/raid1/www/Hosts/bankrupt/TCRLA

/raid1/www/Hosts/bankrupt/TCRLA_Public/020514.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, May 14, 2002, Vol. 3, Issue 94 Headlines A R G E N T I N A CAMUZZI GAS: S&P Ratings Intact Despite Suspension Of Deliveries CENTRAL PUERTO: Suspends Capital, Interest Payment On Sofax Loan FOREIGN BANKS: Argentines Empty ATM's On Rumored Bank Closures IECSA-GTA: Runs Short Of Cash To Pay Employees, Suppliers REPSOL YPF: Local Unit Posts ARS1.84 Billion Loss In 1Q02 SCOTIABANK QUILMES: Singled Out For Difficulties In Argentina UTE: Board Analyzes Strategy To Avoid Collapse B E R M U D A GLOBAL CROSSING: SEC Grills Current, Former Top Salespeople B R A Z I L AES CORP.: Fitzpatrick Named Eletropaulo's New CEO EMBRATEL: Unit Reaches Joint Billing Accords With 3 Operators EDELNOR: Court Rejects SING Supply Appeal D O M I N I C A N R E P U B L I C TRICOM, SA: Company Profile H O N D U R A S GEOMAQUE EXPLORATIONS: YE01 Loss Narrows, Production Falls Short M E X I C O BANCO INDUSTRIAL/ANAHUAC/SURESTE: D&T Studies Submitted To CNBV BANRURAL: Report Indicates Financial Condition Worsening P A N A M A TRICOM: Awaits Supreme Court Decision Over Investment - - - - - - - - - - ================= A R G E N T I N A ================= CAMUZZI GAS: S&P Ratings Intact Despite Suspension Of Deliveries ---------------------------------------------------------------- International ratings agency Standard & Poor's (S&P) sees no immediate threat to Camuzzi Gas del Sur's (CGS) ratings even after the Argentine gas distributor was forced to cut supplies to industrial customers last week, relates Business News Americas. CGS was forced to cut supplies to its customers last week after producers stopped or reduced supply to the Company citing difficulties in financing natural gas purchases. S&P blames these difficulties on the fact that CGS has not received subsidies from the government for sales to residential customers for more than six months. S&P considers CGS' exposure to sovereign risk as higher than that of other gas distributors because of its exposure to cold-weather region subsidies, which on average are 50 percent of the bimonthly bill of CGS household users, according to S&P credit analyst Matias Badia. However, S&P adds it has already incorporated the Company's exposure to sovereign risks. The Company's rating was lowered to selective default on January 21, 2002. S&P estimates that as a result of the Argentine government's financial crisis, CGS did not collect more than US$50 million in subsidies in 2001, and that this amount has probably grown in 2002. Furthermore, the government is unlikely to let CGS claim the full bill from the customers, as set down in the concession contract. However, the government established a trust fund earlier this week to charge ARS0.004 per cubic meter of natural gas sold in the country to raise a maximum of ARS100 million a year. "S&P believes that the creation of this trust should help relieve CGS' working capital deficits originated by the government's failure to comply with its natural gas residential subsidies," S&P says in a note. This financial stress is heightened by lower consumption, higher uncollectibles, and the severe credit crunch, S&P says, pushing some gas producers to reduce or stop deliveries to CGS. CONTACT: CAMUZZI GAS Alicia Moreau de Justo 240 3 floor, (C1107AAF) Buenos Aires, Argentina Telephone: 54-11-5776-7033/5776-7088 Fax: 54-11-5776-7034/4315-6443 Email: Invesrelations@camuzzigas.com.ar Home Page: www.camuzzigas.com/htm/index_1.htm Contacts: Jose Manuel Vazquez (C.E.O.) Mazzolini, Investor Relations CENTRAL PUERTO: Suspends Capital, Interest Payment On Sofax Loan ---------------------------------------------------------------- Argentine generator Central Puerto Sociedad Anonima informed the Buenos Aires Stock Exchange Thursday that it has suspended payment of US$125.4 million in capital and interest on a loan taken out with French bank Sofax Banque in July, relates Business News Americas. The Argentine utility explained that the move was taken in order to guarantee services, ensure the equal treatment of creditors, safeguard working capital and keep the company going following the country's peso devaluation and the end of indexed contracts. In February, Central Puerto reportedly suspended payments on all financial obligations as a result of the economic downturn in Argentina. The Company's debts total US$300 million, including the amount owed to Sofax, which is 100-percent owned by Central Puerto's majority owner TotalfinaElf; US$110 million with the Bank