating Loss Widens To US$97.9 Mln ------------------------------------------------------- Empresas ICA, a Mexican engineering and construction company, ended 2001 with an operating loss of US$97.9 million, compared to the previous year's US$57 million. The loss during the period included a US$113-million charge on account of writedowns and "readjustments" in the fourth quarter, according to a Business News Americas report. Furthermore, 2001 sales were down by 16 percent to US$1.0 billion, compared to US$1.19 billion in the same period the previous year. ICA divested assets worth US$133 million and managed to reduce total debts by MXN2.16 billion (US$236 million) or 28 percent in the last quarter of 2001. Now, ICA's debts stand at US$598 million, US$198 million of which are short-term. The Company also succeeded in rescheduling an additional MXN1 billion (US$109 million) in debts by between three and five years. Despite a reduction in debts, ratings agency Standard & Poor's (S&P) revised ICA's outlook to 'negative' from 'stable' due to weaker-than-expected results for 2001 and an adverse business environment. The rating agency also affirmed its 'single B' corporate credit status for the Company. ICA will continue to depend on the success of its asset sale program to meet its financial obligations, S&P credit analyst Jose Coballasi commented. S&P noted that the environment in which the Company operates remains an adverse one and is reflected in a backlog of less than one year of work. Very low levels of public spending on infrastructure works and increased competition from foreign players have resulted in a dearth of projects and the narrowing of ICA's operating margins, and the decline of its cashflow generation, said the report. EMPRESAS ICA: S&P Cuts Outlook Due To Disappointing 2001 Results ---------------------------------------------------------------- Standard & Poor's (S&P) reduced its outlook of Empresas ICA Sociedad Controladora (ICA) from "B" to "mxBBB-," reports Notimex. The change in the outlook reflects the Company's dismal 2001 financial performance and the low level of performance by the firm's management, despite the fact that the Company still leads in the construction sector. In its report, S&P said: "The expectations of greater activity in the construction sector due to the arrival of President Vicente Fox's government were tempered by the international economic deceleration." HYLSA: Launches Debt $300M Exchange Offer, Seeks Waivers ----------------------------------------------------------- Hylsamex, S.A. de C.V. and its subsidiary Hylsa, S.A. de C.V. (the "Company" or "Hylsa") announced Monday that Hylsa is commencing an exchange offer relating to its $300,000,000 principal amount of outstanding 9 1/4% Notes due 2007 (the "2007 Notes"). In the exchange offer, Hylsa is offering to exchange $1,000 in principal amount of new 10 1/2% Notes due 2010 for each $1,000 principal amount of 2007 Notes tendered. In conjunction with the exchange offer, Hylsa is also soliciting consents to proposed amendments to the indenture governing the 2007 Notes and a waiver of past defaults under the indenture. Each holder that tenders 2007 Notes on or prior to 5:00 p.m., New York time on April 11, 2002 (the "Consent Date") will receive a $10 consent and exchange payment for each $1,000 principal amount of 2007 Notes tendered and not withdrawn before the Consent Date. Holders may also consent without tendering their 2007 Notes. Holders that submit valid consents on or prior to the Consent Date, but do not tender their 2007 Notes, will receive a $5 consent payment for each $1,000 principal amount of 2007 Notes as to which consent is validly given and not withdrawn prior to the Consent Date. The exchange offer will be subject to certain conditions including the receipt of 50% in aggregate principal amount of the 2007 Notes, consents from a majority in aggregate principal amount of the 2007 Notes to the proposed amendments and waiver, and consummation by Hylsa of an overall restructuring of its outstanding debt, as well as other customary conditions. The exchange offer will expire at 11:59 p.m., New York time on April 19, 2002, unless extended. The new notes offered in the exchange offer will not be registered under the Securities Act of 1933, as amended, and will only be offered in the United States to qualified institutional buyers in a private transaction, and outside the United States in offshore transactions. For further information (including requests for offer documentation by eligible offerees), contact the information agent for the Company: CONTACTS: MacKenzie Partners, Inc., New York 800/322-2885 or 212/929-5500 (collect) E-mail: proxy@mackenziepartners.com