/raid1/www/Hosts/bankrupt/TCRLA_Public/020430.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, April 30, 2002, Vol. 3, Issue 84
Headlines
A R G E N T I N A
ARGENTINE BANKS: Foreign Banks Face Mounting Pressure To Dessert
ARGENTINE BANKS: IMF Forecasts Collective Assets Down 80% In 02
PAN AMERICAN: Places US$20.4 Mln In Securities With Investors
REPSOL YPF: Bonds Fall On Possible Moody’s Rating Cut
B E R M U D A
FLAG TELECOM: Scott + Scott, LLC Announces Class Action Lawsuit
GLOBAL CROSSING: Inks Outbound Service Deal For Nextel Argentina
TYCO INTERNATIONAL: Breakup Plans Reversal Pummels Shares
TYCO INTERNATIONAL: Fitch Drops Senior Unsecured Debt to 'BBB'
TYCO INTERNATIONAL: S&P Maintains CreditWatch After Announcement
TYCO INTERNATIONAL: CIT Earnings Up Despite Argentina Provision
B R A Z I L
BCP: Sale Negotiations May Conclude This Week
LIGHT: Board Approves BRL2.35 Billion Capital Increase
C H I L E
TELEFONICA CTC: Returns To Profitability In 1Q02
M E X I C O
AHMSA: Accuses Banks Of Inflexibility In Debt Talks
AHMSA: Creditor Banks Want Executives Removed
CYDSA: Issues Clarification on Bonds, PVC Production Plans
GRUPO ALFA: Recent Performance Moves Shares to Higher Ground
GRUPO MEXICO: Posts First Quarter 2002 CEO Report
GRUPO SIMEC: 1Q02 Results Flat to Modestly Improved
PEGASO: Telefonica To Pay US$1.36 Bln For Controlling Stake
P A R A G U A Y
CORPOSANA: Workers’ Consortium Fails To Qualify For Bidding
- - - - - - - - - -
=================
A R G E N T I N A
=================
ARGENTINE BANKS: Foreign Banks Face Mounting Pressure To Dessert
----------------------------------------------------------------
Foreign banks in Argentina are now under increasing pressure to pull
out of the country after leading credit rating agency Standard & Poor’
s warned that banks would have to substantially increase their bad
debt provisions, reports the Times Online.
"As long as the banks maintain a presence, a prolonged crisis raises
the likelihood of parent banks having to inject further liquidity, as
demonstrated by the US$150 million (£100 million) liquidity facility
provided by BBVA earlier this month," S&P said.
S&P’s warning came as Argentina’s president named Roberto Lavagna as
its new Economy Minister, replacing Jorge Remes Lenicov, who recently
quit from the post.
Lavagna, Argentina’s ambassador to the European Union, faces a very
big challenge in getting Argentina out of its deep financial slump.
Government fears about a run on the banks forced it earlier this month
to close down the entire banking system.
The crisis in Argentina follows the Government decision to abandon the
currency peg, which tied the Argentinean peso to the dollar, and the
decision to default on its US$132 billion foreign debt repayments.
Already, the International Monetary Fund refused further money for the
economy until it had got its economic strategy sorted out. The
Government has even suggested re-pegging the peso to the dollar,
although it is unclear how this will be done.
ARGENTINE BANKS: IMF Forecasts Collective Assets Down 80% In 02
---------------------------------------------------------------
The International Monetary Fund, in a report prepared in March,
predicted that Argentina’s commercial banks could see their collective
assets plunge by 80 percent to ARS4.3 billion (ARS3.10 = US$1) by the
end of this year from ARS21.7 billion in December 2001, Dow Jones
relates.
According to the IMF’s report, Argentina’s strong private banks will
be forced to seek fresh capital from shareholders to keep operating
amid continued losses from uncollectable loans and lost deposits.
Declines in the future price of the government bonds, which the
Duhalde administration plans to give banks to compensate them for
their losses from the country's peso devaluation, are expected to
exacerbate the problem.
The IMF is now urging the central bank to form a rescue agency to
assume control of those banks that can't rebuild their capital base;
these banks would then be sold whole or merged into other local banks.
Foreign banks, based on their greater indebtedness to their parent
companies, are expected to have an aggregate negative net worth of
ARS1.37 billion by the end of the year and will need fresh capital
from shareholders to keep operating as well, according to the IMF.
PAN AMERICAN: Places US$20.4 Mln In Securities With Investors
-------------------------------------------------------------
Pan American Energy LLC, a strategic venture between Argentine oil
independent Bridas and BP Amoco PLC (BP) was able to place US$20.4
million in securities with local investors by pledging to repay them
in much-coveted U.S. dollars when the debt matures in 2004, reports
Dow Jones.
Under the terms of the deal, Argentine private pension funds (AFJPs)
and insurance companies were able to purchase the 7.5-percent-yielding
bonds in pesos (ARS3.10=$1). Accordingly, Pan American Energy managed
to raise some ARS63.2 million via the debt sale to cover its domestic
operations.
Previous reports have suggested that the securities were pulled down
from the company's US$1.0 billion medium-term debt program.
People familiar with the sale said the deal was arranged by J.P.
Morgan, which is yet to comment on the placement.
CONTACT: PAN AMERICAN ENERGY LLC
Maipu 942 Piso 16º
Capital Federal -( 1006 )
Buenos Aires - Argentina
Phone: 011-4315-4012
Fax: 011-472128
REPSOL YPF: Bonds Fall On Possible Moody’s Rating Cut
-----------------------------------------------------
Repsol YPF SA bonds fell after Moody's Investors Service Ltd. placed
the Company’s “Baa2” long-term ranking on review for a possible
downgrade, citing the “ongoing deterioration in the economic situation
in Argentina.”
A possible cut would leave Repsol, which ended 2001 with EUR16.8
billion (US$15 billion) in debt, with a rating just one notch above
“junk.”
Repsol owns YPF, Argentina's largest oil company, and obtains 42
percent of its operating profit from the Latin American country.
The yield on Repsol's EUR948 million (US$851 million) of 5.75 percent
bonds maturing in 2006 rose to about 7.8 percent from 7.5 percent the
previous day. That's 307 basis points more than the French government
bond and more than the 163 percentage-point spread when the bonds were
sold in November.
“Spreads have widened in the past few weeks not because of any
fundamental news from Repsol but because of Argentina,” said Jens
Jantzen, a credit analyst at Bear, Stearns International Ltd. in
London. “There will be a lot of volatility.”
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
=============
B E R M U D A
=============
FLAG TELECOM: Scott + Scott, LLC Announces Class Action Lawsuit
---------------------------------------------------------------
SCOTT + SCOTT, LLC commenced a class action lawsuit on April 2, 2002
in the United States District Court for the Southern District of New
York on behalf of purchasers of the shares of FLAG Telecom Holdings,
Ltd. ("FLAG" or the "Company") (Nasdaq:FTHL) between March 23, 2001
and February 13, 2002, inclusive.
The Complaint alleges that defendants violated Sections 10(b) and
20(a) of the Securities Exchange Act of 1934, and Rule 10b-5
promulgated thereunder, by issuing a series of material
misrepresentations to the market between March 23, 2001 and February
13, 2002, thereby artificially inflating the price of FLAG shares. The
complaint alleges that throughout the Class Period, FLAG reported
strong year-over-year revenue growth. Unbeknownst to investors,
however, as alleged in the complaint, FLAG was experiencing
diminishing revenue growth. The complaint alleges that in order to
create the impression that FLAG was continuing to experience growth,
the Company engaged in a series of reciprocal transactions with
certain competitors for the purchase and sale of dark fiber optic
cable -- the so-called dark fiber swap. The complaint alleges that as
a result of these transactions, FLAG artificially inflated its
operating results and materially misrepresented its financial results
at all relevant times.
To discuss this action or have any questions concerning this notice or
your rights or interests, please contact Scott + Scott lawyers, Neil
Rothstein (nrothstein@scott-scott.com), David R. Scott
(drscott@scott-scott.com) or James E. Miller (jmiller@scott-scott.com)
by e-mail or by phone at 800/404-7770.
