/raid1/www/Hosts/bankrupt/TCRLA_Public/020508.mbx
T R O U B L E D C O M P A N Y R E P O R T E R
L A T I N A M E R I C A
Wednesday, May 8, 2002, Vol. 3, Issue 90
Headlines
A R G E N T I N A
CABLEVISION: Liberty Media Takes US$195M Hit
SCOTIABANK QUILMES: Parent Reveals Sale Plans To Workers
SIDERAR: 1Q02 Net Loss Widens To ARS19.1 Mln
TELEFONICA/TELECOM: Cancels Service to Nearly 1,000,000
TGS: Reports ARS515.6M Loss During 1Q02
B E R M U D A
ANDERSEN: Trial Ends With US$217 Million Settlement
GLOBAL CROSSING: OIPSM To Provide Multimedia Platform in Peru
B R A Z I L
AES CORP: CEMIG Shareholders Approve Infovias Takeover
ENRON: Sale Of Minority Stakes To Petrobras Expected
C H I L E
MANQUEHUE NET: Firms Receive Bidding Invitations
M E X I C O
AEROMEXICO: Resumes Only New York-Monterrey Nonstop Service
BANCO UNION/BANCA CREMI: Liquidation By IPAB Hits Snag
ENRON: Sale Of Stake In Mexican Plant Awaits Judge's Approval
MAXCOM TELECOMUNICACIONES: Announces 1Q02 Unaudited Results
PEGASO: Leap Signs Agreement to Sell Interest to Telefonica
PEGASO: QUALCOMM Announces Execution of Definitive Agreements
PEGASO: Sprint Reveals Sale Agreement Details
STANDARD AUTOMOTIVE: Court Approves Post-Petition Financing
STANDARD AUTOMOTIVE: Exchange Issues Delisting Notification
SUNTERRA CORP.: Judge Approves Chapter 11 Disclosure Statement
SUNTERRA CORP.: Company Profile
- - - - - - - -
=================
A R G E N T I N A
=================
CABLEVISION: Liberty Media Takes US$195M Hit
--------------------------------------------
Liberty Media Corporation wrote off its investment in Argentina's
largest cable television operator, Cablevision, which it co-owned
with Dallas buyout fund, Hicks, Muse, Tate & Furst, according to
a Dow Jones report.
Liberty Media, in a Securities and Exchange Commission filing,
attributed the move to Argentina's weakening currency and the
restrictions imposed by the government on the payment of
obligations to foreign creditors.
According to Liberty Media, it recorded a US$195-million charge
related to its investment in Cablevision and reduced the carrying
value of its investment to zero.
"Our share loss in 2001, when combined with foreign currency
translation losses recorded in other comprehensive losses at
December 31, 2001, reduced the carrying value of our investment
to zero," the SEC filing said. Liberty referred to the decline in
value as "nontemporary."
Liberty said Cablevision recorded foreign currency translation
losses of US$393 million in the fourth quarter of 2001.
On Wednesday, Standard & Poor's ratings agency lowered
Cablevision to "default" after it missed a US$36.1 million
payment.
Hicks Muse, through its partnership with Republica Holdings and
Citigroup Inc., paid around US$370 million to boost its
Cablevision stake to 50 percent from 35.9 percent.
Liberty Media, on the other hand, paid US$590 million to gain
control of the balance, increasing to 50 percent its previous
28.2 percent interest.
CONTACT: CABLEVISION
Bondpland 1773
1414 Buenos Aires
Argentina
Tel: 54 11 47786060
Fax: 54 11 47741016
Home Page: www.cablevision.com.ar
Contacts:
Fabian To de Paul, President
Investor relations
E-mail: spena@cablevision.com.ar
mpigretti@cablevision.com.ar
LIBERTY MEDIA CORPORATION
12300 Liberty Blvd.
Englewood, CO 80112
Phone: 720-875-5400
Fax: 720-875-7469
Home Page: http://www.libertymedia.com
Contacts:
John C. Malone, Chairman
Robert R. Bennett, President, CEO, and Director
Gary S. Howard, EVP, COO, and Director
David J. A. Flowers, SVP and Treasurer
HICKS, MUSE, TATE & FURST INCORPORATED
200 Crescent Ct., Ste. 1600
Dallas, TX 75201
Phone: 214-740-7300
Fax: 214-720-7888
Home Page: none
Contacts:
Thomas O. Hicks, Chairman and Chief Executive Officer
Charles W. Tate, President
John R. Muse, Chief Operating Officer
Darron Ash, Chief Financial Officer
SCOTIABANK QUILMES: Parent Reveals Sale Plans To Workers
--------------------------------------------------------
Around 60 workers of Scotiabank Quilmes convened at the bank's
nine-story headquarters in Buenos Aires to discuss what actions
they may take to protect their jobs after the bank's parent, Bank
of Nova Scotia, revealed to them of its plans to sell the unit.
"We want to ensure that in the event of the sale, we maximize our
chances of keeping our jobs," said Miguel Angel Ronzitti, a
systems management worker.
On Monday, managers told the bank's more than 1,700 employees at
91 branches in Argentina of its plan. The decision came after the
Canadian parent wrote off CAD707 million (US$451 million) of
losses in the country.
Already, Bank of Nova Scotia said it would not inject new
liquidity into its cash-strapped Argentine subsidiary to save it
from bankruptcy.
Scotiabank Quilmes saw its operations suspended by Argentina's
central bank due to liquidity problems. The suspension came on
April 18 and Scotiabank was granted a 30-day period to solve the
liquidity problems of its local unit.
CONTACTS: SCOTIABANK QUILMES
Alan Macdonald
Chief Executive Officer
Phone: (54-11) 4338-8000
Fax: (54-11) 4338-8033
Mail: 6th Floor
Gral. J.D. Peron 564
(C1038AAL) Buenos Aires
Roy D. Scott
Vice-President and Managing Director, Latin America
Phone: (54-11) 4394-8726
Fax: (54-11) 4328-1901
Mail: P.O. Box 3955
C1000WBN Correo Central
Buenos Aires, Argentina
E-mail: scotiarep@sinectis.com.ar
SIDERAR: 1Q02 Net Loss Widens To ARS19.1 Mln
--------------------------------------------
Argentine steelmaker, Siderar SA, part of the Techint group, said
in a statement released late Friday that its net loss for the
first quarter ended March 31 was ARS19.1 million, versus a net
loss of ARS6.4 million in the first quarter of 2001, reports
Bloomberg.
The Company blamed its performance on Argentina's currency
devaluation and the country's political and economic uncertainty.
"The important changes in economic regulations, including a 200-
percent currency devaluation which had a significant impact in
the prices of goods and services, together with the deep changes
in the financial system, had a strong effect on the already
recessive situation in the domestic market," Siderar said in its
report.
Siderar also revealed total sales were 506,000t last quarter and
production of hot-rolled steel 408,000t, less than the 560,000t
and 536,000t respectively registered in the same period of 2001.
As a result of a fall in demand, domestic sales volumes dropped
44 percent over the period to 151,000t, the lowest-ever recorded
by the Company, compared to 270,000t for same-period 2001.
Gross earnings amounted to ARS15.3 million US$4.7 million).
Higher exports were insufficient to compensate for the drop in
domestic sales as international steel prices also fell, the
Company said.
