/raid1/www/Hosts/bankrupt/TCRLA

/raid1/www/Hosts/bankrupt/TCRLA_Public/020328.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, March 28, 2002, Vol. 3, Issue 62 Headlines A R G E N T I N A METROGAS SA: Fitch Drops Currency Ratings; Default Imminent REPSOL YPF: Parent Likely To Support on Debt Obligations REPSOL YPF: Shares Fall After UBS Reiterates `Sell' Stance SALTA HYDROCARBON: Fitch Maintains 'CCC' Rating; Watch Negative TELECOM ARGENTINA/TELEFONICA DE ARGENTINA: Debt Status Worsens TGN: Events Lead to Technical Default on Indenture B E R M U D A GLOBAL CROSSING: Fiber Optek Pursuing Analysis for Possible Bid GLOBAL CROSSING: Hutchison Whampoa Says Bid Remains Unchanged B R A Z I L BANCO ITAU: Moody's Assigns Ba2 Rating To $100 Mln Eurobond EMBRAER: Strong Currency Boosts 2001 Net Profit LIGHT: French EDF To Inject US$1 Bln Via Stock Issue TELEMAR: Prepares to Issue $500-Mln 5-Yr. Eurobond C H I L E ENAMI: Codelco Says It May Take On All Or Part Of Ventanas TELEX CHILE: Southern Cross Advances In Acquisition M E X I C O PEMEX: Reveals Plans US$42 Bln Investment To Up Crude Production PEMEX: Executives Assure Productivity Despite Ongoing Probe - - - - - - - - - - ================= A R G E N T I N A ================= METROGAS SA: Fitch Drops Currency Ratings; Default Imminent ----------------------------------------------------------- Fitch Ratings has downgraded the foreign and local currency ratings of MetroGas S.A. to 'C' from 'CC' and 'CCC+', respectively. The Rating Watch remains Negative. A 'C' rating indicates imminent default. The rating action follows the announcement made by MetroGas on March 25, 2002, suspending principal and interest payments on all of its financial indebtedness. The Company's decision follows the alteration of its concession agreement by the Argentine Public Emergency Law N? 25.561, which includes the suspension of tariff adjustments and the tariff's pesofication. These changes combined with the devaluation impact, have materially affected the financial condition of MetroGas, given the mismatch between its income in pesos and its debt in hard currency, at an exchange rate of around Arg$4:US$1. The company's maturities in 2002 are US$5 million on April 1, 2002 (interest), US$1.6 million on May 7 (interest) and US$94.4 million in September (principal). At present MetroGas, as well as other regulated market participants, is negotiating its concession contract with the Argentine government in the hope of recovering the already lost economic equilibrium, but the outcome of negotiations is uncertain. Upon reaching an agreement with the government, MetroGas intends to develop and propose a debt restructuring plan. For this purpose it has retained J.P. Morgan Securities Inc. and legal advisors under Argentine and New York Law. MetroGas is the largest of eight natural gas distribution companies. MetroGas is 70%-owned by Gas Argentino S.A., 10%-owned by employees and 20% is traded in the Buenos Aires Stock Exchange. Gas Argentino S.A. is a consortium composed by British Gas PLS (54.7%), and Repasol-YPF (45.3%). CONTACT: FITCH RATINGS Buenos Aires Ana Paula Ares Anabella Colombo +54 11 4327-2444, OR Chicago Jason T. Todd 312/368-3217 OR Media Relations: (New York) James Jockle, 212/908-0547 METROGAS G. Araoz de Lamadrid 1360 1267 Buenos Aires, Argentina Phone: (800) 422-2066 Fax: (201) 262-2541 Email: info@metrogas.com.ar Contacts: 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 REPSOL YPF: Parent Likely To Support on Debt Obligations --------------------------------------------------------- Standard & Poor's expects Spain's largest oil company Repsol YPF SA to help its Argentine unit make good on its debt payments in order to avoid triggering cross-default clauses on EUR8 billion (US$7 billion) of bonds, relates Bloomberg. In its report, the ratings agency revealed that the legal structure of some Repsol bonds allows investors to demand immediate payment should any of the Company's subsidiaries miss a payment of more than US$20 million. Repsol is among Spanish companies that face at least EUR9 billion euros in losses because of Argentina's currency devaluation, raising investor concern that some may not help their Argentine subsidiaries meet debt payments. For Repsol, "the incentive to pay is there," S&P analyst Laura Feinland Katz said. However, if the Argentine government intervenes in the Company's operations, Repsol may rule out a support for its unit, which explores, refines and sells oil. Furthermore, the rating company's report suggested that tightened currency