CONTACT: SCOTT + SCOTT, LLC
http://www.scott-scott.com
800/404-7770
Neil Rothstein, nrothstein@scott-scott.com
David R. Scott, drscott@scott-scott.com
James E. Miller, jmiller@scott-scott.com
GLOBAL CROSSING: Inks Outbound Service Deal For Nextel Argentina
----------------------------------------------------------------
Global Crossing announced Wednesday that it has signed an agreement
with Nextel Argentina to provide Carrier Outbound Service, connecting
Nextel customers in Argentina to the United States, Europe, Latin
America and the Caribbean. The service, which was recently introduced
in Latin America and the Caribbean, will enable Nextel Argentina to
transport and terminate voice traffic on Global Crossing’s global
IP-based fiber optic network.
"Through our portfolio of enhanced IP-based services, we are
continuing to offer our customers a wide range of data and voice
products that will impact their businesses," said John Legere, chief
executive officer of Global Crossing. "Our Carrier Outbound Service is
a high-quality product targeted to wholesale telecom customers and is
one of many new and exciting services that we will be introducing to
the market this year."
The Global Crossing Carrier Outbound Service, which is available in
more than 200 cities throughout the Americas, Europe and Asia,
provides complete global termination capabilities for facilities-based
carriers to more than 450 destinations worldwide.
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.
On January 28, 2002, certain companies in the Global Crossing Group
(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.
ABOUT NII HOLDINGS
NII Holdings, Inc., formerly known as Nextel International, is a
substantially wholly owned subsidiary of Nextel Communications, Inc.
(NASDAQ: NXTL). NII has operations in Argentina, Brazil, Chile,
Mexico, Peru and the Philippines. NII offers a fully integrated
wireless communications tool with digital cellular, text/numeric
paging, wireless Internet access and Nextel Direct Connect, a digital
two-way radio feature.
CONTACT: GLOBAL CROSSING
Press Contacts:
Teresa Mueller
Global Crossing, Latin America
+1 305 808 5947
teresa.mueller@globalcrossing.com
Alejandra Fehrmman
ZCM Argentina
5411-4315-7400, x. 281
alef@zcm.com.ar
Analysts/Investors:
Ken Simril
+ 1 310-385-5200
investors@globalcrossing.com
NEXTEL COMMUNICATIONS, INC., Reston
Investors:
Paul Blalock, (703) 433-4300
or
NEXTEL COMMUNICATIONS, INC.
Media:
Elizabeth Brooks, (703) 433-4263
TYCO INTERNATIONAL: Breakup Plans Reversal Pummels Shares
---------------------------------------------------------
Shares of Tyco International Ltd. fell further on Friday, dropping to
a five-year low, after the conglomerate scrapped its breakup plan and
announced 7,100 job cuts. Tyco shares fell US$2.04, or 9.83 percent,
to US$18.71 in late morning on the New York Stock Exchange. The stock
has lost 68 percent of its value since January, when the Company
announced it would split into four separate companies.
"Investors are running away because it looks like management doesn't
have a strong strategic plan for the long-run," said Rob Plaza, an
analyst with Chicago-based Morningstar. "There is very little faith in
the Company right now, and that's why their stock is being punished."
Analysts suggest that the abrupt shift in the company's plans added to
Tyco's credibility problems, which started earlier this year with
Enron-inspired accounting questions.
According to company officials, reports of alleged accounting
irregularities and uncertainty stemming from the breakup plan
significantly hurt Tyco's business this spring. They said customers
were reluctant to place orders and employees were uncertain of their
future.
Now, analysts are urging Tyco to start producing results fast to
regain investors’ confidence. Tyco, based in Bermuda but run from
Exeter, posted a US$1.9-billion loss, or 96 cents per share, for the
quarter that ended March 31.
To see financial statements: http://bankrupt.com/misc/Tyco.txt
CONTACT: TYCO INTERNATIONAL INC.
Media Relations:
J. Brad McGee or Peter Ferris
+1-212-424-1300
Investor Relations:
R. Jackson Blackstock
+1-212-424-1344
TYCO INTERNATIONAL: Fitch Drops Senior Unsecured Debt to 'BBB'
--------------------------------------------------------------
Fitch Ratings has downgraded the senior unsecured debt of Tyco
International Ltd. (Tyco), as well as the unconditionally guaranteed
debt of its wholly owned direct subsidiary Tyco International Group S.
A., to 'BBB' from 'A-'. The rating on the company's commercial paper
has been downgraded to 'F3' from 'F2'. The downgrades reflect the
continuous revisions to the company's restructuring plans which have
delayed debt reduction anticipated from the divestiture of assets,
resulting in heightened concern surrounding the company's maturity
schedule. This has coincided with weak operating results across a
broad range of the company's operating segments, particularly in the
company's electronics and telecommunications areas. Additionally, the
recent turmoil surrounding Tyco has exacerbated the weakness in the
external environment. The ratings remain on Rating Watch Negative.
Tyco has announced its intention to sell CIT through an IPO through
which the company expects to raise more than $6 billion. If completed,
proceeds are expected to be directed toward reducing the company's
debt load, which exceeded $27 billion at 3/31/02. Near-term debt
maturities include $1.5 billion in the current fiscal quarter, $3.9
billion of bank debt due in February 2003, $2.3 billion in convertible
debt puttable to Tyco in February 2003 (which is payable in Tyco stock
at the option of Tyco) and $3.6 billion in convertible debt puttable
in November 2003. Cash sources include $4 billion in cash on hand as
of 3/31/02, free cash flow estimated by the company to be $3.8 billion
over the next four quarters (before acquisition expenditures of
approximately $1.9 billion), plus proceeds from the CIT divestiture.
Fitch says failure to complete the CIT IPO on a timely basis and in
the amount anticipated, could require the company to seek external
capital in March 2003. Tyco's access to the capital markets is very
limited, and meaningful progress on debt reduction through the IPO of
CIT and from operations is likely to be required prior to the
restoration of this access. Any required refinancing that would result
from missteps in either of these two areas would certainly include
significantly higher financing costs and more stringent credit terms.
Successful execution of the IPO, a significant uncertainty, would
allay issues surrounding the company's maturity schedule.
Risks also include the ability to meet internal cash generation
forecasts due to weakness in the company's end markets and the impact
of the recent concerns on Tyco's customers, suppliers, and employees.
Cash from operations remains healthy, and the core businesses are
believed to be fundamentally sound. Acquisitions, however, resulted in
a modest increase in debt in the most recent quarter.
The company has cut back on its earnings and cash flow projections,
with 2002 pro forma free cash flow now projected at $3.0-$3.5 billion.
Free cash flow in fiscal 2003 will meaningfully benefit from the
dropoff in capital expenditures at TyCom, which could be as much as $1
billion on a comparative basis. The company's balance sheet contains
goodwill in excess of $28 billion, a significant amount, which could
be subject to further write-downs as well.
Longer term, Tyco's credit profile and possible changes in debt
ratings will be contingent on Tyco's allocation of free cash flow for
debt repayment, share repurchases and acquisitions.
CONTACT: Eric Ause, CFA
Phone: 1-312-606-2302
or
Mark Oline
Phone: 1-312-368-2073, Chicago
Media Relations: James Jockle
Phone: 1-212-908-0547, New York
TYCO INTERNATIONAL: S&P Maintains CreditWatch After Announcement
----------------------------------------------------------------
Rationale
Standard & Poor's ratings on Tyco International Ltd. and its
industrial subsidiaries remain on CreditWatch with developing
implications following Tyco's announcement that:
- It is no longer pursuing a break-up of the company and will not sell
its plastics business, which was supposed to fetch about $3 billion.
Tyco does, however, plan to divest 100% of its ownership interest in
commercial finance arm, The CIT Group Inc., via an IPO. The SEC
registration statement for the IPO indicates that proceeds could
approximate $6.5 billion, well below Standard & Poor's previous
expectations. Proceeds of the CIT IPO will be used for debt reduction
at Tyco. Future free cash flows will be used for a combination of debt
reduction, share repurchases, and scaled-back acquisitions.
- Tyco is reducing its earnings and free cash flow estimates for this
fiscal year, the latter to $3.0-$3.5 billion from $4 billion.
- It will take pre-tax charges totaling $3.3 billion primarily to
write down fixed assets, inventories, and investments in its
telecommunications business. Included in this amount are about $300
million of after tax cash charges for severance and facility closures.
Developing implications means that ratings could be raised, lowered,
or affirmed.
Standard & Poor's had said in response to Tyco's previous plans to
sell the plastics business for about $3 billion and either spin off or
sell CIT, that a spin-off, if accompanied by expanded availability in
the company's bank lines, could result in an upgrade to 'BBB+' and a
sale could lead to even higher ratings. Given the company's current
initiatives and reduced free cash flow prospects, potential debt
reduction will not be as significant as originally anticipated.