Siderar SA
Consolidated income statement
First quarter ended March 31
All figures are in Argentine pesos*
2002 2001
Net Sales 271.2 Mln 227.1 Mln
Gross Profit 15.3 Mln 37.3 Mln
Net Income (19.1 Mln) (6.4 Mln)
Earnings Per Share (0.055) (0.018)
Earnings Per ADS (0.439) (0.147)
Figures in parentheses are losses.
*The Company said it used a conversion rate of ARS1.84 a dollar
for its foreign currency operations during the first quarter,
says Bloomberg. However, in its earnings chart the Company listed
the exchange rate at ARS3.00/dollar for the first quarter.
Company officials weren't immediately available to explain the
discrepancy.
The peso was devalued in early January. Prior to that, Argentina
had a decade-old currency board that pegged the peso at a 1:1
rate with the dollar.
CONTACTS: SIDERAR
Guillermo Etchepareborda, Investor Relation Manager
Avenida Leandro N. Alem 1067 (C1001AAF)
Buenos Aires, Argentina
Tel. (54-011) 4318-2514
Fax: (54-011) 4313-6417
Home Page: http://www.siderar.com.ar
TELEFONICA/TELECOM: Cancels Service to Nearly 1,000,000
-------------------------------------------------------
Telefonica de Argentina SA and Telecom Argentina Stet-France
Telecom SA, Argentina's two main fixed-line telephone operators,
halted service to more than 10 percent of clients, says Argentine
daily La Nacion.
Citing non-payment of bills, Telefonica, Argentina's largest
phone company, said it cut off about 540,000 clients, while
Telecom said it cut off about 350,000. The two operators together
have around 8 million fixed lines.
Both companies have asked the government for permission to hike
rates, partly to offset the loss of income from clients'
inability to pay and compensate for the devaluation of the peso
in January. However, the government has forbidden increases in
public utility rates as part of its efforts to fight inflation.
The rate restrictions have put severe financial pressure on the
telcos. Both have seen their credit ratings tumble and Telecom
defaulted on its last debt payment.
The government is currently in talks with the telcos and other
utilities. However, the companies cannot expect temporary relief
while the negotiations take place. On Sunday, Argentine daily
Clarin quoted the government's chief negotiator Alberto Biagosh
as saying there will be no transitional rate adjustments.
Biagosh also confirmed that the negotiations are expected to
conclude in mid-June and the new rates will be implemented in
August.
Telefonica de Argentina is controlled by Spain's Telefonica,
while Telecom Italia and France Telecom share control of Telecom
Argentina.
CONTACT: TELEFONICA DE ARGENTINA
Tucuman 1, 18th Floor, 1049
Buenos Aires, Argentina
Phone: (212) 688-6840
Home Page: http://www.telefonica.com.ar
Contacts:
Carlos Fernandez-Prida Mendez Nunez, Chairman
Paul Burton Savoldelli, Vice Chairman
Fernando Raul Borio, Secretary
TELECOM ARGENTINA STET - FRANCE TELECOM SA(TELECOM)
Alicia Moreau de Justo 50, 10th Floor
Capital Federal (1107) Repoblica Argentina
Phone: +54 11 4968 4000
Home Page: http://www.telecom.com.ar
Contacts:
Alberto J. Ricciardi, Chief Financial Officer
Elvira Lazzati, Finance Director
Pedro Insussarry, Investor Relations Manager
Phone: (5411) 4968-3626/3627
Fax: (5411) 4313-5842/3109
Email: inversores@intersrv.telecom.com.ar
TGS: Reports ARS515.6M Loss During 1Q02
----------------------------------------
Transportadora de Gas del Sur S.A.(TGS), Argentina's leading
transporter of natural gas, published Monday unaudited first
quarter earnings results, reports Dow Jones.
The report showed a loss of ARS515.6 million (US$1=ARS3.20), or
64.9 centavos a share, during the quarter. It also stated
earnings of ARS33 million, or 4.2 centavos a share.
TGS blamed its losses on the country's January peso devaluation
and its inability to pass along rate increases to its customers.
A weaker peso pushed TGS's operating costs, selling and
administrative expenses ARS16 million higher and its financial
costs ARS37.1 million higher.
TGS is owned by Compania de Inversiones de Energia SA, or Ciesa,
which last month said it missed paying its final interest and
principal payment due April 22 on a US$220-million corporate
bond.
CIESA is co-owned by Perez Companc SA (PC), the Argentine oil and
natural gas company, and the collapsed Enron Corp.
Transportadora de Gas del Sur (TGS)
Consolidated/unaudited income statement
First quarter ended March 31
(All figures are in Argentine pesos)
2002 2001
Net Revenue 141.1 Mln 126.8 Mln
Operating Income 72.8 Mln 74.5 Mln
Net Income (515.6 Mln) 33.0 Mln
Earnings Per Share (0.649) 0.042
Earnings Per ADS (3.245) 0.208
CONTACTS: IN BUENOS AIRES
Investor Relations:
Eduardo Pawluszek, Finance & Investor Relations Manager
Gonzalo Castro Olivera, Investor Relations
(gonzalo_olivera@tgs.com.ar)
Mara Victoria Quade, Investor Relations
(victoria_quade@tgs.com.ar)
Tel: (54-11) 4865-9077
Media Relations:
Rafael Rodriguez Roda
Tel: (54-11) 4865-9050 ext. 1238
=============
B E R M U D A
=============
ANDERSEN: Trial Ends With US$217 Million Settlement
---------------------------------------------------
Mid-way through the sixth day of trial in a Phoenix courtroom,
the BFA Liquidation Trust announced Monday that Arthur Andersen
LLP has agreed to revive the previously announced $217 million
settlement that collapsed in March.
The renewed settlement contains several significant additional
terms intended to maximize the prospect that the embattled
accounting firm will pay the full $217 million settlement amount.
In return for the settlement terms described below, the Trust has
agreed to stop the trial that began last Monday, April 29, 2002.
Pursuant to the settlement agreement finalized Monday morning,
Andersen will provide on the same day a certified check for
$11.32 million, which is non-refundable, and will be deposited
into an account controlled by the Arizona Attorney General's
Office, with whom the Trust and lawyers for the investors have
been working closely throughout this litigation. Andersen has
also agreed that the Trust, the State, and the investor class
(together, the "Plaintiffs") shall have the right to enter a
stipulated, non-appealable judgment in the amount of $217 million
on June 5, 2002, if Andersen has not paid the balance of $205.68
million by June 4, 2002.
The parties anticipate that the primary source of funds for the
balance of the settlement amount will be Andersen's Bermuda-based
insurance company, Professional Services Insurance Company Ltd.
("PSICL"), if that entity is able to return to solvency over the
coming weeks. At Plaintiffs' insistence and as a prerequisite to
stopping the ongoing Trust trial, the PSICL Board of Directors
voted to approve two separate resolutions at a board meeting in
Hamilton, Bermuda this morning. The first approved payment of the
balance of the settlement amount within five days of PSICL
becoming solvent. The second, effective immediately, approves an
assignment of Andersen's interest in the proceeds of the PSICL
policy that will be used primarily to fund the settlement. While
there cannot be assurance of payment in the event of a PSICL
liquidation, these resolutions provide important safeguards that
will protect the interests of investors in the event of a
liquidation or an Andersen bankruptcy filing.