of America with guarantees from US-based Exim Bank; US$11.5 million with Bankboston; and US$60 million with a syndicate of banks. Of the smallest loan, US$50 million is in dollars and US$10 million is a peso-denominated loan from Banco de la Provincia de Buenos Aires. Central Puerto Sociedad Anonima is in the generation, transportation, distribution, production, marketing, commercialization, import and in block sale of electric energy and provision of technical and consultancy services. CONTACTS: CENTRAL PUERTO Jacques Chambert Loir, CEO 2701 Avenida Tomas A Edison Buenos Aires, Argentina Phone +54 1 317 5074 Home Page http://www.centralpuerto.com CREDITORS: BANCO DE LA PROVINCIA DE BUENOS AIRES San Martin 137 (C1004AAC) Buenos Aires, Repoblica Argentina Tel. 054 (011) 4347-0000 BANK OF AMERICA - Corporate Headquarters Bank of America Corporate Center 100 North Tryon Street Charlotte, North Carolina 28255 www.BankofAmerica.com Contacts: Ken Lewis, Chairman & CEO FOREIGN BANKS: Argentines Empty ATM's On Rumored Bank Closures -------------------------------------------------------------- Widespread speculation that the planned closure of Bank of Nova Scotia's Argentine unit, Scotiabank Quilmes, may set a precedent to other foreign-owned banks sent Argentines scrambling to empty some cash machines in downtown Buenos Aires. Units of FleetBoston Financial Corp., Citigroup Inc. and France's Banque Sudameris all had clients increase withdrawals on concern the firms would shut this week. "I hope that nothing will happen, but I have to be wary," said Cristian Feroleto, 27, who was among 45 people waiting to withdraw pesos from a BankBoston NA branch. The banks said the depositors' concerns were unfounded. BankBoston has about ARS1.7 billion (US$533 million) in Argentina to meet withdrawals, the most of any bank, spokesman Juan Carlos Lynch said. IECSA-GTA: Runs Short Of Cash To Pay Employees, Suppliers --------------------------------------------------------- Argentine company Iecsa-GTA, equipment supplier to Brasil Telecom, has failed to pay its employees and service suppliers for the last five months. The Company, which is responsible for installation and maintenance of Brasil Telecom's networks in Parana, has accumulated debts of BRL20 million. Iecsa's creditors are now seeking legal assistance to recover amounts owed to them, while Brasil Telecom has opted to contract other companies for the same service that Iecsa had provided them. REPSOL YPF: Local Unit Posts ARS1.84 Billion Loss In 1Q02 --------------------------------------------------------- Spanish group Repsol YPF's Argentine subsidiary YPF announced losses of ARS1.84 billion pesos in the first quarter of 2002, a complete reversal of the US$352 million in profits recorded in the first quarter of 2001 (at the time equivalent to dollars). The oil company attributed the losses to the devaluation of the Argentine currency in January and the impact of economic measures on the operations and investments. The effect of devaluation, which reduced the value of the peso by two-thirds against the U.S. dollar, was not previously calculated for YPF's results for the period ending December 31, 2001. In a statement, the Company announced that "the effect is, however, reflected in the results of the first quarter of 2002, resulting in a negative exchange rate differential of approximately ARS2.5 million (US$781 million)." YPF's results were also hurt by a 25-percent drop in crude oil prices - down to US$21.55 per barrel - on the international market for the first quarter of 2002, compared to the same period in 2001. Additionally, the decline of the domestic market over the past few months led to lower fuel sales, including a decline of 7- percent for gasoline and 11-percent for gas-oil. 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 SCOTIABANK QUILMES: Singled Out For Difficulties In Argentina ------------------------------------------------------------- Although the banking sector as a whole is going through a "profound crisis," the only bank in Argentina with difficulties is Bank of Nova Scotia unit Scotiabank Quilmes SA. The distinction was announced by Chief Cabinet Minister Alfredo Atanasof. "There is only one bank with difficulties which is Scotia," local websites quoted Atanasof as saying. Bank of Nova Scotia is considering putting Scotiabank Quilmes up for sale following the central bank's refusal to provide more funds to Quilmes. Scotiabank is the first international bank since Argentina's December debt default to say it may sell its operation after writing off CAD707 