Consequently, the degree of potential ratings improvement is more
limited. Nevertheless, if the company is successful in selling CIT and
earmarks proceeds for debt reduction, it should have sufficient
liquidity during the next 18 months to meet scheduled public and bank
debt maturities totaling about $8.3 billion plus the potential $2.3
billion put of a zero-coupon debt issue (which Tyco has the option to
satisfy in stock). Although Tyco is now expected to recognize a hefty
loss upon the sale of CIT, the disposal of CIT, in addition to
generating cash, would eliminate Tyco's exposure to CIT's refinancing
risk.
Assuming that industry and competitive conditions do not worsen, and
bank line availability is expanded, the expeditious sale of CIT could
result in Tyco's ratings being raised to 'BBB+/A-2'. Conversely, an
unsuccessful IPO will force Tyco to seek alternative financing
arrangements to meet financial obligations during calendar 2003,
heightening refinancing risk. The inability to access capital markets
during the next several months could result in a downgrade.
Reduced earnings and cash flow estimates reflect difficult market
conditions in the company's electronics and telecommunications
businesses. The writedown of the telecom assets is largely related to
the company's sizable investment in plans to construct an undersea
cable network during the past two years. Although future prospects in
this business are uncertain, Standard & Poor's had not expected this
segment to be a significant cash flow contributor during the next few
years.
Even after the $3.3 billion charge and a large anticipated loss on the
sale of CIT, Tyco is expected to remain well within the maximum debt
to capital covenant of 52.5% under its bank credit facilities. These
facilities, which historically had been used exclusively for
commercial paper backup, were drawn down in full in February 2002,
reducing financial flexibility and prompting a downgrade of Tyco's
ratings and their placement on CreditWatch.
Hamilton, Bermuda-based Tyco is a diversified company with total debt
of about $27 billion.
Analyst: Cynthia Werneth, New York (1) 212-438-7819
TYCO INTERNATIONAL: CIT Earnings Up Despite Argentina Provision
---------------------------------------------------------------
CIT Group Inc., a subsidiary of Tyco International Ltd., announced
second fiscal quarter 2002 net income of $157.3 million, compared to
$160.1 million in the corresponding period of 2001. The current
quarter results include a $95.0 million pretax ($58.9 million after
tax) provision relating to the economic reforms instituted by the
Argentine government that resulted in the conversion of CIT's
dollar-denominated receivables into pesos. The prior year quarter
included $22.5 million in goodwill amortization ($19.9 million after
tax). Excluding the Argentina-related provision and goodwill
amortization, earnings increased to $216.2 million in 2002 from $180.0
million last year. This improvement reflected higher risk-adjusted
margins and improved operating expense efficiency. Earnings declined
from $239.0 million last quarter, primarily due to the Argentina loss
provision, lower fee income and lower risk adjusted margins reflecting
CIT's higher cost of funds on bank borrowings and increased liquidity.
Management expects the continuation of higher borrowing costs relating
to these liquidity issues to continue in the near term.
For the six months ended March 31, 2002, net income was $396.3
million, compared to $320.2 million in the prior year period.
Excluding the Argentina-related provision and goodwill amortization,
earnings for the six months ended March 31, 2002 were $455.2 million,
compared to $360.0 million for the six months ended March 31, 2001.
The most recent quarter was a challenging one for CIT. Cost of funds
were adversely impacted by liquidity events. In addition, due to
limited access to the public debt markets and the continuation of soft
economic conditions in the U.S., the asset portfolio declined. Despite
these adverse conditions, the quarterly results reflected operating
efficiencies and balance sheet strength as demonstrated by an improved
leverage ratio.
Financial Highlights:
Funding and Liquidity Plan: During the quarter, CIT completed more
than $3 billion in new securitization facilities backed by home equity
loans and receivables to improve liquidity and broaden funding access.
CIT also drew down on its $8.5 billion unsecured bank credit
facilities and is using the proceeds to pay off outstanding commercial
paper at scheduled maturities. In addition, on April 1, 2002, CIT
completed a $2.5 billion public unsecured bond offering as part of the
previously announced strategy to strengthen its liquidity position.
Managed Assets: Managed assets were $48.1 billion, down from $49.1
billion at December 31, 2001 and down from $54.0 billion at March 31,
2001. The decline from a year ago reflects the exit or liquidation of
non-strategic businesses and lower financing volumes. The decline in
volume is attributable to growth constraints following the draw down
of bank facilities by CIT in early 2002, as well as lower demand in
the soft economic environment.
Risk Adjusted Margin: Excluding the provision associated with CIT's
loans in Argentina, second fiscal quarter 2002 risk adjusted margin
(finance margin less provision for credit losses) was $348.2 million
(3.87 percent of average earning assets) versus $374.6 million (4.00
percent of average earning assets) last quarter and $336.4 million
(3.23 percent of average earning assets) for the same period in 2001.
The year over year margin improvement reflects lower interest expense,
the Company's sale or liquidation of certain non-strategic and
under-performing assets, and improved leverage, partially offset by
higher net charge-offs in the current period. Risk adjusted margin
declined from last quarter primarily due to increased interest cost
associated with the draw down of credit facilities to pay off
commercial paper and higher levels of excess cash liquidity.
Credit Quality: At March 31, 2002, total 60+ days delinquencies as a
percentage of finance receivables were 3.90 percent, unchanged from
3.90 percent last quarter and up from 3.25 percent at March 31, 2001.
Second fiscal quarter net charge-offs were $112.4 million, 1.58
percent of average finance receivables, compared to $112.8 million,
1.44 percent, last quarter and up from $66.7 million, 0.80 percent,
for the quarter ended March 31, 2001. Excluding the impact of
liquidating portfolios, net charge-offs were $78.1 million, 1.11
percent, for the quarter compared to $65.8 million, 0.90 percent, last
quarter. At March 31, 2002, the reserve for credit losses was 2.11
percent of finance receivables. Excluding the provision for Argentina
financing and leasing asset exposures, the reserve was 1.75 percent of
finance receivables, compared to 1.64 percent, at December 31, 2001.
Other Revenue: Other revenue for the second fiscal quarter totaled
$232.1 million compared to $245.1 million last quarter and $211.6
million for the same period last year. Both the improvement from last
year and the decline from last quarter resulted primarily from
fluctuations in fee income and losses on venture capital investments
during the current quarter. Securitization gains in the current
quarter, resulting from the need to broaden funding access, increased
to $34.7 million for the quarter, from $28.0 million last quarter.
Securitization gains decreased from $37.4 million for the same period
last year due to product mix changes and lower current period gains
related to equipment securitization transactions.
Salaries and General Operating Expenses: Expenses were $226.9 million
for the current quarter, down from $230.5 million last quarter and
$263.5 million in the prior year quarter. For the quarter, CIT's
efficiency ratio of 33.4 percent was consistent with CIT's targeted
mid-30's range, compared to 31.5 percent last quarter and 43.1 percent
for the prior year quarter. Employees totaled approximately 6,235 at
March 31, 2002 compared to 6,320 at December 31, 2001 and 7,475 last
March. Operating expenses were 1.93 percent of average managed assets
during the quarter, improved from last year and relatively unchanged
from the prior quarter.
Capitalization and Leverage: The ratio of tangible equity to managed
assets at the end of the second fiscal quarter was 9.14 percent, an
improvement from 8.72 percent at the end of the prior quarter and 8.23
percent at the end of the prior year quarter. Similarly, the ratio of
debt to tangible equity improved to 7.30x at March 31, 2002 from 7.79x
and 8.41x at December 31, 2001 and March 31, 2001, respectively.
International Subsidiaries: On February 11, 2002, CIT repurchased
certain international subsidiaries that had previously been sold to an
affiliate of Tyco on September 30, 2001. The financial information
presented with this release includes these subsidiaries for all
periods shown.
To see financial statements: http://bankrupt.com/misc/CIT_Group.txt
CONTACT: CIT Group Inc.
Yvette K. Rudich
Tel: +1-973-597-2095
E-mail: yvette.rudich@cit.com
Internet: http://www.tyco.com
===========
B R A Z I L
===========
BCP: Sale Negotiations May Conclude This Week
---------------------------------------------
Talks between Banco Safra and BellSouth Corp. regarding the sale of
Safra’s stake in Brazilian wireless carrier BCP SA to BellSouth are
likely to conclude this week, says Dow Jones. The report cites Banco
Safra chief executive Carlos Alberto Vieira.