Should PSICL not be able to pay the settlement by June 4, 2002,
the settlement provides entry of the non-appealable judgment
referred to above, and for a schedule of payments to Plaintiffs
by Andersen itself, pursuant to the payment schedule set forth
below at rates of interest escalating up to ten percent:
June 14, 2002 $10 million
July 15, 2002 $10 million
August 15, 2002 $10 million
September 13, 2002 $10 million
October 15, 2002 $10 million
October 25, 2002 $155.68 million
The settlement amount is the second largest ever agreed to by a
"Big Five" accounting firm to settle litigation not associated
with the savings & loan crisis, and approximately twice the
largest settlement that Andersen had ever paid. It also settles
several other related suits against Andersen that arose out of
the 1999 collapse of the Baptist Foundation of Arizona ("BFA"),
the largest non-profit bankruptcy in American history.
Founded in 1948 to raise money for Southern Baptist causes, BFA
and its subsidiaries and affiliates had marketed securities
throughout the United States as retirement vehicles for
investors, and served as a custodian for tax-deferred Individual
Retirement Accounts ("IRAs"). At the time BFA filed for
bankruptcy in November 1999, it had total liabilities of
approximately $650 million and listed assets of approximately
$290 million. BFA's liabilities included approximately $570
million owed to over 11,000 investors. Pursuant to a
reorganization plan approved by the Bankruptcy Court, the
Liquidation Trust was established to wind up the affairs of BFA
and Clifton Jessup was appointed as the BFA Liquidation Trustee.
The reorganization plan provides that any net recovery from
litigation pursued on behalf of the Trust will flow to the
investors who purchased securities from BFA.
The malpractice case against Andersen, filed in August 2000, is
pending before the Honorable Edward O. Burke of the Superior
Court of Arizona in Maricopa County. The trial, which began last
Monday and was scheduled to last several months, focused on the
Trust's allegations that Andersen had been negligent and breached
its fiduciary duties in failing to disclose serious financial
improprieties by former BFA senior managers, even after a series
of whistleblowers alerted Andersen to the ongoing fraud. The
Trust sought compensatory damages of $155 million for loss of
BFA's assets and significant punitive damages. The settlement
announced Monday resolves not only the Trust case but also a
putative class action against Andersen by former BFA investors, a
civil action brought by the Arizona Corporation Commission, and
disciplinary proceedings brought against Andersen and three of
its employees by the Arizona Board of Accountancy.
After attorneys' fees, the net recovery to investors from the
Andersen settlement alone, approximately $175 million, will
constitute repayment of over 50% of the net losses suffered by
investors after liquidation of BFA's assets. A prospective
settlement for $21 million that is about to be finalized with
BFA's former outside law firm is expected to result in a
distribution of another $18.3 million to investors. As of
December 31, 2001, the Trust had already distributed $49 million
to investors from sales of real estate and other assets of BFA.
Those sales continue, and are expected to generate additional
distributions over the next three years. The Trust is also
pursuing litigation claims against other parties that may recover
additional money to be distributed to investors.
"We are extremely pleased to achieve this outstanding result for
the investors," said Liquidation Trustee Clifton Jessup. "We will
seek the necessary court approvals expeditiously, so that we can
distribute the proceeds of the Andersen settlement and the
prospective settlement with Jennings Strouss as quickly as
possible," said Mr. Jessup. According to the Trust's lead trial
lawyer, John P. ("Sean") Coffey, a partner of Bernstein Litowitz
Berger & Grossmann LLP and former federal prosecutor, "Getting
the settlement back on track, with significant added protections
for the investors, is a far better result than we could have
achieved at trial. Although we were delighted with how well our
evidence has been going in at trial, the fact is that even in the
`best case' scenario a judgment would be months away. This
settlement represents as firm and positive an outcome as we could
hope for given Andersen's situation, one that is better than we
could achieve if we were to prevail at trial, and we have that
result now." Mr. Coffey added, "I want to thank my fellow trial
counsel, Rich Himelrick of Tiffany & Bosco and my partner Bob
Gans, for putting together such a strong case at trial. I also
want to thank the Liquidation Trust Board for their guidance and
support, as well as the fine people at the Arizona Attorney
General's Office and our colleagues at Bonnett Fairborn Friedman
& Balint, who, with Rich Himelrick, represented the investor
class, for the outstanding cooperation as we worked together to
achieve our mutually shared goal of obtaining this result for the
investors." Mr. Jessup and Mr. Coffey each note that litigation
against other parties who played a role in the demise of BFA will
continue apace.
Andersen did not admit any wrongdoing in the settlement.
CONTACT: Bernstein Litowitz Berger & Grossmann LLP, New York
Sean Coffey, Outside Counsel
Tel. (212) 554-1409 (office)
E-mail: sean@blbglaw.com
GLOBAL CROSSING: OIPSM To Provide Multimedia Platform in Peru
-------------------------------------------------------------
Global Crossing announced Monday that it is providing Optical IP
Servicios Multimedia, a subsidiary of ABZ Ingenieros in Peru,
with IP-based services that will help launch the first fiber-
optic multimedia platform in Peru.
One of Optical IP's key objectives is to modernize the platform
of communications services to the hotel sector in Peru with a
state-of-the-art multimedia platform for leisure and business
travelers. Optical IP will combine Global Crossing's fiber-optic
channels with its own Very High Bit-Rate Digital Subscriber Line
(VDSL) technology to become the first company in the country to
use an IP-based network for Video on Demand (VoD), Digital
Internet Access (DIA) and Long Distance Internet (LDI) services.
The new services, which will be introduced and branded as TV
Media, will provide hotel guests at four and five star hotels in
Lima with rich entertainment choices in their rooms, including
interactive games and high-speed Internet access, enabling guests
to download e-mail and browse the Internet, as well as to place
long distance calls at competitive rates by using the LDI
services.
"We are delighted that Optical IP chose us to launch this
innovative service, which will impact positively the travel and
tourism sector in this vital and growing Andean country," said
Jos, Antonio Ros, international president of Global Crossing.
"Our customers in more than 200 major cities around the world
continue to trust Global Crossing and its high-speed global
network for unparalleled service and reach in more than 27
countries worldwide."
"Optical IP Servicios Multimedia's creative use of fiber optic
technology is precisely the kind of application our high capacity
network was designed to support," said John Legere, chief
executive officer of Global Crossing. "Rich multi-media
transmission is the wave of the future, and Global Crossing along
with ABZ Ingenieros is on the crest of that wave."
With this new suite of services, Optical IP will also offer DIA
and LDI services to corporations, LDI carriers and businesses
located in multi-tenant office buildings.
"We selected Global Crossing as our partner because it offered
the fastest, most efficient and high-value service," said Winston
Barriga, chairman of Optical IP. "Global Crossing's team
underscored their commitment to provide optimum service and
technical support, as well as fast and secure implementation.
Their international capabilities also provide us with an
opportunity to expand to other markets in the future."