or business controls in Argentina may lead the Repsol subsidiary to default. CONTACTS: REPSOL 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 REPSOL YPF: Shares Fall After UBS Reiterates `Sell' Stance ---------------------------------------------------------- Shares in Repsol YPF SA dropped EUR0.47 or 3.18 percent to EUR14.29, off a low of BRL14.19, on heavy volume of 6.3 million shares after UBS Warburg reiterated its 'sell' recommendation on the stock, with a EUR10 price target, dealers said. According to the report, Repsol YPF, which has nearly half of its assets in Argentina, is the Spanish company most exposed to the pesos's continuing slide, with a sharp hike in provisions and asset write-downs expected in the first quarter. Many investment houses are expected to revisit their full-year 2002 earnings estimates for Repsol YPF, with further downgrades likely in the wake of first quarter figures, the dealers predicted. In its full-year 2001 results, Repsol YPF made total provisions against its Argentine risk of EURO2.738 billion, but this assumed a rate of a ARS1.7 per dollar exchange rate, compared to the ARS3.95 at which the currency was trading Monday. "The situation in Argentina is so unclear, with the government lurching from one policy decision to another that any confidence, which may have existed has now been completely eroded," a salesman at a leading Spanish bank said. SALTA HYDROCARBON: Fitch Maintains 'CCC' Rating; Watch Negative --------------------------------------------------------------- Fitch Ratings maintains the 'CCC' rating on the Salta Hydrocarbon Royalty Trust $234,000,000 Targeted Amortization Notes. The rating remains on Rating Watch Negative. Fitch rates the foreign and local currency obligations of the Province of Salta 'C' Rating Watch Negative. Since the Republic of Argentina's debt default in December 2001, the economic, financial and political conditions of the country have remained in a constant state of flux. As the crisis continues to unfold, Fitch monitors changes in the institutional environment in which both the public and corporate sectors must operate and its impact on the performance of financial transactions rated by Fitch. Recently adopted measures have affected unfavorably the oil and gas sector. The policies, outlined in the Public Emergency and Reform of the Exchange Regime Law, include the peso's devaluation; revocation of convertibility; prohibition of price and tariff adjustments based on foreign-currency indexation; restructuring of various financial obligations into pesos at a 1:1 rate; and granting the executive branch authority to regulate prices of 'critical inputs, goods and services' as well as a tax on hydrocarbon exports. Although so far, fall-out to the provinces may be minimal, as oil and gas industry players feel the pinch of the measures and react, including re-evaluating the commercial viability of certain wells/fields or cutting back long-term capital expenditure programs, upstream output levels may fall or not grow as previously anticipated having an impact on provincial royalty generation. However, as of today, the price-setting regime for royalty payments by concessionaires under Resolution 155/92 of the Secretary of Energy and Mines of the Republic remains effective. Royalties for oil and gas due to the provinces continue to be determined by the market price of the hydrocarbons quoted internationally in U.S. dollars per cubic meter. Since the resolution was implemented in 1992, the most commonly used reference price for Argentine hydrocarbons, at least in so far as royalties is concerned, is that of the West Texas Intermediate crude. The royalty payments are determined as 12% of the well- head price but must be, under the Hydrocarbons Law, paid in pesos. Therefore, concessionaires operating in the provinces must convert the dollars received from the sale of their hydrocarbon production to pesos in order to compensate the provinces, as required by law. Since the debt default, this regime has not changed. Nevertheless, upon the rescission of the 1:1 exchange rate under the 'Convertibility Law' in January 2002, a new exchange regime has been implemented which has a direct impact on the peso amount of royalties the provinces should receive from concessionaires. Under Law 17.319 and Resolution 155/92, which remains in effect, the concessionaires must pay the royalties on the 15th day of each month based on production levels corresponding to the immediately preceding month, using the exchange rate at Banco Nacion Argentina on the