million (US$450 million) of losses and running short of cash to cover withdrawals. Scotiabank Quilmes hasn't updated its current assets and liabilities since December, when one peso equaled one U.S. dollar. The most recent figures show ARS2.74 billion of assets and ARS2.56 billion of liabilities, including ARS1.66 billion of deposits and ARS223 million of bonds and international credit lines. CONTACT: 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 UTE: Board Analyzes Strategy To Avoid Collapse ---------------------------------------------- Juan Gabito, Director of the electricity company UTE, sees severe financial risk mounting at the firm's Argentine operations because of the devaluation of the country's currency. UTE owns shares in Central Puerto SA, which failed to pay its debts over a month ago, and also has long-term investments in Hidroelectrica del Sur SA and in Central Hidroneuquen SA. In order to prepare the Company for the deepening financial threat, the Board of Directors of UTE will study a strategy to be applied to restructure its investments in Argentina and to reduce costs. The strategy under review includes an exchange of some shares or selling them at a discount. Part of the plan also included purchasing under-valued shares in related Argentinean companies in order to gain more decision-making power and market share. The total investment of UTE in the 3 Argentinean companies updated in the balance closed in December 2001 was almost ARS201 million. This figure in dollars is just over US$15 million. But after the devaluation of the peso, this figure dropped to around US$4.8 million. UTE also injected US$647,800 in Hidroelectrica del Sur in the financial years 2000 and 2001 as part of the payment to participate in the company. ============= B E R M U D A ============= GLOBAL CROSSING: SEC Grills Current, Former Top Salespeople ----------------------------------------------------------- The Securities and Exchange Commission continues with its probe on Global Crossing Ltd. to find out whether some transactions by the Company were shams intended to boost reported revenues. Citing a Wall Street Journal report, Dow Jones reveals that the top current and former salespeople, who ran the Bermuda company's carrier-sales unit, are now the ones being interviewed by the regulatory commission. The carrier-sales unit sells long-term contracts for telephone capacity to other telecommunications carriers. The salespeople are essential to understanding the Company's motivation behind approximately 15 "swap" transactions, in which Global Crossing swapped hundreds of millions of dollars' worth of capacity with other carriers and used those sales when it tabulated nonstandard revenue figures emphasized to investors. A former Global Crossing finance executive, Roy Olofson, has alleged that these transactions had little economic substance, and were used only to inflate the Company's 2001 revenue numbers. Through the questioning, investigators are hoping to get a better sense of whether there was internal pressure to complete the swaps to help the Company meet its publicly stated revenue goals. If the commission finds any wrongdoing, the sales officials' testimony may also help investigators determine how top executives helped craft or approve the transactions. Global Crossing, which filed for protection under the U.S. Bankruptcy Code in January, has turned over to the SEC documentation that it says backs up the business rationale for these transactions and their accounting. CONTACT GLOBAL CROSSING: Press Contacts: Cynthia Artin +1 973-410-8820 Cynthia.Artin@globalcrossing.com Becky Yeamans + 1 973-410-5857 Rebecca.Yeamans@globalcrossing.com Tisha Kresler + 1 973-410-8666 Tisha.Kresler@globalcrossing.com Teresa Mueller Latin America + 1 305-808-5947 Teresa.Mueller@globalcrossing.com Mish Desmidt Europe +44 (0) 7771-668438 Mish.Desmidt@globalcrossing.com Analysts/Investors Contact: Ken Simril + 1 310-385-3838 investors@globalcrossing.com =========== B R A Z I L =========== AES CORP.: Fitzpatrick Named Eletropaulo's New CEO -------------------------------------------------- The AES Corporation announced Friday the appointment of Mark Fitzpatrick as Chief Executive Officer of Eletropaulo, the electric distribution company that serves 4.6 million customers in Sao Paulo, Brazil and Ann Murtlow as President and Chief Executive Officer of Ipalco, the utility that serves the Indianapolis, Indiana area. Mr. Fitzpatrick is an Executive Vice President of The AES Corporation and was formerly in charge of AES's operations in Europe and