HYLSA SA DE CV Ave Munich 101, San Nicolas de los Garza, NL 66452 Mexico Phone: +52 83 28 2828 Fax: +52 83 28 2810-15 Home Page: http://www.hylsa.com.mx Contact: Investor Relations: Margarita Guti,rrez Phone: (52) 81 8865 1224 E-Mail: mgutierrez@hylsamex.com.mx Ricardo Sada Phone: (52) 81 8865 1201 E-Mail: rsada@hylsamex.com.mx HYLSA: 4Q01 Preliminary Earnings Flat to Negative ------------------------------------------------- (The information hereby contains preliminary 4Q01 figures presented in constant pesos (Ps) as of December 31, 2001, and in metric tons. For convenience, some figures are translated into dollars (US$) at the average exchange rate of each month.) - Sales volume during 4Q01 amounted to 558,500 tons, 3% lower than in the previous quarter and showed a 2% gain over 4Q00. - Domestic volume in the quarter remained flat against 3Q01 and 2% above 4Q00. Volume growth was achieved in all product categories, in particular flat value-added. - Export shipments declined 28% from the previous quarter, but grew 3% from 4Q00. Volume loss against 3Q01 consisted of lower margin products, thus enhancing the export mix. - Revenue per ton decreased 4%, from US$ 409 in 3Q01 to US$ 391 in 4Q01. Against the same quarter of 2000, when Hylsa recorded US$ 455/ton, the decline represented 14%. Lower international steel prices explain the difference against both comparable quarters. - In the fourth quarter, the price of Hylsa's main production inputs returned to lower levels and is partially reflected in the US$ 11 and US$ 20/ton reduction in variable costs versus 3Q01 and 4Q00, respectively. - Cash generation, measured as EBITDA, decreased US$ 1 million from 3Q01 before extraordinary income, reaching US$ 20 million. Although cost savings were relevant during the quarter, they were entirely offset by decreases in prices. The same situation was observed against 4Q00, when Hylsa recorded an EBITDA of US$ 25 million. - On December 11, Hylsa, S.A. de C.V. presented to its lenders a proposal for the restructuring of its total outstanding bank debt. Hylsa is a division of Hylsamex, Mexico's second largest steel producer, which in turn is a subsidiary of industrial conglomerate Grupo Alfa. To see financial statements: http://bankrupt.com/misc/Hylsa.doc PEMEX: Union Strongly Opposes Labor Cuts in Restructuring Plan -------------------------------------------------------------- The National Oil Industry Workers Union (UNTCIP) has called on the director of Petroleos Mexicanos (Pemex), Raul Munox, to halt the Restructuring Program of Jobs for workers who do not belong to unions, says Mexico City daily El Universal. According to union leader David Cortes, the program contains unjustified dismissals and compulsory retirements that could affect 8,000 people this year. The union has scheduled a protest for March 26 to show opposition to the Company's intentions. Meanwhile, reports say Pemex Projects of Long-term Productive Infrastructure (Pidiregas) debts now surpass MXN800 billion (US$88.5 billion) and its liabilities are harming the government's future oil revenue. Data from the Expenditure Department of the Treasury reveals that large contracts the Company will sell for projects in the Cantarell and Burgos fields and strategic gas program will cover Pemex's financial commitments from 1998 to 2023, including interest payments and debt contracted under Pidiregas. These last debts have risen from MXN353.3 billion (US$ 39.1 billion) at the end of the Zedillo administration in 2000 to MXN850.3 billion (US$94.1 billion) today. The unprecedented debt level at Pemex now eclipses the value of the Company, estimated at MXN565.3 billion (US$62.5 billion). PEMEX: `02 Export Earnings Down 31% Through February ---------------------------------------------------- Mexico's state-run oil company Pemex announced that export earnings for the first two months of the year dropped 31 percent to US$1.448 billion, compared to the same period last year, relates EFE. On Tuesday, the Company disclosed that, for the period January- February, it exported 1.58 million barrels a day for an average price per barrel of US$17.29. During the same period, 1.2 million barrels of Maya crude were sold daily to its customers in the Americas, Europe and Asia, earned US$1.08 billion. Pemex exported 52,000 barrels a day of light Isthmus petroleum at a value of US$55 million and 275,000 barrels of Olmec crude for US$313 million. According to Pemex, 1.3 million barrels daily were destined for its customers in the Americas, 157,000 for its customers in Europe and 31,000 for its Asian clients. PEMEX: Senator Proposes Administrative Board Overhaul ----------------------------------------------------- In an effort to change