business day preceding the royalty payment date. Although the laws and regulations governing the mechanics of royalty payments are clear and remain in effect, in spite of the crisis, the peso conversion has caused confusion among some concessionaires. From the regulations, the royalty payments should reflect the market exchange rate, not the former 1:1 rate established under the Convertibility Law, nor any other preferential or unstipulated rate elected by the concessionaires. Since January, a number of hydrocarbon-producing provinces have received royalty payments from concessionaires that do not reflect the market rate of exchange as established statutorily. Fitch is concerned about the impact of recent legislation on the oil and gas sector and the apparent confusion from varying interpretations of the statutes in the industry. To the extent that concessionaires effect conversions on royalty obligations at rates that are more favorable than prevailing market rates, the royalty cash flows available to service debt obligations will be diminished. Likewise, the new export withholding tax on the oil and gas sector (anticipated to be levies at a 20%-25% rate for a 5-year term), could have a negative impact on the royalties flowing to the provinces if the concessionaires succeed in some way in passing through the tax. The Argentine executive branch hopes the new tax will raise sufficient revenues to fund at least part of the massive equity losses suffered by the nation's banking system during the crisis. Regarding debt obligations collateralized by hydrocarbon royalties, conversion of the pesos to U.S. dollars for debt service is executed on a daily basis. While the daily conversion minimizes devaluation exposure, intra-day fluctuations as well as a wide conversion spread could further squeeze available cash flow. Although the 'CCC' rating indicates default is a real possibility, the Salta Royalty Trust transaction has performed as expected to date. The transaction is in the interest-only period with the next quarterly interest payment due on March 28, 2002. Fitch has received confirmation from the trustee, Bank of New York, that funds are available to make full and timely payment of interest for this upcoming period. The offshore 6-month liquidity reserve account remains fully-funded. Fitch is concerned with the overall lack of stability in Argentina's legal regime. Fitch will continue to monitor developments in the oil and gas sector as well as legal issues that may impact the performance of this transaction. Any future negative developments in the pricing and payment of hydrocarbon royalties could have detrimental ramifications on debt servicing capabilities and could potentially lead to default. Furthermore, changes to the laws supporting the structure of the transaction may also be damaging. CONTACT: FITCH RATINGS Mia Koo, 212/908-0651 Gersan Zurita, 212/908-0318 Alejandro Bertuol, 212/908-0393 Sofia Migueliz, +5411 4327 2444 Matt Burkhard, 212/908-0540 (Media Relations) TELECOM ARGENTINA/TELEFONICA DE ARGENTINA: Debt Status Worsens -------------------------------------------------------------- Bear Stearns analyst Rizwan Ali says that Argentina's two incumbent telcos Telefonica de Argentina and Telecom Argentina, both of which have seen their bottom lines eroded by four years of recession, are now facing an even tougher situation following the devaluation of the peso. Both the firms' debts are largely dollar denominated, whereas revenues and assets are generally in pesos. However, according to Argentine Research analyst Rafael Ber, both find themselves facing very different futures because of their differing debt and ownership structures. The key difference is that Telecom's debt is with the money markets, while Telefonica's debt structure is directly linked to that of Spanish parent Telefonica de Espana. While both companies need to come up with debt management plans to counter the effects of pesofication, Telefonica can at least rest assured that its fate lies solely in the hands of its parent company, Ber said. The story is different for Telecom, which is 54.7 percent majority owned by Nortel Inversora - a joint venture between Telecom Italia and France Telecom. Telecom needs to carry out a partial debt capitalization in order to stave off a takeover from its creditors, Ber said. If Telecom Italia and France Telecom do not capitalize at the same rate as creditors, they will end up out of the picture, he added. France Telecom, which recently reported a massive net loss for 2001, said it would