Africa. He led AES's initial expansion outside the United States, into the United Kingdom and European electric sectors in the late 1980's. During the mid-1990's, he successfully acquired and managed AES businesses in Hungary and Kazakhstan. Most recently he led AES expansion into Africa. Mr. Fitzpatrick has been with AES since 1984. Ms. Murtlow is a Vice President of The AES Corporation and has recently been Managing Director of AES Horizons, Ltd, having operating responsibility for 1800 MW of capacity in the United Kingdom, the Netherlands and the Czech Republic. She was also responsible for new business development in 20 Northern, Central and Eastern European countries. She has been with AES since 1987. To see financial statements: http://bankrupt.com/misc/AES_Corp.txt CONTACT: AES Corp. Home Page: www.aes.com or The investor Relations at investing@aes.com ELETROPAULO METROPOLITANA Avenida Alfredo Egidio de Souza Aranha 100-B, 13 andar 04726-270 San Paulo Brazil Phone: +55-11-548-9461, +55 11 5696 3595 Fax: +55-11-546-1933 URL: http://www.eletropaulo.com.br Contacts: Luiz D. Travesso, Chairman and President Orestes GonOalves Jr., VP Finance/Investor Relations EMBRATEL: Unit Reaches Joint Billing Accords With 3 Operators ------------------------------------------------------------- Empresa Brasileira de Telecomunicacoes SA, a unit of Embratel Participacoes SA, signed joint billing accords with Telemar Norte Leste SA, Telefonica SA unit Telecomunicacoes de Sao Paulo SA and Cia de Telecomunicacoes do Brasil Central, reports AFX. According to Embratel, the new billing arrangement calls for its customers to pay for all telecommunications services via a single bill. Embratel didn't give the full details of the potential impact of the new billing arrangement on its current levels of unpaid bills. Analysts suggest that Embratel's results have been negatively affected by high levels of unpaid bills. The Company recently announced its first-quarter loss widened 8 percent to BRL36.4 million (US$15.6 million) from a loss of BRL33.7 million in the year-ago quarter. WorldCom, Embratel's embattled parent, has said it is considering the sale of the Brazilian long-distance carrier to meet its pressing debt obligations. To see Embratel's latest financial statements: http://bankrupt.com/misc/Embratel.txt CONTACT: EMBRATEL PARTICIPACOES S.A. Investor Relations Silvia Pereira Tel. (55 21) 2519-9662 Fax: (55 21) 2519-6388 Email: Silvia.Pereira@embratel.com.br invest@embratel.com.br or Press Relations: Helena Duncan/Mariana Palmeira Tel: (55 21) 2519-3653/3654 Fax: (55 21) 2519-8010 Email: hduncan@embratel.com.br mpalm@embratel.com.br EDELNOR: Court Rejects SING Supply Appeal ----------------------------------------- Chilean generator Edelnor suffered a tough blow after a court rejected its appeal questioning the validity and legality of supply contracts between generator Nopel and three distributors controlled by the Emel holding in the northern grid (SING). The appeals court rejected Edelnor's appeal and confirmed the 10- year contracts between Nopel and Emel subsidiaries Emelari, Eliqsa and Elecda, starting January 2002. Edelnor, which supplied these three distributors until December 2001, contested the award saying that the new 10-year contracts to Nopel were illegal. The Company insisted that offers made to the distributors violate antitrust regulations. The latest ruling by the appeals court could prove to be a sticking point to its controller FS Inversiones' intentions to renegotiate Edelnor's US$340-million bond debt with its creditors. Belgian power company Tractebel has a purchase option on FS' 82.3 percent stake in Edelnor, and the renegotiation is important if Tractebel is to take control of the Chilean generator. Tractebel has already decided to exercise the purchase option, said Tractebel representative in Chile Maglio Alessi. The process is expected to initiate in June but, according to an El Diario report, it depends on the outcome of negotiations between FS Inversiones and Edelnor creditors. CONTACT: Empresa Electrica Del Norte Grande SA (EDELNOR) Avenida Grecia 750 Antofagsta, Chile Phone: +56 55 248500 +56 55 248094 Contact: Fernando del Sol, Chairman =================================== D O M I N I C A N R E P U B L I C =================================== TRICOM, SA: Company Profile --------------------------- NAME: TRICOM, S.A. Ave. Lope de Vega No. 95 Santo Domingo, Dominican Republic PHONE: 809-476-4000 FAX: 809-476-6700 E-MAIL: investor.relations@tricom.net WEBSITE: www.tricom.net BOARD OF DIRECTORS: Manuel Arturo Pellerano