ABOUT ABZ INGENIEROS
ABZ Ingenieros is a pioneer of state-of-the-art
telecommunications technology in the country, with more than 10
years of experience in the development of telecommunications,
internetworking and telecontrol projects for all industries,
including the electrical, mining and banking sectors. With
Optical IP Servicios Multimedia, ABZ is entering the ISP and
multimedia businesses, becoming the first company in the country
to use an IP-based network to provide Video on Demand (VoD).
ABOUT GLOBAL CROSSING
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.
CONTACT: GLOBAL CROSSING
Press Contacts:
Teresa Mueller
+1 305 808-5947
Email: Teresa.Mueller@globalcrossing.com
Erich de la Fuente
+1 305 371-4262
Email: erich@edfpr.com
Analysts/Investors Contact
Ken Simril
+ 1 310-385-5200
Email: investors@globalcrossing.com
===========
B R A Z I L
===========
AES CORP: CEMIG Shareholders Approve Infovias Takeover
------------------------------------------------------
Shareholders of Companhia Energetica de Minas Gerais (CEMIG)
convened on April 30, 2002, at CEMIG's headquarters for the
Annual General Shareholders' Meeting and the Extraordinary
General Shareholders' Meeting and approved the acquisition by
CEMIG, for US$32 million, of 50.44% of the voting shares of
Empresa de Infovias S.A. from AES Force e Empreendimentos Ltda.
CEMIG, which already owned 49.44% of Infovias' voting shares, now
is the majority shareholder of Infovias. The remaining 0.16% of
the voting shares of Infovias are owned by Clube de Investimento
dos Empregados da CEMIG - CLIC, CEMIG's employees' investment
fund.
According to Cristiano Correa de Barros, CEMIG's Chief Financial
Officer, CEMIG used resources from its 2001 profits to fund the
acquisition. Mr. Barros also stated that the acquisition of
Infovias is important for CEMIG because of the synergies that
exist between the two companies.
Infovias
Infovias was incorporated in 1999 as a joint venture by CEMIG and
AES Forca e Empreendimentos Ltda. Infovias has the largest fiber-
optic telecommunications network in the state of Minas Gerais,
Brazil. The network is built along CEMIG's existing electric
power distribution infrastructure. Infovias' business model is to
position itself as a "carrier's carrier" by making its fiber-
optic network available to telecommunications companies, allowing
them to increase their coverage area within Minas Gerais.
Infovias has received investments totaling US$120 million and
owns 3,700 km of installed fiber-optic network.
Local and Long Distance Network
Infovias' local and long distance network is comprised of fiber-
optic cables installed along CEMIG's electricity distribution
network (overhead and underground) in urban areas, providing the
means for high-speed telecommunications. The local network,
comprised of 311.05 km of cable, serves 21 cities in the state of
Minas Gerais, namely: Araguari, Barbacena, Belo Horizonte, Betim,
Conselheiro Lafaiete, Divinopolis, Governador Valadares,
Ipatinga, Itabira, Joao Monlevade, Ituiutaba, Juiz de Fora,
Passos, Pocos de Caldas, Teofilo Otoni, Uberaba, Uberlandia,
Contagem, Ribeirao das Neves, Nova Lima, and Santa Luzia. These
cities are interconnected by a 1,300 km long distance network,
which Infovias operates on a loan for use basis until 2015.
Multi-service Network
Infovias' multi-service network is a hybrid network of fiber-
optic and coaxial cables for the provision of data, voice and
image communications services. Its main purpose is to serve Way
Brasil, the company that holds the concession for cable
television service in 33 cities in Minas Gerais. Infovias has
built out its multi-service network in 12 of these cities,
totaling approximately 2,800 km of coaxial cable and 600 km of
fiber-optic cable.
The multi-service network is made from state of the art
electronic equipment and its installation was performed by
specialized third-party companies.
While the core business activity relating to the multi-service
network is cable television subscriptions, Infovias also provides
Internet services. In addition, this network has the
technological capability to provide other services such as high
speed Internet, voice, teleconferencing and telemeter, making it
possible to provide specific applications such as long distance
educational services and telemedicine.
Way TV Belo Horizonte Infovias has a 51% interest in Way TV Belo
Horizonte, a company incorporated in Belo Horizonte, Minas Gerais
in October 2001, that provides cable television and high-speed
Internet services. Way TV has the most modern two-way network in
Brazil, able to simultaneously transmit video, voice and data.
Way TV operates in the Minas Gerais cities of Belo Horizonte,
Barbacena, Pocos de Caldas e Uberlandia, and is currently
expanding. Currently, Way TV has 12,000 cable television
subscribers and nearly 2,000 Internet service subscribers.
Clients
Infovias currently has contracts to provide services to: Empresa
Brasileira de Telecomunicacoes S.A. - Embratel, Diveo do Brasil
Telecomunicacoes Ltda., ITE Consultoria Ltda., Task Software
Ltda., Bis - Brasil Internet Service Ltda., CEMIG, Vesper S.A.,
Intelig Telecomunicacoes Ltda., Eletronet S.A., Telephonic
Empresas S.A., AT&T do Brasil S.A., Engeredes Redes Multimidia
S.A., Terra Networks Brasil S.A., S/A Estado de Minas, Primesys
(Portugal Telecom group), Impsat Comunicacoes Ltda., BUS Servicos
de Telecomunicacoes S.A., Fundacao Forluminas de Seguridade
Social - Forluz and Companhia de Gas de Minas Gerais - Gasmig.
To see financial statements:
http://bankrupt.com/misc/AES_Corp.txt
CONTACT: AES Corporation
Kenneth R. Woodcock, 703/522-1315
CEMIG
Avenida Barbacena, 1200
Sto Agostinho 30123-970 Belo Horizonte - MG
Brazil
Phone +55 31 299 4900
Home Page http://www.cemig.com.br
Contacts:
Djalma Bastos De Morais, Chairman
Geraldo De Oliveira Faria, Vice Chairman
Cristiano Correa De Barros, Finance Director
ENRON: Sale Of Minority Stakes To Petrobras Expected
----------------------------------------------------
Enron Corp.'s Brazilian unit's sale of its minority stakes in two
Rio de Janeiro gas distributors to Petroleo Brasileiro SA is
imminent.
In an accord signed in April, Petrobras and a group of investors
agreed to pay about US$240 million for a 25.4-percent stake in
CEG and a 33.8-percent stake in its sister company CEG-Rio,
according to Orlando Gonzalez, chief executive officer for Enron
in Brazil. Petrobras currently owns a 25-percent stake in CEG
Rio.
Earlier, Petrobras President Francisco Gros said that the gas
Company is examining all the legal ramifications of proceeding
with this purchase. According to him, the Company's lawyers are
working to ensure that Petrobras cannot be liable for any future
lawsuits from disgruntled Enron shareholders should it purchase
shares in the two companies.
Petrobras is also targeting other assets held by Enron in Latin
America, such as the gas pipelines in Bolivia and Argentina and
gas distributing companies in Brazil.
Meanwhile, Gonzalez also said Enron is in talks with many
companies for the sale of Gaspart, a holding company that holds
stakes in seven Brazilian natural gas distributors.
CONTACTS: Mark Palmer of Enron Corp., +1-713-853-4738
Enron Corp.
Investor Relations Dept.
P.O. Box 1188, Suite 4926B
Houston, TX 77251-1188
(713) 853-3956
Email: investor-relations@enron.com
Enron Corp.