"The negotiations are real, but they are still in a phase that's not
concluded because the talks also deal with creditors," Vieira said,
adding that the price tag for its stake in BCP is "more or less"
around US$300 million.
Talks, according to Viera, consist of two phases -- one dealing with
BellSouth and another with banks who are creditors on a US$1.6-billion
syndicated loan that BCP defaulted on in late March
BellSouth has previously denied it was considering acquiring Safra's
stake for US$300 million.
BellSouth and an investment fund run by the owners of Safra each hold
45 percent of BCP, which provides wireless services in metropolitan
Sao Paulo and the country's northeast.
Vieira said BCP has the potential to be "a financially viable company
on its own" and denied speculation that it would later be sold by
BellSouth if the U.S. firm boosts its stake in the unit.
Analysts say BCP needs to take part in mergers in a consolidating
sector here that is increasingly focused on gaining scale and
nationwide coverage.
CONTACT: BELLSOUTH CORPORATION
1155 Peachtree St. NE
Atlanta, GA 30309-3610
Phone: 404-249-2000
Fax: 404-249-5599
Home Page: http://www.bellsouth.com
Contacts:
Investor Relations
Phone (US): 800.241.3419
Fax: 404.249.2060
E-mail: investor@bellsouth.com
BCP TELECOMUNICACOES
Rua Florida, 1970 4o andar
Sao Paulo - SP
Tel: 55 11 5509-6428
Fax: 55 11 5509-6257
Home Page: http://www.bcp.com.br
BANCO SAFRA
Av. Paulista, 2100 - Sao Paulo
Brazil - 01310-930
Phone: (11) 3175-7575
Home Page: http://www.safra.com.br/ingles/index.asp
Contact: Carlos Alberto Vieira, President
CREDITORS: FLEETBOSTON FINANCIAL CORPORATION
100 Federal St.
Boston, MA 02110
Phone: 617-434-2200
Fax: 617-434-6943
Home Page: http://www.fleetboston.com
Contact:
Investor Relations
Phone: 617-434-2200
Terrence Murray, Chairman
Charles K. (Chad) Gifford, President/CEO/Director
Eugene M. McQuade, Vice Chairman and CFO
CITIBANK
Avenida Paulista, 1111
13th floor - room 5
Sao Paulo 01311- 920
Brazil
Home Page: http://www.citibank.com.br
Contact:
Fernando Tafner
Phone: 55-11-5576-2004
E-mail: fernando.tafner@citicorp.com
ABN AMRO HOLDING N.V.
Foppingadreef 22
1102 BS Amsterdam, The Netherlands
Phone: +31-20-628-9393
Fax: +31-20-629-9111
Home Page: http://www.abnamro.com
Contact:
Investor Relations(HQ1191)
Gustav Mahlerlaan 10
PO Box 283
1000 EA Amsterdam
The Netherlands
Tel. +31 (0) 20 628 78 35
Phone: +31 (0) 20 628 78 37
E-mail: investorrelations@nl.abnamro.com
LIGHT: Board Approves BRL2.35 Billion Capital Increase
------------------------------------------------------
The board of directors of Brazil's Light Servicos de Eletricidade
approved a BRL2.35-billion capital increase in order to help the
utility recover its financial balance.
A report by AFX reveals that part of the capital increase will consist
of the conversion of loans disbursed to Light by its controlling
shareholder, Electricite de France (EdF), into equity.
Light will issue BRL23.979 billion worth of ordinary shares at BRL98
per lot of 1,000 shares, thereby raising the Company’s capital to
BRL3.345 billion from BRL995.369 million. Subscription to the capital
increase will be in proportion to current shareholdings.
The capital increase will be put up for approval at an upcoming
meeting scheduled for May 13.
Earlier this month, Light said under the capital increase, EdF will
convert a US$550 million inter-company loan granted to Light in
September of last year and another inter-company loan of US$250
million granted last month.
It said the balance of US$200 million will come in the form of a cash
injection.
CONTACT: 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
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
Contacts:
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
=========
C H I L E
=========
TELEFONICA CTC: Returns To Profitability In 1Q02
------------------------------------------------
Telefonica SA unit Cia de Telecomunicaciones de Chile SA, the country’
s No. 1 telephone company, reversed last year’s first-quarter loss of
US$22.6 million to a net profit of US$3.4 million.
The improvement in the Company’s results is attributed to a jump in
cellular phone subscribers and reduced costs stemming from a slashed
workforce.
"The results of this first quarter reflect our strategy focused on
profitability... in terms of a permanent control of costs and the
development of new products," said CEO Claudio Munoz in a statement.
Telefonica CTC Chile, a subsidiary of Spain’s Telefonica, saw revenues
for mobile telephone services rise 6.8 percent in the period and those
for corporate communications were up 20.1 percent.
However, overall revenues were down 1.5 percent to US$317.6 million as
declines in fixed telephony, long-distance and information services
outweighed gains in other lines of business.
CTC controls 85 percent of the fixed line telephone market in Chile.
The total number of fixed lines in service at the end of the first
quarter increased by 0.8 percent from a year earlier. Cellular
subscribers were up 27.5 percent.
CTC also noted an 8.8 percent reduction in operating costs versus the
first quarter of 2001 to US$267.6 million, due mainly to reduced
payroll expenses after the dismissal last year of 1,600 employees in a
restructuring strategy.
As a result of the lower costs, the Company's EBITDA (operating income
plus depreciation) rose 18.5 percent to US$146.3 million compared to
the US$123.4 million registered in the first quarter of 2001, it said.
Operating income improved by 71.6 percent to US$49.9 million compared
with US$29.1 million a year ago.
First quarters earnings per ADR totaled US$0.01, up from a loss per
ADR of US$0.09 in the first quarter last year.
In early March, CTC filed a lawsuit against the Chilean government for
US$274 million in damages allegedly caused by a government tariff that
it says is faulty.
The Company reported a 2001 net profit of US$6.3 million after posting
a loss of US$173 million the previous year.
CONTACT: Telefonica CTC (Corporacion Telefonica Chilena S.A.)
V. Providencia 111
Providencia - Santiago
(56)-Chile
Phone: (2) 2320511
(2) 6912020
Home Page: http://www.telefonicadechile.cl/
Contacts:
Mr. Bruno Philippi, President
Mr. Jacinto Daz, Vice President
Gisela Escobar, Head of Investor Relations
===========
M E X I C O
===========
AHMSA: Accuses Banks For Inflexibility In Debt Talks
-----------------------------------------------------
Mexican steel company Altos Hornos de Mexico (AHMSA), criticized the
steering committee representing its creditor banks for being too
inflexible in the debt-restructuring negotiations. Creditor banks have
recently walked away from the negotiating table after nearly three
years of stonewalling.
AHMSA’s bank creditors broke off the debt negotiations saying that the
firm’s directors, headed by Alonso Ancira, didn’t supply enough
information about its financial operations. Ahmsa, based in northern
Mexico's Coahuila state, is dealing with outstanding debts of some
US$1.85 billion
However, AHMSA insisted that it had fulfilled all of the requirements
for the viability of the restructuring accords to get through the
crisis that began in 1999. But according to the Mexican steel firm,
the banks had not resolved the suspension of payments in Grupo Acerero
del Norte (GAN), despite this being a prerequisite of wrapping up both
processes.
While the banks say that they have insufficient information, AHMSA
says that they have a team of auditors with full access to the firm's
industrial and financial information.
AHMSA said that its business prospects improved after the United
States and Mexico imposed import tariffs on steel. The Company said it
would work to increase production and take advantage of the market
conditions.
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
AHMSA: Creditor Banks Want Executives Removed
---------------------------------------------
Bank of America Corp., Citigroup Inc. and other banks, are seeking the
ouster of the executives from the controlling families of AHMSA after
failing to cooperate to conclude a restructuring agreement, reports
Bloomberg.
AHMSA, which the Ancira and Autrey families bought from the government
in 1991, defaulted on US$1.85 billion in bank debt and global bonds in
1999.
Now, the banks, which are seeking to collect on US$1.3 billion from
Mexico's largest steelmaker, are suing for control of the Company and
won't negotiate further unless Chief Executive Offer Alonso Ancira and
Chairman Xavier Autrey step down.