Pe�a, Chairman Hector Castro Noboa, Vice President Marcos J. Troncoso, Secretary Carl H. Carlson, Treasurer Felipe Mendoza, Director Anibal de Castro, Director Ralph Smith, Director Kevin Wiley, Director Richard Haning, Director Theodore Schaffner, Director Edwin Corrie, Director Marino Ginebra, Director EXECUTIVE OFFICERS: Manuel Arturo Pellerano Pe�a, Chief Executive Officer Carl H. Carlson, Chief Operating Officer Marcos J. Troncoso, Executive Vice President of International Business Development Carlos F. Vargas, Vice President, Finance and Administrative Division, and Chief Financial Officer Carlos Ram�n Romero, Vice President, Business & Services Division Ram�n Tarrag�, Vice President, International Division Virgilio Cadena del Rosario, Vice President, Network, Planning and Engineering, International Division Valeriano Valerio, Vice President, Network and Engineering Division Jaime Garcia Armenteros, Vice President, Corporate Finance & Budget Ryan Larrauri, Vice President, Marketing and Product Development INVESTOR RELATIONS: Miguel Guerrero, Director Investor Relations Phone: (809) 476-4012 Fax: (809) 476-6700 E-Mail: investor.relations@tricom.net TYPE OF BUSINESS: TRICOM is a regional telecommunications provider in the U.S. and the Caribbean. In the Dominican Republic, the Company offers local, long distance, cable TV entertainment, mobile telephony, as well as broadband data transmission services. Through TRICOM USA, the Company owns switching facilities in New York, Miami and Puerto Rico, providing it with end-to-end connectivity, and is one of the few Latin American long distance carriers that have a United States licensed subsidiary. SIC: Telecommunications - Long-Distance Carriers EMPLOYEES: 1,829 (as of December 31, 2001) PUBLIC SECURITIES: 43,390,464 outstanding shares (as of December 31, 2001) OUTSIDE LEGAL COUNSEL: Piper, Marbury, Rudnick & Wolfe LLP 1251 Avenue Of The Americas, New York, New York 10020, USA Phone: 1 212 835 6000 fax: 1 212 835 6001 E-mail: laura.perry@piperrudnick.com Home Page: www.piperrudnick.com COMPANY'S LEGAL COUNSEL: Pellerano & Herrera Av. John F. Kennedy No. 10 Santo Domingo, Rep�blica Dominicana P.O. Box 20682 Phone: (809) 541-5200 Fax:(809) 567-0773 E-mail: ph@phlaw.com Home Page: http://www.phlaw.com/english/ AUDITOR: KPMG Restauraci�n No. 47 Santiago, Dominican Republic Phone: 1 (809) 583 4066 Fax: 1 (809) 583 4439 TRANSFER AGENT AND REGISTRAR: The Bank of New York P.O. Box 11002 New York, N.Y. 10286-1002 Phone: (212) 815-8325 To see financial statements: http://bankrupt.com/misc/Tricom.txt =============== H O N D U R A S =============== GEOMAQUE EXPLORATIONS: YE01 Loss Narrows, Production Falls Short ---------------------------------------------------------------- In an official statement, Geomaque Explorations Ltd. announced consolidated financial and operating results for the year ended December 31, 2001. The net loss for the year ended December 31, 2001 was $10.5 million, or $0.17 per share, versus loss of $13.6 million, or $0.25 per share for year ended December 31, 2000. Vueltas Mine (Honduras) Production at the Vueltas Mine totaled 27,077 ounces of gold for the year of which 10,211 were produced prior to the achievement of commercial production and 16,866 in the six months ended December 31, 2001. All costs net of revenues were deferred and charged to mining properties until June 30, 2001, when the mine was considered to have achieved commercial production. A net total of $2.0 million was spent on mine development, procurement and pre-production costs in the year ended December 31, 2001. This figure is net of $2.7 million of gold revenue from the 10,212 ounces of gold produced from ore mined prior to June 30, 2001. During the six month operating period the price realized from gold sales was $275 per ounce and the cash costs were $241 per ounce. Cash generated from operations amounted to $573,000. From the time of the first gold pour on March 9, 2001, the Company experienced difficulty attaining the production targets set out in the feasibility study and therefore could not meet the payment schedule under its financing agreement. The difficulties were mainly related to the production of suitable agglomerates from the oxide ore with high clay content and deficient operational procedures related to multiple stacking in a high rainfall environment. Effective leaching was, therefore, not achieved and metallurgical recoveries were negatively affected. Approximately 740,000 tonnes of ore were mined and placed on Pad 1 up to November 2001. However, due to the inability to