Public Relations Dept.
P.O. Box 1188, Suite 4712
Houston, TX 77251-1188
(713) 853-5670
=========
C H I L E
=========
MANQUEHUE NET: Firms Receive Bidding Invitations
-------------------------------------------------
Some three Chilean telecoms companies revealed that they have
been invited to bid for a stake in Chilean competitive local
exchange carrier Manquehue Net, suggests Chilean financial daily
Estrategia.
According to the paper, local corporate communications provider,
GTD Teleductos, Telsur, Entel confirmed they received the
invitation from Manquehue to purchase a Company stake. Only Entel
said it is studying the offer.
Manquehue is now on the lookout for a strategic partner after a
year of disappointing financial results and two successive credit
ratings downgrades by Fitch Ratings that have curtailed the
Company's financing prospects. On March 14, the Company hired
investment bank ABN Amro to assist it with the search.
Manquehue registered a net loss of CLP11.3 billion (US$17.3
million) in 2001, compared to a profit of CLP224,017 in 2000.
Figures did not improve much in the first quarter, when the
Company reported a net loss of 2.15bn pesos for 1Q02, compared to
the CLP922-million loss it posted for 1Q01.
Manquehue's current shareholders are the UK's National Grid (30
percent); Chilean gas distributor Metrogas (25.6 percent); the
local Rabat family (21.2 percent); US-based network operator
Williams Communications (16.5 percent) and investment fund,
Xycom.
===========
M E X I C O
===========
AEROMEXICO: Resumes Only New York-Monterrey Nonstop Service
-----------------------------------------------------------
AeroMexico, Mexico's largest airline, announced plans Monday to
resume nonstop service from New York's John F. Kennedy
International Airport to Monterrey, with continuing service to
Guadalajara, effective July 8, 2002. The airline, which
discontinued nonstop flights between JFK and Monterrey after
September 11, currently serves the JFK-Monterrey market with
daily one-stop service through Atlanta. SkyTeam partner, Delta
Air Lines, will add its code to the new flights.
"Like most airlines, AeroMexico adjusted its flight schedule
following the events of 9/11," said Rolf Hoehn, AeroMexico's Vice
President, U.S. Division. "As demand increases in the Northeast-
Mexico market, we're restoring the only nonstop service to
Monterrey, as well as direct flights to Guadalajara, from our JFK
gateway. AeroMexico provides numerous connections throughout
Mexico from these major business centers, so travelers can
quickly and conveniently reach virtually anywhere in the country
they want to go."
CONTACT: Mayte Sera Weitzman
Tel: (281) 372-3446
Email: mweitzman@aeromexico.com
BANCO UNION/BANCA CREMI: Liquidation By IPAB Hits Snag
------------------------------------------------------
The liquidation of intervened banks, Banco Union and Banca Cremi,
proved to be a tougher task for Mexico's deposit insurance agency
IPAB.
According to Business News Americas, both banks have debts in
excess of MXN74 billion (US$7.67 billion) owed to the
government's agricultural trust fund Fira and have to make
quarterly payments to Fira through the end of 2007, which by that
time will amount to MXN120 billion after allowing for interest.
In November 2000, IPAB set about restructuring the Fira debt and
secured a MXN35-billion loan as part of that process.
Union and Cremi were first intervened in September 1994.
In February 2002, IPAB sold their mortgage loan portfolios, plus
that of a third intervened bank Banco Oriente, for MXN101 million
to cover the government's intervention expenses.
ENRON: Sale Of Stake In Mexican Plant Awaits Judge's Approval
-------------------------------------------------------------
U.S. Bankruptcy Judge Arthur Gonzalez is scheduled to consider at
a hearing on May 30 a request by Enron Corp. to allow it to sell
its US$13-million stake in a Mexican power plant to Tractebel SA,
reports Bloomberg.
Tractebel, the Belgium-based utility unit of Suez SA that owns
the rest of the project, was the only firm to bid on Enron's
share of the 245-megawatt power plant.
According to court papers, the US$189-million cogeneration plant,
now under construction in Monterrey, Mexico, is about 70 percent
complete and is scheduled to begin operating in October.
"The facts supporting approval of the sale of the assets are
compelling," according to Enron's court papers. "Given the lack
of a market for the assets, it is unlikely that any other party
would submit an unconditional higher or better offer."
In an original deal reached in November 2001, Enron and Tractebel
agreed to commit US$52.7 million in equity to the project and
arranged financing of US$136.5 million through the Inter-American
Development Bank, court papers said.
When Enron declared bankruptcy, the IDB stopped financing the
project, but said it would resume financing when Tractebel agreed
to "assure future performance."
CONTACTS: ENRON CORP., +1-713-853-4738
Mark Palmer, Investor Relations Dept.
P.O. Box 1188, Suite 4926B
Houston, TX 77251-1188
(713) 853-3956
Email: investor-relations@enron.com
Enron Corp.
Public Relations Dept.
P.O. Box 1188, Suite 4712
Houston, TX 77251-1188
(713) 853-5670
MAXCOM TELECOMUNICACIONES: Announces 1Q02 Unaudited Results
-----------------------------------------------------------
Maxcom released its unaudited first quarter results, while
issuing its recent efforts to improve company performance, noting
its:
* Solid Balance Sheet after Debt Restructuring and US$66.2
million New Equity
* 57% increase in revenues, 1Q02 vs. 1Q01
* Lines in service doubled, 1Q02 vs. 1Q01
* Tripled increase in paid customer base, 1Q02 vs. 1Q01
* 60% reduction in EBITDA loss, 1Q02 vs. 1Q01
* Regulatory approval to increase its neutral capital structure
up to 95%
* Hiring of a new Vice President of Sales to strengthen its
senior management team
Maxcom Telecomunicaciones, S.A. de C.V., a facilities-based
telecommunications provider (CLEC) using a "smart build" approach
to focus on small - and medium -sized businesses and residential
customers in the Mexican territory, announced Monday its
unaudited results for the first quarter of 2002.
LINES:
The number of lines in service at the end of 1Q02 increased 201%
to 85,339 lines from 28,352 lines at the end of 1Q01, and 9% when
compared to 77,981 lines in service at the end of 4Q01.
During 1Q02, 17,259 new lines were installed, a 187% increase
compared to 6,024 new installed lines during 1Q01 and 32% less
when compared to 25,407 lines installed during 4Q01. 50% of these
installations were in new clusters built during the last three
months.
During 1Q02, 2,400 lines (0.9% monthly avg.) represented the
voluntary churn; another 5,812 lines (2.4% monthly avg.)
represented the involuntary churn. Most of the involuntary
disconnections were from lines sold in old clusters built before
April 2001 under aggressive promotion plans. Additionally, 1,110
lines were disconnections from high usage customers, in line with
our strategy of not retaining this kind of low margin customers.
Inventory of constructed lines at the end of the quarter was
37,816 lines: of which 12,685 lines were from clusters built more
than one-year ago; and, the remaining lines are from new
clusters.