the structure of the Petroleos Mexicanos (Pemex) Administrative Board, Senator Oscar Canton Zetina will present a proposal that will eliminate the secrecy under which representatives are named and committees formed, as in the case of the Consultant Committee, created by decree last April 30. Also under the proposal is a plan to include in the Pemex Board representatives of the areas where hydrocarbons or oil complexes exist in order to improve relations with Pemex. The proposal calls for an increase in the board members from 11 to 15, some 8 of which would belong to the government to guarantee that they always have a majority. The idea is to avoid affecting the role of the State in the sector. Should the Senator's proposal be adopted, the officials on the Board would be representatives of the secretariats of Social Development, Government, Labor, as well as the entities closely related to Pemex. =============== P A R A G U A Y =============== CORPOSANA: Privatization Sale Documents Deadline Extended --------------------------------------------------------- The deadline for the submission of background documents for the privatization of water utility Corposana has been extended from Monday to April 8, reports Business News Americas. Paraguay's state reform agency SNRE extended the deadline at the request of some of the 13 companies that purchased pre- qualification guidelines who wanted more time. A list of qualified companies has therefore also been pushed back to April 12, while offers are still scheduled to be opened June 27. The 13 companies are: 1 - Anglian (UK) 2 - International Water (UK) 3 - Canal de Isabel II (Spain) 4 - Aguas del Bilbao (Spain) 5 - Proactiva Medio Ambiente (Vivendi-FCC) (France) 6 - Ondeo (France) 7 - A consortium made up of Uruguay's state water utility OSE and Spain's Aguas de Valencia 8 - Compania Internacional de Aguas (Paraguay) 9 - Consorcio EMSA-ECOMIPA (Paraguay) 10 - Fluoder (Paraguay) 11 - Consorcio EDB (Paraguay) 12 - Acea (Italy) 13 - A consortium made up of Corposana workers Chicago-based firm, Baker & McKenzie, is the sale's legal adviser. Spanish banking group, Santander Central Hispano, is the financial consultant. Spanish investment bank, Nmas1, is managing the sale process. CONTACTS: CORPOSANA LEGAL ADVISER: Baker & McKenzie Latin America Regional Council c/o Eduardo de Cerqueira Leite - Chairman Av. Dr. Chucri Zaidan 920, 8th floor Market Place Tower I 04583-904 Sao Paulo, SP, Brazil Tel: (55-11) 3048-6800 Fax: (55-11) 5506-3455 Email: info-latinamerica@bakernet.com Marketing Manager: Ellen Van-Waveren Baker & McKenzie Headquarters: 1 Prudential Plaza, 130 E. Randolph Dr., Ste. 2500 Chicago, IL 60601 Phone: 312-861-8800 Fax: 312-861-2899 Bakerinfo.com FINANCIAL CONSULTANT: Banco Santander Central Hispano Plaza de Canalejas,1 28014 Madrid, Spain Phone: +34-91-558-10-31 Fax: +34-91-552-66-70 CORPOSANA: Emilio Botn-Sanz, Chairman Angel Corc>stegui Guraya, First Vice-Chairman and CEO Jose, Luis del Valle, EVP Finance ================= V E N E Z U E L A ================= BANCO PROVINCIAL: S&P Affirms Ratings; Off CreditWatch ------------------------------------------------------ The removal of the ratings on Banco Provincial S.A. from CreditWatch and the original placement follow similar actions taken on the sovereign rating of the Bolivarian Republic of Venezuela, which was removed from CreditWatch because of the adoption by the government of market-oriented policies-including the flotation of the currency and tax and expenditure policies to tighten the fiscal stance-to deal with this crisis. The government's actions prompted Standard & Poor's affirmation of the sovereign ratings, and a similar action on the bank's ratings. With a market share of 15.3 percent in assets and 16.5 percent in deposits as of November 2001, Banco Provincial remains one of the largest institutions in the Venezuelan banking system. With BBVA as its major shareholder, Banco Provincial possesses the infrastructure and market know-how to maintain its presence in the market. Standard & Poor's acknowledges Banco Provincial's important market presence and improving financial profile. The negative outlook, however, reflects the outlook on the sovereign credit ratings of Venezuela as well as the increasingly difficult operational environment, which is likely to prevent Banco Provincial-and all banks in the system-from further developing its business. Analysts: David Olivares, Mexico City (52) 55-5279-2006; Ursula M Wilhelm, Mexico City (52) 55-5279-2007 *********** 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 Ma. Cristina Canson, 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. 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