overcome the extremely slow leaching of the gold and the resulting lower than expected recoveries, mining was stopped to conserve cash and stem the financial losses while a new pad (Pad 2) was constructed adjacent to the original Pad 1 in order to resume operations early in 2002. Efforts continue to maximize gold extraction from Pad 1 by ensuring lixiviation solution reaches areas that were not leached previously. As a result gold production continued into 2002. Pad 2 was completed and mining commenced in February of 2002. Initial recoveries are showing a marked improvement. The ramifications of these production difficulties included the fact that the terms of the Vueltas Mine financing agreement entered in to in June 2000 were not met due to slower than planned startup of the mine and failure to achieve the projected gold production levels. As a result, a number of waivers of potential defaults were required to be obtained during 2001, culminating in a restructuring of the loan agreement in December 2001 contemporaneous with, and conditioned on, an equity injection of $1,265,000 by way of a private placement of common shares which was partly completed in December 2001 and finalized in February 2002. The Vueltas Mine lender, Resource Capital Fund II L.P. ("RCF"), was a significant participant in this placement. In addition the then Board of Directors and President and CEO resigned and were replaced. All of these events have been brought to the attention of shareholders through press releases and/or were approved by shareholders at a special meeting of shareholders held in February 2002. Also during 2001, an agreement was reached with certain suppliers and advisers to the Company, whereby they accepted shares of the Company in exchange for certain amounts owed to them along with deferrals of the payment of other amounts due to certain of them. At the Vueltas Mine, major changes in the senior management and the operating procedures were implemented commencing at the 2001 year-end. In addition, a revaluation of the reserves at the Vueltas Mine resulted in a significant 53% reduction in those reserves. This reduction is primarily attributable to higher mining and processing costs and lower estimated recoveries than those assumed in the original feasibility study. The result is a smaller pit with a significantly improved waste/ore ratio (2.09 versus 3.40), with an increased operating margin, which will help to partially offset the reduction in reserves. The new management believe that, with these changes in place and a renewed focus on operations, the Vueltas Mine can operate successfully, notwithstanding the reserve reduction. San Francisco Mine The gold heap leach San Francisco Mine, located in the Sonora desert in northern Mexico has been in leach-only mode since November of 2000. Heap rinsing commenced in August 2001 and continued into the first part of 2002. During 2001, 17,092 ounces of gold were recovered compared to 69,100 ounces in the year ended December 31, 2000. The solution coming off the heap is still processed to recover the last ounces of gold. This solution is now meeting the Mexican environmental criteria for water discharge and final governmental approval for waste discharge is expected soon. This is the final step in the decommissioning of the heap leach at this mine. Marathon Palladium Project The Company can earn a 50% interest in the Marathon Palladium Project near Marathon, Ontario by spending a total of $1.8 million on exploration and development of the property by November 2004. During the year ended December 30, 2001, the Company incurred exploration expenditures on this project of $643,000 in 2001 which was in excess of the minimums required in the period. Financial Condition The Company's cash position at December 31, 2001 amounted to $614,000 compared to $1,996,000 at December 31, 2000. The working capital deficit of $63,000 compared to $69,000 at December 31, 2000. In February 2002, the second tranche of a private placement of common shares amounting to $997,792 was received. The restructured loan agreement relating to the Vueltas Mine financing provides for repayment of the outstanding principal of $2,973,125 (the "Principal Amount") in seven quarterly payments of $420,000 beginning January 31, 2003 and one final payment of $33,125 on October 31, 2004. No interest will be charged on this loan but a deferred financing fee totaling $1,601,875 (the "Minimum Fee") must be paid on or prior to July 31, 2005. The fee is to be paid on a quarterly basis commencing January 31, 2003 in amounts equal to 40% of