“We don't want anything to do with this administration,” said Samuel
Scott, director of structured finance for Grupo Financiero Banorte SA
and one of the five-member banks' steering committee. “We don't
believe this management is oriented toward lifting its suspension of
payments.”
The recent breakdown of talks is likely to wipe out a restructuring
agreement signed in May 2001, sending the default process back to
where it started and giving banks a better shot at gaining control
through Mexican and U.S. courts.
However, complaints filed by creditors may get bogged down in the
courts for several years because AHMSA filed for creditor protection
in 2000, before Mexico's Congress approved a tougher bankruptcy law,
Scott said.
“We wait on judges to rule, then they appeal,” Scott said. “It's a
never-ending story.”
CREDITOR BANKS: BANK OF AMERICA CORPORATION
Bank of America Corporate Ctr.
100 North Tryon St., 18th Fl.
Charlotte, NC 28255
Phone: (800) 299-2265
Fax: (704) 386-8486
Home Page: http://www.bankofamerica.com
Contact:
Hugh L. McColl Jr., Chairman Emeritus
Kenneth D. Lewis, Chairman, President, and CEO
James H. Hance Jr., Vice Chairman and CFO
CITIGROUP INC.
399 Park Ave.
New York, NY 10043
Phone: 212-559-1000
Fax: 212-793-3946
Email: investorrelations@citi.com
Home Page: http://www.citigroup.com
Contact:
Sanford I. (Sandy) Weill, Chairman and CEO
Todd S. Thomson, EVP-Finance and Investments/CFO
CITIGROUP IN MEXICO:
Banamex
Avenida Paseo De La Reforma
No. 390, Col. Juarez
Mexico City 6695
Mexico
Contact:
Jose Ortiz-Izquierdo
Phone: 52-5225-5136
E-mail: jortiz@banamex.com
GRUPO FINANCIERO BANORTE, S.A. DE C.V.
Zaragoza 920 Sur
64000 Monterrey, Mexico
Phone: +52-81-8831-9720
Fax: +52-81-8831-9727
Home Page: http://www.gfnorte.com.mx
Contact:
Roberto Gonzalez Barrera, Chairman
Othon Ruiz Montemayor, Chief Executive Officer
Federico Valenzuela Ochoa, General Dir. Finances
CYDSA: Issues Clarification on Bonds, PVC Production Plans
----------------------------------------------------------
The following was issued Friday by Cydsa, S.A. de C.V.:
Cydsa wishes to clarify certain information that appeared in the April
3, 2002, issue of "Chemical Week" titled "Cydsa Buys Back Bonds to
Avoid Default". The statement regarding our PVC capacity reduction is
unfounded and completely false. Furthermore, Cydsa has already
extended the Bond maturity until 2009.
There have been no shutdowns at any of our PVC plants, and there are
absolutely no plans to reduce production capacity. On the Contrary,
Cydsa continues to look into programs that will help improve plant
capacity and production efficiency.
This Strategy reaffirms the company's commitment to Policyd La Presa,
its PVC plant near Mexico City, to meet and exceed the needs of its
customers through consistent quality and opportunity in all processes
and services, a fundamental part of the important position that
Policyd La Presa has achieved in this industrial sector.
In 2000, Policyd La Presa became the fifth Cydsa Chemical Division
plant to obtain the Shingo Prize for Excellence in Manufacturing in
North America, which is awarded to a select number of businesses
throughout the NAFTA region.
Based in Monterrey, Mexico, Cydsa maintains a presence in several
industrial sectors, including Chemicals and Plastics, Fibers and
Textile Products and Flexible Packaging.
CONTACT: CYDSA, S.A. DE C.V.
Guillermo Garza, Communication and P.R. Manager
Tel: +011-528-18-152-4699
E-mail: guigarza@cydsa.com
Web site: http://www.cydsa.com.mx
GRUPO ALFA: Recent Performance Moves Shares to Higher Ground
------------------------------------------------------------
Alfa SA, Mexico's second-largest industrial group, with interests in
steel and petrochemicals, rose 6.5 percent to MXN18.3, its highest
level since Nov. 8, 2000, says Bloomberg. Alfa recently reported a net
profit of MXN523 million in the first quarter this year, reversing a
loss of MXN387 million in the same period last year.
The Company’s good performance was due to a 43.6-percent reduction in
financing expenses to MXN512 million from MXN908 million a year
earlier and MXN291 million in foreign exchange gains.
Alfa, whose stock has gained 74 percent this year, is likely to
relinquish control of Hylsamex to a partner and sell its interests in
Siderurgica del Orinoco SA (Sidor), Venezuela's largest steelmaker,
according to the group’s president, Dionisio Garza.
The group is considering such steps because of acute financial
problems at its iron and steel divisions, Garza said. Grupo Alfa's
debt now totals US$2.6 billion according to Mr. Garza.
CONTACT: HYLSAMEX
Investor Relations
Margarita Gutierrez
E-Mail: mgutierrez@hylsamex.com.mx
Ricardo Sada
E-Mail: rsada@hylsamex.com.mx
Phone: (52) 81 8865 1224
(52) 81 8865 1201
Munich 101,
San Nicolas de los Garza N.L., 66452
Mexico
SIDERURGICA DEL ORINOCO, C.A. (SIDOR)
Edificio General, Piso 9
Avda. La Estancia
Chuao, Caracas 1060
Venezuela
Tel: (582) 902 3800/3917/3955
Fax: (582) 993 2930
Home Page: www.sidor.com.ve/
GRUPO MEXICO: Posts First Quarter 2002 CEO Report
-------------------------------------------------
US GAAP
Highlights (Expressed in thousands of US dollars unless noted - US
GAAP)(1)
Financial Data
Three Months ended:
March 31 March 31 Var.
2002 2001 %
Net Sales 630,770 778,859 (19.0)
Cost of Sales 447,326 635,334 (29.6)
Administrative Expenses 33,951 34,640 (2.0)
Operating Income 80,421 36,582 119.8
EBITDA 149,493 108,885 37.3
Financing Costs (net) 48,358 61,788 (21.7)
Net Loss (Majority) (20,940) (48,805) (57.1)
Loss per Share (Majority) (0.03) (0.08) (57.1)
Market Metals Prices
Three Months ended:
March 31 March 31 Var.
2002 2001 %
Copper (US Cts/Lb) 72.2 81.9 (11.8)
Zinc (US Cts/Lb) 36.0 46.3 (22.2)
Silver (Dlls/Oz) 4.5 4.5 -
Gold (Dlls/Oz) 290.4 263.5 10.2
Molybdenum (US Dlls/Lb) 2.7 2.3 17.4
Lead (US Cts/Lb) 22.3 22.4 (0.4)
(1) Because of the nature of our mining business activities, whose
sales are 100% denominated in US dollars, we have presented figures in
accordance with Generally Accepted Accounting Principles (GAAP) in the
United States under the heading "Applies to US GAAP" and subsequently
in accordance with Mexican GAAP under the heading " Applies to Mexican
GAAP".
Grupo Mexico (G.Mexico) consolidated financial results for the first
quarter ended on March 31, 2002, include the operations of Americas
Mining Corporation (AMC), Grupo Ferroviario Mexicano (GFM) and
Infraestructura y Transportes Mexico (ITM), which consolidate the
results of the operating companies: Minera Mexico (MM), ASARCO,
Southern Peru Copper Corporation (SPCC) and Ferromex.
Applies to US GAAP:
G.Mexico consolidated results for the first quarter ending on March
31, 2002 are highlighted by improved efficiencies that allowed us to
obtain significant operating and administrative cost savings at all of
our subsidiaries. These savings were the result of various measures
taken last year, including significant personnel reductions, the
suspension of some of our mining operations, and adjustments to our
smelting plants and refineries in response to the current conditions
of the mining industry. In addition, the company reduced its purchases
of ores from third parties, which did not reflect margins for G.Mexico
mining companies, as a result of the poor market conditions. The
combined effect of these actions reduced costs and expenses in the
first quarter of 2002 by 28.2% when compared to the same period of the
previous year, with total savings of $188.7 million. However, these
savings were not enough to offset the negative effect of the drop in
average copper prices (11.8%) and zinc prices (22.2%) in first quarter
of 2002 with an amount of $124.7 million, compared to prices during
the first quarter of 2001.