not put any more money into the struggling Argentine telco. As for Telecom Italia, the company does not have a very proactive scenario for increasing its investments in Latin America. However, the company has not said anything specific in relation to Telecom, he added. Telecom reportedly has a total debt of US$3.2 billion, of which US$900 million matures in July and September of this year. In order to restore long-term viability to the company, part of that debt must be exchanged for shares in the company, Ber said. TGN: Events Lead to Technical Default on Indenture -------------------------------------------------- On March 11, 2002, U.S. Bank Trust N.A., as TGN trustee, provided notice that an event of default had occurred and is continuing under the TGN indenture. The event of default was caused by the failure of Transportadora de Gas del Norte (TGN) to either reinstate funds in the TGN reserve account or to deposit certain funds into an inconvertibility account. The reserve account funds were used on Jan. 23, 2001, by U.S. Bank Trust N.A. to make a debt service payment to the TGN CRIBs Financial Trust I investors. This event is considered an event of default under the TGN CRIBs indenture. The next debt service payment on the CRIBs bonds is due on July 23, 2002. The convertability risk-insured bonds (CRIBs) are rated double- 'C' by Standard & Poor's. A downgrade to 'D' would be caused by either a nonpayment to investors or if the underlying obligor seeks court protection against its creditors. The event of default could create an acceleration of the outstanding debt if the CRIBs trustee or noteholders representing not less than 25% of the aggregate principal amount of the CRIBs outstanding declare the CRIBs to be immediately due and payable. The CRIBs were issued by the Argentine trustee, First Trust of New York N.A. Representacion Permanente en Argentina, which was established for the purpose of acquiring the TGN note as an underlying asset of the issuance of the CRIBs notes. TGN's inability to meet their financial obligations is related to the pesification of the company's tariffs without allowing for any compensating adjustments, combined with the freeze of tariffs, and the severe devaluation of the peso. This situation caused a strong imbalance between TGN's revenues, now in pesos, and the negative effect of the unsettling devaluation on the company's U.S. dollar-denominated financial obligations. Furthermore, the very depressed economic environment that is affecting collections, and the lack of liquidity in the financial system further eroded the company's already weakened financial profile. There are many uncertainties about the company's cash flow going forward since tariffs are frozen, and the government has established a 120-day (as of mid-February) time frame to renegotiate the concession contracts. TGN's local and foreign currency rating is 'D'. CONTACT: STANDARD & POOR'S Jorge Solari, Buenos Aires, +1-54-114-891-2114 Juan Pablo De Mollein, Buenos Aires, +54-114-891-2113 Diane Audino, New York, +1-212-438-2388 Lidia Polakovic, Buenos Aires, +54-114-891-2130 Matias Badia, Buenos Aires, +54-114-891-2129 ============= B E R M U D A ============= GLOBAL CROSSING: Fiber Optek Pursuing Analysis for Possible Bid --------------------------------------------------------------- Following its announcement two weeks ago that it was considering a bid for Global Crossing, Ltd. (Nasdaq:GBLXQ), Fiber Optek Interconnect Corp.(R) reported Tuesday that it is proceeding with a complete study of Global Crossing's present financial position, its future prospects, as well as its bankruptcy filings. "Our attorneys, accountants, and public relations people are assisting in our examination," said Michael S. Pascazi, president of Fiber Optek. Mr. Pascazi added that, through its attorney, the company has also filed a notice of appearance before the Federal Bankruptcy Court overseeing Global Crossing's Chapter 11 bankruptcy petition. Since its announcement of two weeks ago, Mr. Pascazi said he has received many favorable comments and words of encouragement. "We would like to thank publicly those well-wishers for their show of support," he concluded. Fiber Optek is a privately-owned leading developer and installer of fiber optic telecommunications networks. CONTACT: FIBER OPTEK INTERCONNECT CORP. Mr. Michael S. Pascazi, 845/462-6356 GLOBAL CROSSING Press Contact: Cynthia Artin + 1 973-410-8421 Cynthia.Artin@globalcrossing.com Tisha Kresler + 1 973-410-8666 Tisha.Kresler@globalcrossing.com Analysts/Investors Contact: Ken Simril + 1 310-385-5200 investors@globalcrossing.com GLOBAL CROSSING: Hutchison Whampoa Says Bid Remains Unchanged ------------------------------------------------------------- Hutchison Whampoa Ltd said it has no plans to boost a joint bid to acquire bankrupt wholesale telecoms carrier Global Crossing Ltd. The announcement came after Judge Robert Gerber of the U.S. Bankruptcy Court for the Southern District of New York in Manhattan gave Hutchison Whampoa and Singapore Technologies Telemedia until May 21 to top their $750 million bid for Global Crossing. "We believe we put forward a fair offer which will provide the Company with capital to emerge from bankruptcy," said Hutchison spokeswoman Nora Yong. Other potential buyers have until June 20 to respond with rival offers. In approving the letter-of-intent by Hutchison and ST Telemedia to buy the company, Gerber allowed the bidding group to be entitled to a US$30 million breakup fee if another firm ultimately buys Global Crossing. An earlier proposal sought US$40 million. Gerber also approved a US$5 million fee that the Hutchsion/ST Telemedia group will receive for assembling the takeover offer - half the amount initially sought. The judge set an auction date for July 8, with bids to be confirmed July 11. Bermuda-based Global Crossing filed for Chapter 11 bankruptcy protection in January. With debts of about US$12.4 billion, it was the fourth-largest U.S. bankruptcy petition. CONTACT: HUTCHISON WHAMPOA LIMITED Ms Nora Yong Tel: (852) 2128 1289 Email: noray@hwl.com.hk SINGAPORE TECHNOLOGIES TELEMEDIA Ms Melinda Tan Tel: (65) 6723 8690 Email: tanmelinda@stt.st.com.sg =========== B R A Z I L =========== BANCO ITAU: Moody's Assigns Ba2 Rating To $100 Mln Eurobond ----------------------------------------------------------- Moody's Investors Service assigned a Ba2 rating to Banco Itau's S.A. (Cayman Islands) $100 million Eurobond, maturing April 2005. The outlook for the rating is positive. The Ba2 rating reflects the probability of a sovereign default implied by the Brazilian government's sub-investment-grade B1 foreign currency bond rating, and the likelihood that the Brazilian government could impose a debt moratorium in the event of default on its own foreign currency obligations. The rating also addresses the risk that any such moratorium might include foreign currency bonds and that Itau's bonds might particularly be affected. Because the banking system is an arm of the government's monetary and foreign exchange policy, Moody's believes that, in general, banks may have a lower probability of having their bonds exempted from a moratorium than, say, a major commodity exporter. The rating, therefore, indicates the joint probabilities of default that are contained in the foreign currency ceiling and in the local currency rating of Banco Itau. Banco Itau, which is headquartered in Sao Paulo, Brazil, recently disclosed plans to close about 10 branches in Argentina after racking up huge amount of losses in the wake of the government's move to force banks to convert loans and deposits to pesos. Banco Itau is Brazil's fourth-largest bank with US$35 billion in assets as of December 2001. CONTACT: BANCO ITAU S.A. Rua Boa Vista, 176 01014-919 Sao Paulo, Brazil Phone: +55-11-237-3000 Fax: +55-11-5582-1133 Home Page: http://www.itau.com.br Contacts: Olavo Egydio Setubal, Chairman of the Board Roberto Egydio Setubal, President and CEO EMBRAER: Strong Currency Boosts 2001 Net Profit ----------------------------------------------- Brazil's Empresa Brasileira de Aeronautica SA, the fourth-largest commercial aircraft maker, ended 2001 with a 71-percent increase in its net profit as a weak local currency helped offset an industry-wide downturn after the Sept. 11 attacks on the U.S. Embraer, as the Company is known, experienced a record BRL1.1 billion (US$467 million) profit last year while its operating earnings, as measured by earnings before interest, taxes, depreciation and amortization (EBITDA), almost doubled to BRL2.1 billion from the year previous. The Company's fourth quarter profit climbed a slower 18 percent over the same period in 2000 to BRL291 million as jet deliveries during the quarter shrank to a number of 34, from 44 transports in the same period a year earlier. "With the sudden drop in airplane occupancy (because of the attacks), airlines announced several thousand layoffs and, in a domino effect, aircraft and component manufacturers also were hit by a slowdown in deliveries," Embraer said in a statement to Brazilian securities regulators. Embraer