available net cash flow from the Vueltas Mine, after payment of the quarterly payments to RCF in respect of the Principal Amount, quarterly payments to Sococo de Costa Rica, S. A. ("Sococo"), the mining contractor at the Vueltas Mine, in respect of an amount of $1,685,000 of accounts payable owing to Sococo and certain corporate costs. These payments continue until the earlier of such time as RCF shall have earned an amount sufficient to realize a 40% internal rate of return on the net advances as at September 30, 2001 of $2,973,125, or July 31, 2005, and are credited against the Minimum Fee. Upon payment of the Principal Amount and the Minimum Fee, RCF will continue to have a 10% royalty on the net cash flow of the Vueltas Mine after payment of certain corporate costs. The agreement with Sococo provides for the payment of a total of $1,685,000 of accounts payable in respect of prior work at the Vueltas Mine, in nine quarterly payments of $180,000 commencing January 2003 and one final payment of $65,000 on April 30, 2005. Financial Outlook As described above, the Company experienced difficulty attaining the production targets set out in the Vueltas Mine feasibility study. These production difficulties and the resulting cash shortfall resulted in the deferral of payments to a number of the Company's creditors. These creditors have continued to work with the Company in an effort to bring the Vueltas Mine into a position where it can operate successfully. A second leach pad was completed in February 2002 and initial indications are that the gold recoveries will meet expectations. The gold price has moved up significantly since December 31, 2001 when the restructured credit agreement was finalized. Management believes that cash resources are adequate to meet the Company's obligations until the Vueltas Mine is successfully generating positive cash flow. The Company has commenced a drilling program, in keeping with its current financial position, at the Vueltas Mine in order to identify additional ore reserves. To see financial statements: http://bankrupt.com/misc/Geomaque.txt CONTACT: GEOMAQUE EXPLORATIONS LTD. John Hick, President and CEO TEL: (416) 956-7470 =========== M E X I C O =========== BANCO INDUSTRIAL/ANAHUAC/SURESTE: D&T Studies Submitted To CNBV --------------------------------------------------------------- National Banking and Securities Commission (CNBV) now has in hand the result of the studies conducted by the consulting firm Deloitte & Touche (D&T) into suspended banks Banco Industrial, Banco Anahuac and Banco del Sureste. The CNBV now has enough information to decide whether to sell or put an end to the banks' activities. D&T said the Bank Savings Protection Institute (IPAB) and the CNBV must make a concerted decision together with the Economy Secretariat. The banks could be subject to a restructuring process in order to be sold afterwards. At the close of 2000, Banco del Sureste reportedly lost MXN1.63 billion (US$172 million), Banco Anahuac MXN878 million (US$93 million) and Banco Industrial MXN4.55 billion (US$479 million). CONTACT: DELOITTE TOUCHE TOHMATSU 1633 Broadway New York, NY 10019-6754 Phone: 212-492-4000 Fax: 212-492-4111 Home Page: http://www.deloitte.com Contact: Piet Hoogendoorn, Chairman James E. Copeland Jr., Chief Executive Officer J. Thomas Presby, Chief Operation Officer William A. Fowler, Chief Financial Officer DELOITTE TOUCHE TOHMATSU (MEXICO) Jaime Balmes No. 11 Edificio B, 9o Piso, Los Morales Mexico City 11510 Mexico Phone: +52 (55) 52 83 77 77 Fax: +52 (55) 52 83 76 00 BANRURAL: Report Indicates Financial Condition Worsening -------------------------------------------------------- The financial situation at Banrural is deteriorating rather steeply, according to a Self-Evaluation Management Report obtained by Cronica. The report showed negative capital of MXN602 million (US$63.4 million), an expired portfolio of MXN5.98 billion (US$630 million) - an increase of 40 percent compared to 2000 - and a 2-percent decrease in deposits compared to the previous year. The report was to be presented May 13 during a board meeting where the exit of Director Carlos Ruiz-Galindo will also be made official. Ruiz-Galindo will be replaced by Antonio Meade Kuribe�a. At the end of 2001, Banrural had assets worth MXN33.22 billion (US$3.50 billion) and liabilities of MXN33.82 billion (US$3.56 billion). For this year, the report so far showed assets of MXN33.70 billion (US$3.55 billion) against liabilities of MXN34.78 billion (US$3.66 billion)-- that is, a negative balance of MXN1.08 billion (US$114 