"In spite of a very tight capital conservation environment
instituted at Maxcom while the debt restructuring and capital
raising efforts where underway, we were able to cautiously
reinitiate our expansion with the addition of 14,000 new lines
during the quarter. We managed to accomplish this by controlling
our operating expenses and with the help of some of our very
supportive vendors and suppliers", said Fulvio Del Valle,
President and Chief Executive Officer of Maxcom, and he added
"with the hiring of Cesar Castillo as Vice President of Sales and
Commercial Operations, besides strengthening the management team,
we will reinforce the sales activity focusing on business lines
while consolidating our residential segments".
CUSTOMERS:
Total customers grew 302% to 53,059 at the end of 1Q02, from
13,208 at the end of 1Q01; and 12% when compared to 47,196
customers as of December 31, 2001, reflecting the Company's
continued effort to strengthen and diversify its customer base.
The growth in number of customers by region was: (i) in Mexico
City, 411% increase from 1Q01 and 9% increase from 4Q01; and (ii)
in Puebla, 249% increase from 1Q01 and 15% increase from 4Q01.
The growth in number of customers by segment was: (i) business
customers, 42% increase from 1Q01 and 15% increase from 4Q01; and
(ii) residential customers, 367% increase from 1Q01 and 12%
increase from 4Q01.
REVENUES:
Revenues for 1Q02 increased 57% to Ps$103.6 million from Ps$65.9
million reported in 1Q01. The net change in revenue reflects: a
201% increase of lines in service partially offset by a 29%
decrease in the total business ARPU, from US$126 in 1Q01 to US$89
in 1Q02. The decrease in ARPU was primarily the result of a
combination of a 73% reduction in revenues from high usage
customers and a change in mix from 60/40 business to residential
in 1Q01 to 28/72 line mix in 1Q02. On the positive side, however,
Maxcom continues to show improvement in its core small and medium
size enterprise market where it experienced a 29% growth in ARPU
between 1Q01 and 1Q02.
Revenues for 1Q02 decreased 10% from Ps$114.9 million reported in
4Q01. The net change in revenue reflects: (i) 9% increase of
lines in service; (ii) 8% decrease in the total business ARPU,
from US$97 in 4Q01 to US$89 in 1Q02, basically driven by a 26%
reduction in revenues from high usage customers; and, (iii) 25%
reduction in residential ARPU, from US$44 in 4Q01 to US$33 in
1Q02, as a consequence of lower installation charges due to a 32%
decrease in installed lines in 1Q02 when compared to 4Q01.
"We continued to focus on maximizing our revenues while keeping a
very tight control on expenses in order to utilize our limited
capital on the best capex alternatives based on our time-to-
revenue and time-to-profitability approaches. This in turn will
support the revenue stream required for EBITDA breakeven" said
Eloisa Martinez, Chief Financial Officer of Maxcom.
COST OF NETWORK OPERATION:
Cost of Network Operation in 1Q02 was Ps$44.5 million, an 89%
increase when compared to Ps$23.6 million in 1Q01. This increase
was mainly generated by: (i) Ps$14.4 million or 61% increase in
network operating services and technical expenses due to a 201%
growth in lines in service; and (ii) the inclusion of
installation expenses and cost of disconnected lines in the
amount of Ps$6.5 million (on a pro forma basis, these costs would
have been Ps$5.9 million in 1Q01).
Cost of Network Operation decreased 17% when compared to Ps$53.7
million in 4Q01. This net decrease was mainly generated by: (i)
lower installation expenses of Ps$7.6 million due to a 32%
decrease in installed lines; (ii) Ps$6.7 million higher inventory
reserve in 4Q01; (iii) 11% decrease in reselling costs due to a
shift towards more competitive carriers' tariffs; and, (iv)
higher maintenance expenses and interconnections costs, driven by
the growth in lines in service.
SG&A:
SG&A expenses were Ps$93.2 million in 1Q02 and Ps$127.8 million
in 1Q01. The 27% net decrease was mainly originated by: (i) non-
recurrent extraordinary expenses in 1Q01 of Ps$50.4 million
related to consulting and executive recruiting fees, one-time
executive compensation and incentive expenses, labor related
taxes and bad debt provisioning; (ii) lower marketing expenses by
Ps$4.2 million as the company decided to put on hold most of its
marketing projects during the restructuring process, partially
offset by: (i) higher leasing costs of Ps$4.6 million; (ii)
higher bad debt provisioning of Ps$4.6 million; (iii) severance
payments of Ps$3.5 million; (iv) Ps$3.7 million higher sales
commissions; (v) net increase in labor by Ps$2.5 million; and,
(vi) higher maintenance expense of Ps$1.1 million.
SG&A decreased Ps$19.2 million or 17%, from Ps$112.4 million in
4Q01. The net decrease was mainly originated by: (i) Ps$13.1
million lower salaries and benefits as a result of February 02
headcount reduction; (ii) Ps$2.8 million lower sales commissions;
(iii) Ps$2.9 million lower marketing expenses; and, (iv) higher
bad debt provisioning of Ps$3.4 million as a result of the
involuntary churn of the quarter.
EBITDA:
EBITDA for 1Q02 was a negative Ps$34.1 million which compares
favorably with a negative Ps$85.5 million reported in 1Q01 and
negative Ps$51.1 million in 4Q01. EBITDA margin improved from a
negative 130% in 1Q01 and negative 44% in 4Q01, to a negative 33%
in 1Q02.
Even though during the month of March 02, EBITDA was still
negative Ps$7.7 million, it was 56% better than February 02
EBITDA; 15% better than January 02 EBITDA and 32% better than the
1Q02 average. This improvement is in line with the Company's
expectations to achieve positive EBITDA margins between the end
of 2Q02 and the beginning of 3Q02.
CAPITAL EXPENDITURES:
Capital Expenditures for 1Q02 were Ps$59.1 million, a 138%
increase when compared to Ps$24.8 million in 1Q01 and a 44%
decrease when compared to Ps$105.1 million in 4Q01.
CASH POSITION:
Maxcom's Cash position at the end of the first quarter of 2002
was Ps$241.0 million, Ps$54.6 million in Cash and Cash
Equivalents and Ps$186.4 million in Restricted Cash (deposited
into an escrow account to guarantee April 1, 2002 coupon for the
Series B Senior Notes due 2007), compared to Ps$1,016.7 million
in Cash and Cash Equivalents, and Ps$599.7 million in Restricted
Cash at the end of 1Q01, and compared to Ps$174.6 million in Cash
and Cash Equivalents, and Ps$189.0 million in Restricted Cash at
the end of 4Q01.
EXCHANGE OFFER AND PRIVATE EQUITY INVESTMENT:
On April 29, 2002, Maxcom successfully concluded the exchange
offer for 94.3% of its Series B Senior Notes and the US$66.2
million Private Equity Investment.
Maxcom Telecomunicaciones, S.A. de C.V, headquartered in Mexico
City, Mexico, is a facilities-based telecommunications provider
using a "smart- build" approach to deliver last-mile connectivity
to small- and medium-sized businesses and residential customers
in the Mexican territory. Maxcom launched commercial operations
in May 1999 and is currently offering local, long distance and
data services in Mexico City and the City of Puebla.
To see Financial Statement: http://bankrupt.com/misc/MAXCOM.htm
CONTACT: MAXCOM TELECOMUNICACIONES, S.A. DE C.V.