had a BRL131.2 million financial gain in the period, compared with losses of BRL23.7 million in the year-ago quarter, because the value of its dollar-linked liabilities declined because of a stronger real. The real strengthened 16 percent in the last three months of 2001. CONTACTS: EMBRAER Press office: Phone +55 12 3927 1311 Fax + 55 12 3927 2411 Press office mgr. Bob Sharp Email: bob.sharp@embraer.com.br OR Press officer Wagner Gonzalez Email: wagner.gonzalez@embraer.com.br LIGHT: French EDF To Inject US$1 Bln Via Stock Issue ---------------------------------------------------- French power giant Electricite de France (EDF) is preparing a large-scale restructuring of its heavily-indebted Brazilian unit Light Servicos de Eletricidade SA that will involve an equity injection of US$1 billion. EDF would convert some US$550 million worth of Light's debt to shares and give US$450 million to Light from its own resources to be later converted into shares as well. After the deal is completed, Light should become more dependent on its controlling company, especially in power generation, being obliged to contract and pay for EDF services, as well as to sign contracts to guarantee sales of energy for EDF. Details of the plan are expected to be presented this week when Light unveils its full-year results. EDF has already had long-standing plans to spend US$1 billion up to 2005 to boost Light's generation capacity to 1,500 megawatts from 800 megawatts. Reports have it that Light's indebtedness and losses started with the acquisition of Metropolitana distributor in 1998, now controlled by U.S.-based AES Corp. CONTACT: ELECTRICITE DE FRANCE (EDF) Rue Louis-Murat 75384 Paris Cedex 08, France Phone: +33-1-40-42-54-30 Fax: +33-1-40-42-79-40 Home Page: http://www.edf.fr Contact: Francois Roussely, Chairman and CEO Yannick d'Escatha, COO, Industry Branch Jacques Chauvin, Chief Financial Officer ELECTRICITE DE FRANCE (INTERNATIONAL) 30, Rue Jacques Ibert 75017 Paris Phone: 33 (0) 1 40 42 22 22 Fax : 33 (0) 1 40 42 31 83 Home Page : http://www.edf.fr Contact : M. Fang Deyi Phone: 33 (0) 1 40 42 18 68 Fax : 33 (0) 1 40 42 18 89 E-mail : deyi.fang@edf.fr LIGHT SERVICOS DE ELETRICIDADE S.A. Avenida Marechal Floriano, 168 20080-002 Rio de Janeiro, Brazil Phone: +55-21-2211-2794 Fax: +55-21-2211-2993 Home Page: http://www.lightrio.com.br Contact: Bo Gosta Kallstrand, Chairman Michel Gaillard, President and CEO Joel Nicolas, Executive Director, Operation Paulo Roberto Ribeiro Pinto, Executive Director, Investor Relations and CFO TELEMAR: Prepares to Issue $500-Mln 5-Yr. Eurobond -------------------------------------------------- Brazil's biggest fixed line phone operator Telemar is preparing a $500- million issue of 5-year Eurobonds, according to a report released by Reuters. The upcoming transaction, which will be managed by JP Morgan Chase and ABN Amro, will carry guarantees against political risks for a period of 18 months. Brazil faces a general election in October. Telemar has seen a big drop in profit for 2001 as it expanded its network and restructured, allowing its debt to grow, while Latin America's biggest economy slowed and non-payments spiked. Earlier this month, ratings agency Standard and Poor's revised its corporate credit outlook for Telemar to negative from neutral. Just recently, 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." Telemar stocks on the Sao Paulo Stock Exchange have lost nearly 15 percent so far this month. CONTACT: TELE NORTE LESTE PARTICIPACOES 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 J.P. MORGAN CHASE & CO. Investor Relations J.P. Morgan Chase & Co. 270 Park Avenue New York, NY 10017-2070 (1-212) 270-6000 URL: www.jpmorganchase.com ABN AMRO Investor Relations(HQ1191) Gustav Mahlerlaan 10 PO Box 283 1000 EA Amsterdam The Netherlands Tel. +31 (0) 20 628 78 35 Tel. +31 (0) 20 628 78 37 Email: investorrelations@nl.abnamro.com ========= C H I L E ========= ENAMI: Codelco Says It May Take On All Or Part Of Ventanas ---------------------------------------------------------- Chilean mining minister Alfonso Dulanto revealed that state copper corporation Codelco is prepared to take on all or part of Ventanas copper-smelter, reports Business News Americas. Dulanto is also president of Codelco's board of directors. The announcement came amid efforts by the Chilean government and state minerals processing company Enami, which owns Ventanas, to find a solution to Enami's financial crisis. Enami has been struggling with debts of US$480 million for years now, and the government is considering