G.Mexico consolidated sales for the first quarter of 2002 amounted to
$630.8 million, representing a 19.0% decrease compared to the previous
year's first quarter. This decrease can be attributed primarily to the
lower metal prices and to lower volumes sold.
77.5% of total revenues is denominated in dollars and corresponds to
the mining division. The remaining 22.5% corresponds mainly to the
railroad division and is mostly denominated in pesos.
G.Mexico's first quarter operating earnings of $80.4 million represent
12.7% of sales compared to 4.7% during the same period of the previous
year. The operating cash flow (EBITDA) for the first quarter was
$149.5 million, representing 23.7% of sales.
Investments
The investment program carried out during the first quarter includes
$73.8 million that were expensed during 2002. Of this amount, $63.1
million correspond to the mining division with the completion and
startup of the new electrolytic plant at the Cananea mine in Mexico,
and continued work on the expansion of the Toquepala-Cuajone leaching
system in Peru projected for completion at the end of August of 2002.
The 30% expansion of the capacity of the concentrator in Toquepala
reached 84% completion at the end of March 2002, with an investment of
$43.3 million out of the $69.5 million budgeted. When this project
reaches completion at the end of August 2002, the Toquepala
concentrator milling capacity would increase from 45,000 metric tons
to 60,000 metric tons per day. This increase in milling production
will represent an annual increase of 122,815 metric tons of
concentrates to be processed at the Ilo smelter. In respect to the
expansion and modernization of the smelter in Ilo, final evaluations
of the technical-economical proposals received are under way and the
project is expected to start construction during the second quarter of
2002, with an investment of more than $500 million and a construction
period of almost 3 years. Upon completion, this smelter will be
capable of smelting up to 1.83 million metric tons of copper
concentrates per year and will accomplish the desired economical and
environmental requirements. The Cuajone leaching facilities expansion
project is being developed to expand the leaching pads and the
grinding plant. This will allow the plant to produce 18 tons per day
of copper contained in solution for treatment at the solvent
extraction operation in Toquepala. The combined progress of
engineering, procurement and construction for this project reached 97%
completion as of March 31, 2002.
The investment in the transport division during the first quarter of
2002 was $10.7 million dollars, which was invested in infrastructure
and technological improvements for the railroad system.
Financing
In consideration of the circumstances prevailing in the markets and
with the purpose of adjusting to the current credit conditions and
obligations, we are currently negotiating with our banks and investors
in order to obtain conditions more in accordance with current needs.
We hope to finalize this process with the lenders during the second
quarter of 2002 in order to reestablish the financial conditions
necessary to improve the credit ratings of GMexico and its mining
subsidiaries. The total debt as of March 31, 2002, is $2,766.5 million
dollars, with cash on banks of $231.3 million dollars, which is
equivalent to a net debt of $2,535.2 million dollars.
The following chart summarizes G.Mexico net debt (expressed in
thousands of dollars):
Company Balance as of Due in:
March 30, 2002 2002
Grupo Mexico 87,000 37,000 (1)
Grupo Minero Mexico 1,309,749 144,562 (1)
Asarco Inc. 991,163 450,000 (1)
Southern Peru Copper Corp. 299,043 NA
Grupo Ferroviario Mexicano 79,529 3,992
Total 2,766,484 650,554
(1) We are in the process of negotiating with the banks and investors
participating in these credits with the purpose of adjusting the
amortization of the debt to better align with the current conditions.
Other Events:
On January 24, 2002, GMexico and its subsidiary, Infraestructura y
Transportes Mexico, S.A. de C.V. (ITM), entered into a joint-venture
agreement with Grupo Carso, S.A. de C.V. and its subsidiary, Empresas
Frisco, S.A. de C.V. (Frisco), and Grupo Financiero Inbursa, S.A. de
C.V. and its subsidiary, Sinca Inbursa, S.A. de C.V. Sociedad de
Inversion de Capitales (Sinca). Under the agreement, Frisco and Sinca
will transfer their shares of Ferrosur, S.A. de C.V. (Ferrosur) to ITM
and subscribe ITM shares representing 20% of the latter's capital
stock. As a consequence of this agreement, ITM will own 100% of the
shares of Ferrosur, who has the concession of the public
transportation service of the southeastern railway routes, in addition
to 74% of the shares of subsidiary GFM, who is the sole owner of
Ferromex. With this agreement, we hope to improve the Pacific-South,
Center-South and North-South routes of the Mexican Republic in order
to better compete with the other rail lines that have access to the
South route. As a consequence, we expect to achieve better trip times,
improve costs of service, and make more efficient use of the
infrastructure, thus significantly increasing the volumes of cargo
transported in such routes and resulting in other important benefits
for the users of our railroad services.
The execution of the final agreements and other documents necessary to
establish the joint venture is subject to obtaining official
authorization of the Comision Federal de Competencia (Antitrust
Office) in accordance with the guidelines of the privatization of the
railroad concessions, the laws in the antitrust issues and the
Railroad Law. The company anticipates that a favorable resolution will
be issued in the coming weeks.
GRUPO MEXICO FIRST QUARTER 2002 CEO REPORT
MEXICAN GAAP:
Highlights (Expressed in thousands of Mexican Pesos unless noted -
Mexican GAAP)(1)
Financial Data
Three Months ended:
March 31 March 31 Var.
2002 2001 %
Net Sales 5,817,478 7,897,564 (26.3)
Cost of Sales 4,090,034 6,269366 (34.8)
Administrative Expenses 285,918 335,230 (14.7)
Operating Income 538,207 309,116 74.1
EBITDA 1,441,526 1,292,968 11.5
Financing Costs (net) 446,374 624,605 (28.5)
Net Income ( Loss)
(Majority) 328,873 (230,693) (242.6)
Income (Loss) per Share
(Majority) 0.50 (0.35) (242.6)
Market Metals Prices
Three Months ended:
March 31 March 31 Var.
2002 2001 %
Copper (US Cts/Lb) 72.2 81.9 (11.8)
Zinc (US Cts/Lb) 36.0 46.3 (22.2)
Silver (Dlls/Oz) 4.5 4.5 -
Gold (Dlls/Oz) 290.4 263.5 10.2
Molybdenum (US Dlls/Lb) 2.7 2.3 17.4
Lead (US Cts/Lb) 22.3 22.4 (0.4)
(1) For purposes of comparison of these captions, amortization of the
excess carrying amount over the cost of shares generated by the Asarco
acquisition is not included.
Grupo Mexico (G.Mexico) consolidated financial results for the first
quarter ended on March 31, 2002, include the operations of Americas
Mining Corporation (AMC), Grupo Ferroviario Mexicano (GFM) and
Infraestructura y Transportes Mexico (ITM) which consolidate the
results of the operating companies: Minera Mexico (MM), ASARCO,
Southern Peru Copper Corporation (SPCC) and Ferromex.
Applies to Mexican GAAP:
G.Mexico consolidated results for the first quarter ending on March
31, 2002 are highlighted by improved efficiencies that allowed us to
obtain significant operating and administrative cost savings at all of
our subsidiaries. These savings were the result of various measures
taken last year, including significant personnel reductions, the
suspension of some of our mining operations, and adjustments to our
smelting plants and refineries in response to the current conditions
of the mining industry. In addition, the company reduced its purchases
of ores from third parties, which did not reflect margins for G.Mexico
mining companies, as a result of the poor market conditions. The
combined effect of these actions reduced costs and expenses in the
first quarter of 2002 by 33.7% when compared to the same period of the
previous year, with total savings of Ps 2,228.6 million pesos.
However, these savings were not enough to offset the negative effect
of the drop during the first quarter in average copper prices (11.8%)
and zinc prices (22.2%), equivalent to approximately Ps 1,649.3
million pesos, in comparison to average prices during the same period
of the previous year.
G.Mexico consolidated sales for the first quarter of 2002 amounted to
Ps 5,817.5 million pesos, representing a 26.3% decrease compared to
the previous year's first quarter. This decrease can be attributed
primarily to the lower metal prices and to lower volumes sold.
Approximately 77.5% of total revenues is denominated in and
corresponds to the mining division. The remaining 22.5% corresponds
mainly to the railroad division and is mostly denominated in pesos.
G.Mexico's first quarter operating earnings of Ps 538.2 million pesos
represent 9.3% of sales compared to 3.9% during the same period of the
previous year The operating cash flow (EBITDA) for the first quarter
was Ps1,441.5 million pesos, representing 24.8% of sales.