million), MXN473 million (US$49.8 million) more than at the end of 2001. =========== P A N A M A =========== TRICOM: Awaits Supreme Court Decision Over Investment ----------------------------------------------------- The battle between BellSouth and Tricom Panama continues. According to an article released by the Miami Herald, Atlanta- based BellSouth paid US$72 million for its cellular concession in Panama but, before it was able to recover this large investment, rival Tricom Panama appeared, offering its own wireless communications system, a specialized mobile radio network, to capture a share in BellSouth's lucrative but protected market. The conflict has sparked a lower-court injunction against Tricom, which was overturned by a superior court, ruling that only the Regulatory Agency for Public Services, known as the ENTE, can decide such issues. A new appeal now lies in the hands of the Supreme Court. "Tricom must know something that we don't know for them to be continuing to invest despite the injunction," said Guillermo Inchausti, the general manager of BSC de Panama, the BellSouth subsidiary that is owned in partnership with Multiholdings S.A. Tricom Panama general manager Carlos Pellerano said that his company is operating with a legal concession and expressed confidence about the highest court's pending decision. "It is highly probable that what the Supreme Court will do is ratify the ENTE as the only body" to make a decision on a dispute of this nature, Pellerano said. Tricom S.A., a Dominican telecommunications company in which Motorola and Mexican telecommunications billionaire Carlos Slim have stakes, has its own problems. On April 30, Moody's Investors Service on April 30 lowered Tricom's bond ratings and put it on a watch list. In its American Depositary Shares public offering last December, the Company called itself highly leveraged, with US$450.6 million in debt, nearly double its US$241.4 million in shareholder equity. The horizon was noticeably cheerier a year ago when Tricom unveiled its Panamanian venture, suggests the Miami Herald. Tricom President Arturo Pellerano announced an expansion into Central America, starting with a US$33 million investment in Panama in partnership with the local Grupo Harari. Tricom was a losing bidder during the first round to purchase Panamanian cellphone licenses in 1996. BellSouth netted the license with a bid of US$72 million, more than three times the US$19 million the government had originally calculated. Under Panama's telecommunications law, the cellular market was protected for 10 years, or until 2007, in order to offer BellSouth and its only competitor, Cable & Wireless, the opportunity to recover their investment. Supporters of BellSouth insist that the new technology changes the intent of the original telecommunications law. Supporters of Tricom insist it is a technological advance that was not available at the time the law was written. "It's not our fault," Pellerano counters. "It is the way the law was designed." BellSouth has fought the Tricom entrance from the start, first requesting a probe by the regulators and then winning a lower- court injunction last August that ordered Tricom to cease all activities related to providing mobile-phone services. The appeals court decision overturning that ruling awaits a final judgment by the Supreme Court. The Atlanta company has filed a US$20 million suit against Tricom, which has countersued claiming US$1 million in damages. Inchausti insists that the Company will take the case to international courts if they lose the next round. *********** S U B S C R I P T I O N I N F O R M A T I O N Troubled Company Reporter Latin American is a daily newsletter co-published by Bankruptcy Creditors' Service, Inc., Trenton, NJ, and Beard Group, Inc., Washington, DC. John D. Resnick, Edem Psamathe P. Alfeche and Ma. Cristina Canson, Editors. Copyright 2002. All rights reserved. ISSN 1529-2746. This material is copyrighted and any commercial use, resale or publication in any form (including e-mail forwarding, electronic re-mailing and photocopying) is strictly prohibited without prior written permission of the publishers. Information contained herein is obtained from sources believed to be reliable, but is not guaranteed. The TCR Latin America subscription rate is $575 per half-year, delivered via e-mail. Additional e-mail subscriptions for members of the same firm for the term of the initial subscription or balance thereof are $25 each. For subscription information, contact Christopher Beard at 240/629-3300. * * * End of Transmission * * *