selling or leasing all or part of Ventanas to Codelco to help pay this debt. Enami scrapped plans last year to issue bonds to pay the long- term debt, and since then officials have been mooting the Ventanas transfer option. Ventanas is Enami's principal asset and is currently producing 450,000t/y of electrolytic copper. Enami also operates the Paipote smelter in northern Chile's Region III. A large part of the debts derive from environmental clean-up programs at the two smelters. CONTACT: CORPORACION NACIONAL DEL COBRE (CODELCO) Huerfanos 1270, Santiago, Chile Phone: 56(2) 690 3000 (Information) Fax: 56(2) 690 3059 E-mail: comunica@stgo.codelco.cl Home Page: http://www.codelcochile.com Contacts: Juan Villarzu Rohde, President and CEO Juan Eduardo Herrera Correa, Chief Financial Officer ENAMI (Empresa Nacional de Mineria) MacIver 459, Santiago, Chile Phone: 637 52 78 637 50 00 Fax: 637 54 52 Email: webmaster@enami.cl Home Page: www.enami.cl/ Contact: Jorge Rodriguez Grossi, President TELEX CHILE: Southern Cross Advances In Acquisition --------------------------------------------------- U.S.-based investment fund Southern Cross is set to take control of Telex Chile by April 10 in conjunction with a plan reached with creditors that hold 51 percent in the Company. According to a report by Estrategia, Southern Cross and partner GE Capital will launch a public offer for 29 percent of the shares held in Telex Chile to be completed by April 5th. Banco Santander is acting as Southern Cross's advisor in the tender offer, which will cost the fund and GE Capital an estimated US$1.7 million. Subsequently, it will acquire 100 percent of the Company's debt, and through it, the shares held by creditor banks. A US$390-million capital increase on Telex Chile, through the issuance of new shares, has been scheduled for May 30. The move is part of an effort to reduce debts amounting to more than US$100 million. Market sources believe that the restructuring of Telex Chile and its assumption by Southern Cross is a process that will culminate in an ultimate sale of the Company's control. Telex Chile is a coveted telecom. AT&T previously made an offer of US$70 million for its assets, but Connected Acquisition Corp (Southern Cross 80 percent, GE Capital 20 percent) surpassed its bid. CONTACTS: BANCO SANTANDER DE CHILE Jorge Dominguez Corporate Finance Director of Investment Bank Casa Matriz: Bandera 140 Santiago, Chile Tel: 56 (2) 320-2000 URL: http://www.bsantander.cl =========== M E X I C O =========== PEMEX: Reveals Plans US$42 Bln Investment To Up Crude Production ---------------------------------------------------------------- Officials from Petroleos Mexicanos (Pemex) announced that the Mexican state-owned petroleum firm plans to invest US$42 billion by 2006 to increase its crude oil production from 3.1 million barrels per day to 4 million barrels per day, relates EFE. Such a move, according to the officials, would allow Pemex to reverse the recent downtrend in light crude production. Pemex reported that national crude production has maintained a rising tendency due largely to the contribution made by pumping from the Cantarell oil deposits in the Gulf of Mexico, although the percentage of light crude in the overall production has declined. Due to the 50 percent drop in investments over the last few years, the officials said, the percentage of light crude production on a national level fell from 53 percent in 1995 to 36 percent in 2001. In 2001, Pemex produced 3.1 million barrels of crude daily, including 1.9 million barrels of heavy crude per day, while the remainder consisted of light crude and extra light crude, which brings a higher market price. PEMEX: Executives Assure Productivity Despite Ongoing Probe ----------------------------------------------------------- Pemex's productivity will not be affected by ongoing investigations into an alleged mismanagement of the Company's funds to the benefit of the Institutional Revolution Party (PRI). An offical announcement by Pemex general director, Raul Munoz Leos, was released in a report by Notimex. "Peripheral matters are not our direct concern and we will not allow that to disturb our work in Pemex. We must guarantee growth and make sure programs are accomplished," said the executive. According to Munoz, the information that the Company has is fully available to the auditors of the General Controller and Administrative Development (Secodam). *********** 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. 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 * * *