Consolidated Integral financing cost in accordance with Mexican GAAP
for the first quarter of 2002 was a net income of Ps 260.6 million
pesos. This was integrated by a financing cost of debt for Ps 446.4
million pesos, by an income in monetary position of Ps 437.8 million
pesos, and by an income through exchange rate due to the appreciation
of the mexican peso against the dollar of Ps 269.2 million pesos.
MINING DIVISION
Americas Mining Corporation (AMC)
Americas Mining Corporation consolidated financial results for the
first quarter ended on March 31, 2002, include the operations of the
operating companies: Minera Mexico (MM), ASARCO, and Southern Peru
Copper Corporation (SPCC), which represent our mining operations in
Mexico, United States of America and in Peru.
Highlights
(Expressed in thousands of US dollars unless noted - US GAAP
Financial Data
Three Months ended:
March 31 March 31 Var.
2002 2001 %
Net Sales 488,575 663,482 (26.4)
Cost of Sales 363,786 558,315 (34.8)
Administrative Expenses 26,160 27,992 (6.5)
Operating Income 52,862 24,040 119.8
EBITDA 98,629 77,175 27.8
Financing Costs (net) 48,641 58,878 (17.4)
Net Loss (Majority) (36,528) (53,581) 31.8
Sales for the first quarter of 2002 amounted to $488.6 million
dollars, representing a 26.3% decrease compared to sales of $663.5
million during the same quarter of the previous year. This decrease
can be attributed primarily to the lower metals prices and due to a
reduction in metals sold in accordance with the company's policy to
reduce cost instead of increase volumes.
Sales volumes for our main metal, copper, represent a reduction of
22,812 metric tons, or 8.6%, against the same period in the previous
year. Zinc and silver has shown the same trend with a decrease of
21.6% and 49.4% respectively. Those reductions also were affected by
the strike of the unionized workers in the mining units of La Caridad,
San Martin, Pasta de Conchos and in the Electrolitic Zinc Plant in San
Luis Potosi.
AMC-Sales
Production Sold
3 Months 3 Months
ended ended Var
Mar 31, Mar 31, %
2002 2001
Copper (TM) 241,451 264,263 (8.6)
Zinc (TM) 37,849 48,276 (21.6)
Silver (Kg) 168,824 333,476 (49.4)
Gold (Kg) 471 2,552 (81.5)
Molybdenum (TM) 3,274 3,839 (14.7)
Lead (TM) 7,242 16,012 (54.8)
Metals Prices Market
3 Months 3 Months Var
ended ended %
Mar 31, Mar 31,
2002 2001
Cobre (US Cts/Lb) 72.2 81.9 (11.8)
Zinc (US Cts/Lb) 36.0 46.3 (22.2)
Plata (Dlls/Oz) 4.5 4.5 -
Oro (Dlls/Oz) 290.4 263.5 10.2
Molibdeno (US Dlls/Lb) 2.7 2.3 17.4
Plomo (US Cts/Lb) 22.3 22.4 (0.4)
Operating earnings during first quarter 2002 were $52.9 million
dollars, 120% compared with the same period of the previous year, due
basically to a significant reduction in production costs as well as
savings in administrative and depreciation costs.
EBITDA for the first quarter of 2002 was $98.6 million dollars,
representing an increase of 28% compared to the $77.2 million in the
same period of 2001.
Net financing costs in the first quarter of 2002 were $48.6 million
dollars, 17% less than the $58.8 million of the same period of 2001.
Income before taxes and extraordinary items for the first quarter of
2002, was $4.5 million versus a loss of $38.5 million reported in the
same period of 2001, representing an increase of 112%.
Taxes generated during the first three months of 2002, were equivalent
to $18.8 million dollars, 231% more than the first quarter of 2001 of
$5.7 million dollars, due basically to an increase in the asset tax
and in the deferred taxes in the Mexican mining subsidiaries of AMC.
Extraordinary items reported in the first three months of 2002 of
$16.0 million include the premium of $11.4 million paid to the owners
of SPCC Secured Export Notes who were repaid during February 2002.
The net loss after taxes and extraordinary items for the first quarter
of 2002 was $36.5 million dollars, representing a decrease of 32%
against the same period of 2001.
Operating cash break even point in terms of pounds of copper for the
three months ended March 31, 2002, was 53.7 US dollars cents., 28%
less than the 68.7 cents reported during the same period of last year.
Total cash break even point in terms of pounds of copper (includes
operating cost, financing expenses, tax expenses, and capex), for the
three months ended March 31, 2002, was 75.1 US dollars cents., 25%
less than the 93.9 cents reported during the same period of the
previous year.
Minera Mexico (MM)
MM-Highlights
(Stated in thousands of US dolla)
Financial Data
Three Months ended:
March 31 March 31 Var.
2002 2001 %
Net Sales 148,014 121,059 22.3
Cost of Sales 88,164 81,000 8.8
Administrative Expenses 6,463 5,750 12.4
Operating Income 31,139 15,141 105,7
EBITDA 53,387 34,308 55.6
Financing Costs (net) 400 1,426 (71.9)
Net Income (Majority) 24,205 12,580 92.4
During the first quarter of 2002, accumulated transport volumes
increased 9.8% with respect to the same period of 2001. The sectors
that showed significant variations during the period included:
minerals, with an increase of 110.8%; automotive, with and increase of
75.4 percent; chemicals, with an increase of 10.4%. In addition, the
following segments had the largest decreases: oil at 24.9%; and metals
at 27.7%.
Income from railroad transport services in the first quarter of 2002
increased to $148 million compared to $121.1 million in the same
period last year, equivalent to a 22% increase, as a result of higher
transport volumes.
With respect to investment projects and acquisition of other assets,
Grupo Ferroviario spent $10.7 million during the first quarter of 2002
on construction, expansion and rehabilitation of tracks, terminals,
rail yards, bridges, tunnels and sewers, and on the acquisition of
telecommunications systems. These investments are part of an integral,
planned investment program of $700 million dollars, which to date is
65% completed.
Simultaneously, the company continues with implementation of a
long-term modernization program for all of its railroad routes in
conjunction with the railroad workers union. The program will permit
the company to increase transport volumes, will improve a new
generation of employees, and will update technology to place it on
levels similar to other railroad lines throughout the world.
In accordance with US GAAP, first quarter EBITDA for GFM was $53.4
million dollars, which represented 36.1% of sales and compares with
EBITDA of $34.3 million in the same period last year. This is an
increase of 55.6%.
CONTACT: GRUPO MEXICO
Clayton Allen, 602/977-6500
GRUPO SIMEC: 1Q02 Results Flat to Modestly Improved
---------------------------------------------------
Grupo Simec, S.A. de C.V., announced Friday results of operations for
the three-month period ended March 31, 2002. Net sales decreased 6% to
Ps. 474 million in the three-month period ended March 31, 2002
compared to Ps. 503 million in the same period of 2001. In the
three-month period ended March 31, 2002 Simec recorded net income of
Ps. 54 million versus net income of Ps. 55 million for the comparable
period of 2001.
Simec sold 143,673 metric tons of basic steel products during the
three- month period ended March 31, 2002 as compared to 136,041 metric
tons in the same period of 2001. Exports of basic steel products
increased to 16,276 metric tons in the three-month period ended March
31, 2002 versus 4,659 metric tons in the prior comparable period.
Additionally, Simec sold 13,691 tons of billet in the three-month
period ended March 31, 2002; in the same period of 2001 Simec had no
sales of billet. Prices of products sold in the first quarter of 2002
decreased 15% in real terms versus the same period of 2001.
Simec's direct cost of sales was Ps. 310 million in the three-month
period ended March 31, 2002, or 65% of net sales, versus Ps. 330
million, or 66% of net sales for the same period of 2001. Indirect
manufacturing, selling, general and administrative expenses (including
depreciation) decreased 13% to Ps. 106 million during the first
quarter of 2002 from Ps. 122 million in the same period of 2001.
Simec's operating income increased 14% to Ps. 58 million during the
three- month period ended March 31, 2002 from Ps. 51 million in the
same period of 2001. As a percentage of net sales, operating income
was 12% in the three- month period ended March 31, 2002 and 10% in the
same period of 2001.