Mexico City, Mexico
Jose-Antonio Solbes
Phone: (5255) 5147-1125
E-mail: investor.relations@maxcom.com
CITIGATE DEWE ROGERSON
New York, NY
Lucia Domville
Phone: (212) 419-4166
E-mail: lucia.domville@citigatedr-ny.com
PEGASO: Leap Signs Agreement to Sell Interest to Telefonica
-----------------------------------------------------------
Leap Wireless International, Inc., an innovator of wireless
communications services, announced Monday that it has signed a
definitive agreement to sell its interest in Pegaso
Telecomunicaciones, a Mexican wireless carrier, to Telefonica
Moviles, S.A. of Spain. Leap expects to own approximately 18
percent of the equity of Pegaso immediately prior to the closing.
Proceeds to Leap from the transaction, which involves the sale of
equity and repayment of subordinated debt, are expected to be
approximately $33 million, subject to adjustment based on the
liabilities of Pegaso at the closing. Leap will also be relieved
of a contingent liability under a $33 million guarantee of
indebtedness of Pegaso. The sale, which is subject to Mexican
regulatory approval and other closing conditions, is expected to
close by the end of the year. Pegaso was represented by Jeffrey
Williams & Co. LLC and Greenhill & Co. LLC in the transaction.
"This pending transaction provides important benefits for
Telefonica, Pegaso and Leap," said Harvey P. White, Leap's
chairman and CEO. "With the financial and operating support of
Telefonica, we are optimistic that Pegaso can reach its
potential. We also think this agreement supports Leap's current
focus on our Cricket business in the United States."
About Leap
Leap, headquartered in San Diego, Calif., is a customer-focused
company providing innovative communications services for the mass
market. Leap pioneered the Cricket Comfortable Wireless service
that lets customers make all their local calls from within their
local calling area and receive calls from anywhere for one low,
flat rate. Leap has begun offering new services designed to
further transform wireless communications for consumers.
CONTACT: LEAP WIRELESS INTERNATIONAL, INC.
Sarah Thailing, Media Relations,
Tel. +1-858-882-6018
Email: sthailing@leapwireless.com
Jim Seines, Investor Relations
Tel. +1-858-882-6084
Email: jseines@leapwireless.com,
BOCK COMMUNICATIONS, INC.
Jessica Levy
Tel. +1-714-540-1030,
Email: jlevy@bockpr.com
PEGASO: QUALCOMM Announces Execution of Definitive Agreements
-------------------------------------------------------------
QUALCOMM Incorporated, pioneer and world leader of Code Division
Multiple Access (CDMA) digital wireless technology, announced
Monday the signing of definitive agreements by and among
Telef>nica M>viles, S.A., Pegaso Telecomunicaciones, S.A. de
C.V., its shareholders, QUALCOMM, certain creditors of Pegaso and
its subsidiaries and other interested parties. Pegaso is a
wireless telecommunications operator in Mexico. Pursuant and
subject to the terms and conditions of the definitive agreements,
Telef>nica will acquire 65 percent of Pegaso's equity from
existing shareholders and the Burillo Group would continue to own
35 percent.
The consummation of the contemplated acquisition and the
repayment after the closing of a portion of the Pegaso companies'
outstanding indebtedness owed to QUALCOMM are subject to
satisfaction of the conditions precedent set forth in the
definitive agreements. These conditions include, among other
things, obtaining various regulatory and other approvals. The
definitive agreements provide for the repayment in full of all
interim financing advanced or to be advanced by QUALCOMM to
Pegaso. QUALCOMM has committed to provide up to $140 million, on
a net basis, of such interim financing, some of which has already
been funded. In addition, QUALCOMM is to receive cash payment of
a portion of its existing secured loans to Pegaso. Upon the
consummation of these transactions and exclusive of the repayment
of the interim financing, QUALCOMM's secured debt in the Pegaso
companies will be reduced in excess of $200 million. The balance
of QUALCOMM's senior secured debt to Pegaso will remain in place
to support Telef>nica's expanded Mexican operations and is to be
repaid in accordance with amended credit documents.
"We are pleased that Telef>nica M>viles, which is recognized as
one of the world's leading wireless operators, is putting its
considerable financial strength and operations expertise behind
Pegaso to achieve a successful nationwide CDMA network in
Mexico," said Tony Thornley, president and chief operating
officer of QUALCOMM.
QUALCOMM Incorporated (www.qualcomm.com) is a leader in
developing and delivering innovative digital wireless
communications products and services based on the Company's CDMA
digital technology. Headquartered in San Diego, Calif., QUALCOMM
is included in the S&P 500 Index and traded on The Nasdaq Stock
Marketr under the ticker symbol QCOM.
CONTACTS: QUALCOMM INC.
Christine Trimble, Corporate Public Relations
Phone: 1-(858) 651-3628
Fax: 1-(858) 651-5873
E-mail: publicrelations@qualcomm.com
or
Julie Cunningham, Investor Relations
Phone: 1-(858) 658-4224
Fax: 1-(858) 651-9303
E-mail: juliec@qualcomm.com
PEGASO: Sprint Reveals Sale Agreement Details
---------------------------------------------
Sprint announced Monday that the Company has reached a definitive
agreement to sell its investment in Pegaso PCS to Telefonica
Moviles. Sprint also announced that it has settled with Pegaso
and the other shareholders of Pegaso for payment on the
cancellation of the company's Services Contract.
Sprint expects to receive approximately $65 million for its 12.4
million Pegaso shares, its investment in subordinated convertible
notes and the Services Contract settlement. Under the Services
Contract, Sprint provided operational expertise to Pegaso in
exchange for royalty payments. Not affected by the sale agreement
is the cross-border roaming arrangement between Sprint and
Pegaso, meaning Sprint PCS customers will continue to enjoy the
clarity of CDMA wireless service while traveling in major Mexican
cities covered by Pegaso.
The $65 million that Sprint expects to receive will further
reduce the company's 2002 funding needs, which at the end of the
first quarter were lowered to $600 million for the PCS and FON
Groups, combined. After the close of the sale, which is expected
before the end of 2002, the company's financial results will no
longer reflect equity gains and losses on its Pegaso investment.
Equity losses reduced the PCS Group's reported earnings by
approximately 2 cents per share in the first quarter of 2002.
Given a carrying value for the investment of approximately $40
million at the end of the first quarter, Sprint also expects to
report a one-time gain upon the close of the sale.
About Sprint
Sprint is a global communications company serving more than 26
million business and residential customers in over 70 countries.
With approximately 80,000 employees worldwide and more than $26
billion in annual revenues, Sprint is widely recognized for
developing, engineering and deploying state of the art network
technologies, including the United States' first nationwide all-
digital, fiber-optic network. Sprint's award-winning Tier 1
Internet backbone is being extended to key global markets to
provide customers with a broad portfolio of scalable IP products.
Sprint's high-capacity, high-speed network gives customers fast,
dependable, nonstop access to the vast majority of the world's
Internet content. Sprint also operates the largest 100-percent
digital, nationwide PCS wireless network in the United States,
already serving the majority of the nation's metropolitan areas,
including more than 4,000 cities and communities.
CONTACT: SPRINT
Mark Bonavia, +1-913-794-1088,
Email: mark.bonavia@mail.sprint.com
STANDARD AUTOMOTIVE: Court Approves Post-Petition Financing
-----------------------------------------------------------
Standard Automotive Corporation announced Monday that the
Bankruptcy Court has entered a final order with respect to the
Company's financing arrangement with its current lenders, which
should provide the Company with sufficient liquidity to fund
operations without interruption during the reorganization
process.
The Company has also retained Legg Mason Wood Walker, Inc., the
Baltimore-based investment banking firm to assist it in
identifying potential buyers for the Company or certain of its
subsidiaries. "We are pleased that we were able to come to
agreement with our banks for further post-petition financing,"
said John E. Elliott, II, chairman and chief restructuring
officer. "This funding will provide our vendors with additional
financial assurances that we will continue to pay them in the
ordinary course for goods and services we purchase from them
going forward.
"With our first day orders approved and our post-petition
financing in place we can continue providing our customers with
the high quality products they have come to expect from us and in
the long-term we can focus on the sale or restructuring of some
or all of our subsidiaries which will create greater access to
the financial resources necessary for our subsidiaries to prosper
and grow," Mr. Elliott said.
In addition to the financing that will be provided as a result of
the arrangement the Court approved on Friday, the operating
subsidiary companies are generating profits and the Company's
cash position has improved by approximately $1.5 million since
March 19, 2002 when Standard Automotive, Ajax Manufacturing
Company and certain of its subsidiary holding companies -- CPS
Enterprises, Inc., Barclay Investments, Inc. and Critical
Components Corporation -- filed voluntary petitions for relief
under Chapter 11 of the Bankruptcy Code in the U.S. Bankruptcy
Court for the Southern District of New York.
Standard Automotive is a diversified company with production
facilities located throughout the United States, Canada and
Mexico. Standard Automotive manufactures precision products for
aerospace, nuclear, industrial and defense markets, and it builds
a broad line of specialized dump truck bodies, dump trailers, and
related products.
CONTACT: Sitrick And Company
Maya Pogoda, 310/788-2850
Dana Coleman or Richard Wool, 212/573-6100
STANDARD AUTOMOTIVE: Exchange Issues Delisting Notification
-----------------------------------------------------------
On May 2, 2002, Standard Automotive Corporation announced that it
had received notice from the staff of the American Stock
Exchange, indicating that the Company is no longer in compliance
with the Exchange's continued listing guidelines, and that its
securities are, therefore, being delisted from the Exchange.
According to the notice, the Staff's determination is based,
among other things, on the Company's commencement of Chapter 11
proceedings on March 19, 2002, as well as on the aggregate market
value of the Company's publicly held shares having fallen below
$1,000,000.
The Company noted that it does not intend to appeal the
determination by the Exchange and, therefore, expects its
securities to be delisted on or about May 13, 2002.
SUNTERRA CORP.: Judge Approves Chapter 11 Disclosure Statement
--------------------------------------------------------------
Sunterra Corp. obtained court approval on its disclosure
statement for a proposed Chapter 11 plan.
According to a report by Dow Jones, Judge James T. Schneider of
the U.S. Bankruptcy Court in Baltimore approved the disclosure
statement after he found out that it contained "adequate
information" to enable creditors to make informed judgments about
whether to support the third amended and restated joint plan.
In a recent court order, the Judge gave Sunterra the go-ahead to
begin soliciting creditor votes, which are due June 13, and
schedules a plan confirmation hearing for June 20.
Sunterra expects to issue 20 million new shares under the
proposed plan, leaving the holders of its 9.25 percent senior
notes with a 48.7 percent stake in the reorganized company on a
fully diluted basis.
Holders of 9.75 percent senior subordinated note claims would get
a 29.4-percent stake, 5.75 percent convertible subordinated note
holders a 4.4-percent stake and unsecured creditors an 8.6-
percent stake, says Dow Jones.
Current equity interests would be canceled, and the interest
holders wouldn't receive any distributions.
The enterprise value of reorganized Sunterra is estimated to be
between US$502 million and US$566 million. After deducting
estimated long-term debt of US$220 million from this value, the
reorganized company's equity value is estimated at between US$282
million and US$346 million, the disclosure statement said.
Sunterra also said in the statement that it would seek an
affiliation with an organization having a "strong existing brand
identity among vacation ownership consumers. Furthermore, the
reorganized company also will attempt to dispose of noncore
assets, which it has been doing since it filed for Chapter 11,
and continually monitor the performance of its core resorts.
As of March 31, Sunterra and its affiliates had 48 resorts in the
U.S., Canada, the Caribbean and Mexico, and 27 in Europe.
To implement the plan, Sunterra must obtain new loan and working
capital facilities. The loan facility would fund cash payments to
be made to creditors under the plan and pay off the Company's
debtor-in-possession loan with Greenwich Capital Markets Inc.,
which is expected to amount to between US$160 million and US$180
million. The working capital facility would finance new mortgages
receivable.
The 9.25 percent senior noteholders are expected to recover 90
percent of their estimated US$147.1 million in claims under the
plan through the new stock issuance.
The new stock and interests in litigation trusts are expected to
allow the 9.75 percent senior subordinated noteholders to recover
39.1 percent of their estimated US$203.3 million in claims and
the 5.75 percent convertible subordinated note holders to recover
5.4 percent of their estimated US$141 million in claims.
Unsecured creditors are expected to recover 53.1 percent of their
US$53.2 million in claims through the issuance of the new shares
and interests in a litigation trust.
SUNTERRA CORP.: Company Profile
-------------------------------
NAME: Sunterra Corporation
1781 Park Center Drive
Orlando, FL 32835
PHONE: (407) 532-1000
FAX: (407) 532-1075
EMAIL:
WEB SITE: http://www.sunterra.com/
EXECUTIVE MANAGEMENT TEAM:
Nicholas Benson, President/CEO
Andy Gennuso, COO
Gregory F. Rayburn, Chief Restructuring Officer
Lawrence E. Young, Chief Financial Officer & Vice Pres.
TYPE OF BUSINESS: Sunterra Corporation is one of the world's
premier vacation destination companies with over 80 resorts in
key locales in North America, Europe, Mexico, the Caribbean and
Hawaii. Sunterra also manages various condominium resorts and
hotels in Hawaii and operates Club Sunterra, a points-based
vacation system.
SIC: REAL ESTATE DEALERS (FOR THEIR OWN ACCOUNT) [6532]
EMPLOYEES: (last reported count): 7,800
TRIGGER EVENT: Sunterra filed for reorganization under Chapter
11 of the United States Bankruptcy Code on May 31, 2000 in
Baltimore. At that time, the company announced 900 employees
would be laid off.
TOTAL REVENUES: US$98.1 million (Q ended 3/31/00)
TOTAL ASSETS: US$1,087.9 million (Q ended 3/31/00)
TOTAL LIABILITIES: US$874.9 million (Q ended 3/31/00)
DEBTORS ATTORNEYS:
WHITEFORD, TAYLOR & PRESTON, L.L.P.
Seven Saint Paul Street
Baltimore, Maryland 21202-1626
Telephone: (410) 347-8700
Attention: Martin T. Fletcher, Esq.
Paul M. Nussbaum, Esq.
WILLKIE FARR & GALLAGHER
787 Seventh Avenue
New York, New York 10019
Telephone: (212) 729 -8000
Attention: Marc Abrams, Esq.
Michael Kelly, Esq
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