Simec recorded income from other financial operations of Ps. 5 million
in the three-month period ended March 31, 2002 compared to income from
other financial operations of Ps. 32 million in the same period of
2001. In addition, Simec recorded a reserve for income tax and
employee profit sharing of Ps. 15 million in the three-month period
ended March 31, 2002 versus a reserve of Ps. 13 million in the same
period of 2001.
Simec reported financial income of Ps. 6 million in the three-month
period ended March 31, 2002 compared to financial expense of Ps. 15
million in the same period of 2001 due principally to (i) net interest
expense of Ps. 16 million in three-month period ended March 31, 2002
compared to net interest expense of Ps. 53 million in the same period
of 2001, reflecting lower debt levels in the 2002 period, (ii) an
exchange gain of Ps. 12 million in the three-month period ended March
31, 2002 compared to an exchange gain of Ps. 8 million in the same
period of 2001, reflecting an increase of 1.2% in the value of the
peso versus the dollar in the three-month period ended March 31, 2002
compared to an increase of 0.4% in the value of the peso versus the
dollar in the same period of 2001 and (iii) a gain from monetary
position of Ps. 10 million in the three-month period ended March 31,
2002 compared to a gain from monetary position of Ps. 30 million in
the same period of 2001, reflecting the domestic inflation rate of
1.4% in the three-month period ended March 31, 2002 compared to the
domestic inflation rate of 1% in the same period of 2001 and the lower
amount of debt outstanding during the 2002 period.
At March 31, 2002, Simec's total consolidated debt consisted of
approximately $98 million of U.S. dollar-denominated debt (including
$25.1 million of debt owed to its parent company ICH), while at
December 31, 2001, Simec had outstanding $103 million of U.S.
dollar-denominated debt (including $14.8 million of debt owed to ICH);
Simec's lower debt level reflects the repayment of $15.5 million of
bank debt in the three-month period ended March 31, 2002 (Simec
financed $10 million of this repayment with loans from ICH).
Substantially all of Simec's remaining consolidated debt (other than
debt owed to ICH) matures in 2009 and amortizes in equal semi-annual
installments. All figures were prepared in accordance with Mexican
generally accepted accounting principles and are stated in constant
Pesos at March 31, 2002.
Simec is a mini-mill steel producer in Mexico and manufactures a broad
range of non-flat structural steel products.
CONTACT: GRUPO SIMEC, S.A. DE C.V.
Adolfo Luna Luna or Jose Flores Flores
Tel. +011-52-33-3669-5740
PEGASO: Telefonica To Pay US$1.36 Bln For Controlling Stake
-----------------------------------------------------------
Spain’s Telefonica Moviles, one of the world's leading wireless
companies, agreed to acquire a controlling interest in Pegaso
Telecomunicaciones, S.A. de C.V., a wireless operator in Mexico.
Under the terms of the agreement expected to be announced this week,
Telefonica will acquire 65 percent in Pegaso for a total of US$1.36
billion, including between US$80 million to US$90 million in equity,
and the assumption of about US$1.27 in debts and other considerations
including equity.
Telefonica is buying the stakes from Sprint PCS, Leap Wireless,
Citicorp Equity Capital, AIG-GE Capital Latin America Infrastructure
Fund and the Nissho Iwai Corporation. Most of the debt is being
acquired from Qualcomm Inc., which is Pegaso's largest creditor.
Greenhill & Co. acted as financial adviser to Pegaso, while Lazard LLC
advised Telefonica and Morgan Stanley advised Qualcomm.
CONTACT: PEGASO PCS, SA OF CV
Stroll of the Tamarinds 400A,
Floor 4, Forests of Hills
Mexico, DF 05120
Phone: (55) 5806,8700
Fax: (55) 5806.9080
E-mail: atencionclientes@pegasopcs.com.mx
Home Page: http://www.pegasopcs.com.mx/
Contact:
Roberta Lopez Negrete
Manager of Strategic Communication
Phone: 261 66 38 Fax: 261 66 98
Email: rlopez@pegasopcs.com.mx
Eduardo Jimenez Urias
Phone: 261 66 34
Fax: 261 66 91
E-mail: ejimenez@pegasopcs.com.mx
QUALCOMM Incorporated, San Diego
Corporate Public Relations
Christine Trimble, 858/651-3638
Fax: 858/651-5873
ctrimble@qualcomm.com
or
Investor Relations
Julie Cunningham, 858/658-4224
Fax: 858/651-9303
jcunningham@qualcomm.com
SPRINT GROUP
6160 Sprint Pkwy.
Overland Park, KS 66251
Phone: 800-829-0965
Fax: 816-854-0903
LEAP WIRELESS
10307 Pacific Center Ct.
San Diego, CA 92121
Phone: 858-882-6000
Fax: 858-882-6010
TELEFONICA MOVILES, S.A.
Goya 24
28001 Madrid, Spain
Phone: +34-91-423-4004
Fax: +34-91-423-4010
E-mail: webmaster@telefonicamoviles.com
Home Page: http://www.telefonicamoviles.com
Contact:
Maria Garcia-Legaz, Head of Investor Relations
Arantxa San Román Wong
Raimundo de los Reyes
Paseo de Recoletos, nº 7-9 2ª Planta
28004 Madrid
Phone: +34 914 23 40 27
Fax: +34 914 23 44 12
E-mail: relaciones.inversores@telefonicamoviles.com
NISSHO IWAI CORPORATION
2-3-1, Daiba, Minato-ku
Tokyo 135-8655
Japan
Phone: +81-3-5520-5000
Fax: +81-6-6209-2531
Home Page: http://www.nisshoiwai.co.jp
Contact:
Shiro Yasutake, President and CEO
Masanobu Kondo, EVP General Accounting and Finance
GREENHILL & CO.
300 Park Avenue
23rd Floor
New York, NY 10022
Phone: 212-389-1500
Fax: 212-389-1700
E-mail: newyork@greenhill-co.com
Home Page: www.greenhill-co.com/
Contact:
Timothy J. Haddock, Principal
REGENT GATE
56-58 Conduit Street
London W1S 2YZ
Phone: 44 20 7440 0400
Fax: 44 20 7440 0500
E-mail: london@greenhill-co.com
Contact:
James Hatchley, Principal
Main Tower, 34th Floor
Neue Mainzer Strasse 52
60311 Frankfurt /Main
Phone: 49 69 272 272 00
Fax: 49 69 272 272 33
E-mail: frankfurt@greenhill-co.com
Contact:
Thomas Fetzer, Vice-President
MORGAN STANLEY, DEAN WITTER & COMPANY
1585 Broadway
New York, New York 10036
United States
Phone: +1 212 761-4000
Fax: (212) 761-0086
Home Page http://www.msdw.com
Contacts:
Philip J. Purcell, Chairman & Chief Executive Robert G.
Scott, President & Chief Operating Officer
Investor Relations
Phone: (212) 762-8131
E-mail: indivfeedback@morganstanley.com
LAZARD LLC
121 Boulevard Haussmann
75382 Paris Cedex 08,
France
Phone: +33-1-4413-01-11
Fax: +33-1-4413-01-00
Home Page: http://www.lazard.com
Contacts:
Michel David-Weill, Chairman
Bruce Wasserstein, Chief Executive Officer
LAZARD FRERES & CO. LLC
30 Rockefeller Plaza
New York, NY 10020
Phone: (212) 632-6000
Home Page: http://www.lazard.com
===============
P A R A G U A Y
===============
CORPOSANA: Workers’ Consortium Fails To Qualify For Bidding
-----------------------------------------------------------
A consortium made up of Corposana workers did not make the cut for the
Paraguay's privatization department SNRE’s final list of companies
qualified to bid in the upcoming privatization of the water utility.
As a result, only five the six companies/consortia were left qualified
for the privatization. These are the UK's Anglian Water and
International Water, Spain's Aguas del Bilbao, France's Proactiva
Medio Ambiente (Vivendi-FCC) and Italy's Acea.
Offers are tentatively scheduled for opening June 27.
Chicago-based firm Baker & McKenzie is the sale's legal adviser,
Spanish banking group Santander Central Hispano is the financial
consultant and Spanish investment bank Nmas1 is managing the sale
process.
CONTACTS: 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
SALE AGENT:
NMAS1
Padilla, 17
28006 Madrid
Spain
Phone: 91 745 84 84
Fax: 91 431 38 12
E-mail:info@nmas1.com
Home Page: http://www.nmas1.com/
***********
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
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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
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thereof are $25 each. For subscription information, contact
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